Transcripts For CSPAN Presidents 2019 Budget Request 20180213

Good morning. I will call to order this Senate Budget committee hearing. Good morning and welcome to the Senate Budget committees hearing on the president s budget 2019. Al for fiscal year this budget submission comes to us on the heels of a busy first year for President Trump. I am proud of the hard work and leadership that went into passing the tax cuts and jobs progrowth taxc bill that is bringing investments back to america and boosting takehome pay for workers. The president s new budget submission, and im interested in learning how the Administration Proposes to build on this momentum and further strengthen our economy. One of my greatest concerns as a United States senators ar our Countries National debt. To secure our economy longterm for future generations we must tackle this growing problem while lowering taxes is proving to bolster our economy which will bring in new revenue, we we have a spending problem in america. I look forward to hearing which way we could use taxpayer dollars more efficiently. Today we have the opportunity to hear from the office of management and budget director, mulvaney. Mick we look forward to your testimony and the opportunity to discuss possible solutions to the nations budgetary woes. I want to congratulate you on the documents that came yesterday. Ones. Ght the two lightest i want to congratulate you on how concise they are. How explicit they are, and the difficulty that you went to, not only to explain the budget but also to specifically point out the major savings and reforms that are being suggested. One of the clear presentations ive seen and i have seen a lot of them. The submission of the president to proposal marks an important first step in what should be in orderly budget process. Under successive congresses and administrations, this process is broken down, leaving behind a confusing, illogical maze of legislation and ad hoc governing. An example of which was on display with the latest budget busting spending deal. Instead offending the government we buy week or month by month we must address the structural deficiencies of the budget process returning to a system that actually works. Serving on the Budget Committee for 15 years ive tried to work to solve our fiscal problems. Toevoted much of 2016 working on bipartisan ideas to fix americas broken budget process. We were able to get a conversation started with experts while we made Good Progress at the Committee Level for a variety of reasons we did thesucceed in advancing kinds of reforms we need. Im hopeful that learning from our recent experience the time to reform the budget process is now. To be successful, we have to have a partisan support. Im extending my hand to the other side of the aisle, looking for willing partners to join me. I hope this renewed call for budget reform receives support from colleagues in the senate and even from director mulvaney. I welcome colleagues ideas on budget process reform, even on budget and on the programmatic proposals in the president budget. While these issues often divide, i believe we can find Common Ground and make progress. This is the way the legislative process is supposed to work. The way to approach the task ahead for us is to focus on what i call the 80 rule, focusing on the 80 of issues. Weve been fighting for years. That way we are not sidetracked and can achieve real results. That is the way ted kennedy and this former shoe salesman from wyoming were able to get is done on the Health Education and Labor Committee in years past. The American People are counting on us to Work Together to fix the nations fiscal mess. One thing is clear, ignoring the tough problems today will not make them disappear and the longer they persist the more difficult they will be to fix. Spend 4 trillion. I dont think anyone really knows how much that is, but it is a lot of money. We try to spend that amount to make decisions on spending that amount every year. We really dont make changes. We just increase for inflation and what i call the panic factor. We do make changes. We add new programs. But we do it without eliminating or even consolidating existing. Rograms budget is supposed to be our roadmap to the future. We talked about the need for infrastructure. Budgets, one of those infrastructures we better be working on if were going to have a better budget process. Its a tough road ahead but im confident we can find success together. Senator sanders. Chairman, thank you for holding his hearing and director mulvaney, thank you for being with us this morning. Anybody ine to tell America Today there is a lot of political demoralization. One of thes held more favorable levels best majority of people think we do a terrible job. President trumps favorable ratings are lower than a president people look at washington and they do not see much they feel good about. This budget demonstrates. There are politicians who run for office and they say one thing. President trump when he was a candidate frame for office and said hes a different type of republican. Mulvaneyck type of republican. We are to take on the establishment and so forth. It turns out he did the opposite and this budget is a manifestation of doing exactly. He opposite i think the American People understand their onevote, their one Voice Matters relatively little in a congress which is dominated by big money, wealthy campaign contributors. Koch brothers spend some 400 million in the coming campaign. This budget is the budget of the billion or class. And the American People understand it. This is a budget which will make it harder for our children to get a decent education. Harder for working families to get the health care they need. Harder to protect the air they breathe and the water we drink. Harder for the elderly to live out retirement years with dignity and respect. Candidatet a budget donald trump talks about it takes on the political establishment. This is a budget of the political establishment. This is the robin hood principle in reverse. A budget that takes from the poor and gives to the very wealthy. During the campaign, donald rich will notthe be gaining at all under his tax reform plan. But as president the tax reform legislation from signed into law a few weeks ago provides 83 of ,he benefits to the top 1 raises taxes on millions of middleclass families and drives up deficit by 1. 7 trillion by the end of the decade. And if you are wondering how President Trump plans to pay for his massive tax cut to millionaires, billionaires, and large corporations, this budget answers that question for you. By breaking his Campaign Pledge not to cut medicare, medicaid, and Social Security. In fact, President Trumps budget would slash medicaid by over 1. 3 trillion and reduce Social Security by nearly 25 billion. Mr. Chairman, as you know, medicaid now pays for more than two thirds of all nursing home care in her country. What happens to Senior Citizens who have their nursing home coverage paid for by medicaid if that program is cut i 1. 3 trillion . Now with Nursing Homes alzheimers, serious illnesses, massive cuts, what happens to their families . Today, medicaid covers millions of children with special needs. We are the only major country on earth not to guarantee health care to all people and this budget would then throw millions of more people off the Health Insurance they have. We have an Opioid Epidemic that every person up here talks about every day. But when you slash medicaid by 1 trillion, you make it harder for communities, cities, states, to deal with this crisis. During his campaign, donald trump told the American People he was going to provide Health Insurance for everybody with much lower deductibles. President trumps budget would throw an estimated 32 Million People off the health care they currently have. 32 Million People. At the same time would raise premiums for older americans. What this budget is about is a massive transfer of wealth from working families, the elderly, the children, the sick, and the poor. And the most Vulnerable People in our country to the top 1 and large corporations. Said hedidate, trump understood the pain working families across the country were feeling. Notpresident , you are responding to that pain when you propose a budget that would throw over one million children off after school programs. Youre not a champion of working families, you are not responding to pain when your budget would kick half million families out of their homes by cutting Affordable Housing. We have a massive crisis in Affordable Housing from coast to coast. This budget would make it worse. You dont help working families mr. President , or mr. Mulvaney, by throwing more than 100,000 children off of head start. We need to moved to universal prek. You dont throw 100,000 children off headstart. You dont help working families when your budget would eliminate Financial Aid for more than 1,000,000. 5 1 million and a half this budget makes their problems even worse. You are not a different kind of republican by proposing a budget that would eliminate heating assistance to nearly 7 million families in this country. It gets cold in vermont and many other parts in this country. Many of our elderly people keep warm in the wintertime through low income heating assistance program. Dont eliminate it. While President Trump tells us we dont have enough money to help the working people in this country he does believe we have enough money to provide a massive increase in the pentagon and agency of government that has not been able to do an audit and where study after study shows us there are hundreds of millions of dollars in waste. The good news is, this budget is going nowhere. Everybody knows that. But it does indicate where trump and his friends are coming from. And the American People have got to understand that and we have to stand up and say no. These are not the priorities of this country. Thank you mr. Chairman. Thank you senator sanders. Our witness this morning is mick mullaney, the director of the office of management and buz and budget. He is charged with assisting the president to fulfill his vision for the production of the federal budget and its implementation across the executive branch. Director of time as the office of the Fifth District of South Carolina where he was first elected in 2010. He has served on the Budget Committee and joint economic committee. For the informational colleagues will take less than seven minutes for his Opening Statement followed by questions. We look forward to receiving your testimony. Director mulvaney. Thank you my mother would be glad to know i finally did get that doctorate. Appreciate the opportunity to be here. I have submitted a formal Opening Statement for the record. Im going to depart from that substantially just to say a few things before i start taking your questions. To explain what we have sent you in the last 24 hours. Last year when i sat here i had half the budget. We had a skinny budget at the time. Which was just a discretionary side of spending which is not unusual during a transition year. This year ive come down with two budgets. What we sent you in the last couple of hours, since yesterday, takes our 18 budget and makes an effort to bring that budget from last year sorted into compliance. At least into line with the camps deal you had on friday. 219 budgets. The 19 budget we have been working on since last summer which we have also tried to bring up to speed in light of the cap steel. They make it clear that the numbers solid numbers. Impossible to do six months work in a weekend. But we had a brief Government Shutdown on top of that. The numbers i will talk about today, solid numbers. Expect over the course of the next couple of weeks and months to see additional tweaks. , cap steel i give extends the mandatory sequester by two years. It will take several weeks if not months to run that number through the system instead of waiting until april or may to give you this budget. We decided to come forth with these numbers here today. What have we done with the 18 and the 19 budgets . We tried to deliver two messages. The messages from the administration is this, i recognize the fact that the. Udget is messaging document we can beat you to the punch and asked question if it is dead on arrival. I will never forget senator leahy called me last year right after i sent first budget and he said dont feel bad this budget is no more or less dead on arrival than the other 40 are saints and ive been here. It remains a messaging document. There are two primary messages in what we bring to you today. You dont have to spend all of the money you just allocated or provided for in the caps, but if you do here is how the administration would prefer to spend it. You dont have to spend it all and thats what we put in the 19 budget. Weve added money back to the 19 budget in addition to what we would have sent you if there was steel that we do not spend all the way up to the caps on the 19 budget. The second half of that first is if you do spend it here are the priorities. That is the 18 budget. Weve taken the 18 budget and added 117 billion worth of nondefense spending to 18 to spend up to the cabs in 18 in addition to the 26 billion to our 18 budget for defense spending. You have the administrations two positions. You dont have to spend it all and if something happens between now and the appropriations bill you pass in march or the appropriations bill you pass in 19 between the end of march and september of this year, if you decide not to spend up to the caps you have the ministry shuns guidance on how we would prefer to do that and that is in our 19 budget. If you decide in 18 or 19 or both to stand up to the caps and you are curious as to how the administration would prefer to spend that money, that is the 18 budget. We do believe that message still folkslue, even though you changed the numbers in the last three days and we signed it. We all did it together. Interestingly, folks have asked us if the 19 budget is evidence of the administration reneging on the implied agreement of regarding the cap steals. I say if youre interested in spending all the way up, the 18 budget is there. The 18 and 19 caps numbers are only 10 billion difference. The difference between the 18 defense 0, 80 for the 19 numbers were 85 and 68. Only a 10 billion difference between the two years. I will close by saying it does not balance within the 10 year window. I know i said to members in the house last year i worried that when i came to last year that it would be the last chance i would have to bring to you a budget that balanced in 10 years and i said at that time that if congress did not take steps last year and the administration did not take steps last year to change the trajectory of our spending that i would not be up to balance the budget within 10 years this year and that has been the case. I contend to you that the numbers this year are more solid. It senator van holland, and i would like to go back about back and forth about the solidus of the numbers. Im more comfortable this year that the numbers are more solid. Weve had a chance to digest a years worth of information to put policies to numbers and as the numbers firmed up, it would have been possible to bring you a balance that it if i had fudged the numbers but i would rather bring you numbers that are honest and true and set forth a better picture of our fiscal condition and tell you the balance the budget would balance in 10 years. That today as well. I appreciate the opportunity to make an Opening Statement. Now we will turn to questions. Let me take a moment to explain the process. Each member will have five minutes for questions beginning with myself and senator sanders following the two of us we will alternate questions between republicans and the minority. All members in attendance when we started will be recognized in order of seniority. For those who arrived after the hearing began it will be listed in order of arrival. If youre not here at the time you are called on you are moved to the bottom of the list. I will begin my questions. The broken budget process i discussed in my Opening Statement was on full display last week with the latest caps deal. This legislative action occurred too late to incorporate in the president s budget proposal. I appreciate your explanation. You did release an addendum with Supplemental Information on the administrations vision in light of the bipartisan act. Can you explain how the Administration Proposes to adjust spending levels as a result of legislation passed last week and what advantage is using this opportunity to address the budgets gimmicks . I will deal with the gimmicks separately. We took advantage of the cap 19 to do a8 and couple of things. Amountd a tremendous into the base. Defense and nondefense. Think it was 12 billion we started transition into the base. As part of our longerterm projections, dramatically reducing oko in 2020. We take the total budget down to no more than 20 billion in our projections. We also got rid of a lot of the chips which puts everyone to sleep immediately. The gimmicks, for lack of a better word, that both houses and administrations have used to justify additional spending. We took as much opportunity as we could given the additional underthat was available the cabs to try and give a more transparent you into our actual spending. As regards to the actual spending priorities, as i mentioned in the 18 budget when we went back to plus up the budget from last year to match the caps on had a 26 billion for defense, 117 billion to nondefense. 34. 5 billion was for infrastructure. An additional 15. 7 billion for Border Security. Total for bring the 19 torder wall for 18 and about 18 billion versus the actual cost of the physical structure. You may have heard code5 billion dollars for southern Border Security. The 18 billion is for the wall the rest is for technology, personnel and so forth. That means the proposal we sent you actually contemplates a daca immigration deal being done because we recognize the fact that you have no interest in giving us money for the full border wall unless its part of a larger comprehensive immigration bill. We contemplate that deal is reached. Weve asked for small amounts in 1. 6 billion dollars and 19, part of the ordinary appropriations process. We anticipate in these proposals that a daca deal is reached and we have full funding for the wall. 3 billion additional opioid spending for 2018. Additional half 1 billion for i. T. Modernization. Not very glamorous but something we all take seriously. We spend about 80 billion a year on i. T. In this administration and this government. The overwhelming majority is for maintenance of outdated systems. An 9 billion for research and development. The 18 and the 19 budgets are total spending increases. Dont be misled by some of the is increased rmd in both budgets. The budget gimmicks i talked about represent almost 18 billion in changes. , i will take at lot of time to go down but the biggest increases would include almost 16 billion in the in health and Human Services of which over 9 billion is the nih budget that came to last year. I came to you last year with a proposal to reduce the nih budget in an effort to get them to look at their administrative budget and i tried to make the onlythat if the nih allocated or spent as much money on administrative portion of their grants as they did from private grant money that we could actually reduce their spending by 9 billion but get the same amount of research. Not only did that not sway many people in the legislature, but you actually added something in the april omnibus that said its against the law for us to go in and look at the administrative costs. Weve actually added back the 9 billion to the nih budget but theres a long list of the aspects as we try the ad backs. Thank you for being that concise. Sorry. That is fine. I appreciate the information. Thank you, mr. Chairman. Budgets deal with trillions of dollars and thousands of pages and words afterwords and numbers after numbers, but the truth is, as im sure director mulvaney knows, these numbers have real meaning to the lives of ordinary people. Mr. Chairman, i want to put into the record an article from politico act dated june 20 politifact without going into all of what the article says, it confirms that when you throw millions of people off of the Health Insurance they have thousands of them will die. Repealdget calls for the of the Affordable Care at, the estimate is that some 32 million americans will lose Health Insurance. What study after study shows is that when you throw 32 Million People off of their Health Insurance, tens of thousands of them will die. Mulvaney, tell me about the morality of the budget which supports tax breaks for pros 32 Million People off the Health Insurance they have resulting in the depths of tens of thousands of the deaths of tens of thousands of americans. I dont think it is something we are actually doing. Im not familiar with the article you mentioned. My guess is it references the cbo report regarding various republican proposals to repeal and replace obamacare. I do remember one of the major points of contention regarding the way the cbo scored the proposals was that it would assume several tens of millions of people would be, to use your terminology, kicked off Health Insurance by the repeal of the individual mandate and when we drilled down into that what we found was the cbo assumed that if we got rid of the individual mandate that millions of people would voluntarily give up medicaid expansion. I apologize we dont have a lot of time. I understand the and original mandate. You are proposing a cut of over a trillion dollars in medicaid. An independent analyses have indicated we could argue about nobody knows for sure, is a 25 Million People, 30 million, i dont know. But we do know is when you throw tens of millions of people off, they will die. Studies show that thousands of them will. Theuld suggest that in United States of america the only major country not to guarantee health care to all people, we should not be making a bad situation worse by throwing tens of millions of people off of Health Insurance. Let me ask another question. According to americans for tax standards, the Koch Brothers, the third wealthiest family in worth 94 billion, and a family dedicated with a few of their billionaire friends to put hundreds of millions of dollars into the coming election, will receive a tax break of up to 1. 4 billion a year from the taxk tax plan the trump plan. This budget illuminates funding as i indicated earlier for the leahy program that keeps almost 7 million families warm in the wintertime. The vast majority of these families have children or they are Senior Citizens or are people with disabilities. Explain the morality of a process by which we give the third wealthiest family in america, a major contributor to the republican party, over a billion dollars a year in tax breaks and yet we cut a program which keeps children and the elderly warm in the winter. Heres the morality of the lie he proposal the leahy proposal, 11,000 people 11,000 dead people got that benefit. To take the money from the people 11,000 people got it who shouldnt have. To say that 11,000 out of 7 million, deal with that. I agree with you. All 50 states have individual programs designed to prevent the cutoff of utilities either during the summer in the south or winter in the north which is what the program was designed to do. When it gets 20 below zero, i come from a state which tries to do its best. Vermont and other states around this country, including my ,wning including wyoming dont have the resources to keep people warm when it gets 20 below zero. Situation ted a not you, the president must take responsibility for this budget. Created a situation where people grow cold, some may freeze. That is not what we should be doing in america. In all my years in the United States senate im never seen justpositive results because we passed a tax bill. Ive seen positive results down the road a ways but not within a month of the passage of the bill. I appreciate the administrations focus on maximizing Economic Growth. We cant settle for the anemic growth of over 2 of 2 by the last administration. The passage of the tax bill in december is a key component of this administrations effort to achieve Economic Growth of about 3 which is the average of the 50 years before 2008. We started to see positive effects. Many businesses have announced pay raises, employee bonuses and increased investment in the u. S. Employees are beginning to see your paychecks as less taxes withheld. Reconciliation we can only pass tax legislation for 10 years. Speakor mulvaney, you can to the importance of tax permanent in achieving longterm Sustainable Growth in the president s budget . I can. We assume that for the largest portions of the tax bill, we assume that in our budget the tax bill that passed ends the individual tax rate reduction after five years. We assume it is permanent. Between theriation cbo baseline for revenues over the course of the next 10 years and our budget, half 1 trillion of that is associated with that extension. We dont xm extend smaller tax reductions. Specific programs that are not extended but under the proposals in this budget the individual tax rates in the Corporate Tax rates would be permanent. Ive heard the rule that the administration put out for striking implementing who have to be repealed. Ive heard the president speak about hundreds of regulations being reduced. I would like to have you give me some data that will show the benefits of such. Maybe you are eliminating regulations that have not been enforced for the last 20 years. Im not bad mouthing what the president is trying to accomplish because i think less regulations has had a great deal to do with increasing the Economic Growth. Termsu put quantifiable so we can see what this is doing to benefit the economy . I can do it a couple different ways. I want to thank congress for taking up under the cra revision 17 different regulations. Reinforce the fact that while the administration can take steps to undo regulations, it can be slow, it can be tedious and it might not be permanent. When you take it up under the cra you make sure no teacher administration makes a similar role. Achievedl ratio weve this year instead of two to one was 22 to one on major regulations. Revoked rules and ranks versus three or four brandnew ones total. The total number of rules regulations and other limitations either withdrawn made inactive or delayed is approaching 1600. The benefit to the economy laughter was 8 billion that will go forward. Growth, weeconomic saw increases in Economic Growth, before the tax bill was even fleshed out let alone past. We believe in the work the administration and congress did to roll back the Regulatory Burden had an Immediate Impact on the Economic Health of this country. That fixes the economy longterm. Its something we look forward to continuing. The president continues to make it a priority for the administration and we will continue to make it a priority next year. I dont expect you to answer this question but i want to make sure you know its important to me, instead of putting it in an email to you. The senate has been working to try to stabilize the Durable Medical Equipment medicaid medicare benefit. This benefit is important because it allows patients to remain in their homes avoiding hospitalization. The Obama Administration put in place a rule that applies Competitive Bidding rates to rural and other areas that were excluded from the Competitive Bidding program. In some cases these changes resulted in rates being below the cost suppliers concur for providing services in equipment and i was encouraged in august last year when i saw that cms sent an interim final rule to omb that would mitigate these changes. This rule has been pending since so i want you to tell me in writing specific steps you are making taking to make sure the omb releases that rule. Thank you mr. Chairman. And welcome. And say i cannot believe here you go again on the great lakes. Last year the administration zero doubt the great lakes restoration initiative, which is a Bipartisan Initiative strongly supported in the house and senate to make sure that we have dollars available for emergencies as well as Water Quality issues and so on. After you zero it out last year we put funding back in. Strong support from the entire region. Now youre back again with almost zeroing out areas i dont understand it. I know last year you said this was a local issue. Believe it or not, there is another country that cares about this call canada and we have a Great Lakes Initiative with eight states, it has funded that andunded, local, state nationally. 20 of the worlds freshwater surrounding the physics playing this to me please explain this to me. Capsst year after the yield one of the atbats we made billion split between that and some of the work we are doing in the chesapeake bay. What Research Indicated over the course of the last year and you did raise this with our office as did many members, some federal longterm monitoring programs ongoing and we proposed to continue to fund that. Also to send a message this is not something were interested in doing longterm. We consider it to be regional. Something the states are capable of doing and we would like to see us get out of that business in the longterm. This is a Major Research resource for our country. Are like thees ocean without the salt. One out of five jobs in michigan comes from the water. Boatingondollar industry, i could go on. And that is just michigan. What is af taking commitment every year of 300 million to be able to tackle things like asian carp which were trying to keep out of the lakes and instead put in 30 million, we are going to go right back at it again and do our level best to make sure this does not happen. I dont understand why this major Natural Resource for our country, where 40 Million People get their Drinking Water from the entire region, is something this administration does not understand. Were going to go back at it again and hopefully be able to keep funding going. That relates to michigan and canada. We trade every thing bridge and tunnels and so on except ascription drugs. Not allowed. Probably the highest prices for prescription drugs in the world. We can drive 10 minutes across the bridge and lower the prices, often times 40 or 50 for seniors and others. Were not talking about luxuries. We are talking about in many cases where people will get their medicine. It is life and death. President trump has made promises about lowering the cost of prescription drugs. The administration could open the border now to save importation and senator sanders has offered a bill that im cosponsor of. Ive taken bus trips with seniors to canada over the years. Im wondering, we have not seen action so far. Is it fair to say the president does not support opening up the border to reimport safe prescription drugs into the United States . Promiseieve that is a the president has started to keep. The things weve done in the administration this year as part of changes at cms have saved our seniors this year over 300 million. Within medicare or medicaid and 17 for the first times 2012. On reimportation . We dont address that in the budget but there are other ways to get at this issue. I believe the president mentioned lowering drug rices in the state of the Union Address drug prices in the state of the Union Address. A doubling of funding for the fda, and asked her hundred billion dollars to work on and i are hundred billion dollars to work on genetic drugs. I know there are things he could do right away. His own commission that looked at the open your crisis recommended there be immediate negotiation to bring down the price of the locks on price one. Olox thisconcerned that at point, i will conclude when we look at what is actually happening in the marketplace for seniors, because folks are not talking about prices going down, theyre talking about prices going up. Major windfalls from the tax cut. Corporate rate was 35, 29. And others as well. I have not seen anybody lowering prices because they got a big windfall in the tax cut. That would be something that would be very nice for the president to focus on. Senator corker. Thank you mr. Chairman, director mulvaney, welcome back. I want to applaud you for creating a more real budget. It seems every year we have these fake a jets fake. Udgets t the fictitious budgets that create imaginary things that are never going to occur and you did not do that. I want to thank you for that. I know you and i are of the same ilk. We care deeply about the deficits our nation has. I know you were a strong proponent of balanced budgets when youre in the house and now youre in this position. We as a nation are on an unsustainable path and i dont want to get into specifics right now and i think we understand where we are as a nation. Somewhat discouraged the cap was fart was reached above what the president asked for. Ethically have to say congress in this case one beyond what the and strong the military supported that he is and i am, Congress Went beyond and on military spending nonmilitary spending. Youve had to check your budget up so as people are giving you a hard time today about deficits, you requested less money and at the last moment had to elevate everything to take into account what congress on its own accord did to create even bigger deficits. What i would like to ask you, philosophically, where do we go . 91 debte will be at to gdp. I know our military leaders will tell us our deficits are the greatest threat to our nation, not russia, not isis, not the many things we are dealing with the middle east and around the world, but our debt. I know you care about that. Tell me where we go from here. I think the budget gives insight into that senator. Even though it does not balance within the tenure window, this budget represents a 3 trillion reduction in spending over the 10 year window, the secondlargest reduction proposed spending of any budget ever read the only one thats larger was the budget we introduced last year. But for the caps deal it would have been larger. To senator sanders point, we absolutely keep our promises. We do not take a look at or make any reforms to Social Security retirement and we did not make any reforms to medicare recipient services they get but there are other moneys that can be saved. We saved 1. 7 trillion in mandatory spending by doing it looking at things like the way drugs are priced within medicare. We do tremendous new ideas on things like food stamps and the farm bill. There are some good ideas in this budget that the legislature could take up to get longterm savings and could make a dent in the gdp ratio. Even though we dont balance, we are getting close and we bend the curve down. I think were down below 1. 5 debt to gdp by the end of this window. Term i thinkonger most of us realize this is going to go on for some time. Over the longer term, based on the way you see Congress Acting and you see the other pressures we have to invest in things like infrastructure, you are more hopeful . It does not feel that way to me that we are heading in a hopeful direction as a relates to solving our nations deficit. I see myself as an optimist. Will to you there is an interesting dynamic and going through the blessing up of the budgets. Its more fun to spend money that is to reduce. It is harder to reduce spending in longterm than it is to spend. It is incumbent upon all of us to start making difficult decisions, to decide together as a legislature, are these deficits we really are willing. O tolerate we have a budget that bends that curve in the appropriate direction and we hope the Legislature Takes us up on some of the ideas we offer. My time is expiring. Huge plus up in several areas some of the agencies that are , so large you could have a situation where people are rushing to get contracts out the door to take advantage of the moneys that are available. What are you all doing to ensure that we dont end up doing multiple wasteful things in light of these massive plus ops in one year . One thing the administration is proud of in addition to increasing spending and the Defense Department for the first time, as of september the dod tells us they are ready to be audited. We are starting that process. Weve seen the first fruits of that. So report last week about the pentagons inability to track 800 million. That was something we been able to expose and will be able to fix. We take that risk seriously and hope to be able to do better with it. I share chat senator i share senator corker is. I think you have expressed similar frustrations mr. Chairman. We have a ridiculous budget process and as a result of that we end up with ridiculous budgets. This budget is going no place. It was cooked up in the laboratories of the Koch Brothers and other billionaires who want to remake america in ayn rands image. Polluters who want no regulation so they can do spoil at will. Medicaid cuts that are clearly going no place. It is out of step with the funding bill the president just signed and touted. Billion just 58 from the nondefense discretionary part of the funding bill the president just signed. It knocks down hhs with a 21 cut as opposed to the funding bill we just passed which has 6 billion and hope your funding think americans need. Addednding bill we passed 20 billion in infrastructure related investments. This cuts by 40 billion for 60 billion delta going the wrong way on infrastructure. Part of the reason these silly things are in here is because the process is so silly. It is completely partisan which is why it ends up cooked up in extremist laboratories. It is unrelated to the funding process because of its failures. We have a budget process that ends up producing nothing and we have a funding process led by leadership and appropriators that ends up doing the work of putting the funding measures of government together. Virtually no relationship between the two. The budget is like a firework the goes off with a big bang and everyone pays attention because it is bright and noisy and has zero effect on the people who ask lee make the decisions year in and out on funding government. I think its a shame and the signals that this is wrong, there is no bipartisanship whatsoever. The vehicle for one party to political persuasion, its loyalty to big funders, and to create a path for another purely partisan vote using the reconciliation measure. Thats basically all that accomplishes. A budget process that worked would also look at tax expenditures. More money goes out the back door of the tax code gets spent most of these appropriations. We dont look at that. Expenditure of the country, of the federal government in the 10 year out period has been estimated to a fallen by 3 trillion. That is a big number and we dont know why. I think it has to do with acos and payment reform and with changes in treatment by doctors at the local levels that are driving down per patient year over year cost but we dont know that. We ought to be vitally interested in trying to figure out why we got that 3 trillion in how we can make more of it. What could be more important than improving patient care and lowering costs at the same time instead of going after a preposterous cut . We have to have the budget have elementary effect if it will be meaningful. Right now the budget has zero parliamentary effect because the 60 vote penalty is the 60 vote minimum for appropriations. We have no effect here. We are a null factor. We have to look at revenues. I know it is torture for republican friends to look at revenues. We cannot have passion about deficits and at the same time abandon our passion about deficit assumes it runs against the carried interest the biggest billionaires on wall street. We cannot maintain passion for deficits that evaporates assumes it bumps up against tax benefits for big oil. That need the least tax relief of any companies in the world. Yet there is this magic disappearing passion about deficits when they bump up against some obvious ways to raise revenues. We each have our own politics on either side to bring to this. We can ricochet back and forth from one extreme to the other. Bipartisanwe have a process that actually looks at taxandspend occurs and takes a responsible look at whats going on in Health Care Without cutting benefits and look at revenues and have some parliamentary effect, all we are doing here is north making and firing off fireworks into the sky that people look at and think that must be interesting and in fact everyone whos in on the scheme knows it has no effect and the appropriators and leaders are going to get together and make a deal like they just did and that is how this is going to continue. We have got to fix our broken budget processes. To take a look at how we solve a broken process. Way to budget works is the path of bipartisanship. We have to create such a road. I sincerely appreciate your leadership on this particular question. You may not agree with every word i said, but i think we have common cause in believing that the budget process needs reform and improvement. I appreciate your leadership and moving us in that direction. Thank you for your comments. Mr. Chairman. Thank you, director mulvaney, for your time and testimony today and or service for our country. I agree with our colleagues about the need for budget reform. This process is been in place since the 1970s. This is a disaster. We have to find a reform that can actually work for the American People. I want to talk with something that is working, and that is the taxcut bill. Some more crumbs were announced for the American People. 1500 from a developer in maryland, metlife increasing wages and bonuses around the country. I think this is important. The fact that people are earning more dollars, their wages are going up, the benefit packages are increasing, i think our colleague from vermont talked about utility rates. We have seen utilities reducing their utility rates because of the taxcut ill. Taxcut bill. Rector mulvaney, what happens when people earn more money from a revenue standpoint . It goes up. One of the things he mentioned was to look at the revenues, and one of the beneficial impacts of the tax bill is that the revenues are actually up on our projection versus the cbo baseline. The027 we project government will take in more than 350 billion more. Surely this is more than just crumbs. If ahave often wondered thousand dollars would be a crumb if it came in the form of a government check. If youre looking at utility rate that may average 120 a month, that is the reason we are in right here region we are in right here. You think that is crumbs . I think it is not. Do you think a minimum wage boost his crumbs . I do not. Do you think a salary boost is crumbs . Only a very wealthy person from San Francisco would think that. I want to shifts to some of the other ideas that are in the legislation. One of the most important thing for colorado is the Outdoor Economy. Last year we passed a bipartisan bill to look at the Outdoor Economy and make sure it is part of oura Overall Economic activity. It is a must a trillion dollars it is almost a trillion dollars as a result of our Outdoor Recreation economy. Jobs 65 billion in taxes. Does zero out the Land Acquisitions under the land and Water Conservation fund. I am concerned about that. Land and Water Conservation funding does not come from tax dollars, it is funded through other revenue mechanisms within the budget. These are not taxpayer dollars being spent. I would like a better understanding of the administrations thinking behind the budget request for Something Like land and Water Conservation. We have reached a point where i dont know that all the top of my head. We do a couple of other things that we think of and beneficial out west, including adding back some money for that is very important for colorado. Office out the blm of washington ended to colorado that would save some money. If only we knew the director of the office of interior. , americandominance Energy Dominance is a great thing to be proud to support and pursue. American Energy Dominance is a very strong and powerful diplomatic tool. To theget does have cuts energy and renewable efficiency office. Thatt to make sure Renewable Energy is a part of american Energy Dominance. We do a couple things. Number one. L close number two, what the budget does is a refocusing and of research inon areas we believe the federal government has moved out of the role of basic research into applied research, things that are closer to market. What we are doing is saying that is stop the private sector should take care of, lets focus efforts on basic efforts. I want to summarize a couple of questions. His week we are debating daca hundreds of thousands of workers legally in colorado are going to be affected by this decision the senate makes and this Congress Makes over the next several weeks. Were looking at a population in jobs that could be responsible for as much as. 3 or. 4 of gdp. Of peoples a group that were to be eliminated out of the workforce i think that would have a detrimental effect on the projection of 3 growth or more as we try to a treat that achieve that. Nafta is critical to our economy, critical to growth and the gdp assumption we are building into our budgets. , any kind decision on nafta that could affect our trade dominance could negatively the gdp growth as well. A quick question, i dont know when we are talking about concerns over revenues, have you given any thought to mountain rising to monetizing freddie mae or fannie mac fannie mae or freddie mac. There is considerable discussion going on within the administration as to what to do with the government sponsored enterprises. Senator van hollen . Thank you, mr. Chairman. Welcome, director mulvaney. I cant talk about this at length, but very disturbed that the Trump Administration reneged on the longstanding plan to consolidate the fbi campus in a way that would provide a more secure setting. We can have that conversation later. Back in 2016, during the campaign, candidate trump called himself the king of debt. It is pretty clear that this is one of the promises he has kept as president of the United States. To my friend, senator corker, who says this is the first time we have seen an honest edge it budget, president obama presented budgets that were very honest. They did not balance and 10 years, and you and your republican colleagues ranked him over the coals for that. What we saw was a maryland our legislature is trying to pass laws to stop big tax increases on marylanders. Few hundred 50,000 plus maryland households will see tax including 123,000 households with income between 25000 and 50,000. That is not a middleclass tax cut, that is a tax increase on hundreds of thousands of marylanders. I want to ask you about the trump academy. These numbersk at it looks like the Trump Administration is simply benefiting from the continuation of the obama economy. That trumpe economics is working, you cite the fact that 2 million jobs e added in the calendar of calendar year of 2017. That is great that 2 million jobs were created. That is fewer jobs were created in previous years. I dont have the numbers in front of me, but i believe you. It is somewhat fewer than the year before. It is fewer than in 2015. Again, i dont have the historical data. The reality is, it is fewer than any year since 2011. Im glad we saw 2 million jobs created, but it is interesting to herald this as a great new result of the trump economy when it is less than any other year since 2011. I want to look at the rate of Economic Growth. Year wasgrowth last slower than it was in 2015 and 2014. I went back and looked at what the cbo projected for Economic Growth in 2017. Do you know what they projected in 2017 . I dont have historical numbers. 2. 3 and theojected budget last year accused me of being too been optimistic. I did not accuse you of being too optimistic. That was the same number cv oh had. I said what you did last year that last years budget was overly optimistic in regards to spending. My question here is this, i am puzzled by these claims of how the first year of the Trump Administration deregulation brought all this added Economic Growth. The cbo projected 2. 3 growth in 2017. That wasnt based on any assumptions about trump economics, that was based on where they saw the economy going. In fact, the economy grew at 2. 25, a little lower than what cbo projected. Whereying to figure out the basis for your comment you just made it again, that this and ear deregulation gave us all this Economic Growth when it was slightly lower than what cbo projected and they didnt take into account any of those claims. If you look at the last three quarters we had to quarters over 3 . The Fourth Quarter was just under 3 . Including tremendous financial. The atlanta fed does predicted firstquarter growth in the neighborhood of 5. 4. Everybody has admitted that the economy grew faster last year than expected. I dont think so. Cbo projected 2. 3 . It actually was slightly lower than that. This sounds a lot more like puffery than reality. Cfpb filed asor at lawsuit against some scam artists in the payday lending area. One of them was Golden Valley. Rates,arge 950 interest this is higher than mafia loan sharks. It is reported that you dropped that lawsuit and the spokesperson for cfpb said he were not part of the decision, then said you were. Simple question, were you part of the decision to drop the case against Golden Valley . Yes sir. Is an outrageous decision and an anticonsumer decision. , there is annd Ongoing Investigation into Golden Valley. It is unlikely i will be able to answer many of your questions. It sound like you dropped the lawsuit. Let me be very clear in my wording, because i have a lawyer sitting here behind me. Ongoing an investigation against Golden Valley, and for that reason it is not appropriate for me to comment on that work. I cant answer the specific question you ask me. Thank you, mr. Chairman. Thank you, mr. Chairman. Thank you for being here today, we appreciate all of your hard work. The Administration Budget projects a dip a debt to gdp ratio will decline in 2023 and ultimately reduced below prerecession levels over the 25 year horizon. Hasumably, Economic Growth a role in this change of trajectory as well as spending. Can you explain some of the key policies that have been shifted in order to put our country back on a fiscally sustainable path . Also, what is a healthy debt to gdp ratio . I will deal with the second question first. I think a lot of the academic literature would suggest that. 0 is that danger zone if we can keep it below that that would be great. I would like to keep a below 60, which i think is below prerecession numbers. We have too much now is the short answer to your question. Congressencourage the to consider, on the revenue side , we mentioned that this budget assumes that the individual tax rates, the reductions that expire five years into the current window, we assume those to be permanent. I will tell you that our assumptions regarding longterm growth assume that they are permanent. We encourage you to keep an eye on revenues. If revenues turn out the way we expect, we expect revenues to decline in the short term. Will start to increase all Must Immediately and turn positive compared to the and almost 2023, rented 50 billion to the positive by 2027. 350 billion to the positive by 2027. 1. 7 of that is on the mandatory side. I think you and i share a concern with the mandatory side of the budget that continues to eat into a larger and larger share of our spending every year. While fiscal restraint in any form is to be encouraged, taking a look at that mandatory spending would be helpful. What is a healthy gdp to now . Wherey at are we at now . The deficit is approaching five in the next year or two. We get down to 1. 1 or 1. 2 by the end of a 10 year window, that is better than zero. I would like to see a balanced budget in the longterm. If youre going to run a bit of a deficit, keeping it as low as possible would be advisable. I would love to see revenues growing faster than expenses. That allows us to shrink the size of the deficit as a percentage of gdp every single year. Business, and if your businesss expenses are going after than your revenues you are in trouble. That is a good point. We are in the process of the daca voting and things, trying to get that sorted out. One of the things that is important to the president and myself and so many others is securing our border. We would like to make it such that we have a significant amount of money going that way, because it is going to take that. Thato we do that in a way we can get some money up front and protect that money into the future, but also very importantly making sure that we have the oversight that we need going forward. Senator, as wes, sent out a look at the cap steel dealwas signed caps big was signed it gives a chunk of funding and some of that goes to the border wall. You may have heard me say earlier that our budget assumes a daca deal, it assumes an immigration agreement is reached. We want one to be reached. For that reason we explicitly assume that a deal is reached and that money for the wall is set aside. One of the early proposals we set down was to set up a trust fund, while we have the money available with caps being increased that we set aside money in that trust funds and we dont have a situation like we did in two thousand six where Border Security was off the rise but never appropriated. 2006 where poor security was on the rise authorized but never appropriated. I can only offer you the examples that we brought to other agencies. We have finally been able to bring the Defense Department to an auditable position. I want to give several administrations credit for doing that. Would encourage at least that same level of oversight if not more. I think it is important. We dont want the border wall to be the new cfpb. One of the risks that you run if you put it in the ordinary preparation is not only that it is not spent, but that it is misspent in order to get the appropriation out the door that year as opposed to taking a longerterm view you might be able to make with a trust fund. That is why we need to be creative and create a sort of hybrid to make sure that both of those are accomplished with the money being there, but with also good oversight it is going to require. I agree. Thank you. Sen. Merkley . Budget,ve cuts in this for lie not in health, medicare, higher ed, and food. That is 4. 5 trillion right there. Give 1. 5 trillion in tax bill to the wealthiest americans and proceed to cut our health, our commitment to our seniors on health, cut the affordability of college, because the rich are ok they can pay for their college, dont worry about the rest of americans. The hungry in america . Too bad. Let those children go hungry. They are from poor families, they dont matter. What kind of a message does this send about this administration. You said youre going to work for working families. You are going to address the challenges of living wage jobs are health and education. Health and education hit it get hit a enormously. There are more cuts than that. How about the 3. 4 billion dollars to heating and the offset of a tax cut the wells fargo of the same amount. What is more important . The Heating Program or the tax which hasls fargo defrauded so many hundreds of thousands of people across this country. Which is more important . Im familiar with the three point three 9 billion in heat. I just asked which is more important, the cut to heat or the tax cut to wells fargo which is defrauded so many people. People . I have noticed you never answer question from democrats, so i am not affecting an answer. 4. 3 millione dollars in cuts to rental assistance. We have People Living on streets across america because the cost of housing has gone up enormously compared to living wage. Want to do a 4. 4 million cut and rental assistance while giving 6 billion to exxon mobil, which is more important . One of the things i mentioned during my opening. This is a question, you can answer one way or another. I dont like to answer loaded questions that are simply rhetorical and may not be correct. Im not even sure that 4. 3 million number is right. If there is an amount in your budget you should be aware of that. Lets turn to something about the afterschool programs, stem programs ability to undertake high tech advancements in our economy. Billion to 1. 4a billion to the Koch Brothers and a 1. 4 trillion reduction in after school. Which is more important, educating our children or more money to the Koch Brothers . I cant even see that. Do you think the Koch Brothers consider it a good investment they will spend 400 million and and they get you to give them a 1. 4 billion reduction in taxes . Do you think that is a good investment . I have no clue where that 1. 4 billion range comes from. Getting 2ut chevron billion what you cut Development Assistance by 2. 8 billion. Everything we see in this budget is about help to the powerful and an assault on working americans. I hear a lot of bragging about how we going to help a whole lot of lower income americans at the tax cut, but you put a provision into the tax bill that will wipe out health care for 13 Million People and raise Health Care Premiums 10 . That wipes out any gains from the tax bill. I am really disappointed to see that the philosophy this administration ran on, a fight for ordinary americans, became this is an administration by and and aboutwerful undermining the opportunity for ordinary families to thrive. Lets turn to your other role. You seem to take great pleasure in having wiped out the payday loan role and allow Interest Rates of 500 to a thousand percent, far more than the mafia ever chars. Why is that a good thing for america . I think it is inaccurate to say we wiped out the payday role. We have simply given notice that we are going to take additional comments on additional rulemaking. Did you or did you not suspend implementation of the payday role . We gave notice. The payday role, as far as i know, is still in effect. We just gave notice that we are to take additional comments for additional rulemaking. You can call it whatever you want you can call it whatever you want, you delayed it going into effect. You seem pretty happy to having done so to help out these payday companies. Was there a question there . The question is, when you are so happy about having helped out payday loan companies, why dont you own it now . We gave notice we are going to take additional comments for additional rulemaking. How about equifax . Millions of americans lost the integrity of their data and you left them out. Howabout accountability, about that concept being embedded in the work of what was our consumer watchdog but now is our consumer roll over and let the Big Companies scratch its belly organization. On equifax i can tell you there is been no change in the position from previous leadership regarding equifax. If you are going to make the decisions you might of all of them. Might as well own them. About priorities, i want to thank you and the president for negotiating the budget agreement that gives long overdue relief to the military. On behalf of the men and women who have been serving and have asked been asked to do a lot with a little bit, thanks. I cannot tell you how important it is that we set aside the sequestration cuts for the next two years and rebuild our military. I want to thank you and the president. Graham cassidy, you mentioned that. We assume it passes. I hope it will. Committeeplain to the why you think it is important that it does pass . There are a couple of different things. Writ large it transfers control of this Health Care Issue to the states. We think that is a more efficient way to deal with that issue. I believe that South Carolina knows that are for South Carolina how to provide it with health care than we do in this chamber. The Graham Cassidy goes to the very heart of that, while providing the necessary funding for states to do that. Oftentimes we hear lets give it to the states but we dont given the funds to do it. Fundsdont give them the to do it. Of fiscal and policy it is the best idea we have seen in a long time. Just building on what you said. Four states first massachusetts, new york, and california. They are 22 of the population. Andr Graham Cassidy we try, a 10 year period, to level out spending and have it be per patient and judge inflation based on region. The think that is a fair way to deliver health care . No. That is a reason we support the Graham Cassidy bill. I think every state will get a say and will try to make it the least amount of pain as possible to the states who get the least amount of money compared to the other states. I asked three questions two years ago about alternatives can i send these questions to you or should i send them to doe . Copy them both. We have met with secretary perry, we are aware of your concerns and your interest. There needs to be a more costeffective way to do what we are doing. I will send a copy of the basic questions about alternatives to you and secretary perry. In your personal view, do you week is 70 per i have seen projections saying it wont be finished until the 20 30s. I think they last the last time they ask you when it can be finished they couldnt say. As the budget director that worries me. I just dont think there is a viable alternative. The statet Fund Department fully, then i need to buy more ammunition. Do you doubt that statement . I would encourage folks to look at the state Department Budget and realize that the president ran on saying were going to give less money to governments overseas and the state Department Budget does contain foreign aid and that is what represents those reductions. Is a 20 reduction of the state departments budget. It is, but we have increased spending on humanitarian assistance, we do lower our commitment to the multilateral institutions to try and bitesize our contributions to support what Ambassador Haley is doing. We are aware of your concerns and look forward to working with you on trying to make the state department more effective. Do you agree that the state department is really National Security in another form, as general mattis indicated . They say war is diplomacy by other means. The two are intricately intertwined. I look forward to seeing that we dont take up the table the diplomatic options, not only to prevent war, but to make sure gains on the battlefield are not lost. I think general mattis said it better than i can say. That a deep cut to the state department will lead to instability for our people at risk to our serving overseas. I think you are doing a very good job and i appreciate your stay hand the steady hand you provided when it comes the budget matters. We are all very proud of you. Thank you, senator. Murray . Or before i turn to director mulvaney, i do want to comment joint committee on budget and appropriations process that was included in the budget caps deal. I spent we will hear a lot about that in the coming months and i want to make my views clear. 2017 hijackingt the budget process for two things, a partisan attempt to take Health Care Away from millions of families which crashed and burned, and second jamming in a taxcut for the wealthiest of americans and biggest corporations without trying to work with democrats on ways that could help the middle class. In 2018 think the been different. Republicans came to the table and worked with us on a two your budget deal that increased investment in education and health care and child care and other domestic and military priority. Now, the Appropriations Committee has clarity and we are able to get to work and pass our bills by the march deadline. To thel due respect chairman and by house and Senate Republican colleagues, we dont need a new select committee to tell us what the problem is. It is obvious. This Budget Committee has been unable or unwilling to do its job. Into one crisis and another before the rest of congress could come together and clean up the mess. On hoping we can do our jobs the Appropriations Committee, and i continue to hope that this committee can do its job and not rely on new select committees that are intended to kick the bucket instead of making the tough calls. Director mulvaney, if this were toormal Budget Hearing how start up by commenting that budgets are statements of values and priorities and i would dig into the various proposals. What they said about what kind of country we were and what we wanted to be. If this were a normal Budget Committee i would point out that the socalled immigration proposals it includes our wasteful, divisive. I would point out that it is widely misguided and wrong to ask low income families and the workers have been a handout to bear the brunt of massive cuts while trillions are being spent on tax cuts for the rich and while austerity flies out the window when it comes to the military. If this were a normal Budget Committee hearing i would point out how absurd it is to cut 200 billion in Financial Aid for colleges while students are struggling to afford college and keep their heads above water. I would point out there is serious concern about the administrations request for veterans care. If this were a normal Budget Committee i may even praised some of the attention that is finally being paid to the crisis. This is anything but a normal Budget Hearing. President trump just signed a two your budget agreement into law that makes this request irrelevant. Democrats and republicans have ignored President Trump tossed budget request before in the interest of trying to get something done, president before indget request the interest of trying to get something done. This budget request is only good for reminding people across the country that President Trump cares more about giving tax cuts to the wealthiest americans and biggest corporations than he does about investing in health care, education, childcare, and middle breast priority. Director mulvaney, for years i have heard you rail against deficit spending. You called yourself a deficit hawk, you claimed to take our debt very seriously. You called for a balanced budget amendment. Our debt is so large as to defy description. The debt has only grown. The deficit has increased under this administration approaching a trillion dollars this year or next. You describe it in the pages of this budget. Dont try to hold yourself to the standard you help president obama to win your member congress. When you remember congress. I was prepared to call you out on your hypocrisy, but then i heard you on sunday that if you are in congress he would have voted against the budget legislation that the president signed. I want to give you a chance to step back from the hypocrisy. If you were in congress, would you have voted for this budget you are presenting . Sure. I will give the same answer that i gave on sunday, as a member of congress representing the Fifth District of South Carolina i would have in the shortcomings in this to vote against it. At the director of the Office Management and budget, my job is to fund the president s priorities. Let me ask you one more question. Im trying to give an honest answer. Republicans have busted our budget with trillions in tax cuts to the rich, this budget starts asking the middle class the paper that. You have said before to pay for that. You have said before you would cut secure soup security youd cut Social Security or medicare, can you say that you will not ask for cuts in these critical programs in future budgets to pay for the president s tax cuts . That is what this budget reflects. The proposal that you see that touch on Social Security dont deal with core Social Security. We try to address reforms in disability insurance. What do you propose . Lets talk about medicare. We do not promote propose any changes to benefits or services to beneficiaries. We try to focus on lowering drug prices. The number i have heard a couple is that weday propose to cut medicare by half 1 trillion, the number is 236 billion and most of that is in drug reforms and other proposals. I dont know if you know this, moneyr medicare money you pay in fica that goes into the Medicare Trust fund goes to pay for regiment medical school tuition. It goes to pay for debt for nonmedicare patients at hospitals. Are you eliminating that . We move it to another part of the budget, so we still pay them but not out of the trust fund. A lot of folks think that is a cut the medicare, it is actually improving the Medicare Trust fund. We are out of time. Thank you. Senator kennedy. Director, im over here. You are on my right, i know that senator kennedy. The correct place to be. Thats right. This is america, were all entitled to our opinion, but i think you are doing a great job. I know you are a fiscal conservative, i think you share concern, disbelief, curiosity. I dont understand why taking care of our generation requires robbing the next generation. I want to thank you, in your budget, for emphasizing our need to do something about improper payments. Know, we have 144 billion of improper payments being made every year. Were not going to stop all of them. Is 30an stop 20 , that billion. I have introduced a bill with senator carper, it is called the stop paying dead people act. I am just amazed, you cant make this stuff up. We have a death file at Social Security, but Social Security wont share it with its sister agencies. Dead people are getting checks, and they are being cast. Obviously there is fraud. Hed. Eing cas always a there is fraud. Obviously there is fraud. Little get a little metaphysical here. We talked about the need for a balanced budget, and i support a balanced budget. Sometimes i think we conflate balanced budget with Government Spending. Economy. 20 trillion that is all the goods and services we produced every year. If government is spending 4 trillion, i know the president s budget comes in higher, than the government is taking 4 trillion out of 23. He with me so far . Are you with me so far . Do you think that america would be better off if we had a balanced budget of 4 trillion of Government Spending and 4 trillion of taxes, or would we be better off in terms of 2sonal liberty if we had trillion worth of spending and 1 trillion worth of taxes and would have to borrow a trillion dollars. Trillion dollars . From an individual liberty side, if you assume that the larger the government is the last individual freedom you have, then, by definition, you would be better off by having budget. Trillion i think i could make the take individual liberties out of the equation, and look at the allocation of capital. If i give 4 trillion to the government it is likely to misapply a lot of that and spend it inefficiently. If i let people keep more of their own money, they are going to apply it efficiently. That is the market, people spending their own money is the market and nothing allocates capital more efficiently than the free market. In many ways you would be better off by having that smaller footprint. I want to be clear. I support a balanced budget and i know you do too. Would one way to skin this cat legislation that would limit Government Spending to a certain percentage of gdp . Certainly in theory, yes sir. Do you think the president would support Something Like that . Why dont i talked to the president. I know that came up a couple times in the house. I think that came up in the past as part of a debate regarding a balanced budget amendment. Could we cap government expenses as an overall percentage of the economy. The theory being it is ok to grow the government as long as you are growing the economy at. He same time you left my car before about your revenues outgrowing your expenses. You can go back to my comments before about revenues outgrowing your expenses. Thank you for your services. Senator purdue . Director, thank you for surviving another one. It is always interesting. It was a lot easier the first time. They dont get any easier. I want to make a comment. I take a different view than the senator from washington. I respect her work over the years and i know we can Work Together. We have got to fix this budget process. I know we have had this conversation, and i know you agree with this. To make a comment, the budget process is only worked four times in 44 years. It has led to this debacle of four 2 trillion. We are not going to solve this problem until we fix our debt crisis. Mye told the white house support for the select committee and i look forward to its outcome. Director, i want to comment on the debt. In size of this government 2000 was 4. 2 trillion in current dollars, last year was about 4 trillion. There is our problem. The largest growth was in the mandatory side. Today of that 4 trillion dollars 75 is mandatory, you only have 25 discretionary. Over the lack of ministration we bought about 35 over the last administration which means every time we spent in discretionary money is essentially borrowed. I know your heart and know what you have done historically on this. Help us understand the longterm investment return concept in terms of dealing with the debt. There are things we have to invest into the economy, we have to build the infrastructure. Is, are we moving towards a longerterm solution outside a 10 year window that is a directional pathway towards getting this debt down to some more meaningful percentage of gdp. We talk about spending. The problem with spending is, of the 4 trillion 350balance their of three is all of domestic discretionary programs we still have out there. They have been cut could medically as well. Give me some comfort dramatically as well. On the some comfort longterm solution towards this mounting debt crisis. Unfortunately we have an example that works. We actually balanced budget in the late 1990s. On a per year basis. Recognize there was some funny accounting, but if we look generally to the concept what happened is we figured out a way to grow the economy faster than we expected and we had fiscal restraint. The government grew slower than the economy. If you could do that long enough, revenues will catch up. We have talked to the administration about prioritizing deficits. There are different types of deficits. Deficits that allow people to keep more of their own money because of the allocation capital is actually a fairly efficient deficit. In the midand you might best in the middle you might have things in thefrastructure middle you might have things like infrastructure. We do try to prioritize that if you look across our deficits going forward. That theicture is, you euro a way to grow the economy faster than the government. One last question. With regard to infrastructure investment, investment that will hopefully produce a return unlike the trillion dollars that we through towards Investment Infrastructure back in 2011 that was not made with his priorities. I call out one type of investment, particularly when we talk about spending the money, the question is are we prioritizing based on the return that we get in terms of Economic Growth and contribution to reducing this longterm debt. I specifically call it an issue that i believe is caught between current authorizations and future infrastructure investment. In states like texas, louisiana, florida, georgia virginia, new jersey. These are our eastern ports that are all trying to accommodate increaseat would our ability to compete around the world. These Port Investments offer a higher rate of return than some of the infrastructure investments. Can you address that . Making a smallof correction, we absolutely anticipate the deep water ports will be part of the infrastructure bill. The largest portion of the bill is set aside for programs that can contribute their own portion of the funding. The port in savanna does exactly that. Mind. E deep water port in thank you, mr. Chairman. Thank you. I want to thank the director for his comments. I do want to ask an additional question just from confusion about gdp that we were talking about earlier. The president s budget rejects gdp growth average of 3 annually with a longterm trendline of 2. 8 . This longterm trend is 9 10 Percentage Points higher than the cbos 1. 9 forecast. This was bumped in june prior to the passage of the tax cuts in job act. There has been longterm pressure in terms of demographic changes. How does the tax cuts in job acting courage labor force participation. We were fairly disappointed in the gdp numbers in the Fourth Quarter. Weve beckoned them to be north of three. If you drill into the details we expected them to be north of three. If you drill into the details they came in just south of 3 . That is how you do it, and that is why such a critical part of the tax bill was that Corporate Tax rate and the depreciation rules. Gdprder to get the type of growth we need longterm, given the demographic challenges that we face, we need individual productivity to increase. That comes from capital investment. You invest in a new machine or new technology, you invest in education, and you get individual productivity up. We think we have seen the seeds of that planted almost immediately. Someone mentioned earlier that we have seen benefits from the tax bill far quicker than we ought that we would. Thought that we would. Everyone pays attentions to the bonuses that have been given and the wage increases. If you look deeper into the numbers and you see investments that people and companies are making in the United States of america, we think we see the plans for longterm structural improvement. I am counting on that proving out. I did ask for a static score when we were working on taxes, because during Health Care Debate we asked for i didnt aim i found out that was going to we asked for a dynamic score and i found up that was going to require new legislation. I was not able to do that. I want to thank you for your testimony today. Your full statement will be included in the record. I think you did not outstanding job on presenting the president s suggestions and priorities, and that is what the president s budget is, suggestions and priorities for it the constitution specifies that we are the ones that priorities. Priorities. N the constitution specifies that we are the ones that decide that. Saying there needs to be a program for preschool, ive been saying that all along. There were 119 one i started. We got it down to 45 preschool programs. It seems like one or two really good ones need to be reviewed again and reup the size two really good ones reauthorized and reviewed again might be good. 160ve checked through housing programs administered by agencies. Nobody is in charge, nobody is setting goals and seeing if they are met. How can we say that a decrease in the house and funding would put people out of the streets . Out on the streets. When might streets . A little note i found in reading your documents was a suggestion that colleges had some risk accepted on student loans. That is kind of a novel concept. We made the forprofit schools do that same thing and we put , but there business ought to be some kind of risk acceptance in it. Abouteciate your comments capital budgeting, and used the example of the fbi building for that. I have been talking about capital budgeting since we got here, i think separating that out might make our job easier. If anybody has any additional questions, your questions can be submitted for the record by 6 00 today with a signed hardcopy delivered to the clerk. You will have seven days to respond to those questions. So that we can understand this budget as well as we can. So that we can do our budget. Thank you very much. Outstanding presentation. Adjourned. 1 white house budget director Mick Mulvaney wrapping up his first apparent on capitol hill since President Trump released his 2019 budget request. The u. S. House comes into session today at noon eastern. On the agenda, legislation putting sanctions on people and organizations associated with hamas. Also a bill to expand science, technology, engineering, and math education for children aged 11 are younger. Live coverage here on cspan. Right now, some of this mornings washington journal. He served as chief economist at moodys analytics and is always helpful in answering our questions about the state of the economy. Right at the end of last year you wrote a column for the Philadelphia Inquirer that began by saying this. Times. Re good economic in the wake of the swings on wall street are you competent these are good Economic Times . Yes. I think the correction in the far, aarket is, so typical gardenvariety kind of correction in the equity market. We see many of them at least once or twice a year. It is still longer than normal, the last correction was overdosed go years ago. Over two years ago. No big deal. What are your criteria for good Economic Times . I think what matters most is jobs. The job market. We are creating lots of jobs. We created a couple million last year, about the same as the your before, and the year before that. The American Economy has been a job machine since the economic recovery began almost nine years ago. When you are creating two million jobs a year, that is more than the go of people coming in looking for work. Underemployment continue to the client and both are pretty low by historical standards. The Unemployment Rate is just over quarter percent. Isgoing to go lower just over 4 . It is going to go lower. Were going to get a temporary boost the growth two growth. Th. To grow is there such a thing as too much job creation . The economy can overheat. What i mean by that is unemployment, and underemployment fall to such levels that we start to see inflationary pressures developed and then we see higher Interest Rates. This recent correction in the stock market is a result of concerns investors are having about an economy that will overheat trying to digest these higher Interest Rates. That means you can get temporarily strong growth, then i would expect that in 2018 and 2019. Those higher Interest Rates will do damage and you get a weaker economy. You will get a more up and down economy. I think that is a reasonable scenario. I do think there is a downside to this, and that is probably as we make our way into the next decade. Some lines are open. Isyou want to talk, it 202 7488000. If you are a democrat. 202 7488002. If you are an independent. If you are republican 202 7488000. President s get to claim economies do president s get to claim economies . I think most of the last year was still the obama economy. It wasnt until the end of last year that we passed the tax cuts. Any other Major Economic policy put into place in 2017. I consider 2017 to be mostly the result of obamas policies on the economy. This is now definitely the trump economy. Tax legislation, he is making changes on trade, immigration, regulation. Last year i would say was pretty much obama. You make a good point. There are a lot of moving parts here, and a lot of forces that affect our economy. Economic policy and certainly the president of the United States is only a part of that. President s generally dont matter a whole lot in terms of how the economy is performing, except in times of crisis. That is when they matter the most. Back in the financial crisis nine or 10 years ago, president obamas policies were important. Most normal times, Economic Policy matters in the past five days we have two key budgetary documents out. There is that bipartisan deal that was signed last week, and then we have the president s fiscal 2019 budget request. Do those documents paint realistic economic visions of the coming years . I was just looking at the president s budget, looking at the economic assumptions. One of the Key Assumptions is growth in gdp, gross thomistic product gross domestic product. That is a good measure of what is going on in the economy. In the budget, the president is assuming that 3 per annum realogy real gdp growth. I dont think that is realistic. We have been growing roughly 2 per annum. Even given the tax cuts and all the other policies we are discussing or debating, i expect over the next 10 years we will get roughly 2 growth. Unlikely thatvery we will get 3 growth. That doesnt seem likely at all. Reed is up first. Good morning. Caller i have a couple questions for your guest. Onr guests just commented the growth rate. I am not an economist, im selfemployed in i. T. Right now i happen to be the queen be between clients. You can see the rest of this washington journal statement on our website. Zandi in therk search bar. Now we take you to the u. S. House of representatives. On the agenda, ideal this is like covered on cspan. Live coverage on cspan. The speaker pro tempore the house will come to order. The chair lays before the house a communication from the speaker. The clerk the speakers rooms, washington, d. C. February 13, 2018. I hereby appoint the honorable mark meadows to act as speaker pro tempore on this day. Signed, paul d. Ryan, speaker of the house of representatives. The speaker pro tempore pursuant to the order of the house of january 8, 2018, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate. The chair will alternate recognition between the