Transcripts For CSPAN Senate Democrats And OMB Director Clash Over FY 2018 Budget 20170531

American politics today. Those are the things that make candidates win or lose, along with their personality and all these other factors. I think party labors party labels are kind of an afterthought. Whos also Steve Schmidt served as a senior strategist for george w. Bush and john aint. The discussion and john mccain. The discussion was on Donald Trumps First One Hundred days, hosted by the university of toledo fire. See the disc university of southern california. See tonight here on cspan. On sunday, matt havey will be our guest on indepth. That instant when you fall in love, for me, trump was like that, except it was the opposite. On thefirst saw him campaign trail, i thought this is a person who is unique, horrible, terrible characteristics were put on earth specifically for me to appreciate or unappreciated or whatever the verb is. Because i had really been spending a lot of the last 10 to , without knowing it, preparing for donald trump to happen. He is a contributor to Rolling Stone magazine and is the author of several books. During our live conversation, we will take your calls, tweets and facebook questions on his literary career. Watch live from noon to three 5 p. M. Eastern on sunday. Is on break down many members are talking to constituents about federal spending priorities. Mick mulvaney appeared before the Senate Budget Committee Last week to discuss President Trumps proposed that differ fiscal 2018. This is two hours and 15 minutes. Good morning and welcome to all. We are here today to discuss the present budget request for fiscal year the president s budget request for fiscal year 20 teen. We have been anxiously awaiting. We are pleased to welcome director mulvaney in here in detail from him the fiscal aspirations of the president. Budgets are an incredibly important part of governing because they are the fiscal bloop french of the nation. It is crucial that blueprints of the nation. It is crucial that congress address the rapidly growing deficits. Over the past eight years, even as government took in record revenues and taxes, and nation was still unable to live within its means. Since 2009, and asians gross federal debt doubled thomas 20 trillion today. To put that in perspective, this is larger than the entire u. S. Economy and costs taxpayers, even with todays historically low Interest Rates, 241 billion in Interest Payments last year. The Congressional Budget Office says the interest costs will continue to grow and reach 768 billion in 20 27 alone. That is in one year. This chart shows the interest rate. I think they use some pretty conservative Interest Rates. This amount is based on the conservative assumption of Interest Rates. It was percentage point increase in Interest Rates any year would drive up federal deficits by a further 1. 6 trillion. In other words, these billions upon billions of Interest Payments for the money we already borrowed will soon crowd out our ability to execute our core responsibilities as a government. To make matters worse, and our automatic spending on mandatory programs continues to grow unchecked. Represented 32 of the budget. But in 2017, it represents more than 69 . By 2027, it will represent more than 77 of total spending and consume every single penny the government collects. That chart, the grays a mandatory. The red is the interest. Can see where the revenues projected, we will be borrowing absolutely what we have on defense and nondefense by 2027. That means our entire discretionary budget, which congress sex a debates every year, will be completely deficit financed. We all know that our current bet current debt burden is unsustainable. We are in the worst shape since world war ii. , the balance as 5 trillion to the debt. We must do better. Congress can help washington become more accountable to hardworking americans by spending taxpayer resources efficiently in order to improve or eliminate Government Programs that received little oversight or simply are not delivering results. The chart shows some of the art the unauthorized spending. Just last week, this Committee Held a hearing with the comptroller general of the Government Accountability office. He outlined hundreds of billions of dollars of savings that can be achieved by reducing improper payments or by consolidating duplicative programs. In housing, there is 160 programs administered by 20 different agencies. Chargeis in charge in and there is no oversight. It is hard to tell if anything is really happening with this money. And those can probably be condensed down to five programs. Task ofhe daunting slashing 6 trillion to get to balance, even then, we would still see the debt increase another 5 trillion. But i appreciate the effort that ,as been put into this budget realizing that daunting task of there. Get i look forward to hearing more from director mulvaney on how the president s budget will help improve accountability of the federal government and support efforts to improve Government Programs that are not delivering results. It is also crucial to allocate taxpayer dollars efficiently. The aggressive approach contained in the president s budget to reorganize and reform federal agencies to ensure they are both effective and efficient. I would also like to commend the president and director marubeni on proposing the budget balances. It has been years since the white house has even attempted a balanced budget. But here in this very first Budget Proposal, President Trump has provided a plan to get the balance. You may not like how they get there, but i am looking for suggestions. Please, instead of complaining, please share something that you like. This year, we take an important step forward to help change the way we do business here in washington, by focusing on the importance of a balanced budget. The reason this work is so important is because we must restore the trust of the American People in their government. Floor toeld the Ranking Member senators. Thank you very much. Director mulvaney, thank you very much for being with us this morning. I would agree with the chairman on one point. We must restore faith with the American People and their government. Sadly, this budget does exactly deficit. The trump budget constitutes a massive transfer of wealth, from working families, the elderly, the children, the sick, the poor, the most Vulnerable People in the country to the top 1 . It follows in the footsteps of the trumpryan health care bill, which is massive tax breaks to the people on top while throwing 23 Million People off of the Health Insurance they currently have and dramatically raising premiums for all the workers. A budget which says, if you are the wealthiest family in america, the Walton Family of walmart, you can get up to a buf you a 52 through thebreak repeal of the estate tax. The wealthiest family in america billiont up to a 52 tax break. At the same time, this budget says that, if you are a lower income senior citizen, you will ,ot be able to get one hot nutritious meal a day that is currently provided to you by the meals on Wheels Program rate this is a budget that says, if youre the second wealthiest family in america, the coke others, a family that has contributed hundreds and hundreds of millions of dollars into the republican party, your family can get out to a 38 billion tax break. But at the same time, if you are a workingclass young person trying to figure out how you can go to college, your dream of a College Education will disappear because of 143 million in cuts to Student Financial assistance programs. Go to college, your dream of a College Education willthis is a budget which says that, if you are a member of the trump family, you may receive a billion. Of up to 4 but if you are a child of a lowincome family, you could well lose the Health Insurance you currently have through the childrens Health Insurance program and massive cuts to medicaid. For donald trump campaigned president , he told the American People that he would be a different type of republican, that he would take on the political and economic establishment, that he would stand up for working people, that he understood the pain that families all across this country were feeling. Sadly, this budget exposes all of that verbiage for what it really was, just cheap Campaign Rhetoric meant to get votes, nothing more than that. Are time when the very rich already getting much richer while the middle class continues to shrink, this is a budget of the billionaire class, by the billionaire class, and for the billionaire class. Is a budget that will make a harder for our kids to get a decent education harder for workingclass families to get the health care they desperately need, harder to protect our environment and harder for the elderly to live out their retirement is a budget that yea. Takess not a budget that on the political establishment. This is a budget of the political establishment. This is the robin hood rentable in reverse your you take from the poor and you give to the very rich. The reality is that the budget that President Trump has proposed will break virtually every, see made to working people of this country. Among many other promises that it breaks is not only massive cuts to medicaid, but cuts to Social Security. This budget would make massive cuts to Social Security for people who have severe disabilities, children who have lost their parents and the poor. Any, please mold dont me that Social Security disability Insurance Program is not part of Social Security. Lets be clear. Social security is not just a retirement program. It is an Insurance Program that protects millions of americans who become disabled or lose their parents at a young age. The chairman said weve got to restore faith with the myth people. He is exactly right. The way to do that is to totally reject this budget and creating budget that works for working families in this country, not just the billionaire class. Thank you, mr. Chairman. Thank you. Our witness this mornings mick theaney, the director of office of management and budget. It is safe to say that director mulvaney has had a busy few months. Prior to his time as the director of omb, he served people of the Fifth District of south carolina, where he was first elected in 2010. During his time in congress, he served in both the Budget Committee and the joint economic committee. We look forward to receiving your testimony. Mr. Mulvaney, please begin. Director mulvaney thank you so much. It is wonderful to be back here in this wonderful room to present to you the president s fy 2018 budget. The title on the cover is a new foundation for american greatness. As you can imagine, i spent a lot of time in this document over the course of the last couple of days and weeks. I wish now that i had changed the title on the cover. A Taxpayer First budget. As i went through it, i thought, ok, weve got this title, this name, what is new about it . One of the things that is new about it is that we actually did look at the expenditures through the eyes of the people who pay for it. We look at the impact on the folks receiving taxpayer dollars are not nearly enough time focusing on the folks who pay taxpayer dollars. Imbalances within 10 years, something the Previous Administration was in capable, unwilling to do for their it years there eight years in office. Its important for us to have a conversation about borrowing money. We do something unusual when we compared to the Previous Administration. We plan to pay it back. If you take money from people and have no intention and no plan of ever giving it back to them, that is not debt. That isft here theft. And that is what the Previous Administration did emma took money without any intention to give it back from who they borrowed it. And we change that because we have a plan for how to borrow money in the short term and plan to pay back to the boat. Every salman, woman and child every single man, woman and owed 60,000. You may be able to look them in the eye and say that is ok. The president decided thats not right. It cannot go on forever. We have to have a plan for figuring out how to start paying back the money that we have borrowed from people for all of these years. The next word in the budget is foundation. Our stride to figure out what is the foundation for american greatness. The foundation for american greatness is 3 growth. Discussions are driven by one goal and one goal only to how do we only. How do we get america back on track in the economy . There are some folks who believe and many work at the Congressional Budget Office that 1. 0 growth is the best we can do forever. We refused to accept in this administration the pessimistic future. The we refuse to accept that the new normal is 1. 9 , especially when the history of this nation is above 3 during an act was back 3 p. M. And that goes back to the founding and world war ii. Some of us want to accept the fact that we will only ever grow below 2 growth again. If you are in this room today or watching this and you are 30 years old, you have never had a job as an adult in a truly healthy American Economy. An economy at 3 is semis different from an economy at 2 . In the 1990s, when i was a younger man, we had excellent growth in this administration in this country. We had it under a Democrat Administration and the republicancontrolled congress. If you got fired back then, during a healthy American Economy, you can find another job easily. If you did not like your job, you could quite and start your own business. Dies in aof optimism 1. 9 Economic Growth world. And this budget is designed to get us back to 3 growth. About priorities, Border Security Law Enforcement, veterans, school choice, paid parental leave. I hope we get a chance to talk about that. Do not touch Social Security, retirement or medicare. We also focus on unauthorized programs. 310 billion. If you think it is so important, why dont you go to reauthorize it . That is a fair question when you look at this through the perspective of the people who are paying for it. Ive enjoyed watching all the politicians this week saying we wish we spent more money on this program and the program is unauthorized. And i cannot go back to the taxpayers and say, yeah, i want to spend more money on a program that comest doesnt even care about enough to vote on anymore. That is no longer defensible. So we do all that and balance the budget within 10 years because we look at the government differently. Longer going to measure compassion by the number of programs or the number of people on those programs. We are going to measure compassion by the number of people we get off of those programs and back in charge of their own lives. We no longer measure success by how much money we spend, but by the number we people number of people we actually help. And that is the last part of the budget, which is american greatness. With that, mr. Chairman, i look forward to the hearing today and look forward to answering your questions. I appreciate the opportunity to present the president s budget. You are one of the few people that ever finished ahead of time. [laughter] house here ate really get five minutes. [laughter] we do turn to questions and i will explain the process. Will have five minutes for questions, beginning with myself and then senator sanders. Following the to us, i will alternate question is from republicans in the minority. For those who arrived after the hearing began, youre on the list to be recognized. We will start the questions. Than 2et projects more trillion in increased revenue from increased Economic Growth. What initiatives in your budget do you expect will lead . To that growth director mulvaney will lead to that growth . Mulvaney we set down shortly after i was sworn in. We had a chance to look at the cbo numbers that propose or that 1. 9 growth. We said what are we going to do to get that number to 3 . That 2 trillion of additional revenue comes from the 3 Economic Growth throughout the 10year budget window. Said, ok, we will have tax reform. That should increase gdp. We will have regulatory reform, which will have a greater impact than tax reform. We have trade policies. We will undo obamacare and repealing, according to the Congressional Budget Office, actually added to the gdp growth of this country. Even the cbo recognizes that the passage of obamacare created a disincentive for people to work. We looked through our policies line by line. Depending on the values that we assigned to them, we came up with numbers that were higher than 3 . The government the president did mention numbers higher than 3 on the campaign, but we settled 3 as a defensible number. I found a truly startling figure. In the 10 years ending in 2016, nonindependent agencies added cost an estimated annual through new regulations. This doesnt capture the entire real atari burden as regulations such as the stemming from the are imposed by independent agencies. How does this budget proposed to review those rules to lessen their impact on the economy and prevent such buildup of regulations in the future . We have taken steps in that direction. Arrived, omb i toroved an executive order address the regulatory climate in a couple of different ways. Number one, we instituted a one in two out rule. Introducencies can new regulations, they have to look back and take two off of the books. It is difficult to do that. It iseve learned is that not that hard to slow down an agency in treating you regs. A agency to ask start to deregulate themselves, it is a muscle they have not used for a long time, if ever. So we have been surprised by the challenges. We have done a pretty good job so far in slowing down the new regulations into the pipeline. We will work very hard to make sure we spend as much energy getting the old regs off of the books. And if you are going to introduce a new regulation that creates 100 worth of burden on the american population, you will have to find some to get rid of for that same hundred dollars. So there is zeroit Regulatory Burden on the economy. Thats what i have been hearing in wyoming. The cost estimates for the educations department, various incomedependent Student Loan Repayment plan has been reestimated upwards by tens of billions of dollars. The reason was that enrollment far excludes the governments original estimates. The budget says 8 billion of this is due to still greater enrollment can another 18 billion is due to updated collection rate assumptions, concerning the hundred Million Dollars in Student Loans defaulted that the government currently manages. We find this to loan programs are more expensive than the government expects. How does the Budget Proposal and 10 to contain student loan costs Going Forward . I have not review the report. I think we all know that there was a lot of pressure during the Affordable Care act debate to look to the Student Loans to be generating money. You can as yourself whether or not there was pressure to show unreasonably rosy numbers at the time as part of the obamacare discussion. As we look forward and talk about what the president proposed when he was campaigning, the president made specific promises containing the variety of repayment programs and condense them into one. That is exactly what we have done in the budget. We take a single incomebased tie our repayments of your student debt to the amount of money you are making after you graduate your that leads to a circumstance where, if youre making less money, you pay back less of your loan. Introducedent obama something similar, he suggested that we forgive the debt after 20 years. We move that to 15 years. But by doing it in a single plant, it is easier for folks to use and we expect to use it. And by making the variables, depending on income, we save a considerable amount of money. My time is expired. Sanders i find it mr. Mulvaney and many people in the Trump Administration disparage the director of the cbo. When it was tom price, the former republic chair of the who appointed dr. Hall in the first place. Mr. Mulvaney come as you know, the United States today has more income wealth inequality than any major country in the world. The top 1 10 owns almost as much wealth as the 90 at the bottom. New income is going to the top 1 . But your budget think that it is good Public Policy to provide 52 billion in tax breaks to the wealthiest family in this country, a family already worth 128 billion. You think that a family, like the Walton Family, where one guy owns four ferraris and one maserati, worth more than six he 5 million, are just in desperate need of massive, massive tax breaks. That sheldon adelson, who among other things contributed 5 million for the trump inaugural, is in need of a massive tax break as well as the koch brothers. My question is Pretty Simple and i want you to tell the American People why you think it is a good idea to give 3 trillion in tax breaks to the top 1 at a time when the rich are becoming much richer, while at the same time you are going to throw 17 million children in this country off of Health Insurance because of the unconscionable cuts that . Ou are making to medicaid why you are going to throw seniors in the state of wyoming or the state of vermont off the wheels on meals meals on Wheels Program, maybe the one nutritious program they get a day, why you are going to throw women and lowincome babies off of the wic program at a time when infant mortality rates in this country is already high. You think it is a good idea to tell a lowincome pregnant woman that youre going to take away program, tickling addition programs from children in order to give a massive tax break, a 52 billion, to the Walton Family. Please explain your logic to the American People. Ill see if i can handle each of those in reverse. Let me deal with the cbo first. I dont think i have ever disparaged the director. You guys appointed the director. All until you is that the results are awful. But you appointed him, so lets go with that. I measure performance by results, mr. Sanders. Your opinion is that the results are terrible. Im suggesting that it was a member of the Trump Administration who appointed this gentleman, not some radical democrat. So we can agree that the cbo puts out that a data. We can agree that you guys are beating up on a man that you appointed because you dont like his results. But lets get back to the question. Wic serves all objective participants. Meals on wheels are not reduce. You a limited the block grant that funds the program you say doesnt the program is funded through the oldage senior nutrition program, which we dont change. Is not true. It is true. It is a block grant to the states in some states choose to use some of that and you choose to illuminate that. Total money for meals on wheels that comes from cdbg is 3 . Thats it. I dont know how you can possibly contend you are illuminating the program that funds not only meals on wheels, but many other programs at the discretion of governors. I would be more than happy to have a long discussion about cdbg. The slashing of medicaid, the dramatic cuts to medicaid is a Slower Growth rate of medicaid. There is one your exception during the Affordable Care act the American Health care act where the bill calls for the end to expansion and there is a small reduction that year. But the 10 year budget, medicaid spending goes up but so does health care inflation. We go through these games every single year. The inflation goes up faster than the money you are putting in it. Why do you think the Walton Family needs a 52 billion tax break. Youre basing that assertion on the only tax detail that we have in the budget. X the repeal of the estate tax. And we want to have a talk about why we are revealing that. Tell me. Because ordinary people are paying more. No, ordinary people do not have a wealth of 120 million. The average increase across this nation youre not answering the question. Answer the question. Wealthiest family in america gets a 52 billion dollar tax break as a result of the repeal of the estate tax. Tell the American People why that is good when you cut medicaid and you cut programs for kids. What we dont cut medicaid why ask you dont cut medicaid. We dont cut medicaid. Throwing 23 Million People off of medicare. We repeal obama care why does a bill in a family get a 52 billion tax break . Because we think that it is wrong that ordinary folks lose coverage. Ordinary people . Is the Walton Family and ordinary family . No, they are extraordinary. But ordinary people are losing covers today im asking you why the wealthiest family in america is getting a 52 billion tax break. You and the estate tax that applies to the top. 2 . I thought the us some should was we are looking at the tax reductions that are contained in obamacare repeal. Best that what we talking about. No, no woman no you we are talking about the repeal no, no, no. Were talking about the repeal of the estate tax. When we wrote the budget, we did not have nearly enough specifics to assume what you assume. The proposals that the white house published three or four weeks ago, the principles that we set forth does include a reduction of the estate tax a repeal of the estate tax you are right. But it is mathematically impossible to take those general principles and assume a direct impact on a particular family. No, thats not. That is impossible that is not true. We dont know what people are going to be dying. Thats for sure. Is that the family is worth but were sure they will die eventually. That for sure we can be sure of. [laughter] that was borderline fascinating. [laughter] so for eight years, president obama presented a budget, which was a proposal, and got zero votes in the United States senate or the United States house. Its fair to say we are going to continue that trend. [laughter] you might get one. But it wont be mine. And let me tell you why. I really appreciate you trying to balance the budget in 10 years. You have the budget control act numbers to deal with. Thats correct, right . That is the constraint we impose on you. And if youre going to balance the budget in 10 years, there are no good ways to do it. Taxes by 3. 1 trillion in 2017. I think that would devastate the economy. Thats probably why a got no votes. Some of the cuts you cuts you ml have an effect that the country probably does not wish for. You are in the spot of having to balance the budget, increase military spending because we maked, and that makes you very tough choices, so i appreciate you trying. And we did not touch Social Security, retirement or medicare. Lets not fool people. Meals on wheels is not being gutted. The block grant portion is being eliminated and that is 3 of funding is what you said . Please quit saying things that are not true. There is enough about this budget we can say that is true. I would like to eliminate the debt tax because i dont like the concept of taxing people czechia state when they die because every time they made a move while you while they lived, you texted. I would rather the Walton Family take the money and give it away rather than the government grabbing it after they die because i think the chief philanthropist and discover in this country a lot of the wealthy people you talked about and they are doing good things. They may have a ferrari in the garage, but when it comes to conservation and the things, the Walton Family is contributing. We would up to me, have no death tax because we tax you every time you move while you live. These are philosophical debates. Thing i dont want the public to be misled about is that you do nothing in terms of medicare and Social Security solvency. We dont make any proposed changes if you were unleashed by the president , would you not want to get a grand bargain where we clean up the tax code, take away some that actions for the few at the expense of the many and save medicare, medicaid and Social Security from insolvency, which is coming . When i sat here three months ago, and you asked me what i was going to do you sometimes i would disagree with the president , which i thought was one of the reasons he hired me. I laid out options. We had four hourlong meetings on mandatory programs and i gave him a list of proposed changes and at the end of the meeting, he went yes, yes, yes, no, no ,o no. He said i looked people in the eye and promised i would not change it. The president needs to look people in the eye and say that is an impossible promise when you are serious about getting out of debt. By 2042, medicare and Social Security alone will consume all of the revenue sent to washington. That is the projection. I have seen similar numbers. Because the baby boomers are retiring. You cant skip over medicare and Social Security, if you are serious about preventing us from becoming greece. To skip over this program is to allow them to die over time. The one thing i would say to my colleagues who believe you dont need entitlement reform to keep us from becoming greece, you are wrong. Mr. Mulvaney, you know the right solution. I will deliver that message. You have been the solution, and my view. Thank you for what you are doing with the ports. We will have disagreements disagreements, but one thing about the budget that bugs me is salt power. You know why we did what we did, it was the president keeping his promise to spend less on foreign aid. I dont know what it cost the country to ignore afghanistan before 9 11, to the taxpayer, but when you should women in soccer stadiums for sport, when you blow up statues of anybodys religion to expect nothing to come your way is a huge mistake to the american taxpayer. The king of jordan is the best ally we could hope to have and we reduce his funding. I got a call from the ambassador of jordan saying what did we do wrong . Nothing, maam. Georgia, a frontline state in the crosshairs of prudent, 66 reduction in their assistance. These people are not owed a dime by the foreign by the american taxpayer. View, if wet of dont help the king of jordan more at a time of critical need, his kingdom could fall. If we dont push back from russia and help those in the cross hairs having their democracy destroyed, i dont know what that cost to the taxpayer is, but to me, it is unacceptable. The reason i vote no is because it is destroying this budget. Thank you, senator. Senator whitehouse. Thank you, chairman. The tax cuts about , tax reform proposal . You assume that the tax reform plan is going to be deficit neutral. Is that correct . Yes. Andour presentation your presentation to this committee states it is neutral. We had three choices, we can assume they tax plan there is no scoring on it, yet. We picked the third, middle way. The way that you get to that recognize is that you that there will be immediate revenue reductions from lower tax rates and calculate that they will be offset by increased revenues from enhanced Economic Activity. That they offset each other to economic neutrality. That was not the calculation. Ofwent through the list exclusions that a reduced, loopholes that are close, and actions that are removed. I cant remember the number we assigned. Removalosal includes for local taxes, which is a huge number. We get rid of a wide variety of personal reductions, including everything except your testimony is that you fromot assuming any growth tax revenues as a result of increased Economic Activity in reaching the deficit neutrality. That is all going to be tax dollars in, tax dollars out, no added growth as the basis. I dont know if im agreeing or disagreeing, but we assumed Economic Growth. Is part of the assumption of how we got to 3 growth. Andpolicies were part of it when we go to 3 growth, we assume that govern it revenues go up government revenues go up. Todid not use those numbers say that the tax policy was deficit neutral. Youhe tax policy, as isesee it will be one that deficit neutral without regard therowth, without regard to increased growth that you assigned to the tax policy itself. There is a circularity were people say we will change the tax code and then bake it does revenues back into the tax code. That is not going to be the manner in which you achieve deficit neutrality when you get your tax cut proposal together. Agreeing, butare i am aware of the accusations of double counting. I dont believe we engaged in that. The only way that becomes true is if in fact the tax from tax reform proposal is deficit neutral without regard to growth from the tax proposal. We are agreeing on that point. When we have to make these , verytions for the budget early on in the discussion on what a tax policy would look like, we have to make certain assumptions. ,he three options i mentioned we couldve made the assumption that the tax policy by itself deficit. Uce the we chose not to do that. My guess is some of you would make the contention that the tax policy should add to the deficit. Deficit. We chose the middle to say we dont know enough about the tax policy. We know some of the basic principles of it and we will simplify, but once we get rid of this whole host of reductions, some of which are massive and say the most conservative way to look at this is on its own policy, those would be deficit neutral. Whether or not what you find and what we negotiate you on a final tax, i cannot say, but we have to make certain assumptions early in the process. When we look at your tax proposal, when it gets to a level of stress us that we can actually look at, we will be looking at Growth Numbers that are constant, with and without the tax code and the deficit neutrality will be the function of changes within the text code itself, not projections of growth. Let me look at it a different way. When we offered years budget, we will not be able to make those assumptions regarding what the tax policy will look like because it is either in law or very close to being in law. Looking at some piece of paper with recent principles in trying to do the math on that, we will be looking at a specific thing we can score in making more detailed presumptions. If you do count the growth here in the budget, and then you counted again in your tax proposal, that is a double count and you are saying it is not because you will not use it twice. And i will i would not come an answer questions if i was in fact to. My time has expired. Senator johnson. Lets talk about why you want to grow the economy. Isyou go from 2 to 3 , that 14 trillion. If you assume revenue is 18 of gdp, that is 2. 5 trillion of additional revenue without raising any taxes. We scored it at 2. 1 trillion. I think the whole purpose of tax reform would be to rationalize our tax system so it incentivizes growth. You actually want to see a static revenue loss made up by Economic Growth so you have a dynamic score the comes to as close to as that comes to as close to revenue neutral as deficit neutral as possible. Are you trying to rationalize the tax system to put more money in the federal government . My answer would be the same. Im talking about basic stuff. 14 trillion of Economic Growth yields more than 2 trillion in revenue. You wanted tax policy that makes america more competitive. In a world of 1. 9 growth, we will never balance the budget again. I have a chart here. My 30 year deficit chart. Over the next 30 years, we have a projected deficit of 129 trillion added on to our 20 trillion worth of debt. The net value of all private assets is 128 chilean dollars. Pageis what i call my one income statement over 30 years. Three things are yellow. The deficit and Social Security over the next 30 years is 18. 5 trillion. Medicare is 39 trillion deficit. The remainder of that is basically 65 trillion just in the debt. If we dont want to pay 65 trillion in interest to our creditors, we better stretch Social Security and medicare. I want to talk about how do you restrain the growth in Health Care Costs . Isnt that what ought to be the primary goal of any Health Care Proposal coming out of congress . How do we bring competitive, consumer driven competition to restrain the growth of cost and improve quality and access through competition . What in the me house bill is going to drive consumer driven competition to restrain the growth and health restrain the growth of Health Care Costs because that is what we have to do if we do not want to pay 64 trillion in interest to our creditors. Medicaid is one of the larger drivers. It is a state administered program and states also pay for it. I remember looking at that line item, the secondlargest in our state after k12 education and saying what do we spend it on . Finding out and then saying why do we spend it that way when we could spend it more efficiently . To do inif you want your own way, you cant get the federal match. If you want to do it in a manner that is effective for south carolina, we cannot do that because the federal government did not allow us to do that. This is one of the fundamental changes you get with the health with the house version of the bill. Is that changes one of the longterm drivers of cost and you get to the heart of the matter. How do we get health care more affordable . Just about everything we buy is more affordable and Higher Quality than yesterday then last year except health care. We have driven free Market Competition out of it. Business, Health Care Costs were as and Congress Passed the sha the hsa law. We went from about a 1000 deductible plan to a 2500 qualified plan. The premium savings that we realize just by making that , just that switch allowed me to take the premium savings, divvying view that by invest 3000 and per year, per employee in their hsa accounts. Now theyve got that money, that is their invest 3000 per money and they are thriving in Consumer Choice with things like walkin clinics. It does work. You are investing how much into hsas in the house bill . It is a dramatic expansion of the hsa program. Isnt that the direction we need to go . So much Government Spending is involved in health care, and we need to lucas on restraining the growth in Health Care Costs. Agreed. Senator warner. Good morning. So much to talk about. I have a followup on a couple of these. I have seen lots of tricky budgets before, but this may take the cake. You assume abolishment of the death tax, the state tax, but when you go to the table, you still count the revenues, which is kind of a tricky thing i would call them accounting. Double counting. Outside experts assume your tax plan would cut 5 trillion cost 5 trillion. Somebody spent a couple years trying to wrestle with these numbers and took on entitlement reform an additional revenues. I dont think there is any way with a get there limitation of tax expenditures, particularly when you take charitable, Home Mortgage and retirement accounts off the table. There arent enough text inductions to get Tax Deductions to get to those numbers unless you are going to theatically cut down on deductibility of employerprovided Health Care Plans . Thats a large number. The specific question . Costu have 5 trillion in in your tax plan, unpaid for. You cannot pay for it without double or triple counting or dynamic scoring on steroids. If you take charitable, Home Mortgage and retirement accounts of the table as not being cut. You cannot get there. The numbers do not add up. I dont think you told the public get that to even get close, you will have to then take off the duct ability of employerprovided Health Care Plans. That is on the table. Here is whats on the table. I have gone through these. I know you have as well. Trying to get them to balance. You have to go where the money is if you are talking about any kind of rational revenue neutral plan and i dont think can get there. I dont think your numbers add up. They dont pass the smell test what senator whitehouse was pushing it that you were not double counting, i dont believe that as well because you dont put dynamic scoring in place. Dynamic scoring assumes the tax cuts. You cant say dynamic scoring alone is going to come about without tax cuts in place. Youve got to bake that in so it is not truly a revenue neutral tax plan. ,o get 5 trillion in savings the numbers dont add up. Take nondefense Discretionary Spending down to 3. 1 of gdp. Twoill have another year or before i can say ive spent longer in business that i havent government. I invest in businesses based on their investments in the workforce, planting and equipment and staying ahead of competition. For an american, tax plan and business plan, that would equate to investment in people, education, plant and equipment equals infrastructure, staying ahead of the competition in a Global Economy means research and development. Sojournyou cut those akoni and lee sojourn akoni ly and so draconian assume that we will have all of this wealth . I would never invest in a business that spent less than 3 of its revenue line on workforce, plant and equipment and staying ahead of the competition. And that is what you are saying what the American Business plan ought to be. No i would not. I would also advise not investing in a business whose expenses are dramatically increasing. Amen to that, so its a dress both sides. You are looking at one part of the equation. When you look at the American Business plan, the Capital Investment is critical. We simply think that private Capital Investment is more efficient and history proves that. The we do is try to promote types of Capital Investment you are looking for. We are moving it out of government Capital Investment and into the private market Capital Investment. Alum hearing is for the most part in our country, education, infrastructure and core basic research and development remain a government function. Thank you mr. Chair. Senator perdue. I wish we had two hours. Im sort of glad we dont. [laughter] i can sort of understand that. Thank you for addressing the debt. It is the dirtiest four letter word in our language, today and it threatens our republic. Years, this16 federal government has grown. It is a philosophical debate between parties about big government, but lets just look at results. I made some notes. Big government has failed. It has failed in poverty. We were all for the war on poverty. The poverty rate today is basically the same as it was in in the 60s. If you think the government does a great job running businesses, how about the u. S. Postal service, the va . Trust funds go to zero in 15 short years or less and we are sitting in the weakest recovery in 70 years. I want to get to the point of this exercise and callout what a travesty it is relative to the bigger issue. In the last eight years, we borrowed about 35 of what we spent and in the budget that goes through 2017 2027, it was projected we would borrow another 30 per year on average. If Discretionary Spending is 1 trillion on a fort wayne dollar budget, we are spending less than 1 on discretionary. That means by definition, if every we collected market tax dollars in the last two years than we ever have in our history. And yet we still have this growing debt problem. Every dollar we spend is borrowed money, by definition. I want america to understand what this is all about. The travesty is we are not talking about 4 trillion of expenditures in the federal government. It will grow from there. I want to get at the fact that the budget process it self is broken. It has only worked for times since 1974 in 43 years. We have to appropriate this budget. You talk about authorizing. Billion, 250 programs today that are not that are not authorized and that is not even being considered. Over the last 43 years, we have averaged to an half appropriation bills being passed in that period of time. We have to past 12 to fund the federal government we have to pass 12 to fund the federal government. We will either do a continuing resolution or you will have to do an omnibus or we will have to do an omnibus. Im not arguing programs or cuts. We will do that later, but i have to say this. I applaud the administration for at least addressing the issue that weve got to address over the next five years or so, and that is the longterm implication of debt. Would you support a budget process, i eventually that would include all expenditures of the federal government . Yes, i had part of that discussion in the antechamber before we came into this room. Know, to get at debt, we will not do it by working over 1 trillion. Lets talk about growth for a second. 1. 9 . Style into the true growth is 0. 6 without population growth. That is productivity. That is the way business guys look at it. Growth is. 6 . You have to work on the workforce. There are plenty of people on the margins of our workforce that are not included. I understand the low employment number, that im concerned about the people with that are underemployed and a concern about people who have dropped out and having matching skills with jobs that are available. That is the first constraint. The second is capital. Capitalt 6 trillion of and this is the mistake politicians make. We need morehink Capital Investment from the federal government. That is the last thing we need. We need to do whatever we can to free up the 6 trillion that are not at work in this economy. 2 trillion on the russell 1000 Balance Sheet because of government policy. Small banks and reason regional banks have about 2 trillion on belichick because when you take in the unilaterally,e, none of the other countries are really doing the same thing. Has 2atriation tax trillion overseas. You will focuss on, not just in this budget, but over the next few years . Ini think you heard that part of my exchange with mr. Warner is that you must have more Capital Investment to get productivity. Is that from the government or the private sector . It is the point of this budget which is to focus on private. Hollen . Or van thank you, mr. Chairman. You can call this a Taxpayer First budget, but this is only really great for taxpayers in the top 1 . They are the only folks that looking at the numbers in this budget actually get a tax cut because you have incorporated house health care, into this. Which as we all know, provides millionaires with a 50,000 a year tax cut. It is great for folks at the very top. I should also point out that that revenue in the Affordable Care act came from applying an Investment Income tax to 250,000 ander dedicated it to the Medicare Trust fund. Your proposal takes three years off the solvency of the medicare did Medicare Trust fund. He talked about reducing the debt and i cannot agree more. We have had this conversation for years. You talk about tax breaks, but isnt it a fact that you do not close a single tax break in this budget for the purpose of reducing the debt . Im going to agree with you on that. We close the loopholes. Andave to make assumptions the assumptions are that those to ductions, the loopholes and exemptions go away in order to keep the tax program deficit neutral. We take the benefits in the growth. My point is that we can all talk and we should talk about the debt, but you dont take away one special tax break for anybody, hedge fund managers, for the purpose of reducing that debt. That is a fact and we have had a lot of conversations over the years, pointing out that the largest annual expenditure is the category of tax expenditures , tax breaks even larger than Social Security. That is close. Yet you talk about going after all those other categories to reduce the deficit, but you dont go after the category of miniatures of tax expenditures. I dont think that is entirely true. You have had a reputation as a straight shooter. I hope to keep that. Revenue is about 18 today. The last time we balance our budget was in the early 2000s, but we do not want to go there. What you have done instead of you do cut Social Security disability, i think that is a bad choice. Those are hardworking people. The whole point is to have insurance policy. But you do not do it senator graham mentioned, going further into medicare, and Social Security. Off of theshould go tax expenditures, but at least you have got to be honest. Instead, what you have done is made up a number here based on no policies. You guys have assumed they percent growth. It is easy press to say, we wish we had higher growth. I do, too. Why dont we wish for 4 growth . Is to director, i am looking at what you put out that put the forecast recently. You have the professional forecaster survey. 2. 1 longterm growth. You have the reserve bank of 1. 9 delphia, about where cbo is. You have the Economist Intelligence unit around 2 longterm Economic Growth. Socalled one page tax plan that has been put out by this administration. You have no backup in this budget to tell anybody how you expect to get from 1. 9 , 2 growth, to 3 growth and the only way you balance the budget is on what is logical and accounting in the absence of a plan that shows you how to get there. It would be 2 trillion short in 10 years if you have not made that assumption, isnt that true . If you have not made your assumption about 3 growth, he would be 2 trillion short. I will agree the dynamic thect of 3 growth is dynamic impact of 2 trillion. The dynamic impact . Yes, sir. I think you and the senate are on different pages. Page, a 6s one trillion tax cut. It is 5 trillion that puts you in the hole, and somehow, you are going to have huge growth that is going to recapture that they percent growth as a result, even though you were going to also capture that for the purpose of deficit reduction. It is flimflam. I understand you are representing President Trump, who put the parameters that you described on you. Has a, as someone who reputation as a straight shooter, do not pretend this is balanced. To balanced. Lose the harm in the near term is real. The balance in the 10 years you know is fantasy, flimflam. I will deny that i know that. As i mentioned, i do not remember who it was, we sat down and came up with the impact of our policies, and that is how we got from 1. 9 to 3 growth. Keep in mind, president obama was assuming 6 growth. We did not do that. By the way, he never even balanced while he was doing that. [indiscernible] productivity. [indiscernible] you have taken off the table one of the major factors. [indiscernible] thank you. Senator kennedy. Thank you, mr. Chairman. Mr. Director, i do not know you well, but i have watched your effort here and that if your staff. Staff, and iur have to tell you i find it refreshing. I want to offer you a couple of to view, and i want you to entrap me if you disagree. I want to talk to you i want you to interrupt me if you disagree. I want to talk about how your budget impacts the people in america who get up every day and ando work and available obey the law, pay their taxes, and try to do the right thing by their kids and maybe save money for retirement. I guess we could call them the middle class or the working class. We have a lot of them in louisiana. 20, 25 years or so, what many of those people, in fact, most of those people, would tell me about washington is that they would say, our country i am paraphrasing they would say, our country was founded by geniuses, but it is being run by a bunch of idiots. Leadership, on both toes of the aisle, expect borrow 4 billion a day to in him was 22 trillion debt, run deficits, when we tried that in our family, it did not work. Is what they also tell me. They tell me that they look around and they see to many undeserving people at the top getting bailouts and special treatment. They see too many undeserving people at the bottom getting handouts. And they are stuck in the middle, and they are getting the bill, and they cannot pay it anymore. Because their Health Insurance has gone up, thanks to the Affordable Care act, and the kids tuition has gone up, and their taxes have gone up. I would say what has not gone up. Their income. I think that is why this country. O divided we have two groups of people. We had those americans who believe in more freedom and we have those americans who believe in more free stuff. Me how like you to tell your budget impacts the working class of this country that is being hollowed out, and is not sharing in the great wealth of this country, economically, socially, culturally because the people, the undeserving people not everybody, but the undeserving people at the top and the bottom, who have all four feet in their snout in the trough. Thatnator, i will answer in a way you probably do not expect. Hopes those folks more than they can possibly imagine. If they are above the age of 30, they may remember what it was like to work in a healthy American Economy, where wages were ahead of inflation. People were Getting Better economic opportunities, you could say for your kids education, save for your retirement, that i will answer in a different way. You asked, how does this budget help those people . I think part of the disconnect that we see in the nation right now is that this folks that you just described, many who also live in south carolina, pay ther taxes, and then hear stories about how that money is wasted and they wonder why they are paying taxes, and it undermines their faith in the system when they hear that there are 11,000 dead people getting their money to help pay their dead people bills, when their people in prison getting benefits, when their books not in this country legally getting benefits when there are people not in this country legally getting benefits, and it saddens them. They all react negatively toward the institution of america, and it helps to contribute to that us and them mentality. This budget looks them in the eye and says, we will not allow that anymore. We are going to stop wasting your money if it is going to someone who should not get it. We will stop and we will respect your money as much as you do. Hopefully, that will help cure some of the ills you mentioned. I want to thank you, mr. Chairman. I do not agree with everything in your budget, but i think you and your staff but i think you and your staff your approach. For joining us. You have a tough job today. I do not envy you. You have been asked to come before this committee to explain the unexplainable and defend the indefensible as my colleagues have pointed out, especially senator warren and senator van hollen. President trump sent his campaign promising workers, promising seniors, promising the middle class to admit the economy work for them. What we have in front of us today with this budget is a perfect summary of all the ways those promises have been broken. His promise not to cut medicaid is broken, his promise not to cut Social Security program, broken. His promise to help workers get training, broken in the budget. Promise to protect tax cuts on the middle class and not the rich, broken. And his promise to provide insurance for everybody that is better and lower cost was not broken but shouted to read a lot of promises broken and we are looking forward to see how you explain this was not broken but shattered. A lot of promises were broken and we are looking forward to seo explain this. A lot of republicans are coming out and rejecting this budget. We hear we are able to reach a deal on the 2017 spending bill for the reason that democrats and republicans joined together, they ignored President Trumps absurd and obscene Budget Proposal, we rejected the illconceived and expensive border law, paid for in americas taxpayer dimes, we rejected the attempts to cut planned parenthood, the 18 billion in cuts sent to us last time, and we got a budget done and moved our country forward. Having said that, i want to focus today and start by asking the question on President Trumps roque and promise on health care that you built into the budget broken promise on health care that you built into the budget. Families across the country are scared about the health care isos President Trump causing. On monday, the Trump Administration requested another three months delay in the toses frivolous lawsuit take away payments that help to lower the cost of care for working families. Experts agree and have told us continuously that this administrations threats to end the payments are driving premiums up today. I wanted to ask you about this because the l. A. Times recently reported that cms administrators attempted to use those payments to try to pressure our insurers to support the Trump Health Care bill. Do you believe it would be wrong to use Family Health care as a political bargaining chip . Theater that i tried to find things that agree with with other folks more than i disagree with, you mentioned people are scared of the chaos and you attribute that to the chaos of the trumpcare program. That is what insurers have been telling us. People where i am from our skit about the status quo. People in iowa are scared about losing the coverage over obamacare aboutsked specifically have you been part of any discussions about costsharing subsidies would administrative burma or influenced the conversation . I have been included in several conversations about the cost sharing reduction payments. Have you talked to her about specifically talking to insurers and threatening them not to support it . No. We made the payments in may, like we said we would. We made no commitments to the payments due in june and where considering the options on whether or not we make the payments. Let me ask you about your comments about the cbo score of the hospital. Ok. Given what we learned last night from cbo, do you think the Trumpcare Bill keeps President Trumps promise to provide better Health Insurance to everyone . Absolutely because we do not have any coverage at all. More and more counties i live in a state where we are down to one. That is not what the cbo report said and people will not find that credible when they lose care. They know it is causing this. I only have a few seconds left and went to make a couple points. I was disappointed to see that you attempted to block the office of government ethics request for information on which former lobbyist are receiving secret waivers from President Trump. I think that is wrong, and i urge you to reverse and cooperate with the ethics office, and i assure you we will keep pushing on that trade i wanted to let you know that, number one. I am happy to respond to that if you give me the time. Let me just make this point since my time is out and i want everyone to hear this. If it isndicated that reviewing a role related to the Birth Control mandate, should this yet be another step by the administration to roll back Womens Health and rights . You better expect a strong opposition from the senator, democrats and women across the country. I want you to know that. I am not aware of that detail but i hear what you are saying. Thank you. Senator to me . E . Senator toomy toomey . Or thank you for being with us. Is important to every challenge we face. Every problem in america is easier to solve if we had stronger Economic Growth and some are impossible to solve without strong Economic Growth economicnger growth. It means a better standard of living for the very people that senator kennedy was referring to. Also, it naturally follows if you have stronger Economic Growth, you will have productions because fewer people will need those welfare because that should be the purpose. That should be the idea, that diminishing numbers of people on medicaid and food stamps and section eight housing, you name it, because they are able to get work that pays enough for them to support themselves under family. That should be our focus. In on how we get there. I think an essential part of getting the economy growing at its potential, which is capable of 3 growth, requires her growth tax reform. Progrowth tax reform. We are under in eight alien dollar tax increase from the obama era that had nothing to do with obamacare. If we repeal obamacare, we will have the state tax increase we are laboring under. I seei see no need no affect on federal revenue if the economy is larger and theres that much more to tax, therefore, more revenue. Having said that, we all know we may not get a deck an aggressive dynamic score. They are great men and women who do great work and often do not get the credit they deserve, but they might view the economic affected tax reform differently than i would. My view is we ought to be willing to do tax reform that may not be revenue neutral. The goal should be to maximize growth. If we cannot persuade her democratic colleagues to work with us, we would need to use the reconciliation device under the budget act to tax tax reform with a simple majority. If we go down that road, one of the constraints is a joint tax and cbo determined there would be a revenue shortfall outside of the budget window, then that is subject to a point of border which invalidates the 51 vote threshold. You get to choices in that scenario. One is you have the program tax provisions expire at the end of the budget window and then you have a temporary you have a great tax code which is temporary, which is a bad idea, but the other option is to extend the budget window. We have historically used 10 years, but the budget act says five and it doesnt specify an outer limit. I would like you to consider a 20 or 30 year budget window, something that would allow us to have a great growth, maximizing tax code that lasts a long time. If we had a 20 year budget window for this purpose, it ought to be as close to permanent as you get because you will revisit the tax code in 20 years anyway. Would you comment on a budget window that extends longer than 10 years . Sure. The idea. Ghly of we toyed with adding some consideration for a 20 a window but did not have time to do it. We are toying with what it would be like to do a 10 year end 20 year, so you are talking about several benefits of a longerterm. There are a couple of you did not mention. If you want to make changes that gays in overtime, especially on age tested programs, a lot of times you take the heat but do not see benefits because it falls outside of the 10 year window. There are many attributes to looking at multiple budget windows. It is something we should continue to explore. That wehate to think would go to a 20 budget year window to tell people, we will balance the budget in 19 years because people will not believe this at that point. I think we should try to balance the budget as quickly as we can, regardless of the budget window we look at. We will explore what options are available Going Forward. I look forward to working with you on that because we have an opportunity. We have an obligation to really have a tax code that allows the American People to be as prosperous as the candy. President trump campaigns, among other things, significant tax reform. I think his message is clear that it would not necessarily end up the revenue neutral. His goal was to maximize growth. That is the right goal. If it takes a longer budget window, that is something we should consider. Thank you very much. Thank you, mr. Chairman, and welcome, director mulvaney. I had tremendous concerns about a wide variety of issues in the budget and how they dont match with priorities of michigan families. I want to talk about one that has caused terrific concern in michigan and all around the great lakes. That is the question of completely eliminating the great lakes restoration initiative, which funds the cleanup of our beaches, protecting our fish, wildlife. Three have challenges with asian getting into our waters. That is funded through this initiative, which was a bipartisan effort started in 2010. We have about 40 Million People who get their Drinking Water from the great lakes. I could go through all of it, boating, fishing, jobs connected to the economy. You eliminate all of that protecting the great lakes and then you go into the farm bill to eliminate a voluntary conservation effort to protect watersheds, that we are now having Great Success with, partnering with farmers and conservation groups to address runoff, and Water Quality issues in the great lakes, so on behalf of michigan families, i would like to know why you think it is an important to protect our water . Thank you, senator. We agree. I had a chance yesterday in the it mightpoint out that be news to people, but there are democrats who care about National Defense and republicans who care about clean air and water. Starting from the premise that we do not care about clean air and water is a difficult one to accept to start the conversation. Will then explain why your budget zeros out dollars that allow us to protect our great lakes. Consistent with many other things we did across the budget, senator, we look at programs should be local, programs that are more appropriately local in national inposed to nature. Go back to the original premise. Im looking through this through the eyes of someone in arkansas. Can i really looked him in the eye and say, i need some of your tax money to do something in michigan . Yes, that is called having a country. 20 of the worlds freshwater surrounds michigan and eight of the great lake stakes states, and this is something we not only do in the states and by the community, but it is a Major National resource. The idea that we would not recognize that in this budget is stunning to me. While i would agree there are things that deal with the environment that are national in scope, there are other Things National in scope, for example, i cannot look at the tax code and National Defense. We chose to go another way. Let me ask on another thing that i also think is the responsibility for all of us as americans, and that goes to the question of health care and medicaid. Budget, you assume that the Affordable Care act will be repealed and that there will be i would assume 8000 billion dollars in cuts from the house. Dollars in cuts from the house and in the tent give, that is about a 50 cut in health care for people on medicaid. Three out of five seniors in their Nursing Homes in michigan are there because they have Medicaid Health care, so what you say to a family in michigan, whose mom has alzheimers and she is in a nursing home, and she is not going to be able to get health care she needs under your budget . False ins entirely this government will continue to take care of that person. Just 50 less. I hate i hate maam, to push back on this, but that is not a cuts. Because of the timing of Medicaid Expansion, all that we do in this budget is slow the rate of growth. On year more money year on medicaid. In washington, many people consider that a cuts, but that family back home does not consider that a cuts. Do you believe as Health Care Costs go up, then the family should absorb that, number one . And number two, are you saying that the repeal and replace the 880 billion in cuts in medicaid is not a cuts . To the government to try and write the wrongs we had committed that have contributed to the dramatic rise of the cost of health care. Not just insurance been health care. The reason that family is very is because they see the price of Health Care Going up year over year. One of the things i am proud of theinally try to deal with actual cost of health care, not just Health Insurance. The Affordable Care act may, may have made insurance more affordable for some people, but it made health care more expensive for everyone and that is what we are trying to remedy. I would conclude by saying the reality of what has been done in the house and what is found the senate is a massive cuts to health care and medicaid, and a great, big additional tax cut for the wealthiest americans that does not reflect the values i know in michigan. Thank you, mr. Chairman. Senatorwed by [indiscernible] i appreciate the fact you have not only today, but consistently, made yourself available to us in congress and have worked with us to try to achieve the significant reforms that we are hoping to put into place. I want to use the few minutes i have to talk about the assumptions in the budget. I know there has been criticism about the rate of growth of the economy that the budget assumes. First, could you tell me what for theumptions are first year and the 10year cycle . Growth insir, 2. 3 year one. 2. 5 in year two. 2. 8 in year three, and 3 growth to the end of the budget window. And the average for the budget window is . 2. 9 . I assume you would know this, but it is my understanding that president obamas first budget, his projected growth rate was over 4 for the first four years. 4. 4 , 4. 6 , and 4. 8 . And the average of the 10 year was 2. 9 . So the same average President Trump is proposing . Yes, sir. And dramatically less than the second obama budget. It was 3. 3 over the budget window, the third was 3. 2 percent, the fourth was 3. 2 , so we are lower than the obama administrations first four budgets. I find that interesting and i also would like to have you obamae this, not to the Budget Proposals and economic assumptions, but would you actuality,s to the what is the average rate of growth in the United States for the last 15 years . Slightly above 3 . So the proposal you are talking about is slightly below the historical average. Which is one of the reasons why there were discussions about raising this to get us to the historical norm. What is it . From postworld war ii, three point 4 3. 5 , somewhat in the midthree one of the reasons you are willing to make these projections as i understand it, you are also proposing significant reforms like the Health Care Reform and a number of other significant reforms that would help us to stimulate Economic Growth in the United States. Dir. Mulvaney dont discount the regulatory reform. We talk to businesses and we do believe there was a pentup growth in this country because the Regulatory Environment is discourage them from doing so because the environment is going to change and its already helped the Economic Indicators we know the gdp numbers the him First Quarter were lower than everybody wanted to see into the indicators are very strong and the opportunity for us moving forward on driving growth regulation for them is dramatic. I very much appreciate that. I have been a part of the gang of six fighting for these kind of reforms. I talked about the National Debt and the drag is on the economy for years to years, but im starting to think the Regulatory Burden is beginning to approach the National Debt in terms of its seriousness for its impact on the economy. So i appreciate your focus on that. One last aspect we talked about the roughly 3 projected growth targets that we would like to achieve. Is there any reason we cant reach higher than 3 . I understand a lot of people are saying that the projection should be around 1. 9 and we should just say we will have a 1. 9 growth rate for the next ten years. Why would we set the target one third below the historic average and equal to what we have been seeing during the economic crisis that we have been living through how should we maintain that . Dir. Mulvaney anyone i would argue 1. 9 is where we should be about the review, about the american spirit, their view about the American Worker and the American Economy and whether there is a pessimism hardwired into that number should discourage all of us. Senator into that number should crapo t i want to thank you for setting the goal high, that is probably not the right word, above average, that we can get there and build this economy so thank you. I appreciate your efforts. Senator harris youve mentioned in your comments but in creating this budget, you have considered the impact of your policies. My concern is that you overlooked the impact as it relates to certain americans that are in particular need when we create such a budget so i would like to talk about a few. Theres been a lot of talk about the American Worker. Your budget cuts the department of labor by 2. 5 billion workforce training by 1. 3 billion. As you probably know, there are a number of major disruptions in the labor force and over the next 20 years will be more driven by automation and technology which puts millions at risk, developments like online shopping, automation and fast food delivery and so on. People that are between the age of 30 and 50 in our country right now who are unemployed and want to work and had a job needs to be seen and they will have a Life Expectancy of another 30 to 50 years. I believe they need to support your budget to did not give them when you have proposed a 21 cut to the department of labor including a 40 cut to employment and training administration. So i would encourage you to review the impact of the budget with the population being the American Worker. As it relates to another subset of the populations who need to be seen and the impact needs to be thought about and prioritized. It is that population of people impacted by the Opioid Epidemic in our country. According to the american psychiatry association, a survey that came out yesterday indicates that more than a quarter of americans and more than a third of all millennials report knowing someone has been addicted to opioids or prescription pain pills. Most respondents believe treatment is a better option than Law Enforcement to tackle the problem. 73 of the respondents believe people can recover from opioid addiction. The Congressional Budget Office however estimated the repeal of the Affordable Care act translates to one in six americans losing access to opioid treatment because they live in a state that would waive the requirement on the Substance Abuse treatment. Your budget would also cut the Medicaid Program by 40 , which is currently the largest for opioid treatment. Considering the impact of the policies i would urge you to consider older americans. As you know, they projected that under the repeal of the Affordable Care act the number of seniors would see the cost increase or lose their coverage. According to the aarp Public Policy institute in california for example a 55yearold of today with a 25,000dollar income would pay on average as much as 8,598 more a year than today. In louisiana that would be 5,920 more. 5,670 more, colorado, 609, 7,602 alaska, 18,533 more a year. So i would like to know how you are in her parting the impact of the budget as it relates to these populations when there is objective feedback from folks like the aarp because of the cuts in your budget. The American Workers at the top of the list when you consider the American Workers at the top of the list when you consider what the administration has already done in terms of helping the American Worker, the emphasis we put on trying to bring manufacturing back. Those are all focused on helping the American Worker. Harris i think you know that the American Worker will tell you between who are the ages of 30 and 50 today who are unemployed and had a job to work that they dont necessarily have the skills that industry requires for them to be able to get a job and keep a job and they are in need of training to allow them to transition to these new economies so they can acquire a skill and keep a job. How do you justify keeping cutting funding for the American Worker to transition into these new economies . Dir. Mulvaney we asked a reasonable question we went to the Workforce Program and said successful as measured by the number of people that you trained that actually get jobs after they go through the program and if the program proved they were successful, they got more money. If they were not, they got cost less. That seems to be a reasonable approach. Harris you need to tell that to the American People. Dir. Mulvaney be happy to. First, just to clarify a bit of the administration supported the ahca is that correct, so the budget needs to be looked at as a unit in terms of dollars and allocations. Dir. Mulvaney we included because there were some last minute amendment. I dont think that it made it into the assumptions because of the timing left. Senator king so that means we are talking about is not the 800 billiondollar medicaid cuts just in the aca but also those that are proposed in the budget. My understanding is that those are not identical and in fact it is about 1. 3 trillion combined. Dir. Mulvaney the number i heard was 1. 4 from the 800 from the ahca and the 600 from the other reforms that we proposed. However, you cant add those numbers together because there are components that overlaps with the total would be left depending with the final version of the bill looks like. Senator king is that 1. 2 to 1. 4 dir. Mulvaney it is between 800 to 1. 4. Senator king so it is your position that youre not cutting medicaid youre simply cutting the rate of growth. The problem is as you know it now pays the cost of a nursing homenursinghome for example an elderly person. So the cost of the nursing that was up 6 and under your proposal, medicaid reimbursement goes up 2 , there is a differential. Isnt that so . Dir. Mulvaney under that set of circumstances it would be differential but keeping in mind the to make what assumptions were you using in the budget to create these numbers . Thats where the other 600 comes from. We dialed it a little bit from what was in the hca. Rates inl growth medicaid was below what was in the ahca. King are you saying that even with all these cuts or whatever you want to call them is going to meet the needs of the elderly person in the nursing home . Dir. Mulvaney we do believe that the money that we provide would be enough to meet the population of medicaid serves. Senator king so there will be no real reductions. But im trying to get at is the assumption in the production sql also the assumptions of the increase in the cost of healthcare because as you know, healthcare hashealth care has health care has escalated significantly above the ordinary inflation. Dir. Mulvaney before i say i think ive tried to make it clear and a couple of times we talked about it, there is one year there is an exception and the grandfathering of the variousn of medicaid to states and that leads to a very small senator king what youre testifying is about 1. 4 trillion is much to do about nothing. Is that your testimony . Dir. Mulvaney we have to measure against the baseline and everybody wants to do it that way measuring the baseline is a someplace around to givethe give someplace around 1. 1 trillion reduction in the baseline. Senator king so that is the assumption. There will be no negative impact on the elderly, that is your testimony. Dir. Mulvaney we care about the disabled and the elderly and children as much as anybody. Senator in so is it your testimony that these changes and the rate of reimbursement for medicaid will have no affect on elderly children, disabled people dir. Mulvaney we believe that is the case, yes. Senator king on growth everybody wants growth and we can talk about whether it is 3 or 4 , and clearly whatever the assumption is affect whether you are balanced in ten years or 20. I understand that. None of us know what it is going to be. We all want it to grow. My problem is when you think about it the senator to that productivity. That is the best engine of growth in the end. Two of the principal ways you grow productivity is workforce training and research. My concern is your cutting the training and research both in the nih and also particularly the department of energy. Eliminations of advanced Research Product agency eliminated. Fossil Energy Research and Development Program cut by 58 . Nuclear energy for 331 on Energy Efficiency and Renewable Energy by 70 . I dont know how you increase productivity by cutting the research and im not even talking about nih by cutting the research and job training programs. That is what you need to grow the economy. Dir. Mulvaney thats an excellent question. And i have a reasonable answer which is if you look at the total spending is up. If you look at the spending in the reforms we proposed and i canpropose and i canquickly if you get a grant from the private you are only allowed to use 10 and then the federal government is 27 or 28 . If you take the federal level the same you spend as much on the nih research as you did thed year before. Senator king so it is like before. What looks like the cuts in the budget are not really cut. Dir. Mulvaney we are being more efficient and i think we can do it without negatively impacting the things you mentioned. Senator king i dont have time for another question that i will close the drastic cuts in the department if you cut the state Department Budget you have to buy more ammunition. That is a huge policy mistake. Thank you. Cain this is a hearing about the president s budget so you are the questions but we have to understand these are the decisions. These are questions we are here dir. Mulvaney are you getting ready to be nasty about it, mr. Ine . Kaine this isnt about you. Its about the president s budget. But i do appreciate the written testimony so im looking at the first page. It also keeps a promise to balance in the next decade and reduce the debt without affecting beneficiaries of Social Security and the care retirement and without raising taxes. You do not include the president s promised not to cut medicaid. The president says i will not cut Social Security, medicare or medicaid and i think you were smart not to put the medicaid lien in this because i dont think it keeps the president s promised not cut medicaid. About a Million People on medicaid, 600,000 are kids, 112,000 are seniors in Nursing Homes, 186,000 are people with disabilities. So, im going to be out talking to a lot of people and they are going to ask me the president said he wasnt going to cut medicaid. I am a senior in a nursing home or my parents or grandparents are in a nursing home, im disabled. What do i say to that when the president said he wasnt going to cut medicaid . Dir. Mulvaney when i was telling my history of being in the legislature i cant remember if you were in the legislature in virginia or not but i remember begging the government for more control over the medicaid dollars and how we serve people in North Carolina because we thought the onesizefitsall federal programs didnt serve. So what i would tell them is with the American Health Care Healthcare act yes it changes medicaid and spend less. But by giving local control, governors and legislators senator kaine but you get my point. The president said he wouldnt cut medicaid. And im going to say to them yes but there is a cut between 8. 3 million but im supposed to tell them the qualities are proof. Your quality is going to improve. Dir. Mulvaney and if you go back to my verbal statement, you have a written statement and i stand by both of them ive told them luck, our you going to are you really going to measure your medicaid by the amount we spent with the quality of the care that you got. Senator kaine why am i getting my healthcare cost if i am a child and i am elderly and disabled and the same budget has a 982 billiondollar tax cut what do i say to them . Dir. Mulvaney i represented some of the same sorts of people that you did in the verbal part rural part ofy south carolina. When i had folks on medicaid what they cared about was their healthcare and if they were getting good healthcare they were not the jealous envious type. Senator kaine im not talking about the jealous or indias people either. If they are in the headlines by 1. 3 trillion, tax cuts 982 billion thats going to make them scared. How are they going to believe that . Lets go to another promise of this president. Nobody is going to lose the lose coverage, nobody. Dir. Mulvaney i believe it is a promise that is being broken by the current status of obamacare. Senator kaine hold on a second. This was the promise this president made under donald trump nobody will lose coverage. Yesterday they said 23 Million People are going to lose coverage so i have to go out and say medicaid is going to be cut by a trillion. 3. 982 billion in tax cuts to get 23 million are going to lose coverage and when they say to me the president promised that he was going to lose coverage for 23 million are what do i say . Dir. Mulvaney i guess you are right in this sense. The president cannot keep that promise unless the law changes. Unless the law changes, those people will lose coverage. Senator kaine but if it changes and 23 million are you telling me 23 Million People losing coverage keeps that promise but nobody loses coverage . Dir. Mulvaney i would love to have a conversation about the methodology. It assumes for example senator kaine should this body try to keep the promises of a Healthcare System where nobody loses coverage, nobody pays more and nobody with a preexisting condition has to revert back to the position they are going to get kicked around. Dir. Mulvaney i think you should pass something that replaces obamacare and meets the needs that you just laid out. Nobody loses coverage or pay is poor and nobody gets kicked around. All i know is you cannot keep that promise under the current law. Senator kaine but any change should meet President Trumps promise. Dir. Mulvaney any change would be a changed for the better, thats for sure. Senator kaine im going to leave it right there. Thanks, mr. Chair. Corker thank you mr. Chairman. I was in a meeting a few minutes ago and im glad to be here finally. Im sorry to be here late. Thank you for your service and i hope you still feel this is the job that you have lived for in life to be in. Dir. Mulvaney in all fairness, it is. Senator corker thank you for being here. Somebody in the administration yesterday or the day before said that the president s tax reform plan will be offset on a status basis every year of the budget window. There was a statement coming out of the white house yesterday and i wondered if you would affirm that. Dir. Mulvaney i think that is consistent enough that exact statement with some of the discussions we had earlier about the assumptions that we made in this budget. When we get accused as you heard the assumptions were made on this that the changes in things like the deductions and exemptions and the loopholes would result in a tax plan that is revenue neutral and have to make some assumptions early on. They increase the budget deficit or kept at the same and we assumed it was right down the middle. So that is how we pay for the tax bills we have to assume and then we do take the benefits of the Dynamic Growth in order to generate new revenue to the treasury. Sen. Corker but the actual policy that will be put in place the way you put the budget together is that the tax reform package would be static. Dir. Mulvaney it would be deficit natural. Sen. Corker and that seems to be consistent. It sounds like the tax policy they are planning to put in place would be revenue neutral and every year over the next ten years and is consistent with what you put in the budget. Dir. Mulvaney i didnt realize this and this until i started looking at the job. We will start the 2019 budget now. Thats how much time you have in the budget so theres a great amount you have to make certain assumptions and when we start to make assumptions about the tax policy, all we had to go off of was a single piece of paper and lay out principles so that bill probably can and will look different than that of the assumptions were along the lines of what he laid out. Sen. Corker it sounds like the Budget Proposal that you have to work on that started when you came back to office. It sounds quick that is consistent with what white house officials are saying the actual tax reform bill is going to say and and that is it is going to be revenue neutral on a static basis. I know that the secretary has taken the lead on the discussions and may have met with the senators so i have no idea where we are in the process. I know that, when we had to walk in our numbers, i dont think that is the indication of the final bill. We cant make those assumptions. Sen. Corker i know the word was used for cuts for medicaid and i would like to use the word certainly with all of our entitlement programs and the reforms to make sure people actually benefit from the services. So these programs are around in the future so i would have an editorial comment where i say i do hope in the 2019 budget you are able to look at Social Security and medicare because if you leave that much off the table, its very difficult as you know to solve the nations fiscal issues and you and i both know we can deal with that issue appropriately and not do anything to damage or harm the people that are currently on the programs. So i look forward to working with you and i hope that you are able to alter opinions over the course of time and thats why im glad you are in this position. I would like one final question to ask. Congress would need to raise the debt limit. Sooner than expected. I know that the administrations typically playadministrationstypically i know that administrations typically play this game and give some leeway and its moved up to why so theres a little leeway in the debt ceiling. That may not be the case here. What has changed . Dir. Mulvaney i met with secretary minutia and. Were coming in more slowly than he anticipated when he gave the last letter to congress i think the last letter he sent. I hate to butcher this but itheo was expected that the debt ceiling would be reached about sometime in early september. Now i think its moved a couple weeks in advance giving Additional Guidance on the treasury and it is consistent with the testimony. Sen. Corker thank you, mr. Chairman. Sen. Merkley under hr 1628, Medicaid Expansion is essentially wiped out. In oregon, that means about 400,000 people lose their Health Care Coverage why do you not consider that to be a break in the promise for coverage . Dir. Mulvaney my understanding is folks dont stay long enough on medicaid. It is a bridge to Something Else and the ahca l. The ahca a grant to be grandfather period for the states to allow those folks to rotate off the Medicaid Program so we dont anticipate anybody would be kicked off certainly future folks who might have qualified under wood and have access and somebody would be kicked off. Sen. Merkley using the ability as a strategy to simply eliminate Medicaid Expansion means roughly 400,000 fewer will be covered by medicaid by the expansion. Thats before you start cutting the part of the basic medicaid. Every analyst and expert in every Healthcare Group considers this to be a massive reduction for states that have Medicaid Expansion and a significant reduction for those that have basic medicaid. You can sit here and spin it all day long and that is your privilege. Your here to testify. But we turn to the attack on the Rural America. Rural water, essential service to the airport as well as the contact tower support, clinics, hospitals, rental housing for agriculture which by definition is rural and veterans vouchers. So why does the president have it in for Rural America . Dir. Mulvaney providing 161 million of which is targeted to be increasedtheincreased balloons by 552 million over the enacted level of 7 billion increased community loans by 400 , million to support the loan level of 3 billion sen. Merkley excuse me. Are you saying none of the reductions i mentioned are things that are in the president s budget . I would like you to read the budget if you are going to sit here and testify and acknowledge all these cuts. Is. Mulvaney your question what are we doing to inform Rural America. I would say its the same point i made to other folks. We werent convinced it was showing a return on investment for the taxpayers. Containingy are you debtor you contending that Rural America will get the same amount of resources. Im telling you that in appellation sen. Merkley im not asking you about appellation appeared talking about rural oregon. We are taking care of the folks generally. Sen. Merkley you are saying they will still have that support. Dir. Mulvaney there will absolutely be changes in the program. Sen. Merkley we dont have time to go through all these pieces. Ive listed them out as an essential damage and you may contend otherwise but lets turn to direct impact on those that are hungry in oregon, 370,000 children at risk. Have you ever in your life gone hungry . Dir. Mulvaney no sir. Sen. Merkley then you feel comfortable cutting the basic program that ensures our children have food. Sen. Merkley thats because we dont do that. The snap reduction in the other grams youre looking at the reductions deal with us involving the states managing the programs. The state cost matches that but its 100 of the actual and what the actual benefit and and what we found is that is a formula for wasted growth rate. So we ask the states to pick up some of the costs to drive efficiencies that we know they exist when theexist when the people administering have a little bit of skin in the game so the total spending should not go down or if it does is because of efficiencies and not reductions. Sen. Merkley it is easy to sit there and talk about efficiencies when youve never worked with individuals going hungry. Dir. Mulvaney senator, with respect to ask me if id ever gone to to bed hungry not if i worked for folks that had. Clearly, what you are doing in this budget will do a lot of damage to those people. Dir. Mulvaney i disagree. Sen. Merkley lets turn to housing. We have 4,000 housing vouchers eliminated in oregon of vouchers played incredibly Important Role in a state of emergency to help address the state of emergency in housing. Why make it worse . Why make a housing emergency worse . Dir. Mulvaney i got a lot of questions over the last two days and i do not have the information about the Housing Voucher Program and i apologize. Sen. Merkley the housing crisis is one of the worst because people have heard what a wonderful place it is mostly by the landuse policies. And not anything dealing with federal regulation. You know very little about housing in oregon. Chair i want to thank everybody that participated today and director mulvaney for his answers and the efforts that hes put together in a short period of time to come up with something as complicated as 4 trillion of spending to grapple with these same things as a committee because as ive told people this is a list of suggestions from the president. But we are the ones that do the budget. So i will rely on all these folks who have criticism. I think everybody has some criticism. How they are going to solve the problems that we have and do it in a responsible way, i really theeciate that that is first balanced budget, even though it is over 10 years, that ive seen from a president in a long time. In fact, for the last eight years, we voted on the president s budget and in the first seven years there were zero votes. He didnt get a vote from the democrats or the republicans. In the eighth year, he did better. He got one vote. I suspecthat that your budget will do a little better than that. There is something in this budget for every Single Person to hate. And if they are going to pick out the thing that they dont like and vote against the whole thing, we dont stand much of a chance of even doing the congressional budget that we are obligated to do. You are asked a lot of questions about tax reform. I think tax reform is up to us, too. [laughter] in fact, most legislation is up to you, senator. Enzi yes. I do recognize the difficulty in cutting and the fact that around here in all my time i watched it is considered a cut if you dont ask for it even though it is more than you had before and that makes it very difficult. I appreciate your work on the debt ceiling and of course im hoping that we can get some budget reform to get a Better Process that puts us on a better track. A week ago, we had testimony from phil gramm, who did one of the budget acts earlier and is an economist. He actually suggested that your number for the rate of growth is a little low. He thought 3. 4 was a better answer than that. Based on both historical and what he saw as possibilities for solving some of our problems. Thank you for your efforts on this. Thank you for your patience and willingness to answer questions and the volume of answers you are able to do on such a diverse set of questions. Thank you very much. We will work with you to see how much of that we can accomplish and what will come out in our budget. Dir. Mulvaney senator, thank you very much for having me. Senator enzi the hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable satellite corp. 2017] tonight, political strategists discuss donald trump and how the two major parties may in upcoming elections. Ron clay and talked about the future of the democratic and republican parties. Here is a brief look. Reasons are structural why our candidates will carry the label democrat and republican. , do not think that there is going to be a desk while i do not think that there is going to be a serious thirdparty threat here. The what those labels mean is what is up for grabs. And whether those labels mean anything at all is a for grabs. Our Political Parties are Like Department stores. They are bay, complicated aggregations of a lot of products and things, and we live in an age where Department Stores are dying. Our parties are facing that, too. , reallyblicanstores are party rich people, koch brothers, we have the same thing on the left, john star iran george soros and other people, and specific andrest john stier george soros and other people, and specific interest groups. I think party labels are an afterthought right now. Also participating is Steve Schmidt, who served as a senior strategist for george w. Bush and john mccain. The discussion was part of a conference on Donald Trumps First One Hundred days, hosted by the university of southern california. See the discussion on President Trump and the future of Political Parties tonight at 8 00 eastern here on cspan. Sunday, on q a herbert hoover, secretary of commerce those rules, 90 years ago, still govern how we actually allow resources to be used in our economy today. Clemson University Professor and former chief economist at the fcc, Thomas Hazlett talks about his new book the political spectrum which looks at communications policy. When we went to this political system for allocating spectrum rights, within a couple of years, the regulators at the commission are renewing licenses, but very carefully noting that propaganda stations would not be allowed. Early on, 1929, in that period, you had left wing stations, if i could use the political term, in chicago, w cfo , socialists had bought a station in new york they wanted, for political purposes, free speech, you might say, they wanted to espouse their opinions. These were immediately dubbed propaganda stations by regulators. When they were renewed, they were told to be careful about expressing their opinions. Sunday night on cspans q and a. Trump tweeting today i will be announcing my decision on the paris accord in the next few days. Make a great make America Great again. But cnn reported that president is expected to withdraw from the deal to reduce Greenhouse Gas emissions by 2020. Bloomberg meanwhile reporting the president hasnt decided but is leaning toward exiting the treaty. And after another multinational deal that President Trump has , thehe wants to change renegotiation of the north American Free trade agreement between the u. S. , canada and mexico, will begin in midaugust, covering more than a trillion dollars in trade. So we will have wilbur ross love coming up at 3 30 eastern on the administrations goals and changing the 25yearold agreement. In the meantime, we will hear from the first minister of scotland, nicola sturgeon. Launched thee platform to supporters. She said a refer and him should be delayed until after negotiations for the u. K. To leave the european union. She said there is too much at stake for scotland not to be part oe