super committee suggesting that the income threshold, and in the health care law that were frozen for 10 years. >> i am trying to understand the house proposal. as i understand it, it freezes -- it reduces the 85,000 threshold to $80,000. secondly, it freezes the increase which is normal on bracket. and it is my understanding that will lead us to a point under what congressman levin mentioned that it will be as a beacon percentage of our seniors will fall within these brackets. that is the only point i was raising. it is not just 5%. it will be a much larger percentage. that is the proposal we had coming from the house. >> which is the president's proposal. >> the president also proposes a surtax on high income. are we going to consider? >> the senate rejected that.

had the senate included that, that would be in the scope of congress, but the senate rejected it. >> if we are going to get into the scope of conference issues. >> we are. >> i hear what you are saying. listen to my republican colleagues talk about how we have to come together. democrats and republicans have to come together. if we are serious, we have to compromise as we should. and we want to make sure we are fiscally responsible and we have proposals we believe can get a majority of democrats and republicans together on offsets. the sooner we can get to those discussions, the better off we are. to go through this list of issues that you are isolating, i am not sure is helpful to reaching an agreement on a set of offsets. but let's not -- if you're going to use the fact that it is not them of the house bill, it will be a tough climb.

>> you are asking us to consider something that has failed the senate repeatedly. >> as you know, it received 50 votes in the senate. we understand it was in the context of a proposal that did not have the republicans engaged in getting it accomplished. we now know that both democrats and republicans want to make sure we extend the payroll tax holiday by the in of this month. so we have the focus of both democrats and republicans on getting the job done for the american people and for middle- class families. i think we are all going to have to compromise. i expect there will be things in this conference report that i would prefer not to be in there, but that is what compromise is about. i think the republicans also have to understand there will be things in here that you may not particularly want to see in conference. we can argue each of these

points. i think there are serious policy problems with his proposal. >> i understand. >> that is the preservation of medicare as a social insurance program. >> we have stepped all over senate republican's time here. if the senate republicans wish to make a comment, or i will go forward round robin. mr. levin? >> i think that was a very useful energy. no, seriously. i do not think we need to tie ourselves into knots. how much time? >> 21 minutes remaining. >> how much time do we democrats -- >> we will continue to do rounds. we have 21 minutes. we should be able to get to two more speakers. >> let's put into perspective

what this conference is all about. this is not a conference to reduce the deficit. this is a conference to extend emergency measures. people are unemployed through no fault of their own because of a bad economy, a lot of which had to do with the policies of the previous administration, and now we have a situation where these unemployed people are going to lose their benefits. and if we do not extend their benefits, not only they but their families will go without the basic amount of money to survive. secondly, and this is an emergency. therefore, it ought to be treated as an emergency piece of legislation. secondly, we have a middle- class tax cut that we all say we want to support to, and this middle-class tax cut is one that many of us think should not be paid for at all because the upper income tax cuts have never been paid for, and i am sure

our republican colleagues will say, extend the bush tax cuts but do not pay for them. but if you're going to pay for them, we have got to make sure the economy is improving. so we need to find offsets where we are not putting the burden on the middle class again. we are -- or the burden on their economy recovery. i do not think we should put the burden on medicare beneficiaries or seniors, middle-class workers. when we say a surtax on millionaires, you might want to say over and over again it has not passed the senate, but that is not the test. the test is -- what is a fair way to offset these costs? rather than deciding that some medicare beneficiaries are rich, and we are going to make them pay more, we are saying that those who are genuinely wealthy in our society should

not pay more in their share of the taxes. who is rich and who is not? we have a means testing of the medicare premium. that was in the affordable care act. people who have higher income pay more for their medicare part b and part d premiums. the president proposed something. the president proposed something less drastic, but it was part of a large and long-term deficit reduction package. we are not looking for a long- term deficit reduction package. we are looking for something to pay for the short-term costs of the payroll tax. and, therefore, i do not think we ought to impose this on the medicare system. i think senator -- was articulate. we know people will leave part b if they have to pay 90% of the costs because that is what

the house republican proposal would impose. medpac said right now we have cost sharing for parts b and d. you get a social security benefit, and you live on that, this is a significant burden for those who have fixed incomes. it does not just simply affect the wealthy. in fact, let's decide who is wealthy. under the republican proposal in the house, when it goes fully into effect, 25% of seniors will all be paying more for their medicare premiums. and that means that people who now make $40,000 a year would be affected. i do not think any of us would say that people who have $40,000 a year in income are wealthy, are higher income. >> will the gentleman yield? >> no.

>> i think the brackets are frozen under the proposal. >> if you look at where people are today, the people who would be affected today when this is phased in would be those are in today's dollars making $40,000 a year. and i think the point that senator carden made, this distorts the medicare program. it takes away the social security, the social insurance part of it, because when higher income people decide to opt out rather than pay so much of their part b premium out of their own pockets, they will go elsewhere and by private insurance. those are the healthier, wealthier people. you will leave medicare with a sicker, a lower income people. and that means the entire medicare system will increase

in cost. i have heard a lot of sentiment about millionaires should not have to get a free ride. wealthy people should be required to pay more, yes. in their taxes. but we are looking at the amt debate, higher income was defined as a taxpayer with incomes above $250,000. i just think this is unfair. it distorts the medicare system. it will be a great burden. on a lot of seniors. they already pay more for their medicare part b premiums. and they already pay more into the system over their working years in a medicare tax that is based on their income. >> thank you. ms. elmers. >> thank you. congressman waxman, you know we keep hearing about emergency, a emergency.

what does that translate into for the american people? if this is an emergency, then the government should not have to pay for it and we should not have to pay for. unless, of course, you want to tax the hard-working small- business owners who are our job providers in this country. that is what i am hearing. >> i think you are incorrect in what you are hearing. >> i am not yielding my time. now, if this were an emergency, we would have passed this at the and he of the year, 2011. emergency, this would have been taken care of. that is why what you say is completely and totally incorrect. this is not an emergency. the american people are in hard shot. we need to come up with solutions. we have to pay for. that is what they're asking for. they want accountability, of efficiency. and they are tired of continuing on. senator carden, we keep hearing

about fairness from you. the purveyor of fairness. how is it fair to continue to ask our seniors, and i apologize because i am going to digress for a moment, how is it fair that we have asked our seniors to have a cola freeze for two years and yet will continue to pay our federal workers without that? how was that fair to our seniors? >> there is a freeze. do you want me to respond? >> the point being, that already existed. and now you are basically saying there are federal employees who make more than those in the private sector -- should not be touched. moving on to this proposal, when we are talking about individuals with medicare part b who are of higher income, $400,000, they will pay a little over $300 a month for their premium. this is the president's proposal.

the three provisions we have put forward today for the $70 billion are all bipartisan, have already been hard partisan. why is it today in this conference committee that all of a sudden it is not? these are things that republicans and democrats have voted on in the past. that is why they were chosen because they were already in agreement. and yet, somehow today, they are not. how is that possible? ms. schwartz voted for the pay freeze. that is a good indication of where we are at, and yet we are continuing on this charade as if that is not the case. this is the president's language. which one of you is going to the president and tell him you do not agree with his policy? i would like to see that. we have got to move forward. we have all said that this is a time sensitive issue. we should have taken care of it by the end of the year.

it should have been done, but it was not. so here we are today. let's move forward. we already all agree on these provisions. let's move forward. we are $70 billion -- we are halfway there. i yield back. >> senator baucus, there are 11 minutes remaining. >> mr. chairman, i think what i am hearing is sort of the classic cherry picking. president obama suggested this, and so we have to support that, when in fact, what i believe the president suggested was a comprehensive plan. mr. waxman suggested to do with the deficit which included increasing taxes on the wealthiest americans, which you have said persistently is not within the scope of this conference. so to focus in on part of what

the president said and ignore the rest i do not think it is instructive or helpful. what we are saying is that we have to look for, and again mr. waxman said it well, constructive ways to fund these three programs which i believe are designed to confront a real emergency in the country in terms of people without work, people who are working but need more money in their paychecks, and the srg situation. i think you also have suggested time and time again, the senate rejected this and this and this. i stand corrected to be corrected, but i think all of my colleagues on the republican side rejected the house budget that came across with deep medicare cuts. >> we all supported it. everyone. >> every republican in the senate ordered the house passed a budget last year. >> well, that is what i opened up to be corrected. [laughter] >> it's ok. i believe in fair exchange.

we are in a position that you can't go ahead and take a little from here and say, ok. it is a bipartisan issue. has to be a collective package. i think it would be terribly unfortunate to simply cut programs that benefit the same people who need these payroll tax cuts. they need these unemployment insurance cuts to do that. so i would hope very, very seriously that we can start looking at constructive ways to deal with this issue. i think the point my colleagues have made are excellent. this goes way beyond what the president -- if you want to look at what the president. as i understand it from the information i have received, if

his program with respect to these provisions for medicare part b enrollees, 14% of seniors would end up paying for it, not 25%. that is correct. under current law. again, the real point i want to make to be sort of taking this and do it fairly, taking these provisions out of context, individually suggesting that because they had the president's endorsement, fails to recognize he was talking about a much broader set of issues. frankly, if we are ready to start dealing with revenues, entitlement reductions, spending cuts, etc., the we'll be there, but if it is just select a provisions it is unfair to characterize that this is bipartisan. this is all of us together. >> well, just to clarify. this is what the president submitted to the super committee.

you are right, part of a larger package. but, it also passed the house as a part of this bill with bipartisan support. so it is come now to the conference because of that. but it is identical to what he suggested. all of the items he sent to the super committee were not somehow into related and tied together. yes, there were a number of policies that he made suggestions on, but it is really senate republicans' opportunity here. senator crapo? >> thank you. we are obviously running up against some key philosophical disagreements about how to deal with the issues before us in the conference. it has been said that this is not a conference to reduce the

deficit. it is true. this conference's job is not to put together a comprehensive debt package that congress needs to do. but the work we are doing here is a very relevant to that effort. and at a minimum, this should not be a conference to increase the deficit. we are talking about how to deal with extending the social security payroll tax relief. we are talking about how to reform and extend the unemployment insurance benefits at the difficult times we face in our economy right now, and talking about how to reform medicare and feet sgr to make sure seniors continue to have proper access to medical care. and there are costs associated with each of those, but one of the points we have to remember is that just because we have issues that this conference is needing to deal with, that reflect agreed costs that i

think that we have brought agreement around this table to support does not mean that we simply have a free hand it to just below the debt out or to do so in a way the runs up the deficit. the bottom line is that we have got to remember, as we conduct these deliberations, that every one of the individuals we talk about in the context of our discussions today, whether it be with regard to the premier support or whether it be with regard to the justice to medicare or whether it be with regard to any other aspect of the offsets, every one of the individuals we talked about today is impacted as much by the damage to our economy and the damage to their families and their jobs by our mounting national debt and our refusal to recognize that we have got to stop the tax and spend approach of the federal government. as much as they are by these adjustments. we are trying to find some

adjustments that have the least amount of pain. we are trying to find adjustments that have broad support. but the bottom line is, we simply cannot always say that we face some of emergencies. we face a critical priorities that we need to adjust and because of that, we have to do what congress has always done and that is just put it on the credit card. we can't keep doing that. that is why we are having a difficult discussion today. and in the context of the question of whether we should address this problem by raising taxes or by dealing with the spending side, i think there has been some legitimate agreement among all parties that the revenue peace and the spending piece need to be a part of how we approach it. we should remember, and if i understand this correctly, the tax proposals are permanent tax increases.

they do not just go on for two years or the year extension like we had for the payroll tax relief and the unemployment relief. they are permanent. even though they are scored for 10 years, they go on indefinitely. and what we eat -- let's -- that is just one of the difficult parts of how to put together the kind of relief we need to put together for a deficit neutral package in this committee. that would not ultimately represent a continued expansion of the federal government. and i just want to make the point that i think it's incorrect to perceive this as cherry picking or as trying to go in and identify some of the specific areas that seem to be easier achieved and that that is somehow an inappropriate way to approach this.

i really believe we have got to start recognizing that, although this is not the time and place where we will put together the large comprehensive debt package, it is the time and place for us to do the objectives of this committee's work in a way that is deficit neutral and we have to start finding the pieces as we do so. >> thank you. we are beginning to run out of time. do we want to do one more speaker on each side for the house? >> we need to limit it to that? >> i'm thinking we can have another speaker on each side and then move on. >> miss swartz will speak. i want to say, mr. chairman, it is not going to be helpful to refer to hr3630 as a bipartisan bill because it was not.

and i think we should just stop calling it a bipartisan bill. there were just a few democrats and then 99% of democrats voting against it. ms. schwartz. >> thank you. roy also -- the reason we are here at this conference committee is because, in spite of the house-passed bill, it did not pass the senate. the only way we can reach compromise is by accepting the house-past bill, it is not going to happen. i think the reason we are here is because we ended up with a two-month agreement, and an agreement to come back together and to try again. and -- in fact republicans were very clear that what you are upset about is that the extension of unemployment of benefits and the payroll tax

extension for 160 million americans and the assurance that we protect medicare access to physicians for beneficiaries was not long enough and we agree. we start at the point where we agree and we want to meet those goals. there has to be some compromise with us and the senate. otherwise, we are back to where we were, and the reason we got here which was the two month extension, which you agreed you want to do for 160 million americans and so do we. that an emergency long-term unemployment is real and that we ought to extend unemployment compensation. the issue that we are talking about in the statement is specifically do we pay for it on the backs of seniors, who are counting on the promise of medicare to help pay for their medical expenses as the seniors? understand the notion that seniors do not now pay for medicare is on true.

-- untrue. it was suggested they pay nothing, and it that is not true. seniors pay into parts b and part d. it was said. in fact, they already do. it has been pointed out several times that if we have seniors already paying between 35% and 80% of part b and part d, which is physician services and prescription care, that what you are calling for in this suggestion is that it go higher and it continued to go higher and higher because we freeze the amount of the income. so that over time seniors will be asked pay more and more of their medicare costs. i do understand that that is the goal. i am on the budget committee. we have this debate that is the goal. it is to shift the cost to

individual seniors. the reason medicare exists and the -- is because, seniors in this country four years ago were going bankrupt because they could not pay for health care. we do not want to go back there. if you shift the cost to seniors, we will start to see seniors going bankrupt again because they cannot afford to see their physicians or get the health care they need. this is about health care security and income security for our seniors. there are other discussions we can have about medicare. there are opportunities about the deficit. but to pay for the middle-class tax cut we have all agreed to, to pay -- we do not believe we should pay for the emergency spending on un employment compensation or to protect medicare beneficiaries, access to doctors, it should not be paid for but they are paying increasing amounts for their benefits. this will end medicare as we know it. it is a cost shift and it is

being raised at a time when i think it is inappropriate for us to pay for these particular expenses in this way. so i yield back and hope that we can get back to meeting the promise for our seniors in a fiscally responsible way. >> mr. brady is recognized and that will conclude this issue. >> i will be very brief. the discussion today has been good. i do not understand at all from the same point of the president has yet said yes to this provision. it is his provision. republicans have said yes. and every democrat at this conference committee has voted to require higher income medicare recipients to pay more of their premium. this seems to be the easy as provision on the table, but nonetheless, if this is controversial, if what was at last is a no for today's purposes then i and others look forward to provisions, ideas offered by the senate within

the scope of this committee that can in short that we do not go deeper in debt. the american public is looking for truth tellers. medicare is in trouble. we know this has to happen. i do not know why we keep putting it off. but if you are going to put it off, then i think it is responsible to bring back and offer that has equal bipartisan support of in the house and senate as this provision. mr. chairman, i yield back. >> you know, again, i just think it is important to note that the median income of seniors is $25,000. currently we are at $85,000 which is the top 5%. again, these are proposals the president said. the last item on our agenda is a proposal for which the various versions have been signed into law, not once but three times, and that is recapturing

overpayments of tax payer funded subsidies in the health care law. it is a policy that was first put forward in the health care bill itself and later by senate democrats and the extenders legislation. hhs secretary sebelius has described secret -- previous efforts to recover overpayments as making it "fairer for all taxpayers." i'll turn it over now to senator baucus. >> thank you, mr. chairman. i think the outset it's important to remind ourselves that is a proposal by the house for a tax increase. now, there are tax increases and there are tax increases, but this is a proposed tax increase. in the affordable care act, it

was designed to set up the exchanges for the competition, so individuals, especially those who are not employed by a company looking to find health insurance could go up to a single site and compare, go shopping, just as one does with expedia or velocity in trying to find a car rental or hotel. the thought would be that would be inappropriate way to help people who did not have health insurance, especially individuals, to find a way to find health insurance. the act also provided that when a person shops, he or she sends to the irs his anticipated income, because as we all know, to get more coverage in america, medicaid limits were raised a little bit so more

people could qualify for medicaid. but then there are a lot of people who would not qualify for medicaid who are low-income that could not get health insurance unless they got a break, unless they got some assistance, a subsidy. so we provide subsidies to 400% of poverty. the problem of rises when -- arises when somebody finds out that his or her income is higher than anticipated and that happens. find a job, you never know what. things just happen. there is a thing called a true up, where irs looks at your tax return to see if it matches the tax credit you earlier were warranted because your income was at lower levels to qualify. we in the affordable care act

did provide -- if you got more credit than he should have, send some of the back to the irs. that is only the proper thing to do so people are not overpaid. the fact is that the first the act was passed, for those with income as below400% of poverty, the california 2 was50 for individuals -- was 250 for individuals. it has been increased a couple of times. the fact that that cap is quite high, which means that much more would have to return back from the taxpayer, and basically, it's -- this proposal before us raises the maximum amount of individuals must make the irs from $250 and $2500 for individual and family respectively to $1600 and $3200, so the cap is quite a

significant increase for those folks who are below 400% of poverty. the cap is pretty high as it is now. it's pretty disruptive when you have to go back and pay back more than you have to pay. i think the levels we have in current law are in adequate, -- are adequate and appropriate and it would not make sense to increase that cap that much more, because that not only is a tax increase it would be a significant tax increase on individuals. >> mr. chairman. >> i figure you can use mine. [laughter] you do it? >> i got it. >> it's the angle.

>> the light is much brighter when you're on top of it. when you are looking at it from afar, it is much dimmer. >> i do not think it is on. >> there it goes. >> i would admit error. i thought we were talking about the obama budget and the ryan budget and i believe you were just talking about a rising budget which five senate republicans did not support. -- the ryan budget. this is not a tax increase. it has nothing to do with taxes. with all due respect. when the government pays a subsidy to somebody to help offset the cost of insurance and it turns out to be too much, and the government says we need some of the back, that is not a tax increase. it is an overpayment. the question is how much of that overpayment should we demand?

current law, the $mom is1250. this would take it to $1600. this is not a matter of principle. it is a matter of amount. the question is do you favor the current law or would you favor raising that to $1,600. a, it is not a tax increase. b, not all republicans supporting underlying law. the amount set was set by democrats in the house and senate and we are proposing that amount the increase by relatively small amount, that's all. >> mr. levin? >> in a way, it's regrettable that these are the three items before us, because i think if anyone leaves here thinking that our task is impossible, i

hope they are wrong, because we need to act and act within the next few weeks. so let me just say a few words. how much time do we have? >> 38 minutes. >> i want all of us to have a chance so i will say this briefly. i think what senator baucus -- you describe the problem very well, what he called a tax increase or not. we all know that the exchanges are set up that some people are going to have to have help and that we've expanded, therefore, the coverage of people. and help will be based on income which will vary from year to year.

and so we knew that there would have to be some return on an overpayment that was built into the original law. what has happened is that we have increased in several cases the amount that has to be paid back. and i think we now need to look at the consequences of carrying this one step further as senator baucus said. that is what we need to do. the cbo and the joint tax estimated that when we used it previously, that the cumulative effect would be 465,000 people would for go health insurance coverage. that was their estimates.

when we're trying, some of us anyway, all of us, to increase health care coverage. and the likelihood is, according to these estimates, the same sources, as i understand, it is that if we over do this or however you want to describe it, if we carry the further step, about 170,000 more people will forego coverage of health insurance. so, in the search for -- >> will the gentleman yield for a second? >> that are 170 that will not take coverage through the exchange, correct? >> an estimate -- i am glad you raised that. they all know exactly how many of these people will be left without insurance altogether. and it will shift, as we don't

want to do, people getting health coverage instead of through insurance to the emergency rooms. and nobody 10 can be0% sure of the -- be 100% sure of the exact number, but what we can be sure of is that tens of thousands of people will be without health coverage. this estimate is well over half a million. that is the cbo. if you read the cbo and the joint task committee analysis, that is what they said. that is why the last time around, some of us proposes -- opposed legislation because of that. i just want to raise that and realize that, as we try to stay on track of finding solutions if we might, that we do not take positions that essentially

make it much more difficult. >> mr. walton? >> thank you, mr. chairman. i want to remind us that we are here to find a long-term solution. house republicans in the house were here for a one-year extension payroll tax cut for working americans. a two-year fixed so seniors can have access to doctors and a one-year extension of unemployment to help people. we offered that. the senate came back with a two- month fee proposal which we agree to because we can never have a meeting like this because we could never get conferees prior to christmas in the senate. so here we are. as we look at these things, we are trying to find offsets where we thought there was some level of common ground. this is a bipartisan offset. every democrat on the conference committee has voted to increase the maximum amount of exchange subsidy overpayments that need to be repaid. every member. hhs secretary sebelius described this offset when it was used as part of the doc fix extender by senate democrats as

making it fairer for all taxpayers. the democrats' health care a lot failed to adequately protect taxpayers -- we are talking federal subsidies to purchase health insurance. when we talk about taxes, if you do quarterly withholding any projected income at the beginning of the year in you do not adequately withold enough each quarter, the irs not only makes to pay what you owe, but if you are off by a certain percentage, you pay an interest payment by not having enough withheld. what we are talking about is not too dissimilar. that is you think by income at the beginning of the year qualifies me for certain tax- funded benefits, a subsidy. and as you go through the year you discover your income went up more than you thought it would. guess what? you trigger over that eligibility to be subsidized by the taxpayers. the right unlawful thing should

be you do not get the subsidy. you were not entitled to in the first place. that is what this proposal is all about. it is about fairness to the working men and women who are subsidizing all of this by paying the taxes. and if he were not eligible to get a subsidy from taxpayers, you should not get it and you should pay it back. this is not fully require total recruitment from my understanding. it requires half. i would think if you are not legally entitled to the subsidy, why do get to keep half of that you were not entitled to? by the way, this country has a deficit problem and we should not be subsidizing people that cannot legally have the right to the subsidy to begin with. the house passed provision would reduce the deficit by $13.4 billion. that is less by the $19 billion introduced and passed by democratic-controlled congress, considerably less than the $22

billion saved in the 1099 repealed and passed by the senate 87-12. so this is a reasonable pay for so that we can move forward together and provide middle- class but continue tax cut for the rest of the year. this is one piece of trying to move forward. the house passed a provision that would reduce the deficit. that is less than the 19 billion provision that was passed by democrats-controlled congress. and passed by the senate 87-12. this is a reasonable pay so we can move forward and provide the middle-class it continued tax cut for the rest of the year. picture seniors can deal with what they are covered. i am glad to hear my colleagues going back and forth on the budget. we are waiting for one of them to come across so we can take it up. i yield back. >> i do not think i have any other -- >> let me respond. there is a lot of agreement here as to the purpose of this adjustment. we wanted to provide affordability for our of lower income wage earners.

that is why we provided credit. that determination is made before we know the taxable income of the individual. people make estimates in good faith. we want to make sure that they are encouraged to use this system. that is what we want them to be. from the beginning, we recognized there was a need to do an audit at the end of the taxable year so that it was not an over credit beyond what was reasonable. you are correct. this is part of the framework for how the credits was intended to work. it was included in the affordable care act. we have adjusted it with the payroll tax issue. we came together and said let's

make a further adjustment. we did that. my concern is, where is the right level? where people are encouraged antipathy insurance that is part of the system and costs less money. we have a fair adjustment for the purposes of the taxpayer. i would feel more comfortable if we had hearings on this. and we made a decision based on policy rather than a dollar number to fit into this report. that is what makes us nervous. his point is one we have to reflect on. there are less people using this as a result. that is something we have to think about as to what impact it has in getting everyone into

the system to have a more efficient health care. i think this is a legitimate area for discussion. i regret we have not had more committee input through the regular process so our policy is based upon good health care policy and not just plugging in a number. >> i think it is the senate republicans. >> we are easy over here. we all trust each other. >> it helps you have fewer numbers. >> we are trying to figure out who is next.

>> mr. chairman, i think this underscores what has been said is that there is a danger. we are reaching a tipping point. people might choose to pay the penalty not to have insurance rather than face the danger of may recapture in their taxes. that leads to the potential of 170,000 people. most likely those people would choose to in boyd insurance of the healthiest people. syria have made further situation where, if you are ill or you have family members coup are running the risk of paying a high penalty, if you're healthy, you pay the money. that defeats the overall purpose of health care reform

which is to enroll the largest possible number of americans including healthy americans. what we have done in the past is we have used this. we are at the point of overusing it so we undercut and cost ourselves even more money. with that, i think that for flax what the senators have said. there is no question we have done this before. i think we are reaching the tipping point where it will have adverse effects going forward. we will end up plant -- paying more. >> i think we had the senate republicans yield of their time.

>> mr. waxman wants to say a word. >> i will try to be brief. i was always worried about the medicare premium. it could become a piggy bank. we adopted a means tested premium in the affordable care act. that made sense because it was a way to raise money by asking upper income surged -- seniors to pay more. i was trying to figure out, we all voted for this. we voted for means testing and the affordable care act. republicans did not vote for that. they voted in the house for the proposal. at what point do these things

that we voted for becoming a piggy bank? if we are going to increase the premium even more, the republican proposal goes too far. this issue of the tax increase, let me give you an example of what we're talking about. somebody who gets a tax credit is pretty low-income. the upper income does not get a tax credit. the lower income people do. suddenly you have a job and you get a bonus. that bonus pushes you to a point where when you look how much money you actually made, you are over the amount for the tax credit that you got. it is fair to say to pay back some of that money. that is what was in the

affordable care act. this provision, let me give you another example. we are talking about the tax being based on a filing of the two years ago. this year your spouse got a job and you have the job and the tax credit you got to be able to pay for your insurance is not justified because you have a hiring,. you should pay some of it back. we agree to that. congress said the should pay more back. they did that twice since the ford will care act. that was when we had to pay for the bill to repeal the irs withholding. people did not like it. at's make these people pay higher penalty.

we did that when we have to continue to pay for physician fees. they said people will pay a higher penalty. we hardly gone to this group and increased their penalties twice. and we have not given them tax credits. let's keep this in perspective. what made -- what may be reasonable in terms of a penalty to its to a point where it is unreasonable. if you are a person in the middle to low income and you need help to pay for insurance but you heard about a friend of yours who had to pay this tax penalty, you might not even apply for the insurance. you are taking people out of the pool to get insurance coverage.

the tax committee said this could be 170,000 or the next decade. they will not even apply for insurance. if the penalty is too punitive. that is not a good result. it is not a good result for people who did not plan to be overcompensated in their tax credit. they are really hit with a whammy because they have to pay this additional tax. i think we should put both of these issues into perspective. we all voted for these things. republicans and democrats. thet make these people be piggy bank for paying what has to be paid for. middle-class tax cut, and

doctors to be paid. why should we ask people who deserve a tax cut so they can get health insurance to pay more, or seniors to pay more, so we're not asking people who make over $1 million a year to pay more? that is what we mean by fairness. you do not go after middle income people to pay more and not those who are at the top. if you want to pay for these things. don't use the argument it does not pass the senate. that did not improve anybody. -- impress anybody. >> this is surreal. i don't mind telling you. the question is not whether we are going to tax folks who have a greater income.

the question is whether we are going to subsidize them less. this is an exchange of subsidy recaptured. -- subsidy recapture. all of us voted against it. that is another discussion. the 170,000 figure that has been pointed out that would not be eligible for the exchange, those folks -- at the level that the democrats, when the past to the bill, said would be capable of purchasing of health coverage on their own. so, the subsidy is not a tax. it is going to assist

individuals below four hundred% of the poverty level to purchase health care coverage. those individuals were paid more, given a greater subsidy, than other folks based upon their iras filings. this is the height of trying to get to fairness for all the taxpayers. so much so we have even had members of this committee and the senate leadership weigh in on how fair is. in a release earlier, mrs. the caps -- this is the quote, "the cap on the payback would met -- amount would be on a sliding scale based on the income of

the recipient of the tax credit, making the policy fairer to the recipient and all taxpayers." at the risk of beating this a little further, another quote on this policy. >> you are good. >> "this policy does not change the tax credits for which people are eligible. instead it changes the way when they have received more credit because they earn more money in a given year." i am an orthopedic surgeon. are like a little meat on the bones. let me put a little meat on the bones. let's look at one example of the kind of numbers we are talking about. a family of four earning

$50,000 in 2014. their exchange subsidy would be $10,950. the subsidy is $10,950. if the spouse returns to work and the kids were off at school. get a job teaching school or something like that and the incumbent up to $79,800, their subsidy would go from $10,950 to $750. that is the same amount that any family of four would be eligible for. it closed down to $750. under this proposal, instead of paying back the $7,700 of

difference, we are asking them to pay back $700 of the difference, keeping $37,000 in subsidy. that is a family of four. so, every single person has voted for this idea. talk about fairness. that means that a given american making a certain amount of money is subject to the same opportunities and subsidies and taxes. this tends to equalize that. -- attempts to equalize that. did you not agree with the exchange, at all. the compromise is very clear.

i would urge my colleagues on the other side to please look back at your voting record, look back interstate mints, and let's move forward on this. >> my troops are dwindling. [laughter] we have been depleted here. i think each side expressed their view pretty well. >> i am prepared to conclude this issue. i think everybody has an opportunity to speak. do want to finish? we will finish one on each side.

>> i think we can accommodate that. >> this proposal could end up costing $700 to a family, middle-class family, which would wipe out any tax cut they might get through the payroll tax cut. it would pay for the cost of this proposal on the backs of modest, middle-income families. the first proposal would have put the cost of extending the payroll tax cut on the backs of 3 million middle-class workers, wiping out their payroll tax cut and exceeding that and taxing them beyond. the second proposal we discussed on medicare would put the cost of extending the payroll tax cut on the backs of 2 million seniors in america today who are not millionaires.

$80,000 is not a millionaire. in the future years, not far from now, that would be reduced because of the bracket that would occur. you're looking at a senior making $40,000 who would pay more. this would approach 10-15 million seniors who would be paying more in benefits for medicare to cover the costs of this payroll tax proposal. whether it was the first for the last proposal, so far the only folks who have been asked to contribute our modest and middle income families. simply put, if we ask millionaires, by the way, when

we talk about asking millionaires, we are asking folks who are 1/5 of 1% of taxpayers. some 7000 millionaires last year did not pay a single cent in income taxes. if we are asking who has contributed, the workers have a party have their pay frozen. they have contributed. seniors did not get a social security cost-of-living increase. they have contributed. americans who do not have decent health insurance have been paying for a long time. if you did a simple surcharge on the wealthiest in this country, the 1/5 of 1%, you could avoid putting this on the backs of seniors and middle-class families. the senator said we should find

adjustments that have the least amount of pain. i agree with that statement. he said we should be fiscally responsible. i agree with that. there is no reason why we cannot make the adjustments that have the least amount of pain without putting the burdens on seniors and middle-class. there may be some cases were some of these proposals moved for other reasons. as we try to figure out how to do this, i hope we would realize we're trying to keep the mission of advancing the economy and rewarding the middle class and

coming up with common sense solutions. with that, i yield. >> thank you, mr. chairman. i think it has been a good discussion. i would ask us to keep in mind, as we proceed, the issue of balance. we take an approach that is perceived by the american people to be fair. the president's recommendations were cited several times. the recommendations he made to the joint committee. at the time the president made those proposals, he made it clear that his proposals would require changes in medicare contingent on making other changes like closing corporate tax loopholes. but me q -- let me quote what he said. you have to look at his proposals in the context of the full recommendations. "i will veto any bill that changes benefits for those who rely on medicare but does not

raise serious revenue by asking the wealthiest americans -- americans to pay their fair share. we're not going to have a one- sided deal that hurts the folks who are most vulnerable." when the president made those proposals, and he made them as part of a package approach asking all the american people to be part of the solution and not single out seniors or middle income families to take a disproportionate brunt of the hit. >> to conclude, i would say that the purpose of this is to protect taxpayers from overpayment. these are payments that people are not entitled to because their income has changed. some may be because they got an increase or somebody in the family got the job but also because of fraud.

the proposed eligibility that it did not ultimately provide. what was important with the example of doctor price was that under this proposal, we are asking them to pay back a small fraction of the overpayment or subsidy they are not entitled to. in the example he suggested, the family would keep an overpayment of $7,000 under this proposal to only return $700 additionally. it is a reasonable proposal. it has received support in other legislation sure it i think it is one that one that deserves more merit than it received in the discussion between the parties. this would reduce the deficit by a significant amount, a $13 billion. it is an important part of making legislation we're trying

to move forward. with that, before i close the meeting and describe what might happen, i will turn over to the senator. >> i am hopeful that we can close that out. on the larger issue, it is a number of weeks, a drug- testing, waivers, so forth. i think it might not be a bad idea if we sent to the house an offer on that.

you could expect to see that very soon. >> we will look forward to that. that is one of the core issues we have to come to an agreement on. the payroll tax holiday and sgr. i do think that it appears from the conversation today that the democrats rejected the legislation. i think we do want to get an offer on those as well. i look forward to engaging with my colleagues on trying to find a way to go forward. if we are not successful, we will have three choices -- to go outside the scope of the conference, increase the deficit, which even the president does not want to do, or begin looking at scaling back some of these policies we have identified.

that would mean less time in less generous benefits. at this time, i think those options will guide us going forward. i look forward to receiving the proposal on unemployment insurance and look forward to receiving an offer on other pay-fors if the current -- these are not acceptable. >> we do not have much time. for all intents and purposes, it is by the first part of next week. there is a recess coming up. that will take a couple of days before the recess begins. i urge assault to be flexible. -- us all to be flexible. i think the basic principle is good. but there could be modifications that could be within the scope.

beyond that, we are going to pass it. it will be the whole package. it will be the one supported by both political parties. in the senate, i cannot speak for the house, by definition we will agree to waivers needed because it will be a bipartisan package. you mentioned a couple of other alternatives if we do not reach a solution. i urge all of us, i do not want to be corny, but the american people want is to find a solution. the american people want us to work together.

it is amazing to me when you return here after visiting with your constituents how different this place is. there is an echo chamber sure that is not constructive. i urge us when we are trying to figure this out to remember the people we serve. what would their guidance before us? would they want us to compromise.

to come up with a solution. would they want us to reach an agreement? the answer is clearly yes. i urge us to remember our constituents, the american people who do want us to get our work done. and maybe, maybe the approval rating of this out for it just might go up. but that is not the reason why we want to reach an agreement. we want to do it because it is the right thing to do. i been given we are going to succeed, we need to find a way to have a lot of back-and-forth. i am not exactly sure what the procedure is are what the structure will be. we need to intensify our discussions.

there have been so few here. this was many years ago. it is a very controversial issue. we had some groups that sat down and exchange ideas back and forth. i think we need to do the same thing in one way or another. >> thank you. i appreciate the sentiments of the remarks. our time is short. we do need to find them that will pass both bodies. i ask you to remain flexible. deleted not have a lot of time left. we need to move quickly. we need to remain flexible.

with that this meeting is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] clacks former pennsylvania senator rick santorum won victories in the primary and caucuses in minnesota and colorado. we would hear from mr. santorum and next. >> tamara, the vice chairman of the house armed services committee will take your questions about proposed cuts in defense spending. bill pascrell look at the budget

and deficit. the we will look at the security correspondent for the national journal to discuss nuclear energy programs in countries in the middle east. "washington journal" is live every day at 7:00 a.m. eastern. >> rick santorum won the misery primary and the minnesota caucuses tuesday. he spoke to supporters in st. charles, missouri outside the st. louis. -- outside of st. louis. clacks>> wow.

conservatism is alive and well in missouri and minnesota. thank you so very much. it is great to be here. we doubled them up here and in minnesota. i also want to thank god for giving us the grace to be able to persevere. what a rock. we have had more drama than as a family really needs. she has been an amazing rockets and amazing to me.

i want to thank you. -- she has been an amazing and amazing to me. i want to thank you. i want to thank my two kids and all the kids at home. i will be home in a couple of days. it has been a while. i just want a particular note to my bella. thank you for getting healthy. your votes today were not just heard loud and wide. in massachusetts they were heard particularly about.

tonight was not just about the victory for us. tonight was a victory for the voices of our party, conservatives and tea party people, who are out there every day building the conservative movement and the base of the republican party and the voice for freedom in this land. thank you. there is probably another person who may be listening to your chairs. that may be at 1600 pennsylvania avenue. i would not be surprised if he is not listening. why would you think if he is

listening now? has he ever? y? he thinks he is smarter than me and he is a privilege person that should roll over you. we have a different message. if you look at what came to the wall street bailout, to the president of united states, when it came to the banks, he thought he would do better. when it came to the problems that were being confronted, when it comes to health care, to president obama when he was pushing forward his radical health care ideas listened to

the american people. he thinks he knows better. he thinks he knows how to run your lives and manager health care. when it comes to the environment, he listened to the american people or did he pushed a radical cap and trade agenda that would crush the manufacturing sector? he thinks he knows better. we need a president who listens to the american people when the the majority opposed to speak against. with a president who listens to them. the problem is in this republican field you have been listening. tonight the voters here and minnesota and hopefully colorado i hope you have been

listening to our message. if you listen to our message and you found out that on those issues health-care, the environment, cap and trade, mitt romney has the same positions as barack obama. in fact he would not be the best person to come out and fight for your freedoms in america. i did not stand here to claim to be the conservative alternative to mr. romney. i stand here to be the alternative to barack obama.

tonight we have the opportunity to see what a campaign looks like. this is a more accurate representation of what they will look like. gov. romney's greatest attributes as i have the best money. we have someone that has other attributes to since. it is someone who can get up and

make contrasts with president obama. barack obama needs to be replaced in the oval office. people have asked me what is the secret? wire you doing so well? we have a great message talking but everywhere we go, particularly in the industrial heartland. they still make things here in missouri.

you see when you have a republican talking about growth, they are talking about growth for everybody, right? americans respond. i do care about not 99% 495%. i care about -- or 95%. i care about the rich and poor. i care about 100% of americans. the message we have been taking across the country is a message of what is at stake in this election. this is something we have seen so evident in the last week.

this is an election fundamentally about the kind of country you will handoff to your children and grandchildren, whether they will have the level of freedom and opportunity that you have. we have a president who thinks he knows better and do things we need to accumulate more power for the elite in our country to be able to govern you because you are incapable of liberty. that is what this president believes. if we do not have a republican nominee, they make the case to the american public. this is about a country that

believes in god-given right and the constitution that is limited to protect those rights. the president does not believe that. he has tried to tell you that the government can get you right. the government can provide for you. look what happens when the government gives you rights. when the government gives you rights, the government can take them away. when government gives you right, the government can tell you how to exercise those rights.

we saw that in the last week with a group of people, just catholics. they were told you have a right to health care bill you will have the health care that we tell you if you have to give your people, whether it is with the teachings of your church are not. i never thought that the first generation americans whose parents and grandparents love freedom and came here that we have a first amendment that stood for this perrin they can impose his secular -- that stood

for this. he imposed his secular values. it is worse than that. when one of the catholic bishops try to communicate that to army s, the obama administration said the can and do that because your language is judicious. they made them change the letter of a bishop to his people. freedom is at stake in this election. we need to be the voice of freedom. in that founding document, they sign their names.

every generation of americans does not create freedom. they have a harder job. they have to maintain freedom. your charge tonight here in missouri, and because we are not done yet, we have a caucus coming up. you can go out and pledge not but maybei -- lives your fortune and your honor that you stand on.

your honor is at stake. and preserveut emperors' the greatest country in the world. >> now mitt romney came in second in missouri and third in

minnesota's caucus. he spoke in supporters in denver. >> thank you. i have some big shoes to fill tonight. my mom and romney have gotten some well-deserved time off. i would like to thank all of you for coming out, and to thank all of those for your support. i like to thank senators and congressman.

thank you. in addition, i live like to think all of the great supporters we have across the state. and this guy right here. now i have the distinct honor to introduce my hero and the next president of united states, my dad, met romney. -- mitt romney. >> there we go. thank you. thank you so much.

that is a little smaller than the 2800 people last night. you are just as loud. congratulations. it is great to be in denver tonight. a lot is still on the ground. it is warm to be in this room. i want to say thank you. the races too close to call. i'm confident we will come in number one and two. i am looking for a good showing. i know there are some people getting back from caucuses. i want to say thanks. i want tuition the very bad spir.

i want to thank my fellow republicans. i look for it to the contest to come. we will take the message to every corner of the country. when it is over, we're going to stand united as a party to defeat barack obama and restore the bodies that have made america the greatest nation on earth. three years ago you may remember barack obama came to colorado to accept his party's nomination for the presidency. he rented out a huge stadium. he got some of the styrofoam greek columns. he had two giant television screens. on the big stage, he made some

even bigger promises. he said the democrats had a different measure of what constitutes progress. then he went on to define it. he said progress would be measured by how many people can find a job. more have lost their jobs during president obama's term than any other presidents in history. more have lost their homes than any other in modern history. president obama has failed. we will succeed. in that same speech, he went on defining progress. he said progress would be determined by whether the average american family saw its income go up instead down.

in the last four years, and the median income has fallen 10%. by his own definition, he has failed. we will succeed. he went on to say we can measure progress by determining whether someone with a good idea can take a risk and start a business. by his own definition, president obama has failed and we will succeed pet.

under president obama, the average duration of unemployment has more than doubled. the 40 million more people are on food stamps today than when he took office. by his own definition, he has failed. we will succeed. this week you heard president obama say that he deserves a second term because "we made progress." no, under the definition of progress you made you have not made progress. three years ago, president obama after his inauguration said that if he cannot turn this economy around in three years that he would be looking at a one term proposition. we are here to collect. we will take back the white house.

this is a moment in time when our country is crying out for fundamental change and reform. washington cannot reform itself. washington will never be reformed by the sioux have been compromised by the culture of washington. -- by those who have been compromised by the culture of washington. i'm the only candidate who has not served time in washington. leadership is about starting a business, not trying to get a committee. we all know the soul of this nation can be corrected by reckless spending.

it is that washington may have to change. this is not a moment when we can continue to do business as usual. this is got a moment where they can realize they got it wrong. this is a time for real change. i stand before you ready to lead this party in the nation. i have led businesses. a lead in the olympics. i had the chance to lead a state. president obama said he is learning. we say he is learning to little too late. the presidency is not a place to learn how to lead. it is a place to exercise the

judgment and leadership that has been learned over a lifetime. that is precisely what i will do. i know that many of us are concerned about our future. 30 years i cannote tell me times i heard the reason something could not be done. i've never been good about listening to those people. i enjoyed proving them wrong. my father never graduate from college. he apprenticed as a carpenter. he could take a hand full of nails, stick him in his mouth and then stick them out pointy end forward. he put aluminum paint in the front of a car.

my dad believe in america. the american he believed in and they he could be the head of a car company. from my dad, -- for my dad and for hundreds of thousands like him, this was the land of opportunity where the birth was no barrier to achieve one's dream. small businesses, and to bring yours were encouraged and respected. our economy past and every nation. i refuse to believe that america

is just another place in the map with a flag. we stand for freedom and hope and opportunity. the last three years have not been the best of times. what we lost a few years, we lost our way. the principles that made this the greatest nation on merit has not lost their meeting. they never will. we know we can bring this country back. i believe in america. so do you. america we for the left because we believe in america and the founding principles. thank you so much. we've got a long way to go. i sure love this country. thank you some much.

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america" by s rodney atkins]

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>> rick santorum run the big dams in the primary, taking 55% of the budget. matt romney finish second and ron paul barrett. in minnesota, rick santorum scored another first-place fitch rates. rick santorum slept a third state with medtronic coming in a close second. now a discussion on the middle east and arab spring. he spoke last week at the world affairs council in houston. >> its is a great pleasure to be here. my fondness for the united states goes way back.

in 1964, i was nine years of age. some of you may remember the communications satellite. telstar was the first method of receiving live pictures across the atlantic. some of you will remember. some of you will remember that it is a presidential year. it conventions were in full swing. watching live pictures of party conventions where there were both men's and hats and grown- ups behaving badly this looked to me like a career path.

thank you up for that. my next connection was a 1975. i had a chance to come here as a camp counselor. i learned a great bill about american youth. none is repeatable. they gave me the opportunity to do some traveling in sampling for the extraordinary hospitality. but there you the keys of the car. i remain deeply indebted to the warmth and kindness of that. passed my third connection is that i am a scot. but my parents were born in

scotland. there are a lot here. we will talk about your views on independence later. and then there is the center connection through the alamo. i knew his works well. i was able to quote them to those who were defending the alamo. he would fill a cowards grave? let them turn to flee. it is all about your people not turning and fleeing. from then on, our people have stood together. thank you very much for giving me the opportunity to speak to

you. i have responsibilities. 27 countries, a it is south asia and afghanistan. 27 countries have some form of major insurrection going on. 11 have some form of minor trouble. i am being generous. that leaves three. you can never quite trust the canadians. and that leaves taxes. i am told that the city is to finance.

i think the council for their efforts of pulling this together. this is a busy year for the united kingdom. in july, the eyes of the world will turn to london for the olympic games. it has been a challenging task to get ready for the great issue of off and put on in the sustainable olympics ever. this is another reason why the u.k. is a great place to get things done. it is important for it this. we will commemorate the 170 year. one is here.nsu

the air ride in galveston in 1892. this accreditation was to the republic of texas. watch out for events commemorating this anniversary throughout the year. i am here today to talk about the different part of the world. this is a region that has seen its momentous change. the energy industry is well represented in the region. it will play an important part in encouraging positive outcomes in the region. today i would like to share it the government's perspective on the impact of the movement and how this relates to energy security. the irruption of democracy movements is the most important political development. with potential long-term consequences greater than 9/11 are the global financial crisis in 2008.

this is about people demanding their legitimate rights. a year ago, the crowds were gathering. 100,000 protesters took to the streets. their bravery and believes resonated. mabus

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[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] doesn't allow the satellite nabt a measure based on a view that some people are unworthy. thank you. >> thank you. cooper? >> thank you, your honor. just a few moments if you will please indulge me. first, mr. olson spoke of the loving case at great length, but

we know if mr. loving had desired to marry mr. jeter that the case would not have come out the same way. we know that with certainty because baker against nelson rejected that very claim on the heels of love wrg the gay couple who brought that 14th amendment loving claim relied on loving very heavily. we also they mr. olson is simply wrong when he suggests that the baker case did not involve a classification based on sexual orientation. it was just gender. here is what the plaintiffs in baker said. there is no justification in law for the discrimination against homosexuals.

apellants are being denied basic right to marry. they have been denied numerous benefits awarded to others similarly situated, for example, childless heterosexual couples. this was clearly a case where they challenged the classification as one based on sexual orientation as well as one based on gender. the loving case would have been on all fours and would have -- would have come out -- excuse me, could have come out -- baker case would have been on all fours with loving if it were a fact that same sex sexual relations produced the children same as opposite sex sexual relations do. then mr. olson would have a lay-down case. there would be no basis on which to draw a distinction to

identify a distinguishing characteristic with respect to any interest the state has the authority to implement. there would be no difference. so the question is does the state -- does society have no interest in that distinct wishing characteristic? we submit to -- >> is that good argument? do you have a case to suggest that is the distinguishing characteristic or is that good argument? >> i think it is both, your honor. the case i am referring to is the garrett case, which sets forward the standard that i just quoted, and it in turn is quoting the cleburne case, both of which applied rational basis review and upheld distinction where is they were drawn on dwirk characteristics.

it also offered to the court as well the johnson against robeson case where the court said when inclusion of one group promotes or addresses a state interest and the addition of others would not, then state is justified in acting upon those differences drawing on that classification. i would like to also refer the court very quickly here. well, let me just -- >> very quickly here. >> i'm sorry? >> nothing has been done quickly here. >> and when you're in the red, it doesn't mean you that much time remaining. [laughter] >> fair enough. >> if the court will just give me 30 seconds because this is a point that is clearly very much on the mind ort court, that is the romer case.

i want to share this passage with you from romer. it does more than repeal or rescind these provisions. it prohibits all executive or judicial action at any level of state or local government designed to protect the named class, a class we shall refer to as homosexual persons. the point is that amendment 2 was unprecedented and extraordinary. whether it had repealed anything or not, standing, essentially in its own shoes without regard to what the history behind it was, it was unconstitutional. it would have been unconstitutional if it had singled out and made a stranger to the law any class of persons. again, your honor, thank you very much for your indulgence. >> thank you very much. thank all of you for a fascinating argument. the court will stand adjourned.

>> all rise. the court now stands adjourned. >> former pennsylvania senator rick santorum won missouri's nonbinding primary taking 55% of the vote. mitt romney finished second and ron paul third. in minnesota, rick santorum scored another first place victory in that state's caucuses. congressman paul finished

second. and the results from colorado's caucuses, rick santorum swept a third state with mitt romney coming in a close second. >> when i first started the book, i also thought this must be an american story. this is about a country that worships the religion of self-reliance. it turns out that we're lagers when it comes to living alone. it is much more common than in european nations and it is even more common in japan. >> eric looks at the growing trend of american adults choosing to live aleaned what that means for the country. also this weekend on book tv, sunday at 3:00, the second cousin of former secretary of state condoleezza rice, connie rice, starting a dialogue between gang leaders and police.

and bonnie morris on her one woman play and book of the same name, revenge of the women's studies professor. book tv every weekend on c-span 2. >> now german chancellor angela merkel discussed the future of europe with students at the hertie school of governance in berlin. the event was co-hosted by the "financial times" and the broader european alliance agenda foundation. following her remarks, she took questions during this one-hour program. >> ladies and gentlemen, i hope all of you can see me behind the lectern. it seems like this is a good place to be a student, especially.

i'm happy today to have been able to answer the invitation that has been sent to me and to come here to talk to you about the future of europe. europe has always been at the cross road of history at many points, but i think today is a good time because we have to answer a question. what is the direction that we want to take for the future? this place is perfect. it is the new museum in berlin and for our subject, it is really a good framework. it is a good place to talk about the future of europe, since it is a place that reminds us of the origin of our culture. we see the great classics, we see the wounds of world war ii and we see modern architecture

as well, like we see in a lot of modern museums and it is a place where the old and the new mix in a very creative way. about five years ago in march, 2007, in berlin, we had a great anniversary, the heads of state and government under the german presidency of the european union came to berlin to celebrate the treaty of rome that took place 50 years before. and back then, we took advantage of that to talk about the lisbon treaty and to underline what europe is all about. what means the european union. what we owe the european union and what we expect from the e.u.

we summarized all of this in the berlin statement, which mentioned first that war and anonymity in europe is over. we talked about freedom, about good living standards, about friendship, that this would be our new normal. we talked about multiplicity and diversity. and we talked about the conviction that the great question of the time can only be solved together. that was the basis of what we wanted for the future in the 21st century. we can only answer the questions if we are together. and i think in this berlin statement, we summarized very well what we wanted for europe. and we concluded, and i quote,

the citizens of europe are fortunately united. we are fortunately united. europe defends freedom, democracy, freedom of the press. all this is anchored in our freedoms. and thanks to the economic success in unity and when we read this, we see human rights democracy, freedom of the press, we can see that in a world of 7 billion people, there are many people who still have to fight for all of this. so it doesn't go by itself. we should not take it for granted. there are countries in this world that of course have huge economies. they don't have our values.

they are far from having our living standard and our freedoms. so europe has a model that is now in a world in complete change. and this is a question that we have to ask ourselves. in 1950, just coming out of world war ii, and little by little, brought germany back into the community of the world. in the other germany, it was not the same. back then, we were on a planet with 2.5 billion people. 20% of the humans were europeans. last year we hit 7 billion people in the world, and today, the europeans are only 7% of the world population. even if we are still 20% of the world g.d.p., but when we see each other again 20 years from

numbers will have changed even more. our societies are aging in europe. we are in a rapid demographic change. we are more and more retired people. less and less active people among europeans. what does that mean? it means that if we want to keep our living standards, we have to change our policies. and if we want to keep our values in the globalized world, we have to work together and speak with one voice and we have to convince the others with one voice. it has do with our living standards, but also it is all about our values, and of course europe is in the middle of a difficult crisis right now. and i think that we will only

come out of it if we go back to the origins of this crisis. and if we look at the origins of the crisis, we will see immediately that we cannot overcome this crisis overnight. we have a lot of structural problems. we have a lot of debt in some member states. the competitivity is very different from one country to the other. and there are lots of problems still in the construction of the common currency. three problems that must be overcome, that must be solved, that we must solve together, what does it mean? it means that it would be too simple to say oh, the only problem is the international finance market. the crisis of 2008.

no. that financial crisis revealed our structural weaknesses in europe. shed light on it. and therefore, for me, this crisis is more of a wake-up call. it's a wake-up call that tells me that we have to look in the face at our problems. and it is not going to be easy to find a solution, but i'm fully convinced that the only solution is when we all work together and if we are successful in the new globalization, i think we will. that's what we want. otherwise, we will not be a successful continent. this means that what we have already achieved in europe can

only be preserved if we renew europe with strength and therefore we can say that this crisis a chance for us, it is a chance for us to create a stability union, a stable union worthy of the name. the question of finances, very often it is summarized in cut, cut, cut. well, that's too simple. no, it has to do with the fact that we have to live in this sustainable way and we have to also think about the next generation. and if we were not able to have a sustainable system, well, we would be in a very difficult situation that we could never overcome in the future. the financial markets no doubt wonder if we can come out of this crisis.

therefore, one of the elements is to consolidate our budgets. we can say that we have started. start at the beginning if you want. the facts of the treaties was clear. we had a stability pact with very clear rules. the problem and the truth is that the rules were never respected. nobody checked them. and therefore, the reality was different from what was on paper. so we need solid finances, solid budgets, sustainable budgets. among others for a generational justice. but now all of these rules you be n the stability pact must be binding. that's why in this new pact it will be binding. this new treaty, now has been signed by 25 countries.

and today -- today, this very day, is the 20th anniversary of the treaty. we have taken an important decision. we have decided to go the right way in our common currency. the rules of the stability pact were neglected. now we must say that in the future there will be applied. they will be respected. otherwise, won't have a free and independent economy. but solidity is one aspect. but in order to have solidity, we have to be competitive. debt and lack of competitivity are linked together. if we cannot sell our products, we will have less jobs.

and therefore, our debts are going to go up. that is to say that budget consolidation and growth must go together. one is the condition for the other. if you look at europe, and if you look at the youth unemployment problem, then we must say one thing. the average youth unemployment is over 20% in europe today. in some countries, it is way over 40%. and if you think about the future, imagine what you want to invest your funds. where you want to place your money. thinking about life insurance, for instance. are you going to place your money in a country that has a very high youth unemployment? that has a very profound demographic change and huge debt, or are you going to place

your funds in a country that is in a better situation? therefore, i think, it is important here that we be competitive. that we improve our competitivity so that more people have a job. and so that we can maintain our living standards. so we need structural reforms. and of course, there is the question of fairness, equity. in germany, we had the hearts for reform. it was very tough. change is always difficult. but when i became chancellor, the reform was still fresh. we had 5 million people unemployed in germany. today we have less than 3 million unemployed. youth unemployment has been cut in two in the last couple of years.

and i think that for people, especially for the young people, they have a new chance. of course we could still talk about wages, wage levels and fairness, but at least we have undergone some profound changes if for the better. that's why i'm saying in the e.u., let's learn from countries that have made changes and i think it is not asking too much even if there are no competences in europe. at least we can look at best practices, see who has done well. maybe we could learn something. and change the rules where countries are not doing so well. that's what we thought about in what we call the euro plus pact. and i'm happy to see that a year later, we have reached the point that we were aiming for with more solidarity, more competitivity.

but also the question is how much do i invest in research, in innovation? in 2000, mind you, the heads of states of europe said in 2010, we want to be the continent of innovation. the old promise to invest at least 3% of their g.d.p. in research. today in europe, it goes between 0.7% and 2.3%. of course nobody did what they said. in germany, we are still far from the 3%. but it is not a very good image for competitivity. that we have left the europe. the president to have european council has said, and i quote, we are not facing a choice between community methods and the methods of the member

states. the choice, which is different, it is between coordination among member states and nothing. these are the discussions that we must have today. the economies of the different member states of europe are so tightly interwoven, and especially with the sengle market that, political decisions taken in one country always impact all the others. more today than ever. and this is true of the whole e.u. and even more for the eurozone. that is to say that a european policy will always be domestic policy. we have to understand that. this is different from classical policy. we always thought, well, you're talking among yourselves but we do the same thing in our

countries. we are trying find best recipe in our countries, but everybody is taking different policies. that is to say we must work closer with each other if we want to strengthen our economic and monetary union. and we must always give a piece and a part of our sovereignity to europe. we have always done it in the past. in germany, it was always difficult in terms of the silence policy, the immigration policy that we were giving up some of our sovereignity. it is difficult for all countries, even for germany, especially now in the european union where we have adopted the majority principle. no country has a veto right anymore. we have given a lot of our sovereignity, but in order for the whole to function, that's

what we have to accept. we have to go step by step. we have to understand that little by little, giving up our sovereignity to europe is going to be better and better for all of us. it is a question of trust. we have to trust each other in the end. trusting means that, of course, if somebody is in a crisis, is in a difficult position, we all have to help them. this-the-future european stability mechanism is going feature that so-called e.s.m. also we have to trust each other and trust that the other is also going to make a big effort for better competitivity so there is going to be national responsibility and european responsibility. it goes together hand in hand. if we do that, we will go in the right direction.

and i will quote also courage in adversity. that's what shiller said and of course, it is as you know, the words of the european anthem. courage in the middle of adversity. and europe has had worse problems in the past than the ones we are going through today. in the old days, we had an economy crisis. the economic crisis led to lack of trust to, distrust to, isolation and unfortunately very often to war. today, fortunately it is no longer like this. we europeans are much closer together than we ever were. and now basis of all of that is trust again.

germany knows the importance of such a trust. the western allies after world war ii saw to it that germany would be a democratic country. we owe their trust to what we have become. it allowed us to start again, to be friends with the rest of europe again and without that we would not have had the reunionification of germany nor the transatlantic organization. so german reunionification and european unity are the two sides of the same coin. i spent a lot, many years of my life in the nonfree part of germany. for the generations after world war ii, it was almost a miracle

that we were able to overcome the mountains of hatred and misunderstanding. the european union has made borders less and less important. we have the single market and then we had -- and for people your age, it is -- you have always been in that situation. you have always seen this. it has not always been like that. trust has also made the euro possible. and of course, we had to trust each other when we widened europe. we had the german reunionification. we accepted new countries and now we are all the same members of the same history. we are 28 member states.

we know the rest of the vulcans want to join us. we need the european perspective. that's why it is important that we trust each other. that everybody makes an effort so the trust remains. the berlin statement of 2000 that i mentioned earlier is still important. we want to transmit to the next generation this happiness, this luck of being together and being europeans. the european union has always been a very peculiar structure. it is not always understood on the other side of the atlantic, by the way. but now we are in a world that is constantly changing. we are part and parcel. also the population of this planet keeps growing.

if we want to bring our values to this globalization, we need to have more europe rather than less europe, if we want to do that. so we have to give shape to the political union. the euro didn't make it yet. but of course, not everybody agrees on the shape that europe should have in the future, but we have a commission that functions as a government of europe. we have a strong european parliament. which is becoming stronger and stronger throughout the history of europe. with council, heads of state, which is the second chamber, we have european court of justice, which is our supreme court. many of you will have to keep on building this house of europe

for us. i can promise you, your generation has lot to do. it has a lot of work to do and for me, it is going to be interesting to have this discussion that we're going to have. what do you think of europe? concerns? what are your expectations? what is your vision? what do you want to add? do you think everything functions ideally? and well, therefore it is good that not only i was able to talk to you but also have the possibility have a discussion with you. thank you for listening. >> mrs. chancellor.

thank you very much for this very interesting exposea. -- exposee. and now, it is my job here to be the moderator of the discussion. for me, i think my job is more like to provoke the discussion. i want to widen sometimes what you said. we have many, many questions also that are coming from our students and i hope that in the 30 minutes that we have, no, we can talk for half an hour. thank you very much. [applause] 4 i hope that we're going to have some answers because i know that the young people here have already discussed in groups, they prepared the questions. they prepared the themes .

and i think there is a fear among them. they wonder if this europe that we have already built, is it going last for the rest of their life? or not? that's big question for them. i apologize for my poor german gramer. -- gram ar but i hope that you will see my british passion for europe is better than my german grammer. i have a question myself. and then immediately after that i'm going to defer to the students' questions. recently, you have said, often, mrs. merkel, that if the euro fails, europe will fail, but at the same time you said that the solution of this crisis is to go towards more europe rather than

less europe. more integration. you mentioned that today. and i would ask you, you mentioned fiscal union. what do you mean exactly when you say fiscal union? isn't it what a lot of germans mean when they say transfer union. and are you going to be able to convince your own citizens to accept a transfer union? the fiscal union is not a transfer union. what we mean when we talk about the beginning of a fiscal union is what we have already decided. that is to say that the stability and growth, that which now is going to be binding. so we talked a lot about reducing the debt. people want to put that in their

constitution sometimes. but for the first time, the european commission has the right to come and check whether the member states have really translated the stability pact in their legislation. and if they have not done its, the european court of justice can sue them. it is a paradox, if you want. we have a stability and growth pact, which is like european legislation, if you want. for all the other european legislation, for all the directives, the supreme court, the european court of justice, can sue a country that would not have applied the directives and the country must apply them. but in the lisbon treaty, we said oking we're going to do the same with the stability pact.

it is so important because it is hitting our budget. so we don't want the european court of justice to mettle with that and we thought that it doesn't work, especially when you a common currency. then it should be even more binding. it is not a question of a transfer. it is a question of finding a way to apply what we had already committed ourselves to and if we don't, we'll be sued. but within every country, there are transfers, in germany, transfers. now you ask me if the fiscal pact was the a transfer union, i said no. now you're asking me are there transfers within europe, within countries? of course, in every country there are transfers. in germany, we have a history of

that is 60 years old where we confiscate from one to the other. there is a history of discussions in germany, the small number of lenders in germany are paying for the vast majority of the lender. we have a european community which is not a lender. they are national -- and they are that have been given to the community. so in 2005 until 2013, the project is to transfer 350 billion euros within the e.u. so some countries are paying. germany, britain, and a lot of others, and then you countries that receive in order to bring up their structure to the level of the rest of europe. and of course, we are giving

these funds to eastern europe and to spain, greece, portugal. so the question that we have is what happened? the euro is 10 years old. we have given a lot of these 350 billion euros. and what happened? the difference in competitivity is worse than it was before. so my question is did we use well these 350 billion euros? and these funds of the structural fund, are not all spent. there is some left. should we keep spending it to build more roads, more tunnels? if you go to madera you would be convinced that it is great because you would see lots of tunnels and freeways. but what happened? are they more competitive? no, it is not the case.

i think we have to rethink all of this. have we given the compensation fund right way? all right. thank you very much. >> now i'm going defer to the students and there are many students from different european countries, from the south, from the east. first question comes from germany. it comes from anna. >> you talked a lot about sustainable policy, coordination, coordination of the economic policies, but in the last 10 years, the imbalance got worse between member states. don't you think that maybe we should tell the germans to work a little bit less, to exportless will, and through the coordination to be a little bit more like to south europeans?

>> so pushing southwards, huh? do you think that we should go more towards the north or towards the south? no, first in a stability pact we talked about the imbalance between member states. the question is when we have the same currency, should we see each country individually, when we all have a single currency, the answer is no. in germany, we have never said, oh, well, the bavarians have more money so let's all do like the people who to rebalance. no. in germany, people who give the funds don't have to be more like

the people who received the funds. that would be a really strange thesis. no, what we have to do and it is true for the european union, we should not aim for an average so that everybody is the same towards the middle. so perhaps that would please the financial markets because then we could all have your bonds and common responsibility and the countries would be more like each other, but your living standards would be jeopardized. because we would no longer be competitive on the world stage. the fact that we have the living standard that we have is because we are very competitive worldwide. and so we have to pull the others towards us and not try to bring ourselves down towards the average. that's why i talked about best practices. not about convergence. we have discussed a lot about

that. should we be more competitive or should we more like each other? i think we have to look at the best in europe. the average will not be enough to maintain our living standards in the world. if you compare us with the rest of the world. second question from poland, jacob. >> i've gathered all the questions. if you a question in the back over there, you have to really wave your hands because we don't see you very well. you can make a little airplane and send it to mr. peel.

i have the impression that narrative of the founding fathers after world war ii no longer applies. people don't understand in europe, especially young people in europe and people who are not members of the elite group. people who are not part of the elite, the average citizen. my question is the following. don't you think that we should have a much stronger social dimension in the european union? that is to say we could have european unemployment insurance. that would be a new narrative understood by the population of europe. well, you know, today, and in the future, even less, we can no longer base ourselves only on the roots of europe and mention

the foundation because we are in a totally different situation. that's why today, i insisted on the fact that for me, the justification of europe, besides the historical justification remains true, is that if we want to maintain our living standards as a way of life, a way of life in europe, we have to be more competitive. and because we are together, we are worth more together than individually. and, of course, we have to defend our interests, especially freedom. so europe must defend itself and be itself in the world of 7 billion people. since we're only 500 million.

the social dimension, in the lisbon treaty, we have signed on the social market forces, everybody has its own interpretation of what that means. but i don't think that the only pillar of europe should be social. i think it can be one of the pillars of europe, but also we need community and research in our development policy. we also must make the same efforts to reduce our national bureaucracies. we have a lot to create. we have to create a european public, a european space. we don't have that today. during european crisis, for instance, everybody talks about

countries. we talk about greece. everybody is talking about greece, pointing their fingers at greece. when you look at the press in europe, everybody in europe talks about this crisis in a different perspective and we need a europe with the mobility of workers. it also means that we need transfer possibilities so that everybody can have portable pensions, for instance if, you work in five different countries, you need to be able to take your pension with you. also we need to harmonize the retirement age. in some countries it is 55 and germany it is 67. we have a lot to do. the social dimension is one of the aspects but it is far from the only one. but what we have to create is, of course, as students, you are more together than are workers,

for instance. but we need more of a european public. we have to know that we all belong to the same area, for instance. thank you. >> now i have a question about the relations between germany and the others. what is the image of germany you can speak without a microphone is. i can hear you well. you have a good voice. >> many in europe -- a very positive image of germany with all the reforms that you have already gone through. germany is admired in many countries, but in many other places people resent germany. what can we do? you said earlier we have to learn from each other, but germany already did its

homework, so don't you they the rest of europe has to catch up? and that doesn't give you a very good image. >> well, first -- i have talked about a european public. i have noticed the crisis started that now we have toned talk about them. the -- tend to talk about them. the germans, the french, the spaniards, the greeks and so on. well, we have germans who are very active. others who are very lazy. germans on the right and germans on the left and german who is like to visit museums like this one and others who don't. it is the same in every country. the big achievement in europe was that we had stopped saying that, when somebody showed their passport, we knew exactly, oh, it is a french person. i'm completely against that.

the germans. the germans, they are federal-minded and the french, everything is in the center. they are centralists. that is exactly what europe should take us away from. we have to overcome all of this. and in greece, there are people who did not always agree with the governments. they have suffered under their governments. it was not always wonderful either. in germany, not everybody is happy either. this is true. we did our homework. but it depends what you're looking at. if you look, for instance, at our budgets, at our capital needs, and many other things, our homework is not completely done. and when i look at the family policy in france, they have had it for 25 years. they are far more advanced than

we are. and in germany, we are still discussing how are we going to feed the kids at lunch when we're all at work? the french have solved that. we have done a few things. that's true. it was not easy. the germans were not all that pleased with all the changes that went through. of course, we have to change a lot of things because of the reunionification of germany. we changed a lot of things in eastern germany and personally for me, coming from east germany, i have the experience that change can be good. things can be beautiful. but a lot of people when you say change, it means their situation is going to worsen but change can be nice, can be good, can be positive. the countries would not have joined the european union if change was not good, and we brought them freedom.

so we have to avoid to they one country has already done its homework and the others have to catch up. and if you see in germany how long it takes to build a mile of road or a new train station, you will see that we are still far from our goal. back to poland. >> mrs. chancellor. you talked a lot about trust. unfortunately, a lot of young people have lost their trust in the euro. they have lost their trust in europe. what kind of vision can you give us? are we going to have a european dream? what is the vision that you hear about in the european commission? is it one vision? are there many visions? what can we expect for the future, let's say, 10 years from now?

>> you to build with us to build europe with us. you can always decide what party you're going to vote for. are you going to give your vote to a party that is in favor of the european construction or to another one? i mean, it is up to you. i told you what my vision was. but my vision is not the only one. and we can dream even more. look at, for instance, our defense policy. we have a lot more to do. we have some countries in europe that are not nato members. some are nato members. this always causes problems. for instance, germany is not an easy partner either because in germany, we have a law and parliament and every time you want to send soldiers abroad,

you have to pass a new law in the parliament, so we are not easy to deal with. i don't want to create headlines in the press and many people believe that i want to go around the parliament or cancel that law. that's not what i'm saying. but we have a lot of personal problems. we have more trust among each other when we all do our homework on the one side and also when we all decide to have more europe. and i'm happy to have europe-friendly british journalists. and i know it doesn't represent a majority on the british isles. we need great britain in the european union. i'm going to say that. europe is always a little bit more competitive thanks to britain.

britain is always one of the best in the single market and of course, they are not always very happy when we ask for more sovereignity to be given to europe, but we're going to work on that. we're going to see how we can find a balance so that it is not always the same who are disappointed and yet to go towards more and more integration. we are, here in this wonderful building. the architect was an englishman. and it would be very nice if for europe, we could also find a few british architects. but at this time, there are not. well, let's not be too mean, mr. peel. great britain is a country that is -- that takes the market very seriously and among others for the service directive, you have

been always at the foreground. it is not britain that slows europe down. so if we want more innovation, more research, freer trade, for instance, look at the position of europe at the world trade -- at the w.t.o. britain is always in the right position. we cannot do without britain and very often britain is more pro european than a lot of other countries. >> i have a question from greece. in the back. >> we are under these greek columns. i hope it is a symbol of

solidarity. i have two short questions. >> no, no, one question. let's say less than two. >> do you believe, really, that if greece applies all the measures imposed by the troika, we will solve our problems? i'm not representative of the greek people, but i want to represent my generation in greece. and we really don't know what to do. there are many greek people who want to go back to greece, but they can't. the unemployment is enormous in greece, especially among young people. it's so bad.

i've tried to see what jobs i could find in greece so that i could go home. so i checked out the greek employment agency, and you know what? i found jobs for germany. and for the rest of the world, but none at all for greece. >> yes, i think that right now, greece is in a very difficult, very complicated situation. which is the result of several reasons. one, was that the political system in greece and in the past, whatever government you had, none of the governments had

reached the transparency that was necessary for the rest of the world to see where greece was at. it is a long tradition. perhaps it is difficult for the greeks to be transparent. it is not their tradition. they were not bothered. they didn't wish, perhaps to be transparent. and all of a sudden, of course, we expect that you show us everything. we want to find out everything and you don't have the structure for it. number two, second reason. the job market in greece. in some places it is very narrow. there are many professions that are reserved, that is closed. as a normal citizen, you have no access to these jobs. access to these jobs. they are