Transcripts For CSPAN Washington Journal 20120403

we will begin this morning in syria. the headlines this morning saying that syria has committed to an april 10 deadline. on this u.n.-syrian peace deal, what is next? we want to get your thoughts on that. your take on it this morning. the news coming out of the security council. here is "the new york times" this morning. what is your take on this? what is next for the u.s.? the number to call for our republican line is 202-737-0002. the number to call for our democrat line is 202-737-0001. the number to call for our independent line is 202-628- 0205. also, you can send us an e-mail or send us a tweet. also, post your comments on facebook. facebook.com/c-span is where you need to go for that. is ind that -- susan rice this piece. she pointed out that the withdrawal was just one point of the six-point plan. including talks with the opposition . monica is an independent in at miami, florida. what do you make of it? caller: i think the current administration did a good job in negotiation and peace-keeping talks. i think now the thing is to make sure this is being carried out properly. if not, i believe the u.s. will have to go in and handle this. host: what you mean? what is next at the un peace deal does not work out? caller: i think we should send troops over there if it does not work out. they're not going to stop it. them from doing what they are doing as far as sending troops. host: what gives you confidence that boots on the ground would work? caller: i do not think we have to go with an all-out war. i think we could send in some special ops to go in and take care of business. i do not think this will be the end of it. i really do not. i thank you the administration for during with the are doing. host: do you think may be a model that we used in libya? caller: possibly. i believe that would be a possible route. host: all right. let's hear from bob next. a democrat in new york. go ahead. caller: thank you for c-span. this is all but the devil that you know bursas -- versus the devil that you do not know. as we have learned and many republicans have come to agree, our venture and iraq was just one of the most misguided possibly in american history. the united states needs to get out of the war business permanently. unless, you know, we are attacked by a country that we can fight back against. which, again, was not the case from 9/11. this warmongering, eisenhower had said it. he warned us about the complex of the military industrial complex. it is a business. it is a huge business. incredible political interest vested. lobbyists. host: ok. what should be done about the situation in syria? caller: we need to keep our noses out of it. the saudis and other countries in the area are investing money, giving money to the rebels. my grandmother had the best foreign policy when you ask about the turmoil and the middle east. she said, from apartment in brooklyn, let them kill each other. i think she was right. host: this is from "the new york times." let's hear what susan rice, the u.s. ambassador had to say yesterday on this deadline. [video clip] >> of past experience would lead us to be skeptical and to worry that over the next several days in addition to the violence, we might, yet again, see an escalation to the violence. we hope that is not so and the syrian authorities will implement the commitments they have made without any conditions. should they do so, we will expect the opposition to follow suit within 48 hours as a specified period host: "the wallstreet journal" -- specified. host: "the wallstreet journal" this morning. it goes on to say -- they add, that we need to send guns out to the rebels rather than have them get them from the lack market. caller: i was calling in reference to the caller, i believe he was a democrat, who said his grandmother gave great foreign policy. that we need to mind our own business. i absolutely agree which is why i support ron paul. in my opinion, he would keep the promises the president made back in 2008 when he said he would end the war. i do not see that happening in the last three or four years since he has been president. kudos to his grandmother. host: to your point, let me throw this at you. here are some numbers from "the washington times" this morning. the number breaks down to about . i am just wondering on the number of people being killed, people who say we need to go in there and put boots on the ground, people like senator john mccain. the ranking republican on the arms committee. how many people need to buy it -- how many people need to die before we go in there? what about that argument? caller: i am sorry. i do not agree. and nothing we have done has changed anything over there. we entered into egypt and look what happened. the muslim brotherhood took over. women are still being abused and mutilated. we need to mind our own business. the more we interfere, the more we stir things up over there. that is just my opinion. i feel for the people, but our bonds are killing innocent bystanders as well. host: all right. that is what we are doing this morning. getting your take. the number to call for our republican line is 202-737-0002. the number to call for our democrat line is 202-737-0001. the number to call for our independent line is 202-628- 0205. we want to get your thoughts on this. the ap wire this morning with this news out of syria. if you go to "the guardian's" website they have an update on the situation there. one reporter noted that the unemployment rate is 16% among . that is an update coming out of the u.k.'s "the guardian" website this morning. good morning, thank you for watching. go ahead. caller: good morning. thank you for c-span. good morning, america. a couple points. i do not believe we should put boots on the ground. to paraphrase macarthur, were as a fail worst start. worse prevail, peace is possible. -- wars fail, wars start. wars prevail, peace is possible. host: do you agree with the money, just not troops on the ground? caller: most definitely. people who are aware of this note about iran. if we balance the scales, there is a better chance. tweetups get rid of -- we helped get rid of saddam, gaddafi, osama. this man is like hitler, in my opinion. host: we will keep taking phone calls on this subject this morning. first, i want to share with the syrian ambassador had to say yesterday. [video clip] >> a plan would not be successful unless everyone is committed to it. so far, the syrian government said that it is committed. we are expecting to get in touch with the other parties for those who are involved in initiating, sponsoring, and arming the armed groups in order to make the stopping of the violence relevant to all parties. host: a "the baltimore sun" reporting . on that, a related story in "usa today." like we said, that dollar figure is about $100 million to pay the salaries. that does not stop short of assisting the rebels which is what they have been pleading for according to "usa today." tony, an independent, here in washington. what is your take? caller: the first thing is that your reporting is a lie. you say that the syrians are telling their people which is not true. i think the cia are killing the people. at the blame is not on the government. i think it was the general that said the united states wanted to take over seven countries in five years. host: let me -- caller: the me say this. everyone calling for these wars is lying to you. these are not wars. these are illegal innovations. the only way we can go to war is if congress writes a declaration of war and the president signs it. invading libya illegally without approval for congress. he cannot do that. that is illegal. you try to justify crimes that are being committed. a rule has to be in place here. if we don't want anyone to invade the united states, we should not go invading other countries. we need to put them in jail. it is a human rights crime. host: all right, tony. "the washington times" reported. that is the dollar figure from the u.s.. $12.2 million which is on top of about $25 million that has been sent over from the u.s. since the uprising began one year ago. in a program for you, the associated press is having its annual meeting. she will be talking about international monetary fund situation in europe. we will be covering that. live coverage on c-span. and then the white house this morning. the president also will be attending that luncheon. he will be giving the keynote address. look for our coverage on c- .pan.org cal there it is. don't do c-span.org -- go to c- span.org. energized of voters head to the poll. the former senator, rick rickorum's paper heads -- santorum's state's paper has this headline. one in three voters is expected to replace in this primary. the government accountability board estimate is about the same as the turnout in the last primary in 2008. the highest since 1960. that year, it was 50%. "the wallstreet journal" and does this headline. "the washington times" also on that. republicans quickly countered the remarks. let's hear with the president had to say yesterday. [video clip] >> ultimately, i am confident that the supreme court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected congress. i just remind conservative commentators for years we've heard the biggest problem on the bench was a judicial activism or a lack of judicial restraint. an unelected group of people would somehow overturn a duly constituted and passed law. a good example. i am pretty confident that this car or recognize that and not take that step. host: on the president's comments this morning, here is "the wallstreet journal" commentary. that is "usa today" "the wallstreet journal" -- that is "the wallstreet journal" editorial. the to leaders in mexico and canada were talking about trade and gun issues on the border of mexico. if you want to watch the news conference call to our web site, c-span.org. this is from "the loss vegas review journal." -- "the las vegas review journal." announcing she has stepped down given this scandal. a republican in pennsylvania. back to our question on the u.n.-syrian peace deal. april 10 is the deadline. what is the next step? good morning, you're on the air. caller: i think what we should do is get that president out of office of international affairs. host: ok. we will go to john next, a washington, d.c. democrat. caller: the guy before you start reading the commentary, he has a lot of points. i do not want to deal with that. every time somebody in the world needs money for something, our government, which is our tax dollars, find a way to give them the money. but the same time want to gut our social security and medicaid. all this money is going to syria for aid. something is wrong with that picture. that is number one. number 2, because president barack obama has not help anybody accountable for that invasion in iraq there was not justified by any law, do we really think those people respect anything we have to say when we do not even hold our own constitutional laws? what makes them think anybody in syria is going to respect what this nation has to say? f. barack obama, england, france -- anybody else. i mean, it is unbelievable. thank you. host: an independent in missouri. good morning. caller: good morning. thank you for taking my call. host: what is your comment? caller: i do not understand how government leaders can own stocks and profit on arms, defense, and rebuilding foreign aid. searched the funds. why is it that we the people have no open records laws so we could see all the stocks in conflict of interest. i am curious to know if anybody out there who calls and can define the difference between the government defacto and the government did serve. i will hang up. host: all right. your next in florida. caller: good morning, america. calm down. the lord is still in control of the world. nothing is going to happen without his power. i want to tell you from my heart that i am in agreement with many of the callers regarding syria, lebanon, iraq. iran. let those people run their country by their choice. this has been going on for thousands of years. here we are, a nation under god, meddling in other people's affairs. i hope and pray the people of america wake up and get on their knees and realize this government of ours, which we are to respect and love, is doing the things they are doing. no different than syria, lebanon, and all these other nations. please, america, help our country and our leaders and tell them to stop being a police officer out in the east. that is all i have to say. god bless america. host: ok. democratic line. caller: good morning. thank you for taking my call. with the serious situation -- the situation in syria, i think, frankly, we should keep out of it. it is harder for us to be an example. it is easy to interfere in the internal affairs, maybe, of syria. but in my humble opinion, such as it is, i think we should be an example to the world. not police the world. that is pretty much all i have to say on that. it is going to get ugly. not only that, another, i want to make, if we go to war with any country, where is the money going to come from? we do not have the money. our back economic situation is tenuous at best. host: how do we leave as a country on this global stage, and some say without going into the situation in syria. how do we look like the leader if we do not get involved in the situation in syria? caller: because i believe we should lead by example. i am not saying we should not be outraged. i think we have a freedom of speech. we should be outraged. i think if nato is involved, we should maybe play our part. maybe this sanction them in some way. but to actually go to war, you know. i think we should be a leader of the free world'. wished be a proponent of peace. or should be a last resort. if we're attacked upon, then yes. we should retaliate because we were attacked. that is not us. host: you agree with the $25 million price tag the u.s. has spent so far on the situation? caller: i think, you know, we do not need to spend any more money. where is the money coming from? you know what i'm saying? is there and earmarked for $25 million? we are in trouble as it is. we need to attend to the affairs of this country as opposed to others, particularly syria. that is how i feel about it. host: ok. we go to paul next. caller: we must stay out of the middle east. money will not solve the problem. as far as foreign policy is concerned, after world war ii, korea and vietnam were total disasters. it never should have happened -- we never should about iraq because they did not attack us. forget about it. this is about both administrations and both parties were not understood the consequences and we are paying the consequences now. we have a president who have been governors. they do not understand the consequences. they keep it bankrupting us. that is was coined to happen. host: all right. we will continue with comments through -- from all of you. a phone calls. "the washington post" with this story. the is the story and the paper this morning. on the front page of the paper this morning. it is a lengthy story inside "the washington post." again, that is sent "the washington post" this morning. "the washington times." also, here is a story that was in "the financial times" this morning about general electric. general electric takes a $1 billion risk in bringing jobs home to the united states. it says that if this works, it would be good for ge and united states. if it does not work, it will be hung around his neck forever. also, front page of "the new york times" this morning has the story of a battle over regulation. back to our question for all of you. we're talking about the u.n.- syrian peace and deal. syria agrees to a date. april 10 for a pullback of forces. chris, a democrat in michigan. what do you think? caller: thank you for taking my call. i do not like they did the we are the police of the world. but like world war ii when you have a slot for of all the german people by -- of all the jewish people by the germans, that was not right either. we have another going on. let's get ourselves together. going to make a quick start. get out. i do not want to have any boots on the ground. that is my view. host: an independent in washington, what is your view? caller: thank you for watching c-span and all of the moderators. people need to not think of it as a democratic, republican, religious, non-religious -- but a human thing. there are times when we may not actually have to send people in, are what ever. suggested by the three un representatives yesterday. if america wants to send money into public communications, they can do that. but here is the thing. let the start of this negotiation work before anybody does anything. i think you have to look at this as a humanistic kind of thing. if it is a battle between life, but when you have a small portion of people, basically in some cases outright killing children and women who are defenseless, then that is upon not the united states, but the entire -- the entire world nation of people to take care of that. just on a slight note, i think it is great people have their religions. but if they do have their faith atever, i assume that the person they were shipped as not just watch over the united states. again, i would like to thank you c-span. host: ron, a republican in virginia. good morning. what you think about this? what is next for the u.s.? caller: i will not be bashing the end -- bashing the u.s. in in the army. way to go when, be done. host: boots on the ground then? military involvement? you think military involvement, boots on the ground? caller: yes. the boots on the ground of for sure. we do not need to debate it. we need to protect the people, full force, and knocked it out, be done. we are the united states of america. we can and have shown we are due this -- we can do this. host: are you in the military? what do you do? caller: i am in the army and i do whatever is asked of me. host: have you been deployed overseas? to afghanistan, iraq? caller: yes, ma'am. host: what do you think about the callers who said we cannot be the police of the world? caller: i am not really keen on us sticking our nose and everything, but if nobody else is going to do it, we are humans. and no matter how you look at it, across the board through the united states and china, everyone is a human being. o right, so bed it. host: all right. shreveport, louisiana. democratic caller. caller: is not like what people resort to in regards to iraq and afghanistan. one -- i do not like what people resort to in regards to iraq and afghanistan. when they saw the -- -- did that, libya did that. now you come to syria. it is time for us to intervene and bring democracy. on one side, we say we want to send a democracy of. on the other side, nothing. host: where are you from? i was wondering, where were you born. were you born in the u.s. or another country? caller: i cannot tell you that. host: i am sorry about that. we will move on. i want to show you the website about the economy on syria. about $13 billion was the exports. compared to the world, it ranks about 85th. in exports, crude oil, petroleum. exports partners, 30% to iraq, 11.7% to lebanon, 8.8% to saudi arabia. about $14 billion, that ranks 87 in the world. imports, electric power, food and power, -- food and livestock. edward, an independent in baltimore, good morning. caller: good morning. thank you for c-span. as far as policing the world, i wish to be honest about our policies. we use the guise of humanitarianism, but it is really protecting our energy interests. if it was just humanitarianism, the number of deaths in syria is far short of the deaths happening in africa. but syria, of course, penney is in the middle east. -- is in the middle east. we will go in there and find a reason. we will trump up that we're the police of the world than sumanitarian thi if there are no natural resources, we really do not care that much. george clooney, an actor, is the most outspoken on the major atrocities going on in the world right now. host: we covered george clooney on the hill when he was testifying recently about the situation in africa. want to give our viewers, before we end today, this segment. the latest poll numbers on the primary. here is the "washington times." you can see, in wisconsin he leads over rick santorum. in the district of columbia, 72% to rick santorum's 8.1%. remember, our coverage begins at 7:00 p.m. eastern time. we will bring you the results of candidates speeches as well as coverage of 29's primary. the delegate count so far heading into the primary, according to the associated press, for romney leaves with 572 delegates. rick santorum, 273. because of that, the headlines this morning about the brace, is is it santorum's last stand? that will be the question people ask. if the po #stay true and mitt romney wins in all the contests. a new poll out. -- if the polls stayed true and mitt romney winds and all the contests. a new poll out. by the way, two new ads out. president obama puts out his second ad for this campaign season. want to assure you that this morning and quickly show you if we can rick santorum's new as well. [video clip] >> i am barack obama and i approved this message. >> under president obama, production of oil is at a high. he is threatening to perk and their tax breaks. in all of these fights, mitt romney stood with oil for their tax breaks. when you see this at, remember who paid for it and what they want. >> i am rick santorum and i approved this message. >> what if i took to this man's health care mandated abortions and kill the jobs. what if i took to he supported radical environment job killing and cap and trade. what if i told you he germanic the raised taxes and stuck taxpayers with a $1 billion shortfall? what if i told you the man i talked about is not him. it's him. host: campaign 2012 coverage continues on c-span ahead of the primaries in wisconsin, md., and the district of columbia. coming up next. we're going to take a short break and we'll come back with eleanor holmes norton from the district of columbia. ♪ >> c-span's 2012 takes booked -- takes book tv programming on the road. >> he was interested in history. the civil war, in particular. these are two men who knew each other prior to the war. they fought against each other in battle. they remained friends after the war. here they are at age 100. >> american history tv look at life in world war ii japanese internment camp. >> a wonderful book. its meant surviving the unsurvivable for them. she talks a lot about how the arts and crafts were and how they kept their family. it gave them something to do. about how depression is so bad in a lot of the camps. there were high incidences of suicide. people would make these little things of beauty to give to each other, as a way to say, we support you. we care about you. >> and artur continues the wake of may -- the weekend of may fit -- our cities tour continues the weekend of may 6. "washington journal" continues. host: we are back with eleanor holmes norton. let me begin with the budget. guest: i represent the people happen to live there. host: that is the point i want to bring up. many of them are federal employees. paul ryan's 2013 budget. for what would be the impact on the government and federal employees? -- t: the ryan's budget employs a party given $70 billion to the deficit. they are likely, no matter what the ryan budget says, to continue to downsize. make sure that happens and that the pay, which is frozen yet again, continues with federal employees not only in the district of columbia, but the entire maryland and virginia region. host: but did what about the argument, though, that we cannot afford to continue the way we have been doing business? so, everybody, every agency needs to take a cut? every program needs to take a cut. that is indisputable. the question is how to take and in -- a disproportionate cut. why would he go to the middle class and federal workers more -- the richest americans and then give them more tax bricks on top of that? it will not be a thing federal employees can say. those who have benefited most from the economy and, of course, federal employees have every right to say, do not come to us every time you want to go to others who are in much better shape. -- every time you want. go to others who are in much better shape. host: do you agree with everything the president obama's budget? guest: pres. obama began this cycle before budget discussions went under way last year, freezing the salaries of federal employees. athe injection of federal employes is the president should have waited so that everyone could have understood how much they were going to contribute. it is like if you go to church and the bishop hangs back a dozen contributed the collection plate. that is what the people are going to say. what about him? i think that is what federal employes are saying. host: you disagree with the president as the budget when it comes to federal employees. guest: it is not that i disagree. it is far more even-handed and ryan's budget. i disagree with the fact that it takes from the federal budget among others. it is far more in line, which at think one should receive. the objection that federal employees have to the president was the budget. of course, the have come to them with pensions be. it is a two tier federal employee system. it is the first time in history you have pensions that a two tier. it seems to be spreading. i think that is all federal employees. host: paul ryan, yesterday, was at an event with mitt romney. he had this to say about president obama's budget. [video clip] >> the president has given us for budgets and a four times he is in comparison with the idea of giving us a $1 trillion deficit. he is in comparison with the idea of taking more from small businesses and more from families to get to washington to spend more money. he seems to think that if we just give more power to the federal government, more power to unelected bureaucrats, they can organize our lives, run our economies, run our businesses, seemingly, it makes the philosophy run better. that can all this and make us better. host: eleanor holmes norton, your reaction? guest: the president makes cuts in virtually every agency. these are very important points. at the time when government almost defaulted because some of my colleagues on the other side were reluctant to raise the debt limits for the first time in american history. we did not going to default. do know however -- to know, -- do know, however, that because of this debate, on we lost -- we lost our aaa rating. at the time the budget was released, paul ryan walked away from the budget deal. this was the baseline that both parties agreed to for a federal spending. instead to please what appeared to be the tea party republicans, paul ryan -- on that agreement. watch out for politicians. the president has stayed on that agreement. the reason they reached this particular discretionary spending was because we are in a recovery. after 2013, you will see faster cuts in the federal budget. this line was agreed upon. here is where we are. the senators say we are born to stick with the deal. we are headed for a government shutdown. host: when? guest: sometime in september. he did the republicans insist on a deal that they agreed to at the time of the budget control act, which is what settles the deficit ceiling debate and got us finally to raise the deficit ceiling. host: let's turn to phone calls. carl has been waiting from virginia. go ahead. caller: what is going to happen when the chinese will loan us any more money? we are headed over a cliff. when you compare government wages and benefits to the general public, it is almost double. i think federal employees, wages and benefits should be based on the average american citizen. guest: this is an important point the caller raised. the fact is, it is not double. look to the average wage of the federal employee, that is what we're really talking about. he is talking about the average american. people who make minimum wage to people who make more money than federal employees. the federal employees work force is a very upscale workforce. therefore, there reflect the ice -- reflect the needs of the federal government. that is why the wages are greater. host: higher skilled workers, then. guest: hire skilled. you can i get a job if you do not have these two years of college. it really does not have quirks. it has computer programmers. it has technicians with a high level of trading. people who have been going to the private sector to earn more money. there is a work force that is least competitive when you consider what the federal government has. host: you are next from south carolina. caller: "usa today" wrote a story that said you are more likely to die than be fired by the federal government. you had the situations like the madoff thing where you had a private citizen called repeatedly and say we need to stop this guy. nothing is done. you never hear about people being fired. wouldn't you agree that in private business we all have to tighten our belts? should the federal government to say, look. all agencies need to reduce their workforce 15% to save money? guest: that is what the president's budget does. the paul ryan budget would say that for every three federal employees that left, you could replace them with one federal worker. what is very unusual -- the office of management and budget in a statement said that kind of replacement mechanism would make it hard for the federal government to meet its mission. that is what you would expect a federal agency to say. so, yes, the federal government should be downsizing, it is downsizing. do you want the social security checks? do you want the border protected? these are the workers who do their jobs. considering how highly skilled and dedicated they are, i hope we do not make them what they really are not. host: this tweet for you -- guest: a very important point. the president is not going to do the deficit reduction through the appropriations process. his budget was the budget with the discretionary spending blind agreed upon -- spending line agreed upon in the deal. the republicans walked away from the table. host: why not the votes then from democrats to support the president? guest: because that was not the president budget. the paul ryan budget is not a budget. he is very specific about cuts. more than 60% of the cuts from the poorest people in society. he is completely non-specific about how he is going to pay for it. ways and means committee or some other committee will talk about how they pay for it. the president's budget is his repressed to the congress about how they should spend money for the coming year and is based on the baseline budget that the republicans and democrats agreed to in order to get an agreement to raise the debt ceiling. host: rick from tennessee. caller: good morning. it is a pleasure to be able to ask you this question. i am glad you gave the explanation of the budget process so people understand what is going on and how things are done. because that is pretty much the problem that we have in this country, that we do not know how things are done. the question i want to ask you was what is your feeling about the way the president -- every move he makes seems to be in opposition and misinformation. what do you think can be done to combat this? the so-called liberal media tends to misrepresent and the more in tuned they stay -- that is the push. it is more about the questions -- what they are actually putting out. guest: some of the criticism of the president is under there. -- is unfair. people wonder how come this president gets no cooperation from the other side of the aisle. i think that is the real question. there comes a point -- i have been in the congress for almost 22 years. there comes a point when both sides recognize you have to make the deal or the american people are not going to get anything from this congress. there is nothing, no signature legislation, that the republican house has passed. every district gets funding for roads and transit. we had to do a 90% extension because we could not pass it. democrats are seeing things that the country needs -- they would soon have nothing happened and no signature is legislation to show having been here for almost two years. host: this viewer on twitter -- guest: this is one of the untold stories about the federal government beginning with president clinton. there has been a huge reduction in the number of federal employees. there was something like 50 years ago 130 federal employees for every american. now it is like 72. what you have is people put all government in the same bacg. people may remember the downsizing of the federal government. my only concern is sometimes when the federal government downsizes, contractors, private contractors, are left to do the work that the federal employees were doing. not just those who are civil servants. host: dave on the republican line. caller: i am a retired federal employee and watch a lot of c- span, fox, you named it. previously you asked the lady the question about what her plan was to cut the deficit. all i ever hear from the democrats is we have to achieve ballots commit tax the rich, and those stink and republicans. what are the democrats doing to cut the deficit? are they doing anything? guest: the president's budget does cut the deficit. if the republicans would come to the table, we could agree on cutting the deficit. what it does is it cuts the speed and the rate at which it goes up. as i indicated, the president started it off by freezing federal employees to try to set an example to lead by example. this budget is full of cuts. there are virtually no agencies that get an increase. if federal employees are frozen for three years, that is a huge cut in their salaries. if an agency gets no increase but is cut even though the cost of living goes up and the cost of supplies goes up, that is a cut. the president has cut agencies across the board. the difference in the budgets are where the cuts come from. the paul ryan budget takes the cut from programs that serve the neediest americans, more than 60% of them. on the other hand, in violation of the budget control act, the deal that was made and reached, he would raise the amount that would be given to the military. that is the kind of thing that drives people nuts because they do not see the kind of across- the-board cuts. the president tries to even out these cuts. the difference between the democrats and republicans is how to get deficit reduction. do you take it only from programs that are very poor? and then put that money to reduce the deficit? or do you say take some money from them but also take money from the bush tax cuts? let's do the rule so that everybody who earns $1 million -- host: the buffett rule. guest: why should the richest americans be left harmless? what representative ryan does to medicare, he virtually does the same thing of what he did before. why don't both sides come to the table? sit down and work out a deal. the way we worked out the budget control act. host: "the new york times" has numbers to add what eleanor holmes norton was saying. on domestic spending -- let's go to steve, a democrat in georgia. caller: hello. host: you are on the air. caller: i am a blue dog democrat. i thought bush and the republicans were babbling idiot. i voted for president obama. but he has greatly disappointed me. i do not know what world congress is living in. spending is up. if you do not understand the people in the rest of the country and the rest of the world are going to cut spending, you are wrong. i would like your comment. guest: first, i would like to comment.lcome this and we are hoping to pick up some of these blue dogs, more conservative democrats who tend to be more concerned with budget and spending. you just quoted the difference between the paul ryan budget and the president's budget. i am not sure that my friend, a blue dog democrat, would agree that with paul ryan's, you should raise military spending instead of cutting military spending. the budget least examined it is the military budget. i want my friend to remember we had a deal. i think it was the only thing, the budget control act, which set a spending limit for this year. that was a very tough spending limit. the president signed on to a spending limit meaning deficit reduction and cuts that the republicans agreed to. now they want to come back with even less spending and virtually all of it coming from the middle-class and especially the poorest people in society. host: here is a tweet from jim. guest: i think the president did not support -- did not not support the simpson-bowles proposal. it was on the floor and had a good number of democrats as well as republicans to sign onto it just last week. i think the simpson-bowles proposal remains and will be the basis for negotiations that go on between democrats and republicans. host: in the coming months? guest: or at some point or maybe after the election because there will be a time where you might see all these things happen. host: do you think it will come back up as the foundation for negotiations? guest: there is no question that it is the foundation. very tough. if you want to grow your economy, you can not only cut. you have to have something else out there like the transportation bill that puts jobs on the ground. it balances it. social security, medicare and medicaid cuts that in my judgment will be what is on the table and both sides are going to have to come and say how much do you agree to. i think the president did the right thing. in this climate, you are not going to see that negotiations take place. i predict after the november election is when you see those negotiations again. host: so, at mid december. chris, an independent from michigan. caller: hi. my thoughts go along with the last caller. what i do not understand is that government employees are paid by the taxpayers. roughly about 52% of all workers pay for everybody else. the math does not add up. i also understand that my grandson already owes $48,000 and he is 2 years old, before he even has his first job. just a question. do democrats ever take a math class? it just does not add up. guest: with all respect, the 52% pay for everybody else does not add up the there. i am not quite sure what that means. it is a tiny fraction of what we are talking about. i would ask the caller would he agree that the military ought to contribute something? would he agree that people who earn over a million dollars should contribute to something? if he would agree to that, i would agree to federal employees putting their money into the collection box. host: from twitter -- guest: this is a very important question. i remember in my earlier years in the congress that all of the women went before the appropriation bill to argue an increase inin an breast cancer screening funding. we have found that was a place you could get it from. the defense budget is so schumann does, it would take an army of auditors -- the defense budget is so humongous, it would take an army of auditors. we are going to see the first proxy for an audit in my lifetime. host: they are going to go in there and decide what gets cut. do you think it will be made public? guest: they are already calling and screaming. if you really want to make it difficult, a lot in that budget supports jobs. they will say when you cut this or that, you are cutting jobs in my district in the middle of a recovery. host: what are you hearing? does that go way? guest: the paul ryan budget already violates sequestration and invites it because at the moment, we have reached the pivot point after the election. what he does is try to take the military budget out of the possibility of sequestration. the president will veto it. sequestration is what he least one it. maybe that was the whole purpose. maybe that horrid possibility is going to get people to sit down and decide how we make these cuts for real. host: we will go to david next in arkansas. go ahead. caller: thank you. it is a pleasure speaking with you. all of the bush policies are still running. you have no time left behind," -- you have "no child left behind." also, the problem with the democrats is this. certain democrats will not go along with the president. these people need to be primary. the tax issue is going to be the biggest issue for the democrats. if you people do not raise taxes, the democrats -- we are not coming to vote because if we cannot get you to do anything for us, there is no reason to vote for you. host: tax policy is coming up next and about 10 minutes. we are going to be talking about overhauling the tax code. go ahead. guest: this is where most of us are. at the same time, cutting the deficit. the way in which every budget expert says getting out of the recession with a big deficit is you begin gradually to cut the deficit what growing your economy. if you cut it to starkly, then you cut your ability to grow. the caller makes a very good point. we have engaged in two wars and have not paid for them. abouttalking upalso prescription drugs. if you want to make up for it by going to those who have reached their greatest benefit and those who have received the bush tax cuts that we do not need any longer. have everybody at the table and say everybody has to contribute. host: we want to tap into york law degree. justice kennedy on the individual mandate in the affordable care act at one point last week said that allowing the government mandate would -- this is the associated press quoting him. he is often the swing vote on cases that often divide the justices. what do you make of what you have heard their from justice kennedy? guest: i have argued before the supreme court and i have to tell you i could not tell whether i won or lost. i would caution that while it is often a giveaway, be careful. i am looking more at the chief justice that i and anthony kennedy. because i think he understands the overturning of the affordable care act would be the most serious act by the supreme court on economic policy in the country since the social security act was passed. i think there is some possibility that he would join other justices in speculating the way i say we should not speculate to ask a question and save the affordable health care act. you could do it by looking at the mandate for example. the mandate is very broad. if you look at the reason for the mandate, much of it has to do with catastrophic events. you could save the mandate -- host: the individual mandate? guest: it is very broad. it goes froyou could save the mandate by saying to the extent that the mandate deals only with the package that causes the increase because everybody needs to have health care or else you pass on the burden to others. the mandate its constitutional. in other words, he could look more closely at the mandate and see if any part of its could be saved. if you listen to his argument, there seems to be some sense that he was least likely to just throw up the law and say -- host: have you given up on justice kennedy voting with the administration? guest: i am looking more closely at the chief justice's. it is very unpredictable how he makes his own argument. he goes into those conferences -- justice kennedy is an unpredictable. he is one of the justices that has been known to change his mind after he goes into the conference and talks with his fellow justices. host: a few more phone calls. ed in georgia. caller: it looks like to make the democrats tried to pretend the party of the downtrodden but they are really controlled by the rich environmentalist's and movie stars who can afford those electric cars, a $10 gasoline, and $9 coffee. i think the liberals have lost their mojo. guest: all i can tell you is the democrats are the ones who are trying to say they should be taxed more heavily than the middle class. we want to put more taxes on these rich radicals. in terms of environmentalists, there are environmentalists for reducing gas prices. there are those who believe that that is not the philosophy of the democrats'. they want to bring down gas prices and the first thing they want to do is make sure that big oil contributes to the deficit. and we go exploring for oil without harming the environment. above all, we look to the future. at the moment, up for grabs is the other energy sources. we now see countries like china getting a hold or leadership on those other ways while we hang back and are focused on one way. we will be using oil and gas for a very long time. we do not want to lose leadership with wind and sun. host: the goal of the mandate -- isn't this an end justifies the means scenario? guest: every country in the world including the most free- market countries, countries that have no regulations, every country that does health care has a central way whether it is through private insurance or through government taxation -- the theory is if you want to bring down the cost of health care, you have to spread the burden. every american ought to understand that. instead of buying insurance on the market, we want to be in the market whether it is for insurance or other kinds of insurance. we want to be in there with the biggest pool. the pool is small, you and i pay more. if we get the entire country in the pool, we drive down the cost. host: a democratic caller from new york. caller: hello. i respect you a great deal. i am a federal worker. i have not had a raise in god knows how long. wenner we going to get a raise again? guest: -- when are we going to get a raise again? guest: when budget talks began, the president did something a lot of us thought was a bit much. he started by saying let's freeze federal employees. what he thought was that would lead to the republicans saying let's get everybody else on the line but it did not work. now the republicans are taking advantage of the fact that they are the most visible here in washington. most of them are not in washington by taking advantage of that in order to cut federal pay disproportionately more than they are asking others to contribute to deficit reduction. host: thank you very much for coming back to the "washington journal." coming up next, the u.s. corporate tax rate becomes the highest in the world. japan lowered theirs over the weekend. we will talk about that coming up next. first, a news update. >> small business growth is slowing according to a new study by the financial research firm paynet. the pace of lending to small businesses appears to be at a standstill and may lead to slower growth in the overall economy. u.s. student loan debt is surpassing credit cards and auto loan debt. some economists say this could jeopardize the recovery and increase the burden on taxpayers. the fiscal year 2013 plan passed last week by the house will be the focus of remarks today by president obama when he addresses newspaper executives. the president refers to the republican budget plan as "a trojan horse" and says it represents an attempt to impose a radical vision on our country that would hurt the pocketbooks of working families. you can watch the event on c- span. those are some of the latest headlines. >> c-span22012 local content vehicle takes our programming on the road. the first weekend of each month. this past weekend featured little rock, ark., at the university of arkansas. >> collected photographs and was interested in the 19th century, the civil war in particular. these are two friends who knew each other prior to the civil war who fought the against each other in 1862. they survive the war, came out alive, and remained friends after the war. here they are sitting on the porch talking about the old days. >> she wrote a wonderful book. it meant surviving the unsurvivable. she talks a lot about how arts and crafts kept their sandy. and how depression was so bad, add a lot of the camps there were high incidence of suicide so people would make these little things of beauty to give to each other just as a way to say we support you and we care about you. >> our tour continues from oklahoma city on c-span2 and c- span3. >> "washington journal" continues. host: we are back with alex brill who served as a former staff economist for the president's council of economic advisers. now at the american enterprise institute, a research fellow over there. our topic this morning is overhauling the tax code. the u.s. marked the top spot on sunday as the highest corporate tax rate after japan lowered its rate. we are number one. the u.s. officially at the highest corporate tax rate. japan lowered its rate. what does that mean? guest: that is not a race that you want to win. the u.s. has not changed its corporate tax rate since the mid 1980's while most other developed countries have continually chipped away at their rate. japan was the last holdout. that leaves the u.s. rate at over 39% when you combine federal and state tax rates. that makes us frankly not competitive with most of our trading partners. host: this is another piece from the business section. when they looked at members from the congressional budget office, corporations paying an effective rate of 12.1%. what do you make of that argument? you hear that often, that it is not the actual corporate tax rate. guest: the first numbers we were discussing with the statutory rates. the average effective rate, how many dollars being paid/the total amount of income has been at an historic low. it has to do with the debut factors. when a corporation does not make in come, they do not pay tax. there was a series of temporary tax provisions to help stimulate the economy that the congress and the president enacted which further reduced the tax burden. it still remains the case that the statutory rate is a significant factor in making investment decisions. when it is 39%, the investors get to keep 50% -- that is going to discourage investment. host: these are multinational companies that we are talking about. don't they have accountants and lawyers who do more digging and say to their company ceo's that the overall tax rate, the top number, 39% but we get to do this and that which brings us down to 12 percent? we have the top rate, but companies do their due diligence. guest: that is part of the problem. the tax rate in the united states in part because it is so high creates a large incentive for multinational corporations to think very carefully about what they can do to minimize their tax burden. and more efficient system would be simpler, the tax base broader, and corporations could focus more on their core business and use less of their accountants and lawyers. host: you have come up with your own tax reform plan. what would you do? guest: the proposal i outlined this past january is a six-point proposal. the main element of the proposal is a reduction in the corporate tax rate from 35% down to 25%. proposing that would be done in a budget neutral way that does not make the deficit any worse. that means you are going to have winners and losers. host: for corporations? guest: for corporations and some individuals. the proposal for individuals is progressive. higher income individuals would lose some of the tax preferences that they currently enjoy, and that additional revenue would help offset the cost. host: tell us what highewealthir individuals would lose under your plan? guest: it reform to the mortgage interest deduction. it would turn it from a deduction into a flat credit. under current law, the mortgage interest deduction is more beneficial the high regard tax rate. if a mortgage interest subsidy is worthwhile at all, it should be the same regardless of your income. that change would raise revenue. the other change would be to phase out the state and local tax deduction that would benefit primarily higher income individuals and hire taxed states. -- in higher taxed states. host: how much revenue would that race? guest: about $250 billion over the window. and the second one about $350 billion. it pays for it. these are rough estimate. the final numbers would have to come from the government's estimators. but it would offset the cost of the lower rate deduction. host: 50% bonus depreciation. can you explain that? guest: there are two other provisions. that one is a provision that has been used from time to time to encourage firms usually during a recession to make additional investments. the problem is that it is yet one more uncertainty that managers need to deal with. by making it permanent, you are reducing the cost of investment by encouraging more investment and growth. host: the second one is the limit to corporations. guest: the final is a hair cut provision to corporations' ability to deduct their interest payments. currently, the tax code provides a deduction for interest but no comparable deduction for equity financing. as a result, the tax code prefers businesses to grow by borrowing rather than issuing new shares. there is nothing wrong with borrowing. the tax code should not favor one over the other. host: how does your plan differ from republican candidates? guest: the ways and means committee chairman is a big advocate of corporate tax reform and has proposed bringing the corporate tax rate down to 25% as well. governor romney is also proposing a 25% tax rate. one constrained i do not support is the need to -- is the ability to describe in detail what it will be. the other candidates on the campaign trail have talked about the need to close loopholes, broaden the tax base, but they have not got specific. host: on that issue, water you saying? guest: loophole is not a term that i like to use very often because it suggests an unintended consequence of the tax code. most of the things in the tax code that people do not like were put there on porpoise. letting corporations ability to deduct interest -- that would broaden the tax base. host: here is a tweet for you. guest: it is a profits tax. that is true. individuals do get to deduct some of their expenses. they get to deduct their mortgage expenses and charitable expenses. but the notion of income is different on the individual side. host: we are talking about overhauling the tax code. caller: yes. the gentleman here is treading very lightly on the fact that the actual corporate tax rate is much higher than what is actually paid. from everything i can understand is his plan is just another tax cut for the rich. if you really want a true equity of tax, you would go to a flat tax on all income including capital gains, a tax rate that everybody would pay and no deduction may be except for the first $20,000 for low income. all this other stuff is nothing but a tax cut for the rich. guest: it would increase taxes for higher income individuals. i disagree that it is a tax cut for the rich. it is a net tax deduction for corporations. i think that is necessary in order to bring down both the average rate and the affect of marginal tax rate and the benefit of the lower corporate tax rate would accrue across- the-board for the economy. new evidence in the last two years indicates that lower corporate tax rates are associated with higher worker wages. host: do any of the republican candidates have a proposal for changing the tax code that include raising revenue? guest: governor romney -- so, governor romney i think has been pretty clear on the campaign trail that he intends his proposals to be offset, so both on the individual side by lowering rates as well as his corporate rate. host: so lowering taxes? guest: no. lowering the tax rate is what he has been talking about a lot but he has also made clear that he intends to find offsets to fill that h thatole. -- that deficit hole. host: do you think that is a mistake? guest: ultimately, congress will need to work with the president to find those offsets. i think growth is part of the story. the reason for pursuing tax reform if we were to is out of the belief that it will help the economy. if we can help the economy, we will get additional benefits. workers are better off. the order of magnitude is a policy that improves the economy by 1% would over a decade bring in about $300 billion worth of additional revenue. host: on top paul ryan budget, here is a piece this morning -- -- ap's from "the washington post" this morning -- do you agree or disagree? guest: i do not agree. first of all, i think that the budget resolution that passed the house and this is the case for any budget resolution -- it only sets the spending levels and revenue levels. the actual policies are set by committee. paul ryan's budget makes suggestions about how those spending levels and revenue levels could be reached but ultimately it is up to the ways and means committee to decide. host: good morning. caller: good morning. host: we are listening. caller: here is the problem that i have. as a former owner of a large construction company, none of these people in the private sector -- the first most important thing is this. you do not have the ability to make money. you take money. here is the problem. if you would explain to me what is the difference between an entitlement to medicaid or something else and an entitlement to how the burden in the way of tax breaks. halliburton has become filthy rich and has her the rest of us and you keep acting like they need the money. we own halliburton because of the iraq war. they of the only contractor there. guest: i certainly cannot speak to the specifics of one company's attacks situation. -- tax situation. we do have certain policies that advantage certain industries. that is certainly the case. there is nothing barring those policies from being revoked in the future. in 1986, the last time comprehensive tax reform was undertaken, and member of the tax brackets were removed at that time -- a number of the tax brackets removed at that time. caller: good morning. i readily admit i am not intelligent enough to belong to anything tank or institute. -- any think tank or institute. the first thing you have to do is bar any money to congress. i think that will immediately solve any problems. host: george, do you think that because lobbyists get provisions put into legislation, special interest groups get a deduction for this industry and that industry? is that why you were saying that? caller: i believe the lobbyists are the ones who control this country. it is not washington that runs this country. 8 is wall street and -- it is wall street and k street. guest: i do not have much to. there is certainly the lobbying community in washington which is how policy makers can get information about what is happening to the affected parties in constituents. most large organizations in america whether they be big business or labor or of the social issues or economic issues have somebody here in washington helping make sure that those interests are protected. i do not think that communication between communities, organizations, individuals, and the government is inherently evil. i think more information will lead to better decision making. host: from twitter -- i went to get your reaction to a piece written back in december. guest: that is accurate. a better way to measure it is not the number of companies but the share of their activities that are taxed. if you look at it that way, it is about 50/50. about half comes from c corporations and about half comes from small businesses or entities. host: new jersey. caller: good morning. can the guest speaker about foreign profits that multinationals make in other countries? is it true that we subsidize the tax they have to pay to foreign governments as well as give them a tax break when they shut down a factory in the united states? host: mark says this on twitter -- as was diana was speaking to. guest: that is a great question. in simplest terms, a basic description of how the tax code treats foreign income -- u.s. companies when they operate abroad in a foreign country paid taxes in those jurisdictions. a u.s. company operating a plant in france would pay corporate income taxes in france. when that money is returned to the united states, the u.s. income tax is due but they are granted a tax credit for any tax that has been paid in a foreign country. if the attacks in france is 25% and the tax year is 35%, they get a credit for the 25% and 80 the remainder here in the u.s.. the complication comes when that u.s. tax is paid. under current law, that tax is not paid until it is returned to the united states. it creates more of a level playing field in france for u.s. businesses competing with french businesses. democrats have proposed increasing attacks, making it do immediately or in some way -- increasing that tax, making its due immediately. republicans have looked at this issue as well and have gone the other way and recognized in order to help u.s. companies grow abroad, we should not ask for that tax to be collected. that is how most of our competing countries tax in come. host: jim is joining us, it republican. caller: hello. good morning. i would like to ask this gentleman what he thinks of texting revenue versus income. thoughts on him s the importance of knowing what the rules are in the future as far as you know tax rates and rules and regulations that govern business in order for a business to plan ahead and invest. guest: so, two questions as i understood it. the second one had to do with uncertainty in the tax code. i think this is a significant issue. not only is there a series of provisions that are temporary in the tax code set to go away in a few years or less, that creates a lot of uncertainty for managers and ceo's. looking at our larger this court challenges and recognizing the growing debt burden that we face, it means that someone in the future is going to have to pay more taxes to cover the debts that we are occurring today. that uncertainty i think dampens our ability to grow and investors willing to take risk. your first question was about the tax base, what the appropriate measure is and what it is we should be taxing. the system we have in place today is an income tax. i think that tax and revenue -- taxing revenue would be an alternative way when we think about some of the value-added taxes, some of the consumption taxes. they will take us more in that direction. but we do not want to increase the burden on everything we do. we do not want to impose a tax only when a profit is our. host: jim on twitter -- guest: there is a host of reform proposals are far more radical than mine that are pro-growth. a flat tax would be one way. if the rate become very low under a broad based single rate tax, it changes the distribution of the tax burden significantly. in other words, it would move us from a highly progressive tax code to one that is far less progressive. i think what we have seen from bill after bill over the last decade is democrats and republicans want a tax code that is in some way progressive. we can argue how progressive age should be. my issue with a flat tax is it does not seem to be politically viable. host: chris from north carolina. i am going to put you on hold because you have to turn down that television. good morning, carl. carl, are you with us? question or comment for alex brill. everybody has to turn down their televisions. it republican from maryland, let's try judy. caller: i would like to know how long corporations think the middle-class can continue to survive. i remember ronald reagan, are supposedly a great save your. -- great saviour. the interest deductions were taken away from the middle-class at that time. the only thing we had left were charities and hope. now you want to take that. i watched bill clinton signed the glass-steagall act took the value of my home, lowered its to about $300,000 and destroyed my 401k. how long do you think corporations think -- you are going to spread tax burden which means it comes back to the middle class. the very poor do not pay income taxes but they pay for a lot of other things. all of us are paying taxes. corporations taking their factories overseas, our jobs overseas, and taxing us more. takingd are nois now property tax cuts. guest: thank you for the question. i cannot speak to the aspirations of corp.. i am not here to represent them. -- of corporations. the changes i am advocating for, mortgage interest rate deductions, by primarily targeted at high income individuals. my view is the large subsidy that the current tax code has in place for larger homes and a tax subsidy that is greater for those who have high incomes -- in other words, you face a larger tax subsidy for homeownership then if you are in the 15% tax bracket. my proposal is a flat 12% credit which would have a modest impact for middle-class individuals. host: tony on twitter says -- guest: i agree with. absolutely. i am advocating that it be done in a fiscally responsible manner. i see two problems with the tax code. one is the penalties are too high. the other is the subsidies are too great. there are too many deductions. what i am advocating and i think this is core to the simpson- bowles proposal is a leveling of the playing field. we are by limiting the deductions and credits, we're broadening the tax base. we could have a healthy debate about which deductions to eliminate. the principle is to do it in a way that is budget neutral. host: you say we have to raise some revenue and we do that by eliminating some tax credits and tax deductions. as opposed to republicans who say we do not need to touch that if we have an economy that is a growing. guest: i do not think that is what most of publicans -- most republicans are saying. if you look at congressional leaders and certain members, presidential candidates, both of them are talking about the need to rewrite the code and to limit some of the deductions and credits to pay for lower tax rates. host: democratic caller in brooklyn. you have thisad guest on and that you're discussing this. i agree about lowering corporate tax and i would like to see this on small businesses which generates most of the jobs in this country. there could be large corporations that are troubled and maybe need a tax decrease to continue. maybe we have to be more flexible in how we do that. i have a question. in europe, eight countries came out in favor of a law, named after an economist in the 1970's. cameron said he would support it if it became international. bring down this law would tax financial products, like if you bought a stock or bond, you would pay a small tax, pennies, whatever it is. i do not know the value of exchange. states is like bloomberg with the volume every day -- stations like bloomberg. there is a market open everywhere and people are able to buy in real time and of their computers up to their bank accounts. they are buying and selling stocks. this generated a lot of revenue for us. guest: the idea of a financial transaction tax is one that has become popular again, primarily among progressives and some european countries. a couple of problems i have with this. it would just encourage trading to move to other jurisdictions. i don't think it will be impossible to be imposed in every jurisdiction around the world. even a small tax on transactions in new york, investors will arbitrage that opportunity and move to london or hong kong. i think it would be difficult to generate revenue from that tax. host: we have a comment on twitter. guest: great question. it feels sometimes like it is just one tax because you pay a tax on the interest earned in your bank account and on april 17, you'll pay tax on net interest. the double tax arises when we think of for that income came from originally. originally an individual has earned wages and paid taxes on that income. host: chris from raleigh, north carolina, an independent. we will go to patent in london, kentucky -- payton. caller: this is not a great stretch for me to see a tsunami of global consumer demand with the iphone and permissions of connections everywhere. i think the democratic house would guard that $4 billion and get the country back to work and get the country back in shape for the coming new wave. we will make a lot of money. this tax conversation will be tedious in comparison. thank you. host: any response? guest: the caller was talking about the importance of getting the economy going and having a good infrastructure system. my experience from reading about infrastructure is that there are viable projects that need to be put in place. congress is debating a highway transportation bill to deal with that funding and those programs. economic growth should be our first objective in any fiscal policy. the tax code -- i think it will be reformed. policy makers need to ask the question, how will this effect the economy? host: david in michigan. caller: hi. i wanted to correct the previous caller on the glass- steagall. it was phil gramm who pushed to have glass-steagall repealed. that is what caused the financial meltdown. taking that fire wall between the commercial and investment banks away. it was phil gramm. his wife works for the i banking industry at the time. host: all right. guest: ok. teresa is a republican. caller: good morning. i have a question that concerns me and i don't understand it. i have worked all my life since the time i was 10. i am 80 years old and i love to work and i work as a companion, which i enjoy. it is necessary. what age do you- have to be where the irs stops taking money from me? i have had to pay them several times. they want over $600 from me that i do not have. who decides how much money i should live on. guest: you have an impressive work history if you have been in the work force for 70 years. i know there is a lot of good evidence that suggest working is good for your health. i congratulate you on that. or limit. age cap as long as you keep earning, you'll be subject to tax. host: richard is a democrat in illinois. caller: good morning. i am a 40-year tax consultant and adviser. by changing the tax code and not doing anything with the loopholes is like putting a brand new engine in a 100-year- old car. you have to eliminate the tax loopholes. then if you want to modify the tax system -- it is ridiculous. there will be loopholes and tax attorneys will find them. please do the basic. start with the loopholes. i have to laugh at the experts who think changes in the tax code will fix the system. guest: two thoughts. the incentive for tax advisers to find ways to minimize the tax burden is greater when the tax rates are higher. when the tax rates are low, the benefits for avoiding taxes are lower, as well. about eliminating loopholes -- a loophole tactically is a provision of the code that does not work as intended and allows people to exploit something that was an error. the thing in the tax code that people consider bad policy are generally put there on purpose. i advocate a "walk and chew gum" approach. you have to take it on a case by case basis and evaluate the proposals and decide if they are worthwhile. limit those to some extent and use the additional revenue to lower tax rates. host: mel in texas. caller: i have had my own business and i've been successful in my life and even more so in this obama economy, growing 25% to 30% a year. i've had the privilege to talk to governor clinton and sam walton when i was 28. mr. walton said, young man, you'd better figure at what you want to do. that's the biggest tax on the u.s. i own a pawn shop. it is frightening. out right.house you never mentioned local tax. it is a big burden. a lot of my customers bought a house. that was the worst thing they ever did. it is a troubling thing to see my customers buy a house and it sinks them. host: you said you loaned money to wal-mart workers in your area. is that a lucrative business for you? caller: very much. i want obama to be reelected. i very much think sam walton for doing that -- i very much thank sam walton for doing that. i doubled my business, tripled my business. one of the banks called by loan because the government told them to acquire another bank. that cost me $10,000 to refinance. they just raised my taxes. i had to write a $24,000 check in january. there's no way business can establish in this economy. guest: a lot of good issues. the dynamic nature of the economy. even in the economy we have experienced the last few years with the unemployment rate has been high and economic growth has been tepid. many businesses have done well. that vibrancy underlies the american spirit. there's a lot of new businesses being started, a lot of individuals that seek out opportunities to find growth. this caller commented about local tax issues. that is outside of my expertise. we have seen in some states proper taxes going up and some income taxes going up. a financial fiscal burden as a result of the recession. there is a need to fill that hole. host: alex brill, thank you for your time. we will turn our attention to the lecture series that ben bernanke gave last week. that is our topic coming up next. [video clip] >> we're going to wisconsin to speak with the third prize winner, an eighth-grader. hi. you chose the first amendment and related it to the new cigarette warning label. why did you choose that topic? >> i believe there are 12 images. they show the alarm turn -- long-term effect of smoking. old advertisements about smoking as examples of the new labels. >> in the past, 50, 60 years ago, all the images were so glamorous about smoking. now they -- more have images of -- the same images but there are techniques they use to market their smoking. because itmake sense shows on realistic images -- unrealistic images. they prevented people from smoking and not getting people to start smoking altogether. i think our group agreed with their standing and what their company stood for. >> you interviewed students, the mayor. how did those interviews help you understand the different sides of this issue? >> i think it helped our documentary get a lot more points of view. it showed a lot of different people in different situations. >> what would delight people who watch your documentary to learn -- what would you like people who watch your documentary to learn? >> look at that level and think, i do not want that to be me. or a person who was been spoken for 20 years looks of the label and says, that could be me. stop and think about what they are doing. >> thank you for talking with us. here's a portion of her video. >> for those who are thinking about smoking -- these new graphic health warnings will appear on cigarette packs and on tobacco displays and show stark images that practically illustrate from every ad the painful reality of tobacco use. >> for years we watched tobacco rates fall in the country. in 1965, over 42% of americans smoked. by 2004, a deadfall and to just under 21%, a fairly significant drop. in recent years, despite the well-known health risks, smoking rates have been flat. they have been dropping for decades and stalled at about 20%. >> you can watch the entire video and continue the conversation on our facebook and twitter pages. "washington journal" continues. host: jon hilsenrath is a chief economics correspondent for "the wall street journal." the federal reserve chairman debate lecture series last week. why did he do this? >> it was a pr campaign. a lot of people at the fed feel that among the mistake they have made over the last few years is doing a bad job of explaining what they are up to and how they think about the economy and the decisions they made. they see ben bernanke as the main brand of the federal reserve. they have been trying to put him in different environments where he has a chance to explain to everybody else what the fed is up to. he did a lecture series and he is banon "60 minutes." he is looking around and trying to figure out how he can get out there and explain himself. the gw series was interesting. he was a professor at princeton university. that is his comfort zone. he is kind of a stiff guy, but he was coming out of his shell when he was talking to the students. say? what did thhe guest: he gave a four-part series. he went back to explain what central banks are and what they do. there is misunderstanding about that. he told about the lessons of history. he was an economic historian back when he was a professor. he spent a lot of time studying the great depression. he talked about the crisis, how we got here and what the fed has done. what you would expect the home team quarterback to do. host: you wrote a piece -- to his speeches or lectures play into what he is trying to establish as his legacy? he is in the last -- guest: a lot of people think -- he certainly was telling his side of the story. i think what we saw in the last couple of weeks was a rough outline of the book that he will write when the leaves the fed. there remains disagreement today about what the fed did and to what extent it is to blame for the crisis that we're in. he has taken some blame for it but not all the blame that some people think he deserves. there is disagreement with what the fed has done since. some people see the fed chairman as a real hero who saw the crisis gripping our financial system. others think the fed has taken enormous risk to get the economy going and he is sowing the seeds. host: the critics of his lecture series -- here is one on the forbes website. guest: this is one of the compliance. this is not ben bernanke's choice. one of the complaints is that the fed manipulates the currency. it has the capacity to print dollars. the concern is by printing to devalues our it currency. this was something that he talked about. some of his critics would like to see the u.s. go back to a gold standard. having hard money instead of paper money. the fed likes to talk about cost and benefits. the list of cost with a gold standard is very long. host: i'm sure we'll get into that with our callers. the lecture series, go to our website, c-span.org. we have supply links to all four lectures that we covered. here is some from the first lecture about the current economy. [video clip] >> there is some research that suggests the following a financial crisis, it may take longer for the economy to recover because you need to restore the health of the financial system. that could be one reason the recovery is not proceeding faster than it is. i think that is still an open question and there is questions about the research and about what might lie underlie that stylized track that is out there. you see that recoveries only take a couple of years. very sharp recoveries -- recessions typically are followed by a faster recovery. what may be different about this episode is that unlike the other recessions, this one was related to an triggered by a global financial crisis. host: jon hilsenrath. guest: one of the points he's speaking to is that there is something different about the recession recovery that we're going through right now. our financial system was so deeply damaged and it is been slow to start generating again. anyone who was tried to refinance their mortgage can attest to that. that's one reason why the recovery is holding back. the hole is just so deep this time. we did get a recovery within a couple of years. it has been a gradual recovery out of a deep hole. host: what is the future when you see headlines like this, and from the washington times this morning? guest: right. europe is a very interesting case right now. you see per from countries like spain and greece -- peripheral countries like spain and greece in pain. some of the problems are similar to america's. we have a fragile banking system. there is a fiscal train wreck that has happened in places like spain and greece and it is causing economic pain. the united states is wrestling with these fiscal issues. we can look to countries like spain and greece and say if we don't get our act together, we could be going down that road ourselves. host: let's get our callers involved. george from pennsylvania. caller: good morning. thank you for taking my call. i live on fixed income as a retired teacher. every time more money is printed, inflation goes up. i sing something comparable is going on in great britain. the exchequer is having the bank of england printing money. they are going down the same path as we. guest: it has been the case for a past100 years since the fed was created by congress that the central bank controls the supply of money in the economy. that is their job, to get the money supply correct. they control interest rates, mostly short-term interest rates. one of the interesting things that we see right now is that long-term interest rates are very low. what does that tell us? host: the chairman said he will continue to keep them low for a couple more years. guest: he thinks the economy is so weakened because he does not think inflation is the threat that some people think it is. the fed does not have complete control over long-term interest rates. right now long-term interest rates are very low. the signal is that there is not a lot of inflation right now. that is a controversial view from some people. it is hard to say we have inflation is going through the roof. we can experience inflation down the road. look at the university of michigan -- they do surveys of households. it has not changed very much. look at other indicators -- look at the price of gold or the price of gasoline. there are parts of the economy where we are seen prices go up. host: don from new jersey. caller: thank you for taking my call. i want to comment about his teaching style. ben bernanke seem to be hesitant, not a very exciting kind of guy to take a class from. his arguments -- i thought he was explaining his bullet points for its own reasons for the decisions that he made while he is now chairman of the fad. -- fed. host: did you watch? caller: i tried to feel like i was in the classroom. i have an economics degree. my professors were more exciting than ben bernanke. i could follow what he was saying. he was saying,"what i'm doing is all i know what to do." guest: i do not think anyone will ever accuse ben bernanke of being a charismatic. in some ways that is refreshing. you walk around washington and everybody is putting on a show. this guy is geek. i don't think he would argue with that. he does have a star persona -- stellar persona. host: at his second lecture -- don said he was speaking of talking points. guest: i think we saw a rough outline of what his book might look like. this is a guy who was trying to explain himself -- what the fed has done in the context of history. he is an historian. that is what this series is about -- how he sees the fed's role in the economy and what he did in response to that. it was not your normal college lecture series. host: he did admit to some mistakes. [video clip] >> the fed made mistakes in the supervision of regulation. one would be in our supervision of banks and bank holding companies. we did not press hard enough on the issue of measuring your risks. in other banks did not have the capacity to understand the risks they were taking. they should've been pressed harder or restricted their ability to take these risky positions. bank supervisors to not pressed hard enough on this and that turned out to be a serious problem. another area where the fed perform poorly was in consumer protection. the fed had some authorities to provide some protections to mortgage borrowers that would have if used effectively would have reduced some of the bad landing that occurred during the latter part of the housing bubble. host: was the admitting mistakes made under his watch? -- we he admitting? guest: you have to pay attention to what he is not acknowledging where mistakes were made. he says nothing about the fed's central role. he believes that the fed did not keep interest rates too low for too long. the fed pushed interest rates down so much and kept them there and promised to keep them there for a long time. the argument is that spurred the housing bubble. he disagrees with that. he thinks the easy money problem was caused by china. china was pumping all these dollars back into our financial system and we could not manage it. he does not think the fed made a problem with interest rates. he does admit the fed made mistakes with regulation. he is pointing his finger at tly. greenspan sub our financial system was self regulating. the system had become efficient at taking risk and distributing it widely all over the world. financial institutions were very good and watching each other. you are bank of america and i'm lynn and brothers and we have to do -- and i'm linda m. brothers -- leyman brother, and that world you did not work. the fed is technology that it felt on the supervision front in the last crisis. are they gone to be able to catch the next one? it is malick there were not trying to look after the bank's -- it is not like they were not trying to look after the banks. they have done a lot of work on that front. there's a guy who was pushed to shake up the institution. you'll hear different assessments from different people about whether they're up to the task. host: we have a comment on twitter. gail from new york. caller: good morning. i would like to say that we're chasing our tail. we don't have enough people that understand -- host: we're listening. caller: that understand the language that we're thinking. therefore we have banks that have made deals with outside countries that they possibly even on our land and we would not be able to form our own land and get back on our feet -- to farm. no one at this point can even understand that they have to get out and help one another, to lift themselves back up. host: jim as a democrat in tennessee. caller: i know more of our money is running around the world than there are leaves on a tree. back in the 1980's, they have to make money courted to counterfeit a because i ran was pretty our money and passing around through hezbollah. north korea was printing our money. i heard that seven or eight years ago, they never stop, so we had to swallow all the money. bush told them, north korea, to stop doing that six or seven years ago and they told him to go jump. he started printing money himself and now obama is doing it. guest: i think the caller was talking about counterfeiting. we do not control our money supply. the reminded me of the movie "the in-laws." a despot was printing so much money. the last caller is talked about foreign influence in our economy. it is a fact of life that this is a globally integrated economy. the caller talked about the foreign banks that our banks are doing business with. our banks to a lot of financial transactions with other countries. we are importing and exporting to them all the time. host: we have a question from twitter. guest: ha. this is one of the many complaints about what the fed is doing. a lot of people are saying, where my interest rates so high? that is one of the complaints about the banks -- why did the fed pump so much money into the economy and the banks are not making any loans. they have to be careful. we see the pendulum of a clock swinging in different directions. during the boom, the banks were too easy with their money. the pendulum has swung the other way now. it is hard to get credits. banks are facing criticism because of that. host: the chairman weighed in on determining the risk factor of a bank, too big to fail. take a listen. [video clip] >> we have had to get closer into this because of the crisis. the fed must make some determinations about how critical a firm is. new requirements require the firms struck a capital surcharge, they have to handle more capital. the international bank regulators work together to try to set a criteria related to size, complexity, derivatives -- criteria that determine how much extra capital they have to hold. the fed has to evaluate whether the merger creates a systemically more dangerous situation. host: jon hilsenrath. guest: this is a problem that has not been fixed. the regulators are still working on that. we might never know whether it is fixed or not until push comes to shove. we had a number of big banks that were pushed to the brink. we had big insurance companies -- aig was the biggest of the m all. the government decided they were too big to allow them to collapse overnight. they went out and rescued aig and that made a lot of people on settled. they allowed lehman brothers to fail. it is a heart problem -- it is a hard problem. "if there is a government guarantee behind them, we have to make them hold more capital." bigger buffers. one of the problems is -- it is hard to know who the important firms are. there was another firm -- in money market firm called the reserve fund. it basically was pushed up against the law. they could not pay after customers. there was a run on this money market fund called the reserve fund. people pull their money out and there was a panic. this was a little financial firm will to to the big guys. yet its problems were such that it could ripple throughout the entire financial system. how did the regulators find the little needles in the haystacks? that is a real problem. they cannot say with certainty that a fixed that problem. host: john online for republicans. caller: thank you for your comments. there is a cause for good intentions. i exceed my cost. i cannot borrow my way out of it and i will reach some level of bankruptcy. is the federal congress different because of their continual ability to borrow and to print their way out of any indebtedness that they create? guest: congress is borrowing, which is gone up substantially. really, very few convincing signs that they're in a position to bring that in. the fed has the capacity to fund the congress. that is not quite what it has done. are congress and the white house taking any steps to rein in our budget deficit? is the fed behaving responsibly? are they printing too much money? the fed is not funding the government. they're helping the government by pushing interest rates low. they are not buying government 's debt directly from the government. host: that gets to the independence of the federal reserve board. guest: this isn't just the independence of the federal reserve board. the worry is that the fiscal authorities forced the central bank to buy their own debt to get them out of trouble. you have not seen that in this crisis. the fed was buying debt from other investors. if you get to that point, you start talking about banana republics. host: this related story from " the baltimore sun." a romney win would likely change level at the federal reserve. mary from milwaukee, wisconsin. caller: hi. good morning. thank you. i am a business owner in wisconsin. i cleared my credit report to get a loan from the banks -- i have clients and contracts from doctors. when the business get started, i will be able to gain capital right away. anytime i go to the bank, i cannot get a loan. i get talked around and do not know what to do anymore. guest: unfortunate you are one of the casualties of the financial crisis. loans are harder to come by. by pushing rates down, the fed is funding so much credit into the financial system. they're hoping they will force the banks to go out and find people that are creditworthy for loans. as interest rates are so low that a bank kanaka a decent return, maybe they'd look somewhere else to put the assets and they will put assets in actual loans. it is a slower-moving process. we look at indicators -- it has picked up in the last few months. the fed does surveys of loan officers at banks and they are becoming a little bit easier about making loans. we're by no means back to a vibrant system. you read the article from "the baltimore sun." if mitt romney is elected -- the fed is still independent. the republican white house will decide who the next fed chairman will be. we can expect if that person is selected by republican, it will be not nearly as activist as ben bernanke was. host: let's go back to indicators. take a look. [video clip] >> unemployment insurance claims -- all the indicators suggest the labor market is strengthening. employment is one of our two objectives. we would like to see continued improvement in the labor market. it is more likely they'll be sustained and we will see increases in overall demand and growth. we'll continue to look at consumer spending and consumer sentiment, capital expenditures, indicators of optimism on the part of firms. we have to look at the inflation side and be comfortable that price stability will be maintained and that inflation will be low and stable. host: that comes as this headline in "the wall street journal" this morning. guest: american manufacturing has been one of the bright spots in this recovery. it was hollowed out for so long in the 1990's and early to thousan2002. we're seeing manufacturing comeback. manufacturers have become productive. a weaker dollar has helped them. stuff americans make is cheaper to sell overseas. we've seen benefits to manufacturers on that front. we are at an interesting crossroads in the economy right now. there is a puzzle that the folks at the fed us are trying to figure out. the jobs numbers have improved in the past three months. we sat at the unemployment rate has come down by -- the unemployment rate has come down. but in other parts of the economy, measures of economic output, it is not growing very fast. how can we be producing more jobs if the economy is not growing very fast? you can on a sustained basis to that. we have to see more economic growth or the employment gains will slow down and we could be back in an environment 6 wants now where people are not happy with the with the recovery is progressing. host: we have this comment on twitter. guest: that is one of the worries and one of the risks. as we heard from other viewers, they cannot get credit. it is possible that the fed could create another financial mania that brings the economy down again. it is hard to see it showing up. i can point to two places where looks like credit is moving very fast. one is in the student loan market. just past $1 a trillion. the other is with farmland. it is hard to see how either one could wreck the economy overnight. the student loan issue is something we need to keep an eye on. i don't think that is a question of easy credits. education costs are going up so much. the banks were too easy about giving away loans to home borrowers. right now the government is making a lot of a student loans and they don't have credit standards. if you want it, you get it. host: back to twitter. john, a republican from maine. caller: i like to ask mr. hilsenrath -- it seems the federal reserve is a huge burden to this country. it would make this country a centralist dictatorship. guest: the question was what the fed has done with all the gold. the fed does not have any gold. the gold standard was laid out in the 1930's. it hauls gold for foreign governments -- it has gold for foreign governments. it has gold certificates. we were on a gold standard in the 1800 an's. this is something some people like to see the government go back on. if you go back and look at what our economy was in the 1800's, we had financial crises on a regular basis. nics, inre regular packs part driven by speculation in movements and the supply of gold. that going back on a gold standard would give us economic stability. host: gary in california. caller: i want to go back to why -- supply and demand. there is an oversupply of credit in the banking industry but there is no demand for long-term credit. most homeowners are not looking -- many people are under water. guest: there is a lot of money out there and not a lot of demand for credit in this economy. a lot of it is sitting in very short-term funds at the fed itself. host: jon hilsenrath, thank you for coming back. we will be back tomorrow for more of "washington journal." primary coverage of wisconsin, marrow, and d.c. primaries tonight and we will go over the results tomorrow morning "washington journal here -- here on "washington journal." thank you for watching. 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