I want to also introduce my wife who is a professor at George Washington medical center, and i say as a real job looking for cures for cancer. Also, i want to thank the National Press zero, and also rebecca, if you will raise your hand. That way the media will be able to also get the advantages of questions from the audience to another that is important to cspan also. I wanted thank the National PressClub Executive directors and staff liaisons. The photographer who does such a spectacular job and won the outstanding career award, and our audio people. We will need first with the senate, said rob portman. Thank you. Bob is right. We worked together in the past. It is good to be with him. He has worked with republicans and democrats on the drug issue and has been an advocate for not the current approach to drug abuse and the date to addiction but rather one that focuses on education, treatment, and recovery. This is one of the issues of that although we will not talk about directly is an example of something on the discretionary part of the budget that is getting squeezed more and more as we do not deal with the larger problem on the mandatory spending seven the budget. Maybe keep in mind, that is an example of a program like the Second Chance act that i offered some years ago. The discretionary side even though it actually is a program that is not a top down Washington Program and saves money because it encourages states and localities to put in place prisoner reentry programs that keep people of the revolving door and encourages and is successful in getting people into Productive Lives where theyre taxpayers and taking care of their families. It works better for our communities and the taxpayers. Just an example of the kinds of things that will be under increasing pressure if we get do something about the bigger problem in our budget. This is a nice turn out. I would have come thursday. I tell you why. Look at the website. The description for today is come here, talk about the intricacies of budget baselines. On thursday here is what this says. Caught on camera smoking crack cocaine, led a controversial career. He will be here on thursday. I dont know why you are here, what thank you for coming. [laughter] maybe the two of us could make this more interesting. We need to stick to buy stuff. I have worked with chris a lot over the years, the socalled Super Committee together which ended up being not so super, but a serious effort to try to find answers. We were not ultimately successful, in fact some of what we propose you could argue later happened for sequestration. Will we really did not get at was the broader picture of how to deal with the biggest part of the budget and how to those of the budget, mandatory spending, with intent years of bipartisan Congressional Office skills that will be threequarters of the budget. The fastestgrowing in biggest part of the budget. We had her work that of france. The yen, we have had their virginity towards either of four and will in the future to try to find common ground. The debt that we currently have and the deficit is very serious and threatening to our economy. The deficits are projected to top 1 trillion within the next decade, and yet it seems like it is of the headline, and i want to thank the National Press club for having this. The shining a light on it today. This continues to be an important issue. Some of us suggested that because the deficit is only about 500 this year that is okay. First of all, it does not seem okay to me. Renown was at the office of management and budget bob mentioned that the deficit was 1,601,000,000,000. That is why we proposed. I think 500 billion is not solving the problem but also way too high because we are looking at the trillion dollar deficits within one decade based upon the Congressional Budget Office analysis. It is due entirely to the costs of a mandatory seven the budget. And it is a pretty rosy scenario when you consider a trillion dollars a year decades from now, assumes no worse got recession, terrorist acts and that Interest Rates will stay at relatively low rates. So there is lot of danger that deficits could, in fact, be far higher than that. Cbo projected 10 trillion increase in debt over the next decade. You go from roughly 17 trillion, 77 to 27,000,000,000,010 years from now. The ghetto or relatively scarce in area five. I hope we continue to keep this on the front burner and talk about how we solve this problem both sides of the aisle understands that. Adelle think its a big mystery. Its a matter of arithmetic. As the numbers are overwhelming. Comprises just over half of the budget and are responsible for over 86 percent of the next decade. The entitlement spending is set to double over the next decade. It will consume almost woman represented tax revenue with them at. The entire budgetary overbought, we talked about an infrastructure through the nations credit card because any revenue coming in live to be used to pay for this expanding entitlements spending over or under increase. We have to save these vital and unsustainable programs. If we dont we are not serving the very people who rely upon them. Social security faces a 62 billion deficit. So the cash that cash deficit cut 62 billion yen it more toward deficit this year. The primary trust fund, audience just fun will go bankrupt in just under 20 years which, when you think about that we are at a point where most people retiring today will be at a live the time that disability just want goes belly up. That means a 25 percent cut in benefits unless we change a lot, so this is happening now to vote sure currently moving from work into retirement. The Medicare Trust fund, just over one decade. Some of the citys transit to modernize to reform, the longer we wait the more painful that will beat. It will take reaching across the aisle and both parties being involved and business was done in the 1980s, the last time it was somewhat or reagan and tip oneill. Each party will have to be involved in my view. There are a lot of myths about spending and entitlement and deficit. Let me attempt from my perspective to clear the air today. Five more of the most persistent myths out there that help to keep us from doing this important work, finding common ground, and funding resolution. Foghorn leghorn used to say in the cartoon, thats mathematics, son. And i think it is. You can argue with me, but you cannot argue with figures. Since 1960 tax regulation has stayed around 68 percent of gdp. That is about to change. Cbo projects revenues will see the historic average starting next year and over the next few decades the highest levels ever as a percent of the economy. Of course highest levels in terms of nominal tax easily, but talking about percent of economy. More specifically individual revenue as a percent of the economy was shattered all records in the next decade, so within one decade it will be higher than it has been previously. Again, the Congressional Budget Office, not me or some other partisan group. Unfortunately, of course, spending source even more, so the entire revenues does not keep up with higher spending. Spending has averaged about 20 . Revenues 18 spending cut 20. The cbo projects that help spending net interest cost will drive spending to 25, 30, and eventually 35 percent of the economy in the coming decades. They used to have a baseline that i kind of liked. That did not authorize that this last year. You see that the tax sent some to cut tax system simply cannot keep up with the spending. You could not have an ecosystem that collected texas high enough to keep up with the spending. So i guess one way to say it is that cbo projects entitlement cost and the dead are responsible for 100 percent of the rising longterm deficit. Even the highest sustained tax revenue in history will not come close to paying for that. If entitlements spending is driving this, then shouldnt those Strong Majority of the reforms come from those programs, or should we just keep chasing records spending was higher tax levels . Again, that is a race he will lose because we cannot keep up with it. Myth number two, Social Security and medicare recipients receive only what they pay into the system. I hear this a lot. For Social Security, that is becoming more true. The typical person retiring into medicaid today in will receive 3 in benefits for every dollar paid into the system. And specifically one couple retiring will have paid about 119,000 lifetime premiums and receive about 357,000 in lifetime medicare benefits. You multiply that by about 77 million baby boomers you can see why the medicare act as a make sense. The trust funds are an asset to Social Security but a liability to the treasury. So while a Social Security trust fund assures seniors will be funded, it does not provide any actual Economic Resources to do it. So the general fund sourced a, with trillions of dollars to fulfill that pledge. In that sense the existence of the trust fund does not save current or future taxpayers a dime. All future benefits must be financed by future taxpayers. During the Clinton Administration the office of management and budget have a quotation about this the dollar was appropriate. They said, these balances are available to finance future benefit payments. It can be drawn down in the future. Claims will have to be redeemed by taxes borrowing from the public gore reducing expenditures. Its pretty simple. As a lot of misunderstanding. We can tweet our way to fiscal sustainability making changes around the edges to close the gap which is just not possible. According to the trustees dollars of security and medicare face a combined 40 trillion unfunded liability. That is a gap that tweaks cannot close. The recent escalation of the upper income tax cuts, which the president was committed to close raise to about 620 billion over the next decade. A lot of folks said that that would solve the problem. It is a large sum. It is about 3 percent of the projected Social Security and medicare and medicaid costs within that same time. 3 percent. On defense cuts to lets say we could permanently eliminate the department of defense it would merely delay the day of reckoning by about 15 years. There is no plausible set of tax hikes or other spending cuts that can pay for more than a fraction of these entitlement costs. The entitles entitlements themselves require fundamental reform. Off a new entitlement was started. Some defend obamacare by saying that it is paid for, at least almost all paid for by new taxes and medicare cuts. My view on that is that that does not make it any more fiscally responsible cahuenga. I use the example of family that makes 100,000 figure out a way to find 10,000 in savings through hard work, scrounging, belttightening and take that and go to the mall and spend it. I do not think that there would say that the spending spree was justified because the 10,000 was paid for. I think we need to look at the center is a particularly what it does to medicare. I think with regard to medicare, we can debate whether the obamacare cuts are appropriate or not. The cbo has recently said that some of these cuts are unsustainable and will not be sustained by the congress or are unsustainable in their view under the Health Care System and our country. Lets take that aside and assume that it was the right thing to do. The savings from medicare providers into obamacare, if appropriate, should not have been used to deal with this problem of medicare . Some say, well, you can double counted. It just does not make sense. It was used to Fund Obamacare and otherwise could have been available for medicaid. So facing these record spending and debt levels in obamacare, over onehalf trillion in tax increases in medicare cuts, then spend the entire amount on a new entitlement program. This matters because the options from budget savings are pretty limited. Washington can only raise taxes so high before it and dice the economy in a negative way. Medicare providers can only be cut so much before they stop participating in a program. Some have already come as you know. The antipoverty program, education program, as well as benefits of the already retired have mostly been taken off the table by republicans and democrats. The options are really pretty limited. Is there are only so many programs that can be realistically scale back or eliminated. Is there waste and fraud and abuse . Of course. If washington keeps offsetting spending there will be nothing left to the socalled bargain. Some kind of bargain to deal with entitlements and save them from bankruptcy in scale back debt. The president s budget, 1 trillion in new taxes was used primarily to pay for spending and. The Senate Democrats prefer tax increase, the buffett tax which is now pose as an offset to nearly a dozen proposed spending hikes. This happened again last week. The buffer tax was proposed and to be used for other spending increase. It would close less than 1 percent of the budget deficit or is being used to offset new spending. It is a struggle frankly, as criswell acknowledged probably because we worked on this together to find savings. So, look, before i close let me just add one, i guess,. The need to have ideas out there. It is easy to criticize ideas that come out. Paul ryans budget gets criticized regularly, but it does balance in ten years. There is no Democratic Alternative that does that. I often talk about means testing and medicare as an example where we could make a step in the right direction. It does not solve the problem, as we talked about, but it does suggest that in the right direction and is in the president s budget. It does provide that folks who make over 170,000 per year have to pay more in premiums under part b and party of medicare. It saves about 60 billion in the first ten years according to the analysis that we have, over the next ten years which is why it is a kind of proposal we ought to be talking about. As this expanding benefit to the debt and deficit that we ought to be looking for because the longterm problem can only be solved by those types of reforms, and yet we cannot seem to even make progress there. My proposal today is, lets make a commitment, at least, to take what is within the president s own budget and put that out as a spending reform here even this year because it seems to me that is one where we should be able to find bipartisan consensus. Take a small step toward dealing with these larger problems. Success begets success, and we cannot allow the Current Situation to continue without making some progress i raise this in the confirmation hearings recently with soap sylvia barrell when she was before our finance committee wanting to move from zero in the i dont blame her, to the health and Human Services job. And their response was, well, we cant move on that without a balanced approach. And when pushed, the balance approaches, of course, raising taxes and, of course raising taxes on middleincome americans, businesses. I understand balance sounds great, but think about this, think about the logic of this. We cannot ask wealthier seniors, by the way the roughly equivalent to a two and a half to 3 million annuity. Were asking people who, i believe, can afford it given the situation we find ourselves in with medicare defined more to pave participants. Our answer was raising taxes on as people in order to ask them to pay more premiums, which is also revenue. Makes no sense. There is no logic. I am hopeful that we can make progress on these issues and job of a grand bargain. This year will be difficult to. Settle in next year is an opportunity for us, particularly the first part of next year before we get into that 2015 cycle. But lets take this time together, take the president on his budget and the one thing in his budget that does deal with this entitlement that we certainly talked about today. Thank you for being here. [applause] we are honored by the president of the National Press club who is here with us. Anything you would like to say . Here comes the mike. We are live on cspan. I know senator portman and is a fellow. Very good. You know that the Ohio State Buckeyes are coming to maryland to play. Thank you, senator, congressman. The National Press club, has a motto, this is where news is made. Thank you for helping make news this morning. I dont want to take more than a moment to thank you because i know everyone is here to ask questions. Congressman van allen. Just one second. There we go. Well, let me start by thinking about for a brain is together. It is great to be back here, and thank you for your lead. Thank you for your stewardship of the National Press club. It is great to be here with my friend and colleague, bob portman. As he indicated, we worked together on these budget is used they are tough, challenging, and i am hopeful that at some point down the line we are able to resolve them in a more comprehensive fashion and we have been able to today. We have had some piecemeal progress, but what we need is a more comprehensive progress. Now, will for i talk about the budget issues, i served as cochair of a bipartisan congressional soccer cart this command are want to congratulate team usa on a terrific victory in the world cup yesterday. Hopefully that is a sign of things to come. As everyone knows, they are in a tough bracket. Also, bob indicated that my father had served in the United States foreign service. Earlier in my career i was on the Senate Foreign relations committee. I want say a word about the iraqi situation. When we looked at that, obviously it is a time of great chaos and uncertainty. And we have learned over last week that when it comes to Foreign Policy pundits in washington, there seems to be no accountabili