Skip to main content

tv   Treasury Secretary Urges Congress to Raise Debt Limit Before Summer Recess  CSPAN  June 16, 2017 3:22pm-5:20pm EDT

3:22 pm
this week. he shares his thoughts on what the trump administration is doing to address veterans' needs. watch the interview sunday at 10:00 a.m. and 6:00 p.m. eastern on c-span. c-span. where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies. and is brought to you today by your cable or satellite provider. next, treasury secretary steven mnuchin outlines the president's 2018 budget request before the house ways and means committee. he also testifies on other priorities for his department, including the debt ceiling and the president's tax policy agenda. this hearing is just under two hours.
3:23 pm
>> the committee will come to order. good afternoon and thank you all for joining us today. our committee is honored to welcome treasury secretary steven mnuchin to testify on
3:24 pm
president trump's budget procedural for t proposal for the treasury department. our annual hearing with the treasury secretary on the president's budget plays an incredibly important role in our work, setting the stage for collaboration between the white house and the treasury department. it will help us identify in advance efforts to grow our economy, create jobs, and increase american safety. today's conversation will help encourage a constructive, open dialogue focused on challenges facing our businesses, workers, our communities, and our country as a whole. reading through president trump's fiscal year 2018 budget proposal, it's a welcome change to see that this budget, unlike the obama budget of the past eight years, balances in the next decade. the president's proposals take much-needed action, grow our economy, create jobs, and help
3:25 pm
more americans move from welfare to work. we're also pleased to have president trump's leadership on tax reform. secretary mnuchin, as you're aware, pro-growth tax reform is a top priority for our committee. in the past six days we've held two full committee hearings on tax reform. we've heard from american businesses large and small, they're eager for a simpler, fair, and more competitive tax code. they want to hire more workers. they want to increase paychecks. they want to invest in the future of this great country. they were eager to hear more of the president's proposals to create jobs, grow paychecks, and strengthen our economy for the long term. america faces a number of significant policy challenges with a broken tax code, an unsustainable national debt, and an economy performing well below its potential. these challenges do not only impact red states or blue states. they impact american workers and families in all areas.
3:26 pm
and tit impacts constituents of every member of this committee, republican or democrat. we're committed to work with president trump and to you, secretary, to solve them. we look forward to hearing your testimony. i yield to distinguished ranking member mr. neal for the purposes of an opening statement. >> thank you, mr. chairman. a parliamentary inquiry. >> yes, sir. >> mr. chairman, how will members be recognized for the pumps asking questions to the witness? how does the chairman intend to implement what we know as the givens rule? >> committee rule 14 states that members who were present at the beginning of a hearing will be recognized in order of their seniority and other members arriving after the gavel will be recognized in order of their appearance. this allows the chairman to adjust the order of recognition so as not to disadvantage members of the majority.
3:27 pm
this is why we often go to a two to one ratio at some point during the hearing. mr. neal, i am sensitive to the issue you have raised and will endeavor to use my discretion in a way that doesn't disadvantage members who were on time. this may look slightly different at each hearing depending on the circumstances. but i and my staff will work with you and yours to achieve a fair outcome. >> thank you, mr. chairman. there were some of us on the committee who were actually here when mr. givens was the chairman of the committee. thank you, mr. chairman. >> mr. neal, you are recognized. >> thank you, mr. chairman. mr. secretary, it's a pleasure to see you again. thank you for joining us today. a budget is a reflection of one's values and president trump's budget is no exception. the president's budget cuts program after program that middle class families rely on every day. you name it, the community development block grant program,
3:28 pm
stafford loans for college students, all drastically cut or zeroed out. the budget also breaks the president's repeated promise not to cut social security and medicare. it can you say social security benefits by more than $600 billion, on top of more than $800 billion in cuts in the republican health care bill. it would also restrict health care coverage for children under the chip program significantly. for democrats, our values today reflect a strong commitment to the middle class. for every issue we consider here in congress, the first question we will ask ourselves and the majority is the following. will it help working families? if the answer is no, we won't support it. let's face it, for many american families this has not been an easy time to make ends meet. you work hard every day, sometimes in multiple jobs, and it's still tough to earn enough money to make sure there's adequate food on the table and a
3:29 pm
roof over your head. it's in particular a struggle for many young americans today. the front page of "the washington globe" this week included a story about how the loss of blue collar jobs is forcing young men to fall down the income ladder. this is a reason why working families sent a strong signal to congress last november. many americans were convinced that president trump understood the importance of the middle class and that he would be a different kind of republican who would work, finally, to make sure that they would have an edge and an opportunity. unfortunately, the budget that we have witnessed in the last 48 hours is one that has let those people down in dramatic fashion. we were elected to help america's working families. that's why our priority must always be the middle class. what are some democratic priorities? a key priority is to provide affordable quality health care for all americans through programs like medicare, medicaid, and chip. more and more middle class families rely on medicaid for long term care.
3:30 pm
it pays for 60% of nursing home residents nationwide. it would be irresponsible to cut funds in this critical program. the reason mom and dad aren't living in your attic is because of medicare and medicaid. 95% of the american children have insurance coverage thanks to medicaid, chip, and previously, bipartisanship. it provides coverage for working families struggling to make ends meet. we know the tax code is broken. that is why we continue to pursue reform. but we must reject ideology and move forward in a by partisan manner to create a tax code that is fair for middle class americans. middle class families are frustrated by a tax code that favors those at the top and an uncertain financial future. any tax reform plan must be about moving the dial to help middle class families grow and prosper. another priority for this side is very simple. ensuring that working families are financially secure in retirement. we're about to experience a retirement savings crisis in
3:31 pm
this country. according to boston college's national retirement risk index, half of today's households are at risk of not being able to maintain their preretirement lifestyles once they stop working. far too many americans aren't able to save enough for retirement. we support initiatives to heavy american save like the auto ira, making the saver's credit refundable. i'm a big supporter of tax incentives for retirement savings. we should be helping to rebuild and reinforce social security and allow it to continue to be the foundation of middle class economic security for 171 million workers who contribute with every paycheck, knowing that social security will be there for them when they retire. and if they become too sick to work and to protect their families in the event of their death. let me close by saying that we will continue our focus on this side to make sure the middle class is first. it's going to be true on every issue that comes before us, from
3:32 pm
health care to taxes to retirement. and i yield back the balance of my time. >> thank you, mr. neal. without objection, other members' opening statements will be made a part of the record. today's sole witness is u.s. treasury secretary steven mnuchin. the committee has received your written statement and it will be made part of the formal hearing record. you have five minutes to deliver your oral remarks, secretary mnuchin. welcome, and you may begin when you're ready. >> thank you. it's a pleasure to be here. chairman brady, ranking member neal, and members of the committee, it is an honor to be here today. my first time appearing before the house of representatives. i'm looking forward to working with members of congress in this committee on passing important legislation for the american people. my number one priority as treasury secretary is creating sustainable economic growth for all americans. the best way to achieve this is through a combination of tax reform, regulatory relief, and
3:33 pm
protecting taxpayers. this also includes making some difficult decisions with respect to our budget. we are currently bearing the cost of excessive government commitments of previous years. this has forced us into hard choices. but the remarkable thing about economic growth is that it builds upon itself. if we develop the right policies today, our children and grandchildren will reap the benefits of an ever-growing economy. indeed, in the next ten years, if we return to the modern historic average of above 3% annual gdp growth, our economy will grow by trillions of dollars. this will be meaningful to every man, woman, and child in this country and future generations. tax reform will play a major role in our campaign for growth. it has been more than 30 years since we have had comprehensive tax reform in this country. the administration is committed to working with you to change
3:34 pm
that. we have about 100 people working at treasury on this issue now. we are working diligently to bring tax relief to lower and middle income americans as well as make american business competitive again. all of this comes as we simplify the tax code and make it easier for hard working americans to file their taxes. finally, i would like to speak about the importance of free and fair international trade. few doubt that free trade is an important component of growth. but trade deals that disadvantage american workers and business can hardly be considered either free or fair. in meetings with my international counterparts, i have stressed this dual importance. just two weeks ago, i had productive meetings with the finance ministers of the g7. earlier i met with the members of imf and world bank. they understand our concerns.
3:35 pm
and we have approached our intern international dialogue with a renewed spirit of mutual understanding. president trump spoke about the marvels this country is capable of when its citizens are set free, including removing imprudent regulation and uncompetitive taxes from blocking their way. it's been a significant few months at treasury. we have been studying, developing, and implementing policies that will put this country on the path toward sustained economic growth. in coming months, we will work with this committee and congress and we will look back at an important time for our nation's economy and history. thank you and i look forward to answering your questions today. >> thank you, mr. secretary. first, thank you for your laser focus on jobs, especially those for the middle class. and certainly the recipe for
3:36 pm
moving this country forward are lower taxes, and the tax code built for growth. balancing red tape so our local businesses can thrive. and expanding our economic freedom to trade. as we know, it's not simply enough to buy american, we have to sell american all throughout the world. you play a key role there. mr. secretary, currently we have nearly $20 trillion in debt. and you are using extraordinary measures until congress addresses the debt limit later this year. to its credit, the trump budget cuts deficits by $5 trillion. but that still leaves increased in growing national debt of $4 trillion more. absent in your testimony today is any reference to the debt limit. though i know you continue to make the case for action by congress. as treasury secretary, you also serve an important role as
3:37 pm
managing trustee of the social security and medicare trust funds. together, these two programs are the largest drivers of our debt. more than that, they are under financial duress for the long term. and i worry about them. also absent from your testimony today is any mention of ways or even the need to improve the solvency of these critical programs, which i know we share. as managing trustee, shouldn't we be working to make sure that our children and grandchildren can count on these important programs, just like seniors and individuals with disabilities do today? mr. secretary. >> chairman brady, thank you very much for your comments. and i appreciate your focus on both the national debt, as well as social security and medicare. so first, let me just comment on the debt. we are very concerned that the debt has gone from $10 trillion
3:38 pm
to $20 trillion over the last eight years. and we believe that the most important issue is economic growth. as i said in my opening remarks, the difference between 2% and 3% sustained gdp is trillions of dollars over the next ten years. so that is our absolute focus. i would also just comment in regards to the debt limit. as you've outlined, i've used my extraordinary powers. but i would also like to emphasize for this committee and for the rest of congress, i urge you to raise the debt limit before you leave for the summer. we can all discuss how we cut spending in the future, and how we deal with the budgets going forward. but it is absolute critical that where we spent money, that we keep the credit of the united states as the most critical
3:39 pm
iss issue. it is the reserve currency of the world. we need to make sure we can raise our debt ceiling to pay our debts. >> as part of the upcoming dialogue, do you and the agency intend to present solutions for the long term security of medicare as you go forward? >> i take my role as managing trustee very seriously, as you mentioned. i begin to look at and review with my staff the draft reports that we will be reporting on the trust funds. and i look forward to working with congress as we work through that and look at it. thank you. >> thank you. is your -- final point, is your, to that end, so is your preference for congress to pass a clean debt ceiling? >> that is my preference. >> thank you. mr. neal, you're recognized. >> thank you, mr. chairman. and thank you, mr. secretary, for the assertive manner in
3:40 pm
which you addressed that issue, raising the debt ceiling. i was very happy that the chairman raised that question immediately. the debt ceiling used to be an issue we used to address here in congress in a bipartisan manner. your emphatic support of raising that debt ceiling is appreciated by all of us here today. based on long service with the committee, in 2001 and in 2003, there were tax cuts that totaled $2.3 trillion. they were advertised at the time as the basis for promoting strong economic growth. and in fact, that economic growth not only did not occur, but it was the slowest growth since herbert hoover had been president. yet the debt that we talk about today, it's conveniently suggested that somehow it happened during the last eight
3:41 pm
years. not only was there subpar growth in those years, but the deficits began to mount. there was a war in iraq and a war in afghanistan with a million new veterans who we are obligated to care for. then there was the recession, we were losing 800,000 jobs in some months. when you consider that social spending is formulaic, at the end of the clinton years there were 23 million new jobs, and an unemployment rate of 3.8%, the clinton economic plan appeared to work. and not only did federal revenue go through the ceiling, and secretary greenspan warned us we were paying down the debt too quickly, but we had balanced the budget for four successive years. the unemployment rate of 3.8% meant that social spending, much of which is formulaic at the federal level, also was reduced significantly. and i'm concerned that the model that is being offered and discussed, that i hope there
3:42 pm
will be a chance for us as we go forward, but i would urge you, based on long experience of many of us on this committee, that ideology as it relates to revenue frequently doesn't square with revenue forecasts. and trying to project what the future might look like, suggesting, for example, that automatically going to 3% growth, that most economists think that is unlikely. i think we would be supportive of what you would like to do, but getting there is very different than what we would all like to do. mindful of the fact that even as you propose 3% growth, i think we need to argue and acknowledge that that will not be an easy task, and modelling a tax cut for people at the top based upon 3% growth that might not happen seems to me to be a bit of a risk. you might want to respond to that. >> i'll first just comment, i know we all share a common view of trying to create economic
3:43 pm
growth in this country. and i hope we will all work together to do whatever we can on those shared goals. that is our number one objective. we've been working very closely with chairman brady and others at the senate on comprehensive tax reform. we think this is a critical component of economic growth. we fundamentally believe in dynamic scoring, which implies that when you change tax policies, you do impact behavior. there are many, many economists who believe this, like anything else, there will be different models that come out. when we present a combined tax plan, different people will have their views. i can assure you, we are very focused on being able to pay for tax reform. and we are looking at policies that we're going to do everything we can to get to 3% growth.
3:44 pm
>> thank you. mr. nunes. >> thank you, mr. chairman. i'll be real quick. mr. secretary, it was great to have you last week meeting with us. and i hope that that continues. we want to work with the administration to come up with a pro-growth tax plan. as you probably know, this committee has been working for a decade at reforming the tax code. and so the amount of work and work product that we have here in scoring, working with joint tax, is quite considerable. and i hope that you will continue to work with us as we move forward so that we can deliver the type of growth that you want to achieve. >> thank you. we look forward to that, and look forward to building on all the work and expertise, as you've been focused on this. >> thank you, mr. secretary. we appreciate you being here. mr. chairman, i yield back. >> thank you. mr. levin, you're recognized.
3:45 pm
>> welcome. i think it's important to look where there's common ground and acknowledge where there are deep differences. that may be the only way we find common ground. in february, you said there would be no absolute tax cut for the upper class. are you willing to sit here today and say, under the tax plan, there will be no, absolutely no tax cut for the upper class? >> yes, i did say that, and i think i was actually honored by some people at the senate who nicknamed that the mnuchin rule. i feel like i'm now in good company with the volcker rule and the buffett rule. >> i'm not sure it's the same company. >> well, i'll take it that way. in any event, the president's objective on the personal side of tax reform is to simplify the
3:46 pm
tax code. i think we would all agree the tax code is way too complicated. the irs is too big on reviewing -- >> mr. secretary, i agree with that. but if you would, would you answer the question? >> i am. i was going to get there. so i wanted to start with the president's objective is to have a middle income tax cut. and that's consistent with what i've said earlier. right now, what we're looking at is cutting the taxes on the high end and eliminating all deductions other than mortgage interest and charitable donations. let me just say that this was a short form for the administration's proposal. we are working very closely, as i said earlier, with chairman grady and others on trying to reach a consensus for tax. but the president's objective is to create a middle income tax cut. >> okay.
3:47 pm
but that really doesn't answer the question. in the one-pager that came out, it cuts the top rate, eliminates the estate tax, repeals the amt, and repeals the aca investment tax for those earning over $200,000. so are you willing to sit here and say there will be no absolute tax cut for the upper class? >> again, let me just say, this is going to be a collaborative process for tax reform to pass. obviously it's going to be something that's got to be a collaboration between the house, the senate, and the administration. >> okay. so -- >> and when we come out with the tax plan, we will show the distribution. as you would expect. and you will see it. i would just comment, again, our objective is to cut the high end tax and get rid of lots of deductions that will offset that.
3:48 pm
>> thank you. time has expired. mr. tiberi, you are recognized. >> thank you, mr. chairman. thank you, mr. secretary, for being here today, i appreciate your time. i was pleased to see in the budget request to fund cdfi and maintain new programs like the new markets tax credit program. i hope that's an indication that the administration is supportive of the program, which has been effectively targeting investments in low income communities, both urban and rural, across the country. i've been a big supporter of it, it's by part bipartisan. i just want to associate with my colleagues who expressed a concern that the current order adjustability tax proposal and its impact on consumers and workers. however, i've been one of the strongest proponents of reform, comprehensive reform. i know you are as well. and i look forward to working with you and the rest of the administration at implementing
3:49 pm
actual tax reform this congress, making our tax code more competitive i think is really important to economic growth. and we're going to hear and we already have heard a little bit about economic growth and data regarding economic growth maybe being a little too optimistic. i want to put into perspective a similar conversation we had eight years ago, mr. neal. and i would like to compare just for a moment the president's budget with president obama's first budget. so in its first four years, the obama budget projected average economic growth of 4%. the trump budget, less than 2.8%. the obama budget projected average growth of almost 3.2% over the first decade. the trump budget, 2.9%. obama's projections the first year of his presidency seemed pretty reasonable around here at the time given historical economic growth levels following a recession. but it's not surprising in my mind that president obama's projections never materialized, because he pursued an
3:50 pm
anti-growth, increasing taxes, more regulation policy that left us $20 trillion in debt. the president, this president, the republican congress, on the oth in debt. this president in the republican congress, on the other hand, have already gone on record to not only try to reduce regulations and the regulatory burden, the president signed a dozen plus bills, as well as purceying tax reform, lowering rates and balancing a budget. mr. secretary, a quick thought on the border adjustability tax and mr. nunes' point about economic growth. >> well, we have -- i have had the opportunity, chairman brady and i had been meeting almost every week since i have been in office. we are working very closely together. i discussed there are concerns
3:51 pm
we have on the border adjustment tax, but we are looking forwards to potential changes to chairman brady looking at that. we are working very collaboratively and our objective is to get comprehensive tax reform done. >> thank you. mr. lewis, you are recognized. >> thank you, mr. chairman. thank you mr. secretary for being here today. mr. secretary, i have often said that a budget proposal is a statement of values and priorities. this administration proposed to make it crystal clear that the hungry, the middle class, the elderly and the struggling would be left out and left behind. this budget says more money for war, for guns, for weapons. this budget as a promise to the
3:52 pm
american people, raise medicaid and social security, cut funding for food assistance and support for those who have been left out and left behind, as i stated. i said over and over again, and i believe it today, we have a right to know what is in the food we eat. what is in the water we drink and what is in the air we breathe. this budget cut e.p.a. this is not right. this is not fair. it's not just. i have a strange feeling that this budget is not respecting the american people. it's not -- the people are not top priority for this administration. i think we can do much better. i have sat here for a long time as the ranking member on the oversight committee and we have
3:53 pm
been very, very concerned about how the irs is being squeezed. we don't provide enough funding for the internal revenue service to collect the dollars. i'd like for you to respond. what -- why are we squeezing the irs? why do we continue to cut and cut? >> well, first let me just comment that the budget does reflect the priorities of the president and the military. you are correct, there's been very difficult decisions made to fund increases to the military. the president thinks the national security is the utmost importance to the country and we have underinvested in the military. there are other areas we need to make difficult decisions.
3:54 pm
i would also just say that, i do agree with you and i know the president believes in clean air and clean water. matter of fact, i had the opportunity to visit flint, michigan with him during the campaign. that was quite concerning. particularly as it relates to the internal revenue service, i am comfortable that we have preserved within the budget significant commitments to increasing our technology. >> mr. chairman, i apologize, the time has expired. perhaps we can pick it up later in the hearing. >> thank you, mr. chairman. welcome mr. secretary. we have heard testimony about how permanent tax policy drives investment, growth, business decision making for more than temporary tax policy does. in fact, in our hearings just last week, a witness shared with us that permanent, permanent comprehensive tax reform is absolutely critical for him to make business decisions and certainly in the tax code helps american workers.
3:55 pm
can you share the administration's views on temporary tax reform versus permanent comprehensive tax reform, tax policy? >> sure. i think our preference is to permanent over temporary. i would just say permanent is better than temporary and temporary is better than nothing. >> if we want to go permanent and comprehensive. how does it help small businesses. what would it do to help workers increase jobs, the gdp, whatever? >> sure. first of all, we have a very complicated business tax system that's one of the most uncompetitive in the world. we have a very high corporate tax rate. we tax on worldwide income.
3:56 pm
we have a concept of deferral. it's not a surprise our companies left trillions of dollars offshore. as part of this, we want to make sure that money comes back on shore, is invested to create jobs. a big part of the engine of growth in this country is small businesses. we want to make sure the business tax, not just the corporate tax is something that benefits small and medium sized businesses as well. that's a big priority of ours. >> at the end of your testimony, you briefly mentioned trade. i happen to be the trade subcommittee chairman, so i look forward to working with you and your team at the white house on the upcoming trade issues. i yield back. >> thank you. mr. dogett you are recognized. >> we should not borrow from abroad to pay for it. this tax reform should be paid for with economic growth and tax
3:57 pm
policy? >> i believe it should be fully paid for with changes to economic growth and other ways of broadening the tax base. >> great. do you believe that in its current form the border adjustment tax poses a risk to the american economy? >> again, we have has conversations on the border adjustment. >> i understand you are trying to be collaborative. as proposed, it poses a risk to the american economy. >> i have expressed in current forms i have concerns. >> isn't it in such bad shape, the administration does not propose a way to fix it because they don't know of a way to fix it. >> i don't think it's our job to fix it. >> you don't propose to? >> again, we are working closely with chairman brady. >> you will count on him to come
3:58 pm
up with the idea? the administration will not bring the proposal here? >> chairman brady is going to look at changes. >> as you know, the republican colleagues here, like you, are very over optimistic in my opinion but optimistic about the benefits this tax reform will bring to economic growth. they have included, within their projections, significant benefits from economic growth, dynamic scoring which you pay for. they concluded that was not enough. $1.1 trillion of paying for comes from the border adjustment tax. what specific changes in tax policies do you advocate, can you identify any specifics as distinguished from generalized comment to make up for that $1.1 trillion gap if the border adjustment goes? >> let me comment, we have a terrific career staff at treasury.
3:59 pm
we have a lot of resources. we have over 100 people working on this. i have senior advisers full-time focused and there's lots of scenarios we are running. >> as they look at that, have them look at the $2 trillion hole in your budget that comes from double county. you have counted the benefits of your budget of economic growth to pay for the tax cut and to pay for other provisions in the budget. i think we are looking at over $3 trillion and have yet to hear a specific change in tax policy. you advocate further, can you tell us whether the mnuchin rule that mr. levin asked you about, is it your policy, yes or no. the mnuchin rule is what you advocate. >> time is expired.
4:00 pm
>> can he answer yes or no. >> you have to give him a chance to answer in your minutes. >> mr. secretary, two points, one is touch and go, one is more -- our committee really struggled over the past several years dealing with antibase erosion rules. i mean really, really struggled in a very unsatisfying way. the obama administration really struggled, section 385. none of them work. the attractive thing about border adjustment is that it works. if all we are doing is lowering the corporate rate and flipping to a territorial system, it creates a huge incentive to put it out of the country. i know you are on top of it. we are on top of it. that's one of the things we need
4:01 pm
to get to. that's the touch and go. here is my point. we have to short out, we had a discussion last week. just to continue to highlight this, the capacity of treasury in asset control as it relates to iranian terror. iran is the largest terror. they don't walk away. we can reconcile the relationship if they come clean and stop it. they are continuing to do that. there's large commercial aircraft companies, boeing and others that are determined to sell to the iranians not with standing the bad activities of the iranians. can you speak to that, your current review and understanding. from my point of view, you have the awe authority, to fix this and keep us safe and make sure that the world's largest state's sponsor of terror does not get
4:02 pm
access to commercial aircraft, and can be used for military purposes. >> let me just comment that one of the most important parts of my job is on anti-terrorist financing. i'm probably spending 50% of my time on what we call tfi at the treasury. these tools are absolutely critical. they really work in the case of iran. there's no question. the sanctions are what brought them to the table. i believe we could have gotten a better deal with them at the table. we will use everything within our power to put additional sanctions on iran, syria and north korea to protect american
4:03 pm
lives. i can assure you, that's a big focus of mine and i discuss it with the president. as it relates to the license that you are referring to, yes, it is correct in the case of boeing and airbus, there are licenses that will be required and they are under review. >> thank you. yield back. >> thank you, mr. thomas you are recognized. >> thank you. i was heartened to hear the secretary say that the debt ceiling this year was important. i'd suggest that we, as a committee, and a good show of bipartisanship send a letter signed by the chairman and the ranking member and all the
4:04 pm
committee members to speaker ryan and leader pelosi stating we believe it's important to raise the debt ceiling and prevent the type of catastrophe that the secretary stated. i can do that as a motion of whatever you think is appropriate. would you be willing to do that? >> please present draft letters to us to consider. >> thank you very much to be here today. it is good to see you again. i continue to be concerned about going down this road of we are all going to come together and do great tax reform. i want to be there and i want to be part of that. but, there's a distinct difference between tax reform and tax cuts. i continue to worry that as time slips by, we may get into the mode where folks are looking for a, quote, unquote, win. we revert to just the tax cut and if that happens as you have explained, it's not tax reform and it's highly likely it won't be paid for, it's going to add to the national debt. so, i want to make sure that i understand, you are committed to a revenue neutral bill, you don't want to borrow to do this.
4:05 pm
you want to do tax reform, not just tax cuts. is that correct? >> it is correct i want to do tax reform and i want them to be paid for through broad based changes to the tax code and economic growth. that is what's critical. >> thank you. on may 21st, 2015, the president, then candidate stated i'm going to save social security without any cuts. i know where to get the money from. nobody else does. then we see a budget with tens of billions of dollars of cuts in regard to social security, disability insurance, despite the fact the president stated he wasn't going to cut social security. the president does understand that the disability portion is social security. these are people who paid into
4:06 pm
the system and they have become disabled and can't work. they rely on thousands of people throughout our districts rely on the fact they have this disability insurance program to provide for them while they are disabled and out of work. these cuts are going to hurt those folks, hurt those families and those communities. is it the president's intention to make these cuts in social security and deliver this devastation? >> thank you. time is expired. >> mr. buchanan you are recognized. >> thank you for being here. three quick points. you mentioned we are running trillion dollar deficits. let me go back. in terms of deficit spending, i have been here ten years, we have a $10 trillion deficit. there's plenty of blame to go around.
4:07 pm
i want to make sure the administration is committed to moving toward a balanced budget in the future. a lot of tough decisions have to be made on a bipartisan basis. i look around this room, young people, we are going to bury in debt if we don't change it. you are a business person. at some point, this ends badly. >> i can assure you the president is interested in the long term debt. >> i know you refer to business, 93% of the business is formatted in florida are passed through entities. last time we did tax reform, doing the corporate rate. i want to make sure you are committed to getting parody with small businesses in some states as high as 50% when you add state and federal together. you are committed to not just corporate reduction, but pass
4:08 pm
through as well. >> we are committed to what i call the business tax pass throughs. i want to say, we will want to make sure rich people can't use them to evade the personal tax system. yes, we are committed small and medium sized businesses have the benefit. >> irs reform, i chair the oversight committee. we want to make sure something gets done with the space. it's been 20 years. we talked about it briefly, but as we do tax reform, it makes sense to do irs reform. i want your commitment that you are thinking about that. it's a real opportunity in terms of business disputes and being more customer friendly.
4:09 pm
what are your thoughts on irs reform? >> we are supportive of that. we need to invest a lot of money in technology at the irs and we have preserved those investments as part of the budget. >> i yield back. >> thank you. mr. larsen you are recognize zed. >> thank you chairman and secretary mnuchin. let me start by applauding you and your staff. i appreciate the conversations you have had with mr. neal, mr. cortney and myself and letters from the taxpayers about a god awful situation for people in the state of connecticut facing crumbling foundations and we appreciate your efforts to further look into this. >> thank you. >> let me add with my colleagues, i think you are absolutely right about the debt ceiling and should have resolution before we leave in the summer. we should not leave here with the uncertainty that will result in this and the gaming and politics that could take place. we stand solidly behind you in this effort. now, mr. dogett asked you yes or no on the mnuchin rule? >> what i said is the president's objective is not to cut taxes on the high end.
4:10 pm
it is to cut middle income tax cuts. this is a process that will be the house, senate and administration. we are working together. >> all right. that's not the answer, but let me -- let me also ask you what mr. thompson asked you, whether or not you intend to follow through on these $64 billion cut out of social security. >> the president is absolutely committed that people who should be paid disability will be paid disability. that's what the trust fund is for. we'll honor those commitments. the assumption for change in disability, i say these are assumptions that perhaps some places where people should be going back to work, but that for people who long-term cannot go back to work, they will not see a cut in their disability. >> listen, i hope this committee will go in a regular order. we need a discussion on social security. social security is insurance, it's not an entitlement. people have paid for this. they understand, we are going to debunk this myth once and for
4:11 pm
all. i appreciate what sam johnson said, he's going to have an open hearing on this, the vitality of ideas and what we plan to do with social security ought to be out in the open. i appreciate you coming down to the treasury and talk about ideas we have on both sides of the aisle to strengthen this. this hasn't been touched since 1983. has anyone's insurance premiums gone up since 1983? of course they have. we trick the elderly and tell them they are greedy. they are depending on this. they have contributed throughout their lifetime into a fund that is insurance, the most successful governmental program that has a 99% loss ratio. that's pretty good in the private sector, isn't it? >> your time is up. >> thank you for taking the time
4:12 pm
to be here and share your insight. i think that a lot of work is being done both here in congress and house and also at the white house. i appreciate the fact that i think there is a lot more similarity between the details of perhaps what the white house would choose to do on tax reform as well as what we are with the blueprint and a lot of thoughtful minds are working. i would certainly invite more folks to join the process as we do move through regular order and how important it is to bring people together to work together to solve the challenges that we are facing. we know there are trade offs that need to be evaluated as we sort through the details. i was wondering if you could talk about the process of deciding on how to move forward with various trade ups and
4:13 pm
perhaps looking at finding the right base broadeners as we help achieve permanent tax reform. i certainly associate myself with the comments of mr. reichert and how informative that would be as well. can you speak to the trade offs? >> again, i would comment on the process. we started conducting listening sessions. we have the opportunity to be both here and at the senate and meet with both republicans and democrats to get ideas. we have also had the opportunity to meet with many outside groups and many industry groups comprising of business ceos. we are looking forward to, as the committee is getting feedback on different ideas, doing that as well. >> okay. i thank you. i yield back. >> thank you. mr. kahn, you are recognized.
4:14 pm
>> thank you. i give you credit for being here. the president submitted to the american people released during a week when he is out of the country. in my mind, he owes you a great apology or combat pay for coming out and explaining it. it was dead on arrival and before arrival. i represent a large district in wisconsin. there's not much to like in the president's budget proposal for wisconsin. it guts funding for the grant program. guts funding for the farm administrations and technical assistance for farmers. guts the funding for usda in rural america. the 900 billion that the administration is adopting in medicaid cuts will put rural hospitals in jeopardy. the badger care and senior care
4:15 pm
programs in wisconsin. other than that, what's not to like for rural america. it's a missed opportunity. i also appreciate that you and many of us are interested in taking a run at the code for the first time in 30 years. one of the linchpins being discussed, the border adjustment tax, you had concerns. you were quoted the other day, one of the problems is it doesn't create a level playing field, very different impacts on different companies, potential to pass on costs to the consumer and potential of moving the industry. do you care to address things as we work on tax reform? >> i think there are things that can be addressed to lighten those changes. those are the types of things chairman brady is working on. again, i think the most important issue is that we share common goals of making the business tax system competitive,
4:16 pm
middle income tax cut in simplifying personal taxes. doing all these in a way that will create economic growth. >> finally, as treasury secretary, you are going to play a role in getting the president's trade agenda on track. don't give up on it and don't give up on multilateral agreements. i don't know if you caught the article of harley setting up a factory in pineland. the reason is the failure of tpp moving forward. the 60% tariff that our bikes are facing in the asian market forcing them to move a factory into thailand to take advantage of the markets and the lower tariffs. this is one of the consequences of walking away from a robust trade agreement where we need to be at the table, establishing the rules and trying to level the playing field for workers, farmers and businesses back
4:17 pm
home. thank you, i yield back. >> miss jenkins you are recognized. >> there mr. chairman. i represent a district in kansas where we have a great deal of common sense. i can't find many that support our current tax code. they are eager for lower rates for individuals and corporations, international reforms to bring jobs home, simplification and job growth and economic benefits. i remember 30 years ago, the last time we did this, as a cpa i was on the tax floor and i watched the headlines and seemed like every day tax reform died a certain death. it was able to be accomplished because we had a president at the time, president reagan, along with his administration breathed new life into this
4:18 pm
thing, every stinking day it died. my frustration is we have not had a president or administration committed to rewriting the tax code. now we have a president that ran on this. i'm just curious, will this president be willing to get out in front and lead on this issue? will he visit with the american people about the issues important to them, engage with stake holders and work with congress on this effort? >> yes, i can assure you, once we have further details and are further along, this is one of the president's highest items. i had the opportunity to work with him on the campaign over the last year on his economic plans. the president has absolute intention to be part of selling
4:19 pm
this to the american public. >> will we see additional details to the plan that you are working on in the near future or are you going to rely on leaders on capitol hill to promote those ideas and work alongside you? >> i can assure you, chairman brady, chairman hatch, myself, gary cohen at the white house, we are all working as fast as we can be. this is our highest priority. >> thank you. i yield back. >> thank you. >> mr. chairman, i have been advocating this committee request president trump's tax returns using section 6103 in the code authority. i think my efforts have been no secret, so i'll get right into
4:20 pm
the questions. section 6103 specifically states that the treasury secretary shall furnish copies of the president's tax returns for an internal review by this committee upon request of the ways and means committee. mr. secretary, we don't have much time so yes or no would suffice. if and when this committee uses that authority, will you comply with the directive and the law? >> i'm not familiar with that section, so i will have to review it with my internal legal department. i will get back to you. >> we need fundamental tax reform. congress has no way to know how the president stands to personally benefit.
4:21 pm
that's a problem we had back in 1924. no way of knowing if he is getting special treatment from the irs. secretary, if for no other reason than to eliminate a distraction from your agenda, will you encourage the president to release his tax returns? >> i'm not having discussions with the president. that's his business. >> secretary spicer said the president will not release 2016 tax returns because they are under audit. we know they can be released while under audit and every president's tax returns are audited. can you confirm the president has filed his 2016 tax return or has he filed for an extension? >> i'm not aware of it. i don't have access to that information. >> can you confirm his returns from each of the past ten years remain under audit. >> again, i don't have access to that. that's within the irs. i don't have access to specific taxpayer level information. >> we know in the tax plan before us, we see a $200 tax break on the other side isn't going to cut it for many folks in the middle class. if you do away with the -- doing away with the deduction for state and local taxes, that's about on the average filer, 3500 bucks, compared to the 200 you are talking about in this particular -- let me be charitable in this budget. our state faces the highest
4:22 pm
property taxes in the country, like many other states, we have a high cost of living. how do you justify this revenue from middle class homeowners from high cost states like new jersey? >> again, i think fundamentally, we think that the federal government should get out of the business of subsidizing the states. we are sensitive to the transition and want to make sure that the middle income does have a tax cut. >> thank you.
4:23 pm
time is expired. mr. paulsen, you are recognized. >> thanks for being here. as you know, start ups are young firms with little to no rev as they work to build a concept in companies. a medical device company and start up can go a decade without taking in a dime of revenue investing millions of dollars to build a successful product and get fda approval. tax policy affects their business model in a different way than most industries. these entrepreneurs are clearly driving the future of the american economy and their success has a huge impact on our economic competitiveness. that's why i made it a priority. for example, i'm working hard to rationalize the tax treatment for stock options for start-up employees. i'm also working to find a way to protect start ups from being unfairly penalized by the loss limitations and tax regulations which can depress companies and
4:24 pm
issues like this will absolutely make a difference for the entrepreneurs out there that are seeking to build the next apple. i'm hoping that you will work with those of us on this committee, mr. crowley is another advocate for some of these concepts, hoping you will work with us and these concepts and tax reform that encourages that new company formation. can you share a few thoughts on that? do you think there's opportunity for forging ahead for the component within the tax reform model? >> yes, we look forwards to working with you on those ideas. thank you. >> there, yield back. >> thank you mr. chairman. thanks for being here. i notice that part of the plan as we go forward are whether it's private/public partnerships or bonds when addressing infrastructure and government owned properties. we are engaged in a piece of legislation that would do that along with senator heller in the senate. we have bipartisan agreement on this. if you can just for a bit, try
4:25 pm
to address the large problems we have and we can use. private and public bonds, we can do so many things that bring the public into this. they see their investment taking place. just, if you can, i know you are on a tight schedule. the administration's view going forward on financing infrastructure. >> we are very supportive of public/private partnerships and look forward to working with you. as the president said, infrastructure investment is critical importance to him and this country. we are looking at how to fund $1 trillion of infrastructure without increasing the national debt. we are looking for all types of partnerships incentive mechanisms. >> thank you. i yield back. >> thank you. mr. crowley, you are recognized. >> thank you. welcome mr. secretary. great to have you with us. secretary, i believe a budget reflects a statement of the values that our country has, the aspirations and hopes of the people. i'm frightened at the values reflected by this budget
4:26 pm
presented by the president and the republican party and this specific budget. don't you agree that protecting the homeland is number one and ought to be the number one job of our federal government? >> i think protecting the homeland is the number one job. that's a combination of military, intelligence and protection here. >> that would be the department of homeland security, correct? >> that is part of it, yes. >> why does this current budget cut funding for the homeland security programs for people living in areas at the greatest risk of terror after -- for instance, places like city of new york. >> i'm not familiar with the specifics of their portion of the budget. i know general kelly is very focused on homeland security. i have enormous confidence in what he has done. i'm not familiar with the
4:27 pm
specifics. >> i hope you familiarize yourself with it. i know you are a new yorker at heart. >> i am a new yorker at heart. >> wouldn't want to see new york disadvantaged in anyway. new york is a target and will always be a target. i'm concerned about what i see happening to our nation's vets, our veterans by slashing $1.4 trillion in medicaid funding that will leave 2 million vets without access to care. i'm pleased with my friend and colleague from nevada is taking this issue of vets -- cuts to veterans care head on. we ought to be encouraging, taking care of vets when thigh come home, not using the v.a. as a piggy bank or congress' budget. you cut $64 billion from social security. it is not a pool of cash for congress and the president to use for their own spending needs. so, i don't delineate between social security and social security benefit. workers paid to social security.
4:28 pm
the average social security worker worked and paid into social security 22 years before becoming disabled on the job. mr. secretary, you can spin it any way you like, a cut to social security disability is a cut to social security especially those who are disabled and can no longer work. making it difficult to receive that benefit is cutting social security. with that, i know my time is up. i yield back. >> excuse me. thank you. >> thank you mr. chairman. thank you mr. secretary for being with us. i was grateful to hear your discussion about the time you are spending looking at a terrorist financing arnds the world. one legacy issue we are unclear
4:29 pm
on relates to the iran nuclear deal that was struck by the previous administration. you are now in a powerful position to understand more about details that were not so clear previously. one ambiguous question relates not to the small sum or significant sum turned over to iran, the $1.7 billion that they have been able to utilize by virtue of the release of the four hostages, but there have been great difficulty in actually calculating what other kind of iranian assets have been subjected to sanctions that were subsequently lifted according to the agreement. it's been estimated in the new york times, u.s. news and world report and other places if it's between $100 and $150 billion. dollars that could be back in iran to be utilized for a number of purposes, including the potential it is funneled back into sponsorship of terrorism. is there ability for the treasury department to identify what is out there in the form of
4:30 pm
assets which had previously frozen. dais. dais. dais. supply funding to our state and local partners, travel partners. we have to all take action as the whole community. from my own experience as former director of alabama emergency management agency i was director of a state that continuously seemed to be hit with disasters. and we had several disaster declarations. for us. mitigation funding came in the form of post disaster, 404, 406 funding as we call it in the field. we had much more post disaster mitigation funding which seems regressive to me than really we wanted on the predisaster side of the house. we focussed most will he on the post disaster funding to put that to work according to the mitigation plans we designed. if confirmed i would like to work with the committee to
4:31 pm
evaluate all of the mitigation funding not just predisaster mitigation funding but how do we possibly budgetize all of it up front to do more work to reduce disaster costs rather than basically having to get hit to access the mitigation funding that's there. >> yes. we have very good -- we have very good data and very good access to information. obviously on a classified basis. but we're -- as i mentioned earlier, the sanctions are very effective. we continue to put sanctions on iran, on their ballistic missiles, and on terrorism. >> thank you. time expired. >> thank you, mr. chairman. i want to thank you, secretary
4:32 pm
mnuchin, for being here. i'm excited to have someone heading treasury that's excited to get the economy moving again. tax reform, regulatory reform and protecting taxpayers. i'm a strong supporter of getting tax reform done as soon as possible. i spend 30 years in a business world before coming here so i understand we have to be able to compete. the u.s. likewise has to set the corporate rate to compete. i'm pleased that the tax form outline including a tax rate because to borrow president clinton's james carville's line, it's the rate, stupid. it's hard for us companies to compete against canada where the income tax is 15% or ireland 12 preponderate 5% or even uk which will be at 17% by 2020 so thank you for what you're attempting to do. as history reminds us, 99% of temporary tax cuts in 2011 were eventually made permanent. would you support a temporary corporate tax cut? >> again, as i said earlier, permanent is better than temporary and temporary is better than nothing.
4:33 pm
so these are tradeoffs we'll have to make as we go through and score the various different alternatives. >> where we're headed. >> i heard you say that earlier and i agree. do you support eliminating the deduction for interest, as part of the tax plan? >> my -- well, first of all, on the individual side, i support maintaining the mortgage interest deduction on the business side my preference is maintain interest deductibility which is important for small and medium-sized businesses but we are looking at that like everything else that's on the table. >> do you support extending the ten-year budget period to a longer period so that we can take a look at tax reform and maybe get some tax reform done, that fits within the reconciliation window? >> i have heard people suggest that and i think that's a very good idea to consider strongly. >> okay. regarding 385 regulations which
4:34 pm
went far beyond discouraging cross border mergers and cast a wide net that disrupt business transactions. you know, this is an irish. i want to thank you and the president for reviewing the regulations. do you have a sense on when the review will be complete? >> i don't. it's under review and it will be preliminary to give timing on that. >> all right. again, i am working -- i currently work on legislation to combine the problem that we have on fraud, waste and abuse, but also, tax reform issue regarding improper payments. the legislation i'm working on requires taxpayers to maintain books and records of an income as a tax credit and self report. must calculate the eic based on allowable deductions and permits the irs to disallow the itc and credit payments without a formal audit. will you xhit to work with me on that legislation? >> time expired. mr. higgins, you are recognized. ms. sewol, would you like to be recognized?
4:35 pm
>> yes. thank you, mr. chairman. secretary mnuchin, i really think all of us in this room know that we need to do something to make our corporate tax rates more competitive for our industries. i think that the concern, though, is how do we make sure that it's revenue neutral, that it's deficit neutral, that we also make it distributional, sorry, equal, as well? how will we pay for it? what are your views about -- i mean, i know that the president issued his one pager. and on that one page it didn't say how he was going to pay for it. so can you speak to how he's
4:36 pm
going to pay for it and what your views are about the blueprint that we have -- that's been ushered out by the republicans that say the border adjustment tax is the way to comment? >> let me comment many economic surveys show that over 70% of the cost on corporations are passed on to the workers. so -- >> is that trickle down economics? because i can tell you that the folks i -- >> this is real -- this is absolutely -- there are multiple, multiple reports on who bears the economics of the tax. but in any event, as we progress on the details, we'll come out with more details on the plan and show -- >> so what is your view on the b.a.t. border adjustment tax? >> again, i think i'm explicit saying there's concerns with it in the current form and work with chairman brady and others looking at it. >> well, i have to tell you that i found it quite offensive to hear that the omb director mulvaney in the rollout of the
4:37 pm
economy redefined compassion of how many americans to kick off of social safety net programs. and i just -- i think that what i'd like to hear from you is what programs, what line items in the budget that was rolled out yesterday actually reflects this administration's commitment to working families and to those that are most vulnerable in our society. >> i think there's lots of programs. and again, i think the biggest focus is economic growth and putting american workers back to work. >> well, i think it's a misnomer to assume that people who are on s.n.a.p. are not trying to work. most states have work requirements. in fact, 50% of the people who receive s.n.a.p. only have it for ten months or less. so, i just think that in taking $190 million out of s.n.a.p. for example, nutrition assistance,
4:38 pm
that is not showing compassion and i just submit to you that a rising tide lifts all boats, that people who are living in vulnerable communities are just as american as you and i and they're looking far hand up and not a handout and we all could benefit as americans if we make sure that as we rise they rise, too. >> time. >> thank you. >> expired. you are recognized. >> thank you. thank you, mr. secretary, for coming today. appreciate you being here to answer some questions. i represent the entire state of south dakota, number one tri is agriculture, so i have some questions that would relate to that topic today. you know, i understand my colleagues on the other side of the aisle criticizing the president's budget, but we fought funding issues in president obama's budget every single year. he cut agriculture dramatically. so this is something that congress has the opportunity to provide funding for and put our budget together and i'm always hopeful that a rural america will do well and continue to feed the world. i wanted to talk to you a little
4:39 pm
bit because you mentioned in the opening statement about trade and when a critical component that is of the plan to get the economy growing again. and i appreciate that. nafta is good for agriculture. we do have fixes that need to be done and i know the administration is renegotiating that agreement. i would just encourage going through that process that we don't damage the market we have already created there. we have some issues with dairy and other commodities that need to be looked at so i'm glad that we have identified that and the administration is going after it. the other concern with agriculture is, though, while we renegotiate trade agreements that we miss out on market opportunities. other countries are looking to negotiate with these countries and we need to be aggressive going after them, currently so that we don't lose that market access in the future. so i would just encourage speed as we negotiate free and fair trade with other countries so that we lock up the markets for the united states.
4:40 pm
and then, also i wanted to touch on agriculture programs. just -- and how it is impacted by tax reform. thank you. thank the administration for looking at repealing the death tax. that hit my family personally. it's a double taxation. it's an unfair tax and it should be repealed so i thant to thank the administration for identifying that in tax reform. but also, interest deductibility, expensioning are important to the agriculture industry and how we go forward. >> again, let me just assure you that agriculture is one of our most important exports, and this administration is doing everything it can to make sure that more markets are open for our farmers to export things. and our recent negotiations with china, we're pleased that we have opened the market to beef. it's been over nine years since our farmers have been able to sell beef. and that's something that was very important to the president. >> good.
4:41 pm
thank you. and again, just we do have other countrys that are trying to access other markets that we are still in negotiations with so speed is very helpful to we don't lose that potential in the future. >> we understand that. thank you. >> on tax reform, those are critical components that we're hoping that we get rates low enough that that those small farmers that feed the world and this country -- i talk about agriculture as a national security issue. thank you for being here today. >> thank you. >> thank you. mr. holt, you are recognized. >> thank you. mr. secretary, thank you for being here. i want to compliment the professionalism of your staff. i have met with them. i look forward to working with you and them as we go forward. i agree with you about growth. as the key to solving our debt problems, the key to prosperity for future generations. i'm not so sure i agree about temporary tax cuts being better
4:42 pm
than no tax cuts because if we have temporary tax cuts they rarely incent the growth you want. doesn't incent the behavior you want and if they contribute to the debt problem, i'm afraid this is not going to be good as no tax cuts but we'll work through that. i think we agree that permanence is the best and i believe that we can get there. we all agree that moving to a territorial system is key. the base erosion is a problem. and a territorial system for business tax is a solution. i'd also like to point out that we're only one of two countries, altrea by the other one, that tax the citizens regardless of where they live. worldwide taxation as -- rather than ren des sy based taxation. last week we were hearing from executives and a number of people this makes our u.s. citizens extremely unattractive to hire abroad because it costs up to 40% more to hire u.s. citizen for a position in another country so if we make our companies more competitive worldwide, you know, i hope we look at making our citizens more competitive worldwide by looking at a residency based taxation for earned income.
4:43 pm
i think that would be an added benefit to tackle while we're tackling comprehensive tax reform. we talk about companies leaving the country. we had over 5,000 citizens expatriate last year. that was a huge increase. over a 500% increase of the rates from over 10 years ago. 26% increase from just last year so that's another area i hope we can work on. and then lastly, i want to pick up from something that ms. noem brought up. we appreciate the elimination of the inheritance tax. i hope that we'll also look at the elimination of the gift tax, as well as the inheritance tax. in my mind they go hand in hand. and any extent that a gift tax elimination, you know, might cause some problems, you know, we can find rules to rein in any abuses of gift tax elimination and look forward to working with you on that. thank you. >> thank you. >> thank you, mr. chairman. >> thank you. mr. higgins, you are recognized. >> thank you, mr. chairman. thank you, secretary, for being here. you are the principal economic adviser to the president. the tax policy that's been
4:44 pm
advanced to this house provides 3 million well think americans with about a $200,000 tax cut. and about $250 million not so well think americans with a $200 tax cut. the white house says that the -- the nonpartisan committee for responsible federal budget says that the white house budget will increase the national debt by $5.5 trillion. economists in the right, left and center say the tax cuts don't pay for themselves. they never will and they never have. you want 3% growth. i want 3% growth, as well. all of us do. i just want to urge you to urge the president to do a robust investment in america infrastructure. it won't pay for itself but most economic studies indicate that you could reclaim about half of the money you lay out for infrastructure given the jobs that would be created.
4:45 pm
and the resources and the private sector that that would unleash. it's very important i think to the growth of the economy because that's the way that you reduce debt and deficit. you know, china is making a major move to displace america as the global economic leader. china just announced a $1 trillion infrastructure bill to open up china to 47 other asian countries so that they can sell their stuff to 47 new markets more efficiently. we have a budget that wants to spend $1.5 billion to build a $40 billion wall that we were told we would never pay for. your budget wants to spend $3 billion a month to continue a 16-year war in afghanistan. in response to a $2 trillion need for american roads and bridges with a pathetically weak $200 billion investment in infrastructure maybe. i just think that, you know, the
4:46 pm
focus on tax cuts here should not be discussed in and of themselves. it's got to be something increasingly more and that infrastructure invest systematic so critically important to the competitiveness of america and i would urge you to please urge the president on behalf of the american people to advance a real infrastructure bill that will create real growth and unleash the resources of the private sector. with that i'll yield back. >> thank you. mr. reich, you are recognized. excuse me. mr. smith, you're -- mr. rice? >> thank you. mr. secretary, i -- since 1986 was the last time we did tax reform. and at that time, our code was pretty competitive but in the last 30 years the world has left us by in terms of the philosophy
4:47 pm
of their tax system. every industrialized country all of our trading partners have border adjustment in some form. mr. reich, you are recognized. excuse me. mr. smith, you're -- mr. rice? >> thank you. mr. secretary, i -- since 1986 was the last time we did tax reform. and at that time, our code was pretty competitive but in the last 30 years the world has left us by in terms of the philosophy of their tax system. every industrialized country all of our trading partners have border adjustment in some form. now, since 1990, our manufacturing base has declined precipitously.
4:48 pm
in 1990, 50% of the americans were in the middle class. today 43%. in 1990, the median household income was $52,000. today it's $52,000. so the middle class has shrunk and they haven't had a raise in 27 years. and i believe that's a direct and foreseeable result of our antiquated tax system. now, last week ambassador light hizer was here talking about renegotiating nafta. i asked him, how are you going to get around the advantage that mexico has with their 16% value added tax, their border adjustment. he said, you know, that creates a real problem. yesterday we had a hearing on the border adjustment and the ceo of archer daniels here
4:49 pm
talking about agricultural exports. corn, wheat, soybeans. we have lost 50% of our market share in the last 30 years. and our primary competitors are russia and brazil. both with 15% plus border adjustment. so when china, which has 6% of the world's land, and 20% of the world's population, needs to buy grain, are they going to pay 15% more for american grain because of our antiquated tax system? now, i hear you say and, you know, i read about it in the period calls, that you got problems with border adjustment. but as a tax lawyer, i had doubts when i got into it, too. the more i've learned the more i recognize this is a necessary component if we want to rebuild our middle class. so, what i want to know is, where are you on border adjustment? how can we solve your problems and if you don't like it, what
4:50 pm
else can we do to rebuild our manufacturing base? rebuild our middle class and businesses are competitive and we absolutely share common goals an what we're trying to do to make american business competitive. >> how can we do revenue neutral tax, how can we make our taxes kpetdive if we don't do border adjustment which every other industrialized country has? >> as you comment on other countries -- do i have time to continue? >> perhaps you could yield a moment for the answer because time has expired and we're really staying tight on that, sir? >> thank you, mr. chairman. moment, i was just commenting on the border adjusted. many other countries do have a
4:51 pm
vat tax and use them in conjunction. >> thank you mr. chairman and mr. treasury secretary. can i run through a handful of things? we're supposed to be discussing the 2018 presidential budget. i will tell you one of the things i did appreciate is someone who actually believes compassion is also thinking about my 19-month-old little girl and the ocean of get she will exist and live in and spend the rest of her life paying back what we've spent today. so i hope there's some compassion for the young and what we're doing to their futs. can you walk me through what you believe tfl the 2018 bor rogue is going to be? >> i don't have the 2018
4:52 pm
borrowings. >> looked like in 2017 you've actually used an additional raise in the statutory debt limit of $816 billion. that's obviously debt sold to the public and borrowing from internal ktsds. looks like we're still going to need 740 billion new borrowing capacity both from internal accounts and outside borrowing in the 2018 year, so and i beg of your wroers and sisters here in the committee. i've heard so much talk, but the gdp numbers look reasonable. for next year you actually are saying 2.4. you don't actually start saying we're at 3% gdp until 21?
4:53 pm
>> no. they're reasonable. they scale up. >> i hear this dance, oh, it's crazy. it doesn't have -- compared to some of the obama budgets we'd look at where sometimes there would four plus gdp built into them instantly. the numbers here look fairly reasonable. my great interest here is as we actually get up against the debt sealing, how do we work with you to also do a series of things that we've all run, debt management? look, we're going to continue to bathe in debt because of our demographics. how do we encourage you to actually do the full-throated look at the long-term bond, the thrills, other things of sweeping, idle cash and accounts to do what's necessary for the debt management. >> i can assure you we are carefully studying all these issues. we're looking at ultra long bonds right now.
4:54 pm
>> thank you mr. chairman and thank you for allowing the secretary to anyonish that answer. you're recognized. >> thank you mr. chair and thank you mr. chairmsecretary thank being with us. >> i know how important it is that we have a responsible budget you be also responsible fiscal policies. you brought up the debt feeling and earlier today director mulvaney was speaking with the budget committee and talked about the need for perhaps approval a debt ceiling -- addressing the debt ceiling earlier as revenues were coming in slower and slower, so this might be a more urgent issue. do you believe that this is a more urgent issue and that we need to make sure we pass this by june so we don't wait until the last month in the need to provide stability, as folks talked about, do you think it's
4:55 pm
important to be done right away? >> it's imperative this is passed before the recess. >> you would support doing it right when we get back from memd and that this needs to be a clean bill. >> i'm supporting that this is done as quickly as possible, yes. >> and that it's clean. i worry that people have played politics in the past with this. you on report saying this needs to be a clean deal focused on squlu raising the debt ceiling? >> my preference is it gets passed as quickly as it can. however, my goal is to get this done quickly. >> that would mean a clean bill. >> that would be my preference. >> also we talk about a responsible budget. there are a lot of assumptions that have gone into this budget. many concerns i have with the concept of tax cuts will automatically pay for themselves. but when you look at
4:56 pm
assumptions, too, we need to be assuming a future economy. you've said publicly that job loss due to art sbishl intelligence and information isn't even on your radar and won't be issues until the next 50 to 100 years but many technology and industry standards estimate that, for example, by 2032 half the trucks on the road will not have human drivers or that the truck industry's current size could transition to automation. that means that 1.75 lost driver jobs over the next ten years. if we look at these upcoming issues, shouldn't we be making assumptions and recognizing the need for job training and making sure people have skills in a new economy, things that right now are not addressed in this current budget and would impact people's ability to have jobs of the future.
4:57 pm
>> let me comment. when i made the comment about artificial intelligence, i was referring to like r 2 drvegsd 2 star wars. i am fully aware of and degree that technology is changing and our workers need to be prepared. >> thank you. you're recognized. >> an issue that is resonating in my issue -- i looked at the irs like a logic isks thing. the irs is the face that most americans are dealing with as we look at individuals and even komplgss, so this was part of the blueprint and i spent a lot
4:58 pm
of time in my district, i get a lot of feedback from folks who really want a fairer, simpler tax form and they want us to assure them -- i guess i'm interested in your position here on this issue of a service first irs. because the american people deserve and one of the reasons that we've gotten so much feedback on this is because our blueprint says that the american people have the right to quality service, plooifsy, confidentiality and a fair and just tax system. i know you kind of alluded to this earlier but i'm just interested, i guess, to hear from you that this might be a little box that we're talking about logistically, but how important this is to people who don't trust the irs. where is this on your priority list? are we working towards the same goal here? >> based on what you said -- skbloo i read it to you word for word. >> keeping tax information safe and secure in the world of cyber
4:59 pm
issues is of important to me. we support the idea of 95% of the american public should be able to fill out they've tax form on a large post considered. we want to simplify this and the american taxpayers deserve that they're treated fairly with the irs and have appropriate service. >> i appreciate that. i guess the other reason i'm asking, mr. secretaries, we had a subcommittee meetings with one of the irs add cass who do a great job, but there's been such a hesitation on the side of the irs to invest in commercially available technology that's being used around the world but multiple millions gets shoved into the irs with no new technology to show for it, problems with things that are working already. do you see that commercially cometive window opening finally with being able to modernize this technology? >> i can assure you.
5:00 pm
i have a technology background and i will be spending a lot of time with the irs and other areas of the treasury. >> i appreciate it. mr. chairman i yield back my time. >> mr. smith. >> thank you. mr. secretary, thank you for being here with us today. i a couple of months ago had several tax policy round tables trout the five major cities of you are congressional district which is southeast missouri at all five of those round tables i had people who shoulder up from varying background, big businesses, families, taxpayers, and some individuals that don't pay taxes. my question that -- the issues that came up that -- at every one of those round tables were two. one is to simplify the code which you were just referring to and very grateful to hear that.
5:01 pm
and i look forward to see r mol policies in the future, how they would like to simplify a 75,000 tax code. the second follows on who mr. rice said. no one in our -- everyone in our district said we want the tax code to put a level playing field for the farmers and small businesses in southeast missouri. right now we're not at a plefl playing field and president trump has said numerous times that we need to make sure we have a tax code that puts us on a level playing field. what is that approach? >> again, i think it's an absolute priority in whether it's through trade deals or whether through the tax code. the president has said -- and i agree -- we need to have reciprocal trade that free trade is reciprocal.
5:02 pm
>> i've read your statement of reciprocal tax. could you explain what that is? >> the con sent is in how we get there but the concept is that if we're charging somebody zero and they're charging us 25% that that's not free and fair trade. >> so would you be able to implement a tax just on individual basis or how would you do that overall? it wouldn't be -- would it be in tax code? >> we're happy to follow up with you on it. there are obviously technical issues and how we do this and whether we do it in our trade agreements or what we do. the idea is reciprocal free and fair trade. >> i totally agree with you. i just would be happy to get the details to try to push those policies. >> certainly. >> so i appreciate you being here. thank you. >> thank you. >> you're recognized. >> secretary mnuchin, there are
5:03 pm
many questions i could ask but i am compelled to comment on your administration's budget which leaves all but the wealthiest few with horrific cuts. remember when the president said he would save social security without cuts? he loudly proclaimed, believe me, and many did. well, it turned out not to be true. in fact, when asked if individuals receiving social security disability insurance would receive led, mulvaney said "i hope so." you yourself second mnuchin said this wouldn't touch entitlements. how does that square with the proposed 600le billion cut to medicare included in the president's budget yesterday? this is not a time to mince words. it will cost lives. what's worse, the bare bones
5:04 pm
trump tax form that exacerbates inequality is used to justify the financing o this ror endous budget. essentially, the trump tax plan compared with the trump budget guarantees that many people will suffer so those on top can get richer. i'm thinking of my people like my constituent kaitlin. she became zanld when she was 29 and despite what director mulvaney will tell you, she did work. she worked for years until she couldn't anymore. when her health meant she could no longer continue, she signed up for ssdi. this wasn't because she was lazy or she wouldn'ted to live off the government, it was a tragedy. she didn't meet the minute him
5:05 pm
income requirements for low income housing. she wrote to me. >> on behalf of americans who have a disability and who know they have still much to contribute to our country. what kaitlin needs is help, help to get out of poverty, manage her health problems and know what it feels hike to contribute again. she wants this but it's being taken away from her, thanks to the cuts in the budget needed to pay for trump's tax cuts. and that's the rule of the trump budget, which is that if you're doing well, you get more money through a tax cut. if you're struggling to work pause of a disability, you get less. 23 you run a family business like, say, the trump organization, you get a pass-through business tax break. if you have a family and host your job, then too pad for you. people like kaitlin and the millions of americans who work one, two, three, or four jobs
5:06 pm
deserve better. i yield back. >> thank you. mr. cabela you're recognized. >> thank you mr. chairman and thank you mr. secretary for your appearance here today. i'd briefly like to associate myself with the chairmans comments early in the hearing where he talked about strengthening programs like social security and medicare. i think it's critical that the administration work with this committee not only working as today's senior, toems generations who would like to see these programs around for us. the budget provides continued support for the volunteer income tax assistance program as well as tax counselling for the elderly or vita have provides assistant for low income residents in underserved communities in filing their tax returns. we are dedicated to creating a service first irs.
5:07 pm
can you talk about the importance of these programs for the irs and highway they fit into that service first mentality that we'd like to see the agency adopt? >> well, we're going to review all the different service areas at the irs and i think we're going to make sure that we bring a mentality of customer service, particularly there's a lot of things we can do on line and make sure that we're responsive. >> but specifically with regards to these programs that serve the least fortunate people who really struggle to file their tax returns and to comply with the law, can you make a commitment that the administration is going to make sure that as we look at reforming the irs, making it more customer focused, that we will pay special attention to these services that help the least fortunate in our country? >> we absolutely want to make sure that we have the proper services 40s looesz fortunate. i want to make sure that these
5:08 pm
are the right programs and that they're working but yes. >> thank you mr. secretary. another proposal is reducing improper payments by sharing data sharing capabilities in support of business systems modernization. can you discuss the importance of that and data sharing to the irs in this service-first approach? >> i think it's just critical that we invest in the infrastructure at the irs and make sure that we have the technology and that we look across agencies. i'd also comment that our fiscal services area within treasure touches almost every receipt and payment and that's something we'll also continue to work on. >> thank you mr. secretary. i'll say speaking for myself as we reform the irs and as it becomes the agencies that is on the side of the american taxpayers, i truly believe we should allocate more resources to the agency so it can help us
5:09 pm
effectively administer the tax code in our country. thank you for being hiesh. >> thank you. ms. sanchez, you're recognized. >> mr. secretary, thank you for taking the time to appear fr be the committee today to discuss the administration's fiscal year 2018 budget. i hope we can find ways to work together over the coming years. i have to begin by saying that i'm profoundly disapoirchlted and -- in your testimony you said if we develop the right policies today our children and grandchildren will reap the benefits of an ever-growing economy. i couldn't agree with you more on that sent jmtd, but where you lose me is on almost every single line item in this budget. i continue to believe that budgets are clear reflection or our priorities and if these are the president's priorities, then i'm pretty appalled. our priorities should be pretty clear: creating an environment
5:10 pm
for good paying job that allow workers to support themselves and their families, offering our children a chance to dream their -- achieve their dreams, and fogser an innovative business environment that allows businesses to thrive. to me, the president's budget would be laughable on these points if it wasn't so sad. he guts student loan security, the social safety net and retirement savings for hard working americans. with the few minutes that i have, i'd like to dig in on a few specific items that are mentioned in the president's budget. i want to talk about the paltry leave proposal. while the president's proposal may help spur a long overdue discussion on the issue, that is about all i can see that it achieves. the president has said over and over again that we'd be tired of winning under his presidency. well, if a proposal that keeps us dead last in parental leave policies in developmented drois
5:11 pm
is winning, i'd hate to see what losing really looks like. the budget proposal also lists siting a standard deduction and helping families. family care issues are serious issues and present my constituents with some of the most difficult economic decisions they face. but in this binlt these issues seem to be reduced to little more than a sound bite. childcare costs in this country are staggering. families are spending more to send an infant to day care than they are spending a child to college in some areas. i stand ready to work with anyone across the aisle on serious proposals that try to address those issues, but i remain profoundly disappointed by the dismal budget that we are discussing today. with that, i thank the chairman and yield back the balance of my
5:12 pm
time. thank you. dr. davis, you're recognized for the final question. >> thank you mr. chairman and thank you mr. secretary. both conservative and progressive politics agree that the refundable earned income tax credit is an amazing pro--work success story. indeed the major expansion of the eitc was led by conservative republicans. the earned income tax credit helped chicagoans, illinoisans and americans. almost 1 percent of my constituents and 8% of illinois's benefit from the eitc. in my congressional district alone just under 100,000 workers with children earning less than
5:13 pm
50,000 receive the eitc. moore over, my constituents benefit from the refundable child tax credit. given the high number of working poor in my district, it is alarming that only 15 that this,000 of my with constituents benefit from the childcare and dependent tax credit showing that this tax credit falts to help the lowest workers. this makes it refundable and increases the max him credit per child to help middle class and low income families. i'm deeply concerned about the republican tax plan that appears to cut, other best, restrict these critical support for middle class families. when one fifth of children in the u.s. live in povt and in a
5:14 pm
time of stag snat wages and appalling wealth gaps, we should be expanding the refundable tax credits an increase in assistance to middle class families. could you clarify for me the administration's position on refundable tax credits, including the eitc, the ctc, the aotc, as well as making the childcare independent tax credit refundable. thank you. >> all right. thank you for your concern on those and we believe many of those programs are critically important as you've described and we're reviewing them. >> thank you very much. mr. chairman. i field back. >> thank you, dr. davis. two thoughts. first i'd like to thank secretary mnuchin for appearing before us today. look forward to working with you on all these growth jobs and opportunity issues.
5:15 pm
please be advised members of the commit have two weeks to submit written questions to be answered later in writing. these questions and your answers will be made part of the formal hearing record. i'd also like to make note that we are standing in recess as far as the health care markup. we expect to veen this evening after the second series of votes. with that, the committee stands adjourne
5:16 pm
5:17 pm
adjourned. this weekend on american history tv, on c-span3, saturday at 8:00 a.m. eastern on "reel america." general secretary gorbachev, if you seek peace, if you seek prosperity for the soviet june and eastern europe, if you seek liberalization, come here to this gate. mr. gorbachev, open this gate. [ cheers and applause ] mr. gorbachev, tear down this wall! [ cheers and applause ] >> president n ronald reagan's 1987 trip to berlin. then at 8:00 p.m. on lectures in history, hills dale's college professor paul moreno on how the baby boom and the emergence of teen culture.
5:18 pm
>> advertisers are looking at this. young people beginning to adopt their own styles of dress, the kind of music they listen to, especially, is very different. there's a kind of segregation, separation of youth culture from mainstream culture. >> and sunday at 8:00 p.m. eastern on the presidency. on the 45th anniversary at the watergate breakin joe haldeman offers an insiders view into richard nixon's white house. >> the white house phone rings and i instancely assume it's that dreaded call from nixon. the conversation was surprisingly belief. the president wants john and me to meet him at camp david at 1: 30 today. when the white house phone rings again, i fight to stay composed. that was ron zeigler, press secretary. bob says he's at camp david, too. the president now feels very
5:19 pm
strongly that john and i should volunteer to resign. >> for our complete american history tv schedule, go to c-span.o c-span.org. >> next a look at the future of historically black colleges and universities. speakers focus on outreach and recruitment efforts and funding challenges. from the american enterprise institute, this is an hour and a half. >> so first of all, let me say welcome. my name is gerard robinson, i'm a resident fellow of education and policy studies hire at the american enterprise institute. for those of you who are here for the first time, welcome to our lovely home. for those of you who have been here before, welcome back. i'd like to speak to our people watching thi

17 Views

info Stream Only

Uploaded by TV Archive on