Transcripts For CSPAN3 White House Budget Director Defends Presidents Spending Priorities On... 20170524

Today we will hear testimony from the director of the office of management of budget, the monon honorable Mick Mulvaney. I want to thank him for being here to discuss the president s budget and spending priorities. We look forward to hearing his remarks. While article one gives congress the power of the purse the federal budget is a collaborative process. The administration, this committee and counter parts Work Together to build a budget that reflects our unified priorities over the same time period economic stagnation lead Congressional Budget Office to continually downgrade projects for Economic Growth. Its a large debt burden on the future generation of americans, that reflects moral failure to face head on our challenges. This administration and this committee agree on our our responsibility to improve our countrys fiscal situation and put us on the foot a balanced budget that allows us to start cutting down our National Debt. Our friends will no doubt defend the status quo of the obama areas where the National Debt increased by over 9 trillion, the largest increase of any presidency. Their solutions which are to keep doing what we have been doing are not only unsustainable, they are our responsibility to current and future generations. Our fiscal situation it is in the next 30 years if nothing is done. Over the same period of time deficits will rise from 2. 9 of gdp to 9. 8 of gdp. These are levels of debt and deficits that have never been seen like this before in American History and are well beyond what the economists predict would result in a cri s crisis. Doing nothing and continuing the status quo will result in a fiscal crisis. Put simply, the status quo is not an option. This committee and administration committed to building a federal budget that begins to deal with out of control spending, incentivizes Economic Growth through Regulatory Reform and makes sure that the Government Works for the people, not for the bureaucrats. Our committee and this administration also agreed on the commitment of funding our military the threats to our national and Homeland Security continue to grow. The Previous Administration left the world with growing threats from all corners of the globe. Ensuring is our first and foremost responsibility of the federal government. We should give our men and women the resources they need to complete their mission. It goes through this process it is a resource to provide details on the goals of President Trump. Ball lapsing the budget over ten years presents major challenges but also a great opportunity. For the First Time Since i have been serving on the Budget Committee we have a president willing to take action to get our fiscal house in order. Our budget resolution is no longer a vision document. It is a blueprint for building a better america we promised our con sfi constituents for years. It limits the size and scope of government, ensuring our children and grandchildren arent burdened by our levels of debt and per ser veering far safe and strong america. I know that working together we can find the right solutions for the American People. Thank you and with that you are recognized. This is the priorities. Those contrasts will be made absolutely clear today. The trump budget is shockingly extreme. T it leaves no question of what this administration values, greater gains for millionaires at the expense of American Families and our National Security. Yes, the president s budget is a betrayal, a line by line tally of broken promises. Above all its a shattering of dreams and loss of hope and opportunity for millions of families. This budget starts by taking away health care then food then housing then education then job opportunities. For nearly every American Family struggling to get ahead this budget makes that much harder, if not impossible. The level of cuts is astonishing and frankly immoerl. This budget cuts nondefense discretionary funding by a massive 54 billion from the austerity level spending cap. It goes haywire cutting more and more each year until 2027 when investments are by nearly 20 . Thats without adjusting for inflation. A 30 cut which includes Homeland Security, education, medical research, Veterans Health care, transnsnsnsnsn and much more represents a total disinvestment in our nation and a complete departure from every standard of responsible governing. It gets worse. We know at least 24 million americans would Lose Health Care coverage of this. It cuts medicaid by another 600 billion. Thats a total cut of 1. 4 trillion to a program that is the only source of health care for tens of thousands of individuals in every single Congressional District in the country. The vast majority are children, seniors in Nursing Homes and the disabled. It targets help for people and cutting Social Security disability by as much as 72 billion despite the president s pledge to not touch Social Security at all. It cuts 193 billion from the supple mental assistance program. This is the program that makes sure our poorest families have at least some chance to put a meal on the table. It provides 1. 42 per person per meal again, mainly to children, seniors and the disabled. It eliminates or we vis rates 14 education and arts programs. It manges it harder for americans to compete for jobs, guts investments, jeopardizes the safety of food, air and water and leaves roads and bridges to crumble. The Trump Administration makes all of these cuts for one simple and disgraceful reason, to hide the fact that there are huge tax breaks for millionaires, corm rations and federal interests will explode the debt. This budget relying on absurd fro jekted. It provides no rel information other than on tax reform. I guess its the president s believe me part of his budget. With all due respect we arent going to take the president s word for it particularly when no one elsewhere. Ranking member, would you like me to turn it back over to you or finish your statement . Okay. Let me finish this. We have been down this road before more than once. I know you believe it with all of your heart but youre wrong. Tax cuts for corporations and the wealthiest americans do not pay for themselves. They drive up our deficits and that is the truth. Its also true that we cant trust a budget that sets up false choices. This increases defense spending while cutting by the same anount. We dont have to choose twebetw updating tanks. To strengthen National Security we have to ensure our military and American Families have tools needed for success. Thats our responsibility to invest in the future of American Families and help grow our committee. Education, health care, job training, infrastructure, programs that help individuals with nowhere left to turn and a tax code that helps families get ahead. Those are american priorities and they should be the priorities of this congress and this committee. Thank you. Welcome. I know there was a little confusion in the time. Welcome with. I look forward to hearing discussion a little bit later. So now i would in the interest of time if any other members have Opening Statements i ask that you submit them for the record. I would like to roecognize mic Mick Mulvaney. Youll have ten minutes to deliver your oral remarks. You may begin when youre ready. Thank you so much for having me. Thank you for the Opening Statements. Thank you for making it. So i wouldnt dream of doing this without you. Thank you for having me here today. Its really an honor to be here, to be back in this committee. I served in this committee for two years. It is an honor to be here on behalf of the Trump Administration. Mr. Lewis, welcome. Youre sitting in my chair. Im not going to read my omitting. I will make a couple of comments and well get back to the question and answers. When we looked at the budget for the very first time i picked it up on friday, the new foundation for american greatness. I spent most of the weekend reading it. As i went through it it struck me that we could have come up with a different title. It could have been the Taxpayer First budget. The first time in my memory this is a budget that was written from the perspective of the people that actually pay for the government. We went line by line through what this government does and asked ourselves can we justify this to the folks that are actually paying for it. If im goings to spend it on a program can i justify to him spending that money . Can i justify it to you . Can i look you in the eye and say i need to take this money from you in order to give it to a disabled veteran. Im not sure i can say i need to give it to a program that is completely ineffective and has waste, fraud and abuse. Thats the perspective by brought from the very beginning. Maybe thats whats new. The other thing thats new is that it does balance. You know it has been a long time since the president s budget has balanced. Someone mentioned on the news today it is a moral document. It is. Here is the moral side of it. If i take money with intention of pay it back that is debt. What we have been doing for too long, both parties, taking money from people without laying out a plan on how we will lay it back. It does balance something that is completely new in this town. Whats the foundation . The foundation for the plan is 3 growth. It is whatever can get us to 3 growth. I can assure you when im in the oval office and we are talking about Energy Policy and health dare reform and budgets, we are figuring out how to get to 3 growth. I have news for you, if we do not get the 3 growth and thats not a plan for the future so pl. We do everything we can to get to 3 growth. I look forward to the questions today about how we do that. We do all of this, by the way, and still fund the president s priorities. We wanted more money for National Security. Border security. Law enforcement. Veterans. School choice. Even paid parental leave for the First Time Ever President Trump, the first president of either party is proposing a National Paid parental leave program. 20 billion in this budget to do that. We dont touch Social Security and medicare, following through on his campaign promises. Were able to do all of that and still balance. Why . Because what we did here is try and change the way that washington looks at spending. We no longer want to measure compassion by the number of programs that we have or the number of people that are on those programs. We want to measure compassion, true compassion, by the number of people we help to get off of those programs. We dont want to measure our commitment to the country by the amount of money that we spend, but instead on the number of people that we help get off of these programs and get back in charge of their own lives. That is what we think makes this the american greatness budget. Were going to try and get the country back to where we have a healthy economy. People are working again. People are optimistic about the country again. If youre under the age of 30 o you have never had a job as an adult in a healthy American Economy. And a healthy American Economy is different than what youve seen for the last ten years. The optimism that comes from that is what this administration is about. Its what this president promises, its what were going to do everything in our power to deliver and the budget is a start to that. With that, madam chairman, again, thank you for having me today. I look forward to the questions in explaining the budget to members. Thank you, mr. Director. I look forward to the conversation. Thank you for yielding back those five minutes. Our members will have more time and opportunity to ask you questions. So now we will begin. The question and answer period. Im going to begin with the first question. You mentioned during your opening comments about a moral obligation of balancing the budget. And around here in washington, youll hear some folks say this is just kind of a quaint akronism that we should balance a budget, somehow that would not be something that would be very important. You mentioned about being a moral obligation. I certainly has a mother and a grandmother hopefully a great grandmother someday, do feel that it is our moral obligation to make sure that we leave a strong country without a huge deficit for our children and grandchildren. And so will you talk a little bit more about your view on the fiscal and economic wellbeing and what will happen if we continue these chronic budget deficits and ever rising debt on the moral issue for the future generations . Ill approach it this way, thank you, chairman black. Everybody around this table owes the federal government 60,000. I have three 17 yearolds. Theyre not even out of school yet and they owe this government 60,000 each. Every man, woman and child in this room owes the federal government 60,000. Im not sure if they know that. Im not sure if weve done a good job of both parties of explaining to people what government truly costs. I happy to believe weve done a good job of hiding the true cost of government from the American People. I dont believe that people are willing to pay for as much government as they have. I dont think weve been entirely honest with them for the last 40 years on what government costs. I think theres a moral imperative to tell them. Look, this is how much it costs and this is how much we have to take from you in order to do this. Do you really want us to take from you that much money . Do you want us to try and find a way to balance and spend less. Balance is something it seems foreign in this city, which completely stuns me. I dont know how many of you used to be on the state legislators. I was. But a balanced budget was the ordinary course of business for just about everybody in the world except this body. States have to do it. Families have to do it. Businesses have to do it. My goodness, my church has to balance its budget or else they cease to function. I think theres a disconnect between the American People and government when we dont lay out a path to balance. When you talk about the Financial Impact of that, madam chairman, what you look at as we go forward every single year we talk about more and more of our money going to pay Interest Payments on the debt. I dont know the exact numbers, but at some point in the near future we expect to be paying more money for debt than we do for defense. That worries me. I was in not this room, but the old budget room when i saw the chairman of the joints chief of staff sit in front of this committee and say he thought the greatest threat to the nation was the National Debt. Countries rot from within. That debt is part of that rot and thats what were trying to address in this budget. I appreciate that. I appreciate you putting it in context as well, that we would look at our students in high schools and say to them, would you like to have a 60,000 car . Would you like to just pay your share of the debt to the federal government. So i appreciate putting in in a real context where folks understand that when we talk about trillions of dollars. I know even before i came to congress and serving in the state legislature we talked about millions and billions, we dont talk about trillions of dollars as state legislators. Honestly you think thats a fictional amount because people cannot wrap their heads around trillions of dollars. When you put it in a real context of your share of that is 60,000 and youre really at the end of the day, not paying off even the debt that were continuing to build up. Along with that, i do want to say its gratifying to see that the administration is taking a stand on some federal entitlement programs and reforming them. Do you consider entitlement reform an indispensable part of reaching a balanced budget, especially as we look at how were only spending one third of our total dollars on every day spending and the rest of it is over in that column with the debt and the entitlements, Social Security, medicare and other entitlement programs. Do you consider that an indispensable part of what we must be doing. And along with that, do you agree that even if we werent facing a fiscal crisis, that reforming these entitlement programs really is the right thing to do . Let me answer it this way, i dont believe its possible. I know its not possible to balance the budget solely using the discretionary portion of the budget. There have been years that i was here, 2010, 2011, i believe, where we could have taken Discretionary Spending to at or near zero and we still would have had a deficit. In our budget, we do address mandatory spending, some people call entitlement spending. We do not address the two that the president didnt want to touch, Social Security and medicare. I have set across the desk from him with my list, we had four meetings, we would go yes yes no no no. The noes were all Social Security retirement and medicare. He said, look, i made a promise. I made a promise to people that i would not touch those. And we didnt. Ill be perfectly frank with you and candid. I didnt think we could balance the budget. I was extraordinarily impressed with my team who were able to figure out a way to balance the budget without touching those times. Its probably the last time we could do that. Very difficult in the future to do that because of the role that those programs play in our future spending. I was excited to be able to keep the president s promise. The budget is nothing more than a collection of his promises. Thats how we wrote it. If he said he wanted to spend more money something on the campaign we spend more. If he said we wanted to spend less, we spend less here. He wanted to add to defense, school choice, Veterans Affairs and didnt want to add to the deficit in year one. Thats the framework for the budget. But to your larger point, yeah, you cannot address our long term drivers of our debt without looking at the mandatory side of the budget. Its 3 4 of what we spend going to 80 in the near future. You would be hard pressed to be able to balance the budget without looking at mandatory spending. Along those lines, and ill conclude my questions here. Along those lines, we sat and talked privately about some of the ideas you had. And you shared with me that we dont want to hurt people who really need the kinds of services that we want to be sure they get. We dont want somebody who is unable to afford their heat and air conditioning to go without getting those services. But there are wastes in these programs. I think thats important that we talk about the wastes in the programs at the same time acknowledging that were not heartless people. We want to make sure we take care of people. We also want to make sure our dollars are well spent. Would you give an example of it . Just in the program about how there are wastes that we need to make sure were cleaning up . Sure. I know it fits a certain narrative that our party doesnt care about poor people. And that seems to always filter out during budget time. It filters out all the time. I believe in the social safety net. I really do. I actually think that it helps us get to 3 growth. I made that exact argument to the president. A healthy safety net gives ppeople confidence that we need them to have in order to take risks. In order to start your own business. In order to go out on your own. To bring the sort of dynamism that we need into the economy to get 3 growth and that a healthy safety net is part and parcel of that. And we can absolutely afford to do that for folks who really need it. Part of the difficulty is are there folks on these programs that shouldnt be. Ill ask your specific question by liheap. 11,000 dead people got this benefit a few years ago. Dead people. One of your states has a requirement that they approve 3 4 of the applications regardless of merit. When you look at that through the perspective of the folks who pay for the program, its an entirely different perspective than oh, my goodness youre going to put people out on the street or people are going to freeze to death. No they arent. Were not going to kick any deserving person off a program. Republicans care about poor people as much as democrats just the same we care about clean air and healthy drinking water. Its the balance for those who pay for the benefits and those who receive the benefits. You show me a program where 11,000 dead people are getting benefits. I have a problem with that. I look forward to having those questions as we move forward. Thank you, i now recognize m mr. Yarmouth for questions. Thank you for your work. The first thing i want to do today is thank you. One of the things i think youve done by submitting this budget to congress is highlight some incredibly important vital programs that investments that the federal government makes that help working families throughout this country. And that support much of the economy in this country. Its one thing to say, we can do without cpb, we can do without nea, we can do without cdbg and people just hear initials and dont really know what were talking about. But when they say would you like arts programs in your community, would with you like historical displays in your rural community. Would you like meals on wheels to help your seniors survive. Then they understand that these are critical, critical programs that are worthy of government investment. So i thank you for highlighting that for the American People. And i have to respond to one thing. That guy who is deciding to buy 60,000 car or pay 60,000 to the government, i wonder what he would answer if you said you can have a 60,000 car or your senior parent can come live with you because the money that would put her or him in a nursing home that is paid for by medicaid is not going to be available to you. I think youd get a different perspective on that. And mr. Mulvaney, you said on several occasions that you would not ask you could not ask a single mother i think you said in detroit but it doesnt matter where that single mother would be. Whether she would be willing to pay for her share of Public Television or nea and so forth. I would say most single mothers i would know, if you asked them whether they would pay one dollar a year for childrens programming or would they rather pay 2 thun dolla 2,000 for a de. They wouldnt mind paying that dollar for childrens programming but would not for the defense. This is the age old argument. I think well continue to that have debate and i think its really unfortunate in a way. I thank ms. Jayapal for that impressive rendition of my Opening Statement. But this really is pitting one against the other, this budget. Thats what it does. It pits defense investment against investment in everything else. And thats a frightening concept, i think, for this country. If we have to ignore the portion of the federal budget that invests in people, whether its job training, education, important medical research and other innovation, or whether we buy guns. Thats what were being asked to do in this budget. So youve justified many of the cuts in this budget by saying that theres no evidence to prove that these programs actually work. For example, youve suggested meals on wheels doesnt work. I would think that just the by nature of the fact youre keeping people alive by feeding them is pretty good evidence. Beyond the question of morality of providing meals to seniors, theres abundant evidence it does work, including evidence that even small increases in that program pay dividends in the form of lower medicaid spending. You know, granted there are many other programs where the evidence may be more nuanced. But that doesnt mean the programs dont work and should be eliminated. Pulling the rug out from working people, children, and the elderly who need them. So if direct empirical evidence that something works is the only standard for funding, then what is the direct empirical evidence that an additional submarine or one more f35 increases our security . That kind of evidence would be difficult if not impossible to produce. Does that mean she wouldnt buy submarines . Of course not. We rely on a comprehensive body of information, including opinions of our experts to make those decisions. So the administration is asking for an additional 54 billion above the caps and there have been plenty of evidence and reports indicating waste and mismanagement at the pentagon, including its the only agency that cant pass an audit. There have been hundreds of billions of dollars of cost overruns, reports of significant bloat in the overhead. The business board concluded 125 billion in savings over five years could be achieved. Gao has identified a myriad of risks in business operations, just this past weekend the Washington Post reported on gross overpricing of fuel which created billions of dollars in reserve cash for the pentagon to spend on new priorities. My question to you is, how have these reports of mismanagement and waste factored in the administrations decision to add 54 billion for National Defense . A couple Different Things for that, Ranking Member. And thank you for the questions. On the d. O. D. A couple of things. Im just as interested as you are, i believe in waste at the department of defense. Im happy to announce once i got over to omb i asked questions about what were going to do about that. I think the d. O. D. Filed a confirmation of this that they intend to be fully audit ready by september of this year. Thats pursuant to law, i think theyre required to hit that deadline. They told us theyre ready to hit the deadline. I think certain parts of the department are already ready. I do look forward to continuing to work on those with you. Regarding meals on wheels, ill come back to that in a second. You know i have no intention to embarrass you because youre a friend of mine. But i do believe the article you read about that has been withdrawn by the Washington Post. We never said that meals on wheels was ineffective. Too often the case, the story got printed like this, and the redaction got printed like this. But lets talk about the meals on wheels. We dont reduce it. Okay. Most of that is funded through its an hhs program the primary funding for meals on wheels comes through the senior nutrition services, i believe thats at hhs. It could be h. U. D. I lose track of the alphabet soup. We do cut the cdbg program. Thats a program that accounts for less than 1 and optional by the states. We block grants for the state. Some states do choose to use that money for meals on wheels. That funding accounts for 1 of total meals on wheels. So i just want today classify that. Regarding the public broadcasting, look, i mean, my mom tells me i saw the very first sesame street. Okay. In fact i was curious that theres a printer in the back room here with berts picture on it. Theyve named the printers here, ernie and bert. Its a for profit organization. I can assure you big bird makes more money than everybody in this room. When i do go to that family in grand rapids and say is this what you want your money to go to this . Maybe they can afford to do it without us. Do you think the same family would say, oh, im very happy paying 430 million for military bands . I think that when we look at the priorities that the president has given us. Ist not just defense by the way, you said all the money is going to defense, its not. Ill answer your question and fill in gaps. Yeah, i think folks understand that a function, a proper and appropriate function of the government is to defend the nation. If we got together and came up with a list. Everybody from every different wing of both parties came up with a list of what they thought the priorities of governments should do, defending the nation would be fairly high up on everybodys list. Everybody on both sides of this committee, im sure. This congress. I think one of the knocks against your party is you dont believe in National Defense. I dont happen to agree. I know you think its a priority like we do. That family, do you think some of that money no question about that. Im asking about military bands. Youre cutting out n. E. H. Cultural enrichment programs. Youve got this other program i would argue provides it no service. But let me say one other thing, this is in treelrelation to the methodology. The media is doing a good job documenting the problems with the assumptions that were made in this budget. The 3 rate that no one thinks is reasonable. The notion that tax cuts pay for themselves, which even conservative organizations dont necessarily support. But i just have to repeat what was written today, you know, i can say i want to dunk, and i can make the assumption that im going to grow a foot and return to the athleticism of my 20s. But thats probably not going to happen. I think thats what many of us are concerned about with the construction of this budget that relies on things that just arent going to happen. To make the claim that it balances with basically fantasy land predictions to us is a claim thats not valid. I yield back. Thank you, i now recognize the vice chair for the committee. Its good to see you back at committee again. I really appreciate the leadership that you and the administration is providing, as you said in your opening, youre putting forth priorities. And there are priorities that are responsibility in light of the fact that were 20 trillion in death going to 100 trillion before too long. I take notice you said this is probably the last budget were able to do that. That is to say if we implemented every word of your proposed budget, or something similar, very similar in terms of the numbers, that means in ten years were going to have to look at Social Security, medicare, again look at medicaid perhaps in order to be responsible and sustainable again. Those three programs are eating up so much of our budget. I think republicans when we started out six years ago, we were saying the same thing as the president. We dont want to affect anyone on these programs, but were looking for something to do for the next generation so the programs are strengthened, sustainable and around. Not speaking for the president , of course, but thats how i interpret his promise. I think d. O. D. Will be auditable by the end of the year. I thank you for prioritizing school choice. Something i work on in the k12 education subcommittee i chair. We stand fully ready and behind what the president wants to do to make sure that parents can pick the choice thats best for their kids and not be shackled to a particular zip code. When parents have a choice, you know, the kids have a chance. I thank the president , and you for doing that. I want to focus on something thats come up in my Transportation Committee im also on. The atc privatization. When the cbo scored hr 441 last year which was the air act, cbo said that privatization air Traffic Control would cost nearly 20 billion over the ten year window. If our goal is to reduce defi t deficit, and not add to the debt like you said, why are we embracing things that are going to cost 20 billion . Thank you for the question. I apologize in advance to addressing all of you today by first names. Its a bad habit. Im going to call you mick. Youve called me a lot worse as i recall. Heres why we do it. The Current System is broken and it supports the expenditure. When we look around the world we look at technology, were behind the curve. Way behind the curve. We do support the efforts that are currently moving through the house. With regard to that, i fly in the system, i use the system, 145 hours a year that im flying in the system, not just as a passenger. For the size that we are, it works well. We continue to search for many of us, the actual problem its trying to solve. We dont think one exists. You can say canada like i think your counterpart mentioned the other day, everyone else has done it. So we know its relatively easy to do, unquote. Thats the view of the view of the administration. He was mentioning canada, which is one third the transaction and the size of our system. Just because it was easy to do and took canada a decade, by the way. All of a sudden, its going to be easy for us to do . I dont think anything on that scale would be easy, i do think tits much more modern. Its scalable. You can take it up to something but you dont need to take the dispassionate third party that is the faa to decide disputes in a eco system that has different interests and sometimes competing interests and turn it over to its a monopoly and youre going to turn it over to the airlines. Thats going to be the result of this board. Thats concerning. Do you guys support all parts of that atc privatization proposal, even the Labor Agreement thats been codified in the proposal . I dont get into that level mine budg my biudget. Thats part of the 20 billion cost is this Labor Agreement youre talking from the faa from the controllers and codifying it and baking it into law. If you, agree with that part of the proposal which was my question. Tax rates. On this very thing, the budget states you will work with congress to establish successor tax rates if this new atc corporation is created. Does the administration have a general idea of what the tax rates would be and would the Administration Support moving to a user fee for all segments or any of the segments instead of creating new tax rates . Im not trying to dodge your question, we dont get to that level of detail. I understand that secretary chou is on the committee. This goes to the bottom line budget. Thanks for being here. Thank you. The gentlemans time is expired. I now recognize the gentleman from new york, mr. Higgins for five minutes. Thank you, madam chair. Welcome, budget director mulvaney. Under your budget, three million wealthy americans get a 213,000 tax cut. 240 not so wealthy americans get a 210 tax cut. I appreciate all the concern about debt. The white house budget increases the National Debt by 5. 5 trillion over the next ten years. This according to the nonpartson committee for a responsible federal budget. Economists right, left and center say the tax cuts dont pay for themselves and they never have. You want 3 annual growth, so do i. The Budget Office projects more than 2 growth each year over the next decade. You want growth in the United States economy, you have to invest in that growth. I think china is serious about their growth and i dont think that we are. And let me explain. Chinas americas largest trading partner. Last year we sold 115 billion to china. They sold to america 462 billion. Our trade deficit last year with china was 347 billion. For stuff, for goods. China wants to overtake the United States as the Global Economic leader. China Just Announced a one trillion dollar Infrastructure Investment to open up china to 47 other asian countries. To sell the stuff they make to 47 new markets, much more efficie efficiently. You want to build a 40 billion that we were told that mexico would pay for. Your budget spends 3 billion a month for a 16 year war in afghanistan. In response to a 2 trillion need for american roads and bridges with a pathetically weak 200 billion maybe. Chinas making an aggressive move to challenge the United States global leadership. And the president in his first budget, does not nothing. Absolutely nothing to seriously grow the American Economy and to reclaim economic share from china and other countries. Your thoughts on that . Again, youve given me a bunch to work with. Let me take them in turn and we can fill in the back fill if youd like to. You talk about investments in china. Investment is absolutely critical to get Economic Growth. We all agree on that. I think the difference between you and i and china and myself might be where we think the most Effective Investments are made. We happen to believe that private Capital Investment is always more efficient, more effective, and more accountable than government investment. And when you say that we make absolutely no provision for investment in this country, sir, i have to disagree. The whole tax plan that weve come up with is designed today try and drive Capital Investment. Businesses investing in new technology and people. Trying to figure out new markets. Thats a much more effective way to get to 3 growth. And i can assure you that were fairly confident we can beat the chinese with that. Regarding the trade deficit. We share your concerns. I think thats why youve seen a focus on trying to rebalance our trade agreements. Weve made small progress on that already in the first couple of months. Youve seen some on exports to china. Youve mentioned that china is doing a massive one trillion dollar infrastructure and were only do a i cant remember 200 billion. 200 billion. What i would point out to you is were proposing to figure out a way there are ways to leverage that to at least a trillion dollars worth of spending. Let me give you an example how that might be. Youre a governor. You want to build a road, okay and the recooad will cost you 100 million. You try to figure out a way to pay for it and you cant. You can only raise 80 million. What if we kicked in the extra 20 . Thats a 100 million road that would not have otherwise been built with a 20 let me reclaim my time, respectfully because i have a few minutes. We spent 108 billion rebuilding the roads and bridges of afghanistan. We spent 78 billion rebuilding the roads and bridges of iraq. And they were deficit financed. And the traditional way that goes back to lincoln in how you do it. He called them land improvements. You issue debt over the length of an infrastructure project. Cities, villages, towns, and states do it all the time. In what the Infrastructure Investment does, sir, it unleashes the resources of the private sector. You see that from buffalo, new york, to boston, massachusetts the gentlemens time is expired. I think we need a more serious attempt to get away from building walls and build bridges and roads that are in desperate need of repair the gentlemans time has expire. I yield back thank you. I dont mean to interrupt when youre making a comment. I appreciate the fact that you want to finish your comment. But if i could ask everyone to try to stay within the time. These Committee Meetings do run very long. I know everybody has other meetings they need to go to. So i now recognize the gentleman from florida, mr. Diaz ballart. Good to see you, sir. Let me first thank you for being accessible. Youve been exceedingly accessible to all of us who have had questions and thats refreshing and grateful. Im not going to talk to you about the issues you know in my other life as an appropriater. And well have ample opportunity to talk. I know the president and you are emphasizing, again, infrastructure and thats something im very happy about. And well have ample opportunity to talk about details. Let me kind of shift to talk about National Security. Im pleased this budget recognizes the importance of our military and National Security. I dont have to tell you that for the number of years the last administration, military spending was in essence held hostage to nonmilitary Discretionary Spending. That is something that was broken. Fortunately in the 17 ommubs that was just passed. I dont have to tell you about the growing threats around the world. I believe that having a Strong Military is essential for our security for the stability of the world for ourselves and ally and the United States must continue to lead. I believe that by the way, part of that however is investing not only in defense, but also in targeted soft diplomacy and funding there. Obviously, a big part of having a safe world and a safe nation is when the president of the United States sets a red line, that that red line is enforced. So let me talk to you a little bit about, again, where you see that spending, military spending being, going. How you see the future of our armed forces. Thats one issue id like you to elaborate a bit on. The second thing, if we have some time, im going to open it up to you is i keep hearing that 3 growth is not possible anymore in the United States of america. We have to give up on 3 growth. For the future for our children and our childrens children. That that is not reasonable anymore. I refuse to acknowledge that and believe that if we do some things that my 11yearold son will inherit the same country we inherited. Which is not a country growing at 2 growth. The forecasts are if we dont change the track thats exactly what well be condemning our children for. If you would talk a little bit about tax reform, reg reform is key. Domestic Energy Reform is key. A little bit as to how you foresee this budget and, frankly, this administration, looking at ways to make sure that our kids do not inherit what some believe is inevitable, which is a country that will never grow above 2 . Thank you, congressman. A couple Different Things that you asked me. Where we thought the defense spending is headed. Of course, whats driving all of this is the president s promise. Ill come back to this again and again during the testimony. The president s promise to undo the sequester. Thats what drove the decision. The top line spending number you see in our budget, which is 603 billion this year for defense, i think is the exact number it would have been but for the sequester. So thats what we see is a presequester spending level. Informed by whats going on right now, were in the middle of our new National Defense strategy. Were looking forward to getting that information from secretary mattis. The president made promises coming back to the team on the campaign trail about the size of the forces. Youll see funding to try to get us in that direction. Ill be candid with you, its difficult to do given some of the Industrial Base that we have now, but were working on ways to try and address those problems. So the president is just as committed as you are to try to figure out a way to fix some of the damage that may have been done during the Previous Administration within the department of defense. Regarding 3 growth, i just im stunned. There was an article the other day in the Washington Post that said it was an outrageous assumption . How pessimistic do you have to be to assume that 3 growth which is less than the historical average going back to the founding of the country and the end of world war ii that thats unreasonable. What does it say about the Previous Administration or the cbo, about their view of the country that they dont think were ever going to be able to do that again . We refuse to accept it as well, congressman, as you mentioned. We think that if thats where you are, then dont accept it. Help us figure out a way to get back to 3 growth. Taxing doesnt do it. Come up with other ideas that work with us on trying to figure out a wiay to get to 3 . Every one of your children will benefit in your role as parents. 3 growth should not be something were just sort of talking about. It should be what drives everything that we do. Thank you. I now recognize the gentleman from pennsylvania for five minutes. Thank you, madam chair and welcome back, mick. There was something i wanted to ask you about, you said a few moments ago that we shouldnt worry about sesame street and the rest of the pbs programs because big bird is making more money than any of us in this room. I guess the good news is if big bird really is a billionaire hes standing to get a huge tax cut from the trump budget that does more to help billionaire and less than working and middle class people that happen to populate my district. I want to key in on one broken promise of this budget as it relates to transportation and infrastructure. You know, many principle conservatives such as yourself dont necessarily agree with a big transportation and infrastructure plan. I respect that viewpoint. President trump is someone who clearly does. When he came dozens and dozens of times to my state of pennsylvania, he talked, frankly like a democrat. And said things that i happen to agree with and many of us agree with on the need to repair our historically decrepit infrastructure, which the American Society of Civil Engineers has given us a d plus. We dont even rank in the top 20 anymore in the world. That should bother all of us as americans. President trump as a candidate talked about a one trillion dollars infrastructure plan. When the democratic nominee for president released her plan, he as the republican nominee criticized it not for spending too much, a historically republican position but for spending too little. Here we are now with the budget plan, and instead of having that one trillion dollars plan, something i would sincerely like to work with him on in this administration in a bipartisan way, instead its actually 200 billion. Just a fraction of the one trillion dollars that he talked about and that is the bear minimum we need according to the experts. In turns out that 200 billion isnt even real. Included in the same budget is a 95 billion cut in the highway trust fund. I dont think anyone driving americas highways drives them thinking boy were spending too much on highways these are state of the art and dont need any repair. I want to ask you about that, about why it falls so short of what donald trump said as a candidate. Before you do that, i want to make a point about spending and investment. Not all spending is the same. Granted if someone talked 60,000 and spent it on some sort of luxury car, that would be while, perhaps fun, wasteful spending. That has no return on investment. It depreciates the moment you buy it. However, if you take, instead, that amount of money and invest it in the Community Development block grant program. There is one program i know about in the neighborhood i grew up in philadelphia. An area that has been overlooked for decades. They took the small Community Development block grant on the north 5th street and invested it in the Main Business thorough fare. Something that was once thriving and had fallen down for decades. With just that little bit of amount of money, they were able to improve not just the storefronts that they worked on, but then to actually bring business back to that area. It had a multiplier effect. Now you see that business business thorough fare, that corridor thriving again and good things are happening. That was an investment. Thats quite different from just taking the same amount of money and spending it on something wasteful. I think too often those of us in washington, d. C. Especially my friends on all other side treat all spending as the same when really we should look at the return on investment of these dollars. Anytime we spend on education or i would argue the Community Development block grant program, we are actually investing in rebuilding this country. Welcome back, and you are an example of someone who i have many disagreements with on policy, but shows that good people can still be friends and Work Together on these issues. Mr. Director, do you think you can answer that in 20 seconds . I can do big bird in 20 seconds. Big bird actually does get a fairly large tax cut. We want him too. Henson associates that owns big bird has been paying the highest Corporate Tax rate in the world for the last several years. We want them to have money that can create. We believe theyre more creative than we are and believe that money would be much better invested by a private corporation, by a private individual than it would be by the government. Id be happy to talk about infrastructure. Im sure ill get that question again. Thank you. Thank you. I want to remind the members one more time you have a total of five minutes, so if you leave the director 20 seconds were only going to give him 20 second to answer the question. Id like to recognize the gentleman from oklahoma. Mr. Director, its great to have you back here again. Full disclosure, shortly after my questions, im going to have to get up and leave because i have to chair a hearing for secretary devos. Please dont well let mr. Yarmouth read your closing statement, how about that . I want to start and compliment you, frankly, its a huge see change to see a representative of the president of the United States bring us a budget that tries to balance and does balance within ten years. We havent seen that in a long time. Just the shift in emphasis that that represents is a welcome change. I want to congratulate you for it. I think, you know, we can all disagree with this or that, but that one change is fundamental to Going Forward. I also want to thank you for the emphasis on defense. I sat on defense appropriations subcommittee. Thats a wise choice. To some of my colleague whose are critical, i want to also point out that the president could have gone a lot further. Theres a lot of people on my side of the aisle and the House Armed Services committee that wanted a 640 billion line. This is a prudent balance of letting us move back in the right direction. Even that number, to me, shows fiscal restraint. You could have gone a lot further and in some ways i would have liked it. I think you made the wise decision, financially for the good of the country. There are a lot of your proposed cuts in here that i strongly support. You know, i suppose you you wont take credit for it, but ill give it to you for Social Security disability. Im glad you talked to the president about this because i think thats the crisis were going to face. Entitlements are where were going to have to come back to at some point. The math drives you there. Ive got two areas i want to ask you about. One is with respect to entitlements. What is the spending balance between mandatory and Discretionary Spending today, and in ten years under your budget what will that balance be . I dont have the numbers in front of me, but i think flight youre looking at 74 of the budget is mandatory. And that will continue to grow. Because what we in essence do is we keep the bca caps in place on total discretionary. But allow defense to grow. So should not change from current law in terms of the distribution. Mandatory will continue to get larger and larger as part of our total spending. Again, i would suggest that bear some more thought. I hope we see it in your next budget. Honestly that math cant be sustained. And it will crowd out eventually defense and or the areas we look forward to talking to you about that. I know how serious you take that sort of thing. I dont question anybody, you work for a president , its your job to advance and defend his views. But i hope over time we can have that dialogue. I dont think were on a sustainable course. One place where where do think were being in your budget penny wise and a pound foolish is the center for Disease Control. Let me tell you why weve done it. Weve done it partly because we think its the right thing to do. You want Good Health Outcomes for the American People. Its also the fiscally prudent thing to do. Right now in your budget, and in medicaid were spending 259 billion a year taking care of alzheimers patient and people with dementia. Right thing for us to do. But that will rise to over a trillion dollars in uninflation adjusted figures. Weve had back to back funding for alzheimers ever. Were doing this to get ahead of this thing so we can cure it or slow down the progression. So, you know, im going to give you an opportunity to respond. There you should look. I will also tell you sometime in the president s term you will have a pandemic, youll have a zika, ebola, and cutting the center for Disease Control leaves you and the American People vulnerable. I want to give you a chance to reply. The nih we support research in this area. We especially research, what we call basic research, the stuff thats early in the process thats far away from the marketability and stuff thats less likely to get done unless the government does it. I encourage the committee to consider this, the biggest change we made is to look at the overhead costs f. A private Foundation Gives the university money, typically the university is required to spend 90 on research. With our money its 72 actually goes to research. I encourage you ways to lower the overhead. 90 research in our budget you would be roughly spending the same amount on Actual Research as Previous Years. Well have that debate another day. I want to thank my friend for being here and thank him for his service. Gentlemans time has expired. I recognize the gentleman from california for five minutes. Thank you, madam chair. Thank you, director mulvaney for being here. I want to recognize that representative coles thoughtful comments on the nih and appreciate you speaking out on this. We have strong philosophical disagreements about the budget. I dont want to spend my five minutes on that. Im a freshman, new around here. Im going to try on two concrete issues where i hope we may find Common Ground and i hope you may keep an open mind. The first is the manufacturing extensionship partnership. This was a program that president reagan started. I worked at the department of commerce. It helps small and medium sized manufacturers, many of whom that the way it helps them is you look at my district, Silicon Valley they have Cloud Technology. The program says how do we get our medium sized technologies using Cloud Technology to be competitive to create jobs in an environment i trade is unfair. My sense it was. 003 of the budget by some junior staffer. Im convinced if the president actually met with the manufacturers or benefitting from the program or if you met with them he would probably want to quadruple the budget, given how he campaigned. My question is, could we at least have the president meet with some of the manufacturers who are benefitting with this program or could you take a look at it . Because, honestly, it was a reagan program, its bipartisan. And its probably the biggest thing we can do to help manufacturers. It was a reagan thank you for that. It was a reagan program. I had a policy when i sat in your chair, i was careful about my reagan and bible quotes. My guess is you could find something on the other side of the argument from the same source. Im going to be careful with my reagan quote. I think he said one time there is nothing as permanent as a temporary government program. This program was designed to be temporary. In fact, youre only supposed to be on it for six years, there have been folks who have been on it for decades and thats why it got our attentioni. Coming back to the folk whose pay for it, maybe we can justify giving seed money to businesses so they can get a start and get their feet underneath them. But its supposed to be temporary and its not. That was the reason we sourced this, focused on the program. To your request having the president get involved. The president has shown interest in talk ing with manufacturers, a lot of his focus in terms of the executive action has been on manufacturing and your invitation is welcome, indeed, thank you. I would ask you take a look at it and the manufacturers benefitting. I had the privilege of going down to congressman rogers district in appalachia near Ranking Member yarmouths district. As you know, hes one of the most distinguished members of this body. Republican chaired the appropriations committee. What i saw there were coal mine miners kids getting apprenticeship programs, jobs learning ios software for apple, learning Android Software at google. These are jobs in appalachia, jobs in middle america, future jobs. The Regional Commission funded this program. I think you could talk to congressman rogers about it. I urge, again, that the president may visit this area and see whats happening. This is how he campaigned. He said i want to help folks here get the jobs. The Appalachia Commission does that. He would quadruple the funding with. If the president were to say lets quadruple funding for the appalachia Regional Commission id vote for it but thats zeroed out. Is there way we could have the president visit there or you visit there and see firsthand the jobs that are being created in that area . I appreciate thatti. I dont keep track of his travel schedule. I think hes been to that part of the country at least once. I know hes been to kentucky at least once. Your points about the appalachia Regional Commission are well taken. And there are anecdotes of success with that program. As we sat down, we had a difficult time confirming it was regularly as successful as you mentioned. That being said we recognize the need in the area, so while we did zero out the appalachia Regional Commission we moved the money around to programs we thought were more effective or could prove that were more effective. So the budget provides an additional 80 million for the department of agricultures Rural Economic Infrastructure Grant Program which includes community center, it provides an additional 66 million for job training and Employment Services through the department of labor. Your points are well taken and we tend to agree that those areas are a place that do deserve federal attention. I guess i can come back to folks in Southern California and say can i take some of your money to move to the appalachia region, and the answer is yes. We were want to do it to programs. The gentlemans time is expired. I recognize by the way, i guessed at that northern california. Okay, all right. I got the state right. Thank you, madam chair. Director mulvaney, thank you for being here today. Thank you for the hard work that youve put into this budget proposal. It is refreshing to see a proposal that actually balances in ten years. Youre in a tough situation. Anytime you talk about cutting anything, somebodys not going to be happy about that. But it takes courage to put these cuts on the table. We may not all agree with the same areas where we need to prioritize spending, but i think we all at least on this side of the dias agree we have to do something about the debt in our country and the burden its putting on our children and future generations. I appreciate the courage that you took in putting forth this. Ive read the headlines about draconian cuts and deep budget cuts. So, you know, id like to go back and look at the numbers. And as i study these numbers, theres a phenomenon here i think the general public may not understand and maybe even a lot of people here dont totally understand. We have this process called the baseline budget. And as i look at the baseline budget, over the ten year window, its starts at 4. 1 trillion and goes to 6. 7 trillion. Thats 2. 6 trillion of increase over the ten year window. Thats a 63 increase. If you simplify it and average that, thats 6. 3 increase in each of the ten years for the next ten years. Thats the baseline. So if we look at the budget, this socalled draconian budget youve proposed. It starts at 4. 1 trillion. It goes to 5. 7 trillion in 2027 which is a 1. 6 trillion increase over the ten year window or a 39 increase or 3. 9 per year over that ten year window. Could you explain in a little more detail about how when we say cut in washington, d. C. I served in my state legislature as well where we had to balance a budget. I worked in a business, when we talked about a cut, it meant it was less money next year than it was the year before. And my home and the people the other families i know in my district. When they talk about a cut to their budget, it actually means you spend less money next year than you spent last year. However, in d. C. And budgeting, we can still spend more money than we spent last year and call it a cut somehow. Would you explain that in more detail. Sure. Heres i used to d it back home when i was trying to explain it to people. In washington, d. C. If we spent 100 on a Program Last Year, and 100 on a program this year, back home we would call that a freeze. In washington we call that a cut. If we spent 100 on a Program Last Year and 104 this year, back home we would call that an increase. In washington, d. C. We call it a cut. Back home if you spent 100 this year and 106 this year. We call it an increase, here they call it a freeze. When you spend 108 we call it increase in both normal back home english and washingtonese. The base line assumes were going to glow trow the governme every single year. I cant tell you the number of people who used to come to me and say, two years ago oh, you cut my budget on this. Like, no, we didnt. Everyone is telling me you cut your budget. We growed it slower than otherwise. That sounds like an increase. Why is everybody telling me its a cut . So youll come to washington and tell me to give you more money. Thats why the system worked. Im for getting away from the base line and using english language that people can understand. If you want to be cynical about it, under the world where we spend 100 last year and 104 to your conservative friends back home, we all have them, you can say i cut that program. In washington thats a cut. To your liberal minded friends back home, you know what . I like that program, we spent more money on that. Both statements are right. One using back Home Language and one using washingtonese. It undermines the credibility of the institution. We have to start speaking a language up here that everybody can understand. I thank you for drawing attention to the effort. For drawing attention to the effort, i do encourage this committee to continue to look at ways to articulate how we spend money better. Go back to my Opening Statement, explaining to people how much government really costs them. Because i think in the longterm folks in both parties will be well served by that but thank you for that question. I yield back. I now recognize the gentle lady from washington for five minutes. Thank you, madam chair and direct your mulvaney. Im pleased i had the opportunity to give the opening entertainment on behalf of the excellent Ranking Member. I wanted to highlight a couple of things and get to some questions. Lets talk about clear language and telling the American People exactly what is happening in the budget. We are slashing in this budget you are slashing medicaid by 610 billion. Combined with the health care cut that is almost 1. 5 trillion of cuts to a program that currently serves 74 million americans. So in plain language for the American People, that is a dramatic cut to their health care for most People Health care that they wouldnt be able to get elsewhere. A 1. 2 billion cut for centers for Disease Control, clear english, cuts drug treatment and Prevention Services and a 1 billion cut to housing assistance, including for veterans struggling to keep a roof over their heads. We talked about infrastructure already. So i wont go into that. You mentioned snap, this is nutritional assistance for the most needy families and lets talk about the border wall for a second. This is a 1. 6 billion investment into what i call the wall to nowhere. This is a wall a down payment on a wall that is ultimately going to cost the taxpayers 40 billion according to a recent m. I. T. Study. And as Janet Napolitano said when she was governor of arizona, show me a 100 foot wall and ill show you a 101 foot ladder. This is not the solution to any of our immigration issues. You said director mulvaney that you should call this a Taxpayer First budget but i have to ask which taxpayer. Out of the almost trillion dollars in cuts on the backs of the other cuts we mentioned, 50 of the tax cuts are going to the top 1 . And 75 of the tax cuts are going to the top 75 top 75 of incomeerners. So what were doing is taking away essential benefits for working families across this country, and positions that the president ran on, and putting them into the top erners in the country. When you talk about trumponomics, in your Opening Statement and getting to 3 growth, is that the same philosophy that got the president to six separate bankruptcies, 1. 8 billion in debt for trump hotels before he declared those bankruptcies. Im not sure what trumponomics is when you look at the president s records so i would like to ask you, director mulvaney, is can you explain how taking away from programs like the Childrens Health Insurance Program and disabled and student loan repayments, one of the top issues in this country, republicans and democrats alike, 1. 4 trillion in Student Loan Debt right now, can you explain how that benefits the economy or working families across this country . And i might reclaim my time just to make sure. But lets start there. I can try. Because folks are throwing me notes because you raise aid bunch of issues so let me do this in as rapid form as i possibly can. Chip is being extended, it is not being reduced. Total spending on drug treatment goes up. It is not being reduced. You use the word plain lang, slashing medicaid, to most people, main language would mean we spend this year thap last year. No. That is not true. It is one year with a tiny dip with a cliff caused by the ahca on the Medicaid Expansion states but all we do is slow the rate of growth, which is to say we are spending more on medicaid every single year, i think except one and you could call that a slash but back home, when people say you slash spending on something, i think they would expect you to think that you are spending less money one year versus the Previous Year. The snap, what we do on snap is a couple of Different Things and we could take more time on this if you like. We do ask for an able body work requirement. We could go into the fact that snap went up dramatically during the down furn from roughly 28 Million People on the program before the recession to 78 Million People on the program at the height of the recession and i think we have roughly 42 or 44 million. We are back near to what we would like to call full floimt and weve had several years of slow and growing economy im going to reclaim my time. Im sorry, we limited so im sorry for that. But i think if you look at what the American People thought about the Republican Health care bill, you will see that that slash in medicaid is in fact a slash in medicaid that even republican governors spoke out against. And let me ask about Social Security. The gentle ladys time has expired. Including Social Security Disability Insurance. And i yield back. If i may and if you have additional questions, i know that the director would be happy to answer those in writing for you. So now i would like to yield five minutes to the gentleman from ohio. Thank you, madam chairman, thank you, director mulvaney for your service to the house of representatives and now as omb director and i continue to remind your passion for Public Service and understanding of the fiscal challenge facing our nation. I applaud the president and your office for putting together a budget that balances over the next ten years and your commitment to attention the debt and deficit facing our country. While i may not a agree with all of the policies, i will have an administration that understands how we need to guess our fiscal house in order. Right now we are on an unsustainable path and this proposed budget is a recognition of that reality. Ill use a few words the colleagues on the other side said slashing and cutting but would you agree that the budget is reducing what we borrowed from china to pay for programs we dont have money to pay for. Absolutely. That is what i thought. And would you also agree that today our Corporate Tax rate of 35 is the highest in the world so we could continue to say we dont charge corporations enough, but if we continue to do that, theyll just go overseas and well have less money to spend, would you agree with that. Which is exactly what theyve done for the last several years. Exactly. And on the personal side. 70 of the individuals pay as passthroughs corporate businesses so they employ people and since 70 are paying a rate that is higher than most worldwide tax rates they will find places to go other than the United States and which will take revenues away from us if we dont come up with a plan to reduce taxes. Taking jobs with them as they go. And we could continue to say you are slashing and cutting and all of the other words you want to use but you are looking at a budget and saying we cant continue to borrow or pass this on to our children and grandchildren and sometime on everybody that doesnt realize that all we are doing is handing our children and grandchildren a debt they cannot ever pay. So i appreciate what you are doing. Would you also agree if we do nothing and dont start looking at the programs that arent valuable and working that our debt will become the greatest concerns or our interest will begin to swallow the budget. The Congressional Budget Office said it will still triple in three years baited on the debt growing. I think there was a report that said it would take 100 of of revenues by 2050 but i think they took down that graph. I think we continue to say we are slashing and cutting but clearly were borrowing money we dont have and continuing to spend money that we dont have and passing it over to our children and grandchildren and the only way to fix it so to raise more revenues when we continue to raise our taxes, businesses will just leave, companies will just leave, and well have less and less revenue. So i want to make sure we understand that. So i want to switch gears over to tax reform. Which i believe is an opportunity. And i appreciate you talking about getting a 3 . Because if we dont at least set a goal around here, of 3 , you are exactly right, we might as well say that we will never be able to balance a budget. So whether people agree we could 3 get to 3 or not, i think we should be focused on 3 and im a big believer in tax reform and growth. I have a question regarding the budget window. Do you believe that congress should consider expanding the budget window beyond ten years in order to make Congress Pass some type of tax this year. I believe you have the ability to look at different periods of time. My understanding is over the course of the last couple of administrations some budgets have been five years or seven and we settled on this tenyear budget window for the last couple of years and well continue to do that and were exploring the possibility of looking further out, especially when you talk about changes in mandatory spending. Putting aside for a second Social Security and medicare, if you dont look out beyond the ten year window, a lot of the benefits rpt reaped until arent reaped until outside of the budget window and i think it is important for us to look at whatever options give us the best and most common sense view of the economy and our proposals to change it. You would also agree and i know you and i served on the Budget Committee but also on other committees, in the old day with a ten year budget, we pass legislation that really dumped everything into the 11th year and all of the problems are in the 11th and 12th year. And i think the Affordable Care act dumped a lot in the 11th and 12th year. It is possible to game the system to move the costs of a program to move outside of the budget window. Were coming close to the outside of the budget window of the Affordable Care act and youre starting to see the costs rack up at an exponential rate. And i will yield back. Gentleman yields back. I recognize miss lee from california for five minutes. Thank you very much. Good to see you, mr. Director. Really want to first say to you that never before really have i seen such a cruel and morally bankrupt budget. It dismantles our nations basic Living Standards which americans have turned to for decades. This budget, and you know this, it will push millions of people into poverty, and over the edge. This budget destroys peoples lives. This budget what you are doing is youre asking people to fend for themselves and youre really leaving them out in the cold. And our moral obligation is to make sure that every american has a decent standard of living. This budget is a broken promise and really a betrayal to every american in favor of tax cuts for millions, billionaires and corporations. And how are people going to eat when they need a temporary helping hand with a cut of 190 million in Food Assistance and then add the onerous work requirements and yet you cut 3 billion in workforce Training Programs so people cannot be trained or retrained for jobs. Which i dont see much in terms of investment in job creation in this budget either. How are people going to get Health Insurance with a cut of 1. 3 trillion in medicaid . And how are people going to get a house to either purchase or rent with the elimination of the Housing Trust fund and a 2 billion cut in rental assistance. Your forcing families to choose between putting food on the table and a roof over their head and that is just down right wrong. Youre forcing them to choose between life saving prescription drugs and higher education. Again, that is wrong. And i guess i just have to say, looking at these percentage of cuts, epa, 30 , department of state, 29 , ag 20 , education 13 . Housing 13 , interior 10 . Health and Human Services, 16. 2 . Department of labor, 19. 8 . Department of commerce, 15. 8 . You wipe out the Minority Business Development agency. The department of transportation, 13 cut. For the life of me, i just have to remind my colleagues that steve bannon said that part of the goal of this administration was deconstruction of the Administrative State and i think what we see here is the elimination of the Public Sector. And so director mulvaney, i just want to ask you, one is are these nap cuts for example, how do you think people are going to survive when they need this helping hand . Most people on snap dont rely on this for a lifetime. It is a bridge over troubled waters. Um, thank you, congressman. Ill deal with a couple of things in reverse order if i can. Snap, as i may have mentioned, i forgotten how many times ive answered the question. And let me remind you, secretary purdue mentioned it was a program working and why fix it if it is not broken and he appeared to not appear that you were going to recommend the cuts. It is reasonable to ask if you have 28 Million People at the height of the recession and 42 or 44 million tomorrow today it is not unreasonable to ask if there are folks on snap that should not be. It should go down. It should be Counter Cyclical and weve not seen that. The epa was a proximate is that the mr. Mulvaney, 20 of people eligible for nap dont receive snap because of stigma and other reasons so there are more people that need snap benefits. Let me deal with the every american deserves a decent standard of living. Does that include our kids . And you have a 13 cut in the department of education. Those are the most vulnerable kids who need what about the standard of living for my grandchildren who arent here yet, who will end up inheriting 30 trillion in debt. 50 trillion in debt. 100 trillion in debt. Who will pay the bill. That is what this new perspective is all about. Who is going to pay for all of the stuff you mentioned, us or somebody else and if it is important for us to have, then we should be paying for it because right now my unborn grandchildren are paying for it and i think that is moral bankrupt. I have grandchildren also and i want to make sure they have the opportunity to get a job so that they can help pay for our government which is a government that should be enhancing the standard of living and making sure everyone has a chance for the american dream. The gentle ladys time is expired. I now recognize the gentleman from ohio, mr. Johnson for five minutes. Thank you, madam chairman. And mr. Director, first of all, congratulations on your selection for this position. Thank you. You got an awesomely tough job and i appreciate having worked with you for the last six years. I associate my position with yours in the sense that our children and grandchildren are expecting us to address this problem now. Because it is not going to get any easier. And i hear the cries from my colleagues on the other side calling for more opportunities. Well i dont know that federal government has ever created jobs. That is a private marketdriven economy that creates jobs and if were over 20 trillion in debt that is just going to get that much worse. I appreciate that we finally have an administration understands how critically important it is to bend the spending curve in the other direction and i i certainly accept that there are some very, very tough budget decisions to make to get us there. And so i think you and the team have done a remarkable job putting together a budget that does exactly that. Now, we all know that this is a proposal. That ultimately, the final say will come from congress because that is where the power of the purse resides. But this is a a significant step in the right direction. That being said, i do want to bring one thing to your attention. You and i actually talked about this a little bit yesterday as we met outside of this room. Im concerned with the rational about the appalachian Regional Commission. I understand the logic. I understand what you are saying about moving that money around, my concern stems from two basic premises. One, i think the study that you site, mr. Director, indicating that there is not a lot of evidence that arc has lived up to its reputation. If im not mistaken, that is a nearly 30year ago study. That is a 1996 study by gao and i think if you look at what has happened, lets take last year, for example, 175 million investments by the arc into 662 projects across the region. That money being matches with another 257 million by the local governments and an additional 443 million in leveraged private investments, that brings us to a total of 866 million of investment through the appalachian Regional Commission into 93 counties that are 76 of that money is going to those 93 counties that are considered economically distressed. And so my first point is, i think that 96 study is probably outdated. I would urge either you or the gao or someone to take a closer look at what the Appalachian Commission has been doing over recent years. And number two, i understand giving the states and the governors the moving moving this money around so they have more flexibility, but look, i live in appalachia, and i can tell you that governors are concerned about the regions where the voters are. The big metropolitan areas. And when the money gets doled out, i know personally from history where that how that money gets allocated. So while im very optimistic on the budget and think you have done a great job i urge you to go back and take another look. And one final thing. I was pleased to see the administration reverses its position on the office of National Drug control policy. Funding for the right now with the Opioid Epidemic being what it is, the president s task force is in place, we need to make sure we have a National Focus on that. So i appreciate that. And ive taken up all of the time with my comments. I appreciate that congressman and well look into that study for you. Yield back. Gentleman yields back. The gentleman from california is recognized for five minutes. Thank you, chairman black. Thank you mr. Mulvaney, for being here. I must say i have to start with your comment about democrats not supporting the defense in military. Have you ever served, mr. Mulvaney . Actually, congressman, i think my comment was that you do believe in defense. I heard it other wise. Im sorry. Then i would like to correct the record. I think i said you were accused of not supporting National Defense and i think that thought was wrong. Thank you, i misheard it. I appreciate you setting the record, because i had some choice words for you, so thank you. Let me just say that for a number of years, the department of defense overseas Contingency Operations known as oco which is used a budget practice to circumvent budget caps there are billion dollars for oco for budget activities and that on fis kates innocento vised longterm plans and does using oco designation adhere to your notion of sound budgeting and accounting principals. Youve been a fierce critic of the oco budget as a member of congress and characterized it as a gimmick and does your budget include oco funding for nonwar activities . Congressman, our budget does include oco during the ten year practice and your criticism is well taken and well put. It can be and has been a way to get around budget caps in the past and has included things that are perhaps not properly defined as oco. I simply suggest a couple of things, first of all both parties seem to be interested in using it that way. That the reason that it is used that way is that there is a bipartisan support for using it that way. When i encourage you to look at is this, if you look at the tables and the budget you will see we slowly reduce the oco numbers in the out years in hopes that we could instill discipline so that it could be used for what it is to be souped for to be supposed to be used for and because the top line defense number was simply not tough to accomplish the missions that we were on. So your criticisms are well taken and i could assure you im as skeptical as long term use of the oco and well continue to look at it very closely at the office of management and budget. You know that past democrat and republican administrations as well as congress and the Armed Services committee have failed to get the d. O. D. To do an audit to look at the waste. Clearly you would agree that there is in examples of waste in department of defense and having said that, it is quite disappointing that we look to waste in domestic programs, we point those out extremely rapidly, but kind of just gloss over them when it comes to increasing department of defense spending. There seems to be a hypocrisy and i guess i ask you, why is that the case . And i apologize congressman, again, i may have covered this before you came into the room, on a previous question. I share, as did the president , your interest in finding more efficiency, more accountability inside the department of defense. And in fact, i can assure you it is a priority for the president and a priority i have discussed at length with secretary mattis and he is as interested as you and i are as driving out the waste because a wasted dollar is not going to defend the nation. Regarding audits, what i mentioned early in the hearing was the d. O. D. I believe is required by law to make itself auditable by september. They just gave an update on that a few weeks ago and they intend or tell me and tell you they intend to hit that deadline. One of the reasons you see more focus on the domestic side and not on defense or domestic nondefense discretionary is we have the ability to look at those programs, there are tools available that dont exist in the Defense Department because they are not auditable but im looking forward on them to be promise to be fully auditable by december and that is a first step to drive the efficiencies that were all interested in. Thank you. And lastly there is a 30 cut projected for the u. S. Epa. Have the impacts to the health of our water, of our air, been tabulated, the impacts theyll have the on health of our americans in this country and when we talk about grandkids, what does that mean . I have future grandkids coming. What is the impact to them when we have degraded regulations. The gentleman if you would, please answer that by written as i say, you have five minutes and if you wait until the end, you are probably going to get your answer in writing. So if the director will answer that in writing. Thank you. I recognize the gentleman from new york for five minutes. Director. Thank you for being here today and thank you for your service to the country. I want to ask if you could clarify the medicaid spending and the proposal. We are aware of the reduction in expected increase in medicaid spending through the American Health care act. And there is some confusion as to how the calculation of that reduction in projected increase is also included within the president s budget proposal. And im wondering if you could clarify this issue for me. I could do my best mr. Faso, and if i dont do it satisfactorily, but i will try to explain it to folks, the largest line item deals with the scored version of the American Health care act, which is all we had available to us when we started writing the budget. And the budget, for those of that you dont i learned this for the first time the budget for 2019, we start work an that in september of 17 and that is the lead time and so what we had was the first scored version of the American Health care act and that is how the budget or proposal was scored. We added to that an additional change on the growth rates. We believe that the growth rate that is contained in the bill is actually higher than what we expect to see in the real world so we propose a growth rate that we think is closer to actual growth rates in these types of costs. What you get when you do a couple of Different Things then and the reason that so many folks talk about the 1. 24 million and you have two numbers. Roughly i will round. 800 billion in savings from one and 600 billion in savings from another but my point is that it is almost impossible for those two numbers to be added to get to 1. 4 trillion because they contain within them the sum of the same factors. There is double counting. Double counting. So you take the 800 some of the 800 is contained in the 600 and vice versa and when you put them together and have a proposal, it would never get as high as 1. 4 trillion. In theory it is possible, but it is highly unlikely, the number would be between 8 and 1. 4 thank you. And i appreciate your discussion about the debt. The cbo informed us our debt will go from 19 trillion to 29 trillion in just ten years. And so many of my friends on the other side believe that the problem is were not taxing certain groups within our country enough. And i recently noted the forbes 400 and if you calculated the net worth of all of the forbes 400, in other words, pretent were in venezuela or the Old Soviet Union and we confiscate their net worth, and take all of their money away from them, if you confiscated the net worth of the richest 400 people in america, all you would do is cover the federal budget deficit for about four years and that is it. And i think in the country were not speaking frankly to the American People as to the true nature of our debt and deficits. I wonder if you could comment also as to the risk in terms of servicing our National Debt, if we have a 1 increase in longterm Interest Rates and what that would mean in terms of additional National Debt service that we have to pay every year. Sure. To your previous point, what i like to tell people, if we could tax our way to growth and if we could tax our way to prosperity, every government in the world would have done it a long time ago. You simply cant do it. You have to figure out a way not to tax yourself into lack of growth. Regarding the 1 , it is fairly simple, when we talk about the 20 debt, that is the total debt, gross debt, subject to the cap, some of that is contained within the Social Security system or the private debt but the bottom line answer is roughly speaking. 1 cost us 200 billion a year. So over a ten year period that would make it the largest line of budget in tbeyo defense. And for snap, i want to make sure that people in need of Food Assistance are able to receive it. However, in our discussions in the Agriculture Committee we learned that the taxpayers are paying 3 billion a year for folks on snap to buy soda for which there is no nutritional benefit. Im wondering what the administrations position is and if you thought about this trying to restrict snap to actually things that are nutritious rather than things that are not. Congressman, in all fairness, it is an excellent point and i dont know that weve given that some consideration. Id be happy to talk to the policy cancel and get back to you. Great. Because there is 3 billion there you could probably save. I yield back. And i recognize the gentle lady from illinois for five minutes. Thank you, mr. Mulvaney. You mentioned that the president promised that he would not cut Social Security, medicaid and medicare. And after he won the election, with the help of plenty of older americans, i think were seeing today a tremendous betrayal of that promise and of people who rely on those programs. And i think it is in order to give enormous tax cuts to the wealthiest individuals and corporations. He never did say Social Security retirement. He said Social Security and medicare and medicaid. And the trust fund, the Social Security trust fund has two major components. The oasi, old age and survivor insurance and ssdi, the Social Security Disability Insurance and the contributions come from the same payroll tax and go into the same Social Security trust fund and together make up what we know as the Social Security program yet this budget makes dramatic changes to ssdi, that would, among other things, cut the retroactive benefits that a serious disabled construction worker for example can receive for the time the Social Security Administration Takes to work through its backlog of cases and finally give approval which can take rates can take years. So mr. Mulvaney, when im asking, yes or no, does the president s budget cut 72 billion from the Social Security disability Insurance Program . Im not sure i dont have the number in front of me, but yes, we do make reforms and reductions within the Social Security disability Insurance Program. A couple of things. I think you may have im sure your staff could provide you with a number and that is what im asking. You said the money goes into the same trust fund as old age. It does not. They are separate trust funds. Owe that is important to know. Because they are on different time lines. This is how i explain it, is that we also propose a paid parental leave program. We are running that, funding that through the unemployment Insurance Programs in the states. Which is by the way the same way canada does it. New york, new jersey, california, one other state have mr. Mulvaney, my time is so limit pd and im not and im not asking but you asked about ssdi and im happy to get to that. The point of the matter is many state fund through leave and does that mean that having a baby is unemployment, no. Does it mean that it isdibility. That is how the program is structured and Social Security disability is a Welfare Program for the disabled. We disagree on that. I think most americans disagree. That is Social Security Disability Insurance is part of that guaranteed program. Mr. Mulvaney, the president pledged not to cut medicaid, now i just want to point out, weve dealt with this a little bit today, but we are talking about half the births in the United States, 30 million children and half of all nursing home and longterm care nationwide for seniors and citizens and people with disabilities comes out of medicaid. So it is really yes or no, if the does the president s budget cut 1. 3 trillion from medicaid over 10 years. Ill ask you a question, congressman. When you say, cut, are you speaking washington or regular language . Will the president s budget mean that medicaid gets 1. 3 trillion less than it would other wise . In the cbo baseline score the answer is yes. It will spend more money every single year over the Previous Year with the exception ive mentioned, that in my mind is an increase in medicaid spending. Okay. I want to quote you, mr. Mulvaney, you said that in regard to afterschool programs, there is supposed to be educational programs, right. They are supposed to help kids who dont get fed at home and so they get do better in school. Guess what. There is no demonstrable evidence they are actually helping re helping results, helping kids do better in school. The way we justified it was the programs will help the kids do better in school and we cant prove that thats happening. This budget cuts the 21st century learning program, it eliminates it entirely. And this is a program that does before school, after school, and summer programs that do include food for children. What the heck is going on . Less than 20 of the children who enroll in that program move from not proficient to proficient. 20 is a failing grade. So lets jut not feed them. My time is up. Thank you. The gentle lady yields back. I recognize the gentleman from minnesota for five minutes. I would thank the chair and welcome director mulvaney. Glad to have you back in the Budget Committee. Let me start with a couple of quick questions and a short yes or no answer on a couple of these things and then well get into a more substantive giveandtake a little bit. It is interesting to know, especially from the other side, that the first balanced budget in over eight years or in eight years has been greeted by moral outrage. Shockingly extremes i think is the phrase i heard. Do you find it shockingly extreme that our debt is gone from 10. 6 trillion to 19. 9 trillion in just the last eight years. I absolutely do. To you find it shockingly extreme were mired in growth over the next ten years. Frustratingly so. Do you find it shockingly extreme that we had over [ inaudible ] with a debt this year. It is unreceivable. That interest experience, and if Interest Rate goes back to the post world war ii average it would be well over a trillion dollars. Well be broke. And is it shockingly extreme that the federal budge has gone from a trillion dollars in 1987 to 2 trillion in 2002 to 4 trillion today. Growing much faster than any other measure of economic output. Is it still shockingly extreme that revenue is above the 15 year average of 17. 4 of gdp and now at 17. 8 of gdp and yet we are told it is not enough. It is never enough, is it. And shockingly extreme that out lays are above the 15 year average, 23 and today at 21 percent, scheduled to go to 24 of gdp. Just unacceptable. Federal debt held by the public. 77 of gdp, but actually total federal debt is almost 100 of gdp. Is that shockingly extreme. And going to have longterm detrimental impact on our economy. And the civilian Labor Force Participation rate back to 1977 levels at what 62. 8 . Even lower than it should be giving the graying of the American Workforce population. And the top 25 of taxpayers, those households making 78,000 a year or more, two teachers makes 40,000 a year actually pay 87 of all income taxes collected. That is where the money is, right. And so in spite of the all of the dead and the spending and stimulus we are stuck at 1. 9 growth and cbo said 1. 9 growth for the next ten years and im wondering why that is. That supposed to be so stimulating and demand side economicies is going to pull us out of there and isnt the president s budget an attempt to make certain that we grow at historical averages by not focusing on the pumping up or priming of the demand, but getting investment and productivity back in the economy. Private investment is what is going to save the company save the country. Because that is where innovation comes from and that is where productivity and gdp growth comes from. Weve tried it the other way. With huge federal spending for the last 30 years and now here we are where a large portion of the population and this body thinks that 1. 9 is the best were ever going to be able to do and that speaks to pessimism about the country we refuse to accept. And we heard this malaise and were stuck in growth and we cant move and zwrimy carter talked about malaise and yet we have five quarters of 7 growth. Where is the empirical evidence we cant grow at 3. 5 . I think the empirical evidence is that we can grow at 3 . So the emphasis of this budget is to say, weve got the highest Corporate Tax rate in the developed world at 35 . Weve got 2. 6 trillion in profits that could be repatriated and a passthrough chapter, llc, Small Business man or woman paying not 39. 6 , but 43 or 44 when you take out the peps and peas and lowering the tax rates will provide more capital which will increase productivity and the truck driver is it not true that, director, is always more productive with the truck. Always. And that is what this budget is supposed to do and weve got data to show its been done in the past in the 60s, 80s and the 90s. And we need to do it to save the country. And without this growth and investment in productivity, well never balance the budget. No. Well at some point, we will do it, or do we do it on our terms or someone els because at some point people will refuse to lend us money and i would much rather do it on terms than somebody elses. Thank you, director. Good to see you and i yield back. The gentle lady from flo fla is now recognized for five minutes. Since you began the meeting by providing a better name for the budget, you described it as the Taxpayer First budget. I describe it as the taxpayer shaft budget because that is really what you are doing to millions and millions of people who simply are trying to make sure that they could keep their head above water and live a decent lifestyle. And i find irony in your lamenting that there is some kind of double counting in the total cost of the cuts in trump care. Because lets be clear, this budget as you described does not balance. Hubris doesnt solve basic math problems. The trump budget counts the savings from tax cut and projects the same tax cuts will stimulate growth in the economy and generate so much new revenue that it will produce 2. 1 trillion in additional federal revenue. Now you cant balance the budget by ignoring the reduction in revenue from tax cuts. And then count the cuts as generating unprecedented never before realized growth attributable to those tax cuts. And then trying to use that growth and revenue as a pay for for the tax cuts. That is that is what is called double counting. So let me give say real life example. If i bought solar panels for my house, and i reduced my electric bill through the savings by disconnecting from the grid, but then i didnt count the cost of the solar panels, in my Household Budget and just ignored that they are that there was a significant cost and then i tried to also count the savings in my electric bill, as an offset to the cost of the actual solar panels, then that would be double counting, particularly if i say that the offset is more than the cost of the solar panels. If i went to my accountant and said, my Household Budget, using this configuration is balanced, you would laugh at me. Your treasurer secretary when confronted with the double counting said it was premature to put in any changes as a result of taxes since you are not far enough along to estimate what the impact would be. So, look, we can all go through this exercise and that is certainly what we are doing and pretend that we are going to come up with a budget that we could agree on and send to the president when we havent done that in years. One thing with an absolute certainty is a budget is an expression of our values and your values and your bosss values are appalling. If this is a reflection of our nations values, then we really are in a battle for the heart and soul of this country. So with that in mind, and id love to have you respond to that, ill ask both miff questions and then leave you the remaining time. 65 of seniors who rely on medicaid to be able to afford a nursing home or nursing care in their homes, do it through medicaid. How can states continue to implement innovative programs to deliver longterm care to seniors and people with disabilities in their homes when you are taking 610 billion from them. So if you could, answer both of those questions. Sure. I could try. Illuminate the committee on your math. And ill start, congresswoman, with the pushback on the never before realized growth. That is what is so depress people think 3 growth is not an annual thing. And here we are assuming that is how we describe below average longterm growth. Please address the double counting. The double counting. That is my question. The double counting. The secretary was right. It is and was too early to make any assumptions about the final tax bill. We gave a set of principals to the house and the house and the senate are both looking at them right now. So then clearly you representing that this budget is balanced is inaccurate. No, it is not. You cant say it is premature and say that budget balances. I will answer the question if you give me the chance. But im not suggesting that the budget balance is inaccurate. So if i may continue. We assumed we had to make assumptions regarding what the tax bill would look like. It adds to the deficit, subtracts or is deficit neutral and we assume forsake of doing the budget it would be deficit neutral. That the exclusion removing the exclusions, the deductions, the loopholes would lead us to a tax excuse me a deficit neutral tax plan. The dynamic benefit is only counting one time and that is toward the 3 Economic Growth. And im happy to explain that to you further in writing if you like. You can explain whatever youd like, you are counting revenue twice. And saying that the budget is balanced and Anyone Running their Household Budget the gentle ladys time. Would be in serious trouble down the road. And which is where you are heading us. And i recognize the gentleman from pennsylvania for five minutes. Thank you, madam, chair. Good morning, director. Good morning. As a previous Small Business owner, i understand the need to balance the budget each year. We had to match expenses to revenue or you threaten the future of the company and of course this family, as we need to do that on an annual basis as well. Ive talked about the federal budget in those terms. I expect families and businesses to do that. Why cant we do that at the federal level. In the states weve had a tool, we have a balanced Budget Amendment in pennsylvania, serving in the state senate there. That required us to it posed discipline on the process, if i will. But i brought this up at a i spoke at a rotary recently and first question from the constituent said the federal government is different. We cannot compare the two. We cant compare the federal government to businesses because in the federal government we could print money. So it is not the same thing. That is by the way a very different than having a hearing in this room, cbo director hall was here and he used the term called sovereign debt crisis. If we dont change the trajectory of our annual deficits, the growth im curious, what is your thought on that. What happens if we continue down the path that were on right now. Let me speak to the point raised at the rotary meeting, they are right, you could print money. But what does that mean in the real world. We are not free to do that. If it were, we would do that every single day. When we print money to pay off debts, to pay for things, what it essentially does is make the existing dollars in your pocket worth less. That is why they call inflation one of the cruellest taxes, especially on the older generations that have saved for retirement and now living off investments and so forth and so when you print money you do nothing but essentially tax the people who are already there. It is a tax in a different form. So you could go back to your folks at rotary and say well, you are right, and why dont you give me 20 of the money in your pocket and well call it even. I think this year it is about 14 . But where are we headed . To where i talked about before. We will balance the budget eventually one way or the other, on our terms or somebody elses. Either by balancing the budget the proper way, printing a bunch of money that impoverished our citizens or having someone else who wont lend us money force certain considerations to balance it as a condition to lending us money and only one of those outcomes is desirable and that is the one about figuring out a way to do it ourselves before it is too late. Which requires tough decisions. And also as a business senator, i talked about the real immarket, we talked about 2 , 3 , 1 growth and it doesnt seem like a lot, but we had about 150 employees in our business and ive been through times of recession and low Economic Growths and the jobs werent available, we were a construction company. And it is small enough company that we knew the employees and the families and saw the impact when we had to tell people we just simply dont have enough work, had to lay people off. And im one of the reasons that i think were all here is to provide opportunity for our kids, our grandkids to have lift people out of poverty, provide that economic mobility and i think the best possible thing that we could do is have the higher Economic Growth that will provide that opportunity and would you like to hear your response to that. Im interesting to hear the story about your family. My family is in the Home Building business and my dad turned 75 this year and one of the things i think hes most proud of is the number of folks that are making more than 100,000 at his company that doesnt have a college degree, many didnt have a High School Degree because you could make that kind of living in a healthy American Economy in the construction business. And i think that growth cures so many littles. Bill clinton gave more people gave being the wrong verb, than hillary care would have simply by having Economic Growth. It solves so much of our problemsch and would cure the ills between the two parties because it is a lot more fun to governor in a growing economy than in a sluggish. I think there is a lot we could agree on in both parties but i want to mention one other aspect of the budget and this was brought up and our nation faces a growing Opioid Epidemic that is shattering the lives in my district and those across the nation. That Public Health crisis claims the lived of more than 3330 americans and more in 2015 alone and it is getting worse. I sent you a letter last week which i would like to submit to the record, if i could. Without objection. And again i laud you for recognizing the severity of this crisis and for prioritizing the drug policy and explain to the member of the committee how the president s budget request increases the federal governments response to the opioid crisis. I see that my time is expired but would you be happy to talk to you about that in writing. Appreciate that. Madam chair, if i may be so bold, would be possible to take a 90 second break. It absolutely woxt it lets take a 90 second break for the committee. [ pause in proceedings ] [ pause in proceedings ] [ pause in proceedings ] the committee will come to order. I now recognize the gentleman from georgia, mr. Woodal for five minutes. Excuse me. I think that i did not excuse me, mr. Woodal, i need to go to the democrat side, i apologize. Im incorrect. You are next. I now recognize ms. Jackson lee from texas for five minutes. Apologize. Mr. Mulvaney, you indicated in your statement that reducing lower priority nondefense Discretionary Spending was going to be a core of this budget success. I interpret that as a betrayal, betrayal of the children, seniors, working families, people who voted for trump, cities, counties and states, that is the interpretation that i believe the American People will understand. In the course of your budget, you have gutted or cut the National Endowment for the arts, National Endowment for the humanities and something that the gulf region needs desperately, coming from south carolina, you should understand the army corp of engineers. You repeal the Affordable Care act with 880 billion that is your premise. When the senate said that that repeal is dead on arrival, they said the budget was dead on arrival. Your going to eliminate Community Services block grant, eliminate community very many block grant and eliminate federal Emergency Management agency state and local grants, all lifelines for americans. I wont have to worry about shutting the government down. Because americans will shut this government down if the trump betrayal budget ever passes. So let me ask you these questions and as i do so, let me remind any fellow texans they get 70 billion from the federal government for their budget and they just balanced their budget on the 70 billion from the United States government, federal government, of which you will eliminate. I also want to put on the record that the trips that trump takes to maralargo in the past five months cost 20 million. We keep going at this rate. It will be in 4 years 2 h 200 million. I would like to suggest that one of the things you do is cut his trips to maralargo, but his trips overseas because you are cutting 9 billion from the state department. So my question to you involves the army corp of engineers, why you would be so much against the important flood work that counties like mine need. Number one. And the other question is i want to ask about a letter you wrote last week to the director of office of government ethics, waltir shaw and it seems like an effort to shut down the investigation to trump, giving waivers to so many billions working in his Administration Number one. Number two. Number three, you have a comment, that doesnt mean we should take care of the person who sits at home and eats poorly and gets diabetes so are you supporting a Health Care Plan between the deserving ill and undeserving ill and in deciding who could get federal support and how much. Is that why you have the audacity to cut 880 billion out. And my third question is it easy to assume the budget includes a 1. 4 trillion in more in cuts to medicaid and i just made with the state of texas, they are begging for their medicaid so they could provide for the poor in their state. Id appreciate you asking the question, and would you answer the question, are you betraying those who voted for trump looking for a lifeline, and are you betraying the American People . Thank you, congressman. In reverse order, are we betraying the American People . No, in fact, we believe giving them 3 growth is getting them exactly what they wanted when they elected this president. Is it true or untrue to state we cut 1. 4 in medicaid, thats untrue. Regarding my Statement Last week on diabetes, what i was trying to do is draw a distinction between type 1 and type 2. But you did say it. Again, im trying to put my comments into context, maam. Im aware of the difference between type 1 and type 2 diabetes. Youre not a doctor either . Im not a doctor, are you . I know diabetes. Its in my family and its in my community, and it particularly impacts africanamericans, and we will be devastated by this budget, along with working american, working families. Regarding the oge letter, i got a letter from the office of government ethics that i thought was inappropriately broad and violative of statutes, so i did what i think is the exact right thing to do when there is a dispute between two pieces of the executive branch, we referred the matter to the office of legal counsel, which is the thing im supposed to do. Regarding infrastructure, we are as we mentioned before mentioned here writ large infrastructure is we are focusing, trying to focus our attention on getting to the 1 trillion worth of new infrastructure leveraging 200 billion of new spending. Your budget is full of tricks and trickery, it does not work. No economist will approve your budget. There will not be a 3 growth because the working population is expired. This is a betrayal of the American People. Gentle ladys time has expired. Mr. Woodall . Thank you, mr. Chairman. I want to thank the director for being here. I remember when he was a young freshman, i was a young freshman. In fact, our current chairwoman, ms. Black, was a young freshman and we got here just having been elected in the giant class of 2010 and the first thing we got to do was write a budget. Oh, golly, what an amazing honor that is. You get to come up here and start making priorities and i remember that first moment, and i suspect you remember it, too, mr. Mulvaney, when you realize the budget doesnt actually get signed into law, that the changes that you make dont actually become the new law of the land, that the conversations that we have here are simply about vision and not about how policy is going to change tomorrow. Do you remember that moment of realization . Realization is a positive spin to put on it, yes, mr. Woodall. I ask you that, because heard my friend from florida say your values are appalling, and i apologize for that. Were not were not talking about your values here. I know you, i know you to be a man of integrity and youre exactly the right guy to have in this job. We are talking about choices. I think in the Ranking Members Opening Statement, as read, it was said that these are false choices that we dont have to choose. What i hear you saying is that in the spirit of finding reputable economists that you cannot find a reputable saying continuing as we are continuing is a recipe for success. Is that accurate . Not a single one. I dont think youll find any reputable economist that says we can do what were doing forever. In fact, over the last eight years we havent been making choices. Its hard to make these choices, but in all of the doom and gloom conversation about cuts, explain it to me in simple terms i can understand. Exactly which year, going from one year to the next are you going to spend less money on behalf of the American People . Not one. Let me make sure im understanding you. Youre saying in all of this conversation about the cuts and the and the erosion of the of public spending, youre spending more every single year proposed in this budget . Yes, sir. I know that theres more the United States country than that divides it. And i believe we can find that pathway forward together. If i could put a slide up here on the screen, this is what i have seen in my short time in congress. This is cbo projected growth. Of course, omb has one projection of growth, but time and time again in this Committee Hearing ive heard folks say that your projection of 3 growth is just outrageous, that its unsubstantiated, that absolutely no one would ever agree that such a thing was possible. As i look back on my chart, even we here in congress agree that such a thing was not only possible, but probable just five years ago. When you talk about 3 growth going out on the horizon, is that the same 3 growth that cbo was projecting just a short time ago . And other 5d administrations, Previous Administrations were actually projecting higher than that. When you move from 1. 9 Economic Growth to 3 gdp growth, what does that translate into in terms of revenues in the federal government . I cant remember what the number is, congressman, but its a substantial sum. Remember the difference between 2 growth, and i always cringe when people say you go from 2 growth to 3 increase, thats only a 1 increase. Its not, its a 50 increase. My understanding of that revenue, wed be looking to something close to a balanced budget if these numbers stayed at 3 going back to the time you and i started, wed be looking at a balanced budget today, so significant would be that revenue. I have seen studies that would say youre very, very close to getting there. The what i have heard the president say and what id like to hear from you is that every single thing that he is doing is geared towards returning us to these 3 growth figures. Is that accurate . Every single thing that he is doing is geared towards getting us back at 3 growth. There is there is not one family in my district that doesnt believe thats going to make a difference. Ill close with this. You all sent a 10 million check to the state of georgia to rebuild a bridge that collapsed in our district. There was a fire, 12 lanes of interstate collapsed. We rebuilt it in six weeks. Six weeks, a performance budget going out to that contractor. There is not a conservative family in my district that was not proud to pay their tax dollar to go to that project, because they got value for that dollar. Thank you for trying to squeeze those dollars and bring that pride back in what we do together. And i would encourage you to look at the permit process that was necessary to build that in six weeks. It would stun you as to how much time we spend time expired. Thank you, mr. Chair and thank you, director mulvaney for being here with us today. My background is as a businesswoman, and an entrepreneur, and i know how incredibly important it is to have a budget thats responsible, and i must say that this budget is incredibly irresponsible and dangerous. It would be enormous setback in pretty much every area that affects American Families, particularly for children, seniors, and people with disabilities. It would have a negative impact on critical research, health care, job training, our environment, Affordable Housing programs, education, and thats just to name a few. Rather than gouging programs and important programs that the middle class relies on just in order to give the wealthiest americans a tax break, we should be working on a bipartisan budget. Thats what works. A bipartisan budget that provides working families certainty and stability. And so lets start with farmers. Understand your budget more than 5,200 positions at usda would be eliminated. This is part of a larger 8 cut. The Farm Service Agency alone, which my farmers rely on for critical assistance, would lose 973 people. Usda Rural Development would lose 925 employees, and on and on. This is a bad idea when it was proposed in the past, and its still a bad idea. Whats the rationale for making a farmer drive hours out of his or her way to get to one fsa office thats open three counties away because you decided that Rural Americas doing just fine as it is . And farmers lead incredibly busy lives, and making their lives more difficult through cuts like this is incredibly shortsighted, so why are we cutting important programs for farmers . I appreciate the question, and while i have received some questions about some of the farm supplement and subsidy programs, ive not received that exact question before, so i apologize if im only able to give half an answer. Im not satisfied with half an answer, i want a full answer in writing afterwards. A topic im not as familiar with and i see the farm loan programs are up 564 million in the budget. Farm services Farm Service Agency alone would lose 979 people and we already know access is hard. Ive heard that from my farmers directly. I just heard it from a farmer last night, so id appreciate more information on that. I apologize for not having it on top of the head. This would cut the National Institutes of health by 6 billion, which is a truly stunning and irresponsible cut. In the last few Years Congress has worked on a bipartisan basis, bipartisan basis to boost nih funding by nearly 4 billion, and i remind you that federal funding for nih supports more than 400,000 american jobs and generates more than 60 billion in new Economic Activity. Unfortunately, the federal governments contribution towards basic research at the nih have consistently failed to keep pace with inflation, which allowed the agencys purchasing power to diminish by nearly 20 since the year 2003, so if were serious about breaking new ground and our understanding of complex and lifethreatening conditions, then its absolutely essential that we increase funding for the nih. We cant hope to accelerate development for new cures, therapies, vaccines, without Additional Resources for research. Consistent, stable resources. We just agreed through the end of this year to make sure we increase funding for nih in a bipartisan fashion, so why can we not support bipartisan ideas, important ideas, that have a positive impact on our economy and a positive impact on our communities in terms of the innovation and the impact it would have on peoples lives . Id like to understand your rationale for setting back medical progress and Research Across many critical areas. Sure, i think we probably can agree on more than you realize, congresswoman. I dont know if you were here when i answered a similar question from congressman kohl earlier, but the administration wholeheartedly believes in the commitment to research. Wed like to see more focus on what they call basic research, which is research further away from the marketability of products, because that is one of the gaps that the government can and should fill. When you look at the long lead time on developments of new drugs, for example, Many Companies and thats why consistent dollars are important, so here weve had continuing resolutions and we disrupt that ability for scientists to see their research. Partial research doesnt work. If youre going to fund something, its got to be funded all the way through. Were running out of time, so i want to say this is critically important, a bipartisan issue, something we agree on. Youre cutting dollars, youre not adding dollars. Last three seconds, if you look at the way we propose to spend the money, we can spend as much money in research as last year. I yield back. Time expired. Mr. Ferguson. Director, thank you for coming today. And its interesting as i sit here and listen to a lot of the comments on both sides, particularly from those here on the left, it reminds me so much of where i was just a few years ago in my hometown. I live and come from a hometown, governed in a hometown that lost its manufacturing back bone. We lost tens of thousands of jobs, and no matter in the coming decade and and a half after that, no matter how many Government Programs the communitys relied on, no matter how much public assistance went to those in poverty, education, Community Block grants, no matter what those small wins may have looked like, you could not pour enough money into the problem to address those issues. It simply did not change until we created the environment for advanced manufacturing to call our community home. And its when we put 16,000, 17,000 people back to work that we really begin to see our fortunes changed. It changed our city budgets, budgets we had to cut doing the same things were doing now, programs the community valued, but we simply did not have the mechanism to pay for it. It wasnt until we grew our local economy that we grew our city revenues and cut taxes that we were able to have the revenues needed to put back into those important programs that our community wanted. So, with that, the things that we had to do is we had to create the right tax environment, we had to have the right Regulatory Environment where we partnered with our industry, not penalized it. We had to have an Education System that developed a viable workforce, and we had to make strategic Public Investments in infrastructure to support it. With that, ill ask these very few questions. Does does this budget, and is it a desire of the president to do those things, create the right tax environment . For business . Absolutely. Create the right Regulatory Environment . Drives everything we do. Create the right education environment that really prepares people for a job in the 21st century economy . Yes, sir. Does it create strategic Public Investments in infrastructure that allow the Public Sector to come in behind it and dwarf the Public Investment . One of the reasons we talk about increasing funding on infrastructure. If we do all of those things, can we, in fact, get above 3 gdp growth . Yes. If we do that, can we develop the resources that we need to build a bridge to really effectively deal with what is ultimately the biggest cost driver in the budget, and thats the mandatory spending curve . As i said before, i think youre moving to a point where you wont be able to balance the budget if you dont address mandatory programs. If we are able to do that, if we are able to have significant deficit reduction, as or at least be neutral, as this budget does, i think its important that we recognize that were fighting were fighting over a small part of the budget. If we want to make those Strategic Investments in these programs that our members on both sides of the aisle feel are valuable, we have to address the mandatory spending curve. There is no doubt about it. We have to address issues with Social Security and medicare and medicaid and interest on the debt. And typically when those conversations are had, the first thing that happens is one side or the other looks at throws up some while headline that says bergman over here or whatser man schultz wants to cut your medicaid. We need to have a conversation about where that is and where we are headed, and every Single Member of congress has an obligation to address those programs in such a way that we protect those that are receiving them now, those that are close to the finish line, but be very transparent about the fact that were going to have to change something long term, and were going to have to create enough Economic Activity to be able to build that bridge to get us from where we are right now until when those Program Changes can actually go into effect. I think its absolutely valuable, congressman, you have the perspective of somebody who was either a councilman or mayor, judging by what you mentioned, that folks who have to balance a budget at town level or city level get it. Folks who have to balance a budget at a state level get it. For some reason this body, and i was amongst you until recently, we dont get it. I dont know why we lose that common sense approach. Where that reasoned look at economics and life goes away because somehow we get elected to congress, so i appreciate that input. Thats extraordinarily refreshing. I want to clarify one thing i said before, because i hate being wrong on numbers, probably done it more than once, but i got asked earlier the size of the nondefense discretionary budget versus mandatory, i think i said mandatory was 72 . 66 is what my staff said the right number. Either way you look at it, it is the 800pound gorilla in the room. There is no greater program that we can give our American People than the dignity of work. Thank you. Mr. Jeffries . Thank you, mr. Chair, and i thank you director mulvaney for your presence and for your service. The trump budget balances itself on the backs of working families, middle class folks, senior citizens, the poor, the sick, the afflicted, as well as Rural America. It does this, in my humble opinion, largely to just provide a massive tax cut to the wealthiest 1 or 2 of the people in this great country. Thats reckless and thats irresponsible. Now, the trump budget, as proposed, balances itself and eliminates the deficit in ten years. Is that right . Yes, sir. And part of the reason why its able to balance itself is that it assumes that there will be increased revenue in the amount of 2 trillion connected to exponentially more significant job growth. Is that right . It assumes if youre referring to the gdp growth . I dont know if we talked about fulltime Economic Growth, yeah. Economic growth, we do have numbers on unemployment, as well, but youre correct. Assume additional government revenues through Economic Growth. Thats 2 trillion in additional revenue, not 2 million or billion, 2 trillion, is that right . Yes, sir, 2. 1, i cant remember the exact number. And the projected Economic Growth of approximately 3 is due in large measure to the theory that significant tax cuts, disproportionately benefiting the wealthy and well off will stimulate the economy, is that right . Congressman, thats part of it. When we looked at the cbo baseline of 1. 9, the way that we moved towards 3. 0 included tax reform, but it also included Regulatory Reform, which we think actually will have a larger impact in gdp, included our trade policies, our infrastructure spending, so there was a basket of policies we think moved us from 1. 9 to 3. 0. Fair to say a substantial part of the theory as to the increased Economic Growth is anchored in your strong, authentic, principled belief in tax cuts, is that right . Again, depends on what your definition of substantial part is, we also repealed obamacare which the cbo said added 0. 1 of Economic Growth. Theres no scintilla of evidence that tax cuts in part are responsible for stimulating any meaningful Economic Growth. Is that fair . No. Okay. Well, lets look at the record at least at the federal government level. Bill clinton was president for eight years, and during his eightyear presidency, there was substantial Economic Growth, is that correct . That is a true statement, yes, sir. And the tax rate when bill clinton came into office was at 31 , correct . I dont remember the tax rate, congressman. Okay, we can stipulate the highest tax rate easily ascertainable, 31 . He immediately, with the support of congress, changed that top tax rate from 31 to 39. 6 , correct . Again, congressman, i dont remember. I was not paying much attention to National Politics in the mid 1990s. And 20 millionplus jobs were created during the eight years of the clinton presidency, true . I believe there was substantial Economic Growth. I dont remember the number of jobs. Okay, george bush was elected president in 2000, correct . That is correct. And the top tax rate at the time was 39. 6 , true . Again, congressman, i take you at your word. Okay, thank you. And the bush tax cuts that were put into place in 2001 and 2003 resulted in the top tax rate being dropped from 39. 6 to 35 , correct . I think thats correct. And how would you characterize Economic Growth and job creation during the bush presidency . Congressman, if youre trying to get me to say that the cause of the clinton economic boom was an increase in taxes and that the cause of the recession of 2008 was a decrease in taxes, youre just not going to get me to go there. Im just asking tax our way to prosperity, we would have done it a long time ago. Im asking a factually based question. Actually, during the eight years of the bush presidency when the tax rate was dropped, this country lost 400,000 jobs. Now, during the subsequent eight years weve got, again, 25 years of a record here. Barack obama comes into office, the top tax rate is 35 . Its raised to 39. 6 , and during the obama presidency, 12 million private sector jobs were created. I simply say that there is no evidence anchored in any reality as to the theory of dynamic scoring and trickle down economics yielding substantial Economic Growth. I yield back. Time expired. Gentleman from california is recognized for five minutes. Mr. Director, welcome. Id like to continue that very line of analysis. As i recall, bill clinton reduced federal spending by 4 of gdp. He approved what amounted to the biggest Capital Gains tax cut in American History. He overhauled entitlement spending, in his words, ending welfare as we knew it, and we did have a period of profound economic expansion. As i recall over his objection and at the insistence of republicancontrolled congress. And i understand growth assumptions are at issue here, but the growth assumptions, which are very relevant to whether and when the budget balances are really irrelevant to the policies that are required to produce that growth. Are they not . Policies will drive everything, yes, sir. And with respect to the policies, this budget reminds me a great deal of the first reagan budget when he rebuilt our defenses, restrained the growth of nondefense spending, enacted the tax and Regulatory Reforms that were necessary to grow the economy, where wages are growing and opportunity to prosper expands to include every american. What was the result of these policies that you are restoring to our federal fiscal plan . We built an American Economy that was the envy of the entire world and can be again if we can have the sense to reinstill some of those same policies. In fact, we averaged 3. 5 growth every year for eight years, compared to the Obama Policies that increased taxes, increased the regulatory burdens, increased our deficits dramatically, and produced one of the slowest growth rates in the history of the country. I believe we averaged 1. 5 every year for his eight years. Is that correct . I think that sounds right, congressman. In addition, i think in his very first budget he assumed that he would get 3. 5 growth, 4. 4 growth, 4. 6 growth, and 3. 8 growth. And when reagan took office, the top marginal income tax rate was 70 , getting to the question of these terrible tax cuts for the very wealthy. Top rate was 70 when reagan took office. He cut that rate from 70 down to 28 . And the result was, our Income Tax Revenues went from 285 billion to 456 billion in the same period. Is that correct . Again, i dont remember the exact numbers, but i will take you as your word as with the previous congressman. And the share of taxes paid by that top 1 actually went up dramatically from 17. 6 to 27. 6 . So when we cut the top marginal tax rate, the economy expanded dramatically, revenues to the federal government expanded dramatically, and the proportion of taxes paid by the wealthy actually increased, it didnt decrease. Dont forget president reagan dramatically simplified the tax plan, which is something were talking about doing, as well. So this isnt theory, this is practice, and its been practiced under both democratic and republican administrations, when you cut the tax and regulatory burdens, the economy expands. We saw that under reagan, we saw that under clinton. We saw that under coolidge and harding. We saw that under john f. Kennedy. These are the plans that actually work. This isnt theory. This is longstanding practice, and it is so good to see an administration returning to the policies that work and for the first time in 16 years having a president who actually gives a damn about balancing the budget before it bankrupts the country. And thats the one point i wanted to differ with you on. You said that if we continue down this path, our grandchildren will have 30, 40 trillion of debt on our shoulders. I dont think we get that far. You mentioned a sovereign debt crisis. When the government loses access to capital, pension systems implode, basic services, including Public Safety falter, ultimately you have runaway inflation and the economy collapses. I asked a leading economist with mercatus how long do we have, and his answer was, well, you cant really make a prediction like that, because a number of different factors will influence the onset of a sovereign debt crisis. He says, i can tell you this, when we reach a trillion dollars a year in annual deficits, the markets will be destabilized at that point and you will set the stage for a sovereign debt crisis. Your budget turns us away from that bleak future, but that day comes according to Congressional Budget Office if we dont change course five years from now. We dont have a lot of time left. And i hope the house Budget Committee takes your words to heart, as well, congressman. Gentleman times expired. Gentleman from massachusetts is recognized for five minutes. Thank you, mr. Chairman. Director, thank you very much for joining us here today. Id like to touch on your comment about washington speak versus regular language by the American People. Director, do you believe in inflation . I believe that its very real, yes, sir. Do you believe in population growth . I do, yes, sir. Okay, so i think that people back home understand that if you flat line budgets for things like medicaid, medicare, lets say my parents are counting on getting cataract surgery so they dont go blind today, but if theres enough money in the budget to cover them both today and that budget is flat lined Going Forward and the price of cataract surgery goes up or there are simply more people in america who need that surgery, then they wont be both covered in the future. One of my parents will go blind. Thats why in washington we account for inflation and population growth when we do budgeting. I think people back home understand that the cost of bread is not the same today as it was ten years ago or 20 years ago, because of inflation, and im concerned that in the same way that youre returning us to the failed president bush policies of tax cuts to spur Economic Growth, that when only directed at the wealthiest dont, in fact, spur any Economic Growth at all, that were getting back to the fuzzy math of the bush era, as well. But id like to talk for a second about your cuts to the state department. General mattis in 2013, who was thencommander of u. S. Central command said before congress that if you dont fund the state department fully, then i need to buy more ammunition. And that quote, the more that we put into the state departments diplomacy, hopefully the less we have to put into a military budget as we deal with the outcome of an apparent american withdrawal from the international scene. Do you agree with his assessment, director . Congressman, what you see there is the president doing exactly the same thing hes done on other line items in the budget that ive talked about today. I recognize the fact there are folks in this room who do not appreciate or support the reductions in the state Department Line item, just like theres folks over on this side of the room who probably do not agree with our decision not to tackle Social Security and medicare. Director, im not talking about members of congress, im talking about our own secretary of defense. This is what the president promised he would do. I understand what secretary mattis said before the president also promised he wouldnt cut Social Security, medicare, medicaid, and he is cutting them. He also promised us a Health Care Plan that would see everybody get beautiful coverage, and thats not what were getting from the ahca, which, in fact, is guaranteeing that a lot of people like my parents will see their Health Care Costs go up over the next ten years if its passed. Go back to your basic assumption, congress mang, the government must grow, that you are required to grow at inflation plus population growth. And i think we simply reject that. Theres no reason the government must on autopilot i would love to see the government not grow, because wed get more efficient. I share your belief that we ought to be able to achieve that, but im not going to dismiss inflation, im not going to dismiss population growth when we talk about budgeting. Director mulvaney, the do you disagree with the statement of general david petraeus, former cia director, retired general john allen, retired admiral staph ree tas and other generals and admirals who express their opposition, just like secretary mattis, to cuts in diplomatic programs . They said the state department millennial challenge, peace corps and other agencies are critical to preventing conflict and reducing the need to put our men and women in uniform in harms way. Do you disagree with that assessment . Yes, sir, i dont necessarily agree with that, and the budget does not agree with that. But why do you disagree with that . It sounds an awful like our president , who says hes smarter than the generals. Is that your view . 120 respected generals who say youre wrong. Your own secretary of defense says youre wrong. So why is it that youre willing to put our troops at risk by cutting aid to diplomatic programs that keep them out of harms way . Why is that . That is not fair to our troops. That is not fair to those of us who are on the ground. Mr. Director, with all due respect. Mr. Chairman, i yield back. Thank you, sir. Gentleman yields back. Lets see, mr. Sanford, gentleman from south carolina, youre recognized for five minutes. Thank the gentleman, thank the director, as well, for his time here. I want to say how much i applaud your goal of balancing the budget. As already been noted, the last administration did not have that as a goal. It didnt balance in perpetuity. I very much admire that. I admire your willingness to make cuts, both taxes and in spending. Weve had much conversation on the appalachian Regional Commission because youve actually proposed cuts, something a lot of administrations have not proposed. I admire you, weve worked together over any number of years in different capacities, i think youre bright, capable, and caring. Do i have to write that down . I will, i will. I generally sympathize with the fact that youre doing an executive branch budget, which i did for eight years of my life, and thats a difficult process, but and i will go with a but, i want to go back to what we talked about yesterday. You have said that the foundation of your budget is 3 growth, and i have looked every which way at how you might get there, and you cant get there. And as a consequence, i think it is disastrously consequential to build a budget on 3 budget. Bible says you cant build a house on a sandy foundation, what it does is it perpetuates a myth that we can go out there and balance the budget without touching entitlements. Its not only a myth, its, frankly, a lie. And if it gets started at the executive branch level, it moves from there. And so i think that this notion of 3 , literally the speaker of the house talking today about the notion of 3 growth and how we can balance the budget. I just, again, as earnestly as i have looked at this, i dont know how you get there. And what this does is, is it it creates real debates from happening. Legitimately myself and democratic colleagues can see things quite differently, but for us to have a real debate, we have to base it on real numbers. I would also say its important because im a deficit hawk, as you well know, and if youre wrong on these numbers, it means all of a sudden weve created a 2plus trillion hole for our kids and grandkids Going Forward, so i want to walk through a couple of different numbers with you. One, this budget presumes a goldilocks economy, and i think thats a very difficult thing on which to base a budget. If you look at the average economic expansion in the history of our country, its 58 months. The current expansion that were in is actually the third longest economic expansion in American History. Were at 94 months. But what you presume in this budget is not only we will not have a recession, though were in the longest economic expansion, but its going to keep going for another 114 months. Its not only unprecedented, i would think that to be unreasonable. It assumes that the stars perfectly align with the large economic drivers. Can you guess the last time we had an Unemployment Rate of 4. 8 growth at 3 and inflation held at 2 . Its never happened. The last time the growth was at 3 , we were held for a sustained period of time the tenyear bond yield below 5 , yall presumed 3. 8 . Can you guess the last time thats ever happened . Again, im trusting you on the assumptions. Yeah, its never happened. So, were going way out there on the curve in terms of assumption, and then in terms of the ingredients of growth, i actually broke out some numbers here, you know, Capital Formation would have to go to the record level that weve seen in terms of Capital Growth from 1965 to 1974, though Capital Formation actually goes down as people retire. They withdraw from a savings accounts. Labor force would have to go to what we saw in the 1970s and 80s when women were joining the work force en masse, and even if you took them back up to the numbers we saw in the 1990s, we would see a 0. 2 of 1 , a decimal increase, it would require radedly opening immigration or a radical change to demographics as we are having 10,000 baby boomers retire each day. If you look at productivity growth, it would require numbers, again, that we havent seen since the golden days of 1958 to 1967 in the final wave of consumer appliance and the completion of the highway system to achieve what were seeing. Even if we went to 1990 numbers, we would only see onequarter of what was necessary to achieve 3 growth, though the ram corps says times expired. Reduction of 3 is to be presumed with aging. I would just lastly submit this for the record, which is to say if you look at the correlation between ombacbo entered to the record without objection. Sorry, gentlemans time expired. Gentlewoman from new mexico, recognized for five minutes. Thank you, mr. Chairman, and welcome, director. That wasnt the strategy i was going to take, but maybe i can finish up just a little bit of what my colleague, mr. Sanford, was hitting on. This committee, as you well know, its very difficult for us to have a and i mean no disrespect to my colleagues scene i dont think you mean any disrespect to us on this side of the Budget Committee either, but we dont have these earnest dialogues about how you might look at this and what your priorities could or should be, and i agree. If were looking if we want to have kind of a cadillac growth in the economy in gdp, you want that and you want to get kind of a balanced perspective about who thinks that can happen. Do comprehensive immigration reform. Now, we might disagree about the policies related to that, but i think its going to be very hard for members of this committee to disagree that that, in fact, will grow the economy. You want to make sure that government is lean and efficient, you want to make sure that were not hoarding money or not being accountable, well, lets deal with 125 billion at the pentagon. There are things that we can do. If were concerned about population issues that are very expensive, boy, i spent a lot of time doing aging policy. Its a very delicate effort here. You want dignity and respect and quality of life for older americans, but we recognize unequivocally that they are chronically ill on average of seven medications, most of them need longterm care, including my mother, who by the way is only 77. And the amount that we spend unsustainable. So if were interested in that, then you bet, get nih, cdc, and every research arm and institution, public or private in the United States, and get them to prevent and cure alzheimers. And we have a boom to the economy and we have lowered our risks. And i realize that particularly the last one, you know, theres not a one of us here who doesnt wish we could do that and eliminate all chronic disease, but we arent going to invest in addressing that at all. And, in fact, were saying, look, because there has to be sacrifices to deal with a balanced budget, to really address some serious issues, were just going to have one side of the american population. You sacrificed and everybody else, and i want to talk to you about how im living that. Nbc news just put out a report and ill submit it for the record without objection. I will then. Here it is. New mexico would be hit the hardest, all right, so im living in a state thats using many of these trickle down economic and cut policies, agendas that are clearly imbedded in this budget document, and let me tell you a bit about our and were a defense state with two labs, right, so a lot of the stuff youre proposing should really work in a state like ours, except nbc says not so much. And lets talk about my state, and if you remember from being on this committee, i talk about it a lot, because its a huge problem. Ten years ago we had a 3. 7 Unemployment Rate. Today, we have the highest Unemployment Rate in the nation at 6. 7 for the third month in a row. Our Graduation Rate is the worst in the nation with only 69 of our students graduating on time, 20 of new mexicans live in poverty, 20 of new mexicoen children live in poverty, second highest in the nation. Half the state is on medicaid with some of the Worst Health Care outcomes, second for infectious disease, fourth for teen pregnancy, third for suicide, first for chronic liver disease, eighth for drug overdose, onethird of new mexicans rely on s. N. A. P. And nutrition assistance. Half of new mexicos children under 4 are, in fact, receiving state or s. N. A. P. Benefits. We might argue, see, medicaids not working, but we have a governor thats actually been cutting medicaid and being more draconian about work requirements and not being very smart about reinvesting. Cut, cut, cut, cut. Trickle down economics, which, in fact, have driven out businesses. We have the highest Teacher Vacancy rates in the country. I could spend way more than just the 40 seconds i have left to tell you that were the only state losing population. People have lost hope. And, in fact, embedded in every decision that our current conservative leadership, both at the local level and at the state level have made mirror many of the priorities in this budget with none of the outcomes that you project for the nations economy. So id like to just point to a different perspective that while states are working together had balanced these issues and sacrifices, shared opportunities, shared returns on those investments that, in fact, exactly what youre proposing, and i didnt get to any of the other stuff, student loans, pell grants, any of it. We are, in fact, a disaster using your budget blueprint. Thank you, mr. Chairman. Recognized for five minutes. Thank you, chairman. Director mulvaney, thanks to you and President Trump for all the hard work in crafting the fy18 budget proposal. Im encouraged by the strong conservative reforms the president has proposed and the consideration shown for our tax dollars. As a freshman member of the Budget Committee, one of the most interesting documents i read was about 26 pages, it was called the evolution of federal budgeting. Ive subtitled that when two and two cease to equal four. Weve got challenges, and weve heard it in different ways. As a career member of the military, im encouraged by the investments made in our National Security and the military in general. I applaud the president for taking our National Security threats seriously and for responding in a serious way. But i would suggest to you that this is not a plus up of the military, its a catch up over the last eight years. So i just have one question that i would like to discuss or hear your thoughts on this afternoon. And it regards overseas Contingency Operations or oco, as we call it. The president s budget slowly brings down oco spending. Could you explain briefly the rationale behind the reduction and in your opinion would the Administration Support establishing a set of criteria, prioritized criteria, for allocating oco dollars in the future to ensure that the money that is being spent is actually being spent on security needs and to ensure we dont allocate a more than necessary into the oco account in future years . Weve not had a chance to talk about that in particular, congressman, but i can assure you that i welcome that conversation. Simply havent had a chance to do it yet because weve been doing budgets since the day i got there. I share your concerns, as i mentioned with one of our colleagues earlier today, that oco be used for oco and it not be used in other ways because of the nature of the account where its not quite as accountable, not quite as transparent, its not in anybodys benefit to use it in a place to park other spending. It is an important piece of how we operate the Defense Department, necessary piece of how we operate the Defense Department, but it does need to be properly used. Thank you. This is something we havent heard much this morning. I yield back the balance of my time. You wont hear that much in this committee, mr. Congressman. I thank the gentleman. I see that we have no more speakers, at least at the present time on the democratic side, so well continue on the republican side with mr. Grossman from wisconsin for five minutes. Thank you very much. Coming all over here, glad to see you on that side. Dream come true. Right now the average debt per person, as you pointed out, in this country is about 60,000. I know this is going to be a difficult next four or five months for us all, because there are a lot of people on the democratic side, ill refer to as the bush republicans that feel that 60,000 can get higher. But id like to thank you for trying to hold the line on 60, and in this budget over the next couple years, how much higher do you think thats going to get or do you think we can hold it at 60,000 for now . Or do you expect by the end of this year its going to be up to 63, 64 . Well, it depends, congressman, on what sort of assumptions we make on what yall do. Keep in mind our budget is a message document. It contains the vision of the administration. Yall control the power of the purse. When it comes to spending, that will fall to you. I think the cbo baseline number adding 9 trillion of debt in the next eight years, if you allow that to happen by not changing the current law, thats exactly whats going to happen. Okay. I know you have a little bit more in here for border enforcement. Do you plan on in the next year doing a lot of work towards building the wall . Yes, sir, we do. We ask for an additional plus up at the department of Homeland Security of 4. 5 billion, of which 2. 6 will go to actual border security. And how much of the wall do you think will build, first of all, by the end of our current fiscal year and then beginning the year that were talking about in this budget, how many miles do you plan on building . Its really difficult to say for a couple of reasons. Im not trying to dodge the question, im trying to give you the variables. We havent picked the ideal fence yet. Were going through a prototype project to see what they look like, see how they might function, and then weve not decided if one size fits all on a wall or if different parts of the border need different types of barriers. Whats your goal . You must have a goal. Goal is securing a border. On october 1st of this year, how many miles if i tell my constituents back home if i have a town hall meeting you all appropriated 341 million in the 17 appropriations bill to for replacement, and we plan on spending all of that money this year. Okay. You have no idea, 100 miles, 500 miles . Again, it depends on the kind of wall that you build. I think the boller wall is roughed out at 8 million a mile, but i think thats an allin cost and i think its cheaper when you replace wall thats there already because you own the land, the infrastructure is there, so its difficult to give you that number, and aapologize. We can give you our best estimates after the meeting. Give us the best estimates. Work is going on today. Work is going on on the southern border today. Good. Okay. Next question. I think your increased border enforcement will result in a savings, but i wonder if you could work towards in three areas. Work towards the amount of savings we could get if we kept certain immigrants here we wouldnt want here. Three areas, thinking of crime, as weve all heard about stories of crimes committed to get here. Welfare payments, even though they shouldnt be getting welfare payments, and providing medical care for expensive expensive Illegal Immigrants coming here. Do you have any numbers on all three, how much savings we could have in all three areas . I dont have the numbers at my fingertips, congressman, but i can tell you the budget does propose Social Security numbers for recipients of both the child care tax credit and income tax credit, which we think will result in dramatic savings. I hear from my social workers or income maintenance workers sometimes because there are sanctuary cities or counties arent able to ask questions, but people are taking advantage of our general income support programs, lowincome housing, food share that are here illegally. Can we do anything to crack down on those people . Yeah, we also propose, congressman, switching from the current lottery system to a meritbased system to ensure folks who come here can actually contribute more quickly to Economic Growth. Im glad youre working in that regard. One of the things im trying to do since ive been here is do something about the marriage penalty, which is the current policy of the American Government to discourage parents of children from getting married. Its not hard to think of a hypothetical 20,000 or 30,000 a year, certainly 20,000 or 30,000 for not getting married. Would you be willing to work with congress as we work our way through the system to try to not pay people so much not to get married . Be happy to do that because we agree with the principles. Time expired. Continuing with questions on this side of the dais, mr. Smith from missouri, youre recognized for five minutes. Thank you, mr. Chair. Director, its a pleasure to have you here. When i am home and talking about the budget to our constituents, they theyve never seen a trillion dollars, and so the best way to talk about the fiscal the fiscal situation of the federal government is to take off eight zeros when i talk to them. And you could take off those eight zeros right now and i put it in perspective that the folks back home make roughly 36,320 a year, give or take a little bit. Thats the revenue that comes into the United States in this past year roughly, estimated. But yet that same individual would be spending 42,680 a year. Almost 6,000 more a year, but when you add the eight zeros, which is the federal government, thats a whole lot more than 6,000. But when we talk to the people back home, its you make 36,000, you spend 42,000, but yet on your credit card you have 190,000. Its unsustainable, as you know, as the president knows, and thats why i want to thank you and thank President Trump for offering a solution that comes towards a balanced budget in ten years. So then we are at that point that you make 36,000 and you spend only 36,000, and then you can stop reducing the debt. Do you have the numbers of where we would be if we leave it as a status quo of how much the debt would be over the next ten years . I think the tenyear number is i think the eightyear number is 9 trillion, according to the baseline, if you leave status quo, if we simply go home and dont do anything different for the next eight years, i think its 9 trillion. I think its 9 trillion ten years, but roughly 9 trillion is the answer to your question. So 9 trillion not to do anything, but if we pass this present budget we would add 5 trillion . I think its half that because we actually get to balance in the tenth year, 16 billion surplus, i think. Okay. Is there any items that you feel like that would be great that you would love to express that you may have been cut off in prior testimony that might be helpful . No, i have to admire the way you articulate the numbers, because i think whats so frustrating, we talked earlier today about regular language, regular english versus washingtontonian english. At some point i wish we didnt have the word trillion. I cant tell you the number of times ive asked folks what do you think is more, 952 million or 1. 1 trillion and some people actually think 952 is more. Its a thousand times difference. Its actually more than a thousand times difference, so you are right to get it down into numbers that people can understand. I dont like using trillion dollars because ive never seen a trillion dollars either. I had a constituent give me a calculator that could do trillion dollars, it was about this big, it will absolutely frustrate you. I think youre doing absolutely the right thing trying to explain to people what the real world looks like, because that Credit Card Debt that you mentioned, the 190,000, is absolutely right. And they know what it would mean for their families if their families had that kind of debt. And its not mortgage debt, as you pointed out, its Credit Card Debt, which is entirely different. Its unsecure. Thank you, director, appreciate you being here. Thank you. Gentleman yields back. Gentleman from alabama is recognized for five minutes. Good to see you, director mulvaney of the i want to go back to a question that was asked by one of our colleagues. One of our colleagues on the other side say she had never seen Economic Growth of 3 . I think she said what i was proposing was never before seen growth. I would like to enter the record this document that shows that our average growth since for the last seven years has been 3. 21 . Without objection. Thank you, mr. Chairman. I want to ask you a few questions and try to go through this fairly quickly. In your budget you show 142 billion over the next ten years in reductions and improper payments. I want to know why so little, when last year the improper payments alone were 133. 7. We havent had a chance to talk about that yet. That was a conscious decision. We didnt want to be accused of using different numbers, so we tried to be conservative as possible. I think it would have been reasonable enough for us to go as high as 40 or 50 in that. I think thats a goal you should shoot for. I think it would be reasonable and i would like to have the opportunity to help you with that. Keep in mind, if we do what the budget suggests and get to that 40 , 50 , thats just a faster path to balance. Thank you, director. Let me ask you this, how does the administration define success when it comes to social programs . Do you consider adding more people to the welfare rolls a success . No, and its so frustrating when i see incentives at the state level to get people on to programs. Thats not how you measure success. Success should be somebody who was employed, became unemployed, use the benefits available to him or her, whether its unemployment, s. N. A. P. , whatever, as the bridge to get to the next job, get back into the workforce, back in charge of their own life, back providing for their own family. Thats what the safety net is for, thats what it needs to be for, to provide that type of comfort. But it cant be a permanent dependency. So youre aware that when the government puts people on support that really shouldnt be there, that it disadvantaged people who should be on there. For instance, theres a report out of the Illinois Department of Human Services that indicated they were given preference to the ablebodied working age adults because they were in the Medicaid Expansion that resulted in thousands of people at the lower reimbursement rate being having to wait for care. As a matter of fact, 752 died between 20132016. Thats a bad policy, wouldnt you agree with that . It is. The people who pay the highest price for the abuse within the safety net are the folks who really should be on and need the safety net. Let me ask you this. My democrat colleagues cast many of the things in this budget as cuts when, in fact, they should really be talking about savings. For instance, eliminating payments to dead people. Wouldnt that be a savings, not a cut . Last i checked, that would be a savings, yes, sir. When an ablebodied person whos working age that doesnt have Young Children is encouraged to get a job when in order to continue to get medicaid or food stamps or some other government program, and that ablebodied person actually improves the quality of their life, they raise their income and get off of government support, is that a savings or a cut . That is a win for that person and that persons family, and a win for the country, and we should claim it as such. Person who grew up pretty much dirt poor, i can tell you that work is the right path. I can tell you that from personal experience. I would suggest, congressman, its probably the only path. It is the only path. Let me ask you Something Else in regard to the tax reform. I also have a chart here that indicates that a high tax burden damages Economic Growth, and its particularly damaging to Small Business. Everybody gets caught up in the big corporations, but the employment engine of our economy is Small Business. And over the last eight years weve really seen that damage in fullblown, livid color. Gallup put out a report that indicated that prior to 2008 we had100,000 more businesses starting up than closing but by 2014 we had 70,000 more businesses closing than starting up. Its a disaster for employment in the United States. Can you briefly tell us how you think the tax reform policies will the dynamism in the market youre talking about. New business formation is embarrassingly low level and regulatory policy has more of an influence than tax policy. I have started a Small Business, a restaurant. I want to tell you that figuring out how to handle all the regulatory requirements was harder than rolling a burrito. Business people want to be in business. They dont want to be in the business of filling out government paper work. Mr. Chairman, i would like to address the chair for a moment. While i dont agree with everything in the proposed budget i think its wonderful that we have a budget director that supports a pro growth economy, that supports Small Business formation and supports getting people back to work. I yield back. Gentlemans time expired. Gentleman from florida mr. Gates is recognized for five minutes. Thank you, mr. Chairman. I find it ludicrous democrats in this hearing suggested that President Trump betrayed his voters by presenting a balanced budget. And so direct to mulvaney, please share with the president that the folks in florida who voted for the president are proud of the fact you have worked so hard to bring a balanced budget forward for our consideration and review. I honestly wish that we could vote out the president s budget today and make it the law. And use it as a device to constrain the growth of government. I dont want to see the swamp of this town submerge and swallow up the bold decisions that you and the president have made together to put us on a path to fiscal responsibility. My question for you, director, is this, detail for us the ideas that democrats on the Budget Committee have brought to your office to balance the budget. Its none. Is it safe then to assume that a balanced budget is not truly a priority or an objective of those who have been asking you these questions today . You could certainly assume from the experience on this committee, for example, over the last eight years that since the Previous Administration never offered a balanced budget that that administration representing their party are not interested in balancing the budget. I want to speak for a moment about work requirements. This committee in the context of health care took the position that ablebodied childless adults should have to meet a work requirement if they want someone else to pay for their health care. Whens the president of the president in this budget relative to work requirements. Actually, we support that both within the American Health care act which we support and that you all have already voted on. We also take that same sentiment and apply it to food stamps. Rnd the theory that if you are an ablebodied person with no dependents, and youre able to work, we should require you to prove that youre trying to work to get food stamps. Should that be a mandatory requirement within these federal programs that we have work requirements or should states be able to choose whether or not to have work requirements . Well, both is the answer to your question. I think in the ahcc we allow the states to do it because i think that deals with medicaid which is a state administered program and our budget we introduce that concept into s. N. A. P. Which is i believe a federally run program. Im sure the states are involved in providing the services but i think we are more heavily involved in food stamps. If you tell folks in the food stamp space, snap space, the medicaid space its not further dependence on the government, it is getting the benefit of work, what impact do you think that will have on our aspirations for broader Economic Growth . We in order to get that 3 growth, we need folks to work. All right . And we need to figure out a way to provide them with the Economic Opportunities so that they can go to work. I didnt get a chance to talk here today about the difference between the u3 measure of unemployment and the u6. U3 is used traditionally. Folks defined as being in the workforce but unable to find work. U6 is those people plus folks who are i think we describe it as marginally attached or working part time for economic reasons against their will. Okay . That difference is i think over 6 Million People. Those are folks who want to work fulltime but havent found the opportunity to do that yet. Thats the folks we want to go to and say, look, if we can get to 3 growth, we can get you the fulltime job you want. Please also share with the president graut tuesday of the folks in my district so grateful to see a president willing to prioritize our military and the capabilities within our military to meet the challenges presented by our adversaries. As a member of the Armed Services committee i have seen time and again our adversaries invest in next generation weapons system, testing, evaluation and so maybe could you speak to the opportunities that would be presented for our military and our capabilities in the test and Evaluation Mission if we were to accept the budget that you and the president have proposed . Yeah. Encouraged to have you reach out to secretary mattis but yeah. I think you would hear him say is he wants this money now so that he can modernize and get readiness up to where it needs to be. Thats his First Priority is taking what we already have and making sure its able to be used to defend the nation. We are all interested longer term looking at larger troop numbers, larger plane and ship numbers and the First Priority is making the defense capabilities we have can be used if necessary. Thank you, mr. Chairman. I yield back. Gentleman yields back. Gentleman from texas is recognized for five minutes. Thank you, mr. Chairman. Thank you, director mulvaney, for your service to the country in the house and now the new role. Growing up my dad said that money repeatedly that money didnt grow on trees and i believed him. Until i came to washington. And now ive got to tell him i found the money tree and its the United States treasury and im sure grateful that youre presenting a budget thats not a money tree trimming budget but its a money tree cutting budget. And thats what we have got to do to get our country back. I want to applaud you and the president for proposing a long overdue balanced budget and one that begins reducing our National Debt which i believe is the greatest threat to my childrens future in this great country. And we know what to do. You know what to do. I know what to do. The committee knows what to do. The American People know what we have to do. Theyre waiting on politicians to have the courage to do it. I commend you on your courage and i commend the president equally. I agree with your growth projections. I think theres pentup growth demand in this country. If we will just unleash it, unleash the economy, unshackle it, from the 2 trillion in regulatory costs, the highest Corporate Income tax in the industrialized world and relieve the American People, middle class and working class families from this disaster called obamacare. Were not going to agree on over item in the budget. You know that. I know that. Let me hee light for you what is i think now after ms. Delvaney expressed her thoughts, a bipartisan concern with all due respect. Our food fuel and fiber producers in Rural America are feeding and clothing the American People. And they are fueling the American Economy. Thats not just Economic Development for west texas. Thats ag and Energy Independence for the entire nation. Thats National Security for every american citizen. Now, ive got a question and ill qualify it with four very important facts. Agriculture is the basis for the economy in Rural America. In the last farm bill, we cut billions of dollars from farm programs. The last three years we saw a 50 decline in farm income, the steepest declines since the great depression. And you know this, director mulvaney, but farm policies represent a mere. 26 of the entire federal budget. Heres my question. Recognizing that we need to make cuts, recognizing there are cuts to be made everywhere, why now and why such deep cuts to our farm sector safety net . Thank you, congressman. As i mentioned earlier and i cant put my hand on the piece of paper, i think we actually dramatically increase spending on some ag programs, not least of which is i think the farm loan program. Weve also as im sure you have listened to farmers to find out what their priorities are, what can allow them to change that trend. You talked about in terms of farm incomes. And what we hear from them again and again and again is more favorable trade deals. Because the world is their market and the world needs to be their market and we need to be able to ship u. S. Grown Agricultural Products everywhere and right now we lack the ability to do that. Thats why i applaud the president as im sure you do even over the incremental benefits of chinese with the meat imports. It is a big deal. I was from a rural district, as well. You look at the regulatory climate and what we were doing to our farmers in terms of waters of the u. S. And clean streams and regulations from top to bottom, farmers are farmers. And they want to grow stuff and they want to be productive. They dont want to be paper pushers trying to figure out how the federal government will punish them for doing something they thought was right and hear them again and again down at the white house at the regular basis. I wont be pollyannaish. I think we deal with put it this way. We focused exclusively on what we would call corporate farmers, protecting i think 96 of farms in the country. If i may because i just have a little time. Yes, sir. We need freer markets. As you suggested. Fairer trade, better trade deals as the president suggested. Theyll never be able to compete, though, with china and india and others that dont have an epa, osha. We need a safety net, a reliable, strong safety net. I yield back. Thank you for your time. Thank you. Gentlemans time is expired. Let me recognize the Ranking Member mr. Yar mouth for closing remarks. Thank you. Mick, thank you so much for being here. Just for the record when i as you know, when i was alerted that you were possible appointee for this position i wrote a note to the Transition Team saying that i consider Mick Mulvaney a man of the highest character, principle and intelligence and one with whom i agree on almost nothing but that as Ranking Member on the Budget Committee that i know we would have an ammicible working relationship and a mutually respectful one and i havent changed my opinion about any of that. Thank you so much for your work and your appearance, and i look forward to if i may, congressman, i want you to know that i have protected that secret with my life over the course of the last several months an im glad you were the one to out that and not me and i do appreciate those words and your effort during the transition process. I yield back. Thank the gentleman. Secrets, secrets. Im going to use my closing to clean up some of the record if i could or establish more of the record. I dont think weve talked much about the debt ceiling concept and i know youre worried we wouldnt get to that. Let me ask a few questions in that regard. Of course, the statutory debt limit reinstated on march 16, 2017, at just under 19. 809 trillion. Treasury secretary mnuchin informed speaker ryan, the debt of the United States would be at the statutory limit immediately and that he would be using extroir nay measures to temporarily continue to meet the federal governments obligations and wrote that he was declaring, quote, debt issue shans suspension period to allow him to use extraordinary measures to extend the debt limit and something that the predecessors declared under similar circumstances. Youll remember, as well. He encouraged the congress to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible. So, the two questions i guess would be, does the administration have a preferred legislative approach to the debt limit issue . For example, specific amount or specific time period. And then secondly, how soon do you think we need to act . Thank you for that. Very briefly, the answer to your first question is, no, we do not have a final stated policy yet. I met for an hour with secretary mnuchin to discuss this exact topic. We look forward to director cohn, the third person of the troika thats sort of run lead on Economic Issues in the west wing and within the white house. Attorney from overseas to continue that conversation. We look forward to working with the hill on the best way to go about that. Secondly, regarding the timing, my understanding is that the receipts currently are coming in a little bit slower than expected and you may soon hear from mr. Mnuchin regarding a change in the date. Okay. I thank the gentleman for coming again. Let me add my appreciation for what youre doing. I thank the president for prioritizing as hes done in this budget and i appreciate the respect hes given us to do our article 1 duty. I think mick, the president is lucky to have you and the administration and the country is lucky to have you in this position. Thanks, don. I really appreciate it. With that, this meeting is ajournaled. Adjourned. If you missed any of this house Budget Committee hearing today, you can watch the whole thing again shortly online. It will be available at cspan. Org. Just type Mick Mulvaney into the search bar. Also, available on our website, all 62 pages of the president s proposed budget for fiscal year 2018. Coming up this afternoon, department of Homeland Security secretary john kelly will be Briefing Members of a House Appropriations subcommittee. We will have that for you live at 3 00 p. M. Eastern time here on cspan3. Well, white house budget director Mick Mulvaney broefed reporters on the president s budget request yesterday at the white house. Well show that event to you now