Transcripts For CSPAN Washington Journal 20140920

This morning with a question about your income, including questions about how you have been affected. Call has grown, you can call following numbers host on october 3 we will beginning more detail on the report, but this morning we will be hearing from a finance and markets editor at the publication produced by the atlantic. Good morning, matt. Thanks for having me. Host what did the senses report this week and what it say about this data the economy . Came out withnses their once per year update on median household incomes. This is basically the best ballpark measure we have for how typical American Family is doing. Right at the middle of the income distribution. The story is in great. It was basically flat between around 50,000. A percent below what we saw before the recession hit. 57,000 with the median peaked in 1999. Is holding back American Income . Why have we not seen a more robust increase in earnings when we have been in recovery for five years now . It seems to be a these aren of things already inflation it adjusted numbers. Inflation has been pretty weak, maybe a bit below 2 for the last year. That tends to eat into the income a little that. But it has been improving lately in terms of the number of jobs. Wage growth has remained persistently weak, that is the story here, too. You cover finance and markets. It seems like there is a disconnect between what we worse between what we are saying the average american is feeling and wall street. What is causing some of that disconnect . The relationship between the stock market and the real economy is always difficult to explain. One of the things the stock isket has been reacting to the Federal Reserve is undertaking the quantitative that areograms basically designed to push up asset prices. One of the things the fed has done is really push up u. S. Stock prices. Verynds to be forwardlooking, discounting earnings from corporate america, going out five to 10 years. It is important to note that these census, the numbers that they produce, this is just money income. Salaries, wages, things that pushed the put cash flow into american household. They dont take into account the remarkable runup of the wealthiest households. Were there any bright spots in this report at all . Is there anything that we can be happy about and point to in this recovery . There are a couple of things. The poverty rate declined somewhat. In 2013. The first the client and the poverty rate we have seen since 2006. Theres a big improvement in the number of children in poverty. Big, but significant. Numbers fell from nash numbers fell by 4 million children in poverty. There has been some improvement on that, largely attributed to people, working families who are able to work longer hours because of the improvement in the economy. Report seems to point of the data that shows that income inequality is increasing in this country. How worried should we be about that . How much does it impact the as you know, it has become a more important and prominent issue over the last couple of years. There was a book that came out from a french economist named thomas the caddy that makes the were getting close to levels of income in the 19thnd saw century during the robber baron era. Conclusive be pretty that a higher and higher share of wealth has been flowing to of all u. S. Income. That has risen terribly since the early 1980s. It was about 17 then. Flat. Is pretty much a fact, income inequality is getting worse. Measure, it was basically flat, but there are different measures of it. In terms of how it affects the economy, thats a bit different. We look a lot at public earnings and corporate earnings. You can clearly see corporate ceos talking about this issue if you look at companies that are tailored towards things like dollar stores, they have been hard hit over the last year or so, there have been new challenges in boosting their profits and sales. The ceo essentially said it has to do with the fact that these people are really strapped for money. They dont have a lot of money to bend. Other elements of that too. Mcdonalds has had a hard time. Cocacola has had a hard time, walmart has had a hard time. They depend on the American Consumer and large chunks of the populace are not flush with cash at the moment. Host many consumers are struggling. Matt, we appreciate your time. Caller thank you very much. As you mentioned, the Federal Reserve policies may have had some impact on the disparity that we are seeing between what is happening on wall street and in the real economy. Anthe Washington Post, opinion columnist writes exactly that, that they may have fed income inequality. Is the fedhow much to blame for this . The question is whether and how much that effect is offset by others. Generating higheryielding investments this year, he cited economists estimating that account holders have lost nearly 1. 2 trillion in Interest Income between august of 2007 and september of 2013 relative to the fed policies host what have you seen . You can call us, shows 51,900ort specifically in 2013, thats the median income. The poverty rate for the nation was 14. 5 percent, down slightly from 2012. The percentage of people without Health Care Last Year was 15 . We have joe from north youreston, South Carolina income is increased . Caller just talking about net. I dont see how anyone from the middle income down to the poor could have anything else. Since 2008 the price of goods, services, they have gone up, including gas, entertainment, close, food, even the value meal at wendys has gone up a few cents to make a difference. Since 2010 my Health Insurance ,remium has gone up every year wiping out the increases i have had an income. I have had a little bit more money, but it has gone negative because of the increase around the country. Thats what type of work do you do . Ler i am a legislation legislation legistition. What is that . Caller they have your projects there, your supplies on time, they are your supply line folks. Host is your industry growing or contracting . Caller contracting. Look at it from a military standpoint. As the war drew down, there was less of a need for logistics. We are getting to that topic later today. Appreciate your topics your call. Greg, you say your income has rain flat . It decreased at the beginning of the recession, now it is pretty much flat. The more pipeline jobs we have to the teamsters union, it is going to work up quite a bit. Host is that your field . Caller yes, maam. Host what have you seen in terms of cash . Caller food and fuel are way up. Just different parts, living in oregon, alaska, nebraska, kansas, there are huge price differences. Of course there are huge sales tax differences. The cost of living is pretty much the best in nebraska, but if it is aa, nonunion job you are not going to get ahead of the game, really. All right, thats greg, from oakland, nebraska. Annie, you say your income has gone down . Caller yes. Im a welder. You are a welder . No, you are from welder, texas. Caller yes. Married to a veteran, the disability benefits have completely disk completely decreased. Understand. R host what should be done to help boost the economy . Look atyou know, i cspan, that is the most of where i get my name my news. I think of the senators do their job in order to help all the people get a job. They wont vote on anything for anyone to even get a job. All right, thank you. Is next caller this morning chris, from connecticut. Your income has stayed the same since the recession . Caller yes, it has stayed about the same. Doesnt take into account like the first caller, who i believe was mentioning well, here in connecticut everything has grown up what a bit. Quite a bit. Grocerygs we buy at the store are smaller packages, smaller weights. I think that the government cpi data is highly manipulated. I think that the inflation rate is actually a lot higher. If i could make another point, if you dont mind, you were talking about the Federal Reserve earlier. I would love it if cspan spent some serious time discussing the pros and cons of the fed, trying to educate the viewers out there. Believe that what we are witnessing is the biggest wealth transfer going on right now in the history of this country. It is being done by the federal. Eserve janet yellen, our grandmother, we are supposed to believe she is looking out for our interests . This is six years of income inequality and it is just getting worse and worse every year. So. Host i want to leave it there, because we do actually have some comments from janet yellen that she made earlier this week. Corporation for Enterprise Development conference here and washington, d. C. , this is what she said addressing the issue. Twitter host on twitter we have this message host tell us about your income this morning. Is tim,r next caller from silver, california. He says his income has gone down. You are on the air. My income has gone down. I was a retired member from the city of los angeles for almost early years. 15 years in private before that. 45 years, not counting when i was in younger schools. I have an working since 65. I have got like 55 years or so of working. Even on the books when i was younger, i retired. There are early retirement incentive programs. Families with other agreements and caps when you retire. The most that you can get is whatever youre cap is. When you have people doing these minimumwage jobs, what happens to the people who retired . We are capped at a percentage, we can move up. You are saying that the benefits went down . Caller we worked all of those , we did a lot of overtime to make ends meet. When you retire you dont get overtime. They dont go by your total pay. They go by your base salary. All right that was ken, from california. The next dollars john, from st. Paul, minnesota. You are one of the first people who said that income had increased. Caller yes. Host tell us about that. Caller i retired and it is Investment Income. Host what are you invested in . Caller multiple things. Tot you have been able supplement the steady income you have received from retirement . Caller absolutely, yes. George, alamedas, california, saying his income has remained flat. Hi, im george, im from california. I am retired. I went to college and got a job. I went for 20 years in the private sector. Prices are down. See where people are complaining. Things are great in southern california. Host do you believe that your Retirement Benefits will last you as long as we need them to . Host i am 64 years old. My retirement will last caller im 64 years old and my retirement will last until i die. [laughter] host do you receive a pension . Caller yes. My Social Security will last until i die. Two thousand dollars per month in Social Security and disability. And then i get a lot like 3000, i dont see a lot of people complaining about it. Our next caller today is tim, calling from rochester, minnesota. I am the result of a lot of the downsizing that people did during the recession. It affected my income. Personnel, staffing professions, not a lot in the last five years. Host your industry is suffering from that . Yes, the industry looking for employees. Most of the time if they are hiring at all it is not in the professional ranks. They are mainly looking to start people on a parttime or contractual basis. There are traditional loyalties locate traditional loyalties associated with that. I tried to collect some furniture. I tried to do things the supplement it. It has been a tough road. Host all right, tim, thank you. What is your situation . How were you able to cobble sure you have . Caller i retired in 1999 at the age of 51. The money we had from our 401 k and savings. We sold our house from a high income area and moved to north carolina, which gave us more disposable income. All of the cell phones and Security Systems that you have , the higher taxes in north carolina. Host is it that your income group, or they are expenses increased decreased radically . The income did grow, i am making more money through investments that i did when i was working. Host next up is cecelia, who says her income has gone down. Cecelia, good morning. Caller i think that all of this stems from the inequality. My husbands store just cover to people who had been working there for 20 years for parttime work. Still needed more so they added more parttime people. I hear all of these people talking about retirement when you are making good with good wages and you could work for the government without the republicans acting the fool about it. Host you are still on the air. Caller yes, maam. Now they want you to come in for minimumwage. Someone had the nerve to 10 per about making hour . You have to work a couple of hours every day just to get gas to come to work. Rich people dont spread it . Hrough the economy those people who are retired and making Investment Income, they are making the money erie it making the money. Host to that point, we have something here from jodi tyrell, georgia, it says here that your income grew . I Sell Television equipment. Broadcast equipment. It all has to do with who got hit by the recession. Housing, construction, they will obviously get hit pretty hard. Deny that the fed policies have all been an attempt to boost the overall , going up, the people investing me to increase it. That is the saying, you never fight the fed. People looking for a go to the only place they can in the market. Host all right, thank you. On newsmakers this week, we will be talking with bob goodman. He spoke about the actions that congress should take in terms of using military force in iraq and syria. Caller the economy has got me down. Host next up is kevin from pineville, kentucky. You also say your income has gone down . Caller hello . Thank you. Want to say thank you to cspan. Income is going down. I was construction worker. 95 and over the past two or three months, i have been laid off and stuff and its been hard around the house. I have to work an extra job. 2023, voteay that samantha rice for president. That was kevin and pineville, kentucky and next of his jack from annapolis, maryland. Your income went up . Caller i would like to also say thank you for cspan. I find these conversations illuminating. Up because i work harder and work longer. Im able to provide for my. Family without any Government Support host what industry are you in . Caller i am a lawyer. I work for a law firm. The law from charges our clients a certain amount of money, maybe 600 per hour. I get a small part of that, one or 200 per hour depending how things go. Like anybody else, my labor is worth some money and i sell it. I often hear the president talk about how minimumwage workers should not live in poverty. I think the better understanding of that is that people should prepare themselves of that there labor is worth enough money to support themselves and their family and not rely on the government to provide for them. Host do you have investments in the stock market . Caller i do and on my last tax return i was disappointed to see that my income, my Investment Income, is now taxed at a much higher rate because of obamacare. As you may be aware, there are some Investment Income tax rateases that raise my tax to a level i find to be de fiscutory. Theupset i have to pay for failure of other people to provide for their families. Host there are still a few minutes left in a few elected call in and share your experience or your thoughts about where the economy is going, has your income felt the impact of the recession . You can call us at the numbers on your screen here is another chart from the senses euro showing poverty rates by race. In theas been a decline level of poverty among blacks to 27. 2 but it still remains the highest level of any racial group, the lowest level of poverty is among nonhispanic whites. It has grown since the 1970s. It is still below that of other races. We will take another call from david. He is originally from maryland. You say your income has stayed the same . Caller pretty much it has. There was some slow times and a lot of things ive noticed from the past colors is when they from the past colors, callers is you cut them off when i talk about obama care. We will talk now to eileen and baltimore, maryland who says her income has gone down. What is your situation . Due to anfortunately severe accident i am on disability and had to quit my job after a number of years. Cover mylity does not Health Insurance. My Health Insurance was obviously covered by my company at one point. Obamacare, i cannot get on obamacare because i have called repeatedly and i am not eligible for obamacare because i am on medicare. I feel like i am at a crossroads. It is impossible to pay for anything. Mortgage payment, food when you arent disability. Its not that i want to be but i have to be. Office someone in this that is going to take care of just the regular people out there that cannot afford anything these days, that have to go to the food banks and i did not look for this, this unfortunately happened to me. Its just the state of the world right now. There are fortunate people out there and unfortunate people out there. Unfortunately, i am one of the unfortunate people. I would do anything to not be in this position but i am. I thank you for the call. From thats eileen baltimore, maryland. Our last caller this morning is alphonso from nashville, tennessee. You said you have enjoyed an increase in your income . Caller yes, my income went up. Im better off than i was when i am retired. Im 61 years old. Host you said it when up he retired . How did that happen . Investments and i pick up our time jobs. Its much better. Did you find it was easy to find a parttime job . Mike to, i try to make myself marketable. I go to the jobs i want to. When i dont want to, i just dont go. Im doing better now than when i retired. Im doing much better. We will have to leave it there. We will continue our discussion of the economy in our next segment. We will speak with jason bi ckner. And with rudolph penner. Talk aboutill whether or not the pentagon budget should be increased. Given the fight against isis we will ask worden adams, the former white house associate budget director for National Security what he thinks coming up on washington journal. Also check out our campaign 2014 website. We will be bringing you 100 debates and forms in races across the country. Last night, the candidates for Texas Governor debated each other and they were also able to ask each other questions. Here is a bit of that video. [video clip] regrettor davis, do you voting for barack obama . Mr. Abbott, what i am working on right now is running for governor. Of this incredible state and bringing policies forward that will benefit this state. I am working to make sure that every hardworking texan, no matter where they start, has an opportunity to go as far as they dream. 30 years ago, i could not have imagined that i would have the privilege when i was a young, single, struggling mother sitting on the stage and having the opportunity to ask texas for its vote to be the next governor. Texas is at a turning point and thats whats important in this election. Will we create a 21stcentury future economy that works for all hardworking texans or just some . I believe we need a governor who will fight for all hardworking texans, every single day, because their future depends on it. I believe we need a governor who is going to make sure that our children receive a worldclass education because our future depends on it. Its your turn. Abbott, judge dietz has recently ruled against you and in favor of the School Children of texas, ruling that our schools are unconstitutionally underfunded. The only thing right now coming between our children and appropriate funding of their schools today is you. On behalf of the 5 million children of this state, will you agree tonight that you will drop your appeal and allow our schools to be appropriately funded . There is actually another thing coming between me and settling the lawsuit and that is a law that you voted on and helped pass in 2011 that removes from the attorney general the ability to settle lawsuits just like this. Understandant to that what i want to do is focus on creating, as governor, a better Education System in this state. Its time we put our partisan differences aside it comes to building a Better Future for the next generation. What i am focused on is not the School System that was constructed in part in the last century. A bettersed on holding Education System for the next generation. Video 2015 student cam competition is underway, open to all middle and High School Students to create a fiveseven minute documentary on the theme, the three branches and you, showing how action in the different branches of government has affected you or your community. There is 200 cash prices for students and teachers totaling 100,000. For the list of rules and had to get started, go to student cam. Org. Washington journal continues. Host we are joined now by two guests to continue our discussion on the state of the economy. Hner arst is jason fic fellow at george mason university. He is joined by rudolph penner, a fellow at the urban institute. He was also director of the Congressional Budget Office from 19831987. I give both for joining us. I would like to start off by talking about the speech that House Speaker john boehner gave this week, laying out the Republican Partys economic agenda. There were five key points that he made in his speech which we will show you in just a second. They include addressing the debt, reforming the tax code, fixing the legal system, raining and excessive regulations, and strengthening education. These all seem like they are staples of the gop platform. I would like to start with you, jason. Do you think tax reform should be the top priority and what should the Republican Party be doing in terms of its fiscal policy Going Forward . Tax reform is definitely something when he to Pay Attention to as soon as possible. There are more things that take more time to. Change you mentioned education we will not change education policy overnight and have more High School Graduates and College Graduates in Science Technology graduates overnight but we can change our tax code that will have longterm payoffs. Each the speech is about setting an agenda but they sometimes go on this that specifics. A corporatenow is tax climate which businesses are talking about in versions, capitol hill is trying to stop them and we are seeing the discussion about how we treat the symptoms and not the causes. Speaker boehner alluded to the highest tax rate for corporations in the world. That is very uncompetitive in way to look at how to bring that rate down. Also we need to broaden the base and and the loopholes. I think thats very important. Host do you agree that tax reform should be the number one priority . Guest i think it should. I was interested that speaker banner mentioned it first. Of the waysn camp and Means Committee first brought out his plan, a few months ago, john boehner banner was anything but enthusiastic about that. I think you did not want to get into those delicate political issues during an election year. It was very nice to see him resurrect that. It was very vague about it. It isgree with jason that not something you can do quickly. If you go back to 1986, it was a multiyear grind to actually get was been a very significant reform. I am more optimistic than many people about the ability to do it. With paul ryan presumably chairman of the ways and Means Committee and depending on who , these guys senate are people who have strong ideological believes that they really want to get something done. I think the prospects for compromising on this thing are far better than they have been for a number of years. Host do you think democrats are wrong to be focusing on Corporate Tax in versions in the way that could hurt the broader effort . Guest i think there is a lot of misunderstanding about the in versions. They are two different issues that have not been distinguished in the debate. On the one hand, its our high Corporate Tax rate which puts us at a competitive disadvantage around the world. Secondly, we are the only big developed country who tries to tax the income of our citizens and corporations regardless of where it is earned in the world. Most countries just tax the income that is earned in their own country. These two things created enormous distortions. They are the main cause of the inversion. Reform both, i think, to end the in versions. Its going to be a tough grind. The emotions around the corporate and are very strong. Its going to be a very tough debate. I think first we have to understand what is going on here. Issuer the another issue is deficit has been declining faster than the cbo anticipated. You wrote in a recent piece stating that we should not have a false sense of the National Debt with no longer a clear and present threat. How important of an issue politically and economically do you think this will be . Guest i think its very important. The cboe even tell legislators and the media dont get into a false sense of security. While the deficit may be declining faster than anticipated, in a few years, it picks up again and starts increasing. 22024, you look at Social Security and Medicare Medicaid and the Affordable Care act and the interest on the debt, that will take up 85 of our spending. 85 isaving 15 going toward entitlements. The debt hes driving it. Each time you have deficits, you add to the debt so it is a big problem. Right, wehn banner is have a spending problem and we have to rain that in him politically that speaks to people because the more debt we take on like a household, the more constrained your finances will be. Things are very important to us like education. We dont have the money for that if we spend it on debt interest and entitlement programs. Host we want to hear from you as well so join in the conversation and submit your questions by calling us on the numbers on your screen you can also tweet us and find us on facebook or email us. We will take our first caller from new york and that would be ralph on the democratic line. Caller thank you for cspan. Im a proud uaw worker from new york state. , ifnt to ask your guests the house stays in republican hands this fall and the senate might flip and image but, becomes majority leader he says he will try to pass a national right to work law and that will be the first time in the u. S. Senate history than the national right to work law has a good chance of passing the senate. I would like to ask your guests we have state right to work laws in michigan and indiana and its too early to see their impact because the collectivebargaining agreements have not expired to prohibit Union Security agreements. Do you see any impact on wage earners in the country and downward pressure on wages because of a right to work law . I thank you. As a member of the uaw, you know that unions and the private sector are in big trouble. Their membership has been declining for a very long time. As a Macro Economic issue, im sorry to say that i dont think the right to work laws are going to have that much effect because they affect the relatively small number of people. That would add to even if the Senate Changes hands and goes into republican control, it takes 60 votes to pass anything in the senate now and they will not have a 60 vote majority in the senate. If Mitch Mcconnell brings up a law like that, right to work law, it will mostly about politics and getting on the record and trying to get a vote but nothing will pass the senate, i believe. Host next up, jefferson, georgia, independent line. Caller how are you doing . I want to can you is the urban development people, are they on this treasonous thing . Are you familiar with this program . Guest a little bit. I think people that understand urban economics are interested in the sustainability movement. I think you have to be very careful how you write the regulations on Something Like that. Far, you can stifle growth around the country. It certainly is an ongoing topic and we have people at the urban institute thinking about it. Our next caller is robert from texas on the democratic line. Caller good morning. I would like to make some comments about corporate tracks tax. I dont know if people realize it or not, a number of years ago 25 oftions used to pay the total taxes that were collected by the government and despite all the talk about 35 nowrates, corporations pay something less than 10 of all of the taxes that are collected. Problems that the we have in our tax system. Instead of the corporations paying taxes, individuals wind up paying taxes. We dont collect enough taxes to pay for what we want to spend the. Is bottom line of all this whateal disparity between Corporate Executives get paid and what regular workers get paid. The the reason that i know something about this is i used to be a plant manager of a chemical plant. That bothy is today the tax system as well as the renumeration system is screwed up. Let me jump in here. One of the things we want to teach the public is at the end of the day only people pay taxes. Entities. Ns are legal there are taxes on the wages. We can see attacks on owners of corporations and shareholders. Of a living person that bears the tax. It falls to people in some form. We are trying to find ways to tax entities they cant shift their income around. We dont have the ability shift our income. We are in a different economy than we were 30 years ago. Capital goes overseas. It is going to go to places where it is less taxed. We have to change our taxes to realize is that capital can move outside this country. We have to look at lowering the tax rate to make it more efficient. The most viable alternative to the current tax system under discussion right now . Guest one of the most interesting debates is not going on. Towe want the tax system rest on income or do it to impose the biggest burden on the consumption . You can run a progressive consumption tax. It would not look that much different than the current system. I think there is a lot of merit to more heavily taxing consumption and encouraging savings. It is very difficult to get there from here. There are all kinds of complicated transitions. That debate has not resurfaced. It usually does. If you look at the proposals a veryonths ago, it is heavily on the income tax side. He did not bow at all to the idea that you should tax consumption more heavily. David is our next caller on the republican line up. Oh caller at what point does Government Spending become larger than the private sector as a whole . Local, state,e and federal governments on that. Poverty andting exporting jobs are in it seems like that is not going to work out for much longer. Maybe another generation. The Government Spending is larger than the private sector. Crust elastic trillions about 17. 8 and Government Spending is 3. 5 trillion. The government is a big size, but it is not taking over the private sector size. Does it get too large . I think that is a complicated question. I would argue the government is too large based on where money is going. I see a mismatch in the Government Spending. Not saying that total spending needs to be smaller but the allocation it needs to change. Caller i think the first thing you look like at is the allocation. Host next up is the independent line. I want to ask the guy who ducked the question on the right to work law how they would affect peoples salaries. I would like for him to respond to the question that. When you talk about Corporate Tax rates, what are we talking about . If we are exporting jobs overseas, who are we competing toinst that would cause us not be able to take care of the infrastructure and things we need to take care of in our own a country . We are a developed nation. Responsibilityr than most other countries. To go back to the Corporate Tax, i think jason made the right analysis. This is a question of who pays it. Economists are vague about that. It could be the shareholders or corporations just raise their prices. Then it becomes like a sales tax. It is not clear that we undertaxed corporations. I would like to see more integration between the Corporate Taxes and the individual income tax. One way to do that would allow corporations to deduct dividends. There would be more taxes and or you could make up revenues by raising the rate. The caller had a lot of questions in there. Suggest it would not have a big affect on National Wages because unions are not very important anymore. And cells are successful in raising taxes, wages, that is a big question. Perhaps in the past they were. Since they are such a small part of the labor force now, they are competing against private nonunion sectors. I think that is very difficult for them to raise wages whether or not you have right to work laws. Host we talk about wages to the overall state of the economy, we spoke about incomes being stagnant. The white house this week actually recounted the fact that made a had in six years lot of progress. These are some of the points they released to note the process of the recovery. Businesses have added 10 million new jobs. Goneemployment rate has down to 6. 1 . The peak was 10 . Delinquentof mortgages are the lowest since 2008. Real gdp grew at 4. 2 . I want to ask you, these are some data points the white house put out. Are these the same indicators you are looking at question mark guest there is some good news here. The numbers tell one part of the story. Unemployment is down to 6. 1 . If you ask janet yellen, that number is not a good way to judge the labor market. A lot of people are underemployed. They would rather work fulltime. There are people who are marginally attached to the labor force. Of if you look at these people, the rate doubles. A what does it mean to have a healthy job market . We are now just breaking even. When you look at the federal , have we create another bubble in the stock market . The market seems to fall when we talk about raising Interest Rates. We need to be cautious that we have good news but we need to not rest on those laurels. What do we do about the Federal Reserves assets . Host here is janet yellen speaking this week about the indicators that she looks at. The economy is continuing to make rod gress rod gress. Progress. Of job growth has slowed recently. Job gains of average more than 200,000 per month over the past three months. The Unemployment Rate was 6. 1 in august. Measures such as the have shown similar improvement in the Labor Force Participation rate has flattened out. It these developments continue the trend of gradual progress toward our employment objective. The labor market has yet to fully recover. Are still too many people who want jobs but cannot find them. Too many who are working parttime but would prefer fulltime work. There are too many who are not searching for a job but would be if the market were stronger. She mentioned several alternative indicators. Are those the right ones to be looking at as we try to determine how much further we have to go . I do think the recovery has solidified. A we can be fairly confident that it will go on. It has been frustratingly slow. If you go back a couple of decades, the economy would grow far more than 5 year. The last three years we have grown marginally over 2 . It is very disappointing in that regard. Answer is all whole bunch of things. The labor market is most peculiar today. If you look at the short run Unemployment Rate, it is at levels it would indicate full. Mployment and great far ingterm rate is excess of what it has been historically. It is very hard to say. You can say that there is no indication of tightness in wages. They have been very tight stagnant. Chairman yellen did say that she put some faith in the San Francisco fed report which argues that wages are sluggish now because employers were reluctant to cut wages during the recession. Is this is aaying catchup. Employers are catching up. If that is true, the labor market could be ready tight. Wages could start going up at any time. You could have inflationary danger. The recovery has been very frustrating. It is take a longer time to get where we are today. Correlation is not causation. What speaker banner points out 21,000 reforms per year. Reform, this tort wherean atmosphere businesses wont take investment. Hunker in and dont hire and wait for better times. That is why were seeing a slower recovery than before. That is something that speaker banner john boehner pointed out. If you like to join in you can call us. Next up we have james from texas on the democratic line. Go ahead. Caller i think both of your guests could agree that a oh aeconomy requires middleclass with the disposable income. Anybody who can add and subtract that say over the last 40 years middleclass incomes have been converted. We dont have to spend any money on education. You talk about unions not being important, that is insulting. An intentional effort to redirect the moneys from the most of the people to the fewer people. Corrupted. E has been , thisyou turn that around country has no future. How do you turn it around . I think the most promising area is in the education area. We know that people with a College Education make a lot more money than people who are just High School Graduates. That difference has widened over the last couple of decades. One side of it is to put more emphasis on education. Before that the government is hamstrung by the fact that we have these huge entitlement programs in health and Social Security that are focusing on the elderly mainly. The number of baby boomers is going into retirement is exploding. The next president should make a fullcourt press to try to resolve the bigger budget problems so there would be room for initiatives in education or infrastructure. Ight now there isnt were squeezing all of those things of the government because of the pension costs. Guest james is correct that in order to have an economy you have to have the middle class. We can agree with that. John boehner made a point about education. Depending on the year and the statistics, one third to one quarter go to college. The majority dont go to college. What if we change our Education System to realize at some people go to college but the majority dont and we change k12. The problem is we are not training for that. Would you be talking about an Apprentice Program like germany has question mark guest president obama has come out and articulated having Community Colleges be retrained as trade schools and work with local businesses to Design Training that locals need. That is a very good idea. Host our next caller is daniel on the republican line. Caller good morning. I can see both of these gentlemen have never been in business before. We comment about taxes if increase taxes on the rich or the corporations they apply that to the public. That is very ignorant. Any corporation that is in business understands we compete against each other. You can buy the less expensive product. It is they keep talking about not increasing the taxes on the wealthy. John kennedy was smart. He made sure that corporations didnt give their money to the shareholders and the ceos. He forced them to reinvest in their corporation. Ronald reagan did the opposite. Guest i think there are a lot of points here. We were not saying that put tax increases on to consumers. The point is that corporations dont pay taxes, people pay taxes. At is youllooking never get rid of soul security and medicare. We can reform the program to slow the growth of them to ensure they are here for people who need them for future generations. Right now we cant they for the promises. Have people trying to expand those benefits. Guest i very much agree with that. Problem are the health programs. There has been a remarkable slowdown in the rate of growth of health costs recently. That is a very good thing. We dont know how long it will last. The cbo predict it will accelerate again and it will start growing faster than the economy again. That cant go on forever. We do have to reform the program. John boehner talked about a spending problem. I would say we also have a tax problem. If you concentrate all on entitlement reform or all on tax increases, it becomes implausible politically. Host next up is ramin from pennsylvania on the independent line. Caller good morning. My question would be directed toward jason. 85 of the gdp will be to service debt. I heard this a while back. The said. They are printing our money. Now they are buying the the governments debt. I dont know what to call this. How can the fed front money out to the air and landed federal government and be paid back interest them be so exorbitant that would wipe out the gdp . They are not allowed to be investigated. They can print as much money as they want. The 85 figure is of Government Spending for entitlement programs. Raymond is read about the Federal Reserve helping keep uperest lower by buying government bonds. How do you unwind it . The happens when you have fed supporting government expenditures . That normalize . I am fearful this is going to have deep consequences to the economy if it is not handled rapidly. I think the fed is very cautious in how to unwind this in a slow way. She is being very cautious in her statement. If you spook the markets the wrong way, guest all of this is not resolved the printing of money. Mud of much of it has gone into the reserves of banks. Banks have been very reluctant to lend it out. I think partly because the, they went through during the recession. They could change their mind at any moment. The money supply has been starting to rise recently. There is a real risk here. It will be difficult to unwind this huge amount of public debt. There are ways of doing it. If it looks like the money supply is going too much, they will pay a higher rate of in the extreme, they could increase the third requirements. In addition to the massive stimulus campaign, they are in the process of writing new regulations. John boehner actually addressed why cutting the Regulatory Burden is vital for the recovery. If you take the dodd frank laws as an example. Billion compliance costs. The interesting thing about this to get frank was passed rid of too big to fail. That,ly has failed to do the costs are indiscriminately hidden. Or the small banks, their breadandbutter is Small Business loans and now you have more uncertainty and more money going into compliance. The cost of borrowing goes up. Access to credit goes down. Other countries have a more. Ollaborative ross s reciting process. You have more regulations but the ones that you do have are more meaningful and dont drive up the cost of doing business in that country. Host that was john boehner at the American Enterprise answer to talking about new regulations on u. S. Businesses. What do you think should be done about this . Guest we like to talk about monetary policy. Maybe get the economy youre looking for. Meansgoes into what it when we want a certain performance to happen. Policy plays into how we behave and act and invest in effect the economy. Regulatorylot of burden right now the creates uncertainty. With rudy. There are ways to unwind this. Were looking at ways to make Smaller Banks more competitive. Thanks not necessarily lending. Local banks are going out of business. Add frank could be having counter effect. These bigting more of banks did seem to be too big to fail. Milton from West Virginia on the democratic line. Caller good morning. I want to make a, then ask a question. Know whynt is i dont you keep ringing John Boehners has beenhis when he fighting against the president for six years. Now the they might take over the senate theyre going to come up with something. Have a 40porations million hard debt on the books but they show a profit and pay roff in a to people and still have 40 million in debt . Why dont they pay that debt off . The Corporate Taxes the reason they dont bat off. On debtdeduct interest from your profits and you can deduct dividends. There is a fairly strong incentives. Guest that is one of the things we would like to get rid of. Next up is clifton on the republican line. Caller good morning. I noticed weve been calling Social Security and medicare and a few other programs and entitlements. I want to say they are not entitlements. They are programs that we have worked for for all of our lives. We just want our money back. If you want to talk about entitlements, lets talk about money our elected representatives get. That would be a great place to start. Lets reduce the amount of money government spends taking away from the average american working family. Is the independent line. My question is about the said bill that just passed the house. How will this effect the economy . Which bill reay mentioning it . Which bill or you questioning about question mark caller the audit the fed bill. Is what isuestion an alternative to dodd frank . On the fed bill, i think you have to be very careful. One of the great advantages this country has is we do have an independent fed that is not kicked around too much politically. Auditing the fed could lead to something very bad. That would be making appropriations for fed expenditures. Those appropriations could be contention on keeping Interest Rates low or encouraging a bank lending in certain ways. I would rather not go down that road all. Thee auditing the fed as first problem. Host do you think the chances of an audit the fed will passing will increase if republicans take over the senate . You need 60 votes to pass anything. I would do is massage and nuance the discussion about the fed. They are moving this direction anyway. A quicker release of minutes and discussions. Where money is going and why. I would like to see more transparency to the public. Moreudit issue gets complicated. Host we have a question from twitter. Guest there have been a remarkable set of actions to penalize corporations and Financial Institutions for their activity during the crash. The economist had a very good article about it recently. The big point was these penalties may have been aredeserved, but they determined by negotiations that go on in secret. We dont even know the terms of some of the settlements. That is a very bad thing. It should be much more transparent and it should be done through the courts as opposed to being settled in private. Host our next caller is jeff from california. Caller my problem with both of these two gentlemens philosophy onthere concentrating on title my programs entitlement programs and retirement and not on corporations who have been. Aking record profits people who blaming worked hard and paid in and they finally got a chance to retire, they earned it. You dont ever talk about the record profits that these companies are making now. They are so stingy it wont tackle down. I think maybe we should clarify what we are saying about entitlements. Right now theyre not financially sustainable. Social security will run out of money eventually. Is growingding faster than tax revenue. We have to do something. Do something to secure these programs so they will be there. You cant just do this on the tax side. The Congressional Budget Office looked at tax rate. The cbo said rates had to be doubled. There is not enough money there. That is why we focus on the spending problem. Things are growing too fast. I want to strengthen retirement savings. If we dont change this problem, it is harder down the road. Nobody is going to vote for doubling taxes. We have got to do this on the spending side. Doing them both together makes more sense politically. Plainview, news york. Caller good morning. Am i on . Ok. I feel the Health Care Savings i primarily due to the large deductibles in obamacare. People are now funding their own medical costs because there are thousands of dollars of deductions. Second of all, i feel that the senate and house members are hypocritical because they are getting subsidies for obamacare that they are not entitled to based on their incomes. Single or 934 as a as a family, you are not entitled to a subsidy. They rode subsidies and for themselves. Had it not been looted by the , we would have more than an ample supply of money for sole security. And money was taken away now the government is claiming poverty. I feel that is very disingenuous. Simpson who said we live from the mothers milk of the government should start with his own pension and Social Security as well is his family members. Side, on the health care he should expect more premium deductibles down the road. Inflation hasst been lowered but it wont last. The burden will be shifted more and more to people. The government has paid into Social Security. It now it is paying back with interest. Mostottom line is in 2034, trust funds become depleted. That point, the revenue are not going to cover benefits. In benefits. Ircut that is what were looking at in longterm challenges. Deductions are played some role in the slowdown of health costs. I would not blame obamacare yet. It hasnt been enforced long enough. The slowdown occurred long before obamacare. To highes are switching deductible and high copayment policies. That is evidence reducing the rate of growth of Health Spending because it makes the consumer more aware of the costs of different medical techniques. Another really big thing that is happening is all sorts of patents of run out on widely used drugs and we have been able to substitute generic drugs for branded drugs. That has flattened out and declined. Calling from minnesota. Caller thank you for taking my call. I am a Small Businessman. I hope i am able to get two points across that people can understand. An example would be i was to a morehange over mass production line to be a will to produce more products and lower costs and i was about to hire more employees to do that. Taxes iof the higher have to now pay and the increase in minimum wages, i cant do that. Ist i am going to be doing not hiring more employees and shifting to a more modernized machinery that will eliminate more boys from doing handwork and allows laser cutters to do the work of the employees i was going to hire. The second thing is when you bytrol Small Businesses raising taxes on them, i have no choice but to carry the burden into my product i am selling. If Small Businesses are being taxed with higher rates, we can no longer compete with large corporations. Guest i would say youre 100 correct. Corporate tax burden is borne by workers. In a not growing his business he is not going to make as much rough it. Hinder Economic Growth and job creation. Guest he is right about the minimum wage as well. It is a very inefficient way of trying to help low income people are people. The much superior approach is the earned income tax credit where you actually subsidize people for working. That is so much more efficient. I dont understand why it doesnt get more attention. Host we have time for one last caller. Bob is calling from florida. Caller good morning. Only caller that is older. At aei. Ech took place these are the two biggest organizations in the world. They are responsible for most of the debt we have. They promoted the weapons of mass destruction. They are still looking for weapons of mass destruction. It we spent 4 trillion on that war. His speech was no different than his regular speeches. They make statements about where are the jobs. What they dont tell you is every one of those jobs has a poison pill in it. With regard to the economy, we have to stress the good side of what is going on. The bad side is the sluggishness. A lot of good has happened. Unemployment is doing better considerably. What we have to worry about is being very careful on the way out. One part of that involves not letting our debt grow too fast. That could result in a calamity. Another paul is not letting inflation get out of control. That is not going to be very easy. There is a lot of work to be done. We should not underestimate the good that has happened so far. Will go back to something bob is alluding to. He of politicians making generalized statements for election campaigning. In howoids pacifics they will make reforms. These types. It the interest in the debt is going to bankrupt us. Lets have real discussions about challenges and the policy options and the tradeoff that comes with those. There is no such thing as a free lunch. There are going to be winners and losers. The longer we wait, the longer it is going to be. Thank you so much for joining us this morning. Adams, speak with gordon the budget director for National Security. He will discuss the cost of combating isis in the middle east. Stay tuned. This weekend on the cspan networks, our Campaign Debate coverage continues at 8 00. We have live coverage of the iowa governors debate. 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They look like grandma and grandpa. They are old. Do people think she is going to be fit for office. I just want to say how much i enjoyed cspan. I hardly ever watch regular tv. I watch washington journal every morning. The weekends are fabulous. I just want to say thank you so much for cspan. It is a big part of my life. Let uscan call us to know what you think of our programs. Joined the cspan conversation. Washington journal continues. Is guestxt yes is gordon adams. He coedited a book that is coming up this fall. And is a very timely topic for genesis morning. I like this dark to talk about your estimates for how much it will cost to combat isis in the middle east. Coveringbe 20 billion several different areas including air operations and extending air operations to syria. What time. Are we talking about . How does that total amount compared to the cost of other campaigns . It is built on past exercises that we have done of this kind. Putcally, were going to some money into the actual operations of u. S. Forces. 3 billion to 5 billion. We are going to do them in iraq and syria. We are going to provide support to the iraqi forces. One or 2ing to add billion to the estimate. If you look at the syrian opposition, we have 500 million in the budget right now for the opposition. I expect we will easily double that. Were going to have various many will pay for their own resources. There are other countries like dan where if they are in involved in training operations, they dont have the budget to do this. We will have to subsidize the jordanians. Envelope back of the list, we dont know how big this is and how many people are involved. It wouldnt surprise me if it came to 20 billion a year for the cost of this operation. Including other countries as well and the u. S. Make up the bulk of it . What is critical in this circumstance and this is policy it is aas it is budget, bad idea for the us to put a lot of boots on the ground and be the primary military combat operator. The president has said we will be. He is having some discussion with senior military officers about how much. The ground force for this to be a success has to be in the hands of the countries in the region. It has to be the syrian opposition. It is not going to be the United States will carry the day in this fight. What is the potential impact on costs . Guest you can probably figure if you are adding to brigade sizes. Your estimate will go up to 25 billion. I dont think we are going to do that. From policy terms, it would be unwise to do that. The pushback we would get would be severe. The success would be highly dubious. We have been fighting in this region for the last 12 years. We know that the presence of american Ground Forces is a big challenge if you want to persuade the adversary to do what you want the adversary to do. Host you can join the conversation as well. You can find us on facebook. I want to start bringing in some of the callers. The first is thomas from maryland. Caller good morning. Guest. Stening to your he doesnt of the actual what is going to happen. We have a cia budget that is off the books. We have nations such as china and russia that are participating in anything. Say this is such a great threat. This is an off counter question, why do we say israel is our biggest ally but they never participate in the middle east western mark host do you have any response to the collar . Guest he raises a very interesting a question. What is a realistic american approach to engagement in the world . How much should the United States be carrying . What is the role of other countries . The isis case really crystallizes that issue. It is not the americans responsibility to remake the middle east. The we cant do it. We have tried to do it for the last 15 years. It is very clear that we cant do it. Our efforts to do it achieves the kind of pushback that isis represents. Extremism and its more military version is nothing but a modern version of something that has been going on for 1200 years in the region. For the United States to think they can sell that conflict is not only hubris but highly unlikely to succeed. The end result has not been stability in the region. It has been instability in the region. We are not responsible for all of that. We have unleashed a flood tide of that reaction in the region. The key player here is going to be moderate islam and moderate government and states in the region. That we can argue is going is in charge, to be answered in the region. The United States might be able to play a supporting role at the margins. Host if airpower is the way to putting boots on the ground would not be helpful or influence the outcome, should the president have ruled out that possibility . The Washington Post today there , the u. S. Should not rule out combat troops. 1600 troops is a good start. That number could increase. I think it is right to take it off the table. The military has a particular way of approaching this conflict. To be able to control the flow. You want people doing things from the air in providing intelligence. He went combat advisers. It is perfectly understandable. Einsteins definition of insanity was doing the same thing and hoping for a different outcome. It we have done these exercises. That sending as lot of Ground Forces into iraq or afghanistan is actually seriously going to alter the situation in those countries. This is a political issue. If it works of all, it is going to work because the countries in the region provide the Ground Forces. Airpower from it had states combined with the Northern Alliance in afghanistan overthrew the taliban and a government in kabul. The Ground Forces and military commitment was from the country in the region. It was not the United States that region. Of his position is understandable. Of i think the judgment here is a political one. That is up to the president and it always is. We have jerry calling on the republican line. Caller good morning and thank you for cspan. I am wondering whether there are where we have conflicts. Moderate rebels. I will take the answer offline. 10 is calling now from nashville, tennessee. How many children do you have . I have got oner kid. It is all about boys and girls, about parents coming together. They are homeless. The kids are going to work and the help with them growing up. Kids with computers we can teach our kids to give back. Worldof kids around the did not get basketball. People teach them how to play basketball. Go on to work and help other kids. Children who come from the United States and other countries use influence. Kids do not know who to turn to. All the kids treat them like adults. Host Damon Williams . Guest kids who come through our doors, we get them involved in service in their communities locally. It is a key component of what we really embrace, and was a major aspect of what we really celebrated this last week. For thein d. C. Identification of the National Youth of the year. Each year, thousands of kids participate in one of the great recognitionn programs, the use of the year, which celebrates academic achievement, good citizenship, and healthy lifestyles. We identified a wonderful young woman in Central Florida who is now a firstyear student at the university of south florida. She is the embodiment of all we hope for in our youth across this nation. She carries north of a 4. 4 gpa, is endeavoring toward a career in the health professions. Honors student, deeply involved trying to make a difference and being an empowerment member of the community. It is those aspects that we want all of our youth and could not be more of an exemplar of sullivan. Maryah caller the point i wanted to make was that the program that i have been involved with, with helping our use and people that are going to grow up and someday , involved aiety specific thing. And that is that they can come into a program with little or no knowledge of what it really is all about, and each one leaves feeling that they have been a successful part of a group. And i think that is very important, because and studies have shown there was a study by the university of edinburgh. There was some here in l. A. Where the ramifications were principals,y School Teachers who said, wait a minute. I notice this group is light years yarn some of the other kids, and they are active, and they are participating. Why is this happening . They ended up tracing it back to the program i was involved with. But whatever program it is, whether it is taking kids to the garden, whether it is all the , it isyou have mentioned important that they feel like they are successful at something new. Key part i think, is a of whatever program we are doing. The gentleman from michigan mentioned habitat for humanity. This is a great program. From the other gentleman, excuse me. Do noty of our youth understand a lot of what our kids are going through . I want to ask about another statistic in the report, which is that three out of 10 kids are obese or overweight. Int is from your america crisis report. What are you doing to address the obesity issue . Is this education, health care, access . One of the things that has always been fundamental to the dna of boys and girls clubs is having an active lifestyle, whether that be getting involved in youth sports, whether that be just hopping into the Swimming Pool and swimming some laps, whether that be playing a game of dodgeball or kick all at the field or the yard, that has always been part of the dna of our clubs. If you step into any club across america, you are going to continue to see that dna. One of the things we have been focused on is really focused in helping young people understand the importance of nutrition, and really helping them to understand the importance of consumption regularly of fruit and vegetables. His is a challenge for many of our young people, who grow up in virtual food deserts in many communities, where they do not have access to fresh fruits and vegetables. One of the things we placed an incredible priority arent is helping young people to understand nutrition and to have nutritional literacy that will serve them throughout a lifetime, keeping them moving and active, and setting a foundation for habits that can last a lifetime, and every day trying to get young people more often to have an opportunity to consume fresh fruits and vegetables and healthy snacks as part of their club experience, but also as something that everys into their life day. Host tim from ft. Wayne is calling as a parent. Caller you mentioned our public schools. Our children were rated 22 out of 28 internationally. Public schools have our kids nine months out of the year. Isnt that long enough . When i got off the bus, i went home to my parents. The problem is, we cannot do having four or five babysitters. Since 1996, boys and girls clubs received a hundred 75 million. Million. There is no dad. This singleparent business that is nothing to be proud of. You are being selfish. Host your response . Caller we see ourselves as a highly complementary space to what happens during the school year and particularly during the summers, creating an enriching environment we know makes a difference to young people over time. They tend to consume more fruits and vegetables and live a healthier lifestyle at the end of the day, we go back to our alumni survey, and what the. Lumni said anything and everything we can to help our young people to be on a pathway toward a brave future. Next up is delaying. Elaine. , the children do you have . Caller four. They are in their 50s and 40s. Host grown children. What is your question . Tell you wanted to that 68 years ago my youngest brother was a pingpong champion of the boys clubs of america. It was only boys back them. We were not allowed. But i was a little girl and i was allowed to go to the boys club movies on friday night. And i think if it wasnt for the boys club, my brothers would have been probably a lot of trouble. But they hung out in the boys clubs often time and turned out to be great guys. All right. Next up is ron, also calling as a parent. Caller i am a little late in the program right now. Kids of this stuff with and the parents you see the parents of my generation are buddies with their kids. Thoarativeo real au figure in the family. There is kids drinking with them. I do not think there is the right thing. Host how do you keep a line between being a comforting presence but also an Authority Figure . Caller guest we want to set a certain value system and education level with how we think the savior should manifest itself in terms of character, in terms of ethical decisionmaking, in terms of being caring and nurturing and supporting, and understanding the needs of others, and being able to look at the world through multiple perspectives. That wraps up into our Character Development work we do with clubs and young people. We do that in the general environment. We also do it through our , like smartgrams moves, passport to manhood, and smart girls, it helped empower young people to make great decisions in their lives. That is the space we know we can make a difference in. That is the space we do each and every day across our 4100 clubs. Our last caller is from florida, also a parent. Caller my name is betty mitchell. When myoys clubs children was growing up. They were not allowed to go. It was all white. That is the part i did not understand. Your children can demonstrate. I did not go to sit downs. I was just with my kids, educating. I have five twin boys and two girls. They couldnt go to the boys and girls club. Also, i had to take care of my grandchildren, four of them. They started a boys and girls club. At girls could go. Granddaughter went to universal florida. And she got her went to the university of floridas and got her masters. For my grandchildren to have a place to go i live in a room when they were born. Is trying to get us a boys club. But they wont do it. We need a boys and girls club so bad out here. We dont have one. Host final word. Guest we say great future start each and every day in our clubs. Launched our great futures impact plan for americas youth. Those of you who tuned in had a chance to hear about that from me, but i encourage you to go to great futures greatfutures. Org and to give the treasure of your time, because americas youth needs it so much. We appreciate all of you who are partners. For joining us. That is Damon Williams from the boys and girls club of america and discussing the challenges and some solutions to their problems. That concludes our show today. Tomorrow morning, we will be back at 7 00 a. M. , when washington journal continues. Coming up next, the first hearing to be held by the house benghazi committee, which is investigating the 2012 consulate attacks in libya that left four americans dead. That is followed by a house hearing with be a secretary robert mcdonald, and the v. A. Acting Inspector General who investigated allegations of misconduct at a phoenix medical facility. State Department Official Gregory Starr was one of the witnesses at the house benghazi hearing