Transcripts For CSPAN3 House Budget Committee 2019 Budget 20180217

Good morning. The hearing will come to order. Welcome to the committee on the Budget Hearing on the president s fiscal year 2019 budget. Today we will hear testimony from the director of the office of management and budget, the honorable mick mulvaney. During our hearing we will hear directly from the director of omb and we appreciate you being with us here today, mr. Director. Your insight will be very help of in our understanding. We see that the president s budget each year marks the beginning of the federal budgeting process or budget season as we like to call it, and the white house officially kicked it off on monday. While congress ultimately controls the purse strings, the president s budget request is still an important document for lawmakers to consider along the way. Each fiscal year the administrations budget documents documents the president s policy and spending priority. These are important for both changes to consider as work crafting the budget resolution begins in earnest. Without question there are plenty of worth while ideas included in the president s budget this year. First, im encouraged that the administration prioritizes and boosts the investment in our national defense. With mounting threats to our security both at home and abroad, it is critical that we provide for a strong and capable military. We must ensure our war fighters have the necessary resources and training to complete the missions with which they are tasked today and those with which they will be tasked in the future. Im also glad to see the Administration Confront headon the issue of opioid abuse which has turned into a nationwide epidemic. More than 115 americans die every single day from opioid overdoses, so we can all agree it is a serious, rampant problem that can no longer be ignored. Additionally, the administrations budget request calls forei enhancement and security at the borders, reflecting President Trumps commitment to address tinge broken immigration system. Theres no question that the infrastructure is in dire need of attention. It proposes overhaul of the infrastructure. More detail on the initiative was released earlier in the week. I welcome the president s plan to cure decades of neglect and to build an infrastructure to meet the needs of the American People and the economy. Last in the list of examples but certainly not least, i appreciate that the president s budget, an american budget, acknowledges fiscal reality and takes significant steps towards reducing the deficit. The president s budget projects 3 trillion in deficit reduction including 1. 7 trillion in mandatory savings, bringing us within 1 of gdp in the 10year window. The budget emphasizes a need for efficient, effective and accountable use of taxpayer dollars and takes real steps to target waste, fraud and abuse in government. These are all good things for our country and we will certainly consider embracing the president s best ideas. However, it is important to remember that even with the positive Economic Impact of tax reform thats being felt across the nation by hardworking americans, the financial state of our country is still undeniably grave. The president s budget certainly highlights this sobering reality. While there are many worthy policy proposals in this budget request, it is also very telling of our financial situation that the proposal does not get to balance. It should always be the goal to balance our books. Every year we neglect to do so the task becomes more daunting and more difficult. In order to slow down and ultimately pay down our nations unsustainable debt we have to make some tough choices. So our work writing the budget resolution begins within the house Budget Committee. Balance does remain the ultimate goal. However, today and in the coming days our committee will carefully consider the president s suggestions and work to incorporate many of his budget ideas. Thank you for this initial time. With that i will yield to the Ranking Member, the gentleman from the common weflwealth of kentucky, mr. Yarmouth. Thank you very much. Thank you, director mulvaney, for coming to answer our questions. I would like to thank you for coming to meet with our democratic members yesterday. I know it was valuable for us. I hope it was good for you too. Last year when we received the president s budget for 2018 i described it as a betrayal with a long list of broken promises, which it was. This year im going to start with the positive. In this budget the Trump Administration has done something extraordinary. They have finally realized that you cant balance the federal budget by cutting taxes. You cant balance the federal budget by cutting spending, and you cant balance the federal budget through gimmicks. God knows we have tried all of those. With this new acknowledgement or enlightenment, whichever the case may be, maybe theres hope we can Work Together in a bipartisan way to advance a responsible budget that truly addresses the needs and priorities of the American People. It cant start with the values reflected in the rest of the trump budget. Lets be clear. This is an irresponsibly extreme budget that reflect the disdain for working families as well as a disheartening lack of vision for a Stronger Society. This budget calls for massive cuts to health care, antipoverty programs, and investments in Economic Growth, all to blunt the deficitexploding impact of the president s tax cuts. It takes i am at the bipartisan budget agreement the president signed into law just last week, cutting nondefense spending in 2019 by at least 57 billion below the levels called for in the twoyear agreement. This is funding that would go to veterans programs, law enforcement, diplomatic operations, education, research and other investments to boost jobs, revitalize communities and improve economic security. Beyond 2019 the budget sets nondefense spending on a steep and steady downward trajectory so by 2028 nondefense discretionary funding would be cut by 33 below the bipartisan budget agreement level for this year, and thats without accounting for inflation. That is such a dangerously low level of funding it would leave the government unable to carry out its basic functions. The budget then goes directly after mandatory spending, brutally targeting programs that help americans living paycheck to paycheck. It cuts 263 billion from mandatory programs that safeguard basic Living Standards, including a 214 billion cut to the Supplemental Nutrition Assistance Program that protects 44 Million People including 20 million children from going hungry each night. It takes 72 billion from disability programs including Social Security and more than half a trillion dollars from medicare, a full betrayal of the promises the president made to the American People not to touch either program. Despite the publics outright rejection last summer, the president s budget continues the republican obsession with dismantling and destabilizing health care for million also of americans. It makes another attempt to repeal the Affordable Care act and replace it with a plan that would leave millions without meaning of coverage. As part of this continuing attack, the budget cuts 1. 4 trillion from medicaid, jeopardizing care for seniors in nursing homes, children with disabilities and low income families. Even where the budget claims to increase investments it fails. This proposal pretends to make infrastructure a priority with 210 billion in federal funding, a figure that falls short of the nations needs. Again, the budget simultaneously cuts 122 billion in highway programs while eliminating or limiting other Infrastructure Investments the cities and states needs. Even after these reckless cuts the budget cant hide the true devastation of the tax cuts. It once again relies on unrealistic Economic Projections to make it look less ominous. Even though independent economists predict high growth rates are not sustainable given trends in our labor supply. So while the budget includes some honesty by acknowledging that the tax cuts didnt pay for themselves, it turns to gimmicks to hide full consequences of the cuts while decimating critical investments the American People need. The federal budget is about choices that have major impact on the American People. Not a single millionaire would have gone hungry without the tax cuts my republican colleagues gave them, but Many American families will not be able to put food on the table under this budget. Others wouldnt be able to afford health care, housing or heat their homes in the winter. These are choices my republican colleagues are making and they are reprehensible. Our task here is to build a Stronger Society and to do what we need and to do that we need investments in education, health care, job training, innovation, infrastructure and more. If you believe america is better off by gutting these investments, you fundamentally misunderstand the true source of our nations strength. I yield back. I thank the gentleman. In the interest of time, if other members have Opening Statements they would like to make, i ask you submit them for the record. Then i would like to introduce and recognize the director of the office of management and budget, director mulvaney. We appreciate your time today, mr. Director. The committees received your written statement. It will be made part of the formal hearing record. You have ten minutes for your opening remarks and the floor is yours. Thank you, chairman. Thank you, Ranking Member yarmouth. Former chairwoman black, it is good to be back in the committee. Thank you for having me and giving me the opportunity today to talk about the president s budget. Im not going the read the Opening Statement that we submitted for the record. Lets talk very briefly about sort of an introduction and move straight to your questions. When i was before you last year, it was an unusual year. We had sort of broken the budget into two pieces, a skinny budget and a discorrectionary budget and a fuller budget late last spring which is unusual in a transition year. This year has been another unusual year in that the congress and the white house negotia negotiated and signed a caps deal as recently as i think early friday morning, which as you can imagine through all of the budget process in a good bit of turmoil. What we have brought to you today is almost two buckets. What we have submitted to congress is an addendum to the 2018 budget which purports to take the budget we have previously submitted to you in the spring and add back, bring back the spending, bring up the spending to the level of the caps deal that was executed a couple of days ago. In addition, weve also sent you the original 19 budget we were working on until friday that went through last years caps level. However, that changed as well. We have decided not to write an addendum to the 19 budget that takes us all the way up to the caps, but instead spend less than the caps. Why is that . Because this is, as everyone is quick to point out, a messaging document from the administration to the legislature. What is the message by doing those two budgets . A couple of different messages. Number one, we dont believe you have to spend all of the money. In fact, you saw the president s tweets over the weekend that said that we believed that we had to spend more or pay out more in nondefensive discretionary during the negotiation in order to get the defense spending that we wanted in the administration. We dont think you have to spend all of that money. That is reflected in the 19 budget, in the 19 addendum. If you do, you have the 18 budget and addendum that spends up to the caps. If you look at the two numbers, it is not that different. It is a 10 billion difference from one year to the next. If you decide going into the omni bus appropriation that i believe you will have before the end of march and decide to end up to the caps, which we fully expect you will, you have a guide as to how the administration would purport to spend that amount of money. Between march and the end of the fiscal year in september if you decide to spend up to the caps on 19, you could use the 18 number as a guide because the numbers are not that different. If, however, intervening circumstances prompt you for whatever reason not to want to spend up to the cap, you have guidance in your hand from the administration on how we would spend that money. That is the 19 budget with the 19 addendum. That first message is that you dont have to spend it all, but if you do, here is how we would spend it. The second message behind this budget is pretty straightforward, which is that we are not condemned, we are not condemned to year after year after year of trillion dollar deficits. There is a way to get off of that ride. That is the larger overarching message of the budget, that there is a way probably more than one way, but we have offered at least one way to get off of that cycle of trillion dollar deficits. So as you start looking at the out years in this budget, you will see that we dramatically reduced the overall size of the deficit and the deficit the debt as a percentage of gdp. No, it does not balance. I believe that i said to you when i was here last year that we worked very hard last year to try to show a budget that balanced in ten years. I also pointed out, as many of you have individually especially in the republican side of the room that if we did not start to make changes earlier rather than later, it would become more and more difficult to balance the budget every single year. I think i actually told a couple of folks last year that i was unlikely to be able to balance the budget this year. That turned out to be the case. In hindsight, i probably could have brought you a budget today that balanced, but it would have been made up of funny numbers. I didnt want to do that. I wanted to give you a budget that you could look at and know the numbers were solid, know that they were truth of, know that theres a lot of transparency in this budget, and know that this budget, especially for 18 and 19 reflect the actual fiscal condition of the country. Even though it doesnt balance were extraordinarily proud of it. To that end by the way, i read in the newspaper that said i would not support the budget if i was in congress. Thats absolutely false. I absolutely support this budget. I think someone was making a reference to the caps deal. This is a good budget. You may have been able to do better than this. The chairman and i have talked about things that might be done in addition to it or instead of it, but we are very proud of the budget and i whole heartly support it and would vote for it if it would come to the floor, which was my job when i was here. With that, im happy to go over the details over the course of the next couple of hours, but we welcome the opportunity to come in here and show you give you example also of the specific message that the administration has for the congress when it comes to the fy 18 and the fy 19 budget. Thank you. Thank you for your opening remarks. We appreciate your being here today. Youre going to get an opportunity im sure because i have absolute confidence to the people to my right and left that theyre going to ask some really direct questions and give you an opportunity to expound. Im going to lead off here this morning. I am glad to hear you talk about deficits and debt because at the end of the day what we do with our budgets and how we appropriate the dollars that fund our government has to be checked by what were doing to future generations insofar as running up deficits and piling up more debt that will surely fall on future generations. I am reminded of the many times that people on my side of the aisle have talked about shrinking the size of government, the cost of government, and giving some relief to the fact that theres just a certain amount of money out there and sometimes we kind of overpromise our government to our people. Generally speaking, what is the we talk about this in terms of numbers. Sometimes these numbers are so large in fact, theyre often so large that they just fly over the head of most people because of the number of zeros and the number of commas in these numbers. What is our moral obligation as the legislative branch of government who has the article 1 authority to fund this government . What is our moral obligation to make sure that we get our arms around these deficits and debt . I know youre disappointed, mr. Mcclintock stepped out because im going to use one of his lines i have always liked which is theres no such thing always a deficit, it is a future tax increase delayed. If you assume were going to pay all of our debts, which i think everybody in the room assumes that we will, youre going to have to pay for it at some point in time. Since the only way the government raises money is through taxes, all were simply doing is spending money now that were going to raise in the future. So i think the moral obligation there is to do as little of that as you possibly can. Does it disappointment that we do not balance in ten years . It does. Do i think it is a failure because of that . I do not. It is a Budget Proposal with 3 trillion in savings against the baseline, which is essentially what we would spend but for the budget. That is the second largest reduction in spending of any Administration Budget in history, exceeded only by last years budget. Theres 1. 7 trillion did i say billion . I meant trillion. It runs together after a while. We say 1. 7 trillion against the baseline in mandatory spending. The administration has been accused of not tackling the difficult question of mandatory spending. 1. 7 trillion in this budget, the largest ever by the administration. We make difficult decisions. Is it easier to spend money than cut . Absolutely. In fact, i did it. We went through the process when we took the 18 budget and spent to the cap as part of the addendum and took the 19 budget and spent up to the cap. The meetings are more fun when you get to spend money than when you have to cut, but this is not supposed to be fun. This is supposed to be responsible and honest. Sometimes that does take making difficult decisions. Sometimes doing the moral thing does take difficult decisions, and we think we have done it with this budget. We look forward to working with you on yours because we know you will be doing the same thing. Theres a difference between cutting and slowing the growth, although those terms sometimes and the way we approach the numbers are used interchangeably. Doesnt it make sense that weve got to slow growth first . And if so, how in the world do we do it, particularly on the side of spending that is on autopilot . Im always fascinating that the word reduce spending doesnt seem to exist. It is gutting and slashing and cutting. Reducing is a different language here. Plus, we always compare spending against the baseline. That if you spend up to the baseline, thats not an increase, it is not a reduction, although back home if we spent more money one year than we did the Previous Year we would call it an increase. Here we call it a freeze or we call it gutting or cutting. Youre absolutely right. If you look at our proposal, especially in the mandatory area, mr. Chairman, we continue to spend more money from one year to the next. We simply slow that spending. Medicaid is a good example in terms of the proposals that we have. We can talk about it today, about Graham Cassidy and about our proposal for how fast Health Care Programs should grow. I will contend to you that you are absolutely correct. Growing something more slowly than it might otherwise grow does not constitute a cut or a slash or a gutting. It might also be that it might be the responsible thing to do. Cbo in their last Economic Forecast this is june of 17, expected Economic Growth to average under 2 , at 1. 9 over the next ten years. Your Economic Forecast counts on 3 sustained growth in that budget window. Specifically because i believe in my heart that the Interest Rate environment is going to likely rear its ugly head if in fact we accelerate growth in this economy, how do you anticipate higher Economic Growth impacting Interest Rates and the impact it will have on the net interest on our debt . As we did last year, we think weve made some very reasonable and defensible estimates and assumptions regarding Economic Growth. We have slightly ratcheted up our estimates for Economic Growth in the next couple of years from last years budget. Keep in mind i remember being in here last year and taking a little bit of heat from my former delegation mates from South Carolina for having overly rosie economic assumptions, that in the real world we actually beat. As a result of the Economic Performance of the economy, of the nation for the last 12 months, weve made some slight increases in our assumptions for the next couple of years, some slight reductions in our assumptions in the out years as we think we bring them more in line with reality. We have made some changes to our Interest Rates. We still think these are entirely defensible. They are slightly lower than they were last year simply because we think the environment has certainly been that Interest Rates are lower than everybody thought that they would be. In fact, if you read some of the economic literature, what youll discover is theres a discussion worldwide right now as to where the inflation is. We saw a little bit of an uptick this morning, but still i think economists around the world would tell you that theyre surprised at the low rate of inflation and the corresponding low rates on government debt, keeping in mind that our assumptions are still well within where were seeing debt today. So we think the assumptions continue to be defensible. Importantly, mr. Chairman, they generate something absolutely critical. They generate more money for the federal government. We took a lot of heat in the administration, and you did as the legislature, for passing a tax bill that supposedly would run up the deficit. The fact of the matter is that our numbers indicate that over the course of the tenyear window, it at least the ten years we have, effectively a nineyear window because the cbo has not updated the numbers yet, as a result of the tax bill we will generate more money for the treasury than we would have but for the tax bill. In the final year we have comparisons which is 2027, that policy combined with the other Administration Policies generate almost 350 billion more in government receipts in 2027. That number continues to increase outside the budget window. So we absolutely believe that what weve done to try to fix the economy, to get away from the slow rates of growth, the obama economy as we like to call it of 1. 6, 1. 9 growth forever and move to a more stable and more traditional growth rate of 3 , not only is good for everybody in the country but it is good for the government. I know you and i have talked many times about growing the government creates savings because it provides more revenues for us to be able to play down on this deficit structure, but theres always a net effect of it because you grow and then you have the potential for an Interest Rate hike. So theres a net effect in there. Do you have numbers that show maybe on average what a certain amount of growth in the gdp would do as opposed to a certain amount of growth in the Interest Rate environment . We do. You know, i had a chance to talk about this and i think i talked about it with both parties in our private meetings before this. Estimates are that an additional 1 increase in gdp over the course of a 10year window reduces the deficit by roughly 3. 5 trillion. About 2. 5 looks to be additional revenue to the government. The balance is on reduced expenditures by the government. Keep in mind if you have a healthy economy for a long period of time, we expect fewer people to need meanstested Welfare Program. Not only do we generate more money in for the government through a healthy economy, we have to spend less to help take care of people because the economy is allowing them to take care of themselves also. 1 increase across the window in gdp, growth of the economy by 2. 5 trillion. We weigh it against a 1 increase in interest which across that same window generates an additional 1. 6 trillion in interest costs. So clearly the challenge is to grow the economy without adding dramatically to inflation or to the cost of borrowing money. We believe were in position to do that. We have already started to see that. Again, theres some question as to why inflation is not higher than it already is, but we believe some of the policies we havunder tak have undertaken will allow us to keep inflation under control. How do you pay down the debt in the long term . You have to grow your way out of it. You combine the growth with fiscal discipline, spending restraint. The good news here, ladies and gentlemen, is we have a model on how to balance the budget because we did it. Both parties take credit for it in the 1990s. We grew the economy faster than we felt we otherwise would and we kept spending under control. You have to grow your revenues faster than your expenses. The money you take in has to get bigger faster than the money thats going out. Thats how you end up paying down the deficit and thats how you end up paying down the debt. We think that the policies the administration has already put forward have started to do that and the policies that we put forward again in the budget will continue that trend. Thank you, mr. Director. Im out of time. I yield to the Ranking Member, mr. Yarmouth. Mr. Chairman, im going to defer to my members and question last. Ms. Lee of california. Thank you very much. Thank you, mr. Chairman. Thank you, mr. Director, for being here. Good to see you. First let me just say this budget is really shameful. It dismantles our basic Living Standards that americans have turned to for decades and pushes million also of people into poverty. It will destroy peoples lives. Now, let me list a few of these cuts. You have cut 213 billion in snap, 72 billion in disability programs, 3 billion in rental assist answer. You cut in half adult employment and Training Programs. You eliminate mind you eliminate the workforce innovation fund. You cut education by 10 . You eliminate the minority aids program, and at the office of Minority Health you eliminate this program, a program specifically for people of color to begin to help close the health disparities. You just totally eliminate these programs. You eliminate tiger grants, which have created thousands of jobs. You cut 1. 4 trillion in medicaid and you eliminate Education Programs important to low income and students of color liar gear up. It is hard to imagine how you could be proud of this budget, mr. Director, especially since these cuts are to pay for the tax cuts for the wealthy, billionaires, millionaires and corporations. It is clear to me that you dont care about paying down the debtor the deficit because this budget really shows exactly what this tax scam was all about. So let me ask you about a family, for instance, in kentucky. I think the minimum wage there is about 7. 25 an hour, 7. 50 an hour. A family of four. 24,000 or 25,000. What in the world is this going to do to that family who is struggling, working each and every day to take care of their family and you come up with this kind of a budget . Secondly, i want to ask you about the military parade that the president is proposing, you know, the parade that is very similar to those held in authoritarian countries like north korea. How much is that parade going to cost and where is that money coming from . Thank you, congresswoman. I will answer the second question first. We actually have military parades in this country before. I think we had one recently, as recently as the 1990s, maybe more recently than that. I have seen different cost estimates, some between 10,000,030 million depending on the size of the parade, the scope of it, the length of it, those type of things. We have not accounted for it in this years budget. We continue to work with you folks if we decide to push forward with that initiative. If who decides to push forward . You mean the president . Yes, maam, thats who i work for. I thought you said we. We being the administration. Im sorry. But, of course, you have to appropriate funds for it and we have to find fund for it that you have already appropriated. That would be an estimate of 10 million or 20 million . It would be between 10 million or 30 million. It depends on the length of the parade and the equipment. You asked a straight question and im trying to give you a straight answer. We have not done Much Research on it. Regarding pushing people into poverty, your family in kentucky for example, congresswoman, it probably doesnt come as a surprise republicans and democrats see things differently. We see the best Welfare Program as a job, and we see a healthy economy as a way to push people out of poverty, allow them to lift themselves out of poverty. The reason you see reductions in snap and other types of programs is, yes, we offer reforms, improvement to the programs that we think can work better, but we also assume theres fewer people on there. I would think that would be a goal we all share. If you increase if you propose continual increases in snap and tana, arent you just assuming that youre never solving the problem . In fact, think we all want to see a world where we dont have to spend any money there because no one should need the program in a perfect world. We dont get there with this budget but we think we move in that direction. Thats one of the reasons you see less spending on those times of programs. But, sir, 7 or 8 an hour, people need a little bit of help from their government. First of all, in terms of job training, in terms of job retraining, you are cutting all of these programs in the department of labor, you are cutting out the tiger grants, you are cutting funds that create jobs and Economic Growth. So this budget goes in the opposite direction for people who are living on the edge. Believe you me, i understand what snap is about. I formerly was a snap recipient because i needed that bridge over troubled waters raising my kids. It wasnt permanent. It was just so i could get through what i was going through, and thats the majority of people in this country. So to take that away now, and what you want to do is put them in a depressionera box with food such as food thats high in sodium and sugar content. It is kind of a it is the way that youre trying to make sure people who are low income, that we dont believe that they have the dignity that they deserve the way youre reforming and trying to put snap into a box now. I think it is a shame and a disgrace you are treating low income and working families in this manner. Thank you. Ms. Black, tennessee. Thank you, mr. Chairman. Thank you, director mulvaney, for being here with us today. This obviously is a very important subject for us to discuss, and that is because if we continue to spend the way we are we are not going to be able to afford any of the programs. But i want to go to the idea of cuts versus reform. As the previous budget chair, and now we have a distinguished member sitting in the chair seat, i know that he will continue to look at those kinds of reforms that we talked about in here last year. We had 11 of our authorizing committees take a look at each one of their areas of authorization, to look at possible reforms. You know, when programs are out there for 30 years they maybe need to be reformed, they maybe need to be looked at. One of the programs i think does need to be reformed is medicaid. It was originally put in place for those who were disabled, aged and children. Now we see that we have people who are ablebody workers on medicaid, which only takes away from those that the program was originally intended for. We have less and less opportunity to take care of people that truly, truly do need those services. So what i wanted to ask you was, in the president s budget did we look back and say, is there a way to reform the medicaid that is current cli in place to be there for those in need and do you put in a work requirement . I want to say it is not just to save money. We obviously will save money, but theres something about a dignity of life and a loss of dignity of life when people are not working. Do you have a proposal for a work requirement in the program . We do, in fact. We have work requirements across various different Welfare Programs. Weve proposed that this is actually one of the best ways to make sure those programs are available for folks who truly need it. We could talk about rent support. We could talk about tanif, we could talk about snap if you like, we could talk about medicaid. But we try to bring the ablebody worker concept to a lot of the Welfare Programs so that folks who can can work do. We need folks to go back to work. We talked about the dignity of work. You are absolutely right. The country needs those folks to go back to work. I was asked last year, what would you tell somebody that wants a job that cant find one . Thank you, you are the people who are going to save the nation, the folks who want to work are the people were relying on to grow the workforce, to grow the economy, to grow the gdp. We do need folks to go back to work. I think we have deemphasized the dignity of work for generations now, and i think the budget starts to move things in a different direction. More large, congresswoman, on medicaid what we assume is the grahamcassidy bill, we could talk about that if you like. Generally speaking, we not only by the way, as part of that we give the states a lot more control over whether or not they want to do work requirements as well. That was my second question. I believe that one size does not fit all and we are culturally different from one side of this country to the other. And so i did have that as a question, is what do you have in there for state flexibility . We anticipate a dramatic improvement or expansion of state flexibility. I was in the state legislature and both the house and the senate before i came here. I can assure you that as those of you that have served, one of the things that is different between here and there is it works back home. Somehow we muddle through and get State Governments that work. They know what is best in their state. I would frustrated when mandates would come down from washington and look and them and say this is not tailored for folks that need this care in South Carolina. Why do we assume state legislatures dont want to take care of folks back home as much as we do. I al we do try to move a lot of the decisionmaking to the states. Mr. Director, i only have a brief period of time left and i probably will have to submit the rest of this for the record, but im concerned about the medical equipment competitive bidding. We are losing more and more of our providers and less and less services that are available to those in need. I know theres an interim final rule that is pending at oira. I with like to know more about where we are on that rule to get this moving forward so that we can open that back up again. And i apologize, mr. Chairman. I cant see the time so i dont know how long i have to respond to that. 21 seconds. Quickly, we are aware of the interest of many folks on both sides of the aisle have about the rule. It is not appropriate for me to comment on the status but we are working with hhs to take into consideration all of the issue has have been raised by members of both parties. We look forward to getting that rule out expeditiously. Thank you. I yield back. Thank you, mr. Chairman. Welcome to the Budget Committee again, mr. Mulvaney. While i certainly respect your work in putting together a budget, i think that with many of my democratic colleagues in particular im going to disagree, that the budget reflect something that you just said which is we can do a budget and we can do spending that is both a responsible and honorable way. I am going to take, i hope, a different tact about pointing out what i think are some real concerning issues. So this Poor Committee has heard me over and over and over again, because im lucky. I got to spend 30 years i still do it now doing direct services, largely in health and longterm care, but most of my constituents and clients, disabled adults, grandparents raising grandchildren, folks who need an array of services. Not just was i responsible for doing the budget and figuring out what those expenditures look like and having to demonstrate to the legislature what the impact on the individuals i was serving, but the impact on the state budget and the sustainability of those investments would look like. But maybe a bit differently and i dont know for sure, but maybe a bit differently is i spent a lot of time actually directly in the homes, hospitals, nursing homes, even went undercover in a nursing home to expose terrible care. I really spent time navigating those services. In fact, i spend a great deal of my current career still navigating those services and still get calls from people in rehab facilities and nuring homes that need my help getting out and figuring out housing and a variety of services. So i want to give you a quick example. Most people have never read a medicare bill. Most policymakers have no idea about what the deductibles and some of the benefits really are and arent. For example, if you need dialysis, which is a great number of Medicare Beneficiaries in my home state of new mexico, a huge percentage in fact, and many of these beneficiaries live in rural and isolated areas which means they have to travel to limited dialysis clinics, that when you pay your part b deductible and then you are responsible for 20 of that medicare cost for dialysis, you are spending about 18,000 a year. To be exact, 17,946. The average Medicare Beneficiary has just over 23,000, to be exact 23,500. So simple math, you cant afford that lifesaving treatment, and thats before we deal with figuring out your transportation. We talk about people with dignity, i have to help them find a ride. I have to figure out what kind of food and services and often these are men and women who served our military, who have work their whole lives. As you know in both medicare and medicaid, the vast majority of individuals and the highest expenditures are seniors in longterm care which have prescription drugs and longterm care services. While it doesnt cost as much money, the vast number of individuals covered by medicaid are children. So this whole notion that ablebodied adults will save the system if we do medicaid reform, the math and youre good at this math doesnt work out. These are not reforms when it is a 1. 4 trillion cut, 73 billion to disability programs. In my state, which everyone knows were one of the poorer states in the country. So i wanted to go about this with a minute left a little differently. 20 of new jersey residents live in poverty. We have some of the hungriest families in the country. A third of us are on snap. We have some of the highest unemployment rates in the country. We have a governor who i would say has applied many of the same principles to running State Government and to making reforms or cuts, and were in real trouble. It is the worst trouble the state has ever been in, ever. So i was wondering, i think theres Nothing Better than a partnership. I would like to invite you to come with me to new mexico. I would like to take you we can go to the navajo nation, we can go to some of the most remote areas, and i want to introduce you to some of these very beneficiaries. I would provide with their support a list of things that keep them afloat and the kind of things that would go away under this budget, and maybe you and i could think about a different approach to creating meaning of, lifesaving, longterm reforms, but without creating vast more harm, and quite literally to that dialysis patient a death sentence for these cuts in medicare. Would you be willing to do that . In the one second i have left, i would be happy to talk to you about it. Would satisfy mr. Pierce who has been asking me to do it since 2011. I would be happy to do it with representative pierce because i know he knows many of the same constituents. Thank you. I will be in touch, mr. Chairman. I thank the gentle lady. To florida, the gentleman from florida, mr. Diaz ballard. Thank you, mr. Director. Good to see you. For all of us who have known you and worked with you, whether we disagreed with you or not in the past and i have had both i know you are a straight shooter. I would tell you as a member of this committee and also as a chairman of an appropriation subcommittee, i continue i look forward to continue to work with you on these very important issues. You know, when you were here last time, mr. Director, as the chairman said, the cbo projected that the growth of our economy would be 2 or less for the foreseeable future. You mentioned some of the things that were said by some of our distinguished colleagues about you in that hearing. I dont want to point fingers, but without mentioning who they are let me read some of those things. No economist will approve your budget in terms of it working. There will not be 3 growth. They went on to say this is a betrayal of the American People. Another distinguished friend and colleague said, i think the media are doing a pretty good job of documenting many of the problems with the assumptions that were made in this budget. The 3 growth rate that no economist thinks is reasonable. I could go on and on. In essence, your 3 growth projections were fantasy land projections or a pipe dream. So now we know that despite very costly natural disasters we are basically now at that pipe dream fantasy that was so impossible. Again, i thank you for your leadership and for actually coming up with real projections. The administration the leadership of the administration and your decisive actions has also reversed unnecessary regulations that were really choking small and mid size businesses. I think it has been a major factor of the 3 growth. With that in mind, i want to go talk to you about an industry that has a rich history in south florida, the cigar industry. It has been struggling in the face of excessive, burdensome regulations imposed by the fda. It is my understanding, mr. Director, that the fda is currently reviewing the regulations and plans to release an advanced notice of proposed real making in the coming months. So if i may very quickly, how is your office going to work to ensure the fdas decision on the topic is supported by appropriate cost benefit and regulatory flexibility analysis . And also, i would be grateful if you could have some folks from your team reach out to my team to make sure that thats, in fact, going to be happening. So kind of pose it as a question or as a as a statement, but if you would like to try to address that, please. Thank you, congressman. I have enjoyed talking to you about this before. I was checking behind me to make sure it is not similar to the question that came up, it appears it is not. It looks like it is still over at the fda. We have absolute confidence the fda will apply the administrations new standard when it comes to cost analysis, and that is to actually do it. We hope to have the science and numbers behind it. I have learned a great deal about cost analysis in the last 13 months and i have been disappointed to see what pasted for a cost analysis under the Previous Administration. One of the things you can count out with the fda is a more rational approach to the issue. We are sort of the policy police and regulatory police, just to make sure that the folks are following the rules of the various agencies. We dont supplement our view for theirs. We make sure theyve gone about it in the proper process. We look forward to working with you and with all of the stakeholders on that issue going forward. Mr. Director, i too as well. I agree with you that i think we have seen a different a change in attitude and actually looking at signs versus just, you know, gut or whatever. So i look forward to working with you. I would be remiss if i didnt mention that, you know, i also sit on the defense subcommittee of appropriations, and i just want to thank you for recognizing and putting in your budget in essence what is really needed, which is a rebuilding of our national defense. So, again, i also look forward to continuing working with you on that. This is not the only conversation. This is a first public conversation, but as i mentioned before you have been accessible. You have been easy to deal with. You have been straightforward, and i look forward to further discussions and communications. Thank you and i yield back. Thank you. The gentleman from massachusetts, mr. Moulton. Thank you for the time. Director mulvaney, thank you for coming back. I especially appreciate your willingness to meet with democratic members to hear our concerns and have an open discussion about how to prioritize Government Spending. Thank you for that. Mr. Director, i would like to start with a statement from a freshman congressman. Quote, one of the most frustrating and disappointing lessons i have learned about Congress Since i arrived here about a year ago is the simple truth that washington doesnt know how to disappointing lessons ive learned about Congress Since i arrived here about a year ago is the simple truth that washington doesnt know how to count. If we tried to run a private business using the same accounting the methods the government uses wed likely end up in jail. This has brought us to a place where spending and debt levels are unsustainable. Do you agree with that statement, mr. Director . I do. I seem to recall someone saying like that. I really liked that person at one time. One of the things that youll see in this budget, congressman, that i hope has bipartisan support is weve taken advantage of the additional spending available under the caps to close a lot of the loopholes that gave rise to, in part, to that statement, chimps, for example, and i know i put half the room to sleep. Mr. Director, youve put me to sleep too. May i ask, youve said deficits are dangerous, do you still believe deficits are dangerous . Oh, no, i do, i continue to agree with the statement of the head of the join chiefs several years ago saying one of the greatest threats to the nation was debt. The administrations budget request would add 984 billion to the federal deficit next year and add a total of 7 trillion to the deficit over the next ten years. Do you find it hypocritical for the president who claimed he would get rid of the National Debt, and i quote, over a period of eight years, to send this budget to congress . Its not hypocritical. Again, keep in mind what the budget does, congressman, is simply assume and support the caps deal that was approved by this body just five days ago. Either the president meant what he said or he didnt. Im sorry . Either the president meant what he said or he didnt. The president takes it seriously. But in order to get the funding we needed for the Defense Department that we considered critical, we had to agree to higher defense levels than we liked. The president no longer intends to end the National Debt . I dont think its possible to at this point to pay off the debt in eight years. Do you think its hypocritical for republicans to have slammed the Obama Administration for not eliminating the deficit when this Republican Administration the making it far worse, do you think thats hypocritical, director . In fact, what was hypocritical, i dont remember if you and i were on the committee before. One of the things that was most hypocritical was the numbers they used in not being able to balance. Im not asking about hypocrisy of the Previous Administration, but the hypocrisy of yours. Do you think its hypocritical for republicans to have slammed the Obama Administration over deficits and yet support your deficit spending . I think its fair to say that were disappointed in the size of the deficit, disappointed in the fact that it doesnt balance, but again, this recognizes the reality in washington, d. C. Right now, which is that with all respect, sir, your party insists on nearly a dollar for dollar ransom for military spending. We cant change that, especially with the 60 foot rule in the senate. My investment, as a member of the military, as a veteran of the military. Right. I think there is nothing we can do to further our chances of defeating great world adversaries like russia and china than to invest in things like education, to invest in science and technology. Thats how we maintain an edge over our greatest adversaries. I have another question about the assumptions youve made. It seems theyre overly optimistic. Last year you projected mcgrowth of 3. 1 in the last three years. In december it was projected as 2. 2 over that procedure. The survey of Economic Forecasters estimated 2. 4 . You mentioned earlier the obama economy. It seems the trump economy growth estimates are already in a nose dive, and youre yet just a year in. The Trump Administration now, to your credit, mr. Director, created 2. 06 million jobs over the past year. That sounds pretty good. Except that more jobs were created by president obama in 2011, in 2012, in 2013, in 2014, in 2015, and in 2016. And finally, you take credit for being willing to make tough decisions on Social Security and medicare. Can you explain this quote, mr. Director, i was the first and only president potential gop candidate to state that there will be no cuts to Social Security, medicare and medicaid. May i . Gentleman, take a few seconds to respond. If you take a close look, the job numbers are correct, but the gdp numbers are flatout wrong. As to medicare and Social Security, we do not touch any benefits or raise ages. Its similar to the proposals we had last year on Social Security. I look forward to talking with you about it more, thank you, congressman. Members, please, if youve got a question for the director, dont wait until youve got five seconds left in your time before you ask that question. Well give the director a little bit of time to respond. Gentleman from oklahoma, mr. Cole. Thank you very much, mr. Chairman, and mr. Director thank you for being here. Its always a pleasure to have you. I wanted to begin like the chairman did and compliment you on some things, i think this is a better budget than last year. I know you didnt have a lot of time last year. This shows that. And, of course, we complicated things for you at the end. I think youve adjusted to that as well as you could. I agree with what the chairman had to say, i appreciate the emphasis on defense, i appreciate the emphasis on Border Security. I appreciate the recognition that the Opioid Crisis is a crisis, and youre trying to move and respond that way. Thats something the president mentioned in the campaign. I think, deserves bipartisan praise, and support. I like the idea there is more mandatory reforms in here than last time. I dont agree with them all, but i particularly like the gram cassidy embrace. Thats an importance initiative. Its going to take a while, but i think youre right to seize on it. And i also want to point to one particular area that i have interest in, because i chair the subcommittee, where you had one proposal last year, i think youve listened to some of the things we had to say in that committee, and thats the National Institute of health where youve not only level funded, you actually have had a modest increase. Thats very important for us, very important, obviously, for the health and security of the American People. But its even more important in a sense longterm for bending the cost curve out there. We spend 259 billion a year in medicaid looking after alzheimers patients, no cure, no way to slow the progression. Thats an area weve made a lot of emphasis on in the last two or three years, honestly its the right thing to do, humanitarian thing to do, ultimately if you dont get our hands on that disease, it will be over a trillion dallas dollars on the loine its on. I want to engage you a little bit in the time that i have left on an area that youve not addressed, and im not being critical of the president or anybody else, but i just want to offer a path forward. Thats Social Security, pick up a little bit on the discussion we just had. We all know politically thats a very sensitive area to address. The last president never did anything to address it. The last one that tried, mr. Bush, got savaged over it. Theres a way forward here. I would just ask you to study it. And i wouldnt expect you to embrace it today. But mr. Delaney and i have a bipartisan proposal that goes back and mirrors what Ronald Reagan, tip oneill and houward baker did in 93. The idea as a commission, that one did, it was the green span commission, Social Security was much closer to going bankrupt than it is today. As a matter of fact, the reason we have it today is because of the work that commission did in the surplus that was piled up in the intervening years until finally baby boomer generation began to retire and theyre now drawing it down pretty rapidly. I think an opportunity exists to do that again. And if we could reform Something Like that, and, again, mr. Delaney and i have presented this for three consecutive congresses, i think this president could actually be the person who saves Social Security, who put it on firm footing, and it would be done in a very bipartisan way. Id be the first to tell my friends on the other side of the aisle who are always concerned this means slashing, go back and look what Ronald Reagan did with that excision. And reagan the next year won reelection, and tip oneill remained speaker of the house. You can do this in a bipartisan way. As long as you protect the program. The way they did it is frankly they very gradually raised the age. I was 34. They told me youre going to retire at 66. Not 65, youre 1 yeerdyearold is going to retire at 67. They raised the cap. They made a modest increase in the deduction as well. In other words, theres a lot of little tweaks that could be done that would have a huge advantage. I would ask you in the time you have left, what thoughts you have going forward. Because thats our biggest, most expensive, over a trillion Dollar Program now, and firm footing or not . A couple Different Things. Very briefly. We do make some small proposed changes to the ss program, not in retirement. Were talking about ssdi and ssi, those have marginal improvements on the state of the trust fund. But youre right, theres a bigger issue to deal with, and i think the best points you make is that the longer we put it off, you talk about making small changes, the longer you wait, the larger those changes must be. I would look forward to talking with you further about that. I also encourage you to look just as closely at medicare and medicaid, which are actually larger drivers of our deficit right now than Social Security are. And probably a little bit more complicated to fix. But we can deal with those and look forward to working with congresss on behalf of the administration. Actually agree, spoke with the speaker about that last night, yield back. Gentleman from new york, mr. Higgins. Thank you, mr. Chairman, and director, thank you for being here. We appreciate very much your accessibility, youve got a folksy and modest approach to things, and thats very, very refreshing here in washington. Infrastructure is obviously a center piece of this bill, with 159,000 structurally deficient bridges in america. Every second of every day seven cars drive on a bridge in this country thats structurally deficient. It should be the centerpiece of this bill. However, the white house infrastructure plan, in my estimation, is another thinly veiled hit on local and state taxpayers. For every 6. 50 of local and state road and bridge spending, the federal government will spend 1. So more state and local taxes to fund roads and bridges. So people are get more taxes at the state and local level, they already pay an 18. 4 cent a gallon gas tax to fund the federal highway fund. And then this plan relies on tolls. So people at the local and state level will be taxed three times to finance this bill. Secondly, total spending over the next decade in this plan will not exceed 200 billion. Oddly, that amount of federal spending is nearly equal to the road, u. S. Road and bridge spending in iraq, in afghanistan over the past decade. But iraq and afghanistan gets a much better deal. The 180 billion weve spent over the last decade, there was no local match, there was no toll roads, it was entirely deficit financed by the American People, by american taxpayers. No local match, no gas tax and no toll roads. Every american, democrat, republican and independent, should find this truth to be sickening and highly insulting. On tuesday, september 25th, 2017 i was at a meeting with the president and members of the house ways and means committee. I personally had asked the president about infrastructure, and he categorically rejected the viability, the workability of Public Private partnerships. In fact, he pointed to the Vice President , Vice President pence, and told the entire group, i wasnt the only one there, that public, private schemes didnt work. And he cited indiana as a glaring example. The wall street journal, in august of 2017, the headline was indiana highway gives black eye to Public Private partnerships funding infrastructure. The president was referring to a 21mile stretch of highway in indiana, they call it the highway to hell. The project, private and state partnership, was signed by Vice President pence back in 2014 when he was the governor. The project was two years behind schedule, and only 60 built before the state took over the entire project and issued debt to finance the project in a more traditional way. Nothing here adds up. You not only have a math problem, you have a math problem for certain, but theres also a values problem here. And this is not an american first budget. And i think the infrastructure piece, and this plan is but one example of that. In order to grow the American Economy you have to invest in it. And infrastructure based on objective analysis has been identified as an essential piece to growth. I applaud the administrations goals of achieving three to 4 growth. If we could achieve that over an eightyear period or a fouryear yee period, that would solve a lot of problems. But the budget that you have doesnt do that because it takes away from the very people that you depend on to spend money because the fundamentals of economics are that with higher incomes, there is more spending. Where theres more spending, there is more demand. Where there is more demand, there is more growth. And i would submit to you, mr. Director, that we have a growth problem. And getting and addressing that issue requires investing in growth. Ive gone on, but youve got 20 seconds. Im not sure what to do the 15 seconds i have left. I will tell you that infrastructure plan has specific provisions, maybe we can talk about it with some of the other folks to overcome the shortcomings from the obama stimulus a decade ago, where we threw a bunch of money at a problem and didnt solve the problems. One of the reasons you see a focus on shortening the regulatory pipeline. As ive told the president , you could throw 10 trillion at infrastructure today, and its unlikely that a single new road would be built by it within ten years because of the pipeline and how long it takes to get stuff built. We did try to take to learn from things that have been done in the past that didnt work. I look forward to talking about that more. Mr. Mcclintock, california. Ive often reflected on just how much more infrastructure we could have if the government would get out of the way. Weve seen that across the country. I do want to compliment you, this Budget Proposal already achieved a miracle. Its made the democrats suddenly very concerned about the debt. For eight years the Obama Administration literally doubled the entire debt of the United States, and there wasnt a single protest from the other side. In fact, they were cheering it. Now theyre concerned, although their response is to spend more money. I dont see how that addresses the debt. But thats a subject for a different day. This sort of hypocrisy, though, is not an excuse for republicans to suddenly become very complacent about the debt. At a Budget Briefing a year ago i asked one of the experts how long we have before a sovereign debt crisis. And he said, you know, theres no way to make such a prediction, many different variables. He said if we start approaching trillion dollar deficits, things will start to get very unstable very quickly, and we will have set the stage for a sovereign debt crisis. As i look at these numbers, thats next year. What can you offer to allay these concerns . Keep in mind that a trillion dollar deficit means Something Different in a 1. 9 growth environment than it does in 3. 4 growth environment. The real question is the relationship between the size of the debt to the size of the economy. Its not an excuse for not being alk to balance it and not trying to minimize the challenges that we face. But i think youd agree that a 1 trillion deficit and a 20 trillion economy is not the same as a 1 trillion deficit in a 25 trillion economy. Agreed. The only other time weve had a debt this large proportional to the economy was at the end of world war ii when we exhausted all our resources and credit fighting that war. Were at that level percentagewise now. That concerns me greatly. Trumans response was to cut spending dramatically. He took the federal budget from 85 billion down to 30 billion in a single year, fired 10 million federal employees. It was predicted a 25 unemployment, and a second great depression. Instead we had the postwar economic boom. He also cut taxes. But he cut taxes while he was cutting spending. Now, weve just cut taxes, absolutely vital for Economic Growth, there are strong early indications that its working beyond our expectations, which were very high. But having cut taxes, we also have a keen responsibility to restrain spending. I appreciate being quoted by the budget director, thats the first for me. And im glad somebody was listening over these years. I heard for six years, tom, i was going to pay attention. I keep repeating it until somebody hears it. I thank you for your recognizing that taxes and debt are not opposites, theyre exactly the same thing, a debt is simply a future tax. Once we have decided to spend a dollar, weve already decided to tax it, either now or in the future. But borrowing from the future also has very real implications in the present because we borrow it from the same capital pool to otherwise be available to make consumer purchases, home buyers to buy homes, to businesses seeking to expand. That money is now not there for Economic Growth because the government has consumed it. My concern is, were working at cross purposes with the tax bill. By cutting taxes we have produced, in the process of producing, i think, a remarkable economic revival. But at the same time were undermining that by increasing borrowing against that capital pool that the private sector needs to expand. How do we help with this problem . By, again, the budget is one of the messages that i try to convey in my Opening Statement was that one of the primary messages we hope this budget conveys to the legislature is that you dont have to go down that road to permanent trillion dollar deficits, dont have to worry about the perpetual crowding out, the economic phenomena youre describing. The deficit is slightly over 1 of gdp. The total debt as a size of the overall economy actually starts to come down. Yes, it peaks around 80 , one of those numbers economists fear when crowding out becomes a very wael economic concern, but it then bends the cost curve down immediately after reaching the peak. The answer to your question is how do we solve the problems . Simply encourage you to take the ideas that you like in this budget and incorporate it into your own and try and help work with us to solve the problems youve just laid out. Gentle lady from washington. Thank you, mr. Chairman, and thank you, director, for being with us today. Im disappointed when theres been talk about cuts or reforms, that hasnt been talk on return on investment. As a budget person i would think that would be an important concept. Lets talk about, you know, when we make investments, there many investments we make that give us a great return and actually save us much more money long into the future, education, infrastructure, research. And important programs. Lets talk about snap. The administrations budget cuts 213 billion from snap over the next ten years, which would place millions of vulnerable americans at unnecessary risk of losing the most basic critical nutrition assistance. The snap benefit is 4. 50 a day. Mr. Director, have you ever taken the snap challenge, and lived off of had all your food, 4. 50 a day . No, maam, i havent. I would encourage you to do that. I have. It is very difficult to get by on a snap benefit. You arent able to get fresh fruits and vegetables and healthy foods. If we expect people to be able to do their best job at work to be able to be a great student, children to grow up healthy, then we need to make sure they have healthy nutritious food. We also cared a lot about making sure that people we could do what we could to make sure people didnt have to stay on nutrition programs to be in a place where they could take care of themselves and their families. In the last farm bill, i served on the ag committee and the conference committee, we put together a Program Based on work done in my state, the basic food and Employment Training program that took people on snap and gave them training so they were able to find employment in jobs where they are able to be selfsufficient. I then helped secure 200 million for usda competitive grant pilot programs to expand job training opportunities for recipients of snap. Those programs have been going in usda, and if we want to talk about something that works, and helps people in a place where they dont need nutrition benefits because they are in a place where theyre able to get a good job, those seem to be great investments that actually get a good return on. But i worry because now were the focus of this budget seems to be just on cutting snap, and putting people in a vulnerable position, approximately 44 of people who rely on snap have at least one person in the family who is working. This isnt about people who arent working. Under many cases people are working. And dont make enough to get by. So in the meantime i guess were saying we should punish them by taking away their access to food. And i actually think that would have a terrible impact on families across our country. Im also trying to understand the proposal that families receiving 90 or more per month would receive a portion of their benefits in the form of a usda foods package, something you talked about as a blue apron type program that would have only nonperishable products and when we hear from others about the need for healthy food and fresh fruits and vegetables, this would also move in the wrong direction. I have questions since youre relying on such a program, how would it actually work . How much would it cost the government to set up the physical infrastructure that would be necessary to package and distribute boxes like these . A couple things about the Food Box Program. Thank you for the questions, congresswoman. One of the ways you can stretch that 4. 50 a day further is by buying food wholesale instead of retail, which the government can do and individuals cannot. We actually get more bang for the buck by doing this program. I would point out to you that democrats and supported this program in the past. One of the biggest defenders of the program that be senator feinstein from california when it comes to the Food Box Program we have for many years for seniors. It does work. Its one of the reasons how did the people actually get these . Whats the budget for actually getting them . Do you have a database so that you know what peoples allergies are, what their dietary restrictions are, there are no fresh fruits and vegetables that would be part of this, what if a person is housing is unstable, how do you know how to get them a package, they dont have a concierge with someone whos going to sign for a package, how does it actually get to them . The challenge is to actually get them the box, similar to the challenges to get them their ebt cards in the first place because if youre homeless, its someone carries an ebt card with them and can use them wherever they are. This is ill conceived policy. Its going to deprive people of the most basic nutrition assistance, and costs everyone more, not only in quality of life, but more money in the long term. I yield back. Gentleman from South Carolina, mr. Sanford. Thank you, chairman. Let me first say, mick, i admire you, appreciate your confidence, the way you handle yourself, i think you make the state of South Carolina proud. Usually when he talks like this, theres a but at the end of the sentence. All these things are true. But there is a but. I guess i struggle with this budget, and ill say this, i applaud the fact you all have cuts. Its hard to come up with cuts in public policy, and yet you all have stepped to the plate on that front. But let me get to the but. I think that this budget perpetuates this myth that we can balance the budget without impacting entitlements. I think that that is a really dangerous myth to perpetuate. I think that were sleepwalking our way to the largest financial crisis in the history of our country. And what we do, i mean, it was interesting that the wall street journal entitled the budget deal to guns and butter budget deal. I would argue this budget is the guns and optimism budget deal in that gordon sullivan, former chief of staff of the United States army once observed hope was not a method, a hot of hope built into this. Youre an optimistic guy by nature. But i want to go back to this reality, which is if we have a budget that never balances, and we predicate it on certain things that are that are stretches at minimum, and optimism, theyre somewhere between optimism and stretches, but, i mean, you look at this motion of in essence saying were not going to have a meaningful economic downturn in the next ten years as a component of the Growth Numbers that are built in this budget, i think that thats wildly optimistic. If its wrong, were off by trillions of dollars. Were not talking billions, were talking trillions. My colleague on the democratic side, just a moment ago, mentioned the other projections in terms of Economic Forecast, the fed says 2. 2, private consensus 2. 4, cbo says 1. 9, yet, were going to go at 3 . You know, its really its not that im not optimistic, i am, but if you look at the Building Blocks of growth, as you well know, its Labor Force Growth and its productivity growth that gets you to final growth. In an aging population, Labor Force Growth has really, really difficult. That leaves you other variables. I pulled some numbers here, actually from the committee for responsible government, their point is to hit the 3 growth number it would take a doubling of current immigration the current immigrant population, i dont think that ones realistic. It would mean, okay, if were not going to do that, how about put every single working age adult to work, including fulltime parents, the unemployed, the disabled, those in prison and those in graduate school, thats probably not going to happen, initiate two simultaneous dotcom size booms, difficult. Develop and utilize innovations more consequential face out the weekend. Its mathematically difficult to get there and stay there. Weve had something of running back and forth on this one, you certainly won the First Quarter. A couple quarters at the front end do not make a tenyear buildout. I think youve got a question on growth, i think youve got a question on Interest Rate. You know, you cant have the growth that you all project without a consequent simultaneous rise in Interest Rates. Its never happened in the history of man. Cbos numbers is close correlation there. And so i would just say, you know, how do we get to these numbers because what they perpetuate is this myth that we can balance a budget, or move toward balance without affecting entitlements. And i think thats a really dangerous myth to hold onto, on the democratic or republican side of the aisle. Real quickly, in reverse order, the Interest Rates, yes, we do have something thats lower than the cbo for the first couple years, which we think reflects reality, higher than cbo on a couple outyears. Labor force productivity, the gdp numbers were less, but the capital numbers were four times what we expected. The Capital Investment, part of the tax bill you all voted for that we know we have to have in order to get the productivity growth. This is all part of plan, capital, investment leads to productivity growth, additional machinery, education and innovation. No downturn, keep in mind, all economic analyses are done like that, never know when the recession is coming. Great recession now, we averaged over 3 . Yes, we the depression in the middle of that. Just about every period of time up until the 2007s or 8s, and we had that 3 even though we had dramatic downturns in the middle. But we didnt have a baby boom generation retiring as we do now. I look forward to doing this on the next flight home. Thank you for your questions. End j ental lady from florida, ms. Waszerman schultz. On the screen i would direct your attention to a tweet from the president that he wrote in 2015, which as a candidate. Which reads i was the first and only potential gop candidate to state there will be no cuts to Social Security, medicare, medicaid. Im sure you know, mr. Moulton has already asked you, this budget cut three all of those programs, breaking that promise along with many others that have already been broken. The track record is clear. That threatens the health of children and people with disabilities. The Health Budget cut by medicare by 266 billion. Medicaid by 1. 4 trillion. You referenced in your answer to mr. Moulton that you dont cut benefits for any of these programs. I beg to differ because you do cut benefits for more than a million households in Social Security Disability Insurance and ssi. Which affects more than a third of whom have multiple individuals in those households with disabilities. In cutting medicare, you can argue that you arent cutting benefits directly to patients, but the provider benefit cuts make it far less likely that providers will continue to participate in the medicare program. Diminishing the quality of access to health care that seniors have, and also the diversity. In many places in this country, going to a specialist and adding a sparsity of providers who are participating in medicare is really, really a challenge. I represent, as you know, the state of florida with the largest percentage of seniors in the country by population, and so these cuts disproportionately impact our seniors. The Social Security disability cuts will make it excruciatingly more difficult for people to qualify for ssi. And i dont know when you were a legislator if you ever helped a constituent try to get through the ssi and disability process. But it takes years, which is insane to begin with. And now you will make it even harder. Were talking about an extremely vulnerable population. So im trying to understand why President Trump broke his promise to the American People, and frankly if youre going to raise the issue of our deficits and debt, that doesnt hold water given that you added 1. 5 trillion to the deficit in the tax cut scam bill the president sieped into law at the end of last year. Thank you, congresswoman. A couple Different Things in response to that. Lowering drug prices, which we do in this budget, doesnt break that promise. Ending the abuse that you and i have both railed against that pharmaceutical companies commit in the way they price drugs within medicare doesnt break that promise. I thought it was something we could both support. Putting a cap for the first time on true out of pocket expenses for seniors in part d doesnt break that promise. Introducing a 10 copay for needy seniors. None of those things distract youre trying to distract. Every single one of those things is in this budget. Youre trying to distract from the fact that the president promised, ill direct your attention to the screen again, specifically that he would not cut medicare, Social Security and medicaid. In writing, black and white. You think lowering drug prices for seniors is a bad idea . No. Good, i would look forward to your support for these programs. What i dont support is when the president makes a commitment to the American People and breaks that promise. He specifically said here he would not, as president , cut any of these programs. This budget does cut all of those programs and directly targets the most vulnerable recipients who participate in those programs. Theres no denying that. You can point to other window dressing things you have put in this budget which further explodes the deficit. Let me just ask you also about an issue of great concern to floridians. The budget would also cut noa by 37 . Despite what you might think about Climate Change, theres no denying, and youre from a states that in Hurricane Alley on occasion. Were still recovering from one of the most destructive hurricane seasons in recent memory. Weve got more and more coastal areas dealing with flooding, i have neighborhoods in my district, mr. Mulvaney, that flood even when it doesnt rain now, even on clear days. Why does this budget turn away from National Efforts to assist company floods on clear days. Yes, even on clear days, there are times when the coastal parts of my district, the neighborhoods flood. Okay, all right. We do reprioritize within noa, within department of commerce to move away from Climate Change and more towards weather. We think that would serve more efficiently serve the needs that youve described. You cut regional coastal resilience grants. How are communities like mine supposed to be able to make sure they can gird against flooding when youre cutting the very funding that will prevent flooding from gentleman will have to take that one for the record. Alabama, mr. Palmer. Thank you, mr. Chairman. Ive sat here and listened to this. I wish i had about 30 minutes to talk about Climate Change, for instance. We had a record 142 months with no hurricanes. We talk about rising ocean levels, and i dont know how many people in this room realize that alabama was once a seabed. Something happened to cause the seas to recede. I dont want to get into science. It would take too long to explain it all. But i have some Major Concerns about the budget. As you know. You and i have had conversations privately. Im going to continue to work with the white house to figure a way forward. I do want to point out things that are important and helpful in this budget. Thats the work requirements, and some of the things being suggested and implemented by this administration. Mr. Director, for instance, kansas, implemented work requirements back in 2011. I just want to point out that since that time incomes for the people who left tanef and snap, their income increased 247 . Costs came down for the state and for the federal government. But their incomes went up 247 . Now, my dad was blind in one eye, had an eighth grade education, i grew up skidding logs from mules, i grew up dirt poor, and i understand the benefit of work, ive heard our colleagues attack the tax reform bill, first time in 30 years that we reformed taxes, and id just like to point out when you give tax cuts to small businesses, and to major corporations, it benefits people who grew up like i did. Frankly, i never had a poor person give me a job. I also want to point out they implemented the work requirements in maine. And theyre earning about 7,000 people removed from the rolls. These are ablebodied adults with no kids, not everybody, ablebodied adults with no children. And their income went up a combined 18 million per year. Thats not crumbs, is it . Let me get back to more fundamental issues here, and, you know, i wish we could have a dialogue where both sides were working whats best for the country instead of throwing out political talking points. Its not a Political Campaign when you get to the budget. Its really an effort to get us on a sound physical path. Im not sure were there yet. And you and i have had these conversations. I could literally sit down on a napkin and show you 1. 2 to 1. 6 trillion in additional revenues or savings we could get. But if we dont fix the appropriations process, dont get back to making the house and senate work, make this government work, it doesnt matter, does it . No, sir, it doesnt. We would very much like to, in fact, one of the reasons we supported the caps deal was to encourage a return to regular order in the appropriations process. It is the proper way for our money to flow, the proper way for the administration to participate in the process, proper way for you all to be heard and wed very much like to see it returned to that paradigm. In that regard, if we can get the appropriations process restored the way it should work, and by the way, i think everybody in this room knows we passed all 12 Appropriations Bills last year, we did them in two packages, and we only had five democrats vote for either one of them. We did our appropriations work. But in regard to some of the issues that i think we can deal with in terms of trying to reduce this, our spending, is and you and i have talked about the improper payments. Under in 2010, when the democrats had both houses of congress, and the white house, they passed the improper payments and recovery act. In 2012 they amended that act, and passed improper payments recovery improvement act. Whats going on right now is that even though weve tried to address this issue, we never did real enforcement, so the improper payments rate continues to go up. Last year it was 144. 3 billion. Yet, youre only showing a savings of about 150 billion over 10. I think we can do better, and it should be a bipartisanest. Would you agree with that . I would. We try to be conservative. As i said, i probably could have run that number up ten times what we had and come in and said im going to balance the budget, but weve not shown an ability yet to reduce the payments much larger than we have in the budget. We think the numbers are more solid. We look forward to working with congress on reducing the number of improper payments, keeping in mind that covers a wide variety of things, a check written to somebody that shouldnt have received one, its a lot more than that. Every dollar we send out improperly is a barred dollar were paying interest on. I would like to enter into the record the report on kansas, and i will print the report from maines department of health and human services, if i may. Without objection. Thank you, sir. Thank the gentleman, go to washington, ms. Jayapal. Thank you, mr. Chairman, thank you director for being with us. Director, i am calling this the three strikes youre out budget. And its the American People, and working people rounding the bases, and they are being called out by this president and this administration. And i just want to walk through those strikes. Strike one was when you transferred 1. 3 trillion from working people to the wealthiest in this country and the wealthiest corporations. And strike two, ill give this to you in this budget, you admit that that was a tax scam that you dont have the growth to pay for those tax cuts to the wealthiest, and youre now going to saddle this generation and future generations with trillion dollars in debt, 1 trillion in this next year, 7 trillion over the next ten years. And then strike three is, cut all the programs that people actually rely on to have a decent life. And some of these have been called out. I have to say it again, temporary assistance nor needy families cut by 1. 7 billion in this budget. Economic opportunity programs cutting half a billion from rural and waste water programs. Cutting job Training Programs for workers across the country. Economic Development Agency that invested millions in Coal Communities that donald trump said he was going to save. And programs that help struggling manufacturers. But i also want to talk about snap. Because my good friend from alabama just mentioned kansas and maine. I want to tell you what actually happened in kansas and maine. A year after instituting work requirements in kansas, 40 of unemployed were still unemployed. And the snap participants who lost their benefits had an average annual income of 5,562. I would hardly say that that was a success. Heres what happened in maine. 80 reduction immediately. Thats true. But a year later 60 still didnt have any income. And a secretary perdue himself said, snap is a these are his words, a very important, effective program. Lets talk about medicaid for a second, 1. 4 trillion cut to medicaid. I think this administration would like people to think that medicaid is somehow just benefiting the poor, lazy, back, brown, who knows what youre thinking . But 11 million adults with disabilities, 70 of those folks get their coverage through medicaid. You look at the number of long stay nursing home residents, 60 of those residents get their coverage through medicaid. I dont know how you can call this a moral budget in any way, shape or form, mr. Director, and i want to talk about two specific things that are separate from everything i just mentioned. Yesterday when you came to visit with us, and thank you for doing that, i asked you about daca, and what assumptions youve made in this budget around daca. I believe you told me that you have assumed that the Daca Recipients get to stay, that theres some permanent solution for daca. What i said thats mostly correct. What i said was that we assume that an agreement is reached on immigration, on daca. Between republicans and democrats. I was very disappointed to see that democrats in the senate did not allow the is that the to go thank you, director mulvaney. Let me point out im sorry, this is my time. Let me just point out that the president rescinded daca and put 800,000 dreamers at risk of being deported. The Economic Impact of that is estimates are 280 to 430 billion in either a cut to our gdp or an increase to our gdp. So what happens if this Republicanled Legislature in the senate and the house, paul ryan has not committed to bring a real daca bill to the floor that could pass, what happens if daca is rescinded . A couple Different Things. I would suggest to you that it was the law that rescinded daca, and not the president. Thats not the answer to my question, so reclaiming my time to answer the question, thank you. Im sorry, and your question was what . I actually think i just answered my own question. So ill let you pass that. Let me ask you about whether you know what the suspense Earnings Fund is. The suspense Earnings Fund, no, maam, i dont know that one off the top of my head. That is a fund that basically is earnings that are contributed to Social Security, where the names of the people and the earnings and the Social Security numbers dont match. There is about 1. 2 trillion in that fund as of 2012. Thats about 200 billion contributed to Social Security by undocumented immigrants. Into the Social Security thats paying for Older Americans today. So if you assume increases and enforcement, as youve done in your budget, have you accounted for the decreases to the economy and to the Social Security fund if that were to pass. Gentleman will have to take that one for the record. Gentleman from ohio, mr. Renacci. Thank you, mr. Chairman, i want to thank director mulvaney for being here today. I may not agree with every policy decision made, i am encouraged the president remains committed to reducing our budget. Its interesting because mr. Carbajal this morning had a bipartisan prek fast where we talked about how weve got to get politics out of the way. The frustrating thing about the Budget Committee is we get into politics versus the substance too often. One of the things you said, its easier to spend than to cut. Yes, it is, god help our children and grandchildren. Too often we worry about the next election and not the next generation, which is the problem with the politics that show up. Both parties have taken credit for balancing the budget in the 90s. Either party should take credit for balancing the budget in the 90s. If you go back to those years, youll find out there were 2 trillion budgeted, and 4 trillion spent. We couldnt even control our spending back there, and thank goodness we had something called the tech bump which grew our economy by over 5 for most of those years, which gave us the ability to balance the budget. Otherwise, no democrat or no republican could ever take credit for that balanced budget. The last thing i want to bring up, and i was listening, and i apologize, i had to run down to a ways and means hearing. I heard one of my colleagues on the other side say that this budget will destroy peoples lives. Let me explain something, as a controller general said, a democrat, a controller general who sat in that same seat last year said we are heading for an unsustainable situation, and thats what will destroy peoples lives. As this budget reflects, i believe that we need to take a serious look at the nondefense discretionary programs we currently fund and where we can cut out this dupe licktive i also understand and i know you understand the drivers of our longterm debt and deficit today are the mandatory spending, 70 of federal spending the today show, as we and 70 of mandatory spending in the next 20 years, that percentage will increase to 80 as mandatory spending. So, director mulvaney, do you believe this budget does enough to address and by the way, i give you and the president credit that youve included 1. 7 trillion in mandatory cuts. Do you believe it does enough in the mandatory spending to correct the mandatory spending problem. Again, i think it preserves the president s promises. Weve talked about this last year. And then talked about the process we went through with the president to right the budget. That i gave the president certain options within medicare, within Social Security, that congressman mulvaney would have supported. The president said wait a second, i promised people i wouldnt change retirement, promised people i wouldnt change their benefits at medicare. What weve done is show you in this budget you can still have dramatic savings in mandatory spending, 1. 7 trillion in the tenyear window, and not touch those programs. I think weve at least given you some ideas of things that you can do short of that if you dont want to do that as well. Thank you, and you would probably also agree, and thats why i want to go back to the tax cut and jobs act as someone who spent most of my career in the Business World creating jobs and looking for opportunities to expand my business, i believe that bill will help the economy grow. I know youve projected 3 growth. I actually believe well be higher than 3 in the early years as this tax bill starts to roll in. I cant im not an economist who can judge whether it will stay at 3 . Can you discuss the impact of i know weve used 3 , but just going back to what i talked about in the 90s, we balanced our budget by having 5 and 6 growth, not cutting spending, and where do you see us in the near term and the long term with your thoughts on that . We continue to think the numbers we put forth in the budget are defensible, and towards the conservative side. As evidence of that i would suggest i would point to the atlanta fed reserve that tends to is the practice now of projecting the next two quarters gdp, the number they put forth last week or two weeks ago was a projection of 5. 4 for the First Quarter of this year to governor sanfords point there will be declines over the course of a tenyear window, most normal tenyear windows. We expect above 3 . The numbers are extraordinarily defensible, and we think we have the policies to back them up and get us there. Like many of my colleagues, we were elected in 2010 with a mandate to reduce Government Spending and ensure our children and grandchildren are not held with this debt crisis. Right now we are quite simply on an unsustainable path. I appreciate what youre doing and thank you and i yield back. Thank the gentleman, mr. Carbajal from california. Thank you very much. Thank you, mr. Mulvaney for being here today, and thank you, mr. Renacci, for touching on those bipartisan discussions. We try to have to see if we could find common ground, which oftentimes eludes us. Mr. Mulvaney, i am incredibly troubled by this budget. Budget cuts to domestic programs, just to name a few this budget calls for 10 10. 5 cut to the department of education, including eliminating the Subsidized Student Loan Program and the Public Service loan forgiveness program. A 34 cut to the Environmental Protection agency, which is yet another attempt to undermine environmental safeguards. A 1. 4 trillion, and actually more than 2 trillion if you include medicare, cut to medicaid over the next ten years, a 214 billion cut to snap over ten years, including a new food box proposal that makes that takes choices away from households to buy groceries that they need. This budget pretends to make infrastructure a priority by highlighting the president s 200 billion infrastructure proposal with one hand while taking away infrastructure funding with the o other hand. The budget assumes 122 billion cut in highway programs after the expiration of the current highway bill. It also cuts discretionary transportation accounts, including reductions in amtrak and the elimination of tiger grants, and cuts the Capital Investment grants program. Director mulvaney, can you explain to me how the budget incorporates the president s new 2 200 billion infrastructure proposal with the infrastructure plan actually lead to a net increase in federal investment in transportation infrastructure . It would, and i think discouraged to hear you reference mr. Schumers numbers, theyre flatout wrong, which is unfortunate hes chosen to demagogue the issues. What hes assuming is a 122 million cut because of the Highway Trust Fund. The Highway Trust Fund is 122 billion short, we all know it, and unless you make a separate appropriations for it, that money will not get spent anyway. Classic examples mr. Carbajal, the ways that washington counts that is different from the way the rest of the world counts. He also he takes, i think, into consideration a reduction in the cdbg program which might be infrastructure and might not. Really its demagoguing an issue instead of talking about a way to pass. Mr. Schumer is heavily invested in seeing the president fail instead of talking about issues important to people back home. Mr. Mulvaney, help me you said understand if the tiger grants go away. My district has applied for tiger grants to widen the u. S. 101 corridor, a Critical Link for the Regional Movement of goods, and to widen highway 46, which recently served as an alternative route when the disaster hit and mud slides shut down the 101. Without tiger grants, where do you suggest communities like mine pursue funds for this type of infra structure . Through the new Infrastructure Program we are proposing . If tiger grants were the answer, we wouldnt have this problem in the first place. If just throwing money at the problem, the stimulus 10 years ago would have solved the problem. What we have been doing in the past, doesnt work. Its one of the reasons we have the crumbling infrastructure we have. I give credit to the president for coming up with new ideas on how to fix the problem. Again, if we simply do the same thing weve always done were going to get the same results weve already gotten. Mr. Mulvaney, were actually inverting the formula the federal government has always utilized to help local communities. That is, they used to do 80 funding, and allow local communities to come up with 20 . Now were saying you come up with 80 , and we will come up with only 20 . And we also how is that helping. We found when we increase federal spending on in no additional roads got built. States took money they were going to spend on building roads and bridges and other infrastructure and moved it to other priorities and the federal money displaced that, nothing additional got built. Well, well agree to disagree on how that impacted local communities. I was in local government, and i will tell you, we saw the benefits of those investments. Which is not the case with whats being proposed here. Thank you, sir. Gentleman yields back. The gentleman from ohio, mr. Johnsons recognized for five minutes. I thank you, mr. Chairman, and director mulvaney, thanks were being with us today. I still need my baseball pants back, by the way. Thats an inside joke. He lent me a pair of part of my baseball uniform a couple years, i want to point out that it was much too large. That will be stricken from the record. Thank you, director mulvaney. I am optimistic, and im glad to see that the president , you and the president , the administration is looking at the other side of the ledger sheet, costs and controlling spending as we move forward, and i think his budget reflects that now. I do have some questions about the budget, but last may when you came before this committee to present President Trumps fy18 budget i expressed to you at that time, we had a private conversation about the fact that the funding for the Appalachian Regional Commission has been zeroed out based on a dated study. This year, however, im very quite pleased that the administrations budget has maintained level funding for arc at 152 million. This funding is so critically important for reinvestment and development of the appalachian region, including eastern and south eastern ohio where i live, and to ensure that appalachia doesnt continue to get left behind. I know the president s concerned about that area of the country. Im also pleased that the administration has taken seriously the Opioid Epidemic. As President Trump declared last august, this is a National Emergency and one thats hitting eastern and south eastern ohio particularly hard. Addiction does not discriminate by age, race, social status, economic status, or political party. Solving the problem is going to take communities, families, local elected officials, churches, faithbased organizations, and elected officials from the president all the way down to the lowest level. Its going to be an american solution. Were all going to have to be vested in the fight. Im pleased to see the approximately 20 billion to combat the Opioid Crisis. So here is my question. Specifically, can you give us an idea what is the administration doing to combat the Opioid Crisis and can you expand on how the administration intends to use these funds and how it will coordinate between the agencies and the departments to ensure that these funds are used most efficiently. Thank you, senator. Excuse me. Congressman. Gives me opportunity to let everybody know if they havent heard already that i believe we have named a director of the office of nafshl drtional drug policy. If you look at the line items in the budget, congressman, you see a reduction in the omdc budget. Thats a result of moving the Grant Programs that were managed out of the white house over to i believe hhs and doj. While it appears on a piece of paper as a reduction, its actually just a movement from one section to another. We have 3 billion i think in the 18 budget. 10 billion in the 19 budget for opioids. And then a bunch of other money in other places to bring up to that number close to 20 billion that you have mentioned. The various things the president has talked about, a National Advertising campaign, to discourage people from using it. There are powerful tools we have there. One of the most interesting things is the work that congressman cole mentioned earlier that nih is we have asked them to try to come up with a nonaddictive pailin killing replacement for opioids. With 20 billion you can do a bunch of Different Things, but i think no one can, i think, doubt the president s commitment to this. Not in terms just of money because money is not always the best measure of whether or not we are committed to something, but the commitment of energy and time and attention, i think, is encouraging. I would agree. This is the Opioid Epidemic is not something that we are going to be able to spend our way out of, arrest or incarcerate our way out of it. Its a big problem. Shifting gears just a little bit, the president requests 647 billion in base defense Discretionary Spending in fiscal 2019. I think i know the answer, but i want to give you a chance to respond. Why is funding of that magnitude necessary . I would defer for the details to secretary mattis because i only have ten seconds left but the long and short of it is that to deal with some of the new threats, including north korea, we needed a considerable upfit to come of our capabilities and also to undo some of the decay experienced over the last several years. Chairman, i yield back. You can keep the baseball pants. Thank the gentleman. Gentlemans time expired. Ms. Jackson lee. Where are we . Mr. Jeffreys. You are recognized for five minutes. Thank you, mr. Chairman and mr. Director for your presence today. I was confused by a statement that you made in november. Hopefully you can clarify it for me. You stated in defense of the tax bills obliteration of the state and local Tax Deduction that, quotet quote, it is not right that folks in low Tax Jurisdictions are subsidizing the folks in highTax Jurisdictions. Did you make that statement . Yes, sir, several times. There are two types of states in this country. Donor states and taker states. Is that correct . There are but that deals with the receipts from the government not the pays in. Okay. So a donor state like new york, new jersey, or connecticut regularly send more money to the federal government than we get back in return. Is that correct . I believe that to be true, yes, sir. So i dont understand how there can be any other distinction as it relates to washingtonspeak that you have previously decried when you talk about high Tax Jurisdictions like new york, new jersey, and connecticut, subsidizing the federal government. We actually receive less regularly from the federal government than we get back in return. In fact, new york, a high tax state, generates 9. 4 of the federal governments income tax receipts. We receive only 5. 6 5. 9 of federal spending allocated to states. Similarly, as i think you are familiar with, a real taker state, states like north dakota, South Carolina. Alabama, kentucky, west virginia. Indiana, get more than 2 back in federal spending for every dollar they send to the federal government in taxes. Isnt that the real donor state, taker state you are looking at it on a statewide basis. I am looking at an individual basis. If you and i live in two different states but make the exact same amount of money and you lived in a higher tax state and i lived in a lower tax state you are actually paying less federal tax than i was which we didnt think was fair and it acted as a subs didy so i was paying more so you could pay less. Ill take your answer as one rendered in good faith. In 2011 you called president obamas fiscal year 2012 budget a joke. I dont remember that but it sounds like something i would say. That budget, you indicate, its hard to explain how detached from reality this is to think the country can spend another 1. 6 trillion when it doesnt have the means. I believe i said Something Like that. In 2011 you told attendees at a town hall in sun city carolina lakes development. Wonderful place. I am sure. That the countrys debt is much worse than i ever thought. Allowing this figure to increase compromises u. S. Foreign policy. You recall making that statement . No but i absolutely believe i made it. In april of 2011 you said, when asked whether you would vote to raise the debt limit which some called armageddon. You said its no more armageddon and catastrophic than what were doing right now spending 1. 5 trillion that we dont have every year. Do you recall making that statement. That one i do recall, yes. In 2015 you stated, this is a great one, if reconciliation is used to try and raise the debt ceiling, there may well be blood on the floor of the house chamber. You recall making that statement . No but thats a good one. I like that one. I agree. Now you voted against raising the debt sealing in october of 2015, correct . I dont recall but i have voted against it several times. I voted to raise it a couple times as well. I remember voting against it more than once. In may of 2017 before this committee, when asked by representative barbara lee about the cut to Food Assistance for the poor, you responded that we should be focusing on the standard of living of your unborn grandchildren. Is that correct . Again, i dont remember that but thats consistent with what i believe, yes, sir. Now, the debt which you once decried was previously 14 trillion, its now in excess of 20 trillion. Correct . Yes, i believe the total debt is 20 billion. Trillion. I think the debt held by the public is 16 and change. What confuses me in the time that i have got remaining, is the absence of real intellectual consistency here. Not doubting your good faith, but you take one set of positions as a member of congress, and then come forward with an administration supporting a bill that saddles our children and grandchildren with more than 1. 5 trillion in Additional Debt simply to pay for tax cuts for millionaires, billionaire, big donors to the Republican Party and special interest corporations and triple down on that by presenting a budget that would increase the debt by 7 trillion. I think that, unfortunately, is a shameful abdication of the fiscal responsibility that i always believed the Republican Party stood for in this nation. I yield back. Thank you, sir. Gentleman yields back. Mr. Lewis, gentleman from minnesota, recognized for five minutes. Director mulvaney, thanks for coming today. I think i only have one quote of yours going back a couple of days. Youll be relieved. Remember. I do want to talk about intellectual honesty in a moment. But first, i am not going to sit up here and defend the spending in this budget. But then again, i wont defend the spending in a number of congressional budgets either. The fact is last sunday you made a salient point you hoped the democrats would come along on the defense side but, without giving us additional money for welfare spending but they refused and thats just the world we live in. And i think thats absolutely true. In fact, i dont think its possible in this world to plus up defense from 549 billion to 716 and say well zero out social programs. That is not going to pass anybody, let alone the United States senate. So, instead of a shared sacrifice being everybody tightens their belt across the federal budget, we get the stairsteps. You fund mine. I will funds yours. Except in the budget you have got Discretionary Spending in the president s budget request taking defense up all the way, but social spending goes from about 591 with the bba all the way down to under 400 billion in 2028. How is that not possible now but it will be possible over ten years . Keep in mind that in 18 we spend up to the caps as i mentioned before. In 19 we dont. Those are the two budgets that are in front of you right now. When we Start Talking about 2020 thats the vision for the future. Not next years budget, the vision for the future. We are saying there is a way to get off of this trillion dollar trolley and one of the ways you do it is to look at what the president what we call the two penny plan, to reduce the programs over the course of time. We dont put specifics on it because they are out years. We have policies, general ideas going forward. We offer one way to get off that i think, director, it will be a challenge and i sthifrthink w to get religion that real fiscal restraint means restraint across the budget. The red versus blue is not working. We end up with a you scratch my back, ill fund yours. They are all federal programs and they can all take belt tightening. You will see on the screen a president a few decades ago said our true choice is not between tax reduction on one hand and the reduction of large federal deficits on the other. An economy hampered by restrictive tax rates will not produce enough revenues to balance the budget. Our practical choice is not between a tax cut deficit and budgetary surplus. It is between two kinds of deficit. A chronic deficit of inertia has the result of inwanted revenues in a restricted economy for a tax cut designed to boost the economy, increase tax revenues and achieve a budget surplus. The first type of deficit is a sign of waste and weakness, the second reflects an investment in the future. If some of our colleagues were really concerned about intellectual honesty they would have to disavow John Kennedys speech in new york in 1962. The former president made a specific distinction between a deficit caused by increased spending which comes out of the Capital Market and a deficit caused by tax reduction designed to boost the economy but does not increase. Would you rather have a balanced budget of 4. 4 trillion by raising taxes or a budget out of binges of 1 trillion . Whats more deleterious to the economy . I would rather have the latter. There is a difference between the two kinds of deficits. I hear the other side say, oh, gosh, the tax cut scam bill. You dont care about deficits. Its the amount of spending that comes out of the Capital Markets. And the type of spending the government does, recognizing that letting people keep more of their own money is not spending. Its the most efficient allocation of capital we can have. Because the productivity increases. I want to make certain we understand that we could, quoteunquote, balance the budget by raising taxes, but you are still crowding out the Capital Markets. If disposable personal income is basically the amount of money you earn minus the taxes you pay. Thats a disposal income. Consumption can stay the same. But if you raise taxes, what happens . Actual disposable income goes down. Thats crowding out. Spending is the crowding out. No question. I would encourage everyone that, if you really want to keep your eye on the prize, its not its a problem. No question. Interest on the debt. But its not necessarily all the time how we finance government. Its how much government we choose to finance. I yield back. Am i the only one who feels like i am on a Radio Program right now . That was cheap. Its not cheap. I enjoy the show. Gentleman yields back. Miss jackson lee, you are recognized for five minutes. Mr. Director, its good to see you again. I thank the chairman and the Ranking Member for this time and the time is obviously short. There have been a lot of quotes by some of your statements, mr. Mulvaney. I am going to quote one of my predecessors of many years ago when the honorable Barbara Jordan sat on the Judiciary Committee during the impeachment hearings of president nixon and said she was not going to allow the constitution to be diminished. And what i would say to you, with all due respect, and i am not going to allow the American People to be debased and to have them publicly excoriated by a morally bankrupt budget. This is not a personal statement because you were so kind to tell us that a budget is a statement of policy and beliefs of the particular administration that offers it. So i think it is important to allow just a quick rundown. Your budget zeroes out the federal work study program, it zeroes out Community Services block grant, it zeroes out the help for seniors and others who need support for heat in the winter and airconditioning in the summer. It zeroes out the Community Development block grant that many urban and rural areas depend on. I think it zeroes out the Rural Development under agriculture that my own small cities depend on. It zeroes out the Senior Community service program. It zeroes out a very important asset of the United States, which is the National Aeronautics and space administration, their science missions. Zeroes it out. Zeroes out the tiger grants, evisc rat eviscerates the Legal Services corporation, the arts, and this is a poor statement on what america is about and how the American People voted. I dont believe they voted for the president to destroy the very fabric of this nation. So let me raise the question. I believe you have a policy to eliminate federal workers. Right now, as it relates to the bureau of prisons, comes under the department of justice which i sit on the Judiciary Committee, they are looking to cut 6,000 jobs nationwide. In my own community, 37 jobs, they have preemptively cut these jobs. You are killing federal workers, you are now causing federal workers to vet prisoners to send to private prisons. Disturbance control is now done by our federal employees dispatched out to proiivate prisons because they are not capable of putting down disruptions. I will be asking a question along these lines. Violence against women act or violence or Domestic Abuse has been a major issue over the last couple of days. Its been a problem in your own white house, the inability to speak against it or denounce it, yet your budget does not have a separate line item for violence against women. You put it in the victims fund that has 13 billion. You are taking out a sizable amount for this and many other things, and therefore what you are saying is the americas tax dollars dont believe in fighting against Domestic Violence. Because you have thrown it into a fund that really, the victims of crime across america should be aware that they can be able to apply for the victims fund but you are throwing the Domestic Violence in that, would you answer the question about getting rid of federal employees and the insignificance of the violence against women funding, so much so that it is thrown into a pot of money that should be for those victims of other crimes. I would be happy to. Thank you for that, congresswoman. I appreciate your perspective on that, we just respectfully disagree. We moved the program into that fund because we thought it was the best place to guarantee the flow of funds. There is a tremendous amount of money there. Were actually fully funding the program. I think it is a tremendous commitment by the administration to do exactly that. We may disagree, maam, over the source of the funds but not over the use of the funds. We both agree it should be fully funded. You comment about getting rid of federal employees across america. I cant speak to the Prison Program in particular. I apologize. I know weve forced reductions in places like the epa as a result of reductions there. I cant speak to the federal program. I reclaim my time with the few seconds i have. As i indicated as i started, i believe this is morally bankrupt. I believe we can do a better job and i believe we are not here to crush the American People and deny them the sources of congresswomans time expired. Good afternoon, director. A lot of discussion around the debt and the deficit. I share the concerns that have been expressed on both sides of the aisle. I think its a threat to our Economic Future and to our country if we are unable to get it uppnder control. I thank the administration and the president for taking what i think is an important first step in generating Economic Growth. I believe we cannot at 1. 9 growth get this under control. The regulatory relief, the tax reform that the president has shown in the leadership and really is a first step needed to solve the deficit. I am disappointed that the budget doesnt balance, as you have testified, within a tenyear period. But i am understanding you are saying that you expect annual deficits to decrease. Could you expand on that and, further, do you think we are, if not within ten years, are we putting, with this budget, ourselves on a path of balancing the budget within a certain period of time . If so, how long would that take . Sure. The projections right now, keep in mind the projections may change a little bit, ladies and gentlemen, simply because we havent had a chance to fully digest the caps deal. There are bits and pieces. I gave the example there is a twoyear extension to the mandatory sequester that we have to froor factor in. We are looking at 948 billion in deficits this year, going down to 4048 in 2028. Our assumption is that the reduction in individual tax rates that phase out under the tax bill are actually made permanent. So, if you actually ran this against the tax law itself verbatim, the numbers would actually be smaller but we always thought it was a fair point to make the case that we thought that was good policy. The only reason it wasnt permanent in the first place was to deal with the reconciliation rules in the senate. So the budget assumes something that actually goes beyond what the tax bill does. We sort of trend it down. You heard me say earlier it gets the deficit around 1. 1 of gdp in the last year. To your larger question outside the budget window, we went back on this within the office. I didnt want to go further than that. Coming to you say saying dont worry, the budget balances in 27 or 30 years. I think that undermined the credibility of the numbers. It was more difficult for the administration to admit it wouldnt balance but its more honest and accountable to say that. I would like to ask i will try to give shorter answers. After serving on the Budget Committee for one year, in the past year, one of the biggest takeaways is how broken the process is. Thats certainly i dont its recognized by probably everyone in this room, it is difficult to even argue that the federal budget process is working when, in the past 20 years we have had more than 100 crs, an average of five per year. And under the current budget process there have been 19 government shutdowns. Its simply unacceptable. I have seen the difference in the Pennsylvania State senate, i have seen the difference in the process there from here. Very decentralized. Not a lot of accountability in the process. Do you believe there needs to be greater coordination throughout the country budget process to ensure more fiscal responsibility . I would welcome that. In fact, i have been pleasantly surprised to hear some of the democrat folks commend me and my staff for being much more available than in Previous Administrations of both parties. We look forward to continuing that. I suggest that really the hurdle right now to the appropriations process, functioning is not omb and the house, its the senate. Until they figure out a way to either Work Together or figure out a way to change the rules to allow them to pass bills with a majority and not a supermajority, its unlikely that well see an end to the current budget impasses that we have. I believe there are other changes we can make in the process. A few weeks ago introduced a bill that would create a joint commission on budget process. And this is modelled after something we did in pennsylvania where we had a similar difficult problem there for decades and created sort of an inside commission with appointed members from the house and in that case the senate and the administration, and my idea would be to do that here as well. Include folks from the administration, potentially yourself. Just wanted to get your thoughts on that. Do you believe that the administration should be involved in efforts by congress to reform the federal budget process . We would welcome it. I encourage you to reach out to your counterpart in the senate, one of the leading voices on Senate Budget reform. They are interested in trying to figure out a way to reform the system so that it works and we can spend money appropriately. I think its a bipartisan issue and it is one we should all look to try to solve. Thank you. Look forward to continuing discussions. Gentleman yields back. Mr. Khanna is recognized for five minutes. Thank you, mr. Chairman, thank you, director mulvaney. I want to associate myself with my colleagues comments of concern about the cuts in so many social programs. It is why i oppose this budget. Given that i am the last person to ask questions, i dont want to cover ground that has already been covered, so i want to bring up two different issues. First, in the interest of proving that democrats can Say Something nice when we do agree with a policy perspective, i want to commend you for supporting the will hurd, Robin Kennedy bill on modernizing technology, 210 million to help make the government better with the internet and technology. I think thats common sense. I really hope the Appropriations Committee will fund that bipartisan effort, and i appreciate that being part of the budget. My question is more philosophical because i dont think there is a person on this committee who doesnt believe or doesnt want america to succeed and outstrip china and be the dominant economy in the 21st century. I read a report a few days ago by bane. You cant abuse bane of being like the New York Times or biased. Mitt romney worked there. Banes report said basically we are going through a Technology Revolution similar to the Industrial Revolution. The Industrial Revolution took 40 years. The transition from manufacturing to services took 20 years. This Technology Revolution is probably going to take ten years. Its going to displace potentially 20 of workers. And they said that the biggest challenge to americas Economic Growth is actually income inequality because there may not be enough people with money to buy things. Now, we know china has that problem. China doesnt care about the consumer welfare of their individuals. Its an exportdriven economy. The success of our country has been a strong middle class that buys things, not just from a perspective of fairness, from an actual perspective of Economic Growth and making sure we o outstrip china in the 21st century. I guess my question is simple and really not partisan. Do you see the world from a similar lens that we have to tackle income inequality and care about the growth of the middle class if we care about americas success . I will surprise you and say that we do. And i think many in my party do. One of the places philosophically where we start to vary is how to remedy the situation. Many folks in your party, writ large, who would say the way to solve that gap is to have government get involved, to redistribute. Folks on this side of the aisle say the best way to do it is to allow folks to lift themselves up out of poverty. I contend people dont care about how much other people make, they care more about how much they make. It is not income inequality i care about as much as my own income. If i am able to provide my children with what i am able to give them im happy. I dont care if you make ten or 20 times what i do. I have seen similar reports i know it was a philosophical question. Displacement doesnt always mean unemployment. It never has. When cars displaced the horse and buggy, it created new opportunities at higher paying jobs. Thats why it is critical to have education as part of this. We have taken criticisms today from your side of the aisle regarding some of the proposals on education. We havent mentioned the doubling of the commitment to Apprenticeship Programs because we have proof that they work. An example, trade adjustment that the data suggests if you go through that problem youre worse off. If you go through an Apprenticeship Program you are better off. We moved money to fund those things. We look forward to working together to accomplish the same end. I appreciate the acknowledgement on income inequality. I agree new jobs will be created. Bane says that. The challenge is it took 40 years in the transition from agriculture to industrialization and the question is how long will it take for the new jobs and what will we do on the transition. My hope would be, given the recognition on income inequality, maybe there are productive investments. Maybe in technology credentialing. Public colleges, universities, expanding access to the internet, that people on both sides could come together on because thats what will make america competitive in the 21st century. I hope we can start working on some of that on a bipartisan basis. Thank you, sir. Thank the gentleman. Wisconsin. Thanks for coming over here, mr. Secretary. Glad to see you. I will do a followup on the last question. I personally believe one of the reasons for the widening income gap is for whatever motivation, there are a lot of programs out there designed to make sure that people dont make more money or they lose their benefits. There is no question, i think, that the widening gap, both the wealth and income gap, is caused maybe intentionally by people who like to keep people dependent and maybe unintentionally to make sure people dont make more money. I notice while i thank you for doing what you can to reduce some of the programs you didnt touch the Housing Assistance programs which i think are sometimes as pernicious as the snap programs. Is there a reason why you didnt do things on the hosiusing assistance programs . You will find we did make proposals there. Theyre deep down in the details in the weeds of the budget. We try and encourage folks to work so that they can pay a larger percentage of their income towards their rent. Those are folks who actually can work. Weve taken criticism that i think is i just mean people of working age who are not disabled. Correct. There is no question those programs right now are like designed to keep the income gap we agree. Next question. I voted for the budget last week, a very difficult vote. And sometimes when you take a vote in this business you either have the choice of voting for bad things if you vote yes and worse things if you vote no. But as i get the numbers there was about a 10. 4 increase in nondefense discretionary i mean 10. 4 in defense discretionary, 9. 4 in nondefense discretionary. I believe what happened in the negotiation, it was the executive branch, paul ryan, Mitch Mcconnell. I think, in order to go up on one you had to go up on the other, as a practical matter. Would you be willing to weigh in and say when we reach the final deal rather than going up 10. 4, 9. 4, is say we would go up 8. 4 and 6. 4 . Do you think that would be advanta advantageous for the administration to weigh in on Something Like that . The administrations priority was a raw dollar increase. Secretary mattis made the case to both parties he thought a funding level of 700 billion this year and 716 billion next year was our starting point. When you were before us a year ago you were talking about a 5. 5 increase in defense. Now you are talking about a 10 increase . I do. I dont think we got a lot of the increases last year that we hoped to get, so we had to make up for lost time. I am afraid in this budget that because you are giving the increases and the agencies be it defense or other agencies have to spend the whole 9 or 10 increase in the second half of the year, that the agencies will be shoveling money out the door because thats the only way they can absorb such a big increase. Do you have suggestions to give our negotiators so the agencies some of which will get a 10 increase this year compared to last year and only have the final six months of the year to spend it, to not spend it wastefully. What happens is the money theyve already spent under the crs will be taken into consideration. If your budget is 150, and youve already spent 75 on a cr you cant spend under 25. Say your budget is ten bucks and you decided to give them a 10 increase and now they get 110. Presumably they were going along at 10 bucks. In the First Six Months they spent five. In the second half youre saying you have six bucks, a 20 increase, see what i am saying, in the final. My point is they dont have 11 to spend in the second half. Its five plus six, not five plus 11. Okay. I do believe thats a potential problem. You see what i am saying . We tend to agree. We are very proud of because of the work the congress and Previous Administrations had done, were proud of both parties, Defense Department announced they are ready for an audit and they can going through that process. My final question for you. Since this is kind of a high amount of spending in discretionary, would you be willing to, again and again, publicly weigh in until the senate agrees to reconciliation instructions to take up some of the welfare type programs that the public believes is so abused . I know Mitch Mcconnell is not there right now but you would be willing to strongly push to get in there . The priorities this year are the infrastructure, obviously getting a daca deal, which we were hoping would be debated today and i am not sure it is or not and then infrastructure would come after that. Mr. Woodall of georgia. Thank you. I wanted to thank you for the seriousness of the document you prepared. It makes our job harder as you recall from your time on the committee, if you dont get a serious document out of the administration, it would always be easy to come up with funny numbers and optimistic options and say you got to balance when you didnt. So thank you for doing that. Also want to thank you for your work in the shutdown a few weeks ago. You had another opportunity, you could make those events as painful as possible or make them as nonpainful as possible for the people that we all represent, and this administration obviously made it as least painful as they could. And i am grateful to you for that. I wanted to ask you as a in part of that shutdown context, if there were any discussions you may remember in the carter administration, our great president from the state of georgia, government shut down six times for more than 60 days during that 48month presidency. Two of the months were shut down. Prior to reagans attorney general and his decision that you actually had to close the doors and padlock them, shutdowns meant Something Different. Was there any discussion about what shutdown means and whether it has to be a painful event for the American People . There was. I got direct instructions from the president to make it as painless as possible to keep as many people at work as possible, to keep as much of the government open as possible. He and i commented that the he was extraordinarily proud that the monuments were open for the folks who were here to protest against him on that saturday. We thought that sent a message that the president really did care about the importance of managing the shutdown properly. What we found was that the Previous Administration probably was not as aggressive as it could have been on using carryforward funds and the transfer authorities that various agencies have. I have made the argument that they weaponized the shutdown for political purposes as opposed to trying to make it as painless as possible for federal workers. A lot of these disagreements are representative disagreements about how dollars ought to be spent when we allow a shutdown to weaponize the policy discussion. I think we end up with less thoughtful decisions at the end. Thank you for what you did to make that less of an extortive event. If we can do that more going forward, i would be grateful. My colleague, mr. Khanna, mentioned that americas success had been a strong middle class that buys things. I happen to disagree. I think its a strong middle class that dreams things, produces things, builds and provides things. I appreciate what the administration has done to make the American Worker more competitive with whats going on around the globe. We have several trade deals going on right now, several tariff conversations going on right now. I am grateful for that. I s we worked on amendments to try to make oco represent what it was supposed to rather than pad the dod budget. Does that represent a movement of fundamental defense dollars into defense spending or an anticipation that we will be withdrawing from conflicts around the globe . We took advantage of the opportunity, given the increase in the caps, to move stuff that shouldnt have been oco in the first place onto the base so that the oco number more appropriately reflected true oco, the overseas contingency operations, the war budget, for example. So no. It actually accomplishes, if we choose to do it together, exactly what we set out to do several years ago. Is it obvious from your seat right now why we require an extra oco account as opposed to moving that in, in the absence of a caps system of any kind, doesnt seem to be a necessary component. It does. I have learned that. Also the importance of the supplement process. For example, we came to you with a supplemental request last fall to deal with the north korean threat and some of the things we wanted to accomplish immediately regarding missiles defense and so forth. Some of the flexibility that oco gives and some of the flexibility that emergency supplemental gives are important and its important at the same time not to abuse them and to use them for things that they were not originally intended. I appreciate what you are doing to squeeze every nickel. I would call attention to the corps of engineers funding particularly in the out years. As you know we have a big project going on of National Significance at the port of savannah in georgia. Is there discussion about reducing some of the Infrastructure Investments when the investments are so close to paying off . A couple Different Things. You all set aside a good bit of money in the emergency supplementals that might be available to the other corps of engineer projects that could be offered to savannah. We offer ideas on how to do Capital Spending and capital budgeting. I look forward to talking about that in more detail. There are some ideas out there that could be productive. Thank you for your service. Miss schakowsky from illinois. Thank you, mr. Chairman, thank you, mr. Mulvaney and thank you for meeting with democratic members yesterday. Appreciate that. Last year i asked you about proposed cuts to Social Security disability, and cuts that are repeated in the 2019 budget. You told me, quote, Social Security disability is not Social Security. Social Security Disability insurance is Disability Insurance. It is a Welfare Program for the disabled. Unquote. And i wanted to give you a chance to clarify the answer, but i just wanted to say that it was added to Social Security in 1954, and the money for both, the retirement and disability, are paid for by everyone through their same fica the same fica contributions. And yet you distinguish them, so i wondered if you could clarify your answer. Sure. I dont remember the exact context. I do remember talking with you and others about it last year, was regarding the president s promises. I think what i tried to make the case last year and could and will make again right now is that there is Something Different about Social Security disability. There is Something Different about ssi as well, and what a lot of people associate with Social Security, which is oldage retirement. You are correct. Ssdi is funding through fica, managed through the Social Security administration. Ssi is not funded through fica, i dont believe. But again, neither of those are what a lot of folks consider mainline Social Security. People might think of it as retirement but it is also an Insurance Program for families. Many people dont think about it as for widows and children as well. Regardless of what people think about it, i would argue that it is Social Security. Let me ask you about just ssa, the Social Security administration. So the operating budget for the Social Security administration dropped 11 in real terms from 2010 to 2017. Last year, ssa reported that the average hold time on the phone when you call is 16 minutes, up from three minutes in 2010. Half of callers hang up before getting services, and 12 get busy signals. So do you consider that an acceptable level of Customer Service for americans . We dont like, having served in your position, your as a member of congress for six years, i dont like the wait times and hold times any more than you do. So do you think its a question at all of resources and budgets and ability to have are you saying that its mismanaged in some way . No. I apologize, miss schakowsky. I am not as familiar with this. It looks like part of the argument we make is that the Social Security administration has not done as good a job as it can on modernization of the it work. It can do better on that. Weve asked other agencies to become more efficient and we are asking ssa to do the same thing. The 2019 request for the Social Security administration is 5 lower than the current funding level, and meanwhile, ssa is expected to serve an additional 1 million beneficiaries each year as baby boomers retire. So how is the Social Security administration supposed to handle its increased workload and fewer resources . I am sure all our agencies probably could be more efficient, but it seems to me, with the tremendous increase in need, that ssa is in a very difficult position without more resources. I wonder if you could comment. Again, we just we have asked many administrations, many parts of the bureaucracy, to be more efficient. A lot of them have been slow to take up improvements in their systems simply because they have not been required to, they have always resolved their problems by asking for more money and often getting it. Until you force them to start making difficult decisions, they wont change. I certainly hope you will look at that because the Service Aspect is very important to consumers in every single district in that country. Regarding Social Security Disability Insurance, the wait time for hearing decisions for disability claims spiked to 21 months in 2017. Those claims go through the Social Security administration. This Budget Proposal to limit retroactive ssdi benefits for americans with legitimate disability claims at the same time it cuts funding for Social Security administration is a real problem. Actually there we agree with you and think that our Research Indicates that part of the difficulty, in fact a good part of the difficulty when it comes to the delay on ssda and the other programs is the Administrative Law process. We are not the best at hiring in that particular area and our proposal includes a way to reform that program so that we can actually get decent Administrative Law judges in there to move things through the system. What you will see, the research would indicate that there is actually a small number of judges account for a large part of the backlog. I yield back. Mr. Ferguson of georgia. Director, thank you for being here today. Mr. Chairman, thank you for recognizing me. I want to start with something that was said very early on by our colleague from new mexico, miss grisham. She talked about the dire straits of new mexico. 20 poverty rate, and i think she invited you to see that firsthand. Very dire straits in new mexico. I compare that with my state of georgia, where we are thriving in many, many areas. Dont you agree that policy and whats reflected here in the budget should reflect those differences and allow states to have flexibility so that new mexico can address their issues in a different way than georgia and the fact that this budget is growing the economy and creating opportunities for americans . I dont believe the administration does not believe that any particular state is condemned to permanent poverty, that every one and every state has the ability to improve themselves. I want to focus for just a minute on the process that we go through here. I find it very disingenuous. I have written an oned talking about the big lie we tell youfrls ourselves as the budget process. Since 1994 its worked four times properly. We are 20 trillion in debt. We have put in budget caps. Weve gone down the road of removing earmarks. No matter what we do, we have the same conversations where the minority voice shuts down the government no matter which party is in control and that is how they get their legislative agenda pushed to the front. Do you agree we need to reform our budget process . Absolutely. Wed look forward to working with you on ideas. Again, i dont think this is the chamber thats necessarily broken at this particular time. Thats an interesting perspective. I think the entire process is, and while this chamber while the house may be doing some really good and strong work, we have to do it in the context of realizing that we have got to do this in conjunction with the administration and the senate. I just point out as someone else pointed out, rightly so, that youve done a good job of passing the appropriations bill. Sometimes they dont get across the floor but last year you all passed all 12 of your Appropriations Bills. You are to be commended for that. The other thing i want to touch on. We have had a lot of conversation on this today. The mandatory spending side of the equation. What i think we have to do is change how we have this conversation. We sit in this particular hearing and look at how we frame the conversations. It is either you are cutting it or you are doing something crazy to it. I mean, it becomes a very political vrlenvironment. Our side demonizes the Minority Party and the Minority Party demonizes us and we are not having a transparent conversation about what the future of the programs look like, where we can keep promises to the seniors yet have an honest conversation about what the future of the Program Looks Like for somebody in their 40s and 30s. How should we go about the conversation differently realizing that the only way well be able to do that is for that to be a bipartisan conversation . I dont know if i have magic answers to that, mr. Ferguson, how to solve the toxicity in the government right now. I think a good start would probably be to get back to regular order. I cannot tell you this is not the question you asked how disappointed i am and we are as an administration that mr. Schumer is holding up debate on daca in the senate. He may have relented and allowed it today, but for the last day or so did not allow something he insisted on having in the first place. I am not sure how we are expected it was a golden opportunity. I only saw real debate once in the six years i was here. Folks in the senate are welcoming the opportunity today to have a floor debate on an issue with everybody able to offer ideas and have them voted up or down. Thats a fantastic concept. I wish it would be allowed to run its course. We have had a couple hearings with the Congressional Budget Office on scoring. One of the things that strikes me is that the cbo i asked the question, do you have accurate number, if you go for any tenyear period your projections in year one, how accurate were they in year ten. They only get to year six, yet, there is no data and no determination of accuracy in years seven, eight, nine and ten. Yet, we are being asked and every congress has been asked to make tenyear budget decisions on a number that we have absolutely no idea how accurate it is. How would you address that . The tenyear budget window is voluntary. Different straupadministrations done 5, seven, ten. We looked at possibly doing 20. Really what matters when the rubber meets the road is this year and next, right . The rest is aspirational and a messaging document. Mr. Arrington, texas. Thank you, mr. Chairman and, thank you, mr. Mulvaney for your heart for Public Service and your love for our country and your support for our president. I am encouraged by what i have seen. The results and the actions of this president. I want to start with the praise that this president has put our safety and security first. And its about time. And our troops are desperately in need of those resources. So thank you for that. And i want to say through you to him how much i appreciate his unwavering commitment, also from a National Security perspective to Border Security. And then, of course, your efforts and his efforts to support our moving tax reform through so we could unleash the full potential of our economy. And in west texas, i can tell you, our folks are delighted with keeping more of their money and jobs coming on line and wages increasing. So there is just hope for a better and brighter tomorrow for their families. And i think the best thing, though, for the from my perspective that this president has done and its whats most needed in this country its not changing of the course that we were on over the last several years, though i am fully committed to that and, obviously, by his actions he is and you are, but its the change in the culture. See, he has done exactly what he said he would do. Now, i wish he said he would take on entitlement reform in a bigger and more meaningful way, but he has done exactly what he said he would do. He is a promise keeper. And i appreciate that. I wish we could add to his proposition of promises that we would go more aggressively at what i believe is the greatest threat to the future of this country and to our children and grandchildren, and i believe you believe that. Its obvious by looking at you and others that this is the beginning of lent, this is ash wednesday. And the theme is repentance for the church. Just to kind of borrow from that, and in the spirit of lent, repentance means to turn from something, turn away, go a different direction. Where do we need to repent, mr. Mulvaney, in this government with respect to our spending, our budget and fiscal reforms . Where do we need to repent the most . Well, every dollar is a dollar, mr. Arrington. Every dollar you can save is one fewer dollar that you are going to not have to borrow. Which is why our budget, we think, does offer an idea on how to save a bunch of money. We focus on the nondefense discretionary side of the budget. But we also as i mentioned have 1. 7 trillion of reductions in mandatory spending over the course of the ten years. So we are openminded about how to do better. We think this is one idea and a really good idea on how to get off of that road to permanent trillion dollar deficits. We look forward to working with both parties to see if there are ways to supplement this or do things in addition to it. I appreciate efforts to reduce spending on both sides of the equation. Mandatory and nondefense discretionary while making the appropriate investment in our military and other Core Functions of the government. But i know you know that, if we are really going to solve the debt issue and stave off a crisis and commit to our children a strong, safe, and free america, we have got to go bigger on these entitlement reforms. And i think the issue is, the political will just isnt there that i have observed in congress to do that. But this president is a fighter, and he has got amazing will, and he has risen above what is the typical political culture. And i just plead with him and through you to make this a priority. Everything he has made a priority and everything he has promised he has done, so i just want him to embrace this. For such a time as this he is there. And this they say leaders do the right things. Managers do things right. This is the right thing. You know it. I know it. The American People know it. And i think he could make a big difference there. Thats just my two cents. I will certainly deliver that message. Thank you, congressman. I am encouraged by the i come from a big swath of rural texas, and, as you know, these are the food, fuel, and fiber producers. These are our the backbone of this country from a traditional American Values standpoint. They contribute to our economy and Food Security and energy independence. 75 of the geography, rural america. But only one of every six americans lives in rural communities, but virtually 100 of the food, fuel, and fiber are produced by these country boys and girls living in country places. Thank you for the commitment to rural infrastructure. Tell me how that process is going to work and how would broadband and access to the internet, which is not happening in 50 of rural communities, and you know it is the underpinning for the economy and the community, et cetera. Quickly, what we tried to do, a large portion of the infrastructure bill is focused on things we know could cash flow, generate receipts. Airport, toll bridge. We also recognized that in a large portion of the country those models dont work, which is why we earmarked, for lack of a better word, 50 billion for things specifically like Rural Broadband because we know they are critical to the longterm infrastructure and longterm health of the country and they couldnt be leveraged the way other things might be. I yield back. Michigan, general bergmann. Thank you, mr. Chairman. Is there anybody left other than me . Okay. I was going to say i am last but i guess i am not last. We still have the Ranking Member too. Thats what i am sticking around waiting for. I can start with a general comment, small g. Being from where i am in the First District of michigan, i have got more big water, great lake shoreline than any other district in the country. The great lakes are truly or lifeblood. And not only of our people, in our communities, but also our economies when it comes to the type of industries we have up there. And notwithstanding that 20 of the worlds fresh surface water reside in the great lakes. So its something the great lakes is a, i would say, a global resource, definitely a National Resource that we need to preserve and make sure its healthy. A year ago, when we came out with the great lakes the original great lakes initiative, cut to zero. We got it funded back to 300 million, i see in this budget, concerns me, a 90 cut. There are about 3500 line items in that glri, and i would suggest to you probably 10 of them are being spent in such a way that we need to give them more money because they are great stewards. 80 are probably doing okay and probably 10 that that funding line needs to dry up. My concern in this budget right now is that, with that 90 cut, i am hopeful to work with the administration and my colleagues in the 22 other districts that border the great lakes to work with you to make that number realistic so that we truly, as we look at the health of our natural and National Resources, that would be freshwater, that we dont make a mistake there with this 90 cut. Now, we agree on more than we differ, and thats the beauty and why i am excited positively about the budget. But i have got a couple of questions on the Opioid Crisis. We have started about a month and a half ago in the district to have listening sessions with the people who are boots on the ground, the health care providers, the courts, law enforcement, social workers, the teachers, all of that, to find out what its like in our district so when we come to a National Level of how do we handle this addiction crisis. Any thought or detail you can give me on how this 20 billion thats been allocated how it will be allocated on the front end here . Sure, a couple of Different Things. You may not have heard me mention before i encourage you to not be misled by a reduction dealing with opioids that appears in the budget. It is not a true reduction. There is about a 95 reduction in the line item for the office of National Drug control policy. All that reflects, congressman, is a move of the Grant Programs that currently resided in that program over to the department of justice and hhs. So please dont be misled and allow people to say that is an indication of our lack of commitment. We moved them to where we thought they could be better administered. So well do that. Other money will be spent as i mentioned earlier on nih programs to try and develop to develop nonaddictive alternative. We also have a proposal in meth treatment in both medicare and medicaid. We also have money set aside for a fairly Aggressive National ad campaign to try and discourage people from since youve answered it a couple of times, and i apologize. I was in and out. No i honestly forgot what i said a couple times already, so it doesnt hurt to repeat good, solid policy. Any update on the status of the dod audit . Yes, sir. Theyre undergoing now, and i think you saw the first fruits of it this past week where they said they had discovered about 800 million worth of improper payments. I want to be very clear on that by the way. First of all, the system is working. The reason we found that money is because they have prepared themselves for audit, and theyre going through the process now, and theyre able to find stuff they would not have found before. So thats good. I do want to point out, however, just because we say its an improper payment doesnt mean we sent a dollar to you and we should not have. Improper payments also include sending you 95 cents when we were supposed to send you a dollar, or not having the paperwork. I would be curious to see what type of improper payments they discover. Ive got 15 seconds left. Any final thoughts on does this budget really start to look at duplicative actions and how do we eliminate those . We could do an entire hearing on the number of programs that we condense because theyre d e duplicative. Thank you very much. I yield back. Hello, mr. Akita sir. Happy new year. Appreciate your work. We all saw the benefit that the people of South Carolina had with you when you were a member of congress, and now the whole country is seeing your work. Greatly appreciate your leadership, sir. Greatly appreciate the president s leadership. Im particularly heartened to see in your budget youre calling for the idea that federal employees, when they do a bad job, can actually be fired. And at the same time, youre proposing a bonus pool so that federal employees who do a good job and there are those who do excellent work, who serve with servants hearts for the people. In some professions, its not about you. Its about service to others. The federal beurureaucracy used be that way a long time ago, but now the average salary for a federal public official is sometimes double that of a private sector counterpart. You know, all things being equal, thats not right. I dont want to interrupt you, congressman, but 99. 7 of them get their performance increases every year. You are reforming that. Count me in as a soldier in that effort to reform that effort. Like i was saying, bonus pools for those who actually do a good job. I think thats going to make this place run like more of the private sector counterparts, again recognizing that some professions are about Public Service and service to others. I have a pay jack by the way that would do a lot of these things from two congresses ago. We still continue to fight for it. If you can have your staff note that, id be happy to help in these efforts in this part of the budget. Inland waterways. Youre proposing some for the industry for a lot of us, some pretty bold ways to make ends meet, help our infrastructure. I come from a state that values and has successfully privatized different assets. We never turned them over to an industry or various users of an industry. We always kept it was always about putting out the concession to be run and seeing who had the best bid and who we wanted to run it and what the best deal was. But at all times, the legislature kept control of fees and caps and what could be done and make sure people had the equal access and all that. We had this discussion a little bit last time when we talked about air traffic control. Now its not the same as air traffic control, but its the idea that we might turn over the inland waterways, the operation and maintenance of locks and dams and those sort of things to private actors. The industry puts in 100 million to 200 million to a 1 billion operating cost. I think we ought to work on it. I think you should, if you dont mind, the olmstead lock and dam project, it for years was ballooning in costs. Previous administrations were letting cost overruns control. It is not unheard of for the corer to get halfway through the project, mick, and then stop. But as i talk with you about the olmstead project, its going to get done now because of an adjustment in the costsharing formula that we were able to do on the transportation infrastructure committee. Its going to come in under budget and ahead of schedule. And it was heading for disaster. I dont have to tell you, given your previous work, about the disaster it would be if we cant get grain and steel and all our raw products out of our inland waterways and onto the world market. It is helping with our trade deficit. So i would encourage you and your staff and the administration to look at the olmstead project as a poster child for, you know, just say you dont get the votes for privatization or the inland waterways. A few crazier things have happened in congress than not getting the votes. But this might be privatization light or the infrastructure bill the reason i say this is that name has come up before. I know we have looked at that as a potential model. Theres a bunch of different models. One of the beauties of the infrastructure bill, congressman, is not that its married to one program. You dont have to have privatization. You can do concessions. You can give states financial incentive to sell the stuff they have now and to move it off of their books. Theres a bunch of different models and we look forward to working with you on examples of things that do work. Thank you, sir. Jodey arrington eloquently put forth the argument for automatic spending reform. I do want to note shayou are do some autopilot spending in terms of tanf, snap. How much will that yield . Off the top of my head, i have no idea what those proposals are. It will keep compounding and returning savings. These are structural returns that reap benefits for many years. Thank the gentleman. And, finally, he reserved his questions to the end, and im pleased to recognize the Ranking Member, mr. Yarmuth from the commonwealth of kentucky. Thank you very much, mr. Chairman. Director mulvaney, thank you for hanging around this long. In the spirit of valentines day, ill be very nice. Thank you for having me and for being nice. You know, any discussion of the budget is going to involve a judgment as to what the appropriate role of government is, and many of us in this room have different philosophies about whats the appropriate role of the federal government, what we should be doing more of and less of. And i think its a very healthy debate to have always. But it has to be an honest debate, and that requires that we make sure the American People understand the discussion were having. So with that in mind, this week on face the nation, you were asked about the spending levels in the president s budget, and you said that the democrats, quote, would not you said this actually again today would not give us a single additional dollar for defense unless we gave them dollars for social programs. And, again, you made a similar comment yes, sir. I believe those are my words. So with that in mind, i want to ask you, do you consider the fbi a social program . Sir, and i dont i see where youre going. Nondefense discretionary is a better description of that money, yes, sir. Right. I wont go through the laborious task of going through every one. Whether its dea, Drug Enforcement administration, Veterans Health care, centers for disease control, the fda, tsa, irs, the federal court system, nih, census bureau, i. C. E. , border patrol. These are all things that are in the nondefense discretionary side of the budget. And i hope we have your support for increasing spending on those types of things. And mr. Lewis actually used the term we know what happens when people say social programs. Many americans think welfare. As a matter of fact, mr. Lewis used the terms interchangeably. I think mr. Grothman mentioned did the same thing. And we actually kind of ran an analysis, and we made our own definition of social program, and we defined it as something that is based on income, okay . Means tested. Means tested programs. With that standard in mind, basically somewhere less than 11 of nondefense discretionary could be categorized as a social program. So, again, i hope we never get to the point in this debate or in this country where were trying to pit tanks against teachers or many of these other things, Border Security against soldiers. Things where we would argue that most of the nondefense discretionary side of the budget is as much involved in National Security, whether its physical security, economic security, or personal security, health security, as the defense budget. So i would appreciate it if you again, your point is well made. I dont know if i would go as far as you would, which is not surprising since were different political philosophies, to say that some of the matters that youve addressed are as critical as national defense. They are critical. Theres no question. But in terms of the prioritization, which what this discussion is really about, right . Regardless of how big the pie is, at some point the pie runs out. We can choose to borrow nothing or a trillion dollars but theres limit theed resources a some level. I always agree with you on that. With that in mind, were talking about adding to the federal budget, to the defense side of the budget, essentially 195 billion over two years. 80, 85, and then some other things. Its 165 before you count its 80 billion in 18, 85 in 19, and 165 billion, but thats a rough estimate, yes, sir. Plus or minus, well see, 159 billion. A huge increase on what were spending on defense. A huge amount of increase, and youve already mentioned that until january, the pentagons never been audited. Theyve begun an audit. Just in the initial stages, they have discovered billions of dollars that they cant account for. And my question is with an increase like that, which i think amounts to about a 14 increase overall in the defense budget, close enough for government work, that weve done this. And i know the defense committees, the Armed Services Committee Meet and do an authorization bill and so forth. But my question is has the administration really dug into the question of what this military needs and what our missions are because as i recall during the campaign, the president s been abashed in talking about basically reconsidering our role throughout the world, talking about our involvement in afghanistan. And so thats my question to you is what kind of review of our military objectives, our longterm short and longterm military needs are . Yes, sir. The answer to your question is yes. Ive been extraordinarily impressed not just with secretary mattis, who is the one everybody recognizes, but theres a deputy secretary by the name of pat shanahan, who came over from the boeing corporation. I believe he was able to turn around their 787 program, and hes sort of running the business of the Defense Department right now. He and i Work Together regularly. And i think he would be able to convince you, sir, that this is not a number they have picked out of the air. In fact, its the entire opposite. I think they backed into a strategydriven amount of money. Weve often talked about that here, which is instead of picking a number and then picking a strategy, pick the Strategy First and then figure out what it costs to do that. I think thats how they got here. If you have id be more than happy, you and i, and secretary shanahan go to lunch and talk about that because im absolutely convinced theyre doing the work necessary to justify these types of requests. I would really appreciate that opportunity. So we talked about medicare earlier, cuts in medicare, and you basically claimed that it was unfair we talk about cuts to medicare because were not cutting patient care. Were actually just cutting no. I was trying to discourage that 500 billion number. I didnt think that was accurate, but go ahead. I was going to say whatever the number is, if its 200 billion thats going to be reduced or whatever it is, i vividly remember in 2010, and while i wasnt following your campaign individually, i know republican candidates all over the country were beating us to death with the fact that we were proposing to cut 750 billion out of medicare when, in fact, none of that came out of patient services. Actually we expanded patient services, and we were crying foul. So if we beat you over the head with it, your party over the head with it this year, i hope you wont cry foul. Ill cry foul as you probably did in 2010 and the republicans wont believe you, and the democrats wont believe me. Probably right. So you compare your current tax revenue estimates in this budget to last years cbo baseline. Given that we dont have an updated cbo estimate yet based on the tax act that was enacted, to get an apples to apples comparison, lets instead look at how your estimates changed from last year to this year. You estimated last year 3. 7 trillion more in tax revenues over the period 2018 to 2027 than your current estimates. How much of that reduction in revenue projection is from the tax cut . Roughly 1. 8 trillion. 1. 8 trillion. Okay. And id be happy to explain the difference between the 1. 8 trillion that the office of ota came up with the treasury, and the cbo. It generally yall scored it at 1. 5. We scored it after the fact at 1. 8. The difference is the way that the cbo and treasury, who does all these numbers for us, deal with the individual mandate. Cbo has often said that if you get rid of the individual mandate, folks will drop off of medicaid, and that actually generates a huge savings. We simply dont believe that to be the case, so we dont believe we will experience the same savings from folks not taking medicaid as the cbo assumes. So basically half of the change in revenue estimates that you are projecting this budget came from tax cuts . Yes, sir. Another half a trillion dollars came from the extension of the individual tax rate reductions. The law that passed phases that out, i believe, after five years. We have it being permanent. One quick question, and this is not a contentious question at all. Im just curious. And im not i dont know what you have in your budget, but you talked about Interest Rates and youre projecting Interest Rates actually stay fairly low over the period. Yes, sir. I can read them to you if you like or i can share them. I just want to reference because i know over the past six months, the tenyear treasury note has gone up about 70 basis points, which is a pretty significant rise in a short period of time. For the 19 budget, 3. 1. This is a tenyear number so were talking apples to apples. 2019, 3. 1. 2020, 3. 4. Again, were slightly higher than the cbo baselines from last from january 17th, a little bit lower perhaps than their numbers from june. And then roughly in line for the cbo for the out years. Thanks for the information and thank you for your testimony. I greatly appreciate it. Yield back. I thank the Ranking Member. Director mulvaney, youve been very generous with your time today. I think ive destroyed your table here, from chairman. Thats quite all right. Well add that to the budget. Members are advised written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record. Any members who wish to submit questions or any extraneous material for the record may do so within seven days. With that, committee stands adjourned. This weekend on American History tv on cspan3, saturday at 8 00 p. M. Eastern on lectures in history, former Virginia Governor Douglas Wilder at virginia commonwealth university. I have a oneword definition that i use for politics. Can anyone guess what that is . And i said one word would define politics. Money. Give me something thats a proposition before any tribunal that doesnt involve money. Sunday at 10 00 a. M. Eastern, from the west point center for oral history, henry hank thomas, a combat medic during the vietnam war. My grandfather served in world war i. My father served in world war ii. Always for a black man, whenever you served, it was your military service you hope would confirm your bona fides as a firstclass redblooded american citizen entitled to. At 4 00 p. M. On real america, with the cpac conference in washington, d. C. Next week, we look back to 19 88 when president reagan spoke at a cpac dinner. The American People know what limited government, tax cuts, deregulation, and the move toward privatization meant. Its meant the largest peacetime expansion in our history, and i can guarantee you they wont want to throw that away for a return to budgets beholden to the liberal special interests. Watch American History tv every weekend on cspan3. Next, maine Governor Paul Lepage gives his final state of the state address, where he told state lawmakers he would not implement a voterapproved measure to expand medicaid without a way to pay for it. He also talked about jobs, the local economy, and Energy Policy among other topics. From augusta, this is an hour and a half. Thank you so much. Members of the 128th legislature, distinguished guests, my fellow citizens, i want to briefly remember paul mitchell, brother of senor