2. 6 . We are counting 1. 5 trillion of that macroeconomic feedback as part of deficit reduction. If you had a policy changes on the mandatory discretionary side along with higher Economic Growth we have 6. 5 trillion in deficit reduction compared to the cbo baseline. I will leave it at that. It has been more than ten minutes but that provides an overview how the balance of major provisions, we would be glad to answer any questions. Our policy director and andy morton is the chief economist in the room. Our other staff members, jim bates, chief counsel and others, and they are available to answer any questions and we are glad to do so. Time for questions, the lady is recognized. I have questions about supplemental nutrition and income security. And 296 billion. Does resolution turn snap into block grants in previous years, to require a state match. Fair to say noticing in the Committee Report that we plan to file sometime on friday there is no report to block grants. The house agriculture committee, they requested they leave that issue to be open and flexible and assuming a number of savings of snap reforms. And using the phraseology of grants. How much does the budget a assume the changes . 150 billion over the next we 10 years. When will that start . About the mid10 year period. Most savings are after the fifth year. How much savings to the work requirements . 31 2 billion. And other policy assumptions made for with respect to the budget . Other changes they are assuming, primarily for the flexibility giving states more authority, socalled old block grant approach or stay flexible with the approach we are using today. How much savings is the budget assume from federal employee or military retirement . Approximately if i could take my glasses off and read, 230 billion. How much savings assumes from changes with income tax credit and child tax credit. 20 billion the child tax credit. Combined. There was misinformation, it does not reduce those benefits assumed in savings, and other committees in the past, requiring a Social Security number for each recipient, there was a need to improve the administration and the waste, fraud and abuse programs. Just assuming there is a dollar savings. As you may recall the testimony from the comptroller general, identified by the irs, the outlays for these programs have been viewed to go to people who are ineligible for tax credits. Thank you for the number. We just have a number, and the school lunch program. Eligibility provisions all of these up dont get to the 896. Assumptions we make. [inaudible] that is a pretty big difference. It is up to the committees jurisdiction to decide how it is fundable. Thank you, i yield back. I now recognize the Ranking Member. Let me say off of your initial comments i want to thank majority staff and minority staff for the work that has been done, a professionalism on both sides. And 487 billion mandatory spending, and the components that make up questions about the medicaid policy described in the blueprint, converting medicaid to premium support system for new beneficiaries. The total amount of savings assumed in the budget. Introduce your self. This is about the premium support system for beneficiary starting in 2024. What is the total amount of savings assumed in the budget from that policy . To break out our savings, all of the savings, and nonstructural reforms, reforms in total, over the budget window. The estimate with the plan, in particular housing, the premium support amount is determined, linked to the averaged plan bid or Second Lowest bid. What happens to premium support payment over time tied to a specific impacts like does it float with do you have any details on that . With that report, there were options. What about the solvency of the Medicare Trust fund or projected date of trust fund exhaustion . The reason that ultimately the authorizing committee, flexibility to determine how these structures directly affect questions that are not solvents. The answers are the same for other areas. You got the medicare policy change promoting plans, and how much, you answered the how much. Savings targeted with republican proposals. Get into means testing for high income seniors, savings assumed from those related premiums and that is the same answer. The proposal by president obama and his budget work, increasing testing. The medical Liability Insurance does the budget assume outweigh a savings equal to the cbo scar of hr 15, and accounts for the difference. Hr 1215. Carrying savings in the medicare functionalism carried in the health function . Madam chair, we dont put that in medicare function but 920. We can provide details to your staff, various components same x number of dollars. Medical liability, medical malpractice reform process, so many things, and that is on top of the 487. What policies accounts for the ones that i have mentioned and assume savings for medicare benefit improvements such as the part d coverage gap. We do not include that in our savings number, and other provisions, the illustrative options. And Social Security gradually over time. Streamlining graduate medical education funding, another illustrative option that we include as part of savings. Let me ask about raising the age, already answered that. My understanding is this is going back to the part d coverage gap. Last years budget 48 billion medicare spending reductions from repealing that policy, is that consistent with this year . We do not specify that as an option. Does the budget assume restructuring part a, cost sharing including establishing a unified catastrophic on outofpocket costs and changing medigap supplemental coverage. Yes. What kind of savings assumed in the budget from these. Associated with that policy, however, the policy solution, and carried this in past model it after positive insurances as opposed to how it currently is. Moving to medicaid and other health questions. I will let another member as close. Actually, recognize you for a question. Let the provide some of those numbers. It is important as steve mentioned, we make a resolution based on a series of policy assumptions we make to meet our number but those are not binding on the committees, illustrative examples, there are many ways, ways and means, energy and commerce and medicare to make it theoretically at some point in the future to meet those numbers. Not so much the fact of a particular policy or policies, simply and outline or footprint as to if we get the balance, these are the savings in a fair and reasonable way in a ten year period. Not trying to hide anything but some of the details are not irrelevant but not a policy driven process come a but a numerical effort to show how to get the balance. Thank you for that. The gentleman mister hall is recognized. More funding for Border Security and construction, does that include Donald Trumps border wall . And if so how much is assumed for 2018 . The same amount being implemented by House Appropriations committee to the Homeland Security corporations bill. It accommodates. It accommodates. I write somewhere, 4. 6 billion. What about years beyond that . It doesnt necessarily make any specific sections. The key number is the reallocation of fiscal year 18, we dont make an assumption for that. It is up to the appropriators how they disperse the 302 allocation. Thank you. Does the gentleman yield back . I yield back, sorry about that. The gentlelady from illinois is recognized. Thank you, madam chairman. The budget assumes 1. 504 trillion savings for medicaid and other Health Programs over its we 10 years. I want to walk through some of that. The budget assumes the house past American Healthcare act making its projections. How much in savings are you assuming from the ah ca . Are you carry all the savings in the health function, these are two functions. How much are you assuming in savings, are you carrying all the savings in the health function or is some carried another functions . It is all in the health functions. How to show you Health Reduction savings. It is a simple mathematical subtraction of revenues. If we are reducing outweighs by approximately 1. 35 trillion, we are reducing revenues by 1. 13 trillion and the net of that is 204 billion so you reduce spending, reduce revenue because of the tax provisions, net spending and revenue. It is 1. 35. Net. That is for all the various changes of subsidies and medicaid savings rolled into that 1. 3335 trillion over ten years. This ends the aca Medicaid Eligibility for samson, converts medicaid to a per capita or block grant and make other changes to the program. How much in medicaid savings are you assuming from the ah ca . Approximately 830 billion. It is approximately 830 billion. We can get you the exact number. We assume what was given. Everything is from the house past version, the cba score extrapolated for one more year like the 11th year is why it may seem unusual because we are used to seeing fiscal year 1726 number which is 119 billion, you are seeing the 204 because we have extrapolated that to the extra year of 2027. It is over a different ten year period everyone is aware of. This is work requirements, the budget goes beyond, supporting mandatory work requirement for certain adults in medicaid. How much savings are you assuming . 110 billion. The budget goes beyond the ah ca and encourages states, and working age adults and medicaid among others. How much in medicaid savings are you assuming from this policy . We dont have that number. The budget goes beyond the ah ca, and how much in medicaid savings are you assuming from this policy and what are the policy assumptions generating the savings . My name is brittany. I handle this function for the Budget Committee. We assume 2 billion in savings give or take. We dont go into particular specified policies associated with that. We work with the committee on energy and commerce to come up with an approximate number. So that we can approximate policies. The idea is to institute parity for medicaid recipients. If you can share the data, that would be helpful in responding to this question. Does the 1. 35 trillion figure reflects savings from other changes to medicaid . How much . Are there savings from things like the Childrens HealthInsurance Program and if so how much . There is no savings in the healthcare American Healthcare act, there are no savings included in that number. No change in policy. Not included in the healthcare reform act. A separate policy. The number, 1. 35 trillion, nothing in that number related. To get to the savings. We get assumptions that are separate. Something that can be provided to us. That would be helpful. The gentlelady yields back, Ranking Member. Moving to education for a minute. The budget proposes a total of 210 billion in cuts to mandatory function 500 programs over ten years. What functions are behind that estimate . Most of those are on student loan reforms, to provide details, it is primarily on the student loan section. Doing reforms, trying does that touch pell grants . No. This republican budget is transferring pell grant into a purely discretionary program. Not a mandatory program. The budget encourages innovation in education, focusing on investment in career and Technical Education programs. Is it fair to assume the budget increases funding for School Choice and career and technical programs . We dont make specific policy assumptions about School Choice. To the veterans function the budget has savings of 49 billion over ten years in mandatory veterans programs. What policies does that reflect and do you assume the president s policy regarding changes in individual unemployability this does not accept the president s proposal on the employability but we make a number of other policy changes that we will be glad to those numbers or something at the discretion of the fair is Fair Committee how to meet them but it is a whole range of policy assumptions to get to that number. The 16 billion reduction in mandatory Budget Authority in the justice function in 2018 . That is related to a decision, a build up surplus that will likely not be spent anyway. We grab those for deficit reduction purposes. They have consistently used savings in this area to provide offset . I dont believe we grab the whole surplus. There are still some surplus funds in the trust fund. Mister higgins. Mister higgins from new york is recognized. You had indicated your budget blueprint achieves 6. 5 trillion in deficit reduction resulting in a 9 billion surplus in the year 2027, approximately ten years from now. That is correct. How does the budget propose to get their . A great question. It is through the hard work of every member of our committee. We met we have been working two or three times a week since january on this budget with members of the committee so it is a series of decisions, compromises, change in economics, looking at various programs with a lot of reforms. I dont question the work ethic. Projecting budget growth, in your plan deficit reduction, what are the assumptions that go into a bolt statement about eliminating budgetary deficits in the amount of 6. 5 trillion in ten years . What is your Economic Growth projection . I mentioned in my opening overview, we want to improve on the cbo projections, cbo projecting 1. 9 gdp growth, our budget assumes 2. 6 of real gdp generating 1. 5 trillion in deficit reduction. I appreciate that. The last 17 years the American Economy has grown each year about 2 . Your projection over the next we 10 years that you are going to improve the Economic Performance by 0. 6 . How do you do that . I will let my chief economist answer that question. It is doctor morton. Yes. As rick mentioned this is post policy. Is your microphone on . Yes it is. If you could move it a little closer. The committee is taking approach of of post policy budget. What we mean by that is the budget assumes a series of what we believe and expect to be progrowth reforms including house version of the American Healthcare act, welfare reform, comprehensive tax reform, Regulatory Reform and spending based deficit reduction in the amount of which you mentioned, and economists like john diamond and the former cbo director testified before the committee, both feel with policies of this type. Would that be in the realm of characterized by economists, economic feedback from stronger Economic Growth. In addition to those two economists in a new paper released yesterday john taylor, john cogan, glenn hubbard, very distant was to economists who feel this combination of progrowth policies can help achieve higher Economic Growth. What you are proposing to do is take policy actions today theoretically is that will result in future Economic Growth, which is the assumption that you base your deficit elimination on so it is a modern view of supplyside economics, a policy whereby corporations, wealthy individuals, experience tax savings in the money find its way back into the economy and new investment in job growth. Im not sure the committee would agree with that characterization exactly but it is fair to say as the progrowth policies of our budget when implemented will generate more Economic Growth, more job creation, dynamic scoring. Dynamic scoring refers to a piece of particular legislation, spending or revenue world where it is projected that that legislation has macroeconomic feedback affect, we are talking more broadly, more than dynamic scoring, more of a pro growth agenda designed to get more people working and paying taxes and revenue generators the federal government. As a component. We are budget guys, we look from a budgetary perspective rather than broader economic perspective. We are moving in a different direction, not to debate philosophy or policy but to ask questions about the budget. I will close. I respect that but you are making ambitious budgetary projections as it relates to budgetary deficit elimination over a 10year period, a deep understanding of the assumptions on which those budgetary goals are made are very relevant. The opportunity to debate that. We have 6. 5 trillion in deficit reduction over a tweet 10year period. Only 1. 5 trillion of that number is related to this macroeconomic feedback of more growth policies so it is not the whole thing but only a portion of it. You yelled back. A real quick question. Simple yes or no. The budget assumes 700 billion in savings from reducing improper payments across the government. Where do those appear on functional distribution . 920 i believe, 930, function 930, savings. In the allowances function, 817 billion in mandatory savings, what do they represent . Mostly from what it is, that is the baseline adjustment for the most part, cbo will take mandatory discretionary side, they provide increases in Discretionary Spending that are over and above the caps. We take that expenditure out of the baseline and most of that is baseline adjustment for the bca. What does the rough hundred billion dollars in savings represent . One of the ways you can get there is to sell Strategic Petroleum reserve, that is an option. Sales in the part of that function as well. In the special discretionary category what does the budget assume for disasters, emergency funding and Program Integrity funding under the budget control act. Any specific assumptions on those numbers, we maintain the allocation numbers we provide. The table of mandatory assumptions we talk through a few functions but significant reductions relative to cbo baseline. In the past we showed a table outlining pragmatic assumptions for mandatory pr