Jack spencer, vice presiden Vice President for the institute of freedom here at heritage. He oversees research, range of domestic and trade issues. He previously served as director of the Roe Institute for economic studies where he spearheaded our work on initiatives in federal spending, taxes, regulation, energy and environment. He also specialized in Nuclear Energy issues both in domestic and global arenas. Please join me in welcoming jack spencer. [applause] thank you john. Good morning. Welcome to the principles for tax reform, a conversation with the House Freedom caucus. What a great day to be in washington. The sun is shining, the oppressive washington humidity has yet to set in, and im not sure but i think i even heard a bird or two chirping. Its not just a great day to be in washington, its a great time to be in washington. We have a president thats not just threatening to shake things up, and i dont think im stepping on a limb but hes actually shaking some things up. We have a Congress Whose talking about shaking things up. Thank god they are working to repeal the obamacare monstrosit monstrosity. Just yesterday, the house of representatives passed the choice act. It would start reversing economically destructive and morally bankrupt. Frank regulations. And we cant forget paris. What a day that was. Getting out about liberty sucking quagmire was a victory for us all. That would also go for dodd frank, by the way. Those efforts cant come quick enough. If our goal is to establish america with freedom, prosperity and Civil Society flourish. Part and parcel to that america is when americans get to keep more of their hardearned money. When washington takes less. Not only does that leave the politicians and bureaucrats with fewer resources with which to meddle in our lives, but it gives us more resources to get our economy humming again. That is why tax reform is every bit as important as the repeal of obamacare, reforming dodd frank and getting out of paris. Reform is not easy. We know we want lower tax rates. We want to remove them against saving and investing. We dont want to burden our business with heavy taxation that they become uncompetitive. We want fairness, transparency, and simplicity. Folks have a lot of ideas on how to achieve these goals. Unfortunately these two often come barriers to success. We cannot allow our ancillary issues to derail us from our common objective. We need to find our common ground. Thats what the Heritage Foundation wants to help us do. We had chairman brady speak laying out his plan, a plan that provides a foundation for moving forward. On july 13, we are excited to host secretary of treasury steve nugent to give us his views on tax reform. Today im excited to host members of the Freedom Caucus to give us their thoughts. Without further ado let me introduce our guests. I would like to honor jim jordan and warned davidson. We also have with us the honorable dave bratt representing the seventh district of virginia. The district where i spend a great deal of time and im very happy you are there. And now id like to invite mark meadows to come say a few words, he represents the 11th district of North Carolina and the Freedom Caucus. Good morning. Its great to be here. Its always great to join so many of you that are here. Its always good share a panel with three people who are a lot smarter than i am at that way when the difficult questions come in we will refer them to some of my colleagues. In a few remarks i want to set the framework of where we think we need to be so you can ask the good questions. When we get into the details of what we envision. I want to complement chairman brady and his foresight to get the discussion going. Anytime you put out a blueprint it is a bold move. Everyone will find reasons why it wont work, not why it will work. To have this administration put forth an idea on what they want to do for tax reform, we have to applaud it. The minute you do that again, there are people saying why their plan wont work. We have tried to be good listeners over the last several weeks and months, to find where there is consensus. Some of you are tax reporters. You probably know more about the levers that can be turned up or down based on that, but here are a few fundamental facts. There is not consensus for the border adjustment tax. The sooner we acknowledge that and get on with the plan that actually works and actually can build consensus, the better off we will be. There is not anything weve taken a formal position against, even though we will have some who will say we are divided in the Freedom Caucus but we have some who believe its a great idea and some who believe its not, but the political facts are there is not consensus to have support for the border adjustment tax. What we hope to lineup today is a few principles we believe , hopefully the majority of the house can get behind to not only lower taxes but reform, have true tax reform. The second part is time is critical. Chairman jordan, as i family refer to him, my good friend from ohio, introduced a bill that look at real reform in terms of welfare reform. That welfare reform has the potential of creating some 400 billion in revenue that we can allocate and move across. I look forward to hearing from him. We believe time is of the essence and we need to get tax reform done sooner than later. We should have a real proposal that we start debating before we leave the end of july. But if not, weve already taken a formal position. We believe we need to stay in through august. I see from a lot of heads nodding that we should stay here and get it done. I am encouraged that i believe there is the foundation of coming together. We will be laying out some principles for tax reform that we think can bring consensus and have rigorous debate in terms of what may or may not work. Thank you for joining us. [applause] thank you. Now my first question, you started saying there were three people that were smart, but that would leave one of us who are the dumbest amongst the crowd. I was wondering if you could tell us which one. [laughter] i will just lay claim to i am the dumbest. No, i was talking about my colleague. Will put you way up there in terms of your ability. We will let the audience determine if thats legitimate or not as we go forward. Lets have a conversation, do any of our other panel is have anything to add or initial remark . Lets get to it. I think the brady plan is something were all interested in. There is a lot of good stuff there. You also mention the border adjustment tax. Absent of the border adjustment tax, is that something the Freedom Caucus generally likes . Is that something you can get behind, generally . To answer that, the 20 cut in terms of a Corporate Tax rate cut, as long as it applies to Small Businesses, those who have an s corporation, llc, propers prior ship, a lot of that work gets done there. Its just a corporate cut the big guys, it leaves mainstream off. A 20 rate for that, look at repatriation. My advice would be to do a repatriation over 20 months. We look at not only cutting the rate but expensing that is in chairman bradys plan. How do you do the full and immediate suspense thing . As the business guy, typically i havent made that decision. A lot of big corporations dont make the decisions that way. Making permanent the bonus depreciation in place now would be prudent so doing something on the expensing side and expecting it to be deducted. Finally had to make sure you do things for moms and dads and aunts and uncles and kids on main street. Whether its the brady threepoint structure or for many of us, we believe it puts money back in the wallets of people of main street. We could come to an agreement within the next three or four weeks. We can have a real debate in the months to follow. Some of the rough numbers, you may be shocked to know that politics intervenes occasionall occasionally. Were still working through healthcare. I dont know if we have the votes. Now thats changed in the last couple of days. There is a trillion dollars there that will go to tax or perform. The border adjustment piece is another trillion dollars we need. All displays in and we have a budget piece going on and were arguing about 50 billion. That seems like a big number, but the other two numbers, we just roll over those. That is 2 trillion. Everybody doing the math in their head . We have to vote on a budget in a week or so and all of this plays into the piece we are talking about without blowing a hole in the deficit. If you get rid of the border adjustable, we have come up with a trillion on that side so you dont break the deficit wide open. I think a lot of us have some possibility when it comes to taxes because we know for the next generation, this is a once in a century opportunity to get this country humming again and we are progrowth people. All of that is intertwined right now. We have to make sure we keep the full momentum moving on all of those. I would say, one of the big things, we cant lose sight. We cannot bankrupt our country. We do have to get the tax reform to match dodd frank reform we just passed. Hopefully the senate will take action quickly. I get the politics, why its important to link to the average household, but the doubling of the standard deduction, perhaps some change in payroll holding, because what we have to do is get the workforce engaged. The big challenge is getting labor. In monetary policy, theyve bridged it as far as they can. Monetary policy will probably look under your work at odds with the financial stimulus that were going to be doing. I think we need to do it by the end of q3, not the end of the year because it will have a leg. The other things in the economy are going to have an impact that we need to drive counter with strong fiscal growth. Lastly, when we talk about corporate reform, we are 37 out of 39 developed economies and this gets us in the top 12 or three. Swinging big is the way to go. We dont need another ernst young reform act of whatever year, we need to not tweak around the edges, we need to go big and i think the blueprint does that but we also need to be realistic. I am the one guy appear that can live with the border adjustable tax, i can live within state. The problem has been that they laid this out and there is not yet a plan communicated on how you actually implement it. Its a little bit like the fair tax. I think it has lost a lot of momentum and musters a big reversal, even if you totally love it, which i dont as a standalone thing, i dont see how you pull it off politically. Im a new guys im open to learning and seeing what happens here. It seems to be two principles to guide. What is not in those principles are this concept of revenue neutrality. It has a way of saying the tax burden stays the same you just shift around who pays what. It always works out in this town that the connected class gets a good deal and middle families get the shaft. When did republicans adopt this idea that we have to do revenue neutral tax policy makes absolutely no sense. Letting families keep more of their money is not a cost to government. Its called freedom. Lets focus on that principle. Then lets focus on deficit neutrality which says tax policy that lets families keep their money, one thats conducive to producing growth and lets cut spending. Other fundamental points, you cant get tax reform if you dont have reconciliation. You cant get reconciliation if you dont pass the budget and right now a budget cannot pass in the house of representatives. What we are going to put forward is this, maybe we as the Freedom Caucus can live with a higher budget number if in fact we do real welfare reform on the tax bill, work requirements, time limits on ablebodied adults as part of the package. The idea is you have to write the reconciliation instructions in such a way, like reverse engineering. The dollar amount you will get from welfare reform, make the instructions to make sure they go get that dollar amount. Then we are assured of savings in the long run and its just good policy. Its good policy to encourage work in good policy for family stuck in the system and treating taxpayers with the respect they deserve by requiring ablebodied people to work and not live off the taxpayers dollars forever. We think that is the key to unlocking this roadblock we are in, but i dont see any other way out to get a budget agreement. If you dont get a budget agreement you cant get reconciliation. It seems to be the way to unlock the logjam that exists in the house of representatives. Thank you. If anyone wanted to address the comments on revenue and neutrality, that would be appropriate. We appreciate what was said yesterday. Weve talked about the importance of Corporate Tax reduction. Weve talked about the importance of Building Momentum in the middle class for this and the importance that they also feel like they are winners. The Corporate Tax reduction would actually benefit the middle class but we often dont talk in those terms. My question to the panel is, are there ways we can do that, because that really is the essence of what needs to happen. The second part is how do we build momentum for tax reform. We are talking about big changes in without the Ground Support from your constituents, it can be difficult to do that. A lot of young people i see in this audience, how many of you have had economics . Supply and demand . So it tax reform on the personal side, put money back in your wallet. Thats good, but whats the major problem in this country . Theres no productivity growth. So you can do bailouts and put money in peoples pocket on the demand side, its on the supply side that you need to fix, and thats business. Just to show you what a wide gap we have come the left in budget meetings, they will mock and ridicule and make fun of the supplyside. Who is the supplyside . Its everyone in business. The left is mocking the supplyside when you want to incentivize and boost the supply curve up so all our incomes go up and thats the politics. We need a message. Hopefully trump can do that, hes the business guy but all you young people need to help us out. How many of you have heard of deidra mccloskey . Shes an economist . Her argument is that the moral phenomenon that changes it. We need to take pride and say that the economy, business is a morally good thing, and weve lost that. K to 12, hire education, et cetera. We start saying business is bad, what a downer. What you are going to do for the rest your life is morally bad, and uplifting message. Lets get business rolling so young people can get jobs and have great lives. Are you gonna put out a pop qui quiz. Im going to give everyone a warning. I have one or two questions and then im going to come to you. Its important that you help me carry us through the end of this presentation. We can put. [inaudible] you talked about maybe staying through august would be something worth doing to get this done. There are a lot of legislative priorities. Can you talk a little bit about what your broader priorities are and how tax reform fits into that . I think my good friend from ohio talked about the budget and everything coming together. I believe on tax reform we need to agree to four principles in the next four weeks. Thats easy. Four and four. Lets come up with four principles we can agree upon, lets take the next four weeks to do it. What will force us to do that is what jim jordan was talking about, weve got budget reconciliation, weve got numbers we have to assigned to do appropriations, that comes as a perfect opportunity to bring all of that together so it forces us to make critical decisions that are incumbent on one another. If you cant come up with a number and you cant come up with budget reconciliation instructions, that should influence your decisions on tax reform. We are at a critical time to make decisions, not talk about making decisions, so if you hear me talking about it, it is four principles in the next four weeks. This last question pains me to ask. The senate is talking about delaying some of the obamacare cu taxes, and maybe not at all. If we dont get rid of those, that makes tax reform even more difficult. What does that do to this whole effort if we dont get that up . It doesnt help that. [laughter] theres nothing we can do about that right now. Does the United States senate. We will wait and see what comes, but what i do know is that we make the job too complicated. Our job is straightforward. Do what you told the voters you would do. We said we would repeal and replace obamacare. The building fully accomplish that but it was a step in the right direction. Not just because its good for tax reform but thats because we told the voters what we were going to do. Lets open it up. If you could, give us your name and affiliation and keep the questions precise and short. You mean make sure there is a russian in their. We actually of these gentlemen to provide the commentary and answers. Thanks for your time. My name is porter. I was just wondering if we could get clarity on the caucus division. I note earlier on you mentioned it sounds like with the eliminationyou favor some form of full expensing. If you could clarify the importance of the. Thank you. Great question. I want to verify, as a caucus we have not taken any official position. In fact we had a good hour and a half or two hour debate about the budget and how all this place together. Its one of the best debates you will find on capitol hill. Everyone thanks the Freedom Caucus, we have the same ideas on everything, i can tell you fights can break out any time a day. As we look at that, heres my concern without the interest deductibility. You have to make two assumptions. One is if we are doing full and immediate expensing and youre only doing that, you are assuming a cash scenario. It only benefits thosethat have large amounts of cash sitting around. The average Small Business, many times they dont have that so they have to go out and borrow money. I think thats the question. How do we do that along with what you do with the 17, 18 trillion in commercial Investment Real Estate thats out there. I call it a reverse china, their building all these New Buildings that sit empty. If you do full and immediate expensing you can almost immediately create a problem in your commercial Real Estate Market by making a long depreciation for commercial and immediate expensing for the new, if that makes sense. We would have to adjust that. My preference would be to accelerate those depreciation schedules, but i think looking at the expensing of interest or doing an either or program, we have to look at the numbers. I can make arguments both ways, but thats why we are here. I think this is an example where you look at differences in the sense of, is it good. You get to deduct interest and then you have two weeks that let you take accelerated deductions if this and if that. The beauty of one 100 is there are no hoops. Unless youve got a horrible interest rate, if i can depreciate the investment or the interest, i will take the investment. Id rather write off of old building, machine, ive been the Small Business guy and ended a lot of it with leverage, but i will tell you, i will take expensing the investments over the interest all day. I think it will be much more stimulative for our growth rate. I agree with that. I dont disagree that expensing the Capital Asset quicker, it is good for the economy. Thank you. I am bob carlstrom. Ive built a couple businesses. Just a comment on the messaging, reminding your colleagues that government is overhead on the economy. Taxes and regulations and that, as stewards as the public trust, its a message that i think people need to understand. I know the democrats believe the opposite is that the government permits you to make money. They believe they have a right to take it and thats reflective in the administration that comes from the left. I do think reminding people in your colleagues that what you do is overhead, providing the Necessary Services that the public needs, but the economy is what enables that in the Free Enterprise is the core of our country. I want to say, thank you for your service to our country in your previous position, and certainly at all that. Heres the interesting thing. Right now we are looking at anemic gdp growth of less than 2 . And yet we are growing the government at 4. 8 . The interesting thing is regrowing the government for full expenditures at that but yet cpi is growing at a little over 2 . One of the things we had talked about the other day, and id love to take full credit, but was conversation i had with larry and steve moore. We can look at a cap of 2. 5 . If you did that you have an overall cap on Government Spending at 2. 5 , you end up with the gdp growth at 3 . You have a 3 trillion tax cut and you balance in ten. What a novel idea. Its about fiscal restraint and you make a good point. This concept has been around. Its where you limit the size of your government relative this size of gdp. One of the things weve been talking about, i think its inside the House Republican conference, its a way we can move forward, but is also necessary. The assumption in the budget projections are 3 growth. To get 3 growth you have to reform the tax code for you have to deal with obamacare and you have to deal with the regulatory based on entrepreneurs and Small Business owners. Even with that you cant get the growth and must you have a labor force. The one thing ive heard for three years, the conversation will typically go Something Like this. In spite of all the stupid things going on in washington, we are still reading jobs. We cant find peoples work. This is where welfare reform is critical on a number of good public policy, but i dont think you achieve 3 sustained growth if you dont have labor force to get you to the productivity number. You just cant do it. It ties in with that and its why we are saying this seems to be the solution to get us to this budget agreement and help us get to the growth rate we need in this country. I agree with everything jim just said, but i dont get anybodys expectations up on the spending side. I think this room is educated on the basic numbers. Youve got 20 trillion in debt and a hundred trillion in unfunded liabilities. Medicare and Social Security are insolvent in 2034. All federal revenues will go only to the mandatory entitlement programs. All federal revenues. That means theres nothing left the military, education, transportation, et cetera. Cbo, their estimated deficit is one point to trillion. Whats that, thats the entire discretionary budget. So deficit financed entire government. When were talking about spending, we need to reconceptualize everything and get it through politically for that will happen tomorrow. Its pretty cynical, you young People Better help us think this through because your futures are on the line, and its a pretty dismal picture. We are facing tough decisions. It seems like an appropriate time for me to talk about one of our publications, our blueprint for balance which is a federal budget that will give you more than enough cards to balance and we argue there probably not deep enough because you still end up with a massive government. Lots of cups to do. We just need more folks like you to carry them all out. You know it and i gotcha question when the guy gets out of his seat, hes waving his hand. Ahead. Abstinence and marriage Partner Organization at all and numbers are great but in underlying all of this there is significant trends that are very negative for the economy. Non marital birthright at 41 . Alltime high. Marriage rates at an alltime low and a declining birthrate. If we dont address these major trends we cant grow the economy. Budget drives policy. Im here to say how can we ensure budget policy addresses these trends that have significant implications for our country. Thank you. Thank you. Similar to this, they think this is a little bit of tax policy and were talking about linking it in part because of labor participation. Similar to jim ive introduced a bill that tries to get out welfare reform. We spent close to 850 billion a year across 92 programs. With the concept that im throwing out there, its based off Brookings Institute data. I know heritage and working dont agree on many things, but this is one that we would say okay, probably good data. 80 of poverty is eliminated if you graduate from high school, work a fulltime job and have no children outside of marriage. If you set three criteria, of those 92 programs, some are more effective than others at providing the dignity of work for ablebodied adults. Some are more effective at promoting Healthy Families and some are more effective at actual education attainment that leads to employment. And so, you create a commission, sort of like the base realignment commission. Theres four republicans, four democrats for they get a year to work. If we vote on it this year, next summer we could talking about reform that would take us from 92 tested programs, i dont know if we can get to five, maslow only had five needs but maybe we can get to 40 or 50 programs. The closest thing to eternal life we will see here on earth is a Government Program according to reagan. Seventeen food programs because the 12th one didnt work so lets launch a 13th. Thank you for saying im middleaged. [laughter] even some of the democrats like the idea because they recognize the duplication. No one wants to be this first mover to support it, but you look at reform and how can you with fiscal policy influencing the culture. You get to a broader thing, politics isnt going to solve the solution, it wont be the solution to many of the things that go on, but we do have to be leaders instead of having these complex words good or bad. Thats the one high point of this year. We see moral relativism as dead as an idea. I would probably be the skunk at the party on this aspect, even though i believe in the very benefits of the family and what happens, but anytime you try to take tax policy to create a social desired outcome, it can be problematic. So should there be a penalty . No, absolutely not. You cant make a penalty. We know those facts to be accurate in terms of what gets you ahead, but the other part is just like picking winners and losers, we need to be careful that tax policies doesnt create an adverse issue when we are looking at this. I will be against any marriage penalty that is out there, but at the same time, you can sometimes try to put in tax policy to promote something and have an adverse consequence. Get rid of the marriage policy and incentivize work. The welfare system right now makes absolutely no sense. We have to incentivize work. I tell the story, holly and i went to italy to see her practice. We were there last bring. Im just a country boy from ohio and im there at 5 00 oclock in the afternoon and i say you dont need to cook dinner, well go out for dinner. She said well that we cant. I said what you mean . She said the restaurants on open. I said what you mean, theyre open from noon until 230 in a close and they do there, take a nap and may come back at 730. I thought whoever heard of that. 5 00 oclock restaurants are open because in america we work. Its one of the hallmarks of this great country. When you have policies that this incentivize that fundamental principle which is the 92 programs that we have, thats ridiculous. Its not good for our culture. Its why we think this concept ties into where we are right now and can help us move forward and do good policy for the American People. Just a quick followup to say this, never meant that it cant be a disincentive. Ive got you. Someone raised her hand. Thats right here. Two points of clarification on things you brought up, congressman jordan, on the idea of tying the level of reform to the tax bill, make that deficit measure neutral but do that only without tax savings because you believe it has to be deficit neutral. Im nothing has to be deficit neutral, in the ten or 11 years ive been in congress, this is the latest weve ever done a budget. Weve never done a budget in june except for one other year which was last year. We are at the same point. There is not agreement on a spending number for this upcoming fiscal year. There just isnt. There are three different camps and we cant get an agreement. We are saying we think theres a way forward with this plan. We know it will achieve savings and we know it treats taxpayers with respect. It is a winwin across the board and its a way to get past where we are right now. Dont you need a deficit neutral bill . Some of the tax cuts could be temporary so you dont need to get full deficit neutral but were hoping to close to that. Now we are getting wonky here and i know you were a tax reporter before, but i think what we can do, youve got the welfare reform proposals which are about 400 billion, plus or minus, increase in revenue. If you look at the four points that we laid out and putting all of those together, this is the back of the envelope analysis, it should get us there, but if it doesnt, then you look at the tax cuts the way we have them, you have them expire and thats as close to permanent, 96 of those ended up being permanent. As a fallback position, i think you write your reconciliation instructions to be there. And we need to be specific and make sure we include jim jordans idea in that. As we do that it will help us to find that debate and work towards that decision over the next four weeks. My next question was about the repatriation of the next 20 months, bringing it back to 8 . Are you can about the next 20 months from the enactment of the tax bill or a separate repatriation that would come before. I think you make it part of that. Thank you for clarifying. I also think you make the tax cut that we had retroactive. That way you have them affecting the economy as quickly as possible. Where we look at that, i dont see you doing a repatriation as a standalone. I think it has to be a comprehensive fourpoint plan but thanks for clarifying. Secondary clarification, are you talking about mandatory. I dont think you make anything mandatory. I think at this. 8 , if its not enough to bring things back, then they wont bring it back. I still think it creates, in my opinion, another 380, 400 billion in terms of actual revenues even at eight and a half interest. Mark with liberty conservative, your colleague or former colleague, when he released trumps budget and when he testified before the Budget Committee said there were 300 billion of on authorized spending, programs that had expired. Im curious as the budget process goes through, what is the likelihood those programs actually get approved. Yall can disagree, but zombie programs are hard to kil kill. I think one of the most important reforms toward that but i cant see why we dont is gary palmer has a bill that these executive agencies spend about a hundred billion dollars a year and when you use the power the first and say none of these funds shall be used for whatever and they said no this is an appropriated money, this is our money. Fees, fines, lawsuits, they spent over half a trillion dollars a year on accountable he and it should be deposited into the treasury and they asked for it back in its appropriated. Hes got a bill toward that end. Its not a Zombie Agency but a lot of them would go away because are not appropriated. Thank you. We have time for one last question and im going to ask it. We talked a lot about reconciliation and deficit neutrality and budget neutralit neutrality. Have you all thought about expanding the budget window to 25 or 30 years so you get more of the dynamic impacts of the taxes and it would help ease some of the procedural barriers that we have. I think theres been some real discussion, maybe a 15 year budget window to look at some of that. This is the only place that i know of that puts these artificial time frames on the way that you calculate this. Im not going to bash omb or any of the modeling, even though i might like to do that, but ill give you a prime example. We have natural gas and oil reserves on federal land right now. When you tap those natural gas and oil reserves, it is a net cost. It is not a revenue producer. Even though its bringing more revenue in, the way they score it says its actually costing us something because they make the assumption that its already being tapped. It defies logic. I dont understand. Either you are pulling it out or youre putting it in, but weve got some very interesting rules is the way i would put it. Looking at a budget window that goes to 15 years or Something Like that certainly allows us, we would be open to looking at some of those revised models. Im opening to any structural change that makes sense, but that doesnt get us past, i keep emphasizing that, but you dont do an appropriations process, you can have a spending bill unless you have a budget. You can have tax reform, you have to have a budget. Right now the trump budget said we will puff up defense and lower discretionary. Weve got people saying you cant lower it here youve got to take a higher here and then you have us who like the numbers that the trump budget put forward. Youve got three basic groups that can get agreement and we know thats a fact is a happen last year. Until you get an agreement on that, we can do all a process changes we want but nothing moves forward. Thats what we have to focus on. Someone could come up with a better idea than what were putting forward which is due this welfare reform that saves money over the long haul which helps americans people, if someone has a better idea we are better all years that no one can. Then theres the political angle to that as well. Appear a lot of people think theres this rightwing versus leftwing debate and we all hate each other more out war with each other. I met Bernie Sanders and i said is the right wing leftwing, i just see both sides filling out for trillion. This room is full of processing geniuses and article one people. We put in a balanced budget. They have to aok these process things ahead of time. Thats what jim is getting at, to do a budget the right way. The swamp is just addicted partly because 75 of the budget you cant touch. Its mandatory entitlement. The rest of it is a lot of good stuff, but we are just locked into this for trillion. What warren was saying, theres all this money out there to be had and you think its that sitting there so we have colleagues who went and found that money but its going to somewhere. Its just in some other part. We need to get our leadership on both sides of the aisle to start locking us in to these moves that take discipline over the long run. I would say one last thing, what jim is talking about, lining all these things up so we can move forward and get through the process, the structure that exist today is the status quo structure. Ive been here a year and a day today. One year ago today. In the past year, you look at the structure. We had a rubric for new mergers and acquisition. You look at the strategy, weve laid it out. We have a party platform. We have a playbook. I was encouraged. I looked down here to talk about incentivizing work, its in here, tax reform, its in here. Weve got strategy. The structure is designed to preserve the status quo. We have to look at this and say is this something. We need to build a structure that will change the status quo. Jims talking about an important. Paradigm. We have to get this artificial dividing line from defense discretionary and move it from discretionary to mandatory. The mandatory growth rate in spending is off the charts. Its been reasonably checked, writer wrongly under sequester. Weve had more discussion than attention is paid to because mandatory is growing at such a rate. Many of the tested programs are in that mandatory piece. If you qualify we spend money. Theres no cap on the amount of money. Within that paradigm is one of the most important Structural Reforms we have to do. If we dont get after mandatory spending, we will bankrupt our country and that is not compassionate. We should not let that happen. Everyone talks about it the data get today we preserve this structure that is on a collision course with bankruptcy. One final comment, the plan on welfare reform is something we need to do, not only for the budget numbers but for america. Ive got hundreds of jobs in my district that could be filled tomorrow if the person could meet two basic criteria. They pass a drug test and they show up to work. That is a pretty low bar they could fill good paying jobs. We need to do that for workforce. The other thing we must do. This principle in four weeks, lets agree to it. There is a budget deal that could happen if you adopt jims plan. We will work on the numbers but only if we make some decisions and do it now. I think the American People have waited long enough. Thank you very much. What a great way to end the program. [applause] where have you been. What have you been doing. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] sunday night on after words, new american president and ceo annemarie slaughter examine the global networking in the digital age in her book the chessboard and the web, strategies of connection in a networked world. She is interviewed by dennis, former white house chief of staff in the Obama Administration from o 2013 until 2016. What would strike me is that we knew there was a world , if you think about north korea and china and russia, that world of state to state relations is still very important and i think of it as the chessboard world because its the world of how do we beat our adversaries and think about a move and try to anticipate what move there going to make. That world is there and its very important, but equally important is what i call the world of the web. That world of criminal networks including terrace but also arms traffickers and drug traffickers. The world of business, big Network Supply chains, Global Corporations in the world of nongovernmental organizations. I think of all those
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