Later, some of todays house debate in a bill that will extend on federal workers pay. We have a habit of glossing over president s. They all have to be treated what that means is that you have a smoothing over of the rough edges. Theres a a feeling among modern present that they have the right. That will be located in the president ial library. Even if they are gone, there are children in some cases and their former allies that live longer than president s because they are longer. They continue this. They are even more ferocious but only because it involves them, but the old man is gone. The problem is what does the government do because it is responsible when you have this kind of president . Naftali details the challenges he faced. Sunday night at 8 p. M. On c spans q a. Members of president obamas cabinet were before the Senate Committee today and outlining their sentiments of what would happen if the automatic spending cuts, the sequestration, went into effect on march one. They discussed Homeland Security housing, and education. This is three hours. That morning, everyone. It today we are convening the committee of the Appropriations Committee. It is the worst hearing in the 113th congress for the Appropriations Committee. The focus of todays hearing will be on the impact of the sequester and the Critical National function that are important to the security, safety, and future of the American People. As i take this gavel, im mindful of the and acknowledge the previous leadership of the outstanding chair. It is a great honor for me to be part of this committee. We all carry a special place in our hearts today for senator don the whole ionay senator. The senator of hawaii. I wanted knowledge the incredible cooperation i have seen. One of the senators was the vice chair. He talked to me in those early days to ask that they remove the Hurricane Sandy appropriations. I will be forever grateful for his steady hand and wise counsel and direct assistance that he provided me. I want to acknowledge that my Ranking Members in this committee. It is wellknown to many of the the members of the Appropriations Committee and the senate that senator shelby and i have a longstanding, personal and professional relationship. We have been through the house of representatives together. We sit on the Server Committee and served together. I look forward to working with him as my vice chair and continuing the tradition of bipartisanship that has been characteristic of this committee. My relationship with senator shelby is based on mutual trust, mutual respect, and the desire to move forward. We know that we will disagree on matters of policy, that if we could agree it on matters of progress i get beyond ultimatums, government lurching from one dramatic event to another and return to regular order, the country will be better governed and the American People will be better served. This Appropriations Committee i will remind everyone is one of over two congressional committees the Revenue Committee gathers revenue to operate the government of the United States. The other is to make wise and prudent expenditures in the interest of the United States. We are constitutionally mandated except finance and appropriations. We were greeted by congress to govern its up. We were created to help govern the nation. This is what brings us to our hearing today. We will focus on the impact of the sequester. I think it is a bad idea. It is bad policy. It is a bad economic policy. It is bad governing policy. I really do not like it. It is working with the leadership to be able to find a way to avoid the sequester in the hopes that a higher power find a way for the nine years that it is mandated. What we hope to accomplish today is to take a look at the impacts if the sequester happens for the American People. Thank you for everyone coming. We thank you for speaking about defense. It has been well heard and well spoken. We look toward to hearing from you, secretary napolitano. In the u. S. Military, military, those who wear the uniform, will be protected in the sequester, and they should. There are others that need to be protected. What is the impact of them . And also the future of the country, the ability to ~ the middle class. This is where secretary donovan, we want to talk to about housing and the economy. What is it that we need to do . You hold the future of america in your hands. He went to innovate, but first we have to out educate. To hear about the impacts of sequester for educational reform. We want to hear about the impacts of sequester for educational reform. I believe we will run to view with destiny. We must solve this problem. I do not think the American People quite understand the impacts were sequester mandates and 85 billion cut that is equally shared by defense and by domestics. You are a National Security secretary napolitano. Layoffs and services not delivered to the American People i have to cope with my members here on the issue of the fiscal cliff. Also, the issues of implementing Homeland Security. To talk about the impact on these agencies. We want to talk about the agencies. These indic what about the fbi . What about the people who staff are federal prison . In the area of health and education, i understand for mental and where will they go . A nursing home . We are cutting funding. We are here to listen to you. We know the impact that when defense sneezes, the economy could catch an ammonia. Guard workers. We want to hear from you. Enough about hearing from me. Working with the leadership, i will fight to fight a balance solution of increased revenue and strategic cuts and look at the inventory spending. There needs to be a balance solution. The burden can not be done by cuts on these agencies alone. Make sure the sequester does not happen this year and does not happen over the next nine years. Ive been like to turn my vice chairman, senator shelby. Then we will go to the panel after that. Thank you, chairman mikulski. Thank you for your kind words. Today we will hear from our witnesses on the impacts of the sequester, which is appropriate and timely. The cuts are poised to take effect in 15 days. It should be noted that the sequester is something that congress and the president set in motion, knowing full well that this day would come. The sequester would bring spending cuts that are automatic and across the board for discretionary. The formula would determine how many cuts are made and stead of what is based on Economic Growth, say it, and prosperity. Cuts will come without regard to a programs merit. Some of the most severe cuts will hit defense programs. We must reduce spending, but it should be done in a deliberate way. The sequester was supposed to be a last resort in the socalled supercommittee failed to agree upon measures. In the end, maybe stan impasse. They reached an impasse. We have seen the sequester coming, but we have not taken any steps to fix it. Congress has only delayed it further. This situation prevents present an opportunity. The president has called on congress to act, but he has not put forward a proposal the specific options. Also when i hear the president some members say that the solution must include raising taxes further, i question their seriousness in fixing the overall problem. Ive seen the lease analysis. We do not have a revenue problem, but a spending problem. Revenue is on the path to increase and to return to levels that are in line with our historical average of 1819 of gdp. In contrast, Government Spending remains high during the next 10 years and is expected to grow beyond its 40 year average. This will occur even with discretion all spending discretion alal spending caps. Cbo estimates that Discretionary Spending will fall like more than 3 . That is below the historical average. The real driver of our that is not discretion alal spending, bt entitlement spending. Cbo report this combination of an aging population, rising healthcare costs, and Health Insurance subsidies will drive up the costs of programs shou. This will be to a death spiral. The issue is compounded by the costs of servicing our debt. It will rise in 2012 to over 850 billion rejected in 2023. By then, interest will be 6 of our discretionary budget. This growing debt poses an increased risk of precipitating a fiscal crisis the likes of which we have never seen. The warning signs that we are moving forward, the fiscal meltdown has been in place for a long time. Congress has repeatedly failed. It has been years since congress has even had a regular budget process with appropriations measures upon that were agreed upon. I believe the American Public deserves a transparent and accountable budget process at the Stores Fiscal order. Sequestration should not be part of the process. It is certainly no longterm solution to our spending problem. It should be a cautionary tale for congress. The sequester we face is the tip of the iceberg compared to austerity measures that will be necessary in the future if congress does not act soon for fiscal reform. I believe fiscal on we had to reform must include both tax reform and spending cuts. One without the other is only a partial solution. In the state of the Union Address, the president reiterated what appears to be that number sounds died during, and that number sounds it only scratches the surface. I am concerned that the debate surrounding the sequester will become a diversion from the real problem facing us. The time for partial and temporary solutions is well past. What we need is a collective acknowledgment of the problem and they comprehensive, joint effort to reach a longterm resolution. Anything short of that will place the American Economy on an irreversible, downward path. We will hear about the past consequences of the impending cuts. I do not doubt that he will be painful to bear. They will be painful to bear. Im open to discussion. I believe it is important to emphasize that the sequester of whatever temporary solution we have made is just a precursor to the main event. Thank you. Thank you, senator shelby. We will go to the panel. We would have begin with omb and wrap up with National Security. In the interest of time and efficacy, we will have one panel and be able to ask questions where we can get cross communication going. We will start with you and then secretary donovan and secretary napolitano. We will go to questions and alternating on both sides of the aisle. Right off with senator shelby and myself eri. You are representing omb. Their obligations with the president ial responsibility. Go ahead and give us the details of omb. I will not introduce everyone. We will keep it going. Thank you. Members of the committee, good morning. Im here to discuss the automatic spending reductions known as sequestration. It is scheduled to occur at march 1, as well as the impacts of these reductions and the actions the administration is taking to prepare to implement sequestration should it be necessary. I want to start by reiterating a point. As sequestration is bad policy. Administration believes that congress should pass a balanced , bipartisan deficit reduction to avoid it. If allowed to occur, sequestration would have significant and disruptive consequences for domestic investment, National Security, and poor government services. The cuts required a harm middle class families, seniors, and the most vulnerable. The president believes these indiscriminate acrosstheboard cuts are not ours possible way to address our goals of balance deficit reduction. We have made significant progress in this regard. We have an active deficit reductions over the past two beers. The vast majority of this progress has come in the form of spending cuts. Roughly three dollars in spending cuts for every one dollar in additional revenue. The president believes we need to have a balanced approach that includes a spending cuts, but also includes commonsense tax reform that can raise additional revenue. As part of the american act from tentacle, the date that the president would have to issue this a question should date was delayed from january 2 to march 1, 2013. With 24 billion in deficit reduction split evenly, this approach set an important precedent of avoiding sequestration and having a balance deficit reduction that combines additional revenue and spending cuts. Should congress failed to act in the next two weeks, a sequestration of approximately 85 billion will be ordered for the remainder at the school year 2013. It will be split evenly between defense and nondefense programs. This will lead to a number of deeply troubling consequences and critical Government Programs we depend on. It would mean fewer teachers to educate the children. Less funding for schools to help disadvantage kids with disabilities. Less research into life reckoning diseases. It would cut nutrition assistance for vulnerable tabulations and reduce funding for Center Health programs. It would keep federal agencies from conducting expansions inspections necessary to keep our food and water safe and clean. It would make our home less secure. We need to keep crime out of our streets and neighborhoods. It would make us less safe or. Broad safe or abroad shoul there is no amount of planning to avoid these damaging impacts. The federal government takes reasonable steps to avoid sequestration in the most responsible way possible. Therell agencies and omb have been engaged in ongoing activities for months to figure out how to operate under sequestration. Our primary sponsor that he do execute our core areas on behalf of the American People. Our primary sponsor abilities that we execute our core areas on behalf of the American People. Let me reiterate no amount of planning or perforation on our part, no matter how thorough or careful, can mitigate the significant and harmful impact sequestration would have. It is not a responsible, long term resolution. We need a balanced approach of spending reductions and revenues. It needs to build upon the significant reduction we have worked to achieve, strengthens the middle class, protects investments article, that are critical. Thank you. I look over to your questions. Members of the committee, thank you for this opportunity. Great to see you again. With your support, we would be able to help states, districts, and communities that are providing benefits to those who are the most honorable. I appreciate this opportunity to testify about this topic. I hope that Committee Members will keep the most vulnerable students in the forefront of their minds. They are the ones who will be hurt most if congress chooses to let sequestration happen. I want to be clear that we have the opportunity at all levels of government to make spending for education more productive and efficient. Distinct educational product to video requires smart and targeted changes to programs and not indiscriminate budget cuts. Sequestration would force us to court cut the Crucial Services and effect millions of lives of students. There is no probable plan b. Here is who would get hurt the biggest cuts would take effect next school year that 20132014 school year. We need hiring decisions in the spring we make hiring decisions in the spring. The plan is to make do with less. Meaning larger class sizes and fewer courses and less tutoring and higher unemployment. This undermines the very stability and predicted really every schools and works hard to achieve. It hurts families, children, and school staff. The vast majority of School Districts will not be able to make up with these cuts at the local level. When they had to, they will hurt the most vulnerable students the worst. Federal Education Resources generally are targeted to those children with the greatest need. Title 1 grams serve almost 23 Million Students at high poverty schools. Special education grants help about 6. 5 million specialneeds students. Sequestration would cut title 1 by 725 million. It could affect 1. 2 million disadvantage students. It would affect 10,000 teachers and support staff. Special education, we could be forced to cut millions of dollars. It requires states and districts to cover the cost of approximately 72,000 teachers, aides, and other staffs. Early childhood education, we would see cuts as well. Some 70,000 students in head start could be kicked out. Were trying to do more not to the opposite. It is foolish and morally indefensible. Higher education, the impact is destructive. We would have to cut back collection of student debt, it increased him into the treasury, and fell behind and servicing millions of student loans. We would also cut 70,000 students from grants and work Study Programs that help them financial costs of college. Clearly that is not the path we want to go down to regain our place as the nation that leads the world in college completion. Those cuts do not take cut affect until then next will, others will hit right away. The affect schools and programs that draw direct funding from us, the government. Who would be hurt families of military service members, disabled individuals, and People Living on native american lands. The county schools in new mexico, which 7000 students living on indian land, sequestration would cut more than one third of that districts budget. These are young people we need to invest more in and not less. We have warned our own employees that there would be possible furloughs. That is across the board cuts that we would be forced to make. We believe edu