Transcripts For CSPAN Washington Journal 20131219

We take you through the details and impact of that announcement. We are asking our viewers what you think Ben Bernankes legacy will be when he steps down from the fed. Give us a call. Epublicans, 202 5853881 democrats, 202 5853880. Independents, 202 5853882. Outside the u. S. , 202 5853883. You can also catch up with us on twitter, facebook, or email us. A very good thursday morning to you. Ofwant to begin with some the front pages about that ben bernanke press conference. Here is the financial times. A picture of ben bernanke. A historic end to the tenure. Over to the front page of usa today money section. A bit from the front page of the wall street journal. That is the lead to that story on the front page of the wall street journal. Here he is announcing the decision to taper monthly asset buying. [video clip] let me just say that one of the things i am proud of and i have tried to accomplish over the past eight years is to increase the transparency of the fed and to increase the accountability of the fed. You mentioned those trips to capitol hill. I testified many times, as have a number of my colleagues. There is this notion that the fed is not audited or that it has all kinds of secret books. As you well know, we have complete openness to the general accountability office. We have an Inspector General of our own. We have a private Accounting Firm that does all the books as well, under very tough standards. We publish regular reports on s. L aspects of our we are open to doing that. Host that was ben bernanke talking about the changes in the fed legacy under his tenure at the head of the fed. We will be talking about that with our viewers. We want to talk to you about this decision about dialing back the bond buying program. I want to bring in sudeep reddy. The taper announcement was an important and to end to Ben Bernankes tenure. The fed has been putting its foot on the gas as far as it will go to try to stimulate the economy. We went through an incredible recession. The fed was able to arrest the decline, in part through an initial round of bond buying. Printing money out of thin air so that it could go out and purchase bonds and lower Interest Rates as a result to try to stimulate the economy by leading people to buy houses and cars and other assets on credit. N as being e having done a reasonably good job after failing to catch the crisis on the front side. It is now in its third round of bond buying qe3. Fed has been doing this since september 2012. That is a long time to be printing 85 billion per month. It is not completely chillier when this would end or how it would end. Six weeks clear when this would end or how it would end. End of hisefore the tenure, he was able to forge a consensus on the committee to pull back the bond buying. Theyre slowing the pace of their purchases. Over the course of the eight meetings throughout the year, they plan to scale back by 10 billion per month, eventually at the endn to zero of 2014. The fed will continue to keep Interest Rates very low, that is the other half of its decision. It will keep it near zero at least through 2014 and into much of 2015. That helped boost the stock market and helped the dow should up to a record on wednesday shoot up to a record on wednesday. Host here are some charts from the wall street journal showing the Dow Jones Industrial average when that announcement happened. Also, reaction in the 10year treasury yield. Explain the treasury yield line. Guest the borrowing cost for the government. For is the benchmark rate all sorts of loans across the economy. It is very closely connected to mortgage rates. You could follow that and get a good sense direction only on what will happen to mortgage rates. Springbelow 2 in the when the fed was fully moving on qe3, when it was buying all these bonds with no end in sight. Once it started discussing that in april and may, you could see the 10year yield spike up. It is no close to 3 . It is still a historically low level for a treasury yield, for borrowing bonds. But it is certainly higher. It is a rapid adjustment to go a full percentage point in a matter of months. That is one of the things that scare the fed. The rapid runup of rates. You could see the Housing Market deposit bit over the summer as a result of that potential homebuyers assented to wait to see how this would play out. Some businesses were wondering what this might mean to the recovery. What ben bernanke was able to do is delay the process and by sometime and at least start startme time and at least the tapering. It will be up to janet yellen to carry out the full scaling back of that program over the next two years and eventually start raising Interest Rates, which will be a whole other level of drama. Will bedeep reddy joining us for the first 45 minutes of the show to help answer the questions you might have about the fed. We want to get your thoughts about Ben Bernankes legacy as he prepares to step down at the end of next month. Here is a wall street journal piece. Mr. Bernanke has succeeded in changing an institution once so committed to secrecy. He avoidedtenure, the mumbling and of hisehensible syntax predecessors. The fed will someday stop buying bonds and raise Interest Rates. After that, his impact will be that is mr. Bernanke with his predecessors. We are taking your thoughts and comments this morning. We will start on the republican line. Oklahoma city, oklahoma. Advance vance. Caller i think that his legacy will be that he has solidified our political regime as the government of the banks, by the banks, and for the banks. The United States is now a bank ocracy. It is one where what can be done politically by either party is severely limited by a group of s that basically control the parameters of what can possibly be done in the political sphere. Reserveult, the federal has a monopoly on the creation powerful in is all the sense that it has never been so before. All this talk about bernanke being transparent and Holding Press Conferences and speaking in declarative sentences and such is really a kind of smokescreen, a publicrelations grip uponis deepening the lives of this nation. Ance from oklahoma city, oklahoma. Twitter. Es in on the rich get richer. 38 . Lity ratings unfavorably by 31 . We will go to steve from dayton, ohio. It democrat line. Caller how are you doing . Bernanke is a thief. He is a liar and a thief. I checked out his background. He was taking money from places he shouldnt have been. Host why do you call him a thief . Them and can look at tell that he is. You can tell by looking at him and the way he talks. Host new jersey, independent line. Good morning. Caller ive got a question mostly about the Mortgage Backed securities he has been buying for the past couple of years. Does your guest have an idea about whether or not these are private securities that he is taking out of the market from the banks since they hold the securities, they have 2 trillion worth of these securities are they influenced by having the securities to keep Interest Rates low . , theserest rates go up private securities that they own will become worthless. Host question for sudeep reddy. That is actually a great question. That is something the fed will have to grapple with for the coming years. It owns just about 4 trillion right now buying government bonds and buying Mortgage Backed securities. That willall assets likely come under pressure as the yields rise and as the prices of those assets adjust over the coming years. That is a cost that the fed has a knowledge to and that they will face in the coming years. Onthey are facing losses this portfolio in the coming years or at least not turning in as much profit to the treasury, the fed has been turning over money to the federal government as a result of holding these inds if that were to stop and improving the economy, that will not be that much of a problem for the fed. The overall economy is improving as a result of the feds actions. Letting go of some of these issues will my be that difficult. The problem for the fed is if we end up being in this very weak recovery and the fed is also taking losses on its portfolio. It will have a lot to answer for at that point. That is probably a question for a couple of years from now when we have a better sense of whether we have come out of this long recovery in better shape whether we are still struggling. Host note you got that answer, what is your take on Ben Bernankes legacy . I kind of agree with the two previous colors. Callers. I think he basically muddled his way through it. As far as the way he was speaking to people, i dont know if you would call that clear and concise. He seemed to be meandering in his thoughts quite a bit. I listened to him when he gave , which you course televised very nicely for him. It seemed like he just didnt have the kind of brainpower that is want in a guy that running the most powerful organization in the world. Host thanks for the call. One other piece on this. After burning key exits the fed, how will history judge him . That is the question in the washington post. Gotten the economy through as tumultuous it. A period the fed has ever faced in its 100year history. Did not have the perfect tools for the job, but he searched his Academic Knowledge of how economies work and used to the tools he did have to try to put americas jobless back to work. And theby neil irwin washington post. We are taking your calls. In little over a month before he is set to step down. Steve is from chatsworth, illinois. Democrat line. Caller good morning. There are a few things he is doing wrong and has been doing wrong. Keeping the Interest Rates low or so low we are not raising m up sooner, he is buying or purchasing the Mortgage Backed securities at such a drastic level that our dollar is going to be worth less, not in two years, not in three years, but in 1015 years. This will be the worst thing for our United States. , the top corporations 500 and all the banks, are taking advantage of this because they get such cheap Interest Rates. Backare going to be buying all of their stocks and it is still going to be the 1 that are going to be rising because people were so scared after 2008 the whole collapse that they did not want to go into the stock market, which they should have. They did not know what to do. Not for twoiting, or three years down the road, i am going to be waiting for 10 or 15 years. I dont know if the caller ever read the book whom bust economy economy but i will take my comments now. Host Richard Rogers writes in on twitter. Tweet. Er we are talking about in bernankes legacy on the washington journal. We want to play you a little bit more from his press conference yesterday in which he talked a little bit about the feds performance at the start of the fiscal crisis. [video clip] , we were slow to recognize the crisis. I was slow to recognize it. In retrospect, it was a traditional, classic crisis, but in a very different guise. It made it for a historian like me very difficult to see. Whether or not we could have prevented it or done more about it, that is another question. Time i32,006 by the became chairman and house prices by the time i became chairman , it was 2006 and house prices were already declining. We have done everything we can think of to strengthen the fed possibility to monitor the Financial Markets and take actions to stabilize the economy and Financial Markets. I think we are much better prepared to deal with these events than we were when i became chairman. Host in watching the press conference, west wing reports was tweeting about it for their news site. Had his shareusly of critics, but watching his last News Conference thinking that history is likely to judge and quite positively. We will go to rick from louisville, ohio. Independent line. Caller lets go back to our constitution. Wrote that ars corrupt Banking System was more of a threat to our country than a freestanding army. Im 55 years old. I grew up in detroit. I grew up when there was a Banking System that was not corrupted. The beginning of this is Ronald Reagan. You can look at the treasury. When you go back to the 1930s the Treasury Department issued bonds. That is how the hoover dam was built. This Treasury Department 1000lly manipulates trillion dollars worth of derivatives and it actually creates 75 of our gdp. It quadruples the price of oil. Got the 250 billion barrels of oil. You triple the price of that. You leverage it 30 times. And you buy bonds with that oil money to brinker Interest Rates to zero and then you take the china trade we have a deficit with china. China sends the surplus to the treasury and they buy bonds. You let me jump in and ask the way the fed has run now, you are fairly concerned about it. What you think about the future of the fed . Caller we have to have a revolution in this country. Freedom ofre the speech and freedom of press comes in. With the fed and the treasury. These are the jews. Host i will cut you off there. I want to go you on the janet yellen question. How much role did she have to play in this decision that was announced this today . Bernanke said that she was consulted on this and agreed with the decision. Februaryind out in whether she is going to continue bernankeng key path path. We will be able to judge for ourselves whether the janet yellen fed believes in this policy. The fed is going to have a difficult year because the economy is not really picking up that quickly. There will still be a lot of concern about the pace of recovery, whether it will accelerate at the pace that the fed is suggesting. It will be years before we know whether ben bernanke left us in a far better place than when he started. That eighty know years after the greenspan era, theys were not as good as appeared when he left. People called in the central banker greatest central banker ever. Those have revised remarks because it left incredible devastation on the United States and the world for years afterward. Benill not know if bernankes decisions were the right decisions. A lot of the callers have brought up this issue about uneven growth, too much of the gains going to the top 1 . Those are accurate criticisms of the structure of our u. S. Economy right now. We have a lot going to the wealthiest people. s policy has benefited those who have plenty of money. You have seen wages and incomes for people who are not in that top tier struggle and in some cases decline over the course not just of this recovery, but for the last 1015 years. We have not seen the kind of sustainable broadbased growth that anyone would want. Those are the metrics by which we should be judging our economy , whether it is benefiting a wide swath of people across the board. It may yet do that. We just dont have a whole lot of evidence yet. We have certainly managed to pull ourselves out of a panic and near collapse. We just have not been able to build a kind of cup recovery we want. Host we will keep taking your calls and comments on Ben Bernankes legacy. We want to point out some of the other headlines. The budget deal that was passed by the senate last night. The headline from the washington times. That story notes that while most House Republicans backed the new budget deal, Senate Republicans balk. It quotes a gop consultant. Republican senators are feeling the heat back home. They know they are on thin ice for cutting backroom deals for the democrats that serve to break promises they made back home. On the nine Senate Republicans who joined democrats to pass the budget deal last night. John mccain,as orrin hatch, chambliss of georgia, isakson of georgia, collins of maine, mccluskey of portmanron johnson, ron rob portman of ohio. We want to point out to you that we mentioned at the top of the segment is the Panel Recommendations on the nsas Data Collection programs. That is the lead story in the new york times. Panel of outside advisers urged president obama to employ major oversights and restrictions on the National Security agency. The most significant recommendations was that mr. Inma restructure a program which the nsa systematically collects logs of all american phone calls and a small group of Agency Officials have the power to authorize the search. You can read more on that story in several of the papers today. Left inabout 15 minutes this segment to talk about Ben Bernankes legacy at the Federal Reserve. Steve from haymarket, virginia. Republican line. Caller the bottom line is that these ridiculous games we have been watching the poor have gotten poorer. Andunions and the tea party two or three other groups need to get together and form a second party. With this budget deal, we now know we have only one party. We have one party rule. It is time for the American People to form a second party. Virginiam haymarket, this morning. Adrian is up next from panama city, florida on the democrat line. Caller good morning. Ont see how mr. Bernanke host go ahead. Im sorry. I dont know how he, the president , or anyone can do anything without have anything coming into the coffers of this country. I think if big business left our country, they keep talking about creating jobs i dont know how they can do that unless the government refurbishes steel with the automobile industry, textiles, all of these things. When you go to the store and you get tomatoes from guatemala, that is crazy. You do yousk see any change on the horizon . We are talking about ben bernanke. Do you see anything different under a janet yellen . Chairmanship . Caller i dont know how anything can be different in this country until people get back to work. I dont know what that is going to take. When they Start Talking about, we dont want to a smokestack industry, it is technology. [laughter] college,d everybody to i guess. I dont know what they are going to do. Host fred from gold beach, oregon. Independent line. Caller good morning, gentlemen. Thank you for cspan. That lady was exactly right. Ben bernanke, that was a stimulus. But that cannot be Economic Policy for this country and Economic Policy by just flooding money into our system. You have to have confidence. You can give me all kinds of money, but if i dont think i can replace it and i dont have arentnd these tariffs coming into this country and we dont get jobs because corporations can do it cheaper are note else and we charging them to have access to our economy, we are not ever going to recover from this mess. We need to have our representatives put these things on the floor. These bad trade agreements are killing us. We are not going to survive otherwise. Thank you folks. , the caller reddy was talking about putting bills on the floor to change the system. Another is a bill pushing to audit the fed. Can you talk a little bit about that bill and who is behind that effort. It is directed by a number of lawmakers. A substantial share in the house of representatives. In the senate, you are seeing a fairmont of leadership from senator rand paul, who is following in the footsteps of his father, ron paul. They have been leaders in this effort. One of their goals is to open up the feds Monetary Policy decisionmaking to more scrutiny and at a faster pace. Right now, the feds books are reviewed by accountants. Reviewed byare government auditors. When it comes to Monetary Policy, the fed has a substantial degree of independence. Is youson you do that dont want political officials, people who are looking to get elected year to year or every couple of years, worried about making tough decisions that might be necessary for the economy to avoid inflation problems down the road. The fed is often seen as the front line that will have to take the punch bowl away when the party starts getting good. Fed is going to have to make decisions that a lot of the public does not like. One way to do this is to have politicalce from the characters in our government to make those decisions. They worry about that. That auditing the fed will introduce interference into the decisionmaking. Host we played a clip on ben bernanke was talking about this she seemed to indicate that transparency, he hoped, would be part of that legacy. Did he address the effort to audit the fed yesterday . He has made the fed far more transparent than it ever was. It is on the cusp of its centennial. The federalnce reserve act was signed by president wilson. The fed has always operated with a fair amount of mystery. Sinceen bernanke has done 2006 is to remove a lot of that mystery. That is where he comes in as being clear spoken. On the entire ran notion that the fed should operate with mystery around it, confusion to keep the coffers open. Be asrnanke has tried to clear as possible about what the fed is doing and he has done that to a large extent. Interference in the independent Monetary Policy of the Federal Reserve. There are good reasons for that. Whenever you see in other politics the mixing of and Monetary Policy, the outcome is generally not good. But the caller brought up interesting points about the shortcomings of ben bernanke. Controlling Monetary Policy can only deal with a broadbased issues. It is a blunt tool. There are a lot of things that need some work in our economy that the Federal Reserve simply cannot control. Require bipartisan leadership to come to some agreement on the much bigger issues that serve as a foundation for the economy. Is ansudeep reddy economics reporter for the wall street journal. Us. Weeciate you joining have about 10 minutes left in this segment this first segment. We are taking your calls on Ben Bernankes legacy. A few more headlines for you. From usa today and several of obama to tapers senator max baucus for china post. The next u. S. Ambassador to china. We will be talking a little bit more about that impact on tax matters in one of our later segments of the washington journal. We want to go back to the phones. Tyrone in baton rouge, louisiana. Republican line. Caller good morning. Thank you for taking my call. That they very quickly Federal Reserve, since its , is then in 1913 biggest obstacle in undermining the the constitution. It is nothing but a trust fund. They have done more to undermine the constitution i cant believe some of the things that mr. Reidy said. Congress has the right to create currency and regulate the value. That is our constitution. It was done that way by the founding fathers. To hold people accountable who , so we cancurrency vote them out to the right of suffrage. Back togo all the way the first governor of the board, it is nothing but a sham to undermine the constitution and if we dont get rid of it, this country is going to go the way of detroit. Host all right. Jack is waiting from davenport, iowa. Order to think in judge mr. Bernanke, we have to go back a little bit further. Look at recent history. Retiringl clinton was 2001 i mean bonds. He doubled the National Debt from 5 trillion to 10 trillion and then he left the country in a state of downward momentum, which left us in 70 trillion of National Debt 17 trillion of National Debt. Job in he did a good reversing that trend. There wasnt anything he could do because things were already set up for a collapse, starting in 2001. Bernanke should be praised for what he has done. He was a responsible person who prevented a depression and i think even bush used a word depression. Big guns rights in on twitter. A few minutes left in this first 45 minutes. One other story. Coming out of the white house. In usa today and politico. Fora adviser sorry comparing gop to jonestown cult. He is already ruffling republican feathers. In a profile published tuesday by politico, he is quoted as comparing republicans to the infamous cult led by jim jones who is responsible for the 1978 sinai poisoning of his followers in guyana. After some of the stories started hitting the wires, john podesta wrote on his old twitter page my snark got in front of my judgment. I apologize to speaker boehner, whom i have always respected. A few minutes left to talk about ben bernanke and his legacy. Jimmy is from athens, georgia. Independent line. Caller good morning. Listenersremind your that this tradition of big bank hobia goes back to andrew jackson. They have helped our economy grow. This is the 100th anniversary of the fed. I want to thank mr. Bernanke for giving us the lowest inflation rates in u. S. History as well as preventing Great Depression number two. Talking about the dual mandates as opposed to the single mandate during his thing yesterday, i think he has added unemployment as well as keeping inflation low. How long has he been talking about that . A few minutes left ear. I want to get in a few more calls. You can read sudeep reddys work at the wall street journal. Karen from warren, ohio. Democrat line. Caller good morning. Why didnt ben bernanke see this crisis coming . Elizabeth warren . Theseoth knew about financial products. Michael greenberg talked about speculation. Sounds like he wasnt listening to the right people and that is all i have to say. Thank you. Host you can also follow this conversation on our facebook page. Tes in. Wrigh this debt is going to be put on the young people. One must call from john in ashburn, virginia. Independent line. Ler host john, are you there . All right. We will continue following this conversation on facebook and twitter this morning. Bynext, we will be joined one of the senators from up on capitol hill. Senator tom coburn will talk about his new report on wasteful government spending. Then we will look at the prospects for comprehensive tax reform is a panel of tax experts. We will be right back. This was a deliberate move by the government to end the controversy. This was always the perspective of the government. She was the one who stood out. She should not have. She was responsible. That was the idea that she was the victim and that she should have been protected. They say that there was an elite force of police that would accompany her into the rally where she was killed. There. Snt we sell videos, pictures, we talked to numerous witnesses, we interview 250 people, and all of the people we interviewed said no box formation, no elite force for her protection. That was the duty of the government. Former u. N. Assistant secretary general on the International Inquiry he led into the assassination of former pakistani Prime Minister and is azir bhutto. Ben will take your questions as a part of book tv, weekends on cspan amaral to. 2. Cspan we want to know what your favorite books were of 2013. Go to book tv. Org and click on book club to enter the chat room. Washington journal continues. Tablewe are joined at the by senator tom coburn, republican from oklahoma, here to talk about his newest waste book which he has put out for the last several years. You are also a member of the select Intelligence Committee on capitol hill. We want to get your take on the recommendations from the panel on reining in the nsa that came out yesterday. What do you make of those recommendations and what do you think congress and the president can do with them . We have been busy. I havent thoroughly studied that. I will look at the recommendations. I dont agree there should be a civilian director. There is too much ordination. I have sat on this committee for 3. 5 years. What is in the press is oftentimes erroneous, but you cant state that it is erroneous without compromising other things. Senator feinstein and senator chambliss are often perilous to correct things that are in the media. The second thing i would say is that a lot of what is put out, what mr. Snowden has put out is erroneous, but you cant say how it is erroneous without compromising our own National Security. I think some mistakes have been made. There is no question about that. Of the most thoroughly oversight it agencies oversighted agencies. Time ins a week i spent a closed review oversighting this agency. What they have done, how they have helped secure this country without dilating privacy rights of americans violating privacy rights of americans do you think that is pfizer he panel that was put together was the right group of Advisory Panel that was put together with the right group of people . Guest i dont want to cast judgment on that. I am pretty much known as an independent thinker. I lean more towards the libertarian side. I am not real worried about what nsa has been doing based on what i have seen in the protections that have been put in place to protect Civil Liberties through what they have done. We live in a very different world today than we did 1015 years ago. I am not for giving away our freedoms to give ourselves protection. But they have been reined in significantly, but have also done a very effective job. Of your other efforts for the past several years has been to put together the waste book, as you call it. Calling out wasteful government spending. The waste book tallied some 30 billion in wasteful, unnecessary government spending. That is the highest total of any of your previous waste books. Was this a particularly bad year or was the waste just easier to find . Oh i would be careful with the numbers. The last one was 25 billion. We are spending money on things we dont have on things we dont absolutely need. Interesting hearing your last conversation on bernanke. Bernanke did not have any help from the u. S. Congress. We have the Monetary Policy, that is what the fed can do. But there was no positive fiscal policy from the u. S. Congress. Same thing goes for the spending. Administrations can do so much. But if the congress is not going to oversight but the administration is doing, isnt going to be specific when the right legislation, isnt going to expose waste through an oversight hearing and Holding People accountable, then you are going to continue to have it. Host if people want to see the waste book itself, you can find t at cockburn. Senate. Gov urn. Senate. Gov. Is this book meant for members of congress . Guest it is for both. These are some real problems. Disagreepeople will with me on whether that is appropriate spending. Au cannot disagree that in time when we are borrowing 750 billion those things cant be a priority. Host what are the things you highlight . Study to a yale professor for 400,000 to assess the intellectual capabilities of tea partiers. The focus of that study was to people or constitutional conservatives dont have the intellectual capacity that other people have. The study surprised because theyre smarter on average than the average voter. Is funding through nsf. There was a political purpose to it. That, thenoing to do do it with private money. That is all borrowed money. Billion in this thing is borrowed money. We are borrowing it against our future. Maybe it is a good thing to if wethat, but if it is, have to borrow money to study it right now, when we are in trouble as a nation, should we be doing that now . Lets say you of a completely different political philosophy than i do and you think we are to look at that. Should we look at it now . When we are borrowing the money to do it . Or should maybe we wait and have some judgment and maybe not spend money on somewhat questionable things . Especially in light of that they could be challenge from a political perspective. Maybe we ought not to spend the money until we get our house in order. Host you bring up the Government Shutdown as one of the big waists. Talk about the waste you see in the Government Shutdown. Guest you didnt have to shut it down, one. You paid 300 million to federal employees for not working. You pay them anyway. The amounts of money we are itwing here would have kept from shutting down. 30 billion is half of what the sequester was per year on a discretionary budget. If congress would do their job and create an expectation that you will not get away with spending money stupidly or ,rivolously or not following up you would change spending habits. Here30 billion outlined in you would not have to have a Government Shutdown. Host who puts together the waste book . Guest my staff. We are constantly this is not hard to do. Compiling it at the end is what is hard to do, to make sure you have no errors. The last third of it is nothing with footnotes and references where we got the information and with the bases of it is. Part is not collecting the information, but put it out there were people dont think you are totally being have a biased source. Everything is sourced and legitimately so. This is a third of what we could have put out. Be going through specific examples from the waste book for about the next 40 minutes or so on the washington journal. If you want to call and ask him about the waste book and have some thoughts on it, he is here to answer your questions and talk about it. Republicans, 202 5853881. Democrats, 202 5853880. Independents, 202 5853882. Outside the u. S. , 202 5853883. Jesse in virginia beach, virginia. Republican line. Caller hello, senator. Guest good morning. Caller on 9 11, Building Seven was not hit by a plane. Would you be willing to meet with and review the evidence about the controlled the motion representatives host we will try to stick to the waste book question. Guest we will look at that. I will not spend a lot of time meeting with people. We will certainly look at it. Host julie from los angeles, california. Good morning. Caller good morning. Hi, senator coburn. When you are doing senate , i found your interactions were particularly mineral memorable and im loving the goatee. [laughter] there are brilliant people. Unlike most Supreme Court justices, sometimes i agree with what they are doing and sometimes i dont. I dont think it really matters. The questions you hear are really interesting as they hear cases. Packed from the fact that they are both interesting individuals. I think theyre doing fine. Judgment which coincides with justice if you have open and clear judgment and it is willing andook at the constitution look at the facts of the case ,nd it is done out in the open essentially with a hearing before the justices one of the things i would like to say to the Supreme Court is documentation of their meetings as they decide these cases behind closed doors so that we can have more insight into what the discussions were before we see the a patient opinion and dissenting opinion. Host how did you feel about having cameras . Guest i think cameras and courts are terrible. Just like cameras in the house of called all sorts of acting out, just the same as the senate. Camera,ook at thie the dont look at each other. I believe courts ought to be open, we are to hear it. I am not a big fan, because of what i have seen happen in courts, i dont even like court tv because of all the theatrics that go on. Host we are talking about your waste book this morning. Put out earlier this week. Is there one specific example and here that particularly hooked you or surprised you . Orst theres always one two. When you see stuff done for political purposes the the agencies i dont like that. Funding that like the ought to be is very careful to make sure we are not trying to make a judgment about political for loss of the. Philosophy. Is this a study we need to know . And what value is it . In thathere a bias are you trying to get a certain outcome . Sometimes at nih, you see that. The things that bother me are poor decisionmaking that never gets held accountable. Million spent on airplanes that we will not use. They went to arizona to the bone after they came off the factory line. The person who made that decision did not get fired. Not held accountable. The people that make the decisions they are not held accountable. The companies that provide things to the federalthe compane thanks to the federal government who do not perform, we do not take them to court to give the federal Government Back their money. We spent 300 million on a blimp for warfare observation. An army blimp that flew one time in new jersey, not afghanistan. It did not meet the requirements so we sold it back to the manufacturer for three hundred thousand dollars. Who made the decision to do that . Who is held accountable . What general independent i is forced to retire . Pentagoneneral in the is forced to retire . We never hold people accountable in the federal government. They cioast. We do not hold individuals accountable or the contractors who did not deliver. Some numbers the federal government spends over 80 billion a year on i. T. 80 billion. When you take all the gao and ig reports and the contracts that are over that are high risk by gao. It is estimated that over half of everything we spent every year on i. T. Gets thrown away. 40 billion. That is more than everything in this book just on i. T. In the federal government. We are now Holding People accountable. The administration did not do it, congress does not do it. The number one problem is congress. Congressy members of is really awaiting publication of the wastebook each year. This is the fourth year you have done it. Here is a tweet from senator rand paul. The 65 million in Hurricane Sandy relief money spent on Television Ads promoting torres and in new york and new jersey. Wastebook. Talking with senator coburn about his wastebook. 30 billion in spending listed in the wastebook. Jonathan from georgia on our line for independents. Good morning. Caller good morning. My comment is actually it is on the oversight of the nsa. I think it applies to waste as well. It is always a case of the fox guarding the house. Henhouse. It is an issue of public trust. When you look at spy abuse, i look at this close to previously dealing with it was not until the breakin and the fbi that we discovered the abuse. Then you had the Church Commission to actually look further. To the nsailarly scandal, you had the snowden affair that expose wrongdoing. You had clapper come on and lie to the American People. I think those recommendations coming out should be looked at closely. I think it requires some type of Church Commission. Isthe waste part, i think it the public trust level of our government. Congress and senate and the president , of course. It is at an alltime low. They are saying trust us to oversight ourselves. Host james on twitter writes in. We are spending 50 billion a year on snooping on americans. Are we getting our moneys worth . Guest that number is not accurate. Think the independent caller made a great point. We do have a crisis of confidence in our country. That is based on lack of effective leadership. Both by the president , the house, and the senate. Why would you think we are doing why would we be at 6 approval looking at what we have done. The Senate Majority leader which lack the Senate Majority too high. T is way you have to have been living in a hole or known nothing about the u. S. Senate to think we should have a 6 approval rating. The senate was designed by our founders to force compromise. To build consensus. To not react to the public pull. To think longterm. We have had leadership in the last 8 years that has gone counter to that. Partisan, non compromise, not consensus, and nonreactive to the needs of the country. Almost 5 years since the president died appropriation bill. Says the president signed an appropriation bill. We do not have to want to take a vote. It is the most cowardice thing to not put bills on the floor. We are now running the senate. You cannot get them in you cannot get an amendment or offer a solution. There will be a Defense Authorization bill today, 700 billion worth of authorization. Over half of our discretionary spending. There will not be one amendment offered. The pentagon cannot even report back as the constitution requires how they spent their money. We are not going to do anything about it . We have all this waste in the pentagon duplication and incompetence. Doingon the subject of something, lets talk about what you do when you call out the 30 billion in waste in the wastebook. Robert on twitter. Does this senator coburn does this to stir up the tea party. Why dont you fix it . Guest i cannot convince my colleagues to do the hard work of oversight. If that gentleman will recall, we used to do earmarks. Somebody offered at amendment to eliminate the bridge to nowhere. That was me. It was a strategy to involve the public and what is going on so they will force change. Withears ago, we did away earmarks. Not because career politicians wanted to get rid of them. American people were demanding it. The whole idea is to create such withssed such disgust the stupidity of members of congress that the American People will demand change. I cannot convince them after nine years. I cannot give the leader i cannot get the leadership to do what they need to do. Silicon sedation of duty of oversight and transparency to actually fulfill their constitutional duty of oversight and transparency. Host have there been smaller victories . Excessive printing costs. Going to change until americans demand that their member of congress start doing what they were sent to dale. To do. There are a few of them do. The number one goal is to get reelected, not to preserve the republic. Not to make sure we do not waste money. We give stuff to Committee Chairmen and ranking members to do stuff, nothing happens. 3. 5 years ago, i attached an amendment that forced the gao to study every aspect of government. We have now had three reports and will have a fourth one this year. Worth ofr 250 billion duplication and waste per year in the federal government. Already. Have given us only one time and 3. 5 years has one committee done anything about this gao recommendations. It was the Labor Workforce Committee in the house that consolidated 47 Training Programs into 19. They only had authority over 36. Senate has not done anything. No other committee has acted on recommendations that would be stated us hundreds of billions of dollars a year. We are more interested in perception and politics than we are the policy and the future of our country. Disgustedshould be with us. I cannot believe these 6 the 6 . Nobody is doing their job and there is no leadership to get this country out of trouble. Host talking with senator tom coburn, republican of oklahoma. Member of the Government Affairs and select Intelligence Committee. Author of the wastebook, the subject of our conversation this morning. That was published this week. Joe in georgia on our line for republicans. Caller good morning. Spanve been calling in to c for 30 years, tom coburn is a hero. Is tok the only answer elect more people like you and ted cruz. I am a member of the tea party. Coming downcramer to be on my television show. We have a guy running for just like you. He is running against the incumbent governor. He is a champion just like you. The only answer is to elect super taxpayer champions like you and ted cruz. What do you think . For people not vote who are career politicians anymore, i do not care what party. I do not think you fix washington by sending people up here to fix it. I think the states have to restrict the power of the federal government. It is out of control will stop it is out of control. We need a convention of the the power to rein in of the government. We need term limits in congress. We need to limit the authority of the executive branch. Regulations that have major impact on the economy that do not have any basis in science but have a basis in political philosophy. There is a lot of things the states could do if they had a convention to limit the federal government. Going back historically, if you if youdison, jefferson, read our founding fathers, we are so far away from their principals of a limited federal government and the authority of n relationship to the federal government, we need a big change. You are not going to fix it with career politicians. Limits domany term you think a member of the house and the senate should serve . Msest a max of two ter in the senate and three times in the house. I am in my 10th year in the senate. That is funny. Host you served in the house before that. To come never intended back up here. This place is sick. Is nothing but secular information in washington and very few fresh ideas. It is all handed off to someone else. Freedom terms give you to do and be who you think we ought to be. Rather than continuing to look to get reelected. There are two countries in the eyes of washington. The washington country and that the country outside of washington. Not served well by what we have going on in washington today as a nation. Mitchell from tennessee on our line for democrats. You are on with senator coburn. Caller good morning. Guest i am doing well, how is chattanooga . It is a pretty part of the country. Is beautiful down here. A couple questions you are talking about bending. About spending. I dont see why you dont look at loopholes as spending aret tax expenditures nothing but earmarks in the tax code. 1. 2 trillion dollars, i was on the Bowles Simpson commission and recommended eliminating many of those. Caller you guys have to do that. The second thing, do you know the difference between enlisted pay. Nd officers why would you take money from an enlisted man . I was down there for years, i never saw officers relieved me. Were i was shoveling coal. We had a hard time down there. I spent 15 years and you want to tell me what i did is not worth it . I do not understand what you are saying. I voted against the bill yesterday, i will vote against this one that will impact retiree pay. I am on the other side of that. You may have me confused with somebody else. Caller i thought i had seen your name as voting for it. Host we will go to spartanburg, South Carolina on our line for independents. Good morning. Caller good morning. Senator coburn, i want to let you know that i appreciate what about. Informing us i have always thought that it needed to be brought to the front. And dealt with. All this abuse. All this spending. It is like the rich get richer and the poor get poorer. I am 66 years old, retired. Monthot even make 1000 a in Social Security and that is what i live on. A policys have to have along with your regular medicare, on and on. I tried to keep myself above water. It applied you, senator senator, to you, come on and let us know about wasteful spending. I have been watching cspan for many years. Stuff that they let people senators come on and speak about. I am so discouraged. I love our country, but i am really discouraged that we are going down a path. It is like the whole is getting is gettinghe hole deeper and i am afraid we are getting very. Guest we do not have one problem in front of us that is not fixable. But until you take it out of the hands of the politicians here today republican and democrat that way a game with the American People. Leadership and that says i do not care what happens to the party, i care what happens to this country. Forll make the choices best the country, not my party. I will speak the words that people do not want to hear because they need to be said. Until you have that kind of leadership, we will not fix our country. 80 ofwould tell you is what you hear from washington is a lie. Poken by both parties it is half truths. A halftruth is a whole lie. We continue to see people not wanting to embrace the truth, the facts of the situation. They rationalize everything so they can look better as a politician. Politicians in america have failed this country right now. They are celebrating bipartisanship. That was a deal about politicians, not about the country. It was good for the politicians. Youre not going to have that conflict. Word onoing back on our spending, we put some things in the bill that do not make any sense in terms of asking some people to sacrifice like wounded and injured veterans. Wasting 80 billion a year out of medicare just on fraud. Because we will not hold agencies accountable. Put in the system that the rest of the industry has and we cannot force it. We do not have an executive at hhs that knows what they are doing in terms of improving thanks. We have failed. Need toican people reject the status quo of the politicians here today. Host talking about votes this week. You voted no on the budget bill last night that was passed last night. You said i will vote no again today. The national Defense Authorization act. Why are you voting no. Thet we will never fix problems at the pentagon without structural change. Put some teeth into something that will force them to report numbers. In the constitution it says every year you should get an account for the treasury of how you spent your money. The pentagon has not ever done that. No idea where they are spending their money. What i can tell you from my business background. Every other successful business if you cannot measure what you are doing, you cannot manage it. You have never seen such incompetent management. Why would you buy 700 million worth of planes and put them in the desert. Why would you buy a blimp that does not work. The way you get rid of a trillion dollar deficit is 1 billion at a time. They waste 100 billion a year at the pentagon. They do not know where they are spending their money and how effectively they are spending their money. You look at the major weapons systems, they do not know how to buy weapons systems. Our highrisk list is unbelievable. We have a carrier nobody would believe what is going to cost, the gerald r ford. 35s that are way over budget. They are still going to cost two times or three times what they were projected to cost. Incompetency because there is no adult in the room and no control of buying something before you know what you want. Atneed to make real changes the pentagon. You have people who are authorizing this who do not want real changes. They like the status quo. Ella onat are. Twitter. I do not always agree with him but i know he would be a great president. Any interest . Frustration is high enough. It is time for me to go home before i get in real trouble. I have done and been where i am going to be. Host senator coburns fourth wastebook. You can see that on his website, coburn. Senate. Gov. You can look through that report of about 100 different examples of waste and unnecessary spending by the government. Ken from georgia on our line for republicans. Glad tosenator coburn, see you on the program. I have seen you on the other discussingn fox, your latest addition of government waste. Edition of government waste. As you mentioned, i was just watching a program where there is a move afoot to have an amending Constitutional Convention of where the states legislatures have to put forth the idea of amending the constitution. This would be to get term limits. I agree, at one time i did not believe that was the solution. As you havevinced, expressed numerous times, that that should be the case. Term limits would help get people to be more responsible and to get the career politicians out. One point. Hopefully you would not leave until that is passed. You a reason of voice are a reasonable voice, one of the few and the government. Uote, i have used it talking to some people. We are spending money we do not have for things we do not need. That is a good quote for a book on money makeover for individual families. Host ken brings up the idea of term limits. On twitter, what will term limits do if new members still have to take high dollar money to get elected . Guest if money is the corrupting influence money is not the corrupting influence in washington. If you can buy my vote for a dinner, you have already sent the wrong person. Going to take less and less money, not more and more money. As leaf which campaigns to social media which are less expensive as we switch campaigns to social media, which are less expensive. You get people here who do not know what you cannot do. Happeningk at what is most people who come to their first time have a history of being in elected office. 70 of the senate is career politicians. Their whole career has been in the political arena. What our country needs we do not need another career politician. We need people with realworld experience to have been through the school of hard knocks. Who have made mistakes and made things right and who can make a judgment of their experience and apply it to problems in front of the country. Whichd of the conflict, is natural, it does not mean they are bad people. The natural conflict of how do i stay here and advance my career. That is in contrast in conflict with what is in the best interest of the country. I am term limit, i have term limited myself. I am going home. There is no positive benefit. You need more people who do not know the system who do not buy into the biases of the political elite. They come here and say that will not be the case. Wisdom and their experiences to apply to our problems. Host a few minutes left with tom coburn of oklahoma and author of the wastebook. Mark from california on our line for democrats. Good morning. Caller good morning. I am a disabled vietnam veteran. I have seen a lot of fraud and abuse in the pa system 0 in the va system. They say it is the best Health Care System we have. That is a lie. Most of the stuff that comes out of washington is a big lie. We have been fed a lie. We need to get money out of politics. Until we do that, our government is broken. Everybody is on the take. I do notr a very few, know. I just wanted guest a couple of points, they are not on the take. What they are on is how do i make sure i get to stay here. And my career is more important than the country. That causes more poor decision making. The second point is why should a veteran, disabled or not, be forced to go to aca system to a va system rather than wherever they want . In some places it is great, in some places it stinks. I would give veterans the right to go wherever they want. You served our country, you are service connected, you go where you want and we pick up the tab. If you want to go to the va, great. If you want to get care somewhere else, you should. We create competition and make the va better than what we see today in many places. That will give veterans a choice. They fought for freedom, why shouldnt they get freedom to choose their health care . I proposed that for a long time, i cannot seem to make it work. Host we want you to talk about specific examples from this years wastebook. One that stood out was paying for a study that had people lying in beds for 70 days. Nasa study. Is a paying people to see where the physiological effect of being in a headdown position. That is what they should have their astronauts doing. They should put the very people they are going to be putting through this. Thats why they hire people. We take 10 people or 12 people and pay them 18,000 for six months to lie flat. Lets do that to the guys in the program rather than contact rather than contract out. I am questioning why you would not have the very guys who are going to be your flyers doing that. Host over your four editions of the wastebook, how many examples have you been able to retire from the book . Guest 20 host out of 400 . Guest what we have done is prevent more of the same. Nsf pays a lot more attention to what we are saying, nih pays attention. Does not pay any attention. They probably have not even seen the wastebook, they do not even care. It is such a convoluted mess of priorities. The state Department Spent 5 million to buy crystal where. Crystalware. Whether we need it or not, we spent 5 million. What could that do for education of innercity schools . We are out of control. Host richard from philadelphia, pennsylvania on our line for independents. Youre on with tom coburn of oklahoma. Caller thank you, senator coburn for your wastebook. I appreciate the information. The comment on nsa. I agree with the other caller about the conflict of confidence that exists and has always existed. I wonder about the technology, the development that gives this type of intrusion. Not through the government for beingty purposes, inundated in our society. I am concerned about that. Host senator coburn . Guest he is right to be concerned. One of the things i have told my staff and i am going to do i am not going to carry a cell phone. I will not have a blackberry. Too much Technological Capabilities to invade my privacy. There is no guarantee someone has not it does not have to be the government the fact is that if you want your privacy that, you have got to get rid of the electronics, the mobile devices. Somebody, somewhere not the government google or facebook, we just saw a deal yesterday where facebook can see what youre typing. And not necessarily on facebook. I think he is right to be concerned with this modern method of communication. There comes a lot of motor abilities. There comes a lot of vulnerabilities. We have demonstrated irresponsibility. One of the things that is dangerous for a republic is for people to lose confidence. Lose confidence in the governments offices in the ices, loses ausp confidence and the rule of law. That is how you get the unwinding in a republic. People want us to address the real problems rather than play games. Too often, we play games. Our motivations tend to be about us. Oft senator coburn, author the fourth edition of the wastebook. You can see it at coburn. Senate. Gov. We appreciate you coming. Two tax experts will join us for a discussion on prospects for onprehensive tax reform capitol hill. Later, a new report on federal employee Job Satisfaction. But first, a news update from c span radio. More on the nsa. President Vladimir Putin of russia says secret surveillance by the u. S. National Security Agency is necessary to fight terrorism. But he also said the government must limit the appetite of the agency with a clear set of ground rules. The ap says the comment is a support for the obama administration, facing criticism over the Espionage Program disclosed by former nsa leaker edward snowden. Who has temporary asylum in russia. Warn. Panel looking to crimes and seriousness civilians are systematically vanishing without a trace. The panel has found a countrywide pattern of Syrian Armed Forces and government malicious easing people from mass arrests, checkpoints, and hospitals. Sometimes claiming they do not exist after they have disappeared. Groups such as the Al Qaeda Linked Islamic State in iraq are seizing people. Officials frustrated that military shipments heading out of afghanistan have been stop ped through pakistan face the possibility of flying equi of oneut at a cost billion dollars. This a week after pakistani officials promised secretary hegel they would take action to solve the problems. Protesters are gathering on the route and posing a security threat. Other issuesand later today when secretary of defense hegel meets with reporters at the paragon. You can hear live coverage at 1 30 eastern on cspan radio. Those are some of the latest headlines on cspan radio. She was everyones soul sister. Everyone thought they knew her. She laid her life out for everyone to see. She told us about what life was like in suburbia. For women in the 1960s through the 1990s. One of the wonderful things about her she wrote mainly humor. It was humor that was accessible to everyone. It was humor that happened and everybodys lives. But they might not have recognized it until i saw it written on the page. Funny things happen to us all the time, but we have to be on the lookout for them. She was the one that focused our attention on the funny things that happen in a family. Things that, at the moment, seemed crazy, driving you nuts. When you look back, you think that was really funny. That is a real gift, that is a literary gift. The life and times of irma bombeck, looking at the history and literary life of dayton, ohio. On cspan2 and cspan3. Span, we bring Public Affairs events from washington directly to you, putting you in the room at congressional hearings, white house events, briefings, and conferences. Offering complete coverage of the u. S. House. All as a Public Service of private industry. Cspan created by the cable tv industry 34 years ago and funded by your local cable or satellite provider. Now, you can watch us in hd. Washington journal continues. Host joint at the desk by eric toder of the urban workings Tax Policy Center and Brandon Arnold of the National Taxpayers union for a discussion on the prospects for tax reform on capitol hill. Mr. Arnold, ending the year with a small victory for bipartisanship with the budget deal. Is it a sign of things to come for tax reform in 2014 . Maybe. The tricky part is with senator baucus being named ambassador to china. That throws sand in the gears with tax reform. We are going to have a new chairman of the finance committee. The most Important Committee on the senate side for tax purposes. That is pretty unpredictable. Senator rockefeller, senator schumer . That will play a huge role in determining the future of tax reform. Host why . What has baucus role been . Chairman baucus has been the cheerleader when it comes to tax reform. He has worked with chairman dave camp of the house ways and means committee. They have been able to reach across the aisle. Establishing basic parameters for tax reform. They have traveled all over the country and become good friends. Intowe are entering unknown territory. As chairman camp going to have a great relationship with the new irans chairman with the new finance chairman . Host mr. Toder . Guest they have done terrific work and the most serious discussion of tax reform we have had in many years. It is a big list, no matter what the personnel is. When you talk about getting the moredown to 25 or 30 , like 25, which the house wants. And not losing any revenue, you end up having to pay for it by reducing tax preferences. There are things that could be reduced. Nobody has named any really big ones that they are planning to reduce. The politics get hard. Host even if senator baucus were to stick around and were not appointed to this job in china, it would be tough. Brandon,he timing, arnold, of the National Taxpayers union . What is the timing for when this might happen in 2014 . Guest chairman cant has been ready to go for months ca camp has been ready to go for months. A lot of issues have popped up and derail tax reform. It is probably the baucus announcement will probably delay things on the house side. Host how long does a process like this take. Camp is ready to go. If they move forward, is this a years long process . Guest on the house side, things are teed up. Workinge been doing groups for months. They have been traveling across the country talking to americans and getting feedback from the Business Community. From citizens and nonprofit organizations. The house is ready to go. I talked to some folks on ways and means, they said they could produce a bill in weeks. That was months ago. Today, i think they are ready to go. Host eric toder, what are the must dos of tax reform in 2014 . Guest there are no must dos. Ways to reform taxes. The system is broken. A lot of things can be fixed. Fix everything at once is going to be extremely difficult. Are presented of camp were presented of c representative camp, i am not sure they are ready to go. It is already 2014, they have done great work. Some pieces of what their reports are could be made separate legislation which would be very useful. As far as a broad, getting rates way down, i dont see any evidence they are there. I dont see evidence of what preferences they were actually close in order to be able to get their. Get there. They have interesting ideas on International Corporate taxation and financial products. There are things they can do. They are planning something much more ambitious. Host Brandon Arnold, if they do something comprehensive, what are the must dos . Guest we want to broaden the base, get rid of as many deductions as we can and get the rates as low as we can. The tricky part is Corporate Tax reform and individual tax reform. The ambitious list that chairman baucus and chairman camp set out is to do both simultaneously. That is difficult, even in the house where they have the votes and the political support. In the senate it was an uphill battle. Now that we are shifting to a new chairman, the of the climb got a lot steeper. Want to talk to Brandon Arnold and eric toder about tax reform efforts, our phone lines are open. Republicans, 202 5853881. Democrats can call 202 585 3880. Ndependents, 202 5853882 if you are outside the u. S. , 202 5855883. Itle folks are dialing in, eric toder of the urban Tax Policy Center. Talk about when the last time such a big list was taken by congress. In the corporate and the individual efforts of taxing . Guest 1986 with the tax reform bill. We had a very different circumstance. We had a president very engaged in tax reform, Ronald Reagan put forward a proposal and generosity cask in and Dan Rostenkowski decided to cooperate. He agreed on the concept of lowering the tax rate and broadening the tax base. That got things going. Were working in fixed parameters. They had agreed on revenue neutral. The agreed to keep distribution of tax burdens among income groups relatively fixed. It was still a very hard problem because they had many lobbyists upset about what they were doing. They were at least an agreement on broad parameters. No such agreement today, that is what makes it a much different game. Host Brandon Arnold, same rating on the situation . Same reading on the situation . I was not in town for the last go around. There is agreement on the very broad parameters. Tricky when you start naming actual deductions and naming actual tax provisions. Your coalition of folks willing to push for reforms slowly starts to unravel. It is tricky. They have not put together a chairmans mark, they have not set to the public host explain a chairmans mark. Piece of a jack legislation that provides more detail than what we have seen piece of legislation that provides more detail than what we have seen. A draft that would be picked apart by lobbyists. There is a lot of expectations that even though there has been unity from the Business Community and grassroots americans for tax reform, once the rubber meets the road, things get tricky. Tax 45 minutes to talk reform. Brandon arnold of the National Taxpayers union and eric toder heree urbanbrookings are to answer questions. Jim from michigan on our line for republicans. Caller good morning. I have heard so much lately about flat tax. It seems to me that that would be simplified, more revenue coming in. What are the pros and cons . Host eric toder . Guest ok, so. When people say flat tax, they had Different Things in mind. There is a plan called flat tax which is not an income tax. It is a form of a value added tax. I can explain that, but just to summarize. Thatwould happen under proposal, given today that we have a progressive tax system. People with a higher incomes pay a higher share of their income in tax. It is progressive when you take into account tax breaks and preferences. Toyou moved to a flat rate raise the same amount of revenue, you would have a substantial tax increase on the lower and middle income groups. And a cut on the top income groups. That is one of the major issues with that. The other thing is, you get into the question of not just a flat rate, a question of what the base is and what you include. The proposal that was out there in the academic west to get rid of all charitable deductions, mortgage interest. The rate would have to be higher. Host Brandon Arnold, a question from twitter. Gop has talked about tax reform for decades. Where will the resistance come from . Of peoplere is a lot that have gotten very rich off of various provisions in the tax code. There are targeted provisions that benefit certain industries. Even more broadbased provisions like business expenses that have a positive effect on the economy. Inime you tweak a code or this case, overhaul, extracting 2 trillion out of the economy, there will be winners and losers. The lobbyists are paid a lot of money to try to preserve or expand these provisions. They will push back very aggressively against comprehensive tax reform if it disadvantages their constituency. Guest in 1986, a number of business tax preferences were eliminated. There are not that many professors left. There are not that many preferences leftist the scope preferences left. To acope does not amount lot of money. The real money is in individual preferences, not addressed in 1986. Care,clusion for health mortgage interest, charitable, state and local deduction. Not used byions are a few special interests and lobbyists, they are used by millions of people. Guest they are used by upper middle income people. They are in many cases things we should pare back on. The politics of that is different. Guest there are lobbyists who make a lot of money off of those guest absolutely. Guest the mortgage interest deduction, the realtors, Home Builders association. Lobbyists will spend a lot of time, effort and money to defend. Guest it is not just lobbyists. Host lets go to our line for democrats. Ruben from philadelphia, pennsylvania. You are on with Brandon Arnold and eric toder. Caller did i miss the senator from oklahoma . I was calling about i dont think people understand Unemployment Benefits and how they work. Host on tax reform . That is what we are talking about. Caller i was trying to get in touch with the senator. Host we will go to new jersey on our line for independents. Good morning. Caller good morning. I am going to make a comment. It is just for a few senators lee. Rand, cruz, we should get rid of all of congress. They do not care about the American People. Are sick of people this. They have been talking about tax reform for years. Nothing gets done. These congress people. Com in come congresspeople that in, they leave millionaires. We have to get rid of lobbyists, too. Host lets talk about one of the other members playing a role in these discussions paul ryan. Reports came out this week he is looking to seek that ways and means chairman post that dave camp has. Talk about the role paul ryan is playing for republicans and for tax reform. Has willingly taken a backseat to chairman camp right now. It appears he will have the gavel in the next congress. That will be very interesting. Paul ryan is known for his ability to reach across the aisle, despite being polarizing when he ran on the romney ticket. Relationships on both sides of the aisle. He has a Good Relationship with ron wyden. We talked about senator baucus and leaving the chairmanship of the Senate Finance committee. The senator iif if senator wyden becomes chairman, he and ryan have a Good Relationship paul ryan toder or dave camp, which would be easier for democrats to deal with with comprehensive tax reform . Met bothhave actually dave camp and paul ryan. I have respect for both of them. They are both serious electorals. Serious intellectuals. They will be presenting a different point of view the democrats. Either of those could potentially make a deal. You talk about differences in their points of view as they approach this . Or do they approach it from the same principles . Guest ryan has been much more upfront. Proposal. A i do not think he is as familiar with the details as camp from his work as the chairman. Camp has gone into more of the nittygritty and the nuts and bolts. I am not saying ryan would not or could not. He has put out a broad tax reform plan. Ryan is on record as having at least att one at one Time Favorite reductions in at onences. At least time favored reductions in preferences. He is out there with a plan in a not. Hat camp is host you are on with eric toder. Caller the Supreme Court ruled that corporations have the same status as individual people. I would like to know why it is that individuals are taxed on their gross income, while corporations are taxed on their net income. Host mr. Arnold . Not sure that that is entirely true. Both corporate and individual tax codes allow people to make deductions before paying taxes. I am not sure she has the facts right. Guest individuals and corporations are taxed on their net income. Anyone can take a deduction for the cost of business. The individual deduction is limited to a percent of income. Businessdual runs a and can take deductions and or cost just like a corporation. Independentsn our line indiana. You are on washington journal. American whoyoung is uninitiated with the tax reform movement, i was wondering if they could lay out in laymans terms what the goals of the movement are. In the immediate and long term. Is there unification in pursuing those or is it a partisan issue . Host mr. Toder . It is a partisan issue in one sense and not in another. Everyone is aware there are a lot of provisions in the tax code. 1. 2oburn mentioned trillion a year in tax expenditures and preferences. We couldstates what do. There are a lot of provisions that provide special benefits for certain people and certain activities that are really, in some sense, spend through the tax code. A hard look at these provisions and see which ones are really accomplishing what they are meant to accomplish. There is a lot of room for a reduction in those tax benefits. Both democrats and republicans agree on that. Differencevery big on how those savings would be used. Republicans would like to put those savings into lowering tax rates. Democrats would like to get some more revenue from those savings. There is a conflict over how that would be used. But there is a lot of the sense that there are a lot of things being done through the tax code that may be we should not be doing. Host Brandon Arnold . Guest i agree. One goal should be simplification. We have a tax code where people spend about 6. 7 billion hours just in compliance. The tax code is broken. We are going to have to do what rid ofalks about, getting a lot of tax provisions preferences, my preference would be to lower rates as much as we can. A simplified system would reduce the dead weight losses we are experiencing. People have to spend an excessive amount of time and dedicate money to paying taxes. There are a lot of just portions in the tax code, people engaging in behaviors because they are taxed preference associated with them. Instead of other things that might have a better effect on economic growth. Simplification needs to be front and center talking about tax reform. Host twitter. It will never happen. We need to fix our revenue deficit eric toder, im the idea of tax extenders on the idea of tax extenders. Explain what they are and why 55 of those are set to end . Small,most of them are targeted provisions. A few of them are larger, like the research credit, with a lot of intellectual backing. People think that is good for the government to help out. There are a lot of supporters from lobbyists Host Research and Development Tax credit. Guest congress, when it does these provisions, seems to not like to face up to the budgetary cost of them. Instead of making them permanent, they extend them for one year or two years. When they both the tenyear cost, it is a lot smaller than extending them for the full 10 years. They do not have to count the later years because they are not losing money. Research credit was first enacted in 1981. I do not think it has ever been in place for more than three years at a time. I have lost count of the number of times it has been extended. It has been allowed to expire a few times temporarily and always been reinstated retroactively. These keep getting extended. We are going to see that playing year. Ain this they are set to expire, but that is not the end. If they expire at the end of this year, they can always restore them. 2014. Ill expire for they can restore them retroactively. Host Brandon Arnold, the ones that are expiring. Or quote came from dave camp paul ryan. If we were to do these extenders, it would take the pressure off doing comprehensive tax reform together. Explain that concept. There are a lot of people interested in seeing tax extenders extend it can be done retroactively. The feeling from tax reform on capitol hill, if we hold this over the head of people who want to see provisions reauthorized, that will give us some momentum to bring them into the fold and have an advocate for tax reform. Join the broadbased coalition pushing for fundamental reform. Host is that happening with the guest it is hard to say. There are so many different provisions. Interest 55 special groups lined up. Some are more broadbased and some are very narrow. There are asparagus growers. Ones are more broadbased like the research and development credit. It is hard to say. I do not think there is a great deal of unity because you are talking about so many different provisions. I think that the Political Capital does have some degree of merit. That is making tax reform front and center, instead of taking the pressure off of the extenders. Host we have half an hour left. We will take your questions and calls. Brandon arnold is with the National Taxpayers union. Eric roder is with the urban brookings Tax Policy Center. Lets go to mike. Caller good morning. I would like to have you addressed the fair tax. Every time i talk to a politician about it, the first thing that they say is that it hurts the poorest people the most. They do not start out by , what itg the predates really does it takes the power that they have out of their hands. It runs it into the power of the people with the purse. Can you address the fair tax . A few other people have advocated for it. I do not see much chance for it getting anywhere. Politicians are not going to get the power. Guys would love it. Pelosi,id and to nancy even a lot of republicans. I think the john boehner would be opposed. They do not call the shots. They do not have the Campaign Expenditures go to them. These groups that you have been talking about host can you explain the fair tax . Guest it is a National Retail sales tax. It addresses this to some extent by having a creep pay. , it like in the flat tax exempts a portion of wages. It has the same affect. It would still be limited to one rate. You would not be able to design it in a way that is as progressive as what you have now. There is another concern about the fair tax. It is not coming from obvious, but from many economists and people who favor taxing consumption instead of income. If you select all of the taxes at the retail sales level, it creates an enormous opportunity for tax evasion. That is one of the reason that countries with consumption tax has value added taxes. They are selected at each stage of the business. If the retailer opt out, they still have the revenue that they have collected. I think that it is extremely dangerous and extremely difficult to enforce a tax designed that way. It would lead to rampant evasion. The notion that politicians would keep their hands off of retail sales tax, if you look at the state retail sales tax in the number of exemptions, i think that experience tells you that they will figure out a way to introduce preferences. Host thoughts on the fair tax . Guest this is an idea that has been around for a number of years. The late toes and has been pushing this. The current house sponsor is rob woodall of georgia. Has supportedn National Sales tax. I think it has a lot of merit to it. The biggest is moving taxes away from investment. Less tax on investment, pushing it to consumption. Also, reducing the cost at the federal level. You would have dramatic irs personnel to in face enforce audit. I think this is a nonstarter because it is such a radical departure. It would probably require constitutional changes. It is not in the nearterm future. On the economic side of things, and on the political side, there are some things that are very appealing. This as we have discussion, Sandy Wrightson on twitter that anything less than a single page tax form for all americans is an acceptable. Unacceptable. Do you think we can get it down to one page, singlesided . Guest absolutely not. We need to make the system less complicated. There are all kinds of provisions that do not need to be as complex as they are. There are lots of ways to make it more explain a bow. The fact that we live in a complex world if you want to tax peoples income or consumption, you have to know what it is. If i run a Small Business and i have a card that i use in my business and for my personal use, you have to know that you do not want to tax me on the business, but on the personal use. It rapidly gets very complicated. If we want to have any system that is fair and if you try to not deal with those issues, then what you get is rampant avoidance. You end up having to have all kinds of regulations to stop it. There really is no way in todays Business World i will not talk about corporations are international businesses. They are probably beyond the capacity of understanding. , it is just not possible to have a onepage form. Host for people who are not familiar with the Tax Policy Center, tell us about your group. Thet our group is purpose is to educate people on tax policy. We are formed by people who are former officials of republican and democratic administrations. We strive to be nonpartisan. However, we have points of view that we express. We are not without these points. We have a model of the tax system. It is a computerized model that we have gotten from publicly available irs data. How weuse this to show affect the revenue of the government. Have been able to become a source of information for journalists. We are very much involved in the Political Campaign and analyzing the candidates tax proposals. We analyze tax reform. Host you can check out that group at their website. Eric is the codirector of that group create he previously worked at the Treasury Department and the irs. For folks who are not familiar with the taxi union, brandon . Guest we are the nations largest taxpayer advocacy group. We have advocated on behalf of taxpayers that the federal government level and the state and local level. We believe the taxes should be lower. We believe that spending should be reduced as much as possible as well. Host if you want to check out their work, ntu. Org. We have more calls in the segment. Were taking your thoughts on tax reform and its prospects in the next year or several years. Mike is up next from california. Independent line. You,r i would like to ask what is patriotic about 19,000 businesses in the Cayman Islands of avoiding taxes . I think they are a bunch of traitors. They use this country to make their money and then they hide it. Is anly answer progressive, flat tax with no deductions. Host Brandon Arnold . Guest i think that tax report reform would help to address this problem. We have a broken tax system right now. If we move to a territorial tax, it is a simpler, fairer tax system. It would ease the problem quite a bit. The is this a place where two sides coming in have some overlap in agreement . Guest there is a substantial amount of agreement. You are not taxing people for their earnings abroad and twice further earnings domestically. There is some agreement there. It is still a tough needle to thread. You are talking about billions of dollars in tax revenue. Host guest i have to strongly disagree. One of the problems is that they do not tax foreign income. The companys do precisely what the callers said. They find ways to arrange their affairs so that they report their income in no tax systems. That is what we see happening. I do not fall Corporate Leaders for acting on behalf of their shareholders. Many companies are doing it. Not unique. Going to a territorial system has to be combined with some tougher roles rules on reporting. Is do we decide what income reported to the United States . We do not have roles. Campe way, representative is developing roles that might do that better. They are not going to a simple territorial system. Theyre going to a complex mix of taxes. Situation prevent the of money being locked up overseas. They also make sure that money is accrued and taxed more. Host what other areas to see them agreeing going into this debate . Ms. Baucus released a document on energy tax reform. I think that is very emblematic of the kinds of things they are thinking about. Theyre taking Energy Subsidies and picking technology or winners and losers. There trying to reverse benefits. One is renewable energy. One is for use of renewable fuels. Some people like me think that that is not a correct solution. The better thing to do is to test the carbon content. Within the parameters of the systems, i think this is the perfect example of somebody trying to simplify. Heres what the system is doing. Theyre trying to encourage this kind of activity. Lets do it in a simpler way. Lets do it in a way that accomplishes the generic goals without micromanaging. That is the kind of thing that representative camp might very well be willing to sign off on. Host what happens to a proposal like this . Clean Energy Tax Breaks with him leaving . Guest that remains to be seen. He is showing a willingness to death in that direction. As eric said, it may not be where we want to be. It is a step in the right direction. Vacating the chairmanship, we do not know who the new chairman is. We cannot speculate what their views will be on the matter. Camp on the energy issue is trying to move in that direction. There are bipartisan proposals on the house side. There are tax credits under the American Opportunity tax credit created a few years ago. We are seeing some bipartisan cooperation. The energy side has 42 tax revisions. There are not as many education tax credits. They are narrowing them down. It is a step in the right direction. Host lets go to canton, georgia. Republican line. Caller good morning. I would like to talk about the tax proposal. I am a republican. I was a republican. They passed back down to the states and the counties. The county is raising sales tax. 80 of my property is taxed. 80 of my property tax goes to the schools. I do not have anybody in the county on taxes to pay taxes on. Tax sales tax, gas poor people like me work their pay 300 innd Social Security every month. After all of the bills and Everything Else host to be clear, what is your question . Party everybody in the is passing on to the poor people. They do not want to do anything to help the people out. We do not get anything. They need to do something with the tax code. Pay their share instead of writing it up it off. Host do you want to talk a little bit about that . Yout it is difficult when talk about changing the tax code in a dramatic fashion. These are the exact people that they should be putting first in this process. They should reduce the tax rate on the people that are struggling to get by. Theyre paying too much in the way of taxes. I do not know about the situation, but when youre talking about income tax relief and getting rates down as low as possible, hopefully we will create a system that will alleviate. Me get youric, let to explain another part of the tax code. Can you explain the mortgage interest the adoption . Deduction . Host guest that is available to money on taxes. They have itemized deductions on their tax reform return. They claim the standard reduction. You only want to itemize if you have enough deductions for things like mortgage and charities and state and local taxes. That is greater than the standard deduction. At already five percent of tax returns are itemized. Alsoortgage deduction also is also more beneficial to higher income people. Dashu are in the 15 flat bracket, it is only worth . 15. The mortgage interest has generally shown that most people believe it does not do what it purports to do. It does not have much effect on homeownership. It does encourage people and facilitate the purchase of larger and more expensive homes. It probably has some effect on driving the houses up of that. Abit. Peoplely, i think most do not have a mortgage deduction. Countries like canada and new zealand and australia do not have a mortgage deduction. Homeownership is not comparable to ours. The one thing that i would add however, is that this is a big problem for the Housing Market. If you pull it away rapidly, given the fragile state in the last few years, it could be harmful to the economy. We will have to move fairly carefully. Host we got an email on the subject. Like to avoiduld a citizen revolt, they should not touch the Home Mortgage deduction until our Corporate Tax loopholes are eliminated. If they do get rid of the mortgage seduction, you will see the public pushback and push back hard. The public is looking for fairness. That would not be considered fair. Congress should really think about this. It would be the straw that broke the camels back. That is carly, from minnesota. Gary is up next from texas on the power line for democrats. Good morning. Caller good morning. I would like to inquire about tax collections. I have heard three times now in the past year that the Internal Revenue does not collect all of the taxes. The first number that i heard was 600 million. 600 billion in collected taxes. The second number i heard was 660 billion. Then i heard 800 billion. It seems to me that all of that revenue would balance the budget. If any of those numbers are accurate. Host the question for the taxpayers noon in. Guest this is referred to as the tax cap. It is the difference between what people ought to pay and what they actually pay. It is typically about 85 to 87 . Able to squeeze a few more Percentage Points out of that. They go through everyones tax returns. They send out letters and they ramp up enforcement. They are able to squeeze a few more Percentage Points. I do not think they are able to break the 90 threshold. It is a problem, but it is not a problem that is easy to solve. Unless you want the irs knocking on peoples doors. All of the Financial Information will not be an easy problem to solve. It will always be floating around out there. There is a lot of revenue. This taxa way to close cut. My pet project over there. Actually closing it is not easy to do. Host another email came in as we were talking about tax reform. This fewer rights that they work for the irs and help taxpayers understand credit inductions. Even the irs understand how complicated the rules are. It is hard to understand why they only allow us to handle two or three applications. How could a normal taxpayer understand this stuff . The biggest scandal is the handling of charitable organizations. They are considered charitable organizations. I cannot understand the massive profits that they surely make. Do you want to take this on, eric . The caller or the e mailer makes a good point. There are questions about what is classified as a charitable organization. Pga why is the nfl and the classified as charitable . Guest that is a good question. I cannot answer that. I believe they are categorized as trade organizations. They are notforprofit, but theyre not charitable. If you write a check to them, it would not be taxdeductible. Or an a Church Educational foundation, if you write a check, then you cant adopt. Can deduct. They are taxpaying businesses, but they are nonprofit. Ohio writes in that corporations should pay the same percent in taxes that the people pay. Minutes left. As we talk about tax reform, we are with Brandon Arnold and eric toder. Loving 10, illinois on the line for independent. Host caller thank you for taking my call. The lobbyist is a person who is writing somebody. They ought to be locked up. A 10 tax is fine. 10 acrosstheboard. Kids, no write off. Flat, 10 tax. There is no funny business going on. Same with Social Security. If you make over 110,000 dollars per year, you do not pay anymore. That should be unlimited. It does not matter how much you make, you still pay and on medicare. They need to follow the constitution. Make the government smaller, not weaker. Is up next from pennsylvania on the line for republicans. Good morning. Caller i want to tell you something. We have a flat tax in pennsylvania. Put a 10 sales tax acrosstheboard. It bought us a property tax. We have been trying for 20 years this is all propaganda. Give us the flat tax. Get off of it. Everybody pay their fair share. This is all crap. They are dropping it. It is all talk, talk. It will never be resolved until someone comes up with an answer. Right answer is paying they should be opposed and get rid of them. Abouthe is talking efforts that he is pushing unassailable. Lessons that the federal government can look to state legislatures as they look to revamp the federal tax code . Guest most of the action of late has happened at the state level. We saw the North Carolina passed a big tax overhaul this last year. What they did there was follow the basic principles that we have been talking about. That is broadening the base. Including on sales tax. They were able to lower the rates on income tax and sales tax. I think there are lessons to be learned. You are talking about an animal that is significantly less complicated that the federal code. There are lessons to be learned. They require bipartisanship and citizen involvement. It is an open stakeholder process. That should be run on that front. Host lessons for the states . Guest we will learn a lot of lessons because the states are going in different directions. There are many claims about what that does to the economy. Were going to lock learn a lot more about what the effects are. Host what are the directions to watch for . Guest some states are limiting income tax. Others, like california want to balance their budget. That peopleuestion might migrate from california if they raise their income taxes. We will see if that happens. It will be interesting. Not necessarily carrying over to the federal level. Notfederal government does face the same competitive pressures. Whennk we will learn a lot different governments and businesses try Different Things. We learn about what works and what does not. It will help the development. From elizabeth is up next pennsylvania on the line for democrats. Good morning. Caller good morning. Your guest said that individuals should pay tax on their income. They shoulds that be taxable that is the difference. Adjust grossan income. Businesses pay tax. If you want to the level level the playing field, they should be able to pay tax on their net income. Let the individual deduct their electric if the business deduct their electric. Businesses can use their money to pay cost. Quick, on income. I do not see why it is so difficult if the customer pays 10 . The tax rate in the foreign country is 10 . Up to 20 . E 10 the next tax would be 10 . It would be negative. Why is that so complicated and thank you for your time. Host i believe that the example was your example, so i will a star. Guest let me use a simpler example. I run a business. I get 200,000 of sales. I have employees pay 150,000. What i payt deduct for employees, that means i have to pay taxes on 200,000. I have actually only made 50,000. The money that i paid to employees is not mine. It is perfectly legitimate for businesses to to adopt their cost of doing business. That is what you need to do in order to measure the income of business correctly. Arnold . Would you like to jump in . Guest i would certainly concur with eric there. If we allow individuals to ddeduct, everyone can zero out their liability. Individuals need to pay taxes after taking advantage of deductions that exist. I think that the example that eric put out there is pre illustrative of the examples the problems that we face. And brandontoder arnold, i appreciate you coming on for this discussion. Steir joins usx to discuss his groups federal employees Job Satisfaction. First, an update from cspan radio. Politico reports that max democrat, isontana expected to be nominated by the white house to serve as the next u. S. Ambassador to china. Senator baucus began informing some of his collects and staff about this nomination last night. He remains unclear when the appointment would take effect. The senator would have to win confirmation from the senate. If heco writes that leaves before the term ends, he would relinquish his gavel on the Senate Finance committee at a time when he is still pushing for a rewrite of the tax code. I would put his chances in peril this congress. The montana democrat has already announced he will not run for reelection in 2014. If he leaves early, he will open up his senate seat and a competitive state. The governor would fill a vacancy. In economic news, the Labor Department and announced that unemployment raised last week. It is the highest since march. The increase may wreck reflect volatility. The less follicle fourweek efforts jumped by 13,000. The second straight in greece. Those of this latest headlines. I was a donor to marthas table. Like so many of your viewers. The annual consideration of the things that we cared about. They were important to us as we grew up. The issues that we cared about because they matched our broader beliefs. We were players in the community. Marthas table delivered hot meals to the little park outside of the bill and Melinda Gates foundation. It was in much cash mcpherson square. I would see the lines of people every night. I knew that it was a volunteer driven 10,000 volunteers. 80 hardworking staff. They had in normas influence in the community that they were serving. It was a great brand. Why would i not join that organization . See if i can put my skills to work and see if i can understand better why do we have this issue persistent Child Poverty why do we have so many children that are not graduating high school and going on to college and able to attach to careers the way that i was able to . The president and ceo of marthas table on leading the nonprofit sunday night at 8 00 on cspans q and a. If you are a middle or high school student, our video competition wants to know what is the most important issue that congress should address next year. They gave 57 minute video. You have a chance to win 5,000. With 100,000 in total prizes, the deadline is january 20. Get more info on our website. Washington journal continues. We are joined now by max stier. He has a report on the best places to work in the federal government. It was another bad year for federal jobs. Wasnt it . Guest a very disturbing set of numbers. The federal workforce continues to go down. It has been doing that since 2010. That should be troubling to everybody in this country. Host it is record lows this year. It is the second year of record lows. If you want to follow along with the chart that we will be showing, you can go to best places to work. Org. On achart is your index scale of 100. It talks about where federal Job Satisfaction this line here that has dropped for three years in a row. This drop in the past year matches less than the biggest drop the year before. Guest it is also the lowest since we put these rankings how. All of ourbelow historical records. Very concerning a set of numbers. It basically tells us that we are losing our for what are federal workforce. Were disengaging them from work when we need their help more and more. Of 157. 8. Is a scale you compare that to Job Satisfaction in the private sector. That is this line appear in the low 70s. The gap just keeps getting wider. Guest the partnership for Public Service believes that our goal ought to be to be able to match or exceed the private sector benchmark. Were going in the wrong direction. Host if you want to talk with issue, ourn this new phones are open. The lines for democrats and havelicans we will also a line for federal employees in this segment. The numbers are on your screen. We would like to hear your stories and assessment of this data. Max, the question for you then is why are we seeing these numbers . Can you talk about what federal employees are saying for this reason . Guest i do not think it will be a mystery. Were treating them in a terrible way. That includes a great deal of attacks in the public sphere. We areore important, preventing them from doing their jobs. What is extraordinary about them is that they continue to be extremely mission oriented. They are there because they want to help the american public. They have a variety of ways that the federal government does. What they experienced last year was incredible challenge is. No budget. Declining budgets. Uncertainty. Sequester. Furloughs. Pay freezes. It is a nonstop set of attacks. There are ways that are undermining their ability to do what they want to do. I should note also that these numbers were collected from april to june of this year. Host shutdown . Guest the other shoe has not fallen. This does not include the impact of the shutdown. That has continued to drive down morale. Host for a different look at the comparison, versus the federal employees, the dark line on this chart shows that the private sector Job Satisfaction the blue line is federal employees. This is actually the lowest numbers you have seen since you started doing this survey in 2003. For those who do not know, explain what you do. ,uest we are a nonpartisan nonprofit organization. Were focused on trying to make our federal government more effective by focusing on talent. How to get new talent in and how to make sure it is flat well. How do you ensure that the Work Environment engages employees. How do you have a system to support all of that. We want to make sure that there are stakeholders who are focused on making government better. Now whether bigger or smaller. That is what we do. We also produce a service to america. There are awards for federal employees. We educate talent at universities and do leadership training. A range of things like that. Host and the best places to agencies bying size. Rankingow, the highest in terms of Employee Satisfaction for their agency was nasa. Of 69. 4 on ranking the 100 point scale. They are followed by the Intelligence Community and the department of commerce. That is the large agency category. The department of Homeland Security right last. They had a ranking of 42. 6. Followed by the department of veterans affairs. 49 as their ranking. You can see all of the restores old at best places to work. Org. We have the president and ceo to take your comments. Dna is up first from West Virginia on the line for democrats. Caller good morning. He is absolutely right. There is a war on Government Employees driven by corporations to want everything privatized. I have two data points to comment on. One, during the Bush Administration, they were trying to prove that the private sector could do these government functions better than the public sector. In 80 oftion is that cases, the Government Agencies did the job better and cheaper than the private sector. Second, theres propaganda put out by people at the Heritage Foundation claiming the Government Employees are paid much more than the equivalent people in the private sector. I have a friend from the department of energy who left. He was earning 150,000 per year. He joined the private sector and his paid doubled. His benefits and overall income more than doubled. The day he left government. That is the standard that i have seen in my experience. Guest thank you for your question. As you know, do during the Bush Administration there was an effort to impede activities in the government. That led to the federal workforce winning those competitions. I will say on the pay question that you raised, we are now seeing the wrong debate about federal employees being paid too much or too little. They are being paid in the wrong way. We have a system that was put in place in 1949. The system was designed in an age when work was very different. People could do things that were much more comparable in a system that was created where all people were paid the same. ,f you are a physical therapist on the gs level, you were paid the same. There was very little connectivity to the external market for talent. My view is that we actually need to change the system. What Organization Works with the same compensation system that was in place over 60 years ago . The federal government needs to change. To pay in the marketplace. The reality is that some folks will not be paid enough. There may be folks who are paid too much. The point is that we will pay what we need for the talent that we need. No more and no less. It is the wrong conversation that we are having today. Host on twitter, there is a question on the methodology. What is the major factor that leads to a negative view of a government job . Who is your sponsor does the bar different for private sector jobs . Guest i should note that we very early on or a nonprofit. We were able to persuade congress to pass a law to require federal agencies to enact a survey. That survey is run by the office of personnel management. It is a massive undertaking. Were talking last year about 700 house and respondents. This year, 400,000 respondents. They are responsible for deciding what questions will be asked in the survey as well. On the methodology, we have close to 50 response rate. A very deep survey. We have north of 10,000 pieces of data. Sector, weprivate work with groups that actually put together the benchmark numbers that you described. If you start Digging Deeper into that, it is also fascinating. We start seeing the overall engagement a recognized. Also, the specific questions. Federal employees are much less likely to feel that they are good work is recognized. They are much less likely to feel that they get the information to do their job or that they are empowered to do their job well. They do not think well of their Senior Leaders. There are differences that are highly problematic. Host the Senior Leaders of these agencies take these rankings seriously when they come out . If you are the incoming head of the department of Homeland Security and you see yourself at the bottom, has jeh johnson said anything . Guest the answer is yes. They do take these rankings very seriously. In his answers to congress about what his priorities were, the issue of employee morale was one of the top three priorities for him. Chairman mcauliffe Homeland Security held a hearing two weeks ago on employee morale. The leadership clearly is getting the message. That is very important. You haveem is that shortterm political leaders that are not incentivize to focus on the mission of the organization they run. Theyre not around long enough to pay the piper. Transparency on their impacts insider agencies. That is very vital. Host we want to hear some cash from some federal employees. We will go over these results with max. Federaline for employees is harper from michigan. From harper woods, michigan is tim. Go ahead. Caller i was saying back in 19 2010, the Bush Administration came in. Peoples jobs were being threatened with downsizing. There were a host of other things. People thought their jobs were secure. We would be on pins and needles to find out if there was anything else that they might want to throw at us. Morale was low. People wondered if they would still have their jobs. I feel that there is some kind of stability or something. They know their jobs should be secure. Theyre looking over their back and finding out that were going to have reductions in all kinds of things. I feel that we should have more and, as farundings as some of the supervisors, there is cronyism and nepotism. I do not think it is good. Host tim from michigan on the federal employees line. Are you seeing these results ajar survey . Guest there are two points to point out. The cronyism the numbers are troubling. Riots and protests over 100 years ago that helps to generate the merit system in our civil service. If you look at the numbers, the workforce is saying that they do not think there is as much merit as there ought to be. There are two numbers that strike me as highly problematic. 80 of the department of Homeland Security workforce believes that promotions are not based on merit. 80 . The reverse of that, 80 of the top supervisors say that promotions are based on merit. You have a problem on top of a problem. The workforce is not seeing the connection between great work and promotions. The top supervisors do not see the world the same way. This is the kind of information that the survey is able to draw out. It points to some real problems. We need to change it. Host look good to another federal employee. Joyce in falls church, virginia. Caller good morning. I work in a small federal agency. The Senior Leadership has received very poor marks. Repeatedly. We all wonder why isnt anything being done . We have a payforperformance system, which is supportively better than gs. The popular people or the go along to get along people do much better than the rest of the workforce. Our Senior Leadership basically does not want to follow the rules. When you give them a set of policies or procedures, they want to know why there is no way to work around it. What do we do . Isnt anybody watching these numbers and seeing that the agency is consistently scoring in the lower third percent . Guest you raise a really important point here. Our goal is to create some transparency in the in cap packed impact on leadership. What we see from the data on the survey and analysis of these rankings and what we see is that leadership is the number one driver for Employee Satisfaction and commitment. By far. More than any other activity or category of Work Environment. It really is the leadership that is both responsible and agencies moving up and down. Unfortunately, this is not a solution. Createdsparency can be by the ranking. It does not mean that everyone will respond. The advice that i would have to you is to have your fellow employees do their best to make sure that they identify some key things that might be able to be changed within the agency. We can use the data to demonstrate why the leadership should be listening. Will they listen . I cannot promise. They want attention that the rankings are generating. That provides an impetus for them to pay attention. The tendency in the federal environment is for the leadership to be promoted and rewarded for crisis management, not good management. Our purpose is to change that equation. It is not perfect, but we are getting better. Were seeing more and more leaders who are actually doing things to pay attention. Nasa, the department of transportation, they have all turned things around in dramatic ways. Host joyce mentioned that she was from a small agency. According to your survey, the Top Small Agency was surface transportation board. They have 76 points on a 100 point ranking. They are followed by the consolation service. At the bottom of the list is the office of the trade representative and the last is the federal maritime commission. They scored 39. 9. We are talking with max stier of the partnership for Public Service. Patrick is up next from anchorage, alaska on the line for independents. Caller good morning gentlemen. Thank you so much for the washington journal. I get up early every morning. Host thank you for doing it. Caller i have a couple of thoughts on the question. One is, i believe that government in general is too large. The graph that you showed in the very beginning i happen to believe it is going in the right direction, not the wrong direction. There is a huge difference in my mind between employees and workers. I think that our government workers are hard to find compared to the private sector. You see the check and Balance System in the private sector. You produce work or you go away. That is not the case in almost all levels of government jobs. My question at the end of this, the case in point, the Forest Service in alaska. You cannot find them on a friday. Those people get threeday weekends every day every week of the year. Daysinvented tenhour situations. That does not provide customer service. If the private sector tried to pull that, they would go out of business. You mentioned earlier young man, the federal government is comparing the fiscal physical therapy business. What is the federal government doing in the physical therapy business . Thank you very much. Guest let me start the back in there. I was using physical therapy as an example. The federal government does have physical therapist. The probably the largest user would be the da. You would agree that our veterans should get the best care possible. That includes physical therapy. Put that aside. Your question, in my mind, raised an important point. This is not a conversation about whether the government should be bigger or smaller. There are a lot of legitimate reasons why you think it should do less or more. Our point of the partnership is that whatever the government is doing, you want to make sure it doesnt write. The fact of the matter is, if your employees are not fully engaged and youre not giving them the support that they need to do their job well, everyone gets hurt. This is not about half the employees. Is an Interesting Data point in the office of management and budget. It is one of the Central Power agencies. About five years ago, the number one ranked agency overall. It was the last ranked agency in worklife balance. They were working incredibly hard. Yet, they were the most engaged and committed across the board. That is what you want. You one employees that are being paid for by your taxes. You want them to be engaged as possible so they can produce the most for us. Leave aside the other questions. That is a political debate is well worth having. Once something is decided that they should be doing, do it well. Part of doing it well is having an engaged workforce. That is not what we get today. Host some agencies, after you released the ranking yesterday, were quick to tell where they were. If they were high up in the rankings here are tweets. Uspto posted a link to your website. We have a few minutes left with max. He is the ceo and president of that group. Seattle is up next on the independent line. Thank you for calling. Caller good morning. The first thing i was struck by was the 50 response rate. I work for the Census Bureau on a survey. It requires an over 90 response rate. , it isny of it is obligated by the u. S. Law that people respond. When people do not respond, nothing happens to them. I get docked for not getting the interview. I looked around my colleagues at the Census Bureau and i realize that what they are really doing is pretty much asking us to work a fulltime job for parttime pay. We actually report all of the time that we spent, both administratively and interviewing in the field. We are docked on an hours per case. On the one side, we have a federal response grade. If we do not get someone who refuses to do a survey required by law, we get talked. If we spend time trying to get them to comply, the production rate is docked as well. I see this as a spinning towards the drain. I wonder why the Census Bureau does this kind of thing. Guest i think that you are giving a wonderful example of inefficiency in your organization. One would hope that in a healthy environment, your voice would be heard by the leadership. They would say that he is right and why are we doing it this way . They would make the changes that would enable you to do your job better. At the end of the day, that would ensure that the public gets a higher rate of return for their tax dollars. The environment that we want to see in the government is one in which people on the phone line are heard. Good ideas are acted upon. People have the resources that they need to their job well. That is what the survey is intended to measure. It is intended to promote this. Again, hopefully your statement may help. I am hoping that the Census Bureau and other organizations will start looking at the data and trying to determine whether people feel that they are being heard. One of the key questions on the survey is do you feel that the results will lead to change . That is a pretty good metric about how organizations are healthy. Mail, rick writes in on e asking about funding for the partnership. Guest we are a nonpartisan, nonprofit organization. I spent a decent chunk of my time trying to find money. Businessman, by they are the sole source funder. They care about the quality of the government. We now get our money from individuals. His family he passed away. We do service work for government as well. We work on the survey with deloitte. They help us with talent and funding and other things as well. It is a grab bag makes. All of our information is available for the public if they are interested. Host and that is ourPublic Service. Org. Reno,d is up next from nevada on the line for republicans. Caller good morning. Can you hear me . Host yes. Caller thank you for taking my call. This is a very important subject. The amount of money and the amount of time that people put into running our country is immense. I can tell you that i was in the private sector and i was an officer for a fortune 500 company. I have someone very close to me who works for the federal government. In the justice department. In fact, in the va. I can tell you from the feedback that i get, that the trust is horrible. It all starts with leadership. When people go to work and come back the moralize tonight, you look forward to going to were because of this lack of trust and teamwork and developing employees, it is devastating. As a taxpayer, it disturbs me greatly. I can say through the gentleman to the gentleman there, they do take surveys. These surveys go nowhere. And they give feedback do not get any feedback from the surveys. Nothing changes. I think there is leadership at the top that should conduct 360s on a leadership all the way up the ladder