tv Key Capitol Hill Hearings CSPAN February 4, 2015 9:00pm-11:01pm EST
things that i think the american people don't quite relate to when the president is speaking and even respectfully to your opening statement is the fact that i don't think the american people think that the situation is that great. i think the polls show -- but more importantly than polls is in our districts. i think people are, frankly, concerned. they're concerned about how their families are doing and how their income has not been rising. so i think the credibility gap that exists between what is sometimes said by the president as to the simpluation, the country and reality frankly is rather large. now, a couple things that i've heard today. that -- and this is -- these are things that, by the way, when i go home, people, frankly, are in awe. they their jaw drops. when they hear that if government takes less of their money that that equates to
government spending is something that does not guilty gel with real life. in other words all of these government expenditures in some of the graphs that we show today are because we're not taking their money so therefore, that e kwatquates to government spending: where in real life does not taking somebody's money equate to spending: again, the credible credibility gap, i think increases when statements like that are made. by the way, if that's the case, i think that what? our gdp is what? $17 trillion? what we take in revenue and taxes is about roughly about $3 trillion. ballpark figures. so, in essence, that means that we're spending $14 trillion because that's money that the government is not taking from the economy. so should we then call that $14 trillion in government spending? no. that's ludicrous. and it's ludicrous to say that money that we are not forcefully
taking because people don't pay this willingly, they're forced to pay is somehow government spending. credibility gap. when one says that going from 200$200 plus million in interest payments to a little bit under $800billion in interest payments and that that is less in interest payments, it doesn't pass the straight-faced test. and i would just respectfully ask one more thing which the chairman asked a number of times. and wasn't able to quiet get an answer. when the president states that it's a one for one dollar on defense and nondefense and, yet, it's a one-for-one dollar except that later it's not a one-for-one dollar. that is what creates, among other things, a huge credibility gap.
for the american people, loss in faith of their government. and it's a tragedy when the american people do not trust or have faith in the federal government. they don't have trust or faith in the u.s. congress, in the add min strax, administration and in our institutions. i would just throw this as a word of caution. it's okay to differ on policies. but what is not fine is to try to of la skate, confuse by trying to hide the truth with saying it's one-for-one except that later it isn't. kpept kpept except for later it isn't never comes out. you can keep your doctor if you like: kpeptexcept that's not really
what they meant. i would caution all of you to be a little bit more careful when you speak to the american people. when you're speaking to us, you're speaking to the american people. when you say 200$200 million in interest payments to $800 billion in interest payments is a reduction in interest payments, frankly, it does a huge disservice to the american people. i would gist caution you to be a little bit more straight forward. >> the gentleman's time is expired. >>. . >> mr. chairman, can i say one thing. i do think it's important given that i'm married fromy edied to a woman from new jersey that if you were to pass a law banning people from new jersey speaking, i would have to recommend to the president that he veto it.
>> showing great wisdom. [ laughter ] >> good morning. highways, bridges, transit systems, airports and seaports drive economic growth in america. in this global economy, the countries with modern transportation systems are going to compete best. they're going to be able to innovate and grow. and if part of our strategy is to boost wages, investing in infrastructure is one of the smartest things we can do. but when you look at our transportation infrastructure policy over the past few years it's obvious we can do better. millions and millions of americans are employed in transportation and infrastructure: and these jobs often pay a higher wage. especially my area. in my district the median household income is $35,000 a year. so if you have a job in construction or an engineering, civil engineering at court tampa
bay or tampa bay international air port you're making a higher wage. i know it's true in my community, and i'm certain it's true in my of my colleagues communities, too. so i want to thank you for a strong, six-year infrastructure proposal. see, lately, congress has kind of been treading water. the last transportation reauthorization expired in september. we've had to draw general revenue to plug the holes in the highway fund. so what i hear back home from my community, from the state, from business leaders is they want greater certainty. they don't want a one-year extension. they don't want a two-year bill. they want a six-year, robust investment bill. so i want to thank you for proposing that in the budget. can you go through and outline
the transportation infrastructure plan in the budget? what you project for economic growth and then explain you link funding for a new highway built to business tax reform rather than what we typically do on user pays principle for highway bills. why should we take that forward? >> i'm so glad you asked that. it's really one of the most important things that we can do to grow our economy and create jobs: it's something that's really been a bipartisan effort in past years and i hope that it can be again, this year. what we're proposing is not only a six-year extension, but, at a level that would increase by 40% the investment that we're making in our infrastructure. as i said, it's paid for, more than fully paid for, actually, through our comprehensive business tax reform proposal. specifically what we would do is
ask companies to bring money that they're holding overseas, to bring it back into the country. we''d have a toll charge of 14% on those roughly $2 trillion of earnings that are held overseas. and we would restructure going forward the international tax system to a 19% rate: allover this would of this would be revenue neutral tax reform. it follows a structure that congressman camp and others have proposed in the past. we think it has bipart san support mplt and because it could pay for a six-year proposals, when we've been sort of kicking the can down the road with small inkremtcrements of funding many times over the last few years, we think this is a great way to take this one time revenue, invest it while we are working toward a longer term solution beyond the six years for a funding source. >> i've got to ask for your help on one thing too, when it comes
to infrastructure. the port tampa bay has had a project in the army corps work program for a number of years. congress has authorized it. it's been on the work plan and because the feds stepped up in previous years and said okay, we're going to have the construction dollars set aside we've been able to get a 70% match from private user support and we were waiting for the state of florida this legislate legislative session to put up the rest of the money. but it disappeared from this budget. and i'd like to give you this to ask for your help to take a look. because you have to admit a 70 pntd % match from the locals is a great match. they typically only say 35% match from local sources. this is a very important public/private partnership for the largest seaport in florida and one of our primary economic engines. so i'm going to give you this
and ask you to look at it. >> mr. cole is recognized for five minutes. >> thank you very much, mr. chairman. i've got three things i want to cover, mr. director. but the first one is just, for the record, so to speak you were the secretary high when tornadoes ravaged oklahoma in particularly my hometown in may of 2013. i want to personally thank you and hud for the tremendous job you did in responding and continuing to respond in helping us recoverment through you, obviously, i want to thank you and the administration. that ought to be noted and we don't forget it in my home. so just thank you very much for your service during that critical period. it made a big difference to a lot of people's lives in my district. >> that's very generalous of you. >> secondly, this is just to focus your attention. you haven't done this yet in your official capacity, but i
would just ask that significant bipartisan concerns have been raised with respect to the recent fiduciary rule that will be re-proposed. all i want do ask is will you commit to a full review of the economic analysis to assure that these bipartisan concerns have been addressed? >> absolutely. and i think congressman, i don't have any specifics about release of that rule, but i think when you do see it you'll see that we have really listened to concerns from the first time. >> i appreciate that. again, i'm not asking for anything early. again, it is extraordinarily important for a lot of folks. so i appreciate you giving it a lot of attention. now i want to move back to a couple of items in the budget and discuss that with you. you know, in previous -- or in a previous budget that the president proposed, he had something where it's actually sort of bipartisan support for chain cpi and means testing for
certain entitlement benefits and saved hundreds of millions of dollars. that's not in this particular budget as i read it, is it? >> thaekt. >> does the fact -- and i'm not trying to trap you but secretary burr -- excuse me then-secretary and secretary burr will when she's here. that's not off the tiebl. table. is that still the administration's position that while it's not in your budget, it's not something you would rule out if we were in a meaningful discussion about how to find a compromise? >> obviously, as you say i can't get into specific negotiations here. i think the way that i would frame this is that when it was proposed, i think the president made clear that he was hoping to reach a broader agreement a
so-called grand bargain, and had offered what he thought was not necessarily the best policy but was doing it in the spirit of trying to get to that agreement. and i would say we continue to have concerns about it. those concerns have always been there. but i think it's also fair e fair to say, as director said now secretary, said last year that we are willing to enter into negotiations and to look at some hard things and we look forward to conversations going forward. i think particularly things in the budget are thing that is we want to focus on building the murray ryan precedent. >> fair enough. i'm going to take that as a long yes. but fair enough. [ laughter ] >> with all the qualifiers. another question, and just really a philosophical question do you think the budget can ever be balanced without meaningfully discussing -- we already know that. we've cut $65 billion, a
bipartisan agreement to get that done since president bush has been in office. that's pretty substantial reductions. but the area that keeps growing is the mandatory spending, entitlement spending, whatever hitle you want to use. is there any way to balance the budget without coming to some sort of broader agreement to slow down that spending? not necessarily cut, but reduce that payment of growth. >> we were just talking about social security. i'd be everyone more specific. social security is not one of the primary driverers at this point of deaf sit and debts. it really is health care costs. that is the key thing along with our demographic challenges in the long term going forward. i agree with you that we need to take those on. i would say we have. and, particularly, in the work that we've done through the affordable care act and elsewhere, to lower health care cost growth. the proposals we have in the
budget, sgr fix and a range of others on delivery system reform that would go farther on that and comprehensive immigration reform we think are the most important things we can do on that front. >> the gentleman's time is expired. thank you. the jentle lady from michigan is recognized, ms. dingle. >> thank you, mr. chairman. director donovan, it's great to see you here today. you know we all get in these budget hearings and i think sometimes the american people watch and sometimes think we're talking gobblety gook and right-hand turn able to follow the discussion. so i'd just look to talk about some things in simple terms so that as people are listening up there in america, they understand what they're saying. i think we all agree that we care about the middle class and the middle class is still hurting. and i think that members on both sides of the aisle believe we've got to balance the budget and reduce the deficit.
so the question is how do you get there? i think that the president's budget does a good job of getting there. yesterday, i heard directly from the army about what sequestration would do in michigan and costing jobs. i think all of us have been hearing from our con stitch went wents across the country who have lost education opportunities, haven't found a new job, reduced sfrs edd services for senior et cetera because of these arbitrary budget cap that is we've seen. dr. donovan, could you talk about the types of investments we'd be anyone to make if the budget caps are increased and we do have a reverse sequestration in 2016? and then explain for us how we can afford to spend the additional money and these investments and still meet key metrics that show as being fiscally responsible. >> well,maybe i would focus on one of the air yas we haven't talked about yet.
we've talked about infrastructure, investing in families. i think one of the most important, and this is certainly true in michigan manufacturing has seen a real resurgence under this president. it's not just in the autoindustry, but it's in many, many other areas. this budget is very strong through lifting sequestration, doing more to invest not just in manufacturing directly the budget contains a proposal that would allow us to fully fund the 45 manufacturing institutes that the president called for early on in his administration. but it also makes sure that we're doing things to scale up the most innovative technology. we're actually winning the race to do advanced manufacturing, the highest technology man ewe manufactureing. we're proposing a $10 billion public start-up fund that would allow us to scale some of the
most promising inventions from our r&d and take them to scale hundreds of thousands of jobs. we also want to make sure that americans are ready for those jobs. we're proposing to double the amount of training spots and apprenticeships which are critical in making sure that in these advanced manufacturing jobs, folks are ready to take though. and so there are many things that really focus on building on this resurgence in manufacturing that we've seen these last six years. >> thank you. and talking about that, too many americans are still struggling to find jobs that pay. what does your budget do to address unemployment and improve wages for those that are employed? >> well, we have in the budget this year a kovrpcomprehensive unemployment insurance effort that would make sure that when somebody does fall into unemployment, that the benefits that they need are there. but, also that we would make reforms that really encourage states to connect them to jobs
as quickly as possible. so that's a critical first step. we obviously think that we ought to be raising the minimum wage and doing other things, making sure childcare is available. paid leave. you know, we have american families making terrible choices, to have to give up a paycheck to stay home with their children, with their parents. and we just don't think that those are the right choices to force middle class families to make. >> and then i'm going to give you one last question because i have to do it. headlines in the detroit papers today were the budget doesn't address the third bridge crossing again. so could we ask that we do work with the white house and the appropriate agencies to look at the funding of the custom plaza? that's so critical. the canadian government has been so very, very supportive and we do need the u.s. government to help us on that. >> we've been working closely with them on that. and we're optimistic that it can
move forward. >> thaing. i yield back. >> the gentle lady yields back. >> thank you, mr. chairman. i was struck with the last question. the government cannot put a dollar into the economy until it takes that same dollar out of the economy. that's the paradox bastian spoke of between the seen and the unseen. we can see the job that's created when government puts a dollar into the economy. what we don't see is the job that is lost as government takes that dollar out of the economy. the problem that you've got is there's no way to spin the economy. people know their own experience.
that's why you e you're hitting such a disconnect between all of this happy talk about how good times are rolling and the experience that families are having struggling to make ends meet so many years into this e recession. in fact, it's been pointed out repeatedly that if the recovery under obama tracked with the recovery under reagan there would be millions more working and families would be making thousands of dollars more than they are today. getting back to the question for a moment, how much in tax increases is the administration proposing? >> the americans have been more optistic today than they have since the beginning of the financial crisis. >> you cannot speak for them. i cannot speak for them.
they can speak for themselves. >> in a range of polls and others -- >> people have their own experiences. you are not going to change people's opinion. they have their own experiences with this economy good or bad, and i suggest you stop digging once you're in a hole of that size. my question of you is how much business taxes are included in this budget. >> so what our budget does on taxes we propose a fully paid for set of middle class tax cuts that is paid for in the way that i discussed before. >> with business tax increases? >> actually i want doesn't include any business tax increases. >> what are the taxes? i notice you're planning a massive increase for capital gains tax, nearly doubling the
capital gains tax rate from the beginning of this administration. >> all we're doing is proposing to take it back to what it was under reagan. >> are you proposing to take the income tax rate back down to where it was under reagan? >> we are propose inging a comprehensive, revenue-neutral business tax reform. we're proposing to fully offset the tax cuts for 44 million middle class families average $600 drars ewith the capital gains tax. >> here's the problem -- >> in addition to that, we have about $640 billion of deficit reduction that we would do through other changes to high income tax areas. >> but that doesn't acount for the fact that this administration first ran that debt through the roof, to
trillion dollar levels, year after year. that's like a high-priced store doubling its prices and then boasting about its half off sale. when you tax something, you get less of it. when you tax investment you get less investment. at exactly the time we need more to create the real jobs and the higher-paying jobs that this stag nant economy desperately needs. my time, mr. donovan. the other point i'd like to address was a point raised by the ranking member when he talked about european austerity which was a combination of major tax increases and spending cuts. those european nations that emphasize spending cuts did quite well. those that emphasized tax increases have done quite peer e poorly. reagan and clinton cut spending as a percentage of gdp and the
economy blossoms. >> and we have cut spending significantly in this budget. it fully pays for the discretionary -- >> you've cut spending, yet it keeps going up and up. >> thank you, mr. chair. thank you, mr. donovan for your hard work and that of your agency. can we put up a slide on discussion their caps in the president's budget? there was a suggestion earlier on that somehow the pet's budget increases nondefense spending and at a much higher rate. but sbt it true that it's both exactly the same isle mount. >> that's exactly right. and my point is the way we look at the budget is compared to what would happen under current law. and what we're proposing is dollar-for-dollar increases compared to sequestration and what would happen in the years after that. that's right. >> thank you. the reason i asked that question
is i've served on active duty. and my second question is is there anything in the budget related to base closures do mesically? >> so we are calling for a bipartisan effort to create another b.r.a.c. commission that would look for potential in the savings department successfully to make some hard decisions about where we locate our armed forces. >> thank you. and then my third question is dynamic scoring. so on the third day, i don't think this is a part san issue. as you know, the concept is we
should take into account governmental changes and both democrats and republicans have supported the research and development tax credit because studies show that if you invest in r&d, you generate economic activity and eventually, that could pay for the credit itself. i think what makes rule change incredibly partisan is republicans only apply it to large tax expenditures and they ignore spending, nondiscretionary spending. does it make any sense to apply dynamic scoring to one part of the budget but not the rest of it? >> i think you've raised a very good point.
whether it's an infrastructure, the investments in education that they can have effects on growth just as changes in the tax code can. but i would also say we have serious concerns about dynamic scoring because of the enormous uncertainty that it has. >> so that leads to my last point. the republicans have altered the playing field. we can't change this world. there is going to be dynamic scoring on large tax expenditures. but numbers do matter. so my question to you and really to many academic think tank or nonprofit that's paying attention, can we build the capacity now to start doing dynamic scoring on pending? otherwise, my fear is going into these budget battles with one hand tied blind our backs. republicans say hey, for our priorities, we're going to apply dynamic scoring. and all we can say on the democratic side is we know
infrastructure creates growth. we know investing in education is the right thing to do and we have no numbers to support that. can you, even though you're not the krerks eo, but can your agency do dynamic scoring? or can you start building the capacity to do that so that we can also start general rating these dynamic scoring ranges even though they may not be precise? >> the problem is there 1 so much uncertainty. when cbo looked at a 10% across the board tax cut, there were analyses ranged by 15 times. and, from positive to neg tifr. so literally, they said this 10 pbt could shrink the economy orr it could be 15 times the range of expected. that's the problem whether or on
the discretionary side or the tax side, the uncertainty means that it isn't really good scoring practice to build this into the official score. >> i see. i just need to say republicans can say we need to have dynamic scoring. i wanted to say the same for education and infrastructure. >> the gentleman will be pleased to know that our rule acome dates both spending and revenue. the gentle lady from tennessee is recognized. >> mr. donovan, good to see you again. we appreciate that you are here. there's one promise i'd love to see the president make and i'd like for him to keep this one. he got caught saying if you like your doctor, you can keep him. but i'd love for him to look at the american people and say if you like your money, you can
keep it. ale e and really do something about it. you know, i've got a lot of constituents in tennessee. they look at what we're doing here. there's been a lot of talk about this budget because it is a big one. and they really feel like it's basically immoral for the federal government to look at them and say we're going to force you to live below your means so you can pay your taxes over here to a federal government that refuses to live within its means: and that's how they approach this. they want to have to send less. let me ask you a couple of questions. do you support balancing the budget within 10 years. >> we support making sure we meet the most important tests -- >> no, that's not the question. the question is do you support
balancing the budget within ten years. yes or no? >> yes eagain, we think -- >> i will take that as a no. let me ask you this do you think president clinton made a mistake in working with congressionals to balance the budget. >> i think what we're proposing is that we work there a bipartisan way to build on the cess we've had in murray ryan, to increase discretionary spending but more than offset it, as our budget does, with reductions on the mandatory side and with revenues. >> but it doesn't come into balance? >> again the budget produces -- >> let me ask you this. talking about that deficit. deficit under 3% of gdp may be a substantial improvemented. we will agree with that. when you look at the amount of
sppd e spending that took place early in this administration, but it will still add to the national debt will it not? >> our budget reduces spending overall. >> the debt is still growing. >> and it reduces the deaf sit -- >> we're still at $18 trillion and growing in debt. your estimate is $22 trillion by 2025. that would be the amount of debt. are you okay with that number? do you think that's healthy for the economy and the american taxpayer? >> the key test is compared to current law where our debt and deficits would continue to grow as a share of our economy this budget brings them below 3% of gdp on the deficit side and stabilizes and reduces the debt as a share of our economy. >> are you okay with the $22 trillion number by 20235? >> what i think the focus of a budget needs to be is are we
investing in american families? in our economy? those are the most critical tests of a budget. >> sir -- >> along with the fiscal sustainability. >> i appreciate that. but the focus of the budget should be about the american priorities that the people set. it is a reflection of the priorities of the entity. now, we have gone from $10.6 trillion in debt to over $18 trillion in debt over the last six years. the american people are saying to us and rightfully so that we have to get this under control. you can look at wha is happening with our publicly trading debt and who owns that debt. it has become a national security risk. so what my constituents want to know is how do we bring this budget into balance? how do we do that without
raising faxes? how do we begin to whittle down this debt? and are you all willing to work with us to bring this occurrences about? >> what this budget does is kmaktly what you said we focus on the american people. and we reduce middle class taxes 44 million families would get a tax cut aver ranging $600. and we invest in the things that help kids go to college. >> would that be like paying less in health insurance and now they're paying more? they're paying more in out-of-pocket cost and if obamacare expenses continue to go up and up. we have serious concerns about that and i yield back my time. >> the gentle man from massachusetts is recognized for five minutes. >> thank you very much, mr. chairman. thank you. >> i wanted to first of all give you an opportunity to respond to a comment that was made earlier and you didn't have a chance to respond which is about consumer
confidence. and the implication was that your vision of consumer confidence is not actually the people's view of consumer confidence. could you just comment on that for a minute please? >> if you look at many different measures of the people's view of the economy right now, it's been different since the financial crisis started. the job picture that we've seen substantial improvement. the thing that they want to see get better is neethey want their wages to grow. that is the key focus of middle class economics. that's what this budget focuses on. it helps their paychecks go parteder in the short run by helping their kids go to college and save for retiremented. and it helps create the jobs of the future and make sure that families are ready to take those
jobs with training and other investments. >> director are those surveys of politicians? or surveys of real american workers? those are all surveys of american people. >> thank you very much. is it accurate to say that the debt has increased over both parties over the past 15 years? >> thaekt. r are are that's correct. that is correct. yes. >> so as a result, i think that over this period, we've seen interest payments increase under leadership from both sides of the aisle. can you -- is that something you'd agree with, as well? >> yes. what effects did the unfunded war have under president bush
have on today? >> the cost of what we typically call overseas contingency operations or coco contributed to what we thought were very, very high historical deficits. and one of the important steps that we've made and the president talked to the state of the union about we had 180,000 troops overseas. we're now down to 15,000: the human costs of war obviously, were enormous. but on the fiscal side, what we've seen is our overseas contingency operations costs come down by about $130 billion a year. what e what we propose is to continue that trend into next year. we have the real opportunity to make sure that we are reaping
savings there and reinvesting it into the key things we need to do in our defense department. >> now, those costs don't go away when the troops come home. i was at if v.the v.a. this morning in fact, waiting in long lines. and it's clear that these war costs are going to go on. now, under the cuts last year that paid for by doubling the sequester cuts to nondefense programs, if that budget were to be put into effect what impact would it have for veterans programs? >> i think you raise an excellent point. we tend to talk about defense and non-defense cost in discretionary. but lit's remember in that nondefense all of the veteran's addministrations costs all of the cost in protecting our homeland in the department of homeland security, all of those are part of the so called "non-defense" part of discretionary. this is one of the reasons why it's so critical that we maintain this linkage between
reversing sequestration on the defense side and on the non-defense side. >> thank you. gentleman from south carolina, mr. rice, is recognized for five minutes. >> thank you, sir. thank you for being here today. the release of the prior testimony, the way i understand it, in this budget we have increased taxes and new government taxes or increased government programs are designed to give middle class families another $600 a year, right? i've heard you saying? >> those are the tax cuts that we're proposing. we have about a hundred cultsts reductions p e in spending in programs. >> the design is to give middle class families $600 a year, right? >> there's obviously much more than that that's focused on growing the wages of american families. >> before we make new promises and new government programs, you
know,we've got medicare and social security designed to fail or be dramatically reduced in about 15 years mplt and we've got social security disability that's going to fail unless we do something next year. shouldn't we make good the promtss that we've made before before we make new promises now for more government programs and more benefits and more give aways? shouldn't we do that? >> absolutely that. 's why our budget proposes a simple reallocation of the payroll tax. it's been done many times -- >> or the disability. but it doesn't fix social security in the long run. it doesn't fix medicare in the long run. >> as i talked about earlier immigration reform is actually a very important piece of -- >> but they don't bring them into balance. they never fix it, right? yes or no. >> they would cig nif kantdly extend the life of the trust funds. >> thank you, sir.
the hitle of title of this budget is middle class economics. that 1 interesting to me. would you agree with me that the best way to lift people out of poverty and expand the middle class, would that be government programs or expanding the economy. >> i think expanding the economy is a ski goal. i think smart, targeted investmenteds in certain govrt programs can help to accomplish that goal. >> you know this chart is a -- is cbo's forecast of gdp growth. and what they projected two years ago was 2.9%. and, as a result of the recent economics, they dropped their forecast to 2.5%. and this was over the next ten years, our projection was over the next 10 years. they dropped it 2.5% last year and 2.3% this year. we've had six years of repeated
tax increases, increased government programs increased government regulations and dodd-frank and this is a result of that. next slide or going back to the first slide. this is a graph of middle class income in blue, or aver rang household income. and you can see it's dropped about 8.7, almost 9% since 2007. at the same time graphed against that is fuels and utility costs. war on coal, epa regulations middle class regulations, it looks like there's a little discourse. next slide, please. this is their income graph against food and beverages. energy costs and food costs. they can see it every day at the grocery store. next slide please: >> this is their income against health care costs.
i hear you saying the rate of health care cost is slowing. but that's what they've actually experienced. and all of these things are from the federal reserve. now, the president loves to say he's for the middle class. the fact is i don't just listen to what he says, i look at what he does. the fact is he's gutting the middle class isn't he? i guess i'd have to disagree with you there, congressman. create more middle class jobs, grow wages. and we've seen wages to begin to increase too slowly. but i'm glad we agree that -- >> the fact is the policies
aren't working. and let me ask you this what do you think the effect is on middle class income is going to be adding another, what? 4 million undocumented workers to the work forest? how do you think that's going to affect the middle class wages? >> don't take my information. cbo shows it will grow our economy, increase productivity productivity -- >> over 20 years -- >> the gentleman's time is expired. the gentle lady from new mexico is reck newsed for five minutes. >> i'm actually going to repeat a couple things because i think they bear repeating. the country's gdp is growing at the fastest pace in many years, the stock market is at all-time highs, up employment rate is lower than it was before the financial crisis. so we have had economic growth.
but the -- since the recession. and it's clear, i think my colleagues are agreeing, that it hasn't benefits everyone equally. income inequality is in many areas, wages have been stagnant and many working families are still struggling. the median wealth has grown to nearly 7 times the median wealth of middle income families. and 70 times that of bottom earners. the highest wealth gap on record. the top 1% of earners have accumulated more wealth than the entire bottom 90% of the entire u.s. mopulation. accounting for inflation, the typical middle class household is earning less than it was before the recession. in fact the middle class are earning less than they did in 1989. i'm concerned about those poverty rates and wage rates and i'm going to talk to you in a moment about what's really
occurring in many states including in my state in new mexico. this greemt is about whether we've invested effectively and enough in middle class economics. and so i want to point out and high light that the budget does that very effectively. that we have failed to invest in infrastructure. that we've failed to invest in middle class familyies and in wage earners and in workers. if anybody wants to really see what the sequester has done, come to new mexico, which, arguably, has one of the worst economies in the country where just cutting and across-the-board cuts related to -- i think about a marriage where one spouse racks up the credit cards divorces the other spouse and often in american cow e culture, it's the wife who's left paying back those credit cards. and i'm feeling in this enviernt, like that wife in that relationship, in a severed relationship. so we disagree about how we got here. but i am agreeing that we have a
way to move forward. and i want to be more specific about that. as the president's budget attempts to address this by investing in middle class priorities including access to high quality education providing family's tax relief, helping working families with childcare and making investments in the nation's infrastructure, those are all great and i believe they will make a difference. but what can you do in states like new mexico, in states like alabama, south carolina and west virginia that are all feeling the same thing? what specific strategies in the president's budget jump starts these states and these economies who are still bearing the biggest brunt of the recession and are not seeing that economic growth? what's in there specific for those states? more than those individual investments and middle class families. but really help those states jump ahead because we have a double-dipped recession. >> so i do think particularly in
states that are not seeing wage growth and not some of those same benefits that nationally we're seeing, i do think that the specific focus on how we make paychecks go parteder today, minimum wage is something that the president has pushed on that more and more states have adopted over the past year. but, also, ways to make sure -- right now, we have many families in new mexico -- >> and i feel offer about reclaiming my time, too. we're terrible. we ask you a question and then we don't let you answer. we're all famous for that. and i agree that that makes a difference. but if there aren't those jobs, but let me just give you something really striking. more children are hungry in new mexico than in any other state. 22 of new mexico are living in poverty, 31% of children are in poverty. object
only 29.6 young adults 25-34 have an associate's degree. there are no jobs. there is no manufacturing. there is no productivity. you have to have a job for a minimum wage impact to have an impact. focusing on wage earnings in the middle class that you are investing in those difficult states. there that to be a very specific strategy so that we all catch up in a way. >> the gentleman from south carolina is recognized for five minutes. >> thank you. i thank you for being here. i was struck by what you said to the chairman a few minutes ago and that was he had asked you
about mindless austerity and mindless sequestration cuts. do you really mean mindless or was that a misspeak? >> i mean that we should look to make smart cuts in programs that aren't working. >> it says mindless. >> the implication of mindless is it applies across the board one size fits all approach to cutting spends as opposed to what we're trying to do is be much more targeted. >> fair enough. was the president not smart in offering that proposal? >> i think the history was that it was something that was thought to be so bad that it
would never go into effect. i don't think anybody at the time thought it was a smart strategy for reducing our budget budget. >> i'll let you take that up with bob woodworth. a couple quick thoughts. you and my colleague said extending the life -- i just pulled up the social security numbers. i see nothing that extends the life of social security trust fund. >> what i was saying is that taking steps to pass comprehensive immigration reform would benefit social security and extend the life of the trust funds. >> maybe maybe not. >> cbo last week -- >> we could argue it. why don't we take into the entire rest of the world and extend the life of the trust fund by that accounting. it's a longer theoretical
argument is if you bring a bunch more people don't look at the cost. >> we do look at the -- cbo did look at the cost. >> it's a longer debate. my question is what is real in this budget is borrowing from peter to pay for paul. you borrow from the social security trust fund to pay for disability now and that shortens the life of the trust fund. that's what's in this budget. immigration reform may not pass but we know as proposed in this budget is borrowing from peter to pay paul. why is that a good idea because i think we're in a real pinch regarding these trust funds. >> first of all, it would be terrible to let folks who have paid into the disability into the social security system have their benefits cut by 19% next year. what we're proposing is a solution that on a bipartisan basis has been done many times before. it's a very, very small impact
on the retirement trust fund. i would agree -- >> it's a big impact because i think it's a fiction. when you look at trust fund numbers what matters is cash flow. the cash flow goes negative 2019. if you take out interest it's in negative cash flow right now. we're exacerbating that trend line with regard to future borrowings based on borrowing from something that's now negative cash flow or going to go negative in the immediate future which plays straight into it. you just quoted cbo. you've quoted cbo throughout testimony. the place where you don't quote it is in economic projections. there's about a $2 trillion delta in with regards to where cbo is and where you guys are.
if we run by cbo your budget is about $2 trillion out of balance. >> we're quite close in our economic projections to cbo. where i think we can agree -- >> quite close is $2 trillion. that's quite close? >> on the economic projections that's not accurate. >> that is accurate. >> i think where we can agree -- >> where is that inaccurate? >> i'd be happy to spend time afterwards talking about the specifics of where we are relative to cbo. the important point is where we agree is that while social security isn't a primary driver of our deficits and our debts, it is something we ought to look at by doing the reallocation. >> i've got five seconds. the budget this year increasing government spending. revenue by 16.7% expenses.
why is this a good idea? i'm love to get this in written format. >> you'll be able to respond in written form. the gentleman's time has expired. >> thank you. i do want to welcome my colleague from wisconsin. i served in the state legislature. always glad to see you mr. director. i want to commend the president on including more money for the sec, the cftc and the consumer financial protection bureau. we hear many complaints in congress on a bipartisan basis about wall street having run amuck. about wall street having depends on who's estimate you believe. maybe something in the weight of 16 trillion worth of damage to our economy. i really do appreciate the
president, the sec has complained and so has the cftc they have complained they can't really do their jobs without those being those expenditures those resources being raised. having said that, we see some recovery in our economy and yet my colleagues not with standing that have said that the poor have become more poor as a result of the president's policies and i am just, just for the record sort of reminding and maybe you can remind us a little bit about the conditions that the president faced when he raised his hand in january of 2009 briefly. >> frankly we had the worst economy of our lifetimes and poverty rate was skyrocketing.
unemployment wadss at 800,000 new jobs lost every month. obviously, we've seen substantial improvement from there. >> i want to remind the committee and those who maybe knew that these were not policies. i was here during, i think it was the 111th congress when secretary paulson said we need $700 billion or else we won't have an economy tomorrow. i want to commend to my colleagues who say that it's the president's fault that may not be true. also i wanted to i was very curious as to why we have so many members on this committee to my delight are defending the
poor. i want you to remind us about the 112th and 115th congress the billions of dollars that were cut from food sustaining programs, food stamps, fights over the pell grant, unwillingness to provide unemployment insurance. can you just remind us briefly. >> sequestration, in particular has had a very negative affect on a number of programs. from my own experience at hud there were tens of thousands of families who lost housing assistance or in line that would have gotten it or didn't get it. particularly on homelessness and a range of other areas. i think there are areas in this budget where if we can get some
bipartisan movement we could significantly improve the prospects for our lowest income americans. >> i'm very happy to hear that. i was really happy to see the early childhood home visiting program and your anticipation that is going to lift the most vulnerable out of poverty, our children. i also heard a couple of our members refer to social security as a giveaway. i just wanted you to clarify for us what the social security program does and whether it deserves that characterization. >> as i said earlier these are benefits that have been earned. families have been paying in throughout their working lives to social security. we ought to protect those benefits. >> i thank you so much. i yield back the balance of my
time. >> the gentleman from iowa recognized for five minutes. >> thank you for providing your insights on the budget and the economy today. >> thank you. >> on your opening statement you stated we cannot afford a return to mindless austerity and i just would like to say with all due respect, the good people of iowa that i represent would not agree with you by increasing the federal debt by nearly $8 trillion under president obama is mindless austerity. i think the president's administration and your office lose credibility when we make those types of statements. isn't it a fact this is the worst economic recovery in the united states history post-world war ii. >> i don't believe that's accurate. >> it is. it is accurate. your budget has a ten-year average gdp growth rate of 2.5%
is that correct? >> that's roughly correct. i don't have the numbers in front of me. >> do you happen know what the average for the last 50 years of gdp growth for economy? >> i don't have that in front of me. >> it's 3.3%. in essence the president is projecting over next ten years a below average economy. is that correct? >> i think the president is suggesting that we invest in things that will grow our economy faster. >> if that were the case why are we projecting a less than average committee? >> we are suggesting the in investments should have a pos tifr positive impact compared to what we have. >> you're projecting, this is a
fifth year average, you're projecting a less than average economy. >> we are not, unlike dynamic scoring, or a range of other things projecting substantial impacts on these figures because that's not what is traditionally done on budgetary forecasts. >> i come from the private sector and just to draw an analogy, this would be like the president saying we're below average. our revenues for the next ten years are belowew average. our expenses will be above average. your pay will be below average. that in essence is what this budget is telling the american people. i know what i would say as a shareholder. i'd say you're fired. what would you say?
>> i would say we should come together on a bipartisan basis and invest in the things that will grow our economy that will help prepare people to take those jobs and that's what our budget does. >> when i talk about the economy in iowa i get asked this question. an 82-year-old lady asked me this last friday. she said can't we do better? can't america do better? how should i answer her? >> i think we can do better. >> why are you projecting a below average economy? >> we have laid out a very specific plan in our budget to do that and we hope we can work tot to get some of those things done. >> since this president took officer, working families household income is done. working families household net worth is down. you give a pretty rosy opening
but a poll said 50% of americans believe we're still in a recession. i believe tthsit's because their net worth is down. why do you believe 50% of americans still think we're in a recession? >> when we came into office we were in the midst of the worst economic recession of our times. we have fought hard to recover from that. in fact, when we have come together on a bipartisan basis, reverse sequestration what we have seen over the last year is the fastest decline in unemployment in 30 years. totaling 11 million jobs. we have begun to really turn this recovery around from one of the great recessions of our --
in the history of the country. we need to build on that and do more. what's what we're proposing. >> the gentleman's time has expired. mr. ryan is recognized for five minutes. >> thank you. congratulations on your promotion. we live in a society today where we put our food in the microwave and hit a button and hope in 35 seconds we've got a hot meal. if we're driving around we can go to fast food restaurant and immediately eat. if we get on the internet we try to click and if a web page doesn't come up in 2.5 seconds we're upset that we can't access it quick enough. i understand that urgency that we all have culturely now. i think this hearing there's a high level of delusion coming from my friends on the other side. i say that with all due respect. no one talked about the previous
decade on how we got to a point where our deficits were almost 10% with a complete economic collapse. it wasn't our economic philosophy implemented at that point. it was yours. you had the house senate you implemented supply side economics. you deregulated the markets. you fund the police on the beats and make sure everything was happening in the up and up. then the economy collapses and here comes president obama trying to fix the mix. i remember being here and listening to all my friends on the other side. pass obama care, the sky's going to fall. the economy is going to collapse. we're not going to be able to grow the economy, unemployment rate will shoot through the roof. deficits will go up, not down.
same with unemployment. i'm sitting here looking at the numbers. 9.8% deficit is the percent of the gdp down to 2.8 in 2014 and 2.5% projected out to 2025. you see what's happened with health care. insurance premiums, 10.8% prior to for individual markets. 8.7% growth after the affordable care act. small group insurance 10.4% growth prior to. 6% growth after. these are facts. instead of sitting down with us saying we've got other things we need to do, this isn't perfect. how do we get wages up? i think that's the kind of conversation the american people want us to have, not revisionist history as to how everything that is a problem in society is
president barack obama's fault. i'm thinking that he was responsible for the interception at the end of the super bowl game and the republicans are going to blame obama. he called an audible and he shouldn't have. that's the level of scrutiny and unfairness coming to the president. now, as i said, the sky was supposed to fall and we've had these things. i want to make two quick points. on the tax expenditure piece, the reason it's an expenditure because if the tax rates were going to stay. here is the tax code everything stays. here is the money that's going to get generated and we come in, congress, president and we carve out little exemptions for certain company, credits and all the rest. that number goes down. all things being equal this is the number we would have but we come in and manipulate the tax code and those are called
expenditures. it's a market distortion for our conservative economists. i'm okay with some market distortions because i don't worship the free market like it's infallible. i'm okay with some of these incentury tifrsencentives in here. let's be honest about what it's called. lastly, your budget, and i commend you for it is going to put money in the pockets of average people. if you can have community college where you can save some money and go get retrained or send some kids to school, that's money you don't have to spend on community college. that's a good, that's a public good. child care same way. while we got to work to figure out how to increase wages, these are programs the child care the universal preschool these are things that will move our economy forward. lastly, i'd like to say we had a tiger grant in my community, in the city of kent. $20 million, drew over $120
million of additional investment because of that targeted. we have the first manufacturing institute. we had a company come in because of the institute and donated $440 million in software to youngstown state university. we have corporations now in downtown youngstown. your budget -- >> the gentleman's time. >> your budget understands this. i commend you for that. >> mr. palmer is recognized for five minute. >> thank you, mr. chairman. earlier, alice in wonderland was mentioned. i'd like to bring up a fable about the ant and the grasshopper. i think we're all familiar with that. the ant was very diligent in preparing for the winter. warned the grasshopper he should as well and the grasshopper was dismissive and undisciplined. we know how that turned out. when winter came, he starved.
the fiscal winter is upon us. if this budget is any indication, this administration is playing the role of the grasshopper. the obama budget still has a deficit of $463 billion adds almost 1 trillion more to our debt. this might make since to the administration but it defies some common sense. if you spend more than you take in each year especially with a $19 trillion debt, can you honestly believe this is a responsible budget? >> i believe if you look at the record -- >> it's not the record. if question is if you spend more than you take in is that responsible budgeting? >> this is a responsible budget. it keeps deficits below 3% of
gdp, a widely recognized stand reduces our debt. >> you mentioned in this budget there are savings in medicare and medicaid that are generated through the independent payment advisory board. aren't those savings really going to be on the backs of seniors who are denied services? >> in fact the so-called ipab only, the recommendations only kick in if savings in our health care is not as much as we would expect and most importantly, the recommendations can't deny service and anything they recommend comes to congress for approval. >> i just find it astonishing that so much emphasis on taxing job creators the people who create jobs. i understand who the job
creators are. i find it astonishing that you want to punish the job creators yet count savings against seniors who very likely will be denyied access to services. let me ask you this. you impose a 14% tax on untaxed foreign income. a minimum of 19% on all future foreign income on u.s. business. at a time when some of our biggest companies such as burger king and medtronic are moving their headquarters overseas and countless others are look at it because the u.s. is punishing tax code. what makes you think that adding more taxes on these companies for doing business internationally will keep them rooted here? >> actually our business tax plan would lower the domestic rate from 35 to 28% and it has specific provisions that would stop companies from these
so-called eded inversions and create incentives to bring money back home, bring jobs back home and invest it here in the u.s. >> a long way off from making us competitive with other countries. >> you mentioned the savings generated through this administration's savings policy. given the likelihood this congress will not pass this administration's budget, how much does the president plan to do through executive order? >> the president has already taken action within the power that law grants him. he's made clear -- >> he's taken action beyond the power of the law. >> he's made clear that congress should act to change the law in way that would not only grow our economy but bring down our deficit. >> he also says he has a pen and phone.
he's already used it in an unconstitutional manner. i'm wondering if there's been any discussion in the white house about implementing some of these things. this irresponsible budget through executive order. >> i think when the president took action last year he made clear that he was acting within the authority granted him by law and that there were additional steps that congress needed to take that on a bipartisan basis the senate came together and agreed to and that those steps would have powerful affects to grow our economy and reduce our deficits. we ought to come together and take those steps. >> the gentleman from michigan is recognized for five minutes. >> thank you for being with us today and for your testimony. there are a number of new spending programs in the president's proposal, but one area i was interested in and i
wanted to get your feedback on the great lakes restoration initiative. there was a $50 million cut. i bring that up because you may be familiar with the asian carp situation and i believe that's used fight species in the great lakes and there was edna found on asian carp. the equivalent of one city block away from lake michigan. the great lakes has about a $7 million fishing industry and the asian carp would be a serious threat to that. at the time when we're offering free college and all sorts of other increases in spending and different programs, why did the president recommend cutting spending in this important area. >> specifically there, there is
a significant amount of funding from prior years that's still available. we felt that by combining the $250 million we're proposing in our budget existing levels and hundreds of millions of dollars of other funding that is not in that specific restoration initiative but in other parts of the budget that would maintain the health of the lakes that we have sufficient funding in the budget to continue the important work that you're talking about. >> do you feel because as in michigan and throughout the area there's a feeling that there hasn't been enough progress made. there seem to be delay after delay and at the same time the army corp. of engineers and epa is focusing on other priorities whether it's regulating the water on farmers property or
other priorities against coal it seems that this area of fighting and having a long term solution that's implemented quickly is not a priority and i guess i'm curious why isn't that money being spent that has been allocated and secondly isn't there a way to make this a more urgent priority on the part of the administration. >> i want to assure you this is an urgent priority. we can sit down and talk about the issues around the prior year funding and how we accelerate this. >> just another question on the community college proposal. how was that proposal developed? was it in consultation with the
community college association where people consulted on that? i haven't heard the exact amount of dollars the cost estimates both for the federal government as well as for states and what that means. >> there was extensive conversation with a broad range of not only community colleges but others. it's structured this partnered with states that are interested this doing this. what we're doing is offering incentives that need to be matched by the state and structuring it in way so-called first dollar in to ensure that
it not only would help cover tuition but that oir funding that a student might be bringing themselves to cover tuition can be used for covering books all the other costs around community college that often stop access from happening. there's not a cost estimate. >> there is. i don't have it in front of me. $60 billion. >> the gentleman's time is up. >> i think you answered my question first you would have been done a long time ago. appreciate you being here. i understand your math on the $400 billion in projected savings on medicare and medicaid. i'm an engineer. the math is easy to understand.
the logicdge logic is harder. there's another eight to nine million americans eligible for expansion funding in the states that haven't expanded. i assume the administration is holding out the other states will expand. how much has been spent on medicaid expansion today and the second part is how does the administration budget for the potential enrolees and how much is in the president's budget for that? >> i'll have to follow up with you on the exact figures. we do budget for projected
enrollment based on an expectation of further states. i don't have the exact figures in front of me, enrolling and joining. those costs were fully projected as part of the original estimates and scoring done by cbo. they showed it would contribute to deficit reduction. >> is it safe to say that medicaid costs are projected to increase from the levels they are right now? >> that is why these savings proposals are critical. it's also why the cost saving measures that were part of the affordable care act more broadly and dramatically reduced the expected cost of medicaid going forward are so important.
>> are you cutting costed in med medicaid? >> what we're proposing to do in our budget would make changes that will reduce costs to what we expect. that's the critical factor. >> i think the critical factor we're seeing expanding medicaid costs and a growing population that depends on medicare and saying we're going to save $400 billion in those two programs. it's easy to see it's not equitable for expansion states
to receive dollars while non-expansion states see nothing. under expansion a state can get 100% funding for a 28-year-old medical school student while the same state might only get a 50 to 75% funding rate or match rate based on the state for a disabled child. do you think that's fair and equitable and proper use of america's hard earned tax dollars to have those match rates set up that way? >> the act was structured in a way to encourage states to expand medicaid.
in fact, to go to your larger point, those folks are getting medical care somewhere now. they're going to emergency departments, those are costs that are typically falling inging on state governments already or hospitals or others and often those costs are higher because their waiting to seek care when it's an emergency. if you look at the broader picture if we're implementing expansion, we're seeing it's a very responsible fiscal choice that they're making because not only are they improving the health of those citizens, they're lowering emergency care costs and others that are falling either to state governments or to private hospitals and others that have to absorb. >> gentleman's time had expired.
ms. black is recognized for five minutes. >> i know this question has been asked but i want for the record, does the president's budget balance at the end of the ten-year window? >> the president's budget meets the key fiscal tests that we set out -- >> that wasn't the question. yes or no? does it balance at the end of the ten-year window? >> it achieves the key fiscal targets that we set bringing deficits below 3% of the gdp throughout and reducing the deficit by $1.8 trillion. >> thank you. i'm going to reclaim my time bauds i know it adds $8.5 trillion in debt. that's a direction i don't think any of us should be going toward. i want to take this to a point in the budget that it comes back to very personal thing to my state where the president is
offering this new program where folks can get a free community college education. he did come to the state of tennessee and visit us and he patterned it off of the tennessee promise program. i want to clear for the record that it is not the same. it's being said this is the same as what we're doing in tennessee. in tennessee the students must be high school graduates coming out of high school. the program requires that there is a mentor. they have to do community service time. it's a 2.0 gpa and it also comes from the lottery reserve, so it's not an additional debt for our state. what i see in the president's budget is that we're going to have a $60 billion cost of over ten years. that's not also including if this were handed down to the states what their cost would be.
it's about another 20 billion dollar for the states. it's a different program entirely. it's paid for in a different way not by taxpayer money but by lottery money. how did the administration arrive at the estimate for the cost of this federal program over the ten years? >> i don't have that detailed information in front of me. i'd be happy to provide it tot your officer afterwards. it's more than fully paid for by other savings and revenues that we have in the budget. it's fully offset. >> by additional taxes not cuts? >> we do achieve savings on the spending side as well. it's fully offset in the budget. >> additional taxes. how many additional new tax will be in this budget? >> what we do on the tax side,
we have 44 million families, middle class families who have their taxes cut by an average of $600 per year. that's fully paid for. in addition, we have about $640 billion of loopholes that we close and other revenues we raised from highest income changes and we have significant revenues that come from new workers. >> if i could reclaim my time sir. thank you very much. since the federal government has become a main player in the student loan market we've seen a skyrocketing of tuitions. what do you think this program is going to do considering what we've already seen has occurred as a result of the federal government getting involved? >> actually what the president has done during his time in office is to dramatically increase assistance to students
through increased pell grants and a number of other means. we're proposing in this budget to significantly expand tax credits for families that are paying for college to help them and we have created a score card which could hold colleges accountable to actually lower their costs and driver down tuition. >> that does help me because that tells me you've done something on the other side. i'd like to see that information. there's a great concern that policies and especially this with the student loans, we have seen the tuitions really go up and really push a lot of those lower income and middle income out of actual market. i just want to end here by saying that i'm very concerned about the states and what kind of mandate this would place on the states because $20 billion for states that are already struggling is a lot of money. thank you. >> it's fully voluntary. i would point out. there's no mandate here.
states can choose to join the program or not. >> i think it would be difficult for states if you're putting that out there for them to make that decision but thank you. i yield back. >> the gentleman from virginia is recognized for five minutes. >> can you hear me? >> i can. >> what's your background, economics? >> i have a public policy degree. >> the only reason i ask, i'm trying to be bipartisan here and go through some numbers and get the state of economy. if a member asks does the budget balance within a ten-year window and we can't get a yes or no so we try to do science and answer the value judgments are off the table but the facts are all very much on the table. i just wanted to go through some other numbers that are even bigger than that.
i'm just kind of disappointed we can't get a yes or no on that simple economic question. i want to go bigger in terms of the macoeconomy that affects the work we're doing. we're trying to put together a budget that bipartisan moves the company in the right direction. the fed has three and a half treasuries on their books. if you look at the strength of the economy everybody knows the stock market is up. when ever we do quantitative easing peel 10 or $20 billion off, the equity market gets in a spin. is that your -- do you view the equity market in that way too. >> i guess i'm not sure what the question is.
>> i'll move on from that one. on the deficit i was in earlier and you said it's good news, the deficits are going down. i agree with you. we're moveing in the right direction then they go up by over a trillion dollars by most forecasts. that's in the bigger environment that that also is lifting up the macroeconomy if you're spending borrowing from future generations that's going to lift your current economy. how do you view the intergenerational fairness on the next generation when they're at $18 trillion in debt already. we'll be adding 460 billion this year. how are we doing them a service if we keep moving in that direction? >> i think the numbers are under current policy. this goes back to the key tests i said our budget meets which is instead of debt and deficits rising as a share of gdp we
stabilize them and begin to bring them down and part of the reason for that is that we focused on the key drivers of those long term deficits and done things in the budget that the impact grows over time like the revenue changes that we have, like the health care cost changes and immigration reform. >> good. i don't want to dwell on. the immigration reform, that thing scored in terms of helping social security. that was scored out till what year? if folks come in and tribute to social security how many years is that scored out? >> it's not just social security. we have a fundamental demographic imbalance. we bring in more workers. they're paying income tax as well. >> skip that one. i got a minute half.
bigger issue in terms of you trying to do some good moves on the deficit side and have some policy drivers that are driving the right way. the entitlement side is go to the bottom of the debt clock it's at 125 trillion. not only the debt burden but the entitlement burdens, those four programs take up the entire u.s. budget by 20 be32, i think it is. most of the programs are insol insolvent by 2032. i tell seniors all the time, everybody say within a ten-year window we'll take care of you. there aren't going to be any programs in 2032. there's none for the next generation. what are the drivers we're using to fix those? >> health care costs are the
single biggest driver. i think what we can do on bipartisan basis is work together. we put the fix in our bill and added a number of reforms that could accelerate delivery cost reform. we have $400 billion just in the ten ten-year window that do hopefully accelerate the trends that we have seen. we can do more on a bipartisan basis in that area to make a difference. immigration reform we should recognize is an enormous impact. >> the gentleman's time has expired. >> thank you for your time here. i want to read you a statement that former president made. we have experienced four straight years of surplus. a stretch of prosperity last seen world war i. for three years in a row we have been able to pay off 363 billion of this debt and expect to pay
off 600 billion by the end of this year. with a sustained commitment to fiscal discipline to use the surplus to pay down the debt this nation can be full by debt free for the first time since 1835. we can eliminate the publicly held debt by the end of the decade and strengthen our economy in any idea who said that? >> i've got a pretty good idea. >> president clinton said that after he left office. the president's already said that a democrat president working with a republican congress can get things done. reading your testimony here and following up on mr. sanford's comments. in your second paragraph you talk about mindless austerity. i think we need to be careful with our rhetoric. that mindless austerity has go
back to the first paragraph and you say that the budget comes on the heels of a breakthrough year for america. today america's a soupenergy super power. if this mindless austerity has caused this i think we need the go back and re-examine. even though the president's sequester is not what everybody wanted, but the president should have been careful in asking for it because even though he may not expected it to happen it happened. that's the only reason why we're seeing deficits being reduced. it's not because of an act of congress. it's because of inaction of congress in the white house working together. i would like to display a chart on the screen if possible another quote that was actually
said not too long ago says that our national debt is our biggest national security threat. former chairman of the joint chiefs of staff admiral mike mullen made this statement. looking at the net interests spending compared to other spending in fiscal year 2025. if do you look at where defense spending is compared to net interests, isn't the debt our greatest threat to this country if we start to see interest continue to rise at the rate that it's going? >> you heard the testimony of the joint chiefs this past week they said, specifically that sequestration was a major threat to executing on the president's national security strategy. >> not the greatest threat. admiral mullen says our national debt is our biggest national
security threat. do you agree with that? >> i guess i would say that making the key invetsmentes in our defense in middle class families if we don't make thoeds invetsmentes i would say that is our greatest threat. >> who needs to make the investments, the federal government or the private sector? >> on the national security side we have key -- this is not about public versus private. this is about ways to work together with the private sector whether it's infrastructure or rnd or a range of other things. >> going back, do you agree with mr. mcclintock that a dollar came from taxpayer? >> absolutely. all of the spending is more than
offset by other spending or cuts and wasteful spending in the tax code. >> the debt is going to double under, almost double under president obama's administration. >> under our proposed budget we would reduce deficits by $1.8 trillion compared to what we're expected. >> the federal debt was 6.3 trillion. today it's over 18 trillion. almost 20. the fact is it's only going up. the net interest that's not something we can change in our line items in our budget and say we're going to just pay less interest on our debt. >> looking at nominal dollars without inflation. let me go back to one point you made quickly. sequestration is a small part of what has reduced our deficits. >> gentleman's time had expired. >> a range of areas are important. >> gentle lady from missouri
recognized for five minutes. >> thank you. following up a little bit on our discussion about national defense, your budget shows the department of defense is requesting an additional $38 billion above the cap to make up for readiness shortfalls in the budget and there's the dollar for dollar match that's been mentioned in spending between non-defense as well as non-defense portions of the budge tt for the first six years. >> as the president said earlier this week, our national defense and our economic future are intimately linked. we can't do one without the other without shortchanging the economic future of the country
and our national security. veterans benefits, the department of homeland security all of those are funded on the so-called non-defense side. those are critical for our national security as well. >> i don't see the break down between those. our budgets have always provided for our veterans. can you explain how our national security strategy and the necessary funding to execute that strategy should be contingent upon a dollar per dollar match? >> i think what we're saying is that we got critical priorities whether it's investing in our kids, rebuilding our roads, making sure we're keeping the american economy innovative through rnd. that's critical to our national security as well. >> okay. what are the threats in the world today that are in the presumptions that under the president's budget?
what are the threats today? >> detailed examination with the department of defense of the current national security strategy and we added in targeted places that enhance our capacity. the intelligence gathering that we have range of areas driven by the joint chiefs. >> i wanted to go back to the observation that it raises just the first six years and now i'd like to call up a slide that shows that and actually from the year 2022 to 2025 you decrease both of those. by the end of the ten-year window you're only increasing defense spending by 9 billion
dollar by inkreetscreasing the non-difference by $200 billion. why it is proposing more for non-defense. >> we have worked with defense. we have done that through reversing sequester over the remaining six-year period. >> do you believe non-defense spend sg of greater national priority than defense and deserves more funding? thaths that's what the budget reflects. >> i disagree that's what it reflect. >> it's not shown on this. >> in the spirit of trying to get progress here, what we've done is build on the precedent
of the murray ryan agreement. dollar per dollar increases fully offset by the changes. this is not our model. it follows what congress has done successfully on a bipartisan basis. >> i believe this budget reflects addressing threats in this world. the defense strategy is being dollar driven rather than threat driven by this president. we need to look at threats. we need to get our priorities back and the budget should reflect that. with the few things we should do in congress is provide for the common defense. these cuts that have taken place do the military are devastating and the president's proposal does not address those shortfalls. our national security is at risk and i think we can do better and we will as a committee here. thank you very much.
i yield back. >> gentle lady yields back. we got more than enough time for the most patient member who is recognized for five minutes. >> thank you for your patience. first of all, she left but i'd like to think it's good news that representative moore is back and feeling better than she was a while ago. also like to thank i know there's going to be some administrations but like to thank you you and the administration for introducing mindless austerity into the american lexicon. earlier a couple was talking about the husband running up the credit card and the wife paying for it. now we have them use mindless austerity. going over this one more time, ten years out, you are not close to balancing the bumdget?
is that something we should be working towards? >> i think what the budget ought to aim for is making the key investments that we need to grow our economy and make sure we have a strong middle class. to do that in a fiscally responsible way and that's what our budget achieves. >> you believe adding trillions of dollars to the federal debt that will have to be paid off by children or grand children, by your definition that's fiscally responsible? >> this budget reduces deficits. it's a total of 1.8 trillion dollar of reduction than the path we're on. >> one of the things that's been thrown out there is way of reducing federal spending. most states when they're saddled with responsibility say we'd be willing to take less money if we
get more freedom on how we spend the money. would the obama administration be willing to look at say block grants for medicaid as way of reducing spending? >> obviously i haven't seen details of the approach but in general, the proposals that we've seen to block grant medicaid harm beneficiaries and don't end up providing health care in a way we could support. we do have in the budget this year, a proposal that would work with states and localities with a number of block grants to try to give them more flexibility. it's something that we think on a bipartisan basis would be worth while to pursue so there are places where we could work together on a bipartisan basis to give states and localities more flexibility but blocking medicaid is something at least
in the proposals that we've seen leads to better protection for american families . when hi, deal with superintend ants they complain with federal involvement in local education. they almost uniformally say they'd be willing to take less money if you take away the federal regulation that go was it. i think soon they are going to authorize the no child left behind act. would it be something that your predecessor signs that i never did like. do you think it would be a good idea maybe to reduce the amount of education funding so some of the states if we removed some of the mandates. >> first of all we should be focusing more on education not less but certainly if there are burdensome requirements that don't serve a purpose, we're happy to look at those and try to make changes what i will say though on a bipartisan basis there's been support for
creating more accountability for results, not for paper work or needless regulations but results and that is something that's absolutely critical. it has helped us to make progress to have the highest gradation rate and something that we do think should happen when we authorize no child left behind. >> one question for you. there's something here that bothers me a little bit you're -- which is fine. i appreciate you realize maybe the important job in america is raising children and you're increasing the child -- the dependent care tax credit. one of the things that concerns me a little bit about that is there are some parents -- some families in which bother parents work and some parents are making a sacrifice in which one parent states home. nevertheless you have a substantial tax reduction for families in which both parents work and are leaving aside, you
know, the families in which a huge sacrifice is being made and there's not a child care expense. could you comment on your apparent dislike or not caring about -- you know, the huge bias against families that are not using daycare. so first of all you may be referring to the second earner credit that we have in the bummet as partbum et budget as part of a -- >> the gentleman's time has expired if you've got a short brief answer. >> we have lots of other ways that we're supporting one earner as well as two. >> this concludes our hearing. i want to thank you so much for appearing before us today. please be advised that members may submit questions that may be answered in writing and may be
on the next washington journal, national journal technology correspondent brendon on net neutrality egg regulations of internet providers and we will talk to hampton virginia university president william harvey. washington journal begins at 7:00 a.m. eastern time. call in with your questions and comments and send in your thoughts through facebook and twitter. thursday, president obama delivers remarks at the national prior breakfast. the dauly llama will also be in attendance at the live event. live coverage at 8:00 a.m. eastern on cspan 2. here are some of the our featured programs for this weekend on the networks. on book tv saturday night at
10:00 afterwards. the washington bureau brief on the british efforts in 2009 to top the taliban. >> and the u.s. senate's torture report and why his company decided to public it and on cspan 3 all this month, interviews with former korean war pows including charles ross who was held as a pow from 1950 to 1953 by china and a look back at the voting rights acts 50 years later with cbs news white house correspondent bill plant. you can find our complete schedule at cspan.org. >> e-mail us @firstname.lastname@example.org
or send us a tweet. join the conversation like us on facebook follow us on twitter. the senate ageing committee examined exploitation of seniors on wednesday. this hearing is about 90 minutes. good afternoon. it's my great pleasure to call to order the very first hearing of the senate special committee
on ageing in the 114th congress. i've had the honor of being a member of this committee since my very first days in the united states senate and i'm delighted to now assume the chairmanship. this is the first time that a main senator has sharped the committee since the late 1990s when my predecessor and good friend senator bill cohen whom i worked for for 12 years served as the committee's chair. i'm also pleased to welcome both new and returning members to this committee and i'm delighted that my good friend and colleague, senator clair mchascle of missouri will serve as the committee's ranking member. senator bill nelson the former
committee chairman has also chosen to remain a member of this committee and he will continue to share his expertise. throughout history congress has been urged to take action and it has done so in a bipartisan manner manner. i will continue that fine tradition working closely with senators and all of our members. this year the committee will focus on three major issues, retirement security bio medical research investment that disproportionately act your
seniors and other scams targeting older americans. today, we will examine the harm of some of our most vulnerable seniors. this committee has come to light many schemes that have defrauded seniors out of their hard earned retirement savings. it is deeply troubling when a senior falls victim to one of these schemes. even more egregious is when the perpetrator is a family member, care giver or trusted financial advisor. financial exploitation of older americans is a growing skpedand