Thank you for joining us. Viewers what the Heritage Foundation and the center for American Progress are. Guest the Heritage Foundation is a conservative think tank in washington, d. C. Of policyffect issues, my expertise is federal government matters. A progressive think tank covering a wide variety of issues. I cover budget policy. Romina. Will start with has been in control by the republicans for quite some time. The difference is the white house is also under control of the same party. Is this budget a continuation of the budget that has come out of the house, or are there notable differences . Guest notable differences is a reconciliation package, proposing to cut 200 billion in what are called autopilot or entitlement spending programs. That is the biggest proposal cut to these programs yet. The reconciliation the occult also includes instructions for tax reform. See the house gop setting up for a tax reform package with the president. Trying to do so while cutting spending at the same time. Able what are not differences that you see . Guest lets be clear about what a congressional budget resolution is. It doesnt become law or go to the president. There is the grand division, what can we do if we were kings . That is in past years the ryan budget turning medicare into a voucher program, things like that. What is new is the brass tack side of the budget. What does the budget set up that could become law . The reconciliation package is a big use of that. Setting up, potentially, 200 billion dollars in cuts to programs. When we say mandatory, entitlement, autopilot programs they ensure basic Living Standards like Social Security, medicare. And of course, tax reforms or tax cuts. Reconciliation is important because it mean to can pass a bill without any democratic votes in the senate. It cannot be filibustered. Host i want to remind our viewers that democrats can call 202 7488000. Republicans, 202 7488001. Ndependents, 202 7488002 your questions about the house gop budget and budget process. We are talking with romina b occia at the Heritage Foundation and harry stein the director of fiscal policy at the center for American Progress. Guest i just wanted to correct harry that reconciliation does not allow for changes in Social Security. I want to make sure everyone tuning in knows that is not part of the package. Also in addition to income there isrojects corporate welfare in the mandatory side of the budget. Agriculture subsidies fall under that category. Also in the transportation area. There is more than medicare, medicaid, and income support programs. Host if the proposal is nonbinding, why should we be paying attention . Why are we spending an hour discussing it . Guest the budget resolution triggers a legislative vehicle called reconciliation. That is what democrats used in 2009 to pass the Affordable Care act. It is a very powerful vehicle. The republicans are trying to to repeal and replace the Affordable Care act. Theyre looking to use it for tax reform. That would be the part of the budget potentially enacted. The other is Discretionary Spending levels. How much will congress spend on defense and domestic programs . We are already seeing the appropriators move spending bills, especially for defense, military, construction, Veterans Affairs, and others. Congress needs to pass the spending bills before september two avoid a government september 30 to avoid a Government Shutdown. Host what should they pay the most attention to . Guest i would not dismiss the if we were kings side. It makes huge cuts to medicaid beyond just repealing the. Ffordable care act that was surprising to a lot of people. If you look at the republican Budget Proposals for years, this is what was proposed. Saying, what might be coming down the pipe . This year a lot of the cuts could be included in reconciliation. Social security is the one program that cannot be cut in reconciliation. It is mandatory, but outside the scope of reconciliation. They are potentially bringing a bill to the floor next week in the house giving big increases to the Defense Department and at the same time Cutting Energy programs, particularly renewable energy. Job programs in coal country also take a cut. President trump wanted to eliminate the Appalachian Regional Commission that does development in that part of the country. This does not eliminate that program, but it cuts it. We are seeing similarity in the trump budget. People thought the trump budget was dead on arrival. What we are seeing is a lot of pieces of the trump budget are part of the house budget. Because of reconciliation and the spending level, a lot of the trump budget could become law. Host we will get into details in a minute. Lets look at the top line items. 621. 5 billion in defense spending. Including ive hundred 11 defensein non Discretionary Spending. The2. 6 Economic Growth for next decade, which would shrink the deficit by 1. 5 trillion according to this plan. Is there real deficit reduction happening . Guest there is. Arereconciliation cuts potentially very real. Those are Things Congress can do without democratic votes. Spending cuts in this bill, they are not really going to be for deficit reduction. They will be paying for tax cuts. The reconciliation does not say revenue neutral tax reform. That would be if you cut taxes somewhere you have to raise them somewhere else. That is setting up potentially cutting programs like medicare to pay for tax cuts. What we have seen so far is that tax cuts would go predominantly to the wealthy. Guest we dont need to pay for tax cuts. Taxes exist to fund spending. If you want to provide real tax relief to the american people, to do so by providing spending relief. That is what is driving higher taxes in the future and our deficit in debt. We dont have a revenue problem. Tax reform is critical to reviving the economy. That has been a priority for President Trump. Congress is trying to work with the president to realize the goal of 2 Economic Growth. That starts with three focusing national priorities. Tax reform is a critical component to make u. S. Businesses more competitive. We are falling behind because of our high Corporate Tax rates. The good news is lowering business taxes will benefit the workers, consumers, and some will increase revenue for the expectent as well as we to see more Business Activity take place in the u. S. Again. Isst i think tax reform great if it is about helping the middleclass and closing loopholes that only benefit the wealthy. The actual tax plan from last year, the top 1 get 99. 6 of the tax cuts. It is not really about tax reform. It is only shifting the tax burden from the wealthy to everyone else. Host william from florida on the republican line. Good morning. Caller good morning. Host you are on. Caller young man, i have an objection to your description of the Social Security plan. A number of other programs, do you remember what you called Social Security . You just said it a minute ago. Guest a mandatory program . Host what did he say, remind us. Us of what you are referring to . Caller this young man doesnt remember what he was talking about. , what areour viewers you referring to . Caller referring to the fact that he referred to Social Security with a bunch of other programs like food stamps and this and that. What was the word you used, young man . Host why dont you remind us, or i will move on to the next caller so we can have this discussion. Go onto your next caller, i dont believe this man knows what he is talking about. Ost hi, leroy you are on. What is your question about the budget . Hower i would like to know when wea new tax plan havent seen the president s tax returns . Go back and check it out. These tax with shelters and all this stuff. It will be hard. That is where i sit. Trump, i dont have a thing against him. It is what it is. Think that is an excellent point. If we are going to be talking about tax reform, a big question is who is winning and who is losing. Especially with this Administration Given concerns of conflicts of interest, the point is reasonable. If were going to do tax reform, we should see the president s tax returns. It is a very reasonable expectation and should be a requirement before having serious conversation about tax reform. Guest we need to close special interest loopholes and deductions and lower rates overall. To have a fair tax code that benefits all americans. We need to be clear that Business Tax Reform is not only for wealthy businesses or individuals. It will help more jobs and consumers to buy products at lower prices. Host you talked about the plan being about tax reform, a fundamental part of this. Can tax reform happen without Health Care Reform happening first . The savings that the tax reform plan is counting on, wasnt it supposed to come from the repeal and replace plan . How does this impact it . Guest the house budget assumes the repeal and replace plan passed in the house will be realized in congress. They lower the revenue waistline, what the government line, withnue base the government will be able to collect in taxes. If the government cannot proceed with repeal and replace, that leaves room in the base line to do those changes to remove the harmful obamacare taxes as part of the tax reform effort. Speaking,cedurally they dont have to do Health Care Reform first. They can move onto the budget and set aside health care and move on to taxes. With a hope to do is get some of the taxes out. Particularly the ones like the income tax repeal that only applies to people that make more than 250,000 and applies to their investment income. The idea is to get those out a flaw so when they go to tax reform they wouldnt have to pay for those. In any tax package, you have to realize distribution. Where does the money go . 1 . is going to the top if you get rid of those aca taxes that only benefit the wealthy, it will make your tax plan look better because you dont have to cut as many for the wealthy in your tax plan, but lets be clear. You are still cutting the taxes for the wealthy. Host good morning. What is your question about the gop budget . Necessarily have a question. I have a few comments. I have a lot to say. I will try to get through it quickly in the acknowledgment of time. I was reading yesterday that 939 ,ate ceo pay is up over 900 , since 1979. The average worker pay is up 11. 2 . President obama had the largest middleclass tax cut in the history of the country. That is a fact. We dont have the average highest Corporate Tax rate in the world when you consider all outs in the tax structure. The average Corporate Tax rate is 12 . Gentleman fromis the center of American Progress, please stop adopting the speak of this person on the right and right wingers in general. It is not tax reform, it is tax cuts. Were not talking about entitlement programs, these are earned benefits. Stop adopting their speech. Got i will let romina first. Guest it is a legal term, not one that we have made up. It means individuals are eligible for benefits by meeting certain criteria. Sometimes people confuse it with urban dictionary, the fact that these are benefits that are not earned or they are not deserving. That is not what it means. Medicare, Social Security, welfare programs, food stamps, they are entitlement programs. We have entitlement programs for agriculture, transportation, and state grants. Sometimes people grapple with. Hat term other terms are mandatory, it doesnt mean we have to fund them. Im are for to them as auto programs because they get the first call on resources. They are not capped in any way. Unless Congress Makes changes in law, which i think is necessary with 20 trillion in debt. Guest in a strict legal sense, that is right. Terms like entitlement and mandatory mean the mean something. People are throwing entitlement around as a pejorative. They shouldnt. They maintain basic Living Standards. When youre thinking about standard of living in retirement, health care, nutrition benefits. There was a point about the distinction between tax cuts and tax reform. It is not clear what path republicans in congress will pursue, but the caller is right to be worried that rather than seeing a tax reform we will see tax cuts. With rominau are on boccia and harry stein. Isler i wish the discussion between corporate and individual taxes. 2 segments that we need to improve our competitiveness in the world markets. Make ourrate taxes companys competitive. Simplify soals, complylike me can easily with the law. Talking about entitlements is part of the equation because we should look at safety nets instead of dependencies that people will depend on for the regular income that discourages them from finding work. I think it is right to distinguish between corporate and individual taxes, but remember it is a surprising report that came out recently stocknly one quarter of in corporations is held by shareholders. Thats not tax corporations, just people on the individual side, that will not work with a fund without a fundamental rethinking of how we tax people. By anyone. T be taxed it is important to have a Corporate Tax code to make sure people are paying their fair share. Most of the Corporate Tax ultimately is paid by wealthy shareholders and executives, most of it. On the individual side that is right. We need to make sure the tax code is easy to comply with a we need to get rid of special interest loopholes that only work for wealthy people. You dont want to let simplification become a buzzword for something that sounds good but ultimately only benefits the wealthy. That is what we have seen from a lot of plans that call themselves tax reforms, that are really just tax cuts. Host hi, matt. A couple ofve comments. Number one, mr. Stein, i would like to hear him state that the center for American Progress leans toward communism. It has been apparent that they. Re an extreme leftwing outfit number two, i am 90 years old and have been paying income tax a long time. The entitlement programs which are unpaid like medicare, that we paid in for, those should be under annual analysis as to their sufficiency and application. Money three, every bit of that i received as stock has been taxable. That is an outright lie. If youre not going to give tax cuts to the wealthy, which i certainly am not among, if youre not going to give tax cuts to the wealthy who are you going to give it to . Harry. E will start with guest if you listen to what people on the far left say, we would be deeply offended to hear as being called communists. Let me show you we are not communists. The annual looks at Social Security and medicare, the caller is right. We do that on the Congressional Budget Office and trustees for medicare and Social Security. Annual reports discussing published annual reports, cbo publishes several times the year, looking at the money they are taking in, money they are taking out, how they look over the longterm. The caller is right. We do that now. For taxing dividends, some their do get taxed on investment incomes. A lot is held in nontaxable accounts like retirement and foundations. You need to look at the whole picture. If we are going to be providing tax relief, we need to focus on people working and struggling to make ends meet. The only people that we tax into poverty are working people who do not claim children on their tax returns. So, if we look at who actually pays income taxes, the caller is right. The top 10 of income earners. The middleclass and lowerwage rightans are hardest hit payroll taxes which pay for Social Security and a small portion of medicare. The Social SecurityTrustees Report came out last week. It showed that if we did not toe any benefit reforms Social Security whatsoever, and all we did was raise the payroll tax to pay for the benefits that are underfunded and overpromised , we would have to raise them by a quarter. If we did tax increases when the trust fund would be exhausted in 2034, the payroll tax would have to rise by over 1 3. Massive tax increases on lowwage workers and middleclass americans if we like reform programs Social Security and medicare. No one is really talking about it as part of the tax reform debate right now. When it comes to certain programs, the caller is right. We need to look at the welfare programs on a more regular basis. Earned income tax credit, the payment rate is over 24 . Payments go to people that are not eligible for it. You can collect waste or abuse. It is hurting the american taxpayer. The fact that the house budget proposes cutting medicare by 487 billion. The Budget Proposal put out by President Trump barely touches medicare. Is there going to be a policy battle ahead over medicare . Dont think medicare and Social Security will be a big priority for the congress or the presiden