Government accountability, the report of the nations Fiscal Health. Today the Budget Committee will hear from congress nonpartisan watchdog on the nations Fiscal Health and the importance of confronting our critical fiscal challenges. I welcome back mr. Dodaro who is the most usual and best witness providing information throughout the year that it is extremely helpful heading off some of the future crises that will happen if we dont Pay Attention. This hearing will kick off a series of hearings and discussions about that will form Bipartisan Solutions for the problems we face this year and help build a foundation for next years budget cycle. The next few years should be significant for the Budget Committee. The committee has been the working hard to enact reforms that improve transparency and accountability in the budget process and help put us on a more sustainable fiscal path. Last year senator whitehouse and i introduced the bipartisan congressional budget reform act and i want to emphasize that word bipartisan because its the first time any reform bill has gotten out of this committee in a bipartisan way since 1990. We were successful in turning when we were successful at turning the spill into a law next congress would process the first budget cycle covered by its reforms. Next year will also mark the first budget cycle in ten years not constrained by the budget control act Discretionary Spending caps. In the months ahead we will begin to lay the groundwork for returning regular budgie digging through the series of discussion focused on the major fiscal issues on our countrys rise. With that in mind we are meeting today for an update on the most pressing threats to our nations fiscal stability. Im pleased to welcome back the committee gene dodaro the comptroller general of the United States and head of the u. S. Government accountAbility Office. Today gao is issuing its Fourth Annual update on the nations Fiscal Health. For several years now the support has warned that the federal government is on an unsustainable fiscal path unfortunately the budget outlook has grown even more dismal since last years report thanks to legislation enacted in 2019. Last year gao predicted that death as a percentage of Gross Domestic Product which compares the size of our debt to the size of our economy would surpass its historical high of 106 by 2038. Now gao projects we will hit that grim milestone by 2034. If current laws do not change. The Congressional Budget Office recent budget outlook also shows the cost of legislation enacted since last june has taken on our already unsustainable fiscal situation. Due to this legislation, namely last years spending agreement which cbo attributes one and seven tenths million and i still have trouble with that word truly in his spending increase over ten years and the fy 2020 appropriations package with writers that repeal the pay force for the Affordable Care act and they now project that death as a percentage of gdp will soar to 174 of gdp by 2049, 30 increase from last years projection. Cbo warns that feeling to the front tower rising debt will mean a future of slower Economic Growth, higher Interest Rates and a greater risk of the school crisis. As the deficit growth and we borrow even more money to fund the government the Interest Payments on the money we borrow will overtake all other spendi spending. It should be a major red flag for everyone. Already the annual Interest Payments on our debt exceed what we spend on agriculture, transportation and Veterans Benefits services all combined. By 2041 gao projects our annual Interest Payments will be more than what we spend on medicare. By 2044 Interest Payments will exceed what we spend on Social Security and by 2049 Interest Payments will exceed total Discretionary Spending. We can and do have spirited debates on what our Spending Priorities should be but Interest Payment on our debt arent even debatable. We do not get to decide whether we want to spend that money on healthcare, defense or Retirement Security but its already committed. Its the most mandatory funding that we do and if we stay on the path we are uptodate debt interest will become the largest category of federal spending. I mention this committee had advanced on a bipartisan vote in the budget process reforms that senator whitehouse and i introduced and you all amended to make it an even better bill. Our belt takes several steps toward a more active thoughtful and functional budget process. This includes reorienting the budget, resolution to a two year cycle and incorporating the debt limit into the budget process in a way that would minimize the threat of default. We are also calling for integrating into the budget resolution longerterm fiscal targets based on National Debt as a percentage of the overall economy. A debt to gdp glide slope with this would emphasize our fiscal trajectory and help to get us on a more sustainable fiscal path. One thing we will certainly need as we confront the hard decisions ahead is reliable, financial and performance data. Earlier this year i introduced the cfo vision act with senator warner, grassley, johnson, perdue and langford. I expect the comptroller general is familiar with the spill that grew out of a hearing we had last october. The reform proposals it would standardize response polities to enhance strategic decisionmaking and strengthen deputy cfo authority to ensure continuity when vacancies occur. It also calls for revised planning requirements and metrics to help address longstanding challenges. Like better linking cost and Performance Measures and modernizing outdated legacy systems. I should mention that at gaos suggestion we have put in a request to omb to give us a list of all federal programs. I have not gotten it yet. Seems to be some problem with the definition of what a federal program is. I think i can help with that if they would just give us a printout. All of the payments that go to any entity, if an entity is getting money from us its one of our programs. This is my last year in the senate and my sincere hope that we can take concrete steps toward a sustainable fiscal future before i leave. I return a sensible budget would be a good start and i hope that members to date will Pay Attention to the urgent message from congress nonpartisan watchdog, current federal fiscal situation is unsustainable and we must act before it is too late. I want to thank comptroller dodaro for being here again and again and for all the delightful information that he shares with us. When we follow up on it we get results. I look forward to his testimony and i dont think we have a Ranking Member statement today. I think it might be preparation for a debate coming up. I dont know if senator grassley wanted to make any comments. [inaudible] okay. We will move on to our witnesses but it is gene dodaro, head of government account Ability Office and comptroller general of the United States. Mr. Dodaro testifies frequently before congress and i am pleased to welcome him back to this committee. He is the eighth comptroller general of the United States and was confirmed in december 2010 after serving as acting comptroller general since march 28. He is been with gao for more than 40 years and served nine years as the chief operating officer, the number two leadership position at the agency. Prior to that he headed gaos accounting and Information Management division which specialized in Financial ManagementComputer Technology and budget issues. What a diverse background of information that has been extremely helpful and has been noted every time that you have testified. With that comptroller general, you may begin. Thank you very much, mr. Chairman paid senator grassley, senator braun, its a pleasure to be here today to discuss our latest report on the physical health of federal government. As we convene this discussion today our countries confronting a pandemic that is threatening the health, safety and economic wellbeing of our citizens, businesses and our economy. I make that point because its relevant to our message today of why it is important to put the federal government on a more longterm, sustainable fiscal path. Because the federal government needs to have the budgetary flex ability to marshal resources to deal with emergency situations. I am concerned, as our report talks about, that the debt to gdp ratio as of the end of last fiscal year was 79 . That is the highest it has been since world war ii when we hit the historic high of 106 of debt to gdp ratio. That also contrasts with the debt to gdp ratio since 1946 with only 46 so we are heavily leveraged in debt, added a time when we will be facing a steady, annual deficit of 1 trillion a year for as far as the eye can see. This will mean that our debt to gdp ratio, absent any fiscal policy changes, will hit the historic high of over 100 of gdp within 1114 years and depending on the estimates that are made by gao, cbo and the Financial Report of the federal government issued by treasury and all and be they all result in the same conclusion, more importantly than that is that that debt will continue to grow to 200, 300, 400, five 100 of gdp. This is why we believe the current path is unsustainable. The Social Security program is already at 1 trillion, medicare, medicaid is expected to hit one chilean dollars each by 2026, this includes state money for medicaid. The interest on the debt will hit 1 trillion by 2032. Right now our total for our budgets 4. 5 trillion in those four programs are activities alone will be 4 trillion relatively soon. That will crowd out a lot of other opportunities for spending in vital areas ranging from defense to the whole panoply of discretionary programs important to the country. We need a plan to deal with this. I recognize that we need to deal with shortterm, National Priorities and to make sure we have strong Economic Growth but we also need a plan to put us on a better path. I was pleased, mr. Chairman, to see the bipartisan bill that was passed out of this committee that would set the gdp targets and would also be another troublesome area that i pointed out in the past which would be to have a different approach to setting the debt limit. The debt limit approach right now, those that control the debt, it is dangerous and the fact that it can disrupt treasury securities if it is not raised in time and the treasury market and increased Interest Rates of pro governments we need a different approach and your approach included in the bill is a good approach and one of the options that we suggest tying it to the budget resolution. In addition to these fiscal policy decisions that need to be made there are still many opportunities to save additional money. Weve pointed out in our report that this years the amount of improper payments across federal government jumped from 150 1502175000000, largely driven by an increase in medicaid and proper payments. I think that number will go up higher and am happy to talk about that later. There is also opportunities to consolidate over lap and defecation and fragmentation and so far actions on our recommendations have saved 262 billion dollars and we have outstanding recommendations that can save tens of billions of dollars more but there is a lot to be done to deal with this issue and again, im closing and applaud the committee for taking action in this regard oath on the bar bipartisan reform bill and the cfo legislation. I would be happy to respond to questions, mr. Chairman. Thank you very much. Thank you. Thank you for the document you provided with a lot more information. I will turn to senator grassley for questions. I will take you up on that and go to the agricultural committee. Mr. Dodaro, your written testimony says the pension benefit corporations, multiemployer tension trust fund, is protected to be depleted by 2025 and im aware of that we are working on legislation to try to help that out along with other aspects of multiemployer so after 2025 if nothing is done premiums wont be enough to pay benefits inside the insolvent plans and so alexander and i, jurisdiction over some of this, we are trying to work on that and there are other proposals as well and i think everyone recognizes that the longer we wait the worse of the problem becomes. I wonder if you could comment on the need for action to shore up the multiemployer Pension System and whether you think that should or would be proven to be continue to delay action. Senator grassley, i think one of the most urgent issues facing congress and ive been concerned about the multiemployer plan for years. I wrote a special message to the congress about this back in 2014. Congress took some action at that time but it wasnt sufficient in the longerterm problem. If congress does not act there is about 11 Million People that are insured and the multiemployer pension plan and the once it goes insolvent the only benefits the government will be able to pay is 2000 a year, if that, to these people for a pension. Hardly adequate. The government will fail these individuals if it does not act and i encourage you to continue your efforts and your colleagues to act on this issue. Also, the singer Employer Program while its in current surplus situation, has terminus exposure over the long term as well. About 168 billion of potential losses to that program as well but the multiemployer plan is most urgent and i want to encourage swift action on the part of the congress to allay concerns by these americans that would be affected. I want to go to entitlements for your agency, cbo and others have been telling us for a long time about Social Security and healthcare entitlements and interest issues on the debt are unsustainable. In order to do that we have to reduce deficits and debt, Social Security will exhaust it by 2034 and we will be paying a heck of a lot less and Social Security benefits if we dont do something about that. I want to get to healthcare spending. I have a bill with senator wyden to reduce drug prices, save taxpayers money and reduce healthcare cost generally. We cant allow overall healthcare spending and subsidies to go faster than the economy grows. If we are serious about reducing our debt my question to you is dont we have to control the growth and federal spending on healthcare and entitlements . Absolutely. Congress needs to do that. The Fastest Growing class in the federal government or healthcare and interest on the debt in the healthcare cross as you point out, senator, are growing faster than the economy and are projected to continue to do so in the future. There has to be some changes. By 2026 there will only be enough money and the Medicare Hospital Trust Fund to pay 89 cents on the dollar of the benefits. That is right around the corner and that would affect millions of americans that rely on the Medicare Hospital Trust Fund cost and put enormous pressure on the federal government. The suggestions that you make are good ones but we also have other open recommendations in addition to being down drug costs. For example, if you if your payment by the federal government depends for doctor visits depends on where you go and will place you get in if you go to a Doctors Office affiliated with a hospital medicare pays you more money than if you visited that same doctor in a private practice location for if you equalize those benefits you say billions of dollars. We have had a number of open recommendations and i will provide them to this committee for the record. And provide them to your staff as well but you absolutely have to control healthcare costs. That is the most common gated part of this whole equation. If you dont control healthcare costs you really dont have much of a prayer of reducing the federal government deficit and debt issues. Thank you. Thank you for your courtesy. Thank you. I will let you go to the agricultural meeting. Im sure you just came from judiciary. [laughter] senator braun. Thank you, mr. Chairman. Ive been here a little over a year and probably the First Committee meeting that vividly stuck in my mind is when you were here roughly one year ago and of course, you said basically everything then that you are telling us now and i guess what amazes me most about this place is out we seem to shrug it off like its never going to have impact in the present. Healthcare costs undoubtedly are the driver. I took it on in my own company 13 years ago and there are dilutions. Mostly, the reason were not making any headway on healthcare costs, is ive never seen an industry more dog in and stubborn and wanting to maintain the status quo. When you have 80 u. S. Senators that come up with some idea of how to fix your business that is like the two by four across the head and nobody is paying any attention