Transcripts For CSPAN Senate Democrats And OMB Director Clash Over FY 2018 Budget 20170529

Library. On thursday, Mick Mulvaney testified at a Senate Hearing on President Trumps proposed budget for fiscal year 2018. This is two hours 15 minutes. [inaudible conversations] [gavel pound] good morning and welcome to all. Ill call this hearing to order. We are here today to discuss the president s budget request for fiscal year 2018. I know my colleagues and i have been anxiously awaiting the arrival of President Trumps first real budget submission. Were placed to welcome director mulvaney to hear in detail from him the fiscal aspirations of the president and answer questions. Were interested to learn how the president proposes to grow our economy and help put our fiscal house in order. Of course this is merely the first step in the 2018 budget process. While the president has his plan, the United States constitution instills members of congress with key tax and spending functions, and with the responsibility to ultimately decide what our nations fiscal priorities will be. Budgets are an incredibly important part of governing. Its crucial that the congress and president Work Together to confront rapidly growing definited from the governments overspending which plagues americas and the taxpayers. Cords but our nation was still unable to live within its means. Since 2009, our nations gross federal debt doubled to almost 20 trillion today. To put that in perspective, this is larger than the entire u. S. Economy, and cost taxpayers, even with the low Interest Rates 241 billion in Interest Payments last year. The Congressional Budget Office says these interest costs will continue to grow and reach 768 billion in 2027 alone. Thats in one year. This chart shows the growth of the Interest Rate and i think theyre using some pretty conservative Interest Rates. This amounts base on the conservative assumption of future Interest Rates. Cbo tells us a one percentage point increase in Interest Rates any year would drive up federal deficits by a further . 006 trillion. Soon paying interest on the debt will become one of the largest functions of government and is poised to represent more than we spends on defense, education, infrastructure, and our social safety net. In other words, the billions and billions in Interest Payments for the money we already borrowed will soon crowd out our ability to execute our core responsibilities as a government. Our automatic spending on mandatory program grows unchecked. In 1967 a representative just 32 of the budget. But in 2017 it represents more than 69 . By 2027 it will represent more than 77 of total spending and will consume nearly ever single penny of revenue the government collects. The red is the mandatory and the gray is interest and well be borrowing everything we have for defense and nondefense by 2027. That means our entire discretionary budget, which Congress Actually debates, will be completely deficit finance. Creteing this responsibility is not an outcome that jefferson and madison could have possibly envisioned for our country at its inception. We all know our accurate debt burden is unsustainable. Er no the worst fiscal shape since world war ii and if things dont change well add 10 trajectory the debt. Even this budget, getting aide s trillion cozy. Congress can help the government become mow conditionable by spending taxpayer resources efficient live by removing programs that are not delivering results. That is some of the unauthorized spending, in 2016 we spent 310 billion on unauthorized programs. Just last week the Committee Held a hearing with a the comp comptroller. He outlined billions of dollars in savings that can be achieved by reducing improper payments or by consolidating duplicative programs. I have an example on that chart of the duplicative program. In housing theres 160 programs administered by 20 different agencies. Nobody in charge, know noh goals set no oversight, hard to tell if anything is happening with the money and could probably be condensed down to five program. I know the taunting task of slashing 6 trillion to get to balance and i repeat, even then we would still see the debt increase another 5 trillion but i appreciate the effort that has been put into this president s budget, realizing that daunting task of how to get the. I look forward to hearing more from director mulvaney how the president s budget will improve accountabilitied to the government and support efforts to improve and eliminate Government Programs that are not delivering results and crucial to allocate taxpayer resources so they programs with the best performance receive more funding and poorly performing programs receive less or none at all itch applaud the aggressive approach contained in the president s budget to reorganize and reform both program and federal agencies to ensure theyre efficient. Id like to comment the president and the director for a budget that balanced. Here in this very first Budget Proposal President Trump has provided a plan to get to balance you. May not like how he had the director get but i look for suggestions. Please instead of complaining share some ways to make a devils or at least something that you like. This year we take an important first step forward in helping to change the way we do business here in washington by focusing on the importance of a balanced budget. The rope this work is so important is because we most restore the trust of the American People in their government. Ill yield the floor to Ranking Member sanders. Mr. Chairman, thank you very much. And director mulvaney, thanks for being with us this morning. I would agree with the chairman on one point. We must restore faith with the American People and their government. Sadly, this budget does exactly the opposite. The trump budget that was introduced this week constitutes a massive transfer of wealth from working families, the elderly, the children, the sick, the poor, the most Vulnerable People in our country, to the top one percent. It follows in the footsteps of the trumpryan Health Care Bill which gaves massive tax breaks to the people on top, while throwing 23 Million People off of the Health Insurance they currently have, and dramatically raising premiums for older workers. This is a budget which says if you are the wealthiest family in america, the Walton Family of walmart, you can get up to a 52 billion tax break through the repeal of the estate tax. Let me repeat that. Wealthiest family in america, could get up to a 52 billion tax break. But at the same time, this budget says that if you are lower income senior citizen, you will not be able to get one hot nutritious meal other day provide tote you by the mealses on wheels program. This is a budget that says that if you are the second wealthiest family in america, the koch brothers, family, by the way, that has contributed hundreds of millions of dollars into the Republican Party your family can get up to a 38 billion tax break. But at the same time if you are working class young person, trying to figure out how you can possibly go to college, your dream of a College Education will disappear because of 143 billion in cuts to Student Financial assistance programs. This is a budget which says that if you are member of the trump family, you may receive a tax break of up to 4 billion, but if you are child of a low income family you could well lose the Health Insurance you currently have to the childrens Health Insurance program and massive cuts to medicaid. When donald trump campaigned for president he told the American People that he would be a different type of republican, take on the political and economic establishment, stand up for working people, he understand the pain that families across at the country were feeling. Sadly, this budget exposes all of that verbiage for what it really was, just cheap Campaign Rhetoric that was meant to get votes. Nothing more than that. At a time when he veryrich are already getting much richer and the middle class coins to shrink, this is a budget of the billionaire class, by the billionaire class, and for the billionaire class. This is a budget which will make it harder for our kids to get a decent education, harder for working families to get the health care they desperately need, harder to protect our environment and harder for the elderly to live out their retirement years in dignity. This is not a budget that takes on the political establishment. This is a budget of the political establishment, this is the robin hood principle in reverse you. Take from the poor and give to the very rich. The reality is that the budget the presume has pro that President Trump has propose weed break every promise he made to working people of this country. Manning among many other problems is brick is not only massive cuts to medicate but cuts to Social Security. This budget would make massive cuts to the Social Security for people who have severe disables, children who have lost their parents and the poor. And directer mulvaney, dont tell me that Social Security disability Insurance Program is not part of Social Security. Lets be clear. Social security is not just a retirement program. It is Insurance Program that protects millions of americans who become disabled or lose their parents a at a young age. The chairman said we have to restore faith with the American People. He is exactly right attempt to do that is totally reject this budget and credit a budget that works for working families in the country, not just the billionaire class. Through, mr. Chairman. Thank you, senator sanders, our witness this morning is mick mull vaney the director of the office of management and budget. Having only been confirmed by the senate on february 16, 2017, its safe to say that director mulvaney has had a busy few mocks. Prior to this time the served the people thereof the Fifth District of South Carolina as their congressman, where he was first elected in 2010. He served on both the Budget Committee and the joint economic committee. We look forward to receiving you testimony. Please again. Chairman, Ranking Member, members of the committee, thank you so much. Its wonderful to be back here in this wonderful room. To present you the president s fy2018 budget. The title on the cover is. A new foundation for american greatness. Spent a lot of time in this document over the course of the last couple of days and weeks. Wish now i had changed the title on the cover. I wish that the title was a Taxpayer First budget. I said, okay, we have this title, this name, its the new foundation for american greatness. What is new about it . And one thing that is new is that we actually did look at the expenditures through the eyes of the people who pay for it. I think for too long we just looked at the impact on the folks receiving taxpayer dollars and not nearly enough time focusing on the folks who pay taxpayer dollars and that is new in this budget this year. Whats is new it . Balances. Wind ten years. Something the Previous Administration was incapable, unwilling to do for their eight years in office. Its an opportunity to have a conversation about borrowing money. We do borrow money in this bug, as president obama did before us and president bush did before him. We do something unusual when we compare it to the Previous Administration. We actually have a plan to pay it back. If you borrow money, take money from people, and have no intention and no plan of ever giving it back to them, that is not debt. That is theft. And that is what the previous eight budgets offered by the administration did. Took money with no prospect ever of giving it back to the people from whom you borrowed it. And we changed that. We have a plan for how to borrow money in the shortterm ask then pay is back. Every man and woman and child in this room owes the first government 60,000. My every sing one of your constituents, 60,000. You might be able to look them in the eye and say thats okay. The president decide thats not right and cannot go on forever. We have to have a plan for figuring out how to start paying back the money we have borrowed from people for all of these years. The next word on the budget was foundation. Tried to come up with the foundation. What was the foundation for american greatness and its 3 growth. Every single time im in the oval office talking to the president , whether its budget, tax policy, trade possession si, energy policy, regulatory policy, those discussions are driven by one goal and one goal only, how to get america back on track in the economy. Theres some folks who believe and many of them work at the congressam budget office. 1 point growth is the best we can do forever. We refuse to accept in this administration that pessimistic view of the future. We refuse to accept that the new normal is 1. 9 . Especially when the history of the nation is above 3 , back to the founding, world war ii. We want to some of us want to accept the fact we will only ever grow at below 2 growth again. Youre in this room today and watching this and youre 30 years old, you have never had a job as an adult in a healthy and truly healthy American Economy. An economy at 3 is so much different than an economy at 2 that is hard to describe except like this. In 1990s we had excellent growth in this country, under a Democratic Administration and republican controlled congress. If you got fired during a healthy American Economyow could find another job easily. If you did not like your job, you could quit and start your own economybusiness. That type of optimism died in a 1. 9 Economic Growth world, and we need it back. Every we do in this administration, including the principles in this budget, are designed to get us back to 3 growth. We do that still funding the president s priorities, the national security, worth secured, Law Enforcement, veterans, school choice, paid parental leave. Infrastructure, money in here for that. We can talk about that. We do not touch Social Security retirement or medicare. We also focus on unauthorized programs. 310 billion. One question i asked, if you think its so important why dont you vote to reauthorize it . Thats a fair question when you look at this from the perspective of the people who are paying for it. Ive enjoyed watching the politicians on tv this week saying we wish we spent more money on this program and the program is unauthorized. And i cannot go back to the taxpayers and say, i want to spend more money on a program that congress doesnt care enough about to vote on anymore. Thats no longer defensible. So we do all that and we balance the budget within ten years because we look at the government differently. We are no longer going to measure compassion by the number of programs or the number of people on those programs. We are going to measure compassion by the number of people we get off of the programs and back in charge of their own lives. We no longer measure success by how much money we spend but by the number of people we actually help, and that is the last part of the budget, which is american greatness. With that, mr. Chairman, look forward to the hearing today, look forward to anting questions and hope answering the questions and appreciate the opportunity to be here to present the president s budget. Thank you. Youre one of the few people who finished up a minute ahead of time. Im from the house. We only get five minutes over there. Seven minutes irvery generous. Now we do turn to questions, and ill explain the process. Committee members, each member has five minutes to questions beginning with and is then senator sanders and then ill alternate between the republicans and the minority. All members in attendance will be recognize in the order of are seniority. So, well start the questions. Guest director mulvaney, the president s budget reduces deficits to the prepolicy base line by 5 and 6. 000000000000 and is directly scored to policies in the budget. The ritz estimated to come from economic feedback specific live the bug projects more than 2 trillion in increased revenue from increased Economic Growth. What initiative in your budget do you expect will lead to that growth . Thank you, mr. Chairman. When secretary munchen, director cohn and i as members of the socalled troika sat down, we looked at the cbo numbers that proposed or projected that 1. 9 growth and then asked yourselveswhat are we going to do to get that number 3 . 2 trillion of additional revenue you mentioned from the 3 Economic Growth throughout the tenyear budget window. So we said, okay, were go to have tax reform, Regulatory Reform which has a larger increase on gdp than tax reform. New trade policies. Were going to undo obamacare. And repealing according to the Congressional Budget Office, repealing obamacare added to the gdp growth in this country because even the Congressional Budget Office recognized the pass yang of obamacare created a disincentive for people to work. That what we did. We assign today values and came up with numbers that were higher than 3 . The president mentioned numbers higher than 3 on the campaign but settled on the 3 growth. Thought was a conservatively defensible number. In one supporting volume of the budget i found a startling figure. In the ten years ending in 2016, nonindependent agencies add 178 billion in annual costs through finalization of new regulations. This doesnt capture the interRegulatory Burden as regulations such as chose to from the doddfrank act are imposed by independent agencies how much does this budget profoes review the rules to lessen impact on the me and and prevent such buildup of regulations in the future. We actually have already taken step inside that direction, chairman. After i arrived onb approved am executive order to address the regulatory climate. Institute aid one in and two out rule. Before agencies have a new piece of legislation they have to go back and look. 22 to get off the books. Its been extraordinarily rick to do that. We have learned that its not that hard to slow down an agency on creating new regs. But when you ask an agency, a Bureaucratic Agency designed to create regs to deregulates its a muscle they have nod using for a long time, if ever. So we have been a little bit surprise bid the challenges and look forward to those. So we have done a good job of slowing down the new regulations into the pipeline but well work hard to make sure we spend as much energy getting old regs off the book. And instituted a net zero dollar policy. If you are going introduce a any regular that has 100 worth of burden on the American Population you have to find something to get rid of the same 100 so theres a zero net Regulatory Burden on the economy. Thats what ive been hearing in wyoming. Last month the gao issued the results of a study that found that the cost standpoint for thed of indication department, various income dependent Student Loan Repayment plans has been reestimated upward by tens of billions of dollars. The reason was enrollment prior exceeded the Prior Administration holiday systems, and include a student loan revision raising by an additional 39 billion and 8 million is do to greater enrollment, another 18 bill due to updated collection rate assumptions. Concerning the roughly 100 billion in default Student Loans the department manages. We keep finding the student loan programs are more expensive than the government expected. How does the president s Budget Proposal attempt to contain student loan costs. Ive not reviewed the report but i think we all know that there was a lot of pressure during the Affordable Care act debate to look to the Student Loans to be generating money. And you can ask yourself whether there was pressure to show unreasonably rosy numbers at the time as part of the obamacare discussion. Looking forward, and talking about what the president proposed when he was campaigning the president made pick promises regarding taking the variety of retirement programs out there to ray pie Student Loans and condense them into one. We take a single Income Based Program and tie your repayments of your student dote the amount of money you are making after you graduate and that leads to a circumstance whereover make can less money you pay become less of your loan. If you make more, youll pay back more. President obama suggested we for gift the debt after 20 years. We move that 15 years. But by doing it in a single plan thats actually easier for folks to use and we expect them to use it and by making the variable depending on income we save considerable amount of money. Thank you. My time is expired. Senator sanders. Thank you very much, mr. Chairman. Before we go further, find it a little bit unfair that mr. Mulvaney and many people in the Trump Administration disparage the director of the cbo when it was tom price the former republican chairman of the Budget Committee who appoint dr. Hall in the first place. Lets get that clear. Mr. Mull vainy, as you know, the United States today has more income and wealth inequality than any major country on earth. Top one tenth of one percent owns as much wealth as the bottom 90 . 52 mr. Of awe new income going to the top one persons but your budget thinks it is good Public Policy to provide 52 billion in tax breaks to the wealthiest families in this country, family already worth 128 billion. You think that a family like the Walton Family, with one guy that owns four ferraris ferraris ande maserati are just in desperate need of massive, massive tax breaks. You think that shelton it adelson who contributed 12 million dozen to the trump natural inaugural is in need of a massive tax break as well thats koch brothers. Tell the American People why you think it is a good idea to give 3 trillion in tax breaks to the top 1 at a time when the rich are becoming much richer and youll throw 17 million children in this country off of Health Insurance because of the unconscionable cuts youre making to medicaid, why are you going throw seniors in the state of wyoming or the state of vermont all the meals on wheels program, maybe the one nutritious program that they get a day, why are you going to throw women and lowincome babies off of the wic program at a tine when infant mortality rails. A great income to tell a low income pregnant woman youll takeway the wic program, the Nutrition Program to children to gave massive tax break of to the Walton Family. Please explain your logic. I measure performance by results mr. Sanders. Your opinion is that the results are terrible. I am suggesting it was a member of the Trump Administration that appointed this gentleman. Not some time to radical democrats. Quickly we can agree that the productive data. We can agree that you guys have a manager pointed and you dont like his results. I will get back to the question. [multiple speakers] work serves all of the participants. The meals on wheels is not reduced at all. The change youre making see you eliminate the funny tummy doesnt have an impact . It is funding senator the old age through hhs we do not change. The program is a grant to the state and some states to choose, choose to use some of that. Bottom line is kaine answer the question. The total money for meals on wheels is three percent. I dont know how you could possibly contend are you eliminating the program that funds not only meals on wheels but other programs at the discretion of governors . I would be more than happy to have a long discussion about this and medicaid as well. medicaid, the dramatic cuts. There is one year exception during the Affordable Care act. Sorry the American Healthcare act where the bill calls for the and to expansion and theres a small reduction that year. Generally speaking is a 10 year budget. Medicaid spending goes up. So does the budget. Look this every year. Inflation is going up a lot faster than money. Bottom line is let me get back to this. Why do you think family needs 52 million tax break . You are making that assertion on the only taxi teller we have in the budget. Exactly. Want to talk about why we are refilling i would be more than happy to do that. Good, lets talk. Ordinary people are paying more. Ordinary people do not have a wealth of 128 billion. The average increase across the nation. Youre not answering the question. Answer the question. The wealthiest families in america get a 52 billion tax break as a result of the deal of the estate tax. Tell the American People why think that is good when you cut medicaid and you cut programs for kids . We do not cut medicaid. We are talking about repealing obama care. The results kaine i did not agree to that all. Why does a billionaire fumigated 52 billion tax break . Please have the American People. Because we want to get rid of is the Walton Family and ordinary family . Know they are extraordinary. Ordinary people are living coverture under obama care. Im asking whether wealthiest family in america is getting the tax break. And im answer the question. You and the estate tax which applies to 2 10 of one percent. Center. Im sorry that the assumption was looking at the tax reductions that are contained in obamacare. No, the thumper we are talking about. No, no, no. The budget assumes a deficit neutral tax plan. When we budget we did not have nearly enough specifics to assume what you are suing. Which is a specific reduction. Yes, the proposals that the white house published about three or four weeks ago, the principles that we said it does include a reduction of the estate tax. Repeal of the estate tax care. Yes but it is mathematically impossible to take the general principles and assume a direct impact on a particular family. No thats not i have seen. [multiple speakers] we dont know him people will be dying, that is for sure. We dont know . No, you dont know when someone will be dying. But the truth is the family is worth i am pretty sure they will die eventually. That we can be sure of. At least we agree on something. Senator graham. That was borderline fascinating. [laughter] for eight years, president obama presented a budget which was a proposal. And got zero votes in the United States senate for the United States house. It is fair to say we are going to continue that trend. You might get one but it will not be mine. And let me tell you why. I really appreciate you trying to balance the budget in 10 years. He got the budget control numbers to go with, that is correct. That is a concert a constraint that we put on you. Obama increase taxes about 3. 1 trillion in 2017. I mean that would devastate the economy. That is probably what got no votes. Some of the class e made i think will have an effect that the country probably does not wish for. But you are in a spot of having to balance the budget, increase military spending. And that makes you make very tough choices good so i appreciate you trying. And we did not touch Social Security retirement or medicare. That is my question. Lets not fool people. You did a really good job. Meals on wheels is not being vetted. The block grant portion is being eliminated and that is three percent of funding. That is what you said . Maximum three percent. So please stop saying things are not true. There are things we can say that are two. The bottom line is i would like to eliminate the debt tax. It is do not is the concept of fasting peoples estate and they died because every time they made a move while they lived you taxed it. I would rather have the Walton Family take the money and give it away. Rather than the government grabbing it after they die because i think the chief philanthropist in this country are a lot of the wealthy people that you talk about. They are doing a lot of good things. They may have a ferrari in the garage but i can say that when it comes to conservation and other things, the Walton Family contributes. So it is a philosophical difference. If it works we would have no debt tax. Because we taxi every time you move while you live. The bottom line is these are philosophical debates. It is not mean, we just disagree. With the one thing i do not want the public to be misled about is that you do nothing in terms of medicare and Social Security and which is coming. Is that correct . Correct. If you are able to, if you unleashed by the president , would you not want to get a grand bargain before cleanup the tax code . Take away some deductions for the few at the expense of the many . And save medicare, medicaid and Social Security from insolvency which is coming . Money tell you something. Not technically mexico and yall asked me what i was going to do because sometimes i would disagree with the president which i think is one of the things that the reasons he hired me. Because i gave him options. I gave him a list of proposed mandatory changes. At the end of the last meeting he went yes, yes, yes. No, no, no. And the answers for no, no, no were Social Security, medicaid and medicare. I said i am going to keep this when i was running. The president is look people in the eye and let them know that that is an impossible promise if you are looking to get out of debt. Mr. President , quick they begin at once asleep. Until 2042 medicaid and Social Security along will consume i see similar numbers. Because the baby boomers are going to be retiring to you cant skip or medicare or Social Security if youre serious about the theist becoming checkmate and to skip over these mr. Mulvaney, you know the right solution. I will deliver that to the president. You been the solution in my view. Thank you for what you did with the ports, the Innovative Solution to funding ports. You will have disagreement about limited one thing about the budget that bothersome. Soft power. You agree with me we are not going to win the war on terror by dropping bombs . I agree that you know why we did what we did. All i can say is i do not know what it costs the country nor afghanistan after 9 11 to the taxpayer. But when you shoot women in soccer stadiums for sport, when you block statutes if anybodys religion to expect that to come your way is a huge stake. The american taxpayers. The king of jordan is the best ally we could have. Reduces funding by 279 million. Got a call from the of jordan saying what did we do wrong . Nothing. Georgia, a frontline state in the crosshairs of vladimir putin. 66 percent reduction in their assistance. These people not owed a dime the american taxpayer. Foreign aid is one percent of the budget but i will tell you this mr. Mulvaney, from my humble point of view. If we do not help the king of jordan moore, at a time of critical need, his kingdom could fall. If we do not push back from russia and help those in the crosshairs of having everything destroyed, i do not know what the cost to the taxpayer is but to me it is an unacceptable cost. The reason i vote no is because soft powers destroying the budget. Thank you senator. Senator whitehouse. Thank you very much, chairman. Esther mulvaney, can we talk about the tax reform proposal . You just said that you assume that the tax reform plan is going to be deficit neutral. Is that correct . Yes, senator. Your presentation to this committee states that it is deficit neutral, correct . Basically had three choices. So there is no scoring on it this is an assumption . Yes we will be deficit neutral and we picked the middle way. The way you get to that conclusion is that you recognize that there will be immediate revenue reductions from lower tax rates and calculate that they will be offset by increased revenues from enhanced Economic Activity. They offset each other to deficit neutrality. With respect, that is not the calculation we went through. What was the calculation . We went through the list of exclusions that are reduced. Loopholes that are closed, deductions removed. I cannot remember the number we assigned to ending the proposal, it includes to remove the deduction for state and local taxes. Which is a huge number. We get rid of a wide variety of personal deductions including everything except i think the proposal has your testimony here is that you are not assuming any growth from tax revenues as a result of increased Economic Activity in reaching the deficit neutrality. That is all going to be tax dollars in, text tax dollars out. We assumed Economic Growth. Certainly it is part of as i mentioned in my opening statement, the assumption that how they got to three percent growth. Tax policies were part of it. Certainly what we do go to three percent growth, we assume that government revenues go up. We assume that there is growth but we did not use those numbers to say that the tax policy was deficit neutral. So the tax policy as you foresee it, will be one that is deficit neutral without regard to growth . Or without regard to the increased growth that you assigned to the tax policy itself. There is a secularity. People say were going to change the tax code and it will increase revenues and we will bring those back into the tax code. That is not going to be a manner in which you achieve deficit neutrality when you get your tax code proposal together. Again, i think we are agreeing. But just use my own words is that i am aware of the accusations of double county. I do not believe that we engaged in that. The only way that that becomes true is if in fact, the tax reform proposal is deficit neutral without regard to growth from the tax proposal. Exactly. So we are agreeing on that point. Keep in mind, we have to make these assumptions for the budget, in fact we are very early on in the discussion about what a tax policy should look like. We have to make certain assumptions. There were three options they mentioned and they are the three that we took. We could have made the assumption that the tax policy by itself would reduce the deficit. We chose not to do that. My guess is there are some of you that would make the contention that the tax policy by itself should add to the deficit. We chose the middle way to say look, we do not know enough about the tax policy. We know some of the basic principles. Will lower rates, simplify but get rid of this whole host of deductions. Some of which are massive. And we said look, the most defensible way to look at this is on its own policies those will be deficit neutral. Whether or not what youll find passing and what we negotiate with you in a final tax. What it looks like i cannot say. But we have to make certain assumptions early in the process to do the budget. So when we look at your tax proposal when it gets to a level of specificity that we can actually look at, we will be looking at Growth Numbers that are a constant with and without the tax code and the deficit neutrality will be the function of changes within the tax code itself. Not projections of growth. Let me look at it a different way again and see if we are green by using different words. When we offered next years budget we will not be able to make those assumptions. I hope, regarding what the tax policy would look like. Because we hope it is either in law or close to being in law. So we are being forced looking at some piece of paper with basic principles and trying to do the math on that. We will have a specific thing that we might be able to score and think more details assumptions regarding. Because you do recognize that if you count the growth here in the budget, and then you count it again in your tax proposal that is a double count. Youre saying is not double count because you will not use it twice in that way. And i would not want to come down after answer questions. Thank you, my time is expired. Mr. Johnson. Thank you, mr. Chairman. Lets talk about why you want to grow the economy. You go from two percent to three percent growth that is about 14 trillion over 10 years of Economic Activity added. If you assume revenue that is 18 percent of gdp that is about 2 and a half trillion dollars of additional revenue without raising anybodys taxes. Correct . We scored at 2. 1 trillion but yes. So that is why you want this. I think the whole purpose of tax reform would be to rationalize our tax system so it incentivizes growth. You want to see the static revenue loss made up by Economic Growth to have economic score that comes as close to revenue neutral as possible. Just having a revenue neutral tax reform doesnt do much. So i mean, is that we are trying to do . Rationalize the tax system so again the Economic Growth that does put more revenue than the federal government . Again i think my answer to you would be i dont care about that. Im talking much is basic stuff. 14 trillion of Economic Growth yields more than 2 trillion in revenue. Say whatever tax policy that makes america more competitive so we can grow the economy. Looking at it another way the world of 1. 9 percent growth, we will never balance the budget again. I have a chart here. My 30 year deficit chart. Here are the facts. The latest project important to dollars over the next 30 years. Projected deficit of 129 trillion that would be advanced the 20 trillion worth of debt. The net value of all private assets is 128 trillion for clearly unstable. Lets look at the next sheet. This is what i call my one page income statement over 30 years, three things are yellow. Actually four. But three i want to highlight. The deficit is Social Security is about we will put out 18 and actually more in benefits. 18 and a half trillion dollars. Medicare is 39 trillion. The remainder of that 129 trillion basically 65 trillion in the debt. So in other words if we do not want to pay 65 20 in interest to the creditors we better have Social Security and medicare. I want to focus on medicare. I want to talk about, how you restrain the growth in healthcare costs . Isnt that what ought to be the primary goal of any healthcare proposal coming out of congress . How do we bring competitive consumer driven competition to restrain the growth. And it improves quality and access to competition. Can you tell me in the American Health choice act or whatever, the age the house bill. What in that bill will drive this . Because that is number one thing we have to do. If we do not want to end this. A bunch of different things. I will pick one for the sake of the discussion. Medicaid is one of the larger drivers as well. You can see it behind us. Medicaid is a state administered program. States also pay for it. I remember being in the state legislature looking at that line item which at that time was a second largest in the budget after k12 education. And im thinking oh my goodness, look at this number. What do we spend it on finding out . And then say what was spitting up that way we can spend another day more efficiently . And he said if you want to take care the people in the way that you should and in a way that is efficient because we all want to take care of the most needy, we couldnt do that because the federal government did not allow us. The hca, they are one of the fundamental structural changes that get with a house version of the bill which is what we do. But the states and much more control over how much they minister and how they administer it at the local level. That changes one of the longterm drivers of cost. You get to the very heart of the matter. How do we make healthcare more affordable . Just about everything that we buy is more affordable and of Higher Quality than 10 years ago. In the 40s, healthcare dollars actually paid for by the patient. Today is about 0. 11. We have driven the market petition out of it. Let me just use an hsa as an example. We went from probably about 1000 deductible plan. There was a 2500 hsa qualified plan. The premium savings that we realized just by making the small little change. Lets face it obamacare has a far higher deductible than that. Allow me to take the premium savings to beat up by the employees and invest 3000 per year per employee in the hsa accounts. 10 years later they had about probably 30,000 per employee in hsa. Now they have that money, that is their money and they are driving Consumer Choice and things like walkin clinics, walmart, cbs, walgreens. It actually does work. So you are investing and how much in hsa in the house bill . I do not remember the number but it is a dramatic expansion. Im sorry i dont have the number. But again, isnt that the direction we need to go . So much spending is involved in healthcare. We have to really focus on restraining the growth in healthcare costs. Agreed. Thank you, mr. Chairman. Senator warner. So much to talk about. I have a followup on a couple of things. You assume, ive seen lots of tricky budgets before but this may take the cake. You assume abolishment of the socalled death tax or estate tax. But when you go to your table by category, he still count the revenues. Which is kind of a tricky thing. I would call that double counting. Your outside experts have assumed that your tax plan would cut 5 trillion or cost five 20. As somebody spent a couple of years is your trying to wrestle with these numbers and took on additional revenues, i do not see, i dont think theres any way you can get there. With the elimination of tax expenditures, particularly we take charitable Home Mortgage and retirement accounts off the table. There are not enough Tax Deductions to get to those numbers. Unless youre going or i imagine youre now saying youre going to go ahead and dramatically cut back on the deficit deductibility of employerprovided healthcare plans . Im sorry, sir. The specific question. The specific question is your 5 trillion in cost in your tax plan. Unpaid four. You cannot pay for it in any revenue neutral basis. Without double or triple counting or dynamic scoring on steroids. If you take charitable Home Mortgage and timing accounts off the table as not being cut. Right. The embers do not add up. And by the way, i do not think you took the American Public at that to even get close, you have to then take off deductibility of Employer Provided Health care plans. So that is on the table . Heres was on the table. I think the one thing traffic. Sir, i have got to this. I know you have as well. I spent years going to these numbers to try and get them to balance. He had to go with the money is. Youre talking about any kind of rational revenue neutral plan. Another think you can get there. I dont think the numbers add up, they dont pass the smell test. I think frankly, what senator whitehouse is pushing on, that you are not double counting i just do not believe that as well. Because you have put dynamics scoring in place. And that assumes with the tax cuts. He cannot seem dynamic scoring alone is going to come about without the tax that is in place. So if youre counting on dynamic scoring process, youve got to bake that in. So it is not truly a tax plan. So to take those off of the table, the numbers just dont add up. Let me move to another item because my time is about up. You take nondefense Discretionary Spending down to 3. 1 percent of gdp. I still have another year or two before i can i spent longer in business than i have in government. I invest in a lot of businesses. I would invest in businesses based on their investments, their workforce, plant equipment and staying ahead of the competition. For an american tax plan and Business Plan it would equate to investment in people. With his education. Plant equipment is infrastructure. Staying ahead of the competition that means research and development. How can you cut those so much. Cutting a five 1. 4 toying dollars over the next 10 years. Cut those three areas. And then assumed that we are going to have all of this growth you projected. You know i just would never invest in a business less than three percent of its revenue long on workforce staying ahead of the publication. Youre saying the american Business Plan ought to be. No i am not sir. And i would also suggest you never invest the businesses revenues work for expenses look long dramatically faster than revenue which is what we are seeing here. Amen to that. The Capital Investment begin looking at one part of the equation when you look at the american Business Plan. Because we agree with you. The Capital Investment is in transposable think private Capital Investment is a more efficient and effective way to get there in history proves that. So what we do in the tax plan is retouched to promote this type of investment youre looking for. When moving out of government capitalism what you think is an efficient. I know for the most part our country education, infrastructure and support basic research and Development Still remain a government function. Thank you, mr. Chairman. Thank you, sir. Senator scre senator perdue. This federal government has grown in constant dollars and 2. 420 23. 9 trillion. I know it is a philosophical debate appear between the parties about Big Government philosophy results. Talk about the earlier so i made some notes here. Big government has failed. And is felt in poverty. And in 1964 five the Great Society put the war on poverty, we are all for that. But the irony is that the poverty rate today is basically the same as the 60s in the Great Program was put into place. If you think the government is a great job running businesses how about the u. S. Postal service or the va, fannie mae, freddie mac . There we get to Social Security and medicare. I want to come back to that in a minute. Their trust funds go to zero in 15 short years or less. Were sitting in the weakest recovery and seven years. I want to get to the point of this exercise will do today and call out what a travesty it is relative to the bigger issue. In the last eight years as the federal government with borrower about 35 percent of what we spend. Right now in the budget that goes through 2027 it was projected that we borrow another 30 percent per year on average over that period of time. By definition, if Discretionary Spending was 1 trillion on it for 20 budget we are spending less than 30 percent on men on discretionary. The rest is mandatory. It means by definition of every dollar of revenue, by the way we collected more tax dollars last year and the year before that that we ever have in our history. And yet, we still have this growing debt problem. By definition every dollar we spend, every dollar we are debating todays borrowed money. By definition. So i want america to understand what this travesty is all about appear. The travesty is that we are not talking about for 20 in expenditures. Thats what we are going to spend next year. And it will grow from there. What i want to get out here is that the fact that the budget process itself is absolutely broken. In his own want for time since 1974. In 43 years. As a matter fact we had to appropriate this budget. We talked about authorizing. You have 310 billion, some 250 programs that are not authorized today to your earlier point. And that is not even being considered today. Over the last 43 as we averaged 20 have appropriation bills being passed on average during that period of time after 12 to fund the federal government. That means we are heading toward a train wreck again this year. Moving to september 30, we will have a government funding. They continued resolution or an omnibus message people get in a room at the rest of us getting up or down vote about how we spent 1 trillion. Even that is not just the 3 trillion of mandatory expenditures. I am not arguing. He will do that at a later point in time. I plugged the administration for at least addressing the issue that we got to address over the next five years or so. And that is launching the location. The specific question i have is would you support a budget process eventually that would include all expenditures of the federal government . Yes. In fact i had part of that discussion with senator enzi before we came into the room. I think it is something that we should start discussing. As needed to get at that will not do by working on the 1 trillion. No, you cannot balance the budget within the nondefense discretionary portion of the budget at all. He simply cannot do it. Lets talk about growth for a second. And thank you for telling the American People that 1. 9 is not acceptable. Lets dial into the 1. 9. In the last eight years true growth, 0. 6 percent. That is without population growth. 0. 6 percent is productivity. That is a business does look at it because i communicate population. I cannot manipulate productivity. There are things we need to do. You have to work on the workforce. There are plenty of people right now on the margins of our workforce that are not included in the workforce. I scan the low unemployment number but i am concerned about the people with that are underemployed, concerned about the people that dropped out of the workforce, and concerned about having matching skills are the second is capital. 6 trillion, this is a mistake that politicians make. Im sorry mr. Chairman but this is important. Politicians that that if you want to steam with your percent growth we need more Capital Investments from the federal government. That is a lesson with frankie. We need to do whatever we can to free up the 6 trillion that are not a work in the economy. 2 trillion on the Balance Sheet, because of government policy. Not just the last eight years possibly 20 years. The second thing is the small banks and regional banks have about 2 trillion on the Balance Sheet because we have taken that reserve unilaterally where none of the other countries are really doing the same thing. Lastly, the repatriation tax has 2 trillion or more overseas. My question finally is are those things that you will focus on. Not just in this budget for the next few years they tried develop a consistent three percent growth . Center, i think you heard that in what i said to mr. Warner. Is the capital from the government more productive . It tries to focus on private, not public. Thank you. Senator van hollen. Thank you, mr. Chairman. Great to see you. Thank you. You can call this a taxpayer budget but this is only really great for taxpayers that are in the one percent. They are the only folks that looking at the numbers in this budget actually get a tax cut. Because you have incorporated several things is this which we know provides millionaires with the 50,000 a year tax. So it is great for folks at the very top. I should also point out if we are talking about facts, that the revenue in the Affordable Care act came from applying an Investment Income tax to households over 250,000. And dedicated to the Medicare Trust fund. Your proposal also takes three years off the solvency of the Medicare Trust fund. He talked a lot about reducing the debt. I thematically more. Weve had this conversation for years. We actively just the debt. We talked about tax rates but isnt it a fact they do not pose a single tax rate in this budget for the purpose of reducing the debt . I think im going to include you on that sentiment. What we do. Many much of the sentience. So the assumptions are that the deductions, the loopholes, the exemptions go away in order to keep the tax program deficit neutral. The benefits of the program in the growth. My point is that we can all talk and we should talk about this and what you do not take away one special tax rate for anybody. Hedge Fund Managers for the purpose of reducing that debt. And that is a fact we have had a lot of conversations over the years. And claiming that the largest expenditure is i believe that is close. And a talk about going after the other categories we do not go after the tax expenditures. We disagreed on a lot of things. I dont think that is entirely true. We have had a reputation. I hope to keep that. And ill know you are working for president who translate well i am not going to get into that at this moment. Senator graham went out that when you testify here in your confirmation hearing, he said what you do now . Dont want to close one tax break the last time we balance our budget was about 19 or 20 percent in the early 2000. But you dont want to go there. And what you have done instead of you do cut Social Security disability. I think its a bad choice. Those are hardworking people. In order to qualify you have to work a long time to get disabled. The whole point is to have an insurance policy. We do not do what senator graham mentioned. Going further into medicare and Social Security. Heres the thing. I think we should go after tax expenditures. But at least you have got to be honest and is that what you have done is you made up based on no policies. You guys have assumed three percent growth. Its easy for all of us to say we wish we had higher growth. I do too what we wish for percent growth . Mr. Director i am looking at something that shows all of the forecasts that have been put out there recently. You have the professional forecaster survey. 2. 1 percent longterm growth. Youve got the reserve bank of philadelphia. About 1. 9 percent. Where cbo is. You have the economists unit. Around two percent longterm Economic Growth. You have a onepage socalled tax plan that has been put out by the administration. No backup in the budget. To tell anybody how you expect to get from 1. 9 two percent growth to three percent growth. And the only way balance the budget is on that what is reporting and accounting in the absence of a plan that shows how to get there. It would be 2 trillion short in 10 years if you hadnt made that assumption. Isnt that true . You had me this question about three percent growth 2 trillion short after 10 years of a balanced budget. I agree that the dynamic impact the dynamic impact . You decide this long conversation. I think that you and senator whitehouse are very different pages. Again it is eight 6 trillion tax cut. Which under most that is 5 trillion up with you in the hole and somehow youre going to have huge growth that is going to recapture the end you will get three percent growth as it results of that. Even are you going to also capture that for the purpose of deficit reduction. Look, i understand youre not representing the parameters you described on you. But please as someone who has a reputation as a straight shooter, dont come before the committee and act like this is balance. Its not. You know, you know this fantasy. Senator, i will deny that i know that. And when i say chino is imagined, i dont know who it was earlier but we sat down and came up with impacts of our policies. And that is how that 1. 9 23 percent. Keep in mind that the president obama had 4. 6 percent growth. We didnt do that. Otherwise he never even balance while he was doing that. We think this is extraordinarily defensible. [inaudible] youve taken one of the major factors off the table. And you have this one pager. Thank you senator. I look forward to. Senator kennedy. Thank you, mr. Chairman. Mr. Director i do not know you well. But i have watched you and your staff. And i have to tell you, i find it refreshing. I want to offer you just a couple of points of view and i want you to interrupt me if you disagree. I want to talk to you just for a second about how your budget impacts the people in america who get up every day and go to work and obey the law and pay their taxes and try to do the right thing by their kids and maybe save a little money for retirement. I guess people the middleclass or the working class. We will lock them in louisiana. And for the past i dont know, 20 or 25 years or so, what many of those people in fact most of those people, would tell me about washington is that they would say our country, i am paraphrasing. They would say that our country was founded by geniuses. But is being ruined by a bunch of idiots. How can our leadership on both sides of the aisle, expect to borrow 4 billion a day to operate . Run up in almost 20 trillion debt, run deficits when we try that in our family it doesnt work. And this is what they also tell me. They tell me that they look around and they say that they see too many undeserving people at the top. Getting bailouts. And special treatment. And they see too many undeserving people at the bottom getting handouts. And they are stuck in the middle when theyre getting the bill and they cant anymore. Because they are Health Insurance is gonna thanks the Affordable Care act and the kids tuition has gone up but i will see what has not gone up as their income. And i think thats why this country is so divided. We have two groups of people. Weve those americans who believe in more freedom. And we have those americans who believe in more free stuff. I am like you, i would like you to tell me how economically, socially, culturally because the people, the undeserving people. Not everybody but the undeserving people at the top and the bottom who have all four feet and their snouts in the trough. Senator, i am going to say the easy answer would be to say that three percent growth helps those folks more than they can imagine. If they are above the age of 30 would like to work and help the American Economy with wages were ahead of inflation people get eight opportunities. You can save for your kids retirement americans education. You can save for your own retirement. But i will answer a diff way because you asked me a specific question. How does this budget help those people . I think senator, part of the disconnect that we see in the nation right now is that those folks that you just described, many of them also in South Carolina. They pay their taxes. And then they hear the stories about how that money is wasted and they wonder why they are paying taxes. And it undermines their faith in the system. When they hear that there are 11,000 dead people getting their money to help pay their dead people bills. When there people in prison getting benefits peer when there folks not in this country legally getting benefits. It saddens them and takes them mad. But they all react negatively toward the institution of america and it helps to contribute to the us and them mentality and i think is unhealthy. What this budget does is look them in the eye and says do you know what . Were not going to allow that anymore. And if we are wasting your money were going to stop. Its going to submission get it, were going. Were going to respect your money as much as you do. Hopefully it will help cure some of the ills that you just mentioned. I want to thank you, mr. Chairman. I do not agree with everything in your budget. But i sure do think that you and your staff for your approach. Thank you, senator. And intermarry. Thank you for joining us. I would say have a tough time today. I do not envy you. Youve been asked to come before this committee to explain the unexplainable and defend the indefensible. As a thing my colleagues on this site have pointed out especially senator warner and senator van hollen. The president sent his campaign promising work as he was standing with them. He promised middleclass, was today with this budget is a perfect summary of all the ways those promises have been broken. His promise not to cut medicaid is broken. Promise not to have Social Security programs, broken. Jayapal, broken in this budget. Two focus tax cuts on the middle class, not the rich, broken. And his promise to provide quote insurance for everybody. Well that was better, it has not only been broken is pretty much shattered. So a lot of promises broken and we are all looking forward to seeing how you explain this. But i do want to say im very led to see it is not just democrats but republicans who are already coming out and rejecting this budget. Fortunately, we are able to reach a deal on the fiscal year 2017 spending bill for one reason. That is the democrats and republicans joined together. They ignored President Trumps extreme proposal. Rejected the illconceived and expensive border wall paid for on the american taxpayer is done. Rejected attempts to cut planned parenthood. We reject the 18 million thousand and because that was sent last time and we got a budget done. Can be full. Having said all that i do want to focus today on this. I want to stop asking the question on the president s broken promise in healthcare that you built into this budget. Families in my state and across the country are frankly scared. About the healthcare chaos that the president is causing. On monday this week the Trump Administration requested another three month delay in the house is frivolous lawsuit to take away payments to help to lower the cost for working families. Experts all agree and have told us continuously that this administrations threat to end payments are driving premiums of. And i wanted to ask you about this because the l. A. Times recently reported that cms administrator attempted to use the payments to try to pressure our insurers to support the trump care bill. Director, do you believe it will be wrong to use Family Healthcare as a political bargaining chip . Senator under the theory that i try to find things to agree with folks more than i disagree with, you mentioned that people are scared about the chaos. You achieving thats the task of the trump care program. That is why insurers have been telling us. People where i am from they are scared of the status quo. I am asking specifically about how we been part of conversations with i have been involved in various conversations of the costsharing reduction payments. And we talked about specifically talking to insurers and turning them not to support it . Now i know that me payments in may like we said that we would. We have made no commitments of the payments that are due in june. And that we are considering all of the options on whether or not we would make those payments. Let me ask you about your comments about the cbo score of the house bill. Okay. Given what we just learned do think that the chances bill keeps this to quote better insurance to quote everyone . Absolutely. More and more databases zero providers. I live in a state where were down to one senator. One im just going to say that is not with this report says. And people and michael to find that credible when they lose their care. They know what is causing this. But i only have a few seconds left and i do want to make a couple of points. I do want you to know i was really disappointed to see that you attempted to block the office of government ethics requests for information on which former lobbyists are receiving secret waivers not from President Trump. I think it is really wrong. And i urge you to reversed course and i assure you we will be pushing on that. I wanted to let you know that number one. Im happy to respond to that center if you give me the time. Okay since my time without let me make this point and i want to make it very clearly and i want everyone to hear this. Omb has indicated it is reviewing a rule related to Birth Control mandate. Should this be another step by the administration to rule back Womens Health and rights, you better expect a very strong opposition from the senator, democrats and women across the country. I just want you to know that. Im not aware of the specific detail. Thank you. Send her to me. Thank you, mr. Chairman and thank you director mulvaney for being with us and for really i think an outstanding job that you are doing. I want to particularly commend your emphasis on Economic Growth. It is so important in every single challenge that we face. Every problem in america is easier to solve if we have strong Economic Growth than if we do not. And some are impossible to solve without strong Economic Growth. The fact is stronger growth means more job creation. It means a better standard of living for the very people that senator kennedy was referring to. But it also naturally follows that if you are stronger in the Economic Growth you have reductions in various welfare payments because fewer people would need those welfare though it should be the purpose for that should be the whole idea the diminishing numbers of people on medicaid include stamps and section 8 housing. Because theyre able to get work that pays enough for them to be able to support themselves and their family . That should be our focus. Let me zero in a little bit on how we get there. I think an essential part of getting the economy growing at this potential which i think is easily capable of three percent growth, it requires really progrowth tax reform. I will point out were still laboring under an 800 billion tax increase from the obama era that had nothing to with obamacare. So if we repeal all of obamacare which i hope we will we will still have this big tax increase that we are still laboring under. I see no need to let that in permanently. Secondly, i think it is just mathematically wrong not to take account of the dynamic effect of more growth on federal revenue as senator johnson points out if the economy is larger, there is not much more to tax therefore, more revenue. Having said that, we all know that we might not get a very aggressive dynamic score from our friends at cbo and joint tax. Bateman and women that do great work often dont get the credit they deserve. But they might be the economic effect of tax reform differently than i would. And so my view is we ought to be willing to do tax reform that might not be revenue as you know, we would need to use the reconciliation device under the budget act to pass such tax reform with a simple majority. If we go down that road, one of the constraints that we have is that if joint tax and at cbo determined that there would be a revenue shortfall outside of the budget window, then that is subject to a point of order which invalidates the 51 vote threshold. So you get to choices in that scenario it seems to me. One is, you have the progrowth tax provisions expire at the end of the budget window. And then you have a temporary coming of the great tax code that is temporary which is a bad idea. Then another option is extends the puzzlement of ones earthly office 10 years but the budget accident must be at least five and it doesnt specify an outer limit. So i would like consider seriously a 20 or 30 year budget window that would allow us to have a great growth maximizing tax code that lasts a long time. If we had a 20 year budget when for this purpose, it will probably be as Close Department as you get around it because in 20 years you will visit the tax i actually think highly of the idea. We toyed with possibly adding consideration for 20 year window. It didnt have time for that. We are exploring how difficult it would be to do a tenure and a 20 year next year. Your. He talked about several of the benefits of looking at a longerterm. If you want to make changes over time, especially on aims Testing Programs a lot of times, we take the heat but dont see the benefit. Because of the benefit falls outside of the 10 year window. So there are when asked if he is to look at multiple budget windows. And i think it is something we should continue to explore. I guess it was one against would be doing the balancing test. I would hate to think that we go to a budget year window so we can tell people we will balance the budget in 19 years because people want believe us at that point. I think we should focus on balancing the budget as quickly as we can regardless of the budget window we are looking at. But i with the program this and i like to explore what options going forward. A look forward to working with you on that because as i said, we have got an opportunity. In fact an obligation. To really have a tax code that allows the American People to be as prosperous as it possibly can be. President trump campaigned among other things on significant tax reform. I think his message was clear that it would not necessarily be revenue growth. His quality was to maximize growth. That is the right goal and if it takes a longer budget window to do it then i think that is something we should seriously consider. Thank you for your testimony. Thank you, senator. Senator stabenow. Thank you, mr. Chairman. Welcome director mulvaney. I have tremendous concerns about a wide variety of issues in the budget and how they do not match up with priorities of michigan families. All talk about one that has caused terrific concern in michigan and all around the great lakes that is the question of completely limiting the Great Lakes Restoration Initiative which funds the cleanup about beaches, protecting our fish and wildlife. We have challenges with asian carp right now getting into the waters. That is funded through the initiative which is a bipartisan effort we started in 2010. We have about 20 Million People that get their Drinking Water from the great lakes. I can look at all of it. Boating, fishing, hunting, jobs, connecting with the economy. You eliminate all them that and then on top of that go into this farm bill to eliminate a voluntary conservation effort to protect watersheds. That we are now having Great Success with wandering with farmers and conservation groups like and other groups to address runoff and Water Quality issues in the great lakes. So on behalf of michigan families i would like to know why you think its not important to protect our water. Thank you, senator. I began by saying we absolutely agree. In fact they had a chance yesterday in the house to point out that it might be news to people but there are democrats that care about national defense. Republicans that care about clean air and water. I think starting from a premise that we dont care about clean air and water is a difficult premise to accept and start the conversation. Explain why your budget zeros out dollars that allow us to protect our great lakes. Consistent with many other things that we did across the budget senator come with the programs that should be local. Programs that are more appropriate local and nature opposed to national in nature. Again, go back to the original premise. Im looking at this through the eyes of someone in arkansas. Can i really look them in the eye and say i need to take some of your tax money to go do something in michigan or wisconsin . Yes, that is called having a country. With all due respect 20 percent of the worlds freshwater surrounds michigan and eight other great lakes states. And this is something that we not only do in the state and by the community but it is a Major National resource. The idea that we would not recognize that in this budget is just stunning to me. While i would agree that there are certainly things that deal with the environment that are national in scope and other things like i cannot look at that text in the eye and talk about national defense. Makes is a country on this particular country. Shes in a nursing home and is not going to be able to get the health care she needs under your budget. That is false and we will continue to take care of that particular person. I hate to push back on this but that is not a cut with the exception because of the timing of the end of Medicaid Expansion all that we do in this budget is slow down the rate of growth. We spend more money year over year. Many people consider that a cut that is the family back home that doesnt consider that a cut. With all due respect do you believe that as Health Care Costs go up as a family should absorb that are redoing the replaced repeal effort and 888 billion in cuts in medicaid is not a cut. The reason that family is worried because they see the price of Health Care Going up year over year. One of the things im proud of the bill does is to try to finally try to deal with the actual cost of health care not just Health Insurance. It may have made insurance more affordable but it made health care more expensive for everyone and that is what we are trying to remedy. What is now in the senate is a massive cuts to health care and medicaid and a great big additional tax cut. You have not only today did yourself available to us and have worked with us to try to achieve the significant reforms that we are hoping to put into place. Can you tell me what those assumptions are for the first year and then for the ten year cycle. 2. 3 growth year over year and 2. 5 in year number two and 2. 8 and then 3 growth out to the end of the budget when a. A. The average for the budget is 2. 9. I assume that you know this but in president obamas first budget of the projected growth rate is over 4 for the first four years. It was 3. 5 and 4. 4 and then 3. 8. And then the average was 2. 9. So the same average president of trump is proposing. And dramatically less than the second was 3. 3 over the budget window and a third of all was 3. 2 and the fourth was 3. 2. So we are actually lower than the obama administrations budget. I find that very interesting. And i also would like to have you compared this not to the obama Budget Proposals and economic assumptions, but would you compare this to the actuality what is the average rate for the last 50 years so the proposal youre talking about is slightly below the historical average which is one of the reasons there was some discussion about raising it to get us to the historical norm. I think if you look postworld war ii it is 4. 3, someplace in the midthrees. One of the reasons you are willing to make these projections as i understand it, you are also proposing significant reforms like the Health Care Reform and a number of other significant reforms that would help us to stimulate Economic Growth in the United States. Dont discount the Regulatory Reform. We talk to businesses and we do believe there was a pentup growth in this country because the Regulatory Environment is discourage them from doing so because the environment is going to change and its already helped the Economic Indicators we know the gdp numbers the First Quarter were lower than everybody wanted to see into the indicators are very strong and the opportunity for us moving forward on driving growth regulation for them is dramatic. I very much appreciate that. I have been a part of the gang of six fighting for these kind of reforms. I talked about the National Debt and the drag is on the economy for years to years, but im starting to think the Regulatory Burden is beginning to approach the National Debt in terms of its seriousness for its impact on the economy. So i appreciate your focus on that. One last aspect we talked about the roughly 3 projected growth targets that we would like to achieve. I understand a lot of people are saying that the projection should be around 1. 9 and we should just say we will have a 1. 9 growth rate for the next ten years. Why would we set the target one third below the historic average equal to what we have been seeing during the economic crisis that we have been living through how should we maintain that . Anyone i would argue 1. 9 is where we should be about the review, about the american spirit, their view about the American Worker and the American Economy and whether there is a pessimism hardwired into that number should discourage all of us. My time is up but i want to thank you for setting the target and setting the goal high, that is probably not the right word, above average, that we can get there and build this economy so thank you. I appreciate your efforts. Senator harris followed by senator king. Youve mentioned in your comments but in creating this budget, you have considered the impact of your policies. My concern is that you overlooked the impact as it relates to certain americans that are in particular need when we create such a budget so i would like to talk about a few. Your budget cuts the department of labor by 2. 5 billion workforce training by 1. 3 billion. As you probably know, there are a number of major disruptions in the labor force and over the next 20 years will be more driven by automation and technology which puts millions at risk, developments like online shopping, automation and fast food delivery and so on. People that are between the age of 30 and 50 in our country right now who are unemployed and want to work and had a job needs to be seen and they will have a Life Expectancy of another 30 to 50 years. I believe they need to support your budget to did not give them when you have proposed a 21 cut to the department of labor including a 40 cut to employment and Training Administration so i would encourage you to review the impact of the budget with the population being the American Worker. As it relates to another subset of the populations who need to be seen and the impact needs to be thought about and prioritized it is that population of people impacted by the Opioid Epidemic in our country. According to the american psychiatry association, a survey that came out yesterday indicates that more than a quarter of americans and more than a third of all millennials report knowing someone has been addicted to opioids or prescription pain pills. Most respondents believe treatment is a better option than Law Enforcement to tackle the problem. 73 of the respondents believe people can recover from opioid addiction. The Congressional Budget Office however estimated the repeal of the Affordable Care act translates to one in six americans losing access to opioid treatment because they live in a state that would waive the requirement on the Substance Abuse treatment. Your budget would also cut the Medicaid Program by 40 , which is currently the largest for opioid treatment. Considering the impact of the policies i would urge you to consider older americans. As you know, they projected that under the repeal of the Affordable Care act the number of seniors would see the cost increase or lose their coverage. According to the aarp Public Policy institute in california for example a 55yearold of today with a 25,000dollar income would pay on average as much as 8,598 more a year than today in louisiana that would be 5,920 more. 5,670 more, colorado, 609, 7,602 alaska, 18,533 more a year. So i would like to know how you are in her parting the impact of the budget as it relates to these populations when there is objective feedback from folks like the aarp because of the cuts in your budget. The American Workers at the top of the list when you consider what the administration has already done in terms of helping the American Worker the emphasis we put on trying to bring manufacturing back to. Those are all focused on helping the American Worker. I think you know that the American Worker will tell you between who are the ages of 30 and 50 today who are unemployed and had a job to work that they dont necessarily have the skills that industry requires for them to be able to get a job and keep a job and they are in need of training to allow them to transition to these new economies so they can acquire a skill and keep a job. How do you justify keeping funding for the American Worker to transition into these new economies . We asked a reasonable question we went to the Workforce Program and said argues successful as measured by the number of people that you trained that actually get jobs after they go through the program and if the program proved they were successful, they got more money. If they were no not come at a ct less. That seems to be a reasonable approach. First, just to clarify a bit of the administration supported the ahca is that correct, so the budget needs to be looked at as a unit in terms of dollars and allocations. We included because there were some last minute amendment. I dont think that it made it into the assumptions because of the timing left. So that means we are talking about is not the 800 billiondollar medicaid cuts just in the aca but also those that are proposed in the budget. My understanding is that those are not identical and in fact it is about 1. 3 trillion combined. The number i heard was 1. 4 from the 800 from the ahca and the 600 from the other reforms that we proposed. However, you cant add those numbers together because there are components that overlaps with the total would be left depending with the final version of the bill looks like. Is that 1. 2 to 1. 4 it is between 801. 4. So it is your position that youre not cutting medicaid youre simply cutting the rate of growth. The problem is as you know it now pays the cost of a nursing homnursinghome for example an ey person. So the cost of the nursing that was up 6 and under your proposal, medicaid reimbursement goes up 2 , there is a differential. Under that set of circumstances it would be differential but keeping in mind the to make what assumptions were you using in the budget to create these numbers . It was below what they had in the ahca and i cant remember are you saying that even with all these cuts or whatever you want to call them is going to meet the needs of the elderly person in the nursing home . We do believe that the money that we provide would be enough to meet the population of medicaid serves. So there will be no real reductions. But im trying to get at is the assumption in the production sql also the assumptions of the increase in the cost of healthcare because as you know, healthcare hahealth care has esd significantly above the ordinary inflation. Before i say i think ive tried to make it clear and a couple of times we talked about it, there is one year there is an exception and the grandfathering of the extension what youre testifying is about 1. 4 trillion is much to do about nothing. Nothing. Is that your testimony . We have to measure against the baseline and everybody wants to do it that way measuring the baseline is a someplace around to givthe give or take trillionr reduction in the baseline. So that is the assumption. There will be no negative impact on the elderly, that is your testimony. We wanted to b it to be clear about the testimony. So is it your testimony that these changes and the rate of reimbursement for medicaid will have no affect on elderly children, disabled people we believe that is the case, yes. On growth everybody wants growth and we can talk about whether it is 3 or 4 , and clearly whatever the assumption is affect whether you are balanced in ten years or 20. I understand that. We all want it to grow. My problem is when you think about it the senator to that productivity. That is the best engine of growth in the end. Two of the principal ways you grow productivity or Resource Training and research and my concern is your cutting the training and research both in the nih and also particularly the department of energy. Its cut by 50 for Nuclear Energy for 331 on Energy Efficiency and Renewable Energy by 70 . I dont know how you increase productivity by cutting the research and im not even talking about the nih by cutting the research and job training programs. That is what you need to grow the economy. Is an excellent question and i have a reasonable answer which is if you look at the total spending is up. If you look at the spending in the reforms we proposed and i capropose and i canquickly if ym the private foundation are only allowed to use 10 and then the federal government is 27 or 28 . If you take the federal level the same you spend as much on the nih research as you did the year before. So it is like before. What looks like the cuts in the budget are not really cut. We are being more efficient and i think we can do it without negatively impacting the things you mentioned. I dont have time for another question that i will close the drastic cuts in the department if you cut the state Department Budget you have to buy more ammunition. That is a huge policy mistake. Thank you. Senator cain. This is a hearing about the president s budget so you are the questions but we have to understand these are the decisions. These are questions we are here isnt about you its about the president s budget. But i do appreciate the written testimony so im looking at the first page. It also keeps a promise to balance in the next decade and reduce the debt without affecting beneficiaries of Social Security and the care retirement and without raising taxes. You do not include the president s promised not to cut medicaid. The president says i will not cut Social Security, medicare or medicaid and i think you were smart not to put the medicaid lien in this because i dont think it keeps the president s promised not cut medicaid. About a Million People on medicaid, 600,000 orchids, 112,000 are seniors in nursing homes, 186,000 are people with disabilities. So, im going to be out talking to a lot of people and they are going to ask me the president said he wasnt going to cut medicaid. I am a senior in a nursing home or my parents or grandparents are in a nursing home, im disabled. What do i say to that when the president said he wasnt going to cut medicaid . When i was telling my history of being in the legislature i cant remember if you were in the legislature in virginia or not but i remember begging the government for more control over the medicaid dollars and how we serve people in North Carolina because we thought the onesizefitsall federal programs didnt serve. So what i would tell them is with the American Health care he act yes it changes medicaid and spend less. But by giving local control, governors and legislators the president said he wouldnt cut medicaid. And im going to say to them yes but there is a cut between 8. 3 million but im supposed to tell them the qualities are proof. And if you go back to my verbal statement, you have a written statement and i stand by both of them ive told them luck, our you going to measure your medicaid by the amount we spent with the quality of the care that you got. Why am i getting my healthcare cost if i am a child and i am elderly and disabled and the same budget has a 982 billiondollar tax cut what do i say to them . I represented some of the same sorts of people that you did in the verbal part of South Carolina. When i had folks on medicaid what they cared about was their healthcare and if they were getting good healthcare they were not the jealous envious type. Im not talking about the jealous or indias people either. If they are in the headlines by 1. 3 trillion, tax cuts 982 billion thats going to make them scared. How are they going to believe that . Lets go to another promise of this president. Nobody is going to lose the rich. I believe it is a promise that is being broken by the current status of obamacare. This was the promise this president made under donald trump nobody will lose coverage. Yesterday they said 23 Million People are going to lose coverage so i have to go out and say medicaid is going to be cut by a trillion. 3. 982 billion in tax cuts to get 23 million are going to lose coverage and when they say to me the president promised that he was going to lose coverage for 23 million are what do i say . President cannot keep that promise unless the law changes. But if it changes in 23 million are you telling me 23 Million People losing coverage keeps that promise but nobody loses coverage . I would love to have a conversation about the methodology. It assumes for example should this body try to keep the promises of a Healthcare System where nobody loses coverage, nobody pays more and nobody with a preexisting condition has to revert back to the position they are going to get kicked around. It meets the needs that you just laid out. Nobody loses coverage or pay is poor and nobody gets kicked around. It could be a change that would meet any change would be a change for the better. Im going to leave it right there. Senator corker. Thank you mr. Chairman. I was in a meeting a few minutes ago and im glad to be here finally. Im sorry to be here late. Thank you for your service and i hope you still feel this is the job that you have lived for in life to be. In all fairness it is. Thank you for being here. Somebody in the administration yesterday or the day before said that the president s tax reform plan will be offset on a status basis every year of the budget window. There was a statement coming out of the white house yesterday and i wondered if you would affirm that. I think that is consistent enough that exact statement with some of the discussions we had earlier about the assumptions that we made in this budget when we get accused as you heard the assumptions were made on this that the changes in things like the deductions and exemptions in the loopholes would result in a tax plan that is revenue neutral and have to make some assumptions early on. They increase the budget deficit or kept at the same and we assumed it was right down the middle. So that is how we pay for the tax bills we have to assume and then we do take the benefits of the Dynamic Growth in order to generate new revenue to the treasury. But the actual policy that will be put in place the way you put the budget together is that the tax reform package would be static. It would be deficit natural. And that seems to be consistent. It sounds like the tax policy they are planning to put in place would be revenue neutral every year over the next ten years and is consistent with what you put in the budget. We will start the 2019 budget now. Thats how much time you have in the budget so theres a great amount you have to make certain assumptions and when we start to make assumptions about the tax policy all we had to go off of was a single piece of paper and lay out principles so that theyll probably can and will look different than that of the assumptions were along the lines of what he laid out. It sounds like the Budget Proposal that you have to work on that started when you came back to office it sounds quick that is consistent with what white house officials are saying the actual tax reform bill is going to say an and that is it s going to be revenue neutral on a static basis. I know that the secretary has taken the lead on the discussions and may have met with the senators so i have no idea where we are in the process. I know that when we had to walk in our numbers i dont think that is the indication of the final bill. We cant make those assumptions. I know the word was used for cuts for medicaid and i would like to use the word certainly with all of our entitlement programs and the reforms of people actually benefit from the services. These programs are around in the future so i would have an editorial comment where i say i do hope in the 2019 budget you are able to look at Social Security and medicare because if you leave that much off the table its very difficult as you know to solve the nations fiscal issues and you and i both know we can deal with that issue appropriately and not do anything to damage or harm the people that are currently on the programs so i look forward to working with you and i hope that you are able to alter opinions over the course of time and thats why im glad you are in this position. I would like one final question to ask. Congress would need to raise the debt limit. I know that the administrations typically plaadministrationstypd give some leeway and its moved up to why so theres a little leeway in the debt ceiling. That may not be the case here. What has changed . It will be slower than he anticipated when he gave the last letter to congress i think the last letter he sent. I hate to butcher this but it was expected that the debt ceiling would be reached about sometime in early september. Now i think its moved a couple weeks in advance giving Additional Guidance on the treasury and it is consistent with the testimony. Senator merkley. Thank you mr. Chairman. Under hr 1628, Medicaid Expansion is essentially wiped out. In oregon that means about 400,000 people lose their Health Care Coverage why do you not consider that to be a break in the promise for coverage . My understanding is folks dont stay long enough it is a bridge to Something Else and the ahca l. Owns a grant to be grandfather period for the states to allow those folks to rotate off the Medicaid Program so we dont anticipate anybody would be kicked off certainly future folks who might have qualified under wood and have access and somebody would be kicked off. Using the ability as a strategy to simply eliminate Medicaid Expansion means roughly 400,000 fewer will be covered by medicaid by the expansion thats before you start cutting the part of the basic medicaid. Every analyst and expert in every Healthcare Group considers this to be a massive reduction for states that have Medicaid Expansion and a significant reduction for those that have basic medicaid. You can sit here and spin it all day long and that is your privilege to testify. But we turn to the attack on the Rural America. Rural water, essential service to the airport as well as the tour support, clinics, hospitals, rental housing for agriculture which by definition is rural and veterans vouchers. So why does the president have it out for Rural America . Providing 161 million of which is targeted to be increasetheincreased balloons by 552 million over the enacted level of 7 billion increased community loans by 400 million to support the 3,000,000,000. 6. 2 billion. Are you saying none of the reductions i mentioned are things that are in the president s budget . I would like you to read the budget if you are going to sit here and testify and acknowledge all these cuts. What are we doing to him for Rural America and i would say its the same point i made to other folks. If a return on investment for the taxpayers. It will get the same amount after you salvage all these programs. What we did with 144 im asking about all the cuts that you are doing in oregon. We are taking care of the folks generally. You are saying they will still have that support. There will absolutely be changes in the program. We dont have time to go through all these pieces. Ive listed them out as an essential damage and you may contend otherwise but lets turn to direct impact on those that are hungry in oregon, 370,000 children at risk. Have you ever in your life gone hungry . No sir. Then you feel comfortable cutting the basic program that ensures our children have food. The reductions deal with us involving the states managing the programs. The state cost matches that but its 100 of the actual and what we found is that is a formula for wasted growth rate. Its efficiencies that we know they exist when thexist when the administering have a little bit of skin in the game so if you shouldnt go down or if it does is because of efficiencies and not reductions. It is easy to sit there and talk about efficiencies when youve never worked with individuals going hungry. Senator, with respect to ask me if id ever gone to to bed hungry not if i worked for folks that had. What youre doing in this budget is going to do damage. I disagree. Thank you. Lets turn to housing. We have 4,000 housing vouchers eliminated in oregon of vouchers played incredibly important rules in a state of emergency to help address the state of emergency in housing. Why make it worse . I got a lot of questions over the last two days and i do not have the information about the Housing Voucher Program and i apologize. The housing crisis is one of the worst because people have heard what a wonderful place it is mostly by the landuse policies. Thank you sir. I want to thank everybody that participated today and director mulvaney for his answers and the efforts that hes put together in a short period of time to come up with something as complicated as 4 trillion of spending to grapple with these same things as a committee because as ive told people this is a list of suggestions from the president we are the ones that do the budget. That is a budget over ten years that ive seen from the president in a long time and for the last eight years we voted on the president s budget and in the first seven years there were zero votes. He didnt get a vote from the democrats or the republicans. He did better, he got one vote. I expect your budget will do a little better than that. Its for every Single Person and if they take out everything they dont like and vote against the whole thing and its doing the budget that we are obligated to do you are asked a lot of questions about tax reform. I think tax reform is up to us, too. I do recognize the difficulty in cutting and the fact that around here in all my time i watched its considered a cut if you dont ask for it even though it is more than you had before and that makes it very difficult. I appreciate your work on the debt ceiling and of course im hoping that we can get some budget reform to get a Better Process that puts us on a better track. A week ago we had testimony from phil gramm who did one of the budget act is earlier and is an economist. He actually suggested that your number for the rate of growth is a little low. He thought 3. 4 was a better answer than that. Thank you for your patience and willingness to answer questions with a volume of answers you are able to do on such a diverse set of questions thank you very much we will work with you to see how much of that we can accomplish and what will come out in our budget. Thank you for having me. The hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] washington journal continues. Host with us is trita parsey the founder and president of the National Iranian American Council here to talk about a couple of issues. The reelection last weekend of president rue hani and the trip of President Trump just wrapped up last night here in washington. But the first part of that trip was in saudi arabia as the elections were under way in iran. As the the week wraps up, you have the reelection of the president , the return of President Trump and the speech he gave in reyad, how do you assess u. S. Iran relations . Right now is moving in a more negative direction. Its been a