Then at 7 00 we open our phone lines and take a look at todays headlines on washington journal. Announcer this week on q a, maya macguineas. President of the committee for a responsible federal budget. She talks about the federal budget process and what to expect from the new congress and administration. Brian maya macguineas, the president of the committee for a responsible federal budget. Maya i thought you were going to make fun of the name. Happens regularly. This is in organization that has been around for decades. I think the most distinctive feature about it, think of it as very bipartisan. Our board of directors are people who have been in this town in washington and they have run all of the budget organizations. Our cochairs are governor mitch daniels, now the president of purdue, kim penny, leon panetta, democrat, republican, independent. This has been the head of the treasury department, the opposite of management and the house of the Senate Budget committee. Recently, it is a fiscal Watchdog Group with bipartisan leadership that has been involved in these issues. To know what it is like you have to legislate as well as get ideas and thoughts and notes for policymakers to be more fiscally responsible. Our purpose in life is to talk about the things in budgets. Along with the bigger things. I had no intention of doing this kind of work. I was working at it and cant and then i was working on wall street. I was looking at it in the mid90s. Who is on the about deficits. They are pretty slow to where we get access. I want to learn more about the issue. I started reading reports from the Congressional Budget Office which i found fascinating. I have always been a huge critical independent. I have not taken the part of either party. The more i read about it, the more word and became about the trajectory that our country was unaware with you tomorrow more and more. It has become worse over the all of the times that ive been working in this field. I think that sound budgeting and fiscal responsibility and looking at it from a nonpartisan perspective is the underpinnings of a sound and suspended sustainable economy. I think there is a lot of political pressure to not do things that are fiscally irresponsible. I think it is important to help push policymakers they can take make tough choices. This is going seleka nasty question. You have been around for a long time. You have done this since 2003. Brian the nasty question is, if all of them who have been on government and been involved in the budget process, and they havent been able to do anything about it, why would this make any difference . Maya the truth is and i really believe this, i believe that a fiscal situation would be a lot worse if we did not have the very important intellectual policymakers and former policymakers who have been there, but in the trenches, out there, pushing for us to be more responsible. It is easy to borrow money. We certainly borrow a lot of it right now. There are many bills that passed that have borrowed a lot less because of the pressure that this kind of an organization and others that are out there also, put out there. The kind of information, the reaching out to policymakers, the education that we do both in the grassroots and in the country. Unfortunately, what it is not like is a big ribboncutting ceremony. We think the whole situation. If we dont have these watchdog organizations, we will be barring ourselves into oblivion. I think that would be very little pressure to think about how we are going to pay for things. Think about what spending responsibly looks like. The reason that i and a really Terrific Team of colleagues get up everyday and continue to work on this, even though we know were not going to balance the budget today, that is not the goal that we would even want, it is because we need a counterbalance of pressure. So Many Political pressures are to be fiscally irresponsible. Brian so where did you grow up . Maya i grew up here in washington dc. Never thought i would come back, was never interested in politics and i never imagine myself being involved in budget policy. Brian what did your parents do here . Aya my mom was a reporter and my dad was a lawyer. Brian what was your moms name . Maya carol. She was a freelance reporter. She was a travel writer. She was a restaurant reviewer. A theater reviewer. We got to go to Chinese Restaurant and order everything on the menu so that she could review it. My parents were divorced. When i lived with my dad, my mom would go off and travel around the world and you to write an article about it. It was an on washington and very neat job. Brian what did you study in washington . Maya some of the people stayed on the east coast and i thought it was important to say another part of the country. I also hate cold weather so i might have made a mistake in picking chicago. But otherwise northwest was a terrific school to go to. I started as a matter major and decided that there was only so much math that i wanted to be doing. I wish to become an economics and psychology major. If you could understand people and understand markets, you could understand things. They both baffled me. Brian and then you went to harvard. Maya for graduate school. I went to the Kennedy School of government. Brian so you had to do well at northwestern. Maya i did fine at northwestern, i would for a couple of years, i worked at tim weber. What do i love the Kennedy School of government. It was a whole lot of people who like the same kind of thinking. If you are creating a brandnew policy from scratch, how would you do it . There were some a different perspectives is a much expertise there. That was a great two years. Brian one of the most interesting nuggets was the post editorial board. Maya here is what happened. I sent them an oped and the editor of them were calling back. I said they are going to run my oped. The person who covered economics was going on booklet. One of my favorite dutch i had was working there for two months. Another piece of it was to step out of your career. I know nothing about journalism. I dont know how editorial boards work. A separate they are for the rest of the newsroom. I learned so much. Brian they really separate . Maya yes. Any sense you get that they had any editorial impact . i got the sense that they did not. They were very involved but not what you would write about. That was my sense. Brian what about people outside of the d. C. Area . Ookingsered tons of br stuff. Maya a lot of people us out of washington wondered. I have to keep saying how many things were great jobs but brookings was a great first job that anybody could have because as a research assistant, you go in and you work for incredibly smart people. I researched a whole variety of different topics. It was kind of like so many of say, if i were mature and could to college again, i got to get a much more out of it. I thought if they tag that, i was getting paid to research. Always different economic topics. So i worked on the commercial banking crisis, it is going out at that time. Income ability, a whole variety of economic issues. As it had to do issues which is a great skill and incredibly different today. I got to write about things. The question is what is a think tank. Brian what influence do think tanks have on the decisions made it in washington . Maya i think they have more impact than they do now. It had their slant but they were much more academic. Think tanks bill if they are becoming more aligned with a specific party. They are try to get people and policymakers a specific idea that is political and oriented with policy. They were more academic. We were doing regression analysis. You look at all the data and analyze it. You try to figure out what variables affect Different Things. You are running models. Ill think think tanks do as much for that. They do more policymaking. Both are important but i really enjoyed the academic piece of it. I think it had impact because the scholars of the think tanks were so wellregarded that when they said things, they were treated as experts. Right now, it feels like in the country, there is a rejection of expertise and policy expertise. There is no monopoly on the facts the weight better used to be. It is an easier. Where people would come up with ideas and share them and then you would see policymakers whose think i like that idea. They would run with it after that. Everything seems disputed and debated. Brian we have video of you in 2001. We have video, this is just a little clip, it is about a minute. Were 2009 and 2016 when we can see what the progress has been. Clip] the single most important step in strengthening Social Security is to boost national saving. This will tell money into productive investment, read entire economic output and wages. This will reduce the burden of paying melting retirement costs. Other regional assumptions, at some point, it creates a vicious death spiral. Part of the trickiness of the situation is that we dont know when. We dont even know exactly what that would look like. Whether it would take the form of a Economic Activity or slow damage to our standard of living. The bottom line is our budget process is broken. We have the biggest economy in the world and we are regularly operating without a budget in place. When we do these funding bills, small bills, they serve one at a time, they look at the government programs, they figure out what is working, what is not, you make decisions, choices, that is what budgeting is. That process isnt happening anymore. Clips]deo brian last time, they passed a budget. Maya they passed the budget last year. They didnt adhere to the budget. There is a great, broad question. The budget process is still broken at this point. We have the whole process which is a set of steps that have been laid out. There is a secret that is supposed to happen. Every year, we blow through it. The steps are never adhered to the way theyre supposed to be. Last year there was a budget that was passed. It was a budget that was supposed to save 5 trillion. The budget is no my done in 10 years, if you look at the trajectory. They did pass the budget, that was unusual. They proceeded to pass a whole let up legislation that was completely at odds with that budget. The budget was supposed to reach balance in five years and reach balance in five years and reach 5 trillion. In the two policies and laws that added 2. 1 trillion to the deck. Here is an interesting fact about the budget, the budget isnt actually legally binding. It is not a law. It has the guidance of what youre supposed to do. There are no repercussions if that is not followed. We went and blew through that budget last year. Brian what was the politics behind the budget act of 1974 . 1974, the budget act was probably the most influential maya 1974, the budget act was probably the most influential act that has impacted where we are today. We are a long way from where it was at the time. What they were doing then was they were building a whole lot of congressional strength around budgeting. The 1974 act created one of the best things it was the Congressional Budget Office. Their materials, i find very informative and very balanced are what informs me to start working with the budget. It created the Congressional Budget Office. Brian the Congressional Budget Office, where is it located . Maya it is right out in the middle of the city. Brian how big is it . Maya hundreds of people. Brian who is the boss . Maya steve hall. Brian who does he work for . Maya he works for congress. There are two big areas of the budget, there is the office of management and budget. The office of management and budget works for the president and the Congressional Budget Office, which works for congress is the one that provides the numbers for them. Really, the Church People of the Budget Committees are the directors of the cbo. The first director, she is so important in this whole field. The first director of the Congressional Budget Office, that was alice roebling. She is the wisest leader we all have. She is the wisest leader of responsible budgeting. We have to have these outside institutions that people trust. She did an incredible job of establishing it as that. Brian here is keith hall, who is currently the cbo director. [begin video clip] if these laws remain unchanged, the deficit will continue to grow and debt held by the public would raise to 24 trillion or 86 of gdp by 2016, up from 24 of gdp at the end of 2015. Moreover, it would be an upward trajectory. 50 years from now, debt would reach 155 percent of gdp. The highest recorded in the united states. End video clip] brian this is why we get a lot of people who say why would i want to watch cspan . He is talking about all the language that he is using. We talked about this, before here, right here on 2000, when george bush was taking office, 5 trillion in debt in the united states. At the end of his term, it was 10 trillion. At the end of this term for barack obama, it is 20 trillion. About 44 trillion in debt. People through their hands up people who listen to this language throw their hands up and say, it must not matter. Maya here is something i learned. People dont like it when you talk about actuarial balance. They say no. No. No. Actuarialt is talents . Aya that is how you evaluate the health of the trust funds that are part of Social Security. To me, that is really important, that really matters. It is how you talk about it in a way that if you fix it and things become actuarially balanced, Social Security will be able to pay all of the benefits that we promised to pay. Language matters. It saddens me to hear that even cspan viewers get bored of the budget. It is not only a dry and complicated topic, it is a topic when the numbers are so huge that they are not accessible to people. There is a big dilemma because you want to talk about these things in ways that are accurate. The accurate way to talk about this issue is, what is the debts held by the public for the chair the share of the economy . I lost most people,. When you talk about that, a share of families, that is the easy way to understand, is not as technically correct. Any of us struggle with how we talk about it in a way that is not overly politicizing that or scaremongering it. This is a contentious issue. Republicans think youre trying to raise taxes and immigrants and democrats think youre trying to entitlement and no but it was to pay for things. A lot of what we do is try to stay technically accurate. It is very alienating in how you talk about it. That is something we struggle with. Brian why is it that supposedly, democrats always want to cut taxes and republicans want to cut taxes and democrats want to spend. I said in the beginning, i really a strong independent. I dont understand Political Parties. It is not that simple. There are lots of people who are republicans or democrats and lots of policymakers. They all have their own opinions. One of the reasons that im not a big fan of Political Parties is trying to offer support findings. All democrats think this, all republicans think this. Just because you have one position on social policy, you have a similar publican or democratic view on economic or foreign policy. We are all freethinkers, we have a lot of different opinions. I think it is reasonably accurate to generalize that one of the biggest distinctions between republicans and democrats is that they have a preference for a size of government. Republicans think that markets and individuals can make better choices and impressed tend to think democrats seem to that government can still win where there are needs and market failure and do a lot of good that the private sector wont do as well. As well. That will ultimately tend to the effect the size of government. As an independent, i always thought that i like to see government that is smaller than the one that is projected to be but more progressive. Part republican, part democratic. I think a lot of people have different point of view. I dont think they are particularly accurate. Brian if you watched president elect trumps News Conference this week, have you heard him say that we want more f18s, implying versus the f35s which are very expensive . Brian is that going to be significant enough of a if you could get this reduction and the kind of money being spent, would it matter . Maya it would be significant in the area of defense. It will contribute and that every billion dollars makes a difference. The big problem with Donald Trumps fiscal point of view is that he has laid out overall policies. He has talked about the problem of the National Debt and now that it is for the economy. He has proceeded to lay out a whole suite of policies that will make it much worse. Has talked about increasing spending even know you can change were some of the money is spent. That is an order to change how money is spent in the defense department. But the biggest issues are that he talks about trillions and trillions of dollars of tax cuts. He is talk about trillion dollars of infrastructure spending. Is talked about not touching the biggest drivers of National Debt which is retirement and health care programs. They dont add up to a sustainable fiscal pass that we are already on. Donald trump is inheriting one of the worst fiscal situations president has ever inherited. The economy is doing ok but he is inheriting one of the worst is the situations that any new president has ever inherited. Other than president truman, as defined by the debt held by the public. That means our debt, compared to our economy is almost at record levels, it is the highest it has been since we came out a world war ii and if we do nothing, to borrow another 9 trillion over the next few years, that is before you talk about all the new policy initiatives that he addput forward, which would trillion. Were talking about 14 trillion in new debt over the next 10 years. That makes no sense for where our economy is, it makes us very vulnerable to economic downturns or emergency. It will slow the standard of living. Maya let me give you an example of healthy fiscal policy. Brian what does the word fiscal mean . Maya it means how the budget lays with the overall economy.