tv House Hearing on Presidents 2020 Budget CSPAN March 13, 2019 1:04am-4:00am EDT
>> [inaudible conversations] the hearing will come to order. welcomed everyone onto the president's budget submission and we certainly welcome the director of omb. i will now make my opening statement and recognize myself. thank you for coming here today to testify on the 2020 budget proposal brickle let's dive right in the purpose of
the hearing is for us to be eyes and ears of the american etaxpayers on the priority of the truck administration begetting the brother to an appropriations process over 2020 but what they have produced it is not responsiblele for even useful i describe it as a betrayal harsh words for a harsh budget defending working americans and families the second proposal relies on extreme deficit exploding impacts of the republican tax scheme for the same working families of americans. the budget proposal offers more of the same and relies on a patchwork of projections and extreme cuts for any responsibility for the well-being of the american people. what this administration is saying to our constituents the federal government no longer has a role to make sure we are an opportunity -based society and the american dream is out
of reach. in 2020 the president would have us do the unthinkable 9 percent cut not 5 percent as the white house claims but over the course of the decade they would / nondefense discretionary spending by more than $1 trillion crippling national security to disinvest an education, public healt health, energy, health care research, infrastructure and activities directly related to national security including homeland security diplomatic operations food safety, safety, prevention and control a complete abandonment of our responsibilities to the american c people and it is intentional. you can cut medicare by half a trillion dollars without knowing it will hurt our nations seniors or gut medicaid without knowing it will result a families of health care coverage you can
cut student loans by more than $200 billion without w knowing it will make it harder if not impossible for people to go to college or cut nutrition assistance without knowing the food is on the table and more than 30 percent without to make our air and water less safe and clean. to tighten the belt or even a series of to rein in spending this is malicious that is intended to do harm. onon top of all the damage done in the name of fiscal restrain restraint, this budget calls for $1 trillion of additional tax cuts for the wealthy perk on top of the tax scam enacted 2017 showering tax cuts on the rich but adding trillions to the deficits.
this does not add up or make sense that shows the more creative aspects of the president's budget the administrationsemm has the rejection and oldest accounting trick in the book to disguise the true ramification one of the most striking parts the inclusion of $165 billion for overseas contingency operations a stunning figure. not even trying to hide the attempt to skew the cost of military operations so fiscal conservatives is a backdoor way to supercharge defense spending without realizing caps for spending i'm sorry you don't get points about being honest by being dishonest it doesn't work that way. the only way we can begin a productive budget is sticking
to honest and realistic budgeting. it's my hope we can conduct an open and honest examine notion - - examination set forth by the trump administration to craft a budget that truly reflects the needs and priorities a of the american people also thinking again to the acting director to be here today i look forward to your testimony and ideal to the ranking member. >> thank you for joining uss today. this committee works to craft a budget resolution for the fiscal year ahead we appreciate the opportunity to discuss the president's budget and spending priorities with o today. while the constitution gives congress the power of the purse funding there priority of the american people while ataddressing the nation's fiscal challenges is not an easy task and requires collaboration on both sides of the aisle in bothth chambers and both ends of
pennsylvania avenue this is particularly true when the american people have a divided government sent torn washington to say no to the 116th congress that is why hearing today is so important from the administration as the cbo warned earlier this year that our nation is nearing a fiscal crisis. i would argue we are already in one. it may not seem like it and the markets have not responded yet, but i sense there is some smoldering going on that could lead to a fire as it were and at the current spending levels deficits will total 11.$6 trillion in the national debt will rise to nearly $34 trillion over the same. the debt held by the american people reached 93 percent of gdp the highest at level since just after world war ii.
we cannot continue down this path and we have to lead by example making tough choices necessary to reverse course there is much to do to put spending on a sustainable path the budgets goes in the right direction reducing two.8 billion between 2020 and 2029 under current law annual deficits are nearing trillion dollars annually 2029 under this proposal the annual deficit is lower at 202 billion. further the budget reduces the share of the debt held by the public 80 percent of gdp to 71 percent that is a vast improvement under a historically lie - - high debt levels under current law. additionally there are priorities i'm pleased to see for example,keur taking steps to secure our borders and support
troops and veterans as someone who has served in the military the safety and security of the american people is the most fundamental purpose of the federal government i appreciate the administration's clear commitment to these priorities per glass appreciate the administration focus on improving the long-term health of the american people by investing in life-saving medical research to combat theba opioid epidemic so that said before our biggest threat to all priorities into the long-term security health and prosperity is out of control mandatory spending. mandatory programs account 70 percent of all federal spending and are projected to increase 70 percent in 2029. the go far beyond the intended size and scope to have far exceeded what we canldor afford without action not only will they crowd out resources for other priorities but unable to deliver the benefit today for the future my colleagues on
the other side refused to ignore thatt reality to produce ideas for new mandatory programs while looking to raise the spending caps in fy 2020 as we move forward in the process we can say what is your claim to offset? last week we were pleased to hear from the distinguish majority leader from the house it was a very productive discussion about the need for a deal however i notice i haven't heard much from our friends on the other side of they would be at a suggested we use the ryan murray dealmu from 2013 as a model if that's the benchmark i look forward to hearing recommendations for offsetting increases of discretionary spending by addressing how to control mandatory spending. before i yield back as late as last night i saw the news that suggested the difference of debate whether the majority
partydo even plans to do a budget. i feel your pain. i have been there. but it is like asking if we will do our jobs. i know i am speaking to the choir with the budget chairman because we were anee agreement caand the changes we were advocating on budget process beforepr them. i will say again it is a flawed anddso broken process we need reform i look forward to today's discussion and i yield back. >> i look forward to working with you as we work through the issues very collegially think you if any other members have opening statements they may submit them and they will be published in the record will now introduce the doctor
from omb and i yield five minutes for his remarks. >> thank you mister chairman and ranking member and members of the committee thank you for the opportunity to testify on the fiscal year 2020 budget program yesterday i submitted my false statement for the record however for oral testimony i will just hit a few keyfur y points prick overe past two years present trump has unleashed the american economy with the probe growth economy returning prosperity for the american people working alongside many of you on this committee with historic tax reform into law the first time that the tax code was updated and improved to provide much-needed relief to all americans especially the middle-class. shroughout the administration the present has an agenda
relating in the economy of $33 billion of regulatory cost however these great achievements are challenging to maintain if we don't get fiscal house in order annual deficits are rising and willin exceed 1 trillion and interest payments on the national debt are projected to exceed military spending and the national debt doubled under the previous administration now more than $22 trillion of this level is unsustainable threatening the prosperity and economic freedom of future generations. the responsibility that has been outlined in previous budgets and today he is requesting more mandatory spending than any other president in history. but each time he calls for fiscal restraint he has been blatantly ignored her go instead those opposed to decreasing spending calls for
large tax increases as a means to reduce deficits. however not only does this punish taxpayers or destroy jobs and slow up the economic engine but ignore the reality of the current fiscal situationenalua. contrary to those predictions of the historic tax reform revenues are increasing aligned with fifty-year historic 5 averages the problem is it we taxed too little but washington spends too much this budget is another fiscally responsible spending plan from the president i look forward to work with members of this committee and remain hopeful we can prove to the american people that government is capable to balance the budget to prioritizehe effective spending. thank you for your time i look forward to answer your question questions. >> the ranking member and i will defer our questions until all other members that have
had their chance so with that i yield five minutes to the vice chairman of the committee. >> thank you very much for calling us here today. i will share a quotation from a politician talking about endless deficits who said it would weigh the country down like an anchor that we on the verge of a debt crisis do you know, th who said that? speaker paul ryan in 2013 commented on the obama administration with the fourth straight year of reducing the federal deficit but in reality how much have deficits exploded due to the republican tax law? they have distant that - - definitely worsened but over ten years we believe they will improve and as a result of the taxbe cuts with the overall tax
cut. >> that's interesting because only be consistently reviseded up the estimates since the tax law was passed how big the deficits will be. >> but that's over ten years. >> have you revised up those estimates since the tax law was passed ?-question-mark they are revised to account the tax cut in the short term. >> they have been revised up. >> in the short term. >> one.9 trillion is the estimate over ten years that you have produced. so how many of mister trump's eight.6 billion-dollar wall is built with one.$9 trillion tax mac i haven't done the math. >> it is moreou i than 220. and those democratic priorities so one.$9 trillion does for education does that
make a difference in this fully funds what is necessary to educate children and then south korea and china with those education standards. said to have $50 billion of school choice and it is a paradigm shift but that would not be important? . >> we need to fund the education programs that work and are efficient leading to student outcomes but a dollar spent necessarily equates.
>> there is no debate there. >> but there is a matter that parents and family states and localities can do a better job to educate. . >> we believe what is necessary to educate children. >>, years to eliminate the national debt under his program? it has made a commitment to the american people to keep our fiscal house. >> working on putting a fiscal plan. >> eight years 2017 through 2024 how do they reject that budget deficit to be at the end of the eight years? . >> we are still looking at trillion dollar deficits. >> over aar trillion dollars so
with the obama year in office last year it was $500 billion. so turning quickly to veterans the budget quotes president trump statement that it is our moral and solemn obligation to demonstrate to veterans a continuing gratitude of unwavering support so how does cutting benefits rounding down cost-of-living increases should we be making veterans pay for exploding deficits by denying the full cost of living adjustment? this has incredibly high creases on - - increases for veterans spending. >> you think the cost of living is going down? to make it is an 8 percent increase we are looking for ways to improve programs that they will improve. >> those are the numbers there
was proposed in the past with no adverse impact. >> you need to speak to some veterans. thank you. >> your time is expired. 's the mac i have only gotten to serve with two presidents since president obama who love this country but never once sent a budget to capitol hill that balance ever not in five or ten or 15 years. so i know you're making tough decisions but i appreciate the president sending a budget balanced but you think we could have done it by now but we have an. and then to reduce federal spending year over year.
and then to decline one year to the next. and then the next year. >> the budget we are proposing rightre now is discretionary spending 2 percent less from next.ar to the so what could be done but year over year you are investing more america every year than you did before in the large part because it is rising every year and then to talk about one.9 trillion to justify the interest to be armed by constituents and to
your point only 10 percent of education dollars come from washington d.c. post comes from our county and state that is why we have the finest education programs of the nation. am but i want to be clear looking at that tax revenue they fear to increase not just one year or in the out years but every g ngle year of this budget collecting record tax revenues. is at your position not only collecting more money today but more and more with the presidents budget quick. >> i will walk you through the specifics. and to receive three.$3 trillion in revenues and three.four in revenues.
and in 2023.$6 trillion why we are confident the economic policy of this administration which we assume that is not current law that the policies will more than pay for the cost of the tax cuts we think that's important from the standpoint the getting the economy going and allowing people to have more of their hard earned money to invest in their communities. but thinking back to one ofnt the budgets and to return for responsible budgeting and then the president began to kick him in the shins and rather than taking yes for an answer turning into a talking point but is there anything that i
might like less is a conservative republican would take yes for an answer versus those political talking points day in and day out quick. >> i will get this later but many medicare reforms continue to increase spending every single year with the program integrity proposals to offer commonsense reform where you pay for a particular service within medicare no matter the site of care these are proposals from the obama budget with bipartisan reforms and then if that is a factual basis to understand what we are proposing we can achieve common ground by walking through the proposals.
>> with your leadership we can take yes for an answer and folks will do what they have to do but i hope where we do find agreement is through the american people. >> i have never known you to be scripted. n [laughter] . >>. >> thank you mister chairman acting budget director corporate tax cuts pay for themselves? . >> the corporate tax cuts are very important for economic growthto specifically leading to capitalla formulation, one of the more crucial provisions of the tax cuts to ensure that this prolonged economic growth. >> yes or no? . >>t: yes.
>> the most optimistic corporate tax cuts that you give away is about 32 says that the loss in terms of investment and i don't think there is any credible avenue to suggest that those themselves pay for themselves so the deficit everyone likes to talk about is a big problem but also it is a growth problem from the american economy skipped the 2 trillion of growth is not what we talked about there is very little investment in infrastructure unlike tax cuts pay for themselves and to expect minimally a two-dollar
return with the return on investment the disappointment is there isn't a greater investment to the growth of the american economy because the last time we had sustained growth over the eight year. we didn't necessarily have deficits but a budgetary surplu surplus. i just want to move on to the issue of research this budget is showing that $900 million. >> nih spending above what it was once enacted those levels that congress has been appropriating many to the national institutes of health is something we can no longerno sustain although we are
supportive of nih spending and as the father of a child with cystic fibrosis, we are on the vergee of cutting edge drugs to prolong her life. from the standpoint of the ni nih, we are very supportive of the research they perform but i would say that no agency can spend well what they don't live in a resource constrained well when we put forth proposals without analysis of additional spending resources we expect that degrades the ability n of ni nih. >> that's by $900 million in administration is focusing on other diseases from which to
fund research. >> generally we take the top line reduction to allocate across the board with the exceptions ofon pediatric cancer and that debate over the first two budgets that nih could do things if we don't have as high of an administrative cost paying more for those it is an important debate to have. >> dealing with cancer research the failure is when you are forced to quit because of lack of funding funding about 9 97 percent of all fda approved cancer drugs over the past eight years. so your treatment that is
delayed his treatment denied. at a time when you have incredible ability like the cancer institute in buffalo new york, it seems very shortsighted that the administration is picking winners and losers relating to what we decide to invest with developing new treatments definitely cost money but lives as well. . >> i now recognize the gentleman from north carolina for five minutes. >> many of my friends that i'm deeply concerned about mandatory spending that account 70 percent of the federal budget after spending all federall revenue.
despite this to show it will increase spending with free college tuition and other things. further the interest payments are the fastest-growing line item in the entire budget. taxpayers will spend nearly $400 billion of debt interest along with hundreds of billions of dollars that is needlessly wasted because address has failed to the massive debt problem. mandatory spending will crowd out discretionary spending leaving less resources of other critical areas including defense which is our principal concern as a government. so the budget proposes $2 trillion of mandatory reductions over two years. i will give you the opportunity a to expand with
thosers $2 trillion and specifically that proposed changes tong medicaid and the structureses of medicare. >> to have two.$7 trillion of savings that we propose for this budget. one.9trillion is reduction of savings so these are not cuts butt savings over the ten year window. we have achieved $517 billion of savings as mentioned, many numbers are inaccurate.
we also think it's important medicare does not pay for the uncompensated care within the program for people who are not beneficiaries but student loans $209 billion in saving we think that proposal but 12.5 percent of income you are mine - - expected but after 15 years you are done f after 30 years you are done then to
>> mister chairman i just want to get some facts out but not in any partisan way but the budget proposal reduces medicare spending by $845 billion you describe that as efficiency is that correct quick. >> it is not. >> there is a gross federal line in the budget but if you add that the proposals that we include for the children's means what is the number.
>> $517 million that those that go to the deficit you say it is. >> that the number reported but we increase spending every year. . >> you will cut that amount quick. >> medicare spending will continue to rise every year. >> you are reducing the medicare budget by 517 million quick. >> we have savings from commonsense proposals.
but there is a question if that remains true. that with the aircraft to put online with this budget continues to be something. the president wants the world to know we have the most awe-inspiring military ever in the world. we believe we can have peace through strength. he does not want to have the perception this is about endless wars. the president.
leave her delusional instead we not only hit the numbers that we have been the most accuratete. >> this budget is not accurate. >> we are not suggesting we will make any judgment on - - changes to the budget the aspect is that if you look at what is coming in and going out each and every year you make adjustments that is the importance of the federal budget process and it is agree that they can make reforms. but also budgets are about putting forward to the american people. >> i get all that. but let's bring it to something more local. serving a local office why is that the president and the people only seal eliminating block grants are necessary?
a grant of $100,000 that means you don't pass it on to the taxpayers. >> all of those are federal taxpayers as well with the deficit we cannot afford. >> i agree. but this tax cut does not help. >> we think it puts more money in the pockets of harder working american people and the other issue i have is cutting affordable house many have you made contingency plans once you start cutting these programs to have more homeless people on the streets?
our budget projections and i appreciate the questions that is at the top of my mind every time we raise the budget for hud is to make sure we're not causing homelessness had it went any proposals going forward that have that result in any way they had at that helens is almost a mandatory part so we are trying to put forward reforms and update. >> where do veterans sit on this? if we have affordable housing where do they fit quick. >> we don't think there will be any increase of homelessness as a result of this budget. we have a healthy ongoing
increase of seven and a half especially on the mandatory side where 70 percent of federal spending happens as well as discretionary policies to right size the government working for all americans brickle i also think the proposal to the tax relief by the tax cuts and jobs act is a wise policy given what weol heard to be my colleagues on
the other side shows that it to have the wage increases for quite glad to see the proposal includes 2 trillion in savings for reforms to mandatory programs. do you agree. >> it is a definite driver structurally and in the years ahead after the ten year window but i would not want there to be the impression that discretionary spending is also not a driver of the national debt. we have o 30 percent spent on discretionary spending and a 1 trillion-dollar nondefense budget every single year. one of thes things this budget
is trying to articulate is we often say we are going to get a handle on mandatory spending than past 350-dollar budget agreements we cannot afford because we never grappled with ththe paradigm of one dollar of defense but. >> that i want to get to the mandatory side because we don't work over there. i get all that discretionary with defense spending but that is a very small part. and even if we zeroed out all of that the spending curve is still going in the wrong direction so would you agree mandatory spending is the biggest driver of national debt quick. >> it is a very large driver.
>> how can you say is not the biggest quick. >> and i want to leave the impression discretionary spending but we have to make that case it is the main driver in me will never get out of this debt crisis with those performed reforms that aren. in the budget with savings of student loans to consolidate itrograms with the student debt income payment plan we have savings and reforms of welfare to expand the current welfare to other and with savings and reforms to the federalre retirement benefits to more appropriately align with the private sector and reforms to
health care to repeal and of - - replace obama care and restore a balance of medicate - - a medicaid to lower the cost to allow states to be the most direct eligible participation that medicaid focuses on those individuals. i don't want you to go away with the view that it isn't important but to the extent we will keep increasing discretionary and then with the mandatory savings released in the first two rounds those reforms are things like extending user fees come extending laws that werer already in place.
we don't think those are the reforms that allowdu us to fix the problem you are addressing but i appreciate the question. >> i yield back. >>at i recognize the gentleman for one - - from california for five minutes. >> your budget assumes long-term growth rates above cbo projections by most forecasters. it is one thing to wish for economic growth 50 percent stronger but another one to base your budget built on that based on your confidence of 3 percent what with the disparate impact me if it grew around 2 percent as most believe quick. >> thank you for the question. the first part of the answerha is we have an understanding that has turned out to be true the economic policies lead to
growth and we projected over the first two years of this budget we were the most accurate inn history. >> i have a little bit of time i want to hear your answer t but what about 2 percent quick. >> we have alternative scenarios because we believe we are vindicated in part of the question was why. >> i did not asked that i asked what if it is at 2 percent? but the problem is in those programs being or by 60 percent versus households investing in renewable energy and energy efficiency and electric vehicles but with its own assessment so the
department of energy programs provide for every one dollar invested compared to what the private sector would achieve on its own and with the dynamic scoring here is an example with return on investment. howard the budget /mo programs successfully innovation competitiveness in the emerging clean energy industries to protect public health and the environmentel ?-question-mark we believe with the trillion dollar deficit and the resources h programs that are successfully supporting u.s. innovation, competitiveness, and job creation in emerging clean energy industries that also protect the environment and public health? director vought: he we believe in a time of trillion dollar deficits that the resources that the department of energy has should be devoted towards basic research that would not otherwise be done by the private sector. it should not be focused on applied research that are the types of activities that the private sector could continue to o. that said, we fully fund basic r&d. we keep all the labs open. and we're cognizant of this important activity being funded by the private sector. mr. peters: your budget proposes
larger cuts for renewable energy and energy industry than for well established and highly profitable fossil fuel industries, any reason for that? director vought: there is not a specific reason. when we set those -- mr. peters: fossil fuel extraction industry still needs propping up? director vought: we have taken an approach of all of the above from an energy perspective in this budget. we do have some specific investments. for instance we have a new fast test reactor to support the nuclear industry which is something that many, many experts say is absolutely vital to have a thriving nuclear industry. mr. peters: i was referring to tax support for fossil fuel extraction. director vought: our tax policies over time are trying to align with our view that some spending in this case subsidies should be devoted towards basic r&d as opposed to more later stage. mr. peters: maybe we'll get to equal treatment over time. ith respect to the border,
responsible border governance includes he protecting migrants and honoring our international obligations for asylum claims. there are thousands of asylum seeking women, children, and men, whatever you think of the law we need to process those folks. how does the budget increase our capacity to process those quickly and humanely. are we putting more money into asylum offices and other related personnel. how much? director vought: happy to get back to you what we're specific providing for asylum officers. it's an absolute priority of this budget to deal with the emergency on our southern border. we continue to request funding for the humanitarian crisis that we actually found common agreement with this body on. mr. peters: i'd like to hear -- the other question i had is, you have 171 customs and border protection officers in the budget designated as office of field operations officers to staff ports of entry. we'd like to seek clarity on that as well. we want to make sure --
director vought: be happy to provide that. mr. peters: any thoughts on the effectiveness of i.r.s. enforcement? do they need more resources to be more effective and make sure that everyone's paying their fair share of taxes? director vought: we do think that the i.r.s. needs a dollar spent for i.r.s. collection is a dollar well spent. it's one of the reasons that we have a program integrity cap adjustment in this budget to make sure that i.r.s. gets the necessary resources within this budget and it causes us to be able to generate savings over the life of the 10-year window. mr. peters: thank you. my time has expired. mr. yarmuth: i recognize the gentleman from south carolina, mr. norman, for five minutes. mr. norman: thank you, mr. vought. i appreciate you coming today to present the president's budget. let me make the comment. i think i join most americans who are tired of hearing big numbers. they're tired of hearing deficits. they know something's not right
and they want it done now. and while i would have liked to see more cuts in this budget at east it's a start. and i heard -- in fact, it was yesterday, one of the de facto leader of the new democratic party when they asked her how she was going to pay for free medical care, free jaques, she said, we just -- free education, she said, we just are. i have a solution. again, i am from a private sector. i'm a real estate developer. ere's my solution. get the doctors to work for free. i'll go along with the free education. get the tenured professors to work for free. that solves the whole problem and maybe even let congress work for free. sacrifice our salaries. that being said, i keep hearing about the wall. the dollars funding for the wall. will you agree that not having
any type border security is costing this country a dollar amount? mr. vought: yes, i would. mr. norman: can -- would you entertain maybe $111 billion a year, more or less? mr. vought: we haven't done any specific analysis along those lines but can he definitely think there are savings that over time we would be able to achieve by continued investment in our border and we think it's a very, very important aspect of this budget is to secure the necessary resources along our southwest border. mr. norman: so your $8.6 billion, there will be a return on investment. it's far more even in 12 months than spending -- than the cost? mr. vought: we believe there will be a return. i wouldn't want to anchor it specifically in a dollar amount. mr. norman: the recision package that most of my friends on the left voted for -- voted against
which basically took unallocated escrow dollars, is that take into account in this budget? mr. vought: the bill we sent last year? mr. norman: it is. mr. vought: this is a way we go from the 5% cut from the fiscal year 2019 level. we take that down with a 5% cut to be in the 560's and the rest is to be able to use many of the same recisions that congress has used in the past. money that was never going to be spent within children's health insurance program. again, this is money that's not going to be spent. congress since 2011 has used these chimps, these recisions to the tune of $58 billion. and yet, the minute we try to use it to actually deal with our deficit or to remove them from the appropriations process so they can't be used as an offset somehow we're hurting family and children's health insurance rograms.
so, yes, we do rely on them to get down to the actual cap level and we think there will be absolutely no impact on children's health programs. mr. norman: what you just said is exactly what mick mulvaney when he mentioned he could not understand why there was any argument over this $15 billion in cuts. the money couldn't be used even if they wanted it to so this was not a cut. let's go over what mr. johnson mentioned about the -- you would agree the biggest cost to our -- i guess the biggest factor is mandatory spending. mr. vought: again, i would agree it's one of the largest drivers. i might actually agree it's the biggest. when i say that, i'm trying to avoid conceding the fact that we have not dealt with our discretionary problem. and that that in many ways is how you start as a country getting a hold of your fiscal challenges is by identifying the waste and the abuse and the inefficiencies in the votes that members take every single year. this isn't the -- this is the process that's not on autopilot
and so what we're trying to prompt a debate with this congress is to say, yes, let's talk about mandatory spending. we propose more savings than any president's budget in history, ut not at the expense of continued increased agencies year over year and what they're allowed to spend because quite frankly, those have a significant impact on the american people. mr. norman: i appreciate this effort and i appreciate you presenting the budget that is as -- is the first step in this long stairway of getting financially independent and not leaving our children with a $70,000 debt for every man, woman and child in this country. and thank you for your efforts. look forward to working with you further and i yield the balance of my time. mr. yarmuth: i thank the gentleman. i now recognize the gentleman from texas, mr. doggett, for five minutes. mr. doggett: thank you. thank you for your testimony. i chair the subcommittee on ealth, and as i review the
portions of your budget concerning prescription drugs, you know, i think my main complaint is that folks who prepared this budget didn't listen carefully to president trump. you do on page 41 say -- you quote him saying one of his greatest priorities is reducing the cost of prescription drugs, but when it comes to doing anything to achieve that objective, i think your proposal accomplishes as little and his rose garden press conferences and the last two years in which the prices of prescription drugs have continued to go up. president trump did not campaign on a slogan, elect me and the price of prescription drugs won't go up quite as fast as it has been over the last few years. he talked about bringing the cost of prescription prices down. he said -- and he said it very oldly that we could save billions of dollars by what he called bidding on prescription drugs. outside estimates are that hundreds of billions of dollars
could be saved, not only for medicare beneficiaries, but for the taxpayers on medicare if we had an effective prescription drug negotiation proposal. as you know, i have one. i think mr. khanna referred to t. 120 members of this house have signed onto that proposal. whether you like the specifics of it or not, all i want to know is whether the administration, your office currently agrees with president trump said an important part of addressing the cost of prescription drugs is direct medicare negotiation for the prices of those drugs. mr. vought: sir, president trump has not put forth those policies. mr. doggett: he hasn't proposed what he advocated as a candidate? mr. vought: we see many of the issues -- mr. doggett: medicare prescription drug negotiation is not one of them. are you against it? mr. vought: we have currently not proposed those policies as an administration.
mr. doggett: doesn't mean you are against it. you are agnostic on it? mr. vought: i think we want to have a -- we want to continue to have a conversation with congress about -- mr. doggett: that's good. mr. vought: all of the proposals you put forward. similar to how we would do an infrastructure -- mr. doggett: i want to talk about that next. because i have some questions about that as well. but i want that genuine conversation. let me ask you more specific issue. you and all of our colleagues are well aware of the oipped crisis we have in this country. big pharma has exploited that crisis by raising the cost by 700% of the lifesaving oip united -- opioid drug aloxone. president trump's own oipped -- oipped commission said we negotiate the -- oip united commission said we negotiate the price of naloxone. jim carroll, part of your administration, said he couldn't
agree more with the need to negotiate the prices of naloxone. do you agree we ought to do that and help our first responders provide in lifesaving drug at a reasonable price instead it be gouged by big pharma? mr. vought: i'd dfer to the statements of the other -- defer to the statements of the other members of the administration who have been acutely aware of this issue and want to help you lower the cost of drug prices. mr. doggett: thank you. you mentioned infrastructure. we've gone over two years and all we have is the same one-page description of the president's plan that we had this time last year. i say all we have because it actually includes 1/3 less in resources than you provided in the one pager last year. you propose in this same budget you saw the people that are stuck in traffic all over america today by cutting the department of transportation budget by 20%. i don't see how cutting the transportation budget by 20% reducing by a third the amount
of resources that you want to provide is going to get people out of the gridlock that we have all over the country today. we need a bolder infrastructure program and just like on prescription drugs, we need this administration to lead. that's the only way our republican colleagues can be supportive of the revenue needed to deal with our infrastructure problems. we were told only last week in the ways and means committee that it will take $160 billion over the next 10 years just to keep the third rate system we got now. if we're going to upgrade it, we ave to have more revenue, more resources to do that. finally, with reference to education. i'm greatly troubled that at a time when we face a physician shortage, a growing shortage, you propose to eliminate all of the loan forgiveness programs that are available to get those physicians as well as law enforcement and teachers into underserved areas. this is a great step backwards,
as are your cuts in student financial assistance. i hope you'll reconsider those. i do hope that our republican colleagues, because this does so much embody the values of the trump administration, will put your entire budget up for a vote. we need an up or down vote on your budget as you proposed it 100% the way it is to see whether they want to go along with these cuts to education, to health care, to medicare, and not doing enough about prescription drugs. and with that, mr. chairman, i yield back. mr. yarmuth: the gentleman's time has expired. would the witness care to respond to any of that? i don't think there was a question there. mr. vought: real briefly on infrastructure spending. it continues to be a major priority of this administration. we put forward $200 billion which is the same amount of previous budgets. from the standpoint of why less detail, i do think it's an important clarification. we're responding to the fact that further details that you all have soundly not proposed legislation as a result of, you have your own views as to how we
could structure an infrastructure package. we want to allow you to do that and we're reinterested in what you all -- mr. doggett: with all due respect, is that your response to why you cut the department of transportation by 20% and why you reduce the amount of total resources from $1.5 trillion last year to $1 trillion this year? mr. vought: just real briefly. mr. doggett: looks like you're going backwards. mr. vought: it's not going backwards, sir. as you know when the last deal was struck and there was a substantial increase of nondefense spending above what we allocated for our budget, we asked congress use a portion of that nondefense spending to really invest on the discretionary side of the transportation department. it was -- in some respects a one-time bunt. the department of transportation is being set above the fiscal year 2017 level so we feel like e're continuing high levels of infrastructure and continue to be committed to it in the years ahead. mr. yarmuth: ok. the gentleman's time has expired.
i now recognize the gentleman from oklahoma, mr. hern, for five minutes. mr. hern: i want to thank you for testifying today and appreciate your work and this administration's commitment to lowering our national debt, protecting our nation's borders, the greatest threats to our national sovereignty. as a reminder to us all here, the federal government has no money. we only has our taxpayers money and we are supposed to be good stewards of that. most outside the beltway said we have been a terrible steward of the money that has sent us now. unlike a majority of the politicses in washington, d.c., i have been a business owner for 30 years, a job creator. t's refreshing to see an administration operating its budget as efficiently as a business. as i know and as the president knows, businesses, there are three things to consider. either there is a revenue problem, spending problem or both. as a small business owner, my businesses never had an open checkbook. we had to make a budget just like a house. we couldn't spend more than we bring in.
when a business person needs to raise revenue he or she has three options. they can raise prices which results to customers going to compeat tore, increase sales, meaning your eblingsisting customers buy or increase your customer base meaning you get more customers going through the door. the government can raise taxes which will discourage innovation, entrepreneurship. or stipulate are the economy by cutting taxes. which see this working with the tax cuts and jobs act with companies giving out large bonuses, benefits, increases, and raises. or increase the number of people working by deregulating business. when the government gets out of the way it allows for businesses to grow and hire which results in a larger taxpayer base. which, again, we have seen this in the trump administration's enacting this basic principle and it's working terrifically. in fact, i think you call it maganomics. my questions to you are -- some critics contend your economic forecast is overly optimistic.
nevertheless, bidding your forecast -- forecast would see economic growth averaging 2.% a year, ng along with the longtime historical growth of g.d.p. in the united states, 3%. mr. vought: i have never done the math that way but i trust your facts. mr. hern: ok. always like that. regarding work requirements. does the president agree that aim of government assistance programs should be to move as many people as possible off public assistance and into elf-sufficiency? mr. vought: we do. we want to ensure we maintain a social safety net that's important to provide the basic necessities but we don't want that to be the permanent situation for families across this country. we want to move families and individuals to elf-sufficiency. it's one of the reasons why we believe that welfare reform is so important. it's one of the reasons why we
believe work is so important even though we do provide certain hardship exemptions. we know there are some exceptions that are he had understood to be provided. we want to be able to increase human dignity by encouraging people to work and getting them to self-sufficiency and off of ederal programs. mr. hern: i appreciate the president wanting to help those who need help but those who could help themselves need to find a job. there are plenty of jobs out there. in fact, after the tax reform plan was enacted, many economists boosted their forecast to u.s. economic growth over the next year. c.b.o. said the tax cuts and jobs act will promote one million jobs over the next decade. how much do you think it has boosted the economy's growth potential? mr. vought: we think the tax cuts are one of the major aspects of our economic program. and we think of the economic rogram as wholistically. we think that it will lead to 3% economic growth in the years ahead. which if you really unpack it, what's going on there? what separates the difference etween our numbers and, say, c.b.o.'s numbers?
it's because we are assuming that businesses will have invest in capital formulation. we look at the fact that nonresidential fixed income has increased by 7%. what does that look like? businesses investing in their companies and expanding it, leading to additional jobs. and that's why there are long-term implications. this is not just some juicing of the economy. this is long structural change to our economic growth that will pay dividends for decades. mr. hern: thank you, mr. vought. i'd also like to point out under the trarbgs we've seen unprecedented job creation with unemployment at 50-year lows across all sectors. with record low unemployment of minority and women and with that, mr. chairman, i yield ack. mr. yarmuth: i thank the gentleman. i now recognize the gentleman from virginia, mr. scott, for ive minutes. mr. scott: thank you, mr. hairman.
mr. director, do i understand you to say that the tax cuts will pay for themselves? mr. vought: the economic program of which the tax cuts is a major part, yes, we believe will pay for themselves. mr. scott: ok. when you talk about tax cuts, do some create better economic stipulation than others? mr. vought: we think our tax policies don't come in the same ability to impact economic growth. we do think that the policies that were contained in the -- mr. scott: the ones that stimulate the best aimed at the low and moderate income ranges and the least effective of orporate and high-income tax cuts? mr. vought: now, we wouldn't say that. we would say the policies that are included in the tax cuts that the president signed -- mr. scott: are you would not say tax cuts aimed at low and moderate income stimulate the economy than -- mr. vought: from the standpoint of economic growth, no, i would not rank those higher in terms of them provide long-term economic growth. i would say the policies are all important for various economic reasons. mr. scott: thank you. a former member said he never have been here with a balanced udget.
i have been here when there was a balanced budget. if you look at the blue areas, each blue president going back to president carter had a better deficit than he started and every red president going back to nixon ended up worst than they started. is that true? mr. vought: i note your chart. also note president clinton benefited from a republican congress that was committed to balancing the budget. mr. scott: and he had to shut down the government to stop them from messing up his budget. so don't give them any credit for going into surplus. in fact, when bush came in, can you tell me what president -- what happened during the bush administration with a republican congress that messed up the budget? mr. vought: it did lead to an increase in the deficit. mr. scott: that's right.
what did they do to accomplish that feat? mr. vought: we are not here to say that spending control has not been a bipartisan problem. we're saying that -- mr. scott: we already established under democratic presidents against that under republican presidents it gets worse. under the education budget, it's been pointed out you cut the education department by how much, about 12%, is that right? mr. vought: we spend -- we contributed another $50 billion to education so we think that more than offsets the 12% reduction that you note in terms f department of education. mr. scott: ok. is it $5 billion a year choice program? mr. vought: it is. mr. scott: $50 billion over 10 years. how do you limit it to $5 billion? where do we get details on the program? mr. vought: we will get more details from the department of education. it is an amount of money that we felt was -- that we could
justify in the current -- mr. scott: how do you limit it on april 15 when people file their taxes, how do you know it can only be $5 billion? mr. vought: treasury will be roviding guidance. if you all see fit to enact it into law, states will have quite a bit of discretion to design their programs. those -- their discretion will be based on treasury rules that -- mr. scott: this would have to get through congress before it could -- mr. vought: absolutely. mr. scott: how do you help students pay off their student loans? i understand you cut student loan assistance by over $200 billion? mr. vought: we find savings in student loan programs but we feel we have put forward a proposal -- mr. scott: like eliminate subsidize loans and payments for ccount maintenance fees? mr. vought: we consol daily dathe programs to offer one student income driven repayment plan that we think will provide certainty and allow anyone
receiving a payment now to be eligible under that. and we think it will be certainty and very generous after 15 years, you can walk away from your debt. for a graduate student 30 years. mr. scott: how does that change present law? mr. vought: it consolidates, put forward a new proposal to do that. r. scott: does your budget ecognize the pending multifund pension crisis? mr. vought: we do. we put forward premium increases to be able to -- mr. scott: increases won't deal with the hundreds of billions of dollars we will be on the hook for if these plans go broke. do you have a plan to address the multiemployer pension fund crisis? we had studies at our last hearing on the education committee that showed there will be hundreds of billions of dollars in adverse rim pact on the federal budget. these things go broke because pensioneers will more likely use food stamps and medicaid and will have an impact of hundreds of billions of dollars if we don't do something.
is there a proposal to do something? mr. vought: it's not the proposal we might agree on but there is a proposal to address his. mr. scott: do you recognize the adverse impact doing nothing will have? mr. vought: absolutely. we don't want that to happen. mr. scott: is that in a budget? mr. vought: we have a proposal in the budget to increase premiums to deal with some of these pension crises. mr. scott: is that it? mr. yarmuth: the gentleman's time has expired. i recognize mr. meuser for five minutes. mr. meuser: thank you. director vought, thank you for coming before the committee today. in the fiscal year 2020 budget your office has outlined a plan to invest in important programs that are essential to many americans while also reducing our discretionary spending and reducing the growth of mandatory spending. i am concerned about our nation's rising debt and i do appreciate the fact that the president is putting us on a plan that moves us toward fiscal responsibility by decreasing
spending on nondefense discretionary programs by 5% next year as well as reducing mandatory spending growth through reforms targeted at waste, fraud and abuse and lowering drug prices and as well as welfare reform. our federal revenue growth for pro-- projected for 2020 is 4.9%. is that number ring true with you? mr. vought: yes. mr. meuser: most states in our country would love to have that revenue growth. the only ones that probably have it would occur after a sizeable tax increase. 4.9% revenue growth is very strong. of course, our problem is that our spending levels are quite a bit higher than that. would you say it is accurate that during the previous administration, president obama , the presidency that our debt, national debt went from $9.5 trillion to $1.5 trillion in an
eight-year period? -- to $19.5 trillion in an eight-year period? mr. vought: sounds about right. mr. meuser: sounds about right. can you quantify the general impact of the affordable care act on our current mandatory spending levels? mr. vought: i think it's roughly -- it's a sizeable aspect of our andatory programs. health care expenditures in general from medicare to medicaid to the affordable care act, expansions of medicaid and their exchange premiums, checkively absorb a very large portion of the mandatory side. mr. meuser: and in spite of there being various taxes that went along with the affordable care act, would it be fair to say our current deficit is -- has approximately $400 billion in it due to the affordable care act increasing
the debt by as much as $300 billion to $400 billion in the current year, in 2020? mr. vought: i haven't looked at those numbers recently but i take your word for it. mr. meuser: my colleagues on the other side of the dais said that the projected growth is enacted by the tax cuts and jobs act. my understanding is this does add to the deficit but approximately $150 billion. is that about accurate? mr. vought: the affordable care act did not help us from a federal strength trajectory. i'd -- spending trajectory. i'd certainly agree with hat. mr. meuser: the tax cuts, the deficit -- current deficit, the tax cuts have attributed to approximately -- in current year or next fiscal year about $150 billion? closing rapidly but $150 billion? mr. vought: yes. that's about right. mr. meuser: thank you. and since the enactment of the tax cuts bill we had three million private sector jobs
created. what would you say the estimate of the job -- of these jobs would you say perhaps 2/3 or better have received employer-based health care? mr. vought: that is my assumption. five million new jobs have been created since this administration took office. many of these given the fact we have employer provided health care in this country would receive incredible health care as a result and i would certainly think that's intuitive ssumption from that. mr. meuser: just doing some easy math that would add up taking people not off the unemployment rolls but also providing them health care. i mean, that could add up to $50 billion, $60 billion right there. mr. vought: perhaps. mr. meuser: ok. so one last question. in your modeling for our economic growth, has -- and i suppose the answer to this is no
because i don't think you engage too much in dynamic using current law. has the plans for opening up trade worldwide, the president's goal of reciprocal trade, lowering tariffs with the goal of getting to zero percent tariffs, has that worked into your economic formula at all? mr. vought: they are. it's one of the reasons i categorize our economic policies as a whole when i talk about the revenues that are generated. so if we include the tax cuts impact, we include better trade agreements. we actually include infrastructure spending which we do think has an impact on economic growth to one of the questions that i received. we'll have to wait until the council of economic report -- council of economic advisor's report coming up in the next few weeks to be able to provide more details on the breakdown amongst all those different categories,
but it's an ongoing story we intend to tell. mr. yarmuth: the gentleman's time has expired. i now recognize the gentleman from michigan, mr. kildee, for five minutes. mr. kildee: thank you, mr. chairman. thank you, mr. vought, for being ere. you know, i have a couple of things i want to try to cover but i want to follow up on a statement that you made not that long ago regarding a program that i'm quite familiar with, having spent 25 years in local government. and that's the community development block grant program. i want to make sure i got this right. i think i heard you say that it's your analysis or the analysis of the administration that the community development block grant program has demonstrated no economic value. is that accurate? is that an accurate statement of your views? mr. vought: it's that we think the program has been effective from the standpoint of federal taxpayers. we understand it will certainly offset costs that state and localities would -- mr. kildee: is that the reasons
that democrats and republicans could come together to fund cdbg just to offset local government costs or something greater than hat? has it been tra decisionally a public investment that has a return to the federal government? mr. vought: we would disagree as to whether the return to the federal government has been worth the cost. mr. kildee: do you think the federal government benefits, for example, when there's a reduction in crime in a community, is that a public value that the government has a stake in? mr. vought: certainly. we wouldn't say that the cdbg program would -- mr. kildee: on what analysis has the cdbg program not resulted in ry dux to crime? - in reduction to crime? do you have any published peer reviewed studies that says the program does not deliver economic value to the federal overnment?
mr. vought: we don't -- mr. kildee: on the reduction on crime or any other subject, any other category? mr. vought: we believe it's important to reduce cry we -- crime, it's something we believe we adequately fund as department of justice resources. mr. kildee: so you think there's adequate spend og crime. this is close to me. i have here a published peerk-reviewed study from the journal of criminal justice that points out that the eligible activities in cdbg, including demolition of vacant and abandoned properties, has a positive impact on violent crime, one of many studies i
would cite. mr. chairman, if i could ask unanimous consent to have this study included in the record of the committee i would appreciate that i guess the question i have, i guess you and i disagree and many of my democratic and republican colleagues who seem quite willing to show up at ribbon cutting ceremonies that include cdbg dollars also disagree with you on this subject. i understand your point that you assert that cutting taxes contributes to economic growth and has a positive overall impact ultimately on tax revenues? i disagree with the analysis but i understand that's your point of view. do you ever believe that there's a circumstance where increased spending has the effect of reducing a deficit? mr. vought: i can't think of a scenario -- mr. kildee: you don't believe that at the national institutes of health were able to somehow
through the work of this congress double the amount of research into diabetes in this -- and if the amount of research going into diabetes led to in five years, a cure for diabetes, you think that would have a positive impact on deficits, on spending, on the overall impact that that dreaded disease has on our economy? mr. vought: it has an impact. mr. kildee: so cutting the national institutes of health then could reduce the possibility of that positive impact, is that correct? mr. vought: we don't think so. not by definition is there an assumption that when you take money from federal taxpayers and contribute to it worthy investments which we believe that $33 billion is a worthy investment for the national institute -- mr. kildee: but not worthy enough to maintain it at its current level. not worthy enough to take the
bet, for example, that those people out there who happen to be united states taxpayers who are suffering from diseases like diabetes, multiple sclerosis, alzheimer's, shouldn't have been -- shouldn't these be able to be given a chance by supporting research that would not only potentially ease their suffering which for me is ample justification and i think for most americans would be ample justification but using your values, which i don't think we necessarily share, it potentially and probably almost certainly will lead to significant reductions in the cost of health care in this country. easing suffering does not necessarily mean we can't also do something positive, have a ositive economic impact. so whether it is research into dreaded diseases, cleaning up abandoned houses in beat up old neighborhoods or, for example, the reduction that you -- mr. yarmuth: the gentleman's time has expired. mr. kildee: drinking water, clean drinking water, what i would simply suggest consider internalizing the positive and
negatives in these decisions and i think you would find a different set of priorities would -- would take us a lot further. mr. vought: i think it's a fair point, sir. i don't want to suggest some of the research advances that we make at national institute of health wouldn't have a long-term impact on the cost of paying for coverage for those diseases for the people that benefit from health care programs. we don't have -- we haven't done the sorts of economic analysis to tell you what those would be but i do think it matters as to where the investments we're making and not making just a blanket statement just because dollar of federal spending that it's going to result in some kind of dynamic -- that's what i would reject on back end. i take your point. mr. yarmuth: the gentleman's time has expired. i now recognize the gentleman from tennessee, mr. burchett, for five minutes. mr. burchett: thank you, mr. chair, mr. ranking member. mr. vought, thank you for being here. i grew up in a cool home. i remember daddy had a little
thing on his mirror and says you eny me before man i deny you before the gates of heaven. i thank you for your service to our country now and preparing for this, i noticed when you testified before the senate, i thought you were unfairly attacked for your faith. and i thought it was outrageous at the time and it seems to me it's an appropriate moment to say thank you for being in the public square as a person of faith. it troubles me that a u.s. senator would ignore the first amendment and question the motive of anybody, anybody, any public official, based on religion. i wonder if you want to comment on that, what preluded that, if not, we're good. mr. vought: i have no comment. i'm here to comment on the president's budget policies and the budget the president puts forward.
mr. burchett: thank you. let me start off by saying i agree with the president's goal of fiscal responsibility, specifically with education. i'm implementing him on that. i believe states should have full authority over full education. i stated the department of education -- i think we would be better off if they dissolved that and sent the money to the states directly. i believe people at the state and local school board level know exactly what's going on in the classroom. some bureaucrat up here doesn't, i don't think, has a clue other than preserve their jobs and the obs of others. where do you see the education budget moving forward? and could we see any safings in that by giving money back to the states? and do you see movement in that direction? mr. vought: we hope so. that's why we put forward the policies in the budget. we had a $50 billion investment of allowing people to keep more of their own money, to be able to invest in state grant -- state scholarship programs, either public or private school choice.
we think that's a better way to invest in students and communities and our education system. we also want to make sure we continue to be able to focus precious federal dollars that we are stewards of from a taxpayer perspective on programs' work. so we continue to fund programs that we do think that work. many of the formula programs within the department of education, but we also look to eliminate programs that don't work. you know, one program, the 21st century community education program, these are centers that don't work. they don't have an increase in proficiency in reading and ath. students stay in these centers in a short amount of time. from the effective standpoints we looked and said this is a dollar not well spent. in some cases in this budge, in this budget, when we have a program that's not working, we try to reform it. just like job corps.
we didn't think we could reform it and we'd rather focus the dollars elsewhere. mr. burchett: i agree in education. i was certified to teach. my mama taught forever. and my daddy was a longtime dean. and my sister still is an educator. i've never ever seen a federal bureaucrat in our classrooms ever. they seem to want to always pass it down to our locals and that drives me crazy. i also want to compliment the president on his proposal regarding h.i.v. a lady in my district very close to me -- she's not in my political party, but she -- her name is julia tucker. she lost her son to h.i.v. and she started -- help start an organization called positively living which i'm proud to support. my wife will be sitting at her table at an event i believe thursday. could you provide some more details on how the goal is going to be achieved regarding h.i.v.? i know the president basically said he wanted to eliminate it. of course it's changed so
much. i have friends that i grew up with, i'm pretty sure some of them died of h.i.v. they were just more or less ostracized but now it seems we got medication, we got things but so so dad gum expensive. is there a way to address that, lease? mr. vought: thank you for the question. it's one of the initiatives in this budget that we're very roud of. as we went through the budget process, we worked with the department of health and human service and they put forward a proposal that said we could make serious gains in here based on the drugs that are out there but we need people to be tested. the $300 million investment in this budget, it is allocated within h.h.s. there's money for hrsa. there's money for the ryan white ealth care programs. there's some money for indian health services.
and we're really predominantly trying to increase the testing to be able to make sure that people can get the lifesaving medications that have now been developed and can fundamentally change and prolong their life hich is fantastic. mr. yarmuth: the gentleman's time has expired. now recognize the gentleman from new york, mr. morelle. mr. morelle: thank you for your testimony today. a couple quick observations and couple questions. the tax cuts bill referred to is a tax cut for wealthiest individuals. the stimulus was largely unnecessary during the -- as it relates to tax policy during an economic expansion which was well under way for six years prior to this dministration. if you look charts from 2010, wages, unemployment rates have continued on an upward path ince 2010.
tax cuts did not pay for itself. i think that's been pretty well established and does not have appeared to have added to the long-term economic expansion although there may have been some short-term stimulus. stability has been part of our income structure which was created in the 19th century. would the president and administration support elimination of the cap on the salt deduction? mr. vought: as the president stated, sir, he's willing to consider it but it's something that he feels congress should take a look at. if they want to send him a bill he's willing to consider it, but it's a debate he thinks should start with congress. and we have not assumed any changes in our revenue policies. mr. morelle: i want to go back to something that was raised by the gentleman from california, mr. peters, earlier. he talked about and i want to make sure i get this. related to not only the c.b.o.'s budget projections or economic
projections, rather, but the federal reserve and most private economists do not agree with the administration's assessment on the rate of growth. n fact, i know a number have indicated they think 3% is unlikely to be maintained in the long run that we barely got to 3% in 2018. may have been impacted some by temporary stimulus. and they forecast -- i think c.b.o. forecasts annual average growth rate of less than 2%. you indicate in your testimony that you have not even considered or projected a lower than expected growth rate. given the fact there is a substantial body of economists, both in the public sector and private sector who don't agree, i can't imagine you haven't looked at projections that aren't at 3%. is that what your testimony was, you haven't even considered that? mr. vought: we know it will have an impact and we had rough modeling but it's not the type of precision we would put forward like we would with the
economic report of the president. i would mention with regard to the private forecasters, they were wrong. the first two years they said it was outrageous and ludicrous. we were proven right in both years. the most accurate administration in history as far as the data as been collected. mr. morelle: i do note even in the budget, as i understand it, 2025, which is when there is a substantial likely to be, i think c.b.o. estimates, it will boost modestly economic growth but ultimately serves as a drag on growth rates beginning in 2025. i wondered if your modeling -- it obviously is different than c.b.o. how do you adjust for that? what is your explanation? what is different in the two models? i do note in the president's budget in 2025, it does show a substantial dip in the growth of receipts starting in 2025.
mr. vought: specifically, the difference between us and c.b.o. as it pertains to the outyear growth rates has to due with capital formulation and the fact that c.b.o. does not, we believe, track with economic literature that suggests that there will be significant increases in capital investment. we're already seeing that year to year with the figure i gave earlier with the increase in nonresidential fixed investment of increasing 7%. so this is an example where as a esult of capital investment, companies are expanding their businesses, making investments and we believe that is the fundamental reason for why the tax cuts is not juicing the economy, move on with our lives, but is producing long-term structural higher revenues and economic growth for the country to benefit from. mr. morelle: it's not only the congressional budget office but private economists and the
federal reserve. i don't necessarily concur with that assumption. et me quickly move on. and i recognize i'm almost out of time so i want to come back, perhaps off-line, to address some of the medicare challenges. but your estimate is that half a trillion dollar reduction in the rate of growth over the next 10 years as a result of your olicies? mr. vought: yes. we have $515 billion in savings in medicare. these are program integrity, drug plies reductions and a number of -- drug price reductions and a number of scenarios that common sense ould dictate we pay particular sites of care the same, whether they're skilled nursing facility or long-term care hospital. mr. morelle: thank you. mr. yarmuth: the gentleman's time has expired. i now recognize the gentleman from texas, mr. roy, for five minutes. mr. roy: thank you, mr. chairman. mr. vought, thank you for taking the time to come and address the committee. appreciate your service to this country. i echo the comments of mr. burchett about your willingness to stand up with respect to the
attacks levied against your faith in the united states senate so thank you for being here. couple questions. would you agree that when you balance your budget at home or the most american people look at their balance, they look at revenues, that's the income they receive, they balance that against what they need to spend on the other side and they're trying to spend within the amount they bring in in revenues? mr. vought: yes. mr. roy: should that be the goal of the united states that we look at our revenues and we look at what we got and we spend ithin our means? mr. vought: it absolutely should be. mr. roy: is that the goal of our budget to set us on a path towards spending within the means? mr. vought: it is absolutely. i think -- i appreciate the question, congressman. because it would be easy when you don't balance within 10 years which is the normal budget window that budgets provide for to say balance isn't important. we don't believe that we believe balance is important. it's a debate that every family has across this country about what they can spend versus what they bring in.
and we want the federal government to operate more like an american family from that standpoint which is one of the reasons we said, all right, what can we do outside the normal window, we can go there within 15 and we did so. mr. roy: thank you. i thank you for presenting a budget that balances, albeit in 15 but i'd rather see it within 10 or five. in order to do that on the revenue side, right, we need to get revenues up or keep them p. is that what you're assuming that we're getting revenues up? mr. vought: absolutely, yes. mr. roy: in doing so i heard concerns about the cost to the tax cuts. would you agree that c.b.o. last year said that cut initially would cost $1.69 trillion but amended that based on -- c.b.o. by the way, not y'all, amended that based on increases in revenue, amended that down that we would save $1.1 trillion out of that because of economic
growth, because we would have $6.1 trillion bigger economy by 2027, we'd save $150 billion on entitlement side of the ledger and that would leave us with a $440 billion net cost because of tax increases, does that sound right what the c.b.o. said? mr. vought: i believe it sounds ight what c.b.o. said. the basic point i think is that c.b.o. -- there's been a debate in the last three years, does tax cuts lead to economic rowth? does it increase revenues? and we believe that c.b.o. is coming our way in saying since the president took office there's been $1.3 trillion in additional receipts generated from economic growth. they are not making the same claims we are with regard to our economic policies covering the cost of the tax cut. i am not here to say they are. we do think they're providing data points that argue in favor of what we've been arguing for two years. mr. roy: on the other side of the coin when we talk about spending, is it about 30% discretionary and 70% mandatory? mr. vought: correct.
mr. roy within mandatory, can you tell us about the massive proposals to deal with mandatory spending and entitlements, do you agree with all the points made by members on both sides of the aisle when they stood up and talked about the reforms to medicare and social security when we saw them on the steps of the capitol recently? mr. vought: i don't recall specifically what press conference you're referring to but i do know mandatory spending is a significant issue and often congress has put forward increases to mandatory spending. we're seeing that with proposals that are being offered for medicare for all which would be in the neighborhood of $32 rillion. mr. roy: you're not aware of that because it didn't happen, right? right? are you aware of any serious proposal in congress to massively reform entitlement spending? mr. vought: i am not aware of that. mr. roy on either side of the aisle? mr. vought: i think one side of the aisle has attempted to look at mandatory spending over the last several years, but, again, this is spending is a bipartisan
problem. i'm not here to say otherwise. mr. roy: is there any -- any serious capital being spent to promote such a plan? no? mr. vought: not that we have seen so far. mr. roy: half defense, half nondefense discretionary, on the nondefense discretionary, does this chart roughly reflect what we've seen with respect to caps and busting caps over the last six or seven years? mr. vought: yes. mr. rye: the chart that my colleague, mr. scott, said year before year. you noted 1994 we had a republican congress that came to work with the president -- who admitted big era of government is over and tried to work with s. and deficit spending under president obama increased massively. what happened in 2011 to cause those deficits reduce? mr. vought: what happened in 2011. r. roy: the b.c.a.
mr. vought: the b.c.a. agreements. certainly the two -- we put forward a series of spending caps that were designed to limit and pay for the debt limit ncrease at the time. unfortunately, congress has walked those spending caps back every two years. and increased our spending as a esult. mr. roy: thank you, mr. vought. mr. yarmuth: the gentleman's time has expired. i now recognize the gentlelady from texas, ms. jackson lee. ms. jackson lee: i thank the chairman very much and the ranking member. i thank the director for his presence here. we're all committed to the american people, but as i look up and raise up this budget that says for a better america, you know that i have a completely contrary view of this. in fact, i think this hurts the most vulnerable in america and people who have worked in america, seniors who have worked in america. i want to pose questions along those lines.
first of all, i think it's important to note that the top 10% of america's population now average more than nine times as much income as the bottom 90%. ine times. americans in the top 1% average over 40 times more income than the bottom 90%. the nation's top .1% are taking in over 198 times the income of the bottom 90%. that's a lot of people. nd african-american families with just over $3,500 owns just % of the wealth. i don't believe that this budget that is interested in cutting from the very heart of the needs of people, from education to health care to the environment, $2.7 trillion is seriously committed to working in a bipartisan manner to provide for the great america so that all people have the ability. my questions to you involve issues around medicare. $850 billion-plus, how does that in any way make america better hen you attack the most most
vulnerable? mr. vought: i thank you for your statement. i do believe budgets are ability the visions for our country. it's inaccurate that our budget cuts medicare by $845 billion. we increase medicare every single year. the savings that we include and assume in this budget is $517 billion. the $845 billion number that has been reported in the press comes from the fact that there's not an assumption that we are other places outside of medicare providing for uncompensated care and graduate medical education in our hospitals. ms. jackson lee: might i -- if i might -- if i might reclaim my time, if i might, those kind of shenanigans and manipulation may sound good but it is accurate that there are cuts coming out of medicare of $845 billion.
almost $850 billion. also, i want to take note of the fact that here's a president who engages with russia, north korea, wants to pull troops out of syria, afghanistan. so why in the world are you asking for $750 billion for defense and contrast to the enormity of the amount of billions of dollars that you're cutting from education, environment, medicaid, edicare? what is the purpose of using nondefense discretionary, this statement of mandatory which makes it sound negative, of course, from the very beginning, why is that always the target when vulnerable people have seniors to young people to minorities who have not had equal opportunities, african-americans to the contrary of this administration's representation, it has not been good to them, why are you going after the vulnerable in this budget? mr. vought: we don't believe we are going after the vulnerable in this budget,
congresswoman. we think we are finding reforms that make sense, that would improve the lives of the beneficiaries. two points i think are reflected in your comments i do want to get to. i think it's fair to say, why are we always looking on the mandatory side? one of the reasons i have been trying to have a conversation with the -- the members on this side of the aisle is that we think nondefense discretionary spending is an area where we need to do our best to continue to look for efficiencies and get rid of wasteful programs. ms. jackson lee: reclaiming my time, if i might. i appreciate the interest of the engagement. let me make it very clear as i end.
this budget attacks the most vulnerable in this nation. it is unequal in wealth. the tax scam is still the most powerful undermining of growth and prosperity in this nation by pushing money toward the top .1% or the top 1% and leaving those who can add to the economy along the highway of despair. this budget will not go. i yield back. mr. yarmuth: the gentlelady yields back. any further comments from the witness? ok. thank you. now recognize the gentleman from texas, mr. crenshaw, for five minutes. mr. crenshaw: thank you, mr. chairman. director vought, thank you for being here. i want to thank you for your hard work and tough choices that went into the formulation of this budget. one of the benefits of always going last is i really get to observe the philosophical differences between democrats and republicans. and here's a couple of my observations. there's a key difference in how we view spending and where it hould occur. there is a key difference where we view where government services should occur. on the democratic side, i believe there's -- they are overlooking the fact we have local and state governments. every single problem -- and some of these are real problems. some of these are real
investments. there's this belief that it should always be solved at the federal level. always. i believe your budget takes note of that. i believe your budget takes note of the fact that maybe, just maybe some of these things and some of them have been mentioned today, maybe it's law enforcement, maybe it's crime, maybe it's housing, maybe it's clean water, education, maybe some of these things can be solved by state and local actors. where constituents can go down the street and knock on the door of their representation and say, yeah, you can raise my taxes but i want it going towards this. as opposed to the federal government which they really have no idea where their taxes are going oftentimes. it's also really interesting to note this idea that more must lways be better. that the bigger the dollar sign is the bigger your heart is. you know, and there's this notion that if we want to cut back on programs and many cases you noticed and you noted what a cut really means but just because you want to cut down on
something that isn't benefiting the american people that you are anti-science or anti-health care. that's a moral -- that is a moral accusation. that's an accusation against our intentions. that's not right. we have different views of how we should spend this money. it really is as simple as hat. i want to give you an opportunity again to explain to us because there's been confusion what a cut is versus what slowing growth is. it's been noted over and over again maybe we should reform the pattern of growth on medicaid and medicare. are we actually cutting these programs -- >> we are going to be leaving this hearing at this point. emind you you can watch all of our programs at our website -span.org.
-- >> i would hope we could have honest conversations about this. your regular listener who is watching the media an watching the news what they're thinking is hey, we spent $100 on it this year, next year we spend $90 next year. that's not true is it? mr. vought: no. >> i wish people would understand why we might want to reform these programs. social security, disability insurance, why would i want to reform that? i was eligible for it. i was eligible to get thousands of dollars of taxpayer money, the federal government told me i should get on that the military told me i should get on that program. i am not disabled. i have a thing going on here, kind of a disability but i am not disabled. i should not get that money but that program says i should. there's something wrong there. i'm perfectly capable of working.
i want to get to another couple of the tails in my time left here -- of details in my time left here. this talks about increasing what people can contribute to health savings account, does that include direct primary care? mr. vought: let me get back to you on that particular question but we are excited about the changes in health savings accounts, both medicare and outside. one of the situations we see is that the rules of the h.s.a. programs are too restrictive and so if you have insurance product no -- empts to provide absorb the cost for generics or take care of preventive medicine to lower their cost and the cost of the beneficiary over time if they offer those kinds of insurance products, that then the individual is no longer eligible for an h.s.a. so what we're trying to do is to say what's an actuarial way in which we can make that
assessment and expand those programs. mr. crenshaw: i don't have enough time to get you to answer this question, but i demend you all for putting paid leave in there i think republicans need to come up with a sustainable slaugs to that. in the last 10 seconds i want to ask you about the cuts to the army corps of engineers budget. and why that made the case, what is the justification of this? there's a backlog of about $100 million for infrastructure investment, places like houston we care a great deal about that it's a worthy investment for the future. i'll let you take that. mr. vought: one thing we have been frustrated with the army corps is how slow they are with many projects. we are trying with this budget to say continue to foe tchoins backlog, things already under way and making a line in the sand to say not to go forward with new starts, particularly when there's so much disaster
money that's in the system that needs to get spent as well. 10 i certainly get it. we do support army corps of engineers spending. we think that this is a sustainable level but we also understand where you're coming rfment >> thank you, mr. chairman, thank you, mr. vought, for being here. december of last year, somebody made a statement that said this. the u.s. spent $716 billion this year, crazy. do you agree with that statement? mr. vought: no, i don't agree. ms. jayapal: in october there was another statement that said we need to get rid of the fat, get rid of the waste and a suggestion was made far defense budget of $700 billion, a cut of
to%. do you agree with that? mr. vought: i remember that conversation. ms. jayapal: do you agree with that statement? mr. vought: i agree with cutting fault and waste but not cutting 2%. ms. jayapal: you have disagreed with the president of the united states. both of those statements were made by donald trump. he tweeted, the u.s. spent $716 billion this year, crazy. and he told the cabinet to, quote, get rid of the fat, get rid of the waste and suggested a defense budget of $700 billion, a 2% cult over the previous fiscal year. strange, strange support, bipartisan support between what president trump said and what some of us have been saying for some time. so acting director vought, how much did the president cut total national defense spending by in his 2020 budget? the budget you have before us today? mr. vought: we are increasing
the budget by 5%. can i respond to the comments the president made? ms. jayapal: no, let me get through and if i have time at the end i'll let the chairman let allow you to answer. so you're proposing an increase of 5%, not the decrease of 2% the president said he wanted. did nondefense spending also go up by 5%? in it was cut 5%. s. jayapal: i heard it's 9%. mr. vouth: it's 5% from the 2019 limit. if you include the gimmicks the congress uses to hide the costs the agencies spend at. ms. jayapal: what is the number?
mr. vought: roughly 10%. ms. jayapal: so the increase to 5% and the cut is 10% for nondefense which is education and other priorities. oco, we call the slush fund, mick mulvaney called the overseas contingency operation funding as a slush fund he agreed with us then back when he was in congress. and the house armed services chairman smith also called oco a slush fund. let me ask you in this budget how much does the president propose cutting the department -- the defense department slush fund in 20 -- in fiscal year 2020? how much are you proposing to increase it by? mr. vougth -- mr. vougth: increase it.
ms. jayapal: you propose increasing a slush fund by $119 billion. you said the national science foundation doesn't need to be immune from waste, fraud, and abuse, correct? mr. vought: i said they are not immune from waste, fraud, and abuse. ms. jayapal: do you think the defense department should be immune from waste, fraud, and abuse? mr. vought: no. ms. jayapal: do you know when congress mandated that all government agencies should undergo an audit? 199 0. it was 1990, almost three decades ago. and tell me, mr. vought, when was the first comprehensive audit of the pentagon done. mr. vought: this year. ms. jayapal: so almost 30 years
later we do an audit of a department of with $716 billion budget right now. how many of the individual audits part of this audit of the pentagon, how many of those failed? where did the pentagon fail ? ese audits out of the 21 mr. vought: no. p ms. jayapal: 14 of these fail and two reseed passing grade. -- just received a passing grade. they estimated that pentagon made improper payments, their turn, which is not necessarily fraud but payments that lack sufficient or appropriate documentation or approvals which mean we was no idea where the oney went of $957 million in 2017 and $1.2 billion in 2018. so let me ask you, mr. vought, do you think we should continue to increase the defense department budget when we have no idea where that money is actually going and the pentagon can't even pass an audit and in
fact didn't even do an audit for almost 30 years? ms. vought: we think one of the promises kept of this budget is we're the first administration to comply with congress and do the audit. ms. jayapal: that's good. hopefully you take that on before you ask for more money. mr.iar smuth: -- mr. yarmuth: the gentlelady's time has expired. >> acting director vought, thank you for being here. i believe trump's economic policies are clearly working yusm testified to a lot of statistics, over five million plus new jobs. mr. smith: it's clearly the work of president trump and the republican congress in passing the tax cuts and jobs act. reducing unnecessary regulation. creating an energy policy that is now going to be number one in the world.
various aspects. it's truly the policy os of serving the american people and not the government itself. in the president's budget, he makes some difficult spending decisions. while i don't agree with all of them, i commend the president for making these tough calls. the budget cuts $2 trillion in mandatory spending, reins in the cost of health care by giving control back to states and patients, reforms welfare programs while maintaining the safety net and maintains the historic reforms if the tax cut and jobs act. in particular i'm glad that president trump share misviews on the importance of maybing the 20% pass through rate for small businesses permanent. this is an important reform from the tax cut bill that expires in 2025 if we don't act. thanks to this provision and others from the tax bill, today our economy continues to create jobs and grow at a record rate. in recent polling -- recent
polling shows that small business owner optimism is at an all-time high. do you think small businesses would be impact ned 20% pass through rate were allowed to expire? mr. vought: we believe it would be impacted negatively. one reason we want to extend the tax cuts in this budget is we want to provide certainty to the when sses that are making we talk about promises kept, we are talking about keeping our promise to american taxpayers, in the case of your question, small business owners, to be able to say this was not just a one-time tax cut but we're actually extending these provisions into permanent law. mr. smith: i also was very glad to hear in the president's state
of the union address about the ttempt to increase investment in fighting pediatric cancer research. could you explain a little bit about that in the president's budget? >> sure it's a line item that's not just a line item. it's a spending initiative that's very important to the president. we are taking spending for pediatric cancer from about $548 billion to $598 million. an increase of $50 million every single year. because we think it's so important. mr. smith: i totally agree, i appreciate seeing that. i'm excited that this is how the process has started. the president has brought forth his budget to congress and it's a beginning point. i just hope and i reiterate to my colleagues on the other side of the aisle, after eight years voting against republican budgets, i hope that the
leadership on the other side will find time to present a bill to the floor of the house of representatives for the entire congress can vote on a budget. the president has done the heavy lifting, you have done the heavily lifting -- heavy lifting by presenting a budget. they've done a good job at attacking. now let's see the democrat alternative. let's have a vote on the house floor of the democrat alternative and let's do the people's business and put people before politics. i yield back. mr. yarmuth: the gentleman's time has expired. i recognize the gentleman from california, mr. panetta, for five minutes. mr. panetta: thank you, mr. chairman. mr. vought, thank you for being here, thank you for coming to the premeeting as well. i want to talk thebt supplemental nutrition assistance program. normally the jerusalem from connecticut would be asking a
lot of questions about this, so i get to ask questions, i'll be throwing you softs be balls compared to her hardballs. you're well aware of what the supplemental nutrition assistance program is snap, i'm sure you're aware of the millions who rely on it, 74,000 people in my district who rely thope supplemental nutrition assistance program, food stamps. in this budget you in this budget you finds savings of over $220 billion over 10 years, from that program specifically. correct? >> we do have savings of that magnitude. mr. panetta: three months ago you're aware that the farm bill was passed, right? in that process of getting to a farm bill, and i would call it a bipartisan farm bill, democrats and republicans voted on it in which they rejected the mandatory work requirements that are being imposed in this
proposal, this budget right now. correct? >> you're right. there was not a work requirement in the farm bill that the president signed. mr. panetta: even though it was proposed initially on that farm bill, but then rejected in order to pass the farm bill. correct? >> correct. mr. panetta: one of the reasons i can tell you, as being on the ag committee at that time, one of the reasons why that proposal failed was because there was absolutely no evidence that those proposals ould work. it was not based on evidence. as a former prosecutor i knew early on i couldn't stand up in court and say someone's guilty and sit back down. i had to prove my case. that proposal couldn't be proved, therefore it was rejected by democrats and republicans. that's how we were able to get to a farm bill. what evidence do you have that this proposal will work? mr. vought: we just would look at the history of the 1990's and what we've seen since then, which is when work requirements were put in tanf, that it
reduced caseloads, many people went back to work, and people who were exiting welfare were able to achieve much higher levels of income with the incentive to go back to work. mr. panetta: but you don't have any pilot programs or anything of that nature that it would actually work right now, correct? mr. vought: again, we would look at the -- mr. panetta: reclaiming my time. thank you. part of the proposal, part of the savings that you talk about, is a proposal to spend $5.8 billion to serve food stamp participants with a blue apron-style food box delivery service in lieu of cash benefits for low-income families. correct? mr. vought: not in lieu of all cash benefits. we will continue to provide cash benefits in addition to providing the harvest box, which you mentioned. mr. panetta: great. this harvest box, it was already -- well -- i wouldn't say proposed. it was floated out there during
the buildup of the 2018 farm bill. and it was widely rejected by food assistance experts. correct? mr. vought: not all good ideas -- time has come. we continue to put forward a reform that we think is one that we're excited about. it was proposed last year's budget. it was not enacted in the farm bill. and we continue to see the value in it. mr. panetta: because there were such issues like distribution. do you know whether or not this food box would be distributed door to door? mr. vought: those are the kinds of questions that we think that the policy process and working with congress would answer. but we've had a lot of feedback from working with the private sector that would be interested in engaging with us on this. and so we think it has a lot of merit. mr. panetta: what would happen when people aren't home? what would happen in the time of natural disasterers? would it be distributed through a distribution center? do you know of these details? -- know any of these details? mr. vought: we're not prepared to offer any details --
mr. panetta: that's fine. reclaiming my time. do you know what would be in this food box? yes or no, please. mr. vought: we've been working with the united states department of agriculture to ensure that a balanced diet of all the staples -- mr. panetta: let me tell you what was in the last food box that was proposed. juice, serials, pass tarks peanut butter, canned fruits and vegetables, shelf-stable milk. and canned meat. now, i haven't ate at all today and it's lunch time. but i'm not hungry right now after reading that. are you hungry? mr. vought: this was not meant to replace the benefits that are currently receiving -- there will still be cash benefits. these are the types of details that we would actual leadership that we can work with you on. it's not a static proposal. we think that the basic concept is something that works in the private sector for people who are not on food stamps. let me give you an example from the standpoint of a daughter who relies on medicine that
comes at a certain time. if we're not home, the impact on us is that it goes back to fedex and we are out of pocket substantial amount of dollars because we weren't home. we're fully confident that individuals are responsible enough, whether they are on food stamps or not, to be able to work with their federal government or whoever the contractor is, to be able to deliver and have them at home to be able to receive the food that's necessary and we're willing to work with you to make sure that what people actually would receive is something that they would be excited about. it's certainly something with regard to the private sector options that are out there. mr. panetta: thank you very much. appreciate it and work looking forward to working with you. i yield back my time. >> i'm going to have to leave the hearing and turn over the chair in about five minutes. i'm going to take my time, one point and a couple of brief questions. one is i want to remind my colleagues on the other side that when c.b.o. scored the affordable care act just before its enactment, they estimated the legislation would reduce federal deficits by $124
billion over the 2010 to 2019 period. .5%.y roughly 1 -- mr. yarmuth: the 2010 baseline before the enactment of the a.c.a. projected medicare spending for 2019 to be $828 billion. c.b.o.'s latest baseline projects medicare spending for 2019 to be $632 billion. so projected medicare spending is almost one quarter less than it was before the -- 1/4 less than it was before the a.c.a. i might mention that i remember well during 2009 and 2010 when we proposed $750 billion in cost savings to medicare and my colleagues on the other side, many of them were not -- who are now on committee, were not ere theth then, but battered democrats for the same arling argument that you're now making versus with regard to your reductions in medicare.
but my one question is, your budget contemplates the full repeal of the affordable care act, is that correct? mr. vought: i wouldn't say it's a full repeal at all. mr. yarmuth: you repeal medicaid expansion in the budget. mr. vought: we have a repeal and replace of medicaid with state health care block grants. we say the fair way to comparison is to add the state -- the medicaid program dollars going forward and those state health care block grants to figure out what is the amount of money that states would have to meet the needs under the statutes to provide health care coverage. mr. yarmuth: the current structure of medicaid expansion would be replaced. in kentucky, where nearly half a million residents now receive their health care through the medicaid expansion, would be in serious jeopardy of losing their care. mr. vought: we don't believe so, sir. let me walk you through the numbers on medicaid.
we have 1.-- $1.48 trillion in savings in medicaid but we replace that with $1.2 trillion in spending for the state block grants in which we assume a lot of the policies of the graham-cassidy legislation that would continue to ensure that populations are covered with health care. mr. yarmuth: right now under the a.c.a. -- the federal share of medicaid reimbursement is 90% under the law. it would not be under your replacement plan, is that correct? or there would be -- assuming that a state even continued to ensure the same amount of people, the federal contribution would be significantly lower. mr. vought: correct. we think that's an important part of the reform, that with the a.c.a. we've moved away from paying 57% on average for needy important and populations, now we're paying
for 90% of the cost of populations that medicaid was never intended to cover. we think that is a result from a program perspective that medicaid has lost focus on the disabled and medicaid has lost focus when it comes to women and children as opposed to able-bodied adults that medicaid expansion now covers. we think this is a fundamental incentive problem within the current medicaid program. mr. yarmuth: you would get a significant argument from the 80,000 people in my district who now have medicaid coverage because of the expansion and the other 420,000 in kentucky. so i will yield back my time and recognize ms. omar of minnesota for five minutes. ms. omar: thank you, chair. thank you for your testimony today. i wanted to talk a little bit out how your budget proposal is going to have impact on the millions of vulnerable children
across this country. i wanted to tell you a little bit about the impact that i see that it will have because i don't see like you or this administration or trump gets it. in america one out of five children struggle with hunger. and for many of these children, the free lunch and breakfast that they get in school is often the only meal they get to have. yet the budget that you're proposing and this administration and trump is $1.7 cut from school meals over the next 10 years. a cut that largely would result in more than 29,000 children losing access to free school meals program in my home state of minnesota alone. what this budget does is quite literally take food out of the mouths of children. how can these kids be expected to be present and fully present
in classes to learn in the same space as other kids, how can we expect them to reach their full potential, and how can we expect them to be able to be on the same footing as other kids around the world? i often say that budgets are a value statement. as you have many times in this committee. and you said that we are committed to having promises kept. what does this budget and your proposal in cutting the child nutrition programs say about the promises that we want to keep to children, and where our values really are? mr. vought: thank you for the question, congresswoman. we don't think our budget cuts the programs that you refer to. specifically we think that it's important that high-income schools that are currently grouped together right now to receive benefits because
they're grouped with low-income schools, that that's unfair for the programs themselves. similarly, some of the reductions that you've talked about are, with regard to one-time rescissions that are not needed to be able to cover all of the children that we currently project, and we know congress -- ms. omar: how -- yeah, how is the assessment made, what child deserves to eat and what child doesn't? my understanding is that we should care about every single child arriving in that school, having the resources that they need to be able to get educated and be fully present. we have parents who might fall off the threshold of whatever that income is, who might not be able to pack a lunch or a breakfast or milk or a cookie or an apple for their kids. should those kids not be able to have meals in the school so they can be fully present in that classroom? is that what this administration values?
mr. vought: we believe it's important that communities that are otherwise ineligible to receive these types of benefits not receive these benefits and that only the communities that are eligible receive them. ms. omar: but how is the judgment of what the value of the benefits is made? we are talking about children in our classrooms. we are talking about america's mote vulnerable. earlier you talked about the harvest box. you said if they are not home, that they should pay a price -- mr. vought: no, i didn't say that. ms. omar: that was the example you used. if you're not home, you pay a fee. so what penalty would you think should we propose for people who might not be home to receive juice, cereal box, or a canned meat? mr. vought: i specifically was not referring to suggesting that they should pay a penalty. the point i was making, congresswoman, is that we don't think that it matters where you are in the income scale, to be able to determine a certain level of responsibility to
receive in the mail that which you are expecting to receive in the mail. we think that human beings -- are responsible from that standpoint. ms. omar: i get that. what i am saying is, we have a responsibility to make sure that here in the united states, people are fed. we are talking about food. we are talking about children having food. mr. vought: we agree. ms. omar: we give humanitarian assistance to people around the world because we believe people should not experience food insecurity, people should not starve. but here in the united states we decide to increase a defense budget that might lead to not fully our budgets be intact, but we decide to say that we don't have enough money to feed our most vulnerable.
that is the decision we're making. >> thank you. time has expired. the chair will now recognize ms. schakowsky from illinois. ms. schakowsky: thank you. it is incredible to me, and i want to associate myself with the remarks of congresswoman omar. one out of five american children is considered food-insecure. that is scandalous, i think. i want to say that this budget is -- envisions, really, i think, a radically different america than most americans can and want to envision. this budget is built -- the politics, i think, of division, the politics of resentment, and the -- which on the one hand should not surprise anyone, given the president who kicked off his campaign by attacks on
people of color and immigrants. anyway, on the other hand, though, i think it should surprise a lot and does surprise a lot of people since at his june, 2015, press conference, announcing his candidacy, he said, save medicare, medicaid and social security without cuts, have to do it, he said. and yet the budget -- you don't want to hear $845le about. so i'll say your -- $845 billion. so i'll say your number, $517 billion will come out of medicare. the budget before us cuts $1.5 re by -- medicaid by trillion. before really my view cannibalizing it by converting it into a block grant. the budget before us cuts social security by $25 billion. oh, yes, those terrible entitlements that are so precious to millions and
millions. the majority of american families. did president trump acknowledge he was breaking a key campaign promise when he agreed to a budget that cuts medicare by -- what are we saying now, $517 billion? mr. vought: the president doesn't believe he's breaking his commitment to the american people at all. there are no structural changes to medicare. there is no cut to medicare. medicare continues to grow each and every year. the president also committed to the american people that he was going to attempt to lower drug prices and so many of the reforms within medicare that generates savings simply because the federal government pays for the drugs of seniors, is because we are trying to lower and we have proposals to lower drug costs. ms. schakowsky: that's so interesting that would you want to predict -- you know, usually when we do budgeting, it's really not dynamic and we talk about -- you're predicting that
the president is in fact going to end up lowering these drug prices. you build that in and therefore cut metcafere -- medicare by the projected amount that you think is actually going to be saved. mr. vought, did president trump acknowledge he was breaking a key campaign promise when he supported the cuts to medicaid and then turn it into a block grant? mr. vought: he -- we do not believe that we are breaking the commitment to medicaid in the least. medicaid spending, in addition to where we transfer our reforms to medicaid, the state health care block grant will continue to grow every year. ms. schakowsky: you think that all the states in the nation, you predict that, are going to continue to make sure that low-income people, most of whom are children, are going to have as much money for medicaid by
transferring all that authority to the states to decide? mr. vought: we think the reforms we put forward with the assumptions to have a state health care block grant can lead to better coverage at the state and local level. medicaid is not what we would view as the optimal program. i remember when henry waxman said that there's not a lot of millionaires on medicaid. and wouldn't want to be a millionaire on medicaid. and we asked the question, why is that? why is it that demonty driver dies from a tooth ache in medicaid because never receives care? we don't think medicaid is the optimal way to continue to provide health care coverage and it's why we are supportive of the -- of many of the reforms that were in the graham-cassidy legislation. it's why we moved forward with state health care block grants. because we're trying to do it better. we're trying to make sure that the populations that medicaid was designed to cover get the care -- shaquille o'neal it's
interesting that there's -- ms. schakowsky: it's interesting that there's not anyone involved in the medicaid program, who is involved in delivering care that really believes that this is a reform. and the good news is, this budget will never become law. and i yield back. >> thank you. the chair now recognizes mr. horsford from new york for five minutes. mr. horsford: from nevada. >> from nevada. my apologies. mr. horsford: i appreciate this hearing very much. thank you for being here, acing director. vice president -- acting director. vice president biden used to say, quote, show me your budget and i'll tell you what you value. well, based on this budget, trump values corporate profits over medicare. he plans to cut medicare by anywhere from half a trillion dollars to $840 billion. he values continuing tax breaks for the rich while imposing devastating cuts to needy children, families on medicaid
and child nutrition assistance and seniors on medicare. this is his budget, this is the g.o.p. budget. sadly, few of my colleagues on the other side are here to continue to defend this budget. you have a tough job. i hope a vote is scheduled on this bill. so that every single member of this body has to demonstrate where they stand. and what their values are. you talked about vision, i think it speaks a lot to our values. first, i want to cover something specific to my district and address the yucca mountain nuclear waste repository, located in nevada's fourth district, about 90 miles northwest of las vegas. the state of nevada has filed 218 contentions against storing radioactive waste at yucca. many of which challenge the
department of energy's research and analysis and the people of nevada don't want it. even the president said he agreed with us. in a visit to our state in october of 2018, president trump said, and i quote, i think you should do things where people want them to happen. so i would be very inclined to be against it. we will be looking at it very seriously over the next few weeks. and i agree with the people of nevada. well, mr. president, if you agree, what changed? i'd like to enter into the record a letter from governor sis lack from the state of nevada dated february 27, to president trump, requesting a meeting to express our observations and to hear directly from the president why he includes this in his budget. >> without objection. mr. horsford: thank you. why is the president breaking ploims that he made to the
people -- his promise that he made to the people in 2018 in nevada by proposing $116 million of funding for yucca mountain? mr. vought: he's not breaking his promise. and he is very open to the conversation -- mr. horsford: will you make sure he receives this letter from our governor? mr. vought: absolutely. mr. horsford: thank you. on to military construction. the president requested $3.6 billion for a 2020 department of defense emergency fund to backfill the 2019 military construction projects that he's deferring for his emergency declaration for the wall. the president's proposal threatens to cut federal funding from previously approved projects for active duty military efforts in my district. in my district we have an air force base that's at risk of losing $59 million. this is a base that is performing critical military missions across the world.
dull us air force base is going to lose money and another is at risk of losing $32 million. can you assure me that none of these projects in my district will be delayed or have funds stripped away to pay for a useless border wall? mr. vought: here's what i can say, congressman. all the projects you just mentioned, i don't have the ability to say one way or the other. don't know if it's because these are -- mr. horsford: yes or no, will they be delayed? will these projects that are providing critical missions for our national security, we talk about national security in this hearing, all the time. and you guys are proposing to move money from active duty military that's in need in order for these individuals to meet their obligations. mr. vought: we have not identified the projects that will be eligible for a delay -- mr. horsford: but you've identified the $3.6 billion
you're moving from that fund. mr. vought: we've identified the level of funding that we think we'd be comfortable based on certain requirements. mr. horsford: let me reclaim my time. today we are also talking about cuts to medicaid. more than $640,000 -- more than 640,000 nevadans rely on medicaid. there's a proposal in here based on the graham-cassidy bill, a bill that could not even pass the republican-controlled senate, house and white house and now you have this in your budget. it's opposed by nine republican governors, including nevada's former governor. . why is your administration pushing a failed proposal once again? mr. vought: because we think it's good policy. mr. horsford: you couldn't even get it passed by your own colleagues in the last congress. why do you think it's going to change now that we're in the majority? mr. vought: this administration's budget is about putting forward our
vision for the country -- mr. horsford: this administration's budget is dead on arrival in the house. >> i want to thank the gentleman from nevada. now recognize the ranking member from arkansas, mr. womack. womewome thank you very much, mr. mount -- mr. womack: thank you very much, mr. moulton. mr. vought, thank you for being here today. i'll try to not take up all of my time. you have a tough job. i mean, how do you -- if you look at the spectrum of the federal government, what we possible to it come up with any kind of a plan, any kind of a budget that could satisfy all of the desires, all of the pet projects, all of the needs, all of the urgencies, how is it possible to do that when you have a limited amount of
resources with which to work? how do you do it? mr. vought: you can't. we live in a resource-constrained world. every family across the country lives in a resource-constrained world. and so you try to accomplish what is absolutely vital under the constitution in terms of the role of the federal government. and then you try to make all of the investments that are necessary and prudent. and we do it -- we take a long time to compose these budgets because it's a labor-intensive work product. mr. womack: is it fair to say the priorities change from year to year? there are different sets of urgent mats that are come up from time to time -- mats that are come up from time to time that you have -- matters that come up time after time that you have to take a look at? it's fluid? mr. vought: yes. it's one of the reasons we believe in budgeting every year. we think we should be doing more budgeting, not less. mr. womack: do you think the american people that may be watching this hearing or catching excerpts of it can relate to the fact that there are always more things you want
or need than there are resources to provide? do they do this at home? mr. vought: they do. i think they understand the exercise that we are called by statute to do. which is attempt to budget for the federal government along the lines of how they do it. mr. womack: so along the course of time in a family budget, much like the federal budget, on a much smaller scale, from time to time there will be not enough resources to do the things that you'd like to see on the expense side of the ledger. so what do you do at your house? mr. vought: we figure out what money is coming in, and we figure out how much we can afford and we allocate our spending accordingly. and we just do the best we possibly can. we try to avoid debt. that's something that every family tries to do. when they're trying to get serious about their fiscal house, what do they do? they tear up their credit cards. mr. womack: do you make some tough choices? mr. vought: we do.
mr. womack: and these choice sometimes can be somewhat painful. they can deny you some things that you might otherwise have that makes life a little easier, to go through day upon day. but at the end of the day, you have to make some tough choices, don't you? mr. vought: we do. mr. womack: you ever weaned a calf? mr. vought: i have not. mr. womack: have not. you know what happens -- i'm from cattle country. what happens when you wean a calf? mr. vought: i'd be interested to hear. mr. womack: it's one of the noisiest, loudest, heartbreaking events that a cattleman goes through. about he knows he has to do it. and i use this example not at the risk of somebody from the other side saying that the ranking member wants to compare people to cattle. i don't. i just suggest that any time that you take somebody off of something they've become dependent on, in the case of weaning a calf, a calf and its ma, there is a wailing and
gnashing of teeth unlike you've seen. so when you present a budget that makes some of the tough choices, i just talked about, you can expect that there's going to be a lot of angst to go along with that, right? would you not suggest that we have to do those tough choices in order to prepare ourselves to be stronger in the future fiscally? mr. vought: i agree with that, sir. i think that's one of the importance of a fiscal gofmente when you have a fiscal goal that allows to you make tradeoffs. that's why we think balance is so important. even if it's over a 15-year window it. allows us to enter every one of the decisions you're just referring to and saying, all right, can we afford it? -- this? and if not, how do we either ay for it, or not spend on it. mr. womack: so there are things on the expense side of the ledge that are are must-do -- ledger that are must-do. federal government, it says provide for the federal defense. we can argue about how much,
but we have too to do it. -- to do it. provide for the general welfare, that is kind of a broad subject and i think we can have a debate that goes a long time about what constitutes general welfare, what doesn't. but there was a comment, i'm using one example of many that came up in this hearing today on the other side about cdbg and i'm an old mayor so i'm very familiar with the community development block grant program. and the budget proposes to eliminate it. correct? mr. vought: it does. mr. womack: are you familiar with the revenue sharing that the federal government used to do? it was a program. federal revenue sharing. i think it was introduced to the nation in like -- i want to say nixon signed it into law. i could be wrong. but it was around 1971, 1972 that federal revenue sharing, and i think it was born out of
a need in new york, with a big budget deficit, that we were going to take federal money and share it with other political subdivisions beneath the federal government, state and local. and then i remember, because i was a city councilmember in the early 1980's, when federal revenue sharing ended. and much like the balling of a calf at weaning, there were mayors and others associated with local government that screamed to high heaven that this was going to be terribly damaging to the balance sheets of a lot of our cities and towns. it seems like they survived. we did. we became dependent on something and it was part of our regular revenue stream and therefore we assumed it was always going to be there. $22 trillion in debt is a lot of money. do you not agree? mr. vought: i totally agree. mr. womack: trillion dollar
deficits that will knead feed into that $22 trillion is a lot of money, would you not agree? mr. vought: totally agree. mr. womack: so in order to make the tough choices we talked about earlier, we're going to have to examine the spectrum of the federal government, and as i said early on in your testimony or responses, talked about how it was important for federal bureaucracies on the discretionary side, because we spend a lot of time talking about mandatory spending, but you said on discretionary side we cannot forget that there are places where we can re-analyze approach our and budget perspective in a sense that we're addressing the urgent needs with an eye on fiscal responsibility. did you not? mr. vought: i did say that. mr. womack: as part of your budget, you do advocate for -- that the discretionary budget of the federal government cannot be held exempt from a
lot of the examination that we've talked about on the mandatory side. mr. vought: absolutely. we don't believe any part of the federal government should -- spending should be exempt. mr. womack: ok. you've got a difficult job and before i close i just want to acknowledge a number of people that are seated behind you. i'm assuming that a lot of these folks are staff. i know there's one guy back there with red hair that used to work for me. so i know he's part of your staff. and i just want to give a shoutout to your staff because they've spent a lot of midnight oil trying to prepare a document that a lot of people re going to throw a lot of tomatoes at. but between now and the time that we fund the government on october 1 of 2020, we still have a lot of ground to plow and a lot of decisions to make, between the legislative and executive branch, we'll do our best to put america's priorities number one. mr. vought: i appreciate you saying that, congressman. i appreciate the staff, as you mentioned, that has done so
much to prepare this budget. it's a six-month progress -- six-month process. it takes a lot of late nights. so i thank you for reflecting that. mr. womack: thank you very much for your testimony. i yield back. mr. moulton: i want to thank the ranking member. this is obviously a difficult, contentious process. certainly agree with you on that. i certainly hope that to pick up the analogy of weaning calfs -- caffles, that it's clear from your -- calves, that it's clear from your budget that the administration hears the balling, -- bawling, the angst of the most privileged in america who are afraid of losing their tax cuts. and i just hope that the administration can also hear the bawling, the angst of the least privileged americans who are just trying to feed their families. so thank you for being with us today. please be advised members can submit written questions to be answered later in writing. those questions this -- those questions and your answers will
be made part of the formal hearing record. any member who wishes to submit a question for the record can do so within seven days. without objection, this hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2019]