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tv   Budget Economic Outlook  CSPAN  April 11, 2018 11:51pm-1:18am EDT

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addressbook the senate budget committee on the budget and economic outlook. good morning and welcome to the hearing on the cbo budget and outloo outlook for 2018 thrh 2028. thank you for this report.
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as you know, the update was delayed from its normal release in january due to the congressionacongressional active end of last year. i appreciate the cbo dedication to integrating into the final product analysis of last december's tax cut jobs act as well as the 2018 bipartisan budget act and omnibus appropriations bill. it's vital that this committee has the most up-to-date information to understand the fiscal impact of the policies being implemented. this year's report like so many before it shines a spotlight on the countries on sustainable fiscal outlook, automatic spending programs like social security and medicare. and outpacing the economy, consider this. automatic spending will soon consume all the taxes and revenues the federal government collects, and that is before 1 dollar goes to providing for the
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national defense and other priority is funded through the so-called discretionary spend and as part oaspart of the annul appropriations process. and, 70% of the total increase in outlays over the next ten years is from social security, medicare and that interest on america's debt. congress must come to terms with this spending. our government makes promises to pay for the spending without identifying a source of funding for the sustainability. dedicated taxes and fees are paying for less than half of the total spending. to really address the fiscal imbalance, we can either reduce spending or increase our projected economic growth, but preferably some combination of the two. the tax cuts and jobs act fast was a good step towards growing the economy. it's already producing higher wages, more dollars in paychecks and increase domestic investme investment. and while we may have disagreements over the extent of
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its impact on the economy, both the joint committee on taxation and cbo confirmed the tax cuts will have a positive impact on gdp growth area to the budget committee continues to work towards sending a legislative path for the upcoming year and part of that has to be the process by which congress budgets. we cannot continue to make last-minute appeals that only added to our debt and the changes made for the long-term sustainability. or to spend money from the end of the tenur ten-year period ine first year. the threat of a government shutdown shouldn't be used to increase spending, but unfortunately since the 2,011th failure of the joint select committee on the deficit reduction that was created by the budget control act, we have seen this outcome time and time again. most recently culminating in the bipartisan budget act of 2018.
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if appropriations were to grow at a rate of inflatio the rate e end of 2018 rather than returning to the budget control act, discretionary spending was the one in seven tenths trillion higher over the next ten years. we need to reform the process to end the specter of government shutdowns that lead to overspending. to underline the problems we need more time and effort towards oversight and reducing
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the mandatory spending. congress needs to focus more on these autopilot programs. to set the goals for the sustainable debt to gdp ratio to the overspending does not ultimately bankrupt the country. the continued growth of the national debt is something the committee in congress needs to address. the balanced budget is the best outcome, but as the president's fiscal year 2019 budget shows, it is getting harder and harder to produce. while the correct debt to gdp goal is debatable. the projected path approaching 100% over the next ten years is not a good outcome.
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thank you for being with us again. mr. chairman, over and over again, president of trump and his administration and many of my republican colleagues have made the claim that the tax plan that was passed that gives breaks to the richest people in the country would pay magically for itself. september 28, the treasury secretary said not only will this pay for itself, but it will pay down the debt on october 22 president trump said this about his tax plan. 1.5 trillion is more than pays for everything. on december 4, the senate majority leader mcconnell said i
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not only don't think the text though both increase the deficit, i think it will be beyond revenue neutral. in other words it will produce more than enough to fill the gap. "-end-double-quote. and mr. chairman, on december 19, you said, quote -- this is how much i respect your work -- i'm tired of the budget hawks willing to throw in the towel and accept the trillion and a half deficit over the next ten years. i'm still a deficit hawk and claims to the country that this tax bill will go unpaid for or an incomplete analysis of the tax bill. fair? the results are in and nonpartisan experts tell us not only will the trump tax plan will pay for itself and it will add nearly 1.9 trillion to the federal deficit over the next 11
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years even after taking economic growth into account. and the trump tax cut is not the only republican policy that is increasing the deficit in the nationaand thenational debt of 7 years. .. >> you just talked about it and the necessity in your view to cut social security and medicare and i think that is a
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wrong idea with seniors all over the country trying to get by on a few thousand dollars per year what we should not be doing is giving unbelievable tax breaks to billionaires and then say now we have to cut benefits. that is a warped sense of priorities in my view. so when we talk about the budget we have to talk about it in the context of what is happening in america and what is happening is a massive increase of income and wealth inequality more people in america and now hold for the wealth in the bottom half of the american people so a very specific amount of income goes to the top 1%. i would focus on an economy that works for all of us and
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you don't do that if the president proposes for a trillion dollar cut of medicaid and medicare you don't do that by cutting social security. but you do say to the wealthiest people in this country who in many ways never had it so good, to recognize income inequality is worse today than at any time from the 1920s and you need to pay your fair share of taxes also make them think about why we are expanding or increasing military spending by 155 billion over the next two years. we have veterans sleeping on the street. mr. president or mr. chairman with the presidents tax plan will not lower the deficit according to cbo but increase for us to get our priorities
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right in protecting working families in the middle class. not just the campaign contributors. >> i appreciate you quoting me but later when you said cut medicare social security. >> and what did you mean when you talked about entitlement programs? what do you mean by that? >> i thank you missed part of that some of the duplication and effectiveness to make those programs and i did not rule out an increase that something has to be done and it needs to be a combination is what i said. >> if i misquoted you i'm sorry but some of your house has gone -- her colleagues have talked about cuts to social security and medicare. thank you.
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>> our witness this morning is doctor keith hall earlier this year he appeared before this committee to discuss the cbo work to increase responsiveness and transparency at the agency dr. hall will talk about the latest projections and the challenges that face the nation we look for to receiving their testimony for the information for the opening statement and questions welcome and please begin. >> chairman and ranking member and members of the committee thank you for inviting me to testify the cbo recent analysis for the budget and economy outlook the baseline
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budget projections in the forecast which the agency released on monday in the cbo baseline projections we incorporate the assumption current laws governing taxes and spending remain unchanged it grows substantially over the next few years later on between 2023 and 2028 to a high level and as a result with a steadily rising trajectory approaching 100% by 2028 the projected deficits over the 2018. have increased since we issued the last budget of economic projections june 2017 primarily from tax and spending legislation especially the 2017 tax act of
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bipartisan act of 2018 and and the consolidated appropriations act of 2018. their economic projections inflation-adjusted gdp expands by 3.3% this year and 2.4% in 2019. most of the growth is driven by consumer spending also contributing a significant amount this year growth exceeds potential gdp over the next two years this marks a path to encourage a large part because the recent legislation provide stimulus at a time when there was little left in the economy note the larger deficit results to exert upward pressure on interest rates and prices during the 2020. those factors belong with slower growth with the
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expiration of reduction of personal income tax rates and economic growth. after 2026 it is projected to rise slightly matching the growth rate from 2028 real actual output and real potential output are projected to expand at 1.9%. in our forecast it is the key determine and through 2028 because actual output is near the potential level right now i'm projected to be into the period. so potential output is projected to grow more quickly than it has between the 2007 session as productivity increases over the past 25 years. it is projected to grow more slowly than in earlier decades with slower growth of the labor force which results from
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the ongoing retirement of baby boomers and their projections with the 2017 tax act to raise real potential gdp over that same. it is projected to boost level of real gdp by an average 0.7% nonfarm payroll employment by 1 million jobs. the current economic projections are differ -- differ in a number of ways and it was significant real gdp growth over the next two years projected output is greater because of legislation and improvements of the analytical methods over the next decade to be lower in the current projection and previous ones when economic stimulus although the short and
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long-term interest rates are projected to be higher on average through 2023. turning to the budget projections that budget will total $804 million $139,000,000.139 million more than the $664 million shortfall declared in 2017 the budget deficits will continue after 2018 as deficits accumulate debt hold rises from 70% with $16 trillion at the end of this year to 6% or $29 trillion by 2028 that eight that will be the largest since 1946 well more than twice the average over the next five decades revenues however and the objectives rising steadily by 2025 at five at the end of that year
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many provisions may expire causing receipts to drop sharply and 18.5% in 2027 and 28 averaging 17.4% over the past 50 years. in our projections over the next three years is near 21% of gdp which is higher over the past 50 years after that it grows a little more quickly than the economy with a increase reflects mandatory spending because of the population and rising healthcare costs are projected to increase for social security and medicare among other programs it also reflects significant growth that is projected to grow more quickly than any other component with rising interest rates and mounting debt by 2028 those outlays for interest are triple what they
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are as a percentage of gdp and in contrast it is to decline in relation to the size of the economy we now projected a cumulative debt of $1.6 trillion larger than the $2.1 trillion deficit they participated in june revenues are lowered by 1 trillion in the outlays are higher by half a trillion laws enacted since jun june 2017 are estimated to make the equivalent deficit $2.7 trillion larger largest projection through 2017 however causing us to reduce or estimate of the cumulative deficit by $1 trillion over the same. mainly because of the expectations growing from the economy and for corporate profits all the changes have
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small effects on the projections also to have an alternative scenario altered to maintain major policies in place that substantial tax increase of spending cuts would provide from the sums provided in 2018 in that scenario could be resulted in the current baseline projections and then reaching 105% of gdp the amount that has been exceeded only once the nations history. to contribute to the rise even more sharply rising in subsequent decades and then have serious negative consequences in particular the fiscal crisis that would increase. i appreciate the invitation to testify on the cbo budget outlook and i'm happy to answer your questions.
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>> thank you for your testimony and for the expanded documents that help us to know where things are going. now we began a round of questions it is arrival time based on the gavel order. so the jobs act has already stimulated the economy putting dollars in the hands of hard-working americans investments as we look forward to the reduction of the business tax rates they are incentivizing more and i noticed table number two that revenues grow every single
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year. i noticed that outlay of growth more substantially than revenues which is the problem we need to solve. can you expand on the business response to the tax bill? >> sure. we have forecasted the tax act will encourage savings investment in work and the reduction of the lower tax rates and the lowest expenses will lower the user cost of capital and boost gdp growth we also see marginal tax rate are also down in that will increase labor force participation throughout the ten year period. we also think that those tax
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rates will have a significant effect nothing balances the gdp over the ten-year period as .7 percentage points higher because of the tax act. >> we were hoping for that point it is good news excluding the governmental transfer the only one to come from outside the government that has social security. taxes and medicare premiums, yes the trust fund programs will add deficit to net 1.5 trillion that is the budget. >> so those were fiscally
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sustainable and without legislative action to project this disability trust fund and medicare hospital trust fund will be exhausted. not that i'm suggesting that but suggesting solutions somehow. >> the aging of the population and the rise of healthcare cost is a major force striping my fee health insurance fund. >> we have a re- estimated that the last act will be a loss in 2031. >> the baseline includes more than $14 trillion of discretionary spending over the next ten years will the armed services committee can
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authorize spending each year many non-defense programs remain unauthorized and i know that the cbo prepares a report each year on the appropriations but this year it was released prior to the final appropriations being enacted assuming the defense continues to be authorized on the annual basis with an estimate of what portion of the 14 trillion is unauthorized? >> we really don't the last estimate was 2016 it was a large number. because obviously congress decide to authorize going forward and that could change. >> we are interested in getting the number so the tax cut jobs act made the corporate rate permanent to ensure long-term investment decisions that businesses have
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to make over the long term to show the u.s. is a competitive market so does the lower. >> thank you for the doctorate. [laughter] i barely made it through colleg college, doctor, as you know president trump and my republican colleagues have said over and over using the
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tax cuts but the tax plan will not increase the deficit over the next 11 years correct. >> so at the end of how many hours we sit in this room hearing about the benefits i have to leave to give taxpayers some the revenues will increase to overcome the deficit that is true. but president trump along others misses the quote, the rich will not be gaining it all with his tax plan but
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according to the tax policy center by the end of the decade 83% add benefits from the tax plan go to the top 1% and 60% goes to the top is that true? >> that is the estimate we haven't done a similar calculation. >> so what we are talking about is a tax plan that grows the deficit and all the benefits one of the issues that concerns me is the average taxpayer has seen zero
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wage growth in march 2017 may $22.60 an hour is that true based the three wealthiest people have more than the bottom half? >> that i don't know we did issue a report the numbers are not in my head over the past few weeks about femininity quality in that is a situation worth looking at.
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>> we will do that. my colleague and them making $250,000? everybody is concerned about the financial future and that is a legitimate concern. if you looked closely according to the ssa if you. >> social security will be there to increase benefits to to the lower income beneficiaries. >> it out know if that's true or not.
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>> all people who are concerned may people were struggling today. but the answer is not talking about cutting social security on the big things or to. >> thank you mr. chairman.
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>> thank you mr. chairman. >> directing your work picture painted. so that almost 70% that isn't news i hope congress thinks of the impact on our children and grandchildren, but without debt my colleagues on the other side of the aisle want to make this about revenue and the historic tax cuts that we enacted. i think that completely disregards the positive regard of these reforms that i thank you pointed out in your meeting with the chairman, my first question is kind of carrying on where they left
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off but it wasn't based on your analysis those tax reforms will increase academic growth lower unemployment and investment. >> those are all true. >> i have to conclude and democrats say they want to repeal tax reform that they are really telling the american people they want fewer jobs and lower wages and based on your analysis how would the individual tax reforms expire after 2025 to impact the economy? that is the opposite of stimulu stimulus. >> this is why we have the alternative scenario they don't expire but they
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continue. >> so unless you disagree with us as a percentage of gdp and according to your analysis what word revenue -- revenue as a percentage of gdp be in 2025 prior five prior to expiration of the individual tax reforms? >> it is a bit higher. >> nor the 18%? that is even better than i thought matt 17.5 even with those tax cuts enacted fully in effect revenue as a percentage of gdp.
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>> and i do have the year wrong i'm sorry it is 17.5%. >> turning to spending is it correct spending has averaged 23% of gdp? >> it is north of 21% and of these come and of these come 23.6. >> what are those primary drivers of spending growth? >> so like you take care of
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medicaid mac i agree with that out of the percentages are accurate and that will up at 1449 while discretionary spending that part that we appropriate every year is projected to fall one percentage point so revenues even with tax cuts will remain on historic averages spending is set to increase significantly over historic norms it seems if we are going to get control of debt and deficits the focus needs to be on the spending side particularly mandatory spending programs i yield.
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>> for professionalism was always appreciated here in this room it was produced by chairman judd gregg i was proud to be one of the sponsors so the bulk of the tax relief goes into the pockets of the middle class rather than multinational corporations but our colleagues rejected that approach and decided to put the massive tax cuts to the multinational corporations on the national credit card. so let's walk through a couple of numbers to be clear about. in the updated outlook, you'll estimate it will increase the deficit by $1.9 trillion over
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the budget window even after taking economic feedback into account $600 billion of that cost is a bigger interest payment on all the debt. so here is my question. besides slashing social security medicare and medicaid, i don't know where else republicans can possibly go for the $1.9 trillion largely going to the multinational corporations. and then to strip the budget down it seems to me that cutting the defense budget would be the only other realistic option.
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what is missing with that announcement? >> i don't want to make a recommendation. >> i don't want you to but i guess just alone is 1.6% and that will chuckle just with payments over the next ten years and then it will be 3.1%
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of gdp that is bigger than all of discretionary spending so my point is the interest cost is that we are swamped with defense spending and nondefense ending so it needs to be something pretty big.
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>> number one the middle-class
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are not seeing what they were told which was a $4000 pay raise driving 70% of the american economy. i don't see how growth gets you close to pay for the $1.9 trillion to put on the credit card still growing with a safety net and defense to cut those discretionary programs -- certainly share your you want --dash your views. >> thanks for being here. like most people here this has nothing to do with the leadership that is we thank you for being here today it
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does seem like whoever is in charge not of us have covered ourselves in glory. congress and this administration like the go down and that my best vote of the budget control act of 2011 and to make those cuts that need to be made i don't know if anybody here was but he ended up with the sequester for those of the votes that i made to leave spending for a period of time so you talk about the cost of the tax bill and if it and that costing what was laid out it could be
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one of the worst decisions i made a help that's not the case but to assist whether jobs and i want to get back to that in a moment but what is never talked about with the bipartisan budget and to do an analysis over what we just passed communicating to say that tax bill could add 1.9 showing dollars in debt? >> cap house again. >> if we stuff that was we would be past when asked about the same.
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>> 305 billion of that is from the caps even if not 330 billion for spending. >> with 150 billion per year we had 150 billion for the
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baseline, did we not? >> we just add 150 billion to the baseline. >> but chairman that cannot be accurate.
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to just do the math to get 150 billion? if you multiply that by ten that cannot be accurate. but anyway the point is and tax reform. is that correct? >> correct. >> both sides of the aisle tell 23 people on this committee that haven't been involved over the last 15 months senator sanders i don't think it is because you are fiscal conservatives but they didn't agree with our priorities but there are only three that hammer participated to increase the deficit we all participate i voted against the spending but face it. and i listen to this partisan
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bickering it is ridiculous. we are not capable to do with our country's finances the american people don't really wanted to be controlled. i know my time is up but it is confusing to me on this page you have the growth at .7% the average increase of .7% over the over the ten-year period and we were looking average growth increase of .4% to pay for this bill that was passed. and i'm just confused if that is just from the baseline? i am confused over that.
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>> wanting that might be confusing but that is a level gdp on average will level over ten years. >> doctor hall thank you and your team for your nonpartisan professional work and is a claims the claims that would pay for itself were. fantasy. you indicate here even with additional economic growth, the debt will increase by close to $2 trillion over ten years. so to dig down with the impact the tax bill has a gdp versus gnp because national and
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domestic are measures of the economy but am i correct gross national product is a better measure of the income coming to the people of the united states? >> that's right that focuses on where things are made and designed the income from what is made. >> to that extent to boast -- the boost that domestic product that is because some of the income increased economic activity. >> rights. one of the big reasons with the increase that we have to do national privacy comes from abroad. if you borrow money will interest payments that is money flowing out of the country. >> right. if you look at the stock of american companies it is
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currently owned by foreigners of there is a stock buyback and goes directly into the pockets of somebody overseas. if figure out by 2028 to include that the tax form. >> 80% of the income in the final year when filing kicks in will go to foreigners? >> i wouldn't characterize it that way but i do get your point. >> you just said gdp is a measure of the total economy and the difference is the amount going to foreigners. so you are finding that gdp
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. >> on page 109 you say by locating more tangible assets abroad a corporation can reduce the amount of foreign income and similarly by locating those fewer tangible assets they could increase the amount of income to be deducted then to locate tangible assets abroad talk about moving tangible assets we talk like plants and equipment and that kind of thing? >> i don't know i don't want to say that but if it does
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lower the tax bill to move the job overseas then they get a cash break. >> just to put it into context we think overall the tax act is encouraging to investment in the united states. >> part of that investment what about those tax expenditures? >> is not our call but we
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would follow up with that. >> is that the kind of thing in the past you have said is a tax break? >> actually we rely to make that determination. >> that without government program to encourage the view points and equipment overseas? thank you so i thank you for your appearance and testimonies there a lot of talk about the macro economic picture about budget debt and deficit? so that cdl outlook projection historically low and that creates competition for labor among businesses. because wages are necessary to
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attract new employees so what do are they doing to foster that competition? >> we have a lot of stimulus for the tax act it really is pushin pushing. >> does that mean some of the gains from that group whatever that may be will accrue more to labor than capital?
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>> been on a per capita basis? i want to turn to something now to your testimony i did not see much, if anything about national defense and military spending. did i overlook that? >> i think we did not put a ton of facts. >> i write that because i want to make the point to think
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and now we have participated in those wars but have not had
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that conflict that solves through 45 the reserve bank studied the effects of war on trade not only was that severe but even for those neutral countries and at the united states military was patrolling those chokepoints foreseeing our allies to mediate their differences of their small conflicts don't rise into big conflicts as well as deterring the soviet union now other competitors from that adventurism that launched us into world war ii so please bent a lot more than any other nation because military competition is destructive of economic growth and prosperity
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and we cannot afford to skimp on that so with the absence of much discussing of your testimony that the military is one of the most fundamental things that we have to continue to do so without any help of prosperity for our country. >> good morning. i am reviewing the cbo outlook and i am deeply concerned but even with that budget deficit increase to be attributed to the republican tax plan passed a few months ago that would add nearly trillion dollars to the deficit according to the analysis to see the size of the entire economy in just over a decade. we have forecasted in june the
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problem can --dash two wealthy corporations and then the tax cuts are made permanent ap or giveaway to the corporations into the united states although congress talks about the increase from the tax plan some of my colleagues want entitlement cuts. really means cutting medicare medicaid and social security with the main programs from my home stay in california and they deserve to retire with dignity my constituents means to pursue -- afford their prescription drugs not living paycheck to paycheck and having peace of mind that government will not take away the benefits promised to them
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at a time when somebody seniors cannot afford their life-saving medication we need a budget to allow them to negotiate but we don't need a budget that cuts $500 billion
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my question is based on that outlook what are the effects of this tax bill directly or indirectly to imply -- impact the future of medicare and social security? >> so will that have an impact going forward? with the boost to economic growth that could extend the exhaustion dates but the basic problem is still there. and with the debt getting through the unsustainable level. >> do you agree would have the effect on the senior american? >> certainly certainly and not
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to the economic situation and those numbers from the joint committee on taxation which laid out 17 out of every $20 of benefits goes to the richer americans.
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, let me look that up. i'm sorry. i can tell you the spending part spending part actually is 45% of that increase so it does play a significant part. but the remainder is the tax bill. >> so to breach the tax bill
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includes those that are fundamentally through borrowing? >> essentially we have phil and also speaking to the benefits of the richest americans. >> not just a way to look at it but is that fair way to look at the numbers? >> obviously it depends on who fixes deficit who bears the burden of president clinton
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had a reduction at 236. so obviously a fast decrease with that surplus so under the second increase from 236 to another rough double and under president obama the first year in office 1.4 trained and deficit reduced 584 when he left office. why is it that deficit decreases under democratic leadership and increases in the republican leadership? >> i would not offer an opinion on that.
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>> do i read the numbers accurately? >> that sounds right. . . . . it's your responsibility to offer that. i'm glad you confirmed my numbers are accurate. i will close by saying our children are financing the biggest theft of money to the wealthiest in america and this is what you normally see in corrupt and irresponsible third world governments, not the united states of america. >> thank you, mr. chair.
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it's good to be with you. i'd wani want to draw your atteo page 33 of the report and i'm going to ask about trade. changes to trade agreements and policies as trading partners that impede trade could have significant adverse effects on economic activity where is the removal between the united states and the trading part improved economic conditions. we had a hearing recently where the head of the council and was immediately after president trump indicates he would oppose terroristterrace on steel. i asked at the time based on my understanding on the number of workers and the american industry that make aluminum and steel is dramatically smaller than the number of workers that
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work in the industries that make things with aluminum and steel. i asked his economic opinion about whether the position would be a plus or minus four american workers and he said that literature would suggest looking at it that way before you get into a retaliation discussion that would likely have a negative effect on jobs. do you agree with that? >> i do. >> then i >> then if we get into the substantive retaliation issues, the aluminum and steel issues mattered a lot because i thought anheuser-busch and the breweries to providing aluminum for ten dimples so happy truck plant that's the only manufacturer of the trucks in dublin and virginia is going to raise the cost to consumers. so, there is some effect on the aluminum and steel door for the
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course of the last couple of weeks, a lot of concern in virginia on the side at the announced that they would retaliate especially with respect to things like soy beans and pork and other agricultural products are very challenging. i don't know if you started to do any analysis of what the target on aluminum and steel more broadly for the retaliation were to occur. we would pay attention to and see how things turn out and it's something we would include baseline economic forecast at a later date next time.
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>> you did generally agree in the way of the conclusion. there are terrorists against the sector is that going to be a net good or bad in terms of the workforce? >> to be fair the solution of how winds up its rather than just this one act like that. i do think a lot of concern i find him interesting because they are the inverse of the benefits of the free trade. you can have lower prices and costs of production. undoing those can have an
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adverse effect. but we have to see where we wind up. it's still at the rhetorical level of the retaliation discussion is rhetorical right now. >> we don't know what sort of changes they might make going forward. >> i'm going to conclude and to say that it's interesting the constitution gives plenary power of trade in the clause. we delegate to the president through fast-track, which i support the ability to negotiate trade deals and set up a process for bringing them back for an upgrade on both. it's interesting that we won't to have a say over the trade deal that we allow them to start trade wars without the vote of congress even though the constitution suggests it is ultimately for congress. i don't think a president should
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be able to do a trade show or start a war without congress giving. in the improvements in the process but there can be a lot of executives thank you mr. chairman. doctor hall, you and i talked before about the healthcare spending graph and this is the one from before, but guess what. we have a new one. another year has gone by. just for the record, back here
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when the affordable care act passed the cbo did the yellow line estimate of what federal health-care spending programs are expected to look like. then as time went on and we had the experience of the affordable care act and whatever else took place, we got this actual results that came in below what was expected and then here there's been a new projection pn that they need going forward. in the graph that i used to use all the time of this was $3.3 trillion of savings between the expected spending and the new projection. in this, the number goes up to $4.2 trillion. now, i believe that about
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300 billion of that relates to the repeal of the individual mandate. so you could back that out but that still leaves $3.9 trillion of savings up from $3.3 trillion of savings in the intervening year, and i think it's important to try to do whatever we can to figure out. this has an emphasis now because there is a bicameral select committee working on improving the process. and nobody has been more eloquent than the chairman in understanding how broken the
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existing budget process is. i think that's one of the ways we need to fix the existing broken budget process is to have all of the elements of mathematically add to the debt to be considered in the budget process us are not just appropriated spending but also health-care spending and tax expenditures and revenue that is what leads to the bank and deficit but those are the elements that lead to the debt and deficits. >> if we are going to look at healthcare we need to start looking at ways to address this and i completely disapprove of and will fight to my last breath to prevent attacking medicare and medicaid and taking benefits away from people in order to
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achieve savings because i think there are better ways to achieve savings and efficiencies that can be gained. we are seeing remarkable results out of the accountable care organizations and it's hard to extrapolate from coastal medical in the state of rhode island a provider practice but now reduced its cost by $700 while dramatically improving the experience and the care that their patients get to $3.9 trillion of savings. i suspect there is something going on out there as we improve the payment system for the healthcare enterprise so that it is diverted u funds towards doig
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things to people and prescribing things for people and seeing people than it is to do the things that keep people healthy so they don't need those things in the first place. i just want to first of all ask if you conque concur with that l fund is there anyway we can be helpful to try to figure out what is -- 3.9 trillion, it ought to be a matter of priority to figure out what is working that has made thand that has mae in the. >> we are interested in the topic and trying to do some work on that. i know you're interested beyond this if for no other reason we keep getting the forecast wrong and lowering the cost. if we understood that better we could give a better forecast of the future cost. we are working on that and where tell people what you're doing.
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>> may i ask an additional question? can you look in any way down through the experience of the coastal medical or rhode island care physician or provider group where they are seeing the cost not just go up so fast driving the cost down for their patients and maybe that is a big extrapolation but what does that look likthislook like in your p? >> we talk with providers and their experiences to get an understanding of what is happening to see if we can find a common factor so that it's going to be part of our methodology. >> thank you. if we could save $700 trillion while providing better care for people, that would be a pretty
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serious win-win. >> sharing the information you did i would have to get together and ask a few questions about it. to give more detail get more deo actually work that. thank you for your work on the special budget task force as well. we are relying on you to come up as you did working bipartisan before to come up with some solutions that if we can fix the process -- >> we are much inspired by you, mr. chairman, and we are doing our best to channel your concerns and your wishes and that process. >> i appreciate that. and i want to thank you for your testimony today and for all of the documents that you perceive the preparation of and your statement will be included in the record.
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all questions for the record are due by 6 p.m. today they signed hard copy delivered. under the rules the witness has questions to respond with answers. with no further business to come up with the committee, the hearing is adjourned. the
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it's the sense of powerlessness if you think about the events of 2016, just to take an example, not many members of the government planned to attend the vote to leave the european union and donald trump would become president of the united states. donald trump isn't somebody that gets invited to those meetings
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testified before a senate appropriations subcommittee on his agency is 2019 budget request. he also talked about the concerns of

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