I called to order this hearing of the Senate Budget committee. The hearing on Government Accountability offices annual report on the nations Fiscal Health. We will hear from nonpartisan watchdog on the Fiscal Health and importance of confronting our critical fiscal challenges. I welcome back mr. Dodaro who is the most usual and best witness providing information throughout the year that is extremely helpful to heading off some of the future crises that will happen if we do not Pay Attention. This hearing will cook off a series of hearings and to findons about Hope Solutions and help build the foundation for next years budget cycle. The next few years should be significant for the committee. The committee has been working hard to enact reforms that improve transparency and accountability in the budget process and help put us on a more sustainable fiscal path. Introduced the bipartisan congressional budget and i emphasize the as thatartisan wa was the first since 1990. We were successful when we are successful with turning this into a law the first budget cycle would be covered by the reform. Next year will also mark the first budget cycle in 10 years not constrained by the budget control acts spending caps. In the months ahead we will lay the groundwork for a return to more budgeting through a series of discussions focused on the major fiscal issues in our countrys horizon. We are meeting today for an update on the most pressing threats to our nations fiscal stability. Im pleased to welcome back gene dodaro, the comptroller general of the United States and head of the u. S. Government accountability office. Gao is issuing before the annual update on the nations Fiscal Health. This report has warned that the federal government is on an unsustainable fiscal path. Unfortunately, the budget outlook has grown even more dismal since last years report thanks to legislation enacted in 2019. Debt was gao predicted a percentage of Gross Domestic Product and it would surpass the historical high of 106 by 2038. Now gao projects will have that milestone by 2034. If current laws do not change. The Congressional Budget Office budget outlook also shows the cost of legislation enacted since last june has taken on an already unsustainable fiscal situation. Due to this legislation, namely last years spending agreement i stillttributes have trouble with that. Trillions and spending increases over 10 years and the appropriations package to repeal the pay fors. They say debt is a percentage of 174 of gdp soar to by 2049. That is a 30 increase from last years projection. Cbo warns failing to confront our rising debt will mean a future of slower Economic Growth, higher Interest Rates, and a greater risk of a fiscal crisis. As the deficit grows and we borrow even more money to fund the government, the interest paid on the money borrowed will overtake all other spending. This should be a major red flag for everyone. Already the annual Interest Payment on debt exceed we spend on a good culture, transportation, and Veterans Benefits and services combined. By 2041, the annual Interest Payments will be more than what we spend on medicare. Exceed, payments will what we spend on Social Security. 2049, Interest Payments will exceed the total Discretionary Spending. Debates on what Spending Priorities should be but Interest Payment on our debt are not debatable. Decide whethero we want to spend on health care, defense, retirement security. It is already committed. It is the most mandatory funding we do. If we stand the path we are on today, that interest will become the largest category of federal spending. I mentioned this committee in advance on a bipartisan vote that senator white house and i amended. Our bill takes several steps solutionsore ac budget. We incorporate the debt limit into the budget process in a way that would minimize the threat of default. We are calling for integrating into the budget resolution a longerterm physical target based on National Debt as a percentage of the overall economy. A debt to gdp slight slope. This would emphasize the fiscal trajectory and help to get us on a more sustainable fiscal path. One thing we will certainly need as we confront the hard decisions ahead is reliable financial and performance data. Earlier this year i introduced with otherion act senators. I expect the comptroller general is familiar as a grout of a hearing we had with him grew out of a hearing we had with him last october. Cfo responsibilities to enhance strategic decisionmaking and strengthening deputy cfo responsibilities. It also calls for revised planning requirements and metrics to help address longstanding challenges like better linking cost and performance measures, modernizing outdated legacy systems. Gaosld mention that suggestion, we have put in a request to omb to give us a list of all federal programs. I have not got it yet. There seems to be a problem with the definition of what a federal program is. I think i could help with that if they would just give us a printout. Payments that go to any entity, if an entity is getting money, it is one of our programs. This is my last year in the senate. It is my sincere hope we can take concrete steps to a sustainable fiscal future before i leave. A return to sensible budgeting would be a start. I hope that you take heart to says. Ur watchdog we must act before it is too late. I want to think comptroller dodaro for being here again and again. For all of the delightful information he shares with us. When we follow up on it, we get results. I look forward to his testimony and i dont think we have a Ranking Member statement today. I think there might be preparation for a debate coming up. I dont know if senator grassley wants to make comments . I will ask questions. We will move on to our witness this morning. This is gene dodaro, the head of Government Accountability office and comptroller general of the United States. Testifies frequently and im glad to welcome him back. He is the eight comptroller general of the United States. He was confirmed in december 2010 after serving for acting comptroller general since march 2008. Mr. Dodaro has been with the gao for more than 40 years. He served nine years as the chief operating officers, the number two leadership position at the agency, and prior to that he headed gaos accounting and management division. They specialized in financial Computer Technology and budget issues. What a diverse background of information that has been extremely helpful and been noted every time you have been testifying. General, comptroller you can begin. Thank you very much, mr. Chairman. It is a pleasure to be here today to discuss our latest report on the Fiscal Health of the federal government. As we convened this discussion today our country is confronting a pandemic that is threatening the health, safety, and economic wellbeing of our citizens, businesses, and our economy. I make that point because it is relevant to our message today of why it is important to put the federal government on a more sustainable fiscal path. The federal government needs to have the budgetary flexibility to marshal resources to deal with emergency situations. Reportncerned is our talks about the debt to gdp ratio as of last fiscal year was 79 . That is the highest it is been since world war ii when we hit the historic high of 106 of the debt to gdp ratio. Of 1946. Contrasts ts with that to be gdp ratio since 1946 to only 46 so we are very leverage than that at a time when we are going to be facing a steady annual deficits of a trillion dollars a year for as far as the eye can see. This will mean that our death gdp ratio and fiscal policy changes will hit their historic high of over 100 of gdp within 11 to 14 years. And depending on the estimates that are made by gao cbo, the financial reporter, the federal government issued by treasury and omb, they all result in the same conclusion. More importantly than that, is that that that will continue to grow to 200, 300, 400, 500 of gdp. This is why we believe the current path is unsustainable. The Social Security programs is already at one trillion dollars. Medicare and medicaid is expected to hit a trillion dollars each by 2026 which include state money for medicaid. And the interest on the debt will hit a trillion dollars by 2032 so right now, our total federal budget is 4. 5 trillion dollars. Those four programs are active with these alone will be four chilean dollars relatively soon. That will crash out a lot of other opportunities for spending and ranging from the fence to the whole panoply of discretionary programs to the country. So we need a plan, to deal with this. I recognize that we need to deal with short term student prior to National Priorities and make sure we have strong Economic Growth, but we also need a plan to put us on a better path. I was very pleased, mister chairman, to see the bipartisan bill that was passed out in this committee that would set the debt to gdp targets and with also dealing with another trouble scenario that i pointed out in the past setting the debt limit approach it does not control the deck, it is dangerous and the fact that it can disrupt treasury securities if it is not raised in time. Treasury securities marking and increase inches across the four governments we need a different approach. Youre approach that is included in the bill is a good approach. It is one of the options that we suggest of tying into the budget resolution. In addition to this fiscal policy decisions that need to be made there is still many opportunities to save additional money. We have pointed out in our report that this year the amount of improper payments across our government jumped from 151 billion to 175 billion, largely driven by an increase in medicaid an improper payments and i think that number will go up higher but we can talk about that later. There is also opportunity to consolidate overlap, duplication and fragmentation of the federal government. So far actions on recommendations that save 262 billion dollars. We have outstanding recommendations that could save tens of billions of dollars more. There is a lot that can be done to deal with this issue. I, again, and closing, applaud the committee for taking action in this regard. Both on the bipartisan budget, reform bill, as well as the cfo legislation. I would be happy to respond to questions mister chairman. Thank you very much. Thank you, and thank you for the documentary provided with a lot more information than that. I will turn to senator grassley questions. I will take you up on that, and i will go to the agricultural committee. Mr. Durham, your testimony said that Pension Benefit Guaranty Corporation and trust funds protected to be depleted by 2025. I am aware of that and we are working on legislation to try and help that out along with other aspects of multi employer. After 2025, if nothing is done bbcs premiums will not be enough to pay benefits to the and solve it plans and so alexander and i, jurisdiction over some of this we are trying to work on that. There are other proposals as well. I think everyone recognizes the longer we wait the worse the problem becomes. I wonder if you can comment on the need for action to shore up to multi employer Pension System and whether you think that would be prudent to continue to delay action. . Senator grassley, i think it is one of the most urgent issues facing congress. Ive been concerned about the multi employer plan for a number of years. I wrote a special message to congress about this back in 2014. Congress took some action at that time but it was not sufficient enough to deal with the longer term problem if congress does not act there is about 11 Million People that are insured in the Pension Plans and once it goes insolvent the only benefits the government will be able to pay his 2000 dollars a year. If that. To these people, or pension. It is hardly adequate. The government will fail these individuals if it does not act i encourage you to continue your efforts and your colleagues to act on this issue. Also, the Single Employer Program while it isnt a current surplus situation, has tremendous exposure over the long term as well. Said 160 billion dollars of potential losses to that program as well, but the multi employer plan is the most urgent and i want to encourage swift action on part of the congress to address concerns by these americans that would be affected. I want to entitlement series and see cbo and others have been telling us for a long time about Social Security and Health Care Entitlements and our interest issues on the debt that are unsustainable. In order to do that we have to reduce deficits and debt, Social Security will exhaust by 2024 and we will be paying a heck of a lot less Social Security benefits if we do not do something about that. I want to get to health care spending. I have a bill with senator widened to reduce drug braces in save taxpayers money we can allow over all health scare spending subsidies to go faster than the economy grows. If we are serious about reducing our debt, my question to you is dont we have to control the growth in federal spending on health care and entitlements . Absolutely. Congress needs to do that. The Fastest Growing class in the government are health care across and interest on the debt. The Health Care Cost as you point out senator are growing faster than the economy and are projected to continue to do so in the future. There has to be some changes. By 2026 there will only be enough money in the medicare house spittle trust fund to pay 89 cents on the dollar of benefits. That is right around the corner. That would affect millions of americans that rely on the Medicare Hospital Trust Fund cross and put enormous pressure on the federal government. Any suggestions that you make are good ones. We have other open recommendations, and in addition to bringing down drug costs, for example if you if payment on the federal government on medicare, for doctor visits depends on what you go and would place you get. If you go to a Doctors Office that is affiliated with a hospital, medicare pays you more money than if you visited that same doctor in a private practice. If you equalized benefits he would save billions of dollars in that area. We have a number of open recommendations. I will provide them to this committee for the record. I will provide them to your staff as well, but you absolutely have to control Health Care Costs. That is the most complicated part of this whole equation. If you do not control Health Care Costs, you really do not have much of a prayer of reducing the federal governments deficit and debt issues. Thank you for your courtesy. Thank you. We will let you go to the egg meeting from where he just came from judiciary. Senator brown. Thank you mister chairman. Ive been here a little over a year, and probably, the First Committee meeting said vividly stuck in my mind is when you were here roughly a year ago. Of course, who said basically everything than that you are telling us now. I guess what amazes me most about this place is highly seemed to shrug it off like its never going to have impact in the president. Health care costs, undoubtedly, are the driver. I took it on in my own company 15 years ago in there are solutions. Mostly, the reason we are not making any headway on Health Care Costs as i have never seen an industry more doug is, stubborn and wanting to maintain the status quo. When you have 80 u. S. Senators have not come up with some idea with how to fix your business, that is like that to buy for across the head, and nobody is paying any attention. From pharma to hospitals, the whole him of practitioners as well. Then you have the Health Insurance industry which is kind of the darth vader out there which keeps everything behind closed doors. It is not embrace any of the elements in most free markets which would be north barrier to entry, fools transparency, robust competition in unengaged consumer. We have none of that. Senator grassley, has been most aggressive and this is all mild stuff we have been trying to get done. Health education labor and pensions are among that committees. We still have not settled surprised medical fills. That has got to be the easiest lowest hanging fruit you could ever imagine to pick to solve an issue. And i have not talked to anyone who likes a surprise building. Youve got the doctors arguing with Insurance Companies on how to fix that. Sadly, i do not think were going to do much. The guy that has been most aggressive and instrumental has been the president , and whenever he tries to do things like advancing pbms this counts directly to the pharmacy or the individual, it hits the court system the next day. When you tried to push a transparency bill. I use the opportunity then, and i do it now and i do it often. Because this microphone is probably the biggest asset