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defibrillators, or delay that. also, they do want military paychecks to keep coming. but again, that is the house version where they stand. the senate says no way, the only thing they would consider is simply keeping the government open, nothing that would affect the health care law. >> so the contest begins, canke o'donnell, i know you will be watching, thank you, joining me this morning, ted cruz, the man in the middle of the fight. so here are the stakes, de-funding, say you and other republicans, the president says no way. the law is moving forward. are you in control? >> at the end of the day every senator has to decide how he or she is going to vote. every representative has decided how they are going to vote. the house last night voted to keep the government open, to fully fund the government, but at the same time the house responded to the millions of americans who are hurting under obama care, and i think the senate needs to do the same thing. >> i looked at polling that shows the law is unpopular, 56% want to uphold this law, so when you say listen to the american people, they're not necessarily with you. >> well, look at the phrase "uphold the law," when you do the polling, the answer is always yes. >> just polling methods -- >> i promise you any senator or representative that goes home to their home state and you hold a town hall and just ask people who are you facing? i mean, i have spent hundreds of hours chris-crossing the state of texas, and people all over the country are being forced out of jobs, losing their premiums and health insurance. >> we'll get into particulars of obama care, because obviously there is more to that story that advocates will argue with. so let's stick to that story. how does this end? because as i understand it, you would only support de-funding obama care, a delay is not enough. >> well, the next step, let's talk about that, the senate needs to act, in my view harry reid should call the senate back in today. we have a bill in front of us, there is a government shutdown in 48 hours. listen, i would love to be in houston with my two little girls playing with them this afternoon, but as you know i'm here in washington, d.c., as you know the senate should not be on vacation -- >> you know, the senate has acted, the majority leader would say, passed a bill to keep the government open. and then we've gone back to delaying or de-funding obama care. should they take a part of it? would you filibuster this bill? >> let's be clear what the senate has done so far. so far, majority leader harry reid has essentially told the house of representatives and the american people go jump in the lake, he said i am not willing to compromise or talk. his position is obama care must be funded 100% in all instances or he will shut the government down. i hope he doesn't do that, david, i hope he backs away from the ledge he is pushing us towards. but that is his position. >> but senator, even republicans that i have spoken to, your colleagues say senator cruz can't blame harry reid for shutting down the government. senator reid acted. he passed a bill to keep the government open. >> but let's be clear, the house has twice now voted to keep the government open. and if we have a shutdown, it will only be because when the senate comes back harry reid says i refuse to talk. also, let's be clear, president obama has granted a delay for big corporations, every big corporation has gotten a delay. if harry reid shuts the government down he will be saying if american families don't get a delay like the corporations, hard working american families, he is going to insist they suffer. >> it is interesting, democrats say you know the promise with senator cruz' position is it is a purist position. there are problems with obama care. we have had some polls saying there is great dissatisfaction at the town halls, but you haven't debated on how to change the law, what you have gone out and said let's kill the law, let's de-fund it. >> actually, with respect , david, i think it is wrong, i voted to repeal the law, but that was not my position in this fight. my position is de-fund it, which is different than repeal. and even now what the house of representatives has done is a step removed from de-funding. it is delaying it. now that is the essence of a compromise, delaying, simply on the same terms that has been done for the big corporations, that is a compromise. and at the same time, david, on the other side, what have the democrats compromised on? zero, their position is absolutely no, no matter what. >> you make this argument as if there is no broader context here. obama care has been -- has been adjudicated and it has been tested to the political system. and so let's go through that. we had an election where i heard the standard bearer for the republican party, mitt romney, saying that obama care should be repealed. all the republicans already voted against this thing when it was ultimately passed, the supreme court upheld it. and then your colleagues said let's have a strategy de-funding obama care and the letter, and they joined you in that fight. well, here now you don't even have the same number of folks who signed the letter who voted for this effort. there are not protests in the streets arguing to do away with the law the way that you would like. again, 51% of the poll this week, let's uphold the law. so i'm focusing on results. your goal and results. where have you moved anything? >> okay look, the facts are becoming more and more clear that obama care is not working. every day that is more clear, there is a reason the unions are jumping ship. one union after another is saying let me out. there is a reason why the president of the team, james hoffa, used millions, saying obama care was destroying their health care. destroying is his word. now, why is it that harry reid and the senate democrats are not willing to listen to the millions of men and women -- >> but you're a terrific lawyer, you're making an argument, i asked you a specific argument based on the facts on the ground. you made these arguments for 21 hours, my goodness, you haven't moved anyone. >> look, the american people rejected obama care, they understand it is not working. the only people making the argument are the career politicians in washington, harry reid who wants to use brute force, the great thing about the constitution, the checks and balances, the ability to check one another, president obama has over and over again disregarded the law. when he granted an exemption for giant corporations, that was contrary to law. right now we have a system where the rich and powerful, those with connections to the obama administration, they get spared some of the burdens of obama care. but those who were struggling, single moms and young people and people who are just trying to make it. >> you're a proponent of the law, millions are getting access to health care they couldn't otherwise afford. parents with children, others with conditions getting in the way of insurance. i spoke to a hospital administrator this week in illinois saying utilization is down, you can't know what the effect of five years from now is on this law. and nor can proponents of the law. but here is one argument, you've made yours, and the president, when he spoke this week, referred to your words. i want to play a portion, suggesting what you really don't want is the law to go forward because people may start to like it, is what he said. >> he said it is going to prove almost impossible to undo obama care, ñrright? so in other words, we've got to shut this thing down before people find out that they like it. >> you don't think americans will like it? you don't think that 25% of the state of texas that is uninsured will actually like the expanded access to get health insurance? >> i don't, and here is why, because it is not working. what happens, if you want people to get health insurance, the best way to get health insurance is to get a job, and obama care is the biggest job killer in the country. if you look at the mandate, half of the business managers are reducing or hiring part-time workers. another 24% said they were not growing to keep their size under 50 workers. if you're a young person out of school unable to find a job, a big part of the reason you can't find a job is because small businesses are not growing because of obama care. and there is nothing that can give you better health insurance than having a vibrant economy where you can get a job. let's take the thousands of workers at ups who just received notice from their employers that spousal insurance was being dropped. let's look at the workers of sea world who were told we're reducing your hours because of obama care, people are hurting. >> there are also researchers on my side who say there is no reason health insurers would stop giving insurance to their employees, it is a major tool to get employees. and health care, perhaps these problems that you're identifying could be solved short of complete de-funding. i want to start for just a moment to get you clear. a government shutdown, that is an acceptable outcome to you? >> look, i don't want a government shutdown. i don't think that harry reid should shut down the government. the house of representatives did something significant, which is they passed a bill to make clear that regardless of what happens the men and women of our military -- they should be paid. that passed unanimously in the house. and listen, right now, harry reid and president obama had been essentially holding the military hostage, threatening their paychecks over this potential shutdown. they might force. i think regardless of what happened we should pass the bill. we should not have a shutdown, which means harry reid has to move off his absolutist position. you have been multiple compromises from the republicans, and can you tell me what the democrats have done to compromise -- >> but what has he done -- as i outlined before, you have lost ground from even the summer on the position of getting people to vote with you. you lost ground from that position and you haven't persuaded one democrat. you have got to be democrats if you're going to overturn this thing. >> well, actually, joe manchin came out saying he supported the delay in the original mandate. listen, last time this was in the senate, there was division among the republicans. i had hoped the republicans would be united. that didn't happen, i'll tell you this, this next time around, this is an opportunity -- >> you have raised money on this, taken to the floor for 21 hours, you haven't moved anything legislatively, do you concede that point? >> david, i don't, and the establishment has been exempted from some of the harms. members of congress, how can you possibly justify to the american people that members of congress are exempted from the law? are not put on the exchanges like millions of americans. >> well, they're part of the exchanges, they don't get a portion by the employers -- >> but anyone on the exchange doesn't. >> but hundreds of thousands with their employers do -- >> but people with the exchange don't, you want people frustrated with washington? the simplest reason is you have politicians in both parties who are not listening to the people. they get a different set of rules. harry reid said to president obama, we don't want the obama care. i had an exchange with dick durbin, who argued we should stick the american people in coach. i think his own analogy shows what is wrong with this system, at a minimum, members of congress shouldn't be treated better than the american people, and should he be willing to compromise he would agree what the house has done to delay all of this saying it is not ready for prime time. it is not working, and we'll treat the american people at least as well as the others. >> you are talking about democrats, it is hard for them to get a word in edge wise, because there are members of your party who are so critical of what you have done and how you have done it. you have colleagues who accused you of putting on a show. congressman peter king said you're a fraud, lying to the base. george will, who has been a conservative columnist for "the washington post," who has been great, supportive of you in the past. but he wrote this past week, and i want you to respond. those people who deceive others first deceive themselves, allowing their wishes to be fodders of their thoughts by beginning to wish everything has changed. they should remember everett dirksen of illinois, the leader of senate republicans during passage of the 1964 civil rights act recalled, 40 preachers caught me one afternoon there in the lobby "i'm not a moralist." are you more legislative than others? >> i'm just trying to fight for 26 million texans, and for the american people. and i'm pretty sure what he argued is we should be delaying obama care, which is exactly what the house of representatives just voted to do. and one important thing to remember, you and all the voices of washington keep saying we need compromise. twice now, the republicans have compromised. and a twice, harry reid says we won't even have a compromise, i want to fund it all. we want to stick it on the american people and won't budge, that is not a reason, if we have a shutdown, the american people will be held hostage. >> who did you most admire? >> i most admired phil graham, there are voice whose say this is not possible. and if you remember back in 1993 when hillary care was being debated. and there were a lot of people that came forward that said we'll partially fund hillary light. phil graham said, i know you will remember this, he said this will pass over my cold, dead political body. and a whole lot of republicans who were scared, they looked over, he was not killed. they ran behind him and they said yeah, yeah, what he said. look, the power of leadership can change debates. we saw that just a month ago with syria. when president obama said he was going to launch attacks on syria, you had leaders of both house support him. and then the american people spoke up in overwhelming numbers saying we don't want to get involved in a sectarian war in syria, where there is no clear reason for the united states to do so and what happened, the federal government turned. we didn't get involved. we didn't launch the attacks, and just weeks earlier conventional wisdom in washington said it is impossible. >> do you regret comparing the future of obama care to the rise of hitler in nazi germany? >> well, the premise of your question is not true. what i said is there are many voices in washington who said "we can't do this, we can't do this." and i went through the centuries over and over again when americans were faced with big challenges, on big occasions, whether it was the civil war, going to the moon or winning the cold war, at every stage there were voices of conventional wisdom who say this can't be done, and at every stage, the american people rose to the occasion. and what i said is we should do the same here. we should look to, if we empower the american people to get washington to listen to the people, that is how we get this changed. >> do you ride this to the presidential nomination? >> it is easy for washington to focus on politics. i understand, that is the business of this town. what i am trying to do every day is focus on making a difference in the lives of the american people. every survey that is done in this country, the top priority of the american people is jobs and the economy. under harry reid's senate, we don't even talk about jobs and the economy. obama care is the biggest job killer in this country. and millions of americans are hurting. you know, i would like to see a democrat respond to james hoffa's letter who said this is right now destroying the health care of millions of americans. that is not me, that is a democrat union leader who has supported president obama and harry reid, we need to listen to people. >> thank you, senator. >> thank you, david. coming up, we're going to switch gears, one of the biggest threats is iran's nuclear program. joining me, msnbc's chief foreign affairs correspondent, andrea mitchell, as well as one of president obama's former advisers on arms control. we'll be right back here in just a moment. "meet the press" is brought to you by the boeing company. we know why we're here. to chart a greener path in the air and in our factories. ♪ to find cleaner, more efficient ways to power flight. ♪ and harness our technology for new energy solutions. [ female announcer ] around the globe, the people of boeing are working together, to build a better tomorrow. that's why we're here. ♪ help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. i reiterated to president rowhani what i said in new york, while there will surely be important obstacles to moving forward and success is by no means guaranteed, i believe we can reach a comprehensive solution. >> so what is behind the recent actions of the iranian president? joining me now, our chief foreign affairs correspondent, andrea mitchell, and former adviser to president obama on arms control and wmd, one of the few who met with rowhani while he was in new york, welcome to both of you, what i am fascinated by, what brought you to this moment? >> i think the answer is very simple, it is pressure, the economic sanctions imposed, started by president bush and strengthened by president obama has been sufficient to force the iranians to seek a deal so they can get relief from sanctions. >> but how do we get from there to here? >> that is a big question, i was at a small gathering with rowhani, it is very clear they're concerned about the bank situation. he is a politician, he was elected with the mandate to be moderate. he got 51% of the vote. his closest competitor got 16%, he was greeted back in tehran with crowds of demonstrators, supporters but also protesters. the fact that the mullahs allowed them to go to the airport, they even threw a shoe, but he has explained very ably, will they give up the real stuff? and that is a very heavy price for them. they have spent billions on it. and right now, israel is complaining, and netanyahu is coming tomorrow, israel is concerned they are building a heavy water reactor, which can create plutonium -- >> just to be really -- they have three facilities that can produce the stuff to build the bomb. >> that we know of. >> that we know of. now, you only need a certain percentage to have energy use. they're above that. and the fear is they can what is called "break out," they can get to that nuclear weapon real fast. so how do you prevent that from happening and believe in a deal? >> well, as a condition for lifting sanctions, i think the u.s. and its allies will demand that iran accept physical limits on the nuclear capacity, in terms of size and strength and the enrichment program. >> but haven't we had requirements in place before? rigorous inspections? >> this goes beyond inspections, monitoring is very important to be sure the iranians don't cheat, especially given their history of cheating. i think their physical limitations, so they don't have the capacity to break out quickly, so far, rowhani has not indicated any willingness to accept those issues. >> and they prop up the assad regime, they fortify the hezbollah, the iranian revolutionary guard has a stronghold in iraq throughout the region, they're terrified of the goals of iran at this point. that is the over view, how do you navigate that? >> well, that is the overview, but the war, potentially, the whole region could change if this were there work. if this works, then syria becomes at least more viable as a political solution in geneva, if the hezbollah and the iranian arms are not going to prop up assad. and then russia becomes a partner, we let them into the middle east, which is dangerous, but now there is a way in the u.n. of monitoring things, afghanistan as you mentioned. iran has been such a trouble maker in both of those places. if this economic pressure has been profound enough and you have 30% -- rather 60% of the iranian population under 30, this is the mandate he has, a short window. if this were to work, then perhaps saudi arabia and the gulf states would see the benef benefit, because they and the israelis are very conservative. >> so 30 seconds here, you have netanyahu who is coming to meet with the president tomorrow. he is going to say don't trust this guy, he is fooling you. i think what the president will say is that it will all depend on concrete results. words are nice, but what really counts at the end of the day is whether iran is ready to take action as the president said in his u.n. speech. >> do you believe this is real? >> i don't think it is real yet. i think the iranians will try to get sanctions -- >> and play rope a dope. >> and play rope a dope. as the sanctions continue to bite even more then the iranians will have to make tough choices. >> very quickly, what the israelis are worried about, and others in the gulf, is that the president will be so ready for a deal is that he will not be tough enough because of what happened with syria. >> thank you both very much. fascinating developments. coming up, back here on the shutdown, the reactions to ted cruz, plus reactions on who has the upper hand on the voices. cruz, plus reactions on who has revolutionizing an industrys. can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? 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>> i was watching your discussion, and you made points about how obama care, affordable care, as passed by the senate, and then the president got reelected on that very issue. i watched that discussion, senator cruz talks as if there should be a final test that you have to get through before the law goes into effect. in other words, the final vote, whether it is on the debt ceiling or the shutdown of the government, a final look at the law saying should we really let that go into effect before it is set to go into effect. that is not really the form of government. youutlined the form of government. the test by which we submit any new legislation, and the president signs it, is the law, and upholding the law is a good question, should we uphold the law? i think he goes past his issue, which is the substance, the policy, which will be debated for years. the question is should the law be upheld? >> the question is, when is the law legitimate ever? >> that is a good question, but if you delay the law then you wouldn't be upheld, the president has delayed it for big business and all his friends. and the question is, is the law ready at this time? is it ready for prime time at this moment? i would repeal the law, i would get rid completely of the law. but all we're asking for in the house of representatives is a one-year delay, just like the unions are asking for a year delay like he has given to big business, i don't think it is unreason to ask for that. >> and i don't mean to interrupt you on that. we talked plenty about the argume arguments and the substance. but i want to steer you to the end game piece of that. dee dee, we'll come back around to that. how does this end? >> the house has voted almost 40 times to repeal obama care and every time it almost failed. insanity is doing the same thing over and over -- >> and other times we have had legislation that repealed certain parts. >> but he wouldn't repeal the domestic part, which he believes in deeply. you guys tried 40 times, it failed. now you attach it numerous times to de-fund it. 70% of americans don't think the reasonable avenue to shut down the government to try to make that happen. you know, there are checks and balances, as you like to say. you have no ability to stop obama care. it is not going to happen. so what is the end game? >> i think the end game, partially, we don't see a government shutdown, 25% of them are basically broke on the cloture vote. you basically see guys like corker who are going to go down in this as keeping the sanity. it will be important to see how it is executed throughout the states. you have 17 exchanges that will be up and running on tuesday, we created the first one in utah that has 240 individual policies to be accessed. 300 small businesses are ready to buy into it. i think it will be an important experience, we move into the problem of jobs and economics. does it work or not? >> you can't just say politics on the side, or have a debate, or the policy implementation because this is about politics. and i don't -- some may see it as petty politics, but i think the congress would say look, we want to keep it alive until 2014, and 16, there are political means to overturning this, they just haven't achieved it yet. >> i think it will continue, i am not as sublime as you. the difference is in a kidnapping, you grab the baby and ask for the money. in this case, grab the money and ask for the baby. obama won't give him his baby, you can't negotiate this. dee dee pointed this out. this is his claim to history, what he did after 40 or 50 years of democratic party claim, the clintons tried, almost got it. everybody said we're going to do it since roosevelt, to say i'm going to give it away, or delay it. i think everybody knows the people who want it to delay in a year, want it to die in a year. that is the problem with some of the features in the bill, those who want to kill is, that is a big difference, killing the baby -- >> we're going to be beyond politics real soon and then the world takes over. >> what happens if the government doesn't go back to work? >> if there is a shutdown, it will be 24 hours, republicans know it is a loser for them. they have to learn the lesson of this. that will be you can't have it all or nothing approach. you have to find areas that don't work and fix them as they proceed. >> the democrats think this is a loser for us, everybody agrees this is a loser for us if the government shuts down, that is why i think the president wants a government shutdown. if you look at twitter, there was not a single republican on twitter that said let's shut down the government. but every single democrat was saying the republicans want to shut down the government. the politics are coming from the other side as well. so let's be really honest about this. and the other side would like to see republicans in trouble in 2014. the other side wants to make sure that they're not even willing to meet us half way. harry reid will not negotiate with john boehner, the president will not meet with john boehner, and john boehner is actually trying to be responsible here. >> john boehner does not agree with you, john boehner does not want to shut down, does not want to take this stand. >> you're saying i don't want to shut down the government. >> the speaker of the house is actually not interested in trying to filet up obama care right now as you are, he has a different view. >> i disagree with him, i thought this was the moment to do it, not have the fight. >> so what is the end game, congressman? are you willing to vote for a continuing resolution that comes back that does not delay or de-fund obama care? >> i am not, but i think there are enough people in the republican party willing to do that. that is what i think you will see, the first request was to completely de-fund the program. and we knew we were going to lose on that, now we're asking for a delay, which again, i don't think is an unreasonable thing to do. you know, your boss, tip o'neill, shut down the government 12 times and you didn't call him a terrorist. >> these were always a couple of days, and on both sides. >> but you said why -- it happened. >> where did you get your number from? >> seven times. >> since the '70s -- >> 17 times since the '70s at 12 under your boss. >> there were issues of a day or two, and issues of funding. what i said before is you can argue over numbers, if it is seven or nine, make it eight. but if you say get rid of the number one program, under the law and put it in the history books, you can't say give me that. >> when is a law legitimate? would it be appropriate for the president or democrat controlling the senate to say let's go back and let's overturn a reagan era law. could they do that? >> one of the shutdowns was based on the fairness doctrine, one of the shutdowns was because the fairness doctrine had been done away with. and they wanted it back, so it has been done before. the democrats spent the entire decade of the bush administration trying to repeal the bush tax cuts. it is not like republicans and democrats don't fight about their policies. that is what politics is all about. so for somebody to go on national tv and say we can't fight about our politics. >> the question is, do you fight about the same old rules and making non-negotiable demands. i think there is a debate on health care on whether or not to do it. and finally, the president, through the congress, the electorate, decided to do it. >> not a single republican voted for that law, because you guys, the democrats decided to cram it down, you decided to do procedural issues. >> there was not a real effort on either side to compromise. >> go ahead -- >> this is an example of how divisive this debate has become, a decade ago, the republicans were trying to crack the code on health care reform. as a mandate, the heritage foundation -- we looked at expanding the market place, so i say, we have a law. let's recognize that. now we have the real world, people who are going to wait this week to find a policy. that is the real world, the question from here, the game, the politics and implementation, how do you make it work for people across this country? >> right, and ultimately, this is what part of the political fight is about. because once that does happen, we have the experience of other entitlements in this country, that warts and all, these programs move forward and become the affirmament -- >> i think it is part of the fear here, the exchange is open on tuesday, people can go on line, as you said, go to a meeting, go by mail, if there is a policy that fits their needs, the answer will be yes. for hopefully everybody uninsured, the answer will be yes. once people have a positive experience, going on line, with a policy, being insured for the first time, having better coverage it will be very hard to take it away from people. they have been waiting a long time, as chris said, to get to this point. there are 50 million people in the country who are uninsured. this is an opportunity to change what sort of has been a black mark on our country and society that we can allow that to go forward. >> one last kind of bottom line point, congressman, since you will have a vote on this. at some point there will be a resolution of the government shutdown, before or after, even given your views about how bad obama care is, do you think it is worse not voting to increase the debt limit over this fight? >> not over the obama care, i always told my leadership i want the fight on the debt ceiling about debts, about spending, not about obama care. i always believe that the fight should be at the cr, the spending levels and the debt level should be about debt, not obama care. some people disagree with me. >> all right, we'll leave it here, you talked about tip o'neill, and i thought if only -- into the tip o'neill ronald reagan years. we'll be right back after the break, talking about the new book "tip and the gipper," and the big question asked, why don't today's leaders cooperate my customers can shop around. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare. his day of coaching begins with knee pain, when... [ man ] hey, brad, want to trade the all-day relief of two aleve for six tylenol? what's the catch? there's no catch. you want me to give up my two aleve for six tylenol? no. for my knee pain, nothing beats my aleve. we'll be right back with our sunday inspiration and another reason why we love baseball. the new york yankees picture mariano left the mound for the last time, the final season in the major league. a pretty emotional ceremony, as derek jeter and andy petit went to the mound to celebrate the career of the closer. 652 career saves, mostñr of all the history of dominance. the crowd was on their feet, [ male announcer ] at northrop grumman, we've always been on the forefront of innovation. when the world called for speed... ♪ ...when the world called for stealth... ♪ ...intelligence... endurance... affordability... adaptability... and when the world asked for the future. staying ahead in a constantly evolving world. that's the value of performance. northrop grumman. that's the value of performance. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. and we're back, i've asked chris to stick around, less than 48 hours since the possible government shutdown. he has a new book with politics, "tip and gipper," describes a time where they compromised. i'm going to have you read a section, one of the things ted cruz said struck me, which basically says he represents an age of politicians fighting against the establishment in washington. they don't think the old guard, mostly guys, who could compromise on issues are representing you know, the people they represent anymore. >> yeah, i think it is a good argument, because people are very unhappy today because of the crunch of the middle class. but if you look at the polling and ask people if they respect congress, back in the '80s, tip o'neill had a 67% job approval, today, they had single digit approval. and reagan had at least that high, people were government -- confident that even the government, when it argued, would have a compromise. >> you had had a question of why can't things work? this is not a historical piece, why can't it work -- >> i think people need to know the new norm is not the norm, there is a better time, they will again, they disagreed on the role of government, compromised, trying to get along even as they challenged each other. why, we wonder, can't it be that way again? why wouldn't the leaders work to accommodate each other, as they work to accomplish goals in this country's best interest. the mood today, even on this program, this sort of anger that is in the back drop -- the people out there have an anger. i remember walking up to the president, i said welcome, mr. president to the room where we plot against you. and the president said oh, no, not after 6:00, the speaker says not after 6:00. there is a sense of we'll argue it and get it done. there were shutdowns, over money, the usual kind of things politicians argue about, but there were not non-negotiable demands. >> i guess democrats are complaining this week, saying ted cruz, if you want to change the law, let's talk about how we can change the law. but don't set up a scenario where it is either you get rid of the whole thing or the government will end of being shut down or the debt limit won't be raised. >> yeah, i love the negotiations, jack lew, the secretary of the treasury, sat next to me. we thought it was the most partisan time in history. but the speaker would meet with him, tip would say, okay, i'll give you the democratic votes for the debt ceiling, we'll pass it. but i want a letter from the democrats asking the president to do it. i know you like that idea. because it shows how professional behavior was. one time on the tax increase, mr. o'neill said i'll pass the bill with you, 100% is too high. they knew how to cut dealins afr the fight. >> how did this president do in creating the kind of atmospheric? >> i don't think he was as good as reagan was as nurturing relations. i remember going to the jim dinner, which most of the guys were having steak dinner and apple pie, and baked potato and a beer. and just to be a dissenter, no press, it was a big deal. and in walked reagan with george bush. and george bush, as vp, had been a member of the house and knew how it worked. you got to connect with these guys. and i knew there was something that would help him get elected, every democrat took their picture. >> most of the democrats don't want their picture, that would hurt them. >> reagan being from notre dame, he had a lot of democrats who liked him. and i think this president doesn't have a lot of republicans that like him. this makes it a tougher time, by the way, it is politics, not civics, guys and women who believe in what they do. tip was the classic liberal who served, got elected 50 times as a liberal. he totally believed in helping people. and you know what? reagan respected him liking people and wanting to help people. he actually understood him. and ron reagan is on our program a lot of times, it wasn't personal. >> search for compromise, we need it now. chris matthews, thank you very much. again, the book is "tip and the much. awhen we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. some brokerage firms are. but way too many aren't. why? 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plus, a daredevil succeeds by the skin of his teeth. 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Transcripts For MSNBC Meet The Press 20130930

standoff, an exclusive interview with republican senator cruz of texas. he has elevated the fight to new levels. >> i intend to fight on the obama care until i am no longer able to stand. >> where does his fight go from here? plus, our political roundtable, joining me msnbc's chris matthews, former governor, john huntsman, and democratic strategist, dee dee meyers, is the nuclear disarmament deal now possible? i'm david gregory, for "meet the press," on sunday, september 29th. >> from nbc news in washington, this world's longest running television program, this is "meet the press." >> and good morning, the fast-moving developments, last night the house of representatives voted to delay president obama's health care law as part of an emergency spending, the president promises to veto, the vote brings the country a step closer to a government shutdown, kelly o'donnell has more. >> reporter: well, good morning, david you might expect there was action since the government was threatening to shut down tomorrow. but that is not happening, congress is on pause, after working until the wee hours they paid their message clear, but the senate tells me they are rejecting that flatly. that comes tomorrow. so today, when the country is waiting for an answer, congress is on hold. here is where we stand, this is what the house has done, they are passing funding to keep the government open and operating but with conditions to delay the president's health care law by a year, and to repeal a medical device tax paid by manufacturers for things like pacemakers or defibrillators, or delay that. also, they do want military paychecks to keep coming. but again, that is the house version where they stand. the senate says no way, the only thing they would consider is simply keeping the government open, nothing that would affect the health care law. >> so the contest begins, canke o'donnell, i know you will be watching, thank you, joining me this morning, ted cruz, the man in the middle of the fight. so here are the stakes, de-funding, say you and other republicans, the president says no way. the law is moving forward. are you in control? >> at the end of the day every senator has to decide how he or she is going to vote. every representative has decided how they are going to vote. the house last night voted to keep the government open, to fully fund the government, but at the same time the house responded to the millions of americans who are hurting under obama care, and i think the senate needs to do the same thing. >> i looked at polling that shows the law is unpopular, 56% want to uphold this law, so when you say listen to the american people, they're not necessarily with you. >> well, look at the phrase "uphold the law," when you do the polling, the answer is always yes. >> just polling methods -- >> i promise you any senator or representative that goes home to their home state and you hold a town hall and just ask people who are you facing? i mean, i have spent hundreds of hours chris-crossing the state of texas, and people all over the country are being forced out of jobs, losing their premiums and health insurance. >> we'll get into particulars of obama care, because obviously there is more to that story that advocates will argue with. so let's stick to that story. how does this end? because as i understand it, you would only support de-funding obama care, a delay is not enough. >> well, the next step, let's talk about that, the senate needs to act, in my view harry reid should call the senate back in today. we have a bill in front of us, there is a government shutdown in 48 hours. listen, i would love to be in houston with my two little girls playing with them this afternoon, but as you know i'm here in washington, d.c., as you know the senate should not be on vacation -- >> you know, the senate has acted, the majority leader would say, passed a bill to keep the government open. and then we've gone back to delaying or de-funding obama care. should they take a part of it? would you filibuster this bill? >> let's be clear what the senate has done so far. so far, majority leader harry reid has essentially told the house of representatives and the american people go jump in the lake, he said i am not willing to compromise or talk. his position is obama care must be funded 100% in all instances or he will shut the government down. i hope he doesn't do that, david, i hope he backs away from the ledge he is pushing us towards. but that is his position. >> but senator, even republicans that i have spoken to, your colleagues say senator cruz can't blame harry reid for shutting down the government. senator reid acted. he passed a bill to keep the government open. >> but let's be clear, the house has twice now voted to keep the government open. and if we have a shutdown, it will only be because when the senate comes back harry reid says i refuse to talk. also, let's be clear, president obama has granted a delay for big corporations, every big corporation has gotten a delay. if harry reid shuts the government down he will be saying if american families don't get a delay like the corporations, hard working american families, he is going to insist they suffer. >> it is interesting, democrats say you know the promise with senator cruz' position is it is a purist position. there are problems with obama care. we have had some polls saying there is great dissatisfaction at the town halls, but you haven't debated on how to change the law, what you have gone out and said let's kill the law, let's de-fund it. >> actually, with respect , david, i think it is wrong, i voted to repeal the law, but that was not my position in this fight. my position is de-fund it, which is different than repeal. and even now what the house of representatives has done is a step removed from de-funding. it is delaying it. now that is the essence of a compromise, delaying, simply on the same terms that has been done for the big corporations, that is a compromise. and at the same time, david, on the other side, what have the democrats compromised on? zero, their position is absolutely no, no matter what. >> you make this argument as if there is no broader context here. obama care has been -- has been adjudicated and it has been tested to the political system. and so let's go through that. we had an election where i heard the standard bearer for the republican party, mitt romney, saying that obama care should be repealed. all the republicans already voted against this thing when it was ultimately passed, the supreme court upheld it. and then your colleagues said let's have a strategy de-funding obama care and the letter, and they joined you in that fight. well, here now you don't even have the same number of folks who signed the letter who voted for this effort. there are not protests in the streets arguing to do away with the law the way that you would like. again, 51% of the poll this week, let's uphold the law. so i'm focusing on results. your goal and results. where have you moved anything? >> okay look, the facts are becoming more and more clear that obama care is not working. every day that is more clear, there is a reason the unions are jumping ship. one union after another is saying let me out. there is a reason why the president of the team, james hoffa, used millions, saying obama care was destroying their health care. destroying is his word. now, why is it that harry reid and the senate democrats are not willing to listen to the millions of men and women -- >> but you're a terrific lawyer, you're making an argument, i asked you a specific argument based on the facts on the ground. you made these arguments for 21 hours, my goodness, you haven't moved anyone. >> look, the american people rejected obama care, they understand it is not working. the only people making the argument are the career politicians in washington, harry reid who wants to use brute force, the great thing about the constitution, the checks and balances, the ability to check one another, president obama has over and over again disregarded the law. when he granted an exemption for giant corporations, that was contrary to law. right now we have a system where the rich and powerful, those with connections to the obama administration, they get spared some of the burdens of obama care. but those who were struggling, single moms and young people and people who are just trying to make it. >> you're a proponent of the law, millions are getting access to health care they couldn't otherwise afford. parents with children, others with conditions getting in the way of insurance. i spoke to a hospital administrator this week in illinois saying utilization is down, you can't know what the effect of five years from now is on this law. and nor can proponents of the law. but here is one argument, you've made yours, and the president, when he spoke this week, referred to your words. i want to play a portion, suggesting what you really don't want is the law to go forward because people may start to like it, is what he said. >> he said it is going to prove almost impossible to undo obama care, ñrright? so in other words, we've got to shut this thing down before people find out that they like it. >> you don't think americans will like it? you don't think that 25% of the state of texas that is uninsured will actually like the expanded access to get health insurance? >> i don't, and here is why, because it is not working. what happens, if you want people to get health insurance, the best way to get health insurance is to get a job, and obama care is the biggest job killer in the country. if you look at the mandate, half of the business managers are reducing or hiring part-time workers. another 24% said they were not growing to keep their size under 50 workers. if you're a young person out of school unable to find a job, a big part of the reason you can't find a job is because small businesses are not growing because of obama care. and there is nothing that can give you better health insurance than having a vibrant economy where you can get a job. let's take the thousands of workers at ups who just received notice from their employers that spousal insurance was being dropped. let's look at the workers of sea world who were told we're reducing your hours because of obama care, people are hurting. >> there are also researchers on my side who say there is no reason health insurers would stop giving insurance to their employees, it is a major tool to get employees. and health care, perhaps these problems that you're identifying could be solved short of complete de-funding. i want to start for just a moment to get you clear. a government shutdown, that is an acceptable outcome to you? >> look, i don't want a government shutdown. i don't think that harry reid should shut down the government. the house of representatives did something significant, which is they passed a bill to make clear that regardless of what happens the men and women of our military -- they should be paid. that passed unanimously in the house. and listen, right now, harry reid and president obama had been essentially holding the military hostage, threatening their paychecks over this potential shutdown. they might force. i think regardless of what happened we should pass the bill. we should not have a shutdown, which means harry reid has to move off his absolutist position. you have been multiple compromises from the republicans, and can you tell me what the democrats have done to compromise -- >> but what has he done -- as i outlined before, you have lost ground from even the summer on the position of getting people to vote with you. you lost ground from that position and you haven't persuaded one democrat. you have got to be democrats if you're going to overturn this thing. >> well, actually, joe manchin came out saying he supported the delay in the original mandate. listen, last time this was in the senate, there was division among the republicans. i had hoped the republicans would be united. that didn't happen, i'll tell you this, this next time around, this is an opportunity -- >> you have raised money on this, taken to the floor for 21 hours, you haven't moved anything legislatively, do you concede that point? >> david, i don't, and the establishment has been exempted from some of the harms. members of congress, how can you possibly justify to the american people that members of congress are exempted from the law? are not put on the exchanges like millions of americans. >> well, they're part of the exchanges, they don't get a portion by the employers -- >> but anyone on the exchange doesn't. >> but hundreds of thousands with their employers do -- >> but people with the exchange don't, you want people frustrated with washington? the simplest reason is you have politicians in both parties who are not listening to the people. they get a different set of rules. harry reid said to president obama, we don't want the obama care. i had an exchange with dick durbin, who argued we should stick the american people in coach. i think his own analogy shows what is wrong with this system, at a minimum, members of congress shouldn't be treated better than the american people, and should he be willing to compromise he would agree what the house has done to delay all of this saying it is not ready for prime time. it is not working, and we'll treat the american people at least as well as the others. >> you are talking about democrats, it is hard for them to get a word in edge wise, because there are members of your party who are so critical of what you have done and how you have done it. you have colleagues who accused you of putting on a show. congressman peter king said you're a fraud, lying to the base. george will, who has been a conservative columnist for "the washington post," who has been great, supportive of you in the past. but he wrote this past week, and i want you to respond. those people who deceive others first deceive themselves, allowing their wishes to be fodders of their thoughts by beginning to wish everything has changed. they should remember everett dirksen of illinois, the leader of senate republicans during passage of the 1964 civil rights act recalled, 40 preachers caught me one afternoon there in the lobby "i'm not a moralist." are you more legislative than others? >> i'm just trying to fight for 26 million texans, and for the american people. and i'm pretty sure what he argued is we should be delaying obama care, which is exactly what the house of representatives just voted to do. and one important thing to remember, you and all the voices of washington keep saying we need compromise. twice now, the republicans have compromised. and a twice, harry reid says we won't even have a compromise, i want to fund it all. we want to stick it on the american people and won't budge, that is not a reason, if we have a shutdown, the american people will be held hostage. >> who did you most admire? >> i most admired phil graham, there are voice whose say this is not possible. and if you remember back in 1993 when hillary care was being debated. and there were a lot of people that came forward that said we'll partially fund hillary light. phil graham said, i know you will remember this, he said this will pass over my cold, dead political body. and a whole lot of republicans who were scared, they looked over, he was not killed. they ran behind him and they said yeah, yeah, what he said. look, the power of leadership can change debates. we saw that just a month ago with syria. when president obama said he was going to launch attacks on syria, you had leaders of both house support him. and then the american people spoke up in overwhelming numbers saying we don't want to get involved in a sectarian war in syria, where there is no clear reason for the united states to do so and what happened, the federal government turned. we didn't get involved. we didn't launch the attacks, and just weeks earlier conventional wisdom in washington said it is impossible. >> do you regret comparing the future of obama care to the rise of hitler in nazi germany? >> well, the premise of your question is not true. what i said is there are many voices in washington who said "we can't do this, we can't do this." and i went through the centuries over and over again when americans were faced with big challenges, on big occasions, whether it was the civil war, going to the moon or winning the cold war, at every stage there were voices of conventional wisdom who say this can't be done, and at every stage, the american people rose to the occasion. and what i said is we should do the same here. we should look to, if we empower the american people to get washington to listen to the people, that is how we get this changed. >> do you ride this to the presidential nomination? >> it is easy for washington to focus on politics. i understand, that is the business of this town. what i am trying to do every day is focus on making a difference in the lives of the american people. every survey that is done in this country, the top priority of the american people is jobs and the economy. under harry reid's senate, we don't even talk about jobs and the economy. obama care is the biggest job killer in this country. and millions of americans are hurting. you know, i would like to see a democrat respond to james hoffa's letter who said this is right now destroying the health care of millions of americans. that is not me, that is a democrat union leader who has supported president obama and harry reid, we need to listen to people. >> thank you, senator. >> thank you, david. coming up, we're going to switch gears, one of the biggest threats is iran's nuclear program. joining me, msnbc's chief foreign affairs correspondent, andrea mitchell, as well as one of president obama's former advisers on arms control. we'll be right back here in just a moment. "meet the press" is brought to you by the boeing company. [ female announcer ] we lowered her fever. you raise her spirits. we tackled your shoulder pain. you make him rookie of the year. we took care of your cold symptoms. you take him on an adventure. tylenol® has been the number 1 doctor recommended brand of pain reliever for over 20 years. but for everything we do, we know you do so much more. tylenol®. i reiterated to president rowhani what i said in new york, while there will surely be important obstacles to moving forward and success is by no means guaranteed, i believe we can reach a comprehensive solution. >> so what is behind the recent actions of the iranian president? joining me now, our chief foreign affairs correspondent, andrea mitchell, and former adviser to president obama on arms control and wmd, one of the few who met with rowhani while he was in new york, welcome to both of you, what i am fascinated by, what brought you to this moment? >> i think the answer is very simple, it is pressure, the economic sanctions imposed, started by president bush and strengthened by president obama has been sufficient to force the iranians to seek a deal so they can get relief from sanctions. >> but how do we get from there to here? >> that is a big question, i was at a small gathering with rowhani, it is very clear they're concerned about the bank situation. he is a politician, he was elected with the mandate to be moderate. he got 51% of the vote. his closest competitor got 16%, he was greeted back in tehran with crowds of demonstrators, supporters but also protesters. the fact that the mullahs allowed them to go to the airport, they even threw a shoe, but he has explained very ably, will they give up the real stuff? and that is a very heavy price for them. they have spent billions on it. and right now, israel is complaining, and netanyahu is coming tomorrow, israel is concerned they are building a heavy water reactor, which can create plutonium -- >> just to be really -- they have three facilities that can produce the stuff to build the bomb. >> that we know of. >> that we know of. now, you only need a certain percentage to have energy use. they're above that. and the fear is they can what is called "break out," they can get to that nuclear weapon real fast. so how do you prevent that from happening and believe in a deal? >> well, as a condition for lifting sanctions, i think the u.s. and its allies will demand that iran accept physical limits on the nuclear capacity, in terms of size and strength and the enrichment program. >> but haven't we had requirements in place before? rigorous inspections? >> this goes beyond inspections, monitoring is very important to be sure the iranians don't cheat, especially given their history of cheating. i think their physical limitations, so they don't have the capacity to break out quickly, so far, rowhani has not indicated any willingness to accept those issues. >> and they prop up the assad regime, they fortify the hezbollah, the iranian revolutionary guard has a stronghold in iraq throughout the region, they're terrified of the goals of iran at this point. that is the over view, how do you navigate that? >> well, that is the overview, but the war, potentially, the whole region could change if this were there work. if this works, then syria becomes at least more viable as a political solution in geneva, if the hezbollah and the iranian arms are not going to prop up assad. and then russia becomes a partner, we let them into the middle east, which is dangerous, but now there is a way in the u.n. of monitoring things, afghanistan as you mentioned. iran has been such a trouble maker in both of those places. if this economic pressure has been profound enough and you have 30% -- rather 60% of the iranian population under 30, this is the mandate he has, a short window. if this were to work, then perhaps saudi arabia and the gulf states would see the benef benefit, because they and the israelis are very conservative. >> so 30 seconds here, you have netanyahu who is coming to meet with the president tomorrow. he is going to say don't trust this guy, he is fooling you. i think what the president will say is that it will all depend on concrete results. words are nice, but what really counts at the end of the day is whether iran is ready to take action as the president said in his u.n. speech. >> do you believe this is real? >> i don't think it is real yet. i think the iranians will try to get sanctions -- >> and play rope a dope. >> and play rope a dope. as the sanctions continue to bite even more then the iranians will have to make tough choices. >> very quickly, what the israelis are worried about, and others in the gulf, is that the president will be so ready for a deal is that he will not be tough enough because of what happened with syria. >> thank you both very much. fascinating developments. coming up, back here on the shutdown, the reactions to ted cruz, plus reactions on who has the upper hand on the voices. our political round we've heard from many of you that you would like a deeper look at the issues we cover here on "meet the press." so here is the answer, our "meet the press" magazine, on flip board, you can get it on tablets, smartphone or the web. it will provide you with the "meet the press" experience every day, interesting content from the same sources we use each week to prepare. books, magazines, articles, videos, we'll also have exclusive video from our program. download the flip pad from your iphone or smartphone, and once there, switch on "meet the press" on the tab at the right. we posted a link on our website, twitter and facebook that will take you right to the magazine. download it now, and let me "meet the press" continues with our political round table. joining us this morning, raoul labrador, john huntsman, dee dee myers, and chris humphreys. >> welcome to all of you, here is a poll on who you would blame for the government shutdown, here is a poll, 39% would blame republicans, 36% would blame the president, 17% said both. increase matthews, i was there somebody where chris matthews said would you please tell they're behaving like children. i have done my duty, so the question for all of you, chris, i start with you, who gets the blame? >> i was watching your discussion, and you made points about how obama care, affordable care, as passed by the senate, and then the president got reelected on that very issue. i watched that discussion, senator cruz talks as if there should be a final test that you have to get through before the law goes into effect. in other words, the final vote, whether it is on the debt ceiling or the shutdown of the government, a final look at the law saying should we really let that go into effect before it is set to go into effect. that is not really the form of government. you outlined the form of government. the test by which we submit any new legislation, and the president signs it, is the law, and upholding the law is a good question, should we uphold the law? i think he goes past his issue, which is the substance, the policy, which will be debated for years. the question is should the law be upheld? >> the question is, when is the law legitimate ever? >> that is a good question, but if you delay the law then you wouldn't be upheld, the president has delayed it for big business and all his friends. and the question is, is the law ready at this time? is it ready for prime time at this moment? i would repeal the law, i would get rid completely of the law. but all we're asking for in the house of representatives is a one-year delay, just like the unions are asking for a year delay like he has given to big business, i don't think it is unreason to ask for that. >> and i don't mean to interrupt you on that. we talked plenty about the argume arguments and the substance. but i want to steer you to the end game piece of that. dee dee, we'll come back around to that. how does this end? >> the house has voted almost 40 times to repeal obama care and every time it almost failed. insanity is doing the same thing over and over -- >> and other times we have had legislation that repealed certain parts. >> but he wouldn't repeal the domestic part, which he believes in deeply. you guys tried 40 times, it failed. now you attach it numerous times to de-fund it. 70% of americans don't think the reasonable avenue to shut down the government to try to make that happen. you know, there are checks and balances, as you like to say. you have no ability to stop obama care. it is not going to happen. so what is the end game? >> i think the end game, partially, we don't see a government shutdown, 25% of them are basically broke on the cloture vote. you basically see guys like corker who are going to go down in this as keeping the sanity. it will be important to see how it is executed throughout the states. you have 17 exchanges that will be up and running on tuesday, we created the first one in utah that has 240 individual policies to be accessed. 300 small businesses are ready to buy into it. i think it will be an important experience, we move into the problem of jobs and economics. does it work or not? >> you can't just say politics on the side, or have a debate, or the policy implementation because this is about politics. and i don't -- some may see it as petty politics, but i think the congress would say look, we want to keep it alive until 2014, and 16, there are political means to overturning this, they just haven't achieved it yet. >> i think it will continue, i am not as sublime as you. the difference is in a kidnapping, you grab the baby and ask for the money. in this case, grab the money and ask for the baby. obama won't give him his baby, you can't negotiate this. dee dee pointed this out. this is his claim to history, what he did after 40 or 50 years of democratic party claim, the clintons tried, almost got it. everybody said we're going to do it since roosevelt, to say i'm going to give it away, or delay it. i think everybody knows the people who want it to delay in a year, want it to die in a year. that is the problem with some of the features in the bill, those who want to kill is, that is a big difference, killing the baby -- >> we're going to be beyond politics real soon and then the world takes over. >> what happens if the government doesn't go back to work? >> if there is a shutdown, it will be 24 hours, republicans know it is a loser for them. they have to learn the lesson of this. that will be you can't have it all or nothing approach. you have to find areas that don't work and fix them as they proceed. >> the democrats think this is a loser for us, everybody agrees this is a loser for us if the government shuts down, that is why i think the president wants a government shutdown. if you look at twitter, there was not a single republican on twitter that said let's shut down the government. but every single democrat was saying the republicans want to shut down the government. the politics are coming from the other side as well. so let's be really honest about this. and the other side would like to see republicans in trouble in 2014. the other side wants to make sure that they're not even willing to meet us half way. harry reid will not negotiate with john boehner, the president will not meet with john boehner, and john boehner is actually trying to be responsible here. >> john boehner does not agree with you, john boehner does not want to shut down, does not want to take this stand. >> you're saying i don't want to shut down the government. >> the speaker of the house is actually not interested in trying to filet up obama care right now as you are, he has a different view. >> i disagree with him, i thought this was the moment to do it, not have the fight. >> so what is the end game, congressman? are you willing to vote for a continuing resolution that comes back that does not delay or de-fund obama care? >> i am not, but i think there are enough people in the republican party willing to do that. that is what i think you will see, the first request was to completely de-fund the program. and we knew we were going to lose on that, now we're asking for a delay, which again, i don't think is an unreasonable thing to do. you know, your boss, tip o'neill, shut down the government 12 times and you didn't call him a terrorist. >> these were always a couple of days, and on both sides. >> but you said why -- it happened. >> where did you get your number from? >> seven times. >> since the '70s -- >> 17 times since the '70s at 12 under your boss. >> there were issues of a day or two, and issues of funding. what i said before is you can argue over numbers, if it is seven or nine, make it eight. but if you say get rid of the number one program, under the law and put it in the history books, you can't say give me that. >> when is a law legitimate? would it be appropriate for the president or democrat controlling the senate to say let's go back and let's overturn a reagan era law. could they do that? >> one of the shutdowns was based on the fairness doctrine, one of the shutdowns was because the fairness doctrine had been done away with. and they wanted it back, so it has been done before. the democrats spent the entire decade of the bush administration trying to repeal the bush tax cuts. it is not like republicans and democrats don't fight about their policies. that is what politics is all about. so for somebody to go on national tv and say we can't fight about our politics. >> the question is, do you fight about the same old rules and making non-negotiable demands. i think there is a debate on health care on whether or not to do it. and finally, the president, through the congress, the electorate, decided to do it. >> not a single republican voted for that law, because you guys, the democrats decided to cram it down, you decided to do procedural issues. >> there was not a real effort on either side to compromise. >> go ahead -- >> this is an example of how divisive this debate has become, a decade ago, the republicans were trying to crack the code on health care reform. as a mandate, the heritage foundation -- we looked at expanding the market place, so i say, we have a law. let's recognize that. now we have the real world, people who are going to wait this week to find a policy. that is the real world, the question from here, the game, the politics and implementation, how do you make it work for people across this country? >> right, and ultimately, this is what part of the political fight is about. because once that does happen, we have the experience of other entitlements in this country, that warts and all, these programs move forward and become the affirmament -- >> i think it is part of the fear here, the exchange is open on tuesday, people can go on line, as you said, go to a meeting, go by mail, if there is a policy that fits their needs, the answer will be yes. for hopefully everybody uninsured, the answer will be yes. once people have a positive experience, going on line, with a policy, being insured for the first time, having better coverage it will be very hard to take it away from people. they have been waiting a long time, as chris said, to get to this point. there are 50 million people in the country who are uninsured. this is an opportunity to change what sort of has been a black mark on our country and society that we can allow that to go forward. >> one last kind of bottom line point, congressman, since you will have a vote on this. at some point there will be a resolution of the government shutdown, before or after, even given your views about how bad obama care is, do you think it is worse not voting to increase the debt limit over this fight? >> not over the obama care, i always told my leadership i want the fight on the debt ceiling about debts, about spending, not about obama care. i always believe that the fight should be at the cr, the spending levels and the debt level should be about debt, not obama care. some people disagree with me. >> all right, we'll leave it here, you talked about tip o'neill, and i thought if only -- into the tip o'neill ronald reagan years. we'll be right back after the break, talking about the new book "tip and the gipper," and the big question asked, why don't today's leaders cooperate [ female announcer ] we lowered her fever. you raise her spirits. we tackled your shoulder pain. you make him rookie of the year. we took care of your cold symptoms. you take him on an adventure. tylenol® has been the number 1 doctor recommended brand of pain reliever for over 20 years. but for everything we do, we know you do so much more. tylenol®. we'll be right back with our sunday inspiration and another reason why we love baseball. the new york yankees picture mariano left the mound for the last time, the final season in the major league. a pretty emotional ceremony, as derek jeter and andy petit went to the mound to celebrate the career of the closer. 652 career saves, mostñr of all the history of dominance. 652 career saves, mostñr of all revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. and we're back, i've asked chris to stick around, less than 48 hours since the possible government shutdown. he has a new book with politics, "tip and gipper," describes a time where they compromised. i'm going to have you read a section, one of the things ted cruz said struck me, which basically says he represents an age of politicians fighting against the establishment in washington. they don't think the old guard, mostly guys, who could compromise on issues are representing you know, the people they represent anymore. >> yeah, i think it is a good argument, because people are very unhappy today because of the crunch of the middle class. but if you look at the polling and ask people if they respect congress, back in the '80s, tip o'neill had a 67% job approval, today, they had single digit approval. and reagan had at least that high, people were government -- confident that even the government, when it argued, would have a compromise. >> you had had a question of why can't things work? this is not a historical piece, why can't it work -- >> i think people need to know the new norm is not the norm, there is a better time, they will again, they disagreed on the role of government, compromised, trying to get along even as they challenged each other. why, we wonder, can't it be that way again? why wouldn't the leaders work to accommodate each other, as they work to accomplish goals in this country's best interest. the mood today, even on this program, this sort of anger that is in the back drop -- the people out there have an anger. i remember walking up to the president, i said welcome, mr. president to the room where we plot against you. and the president said oh, no, not after 6:00, the speaker says not after 6:00. there is a sense of we'll argue it and get it done. there were shutdowns, over money, the usual kind of things politicians argue about, but there were not non-negotiable demands. >> i guess democrats are complaining this week, saying ted cruz, if you want to change the law, let's talk about how we can change the law. but don't set up a scenario where it is either you get rid of the whole thing or the government will end of being shut down or the debt limit won't be raised. >> yeah, i love the negotiations, jack lew, the secretary of the treasury, sat next to me. we thought it was the most partisan time in history. but the speaker would meet with him, tip would say, okay, i'll give you the democratic votes for the debt ceiling, we'll pass it. but i want a letter from the democrats asking the president to do it. i know you like that idea. because it shows how professional behavior was. one time on the tax increase, mr. o'neill said i'll pass the bill with you, 100% is too high. they knew how to cut dealins afr the fight. >> how did this president do in creating the kind of atmospheric? >> i don't think he was as good as reagan was as nurturing relations. i remember going to the jim dinner, which most of the guys were having steak dinner and apple pie, and baked potato and a beer. and just to be a dissenter, no press, it was a big deal. and in walked reagan with george bush. and george bush, as vp, had been a member of the house and knew how it worked. you got to connect with these guys. and i knew there was something that would help him get elected, every democrat took their picture. >> most of the democrats don't want their picture, that would hurt them. >> reagan being from notre dame, he had a lot of democrats who liked him. and i think this president doesn't have a lot of republicans that like him. this makes it a tougher time, by the way, it is politics, not civics, guys and women who believe in what they do. tip was the classic liberal who served, got elected 50 times as a liberal. he totally believed in helping people. and you know what? reagan respected him liking people and wanting to help people. he actually understood him. and ron reagan is on our program a lot of times, it wasn't personal. >> search for compromise, we need it now. chris matthews, thank you very much. again, the book is "tip and the much. again, the book is "tip and the gipper" when i'm only in my 60's... i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. 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Transcripts For MSNBC Meet The Press 20130930

with republican senator cruz of texas. he has elevated the fight to new levels. >> i intend to fight on the obama care until i am no longer able to stand. >> where does his fight go from here? plus, our political roundtable, joining me msnbc's chris matthews, former governor, john huntsman, and democratic strategist, dee dee meyers, is the nuclear disarmament deal now possible? i'm david gregory, for "meet the press," on sunday, september 29th. >> from nbc news in washington, this world's longest running television program, this is "meet the press." >> and good morning, the fast-moving developments, last night the house of representatives voted to delay president obama's health care law as part of an emergency spending, the president promises to veto, the vote brings the country a step closer to a government shutdown, kelly o'donnell has more. >> reporter: well, good morning, david you might expect there was action since the government was threatening to shut down tomorrow. but that is not happening, congress is on pause, after working until the wee hours they paid their message clear, but the senate tells me they are rejecting that flatly. that comes tomorrow. so today, when the country is waiting for an answer, congress is on hold. here is where we stand, this is what the house has done, they are passing funding to keep the government open and operating but with conditions to delay the president's health care law by a year, and to repeal a medical device tax paid by manufacturers for things like pacemakers or defibrillators, or delay that. also, they do want military paychecks to keep coming. but again, that is the house version where they stand. the senate says no way, the only thing they would consider is simply keeping the government open, nothing that would affect the health care law. >> so the contest begins, canke o'donnell, i know you will be watching, thank you, joining me this morning, ted cruz, the man in the middle of the fight. so here are the stakes, de-funding, say you and other republicans, the president says no way. the law is moving forward. are you in control? >> at the end of the day every senator has to decide how he or she is going to vote. every representative has decided how they are going to vote. the house last night voted to keep the government open, to fully fund the government, but at the same time the house responded to the millions of americans who are hurting under obama care, and i think the senate needs to do the same thing. >> i looked at polling that shows the law is unpopular, 56% want to uphold this law, so when you say listen to the american people, they're not necessarily with you. >> well, look at the phrase "uphold the law," when you do the polling, the answer is always yes. >> just polling methods -- >> i promise you any senator or representative that goes home to their home state and you hold a town hall and just ask people who are you facing? i mean, i have spent hundreds of hours chris-crossing the state of texas, and people all over the country are being forced out of jobs, losing their premiums and health insurance. >> we'll get into particulars of obama care, because obviously there is more to that story that advocates will argue with. so let's stick to that story. how does this end? because as i understand it, you would only support de-funding obama care, a delay is not enough. >> well, the next step, let's talk about that, the senate needs to act, in my view harry reid should call the senate back in today. we have a bill in front of us, there is a government shutdown in 48 hours. listen, i would love to be in houston with my two little girls playing with them this afternoon, but as you know i'm here in washington, d.c., as you know the senate should not be on vacation -- >> you know, the senate has acted, the majority leader would say, passed a bill to keep the government open. and then we've gone back to delaying or de-funding obama care. should they take a part of it? would you filibuster this bill? >> let's be clear what the senate has done so far. so far, majority leader harry reid has essentially told the house of representatives and the american people go jump in the lake, he said i am not willing to compromise or talk. his position is obama care must be funded 100% in all instances or he will shut the government down. i hope he doesn't do that, david, i hope he backs away from the ledge he is pushing us towards. but that is his position. >> but senator, even republicans that i have spoken to, your colleagues say senator cruz can't blame harry reid for shutting down the government. senator reid acted. he passed a bill to keep the government open. >> but let's be clear, the house has twice now voted to keep the government open. and if we have a shutdown, it will only be because when the senate comes back harry reid says i refuse to talk. also, let's be clear, president obama has granted a delay for big corporations, every big corporation has gotten a delay. if harry reid shuts the government down he will be saying if american families don't get a delay like the corporations, hard working american families, he is going to insist they suffer. >> it is interesting, democrats say you know the promise with senator cruz' position is it is a purist position. there are problems with obama care. we have had some polls saying there is great dissatisfaction at the town halls, but you haven't debated on how to change the law, what you have gone out and said let's kill the law, let's de-fund it. >> actually, with respect , david, i think it is wrong, i voted to repeal the law, but that was not my position in this fight. my position is de-fund it, which is different than repeal. and even now what the house of representatives has done is a step removed from de-funding. it is delaying it. now that is the essence of a compromise, delaying, simply on the same terms that has been done for the big corporations, that is a compromise. and at the same time, david, on the other side, what have the democrats compromised on? zero, their position is absolutely no, no matter what. >> you make this argument as if there is no broader context here. obama care has been -- has been adjudicated and it has been tested to the political system. and so let's go through that. we had an election where i heard the standard bearer for the republican party, mitt romney, saying that obama care should be repealed. all the republicans already voted against this thing when it was ultimately passed, the supreme court upheld it. and then your colleagues said let's have a strategy de-funding obama care and the letter, and they joined you in that fight. well, here now you don't even have the same number of folks who signed the letter who voted for this effort. there are not protests in the streets arguing to do away with the law the way that you would like. again, 51% of the poll this week, let's uphold the law. so i'm focusing on results. your goal and results. where have you moved anything? >> okay look, the facts are becoming more and more clear that obama care is not working. every day that is more clear, there is a reason the unions are jumping ship. one union after another is saying let me out. there is a reason why the president of the team, james hoffa, used millions, saying obama care was destroying their health care. destroying is his word. now, why is it that harry reid and the senate democrats are not willing to listen to the millions of men and women -- >> but you're a terrific lawyer, you're making an argument, i asked you a specific argument based on the facts on the ground. you made these arguments for 21 hours, my goodness, you haven't moved anyone. >> look, the american people rejected obama care, they understand it is not working. the only people making the argument are the career politicians in washington, harry reid who wants to use brute force, the great thing about the constitution, the checks and balances, the ability to check one another, president obama has over and over again disregarded the law. when he granted an exemption for giant corporations, that was contrary to law. right now we have a system where the rich and powerful, those with connections to the obama administration, they get spared some of the burdens of obama care. but those who were struggling, single moms and young people and people who are just trying to make it. >> you're a proponent of the law, millions are getting access to health care they couldn't otherwise afford. parents with children, others with conditions getting in the way of insurance. i spoke to a hospital administrator this week in illinois saying utilization is down, you can't know what the effect of five years from now is on this law. and nor can proponents of the law. but here is one argument, you've made yours, and the president, when he spoke this week, referred to your words. i want to play a portion, suggesting what you really don't want is the law to go forward because people may start to like it, is what he said. >> he said it is going to prove almost impossible to undo obama care, ñrright? so in other words, we've got to shut this thing down before people find out that they like it. >> you don't think americans will like it? you don't think that 25% of the state of texas that is uninsured will actually like the expanded access to get health insurance? >> i don't, and here is why, because it is not working. what happens, if you want people to get health insurance, the best way to get health insurance is to get a job, and obama care is the biggest job killer in the country. if you look at the mandate, half of the business managers are reducing or hiring part-time workers. another 24% said they were not growing to keep their size under 50 workers. if you're a young person out of school unable to find a job, a big part of the reason you can't find a job is because small businesses are not growing because of obama care. and there is nothing that can give you better health insurance than having a vibrant economy where you can get a job. let's take the thousands of workers at ups who just received notice from their employers that spousal insurance was being dropped. let's look at the workers of sea world who were told we're reducing your hours because of obama care, people are hurting. >> there are also researchers on my side who say there is no reason health insurers would stop giving insurance to their employees, it is a major tool to get employees. and health care, perhaps these problems that you're identifying could be solved short of complete de-funding. i want to start for just a moment to get you clear. a government shutdown, that is an acceptable outcome to you? >> look, i don't want a government shutdown. i don't think that harry reid should shut down the government. the house of representatives did something significant, which is they passed a bill to make clear that regardless of what happens the men and women of our military -- they should be paid. that passed unanimously in the house. and listen, right now, harry reid and president obama had been essentially holding the military hostage, threatening their paychecks over this potential shutdown. they might force. i think regardless of what happened we should pass the bill. we should not have a shutdown, which means harry reid has to move off his absolutist position. you have been multiple compromises from the republicans, and can you tell me what the democrats have done to compromise -- >> but what has he done -- as i outlined before, you have lost ground from even the summer on the position of getting people to vote with you. you lost ground from that position and you haven't persuaded one democrat. you have got to be democrats if you're going to overturn this thing. >> well, actually, joe manchin came out saying he supported the delay in the original mandate. listen, last time this was in the senate, there was division among the republicans. i had hoped the republicans would be united. that didn't happen, i'll tell you this, this next time around, this is an opportunity -- >> you have raised money on this, taken to the floor for 21 hours, you haven't moved anything legislatively, do you concede that point? >> david, i don't, and the establishment has been exempted from some of the harms. members of congress, how can you possibly justify to the american people that members of congress are exempted from the law? are not put on the exchanges like millions of americans. >> well, they're part of the exchanges, they don't get a portion by the employers -- >> but anyone on the exchange doesn't. >> but hundreds of thousands with their employers do -- >> but people with the exchange don't, you want people frustrated with washington? the simplest reason is you have politicians in both parties who are not listening to the people. they get a different set of rules. harry reid said to president obama, we don't want the obama care. i had an exchange with dick durbin, who argued we should stick the american people in coach. i think his own analogy shows what is wrong with this system, at a minimum, members of congress shouldn't be treated better than the american people, and should he be willing to compromise he would agree what the house has done to delay all of this saying it is not ready for prime time. it is not working, and we'll treat the american people at least as well as the others. >> you are talking about democrats, it is hard for them to get a word in edge wise, because there are members of your party who are so critical of what you have done and how you have done it. you have colleagues who accused you of putting on a show. congressman peter king said you're a fraud, lying to the base. george will, who has been a conservative columnist for "the washington post," who has been great, supportive of you in the past. but he wrote this past week, and i want you to respond. those people who deceive others first deceive themselves, allowing their wishes to be fodders of their thoughts by beginning to wish everything has changed. they should remember everett dirksen of illinois, the leader of senate republicans during passage of the 1964 civil rights act recalled, 40 preachers caught me one afternoon there in the lobby "i'm not a moralist." are you more legislative than others? >> i'm just trying to fight for 26 million texans, and for the american people. and i'm pretty sure what he argued is we should be delaying obama care, which is exactly what the house of representatives just voted to do. and one important thing to remember, you and all the voices of washington keep saying we need compromise. twice now, the republicans have compromised. and a twice, harry reid says we won't even have a compromise, i want to fund it all. we want to stick it on the american people and won't budge, that is not a reason, if we have a shutdown, the american people will be held hostage. >> who did you most admire? >> i most admired phil graham, there are voice whose say this is not possible. and if you remember back in 1993 when hillary care was being debated. and there were a lot of people that came forward that said we'll partially fund hillary light. phil graham said, i know you will remember this, he said this will pass over my cold, dead political body. and a whole lot of republicans who were scared, they looked over, he was not killed. they ran behind him and they said yeah, yeah, what he said. look, the power of leadership can change debates. we saw that just a month ago with syria. when president obama said he was going to launch attacks on syria, you had leaders of both house support him. and then the american people spoke up in overwhelming numbers saying we don't want to get involved in a sectarian war in syria, where there is no clear reason for the united states to do so and what happened, the federal government turned. we didn't get involved. we didn't launch the attacks, and just weeks earlier conventional wisdom in washington said it is impossible. >> do you regret comparing the future of obama care to the rise of hitler in nazi germany? >> well, the premise of your question is not true. what i said is there are many voices in washington who said "we can't do this, we can't do this." and i went through the centuries over and over again when americans were faced with big challenges, on big occasions, whether it was the civil war, going to the moon or winning the cold war, at every stage there were voices of conventional wisdom who say this can't be done, and at every stage, the american people rose to the occasion. and what i said is we should do the same here. we should look to, if we empower the american people to get washington to listen to the people, that is how we get this changed. >> do you ride this to the presidential nomination? >> it is easy for washington to focus on politics. i understand, that is the business of this town. what i am trying to do every day is focus on making a difference in the lives of the american people. every survey that is done in this country, the top priority of the american people is jobs and the economy. under harry reid's senate, we don't even talk about jobs and the economy. obama care is the biggest job killer in this country. and millions of americans are hurting. you know, i would like to see a democrat respond to james hoffa's letter who said this is right now destroying the health care of millions of americans. that is not me, that is a democrat union leader who has supported president obama and harry reid, we need to listen to people. >> thank you, senator. >> thank you, david. coming up, we're going to switch gears, one of the biggest threats is iran's nuclear program. joining me, msnbc's chief foreign affairs correspondent, andrea mitchell, as well as one of president obama's former advisers on arms control. we'll be right back here in just a moment. 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[knock] no one was at home, but on the kitchen table sat three insurance policies. the first had lots of coverage. the second, only a little. but the third was... just right! bear: hi! yeah, we love visitors. that's why we moved to a secluded house in the middle of the wilderness. just the right coverage at just the right price. coverage checker from progressive. i reiterated to president rowhani what i said in new york, while there will surely be important obstacles to moving forward and success is by no means guaranteed, i believe we can reach a comprehensive solution. >> so what is behind the recent actions of the iranian president? joining me now, our chief foreign affairs correspondent, andrea mitchell, and former adviser to president obama on arms control and wmd, one of the few who met with rowhani while he was in new york, welcome to both of you, what i am fascinated by, what brought you to this moment? >> i think the answer is very simple, it is pressure, the economic sanctions imposed, started by president bush and strengthened by president obama has been sufficient to force the iranians to seek a deal so they can get relief from sanctions. >> but how do we get from there to here? >> that is a big question, i was at a small gathering with rowhani, it is very clear they're concerned about the bank situation. he is a politician, he was elected with the mandate to be moderate. he got 51% of the vote. his closest competitor got 16%, he was greeted back in tehran with crowds of demonstrators, supporters but also protesters. the fact that the mullahs allowed them to go to the airport, they even threw a shoe, but he has explained very ably, will they give up the real stuff? and that is a very heavy price for them. they have spent billions on it. and right now, israel is complaining, and netanyahu is coming tomorrow, israel is concerned they are building a heavy water reactor, which can create plutonium -- >> just to be really -- they have three facilities that can produce the stuff to build the bomb. >> that we know of. >> that we know of. now, you only need a certain percentage to have energy use. they're above that. and the fear is they can what is called "break out," they can get to that nuclear weapon real fast. so how do you prevent that from happening and believe in a deal? >> well, as a condition for lifting sanctions, i think the u.s. and its allies will demand that iran accept physical limits on the nuclear capacity, in terms of size and strength and the enrichment program. >> but haven't we had requirements in place before? rigorous inspections? >> this goes beyond inspections, monitoring is very important to be sure the iranians don't cheat, especially given their history of cheating. i think their physical limitations, so they don't have the capacity to break out quickly, so far, rowhani has not indicated any willingness to accept those issues. >> and they prop up the assad regime, they fortify the hezbollah, the iranian revolutionary guard has a stronghold in iraq throughout the region, they're terrified of the goals of iran at this point. that is the over view, how do you navigate that? >> well, that is the overview, but the war, potentially, the whole region could change if this were there work. if this works, then syria becomes at least more viable as a political solution in geneva, if the hezbollah and the iranian arms are not going to prop up assad. and then russia becomes a partner, we let them into the middle east, which is dangerous, but now there is a way in the u.n. of monitoring things, afghanistan as you mentioned. iran has been such a trouble maker in both of those places. if this economic pressure has been profound enough and you have 30% -- rather 60% of the iranian population under 30, this is the mandate he has, a short window. if this were to work, then perhaps saudi arabia and the gulf states would see the benef benefit, because they and the israelis are very conservative. >> so 30 seconds here, you have netanyahu who is coming to meet with the president tomorrow. he is going to say don't trust this guy, he is fooling you. i think what the president will say is that it will all depend on concrete results. words are nice, but what really counts at the end of the day is whether iran is ready to take action as the president said in his u.n. speech. >> do you believe this is real? >> i don't think it is real yet. i think the iranians will try to get sanctions -- >> and play rope a dope. >> and play rope a dope. as the sanctions continue to bite even more then the iranians will have to make tough choices. >> very quickly, what the israelis are worried about, and others in the gulf, is that the president will be so ready for a deal is that he will not be tough enough because of what happened with syria. >> thank you both very much. fascinating developments. coming up, back here on the shutdown, the reactions to ted cruz, plus reactions on who has the upper hand on the voices. our political round we've heard from many of you that you would like a deeper look at the issues we cover here on "meet the press." so here is the answer, our "meet the press" magazine, on flip board, you can get it on tablets, smartphone or the web. it will provide you with the "meet the press" experience every day, interesting content from the same sources we use each week to prepare. books, magazines, articles, videos, we'll also have exclusive video from our program. download the flip pad from your iphone or smartphone, and once there, switch on "meet the press" on the tab at the right. we posted a link on our website, twitter and facebook that will take you right to the magazine. twitter and facebook that will take you right to the magazine. download it now, and let me ( ♪ ) twitter and facebook that will take you right to the magazine. download it now, and let me for those nights when it's more than a bad dream, be ready. for the days when you get a sudden call from the school, be ready. for the times you need to double-check the temperature on the thermometer, be ready. when you have children's motrin on hand, you're ready. for high fever, nothing works faster or lasts longer than children's motrin. be ready with children's motrin. "meet the press" continues with our political round table. joining us this morning, raoul labrador, john huntsman, dee dee myers, and chris humphreys. >> welcome to all of you, here is a poll on who you would blame for the government shutdown, here is a poll, 39% would blame republicans, 36% would blame the president, 17% said both. increase matthews, i was there somebody where chris matthews said would you please tell they're behaving like children. i have done my duty, so the question for all of you, chris, i start with you, who gets the blame? >> i was watching your discussion, and you made points about how obama care, affordable care, as passed by the senate, and then the president got reelected on that very issue. i watched that discussion, senator cruz talks as if there should be a final test that you have to get through before the law goes into effect. in other words, the final vote, whether it is on the debt ceiling or the shutdown of the government, a final look at the law saying should we really let that go into effect before it is set to go into effect. that is not really the form of government. you outlined the form of government. the test by which we submit any new legislation, and the president signs it, is the law, and upholding the law is a good question, should we uphold the law? i think he goes past his issue, which is the substance, the policy, which will be debated for years. the question is should the law be upheld? >> the question is, when is the law legitimate ever? >> that is a good question, but if you delay the law then you wouldn't be upheld, the president has delayed it for big business and all his friends. and the question is, is the law ready at this time? is it ready for prime time at this moment? i would repeal the law, i would get rid completely of the law. but all we're asking for in the house of representatives is a one-year delay, just like the unions are asking for a year delay like he has given to big business, i don't think it is unreason to ask for that. >> and i don't mean to interrupt you on that. we talked plenty about the argume arguments and the substance. but i want to steer you to the end game piece of that. dee dee, we'll come back around to that. how does this end? >> the house has voted almost 40 times to repeal obama care and every time it almost failed. insanity is doing the same thing over and over -- >> and other times we have had legislation that repealed certain parts. >> but he wouldn't repeal the domestic part, which he believes in deeply. you guys tried 40 times, it failed. now you attach it numerous times to de-fund it. 70% of americans don't think the reasonable avenue to shut down the government to try to make that happen. you know, there are checks and balances, as you like to say. you have no ability to stop obama care. it is not going to happen. so what is the end game? >> i think the end game, partially, we don't see a government shutdown, 25% of them are basically broke on the cloture vote. you basically see guys like corker who are going to go down in this as keeping the sanity. it will be important to see how it is executed throughout the states. you have 17 exchanges that will be up and running on tuesday, we created the first one in utah that has 240 individual policies to be accessed. 300 small businesses are ready to buy into it. i think it will be an important experience, we move into the problem of jobs and economics. does it work or not? >> you can't just say politics on the side, or have a debate, or the policy implementation because this is about politics. and i don't -- some may see it as petty politics, but i think the congress would say look, we want to keep it alive until 2014, and 16, there are political means to overturning this, they just haven't achieved it yet. >> i think it will continue, i am not as sublime as you. the difference is in a kidnapping, you grab the baby and ask for the money. in this case, grab the money and ask for the baby. obama won't give him his baby, you can't negotiate this. dee dee pointed this out. this is his claim to history, what he did after 40 or 50 years of democratic party claim, the clintons tried, almost got it. everybody said we're going to do it since roosevelt, to say i'm going to give it away, or delay it. i think everybody knows the people who want it to delay in a year, want it to die in a year. that is the problem with some of the features in the bill, those who want to kill is, that is a big difference, killing the baby -- >> we're going to be beyond politics real soon and then the world takes over. >> what happens if the government doesn't go back to work? >> if there is a shutdown, it will be 24 hours, republicans know it is a loser for them. they have to learn the lesson of this. that will be you can't have it all or nothing approach. you have to find areas that don't work and fix them as they proceed. >> the democrats think this is a loser for us, everybody agrees this is a loser for us if the government shuts down, that is why i think the president wants a government shutdown. if you look at twitter, there was not a single republican on twitter that said let's shut down the government. but every single democrat was saying the republicans want to shut down the government. the politics are coming from the other side as well. so let's be really honest about this. and the other side would like to see republicans in trouble in 2014. the other side wants to make sure that they're not even willing to meet us half way. harry reid will not negotiate with john boehner, the president will not meet with john boehner, and john boehner is actually trying to be responsible here. >> john boehner does not agree with you, john boehner does not want to shut down, does not want to take this stand. >> you're saying i don't want to shut down the government. >> the speaker of the house is actually not interested in trying to filet up obama care right now as you are, he has a different view. >> i disagree with him, i thought this was the moment to do it, not have the fight. >> so what is the end game, congressman? are you willing to vote for a continuing resolution that comes back that does not delay or de-fund obama care? >> i am not, but i think there are enough people in the republican party willing to do that. that is what i think you will see, the first request was to completely de-fund the program. and we knew we were going to lose on that, now we're asking for a delay, which again, i don't think is an unreasonable thing to do. you know, your boss, tip o'neill, shut down the government 12 times and you didn't call him a terrorist. >> these were always a couple of days, and on both sides. >> but you said why -- it happened. >> where did you get your number from? >> seven times. >> since the '70s -- >> 17 times since the '70s at 12 under your boss. >> there were issues of a day or two, and issues of funding. what i said before is you can argue over numbers, if it is seven or nine, make it eight. but if you say get rid of the number one program, under the law and put it in the history books, you can't say give me that. >> when is a law legitimate? would it be appropriate for the president or democrat controlling the senate to say let's go back and let's overturn a reagan era law. could they do that? >> one of the shutdowns was based on the fairness doctrine, one of the shutdowns was because the fairness doctrine had been done away with. and they wanted it back, so it has been done before. the democrats spent the entire decade of the bush administration trying to repeal the bush tax cuts. it is not like republicans and democrats don't fight about their policies. that is what politics is all about. so for somebody to go on national tv and say we can't fight about our politics. >> the question is, do you fight about the same old rules and making non-negotiable demands. i think there is a debate on health care on whether or not to do it. and finally, the president, through the congress, the electorate, decided to do it. >> not a single republican voted for that law, because you guys, the democrats decided to cram it down, you decided to do procedural issues. >> there was not a real effort on either side to compromise. >> go ahead -- >> this is an example of how divisive this debate has become, a decade ago, the republicans were trying to crack the code on health care reform. as a mandate, the heritage foundation -- we looked at expanding the market place, so i say, we have a law. let's recognize that. now we have the real world, people who are going to wait this week to find a policy. that is the real world, the question from here, the game, the politics and implementation, how do you make it work for people across this country? >> right, and ultimately, this is what part of the political fight is about. because once that does happen, we have the experience of other entitlements in this country, that warts and all, these programs move forward and become the affirmament -- >> i think it is part of the fear here, the exchange is open on tuesday, people can go on line, as you said, go to a meeting, go by mail, if there is a policy that fits their needs, the answer will be yes. for hopefully everybody uninsured, the answer will be yes. once people have a positive experience, going on line, with a policy, being insured for the first time, having better coverage it will be very hard to take it away from people. they have been waiting a long time, as chris said, to get to this point. there are 50 million people in the country who are uninsured. this is an opportunity to change what sort of has been a black mark on our country and society that we can allow that to go forward. >> one last kind of bottom line point, congressman, since you will have a vote on this. at some point there will be a resolution of the government shutdown, before or after, even given your views about how bad obama care is, do you think it is worse not voting to increase the debt limit over this fight? >> not over the obama care, i always told my leadership i want the fight on the debt ceiling about debts, about spending, not about obama care. i always believe that the fight should be at the cr, the spending levels and the debt level should be about debt, not obama care. some people disagree with me. >> all right, we'll leave it here, you talked about tip o'neill, and i thought if only -- into the tip o'neill ronald reagan years. we'll be right back after the break, talking about the new book "tip and the gipper," and the big question asked, why don't today's leaders cooperate [ thunder crashes ] [ female announcer ] some people like to pretend a flood could never happen to them. and that their homeowners insurance protects them. [ thunder crashes ] it doesn't. stop pretending. only flood insurance covers floods. ♪ visit floodsmart.gov/pretend to learn your risk. we'll be right back with our sunday inspiration and another reason why we love baseball. the new york yankees picture mariano left the mound for the last time, the final season in the major league. a pretty emotional ceremony, as derek jeter and andy petit went to the mound to celebrate the career of the closer. 652 career saves, mostñr of all the history of dominance. the crowd was on their [ female announcer ] we lowered her fever. you raise her spirits. we tackled your shoulder pain. you make him rookie of the year. we took care of your cold symptoms. you take him on an adventure. tylenol® has been the number 1 doctor recommended brand of pain reliever for over 20 years. but for everything we do, we know you do so much more. tylenol®. and we're back, i've asked chris to stick around, less than 48 hours since the possible government shutdown. he has a new book with politics, "tip and gipper," describes a time where they compromised. i'm going to have you read a section, one of the things ted cruz said struck me, which basically says he represents an age of politicians fighting against the establishment in washington. they don't think the old guard, mostly guys, who could compromise on issues are representing you know, the people they represent anymore. >> yeah, i think it is a good argument, because people are very unhappy today because of the crunch of the middle class. but if you look at the polling and ask people if they respect congress, back in the '80s, tip o'neill had a 67% job approval, today, they had single digit approval. and reagan had at least that high, people were government -- confident that even the government, when it argued, would have a compromise. >> you had had a question of why can't things work? this is not a historical piece, why can't it work -- >> i think people need to know the new norm is not the norm, there is a better time, they will again, they disagreed on the role of government, compromised, trying to get along even as they challenged each other. why, we wonder, can't it be that way again? why wouldn't the leaders work to accommodate each other, as they work to accomplish goals in this country's best interest. the mood today, even on this program, this sort of anger that is in the back drop -- the people out there have an anger. i remember walking up to the president, i said welcome, mr. president to the room where we plot against you. and the president said oh, no, not after 6:00, the speaker says not after 6:00. there is a sense of we'll argue it and get it done. there were shutdowns, over money, the usual kind of things politicians argue about, but there were not non-negotiable demands. >> i guess democrats are complaining this week, saying ted cruz, if you want to change the law, let's talk about how we can change the law. but don't set up a scenario where it is either you get rid of the whole thing or the government will end of being shut down or the debt limit won't be raised. >> yeah, i love the negotiations, jack lew, the secretary of the treasury, sat next to me. we thought it was the most partisan time in history. but the speaker would meet with him, tip would say, okay, i'll give you the democratic votes for the debt ceiling, we'll pass it. but i want a letter from the democrats asking the president to do it. i know you like that idea. because it shows how professional behavior was. one time on the tax increase, mr. o'neill said i'll pass the bill with you, 100% is too high. they knew how to cut dealins afr the fight. >> how did this president do in creating the kind of atmospheric? >> i don't think he was as good as reagan was as nurturing relations. i remember going to the jim dinner, which most of the guys were having steak dinner and apple pie, and baked potato and a beer. and just to be a dissenter, no press, it was a big deal. and in walked reagan with george bush. and george bush, as vp, had been a member of the house and knew how it worked. you got to connect with these guys. and i knew there was something that would help him get elected, every democrat took their picture. >> most of the democrats don't want their picture, that would hurt them. >> reagan being from notre dame, he had a lot of democrats who liked him. and i think this president doesn't have a lot of republicans that like him. this makes it a tougher time, by the way, it is politics, not civics, guys and women who believe in what they do. tip was the classic liberal who served, got elected 50 times as a liberal. he totally believed in helping people. and you know what? reagan respected him liking people and wanting to help people. he actually understood him. and ron reagan is on our program a lot of times, it wasn't personal. >> search for compromise, we need it now. chris matthews, thank you very much. again, the book is "tip and the gipper" when . some of this week's images to remember. >> yeah, that last image, the opening of the fred w. smith national library for the study of georg hee needed a place for his military, civil, and private papers because they were voluminous and "may be interesting." he finally got his wish. that's all for today. we'l

Transcripts For WBAL Meet The Press 20130930

enough. >> well, the next step, let's talk about that, the senate needs to act, in my view harry reid should call the senate back in today. we have a bill in front of us, there is a government shutdown in 48 hours. listen, i would love to be in houston with my two little girls playing with them this afternoon, but as you know i'm here in washington, d.c., as you know the senate should not be on vacation -- >> you know, the senate has acted, the majority leader would say, passed a bill to keep the government open. and then we've gone back to delaying or de-funding obama care. should they take a part of it? would you filibuster this bill? >> let's be clear what the senate has done so far. so far, majority leader harry reid has essentially told the house of representatives and the american people go jump in the lake, he said i am not willing to compromise or talk. his position is obama care must be funded 100% in all instances or he will shut the government down. i hope he doesn't do that, david, i hope he backs away from the ledge he is pushing us towards. but that is his position. >> but senator, even republicans that i have spoken to, your colleagues say senator cruz can't blame harry reid for shutting down the government. senator reid acted. he passed a bill to keep the government open. >> but let's be clear, the house has twice now voted to keep the government open. and if we have a shutdown, it will only be because when the senate comes back harry reid says i refuse to talk. also, let's be clear, president obama has granted a delay for big corporations, every big corporation has gotten a delay. if harry reid shuts the government down he will be saying if american families don't get a delay like the corporations, hard working american families, he is going to insist they suffer. >> it is interesting, democrats say you know the promise with senator cruz' position is it is a purist position. there are problems with obama care. we have had some polls saying there is great dissatisfaction at the town halls, but you haven't debated on how to change the law, what you have gone out and said let's kill the law, let's de-fund it. >> actually, with respect , david, i think it is wrong, i voted to repeal the law, but that was not my position in this fight. my position is de-fund it, which is different than repeal. and even now what the house of representatives has done is a step removed from de-funding. it is delaying it. now that is the essence of a compromise, delaying, simply on the same terms that has been done for the big corporations, that is a compromise. and at the same time, david, on the other side, what have the democrats compromised on? zero, their position is absolutely no, no matter what. >> you make this argument as if there is no broader context here. obama care has been -- has been adjudicated and it has been tested to the political system. and so let's go through that. we had an election where i heard the standard bearer for the republican party, mitt romney, saying that obama care should be repealed. all the republicans already voted against this thing when it was ultimately passed, the supreme court upheld it. and then your colleaes said let's have a strategy de-funding obama care and the letter, and they joined you in that fight. well, here now you don't even have the same number of folks who signed the letter who voted for this effort. there are not protests in the streets arguing to do away with the law the way that you would like. again, 51% of the poll this week, let's uphold the law. so i'm focusing on results. your goal and results. where have you moved anything? >> okay look, the facts are becoming more and more clear that obama care is not working. every day that is more clear, there is a reason the unions are jumping ship. one union after another is saying let me out. there is a reason why the president of the team, james hoffa, used millions, saying obama care was destroying their health care. destroying is his word. now, why is it that harry reid and the senate democrats are not willing to listen to the millions of men and women -- >> but you're a terrific lawyer, you're making an argument, i asked you a specific argument based on the facts on the ground. you made these arguments for 21 hours, my goodness, you haven't moved anyone. >> look, the american people rejected obama care, they understand it is not working. the only people making the argument are the career politicians in washington, harry reid who wants to use brute force, the great thing about the constitution, the checks and balances, the ability to check one another, president obama has over and over again disregarded the law. when he granted an exemption for giant corporations, that was contrary to law. right now we have a system where the rich and powerful, those with connections to the obama administration, they get spared some of the burdens of obama care. but those who were struggling, single moms and young people and people who are just trying to make it. >> you're a proponent of the law, millions are getting access to health care they couldn't otherwise afford. parents with children, others with conditions getting in the way of insurance. i spoke to a hospital administrator this week in illinois saying utilization is down, you can't know what the effect of five years from now is on this law. and nor can proponents of the law. but here is one argument, you've made yours, and the president, when he spoke this week, referred to your words. i want to play a portion, suggesting what you really don't want is the law to go forward because people may start to like it, is what he said. >> he said it is going to prove almost impossible to undo obama care, ñrright? so in other words, we've got to shut this thing down before people find out that they like it. >> you don't think americans will like it? you don't think that 25% of the state of texas that is uninsured will actually like the expanded access to get health insurance? >> i don't, and here is why, because it is not working. what happens, if you want people to get health insurance, the best way to get health insurance is to get a job, and obama care is the biggest job killer in the country. if you look at the mandate, half of the business managers are reducing or hiring part-time workers. another 24% said they were not growing to keep their size under 50 workers. if you're a young person out of school unable to find a job, a big part of the reason you can't find a job is because small businesses are not growing because of obama care. and there is nothing that can give you better health insurance than having a vibrant economy where you can get a job. let's take the thousands of workers at ups who just received notice from their employers that spousal insurance was being dropped. let's look at the workers of sea world who were told we're reducing your hours because of obama care, people are hurting. >> there are also researchers on my side who say there is no reason health insurers would stop giving insurance to their employees, it is a major tool to get employees. and health care, perhaps these problems that you're identifying could be solved short of complete de-funding. i want to start for just a moment to get you clear. a government shutdown, that is an acceptable outcome to you? >> look, i don't want a government shutdown. i don't think that harry reid should shut down the government. the house of representatives did something significant, which is they passed a bill to make clear that regardless of what happens the men and women of our military -- they should be paid. that passed unanimously in the house. and listen, right now, harry reid and president obama had been essentially holding the military hostage, threatening their paychecks over this potential shutdown. they might force. i think regardless of what happened we should pass the bill. we should not have a shutdown, which means harry reid has to move off his absolutist position. you have been multiple compromises from the republicans, and can you tell me what the democrats have done to compromise -- >> but what has he done -- as i outlined before, you have lost ground from even the summer on the position of getting people to vote with you. you lost ground from that position and you haven't persuaded one democrat. you have got to be democrats if you're going to overturn this thing. >> well, actually, joe manchin came out saying he supported the delay in the original mandate. listen, last time this was in the senate, there was division among the republicans. i had hoped the republicans would be united. that didn't happen, i'll tell you this, this next time around, this is an opportunity -- >> you have raised money on this, taken to the floor for 21 hours, you haven't moved anything legislatively, do you concede that point? >> david, i don't, and the establishment has been exempted from some of the harms. members of congress, how can you possibly justify to the american people that members of congress are exempted from the law? are not put on the exchanges like millions of americans. >> well, they're part of the exchanges, they don't get a portion by the employers -- >> but anyone on the exchange doesn't. >> but hundreds of thousands with their employers do -- >> but people with the exchange don't, you want people frustrated with washington? the simplest reason is you have politicians in both parties who are not listening to the people. they get a different set of rules. harry reid said to president obama, we don't want the obama care. i had an exchange with dick durbin, who argued we should stick the american people in coach. i think his own analogy shows what is wrong with this system, at a minimum, members of congress shouldn't be treated better than the american people, and should he be willing to compromise he would agree what the house has done to delay all of this saying it is not ready for prime time. it is not working, and we'll treat the american people at least as well as the others. >> you are talking about democrats, it is hard for them to get a word in edge wise, because there are members of your party who are so critical of what you have done and how you have done it. you have colleagues who accused you of putting on a show. congressman peter king said you're a fraud, lying to the base. george will, who has been a conservative columnist for "the washington post," who has been great, supportive of you in the past. but he wrote this past week, and i want you to respond. those people who deceive others first deceive themselves, allowing their wishes to be fodders of their thoughts by beginning to wish everything has changed. they should remember everett dirksen of illinois, the leader of senate republicans during passage of the 1964 civil rights act recalled, 40 preachers caught me one afternoon there in the lobby "i'm not a moralist." are you more legislative than others? >> i'm just trying to fight for 26 million texans, and for the american people. and i'm pretty sure what he argued is we should be delaying obama care, which is exactly what the house of representatives just voted to do. and one important thing to remember, you and all the voices of washington keep saying we need compromise. twice now, the republicans have compromised. and a twice, harry reid says we won't even have a compromise, i want to fund it all. we want to stick it on the american people and won't budge, that is not a reason, if we have a shutdown, the american people will be held hostage. >> who did you most admire? >> i most admired phil graham, there are voice whose say this is not possible. and if you remember back in 1993 when hillary care was being debated. and there were a lot of people that came forward that said we'll partially fund hillary light. phil graham said, i know you will remember this, he said this will pass over my cold, dead political body. and a whole lot of republicans who were scared, they looked over, he was not killed. they ran behind him and they said yeah, yeah, what he said. look, the power of leadership can change debates. we saw that just a month ago with syria. when president obama said he was going to launch attacks on syria, you had leaders of both house support him. and then the american people spoke up in overwhelming numbers saying we don't want to get involved in a sectarian war in syria, where there is no clear reason for the united states to do so and what happened, the federal government turned. we didn't get involved. we didn't launch the attacks, and just weeks earlier conventional wisdom in washington said it is impossible. >> do you regret comparing the future of obama care to the rise of hitler in nazi germany? >> well, the premise of your question is not true. what i said is there are many voices in washington who said "we can't do this, we can't do this." and i went through the centuries over and over again when americans were faced with big challenges, on big occasions, whether it was the civil war, going to the moon or winning the cold war, at every stage there were voices of conventional wisdom who say this can't be done, and at every stage, the american people rose to the occasion. and what i said is we should do the same here. we should look to, if we empower the american people to get washington to listen to the people, that is how we get this changed. >> do you ride this to the presidential nomination? >> it is easy for washington to focus on politics. i understand, that is the business of this town. what i am trying to do every day is focus on making a difference in the lives of the american people. every survey that is done in this country, the top priority of the american people is jobs and the economy. under harry reid's senate, we don't even talk about jobs and the economy. obama care is the biggest job killer in this country. and millions of americans are hurting. you know, i would like to see a democrat respond to james hoffa's letter who said this is right now destroying the health care of millions of americans. that is not me, that is a democrat union leader who has supported president obama and harry reid, we need to listen to people. >> thank you, senator. >> thank you, david. coming up, we're going to switch gears, one of the biggest threats is iran's nuclear program. joining me, msnbc's chief foreign affairs correspondent, andrea mitchell, as well as one of president obama's former advisers on arms control. we'll be right back here in just a moment. "meet the press" is brought to you by the boeing company. we know why we're here. to chart a greener path in the air and in our factories. ♪ to find cleaner, more efficient ways to power flight. ♪ and harness our technology for new energy solutions. [ female announcer ] around the globe, the people of boeing are working together, to build a better tomorrow. that's why we're here. ♪ help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. i reiterated to president rowhani what i said in new york, while there will surely be important obstacles to moving forward and success is by no means guaranteed, i believe we can reach a comprehensive solution. >> so what is behind the recent actions of the iranian president? joining me now, our chief foreign affairs correspondent, andrea mitchell, and former adviser to president obama on arms control and wmd, one of the few who met with rowhani while he was in new york, welcome to both of you, what i am fascinated by, what brought you to this moment? >> i think the answer is very simple, it is pressure, the economic sanctions imposed, started by president bush and strengthened by president obama has been sufficient to force the iranians to seek a deal so they can get relief from sanctions. >> but how do we get from there to here? >> that is a big question, i was at a small gathering with rowhani, it is very clear they're concerned about the bank situation. he is a politician, he was elected with the mandate to be moderate. he got 51% of the vote. his closest competitor got 16%, he was greeted back in tehran with crowds of demonstrators, supporters but also protesters. the fact that the mullahs allowed them to go to the airport, they even threw a shoe, but he has explained very ably, will they give up the real stuff? and that is a very heavy price for them. they have spent billions on it. and right now, israel is complaining, and netanyahu is coming tomorrow, israel is concerned they are building a heavy water reactor, which can create plutonium -- >> just to be really -- they have three facilities that can produce the stuff to build the bomb. >> that we know of. >> that we know of. now, you only need a certain percentage have energy use. they're above that. and the fear is they can what is called "break out," they can get to that nuclear weapon real fast. so how do you prevent that from happening and believe in a deal? >> well, as a condition for lifting sanctions, i think the u.s. and its allies will demand that iran accept physical limits on the nuclear capacity, in terms of size and strength and the enrichment program. >> but haven't we had requirements in place before? rigorous inspections? >> this goes beyond inspections, monitoring is very important to be sure the iranians don't cheat, especially given their history of cheating. i think their physical limitations, so they don't have the capacity to break out quickly, so far, rowhani has not indicated any willingness to accept those issues. >> and they prop up the assad regime, they fortify the hezbollah, the iranian revolutionary guard has a stronghold in iraq throughout the region, they're terrified of the goals of iran at this point. that is the over view, how do you navigate that? >> well, that is the overview, but the war, potentially, the whole region could change if this were there work. if this works, then syria becomes at least more viable as a political solution in geneva, if the hezbollah and the iranian arms are not going to prop up assad. and then russia becomes a partner, we let them into the middle east, which is dangerous, but now there is a way in the u.n. of monitoring things, afghanistan as you mentioned. iran has been such a trouble maker in both of those places. if this economic pressure has been profound enough and you have 30% -- rather 60% of the iranian population under 30, this is the mandate he has, a short window. if this were to work, then perhaps saudi arabia and the gulf states would see the benef benefit, because they and the israelis are very conservative. >> so 30 seconds here, you have netanyahu who is coming to meet with the president tomorrow. he is going to say don't trust this guy, he is fooling you. i think what the president will say is that it will all depend on concrete results. words are nice, but what really counts at the end of the day is whether iran is ready to take action as the president said in his u.n. speech. >> do you believe this is real? >> i don't think it is real yet. i think the iranians will try to get sanctions -- >> and play rope a dope. >> and play rope a dope. as the sanctions continue to bite even more then the iranians will have to make tough choices. >> very quickly, what the israelis are worried about, and others in the gulf, is that the president will be so ready for a deal is that he will not be tough enough because of what happened with syria. >> thank you both very much. fascinating developments. coming up, back here on the shutdown, the reactions to ted cruz, plus reactions on who has the upper hand on the voices. cruz, plus reactions on who has revolutionizing an industrys. can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? 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>> i was watching your discussion, and you made points about how obama care, affordable care, as passed by the senate, and then the president got reelected on that very issue. i watched that discussion, senator cruz talks as if there should be a final test that you have to get through before the law goes into effect. in other words, the final vote, whether it is on the debt ceiling or the shutdown of the government, a final look at the law saying should we really let that go into effect before it is set to go into effect. that is not really the form of government. you outlined the form of government. the test by which we submit any new legislation, and the president signs it, is the law, and upholding the law is a good question, should we uphold the law? i think he goes past his issue, which is the substance, the policy, which will be debated for years. the question is should the law be upheld? >> the question is, when is the law legitimate ever? >> that is a good question, but if you delay the law then you wouldn't be upheld, the president has delayed it for big business and all his friends. and the question is, is the law ready at this time? is it ready for prime time at this moment? i would repeal the law, i would get rid completely of the law. but all we're asking for in the house of representatives is a one-year delay, just like the unions are asking for a year delay like he has given to big business, i don't think it is unreason to ask for that. >> and i don't mean to interrupt you on that. we talked plenty about the argume arguments and the substance. but i want to steer you to the end game piece of that. dee dee, we'll come back around to that. how does this end? >> the house has voted almost 40 times to repeal obama care and every time it almost failed. insanity is doing the same thing over and over -- >> and other times we have had legislation that repealed certain parts. >> but he wouldn't repeal the domestic part, which he believes in deeply. you guys tried 40 times, it failed. now you attach it numerous times to de-fund it. 70% of americans don't think the reasonable avenue to shut down the government to try to make that happen. you know, there are checks and balances, as you like to say. you have no ability to stop obama care. it is not going to happen. so what is the end game? >> i think the end game, partially, we don't see a government shutdown, 25% of them are basically broke on the cloture vote. you basically see guys like corker who are going to go down in this as keeping the sanity. it will be important to see how it is executed throughout the states. you have 17 exchanges that will be up and running on tuesday, we created the first one in utah that has 240 individual policies to be accessed. 300 small businesses are ready to buy into it. i think it will be an important experience, we move into the problem of jobs and economics. does it work or not? >> you can't just say politics on the side, or have a debate, or the policy implementation because this is about politics. and i don't -- some may see it as petty politics, but i think the congress would say look, we want to keep it alive until 2014, and 16, there are political means to overturning this, they just haven't achieved it yet. >> i think it will continue, i am not as sublime as you. the difference is in a kidnapping, you grab the baby and ask for the money. in this case, grab the money and ask for the baby. obama won't give him his baby, you can't negotiate this. dee dee pointed this out. this is his claim to history, what he did after 40 or 50 years of democratic party claim, the clintons tried, almost got it. everybody said we're going to do it since roosevelt, to say i'm going to give it away, or delay it. i think everybody knows the people who want it to delay in a year, want it to die in a year. that is the problem with some of the features in the bill, those who want to kill is, that is a big difference, killing the baby -- >> we're going to be beyond politics real soon and then the world takes over. >> what happens if the government doesn't go back to work? >> if there is a shutdown, it will be 24 hours, republicans know it is a loser for them. they have to learn the lesson of this. that will be you can't have it all or nothing approach. you have to find areas that don't work and fix them as they proceed. >> the democrats think this is a loser for us, everybody agrees this is a loser for us if the government shuts down, that is why i think the president wants a government shutdown. if you look at twitter, there was not a single republican on twitter that said let's shut down the government. but every single democrat was saying the republicans want to shut down the government. the politics are coming from the other side as well. so let's be really honest about this. and the other side would like to see republicans in trouble in 2014. the other side wants to make sure that they're not even willing to meet us half way. harry reid will not negotiate with john boehner, the president will not meet with john boehner, and john boehner is actually trying to be responsible here. >> john boehner does not agree with you, john boehner does not want to shut down, does not want to take this stand. >> you're saying i don't want to shut down the government. >> the speaker of the house is actually not interested in trying to filet up obama care right now as you are, he has a different view. >> i disagree with him, i thought this was the moment to do it, not have the fight. >> so what is the end game, congressman? are you willing to vote for a continuing resolution that comes back that does not delay or de-fund obama care? >> i am not, but i think there are enough people in the republican party willing to do that. that is what i think you will see, the first request was to completely de-fund the program. and we knew we were going to lose on that, now we're asking for a delay, which again, i don't think is an unreasonable thing to do. you know, your boss, tip o'neill, shut down the government 12 times and you didn't call him a terrorist. >> these were always a couple of days, and on both sides. >> but you said why -- it happened. >> where did you get your number from? >> seven times. >> since the '70s -- >> 17 times since the '70s at 12 under your boss. >> there were issues of a day or two, and issues of funding. what i said before is you can argue over numbers, if it is seven or nine, make it eight. but if you say get rid of the number one program, under the law and put it in the history books, you can't say give me that. >> when is a law legitimate? would it be appropriate for the president or democrat controlling the senate to say let's go back and let's overturn a reagan era law. could they do that? >> one of the shutdowns was based on the fairness doctrine, one of the shutdowns was because the fairness doctrine had been done away with. and they wanted it back, so it has been done before. the democrats spent the entire decade of the bush administration trying to repeal the bush tax cuts. it is not like republicans and democrats don't fight about their policies. that is what politics is all about. so for somebody to go on national tv and say we can't fight about our politics. >> the question is, do you fight about the same old rules and making non-negotiable demands. i think there is a debate on health care on whether or not to do it. and finally, the president, through the congress, the electorate, decided to do it. >> not a single republican voted for that law, because you guys, the democrats decided to cram it down, you decided to do procedural issues. >> there was not a real effort on either side to compromise. >> go ahead -- >> this is an example of how divisive this debate has become, a decade ago, the republicans were trying to crack the code on health care reform. as a mandate, the heritage foundation -- we looked at expanding the market place, so i say, we have a law. let's recognize that. now we have the real world, people who are going to wait this week to find a policy. that is the real world, the question from here, the game, the politics and implementation, how do you make it work for people across this country? >> right, and ultimately, this is what part of the political fight is about. because once that does happen, we have the experience of other entitlements in this country, that warts and all, these programs move forward and become the affirmament -- >> i think it is part of the fear here, the exchange is open on tuesday, people can go on line, as you said, go to a meeting, go by mail, if there is a policy that fits their needs, the answer will be yes. for hopefully everybody uninsured, the answer will be yes. once people have a positive experience, going on line, with a policy, being insured for the first time, having better coverage it will be very hard to take it away from people. they have been waiting a long time, as chris said, to get to this point. there are 50 million people in the country who are uninsured. this is an opportunity to change what sort of has been a black mark on our country and society that we can allow that to go forward. >> one last kind of bottom line point, congressman, since you will have a vote on this. at some point there will be a resolution of the government shutdown, before or after, even given your views about how bad obama care is, do you think it is worse not voting to increase the debt limit over this fight? >> not over the obama care, i always told my leadership i want the fight on the debt ceiling about debts, about spending, not about obama care. i always believe that the fight should be at the cr, the spending levels and the debt level should be about debt, not obama care. some people disagree with me. >> all right, we'll leave it here, you talked about tip o'neill, and i thought if only -- into the tip o'neill ronald reagan years. we'll be right back after the break, talking about the new book "tip and the gipper," and the big question asked, why don't today's leaders cooperate my customers can shop around. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare. his day of coaching begins with knee pain, when... [ man ] hey, brad, want to trade the all-day relief of two aleve for six tylenol? what's the catch? there's no catch. you want me to give up my two aleve for six tylenol? no. for my knee pain, nothing beats my aleve. we'll be right back with our sunday inspiration and another reason why we love baseball. the new york yankees picture mariano left the mound for the last time, the final season in the major league. a pretty emotional ceremony, as derek jeter and andy petit went to the mound to celebrate the career of the closer. 652 career saves, mostñr of all the history of dominance. 652 career saves, mostñr of all the h[ male announcer ]e. at northrop grumman, we've always been on the forefront of innovation. when the world called for speed... ♪ ...when the world called for stealth... ♪ ...intelligence... endurance... affordability... adaptability... and when the world asked for the future. staying ahead in a constantly evolving world. that's the value of performance. northrop grumman. that's the value of performance. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. and we're back, i've asked chris to stick around, less than 48 hours since the possible government shutdown. he has a new book with politics, "tip and gipper," describes a time where they compromised. i'm going to have you read a section, one of the things ted cruz said struck me, which basically says he represents an age of politicians fighting against the establishment in washington. they don't think the old guard, mostly guys, who could compromise on issues are representing you know, the people they represent anymore. >> yeah, i think it is a good argument, because people are very unhappy today because of the crunch of the middle class. but if you look at the polling and ask people if they respect congress, back in the '80s, tip o'neill had a 67% job approval, today, they had single digit approval. and reagan had at least that high, people were government -- confident that even the government, when it argued, would have a compromise. >> you had had a question of why can't things work? this is not a historical piece, why can't it work -- >> i think people need to know the new norm is not the norm, there is a better time, they will again, they disagreed on the role of government, compromised, trying to get along even as they challenged each other. why, we wonder, can't it be that way again? why wouldn't the leaders work to accommodate each other, as they work to accomplish goals in this country's best interest. the mood today, even on this program, this sort of anger that is in the back drop -- the people out there have an anger. i remember walking up to the president, i said welcome, mr. president to the room where we plot against you. and the president said oh, no, not after 6:00, the speaker says not after 6:00. there is a sense of we'll argue it and get it done. there were shutdowns, over money, the usual kind of things politicians argue about, but there were not non-negotiable demands. >> i guess democrats are complaining this week, saying ted cruz, if you want to change the law, let's talk about how we can change the law. but don't set up a scenario where it is either you get rid of the whole thing or the government will end of being shut down or the debt limit won't be raised. >> yeah, i love the negotiations, jack lew, the secretary of the treasury, sat next to me. we thought it was the most partisan time in history. but the speaker would meet with him, tip would say, okay, i'll give you the democratic votes for the debt ceiling, we'll pass it. but i want a letter from the democrats asking the president to do it. i know you like that idea. because it shows how professional behavior was. one time on the tax increase, mr. o'neill said i'll pass the bill with you, 100% is too high. they knew how to cut dealins afr the fight. >> how did this president do in creating the kind of atmospheric? >> i don't think he was as good as reagan was as nurturing relations. i remember going to the jim dinner, which most of the guys were having steak dinner and apple pie, and baked potato and a beer. and just to be a dissenter, no press, it was a big deal. and in walked reagan with george bush. and george bush, as vp, had been a member of the house and knew how it worked. you got to connect with these guys. and i knew there was something that would help him get elected, every democrat took their picture. >> most of the democrats don't want their picture, that would hurt them. >> reagan being from notre dame, he had a lot of democrats who liked him. and i think this president doesn't have a lot of republicans that like him. this makes it a tougher time, by the way, it is politics, not civics, guys and women who believe in what they do. tip was the classic liberal who served, got elected 50 times as a liberal. he totally believed in helping people. and you know what? reagan respected him liking people and wanting to help people. he actually understood him. and ron reagan is on our program a lot of times, it wasn't personal. >> search for compromise, we need it now. chris matthews, thank you very much. again, the book is "tip and the much. awhen we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. some brokerage firms are. but way too many aren't. why? because selling their funds makes them more money. which makes you wonder -- isn't that a conflict? search "proprietary mutual funds." yikes! then go to e-trade. we've got over 8,000 mutual funds, and not one of them has our name on it. we're in the business of finding the right investments for you. e-trade. less for us. more for you. the fund's prospectus contains its investment objectives, risks, charges, expenses, and other important information and should be read and considered carefully before investing. for a current prospectus, visit etrade.com/mutualfunds. ♪ [ male announcer ] 1.21 gigawatts. today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪ into the future. we've all met bill. he shows up once a month asking for money. you can't avoid him, but you can stop him from wasting 150 million pounds of paper every year. ask bill to go online. green bill is much cooler. the more you know. . some of this week's images to remember. >> yeah, that last image, the opening of the fred w. smith national library for the study of george washington at his mount vernon estate. he told a friend he needed a place for his military papers because they were quite voluminous, he finally got his wish. that is it for today. we'll be back next week. very good monday morning. here's what's coming up on "early today." shutdown showdown. republicans and democrats dig in their heels of promising to shut down the government. this could get very ugly very quickly. israel's benjamin netanyahu meets with president obama and the key topic can iran b trusted? nor questions than answers surrounding a fiery plane crash. plus, a daredevil succeeds by the skin of his teeth. "breaking bad" vows the faithful. an tina fey's hot, hot, hot on "snl." "early today" starts right now. >> announcer: this is "early today" for monday, september 30th. >> very good morning, nice to see you. i'm veronica de la cruz. on the final day of september, the time before the shutdown can now be measured in showers, president obama met with senior staff sunday, but critics say it might be too little too late. nbc's tracie potts is live in washington. tracie, good morning, is there any hope left that this can be avoided? >> well, there's hope, but there's just not a lot of it at this point. because as you said, we're now less than 24 hours away from this midnight deadline. listen to what democrats and republicans had to say over the weekend about all the finger pointing that's going on right now in washington. >> this is the old football strategy. when you get to where you want to be in a football game, you run out the clock. >> you may have strong views on obama care. and you may want to debate those. that's fair. that's what congress is all about. but don't hold people hostage. >> we are looking at about 40% of the federal workforce, 800,000 federal workers off the job. and here's what that means to you. things like national parks would be closed. the statue of liberty and other parts all over the country, the smithsonian museum and a lot of people are happy to hear this, the irs audit office closed as well. there would be limited food inspections. the usda would still inspect meats but the fda's inspectors would be limited. also federally backed loans, that would be huge for people applying for loans. those will get delayed. social security is open. your checks may be delayed but they're still on the way. also, the health care law that kicks in tomorrow, the health changes that is still slated to happen. today, when the senate gets back in, and they're not coming back until this afternoon, this is the republicans' plan on the table. they will fund the government if democrats agree to delay the health law by one year, repeal attacks on merrill devices. and some democrats say they're open to that. and pay military service members. right now, almost 1.5 million of them would have to be on the job whether or not they get paid. there's a possibility of one last offer on the table before this midnight deadline. veronica. >> tracie potts in washington. tracie, nice to see you, thank you. and taking you now to southern california many questions now after a fiery crash involving a small jet. it happened at the santa monica airport around 6:20 local last night. the twin cessna was landing when it ran off the runway and hit a hangar. it was on its way to hailey, idaho. flames were available for miles away. authorities are not saying how many people were on board or talking about their conditions. the santa monica fire department told local affiliate knbc is looked unsurvivable. well the stage is set for what could be an intense encounter at the white house today. israeli prime minister benjamin netanyahu expected to deliver one message to president [, tonight be followed. he said he will tell the truth in the onslaught of smiles

Transcripts For WRC Meet The Press 20130930

the space of your life. so because i don't have that as a worry i get to think about other things. i was thinking of my family the other day whom i support. >>reporter: emotionally. >> no. i support them emotionally too. talking about this i said well, you know wha what, you get to have dreams when your house is paid for. you get to did that. so i feel in i feel in blessed and i feel in like sometimes item unimaginable to me that this would girl from mississippi and just yesterday i was talking to head of my foundation about boys and girls club i founded down in mississippi and how we can continue to support that. >>reporter: rate. >> i think -- wait until you go down there and see the also road that i lived on and -- i mean i don't know such a thing existed so now for you to say whatever number i am 184 about to be even in that arena is a mighty big deal. >>reporter: coming up. i ask the question that everyone wants to know. they have been together 27 years. oprah. will you leave this earth as a will you leave this earth as a never married woman that's next. kerry washington kicks off our exclusive scandal week. expose and who leak the secret. >> will we be absolutely floored? olivia and her daddy how serous they. >>reporter: on tuesday inside tv love tray angle. >> mr. square if you will because it's scandal. >>. >>reporter: revealing season shoot. >> by the way i'm not wearing anything under that. >>reporter: on thursday crazy premier. >> because crazy suffers. >>reporter: on friday how scandal plans to mick social media history and shut down twitter. >> absolutely. >> absolutely. i'm terry mcauliffe, candidate for governor, and i sponsored this ad. for 30 years i've worked as an obgyn, my job is to protect the health of women. so i'm particularly offended by ken cuccinelli. cuccinelli wants to make all abortion illegal ... ... even in cases of rape and incest. ... even to protect a woman's health. i want a governor who's focused on schools and creating jobs, not someone who wants to do my job. who's ken cuccinelli to interfere in the lives of women across virginia? ♪ turn around ♪ every now and then i get a little bit hungry ♪ ♪ and there's nothing really good around ♪ ♪ turn around ♪ every now and then i get a little bit tired ♪ ♪ of living off the taste of the air ♪ ♪ turn around, barry ♪ i finally found the right snack ♪ ♪ with our new, improved peanut butter chewy bars. will oprah walk down the aisles with stedman. goodbye everybody. oprah. will you leave this earth as a never married woman. >> yes. >> definitive. that's your final answer. >> [ laughing] this is good. that's good. [ laughing] you didn't come up with that. yes i think that's my final answer. i think it's my final answer. interesting that you would ask it. i think it's really interesting that you would ask it because i have thought about it again and tina turner wedding. >>reporter: really. >> because 10 a was like you need to do this oprah. you need to do it. i don't have to do it. you need to do this and i was thinking okay would things be different would it be different i don't think so. i think my final answer is i'm going to leaf this earth as a never married woman. and that is really okay with me. it's really okay. because stedman would tell you that shaun if you ever interviewed him, would he tell you that had we married we would not be together today. >>reporter: really. >> no. no. >>reporter: why is that. >> because he's a traditional man. and this is a very untraditional relationship and i think it's acceptable as a relationship but if i had the title wife, i think there would be some other expectation for what a wife is and what a wife does. you have to come home for one thing. [ laughing] that's how the interview should that's how the interview should end ♪ ♪ ♪ ♪ [ female announcer ] it's time healthy gets a dose of happy. new yoplait greek. bye-bye, stir. so long, sour. hello, happy. it's time to lick the lid again. ♪ >> 10-year-old olivia o'donnell loves to bake. when her father was diagnosed with cancer, her passion took on a new meaning and she sold cupcakes and donated all of the proceeds. she's going to have a new kitchen where she can continue to help others for years to come. >> my name is olivia and i'm 10 years old. i'm going to copeland middle school for 6th grade. i found a passion for baking. and i have been baking at least six times a week. >> this is our house in new jersey. we have two beautiful daughters. molly age 13 and olivia age 10. >> i believe she has found her passion with baking. >> she loves it. >> dad taste this and i don't want to taste this all of the time. it's always something good and great and i go back to the gym again. it's good to see her have a passion for something. >> last year memorial day, i was diagnosed with colon rectal cancer. life took a different turn. radiation and chemo in the beginning and surgery and ileostomy, reverse ileostomy and 18 weeks of chemo. i have a clean bill of health and the cancer was never going to get in the way of what we are all about. on my last day of chemo, she baked a sheet cake for the nurses and the patients. and on top of it was a superman logo and flash logo. when the people found out that 10-year-old baked it from scratch, they went crazy. >> after she baked the cake, i posted it and someone from the american cancer society contacted me. she asked me if we would want to be part of the relief for life. >> i donated 800 cupcakes and we had over $3,500 donated for cancer research. >> it was hard because our oven is not very good and we had to wait an hour after we made the batter to put them this and out one at a time. >> the restrictions this the kitchen, i cannot stand watching her climb the cupboards to get down what she needs. that drives me nuts. the fact that the kitchen is a disaster because she's running back and forth between the garage and the kitchen and the other area. it doesn't work. it holds her back. she spends a lot of time where she could be baking new things working around the limitations of the kitchen. >> i would like to raise more money for cancer research and i feel that cancer was -- is one of the main illnesses and i want to make it go away. >> hey, how is it going, everyone. >> it's nice to meet you. >> nice to meet you. >> so excited. i'm shaking. >> how is it going? >> you must be olivia? bring it in. how are you? >> good. >> i heard so much about you. i need a cup of sugar. no. no. i heard about you, olivia. people are screaming your name from the mountain tops. we are here to make that kitchen better than ever. >> what do you think? >> yeah. >> i'm going to ask you to pack up and get out of here. it would not be a surprise while you were living here. we got a place for you to go. i'm going to get my crew to destroy that kitchen and make it better than ever. let's get to work. >> all right, guys. welcome to the o'donnells. helping us out is jeff and michelle. as you can see, this is the kitchen. it is what one might call cozy, that's why i brought you in. we can do something special for the family and make this out of this world. the only thing worth saving in this kitchen is the fridge. of course, the picture of olivia. >> absolutely. >> everything else boom. >> i don't know how we are going to get it out of here. the doors are small. we may have to knock out the walls. >> we really are dealing with, you know, the walls that we have right here. except for this wall. >> we will take down. that is not a bearing wall. >> this wall over here. we have a bearing wall to deal with. post down to the ground here and this wall expose into the dining room. >> we have eight fooilings. we need to take the cabinets up to the ceiling and help with storage. >> we are opening up the kitchen into the living room and dining room. we are going to have to incorporate the dining room and the living room with the rescue. >> there's an existing fireplace. we are going to tie it into the kitchen. everything will tie it in as well. we have ideas with the trim work. everything will flow as one. >> we got to get rid of this broken oven and terrible microwave and get her something new. >> double oven. you think we can fit it there. >> we can go with a cook top and snuck in a double oven that is amazing for baking. >> if she can cook 700 cupcakes in this, imagine what you can do in a day? >> i'm psyched. we have a game plan opening this place up. ripping everything up. brand new kitchen soup to nuts. shall we start? >> get going. >> all right! >> for everything that matters, there a deep and rich enduring color. benjamin moore. find a store near you at benjaminmoore.com. >> let's do demo. i got anything and everything you could possibly need. safety glasses and ear protection and respirators. start ripping it apart. along with protective gear on your eyes and ears, you want to protect the house. that's why we sealed off of the area that we are doing for the rest of the house. >> the designer should take the first whack at the wall. >> 100%. >> yeah! >> you guys get in here. i can do it by myself because i'm awesome with that. >> normally i would take a sledgehammer to these cabinets. they are still in good working order. we are going to get them out of the house and hopefully some other family can use them. olivia, you are getting new ones. i think we just about done with the demo. >> we have to do cleanup. and then get the framing going. >> totally missed your hand on that one. >> that was bad. >> jeff, you know what this kitchen needs? >> what is that, george? >> cabinets. >> would say so. so why don't we take a ride down to creative cabinetry and see what's going on. >> all right. let's go. >> this is what we are doing for the o'donnells. >> that's the kitchen. >> we have taken out these walls. they no longer exist. we put in the place is all of this. we are bringing the cabinets up to the ceiling. i love this island. >> with this picture. this is going to be a different color. this is the main kitchen cabinet doors flat panel. beautiful. this is the stone product that we are going to use for the countertops. this is the island color. special behind that door out there. >> that's the shop. >> that's where you build the cabinets? >> let's see what's being made right now. >> let's do it. >> george, jeff gives us enough warning, we can probably install this tomorrow. >> if i have to work through the night, manny, i will get it done for you. >> they got a new employee. >> starts with good mentors and teachers. i have the best around for you two. >> i count three here. >> these guys. >> all right. >> george to the rescue is sponsored in part by 3m. to find a retailer near you, go to 3m.com. >> jeff, i can't help thinking about this fireplace. i love the idea of incorporating it. i got to make sure that it flows. >> you're right. let's make this whole wall pop to tie it in. >> i love it. >> remove everything. the stone and bring in this new tile that mimics and stack it and raised panels going up. and crown molding to tie into the kitchen cabinets. >> i love that. >> benjamin moore with these rooms. it has low odor. it's safe for everyone in the family. it has fantastic color. using white here. it's formulated especially to resist mildew. when you have steam coming off of the pot, you don't have to worry about the grime that comes on the wall, the color is not going anywhere. it's the perfect paint. especially in the kitchen. >> what are we doing? where is this going? >> this is the cook top cabinets. to put that in, we have to cut a hole. >> and put the painters tape on there to protect the cabinet. more than one way to skin a cat or use painter's tape. >> some of the things we have done here for olivia because she's not as tall as some of us. we have this stool here. you can open it. >> it lives down in there. >> absolutely. she can put it here and reach up and it's strong enough to hold the big guy like me. she will be fine on it. >> for the countertops in the kitchen, we went from a style that's made from quartz. it's really hard. impact and scratch resistance. antibacterial formula that will help. >> put in a sink and dishwasher. done. >> "george to the rescue" is sponsored in part by coldwell banker real estate. fulfilling dreams for 107 years. >> the thing about back splash tile is you have to work around things. wires here which is going into the under cabinet lighting and have the outlets in. it's not like a floor that is an open surface. it's a little bit more obstacles. it will get done. it will get done. we are moments away from cupcake time. not a reveal. it's cupcake time. that's what this rescue is all about. >> how high are we going to hang the drapes. >> most people think when they come home with the drapery rods, think it should be hung right above the trim. that doesn't give you height in the room. i want to bring you high up to this crown molding. i want to hang it blow the crown at 90 inches. more length in our drape and feel like a taller window. >> oh. it did come with a wrench. >> oh. >> lighting has arrived with the chandelier. get it installed. >> a lot of times people think color, you have to have reds, blues and oranges. not the case. by using darks and lights and different shades, you have different color. >> clean dinner wear and buy a new accent dinner plate that changes the look. we have the balance and light and dark. >> and with that, this place is done. let's get olivia and the family. >> come on. >> oh, my god. >> oh, my god! >> oh, my god! >> george to the rescue is sponsored by hilton short hills of northern new jersey where hospitality awaits. >> this project for olivia and also the family is going to be an amazing thing. she's going to have a gorgeous kitchen with so much space. knowing that i helped out a family from my hometown and i grew up in, it's a joy. there's a passion there and now to see the finish, it's unbelievable. >> olivia does so much for others raising money for cancer, it feels good to do something for her. i'm so excited to give olivia a kitchen that works and she's able to bake and do multiple things at once. she has counter surface. i can't imagine what she will create and all of the people she will touch through her baking. >> reveal time. hey, olivia. hey, guys. >> hi! >> how is everyone doing? >> good. good. good. >> hi. hi. >> hi. >> hi, molly. you guys ready to check out the new kitchen. >> so ready. glad to be home. >> ready to do baking at home? >> yeah. >> i know you are all going to be happy and everyone who has come through this door who met me and been in the neighborhood, everyone is fans of you guys and so excited to take part of this project. excited to show you what is done. olivia, you want to lead the way? >> sure. >> oh, my god. >> oh, my god. oh, my god! oh, my god! >> oh, my god! >> so nice. >> oh, my god. >> oh, my god! >> gosh. so beautiful. >> check this out. >> oh, my god. >> are you kidding me with that? >> oh, that's awesome. >> that is great. >> so cool. >> have you ever seen anything like that? >> no. >> i don't want to leave it. if i put a blanket and a pillow, i would sleep there. but i love it. it looks so much more open. and without the wall there, it's -- looks like a whole new space. >> and, of course, we wanted to make sure we had a beautiful kitchen, not just for olivia, it's a family rescue. it's for everything you have been through, chuck, all of you guys. olivia, you brought us here, this is a family rescue. obviously, i wouldn't have done this by myself. everyone who helped us out with this project is outside. what do you say we go on out and greet them. >> exactly. >> all right! [applause] [cheers and applause] >> awesome! >> i can't thank george enough and the whole team of people, but just the entire staff from beginning to the end in how wonderful everyone was with us and how accommodating everyone has been and treating us like part of the "george to the rescue" family, it's a wonderful experience from beginning to end. >> i know this is the beginning. i'm proud of being part of building this kitchen. thank you olivia and chuck and the entire family. 1, 2, 3! rescue! whoa! >> all right. this is the place that you do your apprenticeship? >> yeah. >> what are we doing today? >> red velvet cupcakes. >> let's get to work. >> all of the cupcakes i have eaten in my life, i never baked any. how am i doing? don't judge me now. this one died. oh, dear. >> put that one in there. >> oh, dear. oh, dear. goodness. i might have to eat this one. sorry. it's not good for business probably if we eat all of our product, but -- oh, god. so good. breaking news this morning, government by crisis, we are one step closer to a government shutdown, so how will it end? >> our message to congress is this, do not shut down the government. do not shut down the economy. pass a budget on time, pay our bills on time. >> all republicans are asking tonight is give the nation a year to study a 2500 page bill that even speaker nancy pelosi had not a clue what was in it. >> this morning, the fight and the politics behind the standoff, an exclusive interview with republican senator cruz of texas. he has elevated the fight to new levels. >> i intend to fight on the obama care until i am no longer able to stand. >> where does his fight go from here? plus, our political roundtable, joining me msnbc's chris matthews, former governor, john huntsman, and democratic strategist, dee dee meyers, is the nuclear disarmament deal now possible? i'm david gregory, for "meet the press," on sunday, september 29th. >> from nbc news in washington, this world's longest running television program, this is "meet the press." >> and good morning, the fast-moving developments, last night the house of representatives voted to delay president obama's health care law as part of an emergency spending, the president promises to veto, the vote brings the country a step closer to a government shutdown, kelly o'donnell has more. >> reporter: well, good morning, david you might expect there was action since the government was threatening to shut down tomorrow. but that is not happening, congress is on pause, after working until the wee hours they paid their message clear, but the senate tells me they are rejecting that flatly. that comes tomorrow. so today, when the country is waiting for an answer, congress is on hold. here is where we stand, this is what the house has done, they are passing funding to keep the government open and operating but with conditions to delay the president's health care law by a year, and to repeal a medical device tax paid by manufacturers for things like pacemakers or defibrillators, or delay that. also, they do want military paychecks to keep coming. but again, that is the house version where they stand. the senate says no way, the only thing they would consider is simply keeping the government open, nothing that would affect the health care law. >> so the contest begins, canke o'donnell, i know you will be watching, thank you, joining me this morning, ted cruz, the man in the middle of the fight. so here are the stakes, de-funding, say you and other republicans, the president says no way. the law is moving forward. are you in control? >> at the end of the day every senator has to decide how he or she is going to vote. every representative has decided how they are going to vote. the house last night voted to keep the government open, to fully fund the government, but at the same time the house responded to the millions of americans who are hurting under obama care, and i think the senate needs to do the same thing. >> i looked at polling that shows the law is unpopular, 56% want to uphold this law, so when you say listen to the american people, they're not necessarily with you. >> well, look at the phrase "uphold the law," when you do the polling, the answer is always yes. >> just polling methods -- >> i promise you any senator or representative that goes home to their home state and you hold a town hall and just ask people who are you facing? i mean, i have spent hundreds of hours chris-crossing the state of texas, and people all over the country are being forced out of jobs, losing their premiums and health insurance. >> we'll get into particulars of obama care, because obviously there is more to that story that advocates will argue with. so let's stick to that story. how does this end? because as i understand it, you would only support de-funding obama care, a delay is not enough. >> well, the next step, let's talk about that, the senate needs to act, in my view harry reid should call the senate back in today. we have a bill in front of us, there is a government shutdown in 48 hours. listen, i would love to be in houston with my two little girls playing with them this afternoon, but as you know i'm here in washington, d.c., as you know the senate should not be on vacation -- >> you know, the senate has acted, the majority leader would say, passed a bill to keep the government open. and then we've gone back to delaying or de-funding obama care. should they take a part of it? would you filibuster this bill? >> let's be clear what the senate has done so far. so far, majority leader harry reid has essentially told the house of representatives and the american people go jump in the lake, he said i am not willing to compromise or talk. his position is obama care must be funded 100% in all instances or he will shut the government down. i hope he doesn't do that, david, i hope he backs away from the ledge he is pushing us towards. but that is his position. >> but senator, even republicans that i have spoken to, your colleagues say senator cruz can't blame harry reid for shutting down the government. senator reid acted. he passed a bill to keep the government open. >> but let's be clear, the house has twice now voted to keep the government open. and if we have a shutdown, it will only be because when the senate comes back harry reid says i refuse to talk. also, let's be clear, president obama has granted a delay for big corporations, every big corporation has gotten a delay. if harry reid shuts the government down he will be saying if american families don't get a delay like the corporations, hard working american families, he is going to insist they suffer. >> it is interesting, democrats say you know the promise with senator cruz' position is it is a purist position. there are problems with obama care. we have had some polls saying there is great dissatisfaction at the town halls, but you haven't debated on how to change the law, what you have gone out and said let's kill the law, let's de-fund it. >> actually, with respect , david, i think it is wrong, i voted to repeal the law, but that was not my position in this fight. my position is de-fund it, which is different than repeal. and even now what the house of representatives has done is a step removed from de-funding. it is delaying it. now that is the essence of a compromise, delaying, simply on the same terms that has been done for the big corporations, that is a compromise. and at the same time, david, on the other side, what have the democrats compromised on? zero, their position is absolutely no, no matter what. >> you make this argument as if there is no broader context here. obama care has been -- has been adjudicated and it has been tested to the political system. and so let's go through that. we had an election where i heard the standard bearer for the republican party, mitt romney, saying that obama care should be repealed. all the republicans already voted against this thing when it was ultimately passed, the supreme court upheld it. and then your colleagues said let's have a strategy de-funding obama care and the letter, and they joined you in that fight. well, here now you don't even have the same number of folks who signed the letter who voted for this effort. there are not protests in the streets arguing to do away with the law the way that you would like. again, 51% of the poll this week, let's uphold the law. so i'm focusing on results. your goal and results. where have you moved anything? >> okay look, the facts are becoming more and more clear that obama care is not working. every day that is more clear, there is a reason the unions are jumping ship. one union after another is saying let me out. there is a reason why the president of the team, james hoffa, used millions, saying obama care was destroying their health care. destroying is his word. now, why is it that harry reid and the senate democrats are not willing to listen to the millions of men and women -- >> but you're a terrific lawyer, you're making an argument, i asked you a specific argument based on the facts on the ground. you made these arguments for 21 hours, my goodness, you haven't moved anyone. >> look, the american people rejected obama care, they understand it is not working. the only people making the argument are the career politicians in washington, harry reid who wants to use brute force, the great thing about the constitution, the checks and balances, the ability to check one another, president obama has over and over again disregarded the law. when he granted an exemption for giant corporations, that was contrary to law. right now we have a system where the rich and powerful, those with connections to the obama administration, they get spared some of the burdens of obama care. but those who were struggling, single moms and young people and people who are just trying to make it. >> you're a proponent of the law, millions are getting access to health care they couldn't otherwise afford. parents with children, others with conditions getting in the way of insurance. i spoke to a hospital administrator this week in illinois saying utilization is down, you can't know what the effect of five years from now is on this law. and nor can proponents of the law. but here is one argument, you've made yours, and the president, when he spoke this week, referred to your words. i want to play a portion, suggesting what you really don't want is the law to go forward because people may start to like it, is what he said. >> he said it is going to prove almost impossible to undo obama care, ñrright? so in other words, we've got to shut this thing down before people find out that they like it. >> you don't think americans will like it? you don't think that 25% of the state of texas that is uninsured will actually like the expanded access to get health insurance? >> i don't, and here is why, because it is not working. what happens, if you want people to get health insurance, the best way to get health insurance is to get a job, and obama care is the biggest job killer in the country. if you look at the mandate, half of the business managers are reducing or hiring part-time workers. another 24% said they were not growing to keep their size under 50 workers. if you're a young person out of school unable to find a job, a big part of the reason you can't find a job is because small businesses are not growing because of obama care. and there is nothing that can give you better health insurance than having a vibrant economy where you can get a job. let's take the thousands of workers at ups who just received notice from their employers that spousal insurance was being dropped. let's look at the workers of sea world who were told we're reducing your hours because of obama care, people are hurting. >> there are also researchers on my side who say there is no reason health insurers would stop giving insurance to their employees, it is a major tool to get employees. and health care, perhaps these problems that you're identifying could be solved short of complete de-funding. i want to start for just a moment to get you clear. a government shutdown, that is an acceptable outcome to you? >> look, i don't want a government shutdown. i don't think that harry reid should shut down the government. the house of representatives did something significant, which is they passed a bill to make clear that regardless of what happens the men and women of our military -- they should be paid. that passed unanimously in the house. and listen, right now, harry reid and president obama had been essentially holding the military hostage, threatening their paychecks over this potential shutdown. they might force. i think regardless of what happened we should pass the bill. we should not have a shutdown, which means harry reid has to move off his absolutist position. you have been multiple compromises from the republicans, and can you tell me what the democrats have done to compromise -- >> but what has he done -- as i outlined before, you have lost ground from even the summer on the position of getting people to vote with you. you lost ground from that position and you haven't persuaded one democrat. you have got to be democrats if you're going to overturn this thing. >> well, actually, joe manchin came out saying he supported the delay in the original mandate. listen, last time this was in the senate, there was division among the republicans. i had hoped the republicans would be united. that didn't happen, i'll tell you this, this next time around, this is an opportunity -- >> you have raised money on this, taken to the floor for 21 hours, you haven't moved anything legislatively, do you concede that point? >> david, i don't, and the establishment has been exempted from some of the harms. members of congress, how can you possibly justify to the american people that members of congress are exempted from the law? are not put on the exchanges like millions of americans. >> well, they're part of the exchanges, they don't get a portion by the employers -- >> but anyone on the exchange doesn't. >> but hundreds of thousands with their employers do -- >> but people with the exchange don't, you want people frustrated with washington? the simplest reason is you have politicians in both parties who are not listening to the people. they get a different set of rules. harry reid said to president obama, we don't want the obama care. i had an exchange with dick durbin, who argued we should stick the american people in coach. i think his own analogy shows what is wrong with this system, at a minimum, members of congress shouldn't be treated better than the american people, and should he be willing to compromise he would agree what the house has done to delay all of this saying it is not ready for prime time. it is not working, and we'll treat the american people at least as well as the others. >> you are talking about democrats, it is hard for them to get a word in edge wise, because there are members of your party who are so critical of what you have done and how you have done it. you have colleagues who accused you of putting on a show. congressman peter king said you're a fraud, lying to the base. george will, who has been a conservative columnist for "the washington post," who has been great, supportive of you in the past. but he wrote this past week, and i want you to respond. those people who deceive others first deceive themselves, allowing their wishes to be fodders of their thoughts by beginning to wish everything has changed. they should remember everett dirksen of illinois, the leader of senate republicans during passage of the 1964 civil rights act recalled, 40 preachers caught me one afternoon there in the lobby "i'm not a moralist." are you more legislative than others? >> i'm just trying to fight for 26 million texans, and for the american people. and i'm pretty sure what he argued is we should be delaying obama care, which is exactly what the house of representatives just voted to do. and one important thing to remember, you and all the voices of washington keep saying we need compromise. twice now, the republicans have compromised. and a twice, harry reid says we won't even have a compromise, i want to fund it all. we want to stick it on the american people and won't budge, that is not a reason, if we have a shutdown, the american people will be held hostage. >> who did you most admire? >> i most admired phil graham, there are voice whose say this is not possible. and if you remember back in 1993 when hillary care was being debated. and there were a lot of people that came forward that said we'll partially fund hillary light. phil graham said, i know you will remember this, he said this will pass over my cold, dead political body. and a whole lot of republicans who were scared, they looked over, he was not killed. they ran behind him and they said yeah, yeah, what he said. look, the power of leadership can change debates. we saw that just a month ago with syria. when president obama said he was going to launch attacks on syria, you had leaders of both house support him. and then the american people spoke up in overwhelming numbers saying we don't want to get involved in a sectarian war in syria, where there is no clear reason for the united states to do so and what happened, the federal government turned. we didn't get involved. we didn't launch the attacks, and just weeks earlier conventional wisdom in washington said it is impossible. >> do you regret comparing the future of obama care to the rise of hitler in nazi germany? >> well, the premise of your question is not true. what i said is there are many voices in washington who said "we can't do this, we can't do this." and i went through the centuries over and over again when americans were faced with big challenges, on big occasions, whether it was the civil war, going to the moon or winning the cold war, at every stage there were voices of conventional wisdom who say this can't be done, and at every stage, the american people rose to the occasion. and what i said is we should do the same here. we should look to, if we empower the american people to get washington to listen to the people, that is how we get this changed. >> do you ride this to the presidential nomination? >> it is easy for washington to focus onpolitics. i understand, that is the business of this town. what i am trying to do every day is focus on making a difference in the lives of the american people. every survey that is done in this country, the top priority of the american people is jobs and the economy. under harry reid's senate, we don't even talk about jobs and the economy. obama care is the biggest job killer in this country. and millions of americans are hurting. you know, i would like to see a democrat respond to james hoffa's letter who said this is right now destroying the health care of millions of americans. that is not me, that is a democrat union leader who has supported president obama and harry reid, we need to listen to people. >> thank you, senator. >> thank you, david. coming up, we're going to switch gears, one of the biggest threats is iran's nuclear program. joining me, msnbc's chief foreign affairs correspondent, andrea mitchell, as well as one of president obama's former advisers on arms control. we'll be right back here in just a moment. "meet the press" is brought to you by the boeing company. we know why we're here. to chart a greener path in the air and in our factories. ♪ to find cleaner, more efficient ways to power flight.

Transcripts For CSPAN Washington This Week 20140216

war on the poor. my district is also very low income. manufactured housing is a big deal. 50% of the homes in my district are manufactured housing. and yet, the policies really made it very difficult for banks to lend on that. i suspect that your staff has made known to you that these pressures exist. have you all discussed that in any greater detail that we'd need to look out for the people on the low end of the income spectrum? >> well, qm was a policy adopted by the consumer financial protection bureau. i think they are trying to address a set of practices that resulted in unsafe and unsound -- >> okay. well, thank you. >> -- lending. but it is very important to monitor their impact on credit availability. >> one of the reasons that we've been able to get by with a qe is that we're the world's reserve currency. has the fed thought at all about what's going to happen when more nations are expressing discontent that we're printing money and we're devaluing what they're holding? so we've seen countries trade with other currencies past year? any thoughts about what happens if the world says you're not the world's reserve currency anymore? >> the dollar plays a critical role in the global economy and it's the federal reserve's job to make sure that inflation remains under control so that the dollar remains a safe and sound currency and can continue to play that role. >> thank you. i have nothing further the other countries. i'm going to yield back, mr. chair. >> the chair now recognizes the gentleman from missouri, mr. cleaver, for five minutes. >> madam chair, thank you for being here. i want to talk consumer spending and jobs. 5% of our population is doing about 35% of the consumer spend i ing, and if you exclude food and energy, consumer spending would rise 1, 2, 3%, something in that area? >> with the distribution of spending, it's very unequal. >> yes. so i'm -- my concern is how do we increase consumer spending, raise gdp unless we are able to get a larger share of the population spending? and for them to spend they need to have some form of income. so what is the impact or what would be predictable impact if we -- if we had an employment benefits and a number of other programs that we are -- we've backed away from in congress? >> well, with respect to unemployment benefits, they certainly were serving to support the spend iing of individuals who had long unemployment spells, and, you know, ending those -- we'll have some negative effect on spending and in the economy on growth. >> because they'll spend everything they receive? >> more or less -- >> yes. >> -- that's true. that's right. >> yes. so several people have talked about the structural unemployment here in the country. what do you think -- 6.6, i guess, is unemployment, and that's not necessarily good but it's better than what it's been, but i'm interested in real unemployment. the u-6 rate. what do you think it is? do you have a good estimate? >> well, the u-6 rate includes discouraged workers. >> yes. >> and those on part time, it's substantially -- it's substantially higher. >> more than double the dosh. >> it's close to 13%, and that is a much broader measure of shortfall in our economy from what we would like to see. so, you know, certainly there is discouraged workers, those who are marginally attached. we have 5% of the work force that's part time. for economic reasons they're not able to find full-time work and so that's a measure that is disproportionately elevated in comparison with the 6.6% or u-3 unemployment rate. >> so are there jobs available and people just won't take the jobs? >> well, i think there is a short fall of jobs and the hiring remains well below normal levels and there's a shortage of demand in the economy that propels businesses to see that their sales are rising sufficiently that they're wanting to take on enough additional workers in order to lower unemployment back to a normal level. that's what we're trying to address. >> i drove down to the boot hills in missouri, i'm from missouri, to speak at an event. on the way back i stopped at a chili's restaurant and there were no waiters or waitresses coming over to the table. they had a little box on the table and you speak in the box and -- to order your food and then somebody will bring it out. and they give you a certain number of minutes before it's brought out. the point i'm making is, we're taking jobs away and then we're criticizing people for not taking the jobs that don't exist. thank you. >> the chair wishes to alert all members, i intend to recognize two more members at which time the chair intends to call a 30-minute recess. the chair now recognizes the gentleman from florida. mr. posy for 5 minutes. >> thank you, mr. chairman. i originally -- and i do want to ask about the volatile three pigs, but the questions by ms. bachman i think deserve a little bit more response. as you well know, dr. paul's legislation to audit the fed was the most co-sponsored bill in the 112th congress. very bipartisan. passed by an overwhelmingly bipartisan vote, and it did not talk about interfering with the day-to-day management and decision making of the fed, it was post-decision making audits. and seeing we're all government and official agencies under our dominion are subject to audit, it just seems very strange that the audit would object to having the logic behind their decisions and the many other of the litany of items you're exempted from being audited for deemed to be reasonable. >> so i think if members of congress can ask the gao to come into the federal reserve shortly after a meeting where we've made a difficult decision and to perhaps review transcripts and look at the debate that took place around a particular decisi decision, we release transcripts. we release minutes of our meetings, but to come in, review materials and say, no, we don't agree with a decision that was made at the last meeting will stifle debate in meetings and bring to bear short-term political pressures in the decision making in the federal open market committee, and i do believe that independence of the federal reserve in making monetary policy means that we need some scope for deliberation and exercising our best judgment and then explaining to congress and the public what the logic of that was. and the purpose, as i've understood it as mia peering at a hearing like this, is to give members of congress exactly that opportunity. >> i understand that. some of us believe in the old adage, trust but verify, and that's what an audit would do. and so would it be reasonable to assume you would not object to an audit if it was post 30 days or 60 days? is there a time limit when you would be totally unafraid to be audited in retrospect? >> well, an audit is different than second-guessing policy judgments than made. >> i'm not guessing -- we do that as it is now. i mean, we don't agree with all decisions you make now. i think that's clear from at least one side of this aisle, but i would like to think that at some point the fed could be audited like all official federal agencies, much less one that is not a government agency but has the run of our entire economy. >> well, this is an exemption that has been granted the federal reserve that's central to our independence for decades by congress and -- >> we've changed a lot of policies trying to make it more transparent and accountable. i'd like to think that government gets less corrupt every day, not more corrupt. >> well, i don't believe that the federal reserve is in any way corrupt, and i believe that the confidence of markets in the federal reserve and in our monetary policy making would not be enhanced by that type of audit. >> by knowing -- by historically being able to audit things that every other agency is subject to review for but you should not be -- let me get over to baso 3. starting in 2003 the recovery ratio will require enough banks to have net cash outflows for 30 days. the problem is that baso 3's definition includes the solve voern debt of countries like portugal, ireland, italy and spain. don't you think that that's like leading sheep to slaughter? >> well, we have designed a rule in the united states that would have stricter definitions to minimum. >> so you think that that's not the same as rating agencies with high risk mortgages as aaas which triggers a 2008 crisis? >> one is for our banking organizations and we've proposed this in our rules to hold assets that can be quickly converted into cash. >> time of the gentleman has expired. the chair now recognizes the gentleman from colorado, wears his broncos cap. >> thank you, mr. chair, and i'll wear my broncos cap next week. madam chair, thank you for your testimony today and i had the pleasure to hear mr. bernanke for a number of times come testify at these very same hearings and, you know, i really appreciated three things about him. one, he's very smart, very steady, and not very exciting. and i want to say you're following in his footsteps. >> thank you. appreciate that. >> so -- what i would like to talk to you about a little bit is the epsock and what is happening just in terms of numbers of meetings, what generally are you concerned about bubbles? have you seen anything that, you know, would cause you some conce concern? we hear that student loans are awfully high and that might be a difficult issue coming up so can you tell us a little bit about what you see the role of the epsoc and how often you meet? >> i have to say i'm new to epsock. i've only been in office 11 days and i've not attended epsock meetings previously, but there will be one this week. epsock does meet regularly. there are deputies and staff who meet very frequently. clearly a major focus is to address potential threats to financial stability, to identify those threats, and to assess them. this is something the federal reserve is very focused on. we have built very substantially our capacity to assess risk to the system. we bring that to epsock. we also use it in thinking about monetary policy and in supervising the largest institutions. we recognize that in an environment of low interest rates like we've had in the united states now for quite some time there may be an incentive to reach for yield and that we do have the potential to develop asset bubbles or a buildup in leverage or rapid credit growth or other threats to financial stability, so especially given that our monetary policy is so accommodative, we're highly focused on trying to identify those threats. we could potentially take them into account in monetary policy, but certainly in our supervision and regulation we would try to address those threats. broadly speaking, we haven't seen leverage credit growth, asset prices build to the point where generally i would state that they were at worrisome levels. the stock market broadly has increased in value very substantially over the last year and, you know, our ability to detect bubbles is not perfect, but looking at a range of traditional valuation measures doesn't suggest that asset prices broadly speaking are in bubble territory or outside of normal historical ranges. there are a few areas where we do have concerns but nothing pr broadly speaking. so student loans, you mentioned again that the growth there has been very, very large, that mainly government-backed student loans rather than private, and i would say the concern there is this is debt that will be with students for a very long time if they get into financial difficulties, that debt stays with them. it's important that they be getting a good return for the borrowing that they're doing, and it's important that they understand what the burdens will be on them when they take out those loans. of course, it's very important, education is critically important, we want to see that, but the burdens are very high and it's important that the education that students are getting pay a return and that they understand what it is they're getting for the debt that they're taking on. >> thank you. and then i'll finish where i started. mr. bernanke, very smart, very steady, not very exciting. the markets must agree because the markets are up today so we appreciate your testimony. thank you for taking on this job. it's still a difficult economy out there even though it's getting better, and we thank you for, you know, being at the >> looking ahead to this you miss, if "newsmakers" this morning, another chance to watch it today. it talks about the board's role when it comes to the nsa and other privacy issues. >> here they are, coming in, closing in on me. i'm still thinking, even eight. when i went through survival school, they taught us the people who capture you are probably the least trained to capture p.o.w.'s, maintain them. the best time to escape his right then. these are rookies and i pulled out my combat masterpiece. i had two rounds. get away, get back. then i fired a round right over there head. they did not flinch. and onesed their rifles of them reached in his pocket a little comic book that some of them carry in their pocket. it had drawings on one side and vietnamese fanatics on the other. the drawings showed them capturing an american pilot. in his uniform with his helmet on come a parachute, and his hands up. surrender.y said, hands up, hands up. so here i am facing about nine long guns, staring at me, and i decided that was the best advice i would get that day and i said, hands up. lee ellis pow tonight at 8:00 on c-span's "q&a." >> back to the common the -- back to the house financial services committee. offering their own insights about the economy and monetary policy. to begin with live coverage on c-span3. >> we will now come to order with our second panel. professor of commissions at stanford university. it is commonly referred to as the taylor rule. dr. taylor holds a phd from stanford in economics. dr. mark clayber has spent six years on the senate banking committee. regrettably again, not as prestigious as the house financial services committee. he holds a phd from george mason. before joining aei she was the director of research for the financial services round table and did a tour of duty on the hill on the other side of the capitol. last but not least, dr. codonal kohn has previously served as the vice chair as the fed's board of governor's from 2006 to 2010. we are beginning to wonder if all former chairman and vice-chairman of the fed end up at brookings. without objection each of your written state manies will be made part of the record after your oral remarks. each of you have testified before us and are familiar with the process. you know about the green and yellow lighting system. dr. taylor you are now recognized. >> thank you mr. chairman, thank you for inviting me to this hearing. i would like to use my opening remarks to refer back to my set of questions that have to do with the policy rules and formulating of monetary policy. it seems to me that the case could be made that monetary policy could be far better had it's been made on a set of policy rules. if policy moved in that direction we more quickly move to a more sustainable higher growth rate. there continues to be interested in what you refer to as the taylor rule. based on the research of many people over many years not just me. when the fed has followed you'lls close you'll s -- rules close to that performance has been very good. one where the performance of the u.s. economy was extraordinarily good and that was a period when the fed pretty closely to these rules. i think performance could have been much better. if during 2003, 2004, and 2005 the fed had followed a rule like this, we would not have had the excess risk taking and not have had as much of a housing boom as we had. and the great recession would have been much less of a year. if during the period of a financial crisis, we would not have had to had a kwquantitativ situation. therefore economic growth would have been better in those circumstances. i want to emphasize such a rule would not preclude the actions during the panic of 2008. it's classic last resort role which helps stable ice the markets. i recommend that legislation be put in place to require the fed to report on its policy rule. it would be a rule of its own choosing. that is the responsibility of the fed. if it deviate d, the fed or the chair would be required to report to this committee about the reasons why. we are not close to that right now. some could argue that could be done in a procedural way. number one, the fed recently adopted a 2% inflation target. that is exactly what the taylor rule recommended 20 years ago. more over, the bank of england and japan have adopted that target. number two, the forecast of the current fomc for the interest rate is 4%. combine that with the 2% independent rate target, that is what that rule recommended 20 years ago. there is a consensus now that the fed in particular should be greater than one when inflation picks up. there is debate about what the reaction should be. some argue it should be larger and some smaller. but the 4th reason why i think we are in a position to move in this direction more so in the past is statements of ms. yellin herself. she has indicated that statements like this are sensible and good herself. she would argue that these are not yet formal times. there is debate about when we would get back to normal. it seems to me that debate should be whether it is normal and it is about when. >> chairman, distinguished members of the committee, i want to thank you for the attention to the meeting. certainly the opinion that every government program should be reviewed regularly, the american people deserve nothing less. i can think of no part of the federal government more deserving of oversight right now than the federal reserve. i will not repeat chairman yellin's assessment of the economy as i agree with much of it. but will highlight a few issues. the release last week of january's establishment survey will review continued weakness. it is below expectations. the concenus was 189 and below the monthly average for 2003 of 149,000. despite these trends will are bright spots in the labor market. the rate rose to 63% and the unemployment ratio increased to 58.8. the margin allally attached lab force remained flat. i would assess that the numbers was monday dedest but quite rea. we did not see the numbers driven by people leaving the labor market. however, i will depart with the remarks of chairman yell lyin a others in fact i would say that policies have retarded job creation and what employment growth we have seen has been in spite of policies coming out of washington not because of them. policies have driven up asset prices and have trance for the from savers to borrowers. it may have in cruised the ib sensitives with capitol. it reduced the velocity of money and weakened the impact of the fed sewn. i think the fed zone have delivered little in terms of delivering our labor market. this would be bad enough had it not placed them in a curious position. once we start to see increase interest rates, i think we will see a reversal in asset rates and there are a number of markets that we have yet to see that will only become clear once we remove these policies. if you have long periods of time where you pay people to take money, they are going to do some dumb things with it. turning to regulatory policy. i believe there was probably no bigger force pushing the act of the financial bail outs. i believe the federal distrust is driven by the public surprise that the fed can rescue anyone it seems. title xi refers to arbitrary ba bailouts. dodd frank's title xi limits federal bail outs. as the chairman is aware, notice of proposed rule making was released days before christmas last year. let me mention issues i have with the rule. one is the determination of insolvincy. it does not to limit the notion that a firm is only insolvent once it is bankruptcy contradicts historical practice. it passes the assistant via solvent firms. the final issue i have with the rule, top level issue i have with the rule, is also the definition of broad based. while i am against any bail outs, i believe the intent of dodd frank is that you are only assist classes of firms not individual firms. i believe the language proposal falls short of that. i will say it is a notice of proposeal making. i will be optimistic that hopefully these issues will be addressed in the rule making process. thank you. >> you are now recognized for five minutes. >> thank you for the opportunity to testify today. i'll lead with my conclusion. it has never been more important for the fed to be transparent and accountable in it's rule writing. it is involved in over 50 rule making. the federal reserve houses and funds the consumer protection bureau and has taken place in the stability council. it is charged with super vision of banks and non banks in the country. yet the fed has no requirement to disclose cost benefit analysis on its rules nor are the fed's rules subject to challenge on the basis of their economic impact. former fed bernanke and yellin have found otherwise. in 2011 they found that economic analysis is not standard or routine at the federal reserve. it is important when looking at the impact obrules on low impact americans. i detailed the efforts for this in my testimony but i'll go over for this now. the cost of a basic bank account. the proportion of the bank accounts qualifying for free checking declined for 76% in 2009 to 2012. credit cards have become more difficult to access. and hundreds of community banks which are of ten the most community banking option have closed their doors to costs. many families have been shut out to conventional banking and have turned to payday loans which can be more expensive. the dodd frank act has set out to help consumers. some have proposed setting fees. others may want to subsidize credit. history shows us these options may end up doing more harm than good. i propose considering the impact on consumers during the rule writing process and adjusting the rule writing process. this can be accomplished by establishing a he cost benefit analysis. i propose a retrospective evaluation for major rules. people say it is rarely done well and may slow down the regulatory process. it is routine in most other parts of the federal government. federal agencies have been expected to disclose benefit analysis. cost benefit analysis is in effect of check in regulatory overreach. the dc court struck down because the sec failed eto consider the consequences. the new rules on the economy and consumer consumers is difficult on households that have bore the brought brunt of this. the federal reserve grew under the dodd frank act and this is increase in need in cost benefit analysis. thank you for your time. >> you are now recognized for five minutes. >> dr. kohn could you pull your microphone closer to you please? >> although economic growth has picked up. federal fiscal policy will be much less of a drag next year. the policy is very far from where it can and should be. utilization and industry is below average. slack and labor and capitol use has resulted in competitive conditions for workers and this has been reflected in rates set by the federal reserve. we are in a risky zone for inflation. it could push us into a destructide destructive zone of deflation. federal reserves decided it can dial back security purchases but it has chosen to keep short-term rates close to zero until inflation seems about the best policy right to me. the most important challenge will be deciding when the begin raising interest rates and at what pace they should rise. there are no reliable form lula for making this decision. we are in unchartered waters. policy must respond in unprecedented ways. slow recovery were unprecedented in post war u.s. economic hi i history. there is no judgement in the conduct of policy and the most important way the federal reserve can reduce uncertainty is by reducing mandates. planning for the future care far more about the rate of inflation than they do with the size of the portfolio of level of rates. that brings me to future economic activity. it is one of the few ways to talk about communication. it must realize that policy making and it didn't do this last summer. it tried to do too much uncertainty. our economy is a complex mechanism and state is not summarized and policy needs to react to regulators and prices. this complexity presents challenges but it is a reality. the third challenge is associated in part with monetary policy maintaining financial stability. it does encourage people to take more risks than they might otherwise have done. the issue is what problems might en sue and interest rates are raised. close contmonitoring and using regulations of discovering and dealing with this source of instab billity. i agree with this and i think it is superior to one in which ipt ra interest rating are raised. the final challenge and it is for this committee as well as the federal reserve is reserving the independence from monetary policy. congress should hold the fed accountable for achieving these goals and if they don't, why they haven't. this committee's intension to revisit whether the congress has set the appropriate goals for the federal reserve and whether the fed is suited for the goals is welcome. we need to be careful to safeguard the federal reserve for the political process. much evidence over time and across country strongly. thank you. mr. chairman. the chair recognizes himself for five minutes for question. her concern over the unsustainable level of entitlement spending. i have heard the president say he was concerned. most economists are concerned. i can't find anybody to say we should fwin begin to reform it . i hear her also say in some respects she supports the taylor rule these are extraordinary times. i'm reminded, everybody wants to go to heaven, because nobody wants to go today. what is the day that we take up the taylor rule. would it have been appropriate then or now? please elaborate. i think that if we had stuck to a rule like that. as it was following pretty closely for a long period, that we would have had a better performance. we should have stuck with this long ago. i indicated that in my remarks and testimony. with respect to going negative. that refers to a situation that a policy rule like that. and it certainly doesn't suggest that now. would it have ever gone negative? not by enough to justify this action it went beyond 2009, 2011, 2012, 2013, 2014. it is unprecedented than we have ever seen before. >> i know you listen to chair yellin's testimony perhaps the first few hours of it. i asked her to comment in my own question to her concerning the current state of guidance and the piece of the wall street journal and i would like to quote it to you again. perhaps the open market committee should have called it the evan's suggestion. now that you have heard the respon response, what is taylor rule like? >> the current forward guidance that has been used so far is it keeps changing. it began really 2003, 2004, 2005 they talked about measurable pace and a long period. and in more recent periods it was a fixed tatstate. and then there was an unemployment rate. we'll have to wait a little longer. the problem has been the changing back and forth. it is hard to do forward guidance. even the people who support it recognize that. it is not a rule in a sense that you stick to it. it is always a rule. this one seems to be erratic. you have advocate d fed's 13-3 powers. so how would you define or if you had our jobs and could write the law, how should the lender of last resort define the law? >> how would you see the purpose? >> if you are going to have one, i would limit it to discount window lending based on good collateral penalty rate. and the deefiations from that have been the problem. >> yes. when people thought about it as far back as the 19th century, lending should be to this man and that man. not just to commercial banks but to all the key elements in the money market. there weren't just banks, there were other brokers and things like that. as the u.s. financial market has developed, and these other it simimportant that they be able to support liquidity to it. i would be opposed to spending $13.3. i think the fed needs to think about how it is going to implement it. maybe the rules aren't suv. i think they have to be part of preventing a run, a panic in the markets from bringing down the system. i have exhausting their only time. >> mr. chairman i will point out. it is good to have the gavel and give yourself as much time as you like. i appreciate your patience today. i know it has been a long day for everybody. we talked about the taylor rule. i'm curious about the $10 billion sorry, i forgot i was in washington, not back in lancing when i was in the state ledge sla to slate tour. it appears that the fomc is going to be continuing that. it appears i will be reading the tea leaves with the chair woman today. it is tied up with a bow today. the next powerball winner will be one, two, three, four, five, six. as we are moving forward. i wonder if anyone is going to comment on that. i want to get something on the impact of low and moderate income. >> so that is their strategy and it is good to have a strategy. you saw what happened on may and june. you could quarrel whether that is too specific. i congratulate them with moving ahead with some kind of strategy. >> but you would rather have a strategy laid out like that? >> yes, much better. you have seen the market's better reaction than last june. >> let me also echo that. i would prefer to see tapering at a faster rate. i think it is an appropriate direction. with extra caps that portfolio very slowly gives the market things to tolerate. >> the market seems surprised. and then in january. when the next crunch came not that surprised. >> certainly people have been trying to tie it to that when we've seen dips in the market. our friends in new york pay attention. >> i think those emerging market economies have seen lots of challenges and the taper is a small part of the problem. >> let's talk about low and middle income households. i wish there was a single person on the other side of the aisle was here. representing one of the poorest counties in the nation. i'm very concerned about what is happening to those hard working, working class families that feel like they are getting the short end of the stick. and here they go, the community banks are getting harder and harder to work with. and now they are turning to their credit unions and now their alternatives. talk about that. >> sure, there has been a lot of discussion in washington about economic mobility and we know that access and credit sand savings opportunities are important for families. what concerns me is that an unintended consequence as the rules that we have put into place. with good intensions is that those opportunities are becoming more expensive or rare and those are becoming more lack of mobility for them. >> what would you identify as the most agreethious? >> the university of chicago has suggested the durban amendment alone has resulted in $25 billion in higher fees for consumers but i think the danger with pulling out one or two rules is that we miss the broader impact on consumers and we can't over look the impact that is going to have in decreasing credit and savings opportunities. >> two wrongs don't make a right or in this case 400 wrongs don't make a right. i see my time has expired. >> at the moment we have a little bit of a supply of time. at this time the chair now recognizes the chairman from indiana mr. stuttsman. >> thank you mr. chairman and to the panel for being here. you mentioned the comment that caught my ear today from chair yellin and that was what we are pha facing today is very unusual. the economy goes through changes and we could say they are unusual. i guess what is normal times. looking at what we have today. i'm not sure that the economy is abnormal as much as washington is abnormal. you look at obama care, dodd frank, the durban amendment, qe regulations, what would you like to comment on? are we over reacting and causing more problems or fixing more problems? >> i agree that a major problem in the u.s. economy is major policy. they have indicated that. the fiscal policy. getting entitlements under control. a great deal of uncertainty, a great deal of intervention. if i look at all of those things, it is quite remarkable at how much they are. i think that is why we have had this weak recovery. if the policy is the problem we can change it. the idea that the policy itself is not normal, doesn't add up to me. it was a problem. serious problem. but we are going away from that. we can't argue forever that the economy is not ready for a good kind of normal policy. i think we are ready to go with improved policy. with almost $2 trillion on balance sheets in the private sector. people are waiting. i have talked to small businesses and they are waiting to know what the rules are and letting the dust settle before they can move forward. i would like to talk about the mandate. how does the fed respond to the current conditions that we are facing. we are seeing unemployment numbers dropping i tell you, you get outside of the belt way, we are hurting. we are seeing more peemt oople f the workforce. what should the fed do? >> any three of you if you would like to respond to that. >> i do think that policy has been a tremendous drag. the chair mentioned earlier the tax increases. whether we have seen that in the fiscal cliff. it is important to talk about os tert. all of it has come from revenue racers and not spending cuts. i think we need to fix policy that is outside of the realm of the fed and that you can only do so much. there is a great amount of cash on the corporate balance sheets. almost two trillion on bank balance sheets. but it is cost facing the labor market's cost. so i will repeat something that chair yellin said which is monetary policy is not a pant pantacia. to go back to your question of what would i have the fed do? >> follow a taylor rule. was nothing like 1.25 point something like that. no one is sougti insougt sugges another rate. and to begin to taper into a quicker way. >> 30 seconds would you like to comment? sure i think there is a burden on congress to address the 11 million people who are unemploy unemployed. aside from providing some level of stability we have seen that the fed hass encouraged businesses to hire. i am in favor of congress to hire bonuses from those to get a job. i think the best hope is moving the long-term unemployed back to work. >> this current policy is appropriate and will be at least for a little while longer. among the issues has been the increase in taxes but the key li the decline in federal spending. i asked myself what would the markets look like if the fed fund's rate was 1.25 instead of 0 right now and i have to think that the stock market would be lower and housing starts would be slower because interest rates would be higher. we saw that it would be 1.7 to 2.7 this summer and it slowed the recovery in the housing market. automobile sales would be less because the ability to borrow to buy a car must be encouraging sales. so i think higher interest rates would have produced slower in even slower economic recovery. this is this very difficult discussion about the counter factual. the federal reserve is saying we aren't satisfied. we think it would have been worse without it. others say no. i'm just myself convinced that by and large higher ipt rantere rates are association raiassocer demand. >> i want to agree i think there are a lot of points here that we don't know. i would say take the housing market for instance. starts are about a third of what they were at the peak. it seems to me that the data suggests that most of the boom for the buck has been refinancing and it has been higher prices. but me refinancing which i have, but it doesn't put into construction workers back to work. so it is yet in my opinion to see the actual construction market turn around in a very big way from that. so i think that is important to keep in mind that lending doesn't seem to be getting out there. having that move is more important than pushing housing priced up. as we see families across the country with dollars being taken away from to put towards health insurance and cost of banking they have less money to be spent to buy new cars and homes. >> the chair would like to alert those in the hearing rooms and those listening in their offices votes are expected on the floor within the next 15 minutes. it would be the chair's intent to keep this questioning going until that time. at that time we would excuse the panel and ajourn the hearing. now to the gentlemen from south carolina. >> let's stay right there on a couple of different topics. dr. kohn i hear what you are saying if interest rating were higher. that we would be selling fewer cars and fewer houses. but doesn't that imply sair tha the recovery iselucery anyway? >> it is certainly keeping it lower than any one thinks it would be over the long run. >> the rate is higher than what the market is charging? >> if the rate you mean what might prevail over 15 or 20 years? >> well, with the federal reserve has to set the short-term rate and establish in this. >> it set it at 0 and didn't have the deservsired impact so went to printing money. so it is not there isn't a mechanism here given the central bank and the kind of money facility we have. we are not on a gold standard. there isn't a natural way to establish a natural rate. >> if tomorrow, janet yellin says that quant taytive easing is going to zero, what would the interest be on the ten year treasury? >> it would go up i don't know 50 or 150 basis points. i think it is subject to different interpretations. that is my point. i don't care what you call it. if the fed was not actively intervening in the markets the rate would be higher. that means to be me that the rate of car sales would be lower than it is today. i'm worried sir, that we are creating asset bubbles in assets, stocks, would you agree with that? >> i think it is something to be watchful and careful of it. but i don't see evidence of it. we are leaning against forces that are holding back the economy. last year it is increases in taxes and spending. some of it we don't understand. mark was correct. we are understanding of the economy is rudimentary. people like dr. taylor keep pushing back the frontier. >> let's me go to another question. i apologize for cutting you off. >> about the mandate. one of the things that i heard was her support for the dual mandate. i think that was different than what we heard out of her predecessor. i had a chance to hear from him and while he played lip service to it. he also said but i acknowledge in the long run monetary policy cannot influence the rate. my question is if that is economic orthodoxy right now. why are you and mrs. yellin putting such a dramatic faith in the dual mandate? if we cannot influence the labor market in the long lun. >> in the short to intermediate run monetary policy can influence the labor market. >> has it? >> and the statement they put out in january of every year recognizes that they don't have control over the longer run but they do have influence over the shorter run. >> we have been doing this for five years. has the kwan taytiquantitativeid jobs? >> yes. >> you wouldn't agree with me -- >> i think we have had some of both. on the survey of businesses they have added many jobs 200,000 a month. >> no no no 200,000 a month i think we have done maybe five of six times over the last year. >> it was 130 last month and 75 on an adjusted basis the month before that. >> no, i think we have added to employment so as she noted 7.5 or 8 million jobs in the recession and unemployment is still very high i agree and the federal reserve wouldn't have n engaged in several rounded if it hadn't been okay with the outcome. >> if you take the same policies towards fighting deflation. i'm waiting for my chirm to >> the gentleman from south carolina asked for it, the gentleman got it. the chair now recognizes the gentleman from pennsylvania. >> appeared comfortable with the fed staff company. >> i will em -- >> what will you look for in a stress test? what kind of variables? >> one of the things that i'm most concerned about. we're all in agreement that rates are going to go up so i do worry that as a yield curve steepens that you're we do need to keep an eye on that when rates go up. i also think we need to be a bit more stressful about sovereign risk. i think we need to look at the treatment of municipal debt. across the board that we really need to take seriously. >> what would your consideration be, for example, if interest rates did go up 150 basis points? and what that would do with the value of the securities that the fed is holding right now? >> we certainly know that increases in interest rates will lower the value of long dated assets ong bank balance sheets and federal reserve. i think that's a very real concern for me. the entire exit strategy says that you will not have to conduct open markets. the factor of the desire to raise interest on reserves. this is where i'm more skeptical. my back of the envelope is on the reserves probably paying somewhere around $6 billion a year. in an inflationary environment, i can see that approach 30, $40 billion and it strikes me as politically unsustainable for the federal reserve to cut a check to the banking industry. i do worry that open market operations may be off the table. >> would you consider broader impacts? we have that experiment about a month ago. whether it was related at all to pull back on qe. any thoughts there? >> i certainly think we're going to start to see rates go up. earlier numbers were 100, 150 basis points. so of course we do hope that you start to have economy recovery so that the fundamentals start to drive it. >> i don't want to push the comparison too much. i do think we're in the 2003 to four situation. we saw a tremendous amount of situations in 2003. that went away when interest rates started to go up. you started to see a reduction in credit quality. i worry that we will start to see that cycle play out again. we had a booming bust at the beginning and end of the 80s. i think that's something that needs to be taken quite seriously. we have heard the suggestion that there has been a cost benefit analysis. do you have an opinion that the fed may have done with respect to the rule? >> there is no economic analysis disclosed by the fed on the rule, which is gree vous. i think that is a great example of why having a requirement would be an important step forward for the fed. >> thank you. >> thank you, chairman. >> the chair recognizes the gentleman from north carolina. >> thank you. and thank you all for being here today. how do you believe this will affect mainstream america and is there anything that the five regulators can do to calm the fears that we're hearing in the financial industry? we can start with you, if you like. >> sure. i am -- one of the issues that i don't think is discussed enough in the focal rule, i do worry that you combine that with a liquidity coverage requirements, i worry that we're putting our thumb highly on the scale towards government debt versus the private sector. i think one of the things we need to do, it's quite interesting they have almost got to mirror each other. banks have not stopped lending they just changed who they are lending to. so, i do think that we need to keep that in mind in terms of long term growth that we don't want to push the system away from lending to the private sector. we have not had financial crisises caused by lending, but we have by lending to governments. >> anybody else want to comment on that? >> i haven't seen any studies that specifically look at the consumer impact but theory would suggest that banks could seek higher yields elsewhere and make the system more unstable or off set reduced revenue. so while there was no economic analysis before, this also raises a need for retro speculative analysis to consider how it's really impacting the economy. >> the unemployment rate is trending downward. would you believe this is an indication of a strong economy or indicative of people leaving the labor force? >> the january number has been driven by people leaving the labor force. i think its modest improvement, you have seen in previous month s. >> yes. >> i think a significant part of the unemployment reduction led towards declining, look at projections on labor force participation the demographics can't explain a lot of the decline. the actual unemployment rate will be higher than what's recordedk i the unemployment rate significantly increased african-american teenagers, which to me is quite shocking. i think one of the only real bad policy mistakes was going into this session, we put in place a series of minimum wage increases that i think have hurt the teen aged labor market. >> you are trying to do that today? >> i didn't hear your question. >> i just made the comment that continuing in the venture today to make it more difficult for teenagers to get jobs. >> i just like to get your opinion on how this has affected the current fiscal issues facing our country. >> the country still faces some very, very serious long term fiscal issues in terms of the demographics interacting with the promises that pass congresses and presidents have made and enacted into law. do you think this has been a help or a hindrance? >> they have made it easier for the government to borrow money at a cheaper rate. but politicians have. >> thank you very much. i yield back the balance of my time. >> thank you and thanks to the panel. appreciate my testimony. this was a subject that i was exploring with the chair a little bit but i would like your thoughts on this. obviously, as the fed continues to taper the asset purchase program and as interest rates begin to normalize and elevate, the cost of borrowing to the government is going to rise. what council do you have to congress in terms of the urgency and the time sensitivity of getting our fiscal house in horder and the impact it will have on cost of borrowing? >> i think this is more of a medium to longer term problem. it's important to act soon. it's not fair to do it to people who are going to retire in five years. >> i would add i think there's a tendcy to kick the can down the road on the debt. don't come for 25 years based on current projections by the cbo. but there is substantial economic literature that says countries with the levels of debt to gdp that the u.s. currently has right now experience slower growth and less job creation. so when you look at it through that lens, i think it's an urgent requirement for congress to fix the debt. >> you know, i would emphasize as well, i agree basically with what was said and i will emphasize as well, we can address long term fiscal issues now without having any negative impact on any short term stablization goals. while i'm skeptical, dealing with long term entitlement problem will be a positive not a negative. that's still lingering around. projections of long term debtors are as pessimistic as they were four or five years ago. the sooner it can be addressed, the economy will respond positively. >> i was reading with interest your written testimony about the impact that financial regulation has on low income americans, some voices have been pretty vociferous and aggressive advocated an increase in the minimum wage. i like to hear how consolidation in banking is forcing many to be unbanked or underbanked and moving into alternative outlet's. you are being forced into alternative services like a payday lenders. at the same time we're anticipating the consumer protection bureau clamping down on that industry as well, leaving a lot of these low income folks with no other alternatives with access to credit. >> i will take your questions one at a time. there is is a lot of debate about the disemployment effects from minimum wage but what we do know is that even if it worked perfectly, it's a really perfect way to lift the poor out of poverty because most people who are poor do not have a job at all and people who are low income, very few of them is actually in minimum wage. most of the minimum wages are given to younger workers, part time workers and those three or four times above the poverty level. >> i yield back. >> doctor taylor i'm under the impression you have travelled the greatest distance. at least there is consensus so we know that banks are sitting on a trillion six, a trillion seven of excess reserve. i'm trying to figure out what further rounds of quantitative easing achieve for us today what there hasn't been is a discussion today about what is it going to take to unwind this balance sheet. maybe there will be further taberring. even if there still is, we are adding to the balance sheet. under you and my mentor, senator phil graham have written about this subject in the past, but what are the risks socialed if she and the other members choose not to taper what are the risks associated? the only thing i can say. >> i don't think it should be postpo postponed. i don't think the purchases are doing much good. i say look at qe 3 as a program. how can you say that program worked? you can say it was the problem of unwinding. i think it would be a mistake never to unwind because ultimately that's going to be inflationary. it's the one we are always rewarded about. we have experienced that downside already. mark is quite right. that's going to be hard for the fed itself. there's the question of capital losses, how that's going to be treated. ultimately as i understanded, you have to get on with it. and at least they're getting on with it. >> want to thank each of our witnesses coming to testify today. >> i would ask each of you to please respond as promptly to these questions as you are able. all members will have five legislative days within which to [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] to a lookup, we will at some of the conservative policy summit held recently in washington, d.c.. with tom donohue. he testified recently on capitol hill. the newsmakers and national security and freedom of the press with thomas friedman. night we continue this with a live two-hour program. the managerial skills. it makes mount vernon a successful operation. a mix of possible for washington to be away for eight years. aboutre's something abraham lincoln that she saw the potential and helped develop it. it's help polish them up for washington society, the political parties they had where they invited a lots of very important will. she will did a lot of power. >> the involvements in the political career is right from the beginning. she becomes much more active in 1921 when they contracted polio. >> monday night at 9:00 eastern by von c-span. conversation about the first lady's and their contribution to the nation, live at 8:00. the washington examiner had an article today about comments made by former senator jim demint on cbs'face the nation. he was quoted as saying conservatives do not feel like they are represented in washington. he is not the president's of the heritage foundation to several republican lawmakers. you some of the summit beginning with jim demint. >> over the last 15 years or so we have seen every combination of power in washington, d.c. we have seen a republican president with republican majorities in the house and senate. we have seen a republican resident with a democrat majority in the house and senate. from 2008-2010 we solve the democrat president capable of getting through an aggressive agenda would democrat control in both the house and the senate. we looked about this. we said if we are serious about building america for freedom and civil society, we need to do something more to make sure that our policy gives across the finish line. that is why we started heritage action. have learned there are three things that are necessary for conservatives to do to ultimately get our america built. do something different than what you're supposed to do. we have to win elections. it is undoubtedly true that conservatives that we will never do this unless we have elections where majorities are open to our ideas. this is not a sufficient condition. is very popular in washington say washington is broken. it is not broken. washington, d.c. is a finely is aimed ate that expanding government power, picking winners and losers in the economy and making sure those who have access to the corridors of power have access to the lobby is to run this town. it allows them to have a competitive advantage for people who want to break in and disrupt the businesses. washington, d.c. is a good i -- is a place where good ideas go to die. until we break the status quo, conservatives will never have interest. that is the second condition. the third is that we need to have bold ideas. are interested in making my better for all. that is what we're here to talk about today. we have a fantastic roster of people talking about issues from show -- from school choice to access to energy, what we can do about cronyism and all the way through the agenda. fighting the status quo is likely to headlines. i cannot think of a better person to lead out the discussion today in our first speaker. he needs no introduction. as i went around the country with him, i introduced him simply as the real mr. smith comes to washington. i am pleased to introduce the president of the heritage foundation, senator jim demint. [applause] >> good morning. thank you so much for being here to join us today. i'm pleased to welcome all of you to this very important policy summit. i think heritage action for hosting this today. i am also very grateful to the many members of congress who will soon be speaking. i appreciate them taking time out of their busy schedule to join us and share their ideas. toaddition, a big thank you all the policy specialist from lentand elsewhere who have their expertise to shaping these ideas and will be a part of presenting them here today. toetimes it is too easy caricature conservatives as people who are more interested in stopping bad policies than promoting good ones. i know that's not true. but i suppose at times it is tempting to just sit back and be snide about the many failures of modern liberalism and big government. with examples like detroit and obamacare, they make it too easy. but even with such easy fodder, we can't give in to this temptation. we are conservatives first and foremost because we know that conservative ideals - brought to action - will help people the most. we have the concrete solutions to build upon the successes of the past and realize the potential of the future. crucially, much of this requires cleaning out the cobwebs and rust, which have gathered in too many federal laws, an antiquated federal tax code and a regulatory regime that cannot address america's current challenges. in short: it's time for real progress. as the great c. s. lewis said," we all want progress. but progress means getting nearer to the place where you want to be. and if you have taken a wrong turn, then to go forward does not get you any nearer. if you are on the wrong road, progress means doing an about-turn and walking back to the right road; and in that case the man who turns back soonest is the most progressive man." unfortunately, there is nothing "progressive" about the progressive establishment. it cannot turn around: it is blocked by a berlin wall of the mind, trapped behind policies that promote subsistence, not independence; control, not freedom, and the endless gray concrete of centralized power. the men and women who will shortly take this stage have looked over that mental barrier and seen a new landscape, one where problems are solved, not subsidized; one where citizens are entrusted with the care of their own families and communities; one colored by opportunities as diverse as the millions of lives in this great nation. today, we'll be looking at the path act, which representative jeb hensarling has introduced to dissolve the bumbling fannie mae and freddie mac and encourage private investment and innovation. we'll see the transportation empowerment act, introduced by representative tom graves and senator mike lee, which lowers the gas tax, cuts red tape, and returns funds and decision making back to the same localities that know best how to handle them. senator lee is also going to reintroduce the welfare reform act along with representative jim jordan, which not only saves taxpayers hundreds of billions of dollars, but puts social assistance back on track: getting people into jobs and out of poverty. we'll be hearing about the hero act, which takes school accreditation out of the hands of federal bureaucrats and puts it at the state level, while lowering the cost of higher education for students across the nation. representative raul labrador will walk us through the marriage and religious freedom act, which enjoys broad bipartisan support, and prevents government discrimination of any person, church, business, or other institution based on their traditional view of marriage. these policies do not arise from the lobbying of special interests; they are for the benefit of all americans. they were not designed to serve those who walk the halls of power, but those who sweep them late at night. if conservatives in congress wish to return to their seats this november with a mandate from the people, the ideas presented today will help secure that mandate. it's not sufficient for conservatives to run against agendas; they must advance ideas and legislation that will build a stronger america. a mandate to lead without a plan, without a proposal, without original legislation, is no mandate at all; it is simply a continuation of a broken, deadlocked status quo. already, there are rumblings of huge, contentious pieces of legislation we might see in the coming year. these bills, as ever, treat the law like a club, with which 50-some percent of the country uses the law to bludgeon the other 40-some percent. like the disastrous obamacare initiative, they attempt to address an issue altogether in one grandiose action, legislation stretching into thousands of pages, unread by the very people voting on them. they invariably increase spending and our national debt and create more problems than they solve. they are divisive to legislators themselves. when enormous bills are rammed through congress, it destroys any hope, any reason to reach across the aisle and cooperate on improving our system of government in ways that are agreeable to everyone. perhaps worst of all, they divide our fellow citizens. it's not just a matter of political disagreement-we'll always have that, and i think we can always find a way to benefit from it. the unity americans have with each other does not arise from quashing those communities with different beliefs or opinions, but allowing them to govern themselves according to those beliefs. and when so many different viewpoints and lifestyles and cultures are forced into one mold, resentment replaces love for one's neighbor. public affection turns into public enmity, patriotism into ambivalence. i ask the leadership of the house and senate, regardless of party, to leave this ham-fisted approach behind. instead of wasting time forcing the country into one-size-fits-all policies, take the opportunity to genuinely consider the ideas we discuss here today, and allow for open debate on these and other proposals which could improve lives of many americans so easily and so quickly. i am confident that these ideas, if allowed to inform our laws and our way of governing, will make that first great stride toward the three things we all wish to achieve: a strong economy, a strong society, and a strong america. let this be both our goal and our starting point: no matter our parties or philosophies, we can unite if we recognize we're running in the same direction. this agenda to unite america has the promise to give aid to those disadvantaged by circumstance, opportunity to those trapped by bureaucracy, and protection to local values endangered by national meddling; these ideas can bring people together once more in appreciation for each other, their country, and, dare i say it, even their government. appreciation for each other, their country, and i dare say it, even our government. thank you and i look forward to being with you here today. \[applause] >> jim has some time to take questions if we have them from the audience. anybody want to jump on first? jim, zsh >> jim can you start off and talk about your experience in the house and senate in terms of bold ideas when you were capable of moving them forward, what some of the hurdles were to getting those going? >> i better stand over here where there's a microphone. it's never easy to move things through the house and senate but i will say when i first came to the house, mike -- i was elected in 1998, there was certainly much more bipartisan working together. all the bills that i introduced, we had a bipartisan or democratic co-sponsor, and -- but what i have found, not so much in washington, that america is hungry for bold ideas and clear leadership. certainly the polls are clear that they're pretty disgusted with congress in both parties. but what we found in the last year, we talked to people all over the country, students, minorities, people from all walks of life, is there is broad agreement on the things that we're talking about today. even, i think folks who have -- who have had a liberal mindset for a long time are starting to see that the federal government, despite good intentions, cannot do the things they're promising to do. they have not been successful running our schools. health care appears to be a disaster. but we see states opening up so many new opportunities. it wasn't too long ago when the president said we were out of energy as a nation. but now that states have moved around all federal lands around federal regulations with new technology, we found we have enough gas, natural gas, oil to last 100 years. lowering the cost of energy and creating vibrant economy. so the bold ideas, mike, we see moving at the state level more than the national level. we can see choice in school creating opportunities for at-risk and poorer children who had no opportunities before. we see families with jobs because states are developing energy. we see a lot of states solving the health care issue in different ways. so these are not just pie in the sky ideas we're talking about. a lot of what you hear today is just taking the -- a need a legislative idea, and moving the power and money back to the states and doing the things in washington that we need to do, doing them better and more effectively and more efficiently and hopefully at a her -- lower cost. so i'm confident that these ideas, these are not huge things like tax reform or entitlement reform that we know we can't get done this year. but the things in education we're talking about, the things in transportation, i know that there's a number of democrats who support them because some of the ideas have been introduced before. so i'm optimistic that if we take these ideas to the american people, that's the whole idea of heritage action is not just to take them to the hill but take them to the american people, inspire the american people with these ideas and then in that, hopefully we'll create a consensus with their legislators to get something done. >> \[inaudible] the discussion of amnesty and immigration, i'd like you to talk about the politics of that issue. >> well, i think the broader issue just these comprehensive thousand-page bills, we see the damage that they can do. and the pattern in washington now is to introduce them and pass them within two days before america has a chance to find out what's in it. that's what happened with obamacare, dodd-frank, and they would love to do the same thing with the huge immigration bill. that type of bill, it will divide our country right now. and we need immigration reform. but as we've talked about at heritage, we don't need this big conglomeration of comprehensive bills, especially at a time when americans have lost the trust in this president to faithfully carry out the laws. there are immigration laws on the books that the president is ignoring. so how can we in good faith say, yes, we'll give an amnesty now and then the president is going to fix our borders and handle workplace enforcement and do the guest worker visas that we need. frankly, this is not a good time to do it. i believe that we need immigration reform, heritage has a step by step proposal that i think will earn the trust of the american people, unite the country around an idea and i think restore the -- this whole idea of our heritage of immigration which we certainly support here. but with this president, what he's done with obama kaye and arbitraryly enforcing our laws, how he's misused the i.r.s. against his political enemies to give the president the authority that would come with this giant amnesty bill does not make sense. >> daniel patrick moynihan said you have the right to your own opinion, you don't have the right to your own facts. i had the opportunity to have a lovely exchange with david brooks on "meet the press" about the immigration bill and there's a misperception that there's an immigration bill in washington, d.c. that would give america the modern immigration system that it the serves. there's not. there's a corporate cronyism bill in the senate that's masquerading as an immigration bill that was written behind closed doors by this afl-cio and chamber of commerce and it would do a disservice to this to allow a corporate cronyism bill to pass, to make us all feel better about doing immigration reform and miss a chance to modernize the system. we are eager to work on a step-by-step possess to work on immigration reform. unfortunately there's nothing to work with here in washington right now. >> today we're going to hear, i'm certain, a number of conservative ideas, heritage foundation, heritage action has done a great job in advancing them but to get them to become law, what plan do you have to get the senate democrats even to consider them and get them passed -- get them past harry reid or do you plan to take the ideas to the states where there are republican governors and republican legislatures that would have a propensity to be more support snive >> the american people have the right to be presented with a choice. i think that one of the things that we regret about the last three or four years is that they have not been able to have that level of choice because house republicans frankly haven't pursued a bold agenda. think back to the fiscal cliff debate of a year and a half ago. if you'd gone into a debate and said to the president of the united states, we just passed a tax reform bill that would have been pro growth, wouldn't have been worried about picking winners and losers but instead making life better for all americans, that's what we want, to use this opportunity, to use the unfortunate opportunity of the fiscal cliff to do that. if you're not willing to do that, we'll maintain the status quo of keeping the bush tax cuts because now is not the right time to raise taxes. that allows the americans to see that there's a conservative agenda, that works for all americans, not americans who have access to lobbyists who can get a 0% corporate tax rate. we're here today to talk about those bold ideas. we hope that the people in the senate, the president, anybody in washington will look at those bold ideas and say, this is what what's right for america. frankly, we're skeptical. there's a status quo bias in this town that needs to be broke. we're committed to break it. bold ideas, we think, will work at the ballot box and we think anybody that works on bold ideas will result in electoral success. but right now there's -- there's not a conducive environment in washington, d.c. to advance a gold agenda that's good for all americans because this town is where bold ideas go to die. so it's not to be done in the next six month bus the process of starting that process is what we're here too do right now. >> are you advancing some of these ideas -- >> let me jump in here. that's a big part of what we do. our folks at heritage are traveling all over the country, working with states, particularly in the area of school choice, right to work concepts, so we can stand here in washington and point to states that are working and working with these ideas and by promoting them i think we're encouraging other states to do them but as mike said, showing the world that conservatives have an alternative to what's going on here in washington today. that's been the real weakness, i think, in the last few elections is the idea that the economy is so bad, gas prices so high, it was going to take the democrats and obama down. that doesn't work that way. americans need to know what we stand for. you'll hear part of that today. certainly this is not our whole solution for 2014, but you should take a look at that if you're interested and ideas that can build a better america. what we want the country to know is that the ideas that we're talking about really unite people. we have seen that all over the country. they agree with our ideas. sometimes they don't like the packaging of republican or democrat but the country is not nearly as quided -- divided as washington makes it out to be. if we can present ideas and we've seen it with school choice, for instance, juan williams helps us with school choice. minorities all over america are seeing that this is a way to get kids out of failing schools and into schools that are working and safer and get more opportunity. by doing this, i think we'll help pull the country together and hopefully show both parties that the right ideas are also good politics. >> i thought maybe you'd make some progress there since it's been going on for 75 years. >> i'll let mike comment on that but we did make progress in the sense that we helped americans see. i think for the first time the farm bill wasn't a farm bill. 0% food stamps and the spending -- 80% food stamps and the spending on food stamps increased dramatically. they cut it back a little bit. if we hadn't forced a debate on it, there wouldn't have been any debate on food stamps or farming. i think we made it harder for them to drive through a farm bill without real reforms. we'll be working on that every day between now and then. mike, you were on the front lines of all of that. >> that's a great question, it el straits the problems in washington we're here to address today. you can't find a single policy expert from right to left who thinks america has agriculture policy that makes sense. the peterson policy did something a few years ago, coming up with plans going forward and all of them said there needs to be changes to the agriculture policy. yet when the deal is struck three weeks ago, the media and nerve washington, d.c. said, bipartisanship has broken out in washington, d.c., washington is working, something got done. well, something got done in the sense that it passed but america did nothing to move our agriculture policy forward toward a modern, 21st century agriculture policy would look leek. instead we kept the same soviet-style ag policy this country has had for decades. i'm hospitalistic, we have gone through two years of frankly unpleasantness that none of us want to be caught up in over a farm bill. i'm optimistic that the house agriculture committee, the senate agriculture committee, committees in the past that have had very little interest in meeting with policy experts to talk about what a 1st century -- 21st semplingry pardon me bill, will use the next few years before we have to go through one of these again to think outside the box. we've had members of congress express interest in sitting down with us and figuring out, when we have to do this again in five years, what's good policy, not just what's the status quo pushing forward but that's what's happening in washington. the farm bill is a perfect example but you see it in every other bill that goes forward and i think today is the start of turning that around. >> more now from the national heritage foundation. >> let's rejoin the conversation here. i am excited to introduce jim jordan. great leader on almost every conservative issue that, you know, a lot of you know him. he is absolutely a great leader on every conservative issue that we work on. whether it is federal spending, tax reform, entitlements, pushing back against cronyism, jim is on the friend life. en he chaired the republican study committee. as he chaired the republican study committee, his leadership there was extraordinary and that committee really flourished under his leadership. it became clear under his chairmanship that this was a guy to keep an eye on. since leaving the rfc chairmanship, jim has not slowed down at all. he's become in many ways the voice of the conservative conscious in the house of representatives. now on top of everything else that he's working on, he's taken on the very important work of transforming the welfare state. we slang around here. we call it welfare reform 2.0. as you know, this has been a very important issue to the heritage foundation. it's been at the core of what we've been working on for decades. heritage was instrumental in the 1994 success, and we are determined the to keep those victories and to keep transforming the welfare state. so, he's been working hand in glove with robert and jen here to translate those ideas for how to keep going into legislative form. so his bill has been dropped, i think this week. it's ready to go. we are going to make a massive push after this for cosponsors. we want the leadership team to bring this to the floor. this is a very important piece of legislation. so he's been working with our people here. he's also joined one of our panelists, bob woodson, who i'm excited for you all to be able to meet up during the panel. and he's gone out into the field to see firsthand what the kind of challenges that we face are. as you know, this is going to be an important one for us. so i want us to be able to find pa way to push this out there. we're excited to help jim on this bill. we're excited to advance it. please welcome jim to the stage. >> don't clap. you haven't heard me talk yet. thank you, jim. thanks to heritage. let the greatest policy think tank in the whole darn world. any time you can team up with heritage -- well said -- they're doing all the work. i just that to get the privilege introducing the bill in the house side. senator liesman introduced it on the senate side. and we so appreciate heritage's work. not only on this legislation, but of course on all kinds of conservative issues. these two people over here are going to join the panel are the specific ones. bob woodson. we've been down and saw firsthand what people getting in the trenches and going out and helping people. not just talking policy. not just saying big things and nice things, but going out and ministering to people and helping them to improve their lives. and jennifer marshall, of course, has been tremendous. she organized the whole trip and has done so much research in this area. let me say it this way. if you're going to stop poverty in the broad sense, and i'm going to talk briefly and we'll get to the panelists. if you're going to prevent poverty, three things you need. work, strong families and free markets. i mean, it's really that simple. focus on work. focus on marriage and family. focus on free markets and let's be honest, this administration is not doing good in any of those three areas. and that's why we need to change and that's why we need to highlight this, and that's really what our bill is all about. and i want to spend my few minutes talking mostly about the first thing, and that's work. we crossed the the line last week. you probably all saw the cbo report. we now have one of two major parties in the country embracing this concept that less work and more help from government is now part of the democrat platform. and i would argue we crossed that last week. did you hear the comments that keith ellison made? and i like keith. he's a nice guy. did you hear his comments on the tennessee sunday shows? did you hear what nancy pelosi and harry reid said about job loss? it's sad to see one of the two major parties what i would argue now step over the line and embrace the idea that it's somehow good when people work less. we come from entirely different focus. this bill we have is an entirely opposite direction. we think work is a good thing. i would ask you all to let's just do a short exercise. think about the first job you had. very first job you had. maybe it was a paper route. maybe it was babysitting the neighbor's kids. maybe it was working at mcdonald's or burger king or some other fast food restaurant. for me it was bailing hay. i grew up out in the middle of nowhere in ohio. it was bailing hay and mowing lawns. the first real business i had was mowing lawns. the things, the lessons i learned, my brother had a lawn mowing business. and the you think about the things you learned from that first business. how to manage money and manage resource. we had kind of an interesting operation. my dad said -- my dad was old school -- and he said, okay, i'll provide the truck. a beater of that truck. give you the two riding lawnmowers. we had one push mower and gas cans and that kind of thing. he said, i'll provide those. you guys got to pay for the gas. you guys have to -- you hang out with your buddies. you have a date on the weekend. that will come out of your money. you learn to sort of manage the resource. he was old school, too. if you were screwing around and broke something on the mower, you had to break for that. if it was normal wear and tear, he would cover that. you learned about work and the satisfaction you get from doing a job well. you get done. you see the nice lawn you mowed. you met the customer's need. you learn the basic values. and when we don't let people experience that or we have policies that discourage that or disincentivize that, we rob them of the abilities the to learn the skills that we all got from our very first job. we took those skills and lessons and principles onto a better -- obviously i'm not still mowing lawns. i would like to mow my own. i do. but that's what we're missing. this focus on work. i was thinking the skills you learn -- you learn to deal with people. whenever someone would call our house and find out we were in the mowing business, someone would call. we would see them and answer the phone. and we knew someone was asking for us to mow their lawn as well. we had 20 at the time. we didn't need more. we would be in the background like we don't want more. my dad never turned one down. anyone called, we always took that additional lawn. but you learn to deal with people. i remember the steinberger ladies, too. two older ladies who were never married, lived together, two sisters. they had a big lawn. we quickly learned -- a lot of times you pull into someone's house and grab the mowers and get to work because you that had to get to the next one. with that house we always went and took a few minutes before we started to talk to them. we knew if we talked to them a little bit and visited with them a little bit, they were more likely to bake the chocolate chip cookies and have them waiting for us. they did it so many times. you just learn thoese skills tht are important in the business i'm in now. right? we had to keep track. you had to write down that sho so many people wanted it on thursday and friday before the weekend. so many different things you had to do. my point is this. we're robbing people of the opportunity to get those same skills. and we have a bill that focuses on that. it focuses on how important work is. that central element. our bill is real simple. real simple. it says let's do two things. let's figure out what we're spending the money on right now. 77 means tested social welfare programs. your federal tax dollars are used to fund the various social welfare spending we do. let's aggregate that. let's figure that out and let's require states, let's incentivize states to have work programs that make a difference in people's lives and teach them loez lessons that we all learned. whether it was mowing lawns, flipping burgers, running a paper route, whatever it may be, let's teach them the basic skills to move onto better employment and something better in life. if you had a chance and if you see the story -- the story in -- here, i got it. wall street journal over the weekend, i thought it was interesting. economist casey mulligan talking about this issue. we had mr. professor mulligan speak at a sub committee hearing about year ago on the unemployment concerns and started talking about these issues. of course cbo understood this guy had it right. it was largely his analysis put into our anal sit. i would argue on the the broader policies from this administration, but it's worth your -- worth reading that if you get a chance. i'll finish here and we'll get to our panel. president johnson said this. he wants to strike at the causes of poverty, not just the consequences. and nast whthat's what our bill to do as well. you want to get at what causes poverty, it's not focusing on marriage and family. and you want to get at what causes poverty, it's not adhering to free markets. so when we focus on those things, good things can happen, and we can move in the right direction. last thing i'll say is -- i used to say this to all the the student athletes we got a chance to -- some of you know my background before i got crazy and got in the business of politics and public life i was assistant wrestling coach at ohio state university. i used to tell our student athletes all the time, hard work doesn't guarantee success, but it sure improves your chances. you want to achieve things in life that have meaning and significance, hard work is the best ticket. when we have a culture and when we have government policies that go in the opposite direction, that's a mistake. that's something we should all look to correct. and when owe focus on that work opponent and work ethic, you build a quality that is the most important character quality necessary for anyone to achieve anything of meaning, anything of significance. and that's self discipline. it's so important. i think i've shared this story with tim before. it stuck with me. at our high school wrestling coach at our high school. wrestling is big at our school. my brother is the coach at our high school. we won the state championship the last 14 years in a row. it's a big deal. but the coach that got it all started was our coach back in the day. the wrestling room is named after him. he got cancer a few years ago and passed away. had an amazing memorial service for this guy because he had a huge impact on students and student athletes in our school. he would talk about discipline every day. he was the toughest teacher in our school. he was taught chemistry and physics. i still remember. jordan, this is chemistry class. this is not just any old class. you want to do well in my class, you better read the material the night before. you better come to class prepared. you better answer questions and participate in class. it's going to take discipline to do well in this class. this is chemistry. and then the wrestling room. he would drive me nus. self discipline is the most important quality. i was like, would that guy shut up? he's driving me crazy. sounds just like my dad. now i got to get it from coach at class and in the wrestling room. it hangs in the wrestling room today. discipline is doing what you don't want to do when you don't want to do it. and doing things coach's way rather than your own way. and that's doing things the right way when you would rather do them the easy and convenient way. the biggest problem in this town is we always do things the convenient way, instead of the right way. this is about teaching them the qualities to help them do things the right way. so they can better their families' lives and their lives. it's focusing on hard work and self discipline. that's why i'm so excited about it. we'll get there. it won't beeasy. tell me anything in life that's worth doing that is easy. thank you all very much. and time for questions. [ applause ] we're going the panel. that's right. >> if i could invite our panel up now and i'll introduce them as they come up. if you haven't had a chance to hear from bob woodson before you're in for a real treat. he's working with a lot of folks in in congress, like jim said, getting them on the ground. getting them to talk to people. really to understand. to rub shoulders with folks and see what's it's about. bob's work has been really important to this effort. jen marshall here at the heritage foundation have been working with bob and robert on this. jen is the director of our policy study here at heritage. and we are really privileged to have her, too. i will open it up with a couple of questions here. then we can go do the audience. i would like to start with bob. bob, your testimony at the senate budget committee about hurt with the helping hand. we saw that very powerful. you shared a story about your niece in that testimony. that's what really connected with a lot of people. would you mind sharing that with the group today and talking about the implications of it? >> yes, when the chairman first of all started off by talking about when her father died, left behind six children, impoveri impoverishimpoveris impoverished rural community and welfare was important for the family to become restored and they all went to politics on government scholarships and therefore that was her defense. and my response was that we generalize about poor people. we disaggregate them. you have people who use welfare whose character is intact like she did. it was used as an ambulance service, not a whole transportation system. then you have category two, like the woman, young mom in wisconsin, who saved $5,000 of her welfare checks to send her daughter to college and she was charged with a felon. and she reasoned, well, i made a decision, and therefore i'll stay dependent. not because she had bad character. she made a conscious decision. that's a second category. the third category, those who are poor because of the chances that they take and the choices that they make. there are character deficits

Transcripts For CSPAN2 Book TV 20121230

>> rajiv, when we over in afghanistan to write this book? book? book? >> i traveled the initial in early 2000. i made 15 trips from 2009 through this year, many of them several weeks at a time. i traveled all over the country, but i emphasize my time in the south. i spent a lot of time with our military forces, with u.s. marines into helmand province, with army soldiers in kandahar, with american diplomats and reconstruction workers, and with the afghan people. traveled around by helicopter, by my is that trucks, pickup trucks, by donkey, and really -- >> we able to get out on your own? >> yes. fortunately, though i'm an american, i'm blessed with dark skin and this beard. >> did that make a difference? >> it did make a difference. it allowed me to blend in perhaps in ways it would be more difficult for you to do in kandahar. >> rajiv chandrasekeran, here is his most recent book, "little america: the war within the war for afghanistan." he has been our guest here on booktv on c-span2. thank you, sir. >> thank you. real pleasure. >> visit booktv.org to watch any of the programs you see here online. type the author or book title in the search bar on the upper left side of the page. click search. you can share anything you see on booktv.org easily by clicking share on the upper left side of the page and selecting the format. booktv streams live online for 48 hours every weekend with top nonfiction books and authors. tv.org. >> next, former speaker of the house newt gingrich presents the second book in his historical fiction series on george washington, "victory at yorktown" but it's a little over an hour. >> good evening, everyone. my name is john, and i had the honor of being executive director of the ronald reagan presidential foundation, and it's my pleasure to welcome all of you here on this rainy evening. in honor of our men and women in uniform who defend our freedom around the world, if you would please stand and join me for the pledge of allegiance. >> thank you, please be seated. >> before yes, sir. i would like to recognize a few special guests we have with us today but i'd like to begin with a welcome to one of our members of our board of trustees and a former governor of the state of california, pete wilson. governor. [applause] >> also with us tonight is a terrific congressman who is retiring after 26 years of terrific service and his wife. [applause] >> our ventura county supervisor, peter, thank you for coming. [applause] >> now for those of you who are patient enough to go through the book signing line just prior to the event this evening, you know this wonderful woman is here with us tonight. she's a best selling author, "new york times" best selling author and the president of gingrich production, ladies and gentlemen, please join me in welcoming callista gingrich. [applause] so we have with us tonight a very special guest. i know that if i were simply to give a difficult introduction to spend her gingrich, the one where you list every accomplishment of the speakers bio, i promise you we would be here all night and even he would get bored. [laughter] >> his list of achievements in politics, his involvement in lifelong learning, his expertise in national security matters, his business interest, his philanthropic endeavors, the dozens of books he's written, the list goes on and on. so allow me for the moment to presume that all of us here are already well a coin with the important milestones in the life of one newt gingrich. because i want to focus in some part on the future. and what i sincerely hope is newt's place in it as it relates to ideas. so let me explain. it is no secret to anyone here that the party of abraham lincoln and ronald reagan took a beating three weeks ago. republicans lost the battle for the white house the white house as well as seats in both the house and the senate. now, most are still stinging badly from that defeat. i know this from firsthand experience, as many are visiting the reagan library in droves lately, and what seems to be a quest. a quest to remember a great president, and remind themselves of these ideals, his optimism, and what he did to inspire americans to greatness. we should remind ourselves that while our 40th president had the uncanny ability to reach into the hearts and minds of americans, it was ronald reagan himself who said, quote, i wasn't a great communicator. i communicated great things. today, we can recognize the great things spring from great ideas. we can also take heart that there are leaders in our time like speaker newt gingrich who has great contributions to make in the way of such ideas. now, there's plenty of precedent here. when newt was first elected to office in 1978 in georgia, his party, like the republican party today, was in the wilderness. the jimmy carter occupied the white house, and both the house and senate were safely in democratic hands. but with the election of president reagan in 1980, republicans took both the house and the senate. but in the house, where newt gingrich went to work each day, he was badly outnumbered. now, i worked as a hill staffer for a congressman's office who was only steps away from newt, and i can assure you for representatives like newt, the minority was often a lonely place. the republicans had not held the majority there since 1954, and it was not a soul alive who could ever imagine a republican majority again. oh, except for newt. with no seniority but a tireless work ethic, a vision and a mind filled with ideas, it was newt gingrich who sat in the back benches of congress and methodically devise a strategy over several years to make the republican party a party of ideas once again. it was newt edifies the famous contract with america. plan to give republicans more than something to run against the historic 1944 election. he gave them something to run for. it was newt who rallied the faithful behind these ideas and took back the house after 40 years in the minority. it was newt who helped engineer passage of the welfare reform and to balanced budgets during his time as speaker of the house. he's been on the national stage ever since, pushing america and the conservative movement forward with his ideas. so ladies and gentlemen, i'd like you to please join me in welcoming to the reagan library, speaker newt gingrich. [applause] >> thank you. thank you all very, very much. it's always an honor to be back at the reagan library. i want to thank john for the great job he does of really providing leadership on a day-to-day basis, the degree to which of this library as a model of educating young people is really remarkable. analog that goes to the energy, and to be candid, the fund-raising ability that john brings us. so, john, thank you for your work. [applause] >> i hope all of you will join close to me in keeping mrs. reagan in your prayers. she is a remarkable woman who spent a lifetime serving this country. and we all cherish her, as she continues to be active and continues to play a role here at the library. so i couldn't come here, and i mentioned nancy fortissimo their aisles with say, governor, it's great to be back with you. we did a lot of things over the years. from being made in san diego to u.s. senator to governor, to a leader in a variety of ways. i look to pete wilson and to gale as great people who represent the willingness to serve the state and the country in an important way. i want to say, it's always a family engagement if you're out there, thank you both for serving the country but it really does make a difference. it's great to be back here. [applause] >> i did not you would be with us, but we are thrilled to have you here. callista and i have launched what we call an american legacy book tour. we are very fond of the library, as you know, and we made a movie called ronald reagan -- i want to recognize tonight kevin and his wife are here. kevin was the director of that film, and we are just always thrilled to be with kevin because he does such a great job with movies within together. and so, we come back to the reagan library from a unique background, and you may wonder why we talk about an american legacy book tour. you may wonder why callista has created an alliance with the elephant to create -- -- and why i have witnessed many novels as i have come and i thought the best person who could explain our commitment to american history being at the reagan library was president reagan. so join me for a minute. we want to show you part of president reagan's farewell address. his last speech in the oval office but i think this captures perfectly why we have an american legacy book tour. >> there's a great tradition of warning in presidential farewells, and i've got one that's been on my mind for some time. and hardly enough, ma it starts with one of the things i'm proud enough in the past ages. the resurgence of national pride that i called the new patriotism. this national feeling is good. but it won't count for much and it won't last unless it's grounded in thoughtfulness and knowledge. and informed patriotism is what we want. and are we doing a good enough job to teach our children what america is and what she represents in the long history of the world? those of us who are over 35, grew up in a different america. we would talk very directly what it means to be an american. and we have a love of country and an appreciation of its institutions. if you didn't get these things from her family, you got them from the neighborhood. from the father down the street thought in korea, or the family who lost someone, or you get a sense of patriotism from school. and if all else, you can get a sense of patriotism of the popular culture. the movies celebrated democratic value, implicitly reinforced the idea that america was special. tv was like that, too, through the mid '60s. but now we're about to enter the '90s, and some things have changed. younger parents are not sure that i'm ambivalent appreciation of america is the right thing to teach modern children. and it's for those who crave the popular culture well grounded patriotism is no longer the style. our spirit is back, but we haven't reinstitution allies did. we've got to do a better job of getting the thought that america is freedom. freedom of speech, freedom of religion, freedom of enterprise, and freedom is special and rare. it's fragile. it needs production. so we've got to teach history based not on what -- but what's important. why the pilgrims came here, what those 30 seconds over tokyo meant. four years ago on the 40th anniversary of d-day, i read a letter from a young woman writing to her late father who had fought on omaha beach. her name was lisa, and she said we will always remember, we will never forget what the boys of normandy did. well, let's help her keep her word. if we forget what we did, we won't know who we are. i'm warning of an eradication of the american memory that could result ultimately in an erosion of the american spirit. .. [applause] >> i want to thank the staff here at the library, because i called this afternoon, and i said, you know, i've been thinking about how to introduce this talk, and it occurred to me it's pretty stupid for me to quote reagan, and i could get reagan to quote reagan, and i think you will all agree there's a power to what he did and how he did it. i also believe, by the way, that's at least 50% of the explanation why we're in the mess we're in. those of us who are conservative lacked the courage to take on the school board, the teachers' union, the local academic elites, the news media, the entertainment culture. and we ceded ground which has crippled this country's understanding of itself. and part of what california lis saw and -- ca list that and i have done, in my case with writing novels is to try to get across to the american people this is a country worth knowing, and you know it by learning its history. you become an american. any other place in the world you can claim genetic pattern, geography, it's not true here. you can come here from haiti, somalia, china, mexico, in calista's case her grandparents came from switzerland and poland, in my case they came from places like scotland and ireland. you can come from anywhere, and you can learn to be an american. but to do that, the you have to learn to be an american. and if you have an academic elite and a news media elite and an entertainment elite who are opposed to teaching you how to be american, you cut off the life blood of this country. that's why we have an american legacy tour. now, several people said when they found out i was coming out here that if i'm going to come out here and talk about george washington, which to a lot of people seems a long way off, and i talk about sweet land of liberty and land of pilgrim's pride, both of callista's books have become bestsellers, it's actually about the 13 controlnies. her mother, who's now 80, wrote her and said you should not say this is for 4-8 years old, this is for 4-80 years old because nobody has studied the colonies and, therefore, it's brand new information for everybody. somebody said to me, okay, you're going to do that, but what you really should do in order to engage washington and the national media is you should apply it to the fiscal cliff. and i thought to myself at the reagan library what better place to go back to first principles. and since i've written now three novels on george washington, what better pattern than to weave these two giants, ronald reagan after whom the soviet empire disappeared, and george washington after whom we became a country. and ask yourselves what are the lessons of history? i don't study history because it's an interesting habit, i study history to better understand the present and the future so that i can be engaged in making history by being an intelligent, informed perp. that's what citizenship ought to be. and so what are some of the lessons? now, let me start with the fiscal cliff. and i'd ask a simple, obvious question. this is a very sophisticated group. how many of you have heard the term "fiscal cliff"? [laughter] okay. now, i want to say something which in washington will be seen at heretical and as gingrich once again going off and doing things that make no sense like the contract with america, balanced budget, i've participateed in my career with reagan's supply-side economics. i'm proud of the number of things i've participated in that made no sense in washington. [laughter] there is no fiscal cliff. this is absolute, total nonsenses. the best way to understand what happens to all of us is to read a great essay by tom wolfe, thomas wolfe enentitled mar mowing the flak catchers. this goes back to, i think, the '60s when he first wrote it. now, wolfe is trying to describe a particular pattern in san francisco. in which the welfare department has figured out that all of the senior welfare people should be on the second floor of the welfare office hiding from the people they serve. and the newest, least paid people should be on the ground floor screening the people who are mad. and wolfe describes the samoan community in san francisco. as having figured out what the game was. and so you would have 6-5 and 6-6 samoans come in carrying traditional native war clubs. [laughter] and they would walk up to the front desk, and they would say i want to see the boss. and the underpaid, brand new staff person would say, uh, we're not supposed to let you see the boss. and they would start to hit the floor with their club. and so you'd have this normal-sized person staring up at this gigantic samoan with his war club and thinking to himself, do today pay me enough for the next part of this? [laughter] and if you haven't read this essay, thomas wolfe is one of the greatest observers of the american scene in our generation. if you've never read this, it's worth going back and reading because we're revisiting everything wolfe, everything wolfe described in his great early essays. we're revisiting. because the left has continued to mutate and evolve and metastasize and become more baroque than it was when wolfe first described it. and so now instead of it being the local samoans at the local san francisco office, it's the national news media. and they get together, and they chant fiscal cliff, fiscal cliff, fiscal cliff. and if you're an intelligence politician and you walk out to do a press conference and you say what i just said to you -- which is the fiscal cliff is a fantasy, it is an excuse to panic, it's a device to get all of us running down the road so we accept whatever obama wants because otherwise we have failed the fiscal cliff, and how can you be a patriot if you don't do what the fiscal cliff requires? and the fiscal cliff will tell us one afternoon much like the land of oz where there will be this person hiding behind the machine who will say raise taxes now. and if you don't raise taxes now, you'll have violated the fiscal cliff. now, do any of you want to be the person who stands up and destroys america by violating the fiscal cliff? do you want to explain that you are so out of touch of life that you don't care america's going to die late on thursday? [laughter] it's all right if that's the kind of person you are, because we just need to know it now because we're never going to schedule it. [laughter] after all, you're or clearly weird. [laughter] so let me start with the fiscal cliff idea and say there is no fiscal cliff. let me say second act conservatives and republicans -- about conservatives and republicans who are demoralized, get over it. we had a bad election. we did a number of stupid things. we faced an opponent who worked harder than we did, did some clever things. ronald reagan, one of his most important single statements is february 1975 in washington at the conservative political action committee meetingment now, i was part of this. i ran in '74. i've had no sense of timing. so i picked watergate to run in. [laughter] i'm in georgia. i'm a yankee-born army brat with a strange accent, a weird name running as a republican during watergate. this was beyond not clever. [laughter] this was like, you know, don't give him money, pay for the therapy. [laughter] in december of 1974 republican party id was at 17%, and there was serious talk about is the party going to disappear and be replaced. now, it was nonsenses, but it was serious talk , and i was part of the group doing serious, in-depth analysis of what went wrong and why did it go wrong. they actually had a series of commercials called republicans are people too. now, when you're in bad enough trouble that you have a commercial that says i'm a person too, you know you're deeply moving. [laughter] it was in this environment that ronald reagan went to cpac and said we need bold colors, no pale pastels. and he was throwing down a battle sign. he was saying don't tell me you've got to sellout, don't tell me you've got to cave, don't tell me you've got to do whatever the left wants. there are moments in history when you draw a line, and you fight. now, we have 30 governors. we have control of the united states house of representatives, we have a huge number of state legislatures. the idea that we are supposed to create a surrender caucus in order to be socially acceptable in washington is absurd. let's be clear, that's what we're -- that's what people are currently forming in washington. how much do i need to surrender so you won't beat me anymore. when i was finally elected to the congress -- by the way, in terms of my bad scheduling, the second time i ran jimmy carter was at the head of the democratic ticket. and i remember it was the best campaign technically i ever ran. and it felt really good towards the end. and we've been think these moments when everything feels right because you're the candidate, and you're in the middle of the cocoon. so i went in to vote on election day, 1976, and the state of georgia was very proud that jimmy carter was the nominee. and i found myself standing in line behind three people who had come from the nursing home. [laughter] to get revenge for sherman's march through georgia. [laughter] and i thought to myself, how likely is it that after they vote for jimmy carter they will submit their ticket for a yankee-born army brat on the republican side? and i thought, this is going to be a long evening. [laughter] and it was, i went from 48.5% against the dean of the delegation in '74 to barely enough to survive in '76. getting in, carter proved the left can't govern, and by 1978 i won the seat. when i came to washington, the democrats had been so dominant from 1973 on that they would salter onto the floor of the house looking for republicans to beat up. [laughter] and republicans would shrink onto the floor of the house hoping not to be noticed. and the new generation who were elected starting in '78 literally banded together and went to the floor of the house to find democrats to beat up. and we'd pick fights with them. i'm talking about -- i'm talking about debating, i'm not talking about physically. i just want to make that clear so that nobody in the national media says gingrich advocates beating up democrats. [laughter] you have to be very careful how these things spread. but i do agree passionately with margaret thatcher's rule. first you win the argument, then you win the vote. so we'd get groups of people who would go to the floor regularly and start debating. and after a while the democrats stopped coming to the floor, because they understood there were more of us that were prepared to debate than there were of them. we studied it every week because we didn't have to govern. the minority, as phil graham once pointed out to me when he switched sides and he became a republican, he said if you're in the majority, you have to have an idea, fashion it into a bill, hold hearings, mark up the bill, pass through your body, go to conference with the senate, get something done. you're busy all day long trying to achieve something. if you're in the minority, you get to golf and vote no. [laughter] that becomes a self-perpetuating model. and one of the things i would say to the house ore palins is to get a grip -- the house republicans is to get a grip. they are the majority. they're not the minority. they don't need to cave in to obama, they don't need to form a surrender caucus. the senate, as pete knows, is an institution in which individuality totally dominates teamwork. each senator is a unique figure, each senator somehow fashions out what they're going to do. you're not going to, in the short run in the minority, organize the senate republicans in terms of actually being able to do something positive. you may be able to organize them to do negative things, you're o not going to get them to suddenly, magically come up with a formula because there are always going to be five or six difficult versions depending on how many senators are in the room. on the house side, you're in a different situation. you are the majority. you control the schedule. you control the committees. you control the hearings. and so my number one bit of advice to the congressional republicans is simple: back out of all of this negotiating with obama. the president is overwhelmingly dominant in the news media. you start setting up the definition of success finding and agreeing with obama, you just gave obama the ability to say to you, not good enough. we send welfare reform down to clinton three times, and he vetoed it the first two times. we didn't start by reaching an agreement, we started by doing something. if the house republicans would say to every single subcommittee -- and there are a ton of subcommittees -- every one of you is going to hold hearings on waste in government, so why don't you go back home, and they could create 1-800-waste. [laughter] okay? probably technically a few more letters in there, so i'll let you add whatever the right number are to get to the number for the phone company. or to put it online which is a better way to do it and also have it available in a variety of other formats and say, look, you send us everything you think we should hold hearings on. how many americans do you think could find one or two or three items of waste that they would be willing to suggest congress hold a hearing on? so within the first two or three weeks you'd have five million suggestions. and you could say, look, this is what he wants to raise taxes for. somebody from new jersey said to me two days ago their estimate is that in the fema effort, the federal emergency management agency effort in new jersey one dollar of every three is waste. now, that may be a little bit high, a little bit low, but it gives you a flavor. certainly, it was true in katrina. so you start saying to yourself let's have a discussion about how many billions have been thrown away on bad loans and solar power. let's have a discussion about why we're still sending money to egypt. let's have a discussion about how much money is being wasted by various agencies. let's have a discussion about whether or not we want to give epa this money to enact a radical program. now suddenly you're in a different conversation. but instead, the president and the news media have magically gotten the republicans into an argument over taxes. and then, and i give obama great credit for this, i have never seen anybody better at finding trivial distractions in order to avoid responsibility. [laughter] [applause] and let me say to give you a 2012 variation on ronald reagan's 1975 bold colors, no pale pastels, obama light is not a winning formula for the republican party. [applause] so let's start with how the media operates. the media operates in collaboration with the white house first to create panic. you're going to run off the fiscal cliff unless you're totally insane and do exactly what we're told to do and, therefore, you're a bad person if you ask the question why is there a fiscal cliff, and will america be dramatically different on january 2nd if, in fact, we just hold our breath and see what happens. second, you then go to distraction. the current distraction is grover norquist. now, i've known grover norquist for a long time. i think he's a fine person. he holds no elective office and, in fact, he wasn't elected president. so the president of the united states who is responsible for figuring out our problems who has not offered a single serious, cost-cutting measure, i mean, tell me what you think barack obama's going to go to the house and senate democrats and say i need a yes vote on this cost cutting. instead of dealing with the fact that the president of the united states is once again totally failing to provide leadership, the president has cleverly gotten us worried about whether grover norquist now defines the republican party. because as we all know, if we are not worthy of the news media's respect and love -- [laughter] we are a party that will disappear. i mean, just listen to the tone of the language when you watch morning joe or you watch, you know, even fox and friends are off on this whole. shtick. and grover did something very important. he came up with the idea of a no-tax increase pledge as a way of drawing a line in the sand. i voted against the tax increases under reagan -- i say this in the reagan library -- i voted against the tax increase of george h.w. bush which i think was a disaster and a fundamental mistake, and when we balanced the budget for four straight years, the only time in your lifetime, we did it by cutting taxes to accelerate economic growth. so i clearly represent a different view. [applause] but i have no problem if somebody wants to break their no-tax pledge. if they are prepared to go home and explain it. but this idea that they're creating this posturing, several senators have said i'm not afraid of grover norquist. well, i just want to put in the record here i've known grover for years, i'm not afraid of grover norquist. they didn't give their pledge to grover norquist. they gave their pledge to the voters of their state. ms. now, there are circumstances where you raise taxes. ronald reagan, you have in your archives this great video. reagan campaigned at one point and said my feet are in concrete. and being reagan, he could get away with going to the press conference one morning and saying the sound you're hearing is concrete breaking. [laughter] because as governor he concluded in order to meet the state's requirements he had no choice. but it never cost him very much because he was totally up front and totally honest, and he went to the people of california and said, look, here's where we are. it's a bigger mess than i thought it was, i can't fix it any other way, i think we have to do this. but he did that after creating a commission which fundamentally cut costs and dramatically cut spending. i mean, nobody thought ronald reagan was raising taxes to create a bigger government. they figured out if he needed it, then it must be really serious. what we have today is no innovation, no reform, no new thinking, no creativity, no hearings on waste, no hearings on better ways of doing things. you live in the age of the ipad and the iphone and of google and of facebook and of twitter, and you're face with the a federal government which currently runs at the pace of a manual typewriter. [laughter] and you have no serious effort in either party to fundamentally overhaul the system. and in this that sense we're told by people who are running a disaster we need more of your money to prop up a disaster we can't reform. and it's a bipartisan failure. now, the last thing i want to talk about is how washington, i think, would have dealt with this. washington's a remarkable person. i think he is the most important single american. i think all of us stand on his shoulders. i think we probably would not have won the american revolutionary war without him, we might not well have gotten a constitution without him, and we might not well have been able to find an orderly system of self-government. and we all stand on his shoulders. and washington was very big on listening to people who actually knew what they were doing. [laughter] and i mean this in a very specific, narrow way. because i'm not against listening to people who know more than you do about their topic. i've listened to consultants who know less than you do but get paid for telling you thing z so you feel secure, because you paid for somebody else, and it fails, it's their fault. so washington, for example u in a fight at trenton -- this is in the second trenton campaign -- needs advice. calls a council of war with. and there are two people in the council who are not part of his military. they're local farmers. and i always remind -- i was at one time the longest-serving teacher in the senior military. i spent 23 years talking about the art of war. and i would always tell generals and admiral the reason washington had these two people in the room is they were farmers who actually knew the local neighborhood. and they were the only two people in the room who knew that there was a sunken road south of trenton, and you could go from trenton to princeton, and the british army wouldn't see you. so they weren't there for social reasons. they were there because they were, literally, the only two people who knew what they were doing. so you have with washington something which you see almost none of in washington today, and that is a person who was prepared to reach out to the person who knows. i spent years, literally years,, trying to convince the government in both the republican and democratic party that we have between 70 and $110 billion a year of fraud in medicare and medicaid. and my sources were very straightforward; american express, visa and mastercard. if you had in the federal government in medicare and medicaid the same level of fraud you get at american express, you would save somewhere between $70 and $110 billion a year without raising taxes and without punishing any honest person. can't get anybody to listen to me. they don't fit the congressional budget office model, they're not in the bureaucracy, they have these weird private sector ideas, they want to use computers. [laughter] i mean, there are just a whole series of weird things about this. and that's where we are. we're a country which could solve virtually all of its problems. if you read -- and i want to close with this reference back to washington for a second. because i'm, frankly, callista and i have been going around the country listening to conservatives and republicans belly ache. you know, can you imagine -- i've written three novels in washington; to try men's souls, crossing the delaware on christmas night with ice in the river during a snowstorm, to march 9 miles in the dark with an army which has slunk from 30,000 to 2500, and of the 2500, one out of every three do not have boots, they're wearing, they're wearing burlap bags on their feet and leaving a trail of blood. so when conservatives say, oh, gee, i don't know what i'll do, it's so difficult, i say do you have any idea what it costs to become free? what people did, what they paid? but can you imagine if washington brought in his consultants? [laughter] hi, i've got this idea, we're going to cross the river at night. can't do that. [laughter] won't work on a 30-second commercial. [laughter] our second volume's valley forge. and, by the way, if you want to see a congress that's truly incompetent, don't rely on the current model. they're amateurs. go back and look at the continental congress. 14,000 soldiers cross a ridge into the valley that's called valley forge promised by the congress that they would have money, they would have supplies, and they'd have equipment to build cottages. they have one axe for 14,000 people. and we did, we wrote valley forge in part to remind folks it's always hard to be free. it's always difficult. and washington going through the most bitter winter in the history of the american army transforms the army by bringing in an officer who understands the most important thing: americans aren't europeans. i would say this to the current congress, the current people in washington, the current news media, we're not spain, we're not greece, we're not totally messed up like europe. this is a country where if we could just get government to quit screwing up, we would do fine over the next 20 years. [applause] but imagine the consultant report if they came out and said, you know, general washington, we've evaluated the situation, and you have one axe and 14,000 people. we think this is bad. [laughter] we think you should be deeply depressed and consider quitting. [laughter] a congress that isn't doing well enough to be worthy of at least a couple hundred axes doesn't deserve your loyalty. why don't you go home. now, these people wanted to be free, and they were prepared to die. when they cross the delaware on christmas night in a desperate last effort before the army ceases to exist, their slogan, their password is victory of death. victory or death. and they meant it. it wasn't victory or i'll cry for six weeks. [laughter] it wasn't victory or i'm not going to watch fox news for a month. [laughter] it wasn't victory or i think i'll pout. [laughter] these people were really passionate about the idea that freedom was the right god had given them, and they weren't going to fail god by giving it up. and finally, we get to yorktown, our last novel on washington. it's an extraordinary gamble. the country's exhausted. washington can't win the war by direct assault. he's sitting outside new york. the royal navy has so much power that he can't capture manhattan. one ship of a line had more artillery firepower than the entire american army. people forget how powerful these ships were for their time. and so he's sitting there, and at a time when there are no helicopters and no cars and no television and no computers, he gets a note from the french army which is sitting in rhode island which says the admiral of the french navy sitting in the caribbean believes that he could come north for six weeks. now, the entire opportunity was created because washington had had the courage over a year earlier to send one-third of his army to the south to fight general worn wallis and wear -- cornwallis and wear him out. cornwallis won a victory in greensboro, north carolina, that cost him so much that he said to his staff two more victories like this, and we won't have an army left. and they were just gradually tearing up cornwallis' army, and he retreats to yorktown in despair expecting the royal navy to save him. and washington has gotten this note. the french march from rhode island over to new york, the french general says i am under your command. they manage to mask the british in manhattan so they don't know washington's on the move and think he's still sitting there. they had a four or five-day head start. they run through philadelphia where washington has to raise enough money to pay the army to get it to keep moving. that's how close this is. the only time in the entire war that washington is described as intensely emotional is the morning he sees the french fleet where he is described as acting as though he were crazy, dancing and yelling and screaming and tears coming down his eyes because he's gambled everything. he had no way of knowing if they'd show up. and they were there, and the british weren't. when cornwallis surrenders, the band plays "the world turned upside down," and it was. i came to the reagan library tonight, a place named for a man who believed in freedom so much that the soviet empire disappeared, i came to talk about the man on whose shoulders we all stand, george washington. and i would say to each of you and to every person, every republican in the entire country, every conservative in the entire country, find the courage to live up to the endowment your creator has given you. you are endowed with liberty, you are endowed with the right to pursue happiness. it comes from god and, therefore, you have the responsibility to respond to that endowment. together we can do exactly what ronald reagan and george washington did. ronald reagan understood margaret thatcher's rule, first you win the argument, then you win the vote. george washington, the night they were marching to climb on the boats in the ice during the snowstorm, had his officers read the opening pages of thomas paine's latest pamphlet which washington had asked him to write. paine was the great panel me tier whose pamphlet, "common sense," described the declaration of independence vividly. and now it was turning out to be really hard. july of 1776 by december had turned into a bitter, painful, depressing, demoralizing soors of defeats. and washington got him to write a pamphlet called "the crisis" which begins, these are the times that try men's souls. because washington understood, first, you win the argument. then you win the war. people had to believe. so i just came here tonight to say to you, we have no reason to despair, we have no reason to back off, we have no reason to surrender. we have every reason to behave as americans. i look forward to questions. [applause] [applause] >> so the speaker's been kind enough to give us a few minutes for questions and answers. if you have one, raise your hand. we have people in the aisles with microphones. if you could wait until we get a microphone in your hand so everyone can hear it, that would with great. so we'll start over here. in first of all, mr. speaker, i'd like to congratulate you and thank you for coming out and for being the man in the arena who's willing to fight the good fight. we do appreciate that. [applause] and i agree with you that we haven't the war, we've only lost the battle, and we have to continue to fight. some of the things that i think we need to do and we should all think about going forward or is, one, we need to make sure that the constitution is followed, and they should be called out when they don't follow the constitution. we can't rule by executive fiat. i also think that callista's doing a wonderful job by starting the education in the schools, because i think that's where we need to start a long-term plan of 30-40 years of turning it around. because we need to educate people, not indoctrinate them. and i think we need to go after the media. and i'd like to see you come up with something along the lines of the contract with america, maybe the contract of we the people to define conservativism and to lay out clearly, like did before to the american people, and i think we can win and conquer again. >> thank youment. [applause] thank you. those are good comments. >> over here. >> speaker gingrich, sincerely appreciate your intellect. i'd like to ask you a postelection question on the current immigration debate. it seems problematic that those people who are coming into the nation whose first interaction with our country are to violate our laws or at best to completely ignore them. are we running the risk of inculcating a culture of lawlessness? i'd certainly like to have your thoughts on how we can avoid this problem and solve this issue by not only strengthening our country, but hopefully avoiding further demise. >> well, i think whatever way we define immigration has to include control of the border and has to include some kind of worker permit system which is actually rigorously enforced. that is i happen to think you're going to ultimately end up with some kind of system that has people who are resident but not citizen and who have a work permit but are not on a path to citizenship, because i think that's a matter of -- at some point, you've got to be practical about what is doable. but i think it's very important to insure as you build that that you're actually going to enforce the law. and i don't blame people who show up here. if we refuse to control the border and we refuse to identify who you are and we refuse to police ourselves and we refuse to do anything if we find out you're here illegally, it's a little hard to tell you you're stupid for taking advantage of the richest country in the world that seems to be saying to you, please, come and exploit me. i think to some extent -- [applause] we have to reestablish a rule of law. and the only point i tried to make during the debate which i think had a significant impact, unfortunately, for our side in solidifying the degree to which people adopted positions that made no sense. i made two points. one is we're not going to deport grandmother. now, is some of you may disagree with that, but i will guarantee you if you look at this country as a whole, the idea that we're going to go out and find grandmothers and deport them, the churches will protect them, their families will protect them. it ain't gonna happen. now, conservatives should not write laws that are fantasies. we have some obligation to bound conservativism in reality. and so i didn't say give them amnesty, i'm not for citizenship for people who came here illegally, but i'm for figuring out a path for residency that gets them to pay taxes, get them to be within the law, get them to be not exploited and ends the sore. we will never appeal, i mean, when you have a candidate who basically says to an entire group of people -- and, remember, we lost asians by a bigger margin than latinos. now, this cannot be a gift problem, as one of our leaders described it, because asians are the hardest-working, most education-oriented and, by the way, economically most successful group in america. so they're not the people who are going to stand around and say, oh, please, give me a gift. but when you walk into a community and say, hi, i want to talk to you about economic liberty, but first i've got to kick out your grandmother, all of you who believe in families understand that's a really high barrier. i mean, it's tricky at that point to have the rest of the conversation. because they just say, no, i'm not going to deal with you. and somebody's got to have the guts in our party and in our movement to stand up and say i am for a conservativism that enforces the law within a framework of reality, and i'm for a conservativism which is based on facts. and i think that's going to require that we find some way to say, yeah, i'm totally for enforcing the law. but i'm going to start from where we are this morning or this evening. i want to then impose -- and i'm prepared to be very tough about it. i'm prepared to say to employers once there's a 24/7, instant verification model based on your atm card, you hire somebody who's not here legally, we're going to hammer you economically so it's irrational. but i think, you know, i think people will buy that. you can create a contract that works. what you can't do is continue to go down this road of trying to find a contract that's impossible and isolating yourself from the country in a way that guarantees that the left will control. because what the left wants is unlimited illegal immigration who then get to be citizens and vote. that's the fundamental difference. >> over here. >> in california it's virtually impossible due to demographics and due to skewed registration to have republicans elected to federal offices. and for the governorship. this skewed demographics is becoming more and more important every election, and how can we do something about that? in the elections in the future? >> that's a great question, and it's -- theodore roosevelt in the 1880s decides he wants to get into politics. now, theodore roosevelt came from a very i risk accuratic -- aristocratic family. went to harvard, was independently wealthy. and all of his social friends said to hill, what are you doing? and roosevelt said, i'm going down to the german and the irish bars -- [laughter] and they said how can you do that? i mean, there are germans and irishmen there. [laughter] and roosevelt said political power in this city is decided in those saloons. and you can sit up here in your penthouse all you want, but i want to be in the room where the decision is made. i'll take your word "demographic." i don't, and this is where i so deeply disagree with our consulting class and, candidly, with one of the comments of our last nominee. i don't see demographic problems. what do you think asian-americans want? they want a good education for their kids. they're passionate about their children. they love their children. they invest heavily in their children. they invest more heavily in their children than any other ethnic group in america. what kind of future do you think they want? just saw a survey in the morning that came out. guess what the number one validation of achievement as seen by college students is today when you say from them 25-30 years from now how do you know you'll be successful, you know what it is? owning a house. now, if you were a true left-wing collectivist who wanted to herd everybody into apartments so they could be close to the subway so they wouldn't need a car which is a terrible thing that gives them independence, can you imagine how depressing it would be to know that obama's vote base wants to own a home? have possessions? be economically independent? and i think we as a party have to sort of humble ourselves. i tell the story about washington and those two farmers for a practical reason. we need to relax a little bit and go out and actually listen to the people of california. you think the average latino likes the fact that l.a. unified is a disaster? do you think they like the fact that sacramento's owned by the lobbyists? do you think they're thrilled to pay higher and higher taxes for fewer and fewer jobs? or do you think maybe they don't have any sense that they're allowed to have a conversation with us? and that maybe starts with us going and sitting down with them and saying, so tell me about your dreams, tell me about your hopes. i think you'd be shocked. i have a great story, i can't use the guy's name. he's a democratic consultant -- and it wouldn't be fair to him because he told me one night, but he happened to be hired by the traditional party which had run mexico since 1929. and he went down, this was just before vicente fox won on a reform ticket. and he went down because their candidate was in deep trouble, and they wanted clever american advice. and he did a series of focus groups, and he said, you know, you have a real problem. it's called corruption. [laughter] and the guys he was talking to were the guys who were corrupt. [laughter] and they said to him, he said -- now, this is his description, not mine. he said, you have a number of guys who are fairly overweight smoking cigars in this room, and they're going, you don't understand us. you're clearly a gringo. people don't mind corruption in mexico. and he said, he looked at them and said let me get this straight. you think the average mexican gets up on monday morning and goes to work thrilled at the idea that two of the five days' salary will be stolen by some fat, machine politician who's totally out of touch with them? they said he fired them later that day, and they lost the election. i think there's a message there. people don't come to america to recreate bad government. and they're watching sacramento reinvent really bad government. [applause] >> we've got time for about two more questions. we'll come right here. >> thank you for coming, mr. speaker. i really was looking forward to you debating barack obama. that would have -- [cheers and applause] been amazing. one of the things that was really noticeable and palpable in the last year of the presidential debates and the candidates was the lack of media objectivity. and as a media person, what do you suggest for this next wave of breitbarts and television and bloggers in order to combat and, basically, silence this mainstream or lame stream media that we have today? >> well -- [applause] and if you go back and look at the debates, i did a fair amount of policing. [laughter] but my first, my first question as republicans look at this, and i've just started at gingrich productions what'll be a six month project of reviewing and trying to learn the lessons at a much deeper level than you're going to get from the current wave of analysts. because i think when you lose five out of six presidential elections in popular vote remembering that bush got a minority of the vote in 2000 and we, you underperform in the presidential election of 2004, the weakest incumbent re-election in history. there's something, i just wrote a newsletter which you can get at gingrich productions.com in which i said the r word is not romney, it's republican. this is about a party that i think has failed to become a modern, effective party. part of the answer there i would suggest is that the republican national committee work to create a set of debates that are hosted by the republicans. [applause] and we tell the media, why would you -- i mean, i participated, and we had a great time here at the reagan library. but the truth is you ended up in the reagan library, you end up with left-wing moderators who think they're centrist because everybody they know is to their left. [laughter] i mean, these are not people who think they're biased. they think they represent the center of america because everybody they go to cocktail parties with is literally that far to the left. so they ask the question -- if you were to go back and analyze the questions, and we're putting together right now an absolutely fascinating case study which some of you will remember where george stephanopoulos asked this question about the 1963 griswold v. connecticut supreme court or suit involving contraception. i guarantee you every -- because i was there -- every republican candidate in the debate is going, what? now, we learned a few weeks later that george, apparently, had been briefed that this was the beginning of the war on women in which we discovered that $50,000-a-year law students who were unable to afford their own contraception have to have as part of the new socialist model free contraception or otherwise they'll be deprived which then, of course, became a symbol -- time magazine may name her person of the year. well, of course, because after all, she symbolized the total dishonty with which they won the election. she's the perfect similar bomb of our incompetence. but they clearly had a strategy. and george stephanopoulos lawn of. ed the strategy. now, why would you want to set up a debate and invite the other team in? it would be like us saying we'll make a deal. if the democrats will allow sean hannity, rush limbaugh and three comparable people to host all their debates -- [applause] and yet we continue to pretended that the news media's neutral. the news media is the left. and so i think that you have to really start at a very fundamental level of rebuilding. by the way, this is a big problem in california where you need to have a serious effort to create a conservative, internet-based political medium because there is no effective, coherent political news coverage in california, and it makes it very hard to govern the state. [applause] >> time for the last question up here in the balcony, mr. speaker. >> hi. >> hi, balcony. >> hi there, how are you? last christmas was my best christmas ever, you were 30 points ahead in the polls. [laughter] i told my family no gifts, no anything, my favorite politician is ahead. so thank you for a great christmas to start off. and then going ahead, a little more controversial here. i did vote for romney, let's start off with that before people start getting angry. to follow up with that, do you feel like the gop establishment forced romney on us, and if you did while you're campaigning, how do you feel about that, and how difficult was that knowing that's what they were doing? if you felt that way. >> first of all, i don't think there is a republican establishment. i think governor wilson, who's lived through all this agrees with me, the mythical notion that somewhere in the country there's a club where the republican establishment gathers isn't true. mitt romney spent six years running for president. he is, he was very good at what he was very good at which was raising money. which is how he had earned a living. i mean, he was a finance guy. he'd spent his swire career at bain -- his entire career at bain being a finance guy. they got together, they talked finance stuff. it all sounded good to them. they said, hey, this is our kind of guy. he's a sincere, honest guy. frankly, he's a smart guy. mitt romney's not -- you know, i'm not going to get sucked into some, he lost an election which i would l argue any of us would have had a hard time winning because we were in aver overmatch. -- overmatch. we don't understand this yet. the obama people never quit. they kept offices open in '09, in '10, in '11. i think there were 53 offices in north carolina alone. and this is why i'm doing this six month study at gingrich productions which i've entitled lessons to learn. we don't have lessons learned right now. we don't know what we're talking about. when you see these guys on tv who wasted millions of collars as con -- of dollars as consultants explaining what they now think, what you know is they don't. because they haven't taken enough time to learn anything. [laughter] i mean, this is a serious crisis of the conservative movement and the republican party because if we don't figure out the new game, we're not going to be, we're not going to be competitive for a generation or more. that's how serious it is. i mean, don't assume we're going the win in '16 because we'll nominate some clever person of, you know, who has the appropriate ethnic background and articulates better than mitt did. mitt got about what mccain got which was about what dole got which was about what bush i got running for re-election. that's a fact. and unless we get our act together, look at the california republican party. you think finding the right individual is going to turn around the largest state in the country? it's going to take a serious, deep, fundamental rethinking. now, unfortunately, i've been around so long i was there for the rebounded after goldwater which took a total of four years, i was there for the rebounded after watergate which took six years, i was there after george bush lost in '92 which took two years, and i was there after we lost the house in '06 which took four years. so if you said to me am i strategically optimistic, sure. they've got to govern. the world's not going to be kind to obama. they'll have plenty of mistakes. the challenge is not what they will do wrong. the challenge is whether we're prepared to slow down, think, have honest arguments and figure out what we need to do right. if we do that, this country will be just fine. thank you very, very much. [applause] >> for more information about newt gingrich, visit gingrichproductions.com. >> you think of washington in 1835, 25 years before the civil war with, um, you know, what would you think? you would think, well, you know, slavery was well entrenched, you know, the black people were miserable, the whites were kind of cruel and indifferent. and that's actually not true at all. in washington, um, in washington -- washington had about 30,000 people then as a city, 12,000 of them were black. the majority of the black people in washington actually in 1830 were free, were not slaves out of the 12,000 black people, slightly more than half were free. >> what led to washington, d.c.'s first race riots in 1835, and what part did francis scott key play? jefferson morley recounts this almost forgotten chapter in american history in "snowstorm in august," monday night at 10 eastern part of c-span2's booktv. >> washington post correspondent and author rajiv command chandr. his newest book "the little america." mr. chandrasekaran, when you talk about little america, what are you talking about? >> guest: i'm talking about this remarkable community that the americans built in the deserts of southern afghanistan not in the last couple years, but six decades ago. back when, unknown to most of our countrymen, there were dozens and dozens of american engineers there back in the '40s and '50s digging irrigation canals, building dams, helping to nation build in afghanistan. on the very same terrain president obama's troop surge unfolded over the past couple of years. in my history of obama's surge, in my examination of it, i actually start back in the 190s in this remarkable period of american assistance to afghanistan, a period of great optimism when we built this town there that the afghans started calling little america complete with a coed high school, a swimming pool where boys and girls would swim together, a clubhouse where you could get a gin and tonic. it was a period of great promise for the americans and afghans, and i use that as the opening for this book that talks about the great hope and tragedy of our war in afghanistan today. >> host: does "little america" still exist? >> guest: it does. it's the capital of helmand province. though it looks nothing like it did way back then. the suburban-style tract homes have been sort of built over, there's no more swimming pool, and it's not quite as safe of a place as it was six decades ago, unfortunately. >> host: now, for americans six decades is a long time, but for the afghan community it's not such a long period, is it? >> guest: afghans over there still remember this period. i remember going and traveling through helmand province in 2009, and an old afghan man came up and asked me and the marine colonel i was with whether he knew mr. and mrs. lerner, and the colonel looked befuddled. of course, the lerners were the couple that taught him english decades ago, and he had no concept of the united states was a country of 300 million people. of course, we should know every other american, and why did we not know the people who had taught him english? so for the afghans of a certain generation they remember with great fondness this period of engagement and, in fact, remember it far more fondly than they think of the current american period of our stabilization activities there today, unfortunately. >> host: now, rajiv chandrasekaran, haven't there been several starts and stops and boom and bust, hopeful periods in our history with afghanistan? >> guest: there have. you know, the '50s and '60s were a period of great optimism and then, obviously, there was the soviet invasion. the taliban were toppled after the 9/11 attacks, there was a period of great optimism that afghanistan would be able to build a more stable democratic society. but then we took off eye off the ball as many americans know, and we focused on iraq. and what that allowed was the taliban to surge back in, and unfortunately, i think what we're seeing now is a period of a real mixed bag, if you will. there have been some real gains paid for by the lives and limbs of many americans, many american service members. and we have beaten back the taliban in places. security has improved. but there are real questions as to whether any of that can be sustained, whether the afghan government, whether its army and police force will really be able to take the baton from american forces as they start coming home over the next couple of years. >> host: rajiv command chandrasekaran, imperial live in the emerald city was about baghdad, "little america" is about afghanistan. >> you don't always find many newspaper editors of any era embracing investigative reporting. the point we've seen over the years is not just economics, it's the discomfort that investigative reporting often causes in a newsroom. because it's troublesome. it's that more than the economics. i mean, if you're going to ruffle the feathers of somebody powerful, that gets those people run anything to complain to the publisher -- running in to complain b to the publisher, and there are stories legion over the years about those things happening.

Transcripts For CSPAN U 20131022

Transcripts For CSPAN Key Capitol Hill Hearings 20140320

wisconsin pays $1,000 in dues. that was taken out by the city and school board and given to the union you never saw. now it sits in your pocket until the union guys come and say, can we have our thousand dollars and you're allowed to say no. oddly enough, several do. and he got a concealed carry in a pass that was one of two with no concealed carry for firearms. and every rich republican has made a contribution to him when the unions tried to recall him. only governor who's ever been recalled who successfully defeated the recall and got himself re-elected. everyone else went down in american history. pretty cool. then go to rick perry. faltered last time because you shouldn't take large quantities of pain medicine during debates. i have not had any in hours. but that said, he spoke at cpac, conservative political action conference and establishment press was saying wow, he's incredibly articulate. yeah, when he's not taking pain medicine. very successful governor for like 14 years. so there's a real narrative that conveys a bunch of money. people in texas evidently have it. and you go down to bobby jindal in louisiana. also very successful governor. got an ethics law in montana that minnesota would have been pleased with passed in louisiana. talent, very aggressive, got school choice for 380,000 kids. could take a $5,000 voucher to any school they want to. not enough schools to do that but parents have that right as soon as schools are available for everybody who wants to take thm up on that. he could and may well run. jeb bush was governor for eight years. perfectly competent, reagan republican governor. and would be a candidate who could step up. i think somebody else may have to fall over for him to decide to step up but he could step up and do that. and then rand paul, who starts with 15%, 20% base vote in all 57 states and there i think you have a real opportunity as a senator, he could run. other senators very difficult to run as a senator. what did you do? i passed this bill. yeah, you and 50 other guys. what do you mean you do that? increasingly -- >> increasingly they don't pass bills. >> but then you're just giving speeches. giving speeches is fine if everyone else you're competing with is giving speeches. but if you're competing with a guy that will wake up tomorrow morning and do something on the front of the state's newspapers and television, it's awfully hard to compete with them. >> you didn't say rubio -- christie, walker, perry, jindal, bush, paul. is there a top three? rarefied leaderboard there? >> i think the good news is all of those guys are being tested from the last jobs and most have been through quite a bit. christie's being run through the ringer again. if he makes it, he will be tough as nails. if he doesn't, we will have five. but i think he's governed well in a difficult state. state of about $130 billion out of unfunded liabilities, state pension system and negotiated that through with democrat house and democratic assembly and senate in new jersey. so real progress there. sleepers, watch brownback of kansas. he could next year have an exciting legislative term just as scott walker did. back in 20 11 and that could put him up front. other than that i'm not sure i see a governor that has a legislature that would work with him to do the kind of amazing back flips where you go i know these six guys are interesting but, wow, look at the new kid in kansas. >> moving from '14 to '16 to the elections of the future, there's a pugh poll that came out i believe at the end of last week to look at trends among millennials and it found a couple things that i think i think pertains interestingly to this conversation. first, even though they don't, they tend not to identify as labels. republicans and democrats. mostly independent. the gap between number of them that voted for obama versus the republican candidate in '12 and '08 was the largest of the last 40 years. 68% of nonwhite millennials said if it's the government's spoment to provide health care and this is the most diverse generation in american history. the generation behind it is more diverse. 71% said they want a bigger government with more services. these are not slight majorities. they are filibuster-proof majorities all tb in a pugh survey. does the republican party have a serious demographic disadvantage moving forward the next 20 years? and what's the best way to think about that? >> sure. you need to look at demographics in two different ways. democrats think of demographics they think race, ethnicity, gender. because that's the way they think. there are also ways to look at it, look at the number of self-employed people, number of government workers versus private sector workers. people who own $5,000 worth of stock or 18% more republican and less democrat. which is why the republican solution to every problem is education, savings account, health saving accounts, individual retirement accounts, getting more people into the stock market. the democrats' answer to everything is 100,000 more cops, teachers, government employees because if you hold a government job long enough, you're more likely to be a d if you get paid more than $37,000. this is whatever demographics there are. makes you more likely to be a d or being a shareholder more likely to be an r. you add to that the other things you can change. this is why democrats shift. you look at the united states 25 years ago. 25 years ago homeschooling was illegal in just about every state. maybe two had it legal. today it's pretty much legal in 50 states and 2 million people homeschooled and they know perfectly well the modern democratic party wants to take that away from them. add 380,000 currents who know they have a 5,000 voucher in louisiana. 300,000 in arizona. 500,000 in indiana and now 750,000 in north carolina. now, again, we're not building out schools and structures and it will be very interesting to allow people that choice but then go to a different public school or the one that's they go to now might be nicer to them when they walk in and say, i got $5,000 here and i want to know how you are going to treat my kid this year versus last year. what are you think something they will treat you with respect, which they don't do now. or i can go to another school. you tell me. think of how you're treated when walk in to buy a car versus when you go visit the department of motor vehicles. so don't think the democrats ever come back in the states where school choice has been won. it's just as labor didn't come back in britain until they fundamentally change their viewing. remember when thatcher allowed people to buy council houses. buy your public house, council house. you can own it. people did. and ben the bolshevik who ran against her for re-election said when everybody gets in, we will steal everybody's house away and be socialist. they just got wiped out in the very areas who the demographic people would have told you those are labor voters. not when you're threatening my house. not when you're throatening my kid's education. or 30 years ago, 30 years ago there was very little concealed carry issue. people allowed carry a gun in their purse or car and swell of your back. today $9.3 million americans have concealed carry permits, starting with my parents. the person who's made that decision is a different unanimous human being than the one who says we have a government and if something goes wrong, they will come and draw a circle, little white chalk mark and this will be helpful. the person who says i will pass on that and be in charge of myself, thanks. try and take that away from people. try and take that away from people. that's why democrats get in trouble talking about gun control because they don't understand they're threatening something they consider important. we can by expanding liberty. that's where half of the country that lives in red states are doing all of these expansions of freedom. and d's are going we voted against that. we would not want you to have that freedom. if we ever get back in wisconsin, we will take your dues out and you will never see it and you don't get to say no and we will go back to the way it was. that's not a real seals pitch, to go to people. once you give people more liberty, you change the nature of who they are as voters. and i think you're seeing some of that with republican openness to a discussion about drug as federal issue out in the states. i don't think the challenges you mentioned will continue out. we're not the same prn at 40 than we were 20. that said, i think the modern republican party, and i work on this personally, needs to be much more aggressive with pro-immigration. take the smart people from around the world and when they come here in getting a ph.d., i'm not in favor of not letting them leave, i'm in favor of letting them stay and encouraging them to stay and stealing their airplane ticket home because we want all of this talent. and there's a lot of people in a lot of jobs that we need more people. the reason we're the future and china isn't is because we are remembering to have kids and we're remembering to have immigration. >> we have time -- thank you. we have time for one question. make it great. t's right there. >> hi, john cummings, writer. i know you promoted liberty but how do you feel about corporate responsibility, a company through negligence or error dumps chemicals into a west virginia river and declares bankruptcy? how can our economy deal with situations like that, that doesn't just fall on the government to bail them out? >> ok. you want to have reasonable tort laws so people who pollute their neighbor's property or water along that line pay for damage they do just as if they ran a truck over you because real damage can be done. i think it's very important that we ask individuals and businesses to be responsible for real things they do, which is why tort reform, where the trial lawyers have been getting rich going after people for stuff that the guy who owned the house before them did. some of the stuff you go after the guy with the deep pockets, again, texas passed a great number of reforms in terms of tort reform that dropped the koss of medical care in the state. more doctors are moving in texas as a result. louisiana about to pass the same collection rules. i think getting tort reform so billionaire trial lawyers that have been abusing the system and threatening people with lawsuits and basically getting paid to go aa, that sort of thing we really need to tamp down. it's killing -- not killing but damaging high-tech sector, being very unhelpful and silicon valley guys are very concerned about the abuse of the pat patrols and trial lawyers in that zone. let's reform those so that we n focus on cases of real criminal activity by individuals or people acting collectively inside a company. >> we have time for one more uestion. guy with the beard. >> guys with beards get to go first. new rule. >> you have taken it to extremes, sir. [laughter] >> sunshine press. if whoever steps forth what metrics make an economy better? that is what is the purpose of all of these policies whether it's tax cut or tort reform or whatever? how do you measure the economy is better here than there? you pointed to some states where the d's and r's are dominant. to you look at life expectancy, education levels? how can you tell if the economy or conomic policy is better worse? >> yeah, you want to have metrics. if you don't have metrics, you end up with all sorts of problem. i talked to the budget guy when bush came into office, bush 43 and said what metric are you going to use, right? running a.g.p., you're the government, or part of it. what's the metric you're going to have to contain the government of government? he said that would be a good idea. we should do something like that. but they never did. it wasn't even on the list of things to do. to measure the size of government. what are you trying to get to? per capita, the per capita g.d.p. is one measure. to be fair, some people decide to be monks or war locks or something and they're not interested in that. so it's not like you're required to want to earn a lot of money but most people would prefer to have more rather than less. one measure is g.d.p. for capita. one of the things i find sad or a measure of ill health is how few people are quitting jobs and how few people are moving. in a vibrant, dynamic economy where things are chugging, a lot of penl leave their jobs for something to move to and a lot of people move, something to move towards . when you look at bad numbers, unemployment number, number who left workforce, perhaps the most scary but outside of that, i also consider that we're not moving as much as we used to. we're not leaving jobs as easily as we wanted to. you don't want people handcuffed to a job. want people to leave easily and move on to other stuff. move to a different state if they want. so i think generally those measures and the one where's ask are you happy, that's pretty useful. and our friend at the american enterprise institute's done fine work on earned success being what translates into happiness. winning $1 million in the lottery oddly enough doesn't make you happy. earning a certain amount of money and knowing you earned it makes you happy. sometimes some of the people who make a lot of money but got it because luck of draw in hollywood or something, they don't get to be hani. they're not so sure they earned it. earned success is what correlates with happiness. like i said, happiness than money but it's probably easier to have money as the metric. >> big thank you to grover norquist. what's our funniest guy, funniest poll? >> washington, d.c. funniest celebrity. >> stand up here a minute. >> grover competes every year and he wins most years in something called d.c.'s funniest political celebrity and he drafted me in. august or -- >> run in december. little extra time. >> i realize i have gone back to watch who's one in many of the cases. one of the winners was john love lovett, president obama's funniest speechwriter and he impersonated ariana huffington. grover won last year for impersonating dick cheney and i think my strategy will be to impersonate grover norquist. see you all there. >> you will be a star. >> enough. >> former federal reserve vice chairman and white house budget director alice rivlin also spoke at the atlantic economic summit. she said the technical glitches with the health care website were extremely unfortunate but enrollment numbers are up and website improved. miss riv list also addressed federal judget, earned income tax credit and u.s. trade agenda. his is just over 30 minutes. >> next up, we have the honorable alice rivlin, former director of the budget office, former vice chairman of the forever board, director o.m.b. and current senior fellow at the brookings institution. you can follow alice at just rivlin. interviewing her today will be our very own derek thompson. one quick programming note, unfortunately, e.u. ambassador is very ill and really wanted to be here but can't make it so we will continue on with senator gregg after this. thanks. >> hey, thanks, everybody. alice, as you put that back on, y you fiddle, janet yellen's first meeting is today and tomorrow. one issue she's going to have to raise is so-called evans rule, which said once employment rate falls below 6.5% it acts as a threshold. that's when you can think about raising rates. the rule with me before we realize how quickly unemployment was falling and it's not necessarily falling quickly because we're creating jobs faster pace, it's falling because the denominator is changing. people are leaving the workforce. and it's become clear the recovery sent right now at a state where we want to be dramatically raising rates. if you're an ear if that room how do , and a voice, you shape yellin's understanding of the labor market issue and how do you think she's going to try to sway this group to think differently about unemployment and raising rates? >> the first place, janet yellen doesn't need me to help her understand the labor market. she understands it very well. she and her colleagues have been making some of these same points in speeches. and even in the fed materials for quite a while. the labor market is complicated. right now the unemployment rate has fallen quite respectablely but that's not a good indicator of what good shape we're in in labor markets because we know that a lot of people have dropped out, have given up looking for work. this has been a very deep and long recession. and the particular manifestation has been many more people who have been unemployed for a very long time and some of those people have given up. on top of that, we have people who are working part time and would like to work full time. these are often true in a recession but this is a bad recession. we had people taking early retirement or dropping out because there are a lot of people in the age group. this is the baby boom generation reaching retirement. it's complicated i would expect that the discussion today would say a lot of those things and they may even change the statement that they make at the end to put less emphasis on the unemployment rate and more on these other factors. >> i would like to talk about the participation rate, for example. thace -- this is a huge debate in washington. the labor force rate, share of people working or interested in working who actually are working, has fallen to its lowest rate since the early 1970's. demographics have to pli a part. what else is playing a part in this? >> demographics play a big part but the depth and length of the recession is also playing a part with a lot of long-term unemployed. and then it's overtaken by some structural factors. you also have structural factors that are not shifts from different industries. but i think it's not a surprising fact we are having fewer people in the labor force. >> right. one thing you're doing a lot of work on right now is health care research. rollout aft affordable care act, obama care, has been somewhat disastrous with the r standpoint. if you look at the democrats' forces in november, this is an enormous albatross around their neck. from a policy standpoint, what are the numbers, metrics you're looking at to determine whether or not obama care is succeeding or failing on its own merits, not just the politics of the law? >> well, the technical glitches were extremely unfortunate. i'm shocked and saddened that this happened. although sthupet surprise anybody. anybody who's dealt with putting a big new system in, in the public sector or private sector, knows it's really hard. it doesn't work the first time. you need to test it a lot. they didn't do that. don't know why. the real question is has the website recovered? the answer to that is mostly yes. numbers are up 5 million people enrolled. hat's not 7 but getting there. so i think what we will watch over the next few months is how fast do those numbers go up, particularly in the next couple of weeks? and what happens after that? do people actually get the insurance that they thought they bought or are there going to be more glitches? but we're doing a complicated thing and we're doing it intentionally. a lot of people say oh, we should have blown up the whole system and started over and single payer as if that were easy. but we didn't. we have a very complicated system, medicare, medicaid, and employer insurance and western filling in the last gap. it's much hard tore patch a system than to start over. so that's what we're doing. >> right. what -- one of the most ballyhooed findings on obama care, affordable care act, it would reduce the amount of work done in the u.s. economy tremendously based -- compared to previous estimates. this is misinterpreted by some people saying it would kill all of these jobs, would not necessarily kill the jobs but people who had jobs would choose to work less or give up their work. their mrk would -- health care would no longer be tied to their employer. is this good or bad? >> probably a good thing. many of us over the years pointed out as a reason for having a different kind of health care for the -- that would cover the uninsured that there was significant number of people that were stuck in jobs because they needed the health care and they might have a spouse or child that had high health care costs and they couldn't leave their job because they would lose their health care. and they don't get more because it was a pre-existing condition. so the affordable care act has changed that. no more concern about pre-existing conditions and you could go to the exchange and buy health care and get a subsidy if you have low income. it's not surprising some of those people will give up those jobs. >> when you look at the two issues together. on the one hand the long-term tell graphics and recession-driven decline is labor participation rate. and the number of hours less worked because of obama care, because that is giving people health care, do you have a worry that when you add these two things together, there are not enough americans working enough hours to pay for the obligations we promised ourselves? entitlements like social security, medicare, medicaid and so on? >> not because of obama care or -- but what we are seeing is what we knew was coming. baby boom generation is retiring. surprise! we have known about these people since 1946. [laughter] and you -- you haven't but i ave. so we should not be surprised if we have a large generation of retirees and people are living longer. so this is putting upward pressure on social security and on medicare and we know that. and we've got to see what we want to do about it. it's not a terrible crisis. but it is a long-run problem that we have to face. the easy part, i think, is fixing social security. that should be done quickly because the longer you wait, the harder it is. and we should get a bipartisan group together again as in 1983 and say we need to fix this. how do we do it? and they would have to compromise. compromise isn't a dirty word. we now think of it as something terrible means you don't have principles if you compromise. that's nonsense. we all have to have principles and we all have to think how do we solve problems and get something done? and social security is a good example of that. nobody serious wants to kill it. it's a very good program that served a lot of people well. we need to fix it and fixing it isn't very hard. >> what's interesting congress initially touches more than social security, we also talked backstage a little bit about immigration. the doc fix. tell me why you're absolutely more optimistic about this impossible body of government potentially coming to a solution on the doc fix? >> i brought up the doc fix as an example of something we were not fixing because we're so polarized that everybody agrees we ought to. what is the doc fix? some years ago people with very good intentions decided that we needed a formula for changing physician payments under medicare and they devised one. tied it to the growth of g.d.p. but then when g.d.p. didn't grow as fast as they thought it would, it meant the doctors would be getting less and so congress in its wisdom said we don't want to do that so they postponed it and they kept postponing it and kept postponing it. the way the law was written, it was cumulative. so right now if we did want the law said -- >> went back to current law overnight? >> back to current law, that's not a surprising thing. it's the law, right? we should -- we would have to cut doctors fees something like 27%, 28%. now that's not going to happen. it shouldn't happen. fees for medicare are not that high any way. so we have got a bipartisan compromise, several committees, house and senate came together. they worked hard. they got a compromise together. to make a permanent fix to this. it's quite sensible. it can't be passed was it's gotten caught in polarized policy. a srn party said we won't consider this unless you postpone obama care. >> you say a certain party, i assume you're not talking about the democrats? >> no, i want. i was talking about the other one. >> the other one. but it doesn't matter. there are intransigents on both sides. this is just an example of something that reasonable people on both sides of the aisle want to do and can't do it because we're in this got you politics. >> right twofment other things we want to do. one thing we want to do is help incoming equality. there are two big solutions that have been rolled out. one is raising minimum wage. the other is the earned income tax credit. which of these is a better policy and why? >> well, would i do both. >> ok. >> we have not raised the minimum wage in a long time. raising the minimum wage would but uite a lot of people i'm an economist. i'm stuck with that. economists like to think of efficient ways of doing things. actually the earned income tax credit, which is basically a wage supplement for people who are working at particular wages, low wages, that's more efficient ay to do it. so i would do both. it discriminates against people who don't have children. it's not clear why -- >> part would raise earned income tax credit for people without children? >> it would. but that's an illustration of why it's a more targeted thing to do than a minimum wage. >> the income tax credit, i.t.c., was founded in the republican administration. it's been raised with democrats and republicans. what are the odds we raise it this year? >> i don't know exactly but it's another example of my theme, which is if you have bipartisan support for something, do it and stop worrying about where the blame falls. >> with grover norquist was up here earlier and he has a mega theory or metta theory -- >> i'm not surprised -- >> -- for why we're so polarized. we used to have people who wanted to expand government a little bit and they compromise with people who wanted to expand government by a lot so we got a goldie loc expansion of new government. do you have -- it doesn't have to be similar in any way but a meta theory for why we're in such a terrible moment of polarization in washington today? >> i don't have a meta theory. i think a lot of things have happened. part of it is our primary system pulls people to the right or left, depending on which party they're in. that's exacerbated by the way congressional districts are drawn. but that's not the whole story. if you look at the senate, it's polarized too and it doesn't have to do with districts. our political leadership i think has gotten out of touch with the way most people think about things. if you get a group of average citizens or representative group of citizens around the table and give them a problem, whatever it is, what should we do about the deficit? what should we do about immigration? they will sit there and talk about it and then they will cut deals. if they know they have to have a solution, they can find one. i just wish that our congress was behaving that way. but it's not. >> right. lastly on the debt, right now it -- the deficit fell so quickly between 2010 and 12013 and it's still falling, the debt as long-term issue has stopped casting such a long shadow on d.c. politics. do you think we should be thinking more right now about our long-term debt? or are the problems we're facing in the labor market, up-front problems important enough that they should be on the front burner and we should deal with the debt after? >> it's not a choice. we have a lot of burners. and we can actually cook two things at once. i like to think of the budget situation and comparison to what it looked like in 2010. i choose 2010 because i was on simpson bowls along with judge gregg, who we will hear from in a few minutes i think, and others. and at that time remember the recovery was just beginning. we weren't sure it would take hold strongly. deficit was very high. stimulus was spending out. we knew that the deficit would come down as the economy recovered and the stimulus was behind us. and it has. it's come down very rapidly. but we also looked ahead and saw this baby boom generation retiring, very big expenditures for social security and particularly medicare and medicaid looming at us and a lousy tax system. so the solution was fix the tax system so it's better and raises more revenue and slow the growth, particularly of the health care costs. that was the right thing to do at the time. if you look at it again now, the same patterns are there but it looks less scary. long-term future looks less scary and there are two reasons for that but they may not be sustainable. system has olitical cut short -- cut discretionary spending a lot. both in the military and in the domestic side. when you run those out and assume that's permanent, you get very low numbers for discretionary spending. i don't know whether that's sustainable. can we run government at a smaller percent of g.d.p. than we had in 1940? i don't think so. but the other thing we -- that happened and also may not be sustainable is is the rate of growth of health care spending slowed. it slowed dramatically. we're not quite sure why that is true. part of it is the recession and slow growth. and low inflation. but part of it may be that we finally come to our senses and realized that our health system is very inefficient and some things are happening both in the public and private sector to low the growth of costs. without reducing the benefit of health care. i hope both of true. we're working hard on how do we keep these reforms sustained so we can produce more health care for less money. that's a work in progress. not clear. but that's where i think things are. >> are you worried from a messaging standpoint, deficit hawks are sort of in a position be careful what you wish for? i was talking earlier on another panel, there are a lot of people raising the point in 2009, 2010 we need to do something about this debt. deficits and debt are easily conflated among people whose job isn't to look at c.b.a. reports all day like you and me. it's easy to confuse these issues and as a result what we got in a way was like the opposite of what they were asking for. they wanted larger deficits in the short term, shorter deficits in the long term and they wanted do this by holding on to discretionar scombrinding because a lot of that is investment in infrastructure, in education and they wanted to cut entitlements in the long term. instead what we got is a smaller discretionary spending as share of g.d.p. since 1940's and practically no exchanges to medicare or social security. did we get the exact opposite of what the deficit hawks were oping for? >> yes. i think that's a good analysis. but the word deficit hawk, and i'm accused of being one, is used very loosely. in other words you really worried about deficits or you didn't. as you say the right policy four ars ago and still i think is invest more in long-run growth. that does mean more transportation, more skills, that sort of thing. that's discretionary spending in general. and at the same time work to slow the growth of entitlements over time. that takes slowing the growth of health care spending, especially inefficient health care spending and fixing the social security system. and we have to fix the tax system too. i think there's some hope for that but they need a real push to come back to it. i don't think woor going to do a grand bargain. but we might do some of these things. we might fix social security. it's such a sentinel thing to do. we might have tax reform. >> we have time for a few questions. can we have one right there. >> dr. edward burger. ellis addressed the issue of health care financing. i think i inferred from earlier remarks you made if we had chosen to in fact start anew with a new system rather than add mixed, a system, hybrid system we already have, it would have been easier and by inference maybe we would have had a better system. do i hear your remarks correctly? >> no, not really. i may have been misleading. i said easier conceptly to say blow it up all and start over. there never was a chance we could do that. i'm not even sure that the people who talk about single payer for the united states have a clue how hard it is to run a single-payer system in any country but we're a huge, diverse country with a lot of suspicion of government in our and don't think we're going to do that and not even sure we could manage it well if we did. medicare is the single pair system. >> very popular one. >> it's a very popular one but it's not moved towards efficiency in the incentives in edicare. why not? because the politics have been against it. it is the politics of our provider groups that make it very difficult to make big changes in the direction of efficiency. i think they're coming around and some good things are happening. but i think if we suddenly -- and it's hard to imagine this said we will blow it up and have single payer system, that we would be really, we don't know ow to do that. >> sorry, there you are. >> i'm curious about your thoughts about the fact the pace of technological change continues to improve our productivity and we continue to sort of invent things that eliminate whole job categories. and what do you think about jobs 20, 30 years from now? will we have enough jobs in this economy or the population that we have? >> yes, whether he have enough jobs. the question is how good will these jobs be? and that depends on what we do about it. if we have a filled labor force and invest in making our economy more productive, and i think that involves modernizing our infrastructure and upgrading skills and probably other things, we will have higher standard economy than we would otherwise. i'm old enough to have lived rough the cycle of the scare of somehow machines are going to take over everything or computers are going to take over everything and nobody's going to have anything to do. we go through that every once in a while. it's ridiculous. >> looks like we have a question ack there. >> hi, i'm john cummings. question you mentioned wage subsidies of the earned income tax credit. food stamps would fall into that same category. do you think not just entrenched low wages, could they not help keep wages low by corporate welfare. second as a safety net in general, do you think there should be time limits on how long a safety net is in place? .> well, i may have said wage what i meant to say about the ietc is it's wage supplement. unlike food stamps, which could e viewed as tied to your income. but the earned income tax credit. you earn those wages and then you get a little more. it's an incentive to work in a way that the other safety net programs, and i'm not knocking them but i think we need food housing we need subsidies for people who cannot afford housing but they're not the same thing. you're raising a very big question about is the safety net too generous? i don't think so. i think it might be better designed but if people are hungry and people can't pay for the ordinary decencies of life, than i think we have an obligation to do something about it. >> over there. >> thank you very much. my name is jeannie williams. to talk ike to ask you more about the trade deficit and the debt and building with that the impact of health care reform. i know you have done intensive studies on the fact if we don't work on the health care reform, our trade deficit would be tremendous. and also impact of sequestration , is there a way that we can suggest to congress to work on something that sequestration? t.p.p. about jobs and without other partners, even china. does that affect our job markets here? and to that extent, where do you think it can suggest the democratic party to work under the unions and labor law? a lot of problems converging the inimum wage, labor law and t.p.p. and job markets. >> that's a lot of questions. >> a lot of questions. >> i am pro -- pro trade and i hink you heard from ambassador fuhrman a few minutes ago and he gave the case for moving ahead on trade agreements. i would just say it's another example of my thesis, there's bipartisan support for moving ahead on trade agreements and we can't do it at the moment. because of the polarized politics. i think that that's a shame. i don't expect a revolution. i think it's very important not to 0 oversell some of these things. i was in the clinton administration at the time of nafta, and i think it was a good thing. and it was bipartisan and the president was courageous in supporting it because he needed a lot of republican votes to get it passed. but i also think we oversold it. the cabinet spanned out and said this is the greatest thing since whenever and it will save the economy. and it's very dangerous to do that. i think nafta's been a success. but it's been a modest success and we shouldn't overrate those things. >> one more question. right here. recently retired, i'm a principal or whatever. my question is social security. my wife and i are at that stage and we talked to a lot of people. it seems like there are way to maneuver the system to get more and more if you do it right, which doesn't sound right. that i go first and then she goes halftime and it does this. there's a book written on ways to make more money on this. i would love to hear, it just doesn't come right to me, want to do the best thing but i don't want to do something that will hurt others because they can't do it. is that understandable? >> yes. i think so. >> thank you. >> just had a granddaughter graduate from sidwell friends. great school. but i think you can't design any system whether it's the tax system or pension system or medicare or whatever it is that someone isn't going to right a book about how to gain the system and probably make money on it. and you need to be careful when you're drafting things so that there are not kind of loopholes people can sneak through and get money they are not entitled to. but i think stick with the big picture. social security is an extremely successful program. it keeps millions of older people out of poverty and it keeps their children from having to support grandma and my children are probably grateful on that, that they would otherwise have to do. and it's a very good system. it's well designed. it just wasn't quite designed for this huge avalanche of seniors entering it now. we have to adjust it a little. it's a tweaking thing. and i would do a particular set of tweaks. ome of which would be slightly lower benefits for people like me of people who don't really need them. i would not take them away. we need to have a stake in the system. but the top-level benefits can be a little less and we should collect more money and we could actually make the system a little more generous at the bottom. and we could fix the way the indexing is done. the president was right about that. but i think it sort of wasn't sensible to throw it up there out of the context of a total social security reform. it fits there. >> great. thank you so much, alice. thank you. [applause] >> former senate budget committee chairman judd gregg said the republican party needs to compromise with president obama on issues such as immigration and tax reform. speaking at an event hosted by the atlantic, the former u.s. senator from new hampshire also addressed sanctions against russia, financial regulations and the overall u.s. economy. his is about 35 minutes. >> next up, we have the honorable former governor of new hampshire and former chairman of the u.s. senate budget committee. today he is speaking with michael hirsch, competent from "the national journal." please welcome senator gregg and ichael hirsch. >> how about right here? i will be able to focus a little more. you have tor gregg, been known for a long time as master of the numbers -- >> i think you just had master in the analysis. >> the other part of the capital, hill part. but since i think these people have been pretty easily getting numbers all day long, i want to start out with a purely political question for you. you were one of those who wrote quite refreshingly last september that the republican party was in danger of failing abysmally because of what you called the crelf promotional babble of a few. in enforcing the government shutdown. we have now been through that and it appears leaders of the share hiseast came to view to some extent in terms of resolving those issues. effort to defund obama care and the government hawks you oppose. i want to get your assessment where you think the government parties now heading into elections, has some balance been restored? >> first, great question. let me first thank the atlantic for this opportunity and it's a great pleasure to be here. nice to be here with congressman harman, who did so much in this country in the area of intelligence and making sure we had strong intelligence community. your question is really one that is very current. the party is going to obviously going through a period in the wilderness and it has to figure out how to get out of the wilderness. i compare it to some degree to the democratic party in the early '70's when the party moved and lurched to the left with the mcgovern nomination and then spent ten years trying to get back and was led back by the democratic leadership council and president clinton and al gore and others who participated in that. we unfortunately have what i call shouters and narrowers to take the playing field and dominate the playing field for in my opinion too long as a party. national parties, and we have two and should only have two. you don't want a multiparty system in a country our size because people then go to our corners and never leave their corners and it's almost impossible to get compromise. national party must be a very big tent. it's the first step in the mad sewnian form of government, which we have, which is checks and balances of government, which demands compromise, demands that people govern by reach an agreement across the aisle and the way you reach that sort of agreement is you start with the parties gathering everybody under their tents under basic philosophies and that sort of filters up and then becomes the framework for people going across the aisle when big issues come along onto the leadership of the president at the national level. our party unfortunately as i said, i think allowed too many people who had no interest in governing but basically had an interest in promoting themselves or their ability to raise money to take center stage and dominate. and the best example was, of course, the debt ceiling fight. we used -- i served in senate leadership 16 years as the con singularry to the leader. and we used to have a saying that actually came from phil graham, who had a lot of great sayings. never take a hostage you can't shoot. the simple fact was, you could not shoot the debt ceiling or the continuing resolution. you were always going to end up shooting yourself in the foot if you tried. on two different occasions that was proven to be true. just within the last three years. now i think we have been through that exercise and those folks who basically have been shown to be more concerned with their own personal -- growing their own perm reputation and raising a lot of money have been shown ineffective in their ability to lead the party and put us forward as a party willing to govern have started to leave the stage a bit. and the party has got its act together. and it understands if it's going to communicate with the american people, it's going to have to show it can govern. i think the speaker of the house has been very aggressive in this area and i congratulate him for it. clearly mitch mcconnell is the republican leader in the senate understands this and has been pushing this approach. so i do believe we're starting to see a party getting much more back to the realistic need to govern as versus just simply shout from the corners. where does this translate to politically? i happen to think if not this spring, then certainly in the next congress, which i suspect may have a republican senate. the republican party is going to have to govern by reaching agreements with this president on core issues where everything can be reached. the obvious ones are first immigration. second, gse reform, which most americans don't really care about, which is fiscal policy very important. third, potentially tax reform. and this fertile ground for agreement there and i think we can get it. >> what changes the political dynamics? let's assume that the election does yield a republican senate as well as house. is the tea party gone? is it on the run? i think ted cruz would disagree with your assessment he's about to leave the stage or has left. >> i don't think he's left the stage and i don't think that that segment of our party will or should leave the stage. they're a very important influence on policy. but i think those folks who understand that you cannot speak to the american people unless you explain to them how you intend to do something positive. you can't always be postured in the negative. you have to be at some point posturing yourself on the positive on issues that affect everyday americans in their everyday lives. those folks within our party are going to take the basically the dominant role. i do, as i said, i see three issues where you have opportunity to have that type of consensus reached. you don't have to give up your philosophical beliefs in order to reach agreement with the other side of the aisle. gene harman classic example of that. you can reach agreements across the aisle, which are important to making america stronger and better governed nation. without giving up basic core beliefs. because there's a lot of identity of interests in our nation, most of which comes down to having people have process life and pass a better life onto their kids. >> let's talk about that fertile ground you just referred to. you wrote recently that you saw a few lights at the end of the tunnel that were not trains oncoming. d you cited the democratic senator taking over senate finance committee as opening the door at least to dynamic scoring. you cited tax reform plan that republican congressman dave camp has put forward. you also cited chuck hagel budget. do you still think those are all realistic? obviously, the ground has shifted a little bit. widen i think has gone back on what he said and we have now as sarah palin famously put it putin rearing his head, raising questions about whether we want to pair down a defense budget as we once thought. address those if you would. >> well, yes to all three. i think first off dynamic scoring is dangerous grounds to step on as former chairman of the budget committee or ranking member, i always defended the right of c.b.o. to be irrational, which they are, on all sorts of scoring issues. there's no relationship to common sense or what the practical effects of doing something are on the people's reaction in the economy. but in tax policy, some things are very obvious. one of which is that if you ask people to invest or you tell people or create a tax law which tells people to invft for the purposes of avoiding taxes as their primary goal, or you tell people to invest for the purposes of getting better return on their money as primary primary goal, you will get a better and stronger economy generating more revenues if you have people moving in the direction of investing for return as opposed to tax reforms. that is my view of the world. the fact that you have a progressive and a conservative viewing things in this context and a lot of other people of those ilks, dave camp, for example, that's good news. i think that at some point, cbo on some level will have to acknowledge that. that is important because you can't do a grand bargain on the budget -- you can't even do a mini grand bargain on the budget unless you reform our tax laws, reduce our rates, eliminate exemptions and generate revenues along the lines of what simpson-bowles proposed. dave camp's plan is a starting point, he steps on just about everybody's toes and that's the way you have to start tax reform. i was on the ways and means committee in 1986 when this was done between president reagan and rostenkowski. remember, it did not start with reagan and rostenkowski. it started with bill bradley and jack kemp and took a while to bubble to the surface. they started to talk about major tax reform in 1982 and 1983 and it was not enacted until 1986. we are further down the starting point than usual because you have the chairman of the clore -- core committee and widen, the chairman of finance who put forward his proposal so the opportunity is there. it should be taken. and it requires quite honestly presidential leadership and if president obama wants to have a legacy, reforming the tax laws may be a good one. the third issue of what secretary hagel proposed in defense spend, he didn't just propose cutting defense spending significantly. level funding it. what he proposed was thinking about it in terms in which -- which it hasn't been thought about since the end of the cold war, which is what are the threats and how do you respond to them 1234i cited, for example, eisenhower's great fare well speech, where he said the biggest threat to national defense is the defense industrial complex that fights the last war and certifies the defense community as a result of that i disagree with some parts of it but i think the concept of thinking this way is important. the main emphasis should be on the threat and the threat toward us, for our nation, is a terrorist using a weapons of mass destruction against us and they are not nation state terrorists. they are asymmetrical. so you have to find them in a different way than you fight another nation. and that requires massive intelligence gathering capability. and he is committed to that. secondly, once you find them, you have to find the ability to deliver lethal force to them. that requires certain types of military structure, certainly a task force and a deliver force. does russia and crimea change this formula? are we going to fight a land war in europe? no. it's not going to happen. we are not going to engage militarily with the russians on the issue of crimea. the historic roots of crimea go back to peter the great. we have leverage there that we haven't effectively use bud it's not military leverage. i think what secretary hagel has done is opened a discussion on how to approach defense spending in the post-cold war period that should have occurred before 9/11 but definitely could have ooccurred post-9/11. >> i don't want to stay on ukraine but what should obama have done? >> he should have gotten the european union and use what we have, which is considerable leverage over the european union to aggressively assert sanctions. there should have been a no holds barred sanction effort put forward by the president, get the european nations, which are obviously concerned about their gas supplies, but make it clear to them, they can be concerned about the gas supplies or they can be concerned about our friendship. we have much more levranl than the russians have in bringing them together to assert what should have been very, very aggressive sanctions. sanction 20g people? that's like sanctioning the board of aldermen in chicago. it's an absurd -- it's embarrassing. and i think this was the -- i think it was the wrong approach. >> back to the budget. it seems to me that the last time there was a remotely reasonable discussion in this town was the simpson-bowles commission report in 2010, 2011. you approved the work. obama did not really embrace it perhaps enough. design your perfect budget that would be close to ideal but passable by both parties in the sort of bipartisan way you have proposed. give us the key elements you think would work to address all these issues, slow growth, debt, deficit -- >> i was on the simpson-bowles commission, and the irony of that commission is that both parties in the senate and put the three most fiscally conservative republican norths were on it and the three most liberal democrats were on it and we still reached an agreement. from 20,000 feet, you don't want short-term austerity. you don't need it. it would slow the economy. what you want is a glide path that shows in the second and third decades, you have bent the curve of spending so you have your debt to g.d.p. ratio lower than 70%. our debt to g.d.p. ratio until 2008 was about 35%. very strong position. it jumped, doubled in four years by 2012 and it was at 60%. now it is at 74%, heading to 100%. to put that in context, our debt to g.d.p. ratio, there are only five countries that have worse debt to g.d.p. ratio, one is japan who can self-finance because they save so much, so it's not a big issue them. the second is iceland, bankrupt, greece, bankrupt, italy, nobody knows what they're doing, nobody knows how they keep their books but we're pretty sure they're bankrupt. the fourth is ireland, then -- the fifth is ireland, then the united states. all the countries in front of us have fallen, except japan, which has a unique situation of massive domestic saverings. we are on the wrong path. we have breathing room because we're the currency of the world and the world looks at us and says, the united states solves its problems. and we do solve our problems. so they should have that onfidence in us. at some point, someone will wake up and say, i just let the united states $100. 10 years from now, they will not be able to pay me $100 back. they will pay me dollars so it's only worth $70 or $80. so we'll have to spike their interest rate significantly. that will come. you can't get around that if we continue to borrow money that we cannot pay back without inflating our currency. how do you address this? simpson-bowles put the template down. i think you need to give credit for what has been done so far. think of it as a three legged stool that you address the budget issue with, the deficit issue. one leg is discretionary spending. one is entitlement spending. the third leg is revenues. the entire discretionary side has been done. $900 billion of savings in the 2011 agreement. $1.2 trillion under the sequester, assuming it holds. that discretionary has been done. revenues have been raised $600 billion. that is a big number. it was done incorrectly. it was done by just raising rates, should have been done through tax reform, but that's a big number. what's left on the table to do? entitlements and in the entitlement accounts there are only three that count. medicare, medicaid and social security. the united states has historically spent 20% of gdp. those three accounts alone account for 20% of g.d.p. by about 2025 and they're still going up, because of this massive demographic shift. they're all related to aging. we're going from a re-- because of the baby boom generation we're going from 35 million to 75 million retired persons and the system doesn't work. we have to adjust our entire entitlement programs. not in any draconian or dramatic way that affects present recipients. but in a way that 10 years from now 20 years from now, 30 years from now you bend the cost curve. simpson-bowles suggested raising the rate of retirement by two years, but we took 60 years to do it. so it didn't affect anybody over the age of 15. we can handle that as a couldn't i. -- country. and the president suggested changing the way we calculate c.p.i. and the house didn't take it. that was the best offer on the table for fiscal responsibility so far. so there are ways to do this. >> and these are all feasible with the new politics? >> no. unfortunately, i don't see a grand bargain coming down the street. and i don't see a mini grand bargain coming down the street. i see bits and pieces. medicare will be adjusted in a way to bend the cost curve in the out years to move -- by moving to an income based system and a system that caps cost. bill it be debby some grand scheme? no. >> i want to open it up to questions. but one last point. i wanted to ask you about financial reform. you were very involved in 2008. you spent seven months as head of the major financial industry lobby. what's your basic assess se -- assessment of where we are now? do you think the too big to fail problem has been involved or not? what about the volcker rule. we haven't heard from you in several years on this issue. just briefly. >> dodd-frank has not accomplished its goals in the send that it was supposed to stabilize the banking system in a way that allowed more liquidity in the marketplace. it's doing just the opposite. it's contracting liquidity, contracting lending and pushing a tremendous amount of activity into off balance sheets, nonregulated entities. has it solved too big to fail? i think it has. capital requirements are stiff and good. you didn't need dodd-frank which has produced $20 -- which has produced 20 million words and we have a new regulation every 2.6 days or something and we're only 40% of the way through it you didn't need that you needed tough capital requirements and that would have solved the problem. to a great extent. the issues that created the problem in 2008 were failure of underwriting, securitization, and as a result of that, lack of capital behind those two activities. volcker, thousand-page proposal from an idea that makes sense in concept but can't be executed in practice. it is almost impossible to separate market-making from the structure of how a bank works in a way that will be clear enough so that you don't end up with massive regulatory oversight which kills the market for market-making. our nation's great -- one of the great american advantages is, and it really is unique to our nation, is that if you are a person who has a good idea and you go out and take a risk and start to grow that idea and hire people and create economic activity, a whole bunch of people will come along behind you and give you money to do it. it's called stocks, it's called bonds. no place else in the world does this happen the way it does here with twitter and facebook being the most recent examples. and we're undermining that in my opinion. >> we also cost the economy $50 billion in 2008. >> no question, it needed to be addressed but the way it was addressed was in a way that had very little relevance to the underlying problem and in the end has produced -- will produce a lot of problems for our capacity as a market to be as competitive as we were before and to be as vibrant as we were before. that's one of the things drags the economy a little bit. >> let's open it up to the audience. this lady right here in the black hat. i believe it's black. >> my question to you, senator, and as far as i'm concerned, you are still a good senator. could you address the situation with russia right now where our big is on mobile has a major deal with that major elephant in russia to do major drilling in the arctic. and become so huge. and what that will do in terms of affecting us as we might change our tax code, so exxon has to pay its dues. >> i'm not familiar with that specific issue but obviously russia has massive oil reserves and gas reserves. one of the levers we have to put pressure on them is our technology, because they can't get it without our technology. if you're talking about ways to put pressure on russia, you should talk about putting sanctions on the ability of our technology but you have to do it on other nations that have that type of technology, to be delivered to russia. this is where i think this administration has failed. they have not been aggressive enough in gathering people who have some capacity to impact the russian economy in making sure we do it in a coordinated way. as the specifics on exxonmobil and their investments there, i don't know anything about it. >> the gentleman here. >> john schilling. you mentioned the importance of providing more tax incentives for investment, it would be useful for you to clarify that. things like the capital gains tax is really not by and large promoting new investment but supporting long-term gambling on the stock exchanges as you buy existing assets and carry them forward and sell them or the interest carry forward tax benefits for people who do a lot of active trading with hedge funds. so what are the kinds of incentives you think are important to promote real investment, that generates more productive capacity and jobs? >> i am not a big fan of incentives. i don't believe in industrial policy, whether supporting a group like solyndra or the tax laws. i believe what you do is reduce as far as you can the deductions and exemptions in the tax laws and bring the rates way down. in fact, you bring them down so far that you really don't need any capital gains differential. or dividend differential. your top rate under simpson-bowles, we had three rates, i think they were 10%, 15%, and 20%. when you do that, people don't invest any longer for tax purposes. they invest for the best return on their money. that's the best industrial policy. because that means you're getting the most productive use out of that money and it will probably jeb ration more revenues than a tax law that gives a lot of exemptions and has right hates. in fact, i'm sure it will. that's my thumbnail answer as to that. >> yes, sir, back there. >> thank you for coming today. my name is arnold king and i own king consulting solutions a business consulting business. my questions are, what can a get the issue- to can they fity, how the economy this year and in 2015 because talking about obamacare is not enough. e need to get back to our, get back to -- to our talk about the economy and what can we do about the economy onward? what can business do to improve ?he economy >> great question, how do we get the economy going? i believe the united states is on the verge of massive economic expansion. probably as large as we have ever had in our history. it will be driven by four basic factors. the first and most important by far is the new energy paradigm where for the first time since the 1950's we'll be an energy exporter instead of an importer. more than that, we'll have an incredible competitive advantage over other industrial nations a ause our cost of energy by fact of two or five or in the case of japan seven or eight times less. nothing translates to an economy with more aggressiveness -- we are not just talking about oil and gas. we are talking about everything in the economy being impacted in a positive way by a lower cost of energy. we discovered massive capabilities in energy and this will translate into a huge economic opportunity for us as a country. the second thing we have going for us is that we are still the place where great ideas come from. whether it is twitter or facebook or tesla or, in my part of the country, biomedicine, we are the creative people and we are creating these ideas. the third thing we have going for us is that there is a massive amount of capital waiting on the sidelines to invest in these ideas. so you have a lot of people who are willing to follow and take risks with their money, through pension funds and whatever else, on people who have these ideas. and the fourth thing we have going for us is we are an inherently entrepreneurial people. we are still the best place to come if you have an idea and you are willing to risk and put your sweat into it and grow your opportunities. that is just our culture. what is holding us back? the only thing holding us back is our fiscal policy, the fact that we are running these deficits and debts that put us at risk on the fiscal side. i happen to think we will straighten those out. i hope it will lead to a deprand bargain like simpson-bowles, but i think incrementally we'll get to it. we will get tax reform and we will get medicare reform which is really all that there is left to do. so i am pretty positive about america's future and our capacity for economic growth. a lot of it is coming. 90% of it is coming because of things washington is not involved in. >> we have time for one more uestion this gentleman here. >> yes, i'm barry stern. i'm an education and work forest development advisor to the haberman educational foundation. my -- worldwide, he was reminded of this by the professor this morning, we talked about a great economic stimulus being babies. that would be true in the united states and maybe russia but throughout most of the world there's too many babies. the demographic pyramids look very different in developing countries. that translates into tremendous unemployment throughout the world. there's a lot of angry young men, especially, around the world and the numbers are enormous. do you see any kind of geopolitical threat of lots of young men unemployed, primarily in developing countries, and are there any u.s. foreign policy initiatives and defense initiative this is a ought to ake these things into account? >> well, that is a very legitimate concern but it is not one that we as a nation or our government can do a heck of a lot about. their is no question that a lot of the radicalism in this world is driven by the fact that there are large numbers of young people who don't have much else to do but be radical. and that is especially true in some of your countries which are feeding the islamic fundamentalist movements. what can we do about that? probably very little. we cannot solve the worlds problems of unemployment. what we can do, however is have a vibrant national economy and to the extent our economy is vibrant that does help the world. i saw some statistics somewhere about the implications of wal-mart for the rest of the world's employment, it's massive. the simple fact is, as our economy is growing, we bring a lot of people with us. the best way to make our economy grow is to highlight our strengths and our strengths are innumerable. we are so well-positioned as a country, it is staggering to me. i don't see any way that we aren't going to grow and be extraordinarily prosperous. the only thing that will stand in our way is our government. and our government will not stand in our way that long because it is full of people who are wanting to do what is right. they'll get it right after a while. it just takes a while. they'll make a few mistakes first. as winston churchill said, democracies will get things right after they have tried everything that is wrong. we're in the process of trying a few wrong thing bus we are still moving in the right direction. we are still of the biggest and most prosperous nation in the world and the best place to live. and as we grow, the world will benefit. that's my answer to that question. >> on that high note, relatively speaking, thank you very much, senator. >> also from tuesday, an interview with former fdic chairman sheila bair. she addresses the economy, the dodd-frank regulations law and the housing economy. this is 45 minutes. >> i just googled our next guest and when people search for her they search for timothy geithner. there's a story there. much of the story was written by sheila in a terrific book about the global financial crisis, the subprime crisis, a wonderful book called bull by the horns, fighting to save main street from wall street and wall street from itself. without further ado, please welcome the honorable sheila bair, senior advise i don't have of -- advisor of the pew charitable trust, and in a conversation with her, debra of "the wall street journal." >> thank you, chairman bair, that's how i will always think of you. you did this conference last year and at that point you said a lot of the dodd-frank regulatory reforms had yet to be completed, we weren't at the end point yet and one of the thing this is a jumped out at me is many of the things that you ticked off at that point, leverage ratio, minimum levels of long-term debt, some of the things we wanted to put in place to prevent the banks from collapse, still haven't been finalized, are still in the discussion stages and i guess i thought as an opening question, where are we now, six years post-financial crisis, how far have we come, how much better is the financial system protected than it was previously? >> it is better but it's taking a long time. i think by the numbers, dodd-frank is about half finished. really important issues -- measures like increasing bank capital requirements, which simply reflects how much of their balance sheet, how much of their risk they need to have in equity as opposed to debt. those are important. they have been propose bud not finalized yet. and there's an issue about long-term unsecured debt which can be triggered in a resolution to absorb losses if they fail, so make sure after they fail there's loss absorption capacity so you don't have to end up assessing the rest of the industry for their losses or go to taxpayers far bailout. those are two good examples where regulators have been talking for a long time about getting them done, act knowledging they need to get done but we haven't gotten over the finish line. i think through the stress testing process, there is more capital in the banking system now. the numbers i have seen, it's been about a two percentage point increase in capital ratios. that's good but you know, considering where we were prior to the congress, it's not nearly enough. ironically a lot of it comes from merger and acquisition activity, not regulators forcing them to raise more capital. if you look at their off balance sheet, their capital levels are only 3% to 4%. if you're an auto manufacturer with only 4% equity would you do business with that company? robably not. it's frustrating to me this hasn't been a bigger priority. another priority is loss reserves, prior to the crisis, their coverage ratio, the nonperforming loans was over 100%, now it's 65%. and of course they've been releasing reserves to drive earnings. that makes shareholders happy and others, they can report earnings, but assuming these are the good times you should be building those reserves up. we passed the point at which they should be releasing them, and that's an area of concern. i would say it's a bit safer. there's less reliance on short-term funding, still too much but there's been incremental progress. but it's not enough. we need to get these rules done. >> the banks sort of suggest that there's been a piling on that regulators are never satisfied, that they're continuing to talk about new things and adding more layers of regulation and capital requirements and i guess i wonder, what are you going to look for to say that either the too big to fail problem has been resolved or the financial system really is as protected as it can be knowing that regulation can't top every crisis or problem. >> i agree with them to some extent. regulation has been a moving target. there is a sense of an overarching policy objective. to e, i think there needs be much tougher capital requirements, not these ratios that are easy to game. then also very aggressive regulatory action to make sure that they can, they do fail, they can be resolved in an orderly way in the dodd-frank process. that means they need to simplify legal structures, organize those along business lines, have more , nd alone capital liquidity that work has barely begun. i agree with you that some of this stuff has been a moving target but on others there's been a consistent theme. leverage has been one with its reliance on short-term fund regular solveability, the regulators need to move more aggressively on those fronts. even the bailable debt, we need those minimum rules in place but they haven't been proposed yet. >> for those of you who have read sheila's book, you know she was not the biggest fan of one big bank, citigroup, basically said they wering my managed and the rest of crisis, they were one of two bank this is a needed a big bailout from the government besides the regular tarp program. there were various points of discussions about whether to remove the c.e.o. and at that point, it was big ram handit he, didn't go until he eventually did and you applauded that. the company is back in the news because their mexican subsidiary has been in the news about money laundering, whether their subsidiary was doing fraudulent business, it raises a question. are these banks too big to manage. when you have a global bank with far flung operations across the globe is it just too much? is it not the size but sort of the complexity that's the problem at this point? >> i do think, first of all, fraud is very difficult. we don't know all the facts about whether that should have been discovered earlier or not but fraud has been a perennial problem. it affects even the -- it vexes the best of managers and regulators. you need to take that into account. citi's a much stronger bank than they were prior to the crisis buter that complex organization, anaged centrally at the top. i recently joined the board of a spanish-based bank that has worldwide operations, but they, like others, bbva and hsbc, foled -- followed a an approach where in each country you have major operations, you organize it separately, it has its own managers, boards, and capital liquidity. you can make mistakes with that model as well but then i think you're more a conglomerate a collection of small, regional banks, as opposed to trying to manage everything centrally at the top which i think is extremely challenging. as regulators proceed with getting these large bank into resolveable forms in way this is they can be broken up in an orderly way if they get in trouble,ic will be more resolveable in the long-term. we saw this problem with j.p. morgan chase, bbva has had its problems as well. you look at wells fargo, they're not perfect either but they have a more straightforward model. it's a simpler institution to manage but they're getting into securities activity taos, so we'll see what happens there. i do think it's simplicity and -- it's complexity more than it is size and having more stand alone entity this is a have their own boards and managers is a way to tackle that problem. there's some benefits with a global presence. if the u.s. is having problems and the emerging markets are doing well, you're in better shape than if you're just in the u.s. but the management channels are substantial. >> citigroup is now known as the new goldman zach. they have top officials in -- goldman sachs, they have top officials in washington. we have secretary lew, stan fisher, nominated for the fed, nashan -- nathan sheet, another treasury official. does it help to have people in washington who have experience on wall street? or does it hurt at this moment when we try to figure out how to rein in the banks? >> i think it's important to have diversity in your economic team and among your financial regulators. i think it's important to have diversity of perspectives, backgrounds, gee og fism so yes, when you start having a lot of people with very similar past experiences, perhaps your team isn't as strong as it might otherwise bfment i think there's also an optics issue. it's all about the individuals and you know, all the people you named are fine individuals. but there's an optics issue too that i think we need to be sensitive of, especially since there's so much public cynicism after the crisis about government and its relationship with the financial sector, to be sensitive to that and make sure there's good diversity and you know, that you have people who are identified more with reform and public protection as well. you know, the white house has a prime opportunity, they have one more vacancy to fit. i would love to see them put a real reformer in there, somebody republican, g, a republican supported. he was strongly supported, he's currently vice chairman of the fdic. known for his strong support for reform, strong opposition to too big to fail. having somebody like that, a go-getter who the public trusts as a reformer would add diversity and also bolster public confidence system of i hope they look at that last remaining vacancy as an opportunity to put somebody reform minded and associated with protecting the public. >> you mentioned j.p. morgan. i wanted to ask you, you had written a column for fortune in which you said you thought there was a lot of piling on going on. jamie diamond was being unfairly blamed for every sin, all of a sudden this company, that was the teflon bank, you know, everything was sticking to it now. every kind of possible allegation was being leveled at j.p. morgan. i would love to hear more about that, do you think it was sort of, the regulators sensed weakness and went after them or were they a big bank with a lot of operations that spawned problems? >> i think they made plenty of mistakes. the actions were more than justified but it did seem like there was a particular focus on them. that's how it struck me. that's how it struck a lot of people. i think that regulators and others who enforce our rules need to be mindful of the kind of signals they send if they decide to, well, we're worried about one of these guys getting in too much trouble, we'll go after the one with the deepest pockets because they can stand it, if that's how you manage your regulatory philosophy, you give disincentive to banks to be strong, which you don't want. i do think it's something that regulators as well as the justice department and others who are charged with enforcing our laws need to be mindful of. i don't quibble with any of the suits. everything -- they had grounds. i think they was prioritization, maybe there were other banks doing the same thing that were not subject to the same kind of focus. but we do need to be mindle of -- mindful of the kind of signals and enforcement actions just like regulation should be designed to change behavior and if the signals are confused, so are they being picked on because they're strong or because they did xyz? i think government needs to be clear about the activity that's being punished, why this is being punished and go after other institutions if there's more than one institution doing it. >> in your years of regulating banks, you've joined a bank. i was curious to hear your thoughts about why that bank, what you hope to bring to the table as an independent director but also you've been a critic in the past of european banking system. i think you said some of the banks were undercapitalized. in the early days there were concerns they were gaming their own stress tests. i would love to hear a little bit about the strength of the european banking system at the moment, whether you can they're better capitalized, less of a risk to the world's financial system than they were? >> i think they're making progress. i'm delighted to see that the e.c.b. will be doing quality review now, so they're taking that stress testing process over and they're already seeing results. banks are starting to clean up balance sheets already before the review takes place. that's all positive. i think there are several very large, complex injure peen -- european institutions, big trading operations, that have been operating at like levels of capital. excuse me, very high levels of leverage, low levels of capital. part of that the rules need to be strengthened, the capitals need to be strengthen in europe. they don't have regulations. y rely on risk-based measures. if you have large trading operations, you can really lowball your capital with the complex modeling that is going on to determine the riskyness of your trading assets. i do this -- i do think this has been a problem. they are improving. it's been a drag on the european economy. well capitalized banks with doyle more lending than more leveraged ones. i will say, you see the same dynamic in the u.s. if you have a bank primarily in the business of making loans as opposed to trading operations, they'll have, if you look at their capital on a leverage basis, equity to foe total assets, they'll have much higher levels of capital. that's the way it works now. if you've got a big trading book, you can have high levels of leverage. if you make loan the rules are tough. >> when you look at the exposure of the u.s. to the european banking system what do you see? are we better protected now than we were? >> i think -- i'm strongly supportive of the foreign banking organization rules that the fed recently finalized. you look at the very thin capital levels of some of the larger institutions in europe and you have to question what ability would they have to serve as a source of strength if we got into another situation. in point of fact, their operations in the u.s. and the fed in particular was operating as a source of strength for them, the money was going that way, not coming into the u.s. the reality is, you get into a stress situation, the likelihood is assets will be there. if european bank a is in trouble in europe, to think that the fed will convince the foreign regulators of that bank to send money here, it's not going to happen. so requiring that they have, again, their own stand alone capital and liquidity, this is a model some banks follow already. their own capital and liquidity here in the u.s., regulated by a company with its own board in the u.s., that makes for a more stable financial system and provides an additional level of protection if europe has problems. if it goes the other -- it goes the other way too, if the u.s. subsidiary starts having trouble, its segregation from the company in europe prevents these problems from going to europe. >> you need all regulatory regimes to be on the same page and doing similar resolution planning and similar plans? >> optimally you will. last lot of that that goes on already. not as explicit as what the fed did. but it's a reality if you get into a stress situation that's what's going to happen anyway. it's not quite formal. i would like to see the global financial system migrate to that kind of structure. it would make the -- they want to be large for the diversify case that brings but make them have subsidiaries. >> one of the thing this is a triggered financial reform was not a bank, but an insurer, ample i.g. it was if not the impetus, one of the impetuses for dodd-frank. there was a gap, these large insurers had become more than insurers and nobody was policing them you said a.i.g. had not been designated an important financial institution, it now has which gives the government the right to regulate the company. but there's a huge lobbying in the works by the industry to try to get the fed to go easy on them, to not apply the same capital rules and other rules to insurers. they're saying we're different than banks, don't regulate us as such. there's a lot of support for that on the hill. janet yellen says they're sympathetic to that but their hands are tied by the law. you wrote a letter that said congress should stay out of it. what's your thoughts on this? >> for the regulated part of the insurance, we're talking about big insurance conglomerates. that's what people are worried about. for the pieces of those conglomerates that are subject to robust state insurance regulatory regime, that should and already does have discretion to defer to that capital regulatory regime but if they're doing things outside of that regulated insurance, like credit default swaps in london, for example, then they absolutely should be subject to the same capital rules and other standards that banking conglomerates doing the same activity are subject to. and even insurance companies,ic the fed should have discretion and does to defer to a state regulatory regime it deems adequate but where do you think insurance companies put their dollars? they have mortgagebacked securities, bonds, sovereign debt, corporate debt, commercial loans, real estate loans. these are things, this is where they put their money. so the risk, whether it's a bank making a loan or an insurance company the risks are the same. to suggest that oh, we -- because we're an insurance company we don't need capital rules, that's just not right. we need a more thoughtful dialogue. i worry that so often, these deregulatory movements can get started with sound bites. now the sound bite is, oh, we can't have bank-cent rick rules applied to -- bank-centric rules aplied to insurance companies. whether you're a bank or an asset manager, you can expose your stake holders, whether it's policyholders or depositors to harm if you're overleveraged and get yourself in trouble. if you're systemic you can expose the rest of us to harm. it needs to be dealt with. just because they're an insurance company doesn't mean we don't need additional protections. >> i'm not going to get to my next question because we're going to q&a. if folks have questions out there. think there's a mike. >> given your experience at fdic and what you were just talking about with the mega financial institutions, how would you feel about putting up an insurance program like fdic that applied to the mega financial investment institutional companies, maybe the mfiic, that requires home to pay premium based on their size and degrees of leverage so that when a crisis comes up, and they have to be build out by the public, much more of it is covered by insurance than just by this public. today they're essentially getting free insurance as they have been for decades and there have been hundreds of billions of dollars spent bailing out financial institution this is a took excessive risks and they didn't pay anything for it and they got brought back and made more profits until they caused the next crisis. how would you feel about having a much broader financial institution insurance program that they had to participate? >> well, i actually would go the opposite way. i think we need more market discipline. i have not given up on market discipline. i think clear rules, this is what the long-term debt requirement we're talking about that says, shareholders, bobbed holders, in this institution, or uninsured depositors going as far down as you need to to impose lesses so that their stake holders, their creditors will be subject to laws. and taxpayers will get involved. if that money still falls short, the rest of the industry will be assessed. that said, we had tried to get a fund a prefunded reserve through dodd-frank. we got it passed through the house. $150 billion fund. the idea was not to provide insurance but working capital. you need to provide liquidity support to these institutions as you unwind them system of this fund would have been there to provide that liquidity support while any ultimate losses would have been imposed on the stake holders this d, the shareholders of the institution. we got that through the house. we couldn't get it through in the senate. i go into detail in my book as to why. quite disappointing. the administration did not support us. secretary geithner worked with several republicans actually to kill it. it was called, ironically, it was called a bailout fund system of this is an assessment i wanted to impose on institutions above $50 billion. it would be risk-based, got a lot of leverage, short-term funding, you'd pay a higher fee. it died in the senate. they called ate bailout fund and replaced wit a line of credit for treasury to provide the working capital, which is kind of silly, so there's washington for you. i would provide working capital. we've got safety nets too big for them already. what i've been looking for and what i think we successfully got into dodd-frank, even though it's not a prefunded reserve, is to make sure the creditors of the institution know they're on the hook for losses and get more market discipline on them. and there are harsh rules in terms of firing boards and managers and three years compensation which will discipline management a bit. >> i'm a medical and social science researcher and i reviewed your book and i highly recommend it, it's a wonderful guide for explaining these complex issues as well as activism. i have three question, can you comment on senator warren's 21st -century grast-steagall act and the efforts to restructure fannie and freddie and i don't know if you can say anything about ed demarco, i've heard that he's a hero in a sense, doing this job, trying to protect our money, whereas he was vilified by senator barbara boxer. and the last question is, one of our gubernatorial candidates in maryland is trying to few forth a foreclosure moratorium bill. is that something you think is a good idea? how might you craft it? and is there any way of going back in the last four or five years to try to help people who didn't get help but were swindled? thank you. >> a lot of questions. so warren-mccain a bipartisan bill i have suggested in my book that we accomplish that through a press process that requires market making, securities banking activity, all be separated in stand-alone subsidiaries, autonomous from each other that have their own specialized boards and management. i would be happy to support the bill but i don't think it has traction. on g.s.e. reform, look, i think we subsidize housing too much. i would like to -- i know what i want is unrealistic. this town loves housing and we're going to throw housing subsidies to that sector until the day i die. i would like to see, just withdraw. let the mark decide how much capital to allocate to home finance. i think we skew too many resources in that direction. there are other areas of our economy that have been hurt in the process. that said, if they're not going to do that, i think the approach built on the warner-corker bill, to have at least if you're going to have a government guarantee, make it explicit, charge for it, don't have the g.s.e. model where you're backing a for-profit, publicly traded entity, that was a bad model and one we should not revive. ed demarco used to work for me at treasury, your description is correct. i think he was unfairly vilified some of the things he did. he was following statutory mandates. he didn't have agendas. he had certain obligations as conservator of fannie and freddie, he did great work there and was pretty harshly criticized. i think we do owe him a debt. the foreclosure moratorium, that conversation would take a lot longer than we have. it's sad we've never effectively dealt with that problem and i think that's dragging our economy. the housing market is not really recovering the way it should and that's frankly because we never dealt with those under water mortgage, the distressed boar erowers, never dealt with that. >> time for one more question. anybody? >> hello. my name is michael, i'm an economic historian with "e.i.r." magazine. the fdic, this last week, announced that it's going to sue the 16 largest banks for the libor. i think that's great. you're not the chairman -- chairwoman now but very happy to see that. does this indicate that the federal government's finally able to defend its interests with as much aggressiveness as j.p. morgan and wall street have tried to defend their interests? second main question though is, on this issue that thomas honig, as you said, on february 24 of this month, he put out his latest warning saying the derivatives bubble is grow, banks only have 4% of equity ratio to their total assets and even with the decline in the value occurs that much you'll have a wipeout of everything and he said that bailing won't secure a banking system in a crisis because it's not going to be just one bank you can resolve. he was on a panel with you about six months ago in congress and michael capuano from massachusetts said, if you were in our shoes would you reinstate glas-steagall? he said yes, that's what i'm trying to tell you. what gives? how come it's taking so long to get this through? why as he just said is the elizabeth warren-mccain bill going to take place? we can't wait until the next crisis, it's going to be too late. as honig said in that address, you'll be bum rushed into another bailout if you don't put this in place. and lastly, he definitely should be on the federal reserve board. i'd vote for him for president, thomas honig. >> so the libor suit, i think it's important to understand what that's about. i think -- i also applaud the fdic's courage in bringing that but they're acting as receiver. the fdic is not the regulator of large banks that do this. the fed on the u.s. side, these are not done inside insured banks, they were done in holding companies, outside insured banks but that's their primary regulator. the fdic found a hook to come in as receiver because under the theory that by manipulating the libor rate some of the bank this is a failed had losses, lost money on their loans because if the interest -- if you manipulate the interest rate down, you're charging lower rates on your loans, if you are on the losing side of an interest rate swap it would cost you money too. but their authority is limited to recovering what they can show the libor manipulation cost those failed banks. it is one additional tool that's used and should be used, and i applaud them. but they are constrained, they're acting as receiver, they're not enforcing the law, but claiming damages for failed banks that were insured by the fdic. tom honig, i think he's great, he's a great public servant, smart, understands the financial sector, committed. again, i think -- you want him as president, i'll settle for getting him over at the fed. we need more people like that in area, you need people making the arguments, driving things forward, inertia can take this over. i think there's been a delay game here thinking that the longer dewe delay rules, the public will lose heart, people will get frustrated and go to other things and leave them alone. and they have tremendous power. look what they're doing to poor dave camp. you can agree with that tax or not but this is unseemly, all these bullies piling on him and why -- there's nobody on the democratic side defending him. at least he stepped up. i don't get it. it's unseemly. but there are, you know, members of congress who sign their names to letters aligning with him and it doesn't seem to have any repercussion in their home district so this is one of the reasons i wrote my book, people need to take notice when this kind of thing goes on, find out who is doing it, tell them you don't like it, you're not going to vote for them if you see them doing it. otherwise all the money in new york, the financial sector, comes in and influence -- exercises influence. if voters don't provide a counterbalance, you'll get what you have now. >> thank you. we squeezed a lot into that. >> the health care problem in the united states is going to continue and it's not going to go anywhere. if we do not deal with the issue of innovation, if we do not translate all those findings that occur at the university level, into health care products which are affordable and that treat disease and cures them and as long as we do not understand diseases, their causes and how to treat or cure them, there's no point in talking about the solution of the health care problem because health insurance coverage is going to provide health insurance but then when it comes to drugs, when it comes to the premiums, when it comes to subsidies, where are the subsidies going to come from? from taxpayers' money. it's not that people are going to just get the dollars out of the trees. people have to pay for that. and there's a limit. the economy is basically the science of limitations system of if we don't deal with a better system of working on prevention, of working on understanding, how we could take care of our own health, then there is no point in just having health insurance because what is going to happen is what happens in colombia right now, people are covered, like what happens in panama. everybody can have access to health care or what happens in europe too in which people are covered but when it comes to medications and when it comes to drugs, governments are having problems affording them. >> the future of health care, sunday night at 8:00 on c-span's "q&a." >> c-span, for 35 years bringing public affairs events from washington directly to you, putting you in the room at congressional hearings, white house events, briefings and conferences and offering complete, gavel-to-gavel coverage of the u.s. house all as a public service of private industry. we're c-span, created by the cable tv industry 35 years ago and brought to you as a public service by your local cable or satellite provider. watch us in h.d., like us on facebook >> microsoft founder bill gates poverty.ut global president obama announces new economic sanctions against russia. then a preview of the president's upcoming trip to the european union summit. later, the special inspector general for afghanistan reconstruction on the problem of corruption in afghanistan. next, former microsoft ceo bill povertylks about global and the bill and melinda gates foundation, which funds health care and education efforts in developing countries. forbes magazine estimates bill gates net worth

Transcripts For FBC Varney Company 20121226

good morning, "varney & company" viewers, we have a treat. nicole is at the stock exchange, futures are traded up a bit. and president obama is cutting his vacation short to continue talks on the fiscal cliff. joining us now is dan henninger from the wawr wall street journ. does he want to go over the fiscal cliff? some are saying he needs more than he would just get from the rich guys. >> i doubt that he wants to go over the cliff. and i must say, president obama has repeatedly referred to himself as the unique politician, he's different than everyone. there is no politician i know would want to get into a situation like this. and barack obama marchs to his own drummer and it's possible, but i kind of doubt it. >> you wrote a piece in the wall street journal, called "no guardrails", you said the old society kept the politicians in order in washington, self-order and self-restraint. all of those disappeared as a result of the "me" generation and you say that obama is the epitome of a the "me" generation president that he sees things from his perspective and won't bend. >> the original metafor, you do have guardrails on a highway, people drive 75 miles per hour and occasionally someone gets out of control and drives too fast and you don't want them going over the cliff so to speak, you want to protect them. well, that was, i argued back in the 1960's, remember when people were sit inning in the universities, a nonnegotiatable demand. a thing called nonnegotiatable demand and that was society and people became more self-righteous and self-directed rather than understanding we had to operate within certain rules. i do think it has infected washington. i mean, i would call president obama one of the most self-righteous presidents we've ever had. david: president reagan, for example, stood for concrete things and didn't bend on the principles, because they had the guardrails that allowed them, it made it easier to negotiate with people they disagreed with. for example, tip o'neill, the democrat made a deal for the huge change in our tax structure. there seems no possibility of a deal like that being made now. >> well, the republicans clearly feel that they've been disadvantaged by president obama and they actually, i don't think, trust him or the democrats anymore because of the experience they went through with the affordable care act. obama care, they've got nothing out of it so they feel they will be hung out to dry if they do a deal. >> you know, there are so many pots and plans clattering around the chamber and what bothers me he is the lopsidedness of the debate. how about the g.o.p. for decades never said we are the ones delivering the middle class tax cuts. these are middle class tax rates that were enacted undergeorge w. bush. we own these for the middle class, not the democrats. why isn't the g.o.p. stepping up for that. >> i guess because they have no historical memory, a democrat hasn't done this since jfk. back in the early 1960's. and he got a huge amount of protest. >> clinton lowered the capital gains tax and because of that a huge boom in the stock market. >> the tax cuts barely passed at the early part of 2000. why didn't they make them permanent and we could have avoid this had kind of discussion? >> tax policies extremely difficult. they put it through the so-called reconciliation process, which doesn't require 60 votes. reconciliation laws, sunset after ten years, they're not permanent and that's why this one is sunsetting, rather than having done a, you know, a long-term tax reform bill. and tax reform is very difficult. >> why can't we get sunsetting on spending, and no sunsetting on tax cuts. we shouldn't be, that's what we should be sunsetting are the spending bills. we should be talking about wind energy that needs to be sunsetted, soon. you bring up the side of the cliff that no one talks about. the sequester, the automatic spending reduction, i don't think it would be a bad thing if washington took the sequester and showed that they could cut spending. >> because we have a never budget balancing act going on with the journalist pointed out the secret gang of six meetings, that's budgeting by, secret gang of 12 meetings. and-- >> quickly that's what we use today call blue smoke and mirrors in washington and that's why people are upset at washington. don't trust them. david: good to see you. well, the numbers are in and you were not shopping as much as last year, apparently. holiday retail sales were basically unchanged from last year and sandy, of course, and the connecticut shooting got some blame, but what about no jobs and no money? coming up, the opening bell, futures are up. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ from td ameritrade. i played a round of golf.id in the last five hours? then i read a book while teaching myself how to play guitar; ran ten miles while knitting myself a sweater; jumped out of a plane. finally, i became a ping pong master while recording debut album. how you ask? with 5-hour energy. i get hours of energy now -- no crash later. wait to see the next five hours. david asman, in for mr. varney. we're minutes away, dow futures are trading up. so at least at the beginning it may be a good trading day. now 15 seconds away from the opening of the dow, nasdaq and s&p 500 have been down the past two sessions, but as we hear the opening bell he, the first tick will probably be to the green side. let's check the board right now. we have no first trades. at 13,000, seems to be hovering around 13,000 for a long time, doesn't it adam? >> it does, because people are waiting, we have five days. david: five days for the fiscal cliff, that's going to change everything. >> i agree with adam in trading. david: we're trading up just a tick now shall barely noticeable tick of 7 points. well tturned out to be a disappointing holiday season for retailers. retail sales up only 7/10 of a percent two months before christmas compared to last year. that's the weakest result since 2008 which was right after the recession hit. those numbers, according to master card spending pulse, nicole has some retail numbers, are they suffering, the stocks, as a result of these figures, nicole? >> right weeks, we're seeing sof them mixed and j.c. penney and macy's, you see the push and pull happening as the retailers are trying to find their footing. the point. story here, dave. you look at the number. rise of 7/10 of a% two months ao months coming into christmas. that's the weakest since 2008 when the recession hit. it just shows you that consumer remain nervous, they're not out there spending frivolously, they're penny pinching, trying to get the best bet. and i like the title on the board there, you're not spending, that's true. people held back. david: there are a lot of issues. i'll take it to the company. there's sandy and the fiscal cliff. >> i'm not saying perhaps we should hold off saying that the consumer is nervous because spending pulse which did this survey and put out this expectation, even pointed out that in the northeast, in the mid alantic region because of hurricane sandy, spending was drastically lower than they would have expected so this could be a result of people being shocked by the superstorm not necessarily consumers being afraid. david: and there's also, by the way, the shooting. >> the interesting thing, too, national average for retail spending, 2, 2 1/2% growth from last year, the average nationally for the last decade or so has been about 4, 4 1/2% growth. foot traffic still remains pretty strong meaning people are coming out to the malls to mange out and possibly not spend. david: what bothers me, saying that the fiscal cliff is stopping people. you're asking people shopping less because of-- i don't know, anybody, i don't know anybody, the fiscal cliff directly stopping people from shopping. >> these surveys, keep in mind that the national retail federation is still holding with white knuckles to the prediction we'll have increased growth of spending, and 586 billion dollar seenlz. so nrs has not changed its forecast. >> shopper track has. >> shopper track on monday went down from 3.3% to-- >> and shopper track has devices in stores that track it. david: what does your gut tell you a mediocre year. >> yeah, but i'm optimistic. david: personally i see anecdotal, fewer people than i saw last year shopping. >> i do it all online, and down for you. david: well, if congressional leaders fail to come to some kind after agreement by the end of the year, tax rates go up, at least for everybody to pay taxes. did the republicans miss a opportunity to sign on to a promise the president made last year not to raise tax rates and what about nancy pelosi's pledge pledge. >> nick from the daily caller, did republicans miss a move here? >> i think they missed a opportunity if you go back to 2010 when they sweep the house and had the president in a position where he could support a permanent extension of the bush tax cuts, and they only went for the the extension for two years. david: why is that? only go for two years as opposed to a major change in the tax code? >> maybe they were hoping that they would win the presidential election in 2012 and then have a upper hand event. but you know, they didn't go for the permanent rates, the bush era tax rates when they had the chance in 2010 and the sequester, the automatic spending cuts getting lost in the conversation are something they pretty much set up with the democrats in 2011. >> well, here specifically, here is about the millionaire cut off figure because of course, now the president says compromise going out to 4,000. here is what pelosi said in may of 2012 to speaker john boehner. democrats believe those earning over a million dollars a year should expire and we should use the resulting revenues to pay down the deficit. has anybody called her on that, hey, look, you're only for raising rates for millionaires and above before now you're into the $400,000 level? >> i called her on it last week, and she avoided the question and didn't answer it directly. she said, we were trying to smoke out, that was her quote, smoke out republicans and steny hoyer himself mentioned that it was a ploy. so, i think they were trying to get republicans to agree to the millionaire tax increase and then see how far it will move even more. and it's politics, david. david: yeah, yeah. >> by the way the millionaire tax, only, it would basically raise money to cover eight days of government spending, but you know, david and adam, we've had the letter from nancy pelosi. do you really believe it was a ploy to smoke out the republicans? because nancy pelosi in her letter is equating millionaires to big oil, special interest and corporations. why doesn't the g.o.p. capitalize on that they really want middle class tax hikes when they're talking about raising taxes on the 250,000 plus crowd >> well, i think speaker boehner and the republicans in the house would be able to get some democrats support for the millionaire tax increase which i don't think they did enough of and they had to call off that vote as we all know on that plan. but some democrats would support something like that, but we're talking here about the leadership speaker-- minority leader pelosi and you know, she, because now it's republicans proposing it, now they seem to be backing away. they might be able to get some conservative leaning or moderate democrats to support something like that. and the president, as we know, the white house has signaled they would even take 400,000 increases over-- >> david: here is what gets me about the president. i grew up in washington so i'm cynical about the process, and familiar with politicians breaking promises. the president said just a year ago when he was talking about changes in tax rates, he suggested there wouldn't be need for changes in tax rights, even of millionaires, let's play the tape. >> what we said i was, give us 2 trillion in additional revenues which could be accomplished without hiking taxes, tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions, and engaging in a tax reform process that could have lowered rates generally while broadening the base. david: all right. now, that was in july of 2011 and then a couple of week-- a couple of months later came out with the budget, saying the tax system should be simplified and work for all americans with lower rates and brackets. the president has come out time and again saying we shouldn't raise any kind of rates. is anybody calling him on that? >> well, a lot of republicans are wondering what's different now? we still have a sluggish economy, why the change in position? , but the president was out on the campaign trail, time and time again saying individuals and families specifically making over $250,000 a year should be-- should get tax increases so he's sticking to that position, like i mentioned before, the white house seems to be signaling that they would move in the direction of 400,000, those making over 400,000 increases there which may be something that congress could agree on and get through. but again, we're going to have the conservative wave in the republican house saying no increases, so, boehner's going to be in in a position do i get democratic votes and risk speakership. >> boehner is between a rock and a hard place, no doubt. david: good to see you, from the daily caller. >> good to see you. david: government subsidies are suppose today make something more affordable for consumers if they work right. that's not the case, especially for so-called green energy and wind power. noi, thnow, the taxpayer, you, e out billions more. find out how much and when at the top of the hour. meanwhile, back to nicole, netflix is blaming amazon for outages that hit the streaming video service right at the worst time, christmas eve we all want to see the movies, more than 27 million subscribers could have been affected after a outage at a amazon web service center in virginia. how is all of this affecting stocks, nicole. the stocks slightly to the down side. that's the point. christmas eve a lot of people are home or ready to access their online services, this is a huge source of revenue for netflix and to have a outage, particularly on a key night like christmas eve, not good news there for netflix, and you see it below 90 bucks. david: all right, nicole, we'll be keeping close watch see how netflix is affected. and now i have your seven early movers looking atling th at thet winners and losers, bank of america, a huge move for bank of america. moment depot up 46% this year as well. disney up 33% this year. jp morn, the bi morgan the big . up. imcdonald's down 11%. and the biggest dow loser hewlett packard down 45% for the year of 2012. well, iphone versus android. kindle versus i-pad. apple, google and amazon all going to war in 2013. who comes out alive? and don't forget facebook, they're in the mix as well. telecom ceo is next to tell us mo he thinks will come out on top. 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>> let me say the tech tore is more than your wrist over hang gliding over the mountain ve s.u.v. ious. if you're not going to make it, it's about e-commerce and advertising. david: apple has a huge dominance in apps, right? >> yeah. david: don't they win by the sake that they're far ahead of competitors in apps? >> they're not going to win unless they're more into apps and content. apple is about the new-new. and the new-new is about the new products. a lot of the problems that everybody is getting into are lost leaders. you need to be in content. you need to be in apps and you need to be in mobile because of the mobile moneyization. they need to get into it. and siri was the beginning of the search engine business. david: siri was the first attempt to change the way we searched for things. we used to search on google, but siri talk to it and tell it what you want, does it work that well? a lot of people are disappointed with it. adam-- >> cool occasionally, but only thing i would use it for-- >> you default to google. but i'm also a middle aged guy. >> siri has a way to go, but apple has a ton of cash and r and d dollars, research and development, and they need to get-- >> there was a report, i forget which channel put it out, but at the end of the day you have 7 billion people roughly on the planet, potential customers. majority are going to be buying android based operating system devices. david: you mean like the galaxy phone and-- >> and they have a market, but it's limited. will apple will have eventually have a limited market? >> i don't believe so. i don't believe so. i think they're going to continue to grow and i think in a lot of the emerging markets where you're seeing enjoyed you may see a little more, but i think that apple is going to continue to agree. david: e-mac, if the content is the key here, if we find out -- if you go on to netflix i'm disappointed i can't get a particular movie i'm looking for, i can't get the content, but apple has so much money and netflix probably has what, 5 to 10 million max and apple has over 100 billion in cash. they can make the deals with hollywood, hollywood dynasties to run any kind of movie. >> and apple could buy facebook or netflix easily. i love netflix personally, i think it's great. and apple is the big gorilla here. who is left standing in ten years? i mean, facebook, a lot of defriended facebook and one big giant app anyway. >> they're going to continue with the mobile and a billion plus users, the major player facebook. david: larry, appreciate it. >> thanks for having me. david: time for your morning gold report. we saw oil popping dramatically about 2 1/2%. did it gary over to gold? let's take a look at the price of gold. it's up, but not substantially. we saw the price of oil go up 2 1/2% and the price of gold going up 7 1/2-- 7 1/2 dollars, translates to 1/2 a percentage point. so a jump for gold, but not as big as we saw in oil. 1666. who on your street has had a gun? what if there was a map to tell you who specifically on your street had a gun? people say it's a invasion of privacy. others say it is a red carpet for criminals, everyone is fired up about this story, we'll be, too. stick around, that's next. ♪ the scarlet letter of gun ownership. a local newspaper in new york putting a map on its website. take a look at this. all the red dots you see, those are the homes where a owner has a gun license. this is all on the public record, but how do you feel about publishing this information? >> we just broadcast it, are we culpable. david: specifically for people to find a house-- >> it doesn't necessarily pass-- i think a lot of people, 50-50 i think most of of us feel uncomfortable with that kind of-- >> ina invasion of privacy and plus the people who don't own a gun are vulnerable to those who don't have a gun and could be vulnerable to crooks. and i like the newspaper is justifying the action, look, our reporter owns a gun. where is his address printed in the newspaper and are they going to print the addresses of everybody in the newspaper? you don't see that information. maybe then they'd see how people feel about invasion of privacy. david: i don't know-- i don't mind that the crooks know i own a gun. break-in rates are less in texas because people assume they have a gun. the privacy bothers me a lot. the government, obviously, the government can get whatever they want, but any particular government official would know if i have a gun or not. >> when you register, i mean, the basic laws just to purchase a gun, a handgun or something else, you've got to fill out the forms and they know from that moment. where you're going with that. >> the fact that i think i have a right to own a gun in the privacy of my own home and that where privacy is very important to me. >> what about the people's houses that don't own a gun and concerned about those and will the criminal find them. david: in other words, the criminals would prey on the houses that don't have a gun. >> it's not fair to anybody to have such a invasion of privacy. >> president obama is headed back to washington to work out a deal on the fiscal cliff or is he? does he really want us to go over? and specifically what would happen if we do? we will ask former clinton strategist doug show hen in just schoen in a fewminutes and the y that isn't. find out exactly how much in just a couple of minutes. can your hearing aid do this? lyric can. lyric can. lyric can. lyric by phonak is the world's only 24/7, 100% invisible hearing device. it's tiny. but lyric's not just about what you can't see. it's about what it can do. lyric can be worn 24/7 for up to four months, without battery changes. incredibly easy to live with, lyric can be worn showering, sleeping and exercising. in fact, you might forget it's there at all. call for a risk--free trial. and you'll see lyric can also give you exceptionally clear, natural sound in quiet and noisy environments because of how it works with your ear's own anatomy. (testimonial section) (testimonial section) (testimonial section) did you know, 94% of people who use lyric would recommend lyric to a friend or loved one. can your hearing aid do all this? lyric can. to learn more about lyric's advanced technology, call or visit trylyric.com for a risk--free 30--day trial offer. you'll also get a free informational dvd and brochure. why wait? hear today what a little lyric cacan do for you. lyric from phonak. life is on. david: good morning varney & company viewers. i'm david asman. stuart will be back tomorrow. new at 10:00, federal subsidies for wind power are set to expire in a couple of days on december 31st if congress decides to extend those subsidies, you the taxpayer will be on the hook for 12 billion dollars just for next year alone. since 92 the u.s. has spent nearly 24 billion dollars on wind energy, but get this, it hasn't gotten any cheaper, not a penny. it is still one of the most expensive ways to get energy. so we will be discussing that. let's check the big board. we're up 27, 27, 28 points. again, it reached a high of up 35 points on the dow, a little earlier this morning. it pulled back from that and then is going modestly upward as well. we're not expecting big volume today, but we have big topics to talk about with our company: elizabeth macdonald, adam shapiro they are here. nicole petallides from the floor of the new york stock exchange. more signs of recovery in the housing sector. the case shiller home price index up more than 4% compared to last year. so nicole, how are the homebuilder stocks doing? nicole: right, it is interesting when we take a look at the numbers. let's look at the stocks. they are doing quite well, for lennar, up over 1%. then's on a -- and that's on a day where the dow is just virtually 2/10 higher so -- percent. so pulte group, toll brothers also gaining nearly 1%. with the case shiller numbers month over month, october versus september you did see a gain. that gain we saw was the loss -- the loss of 1/10 1 of% were better than expected -- 1 pent -- 1/10 of 1% was better than expected. you are seeing strength in areas such as san francisco, detroit and phoenix, you are seeing growth there. some experts are saying that the housing recovery we're seeing here is gathering strength. people are starting to believe in the recovery little by little. david: still have a long way to go, though. nicole: right. david: improving a little bit. thank you very much. federal subsidies for wind power are set to expire in a couple of days, december 31st. extending them for one more year would cost 12 billion dollars. this according to the joint committee on taxation, which is a pretty neutral committee. so company, when they went into effect 20 years ago, even the congressman who pushed for them said they should expire, said they should be sunseted and they are nowhere near that happening now. adam: if you believe that the government has a role to help new technology get a foot in the door, then the foot's been in the door for a long time and they keep slamming it on us. david: you bring up a point. the reason why the door keeps getting slammed although the door to the subsidies continues to be open is because it is getting more expensive to produce energy by wind power, not less. going in the opposite direction. adam: there's a lot ways to look at this, i'm going to look at this from we can't afford to spend the money we don't have. david: if it doesn't pay off, we're still wasting money and those are billions of taxpayer dollars we're wasting. liz: we may not waste money if you put the wind farm outside congress with all the fighting going on down there. what i love about this story, this is classic case of keep irrational hope alive. if this was commercially viable -- by the way, the issue is private sector companies gets all sorts of tax breaks and loopholes, if they can't do it, if they can't pull off wind energy, why would completely government backed companies do it. nat gas is really cutting into wind energy. david: it is interesting you say that because specifically when we say that wind energy costs more, let's be specific about it. 1 million watt hours generated, that's how they measure these things. with wind energy it's $52. that's how much it costs to produce 1 million watt hours. with nuclear energy, it is $3. with natural gas, it's 63 cents. they're so extraordinary. adam: absolutely you would go with natural gas. it is kind of electric cars versus -- if you buy a ford focus with a 4 cylinder engine, you will wind up much better -- [speaking over each other] adam: one man's subsidy is another man's -- [inaudible]. phil graham voted in 99 when he was senator to stop this kind of spending. david: two wrongs don't make a right; right? liz: i'm for green energy, yes, in certain ways but not government backed. david: the bottom line, this is a department of energy study by the way in 09 found that the average wind power costs were higher in 09 than they were in 94 when all these subsidies began. all of these are supposed to bring costs down, but it's had the opposite effect. the g.o.p. is in disarray, i think that's fair to say. they missed an opportunity to not raise tax rates. now president obama is ready to fall off the cliff to bring in more money for the government. joining us now is doug schoen. doug, i've got to ask you directly because you hear a lot of this off the cliff stuff. specifically what would happen? what would happen to the private sector? what would happen to the government if we go off the fiscal cliff? >> sure, well, it's anyone's guess, but i think we will see economic activity slow down, david. i think we're going to see with the certainty of tax rates raising on all of us, that people contract their economic activity and given the cbo estimate, if we go into a recession, i think it will be cataclysmic for the american economy. david: specifically with the government, i remember during the clinton years when we had that debt ceiling thing that we went off of and that the government shut down -- would we see a shutdown in certain government agencies if we go off the cliff? >> i'm not sure we're going to see a shutdown, but we will certainly see a lot less economic activity, and particularly in the military sector, i think defense procurement will ground to a halt, and that will have, again, an impact on the economy and it will be deleterious. david: let's talk about the politics of some of this. >> sure. david: nancy pelosi -- i very rarely agree with her as you well know. >> i do know. david: but she said something i kind of agree with. she was talking about the republicans. she was defending her comment last may that taxes should only go up on people earning a million dollars. she's come down now to the president's level of 400,000. but she said -- she counter attacked as she often does, she said republicans have already become a little bit pregnant on their tax plans that they're never going to ever raise tax rates. i would have to agree with her. once boehner went off his cliff, if you will, on his pledge not to raise tax rates believing as you just suggested if you raise tax rates, you will probably have a slowdown in economic growth. once they went off that cliff -- what do you think? >> well, i agree with both you and nancy pelosi that bottom line, the republicans fell into obama's trap. they went for a tax increase, david, but what they didn't do is outline a strategy for economic growth, for job creation, for stimulating the economy. bottom line, obama's talking redistribution. the republicans are just getting moved by a president who is playing political games with them. david: when you say republicans didn't come out with a plan to stimulate the economy. republicans don't believe the government can stimulate the economy. what could they have done? >> what you have been talking about for years a strategy using a tax system to stimulate economic activity through a series of lower tax initiatives that would offer the prospect for growth, a la jack kemp. liz: but keeping the bush rates for the middle class, that helps the middle class, that's a g.o.p. victory there. i will tell you say something, what the g.o.p. is fearful of getting rather pregnant as pelosi says with their tax rate being lowered is defeat, giving birth to an electoral defeat if they go along with these tax hikes that the white house wants. doug, i have to tell you something, we still have a debt ceiling fight coming at us in march. is the g.o.p. right to stand their ground and say no tax hikes, we want to help everybody, and we are not going to exchange these poker chips in the debt ceiling fight saying hey, we're going to get entitlement reform from you the white house. this is about the little guy on the street in all tax brackets. >> if the republicans the had as coherent position as you do, liz. take three republicans you get four positions. bottom line, there's no republican strategy on anything, either on taxes, on spending, entitlement reform, and certainly not the debt ceiling which is why david was right when he began his comments by saying that the republicans are in bad shape, and bottom line as a matter of politics, the republicans are losing, more importantly the american people are losing even more. david: doug, adam and are a little bit theorists. we believe the president does want to go over the cliff. you look at the spending that took place during his administration. from 08 to 09 we saw a big jump in spending because of the stimulus plan. that was an 800 billion dollars plan. but then that spending level just continued. he substituted all of his special spending programs with all of those in the subsidy, the stimulus subsidies so that we ended up with this high baseline. he needs much more money than just taxing the rich can bring in, that's why he might want to go over the fiscal cliff. what do you think? >> well, i certainly don't think he's going to be crying crocodile tears if we go over. i think it is more base politics. i think he thinks he wins the fight if we go over the cliff and the republicans are blamed and then the republicans will do business on his terms. you and adam may well be right, but bottom line, nobody is puttings the country first -- nobody is putting the country first, he nor the republicans have a centrist program like simpson bowles. david: thank you very much, doug schoen. >> happy holidays to you. david: happy holidays to you. thank you doug. our next guest from laptopmag.com is joining us about ten minutes from now. is blackberry all but finished? we will have an answer coming up. meantime, let's take a look at some retail stocks with nicole. nicole: the retail stocks are moving in the wrong direction if you are bullish on the group or have high hopes for shoppers and the economy. take a look at coach, down 2%. urban outfitters much of the same. also dropping about 2%. when you look at the s&p 500 which is actually squeezing out a gain, it is up 1 point. the five biggest losers on the s&p 500, 500 companies of all walks of life are all the retailers. it shows you now the day of christmas. we got in that spending number from mastercard and that spending number actually showed retail sales gaining .7% year over year. we said that's the weakest since 08, right during the time of the recession. so not a great showing, david. david: all right, nicole, let's hope they do better before the day is out. speaking of retail, folks, why aren't you shopping? is it really just the weather or is it something else? we will be asking market watcher keith fitzgerald coming next. 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[ male announcer ] now all youeed is a magic carriage. citi price rewind. start saving at citi.com/pricerewind. david: president obama cutting his hawaii vacation short to get back to washington to discuss the fiscal cliff. let's check the big board and see how the market is looking just days before americans could plunge off that cliff. it's been pretty steady at about mid 20s to the plus side on the dow. well, netflix shares are down as it blames amazon for outages that hit the streaming video service on christmas eve, more than 27 million subscribers could have been affected after an outage at an amazon web service center in virginia. full service was restored on christmas day. the company being blamed, amazon, shares of amazon are also down today, and what you might see written on your next cup of jo from starbucks. we will tell you what that is coming next right here. david: well, you might start to notice that starbucks employees are not writing your name on your latte, but they are putting a message there instead. a new campaign from a starbucks chief executive is urging his employees to write come together on customers' cups as a message to lawmakers as an effort to urge lawmakers to come up with a deal to avoid the higher tax rates and the spending cuts of the fiscal cliff, we will see how that affects the stocks. u.s. retailers report the weakest holiday sales since 08. sales in the two months before christmas increased .7%. some analysts say that the 2012 shopping season was affected by bad weather and people's uncertainty about the economy. joining us now is keith fitzgerald from money map press. keith, do you think really think that's affecting people's shopping habits? i think they are just worried about the money in their pocket. they don't have as much of it as they used to. >> i'm with you. i don't think it's the weather. i think that's always an easy thing to blame. the reality is the average american has less money in their pocket. they're very concerned about the lack of adult supervision in washington. retailers in part to be blamed for this, they spread holiday shopping across multiple seasons and outlets at a time when consumers don't have the money. they're missing the boat here. they have done it to themselves. the specials are very aggressive after christmas. we have a few days to make this up, but i don't think it is going to happen. david: housing is a good story, we have been talking about it this morning, it continues to improve, thank goodness it does because so many jobs depend on housing. with the exception of that, we have seen i would say a sort of slowdown in already slow recovery over the past couple of months, i just sense that that's beginning to work into people's buying decisions right now. >> i would agree with that. i spend a lot of time my traveling around the united states and the world, in fact, i see consumers very uncertain about the fiscal cliff and the taxes. what i hear a lot is they are really worried about inflation. the government says it doesn't exist of course but reality is everybody is experiencing, 9, 12, 15 percent in their pocketbooks. evidently these guys from washington don't eat or drive. david: everything that you need to buy because they factor in all this other stuff has been -- i just bought a pound of coffee and i remember the same kind of coffee costing $4.99 when i bought it about a year ago, because my wife i must admit does most of our shopping, it now costs over $8. i mean, you know, coffee, milk, meat, everything is going up. >> we see the same thing, when i go to costco, for example, with my wife, i see salmon that used to be 8, 9, 10 dollars a pound, it is 17 to 20 dollars a pound. my wife from japan tracks those things very carefully. i'm very proud of her as a shopper, but i hear about it consistently. adam: keith, i'm adam shapiro. i want to know where do you get the figures that inflation is at 20%? give me where that comes from because that seems pretty pretty high to at least my ears. >> you bet. i think that if you look at a couple different sources. you can track it individually. you can look at what your health insurance premiums are doing, your education bills but y favorite site is something called shadow stats, they track cpi and it varies between 8, 10, 12 percent depending on which versions you use. because every administration seems to adjust those figures to proactively reflect and keep them down. and the government has every incentive to do that because cost of living increases are tied to that, military spending is tied to that, a lot of things are tied to cost of livings increases that are in fact tied to inflation. david: let's face it, the federal reserve has become a branch of the u.s. government essentially. it's supposed to be a private institution. it's been essentially printing money to bail out all of the free spending politicians. that means less money in our pocket. >> well, that's right. you know, this illusion that government spending is in fact going to make up for the private spending gap is just that, it's an illusion. it hasn't worked that way throughout history on anything other than a short-term basis. it may stave off the pain now, but it is really a game of kick the can down the road. sadly these guys in washington who have had months and years in fact to work on this, don't seem to understand this is government at the expense of the people not for the people. david: even my friend richard fisher who is in dallas texas by the way not even washington but i think he has it wrong. i see inflation saul over the place. -- i see inflation all over the place. keith, good to see you. >> happy holidays. david: the hits keep on coming for research in motion. it is betting big on its new blackberry software, if it flops, so does the company. and that story is next. >> it's all about the content apps and mobile. that's what the big play is. if you're not into content apps and mobile space, you are not going to make it. why i say that, it's about e-commerce and it's about advertising. david: in our last hour, on the heavy competition between apple google facebook and amazon. remember to tune in every weekday morning at 9:20 sharp. that's when varney & company begins. let's take a look at the markets. we are off, way off where we were. it looked like we had a -- kind of a strong positive start to this market. the futures were up double digits 30, 40 points. it went up to 35. now it's pulled back to 12. a lot of depressing news about retail sector clearly having an effect on the markets today. gas prices, though, are at their low for the year. and that means more money in your wallet. will prices at the pump continue to drop next year? gasbuddy.com joining us to tell us in a few minutes. research in motion, the company behind blackberry plunged more than 20% after it released its earnings. an announcement made by company's ceo about a new pricing structure has investors concerned. users would continue to pay for certain services, like advance security but other services would generate less revenue. joining us now is our next guest. this is something that the average consumer doesn't think about, but it is affecting investors. >> a lot of people don't realize that the service part of rim's business generates a lot of revenue. a lot of that comes from the carriers. they have decreased their market share so much, now at 4.7%. the carriers realize they are in a much better bargaining position which means rimm will eventually have to charge less for the services and that means less revenue coming in. david: let's talk about the future of the actual product itself, the blackberry. we were in a meeting this morning, we were talking about the demise of rimm, 6 out of the 7 people in that room had blackberries and were using their blackberries. there are a lot of companies because companies have trouble changing, once they get used to the corporate culture, once you get used to something. i haven't seen the major shift yet, either to the android service or to iphones. have you, from blackberry? >> it is coming in dribs and drabs. and a lot of it is because bring your own device trend. david: again, corporations tend to be stodgy institutions. they don't move too fast. and when you were doing your accounting, if you're switching to apple bills instead of the blackberry -- it makes it more difficult for the accounting department. >> it does. there's an analogy in the computing role too. think about how many businesses are still on windows xp president -- windows xp as opposed to to windows 7 or 8. adam: regarding rimm, one argument people make in favor of it, is -- [inaudible] -- is that going to be enough to offset what you are talking about? >> i don't think it will be enough in the short-term. even in those marketses, they are seeing their share decline. like samsung, they have larger screens, they have their own enterprise developments that they are developing to make sure their devices are more secure. david: they are doing gangbusters in china as well, the samsung galaxy is far outpacing the iphone 5 right now. >> what rimm has going for it is they do have 78 million subscribers and they are known for the security. they are known for a compression technologies that make the web surfing faster. if the user experience of blackberry 10 and developers don't get excited about the next platform, then they are toast. david: one thing they have surprised me about iphone or about apple in general, is they haven't taken advantage of the problems that rimm has to get into the business market. they are so focused on getting the new jazzy thing for the consumer, rather than the business user, that they haven't tried to invade that market. does that surprise you? >> yes, to a certain degree. i think mostly on the ipad they are making a lot more inroads than they are with the iphone. iphone is sort of still a back door sort of deployment. i think once -- sort of microsoft might wind up helping apple in the sense that a lot of people think they are developing office for ios. if that comes out, i think a lot of people will turn towards ios. liz: you make a great point about security. that's why security authorities in the united states, federal government uses blackberry. >> that's right. liz: the other thing too is we've got the baby boomers really retiring in mass, and they want that big screen. they don't like to have that little problematic typing situation with the iphones. that's why they like the blackberry keys. >> yes. liz: do you see apple adapting to that and having a bigger screen with bigger key pads? >> yes, i do. i think ultimately it is all about user choice and people are going to want an extra large iphone, and if they don't, samsung is going to do it. what i do give rimm credit for, they're coming out two types of devices for blackberry 10. one will have a large screen with new predictive key board so if you are typing and the word shows up, you can swipe up from the key board and it will show up. they are actually going after baby boomers in that sense, but will make traditionalists happy with the standard key board. david: the most popular gift you had this christmas season is a pogo stick that you bought for your kids? >> yes. but the nintendo ds also did well. adam: who would buy rimm honestly, the patents you were talking about, the security features, who would best capitalize on that? >> concentrating on enterprise more than ever before, like hp and dell to a certain extent because they have sort of given up on the consumer marketplace so they might be targets for that. david: mark, who i'm proud to say bought a pogo stick for his kid. even though he's into all this electronic stuff. good to see you mark. thank you very much. federal subsidies for wind energy are set to expire after 20 years. they have been in effect that long. that's not good news for california which bet big on wind energy. republican strategist is in california. we talk to him coming next. 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>> well, it's for the stock indexes that i trade, the s&p and dow jones those markets i think will take a very large hit. in fact a good example of that would be what we saw about week and a half ago when we saw the republicans come in with the vote and then tend up not taking the vote at all. we saw the s&ps lose about 30 handles overnight, got a lot of that back because everybody thought they would go back and talk again. that's a really good example, a little bit of foreshadowing if you will of what's going to happen to the market if we go over that fiscal cliff, if we get beyond the point where they don't make a deal, i think the markets will take a very large hit. certainly see the s&ps below 14 hushgsz -- below 1400. see the dow a lot lower than it is right now. i think traders who have been long these markets looking for the santa claus rally not real happy about that. people want to see the market go up, and i don't think that's necessarily going to happen. david: if we go over the fiscal cliff, would the markets be pricing in a recession? >> i think they would. i think they would certainly be pricing in a very good chance of recession. as you know, it's that self-fulfilling prophesy. if people all agree on the same thing happening, that's a big issue. i think we will certainly see that as a result in what happens with the markets. david: psychology of the markets, it is a real thing. thank you, larry. federal wind subsidies are set to expire at the end of this year. if congress renews them, it is going to cost taxpayers 12 billion dollars. that's next year say alone. if you want an idea of what another year of wind subsidies looks like, just go to california. they bet big on wind and well let's let our next guest tell you how it went down, from front line strategies. the investments in wind power in california, how did it turn out? >> so far it hasn't proven to be the panacea that i think governor brown and the california legislature had predicted. last year as a matter of fact i think we created about 3,000 jobs in green energy, that's total. that's all renewables. and at the pace that jerry brown promised, 500,000 new jobs over the next 10 years, it will take him 167 years to actually make good on that promise. david: by the way, the "wall street journal" looked at the government's figures, the federal government's figures about how many jobs were supposedly created by wind power, by a 4 billion dollars wind power project involved over 30 wind power farms, and the government claimed there were 7,000 jobs. the journal sent reporters and called in to each one of those locations, found out there were only 300 jobs. the government said 7,000. in actuality there were only 300. you can't even depend on government stats to back up their job creation numbers. >> well, they put a tremendous amount of investment into this green jobs right now. and frankly the thing we worry about is governor brown has now mandated that 33% all of energy has to come from renewables by the year 2020. this tax credit going away is going to put a serious crimp on that promise. david: margaret thatcher's famous line, eventually you run out of other people's money. california is practically there. it's really run out of money. it's operating on the basis of fume. you are losing a lot of rich people, from whom they thought they would get the last dime are leaving the state. you look at the price it costs to produce energy from wind, $52 per 1 million watt hours when it's 63 cents by natural gas. isn't the economic reality of this eventually going to force the government there to make changes? >> well, they are going to have to, because we know not only is it unsustainable, but it is unreliable. what's not projected in those costs david is the fact that for every wind turbine farm there has to be a connected fossil fuel turbine that's running constantly in order to make sure the power grid isn't upset when the wind tends to come. also inefficient because peak production hours for wind come at a time when most of us are asleep, whereas peak usage hours are between let's say 9:00 and 10:00, where the wind tends to die down a little bit here in california. you see it is not only unproductive and it is inefficient, it is also way too expensive to be sustainable. david: i don't think this is the main issue but it is an issue that bothers some people out there. birds get killed a lot by these things, you know. >> oh, yeah. david: suddenly all of these people, the wildlife foundations, etc., eco people, why aren't they screaming because a lot of birds are getting murdered by these things? >> sierra club has joined a couple environmental groups trying to block a couple of wind turbine plants in the county here. here's the interest thing, the state of california is protecting a lot of these new projects because they want to give them time to quote unquote mature without the legal entanglements that come with the lawsuits. just one turbine farm in northern california kills anywhere from 75 to 100 of these golden eagles per year and that's not counting the thousands of other birds and bats that are on the endangered species list and yet they are exempt from prosecution because of the fact they want these wind turbine farms to succeed at any cost. david: not only prosecution, but also fines, they don't have to pay any fines. >> nope, they are free and clear. david: it is definitely a double-standard. mark of front line strategies, good to see you. thank you for coming in. >> thank you. david: gas prices flat overnight, but in the last month they have been falling. will we see even lower gas prices next year? we get the expert to chime in. gas buddy -- gas buddy is next. david: u.s. retailers reporting the weakest holiday since 08 when of course the country was in deep recession. sales in two months before christmas up .7% according to to mastercard spending pulse. analysts are blaming sandy and the shootings in connecticut and also of course uncertainty about the economy. research in motion the company behind blackberry is bouncing back today after it declined recently. set to release the new blackberry 10 in less than a month. the company has pinned its hopes on that device. check the price of oil, popping big-time, look at that, $91. not only is it above 90 but just for a second it was at $91 for a barrel. the price of gas is at 3.24 per gallon. that's the national average. you see the temporary halt in a long slide in gas prices. will they start falling again? patrick sheehan from gas buddy.p com is going to be here next -- from gasbuddy.com is going to be here next. david: gas prices are at their lowest point this year, but compared to last year prices are still higher. will they continue to fall in 2013 or have we hit rock bottom? joining us now is patrick dehahn from gasbuddy.com. good to see you. first of all we have to talk about the price of oil. eventually of course that's where gas comes from. it is up over $91 a barrel right now. how soon before that begins to trickle into the price of gas? >> you know, it probably will be pretty quick. we look back at the last 7 years and 6 out of those last 7 years we saw gas prices take a jump between christmas day and january 15th. so it is likely the party is already over. the national average is popping up a bit. wholesale prices are moving higher just as oil prices are, so we expect some translation into the pump here within the next few days. the party is over. we hit our low. prices will begin rising again as we approach 2013. david: now i can't disagree with you, but i'm going to put out a couple arguments that might be disagreeable to that notion. one is demand destruction. the fact the higher the price of gas goes, particularly if the economy -- if we go off this fiscal cliff which means we could go into a recession, which means people are going to have to cut back on all kinds of things, one of those things would be their trip to wherever, driving their car, maybe they will take a bus instead, won't that bring down prices a little bit? >> it certainly will if we go over the fiscal cliff, that could send the country into recession. that's the whole fear here is that we do go over the cliff and then yes, gas prices are likely to move lower. they could move substantially lower. but there has been some talk on the front of the fiscal cliff. there's some sort of resolution that will likely be hammered out, and so i don't really foresee us going off the said cliff, but certainly gas prices may be lower in 2013, even if there's some sort of resolution, we may fall in a yearly average somewhere between 2011 and 2012 average, so it may be a bad year but shouldn't be as bad as what we saw this year. liz: patrick, it seems like every two or three years for the last several years, you know, the country goes into a panic attack because by june or july we see $5 a gallon for gas. what are your forecasts for going into the next summer or even into the spring? >> well, believe it or not, in all the months and the year, all 12 months, there's only one month that we believe prices may approach $4 a gallon on the national average. now, of course california will be the exception here, and of course will be much higher than the national average. but our forecast look for 2013 that isn't quite as bad as 2012 was, very similar. we will likely see two price peaks. we will prices pop in the springtime as they always do ahead of the switchover to summer gasoline. and we likely will see another price peak later in the summer corresponding with the peak of hurricane season. that of course is something we're now aware of after katrina washed many oil platforms out. that's certainly a concern as well. two price peaks, but i don't believe the national average will breach $4 a gallon in 2013. >> patrick dehaan gasbuddy.com. we appreciate it. >> thank you. david: we will tell you the details of unions next. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. 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[ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ david: workers from boston to houston are threatening to walk off the job. the strike could disrupt billions of dollars in shipments and cripple supply. now the two sides have agreed to meeting after talks stalled earlier this month. that could cripple the economy. adam the one in los angeles about ten yearings ago cost a billions -- ten years ago cost a billion dollars a day. that's just one port. this is going to be newark, the gulf ports down in houston. adam: what seems to be a sticking point is a fee that the men and women who unload the containers get paid by the weight of the container. one thing not knowing too much of the details of where the hold-up is, the containers are getting larger and larger. what the ports are saying is it's too expensive. it hit a point where the the fees can't keep growing. they want to cap it. that seems to be where they are at loggerheads. you don't want to shut down commerce in the united states and that's what this will do. liz: it would stretch from maine to houston apparently. it would choke supply chains across the country. and whether or not the federal government would step in and mediate this one is going to be a key issue going forward for any similar labor disputes. david: if the government does, of course the obama administration has been seen as being pro union, would that continue to be pro union even though being pro union could cripple this economy. liz: it depends on whoois on the board. this could turn into ten day port lockout, that's what the threat is. if you hang that over the u.s. economy, who else could do that and make those threats? david: is it another nail in the coffin for traditional print journalism. we love the print journalism. does anybody under the age of 25 care? liz: that's the key. google made more in advertising revenue than all of media combined last year. that's really a danger zone. i mean "newsweek" started in 1933 at 10 cents an issue. i mean there's a nostalgic value to it. now the parent owner is iac interactive. again, a web-based kind of a company. david: barry diller's outfit. liz: the question is is it generational? our generation and higher likes to hold print in their hands versus the younger generation. david: there are a lot of us around who can buy newspapers and magazines, but not enough to continue these -- adam: so long, love my ipad -- david: will they go entirely? adam: there will be a few newspapers. the "wall street journal" is profitable and does just fine. so there will be some that survive but having numerous newspapers that run the same stories from ap, nationwide it is no longer necessary. liz: google made all more than the print media combined in ad revenue. adam: radio stations, tv stations ownership rules of the fcc revised those, tv station can own all in a local market. so they can merge can become more efficient so the paper can survive and tv can survive as well. david: those rules are out of date because congress are out of date and the president is out of date on these rules. the bureaucracy will never catch up with the technology, will it? adam: no, unless they pay for it. david: the highlight reel is next. david: here it is. the highlight reel. we believe the president does want to go over the fiscal cliff. >> boehner will be in the situation, do i get democratic votes. >> this is about the little guy on the street said that the republican people are losing. the american people are losing even more. david: are we going to go into a recession if we go off the cliff? you think we will be back i am not so sure about it. if you will cut spending, that is the issue. would we go into recession if we go over the cliff and they do not restore the spending cuts?