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tv   U.S. Senate  CSPAN  November 16, 2011 5:00pm-8:00pm EST

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quorum call:
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the presiding officer: the majority leader. mr. reid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: mr. president, we started out this week hoping we could complete a minibus. what that means is to do what we did a couple of weeks ago and complete three appropriation bills at the same time. we had three good subjects of
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that, we had the underlying bill which was energy and water, we moved from that -- we added to that financial services, and foreign operations. we were unable to get a consent agreement that we could treat the package of bills the same way we treat other appropriation bills. that is, there is a -- there is -- you can't legislate on an appropriation bill and it has to be a germane amendment. so we didn't get that agreement which i was disappointed, it's really too bad but that's the way it is. i accept that. the best news out of this is we have with the underlying bill two of the finest senators that we have in the senate or have ever had, actually, senators feinstein and senator alexander. they are knowledgeable, they're easy to work with, and they understand that legislation is the art of compromise. to work through issues. and they've done a wonderful job in the last 24 hours breaking down the amendments.
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we have a number of amendments on the republican side, a finite list of amendments. we should have the democratic side of those very quickly. i think we need to work it down a little more, but i appreciate very much the good work of senator alexander and senator feinstein. the normal process would be to pull the bill and come back some other time. we're not going to do that. we're going to have the bill on the calendar of the senate so we can move to it at a minute's notice, really. and we'll keep this around, we hope to be able to move to that soon. we're going to have also around here there's down time and there we should be able to finish this bill in a day, a day and a half once we get these amendments worked out. this will give us the opportunity to move to the defense authorization bill. i indicated senators levin and senator mccain, well more than a month ago i would move to this bill. not everything is worked out in it but that's nothing that's
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unusual. this is a huge bill. senators levin, mccain, lindsay graham, and others have worked very hard to try to work out one of the problem areas we've had and significant progress has been made there. it really doesn't matter. i've spoken to one democratic senator and he still isn't real happy about that information that's in that bill but i told him that we offer an amendment very quickly and he could try to assert his position. i think that's how we should do things around here. i ask unanimous consent following morning business tomorrow, thursday, november 17, the senate proceed to the consideration of calendar 230, s. 1867 which is the defense authorization bill. the presiding officer: is there objection? without objection. mr. reid: it would seem appropriate, mr. president, we move to a period of morning business, senators allowed to speak for up to minutes each. the presiding officer: without objection. the senator from louisiana.
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ms. landrieu:, mr. president, --. mr. reid: if i could ask my friend to withhold for a minute. it's important to announce because of this there will be no roll call votes tonight. the presiding officer: the senator from louisiana. ms. landrieu: thank you, mr. president. i'd like to ask that miles ceety from senator grassley's office have floor privileges for the remainder of the day. the presiding officer: without objection. ms. landrieu: i ask unanimous consent that the health committee be discharged from further consideration of s. res. 302 and the senate proceed to its consideration. the presiding officer: the clerk will report. the clerk: s. res. 302 expressing support for the goals of national adoption day and national adoption month and so forth. ms. landrieu: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table with no intervening abc or debate and any related statements be printed in the record as if read.
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the presiding officer: without objection. ms. landrieu: thank you. i ask unanimous consent the senate proceed to consideration of s. res. 324 submitted earlier today. the presiding officer: the clerk will report. the clerk: s. res. 324, commemoratingthe 60th anniversary of the united states-australia alliance. the presiding officer: without objection, the senate will proceed to the measure. ms. landrieu: i ask unanimous consent the resolution be agreed to pork-barrel the preamble be agreed to, the motion to reconsider be laid on the table with no intervening action or debate and any statement related to the resolution be placed in the record at the appropriate place as if read. the presiding officer: without objection. ms. landrieu: thank you, mr. president. the first resolution that was just approved by unanimous consent is a very important resolution that senator grassley and i are proud to support along with senator inhofe and others. and that is a resolution commending -- recognizing that
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this saturday is national adoption day. and i'm happy to report, mr. president, that on this saturday there will be over 3,500 children that will be adopted into permanent families. and this day was start bed ten years ago by some very enterprising organizations and the senate, and i believe the house of representatives has been helping to promote the concept of national adoption day for many years now, maybe as long as ten. we sure have been working to help highlight this special day. but it was started by nonprofit organizations to highlight the fact that we have in the united states orphans. people don't believe this, but there are over 100,000 children in our foster care system between the ages of zero and 21 who were in our foster care
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system, whose parental rights have been terminated for good reason, maybe terrible or gross abuse or neglect, parents just unable or unwilling to raise biological -- their biological children. and these children need a forever family. they need a relative to step up. they need a cousin to step up. they need an aunt to step up. they need a grandmother to step up. or they need someone in the community to step up and say you can be a part of our family because people, mr. president, don't stop needing families when they're 21 years old. now, they age out of the foster care system, unfortunately, at 21 despite the good work we've done to extend the time from 18 to 21. unfortunately, every year 25,000 children able out of our foster care system as the senator from iowa who is a leader on foster care reform knows, without ever having been
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cooperate adopted. when you're 25 and you're trying -- or 24 or 23 and trying to apply for your first job, it would be nice to have a mother or a father or a grandmother or father to call and ask how do i dress? what should i say? does my resume look okay? these children don't have that. when you're engaged, it would be nice to be able to call a parent and say can you help with the expenses of the wedding or be there for me? these children don't have that. and so that's what national day -- adoption day is about, to highlight the fact that there are children in our foster care system, beautiful children, strong children, intelligent children, that need a forever family. and we're doing our best to promote adoption for them. not only in our system, mr. president, in the united states but sadly, there are about 163 million children around the world living outside of family care and we think that number is conservative because
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we have reason to believe that even unicef who does a lot of this counting is not really counting children that are in orphanages. so this number, unfortunately, is probably larger than this. and it sounds overwhelming, and it can be at times to think about our goal to try to find a home for every one of these children, but just put -- but just to put in perspective the louisiana or the u.s. numbers, it's 107,000 children. but the good news is that we have 300,000 churches in america alone, not counting synagogues or mosques, just 107,000 -- i mean 300,000 churches. so, mr. president, you can easily do that math. if just one family out of every three churches adopted one of these children in foaser care we wouldn't have any more orphans in america. that's why we're promoting today and this week which is national
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adoption month, this is national adoption day, the fact you don't have to be forexpect, you don't -- perfect, you don't have to be wealthy, you just have to have a big heart and step up and be willing to add this blessing to your family. and so many families have been blessed by adoption, as many people know our family has been dlessed by adoption. -- blessed by adoption. so this day to commemorate national adoption day, in fact i said 3,500, let me correct the record, that's 4,500 children that will be adopt owned this day and five will be adopted in new orleans, louisiana, and i want to thank judge ernestine gray and all the judges for their good work to make that possible. so we want to finalize these adoptions in all 50 states this saturday, celebrate and honor families who adopt, encourage others -- others to adopt children from foster care, build stronger collaborations among local adoption agencies and again, raise awareness
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about the 107,000 children waiting. many of these children despite our laws that mandate an 18-month wait period maximum, sometimes they wait more than three years. so let me just in conclusion say we need to do more, we can do more. i want to highlight for the record two wonderful organizations that in my mind have been going above and beyond the call of duty. one is dave thomas foundation. wendy's wonderful kids. they are great example of just one organization that are doing great work to find homes for children who were considered unadoptable or hard to place simply because they're 7 or 8 and 10 or 12 and not 1 or 2. they're too old to be adopted. i never thought i'd hear the words "too old" when you're 7 or 8 or 12 but that's what people think. so they've worked hard, wendy's
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wonderful kids, and have come up with a new approach, a better approach. they have had extraordinary success in piloting a new child focus recruitment plan and finding 2,500 children permanent homes since 2004. rita soren, executive director is the leader of wendy's wonderful kids is a great example. and let me just put into the record another organization which has a gallery right here in the national heart gallery which was exhibiting right here at the capitol in the russell senate rotunda. the senate heart gallery, which is another organic, nonprofit, community-based movement to take beautiful port traits of these children to show their personality and their life so when people are looking at their
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port traits thinking -- portraits thinking maybe this is something we could do, they will be pulled in by the beauty and true reflection of the child's personality. so the national heart gallery is another wonderful organization, and i want to just recognize those two. there are many others. i want to say in conclusion i thank the senator from iowa. he and i chair the foster care caucus together. it's been a pleasure working with him. we look forward to another great year ahead. we've had some success, actually a great deal of success in promoting adoption out of foster care and reforming the foster care system, but senator grassley, it's a pleasure to work with you, and i now yield the floor to my colleague and we'll -- will submit the rest to the record. thank you, mr. president. mr. grassley: mr. president,. the presiding officer: the distinguished senator from iowa. mr. grassley: i appreciate the kind words of the senator from louisiana, and likewise, it's not only a pleasure to work with
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her, but most of us have been worked on foster care an adoption issues to find a broad coalition of senators who are very interested in making sure that people that don't have permanence because of the lack of adoption or because of faults within the foster care system to bring changes in legislation that make that permanence and stability more a fact and a better quality life for the young people. so thank you, senator landrieu, for your leadership, and i likewise, as she has, rise to honor national adoption month. and so i would take a few minutes to discuss my support for senate resolution 302 and for policies that promote and encourage adoption.
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for years, i've championed efforts to increase awareness of adoption and help streamline the process for families who open their hearts and homes to children who have no other family. senate resolution 302 helps promote national awareness of adoption and the children awaiting families celebrates children and families involved in adoption. and lastly, encourages the people of the united states to secure safety, permanency and well-being for all children. as cofounder and cochair of the senate caucus on foster youth, i've taken a keen interest in helping children who find themselves in the foster care system. in the united states today, more than 400,000 children live in the foster care system. many of these children have been welcomed into adoptive homes.
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however, over 105,000 of those in foster care are still waiting to be adopted. according to the administration of children and families in my home state of iowa, more than 4,700 kids entered the foster care system last year. a total of $6,500 kids were in my state's foster care system in 2010. foster youth simply desired to have what so many of us were blessed to have; that is, a home with caring, loving parents and siblings. in other words, short -- in a short statement they want permanency, they want stability. too many oral children in foster care, especially those with special needs, are often the ones who wait the longest to
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leave foster care. these kids are less likely than younger children to find what we refer to as forever homes. while research shows that 40% of the americans have considered adopting, many had reluctant because they are unsure of the adoption process. they have inaccurate perceptions about the children who are eligible to be adopted. some believe that children in foster care are there because of delinquency and other behavioral problems. the unfortunate fact is that most children who are in foster care are there because they are abused, neglected or abandoned. these vulnerable children desperately need a family structure. they need parents who serve as a positive roll model, helping them become bright and successful members of their community.
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while progress is being made to increase adoption, there's always more work to be done. helping in this process are numerous agencies and nonprofit organizations who work tirelessly to find worthy american families who want to be adopting parents. in iowa, one such agency is four oaks family and children services of cedar rapids, iowa. four oaks has had a recruiter working with wendy's wonderful kids since 2005. wendy's wonderful kids is an innovative program of the dave thomas foundation for adoption. named after the late american business icon who founded wendy's restaurant. the foundation mission is to promote adoption. it recently released a report
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about the success of the wendy's wonderful kids program. specifically, the program is more focused on hard-to-place children. recruiters work with children to find them the most appropriate placement. this program is a success story. congress has also adopted and acted on legislation. in 2008, i was part of a bipartisan effort to pass the fostering connections to success and increasing adoptions act of 2008. this new law represented the most significant and most far-reaching improvement in child welfare in over a decade. it provided additional federal incentives for states to move children from foster care to adoptive homes. it included legislation that i had introduced to make it easier
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for foster children to be permanently cared for by their own relatives, including grandparents, aunts and uncles, and to stay in their home communities. and that, of course, is a -- is one way of bringing about greater stability. provisions in the law also made all children with special needs eligible for federal adoption assistance. previously, that assistance had been limited to children who were removed from very low-income families. the law broke new ground by establishing opportunities to help kids who age out of foster care system at age 18 by giving their respective states the option to extend their care and by helping them pursue education or vocational training. in late 2009, senator mary landrieu and i formed the senate
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caucus on foster youth to give older youth and n and out of care and their families a place where their voices could be heard. we wanted foster youth to be part of this legislative process. by hearing from young people and from their families who have experienced the foster care system firsthand, congressional leaders will become more aware of the issues facing young people and their families. the caucus has and will continue to generate new ideas to prevent negative outcomes and create new opportunities for success. we wanted to focus on helping young people when they age out of the foster care system, typically at age 18. as many as 29,000 children age out every year without ever having found adoptive placement.
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and without the security of a family, they often end up homeless, end up incarcerated and end up maybe addicted to drugs. children who age out of the system enter adulthood without knowing what it was like to be raised having their own families because they were under the state's supervision and, in a sense, the state was their family. and that's not much of a family. they missed out on having a mom and a dad and maybe brothers and sisters to grow up with and to learn from and whom they would have relationships with for the rest of their life. they missed out on a very important part of childhood that they will never know, one that too many of us take for granted. they're thrown into the world by themselves and forced to take care of themselves. they struggle to pay bills, to find and hold a job, and simply
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make ends meet. that is why adoption awareness is so very important and, hence, the resolution that we are talking about. since the first national adoption day in 2000, more than 35,000 children have joined forever families during national adoption day. in 2010 alone, adoption for almost 5,000 children were finalized through 400 national adoption day events in all 50 states, the district of columb columbia, and puerto rico. these are impressive numbers, numbers that make us proud of the work being done to help foster children get the proper care. but there is always more work to be done. and i've said that twice and you can't say it too many times.
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and it is through awareness like this that we can help the work to continue. in passing senate resolution 302, this body will make an important statement about our collective support for the needs of foster children. it recognizes the families that took giant threep open their homes to other children -- giant leap to open their homes to other children. national adoption month is about kids who need a home. it's about kids who just want a mom and a dad. it's about helping children who are victims of neglect and abuse. it's about giving children living in foster care the ability to live their dreams. we need to keep working together to break down the barriers to adoption so every child feels the relief of a solid family. i'm proud to support the many kids who wait for permanency and stability but, more important,
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you also have to salute the many organizations that are helping to make their dreams come true. i yield the floor and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: on.
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mr. grassley: mr. president, because of the attack against congresswoman give ford, there has been some legislation
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introduced for more gun control, and we're always going to have to take a good look at that piece of legislation, like we have unanimously passed legislation after the tragic shooting on virginia tech in april of 2007. not -- i'm not going to deal directly with that specific piece of legislation, but i'd like to talk about some of the general approaches to gun control that's being discussed. getting back to virginia tech, the national debate surrounding updating federal gun laws gained national attention following the tragic shooting at virginia tech. and now of course it has come up again because of the attack against congresswoman gifford. following the terrible tragedy at virginia tech, congress
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passed the national instance criminal background check system, and that goes by the acronym of nics -- n-i-c-s. so i'll be referring to the national instance criminal background check by that acronym. this bill passed the house and the senate by unanimous consent and was signed into law by president bush. despite the strong bipartisan support that the nics improvement act had, the improvement act was not a perfect piece of legislation and is a good example of why we need to be very careful when we legislate to avoid unintended consequences, and so i'm raising some of these issues in regard to the possible consideration of
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legislation that's been introduced because of the terrible attack on congresswoman gifford. for example, in the nics bill, it actually woul would -- unintd consequences but still would do if -- strip thousands of veterans and their beneficiaries of their rights simply because they had a fiduciary appointed on their behalf. oftentimes a if i douch fiducias appointed for managing compensation pensions or survivor benefits. under an interpretation by the department of veterans administration, veterans who have a fiduciary appointed are often deemed -- quote, unquote -- "mentally defective" and are then consequently reported to the f.b.i.'s nics system and, consequently, prohibited from purchasing a firearm.
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under the nics improvement act -- and that was a bipartisan bill with unintended consequences, this happened: around 114,000 veterans and their beneficiaries have been automatically denied their second amendment rights. it is a terrible irony that veterans, who have served their country on the battlefield, who have been entrusted with our national security and have been provided firearms by their very government, are the same people that the nics improvement act harms by taking away their second amendment rights, all without a hearing or formal adjudication. now, we just honored -- celebrated veterans day last friday. yet we are possibly going to be debating new legislation to
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restrict the second amendment rights of citizens without fixing the unintended consequences of our last major gun law -- that nics improvement act. while the horrific events in tucson are still fresh in our memories, as we discuss new gun control laws, we also need to move forward on bipartisan legislation such as the veterans second amendment protection act introduced by a bipartisan couple, senators burr and senator webb. this bill would fix the unintended consequences to thousands of veterans caused by the nics improvement act. at a hearing we had this week thaitoffered me an opportunity o
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discuss illegal firearms tracking and the government's efforts to stop it. at the forefront of this is the departmendepartment of justice'd operation called "fast and furious" where the a.t.f. knowingly allowed illegal purchasers to buy guns. the more we learned about "fast and furious," the more we have discovered that senior justice department officials knew or should have known about these nearly 2,000 guns ending up in the hands of criminals. including the drug cartels in mexico. at the first house oversight hearing on "operation fast and furious," multiple a.t.f. agents testified that fear spread through phoenix's field division every time there was news of a major shooting event, so that brings us back to the tragedy for congresswoman gifford.
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specifically with regard to the congresswoman's shooting, one agent said -- quote -- "there was a state of panic, like let's hope this is not a weapon from that case." end of quote. and that case was the "fast and furious" case where our government decided to encourage licensed gun dealers to illega illegally sell guns to straw purchasers with the idea that we'd follow them across the border. but there wasn't any follo foll. so it was an effort doomed to failure in the first place. the "fast and furious" operation was failed in concept, in design, and in execution. as the attorney general said last week before our judiciary committee, "it should never have happened."
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and the justice department officials who knew about this program, including those who allowed false statements to congress, need to be held accountable. i thought it was fitting that late last week attorney general holder finally wrote to the family of agent terry, the person that was murdered with two of these "fast and furious" guns found at the murder scene. and this is the very same attorney general that had an opportunity to apologize to the terry family when he was asked by senator cornyn, have you apologized to the terry family? and the attorney general said, no. he said, would you like to apologize now -- that's what senator cornyn asked him. and he gave an answer, but it wasn't an apology. so we have a letter late last week going to the terry family. in his letter he stated he was sorry for their lost, although
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he refused to take responsibility for the department's role in agent terry's death. at the root, then, of "fast and furious" and a lot of rhetoric surrounding gun control legislation has been the gun trafficking statistics provided by a.t.f., these unclear statistics have fueled the debate and contributed to undertaking such a reckless operation as "fast and furious." for example, in 2009, both president obama and secretary of state clinton stated that 90% of the guns in mexico were from the united states. but that statistic later changed to 90% of the guns that mexico submitted for tracing to the a.t.f. were from this country. and now this year that number has become 70% of the guns
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submitted by the mexican government for tracing were from the united states. now, in all that different percentages, it begs the question, what are the real numbers? articles discussing the 70% number misrepresent the facts, as i pointed out in a letter to then-a.t.f. acting director necessarily none is june this year. first, there are tens of thousands of guns confiscated at crime scenes annually in mexico. the associated press stated that in 2009, over 305,424 confiscated weapons are locked in vaults in mexico. however, the a.t.f. has acknowledged to my staff in a briefing on july 29, 2011, that a.t.f. does not have access to
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the vault in mexico described in that story. a.t.f. also acknowledges that only a portion of the guns recovered in mexico are actually submitted to the united states for tracing. in november -- in a november 8, 2011 court filing, the chief of a.t.f.'s firearms operations division made a declaration saying -- now, remember, this is in a court filing -- quote -- "it is important to know, however, that a.t.f.'s e-trace data is based only on gun trace requests actually submitted to the a.t.f. by law enforcement officials in mexico and not on all of the guns seized in mexico." end of quote. that court filing further states that in quote -- "2008 of the
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approximately 30,000 firearms that the mexican attorney general's office informed a.t.f. that it had seized, only 7,200 or one quarter of those firearms were submitted to a.t.f. for tracing." so, if mexico submits only 25% of the guns for tracing, then the statistics could be grossly inaccurate, one way or the other. the discrepancies in the numbers do not stop there. a.t.f. also informed my staff that the e-trace-based statistics could very trass stickily, by -- could vary das strickly by a single definition. we have an example of definitions. the 70% number was generated using a definition of u.s. source firearms.
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that happens to include guns manufactured in the united states or imported through the united states. thus, the 70% number does not mean that all guns were purchased at the u.s. -- at a u.s. gun dealer and then smuggled across the border. it t the firearm was manufactured in the united states. so, when my staff asked a.t.f. how many guns traced in 2009 and 2010 were traced to u.s. gun dealers, the numbers were quite shocking in comparison to the statistics we've previously heard. in 2009, of the 21, 313 guns recovered in mexico and submitted to tracing, only 5,444
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were sourced to a u.s. gun dealer. that's around 25%. for 2010, of the 7,971 guns recovered in mexico submitted for tracing, only 2,945 were sourced to a u.s. gun dealer. that's only 37%. a far cry from 70%. a far cry from the 90% that we've been hearing over a long period of time. not to mention that the guns in 2009 and 2010 from gun dealers could include some of the nearly 2,000 firearms that were walked as part of our own justice department's operation fast and furious. we need clearer data from a.t.f. and from mexico. mexico needs to open up the gun vaults and allow more guns to be
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traced, not just the ones that the mexican government selects. we need to know if military arsenals are being pilfered as a source, as media articles have claimed the state departments points to in diplomatic cables. so when it comes to the diplomatic cables, i sent a letter today to -- actually it was yesterday to secretary of state clinton seeking all diplomatic cables, discussing the source of arms from mexico, central america and south america. i believe this information is relevant to congress, given that i discovered in july 2010 cable as part of my fast and furious investigation. that cable, titled -- quote -- "mexico weapon, trafficking: the blame game" seeks to dispel myths about weapons trafficking.
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among other things, a state department author's discuss what they perceive as -- quote -- "myth and highway of weapons flows from the u.s." these cables are vitally important to congress's understanding of the problem, further they appear in documents submitted and given to congress as part of "fast and furious" there should be no reason for the state department to withhold them as part of our legitimate oversight even if they are classified. there's a lot more to be said about the specific problems with the legislation that we -- might be coming before the judiciary committee as a result of congresswoman giffords tragedy. we have to ask a lot of questions to flush out some of these serious problems, because we don't want to happen in this legislation what happened in the
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improvement act when 114,000 veterans are denied their second amendment rights. and consequently avoid these unintended consequences. and we should not be legislating away any constitutional rights that people have under the second amendment. i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. whitehouse: thank you very much, mr. president. i'm not going to speak very long tonight and i'm not going to speak very formally, either, but i did want to come back to the senate floor and make a point again that i have made repeatedly here on the senate floor before. and that is that there is a path to reform of our health care system that will improve the quality of care for patients, will improve the experience of care for patients, will improve the outcomes of care for patients, and for our nation, and will lower cost for our country. and the reason that i come to raise that point again is that the senate is now awash with
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rumors that the 12 members of congress, senators and congressmen, who have been tasked with trying to create a solution to our deficit problem, are going to cut medicare benefits by hundreds of millions of dollars. that is as best as i can tell only a rumor. i certainly can't vouch for it being true. indeed, i hope it is not true, and the time i would like to spend this evening is to remind my colleagues that it is a very unfortunate and mistaken path to take to follow the road of benefit cuts at a time when the road to reform is so promising
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in terms of the win-win of better care and lower cost. and it's not just me saying this the president's council of economic advisors has said that the annual savings that could be accomplished with a health care delivery system reform without reducing anybody's quality of care or access to care -- indeed i would hypothesize actually improving quality of care -- is $700 billion a year in the american health care system. and the president's council on economic advisors is not alone in that opinion. the institutes of medicine have just said that it's around $770 billion a year. a few years back the new england health care institute said it was $850 billion a year.
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and the lewin group, a fairly well-respected health care consult answery here in washington as well as george bush's treasury secretary, secretary o'neill, have both agreed the annual savings could be a trillion dollars a year, all by improving the quality of care and the coordination of care. and i don't know if it exactly going to be $700 billion or a trillion dollars, but my point here is that there is a really big savings target out there that everyone from president obama's council of economic advisors to george bush's treasury secretary, to a lot of very well thought of groups in between, including our national institutes of medicine, all agree on. so i think that that makes it a very important target to pursue
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in this discussion. and it's not just me in believing that at this potential split in the road we should work and fight very hard to make sure we're taking the right path, and that we don't go down the easy-to-score but unnecessary and unhelpful path of benefit cuts which single out seniors in medicare and do nothing about the underlying cost of the system and make it the wrong road to follow, when we have a really well illuminated path that can move us towards a better, more efficient delivery system that provides better quality health care, better outcomes, fewer hospital-acquired infections, better coordinated care, stronger electronic health records, all the things that support a truly modern health care system that can be the envy
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of the world. that's the choice that we have and i think it would be a terrible mistake to go the benefit cuts route instead of the reform route and it's not just me who says that. just hal verbson --, halverson is the c.e.o. of kaiser permanentty. -- permanente. kaiser permanente is one of the biggest health care providers in the country. it provides health care in many, many states and george halverson is a very serious individual and knows his stuff, he would not be the c.e.o. of that very big company if he did not. here's what he said the other day. "there are people right now who want to cut benefits and ration care and have that be the avenue to cost reduction in this country, and
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-- and that's wrong. it's so wrong, he said, it's almost criminal. it's an inept way of thinking about health care. that's not me. that's the c.e.o. of kaiser permanente. there are people right now who want to cut benefits and ration care and have that be the avenue to cost reductions in this country and that's wrong. it's so wrong, it's almost criminal. it's an inept way of thinking about health care. and yet that is the direction that it looks like we may be taking, the inept direction. i had a hearing in the "help" committee. the presiding officer, senator bennet of colorado, is a member of that "help" committee.
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and we had some very interesting witnesses, because the path towards savings through reform isn't just a hypothetical path. this is not something that some academic has constructed and maybe if you take that path, things will work. this is a path that major corporations, major health systems, major hospitals in this country are already walking. they are already walking down that path. kaiser is one of them. blue shield of california is another. intermountain out in the west is -- is a third. mayo, geisinger, gunderson lutheran. there are a number along the east coast. and these are companies that have determined that this is the right path and they're walking that path.
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and two folks were there from such companies. one was dr. gary kaplan, who is at the virginia mason health system in seattle, washington. despite its name, virginia mason, it's actually in seattle, washington, on the other coast. and he pointed out that they went through a quality management transformation in their hospital. it was a cultural transformation. it was a process transformation. and as a result, they have made significant improvements. just in one back pain reform process that they did, with 2,000 patients, they calculated that they've already saved $1.7 million on 2,000 back pain patients, and those patients are happier with the new regime, the
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less expensive regime than before, because they're getting better quality care. he testified that they saved $11 million in planned capital investment, reduced inventory costs by $2 million through supply chain expense reduction, reduced staff walking distance by 60 miles per day, reduced labor expense and overtime and temporary labor by half a million dollars in just one ye year, reduced professional liability insurance premiums by 56%, reduced their self-insured retention fund by 70%, reduced the time it takes to report lab tests by more than 85%, and improved their medication distribution, reducing errors, reducing the time when a patient first calls virginia mason's breast clinic with a concern to the time that they receive a diagnosis from 21 days to 3
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days. and many patients receive their results on the same day. these are the kind of improvements that have put virginia mason at the front end and make them, according to the leapfrog group, one of the top hospitals in the country. they are walking the walk of improving the quality of their operations, improving the quality of care and saving money by doing so. the other witness was greg paulson from intermountain. he described two examples. one was a sepsis program for people who were admitted to the hospital suffering from sepsis throughout their system. sepsis is a dangerous condition. sepsis on average has a 40% mortality rate. so 4 out of 10 people with sepsis die of it. they have reduced the 40% mortality rate from sepsis to
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5%. from 4 in 10 dying to 1 in 20 dying. did it cost a lot of money to do that? that was a big investment that they had to make? did it cost the taxpayers a lot to save those lives? no. what they found is that they saved $10 million with that improvement. similarly, they have a diabetes program that has been described by the former c.e.o. of the mayo clinic as the diabetes program that he would go to if he were sick with diabetes that has the -- quote -- "best outcomes and lowest cost." "best outcomes and lowest cost" in the country. they saved $5 million a year on diabetes treatment by going to better health care providing. now, there is a problem, as he pointed out.
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that $10 million that they saved is actually a revenue loss. because when they save money by not having unnecessary care, by not having complications, by having things be more efficient and streamlined, what they do is they reduce their billing to the insurance companies. and it's actually the insurance companies, it's the payers who save the $10 million. who thwhat the system -- what te providers experience is a revenue loss. so we have our systemup side-down in that respect -- so we have our system upside-down in that respect, so that's one of the twhaiz we need to reform the system. the third witness who was there was chris kholer. we have a unique office in rhode island. he's the health insurance commissioner in the country. he's the only insurance commissioner in the country. i also tease him that he's the
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tallest insurance commissioner in the country because he's so tall. but he's the only one. we focus ways we can deliver care better. one way is through prevention and primary care. turned out that in rhode island, the amount of every health care dollar that was spent on primary care was 5.9%. for every dollar spent on health care in rhode island, less than 6 cents went to primary care, went to your regular family doctor and the basic health care providers. less than 6 cents out of every dollar. the insurance companies have more overhead than that administering the system. the cost of administration of the health care system is more than the primary care providers
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get out of the system. that's another sign that the system is upside-down. he's encouraging them and they've agreed to step up the spending on primary care by 1% a year for five years. and we believe that that is going to make a very substantial cost savings, because there's so much that a primary care provider can handle without having to go to a specialist, without having to go to the emergency room, without the condition getting worse because they couldn't find you. by simply make primary care more accessible and more available. and so the additional expense for primary care should bring down system costs overall and having it designed more intelligently. so i'll close with a few words from the witnesses. dr. kaplan said that through the work that they have been doing on reform and efficiency, he
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said -- i quote -- "we have demonstrated that the path to higher quality, safer care is the same path to lower costs." he actually said that if we could get more transparency into the system about who's doing a better job and who's not, what the outcomes are for different hospitals, that basically where we are right now and the delivery system reform provisions that were in the accountable care act, he described them as one of the last chances of a market-based system. this is somebody who is in this business all the time and is actually running a hospital that is actually producing results. this is a person who is steeped in the reality of health care. and contrary to what we hear in the cartoon version that infects
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washington, where obamacare is is socialized medicine and is a step away from market-based ca care, this practitioner says that the potential of the accountable care act, as i see it, is as one of the last chances of a market-based system. it could actually lead to a market, whether it was medicare, medicare advantage as part of medicare, or the commercial sector, that we would actually be able to understand what we're buying, what we're paying for. that's the kind of commonsense transformation that we need. similarly, mr. paulson -- you remember dr. kaplan said we've demonstrated the path to higher quality, safer care is the same path to lower costs? here's gary paulson: "intermountain and other organizations have shown that improving quality is compatible with lowering costs and, indeed, high-quality care is generally
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less expensive than substandard care." and the primary challenge for us and the main reason more organizations don't adopt the high-value models discussed in the hearing that we held is the underlying fee-for-service payment system which predominates, of course, in the united states. we pay doctors for doing more not for doing better. we pay doctors for doing more things to you rather than getting you well. and because we do that, we have the results we have. now, when you look at that mess, you can say, okay, we're going to leave all of that alone. we're not going to follow the path that intermountain has proven, that gunderson lutheran has proven, that virginia mason has proven, that kaiser has argued for and proven, that so many systems around this country are doing, you could say we're going to forget all that, we're going to leave it in place, we're going to leave it a mess
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and we're just going to cut benefits away from seniors, from our elderly and the people who need care the most, from the people who paid into the system, from the people who don't have a chance to recover, very often from people who really aren't in a position to direct their own care and make effective choices if they're the very elderly on medicare or, worse, the medicaid/medicare dual eligible. we're going to go after those people, we're going to cut their benefits. and we're not going to take the trouble to follow the path that the professionals who are doing this are already showing is the path that leads to savings, is the path that leads to a better health care system, is the path that leads us out of the difficult position of being the only country in the world that spends 18% of our g.d.p. on health care. of being the most inefficient country in the world in health care by a 50% margin. the next closest country in terms of inefficiency in health
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care is about 12% of g.d.p. we're at 18%. why is it necessary that america has to be the most inefficient health care provider in the world of all the countries we compete with by a factor of nearly 50%? half again worse than the most inefficient competitor we face. it makes no sense to be in that position. there is enormous room for improvement. the path to that improvement is clear. it is already being walked by serious and responsible institutions who have set this as their corporate goal and that is where we should go. i'll close again by repeating george holverson's exhortation. he's one of the great health care leaders in this country. is he a savvy corporate manager. he runs an enormous health care
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corporation. this is not an idle opinion of his. there are people right now who want to cut benefits and ration care and have that be the avenue to cost reduction in this country and that's wrong. it's so wrong, it's almost criminal. it's an inept way of thinking about health care. those are c.e.o. george halverson's words, not mine. i hope they ring through this body and that we do not make the mistaken decision to go after medicare benefits and instead take the positive path of reform and improvement. i thank the presiding officer. i yield the floor, and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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the presiding officer: the senator from rhode island. mr. whitehouse: i ask unanimous consent that the pending quorum call be rescinded. the presiding officer: without objection. mr. whitehouse: mr. president, i ask unanimous consent that the senate now proceed to the consideration of calendar number 229, senate resolution 296. the presiding officer: the clerk will report. the clerk: calendar 229, s. res. 296, commemorating the 50th anniversary of the combined federal campaign. the presiding officer: without objection, the senate will proceed to the measure. mr. whitehouse: i ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid upon the table with no intervening action or debate and any related statements be printed in the record as if read. the presiding officer: without objection. mr. whitehouse: mr. president, i now ask unanimous consent that
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the environment and public works committee be discharged from further consideration of senate resolution 251 and that the senate proceed to its immediate consideration. the presiding officer: the clerk will report. the clerk: s. res. 251, expressing support for improvement in the collection, processing and consumption of recyclable materials throughout the united states. the presiding officer: without objection, the committee is discharged and the senate will proceed to the measure. mr. whitehouse: mr. president, i further ask that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table with no intervening action or debate and that any statements relating to the measure be printed in the record at the appropriate place. the presiding officer: without objection. mr. whitehouse: mr. president, i now ask unanimous consent that the armed services committee be discharged from further consideration of senate resolution 303 and that the senate proceed to its consideration. the presiding officer: the clerk
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will report. the clerk: s. res. 303, honoring the life, service and sacrifice of captain colin p. kelly jr., united states army. the presiding officer: without objection, the committee is discharged and the senate will proceed to the measure. mr. whitehouse: i ask unanimous consent that the resolution be agreed to, that the nelson amendment to the preamble which is at the desk be agreed to, that the preamble as amended be agreed to, that the motions to reconsider be laid on the table with no intervening action or debate and that any statements related to the resolution be placed in the record at the appropriate place as if read. the presiding officer: without objection. mr. whitehouse: i now ask unanimous consent that the senate proceed to the immediate consideration en bloc of the following resolutions which were submitted earlier today -- senate resolution 326, senate resolution 327, senate resolution 328, senate
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resolution 329 and senate resolution 330. the presiding officer: without objection. mr. whitehouse: i ask unanimous consent that the resolutions be agreed to, the preambles be agreed to, the motions to reconsider be laid upon the table en bloc with no intervening action or debate and any related statements be printed in the record as if read. the presiding officer: without objection. mr. whitehouse: mr. president, i ask unanimous consent that when the senate completes its business today, the senate adjourn until 10:00 a.m. on thursday, november 17, 2011, that following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, and the time for the two leaders be reserved for their use later in the day, that following any leader remarks, the senate be in a period of morning business for one hour, with senators permitted to speak therein for up to ten minutes each, with the time equally divided and controlled between
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the two leaders or their designees, with the republicans controlling the first half and the majority controlling the final half, and that the -- and that following morning business, the senate proceed to the consideration of senate 1867, the department of defense authorization act under the previous order. the presiding officer: without objection. mr. whitehouse: i am advised to announce that we expect to receive the conference report which contains the continuing resolution from the house tomorrow. senators will be notified when votes are scheduled. if there is no further business to come before the senate, i ask that we adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until
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>> to those who say my friends, to those who say we are pressing the issue of civil rights, i say to them we are 172 years late. for those who say that this civil rights program is an infringement on states' rights, i say this -- the time has arrived in america that the democratic parties had get out of the shadows of state rights and walk forthrightly into the
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bright sunshine of human rights. >> hubert humphrey spoke those words. later, he ran for president in 1968 and lost. we'll look at his influence on american politics this week on c span's series, the contenders live friday at 8 p.m. eastern.
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>> bowles and simpson highlighted the nation's issues during a panel yesterday at the wall street ceo forum urging the joint deficit committee to go big and bold and are spectacle that this had happen as the deadline nears. representative paul ripe and jack lou were also there. >> well, we're going to talk about the pocketbook and its condition. i, you know, i'm wondering given the dimension of this problem, if we can take just a minute to do a little laying of the land, landscape, and then address immediately something on the mind of the ceo group. every year, i talk with the ceos of this session. there's inevitably the discussion of uncertainty about the future comes up. we don't know what the regulatory structure will be,
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what the tax structure's going to be, and so we can't make business decisions, and that's why we're not hiring. at root, is our fiscal well being in this country, and i'm wondering, bowles, if you can start us off. give us the dimension of the issue for those who have not spent the last 5 minutes reading the newspaper, and whether or not you think the super committee will have the political will, the topic of the session today, to do something about this. >> sure. good morning. if you have not thrown up yet, get ready to. [laughter] like you, i'm a business guy. this makes me sick. [laughter] i think we face the most predictable economic crisis in history. it's as clear as the nose on my face. i know that the fiscal path
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they're on here in washington is not sustainable, and worse yet, i know every member of that fiscal commission knows it to. the economics is very clear. the politics is very difficult. somebody asked me the other day, john, to give an analogy. i said, yes, these deficits are like a cancer, and over time, they are going to destroy the country from within. i'll give you one little simple math example, and you can draw your own conclusions based on your own company. take 100% of the revenue that came in last year, not 20 years ago, but last year. every single dame of it was -- dime of it was consumed by our mandatory spending and interest on the debt. mandatory spending in english is basically the entitlement
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programs, medicare, medicaid, and social security. that means every single dollar we spent last year on these two wars, on national defense, homeland security, education, infrastructure, high value added research, every single dollar was borrowed, and half of it was borrowed from foreign countries. i mean, that's a formula for failure in anybody's book. we do nothing. we just, you know, take the ostrich theory and stick our heads in the ground and do very little. what you see by the year 2020 is we'll spend over a trillion dollars a year in interest costs alone, and this is not a problem that we can solely grow our way out of. you can have double digit growth for decades and not solve the problem. it's not a problem we can solely tax our way out of it. if there's another democrat in
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here, and usually, there's one or two -- [laughter] you know, i can tell you, you can't solely tax your way out. raises taxes doesn't change the demographics and health care is growing at a faster rate than gdp, and we can't cut our way out of a problem. i think that's become pretty clear as they have gone through the last debate. that's why al and i came up with a balanced, what i think is a responsible, reasonable plan that takes $4 trillion out of the deficits, a trillion from revenue, $3 trillion from spending. the spending has to come before the revenue so we don't get caught in one of those deals 245 reagan -- that reagan did back in the 1908s, and we have a super majority to vote for it. we got a majority of republicans and majority of democrats, and as an example, there's six u.s. senators op our commission, five
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voted yes, all three republicans, and two out of the three democrats, and the vote was as dispersed from the far left of dick durbin from illinois to the far right of coburn from oklahoma. we tried to do it in a small way so we built it around six basic principles, but the first principle was simple. we didn't want to do anything but disrupt a very fragile economic recovery. there's no doubt this recovery's pretty fragile. to date, where are we? obviously, what al and i want this group to do is to go big, to be smart, and to be bold, and i'm not sure they're going to do any of those three. the reason we came up with the $4 trillion was not because the number four bus went down the
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road and said, well, that's a great number. $4 trillion is not the maximum amount we need to reduce the deficit. it's not the ideal amount, but the minimum amount you need to reduce the deficit in order to stabilize the debt to get it down the path to gdp.. . .
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[laughter] it was fiscal. i thought, that's fascinating. let me tell you. we don't use charts. we don't use powerpoint. we speak all over the country together. this is a magnificent man, and we just say to people if you spend more than you earn you lose your. if you spend and borrow 41 cents of it you have to be stupid. and if you are borrowing today $4,600,000,000 in doing that today and tomorrow and the next day, you have got to be dull-witted and that is where we are. and why is net moving? what is happening? let me tell you. the the four chilean dollars is an absolute, we thought would be something we could swallow. we thought we could restore the solvency of social security without balancing the budget on the backs of poor old seniors.
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stick your finger down your throat the next time you hear that, baby. we protect social security for its own sake and we can't raise the retirement age to 68 by the year 2050. we can't change the cola to cpi. we can't get this and we can't get that because of the aarp. let's get serious here. you have seen their ads. they are savage adds. this old heart points his finger. we know where you are and we know your foes is. [laughter] they are impossible and then grover norquist wanders in with his white robe on. and let me tell you, it is funny but it is not funny because grover norquist has 95% of those republicans who say, he said to them, don't you raise taxes one shred unless you reduce.
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coburn sticks in a thing to get rid of ethanol. 6 billion bucks. passes and grover calls it a tax increase. that is ludicrous and deceptive so he is out there and he is going to ask them to deliver. i think the thing that disappoints both of us, what can he do to you? he can't murder you. he can't earn your house. the only thing grover can do to you is defeat you for re-election and if that means more to you than your country and extremity you shouldn't be in congress. >> november 23 comes along -- [applause] november 23 comes along as the midterm papers due again. there is an all miter beforehand if history plays out again. and let's say we don't get a deal and that triggers fire off. $1.2 trillion comes out of
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defense and discretionary spending. is that an acceptable, painful resolution? >> nobody will get blamed for it because the election will be over. it takes place in 2013 and that is why they put this little package together. don't forget if the heat gets really big they will just cope back to session and take those triggers the way. >> all they have to do is gather and legislate. [laughter] or rethink the defense portion of the trigger. >> anyway erskine, it will be a tragedy to do that. i say let leon panetta alone in there. i've known him for 40 years and he will do it with a scalpel. he is dealing with tricare which is the health care system which is 470 bucks a year premium, or hundred and 70 bucks a year for military retirees. i was in the military. 2.2 million of them in a costs nifty 3 billion a year. we went to him and said bob,
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what the hell is this? he said you take them on. i have to deal with this professional veterans, vfw which i'm a member. let me tell you getting the reason things are so hot now is we were so specific we knew the interest groups would gear up if they ever thought this goofy thing we messed with woodwork. they laughed at first and now they are thinking man, here come the home mortgage, here comes the insurance inch -- industry in the blue cross and all those tax expenditures are a trillion, $100 billion a year and they are only used by 6% of the american people. the little guy never heard of half of them. >> you guys would have loved it when we went to see gates and we were talking about the things in the defense department we could cut. we got around to contractors. [laughter] i said well how many contractors do you actually have?
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he came back a few minutes later and said we have got somewhere between one and 10 million. i said that's a very narrow range. but that is the kind of information you can get. i think it is a travesty if we end up at $1.2 trillion on these deductions. it doesn't solve the problem i any stretch of the imagination. i'm afraid the american people, some of them will think it solves the problem and it certainly doesn't. worse yet as you were intimating john, we are going to go through this sequester process. the cuts are basically 600 defense, 600 in on and on defense with a few exceptions off to the side and if in fact we only do the $1.2 trillion i think most people in the world will look at us and they will think of this debts default fiasco we went through in the
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summer. they will think, will this proves these guys can't govern and then if we put the sequester in and these guys turn around the very next day and try to figure out how they can bust the sequester since the cuts don't go into effect in 2013, then i think they will really come at us and i think you can see some really make it of effects in the market. >> you were saying before we came on that the various groups that you have spoken with have said please save us from ourselves. what we are looking for is some outside divine intervention to untangle the political seizure that we are in. can you describe that a little bit more? you mention aarp. you mentioned various interest groups. why is that, why is that so unmovable this time around and second what could this group do to help in the process? who needs to be given some backbone and how is that done?
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>> it wasn't the groups we were surprised that said that. we spent 10 months on the campus here. i call it the campus because there are a lot of students there. they would come up to us and they went to a roll call votes. democrat and republican alike to say, save us from ourselves. these are intelligent, good people of both parties. they are frozen in place. they are frozen in place by a system and they said we didn't find any time how we got here but let me tell you an instant how we got here. we were sent to congress to bring home the bacon. we were sent to get the tax code change and we were sent to get this and sent to get that, this gimmick, that gimmick, this railroad, this, this whatever. if you didn't do that you weren't reelected. now they are caught.
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the is dead. there is no bacon to bring home and they won't, can't even get guys on the appropriations committee but let me tell you, the power is a campaign contribution has now reached its ultimate.. through the years that help the guy with the primary and maxed out on that. it maxed out on all the generals he ran and at the end of the day he came in and said we never bother you, we just love you and that is why we support you so gingerly and beautifully and at all times, but now when they see what could happen to them, they are in that congressperson's office and said we never asked you for a thing buster but this is it. we will go down the pike if we loose this tax expenditure and you are going to deliver. i don't mean that in the form of retribution corp. rivalry. it's called washington reality, and that is what is out there right now. >> these guys absolutely
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understand the need to do something and they need to do something now. and do it in a smart way. it is the politics as i always say, that keeps them from doing something smart. and you know i have spent my life in the business world and we really do need your help. the problem you all have is not too different from the problem that the members of congress have. as i have talked to, allen and i both together talked to thousands of dismissed leaders from nam to the chamber to the prt to the business council to hear. and all of you have your individual saying up here that you are worried about. you have your issue, your sacred cow and by god, you hear somebody like us talk and you get it. you know these guys have got to really cut spending and they
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have got to ray ford the tax code and you will afford -- you have to get rid of some of these backdoor spending better called tax expenditures. so you get all charged up and you say i'm going to help on that. then you go back to talk to your washington guy and you say wait a minute guys. we have this big issue and if we do that these guys will get mad at us and so you can kind of be forward in general but don't do anything specific. so the business community really does need to step up. if you think this is really important. alan and i happen to think it is one of the most critical issues the nation faces today and i don't care if you are a liberal or a conservative. this is going to bite us all. the one thing we did find is we went through this process is the more comprehensive we may get, the more people we have got to support it. nobody would want it -- that
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they said if everybody's ox is going to be gored then it is really and everybody has got some skin in the game. everybody is being asked to sacrifice somewhere and so we were able to get such a broad correlation of people to come on board because they so we were doing it for the country and everybody was going to pay a price because as a nation we have promised more than we can deliver. >> we have half a minute before we go to questions but let me make sure i'm clear on my earlier question which is what is going to happen come november 23? no deal? at deal? >> i would say in my opinion, there is probably a 10% chance that these guys will go bid, and that is 9% higher than anybody is in town would say. remember all they have to do is get a simple majority. we had to get a supermajority and they got it.
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i think that politics the politics has changed some sense last december when we came forward with our report. because of what is going on in europe, because of that hold debts default fiasco in the summer i think more people understand the problem and the polls show that. last year week just got hammered with the across-the-board cuts in as you guys do across-the-board cuts are never a smart way to get anybody under control. i think we have about a 10% chance to go big and by grow big i mean to $4 trillion over 10 years. i think we have got a bubbly a 25 to 30% chance that they will actually come up with real cuts that ad up to $1.2 trillion or $1 trillion which is their mandate and hopefully those won't all be beginning. i think that leaves at least a 50% probability that they won't do anything but completely fail.
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>> alan? >> a reminder that you can submit questions on your thinkpad. while you are thinking about it let me ask a question of the two of you. i think you two know as well as anyone that this isn't something that will be salt like committee. ultimately it requires leadership. it is a pretty dismal view of you have given us, the state of the leadership at the moment. what are the chances after the election you have the leadership in the political will in place to really tackle this in a serious way? >> i think after the election, the people who have been hiding and don't have the guts or courage to come forward when their country demands their leadership and their congressional leadership, i think in the election some of those people will be defeated instead of latta to the high heavens that you didn't touch social security, you didn't
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touch defense, you didn't touch medicare, you didn't touch medicaid and we love you for that while the country just sinks and forget obamacare. call it elvis presley care or i don't care, can't work. it can't possibly work and you know that in your heart. dave cody was on our commission, honeywell ceo. he got up after four months and he said, who are you people? you are stupid. you see the problem as politicians think business people are stupid and business people think politicians are stupid. that's not a good thing and that is very real. i didn't answer your question but i got a lot off my chest. [laughter] [applause] >> if you look at these forecasts, you would die, because again you can imagine what a trillion dollars of new debt does to a country's balance
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sheets and operating statements and by the way most people in this town if you put a balance sheet in this hand in income statement in this hand and asked them which is which, they couldn't tell you. but, most of them, you can see what the results are and for current path is not sustainable in the markets are not going to let it go forward. as soon as the market gets their eyes off of europe and refocus back on the u.s. i think you can see a real reaction. i think it will be a crisis and i think it will force these guys to act. >> how did she describe her cutlery -- country? >> somebody asked me why are interest rates were so low. i said because we are the best looking horse in the glue factory today. [laughter] >> in your view it will take an crisis. >> i think we will have a crisis before these guys will act and i hope they will act now.
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i hope they will act next year. i hope they will ask right after the election but again, you know, in 1997 i negotiated the balanced balance budget between president clinton and gingrich and the lott and in that particular circumstance we had two sides that really wanted to get a deal done and people were willing to put their partisanship aside and there was severe partisanship if you remember and really work towards common goal of balancing the federal budget and putting our fiscal house in order. but it takes both parties in the leadership of both parties to get behind it and without the megaphone of the president who has been largely absent, it is really really tough. >> a question. >> good morning, bob reynolds. you were a presidential commission and delivered your report in december. how surprised are you that your
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commission gave the president tremendous coverage to do something and it wasn't even mentioned in the state of the union and i would like to hear your reaction. it was i think an unbelievable opportunity for him to really take control of this problem. >> if you think you are surprised, you should have looked at us. as i said i negotiated a budget for president clinton and you know, every investment banker will tell you the key to success is knowing your client and defining success upfront. i knew what the success was on his part so i could negotiated deal. i did not know president obama and neither did alan so we spent a tremendous amount of time upfront with him and with his economic team defining success because we didn't want to come back with a plan that was here and they would be here in the the hold it would fall apart. that doesn't do anybody any
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good. we negotiated a deal that again got a majority of republicans to vote for it so we had plenty of cover on the other side but exceeded every single one of the goals that he gave us. and so i fully expected them to grab a hold and say that's great. president clinton said, i created this, this is wonderful. [laughter] and so we were really surprised and you know my belief is that most of the members of the economic team strongly supported it. they got it, and like every white house there is a small cabal of people that surround the president that he trusts and works with and i believe it was the chicago guys, the political team that convinced him that it would be smarter for him to wait and let paul ryan go first and
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he would be the essential kind again. we then expected in his state of the union when he did the stimulus that would be a great time to say not only we are going to do this to get the economy moving forward but we have to do it within a context of long-term fiscal reform and responsibility, and he didn't. we then were sure was going to be in the state of the union and get your member in the in the state of the union he talked about the real need for this country to invest in education and infrastructure and high value-added research to be able to compete in a knowledge-based global economy. he left off the park, we have to do it in a fiscally responsible way. we live in a world of limited resources and limited resources mean choices and priorities. >> the terrible irony is the mandatory programs are eating a hole through those programs. they are on automatic pilot. they can't be stopped. i mean medicare is on automatic
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pilot and medicaid in these things. every day that they get deeper in their train wreck, it takes it out of the things that he is speaking of. those things will disappear. they will get squeezed out. >> i spent five years as president of the university of carolina. the product we were receiving k-12 is not up to international standards by any stretch that we wanted to do our part. we were part of of the problem as well as the solution so we said look we have to produce not just more teachers but better teachers more math and science teachers. i turn to our guys and i said look their federal programs to get this done. let's go look at it. as it turned out there were 82 federal programs. do we need 82? hell no, we need more than two really good ones. i told them, it guys when we were doing this, he said this reminds me of a great nobel prize winning scientists when
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his nobel project was running out of money. he turned to his team and said hey we are running out of money. now we have got to start thinking. [laughter] that is what america is, we are running out of money. we have got to start thinking. we have to set priorities. we have to spend our money more wisely just like you guys do having gone through -- you have to spend your money more wisely. >> questions, comments? >> there is one thing that is very difficult and that is the word trillion. no one understands what a trillion is, so a trillion is 1000 billions and if you really want to know what a trillion is the big bang theory of the universe was 13,600,000,000 years ago. that is a third of a trillion and we owe 16 of those babies, 16 trillion. if they don't starting turning
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to b a billion in twic t they won't make anything in the unfunded liability of the united states and all programs is 63 trillion. the first question we usually get is, why do we have these deficits? we always turn back and we say, what do you all think? i swear we get the same for answers every time. people say it's a waste, fraud and abuse. is foreign aid. it's oil subsidies. nancy pelosi's airplane. those who are the four we hear. [laughter] all of those are just like very little things. the big reason we have these deficits is first health care. we spend twice as much as any other developed country in the world on health care whether you talk about as a percent of gdp or on a per capita basis. unfortunately while we spend
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twice as much as any other country or outcomes, the things that you measure, not very good. we rank somewhere between 25th and 50th in things like infant mortality or life expectancy or preventable death so health care is number one. we have to get the cost of health care under control. second leg is defense. we spend more than the next 14 largest countries combined on defense. you know, that is causing us to hollow out the rest of what we do in this country. we are not making appropriate investments in education, infrastructure high value-added research. what we are doing doesn't make common sense. we have this treaty with taiwan that we will protect taiwan if they are invaded by the east. there is only one problem with that. we have to borrow the money from china to do it. [laughter] it's crazy.
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it's crazy what we do. the third reason is we give away half of our revenue in the form of backdoor spending in the tax code. and the plan we put forward, we said look, let's get rid of all of these tax ventures, 100% of them and let's use 92% of the money, 92% of the money to reduce income tax rates and 8% of the money to reduce the deficit. if you do that you can reduce the deficit i about $100 billion a year for 10 years so about a trillion dollars and you can take marginal rates to eight are sent up to $70,000. 14% up to $210,000 have a maximum rate of 23%.
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and you can take the corporate rate of 26% and you can pay for a territorial system so that we can take that trillion to $2 trillion overseas and bring it back to this country to create jobs over here. i think that would add real dynamic growth and create a lot of action sewer tax code is the third reason in the fourth reason is interest on the debt. i know you guys understand the power of compound interest and if interest rates slides back up and we get downgraded again it is going to hit us like something you have never seen and that trillion dollars i talked about in 2020 of interest on the debt, -- >> when the tipping point comes marcus will decide there won't be anybody with the chart at the white house or from congress. the markets will decide when that time comes and interest rate creeps and inflation creeps and guess who gets hurt the most? the little guy, the most
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vulnerable people in society. what people babble about all day long around this place. >> let be just say one more thing. that's a perfect example. we hear so much about trying to make social security sustainable esol that. i am a democrat and democrats were supposed to be for something that would actually be for the payment for the little guy and we did that. we took the minimum payment to 125% of poverty. we gave a 1% bump up to people between 81 and 86 and economist told us that is when people's personal savings run out. lee made a great, we were the devils, right? the great mistake according to aarp is we actually raise the retirement age. we raised it one year, 40 years from now. we wanted to give people a chance to get ready.
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[laughter] but if you make small changes like that you can make social security sustainable insolvent. we did make the rate of growth of the payment that we get in this room, we slowed it down. that's okay because we increase the payment for the people at the bottom. and again, the people that are attacking us is aarp. we are supposed to be protecting these people. >> when you reduce the payroll taxes stimulate the economy guess what system goes further into insolvency? social security. >> gentleman i hate to interrupt this presentation. [laughter] thank you very much. [applause] white house budget director jack lew mack also spoke at "the wall
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street journal" forum. he said he is more optimistic than the joint reduction committee can come to an agreement. >> for those of you who don't know he literally walked through the door. so you messed the erskine alan show but you were in the middle of it, trust me. and now showing you our brave men men have agreed to respond to it i guess or if he didn't agree that is what you are going to have to do so let me just start with what the roof just heard from those two guys and i think you have heard a variation of their presentation before. they say things about the federal deficit like unsustainable path, broken process, inability to get to the heart of the problem and erskine at one point said we will have a
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crisis before those guys figure it out. i think by those guys he meant everybody. i guess where i would ask you simply by asking you can you offer a more optimistic scenario than that? >> it is hard to be more optimistic than that. i think erskine bowles and alan simpson do enormously important public service this year and bringing their commission along to a set of bipartisan recommendations. while it didn't get the job done it helped shape the debate and a lot of boys all of us have been working in a world shaped by the work that they did. i do tend to be a little more optimistic than that. i have said this a lot over the last 10 days. it is calling process is dead before they have had their final chance. i've never seen something complicated done before the last minute in washington so this week, the next few days are
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critical. i'm not going to sit here and say i think it is 90% likely that they big deal comes out of the supercommittee. i think it has been written off prematurely. let me maybe take a step back and then a step forward to frame it. if you look at the negotiations that went on this summer, president and speaker were this close to a really historic agreement. now one could take depressing view that it fell apart and therefore nothing can happen or they started to show a way towards working together. working together is alternately either this week or sometime in the future going to be a balanced package as the bowles-simpson commission did. it puts revenue in the table and put spending cuts on the table. they get something big enough done it inspires confidence. is not going to be done in a lopsided way. over the summer president obama was willing to do things which were quite painful in the
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perspective of a democrat and democratic president. he was willing to entertain changes in social security cola. he was willing to entertain changes in the eligibility age for medicare, putting payments for various services that there is no payment for and medicare. at the end of the day we could july or august, because they know the story has been told that somehow the president raised the bar. i think we hit had a wall because ultimately the senate and the house were unwilling to accept it. i think if you look from where we were in the summer to now, we have is that put our views before the supercommittee and in a quite conference if package in september. they are now struggling with the same thing we were struggling with in july. what is the balance between mandatory entitlement savings and revenue savings that is fair, that is balance, that protects those who are the most
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unfortunate positions in life. and i'm not sure what the outcome is going to be this week. i think if one can read a they are struggling to get to a revenue that is large enough to have democrats go forward for serious entitlement changes and it's still not clear whether they can sell that to the republican caucus. >> if you step back from that as you suggested you you have suggested you are describing a situation with in which a deficit reduction plan of four chilean dollars over a decade in the summer was unsustainable. now we are down a few months later whether a deficit reduction plan is even achievable. that sounds like walking backwards. >> first, let's remember what we did over the summer. over the course of the negotiations we did not accomplish 4 trillion as we had hoped. we did lock in place a trillion dollars in savings in discretionary spending at the annual appropriations and as
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somebody who is putting together a 2013 budget i can tell you those cap several meaning. the measure of doing well in an agency will go from did it grow to dedicate frozen at last year's level? frozen is going to be the new i won so we are in a different place than we were on discretionary spending. defense, we are close to $500 billion in savings in defense. we are working on a strategic review with the defense department. these are serious trade-offs. we have made clear we think they sequester were to happen on defense would not be a good thing. we think of a sequester happens on the domestic side it would not be a good thing that -- but that shouldn't erase the fact that there's a trillion dollars in savings. the reason we can't go there in part it's because we have party accomplish that. so if i could just finish, the target for this committee is to get from one to another 1.2 so we get halfway there. the president put forward a plan
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that would get all the way there. the president put forward a four chilean dollar plan. this committee is going back and forth as we did over the summer in an upgrade is easier to go bigger than smaller because if you are picking just a few sacred cows it is very hard and everyone is in it together in some way to get a little bit easier. i'm not sure what number they are shooting for. i think in some ways they are more likely to get to a slightly larger number and they may not succeed at all but they may get a large number rather than a smaller number. >> but to go to your desired to project a little bit of optimism here, are you suggesting that in its own messy way that washington has turned the aircraft carrier on the big spending debate? in other words, is it significant that the discussion now is not whether to cut spending but how much and how soon and how fast? >> i think it started. i think most americans don't realize we have already started.
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it's not reasonable to say the goal is $4 trillion. we did $1 trillion we got nothing accomplished so you know, having the first quarter of it done a significant. getting more than halfway there would eat a very important step so i'm not saying, i've been burning for success of the supercommittee. i think it would be hugely important were the country and for confidence both to get the policy accomplished and to show that washington can work. it was a very bad thing from april to august to have a the display of dysfunction in washington. if you compare the united states to europe, look at the rating agencies have said. we do not have an immediate economic crisis in our deficit. we have a problem steering is clearly in the face just a few years down the road. we have some time to deal with it. the recent downgrade happened this summer was not because we didn't implement an immediate
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cut. it was because the rating agencies and the american people saw a washington that was dysfunctional. that's a very bad thing and i think breaking through that would be as important as the economic accomplishments. >> the cynical view though the process at the moment is the white house would be more than happy to see failure here because it sets up an election-year dynamic of a president who wants to do the right thing against republicans in congress who won't budge. >> ethnic we have changed the debate from one in june, july and august were frankly a very small number of extreme members of congress were able to hold everyone in washington and the american economy on the edge of a cliff. would we be willing to default the bonds of the united states or would we give into the kinds of policy changes that with any kind of even distribution of
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leverage were unacceptable to us? we said no to that. we said no to that for a good reason. you can't deal on those terms. you cannot conventionally because someone else is willing to drive the car off the cliff. we are not in that situation right now. the reason that is so important for the economy and the country and for the world to get an agreement on the debt limit that went beyond the election is we created a window of time to have hopefully a more civil debate. i think there has been that kind of conversation going on in the supercommittee. they are struggling with this. they are not done, they are not there yet. i think to turn it into just a political issue is a mistake. it would be better for this to be done sooner rather than later but when it is done that has to be done right. it has to meet the same standards whether it's done now or later. is a balance? is it fair? is everyone being asked to do their part? let's get something meaningful than. >> you put the question bluntly, you prefer success to failure in this process.
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>> i have always, we been rooting for success. we have been trying to strike a balance between, this is a process that congress set up because as you were saying with both alan simpson and erskine bowles were saying the process is broken. it doesn't any longer take a majority to get something done in the senate. it takes 60 votes just to do routine business. it's almost impossible to do difficult things in that environment. this practice was set up to create a space or congress could function. we have been careful to strike a balance here. a lot of people said where's the administration? we sent a 70 page document to this committee in september with line by line details. we went through negotiation over the summer where the whole world knew what the president was willing to do in a bipartisan negotiation. i don't think there's ever been a process with more transparency to what is acceptable to the
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present of the united states this one. we have now been given the committee room because ultimately takes both and they are in the best position to determine where that spectrum of acceptable outcomes to get a majority and frankly one of the things they are focusing on if the reports are correct is how to balance short-term actions they get the economy moving to create jobs with medium and longer term action to get a definitive amount of deficit reduction. that is what we proposed in september. that's the right balance. >> let's take one bigger step back. i think the thing that would probably be reassuring to the markets and probably the people in this room would be a deficit reduction agreement that was actually bipartisan that seem to have a bipartisan consensus behind it that allows it to endure that make set lasting as opposed to temporary and subject to the whims of the moment. when you look at the budget did you guys have put together out over 10 years you are projecting a percentage of gdp for government expenditures of 20 to
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223% range. you have republicans on the presidential campaign talking about government expenditures over the period method go down to 18% of gdp. that's an enormous gap. that's hundreds of billions of dollars every year. is there consensus in a gap that white? >> i think there is more consensus on what we need to do to stabilize the medium-term. there is a pretty strong consensus that if you look at where we were at the beginning of the year and what we need to accomplish over the next 10 years, $4 trillion in deficit reduction would get us to a place that's not feel smug goal but that would keep the debt and the deficit from going into the danger zone. we then would have to take more action obviously. this question of government size and percentage of the economy, it gets very abstract very quickly and to me i have to bring it back to driving the numbers and are you willing to accept the policy? i don't think either democrats or republicans are willing to
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accept the consequences of what it would take to get government to 18% of gdp. it would mean massive reductions in our national defense and would be an acceptable to both sides a massive reduction in social security and medicare beyond what it would take to make those programs sound for the next generation of my think it is on an abstract level attracted perhaps to the presidential campaign. i would doubt if any of them would own the consequences of those policies. you look at what locking and 20% of gdp does. it would be ignoring the fact that we have a new generation, the baby boomers, retiring and that is driving social security and medicare expenses. that is going to happen. unless you are willing to tell the baby boom they don't get their benefits they are getting older. the system was designed to pay for that. the shortfall is a small percentage of the total. we need to deal with the shortfall but this percentage of gdp where pretend these things can happen without consequences
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is a mistake. it to get to a place where we balance revenue with expenditure but we need not -- we can't pretend that we are willing to drop our guard in the world and not have the national security program or eliminate social security and medicare in many of those who need a. >> so you think over time the consensus about the government size is going to be at 22% rate of gdp? >> i think we have a mixture of issues right now where the role and size of government are being debated on the regulatory state, on the spending as percentage of gdp stage. if we were where we were in the late 1990s and 2000, 2001 where we were balancing the budget i don't think he would be hearing this debate about the intrusiveness of government. what happened since then as we had a tax cut we can afford. we had two wars we didn't pay for. we had a recession that threw us off track. we need to get back on track.
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we need to be honest about what it cost to conduct wars. we need to be honest about what we can afford in terms of tax cuts. i think that the issues on the regulatory side, think they are related to this conversation. we have tried very hard as an administration. i don't think that it is probably well-known or understood and in fact it isn't reality to take the regulatory process and bring it in to check where we can show the benefits of the regulations we are doing have a better record in terms of outlying costs in terms of the osha administration. the president stopped regulations he thought we could handle in terms of the interest of the economy. we have had a debate over health care reform and over wall street reform and they think these issues are sometimes conflated. we are not taking a step back in the fact we need to implement those two important initiatives and the will involve having rules but the sooner we get that
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down the better. i think the political debate has created a kind of uncertainty that that is self-fulfilling and self-defeating. delaying action on those things only adds to the uncertainty. we should move on, we should implement it and settle things down. >> let me just ask you one final question and we will open it up. you have seen this process for a long time and you have seen it up close and personal. i'm wondering if you think one of the things that is obscured in the fog right now is the fact that there may actually be a consensus on the need were fundamental tax reform. is that correct? when the dust settles is there going to be a realization that they big factor is on the agenda and has to be dealt with quickly? >> you know i think both in the negotiations the president speaker at over the summer and what i understand to be the conversation going on now in the supercommittee tax reform has been at the core of how do we do with revenue, how do we deal with getting a balanced
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approach? i think we need tax reform run its own. we have a system that since the mid-1980s has gotten out of shape again. every 30 years or so you need to go back and clean it up. there ought not to be creating disparities of word and but apart from being unfair in terms of just the distributional impact, it creates a lack of confidence that the tax system is on the level. you end up with public confidence in the basic instrumentality of the public sector being undermined. i think we need tax reform and i think it is consistent to broaden the base and potentially lower rates ended up with a more progressive tax system. it has to be connected to dealing with the deficit because if it doesn't raise revenue we are going to be back where we started from. we can't afford the tax policies that are in place now. >> let's open this up. alan d. want to start? >> a question.
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anyone? the lights are kind of tough. let me ask jack on behalf of the group because there's the strong sentiment in this room and be heard we heard it again last night over dinner. we heard it really kind of successively over the last three years. that this administration is just unfriendly to business, doesn't really understand what drives it and what would be necessary to get these companies to start creating jobs in the u.s. again. i know you have heard this before. it's not new. you oversee many of the policies that most concern them both on the budget front and the regulatory front. what is your response to that criticism? >> i think at the core we have totally overlapping interests of their ought not to be that. we know that the key to the economic future is all the
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private firms investing in creating jobs. right now you have a situation where washington doesn't have the resources and doesn't even have the ability to create the long-term engine of economic growth. the private sector is sitting on resources, lacks the confidence where the economy is going to make those investments. unlocking that confidence, getting the private sector reengaged is critical. my own view in in conversations i've had with many people in the private sector is issues tend to get conflated. if we saw aggregate demand going up and order books being filled i think there would be more confidence. i don't think it's because of the last rulemaking that there is a lack of confidence. if it were really about rulemaking there would be more of an sensitivity to the fact that there are many many areas where we rollback rules. we have tried to create not just certainty and clarity but a lower burden of regulation.
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>> but specifically focus on the minds of some people here was the decision to delay the keystone pipeline from canada, oath jobs and energy supply. >> i think in the area of energy and environmental policy we have been trying very hard to balance our core responsibilities to protect the health and safety of americans and to make sure that we are planning ahead on the energy security of the united states. but do it in a way that gives oath -- meant both halves of the equation to work out. if you look at the rules we have worked through on fuel economy standards they are kind of a model for how to do rulemaking. we have had the auto industry and even some of our biggest critics and kind of a business organization acknowledged acknowledge that is the way that you ought to do regulation so we have been working very hard to try to do it that way. our record on class benefits is
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actually quite outstanding compared to administrations. the fact that the economy has not yet picked up is i think now because of the regulatory policy. there have been a lot of studies on it, both right and left. we started this administration with an economy that was in a much deeper recession than anyone knew at the time. if you look at the pattern of their coverage is more similar to other recoveries do not in most regards. it's been a long recovery from a deep financial recession. that is what the president inherited. the actions he took, the recovery act, i wasn't part of the team that was working on the recovery act in 2009. i think it is responsible for a significant amount of economic growth and millions of jobs. our opponents in washington ridiculed it and that's fine and the political process but we also have to take a step back and ask what would aggregate
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demand of this country have been like if we had not done the recovery act? what what would we have had a deeper and longer recession? with a double dip have been inevitable? there is a lot of talk about a double dip of all the projections i see show that we have to be able to continue to grow. so i think the economy is coming back slowly and fast enough, the regulatory program is more balanced and frankly i think it is given credit for broadly and we profoundly understand the need for there to be a partnership. we also have to ask our friends in the business community to understand the financial crisis that causes recession puts an imperative on the public policy process to respond. wall street reform is necessary. it is necessary. it has to be done right but we cannot dna place where we look at the immediate past problem and have a government intervention to get the economy
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and save the financial system and not take action to build capital and reduce the need for the government to step in the future. >> a question that came in from one of the members about tax reform. does fair and balanced me more than taxing millionaires and billionaires? doesn't class warfare and p. the ability to rebalance the size of government? >> you no, i actually think the charge of class warfare is overstated. if you will look at what the president has said and look at what we have said, no one is criticizing the people who are wealthy or successful. and i tell you in the conversations i've had the ceos privately, i've yet to meet a ceo who has argued with me that the tax rates should stay where they are and maybe some of you have different views are going not saying that the universal deal but i think it is a broadly held view among the ceos that i have talked to
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that we ought to be talking about the tax rates. political rhetoric is not the core of what i do. it's very hard to talk about fair and balanced and the top rates going up from where they were set in the bush of administration without your critics saying it's class warfare. i think if i gave everyone in this room a package that would accomplish meaningful reduction that would establish a corporate tax system with lower rates and more even playing field with tax rates that reflect of what we could afford and a fair distribution of durden, i probably would get most of his people in this room to sign up to. don't don't think it is class warfare. i think it is both common sense and in the best of the american spirit. >> you ron, did you have a question? >> good morning. i'm juan williams. we heard from the prior
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panelists about the impact that medicare and entitlement probe rams are having. we also have an introduction of of the health care accountable care act. i would be curious about how you see the entitlement programs being modified in the context of addressing the issue of the deficit. on one hand we have -- and on the other hand we are increasing our expenditures with the hope that efficiencies and productivity will make a balanced. >> first of all the affordable care act had very substantial savings in health care. there were kind of scored savings from the congressional budget office perspective. it's not just the administration saying so and when i actually think they were politically validated as being scorable savings because of the midterm elections. democrats who voted for the affordable care act were accused of cutting medicare because of the savings that were in there. the affordable care act is the largest set of health health heh
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care savings i think ever and in addition to the size, it said set in place a process that intended to start the bin the cost curve. you look at what is driving public sector health care spending. it is the same thing that is driving health care spending in all of your corporate insurance plans. it is inflation in the health care system generally. the public says there isn't growing faster than they private sector. we fundamentally up to address some of the issues about what is structurally going on in our health care system if we are going to get our hands around the. thale decisions we can make in washington are to say that an old person or a poor person doesn't get care and that is how we save money, don't think that is going to do the job. those people will get sick and they will show up. i used to run an academic hospital. i know which of -- happens when people show up without insurance. i think if you look at the affordable care act, it was a
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meaningful important systemic change. is it hard? yes. is a controversial? obviously. the supreme court is going to have to make some fundamental decisions on it. i think when it is given a chance it will be important and going forward look at the kinds of things the president was negotiating over the summer. does taking him seriously both the provider side in the beneficiary side having a balanced package with additional restraints. there was an openness on our part two things that not that long ago would have been considered heresy in democratic circles. we are all going to have to get out of our comfort zones and we are going to have to accept some boundaries. i don't think we can go to the place where we say we are just going to start lopping off in the fifth for either the poor, the disabled or the elderly who have nowhere else to go. so we have to bend that class kerr. we have to put more burdens on providers and individuals and i think that's what the system is willing to do. it's hard to get to the point of an agreement that there has been
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substantial progress over this year in terms of the debate. the bull cinching commission helped in that and i think the negotiations over the summer move to fort. >> we are out of time but we will try to take one more very quick question. >> i will keep it short. tom glocer from thomson reuter. sticking with the deficit reduction plan. if congress, the supercommittee is not successful next week number one do you think it is possible to then resurrect bowles-simpson and number two would you recommend to the president that he take a leadership on it since even though we have left congress at the time they would have then failed to do something? >> i think that the notion, it's very important that the supercommittee succeed so as i said earlier i'm rooting for success. i think would be very important to do it now and even if he did the same thing now versus a year from now but i think it is a mistake to think that should they fail this issue goes away.
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i think if you look at the end of the year, the end of 2012, there is a perfect at the end of 2012. you have not about etc. cuts that is triggered now that takes effect in january 2013. i think that is an acceptable set of policies. i think most republicans fink is an unacceptable set of policies and most democrats think it's an unacceptable set of policies. it was supposed to be in action forcing device that would focus the congress on getting its work done. one of the reasons the supercommittee is as engaged as it is this because they want to avoid those across the board cuts. another thing happens in january 2013. apart from these automatic cuts taking effect. the tax cuts that were to pastor and in the bush of constriction are all set to expire in january 2013. now we have been of the view that the tax cuts in the middle class should be made permanent. the tax cuts to the top two bracket should go away.
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one way or another i don't think that there is going to be a strong sense that taxes should go up on all americans in january 2013. quite the contrary. i think there's a lot of pressure on congress to take seriously the president's proposal to extend the payroll tax cuts because the economy can't really sustain that right now. so we need to move this year but should he get to the end of 2012 i think there will be action. i think that if is the supercommittee fails and sherry asked whether our goal was to have it to be a political issue, i'm not sure it's the goal but i've no doubt the consequence of failure is that it will become a framing political issue. a political issue in a national election year framed with real consequences at the end will create another window for action. i think it's better for the action to happen now so i am being unambiguous. i would be willing to be optimistic at the risk of being written off as


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