trajectory of federal spending growth particularly that of our largest entitlements and what it means for america's economic and fiscal future for a long time these warnings seem to fall on deaf ears but there is reason to think that might be changing americans from all corners of our nation have become increasingly alarmed and angered by the explosion of spending deficits and debt they've seen come out of washington and they have a right to be considered in a single year this congress has pushed through a trillion dollar debt financed economic stimulus a budget that would double the debt in five years and triple it in ten years and initiated the expansion of government control of the nation's energy sector financial markets and the auto industry but i think americans are most alarmed by this seemingly rel drive to jam through a new trillion dollar entitlement and a government takeover nation's healthcare sector all told the congress and the white house last year push through legislation that will boost spending taxes deficits and debt by on unrival numbers as alarming as today's one point four trillion dollar deficit is our long term debt projections are almost inconceivably worse this past november historian niall ferguson wrote in newsweek that if we fail to come up soon with a credible plan to get our fiscal house in order quote the danger is very real that a debt crisis could lead to a major weakening of american power end quote and he pointed to historical precedents in which great empires collapsed under their indebted like to think this couldn't happen to us but then we never thought general motors would go bankrupt we certainly never imagined that the chinese would be lecturing us about fiscal prudence but here we are we must set a different course and i think that starts with recognizing a few basic points first well it might be a great talking point for some we didn't get to this point because the federal government was being starved by american taxpayers we are here because washington spends too much even if this congress let all of the two thousand one in two thousand and three tax laws expire those most people onto the alternative minimum tax and resurrect the death tax all it would accomplish is having opposed the largest tax increase in history in the midst of a recession because according to below federal spending would still far outpace revenue second the greatest factor in washington spending problem is the unsustainable growth of our largest entitlements we all know this to be true specifically in social security medicare and medicaid and for every year we put off addressing it the problem gets significantly worse we need real substantive entitle and reform proposals i've offered ideas of my own and others have as well but we need to move beyond the debate and get to the business of actually reforming these programs what i hope we hear today from these very insightful and impressive witnesses is what kind of fundamental entitlement reform they recommend to get this problem under control and with the chairman thank you especially for higher earners combined with the wars in iraq and afghanistan and a major new spending programs were undertaken without being paid for the predictable result of cutting taxes while increasing spending at this rate was steep fiscal decline on a scale not seen since world war two along with an ionic unprecedented explosion of debt policies enacted during that period are responsible for more than half the deficits in two thousand and nine and two thousand and ten the recession obviously obama only eighteen percent of the two sets and nine deficit is attributable to policies passed by this congress the third point i'd like to make is that not withstanding how we got here going forward long term deficits do post substantial risk to the overall economic wellbeing of the united states into prospects for shared prosperity these long term deficits are driven largely by two underlying trends the aging of the population the rising of health care combined with a chronic need for more overall revenue these underlying trends threaten to overwhelm the federal budget in the near future meeting this challenge will require a balanced approach that includes a variety of contributing positions primary primary amongst them was t policies to bring down the cost of health care i know the prospects for reform may seem uncertain as we sit here this morning but the economic health of our country as well as the health and well being of american citizens depends on finding a way forward in a way that produces significant delivery form reduces the rate of health care inflation and makes health care coverage affordable for families and businesses in addition to controlling health care costs will be a need for renewed commitment to setting priorities only spending taxpayer dollars on programs  work and building a smarter more productive government that makes the most of every tax payer dollars we also need a sustainable and fordable national security policy and well designed reforms to large and tighten the programs as mr ryan suggested including social my fourth point is that it must be acknowledged by everyone who is serious about improving the nation's fiscal future that spending cuts alone will not solve the problem the country will need more revenue any serious review of the budget numbers necessarily results in that conclusion balancing the budget by twenty nineteen without raising any revenue and holding medicare social security debt service and defense harmless would require cuts of seventy percent in non defense discretionary spending i think th bad for the country and it's politically unfeasible a fifth congress can take action now to lay out a path back to fiscal sustainability the center for american progress proposes an ultimate goal that is simple a revenues equal total spending with the exception of debt service the budget in primary balance would mean a fundamental return to responsible budgeting we've issued a couple reports we'd like to include those in the record if that's possible but to reach these two goals intermediate and ultimate we're proposing specific annual targets that makes that he progress in each year expressed as revenues a share of spending supported by a system of statutory mechanisms designed to enforce fiscal discipline that will make it difficult to deviate from that half missing the annual revenue to spending ratio target should trigger automatic reductions in spending that would affect both traditional programs and in our view tax expenditures to achieve deficit reduction targets w require a statutory budget enforcement regime statutory pay go in force by seaquest ration process was effective in the one nine hundred ninety s to create a balanced budget and create a surplus it can serve us well again the house i years of the same impact as mandatory spending have had and they've had a growing role and should not be held harmless if we're serious about enforcing paygo discipline the point is not to actually have but to force the discipline on the congress and the white house and finally my final point is that a deficit commission appears likely and this could prove to be a useful step forward to addressing our deficit challenges however commission without a clear mandate and specific goals is likely to fail if the purpose of creating a commission is to have a mechanism to move forward on the six dreamily difficult issue it's important to charge that commission with a clearly defined goal as noted earlier we believe achieving a set of and then to start phasing it in gradually one strong enough starting in two thousand and twelve judging from projections about economic recovery right now number five the policies that will stabilize the debt in the medium term and close a longer term  gap are somewhat different both will be needed number six a credible plan will have to be aggressive enough to reassure credit markets and number seven economic risk of doing nothing are tremendous likely leading to a fiscal crisis or an ongoing us standard of living that the country these tremendous challenges is not news to anyone on this committee and under reasonable assumptions the debt will grow as a share of the economy indefinitely at some point this will push up interest rates and interest costs as a share of the budget for borrowing and creating a birol we receive increasingly regular warnings from credit rating agencies to what we hear from the chinese officials worried about their investments in the us what we see happening in our over and over around the world the peterson pew commission suggest that congress and the white house follow a six step plan to write the fiscal course the first step would then to be to commit immediately to stabilizing the debt at sixty percent of g d p by the year two thousand and eighteen step two would be to develop a specific and credible stabilization package in this year two thousand and ten step three would be to begin phasing it in in two thousand and twelve step four would be to review progress annually and implement an enforcement regime to stay on track like what we just heard with triggers and specific annual goals step five would be to stabilize that debt by two thousand and eighteen but given historical debt levels we don't think that goes far enough and over time step number six is to continue to receive reduce the debt as a share of the economy over the longer term so there are a few points i do want to emphasize one prior to the economic crisis we at the committee for responsible federal budget were worried about the long term fiscal problems facing the the country driven primarily by the aging and health care cost problem but now due to the deficits we ran before the recession the effects of the recession the policies put in place to deal with the recession and a host of additional expense of policies the congress and the white house support the debt has grown dramatically dramatically and it's on course to reach unacceptably high levels much sooner than what used to be a multi decade problem policymakers will have to act quickly to reassure credit markets there's no single right goal but given that the average debt levels over the past were forty percent of g d p it's quite likely that aiming to stabilize the debt at twice that amount would not be sufficient to reassure market so i'm not going to i'm certainly not going to criticize any other approach is i don't i don't think there's any single right goal i think it's really important that people who share these objectives spend their energy kind of reinforcing the need to do something rather than disagreeing about the details of specifically what happened what needs to happen and i think it's wonderful that in the past couple months a growing number of groups have put specific ideas on the table i will point out to think one part of the reason we were able to respond to this economic crisis was that we had the fiscal flexibility to do so our debt levels were low when we entered this downturn and that allowed us to borrow we can disagree about whether the stimulus was necessary or whether it was right but it allowed us to respond in many ways to what could have i believe potentially been a devastating economic crisis if we had been running debt that was at sixty seventy percent of g d p we never would have had that fiscal flexibility second the kind of goals the numbers that we are suggesting to stabilize the debt at sixty percent of g d p are certainly aggressive but they are really only aggressive when you compare them to current policies if you look at them compared to current law under the targets that we're looking at you would not actually have to have deficits that are lower than current law until the year two thousand and fifteen it's certainly going to be a heavy political lift no matter what but we got ourselves into a very large problem and it's going to take some pretty aggressive measures to reassure credit markets that we're serious about getting out of them the timeframe for a plan should not be too long helping to mitigate the political risk the first sign of improvement policymakers jump ship and go back to the easier policies of cutting taxes and increasing spending eighteen we think the policies will be most two thousand and eighteen we think is a reasonable timeframe it's also likely that the policies will be most palatable to bring the debt to a reasonable level a reasonable level over a reasonable time period are going to be different in the medium term than in the longer term in the shorter term we have to look for changes that can be implemented quickly history deficits and debt over the long term it affects not only outlays for federal programs but it also reduces tax revenue by making a less and less of compensation in the form of taxable income number three  absolutely essential goal that must be met is to avoid a debt explosion to prevent the debt from perpetually rising as a share of the economy that is  to stabilize the debt as a share of the economy that is the bottom line goal that has to be met number four that it is not necessary to balance the budget to achieve the goal that actual academy of science report notes the debt can be stabilized at reasonable levels if deficits are held to somewhere in the range of two to three percent of the gross domestic product and lastly it will almost certainly require a combination of changes in both revenues and spending to achieve this now as john podesta noted we are not talking here about the deficit this year or next year deficits are absolutely necessary now to deal with  weak economy in fact i think more needs to be done to shore up the economy we're talking obviously about deficits over the longer term and dealing with a long term budget problem i would argue should not be the concern of deficit hawks or people thought of as green eyeshades if the budget is not put on a sustainable path it is my view that over the long term low and moderate income families will be among those who suffer the most from the inevitable erosion of the standard of living let me turn now to the jim of what might be an appropriate for school target for the years ahead the years that will be covered by the next budget resolution that this committee will write in the coming months and before getting into the specifics let me raise two concerns one concern is the potential of not having a meaningful fiscal target at all l and the national academy of science in conjunction with their long term fiscal forecasts and in all of them the goal is to stabilize the debt as a share of the gross domestic product over the coming years in determining more specifically what that goal might be we need to take two things into account the first should not and cannot start cutting deficits in the next few years while the economy is still on its back and the second is that you could take social security as an example a little help focus one's mind on this many of the changes that are ultimately going to have to be made are going to have to be phased in over a number of years think about changes one might make in social security and it becomes clear one with them in over a number of years we recommend based on this  stabilizing the debt in the years ahead by setting a trigger get of reducing the deficit to no more than three out of the gross domestic product in the years after the economy recovers if one did  that that would result in that would succeed in stabilizing the debt the debt would be initially stabilized at slightly over seventy percent of the gross domestic product now the peterson commission and the  leader would be self defeating because it would require targets so extraordinary really daunting that you wouldn't meet them we were on the numbers yesterday and found that to get to sixty percent of g d p by twenty eighteen would require deficit reduction averaging eight hundred billion dollars a year in tax increases and spending cuts from two thousand and thirteen through twenty eighteen and over the ten years from two thousand and thirteen through two thousand and twenty two between eight and nine trillion dollars in tax cuts but tax increases and spending cuts doesn't encounter additional savings and interest costs on the debt noted that under this path you wouldn't have to cut deficit far below current law in the next few years but current law isn't real as you all know current law would entail a twenty one percent cut immediately and physician payments under the s g r forty million households within two years being added to the a m t repeal of every one of the tax cuts including the middle class ones at the expiration of all of the tax cuts including the middle class ones and acted in twenty one and twenty two thousand and one two thousand and three no no  disrespect intended but you aren't going to do that so my concern again is to set a target that gets to the goal which is stabilizing the debt and avoiding a debt explosion that is one you can enforce and you can meet i would note that there is absolutely no evidence that a debt to g d p ratio of sixty percent or any other particular person percentage is the particular target needed to avoid harm to the economy that actual economy report is quite explicit that there is no magic number there is no particular number there is one piece of economic research on this that does find evidence that economic growth falters when government that exceeds ninety percent of g d p and i don't propose we go that high my point is simply we have to stabilize we have to have a path to get there and it needs to be a path that can really be met now what i'm proposing which is a target of deficits down to three percent of g d p is really tough itself the target that i am proposing would require spending cuts and tax increases of four hundred billion dollars a year starting within a few years after the economy recovers that alone would be really really tough so i think that history involving the grammar of the hollings wall and the like suggests that if we set overly ambitious goals we actually can have the unintended effect of making continued in action more likely if we recall the late one nine hundred eighty s when we had a path under graham rudman of annual deficit targets getting down to zero that were not remotely realistic what it produced was a cottage industry  on both sides of the aisle of how to do rosy assumptions how to print budget gimmicks in the budget how to have a charade that we were meeting the targets in order to avoid and when that didn't work we just wave the target sequence straight away anyway what we need is a path after the economy recovers that we can get here to our first step is to avoid the debt explosion for the long term i would agree there would be desirability in stabilizing the debt at a level lower than seventy percent let's first of the goal of stabilizing once we get there we can talk about the necessary steps would entail to go further and whether the congress is willing to take but my fear is one of continued and therefore my recommendation is that the essential goal stabilizing the  dollars twenty nine that's more than tripling what the government owes the lenders in just eleven years moreover this rapid run up in debt would occur just as the nation is entering into a period dramatic demographic transformation in  an increase of about four point six percent of twenty years but then the perspective that's like adding another program of the size of social security to the federal budget over a period of time without any additional revenue to pay for it the president has correctly argued that rising health care costs along with the aging of the population is at the heart of the medium and long term budget problem but there are many reasons why those who are concerned about the nation's long term finance should be very concerned about the budgetary implications of the health care bill now under consideration in congress let me outline just a few of the first medicare physicians both the president and congressional leaders have signaled that they will not allow a twenty one percent reduction in medicare physician to go into effect in two thousand and ten or later your original version of the house house health care legislation released in july included a permanent repeal of the plan a cost of two hundred  twenty nine billion dollars over ten years however after the president announced a nine hundred billion dollars limit on total spending in the bill to drop this provision from the larger health care legislation and pass it as a separate bill senate leaders then followed a similar course of course passing it separately does not change it is still two hundred billion dollars in spending that must be either offset or borrowed from wonder and it doesn't matter of the health care effort is passed in one bill or to billion dollars to stansell non coverage spending in the bill in september the president said he one of the bills has been no more than nine hundred billion dollars over ten years he didn't say that was for a net number with tax increases offsetting part of the cost nor do you say it was a limit only for some of the spending in the health care bill and yet when all the spending is included in a proper both the house and senate passed bills would far exceed nine hundred billion dollar limit the president himself  provisions from everything from special payments to u s territories to medicaid expansion according to these provisions will cost about two hundred thirty billion dollars more over the next decade add two hundred twenty two hundred ten billion dollars for  kinds of provisions instead of the bulk of the medicare savings would total which totals four hundred sixty seven billion dollars over ten years in the senate from across the board payment rate reductions including an automatic yearly cut in the inflation up insolvency and yet despite this warning the house and senate bills assume these cuts would continue in perpetuity and provide the offsetting savings needed for a rapidly growing entitlement expansion number for the class  both the house and senate bills would stand up an entirely new entitlement program for long term care called the community living assistance services and support for eligible participants would be required to pay premiums in advance of receiving any benefit payment consequently starting this new program from scratch would produce one time savings inside the budget window from premium collections before any cohort of beneficiaries starts drawing benefit but the premiums collected in the early years would also be needed to liquidate entitlement obligations later outside the ten year budget window so in a very real sense the class act premiums are being double counted they are being used to pay for the health care bill as well as the positive into an account to pay future long term care benefit if premiums were only counted once the ten year deficit increased so stated with the house passed bill would go up by another hundred billion dollars the truth ten year ten year window increases would kick in much earlier looking at these bills over a true ten year window of full implementation much higher cost the senate bills provisions even excluding the medicare position would total two point three trillion dollars paying the penalty for going on and sure they could not go into the so called exchanges to get insurance subsidies with federal tax support firewall rules would create large disparities in the federal subsidies made available to workers inside and outside  for instance many point to the so called high cost insurance in the senate bill is a potentially important cost control provision but in recent days the white house announced an agreement with some of the nation's leading labor unions to exempt all collect bargain plans  not make any recommendations which alter any aspect of insurance coverage for beneficiaries or reduce spending through twenty one that doesn't leave a lot of room to implement any meaningful changes which have a large impact on cost or overpressure would build to extend indefinitely the exemptions for hospitals and physicians and to make it available to be able to other providers of medicare well let me conclude the nation's long term budget outlook is bleak in large part because our health care entitlement bipartisan compromise on this question i think if you look back at a couple of commissions in recent history called greenspan commission on social security it really took the political will at the  in which both parties participate and it's going to require political well and then finally i would say as i said in my in my opening statement that it's going to require one other thing which is that and if you just sort of charges commission was saying we got a big problem trying to figure out i don't think that's a recipe for success it really needs a target that it needs to hit in which case then i think people can debate what the best way to get to those targets are  i would as i as i noted i would i would say that what's critical and i think there's a fair amount of agreement at least amongst the three of us on this side of the table that having a goal of stabilizing the debt to g d p ratio we go further in the out years and try to get achieve a real balanced budget which would begin to reduce the debt to g d p ratio i think those are the metrics of success and doing that across the platform of the entire federal budget in the commission is the right way to go if there is congressional it's never going to work people don't buy into it i felt that with the commission there was a good chance of moving forward and i have been hoping that we would see progress on that and i was hoping that the white both sides i can see a strong argument that this is more about political cover than really doing anything critically important to have some mechanism in place that is not impossible that we have a fiscal crisis here and it really concerns me that there's no commissions i think context is crucial i'm somewhat concerned that the environment today is not going to be particularly conducive to a successful launch of a commission i think it's going to look and feel to budget and the long term budget and so it looks and feels a little bit like let's lock in this big program and then after the fact come back and have a commission to try to get our budget in order and i think if that's the way this  the right now there's great instability around the notion of drawing a partisan commission together because we're in the midst of a very intense struggle over what to do about health care which has big implications  health care bills i was very optimistic about the notion of bringing in all the things that would actually slow the growth of health care but it's not surprising that much of that which is hard has gotten watered down and we're going to have to go i don't think anybody  farther than the current health care reforms would be able to get some of the real problems in the budget i think a great place to start is looking at the tax we have almost a trillion dollars a year in tax expenditures these are very inefficient there's no question that our fiscal future is tied to help everybody understand that everybody on the panel would agree with that you've done a very good job of exposing the true cost of this particular bill what it really costs when reality is applied to the  happy to just debate anybody on that but this bends the curve up not down and i know you would agree with that but the question is should we do health care reform that actually achieve the objective we want in the priorities of budget balance i think the answer is yes although we do need to approach this whole subject with a certain amount of humility health care system very complicated and  cified number of times of this committee and other committees over the last four or five years that there is a vast amount of waste in the health care system and i think a lot of people agree with that provided it's not needed or too costly  or the quality isn't as high as it could be there are ways to improve the productivity the health care system indeed that's really the central question in the whole debate such as well let me get to this i mean the process we're not going to decide right now how to do it here from washington how to practice medicine out in the united states but what we do what we need to do is what process has the best chance of driving out an unnecessary inefficient process will drive up the productivity of how positions and hospitals actually care for patients and the quality is well that's really the question what process because we're not going to make all the decisions all of you have to set up a process that will continually do this drive productivity every year and the bills as currently written for maybe maybe sometimes good reasons lean very heavily toward a governmental process that essentially the federal government will lead a research effort medicare payment policy will try to drive a regulatory policy to get out unnecessary care i find that incredibly realistic from my point of view that that will never work and in fact if you look at the history of the medicare program what happens when we try to use a governmental process drive cost control the government ends up just applying across the board payment because it's very difficult for the political system to pick winners and losers in the of what we do through the political process as we apply arbitrary across the board cuts to every license provider whether or not they're providing high quality care or not i find that exactly the wrong way to go about this what we need to do is much more like type system or medicare part d type system where the government is providing important oversight and cost consumer protection but the resource allocation decisions are made  so my recommendation would be to focus on ways of reforming our entitlement policy and tax policy to move control back more toward the beneficiaries and consumers much like your roadmap actually recommended  u about this because he was very involved when when president clinton came into office we've been in this situation before we've inherited a deep debt and a budget that didn't end fiscal policies that actually were not sustainable simply not having enough revenue to meet our obligations and relying on borrowing and we're in much worse situation than we have been ever before both because we now are keenly relying on borrowing just we have some of them where under the bush administration we relied on borrowing we doubled it from three point four trillion to six point three trillion and almost all of that is for a bombing and i think that as you mentioned that that is a cost because they can increase those interest rates and they can also stop lending to us and all of that is really very very risky we're now spending about five percent of our spending our expenditures go to  debt interest payments on the american family can understand that you're borrowing way more than you should and you're paying interest rates lower paying low interest rates it is a huge problem for us going forward so our commitment  know year ago we were seeing seven hundred plus jobs a month a lot of financial institutions essentially on collapse and housing industry and you know in collapse as well so we have we believe that we have stabilized some of those really serious economic situation in this country but i appreciate the fact that you also recognize it's going to take us a while to get ourselves out of this very very deep recession and d fact my analysis of how we got here is correct and then how we and i appreciate some of the very concrete ideas already but versus a commitment to deal with this but the other and and secondly an understanding that it's going to take a while for us to grow to get  administration with a surplus which of course has now been turned into an enormous debt so i don't have too much time but if you could answer that that would be much appreciate know that underscore the point that it takes it takes some courage takes some political will it takes compromise to to move this forward but as my testimony notes when president clinton came into office the  t i'm sorry the deficit was four point six percent of g d p we obviously brought that down to a balanced budget and created a surplus which we passed off to president bush that that included the restraint  twenty three million jobs were created compare that to the eight years of president bush two million jobs were created g d p growth rate was higher median income went up didn't stay flat wages kept growing for all parts of the of the wage bactrim so it has a direct effect on the well being of the american public and by the way i think that the president also managed to cut taxes even in that original bill for people at the low end of the wage scale which i would recommend as was done at the beginning of this year that the expansion of the earned income tax credit the child tax credit be extended as you think about the needs going forward and what happened in two thousand and one we cut we had two major tax cuts while we were engaged in two wars that were as you noted were sort of the real costs were hidden in the budget process   a debt below and i'll just finish with one thing as we look at these massive numbers that we've been talking about in terms of the deficits and pain and payments on the debt fully a quarter of them are attributed just to you thank you mr chairman first of all just one little anecdotal comment about commissions in my home state of california where we have had a continuous budget since two thousand and two the republican governor and democratic legislative leaders appointed a bipartisan commission that had people in union leaders and people and all that they couldn't even agree amongst themselves on the commission with a unanimous suggestion on how to resolve the budget and so there was a majority report and a minority report that came out of the commission which was summarily rejected by both republicans and democrats elected to the legislature so as the commission thing sounds good but i generally think we need to do our job as a  given this a very the problem which i think unanimity on that given the difficulty of the solution which involves changing programs dramatically reducing spending raising revenues whatever isn't the one thing we ought to not be doing is what we've been doing lately if we haven't title months that we already can't pay for shouldn't we not be adding new entitlement if we have all kinds of unfunded mandates and so forth on states that are having trouble should we stop doing more unfunded mandates if we are looking at problems with discretionary spending things we have reduced we stop creating new programs new agencies new commissions and new discretionary spending wouldn't the very first thing because clearly this won't solve the problem in and of itself but shouldn't the very first thing we should do be to stop creating but let me suggest that amongst the problems with pay go might be if in order to solve this problem long term we have to raise taxes cut spending or some combination thereof but every time we add new spending and pay for it by cutting some existing spending or raising some taxes we use up some of the capacity to solve the long term problem and i would argue some of the some of the physical capacity but also some of the political capacity to solve the long term problem when those revenue increases or spending cuts could be used to solve the overall problem so rather than pay go i would like to suggest we have we put instead in place spend stop and that we just stop that as a start so that then we can deal with the with the long term problem and open that to have or would like to comment the middle of a very long struggle over a health care bill they would vastly expand health care entitlements which is actually a big part of the problem with health care entitlements even i would admit are even a bigger part of the problem and so we're going to add they've been growing video has told us repeatedly the health care entitlements have been growing at a rate of two and a half percentage points a little bit less now that more than two percentage points per year faster than g growth per capita per capita basis since one nine hundred seventy five that's a very long period of time and then the bills that are under consideration would add a new entitlement on top of that which is essentially would grow at that same rate they're not saying that this with the bill would slow the pace of this new entitlement down to g d p growth they would actually grow faster than the economy and so i think you're exactly right that you know all this concern about debt mounting debts mounting deficits are very much in a related with the entitlement problem and the health care bill in particular would exacerbate that on very questionable assumptions about cost control later which i that but the most important perspective on that is that an enhanced productivity enhancer new job creation innovation etc i think there's a role for the physical infrastructure which you've concentrated a good deal of attention on i would also point to the energy infrastructure of this country to deal with the energy security problem we have through the imports of oil there's the capacity i think to tap vast reserves of natural gas in this country to move toward clean productive energy and one way maybe this is not usually thought of as a user fee one way to i think finance that is through  so called green bank or the energy deployment administration to use fees from the pro provision of credit in that infrastructure to create capacity i think that would enhance innovation productivity  the republicans or democrats mr garrett i think that the democrats took control in two thousand and six because the the american people were quite frustrated and then happy and i think they're still frustrated and unhappy as was indicated in massachusetts just went haywire and you're using my time but i apologize that's why i just bring up to set the record straight because the other side always wants to go back and i want to work in a bipartisan matter to say we really should be going forward but to set the record straight thank you it and what's going on there it was in december of this past year that moody's said that debt from the u s and u k has been now set apart from other aaa rated countries it is now classified in a weaker category than before it's now called resilient and not resist d the report said that in a worst case scenario the u s could lose its aaa rating at twenty thirteen if growth slows interest rate supply and perhaps most rebel into the relevant today if the government fails to address these problems that we're discussing today comment and i thought was interesting to say that we have to come up with a plan everyone says that you made the comment when i first came in here saying that we really can't do it right now because of the economic growth that we're in right now but we have to wait until we get out of it  let me clarify i would favor taking action now i would favor however that that action not actually be implemented until the economy recovers you could pass legislation now that makes changes later on even if we had those actions in writing now the same time and when those things when push comes to shove a couple years down the road when doc eventually has to go into effect the political pressure would be at that point five years down the road  know i disagree with that we actually did a major study about a month or two ago of every measure enacted under republican and democratic congresses and presidents in the medicare program from one nine hundred ninety four where this is encouraging of the asians and understand a lot about whether or not somehow to deal with some of these issues and you have quite an impressive resume i was quite intrigued after reading that resume that you spent your time  that you all developed advocated for and implemented during the time that you were in the white house so maybe we can take some of that as a lesson and in advance of here let's start with  i'm not sure actually if we did develop one i'm not positive i have thought about that in quite a while i think i'm pretty sure we probably didn't what about the alternative minimum tax that's a public policy baseline issue that we know that this get going there was a lot of bipartisan interest in doing it but it was thousand water two thousand and three tax program you know they were permanent fix on that was not in those bills that's correct but the president did propose to try to deal with a permit and a larger tax reform initiative that quite frankly didn't get a lot of traction but that was where they but the one that did get traction it was not in it was not in the two thousand what about estate tax now we know well maybe everybody here doesn't know what a the estate tax is but in a state tax which graduated the exemption from two thousand and two until two two until now now the tax is gone and it comes back at the end of this year  out of this hearing that would be productive and not tearing down something that somebody else has proposed that would be productive for us to advance so that we can fix this long term fiscal crisis that we are  entering and for years was coming good question i have two things to offer first of all you might recall that after president bush was reelected in two thousand and four he did try and spent a lot of his personal time trying to get