tv Washington Journal CSPAN September 15, 2010 7:00am-10:00am EDT
arlen specter on the pentagon's plans for reducing defense spending by $100 billion over the next five years. later, clifford rossi of the university of maryland school of business will talk about the new wall street regulations bill which creates a financial oversight board. this is "washington journal." [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] host: another victory for sarah palin and tea party expressed in delaware. christine o'donnell takes the tea party nomination from moderate republican mike castle. the wind has stunned at the republican expect -- establishment. , rose on fox news says she
cannot win in the general election. new hampshire senate primary race is still too close to call this morning. with 85% reporting, party-backed candidate has a less than one- point lead. she has 46,346 votes. we want to get your reaction to tuesday's primary results. zero be on your screen. joining us this morning from our news desk is steve peoples from "roll call." let us begin with the headline from the delaware newspaper, anti-establishment insurgency rocks of delaware. o'donnell in shocker. tea party-backed candidates funds. how would she be able to do it? guest: not surprised here.
the tea party express came into town against the wishes of some people in washington. spent a lot of money. in a closed republican primary was able to make a difference and up said cassell. honestly hard to see this as anything but a nightmare scenario for the gop, at least in this delaware race. you heard karl rove right off the race and both people on both sides are doing the same thing. host: people did not think she could win this primary, either. guest: two different races. winning a closed republican primary which -- i looked at the numbers, about 60,000 people voted, about one-tenth of all registered voters in delaware. about one third of registered republicans. a very small sample. you get enough of your friends and the excited base out, you can make a difference.
a general election, very different story. delaware is not a kentucky, not a nevada or alaska. this is a state where democrats outnumber republicans almost two to one. and it will be very difficult for a candidate like o'donnell who has absolutely no appeal to the middle to be successful. is it impossible? this year, i don't think you can write anyone off. anything can happen. but certainly most political reports are shipping this race to the likely d column this morning. host: tea party express put about $250,000 into her race last week. what if they doubled more money and more effort into this race? jacob certainly it could make a difference but christine of dawdle -- guest: certainly it could make a difference but christine o'donnell -- starting of she has a fractured republican party. the state gop, i have rarely
seen a state party go after one of its candidates with such ferocity. literally yesterday the state gop was pushing these robo calls in which they had a former o'donnell staffer going after her saying she mishandled campaign funds, was not paying staff, was using donations to pay her rent. it is going to be very difficult with just $20,000 in the bank. certainly there will be a bump after last night -- people excited and the base but it will be hard for her to overcome that. host: who will she be facing in november? guest: county executive chris koons. honestly he is a guy we have not talked a lot about. in a year where republicans are going out of their way to define democrats, this republican primary has been so bitter. he has really flown under the radar.
i can see a scenario playing out where more voters are showing up in a member voting against christine o'donnell as opposed to voting for chris koons and that benefits a guy like chris koons. host: you mentioned it in human to on the top that karl rove on fox news said she does not have a win. he has a group called american crossroads, raising money and trying to fill what they say is a void left by the national republican committee. does it mean in all likelihood christine o'donnell will not seek any money from american crossroads? guest: probably. at this point, it has been 10 hours. it is tough to say exactly. but there are finite resources here. pacs, in addition to the campaign committees, really have to be selective of where they devote the resources. i think a lot of the people this morning including a lot of those pacs are writing off the race
and feel their money is better spent elsewhere, like kentucky, nevada, a place like alaska. host: we cover last night's victory and concession speeches. i want to show a little bit about what christine o'donnell had to say about the wind. >> there is another woman i got to think -- thank you, governor palin, for your endorsement because she got behind -- [applause] she got behind us war-weary folks and gave us a boost of encouragement when we needed it, and she was a vote against the politics of personal destruction. host: how is sarah palin doing? guest: she had a good night last night clearly. i did not want to jump ahead to new hampshire, but two gop senate fights. of the new hampshire race obviously is not decided but the
palin-backed candidate is ahead as well. i tell you what, this delaware race, crazy the way things played out last week. i talked to some folks, gop, insider types, there was very little momentum even after the tea party express showed up, i think that was tuesday or wednesday, and by late thursday and friday, sarah palin had jumped in, jim demint, senate conservatives fund jumped in, and there was an incredible wave of momentum that built and it really turned the tide. how much was sarah palin responsible for that? talk to say. but certainly she had an impact. host: steve peoples is our guest for the next 25 minutes. of course, we want to see your reactions. as soon as your phone calls, and we will get your reaction. let us talk a little bit morning about the comet and "the
sounds dramatic -- but the soul of the republican party. we have seen it played out over that last day. it is shifting to the right. and it is hard to imagine that not having an impact in the congress. and as we know, it is very difficult to get anything done if neither party is willing to reach across the aisle and make some compromises. we are seeing that the candidates most successful in these gop primaries are those that are saying, i will not under any circumstances. across the aisle. we need to stand our ground. what that means for congress's ability to get something done in january remains to be seen. host: let us talk a little bit about what is going on outside of washington, d.c., with the voters. in the tea party express. we brought up alaska. i want to show actually our viewers the front page of the "in anchorage daily news."
murkowski, who was defeated by joe miller in a primary, is slated to announce our campaign plans friday. whether she will be right in or drop out. in that race, we saw joe miller tot lisa macao's d., 50.9 49. -- beat lisa murkowski. mike lee, a tea party backed candidate comes out ahead in a republican primary. rand paul and kentucky -- in kentucky. 58.8% to 35.4%. in florida, if you go there. in the latest polls of the three-way general magic, mark rubio leads. this is the latest poll from
fox. do you know, steve peoples, what is going on? guest: i do not think it is a real surprise. the same trend we are seeing, in these low turnout republican primaries, the energized conservative base backed by the tea party in most cases can really push what some might call fringe candidates over the edge. it is not rocket science. the side that gets its group bought more energized to get out to vote will win. and we are seeing that playing out across the country. host: let us go to our first phone call. darlene from the democrat mine in dallas. can you tell us what is going on? why do we see the tea party, anti establishment candidates winning? caller: yes, first of all, the
democrats have a progressive group and you guys never talk about and show them on the news and that is one reason why. no one ever talks about. they talk about sarah palin and tea party. secondly, i do like c-span and i watched c-span but why don't you have black on the show -- you are biased toward republican and tea party because especially you and the lady called you and you refused to acknowledge and accept the fact that you are biased about that. host: all right, we are going to go on to caroline, republican line, at the illinois. caller: i wanted to thank all of the people, including mr. peoples and karl rove. it is a new day in america. it is not the old republican party anymore. what we are doing is going through a run as bonds. i am a republican, a woman of
color and it was a terrific night for the new day republicans. and all of the pundits who are saying that people can't win, they are wrong. these women and others like her will win. it is a new day and a new style republican and that is simply what they don't get. thank you. host: ruby on the democrat line, good morning. caller: i think people better check the voting machines. going back to the voting machines problems. host: what do you mean by that, ruby? caller: you know how they have done research on the previous elections where in chicago and ohio where the voting machines were preprogrammed. i think people did not -- it is going to decide who is in charge. thank you. host: all right. the next phone call. tom, democratic line, missouri. go ahead.
caller: hi. i hope the tea party people continue to win these primary contests. it will push the republicans further to the right and it will spell disaster in the general election. host: fort smith, arkansas. joyce, independent line. your thoughts on tuesday's primary results. ok, you've got to turn that television down. we'll come back to you in just a second. steve peoples, let's talk about the new hampshire senate primary race for the republican nomination. as we said at the top, still too close to call. what is going on? guest: earlier in the night last night we thought we might be seeing and all donnell upset in addition to an upset of establishment pick --
khalidayo -- kelly ayotte. there was a tea party candidate, lamontagne, was surging. he was within less than one percentage point. right now khalid ayotte, establishment pick, is ahead and may hold on. -- kelly ayotte. but honestly it is too close to call. host: whoever comes out, who they face in november? guest: congressman paul hodes is the nominee. typically a sitting congressman would be the favorite, especially in new hampshire which has been trending blue.
this year, not so much. if kelly ayotte pulled this off, she will probably be the favorite going into november and paul hodes is not very popular in new hampshire, they are fiercely independent and they are not happy with how things are moving in washington right now, the direction of the country. they like to have a balanced delegation in washington representing them and it has not been the case recently. look for paul hodes -- if she wins, and honestly, if she does not, ovide lamontagne can meet this competitive as well. host: john, republican line. caller: i think the problem that we have in the country right now is we have one party in washington, and it does not matter if you are republican or
democrat, they do what they want to do and not the will of the people. end of the fix is term limits and we the people have the power in the next four years -- 45 or 50 days, to change that. if this peak -- these people will not get out after three terms, four terms, five terms, and 20 terms, in the house and senate, then we the people need to vote them out and that is what we are doing right now. all incumbents must go. and if ms. o'donnell does not get supported by the republicans and she loses, the objective is met. we don red of the other gentleman and put a new person in. get rid of the incumbents, give the power back to the people. term limits. if they want passed term limits, we, the people, will. host: here is a headline in "the new york times" to about another
the story includes a quote from one of the voters who voted for mr. paladino. a retiree said he was frustrated with albany and washington of wanting somebody different from outside -- outside the usual political world. arkansas, joyce on independent line. tuesday's primaries results. are you with us? it would help if i push the right line. caller: about ms. o'donnell. i saw fox news and i will not name the commentator and he said earlier that she had bankruptcy, some $12,000 in debt and he made a comment that he did not have either. heaven forbid, that is the key.
they want people in the same situation but have the guts to go out there and run and be forthcoming about their situation and not flaunt that i have millions of dollars is spent on campaigns -- which there is nothing wrong with that if you have the money. but it does not reflect what people are going through right now and they did not see any hope for people who already have it. host: angela, democratic line. thank you for c-span. caller: i watched the primaries as the results came in last night and i have been keeping up with the tea party. my only problem -- yes, government is broken, yes, we need to get a lot of people out of theire. but the policies are some of these candidates are the very things that people have been fighting for four years.
we say taxed enough already but their platforms are more about destroying what has already been built, what works with government, more so than anything else. you want to destroy the department of education for charter schools which in some cases is a good thing but what about the people who can't afford the charter schools, who can't afford to move their kids? this is america and when we get caught up with the labels of the conservative or liberal, there is no perfect party or no perfect ideology and i am just afraid that some of these candidates are so far out on the friends that it is going to do more damage than what is going on right now. h., north carolina. well on the democratic line. caller: good morning tube.
i wanted to point out quickly when the female callers called about three times ago. she is correct. you are paying attention to sarah palin and the tea party but you forget there is a progressive movement in the democrat party that nobody is mentioning. cnn, fox, you are all for getting about it and not even covering it. host: this morning we are just talking about the news, will. caller: ok, all right. thank you. host: we will leave it there. let's go back to steve peoples joining us with "roll call." let us go to new york and talk about charlie rangel. he was able to survive a primary challenge. guest: fascinating race. real quickly. just want to speak to will's point, there was actually progress of up said in new hampshire, a candidate who
defeated katrina sweat, a well- known name. so not all bad news for republicans last night. but going to charlie rangel's reyes, this is a guy, inside the washington bubble, he has every reason to lose in a combat of the primary, especially against the candidate who was the grandson of the guide charlie rangel upset in 1972 initially when the seed. all sorts of political, going on. on paper looks like it to be competitive. rangel has all of these ethical challenges. but the bottom line is in new york, people love charlie rangel. the local democrats and independents going to back -- going to bat for him. president clinton, it was reported in a robo call.
mayor bloomberg, former mayor dinkins. on the ground they see this guy who delivers for the district. he is a well loved and there is a real disconnect. a fascinating race. he cruised to victory. not that close. and certainly the is virtually guaranteed to win in november. host: last night some of our coverage included charlie rangel's victory speech. >> i thank the team, the rev., everybody. and even some of a sinners -- thank you, any. thank you. thank you, george. thank you. [crowd chanting charlie] >> ladies and gentlemen, this is a champagne moment faug.
its goal is it likely charlie rangel wins in november? guest: i noticed he changed his boat tie he was wearing a earlier in the night. interesting decision. certainly i think it is a heavily democratic district, there is nothing but token republican opposition. as i said, i am actually meeting with his republican opponent tomorrow morning. but it would be a real shock if charlie rangel -- virtually impossible for him not to win. obviously a lot of democrats are upset about that. some people just want him to go away because as long as he is out there campaigning, in the news, being talked about on programs like c-span, he is the poster child for republicans talking about everything that is wrong with washington. host: carolyn maloney -- likely
to win in november as well. she faced a primary challenge for the first time in her 18- year career. is that right? guest: there were a few incumbents facing what we thought would be competitive primary challenges. malone made's was one. congressman bill lynch in massachusetts ninth district, both were won relatively easily and certainly the favorites in november. host: new york house races. the 23rd and first district. what happened in these races last night? guest: new york 23, a lot of people are familiar with it. it was really picked the first tea party upset race, and special collections last fall, a seat republicans had all the about 150 years, 19th century. and a divided republican base basically handed that seek to
build all ones in that 3-1 special election. it looks like the same thing playing out. owens ran unopposed. doug hoffman, who in the fall was unsuccessful for that bid for the nomination, nevertheless he will appear on the ballot as a conservative party candidate. it remains to be seen how hard he will campaign for that seat. he has indicated he will seek -- he will try to win and certainly that means that the bill owens again could be the recipient of another term in congress thanks to a division within the republican party. host: in other political news, here is the political section of "the washington times" this morning on the colorado gov. race.
also in other primary results, this is "the baltimore sun." it says the -- that o'malley and ehrlich are braced for a rematch. and district of columbia, d.c. current mayor adrian fenty lost to vincent gray, 39% to 59%. richfield, ohio. lee on independent line. caller: nice to talk to you this morning. one of the things i would like to say is i hear all of these people talking about the tea
party and saying that the tea party is so far to the right. i am trying to understand why an individual or a group of people that are bent on bringing this country back to the constitution would be considered to the right? or a group of people that would like to reduce spending in this country are called the rightist s? to meet it makes perfectly good sense to reduce spending, to follow the constitution and to be an independent thinker, which is what the tea party is. now, there is no doubt that no one expects the tea party candidates to win every race that there isms. -- there is. she may not win the senate race.
but if the republican party, national committee, chooses to support her, she would certainly have a better chance. the next thing is, is that just -- this is just one election. 2012 we will be coming up -- and we will come up with another election in 2014. it is not important that we take both houses. it is important that we garner one house. i think we will be able to do that in the house of representatives. in 2014 we will take back but senate. host: philadelphia. holly on the republican line. good morning. caller: i can see how the republican party -- or i should say the conservative party, they pushed out scott in new york 23 and now they pushed out my castle.
did anybody know gov. chris christie endorsed mike castle? communism is coming. you cannot push out but party of quincy adams. this is how you can tell the republican party is far to the right. they don't realize today marks the birthday of the greatest conservative of the 20th- century, william taft. host: in the debate over extending the bush tax cuts here is the headline in "the washington post." from laurie montgomery. the story goes on to say --
also yesterday we told you about the small business bill. it passed in the senate's in a boat 61-37 -- excuse me, the votes to end debate past, which is a good indication the legislation is likely to pass at the end of this week. the small-business bill advances, is the headline in "the washington post" and many other papers this morning. "the wall street journal" editorial signals out senate democratic incumbents who are running this november who are likely to raise taxes in a recession. the make a list of the following
democratic incumbents. you can take a look at that list as we go to cold water, michigan. richard and independent-minded tuesday's primary results. go ahead. caller: i was glad to see the so-called tea party candidates win or what ever, but what i really like to comment on is the tea party because i voted for ron paul and the last election and as far as i am concerned i believe he is the one who really founded -- he had a tea party during his campaign. and that was -- the tea party people, you are talking about something that is not organized. an entity just floating around that you can attach any number of view is to it because it is not organized. but if you want to know the true tea party just look at the views of ron paul. i agree with a couple of callers
ago about the wordsmithing that goes on because yes, if you talk about the constitution and following the constitution you are called an extremist because the view is in there were very extreme to the british who had an empire. and now they seem very extreme to the east in this country because we are an empire. so we are right back -- and people understand is and that is what the tea party is all about. we need to not just reform our government, but the start -- the hallmarks of any tea party candidate, in my opinion, who i would vote for is reducing our military presence abroad drastically. host: all right, richard. from cold water, michigan. willie of the democratic line. caller: how are you doing?
host: doing well, sir. caller: thank you for c-span. one of my favorite television shows in the morning. the democrats now must rise up. we saw a primary last night with a lot of so-called -- i guess this new party now in america called the tea party is emerging in these different primaries. allhink the democrats -- this sentiment about we are going to lose the house and senate seat, this sends a direct message last night and into all democrats across the united states of america for us to rise up and continue to -- with the programs that the president of the united states barack obama and his administration is enforcing. we should not just take this lightly. host: were you motivated before yesterday's primaries? caller: i have been motivated for many years. a true democrat. for many years.
the working class of americans depend on the democrats in office. and i am a union man, international longshoremen. host:. on the republican line. caller: i thank you for taking my call. i dixit -- disagree with willie, okay, because t -- thank you for the tea party movement going on. the democrats will take us in 10 years for keeping fiscal sanity. the way the democrats are spending money, it is insane. and that is what the whole movement is about. it is not about republican or democrat. it is about restoring our country back before we lose it. and then everybody will be crying in the streets that we have no money. i don't want to go broke overnight. what i want to say, let's keep the movement going and any
candidate we put in, they should get fired in two years if they are not fiscally sound. i don't care if they are republican or democrat. as a matter of fact, the democrats should join us and throwing out incumbents that spent us to $13 trillion in debt in this country which we can't get out of thanks to them. how does he answer that, the guy from georgia, willie, thank you for taking my call. host: chicago, barbara, independent line. you are next. caller: good morning. well, i am america. very quickly -- i on a small business, i am being crushed by washington, i have been a republican for ever and i am turning independent just like everybody else. i am terrified to put a vote on a third party because i do not want to throw away my vote but as far as i am concerned, all of congress -- i don't care who you are, everybody sitting up there does not represent the american
any more. does not represent us. they put a through a bill that they don't have to use for health care. they have lost sight of who we are. i would like to ask each and every one of them how much as a gallon of milk, a gallon of gas, because i did 90% could not answer that. but you and i have to deal with those things everyday. although i am terrified about a third party because i did not want to throw my vote to mickey mouse or a useless vote, how can we as americans sit by and watch what is happening up there. i really think it is frightening. host: on health care, here is a headline for you. three suits on health care bill likely to advance. 20 states counseling the constitutionality of the new health-care law and its requirement that most
individuals obtain medical insurance. new york. veronica, democratic line. caller: just give me a few minutes. number one, i live in a completely republican district, our district is totally republican. and i am a democrat. i feel that republicans are having as much trouble as the democrats. everyone day are picking to run, the teat backers, candidates are winning the only thing with the tea baggers, they are so out of step with america. they are out of their minds. i see that they are out of control. they walk around with signs. what they call the president of the united states. host: one of the republican blind -- ron on the republican line from arkansas. caller: i used to be a democrat
but this year when it comes the november elections i am going to be voting all republican now. i got a tea party flag hanging on my porch. we got confederate flags. these are american heritage. red, white, blue, that is american. we have the red, white, and blue and the heritage flag and we have all kinds of flags. we are going to go total republican this year because i had people attack our property, destroying property. they are against john pozman running for u.s. senator, and i think he is well educated. these are people we need to have been there. i think what we need to have in there is more like mccain. we need to have -- if we don't get them in their america is going to be in some real turmoil because we don't need to be paying $150 a month for health care insurance. that is another issue obama is
doing. i do not believe -- we told him -- the democrats told him they wanted universal health care insurance and now we've got here is -- host: let us chat one more time here about tuesday's primary results. and going forward, what are you going to be watching? guest: honestly, i would love to watch the delaware race. i think it will be fascinating. i had a talk with my editor last night and reporters, like the owners, have finite resources and i might be diverted away to a more competitive race. this verbal of fact, not just affecting the campaign committees but also some news coverage. obviously we are still waiting to find out what is going to happen in new hampshire. the big question as to whether kelly ayotte hold on to the
race, she has a lead of less than 1% right now. should she lose, it would further propel the story line where tea party candidates are making a huge gain this year. a lot going on. and of course, the bigger question, what is happening to the republican party as it really struggles to find its new identity. clearly it has been pushed to the right. it remains to be seen how it plays in the northeast especially. not just kentucky, nevada, colorado. someone just mentioned john mccain. he is someone who plays very well in new hampshire a couple of cycles ago. a candidate like that who has shown a willingness to reach across the aisle could be successful. i am not sure if christine o'donnell is that kind of candidate. it's still let us go back to the
column this morning in "the washington post" and add what you are talking about. is it realistic to think that those three candidates could win? guest: yes. it is tough to say whether all three but certainly rand paul is ahead, the harry reid race with sharron angle as at the margins. democrats were excited about they were more competitive than they would have been, but these tea party-backed candidates could pull it off in november, especially, as we look at this enthusiasm gap. i think it was willie you were talking to in georgia, a die- hard democrat, he will show up regardless.
but there are not a lot of will lead a crop -- willies across the country. certainly the right is more excited to show up in november. host: steve peoplesr steveoll call) newspaper. thank you for being with us this morning. let us go to battle creek, michigan. kevin, democratic line. you're on the air. what do you think about tuesday's primary results? caller: i am astonished. i think the tea party needs an opposite. what happened to the coffee party? i believe the republican party has its friends, and the tea party is it and i believe that they channel their aggressions and all of their lives and everything they don't want to say because they have to go against the general election, they let the tea party say it. if you want to know how person stands and who they vote for, rich people or more people -- or
poor people, what do you watch? c-span or cnn or fox news? anybody who says -- you may hear aggressive -- aggression in my voice. ask them if they watch fox news. a person commented that he is voting straight republican and he used to be a democrat. come on, do, you cannot be a republican today and used to be a democrat because the democrats used to be strong for poor people now they are trying to appease you guys on the right who they are scared of. host: one last fall and called. -- one last fall called. van nuys, california. caller: i feel as a democrat -- that i feel a little better. one thing i don't feel better about is of the fact that i
don't have anything against other people who have a different opinion and had an ideological difference from mine. but the problem is when the people, the voters of the country are not willing to compromise, then it hurts all of us. and another thing, i want everybody, no matter what your affiliation is to know, which i have not heard much talk about but it is a fact, and that is our deficit is now down by 8%. and i want everybody across the country who is listening this morning to start googling or whatever, because i just heard it in the wee hours of the morning and i once everybody -- on a program i was watching. everybody needs to take that
into consideration. a host: a nice segue. up next we will talk about tax cuts and the deficit and whether or not they should be extended for everyone or should the congress go to president obama's plan to just extend them for the middle-class and lower class americans. we will be right back. >> c-span's local content of vehicles are travelling the country, visiting communities as we look at some of the most closely contested house races leading up to this november's midterm elections. >> there are only a certain number of congressional seats that are highly competitive as we go round the country and constitute good opportunities for republicans to pick up a seat in congress. >> it has always been one of those races that is a barometer of what will happen nationally with either party. it has always been that way and i think that is why there is always a lot of interest in it. that is not what is important to
me. what is important to me -- >> running in the ninth congressional race. we have the democrat incumbent barry hill, first elected in 1998 and served most of that time, until now, he was defeated one time in 2004 and then won his seat back. challenged by republican tide young, an attorney from bloomington, making his first run at any public office. a very interesting district. the district runs along the ohio river in southern indiana. to glance at it it would seem to be homogenous. but at sully there is quite a lot of diversity in terms of political thought. you have an area near bloomington, probably most liberal area, that is the northern part, and you have a big swath of very rural area that where people consider themselves democrats -- they
elected democrats locally, to the state house, but they tend to vote for republicans for president. a and then you have areas cincinnati, louisville, that our urban and suburban so you get a real mix. those are areas that are always changing. the result is that even though that the district can be considered a democrat district, there is southern indiana conservatism there that you are really never quite sure how -- how that will play out. one of the things that makes this district interesting and very expensive for candidates is that it is excellent covered by four different media markets. the problem is none of the four -- lloyd though, cincinnati, indianapolis, evansville -- none of them are majority in the district so it is very expensive to buy advertising and the dollar did not go very far because of the cincinnati market is mostly covering ohio, louisville is mostly -- so it is
very expensive and complicated to run a campaign. >> this time around -- what will make a difference? >> for baron hill it will be explaining some of the votes that been somewhat controversial about health care. i talked to him the other day and he says when he has a chance to explain to an individual voter why he supported the health care plan and what he believes it will mean for that individual, he feels like he can make a real difference. the question is, will he have the money or the time to get that message out to another people and will they buy the explanation? since todd young is a first-time candidate it will depend on his ability to raise money. he will have an id problem unless he can raise enough money have enough advertising. as i said before, it is a very difficult district in which to advertise. you have to rely on a lot of radio and cable television.
big bucks and advertising in major markets. i hate to say it but money will play a huge role. baron hill had over a million dollars at last check. but todd young was raising money at about the same pace. so if toddy and can keep up the momentum and you see some national groups come in -- national republican campaign committee and the democrats' campaign committee -- that is where the difference really comes in, is whether those national groups come in and spend many in the district. >> social security is not a huge problem to correct. we corrected it under ronald reagan. had to do something is back in those days. now we have to readjust the dan. the commission -- there is a commission to offer recommendations. those recommendations probably will not be forthcoming until, i guess, in december. then we have to go the whole package up or down. but we will fix social security. we need to keep it like it is
and not privatize of like my opponent wants to do of that is why i am criticizing him. >> i lament the fact that congress has been so irresponsible with our finances, that they spend our retirement money on everything but our retirement. passing a trillion dollars stimulus package, pork barrel piece of legislation, when we have in central programs out there like social security that need to be preserved. plus baronet is the only one in the race to endorse is privatizing social security -- baron -- something he scares people in his commercials. >> i think social security will be a big issue in this race because there seems to be a difference between where republican todd young stands and democrat baron held does. we are not quite far enough into it to be able to distinguish where the differences lie but it is clear that baron is going to make quite -- tried to really have -- distinguish his opinion from todd young and there is
going to be a debate about whether privatizing social security or having some kind of private accounts as an issue. todd young is going to spend a lot of time bringing up some of baron held's past votes, including his support of the federal health care of law and the unsuccessful cap and trade bill that the governor of indiana highly opposed. there is a concern about federal spending. and b bobaron hill -- he is a blue dog democrat, so eat he is considered some conservative in spending, i would expect todd young to spend a lot of time talking about the federal budget and deficit. there are so few races where the districts are competitive. they're really only a few dozen. those are the places where we watch to see what happens in this happens to be one of them. this is a big race. plus, you have a democrat who did vote for some of the major
things president obama was seeking, but also a guy who is somewhat conservative so i think you will really see a test of how voters feel about incumbents and the democratic party in this race. >> c-span pocket local content of vehicles are travelling the country, visiting communities and congressional districts, as we look at some of the most closely contested house races leading up to the midterm elections. for more information, go to c- span.org/lcv. "washington journal" continues. host: for the next 45 minutes it is your turn to weigh in on the tax-cut debate, whether or not to extend the bush tax cut for everyone or just for the middle- class and the low wage earners. today we won't divide the phones lines a little differently -- if you support extending them for all, --
our guest, alan viard, is resident scholar at the american enterprise institute and former senior economist for the council of economic advisers from 2003 until 2004. we will get his comments and get your comments as well. let's just begin with your thoughts on this. do you extend the tax cuts for all? guest: i think it is important to include the high income people because that is where you get them most powerful incentive effects. i think president obama has taken the wrong approach saying i will extend everything below
high income levels with no budgetary of sets but not extend most of the cuts that applied at a higher income levels. i think having an extension of some of the high income cuts, selected extension -- we could actually get some of the income tax cuts extend it while still keeping the revenue loss below what the proposal would involve. host: you say you have to extend for the wealthiest americans because they have the most money to invest in our economy and grow our economy? guest: that is one of the most powerful reasons. their tax rates are relatively high to begin with. this is a fact people do not always realize. when you impose a tax increase on income above a certain amount, that you are actually collecting less revenue relative to the incentive of fact that you would for other kinds of tax increases because the first $250,000 it needs -- is not subject to the tax, but yet the disincentive if that is just as strong as if you were taxing the whole income because it is
the tax rate on the last dollar that in turkey -- determines the incentives. host: what about the folks who argue the wealthiest americans, they will just say about the money. they don't actually turn around and invest in r&d or companies? guest: the savings is what finances investment. that is what we want for a long one growth. we want -- one savings the capital markets will translate into investment. host: let me show you this opinion piece and "the wall street journal" written by a harvard political economist. he says tax cuts versus daniels. evidence is in a. a review of over 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth.
guest: an interesting set of results he obtained. almost from bird and i would have expected but it is what shows up in the data. i think his results highlight the importance of spending restraint, which is something i think is falling by the wayside. neither republicans nor democrats are saying the things that need to be said about restraining federal spending. we are obviously hoping that president obama's fiscal commission will come up with a credible plan in december. i just hear partisan deadlock may prevent real action. in "theheadline washington post." a plan put out by mitch mcconnell. the cuts would be permanent. it would nearly double the deficit.
he would also extend some other tax cuts at a price tag of $4 trillion over the next decade. first let us just take a portion of extending the tax cut permanently for everybody. guest: i think it is excessive. we don't need a $4 trillion package. the plan is right to make sure that i and, reductions are included in there. but it is a very expensive package. kabul problem with president obama's policy is you're getting 75% to 80% of the budget cost under his proposal because he includes in the middle class tax cut, the alternative minimum tax relief and the only party is leaving out as most of the high income rate reductions which exactly provides incentives for savings and investment and long- term growth. a lot are criticizing mcconnell plan because of the deficit, fair enough, but you did most of the impact under president obama's approach but not getting as much of incentives for savings and investment. host: president obama's plan
adds about $2.80 trillion to the deficit. guest: the difference is about $700 billion before you take interest costs into account. maybe a little more because of the state tax differences. with interest, the difference is probably $1 trillion. but the part that he is sacrificing to limit the death of the impact is i think the more balanced approach would be to have some middle-class tax cuts. i also think both parties need to be doing something more about spending restraints. host: mike, who earns more than 250,000, middle river. caller: i have my own business, i have been making about $600,000 every year. this is going to bring taxes
back to its normal level. when i earn more money, i am not going to spend it, i am keeping it, because i am worried about the economy. host: let me ask you something. we lost him. sorry about that. something from the tax foundation. for mike, who makes more than $250,000, he is married, has two children -- let's say. the difference in the amount owed if the bush tax cuts were in effect in 2011, the difference is -- or if you are in every couple and you make 500,000, the difference is $123,900 under bush, so it does
not seem like much of a difference. if you are already paying $61,000 in taxes, thus $4,000 make a difference? guest: the dollar value is not the key thing to look at. the difference between the policy is only applies to the excess above $250,000. the revenue change is not all in that dramatic. on ordinary income, you are going from a 35% bracket to 39.6%, as well as bringing back other stealth deductions. and because of the health care law, we have the medicare contribution coming in to hit interest income by another percentage. you are talking about a significant change in that tax rate. it is not only impacting tax
payments. you are not getting that much additional revenue but you are creating a much bigger disincentive. host: chris in the florida. go ahead. -- chris in florida. caller: i think a lot of people get this wrong, especially in a bad economy, about tax cuts. we cannot afford for the government to take money from the private sector. my brain works. i know if the money is taken from the private sector, in any area, that is less money that will potentially end up in my paycheck. simple as that. what i think it is funny, too, why are they even talk about
renewing tax cuts for the middle class and fopoor? guest: he makes a good point. the bush administration, the ironic thing is it is criticized for the impact it is giving to the rich. however, large tax cuts were provided to middle income and low income levels. frankly, it the incentives in savings and investment, relative to the revenue loss that was being incurred. now we are recognizing that reality, talking about extending those tax cuts for people which did not exist. host: the next phone call. chris. caller: i am asking your guest, and if he is going to be pouring all this kool-aid, how much are
the american people going to drink? as the republicans were leaving office, what was happening to the economy? now they want to extend these tax cuts, for what reason? the people that have the money are still going to war in the money. the people that do not will spend the money. -- are still going to horde the money. guest: i do not know what "horde the money" means because that is exactly what we need to build up economic growth. capital accumulation is one way to improve the economy.
education is another. there are other policies that we need to look at and address. but from the standpoint of tax policy, the question we have to ask ourselves is, how do we build savings and investment to drive growth? host: david from michigan. he opposes tax cut for all. caller: you brought up the point of capital investment and savings, helping the economy. that was one of the things ronald reagan was all about. one of the things that they did was move all of that investment overseas. you can see that by the crumbling of all of the industries in america. host: david, hold on the line. alan viard is shaking his head.
guest: investment was very strong in those years, so i do not know if it is true that all of that investment went overseas. caller: that may be true, but i still plants being sold here. i lost my job because it went overseas. your data is just words. i saw the reality. guest: no, the data that i saw it is the reality. the data and applied to the country as a whole. you always have the process of resources shifting. in the capital system, it is called creative destruction.
money is always moving into industries that are stronger. obviously, we could always give these industries a bailout, a tax measure, but that is not our goals. we want to build up over all the best in the country, whether or not plans are shrinking in any particular industry. host: do you believe that we have to extend the cuts for all because small business owners will be in snared, letting the bush tax cut to expire, a lot of them making more than $250,000? guest: that is a half truth. i think it is disappointing that the republicans have latched onto the small business argument. only about 3% of the past through business owners,
providers, corp. holders, they would be the ones hit by the higher rate. income, employment, economic activity at these firms it is very concentrated, so that translates to about half of past income earned in the country. so you have a large volume of economic activity taking place, that is being financed by the very small 3% of owners creating the investment. by definition, that means a lot of these owners are going to e get hit by higher rates, and they are not small firms. we have other large firms organized as corporations, and their income is head on dividends and capital gains. when you let these tax cut to expire at the top is an increase of disincentives by big and small pass through firms, small
corporations. we should not be bogged down in saying it is just small business. host: but let us take a look at the potential tax changes in 2011. rates will revert to 28% time, 36%, 36.6%. what will happen if the tax cuts expired. in part, the emphasis i am questioning here, the notion that all middle-class tax cuts have to be extended, dollar for dollar, with no budgetary offset, while treating the hawaii offsets as something
else. host: washington, d.c. you oppose this? caller: yes, i oppose tax increases, it should be based on families. my daughter has triplets and she makes more than $250,000. making her pay more taxes will be unfair. one of her kids need more services. it would be a crime to make her pay more taxes. pay more taxese mak when all of that is only going to go to big business? host: can you talk about the connection she just made?
guest: obviously, bailout is unquestionable government policy. the government has all lot of spending commitments, and those commitments are related to the growth of health care spending, to a lesser extent, social security. we have an explosive growth slated to take care in three -- take place in medicaid and medicare. we also have a new set of subsidies to provide health insurance to those who purchase under the new law in 2014. so we have a huge rise coming in health care costs. the question is how we are going to meet that challenge. i think it will be a combination of spending restraints and tax increases. the tax increases cannot comes only from the top 3% of the population. president obama's situation on
that is simply unrealistic. host: next phone call. caller: who provides most of the jobs in america? it is the corporate companies. if you start taxing these people, you will not produce jobs. one point that has never been made it is the direct correlation, when you see the stock market crash, barack obama was poised to win the white house, then the stock market pulled back. corporations were scared of what was coming, energy, cap and trade, tax says. and the difference between the bush tax cuts, the people making the money, it would be $7,000 difference. that could be a decision to purchase a new car, go on a trip, and they are not going to spend the money now.
is that really going to help the situation we are involved in? guest: you make a good point, echoing my point. they are an important poinpart f driving growth in the country. host: jim, you are next. caller: somebody has to pay. we need to generate income. the same people that put us in the ditch want to continue to put us in the ditch. guest: you are right, someone has to pay. the problem with obama's policy was too narrow. he is clinging to this idea that we can only tax the 3% at the top. economists across the spectrum have said, no, you cannot get all the revenue needed from that
group. they are wealthy, obviously. even so, their share of the national wealth is not enough to finance the spending commitments we have made. that is a conclusion that many have come up with. numerous scholars, the brookings institution. the reality is, we have to bring back some of the spending commitments or we need to tap into a broader base of taxpayers. host: this had blinded in "the wall street journal" -- this headline in "the wall street journal" --
guest: this is a striking trend. this is the dilemma that we face. the entitlement spending is slated to grow dramatically. medicaid is a big part of that. realistically, we have to be examined those spending commitments or recognize there will have to be a broad foundation from which we pay those things. the president's approach, only increasing taxes on the top 3%, have half of the country not pay income tax, that is not a viable approach, going forward. at some point, we will face the reality on this and say, we need to reexamine the spending or we
need to tax more broadly. how long it takes for that to happen, and how high the top marginal rates have gone, how much damage there will be, is yet to be seen. host: dee dee insane roberts, missouri. you disagree with the tax cuts. caller: president obama has quantify the tax cut with a $figure, and the rich would receive $100,000 per person.
he is also spending tax credits for $250,000 for everyone. i would like to know when you're just have to say about that. guest: the president has been emphasizing let me that the tax cuts and expanded -- extended would apply to everyone because in millionaire would still get a tax cut on the first quarter. but we are giving money to the millionaire without having an incentive to affect. the incentive applies to in the last raid on the dollar. -- rate on the dollar. we need to provide an incentive effect to provide investment and savings. host: karen, you support tax cuts for everybody. caller: i would like to ask your guest, i saw an interview with
charlie rose and peter orszag. he was talking about our economic condition today. he said, because of the political atmosphere, it would be impossible to do what president obama would like to do. if you extend the tax cut for two years, perhaps, and then return back to the clinton tax rate, and reduced spending -- spending would take about five years to come into effect. the conditions of the states, most of them are economically deprived as well.
how do we get out of this? we barely hear the truth about anything from the media today. how do we get out of this situation? guest: in is a complicated situation. the media struggles to describe this because there are so many moving pieces. i am pleased that you described peter orszag's plan correctly. most people attached on to the fact that he wants to have them for two years, but then they would expire. that is not the worst approach to be adopted. if you take that money and pursue spending constraints, then you would do an enormous amount to reduce the deficit. yes, you will be creating disincentives for investment,
st. petersburg, florida. david, what do you think about extending the tax cuts? caller: we need to do more. we need to tax cuts -- cut taxes more. we need to cut government spending. you know, it is not the government's money, it is my money. the people i employ appreciate the fact that i pay them host: you have had the bush tax cut since 2003. what are you doing with that extra money? caller: i bought a building, a renovated the building. my insurance costs are up because of obamacare. and iuilt a building, hired dozens of construction people to do this. i increased my business staffed by six people, and there is an empty lot next door.
i would then like to franchise my building across the tampa bay area. if you put money in my pocket, do not deregulate me, i could do far more than the government could ever do. host: one more question for you. as we look at a chart of those that make more than $250,000, and you look at the difference between the bush tax cuts and obama plan, it is an negligible difference. if you are going to be paying $62,000 in taxes, is it that big of a deal to make $3,000 more? caller: is a big deal to hire somebody because i cannot keep them on or hire somebody else? it is not the government cost money. stop thinking in the central economic keynesian way.
you think it is the government's money, but it is not. host: i am just putting the question out there. caller: you have an opinion, it is obvious. guest: if you have an opinion, it is not obvious to me. at the same time, we have to fulfil the government's spending commitments, but there is a point that we have made -- that we have not made. how big are these rate increases, are we just going to go back to normal? what people do not realize it is the stealth provision that has not been talked about much. the other income medicare tax, part of the law, is a 3.8% tax on interest, dividends, interest gains, with only a few exceptions. that is a 3.8 percentage point
increase to those making above $250,000. if passed through congress -- it passed through congress. if we let the tax rate to expire at the top, as president obama is proposing, the rate in 2013 will not be back to the clinton levels, they will be reborn eight percentage points higher. -- they will be 3.8 percentage points higher. host: so what does that mean in dollars? caller: -- guest: in terms of interest on income, it is a small increase. 40.8 is the clinton level.
starting in 2014, you have 3.8% more, so you have even more. people do not know about this tax. it is also misnamed, by the way for. it is not a contribution, it is a tax. it is not a tax on unearned income. it is a tax on income earned by savers. the medicare contribution is also misnamed. host: a viewer writes -- alice, you oppose this idea for
all, why? caller: this is the greatest transfer of wealth in the history of mankind, to the wealthy. they should be paying the taxes and paying for the war in the financial disgrace they have brought on the country. yes, i oppose these tax cuts. host: phil, who makes more than $250,000 a year, bowling green, ohio. caller: my opinion is, these bush tax cuts were initially implemented as being temporary anyway. why not make them permanent to begin with? guest: obviously, that is a fair question. we are only facing this question because they were enacted on a temporary basis. the decision to make the 2001 tax cut temporary was a decision
by the republicans. they needed to not have any revenue loss be beyond 10 years. host: phil, are you still there? go ahead. caller: they were temper to begin with. -- temporary to begin with. i think both tax cuts were political moves by president bush. in today's economy, we talk about creating jobs. the demand for goods and services is just not out there. guest: i think we need to set permit tax policy not based on the business cycle. obviously, it is important.
it determines whether or not people are looking for work. we can do that through monetary policy at the federal reserve, stimulus policies. but from the standpoint of a permanent tax cut, that needs to be driven by long run growth considerations. the one thing we know about growth is saving and investment is critical. host: bernard in massachusetts. you oppose this. caller: i remember during the ronald reagan years, we were told if the rich got more money, the economy and country would be better off, and then we had the reagan recession, which included the collapse of the savings-and-loan industry. then clinton reversed the process, at least slowed it down, and then along came bush ii and cheney, and they said the
same thing. that brought us to the mess that we are in now. now this guy is saying, i have a great idea, it did not work under ronald reagan, it did not work under bush, so let's try in a third time because the third time never fails. we give the rich lot of money and piled into their pockets. we are all going to be better off because the rich care about us, they care about what happens to us. they care about whether we survive or not. they do not care about buying a new yacht or going to cabo san lucas. they care about the little people. that is insane. guest: that is exactly not the premise that i am putting forward here. the rich are not driven by altruism, desire to help other people, particularly. they are driven by a desire to
pursue after-tax returns. the way to motivate investment is precisely to provide and that -- incentives for investment and not rely on some notion of charity on their behalf. that would absolutely be insane. that is not the philosophy being pursued here. so many try to look at the different economic reform in different time periods and compare them and it is tricky because of other factors affecting the economy. it is tricky to do that, especially when you are selected on how you look at those years. we also have some growth in the reagan years. if you are trying to classify these things, first of all, you need to do it more carefully, and realize that there are other factors going on and we are looking at long run growth.
host: we are out of time. we appreciate it, alan viard. we will turn our attention to the risk agency. coming up next, arlen specter will be joining us, talking about defense spending, potential cuts to the pentagon budget. first, a news update. >> the white house says it will convene the first ever summit on community colleges on october 5. president obama wants the u.s. to lead the world in a morning college degrees by 2020, and is -- awarding college degrees by 2020, and is joined by jill biden. the u.s. is accusing iran of intimidating un inspectors in an
effort to influence their findings. the charge follows iran's decision to bar two inspectors after they reported that a runoff was experimenting with pyro-processing, the process used to purify uranium. the chief u.s. delegate to the iaea tells the agency's board, barring inspectors because the report accurately is unprecedented, he said. the u.s. embassy in jordan has issued a warning for those in the city of -- they say they have received information about a credible threat, but did not provide details. >> warren brown writes the
weekly car column for the "washington post." >> it is horrible to say we would not have had a black middle-class if we did not have general motors, ford motors, chrysler. >> he supported the auto bailout. he will talk about his life and what is ahead for carmakers. >> the conflict between the first amendment and national security. "necessary secrets" this week on "book tv." >> all this week, followed the congressional chronicle that the c-span video library. it is a great resource for anybody who follows conference.
it is free to any time. watch what you want, when you want. >> every weekend, experience of american history tv, starting saturday. 48 hours of people and events telling america's story. historic speeches by national leaders, eyewitness accounts of events that shaped our nation. "american history tv" all weekend. host: senator arlen specter, democrat of pennsylvania, member of the appropriations committee, thank you for being here. we want to show our viewers what defense secretary gates had to say about the pentagon budget and potential cuts. >> as leaders in government and
industry -- and we owe it to the men and women in armed forces to provide the support to complete their mission in return safety. what do i think we can to succeed? we have established, reasonable reduction targets, we are focused on savings, we can identify the excess after an era of double-digit growth the congress and president and i are all supported in changing how we do business. i know there is a lot of speculation about whether these efforts will be successful war will continue -- or will continue once i am gone. the thing that i want to underscore is that i believe it will be the case. this has been a team effort. these initiatives have involved a significant number of people across the department who are now invested in the process and believed in it.
this includes both civilian and military leadership in the department of defense. i have no doubt, for years to come, these efforts will continue, as civilian and military leaders continue to see the benefit in adopting process says, that not only save the taxpayer money, but allow us to transfer money from overhead to real military capabilities. host: the headline in "the washington post is -- "the financial times" sat down with mike mullen and had an interview with him. he said -- guest: i think what the
secretary of defense has outlined is preeminently a reasonable period you have an enormous defense budget. -- is preeminently reasonable. you have an enormous defense budget. we are facing troubles because of the size of the debt and deficit. the military had been rising consistently. i think it will call for a sharper look on what commitments we make. we asked about the wisdom of what was happening in iraq. notwithstanding the announcement of withdrawal, we still have 50,000 troops. i think she makes sense. host: admiral mullen goes on to say --
as an operator, you say it is realistic, but you think it really is, over authority over purse strings? guest: 84 and up -- a large amount of what congress appropriates our jobs in their own districts. by and large, when an individual member or group wants to support a certain weapons system, and the department of defense said givenhey do not need it, the current situation, and they will have their way more, when they talk about cuts.
host: the defense authorization bill is supposed to come to the floor next week. harry reid gave us a preview. guest: the senate has been stagnated by gridlock to the detriment of the american people, filibusters' from republicans. there are many republicans who do not want to take up the controversial issue of don't ask, don't tell. we should have abandoned that a long time ago on the issue of equality, the gay matter. if we take it up, it will be a knockdown, drag down fight -- that is the u.s. senate. host: there is an offer to take a don't ask, don't tell out of the authorization bill.
will not pass? guest: i think it will be repudiated. when you make a distinction of that kind, it is not going to be followed any longer. there is an evolving change in the attitude of the american people, the values on that subject. i think we are well past that point of tolerating the anti- discrimination. host: you say there has been stagnation because republicans have been holding up legislation. you used to be a republican. coming to you the close of your tenure in the senate. what would you fix about the senate? guest: first of all, i am no longer republican because i refuse to go on with party
doctrine. we need a stimulus package. the republican leadership, republicans, generally, would not even talk to the democrats. three of us would. out of 10,000 vote that i have cast, i think that is one of the more important. that terminated my relationship with the republican party. how are we going to fix the senate? if we can get medical -- middle america, who wants to govern from the center, to participate, then we could have faced with the government. but when you have a strong center like joe lieberman, who cannot win a primary -- i faced
the same situation as a republican. you see what happened to clear mechanical and in delaware. ill last clair mccask night. host: what about beyond the senate? before you leave, is there something that you wish you could fix about the government, do something differently? guest: beyond what i just said, getting participation from people in the country so you do not have extremes on both sides, i would like to see more funding for the national institutes of health. i have taken the lead on that as chairman of the appropriations subcommittee, raising the fun thing about $10 billion more in
the stimulus package. introduced legislation two days ago to be able to use federal funding on stem cells, which has great promise for curing the maladies of the world. i would also like to see the supreme court televised. we have a serious situation where nominees from the supreme make commitments in the confirmation process and then totally change, so the will of congress is disregarded. when we enact legislation, we do it on the basis of a record, where we have hearings. you have the nominees saying we will follow congressional intent. then once they get into office, where the standard used to be constitutional legislation, if there is a rational basis, they
adopt new tests like congruence and proportionality, which no one understands. justice scalia has said it gives the court open season to do what ever they want. you have the chief justice and others making promised to follow precedents, not to drop the system. -- jolt the system. then you have citizens united allowing corporations to pay for political advertising, which is a lead it into a tremendous imbalance in funding, which is contrary to having the system decided on equality, as opposed to high-priced television commercials. i would like to see the court televised, so the american people could understand. if they understood that nominees
were taking one position before the committee and briefly thereafter, doing a 180 degree u-turn, there would be some pressure for them to maintain their positions. host: we will talk more about this. that is the headline in "usa today" -- we can talk more about that. you also have some legislation dealing with that. charlotte in north carolina. democrat. go ahead. caller: i find it rather amusing that the republicans are
so concerned about the budget deficit. shamefully enough, it is these shadowy meet that are profiting off of the wars, not only robbing the taxpayer blind, but also these other countries of their natural resources. how much will it cost taxpayers to rebuild these nations? guest: it should not cost them anything because we should not be engaged in nation building. when people express concern about the deficit, they are right. people have expressed concern about the national debt, they are right. when i was elected to the senate, the national debt was $1 trillion. by the time president reagan
left office, and he was touted as a conservative president who would not engage in excessive spending, but national debt was $3 trillion. now the authorization has put us closer to $13 trillion. when you talk about the deficit, i think that is an important point that we ought to be acting on. host: the debate over extending bush tax cuts, the republicans want to extend them for everybody. obama's plan is not to extend them for the wealthiest americans, but would permanently led to extend them for the middle class. olympia snow believes there is a compromise there. she would like to see an extension for everyone for just two years. do you fall into that category? guest: no, i do not. i think the president is right. i think the cut off at $250,000
is a realistic. everybody would see that benefit. the problems of the deficit are too acute. people who make more than $250,000, as a matter of fairness, ought not to have the lower rates extended. when you talk about job opportunities, we have had problems stimulating the economy, even with those tax cuts in effect. when the bush tax cuts were enacted in 2001, i was one republican who disagreed with the proposal. the president wanted 1.7 trillion. senator jefferson and i've provided the votes to reduce it to hundred $50 billion, to go rather into education. those tax cuts were very large.
they had 10 years to work. i believe a re-evaluation is in order. host: michigan. georgia on the republican line. caller: democrats are like peg bundy. when al falls asleep, she robs them blind. host: next phone call. caller: sir, do you know who joseph adams is? you were head of the warren commission. if you do not, that is a problem. guest: we have a lot of problems. tell me what your point is. caller: he said he killed president kennedy and no one has ever heard about it. guest: i do not know that there is any such state.
there are a lot of rumors, comments about what happened in dallas. i have not heard a lot about them. there are libraries written about conspiracy theorists. i was assistant counsel to that commission. i will stand by the warren report. there have been exhausted studies done. abc did a two-hour story special and they called my one-bullet theory a fact. i would be glad to look at something else. host: next phone call. republican line. caller: president obama made the statement, if this costs over
$700 billion, -- well, this is going to cost more than $3 trillion. i am conservative. how do you intend to pay $3 chilean -- truly and which would add to the national debt -- trillion which would add to the national debt? pretty soon, this country will be going down. i want to know how you are going to pay for all of this money through a takeover, which you passed. -- pay go, which you passed. guest: any additions to the budget would have to be paid for. i believe there are significant
economies that can be made. we talked about one earlier today. talking about hundreds of billions of dollars from the defense budget, that is a good start. host: oakland county, michigan. jamie, you are a republican. caller: you are one person that we can believe when you speak. i am just puzzled by hal republicans are destroying their party. -- how will republicans are destroying their party. -- how republicans are destroying their party. host: are you referring to what happened in delaware? caller: i am not worried about the tea party. dick army, and i saw him when he
went down. he has the biggest control over the tea party and he is destroying the republican party. host: can we get your thoughts on what we saw from the tuesday primary results, what it needs for the republican party? guest: the result in delaware were shocking. to have a solid member of congress, like mike castle, be defeated by o'donnell. i saw the right-wing takeover of pennsylvania, which made it impossible for me to remain a republican. totally different thinking. i voted for the stimulus package, funding for education, national institutes of health. you have senator bennett,
senator mikulski, now senator council -- castle. there are comments in the morning analysis that this could kill republican chances of taking over the senate because democrats will win with candidates that are so far to the right. but that may not necessarily be so. we have a republican running for my seat in pennsylvania who has a 97% approval rating by the conservative party. that is much more conservative than senator santorum was, and he lost by 19 points. the republican candidate, with that rating, is suddenly moving to the center.
these candidates backed by the t party from the very far right -- like the guy from pennsylvania -- have a way of moving to the center. people tend to forget heavy advertising, lots of money provided by the supreme court decision, allowing corporations to make contributions. it is a very tempestuous pot that we are looking at. host: what are voters reacting this way, going to the polls, voting for these candidates? guest: there is great public discontent for what is happening in washington, for many reasons, and some of them are for good reason. people are madder than hell about the gridlock in washington. we saw the signal last summer in the town meetings.
i held one in a town called lebanon. usually there are 12 people, but this time there were 1200. i was traced by a man who said that god was going to -- chased by a man who said that god was going to chase me down. he was expressing concern over the health care plan, which was controversial. that is why people are looking for some new faces to change the system. they have a point, but we have to respond. we have to legislate. we have to stop the gridlock and look sensibly and what we're doing here. host: florida, independent line.
you are next. caller: god bless you. guest: thank you. caller: i am new hampshire of the other day world war i veteran. he wanted to do something about the disabled veterans. can you tell me if anything ever happened to that bill? thank you. guest: i do not know the specific bill you are referring to, but there are movements on the veterans affairs committee, where i was for six years. i think we have to do more for our disabled veterans. the first veteran i knew was my father, an immigrant from russia, came to the u.s., was a disabled veteran.
that was the first experience i had with congress remitting -- renigging on a promise. there was a big march on the washington mall. president hoover called up the army and fire and killed veterans who were protesting. one of the blackest days in history. ever since, i have been on the way to washington to get my father's bonus. we knew to do more for veterans. there are many of us pushing for that. host: what will you be doing next, when you end your career in the senate? guest: i am thinking about my
next move. former senator george mitchell says people who leave the senate should take some time figuring out what they want to do. i am going to take my time. host: are there certain areas of public policy that you would like to focus on? guest: that is inarticulate rephrasing of the last question. there are a great number of possibilities. i have had contact with people making suggestions. so far, i am just thinking about it. .
want to come out having a tax break. that didn't help because if you pay more tax you have more money to spend for the rest of everything. >> i have the question. the question about the veterans her husband who is in need of help, she is correct. just yesterday i met with the secretary of veterans affairs and we are dealing with a problem of disability arising out of agent orange, where our soldiers much exposed to that element. we are expanding benefits in that line. i use that only as an illustration. we talked earlier about the need to expand benefits for veterans.
we are looking for a tax structure which is fair. we have long agreed with a progressive tax, that is, the people who earn more out to pay a higher proportion of their marginal dollars, and we are trying to reduce expenses as we talked about $100 billion in defense and other cuts, which i think we could make to move toward a balanced budget and try to get a tax policy which is fair to all the taxpayers. >> let's go back to cameras in the courts. another trial run looms for cameras in federal court. this federal trial -- some federal trials could be televised. the judge that approved the plan said he was responding to interests among members of congress who have pushed open courtrooms to television broadcast. this wouldn't affect the supreme
court. you have legislation to open up the supreme court to cameras. is it realistic? >> you are referring to a "u.s.a. today" arm and i'm quoted there as saying what they are proposing on a pilot program to televise trial courts doesn't go anywhere near the core problem. the core problem on other legal system and public understanding involves what the supreme court of the united states does. because they decide all of the cutting edge questions. they decide about affirmative action, who goes to what schools, healthcare, whether you could have medicinal marijuana. they decide about who gets the death penalty, the right to live. they are change being the law very frequently. now, the senate has some limited opportunity to find out what their philosophy is. and we have judiciary committee
hearings. the nominees come before the senate and they make commitments , for example, to not jolt the system, to follow the precedents. then they get to the court and they totally change their views. i think that the american people need to know what is going on. i believe that the court ought to have the last word. and judicial independence is vital in our society. but the public has host: some
justices have said they don't agree with public cameras in the court. justice kennedys has said i don't think it is the best -- in the best interests of the institution. the dynamic works and discussions the justices have with the attorneys during oral argument is a splendid dynamic. if you introduce cameras it is human nature for me to suspect that one of my cheeks is saying something for a sound bite. don't introduce that into what is now a collegiatal court. our court works. we teach by having no cameras and we are different. we are judged by what we write and over a much longer term. we are not judged by what we say but all in all i think it would destroy a dynamic that is a splendid one and i don't think we should take that chance. guest: when justice kennedy talks about one of his
colleagues looking for a sound bite, i think that denigrates his colleagues. i don't think his colleagues would be looking for a sound bite. but if they do, that is a minor problem compared to having a populace that doesn't understand or know what is going on. when he says they express themselves in their opinions, i challenge anyone to read justice kennedy's opinions and see if they can figure them out. justice kennedy is the exponent of testing congressional legislation on a test called congruent and proportionate. justice scalia, i think, is correct in saying that is a flabby standard to enable the court to do whatever they choose. i can understand why justice
kennedy would like to have the power to decide as he wishes. he has been the swing vote in a lot of cases. if you take a couple of them, under the americans for disabilities act for example they decided 5-4 one way and 5-4 another way on a case. i read those cases and can barely understand them myself. so when justice kennedy talks about reading their opinions, he is way off base. what minor problems there would be would be far outweighed. justice kennedy is a public servant like arlen specter and the public has a constitutional right decided by the supreme court to have a newspaper reporter in there making notes. but you can't have a radio station, you can't have a television camera. when they had the case of bush versus gore and the supreme
court decided that case 5-4, the presidency was decided on one vote. senator biden and i -- then senator biden and i wrote chief justice rehnquist asking him to open up the proceedings and they declined. they did put out an audio the same day. the court won't on do that now. but i think if the public understood what the court was doing, there would be a -- they would be a lot more responsible to their sworn testimony. it has been well noted the supreme court watches the election returns and the public ought to have that kind of information. host: augusta, maine, david on the republican line. caller: i usually have a lot more preparation before i do this. i'm on again and off again caller. i have been calling in a few
years. i used to like the old format where the interviewer asked a few questions and the guest answered and it was all gone calls after that. the last question was a bit long-winded. the other question about what are you doing after your senate career you completely didn't answer so she had to rephrase it. this is indicative of what the democrats do. watch a robert gibbs press conference. one thing that i have heard a lot this morning out of senator specter is i and me. i don't hear a lot about his constituents at home. i don't hear a lot about his voters, people from pennsylvania that elected him. you worked awfully closely -- i'm from maine so you are familiar with the two senators here in maine. you worked closely with olympic why snowe -- olympicia snowe and
i used to have a lot of respect for you before you changed parties. i'm sure your constituents in pennsylvania do not reflect your opinion any more -- host: we got your point. let's get a response from the senator. guest: i don't have to make any apologies about my constituents. the past 30 years i have been to virtually every county every year and have a reputation and record for excellent constituent service. when i'm asked questions about what my plans are for the future, they are being formulated. that is a highly personal question. i think i'm entitled to think about that. i'm going to be in the senate for several more months and i am weighing what i want to do. you asked me a question on a substantive matter, i'm glad to give you an answer. you say that a response on the supreme court was a little too extensive for your taste, well,
that is a very, very important subject. as a matter of fact, that is the subject which i had wanted to talk about. but when greta was asked the other questions i have been glad to respond. but there is a big issue there which is largely misunderstood by the american people and for the most part the people who watch c-span have some political influence. chris:. democratic line ino -- -- in ohio. caller: i want to go back to palin. this thing of taken what she has in the bank and getting all the governors and senators in, that is brought on, too, by a very instrumental person named karl rove. he is right behind her. and this happened a long time
ago getting daddy bush in. they go around when the economy and people are down to the very minimum in their finances, they go around to the poor people and ask for $100 to vote for them. so, that happened here years ago. they got a lot of money on the republican side and get bush in. host: let's get your thoughts on sarah palin. guest: when you talk about governor mailing and karl rove you are talking about people with definite political ideas and the center of the republican party has to express itself. right now their intentions are pretomorrow negroponte. if you look at what has -- predominating. if you look at what has happened
in those states it is a clarion call for the they are to come out. host: hardyville, kentucky, samuel. caller: i was wondering why they don't have all of voluntary budget pay of. because the million temporaryaries -- the millionaires are trying to do something with the budget but they don't put out anything to help pay it down. and i don't see why obama is wrong on everything. there is nobody wrong on everything and i believe there is something behind the republicans causing them to say no on good policies. they know some of the policy is good but they say no any way. that is the way i see that. guest: i think the gentleman is right. someone is not wrong on everything. even a clock is right twice a day when it is stopped. when you have criticism of
president barack obama most of it is politics so thick you could cut it with a knife. host: thank you for talking to our viewers. coming up next we will turn our attention to that new agency that was ford under the new financial regulation bill. first the news update spr c-span radio. >> it is 9:14 a.m. eastern. more on the primary election results yesterday. democratic party chief came crain speaking earlier says tea party backed candidate christine o'donnell's win in delaware show democrats have a super chance to win in november and contain control of the senate. she won the republican nomination for the senate seat once held by vice president joe biden. the president of the world bank in remarks in beijing says unemployment in the united states is likely to remain high but a double dip recession
probably will not happen. also in beijing ambassador steven bossworth arrived to talk on restarting the north korea nuclear disarmament. in remarks to rortse he said it will take time -- reporters he said it will take time. north korea walked out last year to protest criticism of the rocket launch. prospects for resuming dimmed after the sinking of a south korean warship in march. secretary of state hillary rodham clinton speaking earlier today says israeli and palestinian leaders are getting down to business tackling the key issues in the peace talks but made no mention of the settlement dispute on the west bank construction. secretary clinton is in jerusalem for a second day of talks with the two leaders. one day after meeting the leaders at a summit in egypt. those are the latest headlines on c-span radio.
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host: the office of financial research is a new agency formed under the financial regulation bill that was signed into law recently. it has the following powers. it can collect all data necessary from financial companies, banks, hedge funds, private equity fund and brokerage funds. it conducts research on potential risks to the su financial system and requires financial companies to submit periodical reports to determine which firms to monitor and the director of the new agency can issue subpoenas if companies deemed not forthcoming with information.
the bloomberg quote lobbyists calling this new agency the c.i.a. of financial regulators, why is that? guest: because it is getting into the atomic level of data that is provided by all sorts of transactions and positions that various financial institutions -- banks, hedge funds, private equity funds -- you name it, these institutions will be on the hook for providing very detailed information to this entity in a way we have never seen before. if you look at all of the regulatory agencies, it has been fragmented in a way in which the data has been provided to have them understand the risks that are posed to the system. so this is brand-new and probably with respect to the financial stability oversight council's role this is one of the biggest centerpieces of that new situation. host: you are talking about sensitive information that they will be required to collect? guest: sensitive information,
yes. i think that there is certainly a lot of concern today about proves si issues as it relates -- privacy information as it relates to information that will be gathered. and there is a lot of uncertainty associated with that and i think that creates some of the anxieties. until we see the execution of this we won't have a better idea. but it will be my expectation that for sensitive information, particularly consumer type information, they will be stripping out names, addresses, social security numbers and what they are after is the information that will allow them to understand the risk profile of the underlying institution. host: what is the information and how is it different from what the agencies were collecting before the financial crisis? guest: today for a commercial bank we -- institutions on a periodic, quarterly basis, report in the fdic call report
of income and condition. various information on the income statement and balance sheet, assets and liabilities but in broad aggregate categories. you will get performance statistics relating to delinquency and whatnot but you will not get a good sense of the direction which the institution is growing riskier. they need that more in realtime and much deeper level of information level so. host: so you said we have to wait to see how the agency will work. when will it be up and running and how much staff and resources? guest: there are some open questions with that. it will be an institution that is funded effectively for the first two years by the federal reserve. after that it will be self-funding by the institutions that will be overseen by the council. i have heard numbers up to $500
million to get it started. it will largely be a group -- set into two groups, a data center and research and analysis center. will that you will see a lot of technical oriented people sitting there. host: there is a "washington times" editorial in this new agency calling it big brother loves financial reform. one part of it is -- says this new agency can set schedules -- set salaries and benefits and the agency's director could pay salaries in excess of $200,000 a year to many bureaucrats. what type of person do they want to be applying for this job? guest: i will tell you from just personal experience that in order to attract the best and brightest to go head to head with wall street you need talented individuals. you need to pay for that. i realize it is a cost but i think it is a necessary cost in the grand scheme of trying to
stem stem wrick risk exposures. host: you were at city bank from 2007 to 2009 the chief risk officer for consumer lending trk citigroup, excuse me. then chief credit officer at washington mutual and chief risk officer at countrywide from 2004 to 2006. were you looking at the type of information this agency wants? guest: absolutely. we were looking very closely at the loan level type of information these folks would be interested in. what we are interested in particularly as relates to the mortgage crisis were the loss content of the portfolios that were starting to build up and be able to articulate and tell them there is a lot of risk building up. we need to take objection. host: so you were the guy said we need to get out of this, we have too much money in this area? guest: i would be the guy recommending we get out of it. host: so, given your past
position do you agree with having this office of financial regulation or financial research? guest: i seven do. i believe firmly that you cannot have enough information in the sense if you compare this to what we have seen from homeland security, getting that c.i.a. type of intelligence to be able to combat system yk -- you go getting another agency involved presents another burden for those companies to kind of come forward with that information. so, it can potentially create another regulatory burden. host: we are talking about the new office of financial research. our guest is clifford rossi of the first phone call mike on the independent line from austin. texas.
go ahead. host: hi, how are you. host: hi, mike. comment or question? host: two things. one comment is i really don't think and agree with this financial risk agency. the reason is that it is one more way for the government to spend more money, more taxpayer money, and to regulate businesses which i don't think it has any business in doing. i never agreed with the bailouts we did with the banks. as a business owner if i run a bad business no one will bail me out and i don't think the government has any business being involved in the public business. host: mr. rossi, why should the
government be involved? guest: first of all, i can't say -- and first i would say that there is a lot of blame to go around. banks and the regulatory system. but i will say since there was such a chat check list mick meltdown of how much exposure we had, we need to have focus and attention on something to be able to self-correct the next time before the next crisis happens. at the same time i'm mindful of the fact that the regulatory burden is there and it comes back to what i said earlier. you have to be careful of the execution of this. guest: not directly. what will happen is the o.f.r. is the eyes and ears like the satellite intelligence if you go back to the analysis with the c.i.a. they will report in to the financial stability oversight
council which chaired by the treasury secretary and has nine other voting members predominantly from regulatory agencies. that council will recommend action depending on what course they see. if we see that there are risks posed by large nonfinancial types of institutions as in the case of an a.i.g., they will take action to put them under direct supervision of the federal reserve. that is something new. host: let's show our viewers who will be sitting on the new financial stability oversight council. it has 10 voting members, led by the treasury secretary mr. geithner. ben bernanke will be on it.
host: if she sits on this what does it mean? guest: it increases power across the board. you have all the major regulatory agencies reflected on that council. so, from the standpoint it takes a two-thirds vote with the confirm makes by the secretary of trks to put a -- to put a company over in direct supervision by the federal reserve. it is a big improvement in the powers. go from there and say that in some sense you step back and say will is much to like about this and much to question about this as well. part of the questioning is that, after all, the regulatory agencies that we have on the counsel are those that in some opinion might not have done such a good job the first time around. host: michael on the democratic line from minnesota. caller: i would like to say that the bush years, you know, eight
years of bush with their rich tax cuts and the stock market, these people just ran rampant. all the rich stuck all of this money in their pockets. the stock market market run rampant. then as a final fairwell to the rich, bush handed this bailout of the stock market obama. i certainly hope that, you know, this organization that was created can fix this problem of just letting wall street be so out of touch with main street
america. host: bailouts and letting the big companies fail. on the two-year anniversary of the failure of lehman, will this new agency have the power to unwind a company like lehman brothers? guest: it will. the powers are there. as i go back, it is about the implementation of this. maybe i'm a little bit more pessimistic about it. i think there are great intentions along the way with this new council and what it is about. at the same time, you can rewind 20 years ago to the last major meltdown, the thrift or savings and loan crisis, we had a great amount of regulation recreating a number of regulatory agencies and with similar kinds of results. here we are 20 years later, new regulations, and it is not clear as time goes on that we ever learn our lesson. so i'm hopeful that things will be better this time, but i'm not
sure that what has been put in place will be a direct remedy to prevent the next crisis because, first and foremost, no one has been able to actually identify when the systemic risk event happens so while they will be tasked with collecting data and research and analysis, there isn't the ability there to yet have the models or analytics in place to say we are six months to a year ahead of a imagine strove -- catastrophe. host: when you were the risk officer for citigroup and countrywide and others could you see these risk events occurring? can -- did you see the hoisting situation? guest: a number of us were watching this. we were watching the build-up of home prices. we had the most sophisticated analytical tools and best teams in place. and at the end of the day the
best we were calling for was a soft landing in the housing market. there were a few people out there that were calling for more of a downturn than we saw. we were triangulating on a lot of that information. but as i said earlier, the risk folks in many cases were a voice in the which would areness. that is why i was with three companies in six years. i didn't stay too long at any of them for a variety of reasons. nontheless, that calls into question to get to the heart of this is that we need more air cover for some of these risks folks. host: if you were sort of seeing it but not necessarily the full impact how is the new agency going to see the risk he wants -- risk events happening? guest: before everybody had one look at the elephant. somebody a view of the hunk, head, tail but no one had a view of the whole thing. somebody has to be accountable
for owning the totality of the risk. we can't be blind sided that it is coming from the mortgage area or credit cards or whatever area. somebody has to own this because no one institution can do it. host: cornelia from iowa. caller: i would like to appeal to the american people not to be partisan. to look at the candidate and policies that are coming,for election there fall. host: we are talking about the new financial agency. do you have a question about that? caller: i guess what i want to say is whenever we give the government too much power, then there is a lot of danger in that and we are feamples and in one year we -- we are farmers and in one year we may make $250 much000 gross but our take da -- gross but our take home may be
$25,000 guest: there is an aspect of too much power and there is balance that has to be looked at. i get back to the point that we have a lot of bureaucracy here. you could almost liken it to creating another homeland security. some of the issues that are attendant with that. at the same time there is no question there was a huge gap in the oversight from a safety and soundness standpoint of our biggest institutions. host: you said it is like creating a homeland security. there are a lot of positions created when they created the homeland security department. are you thinking it will be on the same scale as that? guest: not quite. but i do think -- what it is doing similar to homeland security is it is bringing under a broad umbrella under the oversight of this the focus and attention of all of these other regulatory agencies so it is creating the office of financial resource and there is a lot of uncertainty about how much money they will be able to spend.
and i come back and call into question we need greater specificity. we had 2,300 pages in the dodd- freanching act that. is a lot to put on the table of what this is but this will be a lot of room left for rulemaking and implementation and jockeying for that. host: how many staff will it have? guest: i don't know the actual numbers. host: do you suspect there will be a fight over who is the director of the agency in the senate? guest: this position actually can wield a lot of power because it will give a lot of insight as to where risks of coming from. it may not be to the same level as the consumer financial protection bureau, but it will not be far from that. and i think it is is different there. host: tacoma, washington. caller: good morning.
my question is -- and comment -- it sounds to me on the face value of what you are saying that hopefully this is going to prevent or help stop messenger disasters with the hedge fund -- help stotch major disasters with the hedge fund running amuck and the housing market bubble and things along that line. my question is, will the agency be meeting periodically on capitol hill with the senators or representatives to get together so people can talk, ask questions and get concrete answers to where things are looking. host: oversight. guest: for sure the office of financial research had this independent director that is embedded in the treasury department and that director will be required to testify to the senate banking committee and house financial services committee on at least an annual
basis. so there will be therapeutic si object the information -- transparency. at the end of the day, however, there does need to be additional, say, sunshine put on the spotlight of what the actual council's work will be about. host: bill, republican line, cleveland. caller: good morning. i saw in the "wall street journal" this morning 50% of americans are not paying taxes, 50% are collecting some kind of assistance from the government. what is the risk management on the healthcare bill if 50% of the people can't pay taxes? how do they pay for healthcare if they don't get it from their employer they are supposed to pay a fine or tax? guest: healthcare tax issue is something outside my field of sprs. host: hamilton, montana. caller: mr. rossi, when we were
told that we weren't going to have a country financially any more unless we infused $700 billion into the economy and the president did it, and then mr. cheney said oil would pay for the work, i think that has affected us profoundly in the country. i know that $700 billion evaporate. we told our congressmen and senators we wanted them to do something and they put their foot down which was a rare occasion for them to do that. then they turned around and scared the crap out of them again and we had the bill rammed through overnight -- host: mr. rossi? guest: let me respond to that. there is no question that we
were on the precipice of a severe financial catastrophe without some sort of intervention. as unappetizing for us as that is. i'm in the camp that believes we needed to act swiftly and dramatically to stem a lot of the confidence issues. at the end of the day we can all debate which way the best or optimal way in which to distribute the $700 billion would have been and that remains to be seen. host: allen on the republic line from texas. caller: good morning, greta. good morning proffer rossi. this new agency strikes me as being a bit analogous to prohibiting smoking in a building because we discovered we have a gas leak. i think we are putting too much emphasis on the banks being the cause of the problem. i have read six books on this thing, and including the daryl
issis report from congressional investigation of last year. and 3% down payments is idiocy. that started under the clinton administration. and the credit default swaps, which are part of the knowledgal blame for the -- nominal blame were nothing more than trying to make lemonade out of lemons. guest: as i like to tell my institutes these days, there are many people that own the crisis in some sense. not only is it that we can lay some of it at the foot-steps of the banks, regulators and borrowers themselves in some cases, investors, credit rating agencies. there is lots of blame and what we need to do is say we can
blame everybody under the sun but we have to figure out a solution that is viable to get past this and make sure we never face anything lick this again. host: new york city, david, democratic line. caller: thank you. i would like to ask the c-span staff or producers as well as this guest to just review a case where a new york developer who had connections to government officials, high ranking government officials from albany was able to steal hundreds of millions from hud and fannie mae and freddie mac and there was a case brought by the u.s. attorney general. the whole case was washed away. they threw it out after 9/11 saying the files were lost in building seven. more importantly, there's been a collusion between government officials and developers for an
ever-expanding tax base whereby they built a lot of overpriced homes and didn't really provide housing for the working class people or poor. it was more of an investment class. they built all of these mansions that the working class can't afford and never will afford with the decline in the economy. host: mr. rossi? guest: there are some statistics that would say through all of the subsidies provided to the real estate industry, both commercial but mostly residential the last 50 years that we are overhoused by the tune of 30%, which calls into question something you spoke of, which was noticeably absent from the legislation is what to do with the two government sponsored enterprises, freddie mac and fannie mae. from that standpoint we have a lot of work to address that. because as we know, until we get employment and housing stabilized, we will not get this country back on its feet. host: you were at freddie mac
from 1995 to 2003 and fannie mae in 1994. should these agencies be dissolved and have something new? guest: actually, there are many good proposals on the table. there is one that is being looked at closely by the housing policy council. but i think that we really need to look at this whole hisically and ask ourselves. we have mortgage interest deductibility. we have the federal home loan bank system which i'm not hearing much in terms of reform but needs reform. i also think that both fannie mae and freddie mac we need to think about the rules under which they actually operate, but you cannot pull the rug from underneath the housing market. so it is a tricky business. there is a shorter-term plan that needs to happen and shorter-term plan in terms of using the institution toss keep the mortgage market steablized. host: a tweet from a client.
guest: if there are institutions that have operations within the united states, it will be monitoring that from a data standpoint as well and analytical standpoint. the other thing that will happen is this agency will be following along with all of the various regulatory changes that are coming about such as basil three from a capital standpoint. host: ann on the republic line from palm beach. caller: good morning. number one, when they gave our tax money to the banks they could have at least put it in our names. they could have mandated that we will give the american taxpayer $200, $300, $500 and the bank will have to pay us interest.
but the money still would have been ours. you just gave away our money and nobody is even sorry about it. the other thing, this agency is being run by the people who ran the banks. and you were at freddie mac. give me a break. why didn't you say something while you were there? host: mr. rossi? guest: i have spoken on this a number of occasions having left the banking industry. and there are many issues surrounding how we came about to the place we find ourselves in today. the risk officers are not those that are empowered with making the final decisions on the level of risk taking at the institution. that is left with the c.e.o. and board of directors. as we know, there are a lot of issues surrounding executive compensation and incentive issues. i will say there are a great many of us that were calling out the risk during this time.
i will also say there were a frame of us that department stay very long in some of our positions as a result of that. host: rebecca from maryland. caller: although we can't regulate greed, there is always somebody trying to work from the economy and when we're intertwined from the global economy and how can you regulate that? and the new agency going to be political appointees? and is this going to be another revolving door for politicians? host: three points there. why don't you answer the last part first, revolving door. because the washington times editorial had concerns about that as well. they said that bureaucrats will be allowed to exploit their knowledge of market conditions as private sector consultants one year after leaving this agency. guest: that's correct. so, i have concerns about that
as well in that you do have -- i'm concerned that there is a lack of independence of this council itself. after all, and no offense to the treasury secretary, but it is not an independent agency or council in that sense. and it is the voting members who are all folks that are coming in with the administration. from that standpoint we have to guard ourselves against what is going to be in the best interests of the country. host: they are not all political appointees because the secretary and others have to be confirmed by the senate but are some of them political appointees? the commodities future trading commission, federal housing finance agency, national credit union. guest: appointed by the president with the advice and scent -- consent of the senate. if you rewind, the acid stess say in 2006 would they have acted in a different way in precipitating the event that
unfolded. host: howard on the republican line in big run, pennsylvania. caller: good morning. i would like to know where the $700 billion went and who got it. and also there's forth to be a winner and a loser. the loser is the taxpayer and i would like to know who the winners are. guest: i would like to know, too. when you find out, let me know. the short answer, as unfortunate as it is for all taxpayers, this is kind of the most devilish part is none of us really knows what would have happened in the absence of the infusion. we can speculate that the world would have come to an end but we really don't know. and that is bothersome. but i believe had we not done something dramatic we could have slid further into something that would have lasted much longer than what folks are calling for today. host: we know what the new office will do and have subpoena
power, require all the data necessary that it needs to get from banks and hedge funds. but what are it not do? what will it not have the power to do? guest: it won't have much power from enforcement against the institution. that is not its role. it will only be able to set data standards and consolidate and conform the data across the institutions so we can look at it on a consistent basis. beyond that, it is more of a support entity for the council. host: sarasota, florida, david on the democratic line. stpwhroo how are you doing? does the new agency help looking to banks and different funds that help companies and individual taxpayers hide their profits that they made illegally ? guest: absolutely. in fact, i believe that if it is
doing its job effectively, it would have anticipated or been able to foresee some of the issues that were going on with the madoff scandal. so, getting back to the fact i know a lot of concerns about the privacy and data privilege issues, at the end of the day having information in real time that can be assessed to make sure people from one of our last callers, greed ack problem and you can't -- being a problem but you can monitor it. host: manhattan, ruth, independent line. caller: mr. rossi, i want to ask about three quick things that i never hear addressed. one is, where do you stand on the issue of hedge funds like the aman that fund out of eugene by the kaiser family foundation?
this has gone on unreported. and it is leaked to hamas terrorists. the second question is fannie mae and freddie mac both agreed to get involved in sheria financing in 2005. the public doesn't know that. i would like you to address that. host: we will attack those two. earnings there is no question -- we have other regulations out there. the patriot act that allows for government regulatory agencies to surface that kind of illegal financing from a terrorist activity standpoint. in addition to that, freddie mac i believe it was was investing in philip morris bonds and got out of that as a result of some of the publicity associated with it. what the o.f.r. will be looking at as we look at this today is largely around systemic risk, not some of these other issues that are very important but can be addressed by some of the
other regulations we have in place. zwroo our guest is the -- host: our guest is from the smith school of business is center. he was the cheaf risk officer at citigroup, wamu and countrywide and worked at freddie mac and fannie mae as well. next phone call is miami, jane, republican line. caller: hi, how are you this morning and good morning to both of you. i guess you noticed a lot of people from florida are calling in. a concern that i have is we seem to be decentralizing these functions. if you look at the inability of the attorneys general across the different states and their frustration with what happened, for instance, with companies such as countrywide, they felt that they were way ahead of the curve and because companies are hiding behind their national charter, they had to rely on the federal government to do its
job. my question is this. we have effectively collapsed our economy in florida. tourism is the number one engine, but the onerous practices in our state in overbuilding several counties are in serious trouble. unemployment is up over a point in the last year from july of 2009 to july 2010. how are you going to be interfacing with the states in specific and looking at the numbers state by state? guest: that is a great question. if we come back to the issue of the financial stability oversight committee there are 10 voting members and there are also five nonvoting members. three of them sit on the council with the other federal agency heads include folks that are state banking commissioners, insurance commissioners and securities commissioners.
from that standpoint there will be representation at the state level. one other point i want to make is you are talking about the federal preedges -- preedges issues and that is changing with the result of the new act. hopefully we won't get into some of those issues again. host: idaho, mike, independent line. caller: yes, i was a former fdic bank examiner in the late 1990's and i separated in early 2002 to go to afghanistan with the manner corps. during that time when i was an examiner i never agreed with the too big to fail policy and we were not charging the bank insurance fund fee and i would like to know what happened to that money. guest: hopefully we have gotten smarter and we are actually
trying to now and have been promoting risk based deposit insurance as a way to represent the underleg risk of the institution going forward. that is one way to recoup appropriate insurance premiums with the risk taking of the institution. at the end of the day i had say that we have to give greater focus. the first line of testify are the folks with the fd ifrpblt c, the examination staff that live 24-7 and i'm not sure the public understands there are a good number of people that sit there looking over a lot of the information here with these largest institutions. host: we will try to get a couple more calls. raleigh, north carolina, tom, republic line. caller: one question i have is this. in terms of the dearrive temperatures and the role think played i would like you to explain some of that what that is and what your perception is
in their role. guest: overtime the counter drives were one of the -- derivatives were one of the problems of the crisis in the sense that some of these exotic types of securities, credit default swaps that we hear about that were traded in great quantities across mortgage companies to other investors, at the end of the day they were not on an exchange where there was great transparency between, for example, if i were to issue a security to greta, for example, no one else would necessarily have to see the terms and conditions of the credit default sweep. that is not right. we changed that with the rules now under dodd-frank that we will bring some of that like fannie mae and freddie mac more under the microscope by putting it on zhanges where there will be good reporting associated with it.
so of dodd-frank that is one of the better things. host: a treat from a viewer. guest: as i understand it, other than subpoena power the office has, you can -- an institution could be called in contempt of court if they refused to provide information. other than that, i think it is the standard proceedings that all of the regulatory agencies have if an institution doesn't comply. host: venice, florida, alex is, democratic line. caller: good morning. i have a quick comment and question. history repeats itself we know from the great depression. we know from the 1980's what happened when we had that big bubble in the interest rates that went up to almost 20% to get a loan. back then you had a conventional loan. you didn't go that you bankruptcy and a year later pay
no money down and buy a house. my comment is this and my question is this. i'm just a high school graduate. i saw the whole elephant. you say you didn't see but parts of it. i saw where we were going in 2006 and 2007. when they came out with the interest only loans much when we had the bubble and it popped in the 1980's, the interest rates went through the roof. this time our rates can't go any lower. we have such a glut of housing. we have banks that are really not showing how many foreclosures there are on their books. in the state of florida, they are trying to pass a law that we will not have our day in court if we are going to foreclosure. i read the bill and there are some loopholes and the bill didn't pass because of the fact that it was an election year, it
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