Transcripts For CSPAN Treasury Department Fiscal Year 2016 B

Attack takes place in our own country. This president by the way his former secretary of state let us down in this regard. We will hear from hillary clinton, from an emilys list gala, and we will hear from jeb bush in iowa, speaking at a fundraiser for david young today at 6 30 p. M. Eastern here on cspan. The Senate Appropriations Committee Held a hearing on tuesday to review the president s budget request for the Treasury Department. Jack lew and john cost them and discussed why additional spending is being proposed. They also talked about areas like Cyber Security, tax fraud and irs Taxpayer Services in helping Small Businesses. This is almost two hours. The subcommittee will come to order. Today marks the first hearing of the Financial Services and general Government Subcommittee for the 114th congress. This is also my first hearing is subcommittee chairman. I am pleased to sit alongside the new Ranking Member. I would also like to knowledge the other members of our subcommittee. Although our subcommittee is small, the number of agencies we have found is large and their impact on our economy is significant. I am confident that the members are up to the task before us. As we begin this important hearing to review the budget request from the department of treasury and the Internal Revenue service, we welcome our witnesses, senator jack lew i bet i am not the first one that struggled with that name a little bit. [inaudible] very good. And the treasury ig for Tax Administration, russell george. Thank you for being here and we look forward to your testimony. As members of this committee we have a tremendous responsibility to ensure that the hardearned tax dollars a millions of americans are spent appropriately. Unfortunately the president has put for the budget that is out of touch with the needs and concerns of hardworking taxpayers. In his current budget the president proposes to create 2. 1 trillion in new taxes increase spending by 65 , and add 8. 5 trillion to the debt over the next 10 years. While the hardworking people will be forced to cut their spending significantly for the last few years. The president has been unwilling to do the same in washington. The country is in need of serious budgeting. All too often they lose sight of the fact that every dollar the government spends comes out of the pocket of the taxpayer and is one less dollar that the taxpayer could spend to provide for their family, grow their businesses, or help their neighbor. As members of this committee we have a responsibility to ensure that the decisions about federal funding are made with those taxpayers in mind. Nowhere is the need for oversight more apparent than in the agencies before us today. When the iri irs takes actions that reach the American People, it affects the impartiality of the agency. This selfinflicted damage harms a credibility essential for our voluntary compliance system to function. Americans have lost faith in the institution and you have a responsibility to regain their trust. We have all heard too often that investigations into these issues are distracting and that everyone should move on. Unfortunately to taxpayers these responses continue to reflect the lack of accountability and leadership. To repair that damage there has to be a fundamental change in the culture of the agency and the change must begin with the complete transparency and acceptance of the responsibility. Unfortunately there is continued evidence of a culture that is simply out of touch with taxpayers. Hiring employees who have passed performance conduct issues, and it weakens the ability of the irs to safeguard the rights of the taxpayer. Making bonuses a priority does not help them regain the trust of the taxpayers or raise the confidence that the agency will enforce tax laws impartially without regard to individuals exercising their constitutional rights. This was the case in the previous fiscal year, one of their first actions after the enactment of the appropriations bill was to announce that they would pay out 60 Million Dollars in awards to employees. Once again irs management seems to have forgotten that their most important customers are not their own employers employees, it is the American People. It is disappointing to again see that their budget request is unrealistic. The president s request for 2016 is almost 12 point 9 billion. Under the budget control act the Discretionary Spending caps for fiscal year 2016 limit nondefense spending to four hundred 93 billion. This represents an increase of 1. 1 billion over the fiscal year 2015 level for nondefense departments and agencies. Yet for fiscal year 2060 the increase has requested a base increase that is higher than the total increase available for all the nondefense Discretionary Spending. Also troubling is the request for the visual 670 million above the limit of the spending set by the current law. The treasury and the irs are fully aware that cabinet adjustments like this were not included in the budget act of 2011. No adjustment has been authorized to spend. Given this unrealistic request it sets unreasonable expectations, more troubling when looking for critical work to protects protect taxpayers in the future from the trauma of Identity Theft. The American People want a government that works for them not against them. They want to make the government more efficient, effective, and accountable, pursuing policies that create Economic Opportunities for everyone. These are the qualities of the American People reflected in the critical oversight that we conduct as we consider fiscal year 2016 budget requests for all the agencies within our jurisdiction. With that i yield back in time to senator kearns. Thank you for bringing us together today. I look forward to working with you and hope that with new blood, new energy, and a new approach we might bring more to the committee. I look forward to the testimony that you have in accordance with your difficult jobs under these challenging scenarios. A responsible stewardship of the hardearned taxpayer money is one of the most responsible allegations we have and it is important that we work diligently and together for the trust that our constituents put in us. I realize that there will be areas where we disagree but i hope we can approach the work with the seriousness deserved to it. I welcome the chance to examine the treasurys budget request and have what i hope will be a frank discussion about what is required to fill your responsibilities. Even to learn how treasury has adapted to Budget Constraints and how you will deal with resource competition and competing demand. Much of the treasurys budget goes to the irs, but there are a number of important functions i look forward to hearing about. Three in particular play the request towards strengthening the Financial Institutions Fund Bond Guarantee Program with the state credit program, i believe that programs like these can provide access to capital for Small Businesses around the country, helping them to grow jobs. Given the pressing issues in the sanctions against russia i look forward to hearing your thoughts on that topic. No agency is more visible to the American People than the Internal Revenue service. Each year more than 80,000 Public Servants at the irs make hundreds of millions of contacts with taxpayers. It is my hope that the irs could be best reset described as the counts receivable department and for fiscal 2016 they requested in 18 funding increase for the irs. At this point it is malleable to reflect on the bipartisan dislike of pain, we should not cut off our nose to spite our face. The more we cut off funding, the harder it becomes for the agency to respond to tax fraud or abuse. I hear from those who are frustrated when there calls go unanswered or it takes a long time to connect or get responsible answers to questions. Im sure that many others have had the same experience. Every dollar cut from the budget results in seven fewer dollars collected by one estimation commissioner douglas, that was 2011. So, we have a lot to discuss today, ways that we can improve the functioning operation of the irs, ways that we can improve the functioning and operation of the Treasury Department. The forecast is not encouraging a significant restraints remain in place. I look forward to getting the perspective on what is required to deliver topnotch Service Taxpayers and enforce our laws fairly. I look forward to working with you and having an open exchange of ideas as the hearings progress. Thank you. Thank you, senator. We now look forward to the testimony of secretary lou. It is a pleasure to be here to discuss the treasurys budget. As we meet here today, the economy and the country have made considerable progress that we can take pride in. From job creation to Economic Growth deficit reduction and Energy Dependence america has come a long way. We have seen the best year of job growth since the 1990s and in the past five years american businesses have created 12 million new jobs. The longest stretch of sustained job growth in the nations history. We continue to expand in 2014 with forecast projecting above trend growth for the year. We continue to work with trading partners who are struggling to recover from the Global Economic crisis. Records were set last year for goods and services set overseas, largely driven by Small Businesses. The deficit has fallen in this forecast and it declined even further for the next fiscal year. These achievements underscore americas enduring strength and we can keep this progress going with the right policies and bipartisan cooperation. This is a blueprint for washington to Work Together laying out a path for Common Ground, putting forward sensible solutions for every american that works hard having a chance to get ahead. The budget knocks down barriers for working families. Things like child care, mortgage payments, more affordable. It Fuels Research and development, repairing roads bridges, and ports. It reforms the tax systems of the we can eliminate special interest loopholes to strengthen the middle class for businesses. The bipartisan budget act of 2013 released a portion of sequestration and allowed for higher investments in 2014 and 2015, doing nothing to alleviate sequestration in 2016. The proposed arbitrary spending cuts that were bad for the economy and for security. These acrosstheboard cuts were never intended to go into affect. Rather they were personally unpalatable to prevent deficit reduction. Congress should act for their domestic and National Security requirements. Treasuries budget will allow the department to carry out its vast responsibilities efficiently and effectively. They are instrumental in helping to shape economic policies and todays requests will allow the department to promote prosperity, responsibility, and resilient Financial System, even as it addresses our National Security objectives here at home and abroad. The Treasury Department touches the lives of virtually every american to our work to responsibly manage the governments finances, fuel lending to Small Businesses spur Economic Development advanced Strategic Interests make Social Security payments and reduce the nations currency. Since president obama took office, the Treasury Department has had to marshal resources against deep challenges. We have consistently met obligations efficiently. This budget request continues to achieve savings and fund vital programs alongside strategies that will make the department more effective. The primary area where we are affect requesting Additional Resources are in the additional are in the Internal Revenue service. These cuts amount to a total of 1. 3 billion, or 10 of the agencys budget. As a result taxpayers face longer and on acceptable wait times on the phone and it takes the irs longer to respond to correspondents. A sustained sustained deterioration in Service Presents serious longterm risks for the tax system, which is based on voluntary compliance. The treasury budget requests storage to provide an acceptable level of Customer Service as deserved by the american taxpayer along with modernization to meet legislation from congress. The funds will help the irs to update on update antiquated Computer Systems and prevent taxpayer misinformation. We are sinking an injunction of the Program Integrity gap to allow them to invest in investments that will generate sizable returns. To be specific, 60 billion dollars in additional revenue at the cost of 19 billion, meaning the deficit will be reduced by 40 billion over the next 10 years. The budget also includes additional funding so that treasury can meet its obligation in the digital accountability and Transparency Act and provide americans with Accurate Information about government spending. On top of that we are requesting a reauthorization of programs that have proven results, like an extension of the Community Development financial to should one guarantee program in underserved communities. It proposes a new investment in the state Small Business Credit Initiative that leverages strengthening to private businesses nationwide. I would like to think the team at the Treasury Department. The dedicated work that they do in their commitment to the American People, proud to represent them here today, on behalf of these hard in many and women i would like to say how much we appreciate the support of the people on this committee. Thank you. Thank you very much, mr. Secretary. At this time we will proceed to the question reach senator has seven minutes per round. There are sufficient opportunities that we will try to accommodate. I appreciate it. In their you mentioned the need for finding Common Ground i think that you mentioned infrastructure and things like that. We have some different viewpoints as the how to get those dollars, which is a sticking point, but the other thing is let me do this in the form of question it concerns our Community Bankers. I feel that the backbone of america is Small Businesses, but the backbone the Small Businesses is Community Banks. Many have expressed concerns about the cost of applying what they feel are onerous Regulatory Burdens. Again, it is the bat backbone of our community. University Research Released a report in february about the plight of Community Banks in the United States and how poor regulatory coordination is stifling Community Banks. This is a particular concern to states like arkansas, for 96 towns that have only one physical banking location. Two thirds of these communities have less them 1000 residents. What do you propose that the Administration Due to ease the problems facing Community Banks . We very much share with you the view that Community Banks play an important part in our communities and in the fabric of our national economy. I think that if you look at the design of many of the laws and rules, you will see that there are standards that reflect the differences between smaller and larger Financial Institutions. There are exemptions, in many cases, for smaller institutions bars that are easier to clear for smaller institutions that do not present the same level of financial risk. I know that as regulators look at their discretion they are all looking for whether there is flexibility and whether or not there is a risk that they need to be concerned about. They have consistently made judgments to have the burden on smaller Financial Institutions reflect in general lower levels of risk. I think that we have to be careful to remember the purposes of financial reform. The purposes were to make sure that w