As mentioned, the senate advanced the nomination of representative of South Carolina to head the omb, his confirmation vote is expected sometime today or early tomorrow ahead of the senates return, here is his confirmation hearing last month before the Senate Budget committee. [inaudible conversations] [inaudible conversations] good morning, our call is hearing to order. We are here, im going to try to keep my opening remarks brief since we have a pair of senators before us to give introductory marks concerning the nominee. President trump indicated his intent to nominate representative for this position, a little over a month ago. I think all the members of this committee can agree that we would like to see it confirmed omb director in place as soon as possible so im happy to know that the other committee, omb, Homeland Security will be convening this afternoon to hold their own hearing with representative molvani, we need director in place with so many issues requiring the attention of the new administration for the most a trillion dollar debt america now shoulders. Congress needs omb director who can work who we can work with to put our nation on a responsible fiscal path. Thats why im pleased that President Trump nominated a fiscal conservative for this key post. Representative has been a vigilant budget hawk including tenure in house and oversight committee. He has been a vocal contributor to the great budget debates of recent years focused on questions on how he ultimately stopped the federal government from overspending while continuing to fund the countrys core priorities and responsibilities. Representative has been a prominent voice arguing for fiscal restraint, balance budgets and honest budgeting that avoids the use of gimmicks such as emergency funding designation for nonemergencies. Ive also discussed with representative the urgent need to reform the budget process which is contributed to the budget stalemate and resolutions which congress routinely restores about spending and debt and urgent need of reform for the process such as implementing budgeting and the overhaul of outdated budget accounting concept that is have outlived their usefullness. Ultimately goal so produce comprehensive and lasting budget process reforms that put our nation in our better fiscal path. Despite its significance, the preparation of the president s annual budget submission is one of the responsibilities of omb. As an entity within the executive office of the president , omb has numerous management responsibilities in addition to budgeting and spending that concern various activities carried out by federal agencies. These include agency rulemaking, contracting, grants management, financial management, information technology, program assessment, personnel policy, Property Management and several others. Im particularly interested in hearing the representatives view on the office of regulationory affairs in vetting agency regulations. This committee has been exploring the concept of a regulatory budget as one way to produce the check on the youing growing burden of regulations and also to Small Business. Also since hes the house sponsor concerning improper payments, im interested in his view on how he believes about improper payments. 44billion in 2016 and the cumulative amount of improper payment since we started counting them in 2003 exceeds 1 trillion. Senator, sanders. Thank you very much. I would like to take this opportunity to welcome the new members of this Committee Senators harris on our side and senator gardner. I look forward to working with all of you. Mr. Chairman, you and i dont agree on too much but we can all agree that President Trump ran a very Unconventional Campaign and that he told the American People that he would govern as a very unconventional republican. I think thats where we can have unanimous consent on that one. Over and over again, in fact, the cornerstone, one of the cornerstones of his campaign was that he was not going to cut Social Security, medicare and medicaid. He didnt say this at an ambush interview at 3 00 oclock in the morning, he said this over and over and over again. And i suspect that many millions of Senior Citizens in this country or millions of workingclass people who do not want to see Social Security, medicare or medicaid cut voted for him for that reason. And im just going to read a few of the quotes with your permission, mr. Chairman, i would enter into the record many of the quotes that President Trump said on the campaign trail. He said on may seventh, 2015, quote, i was the first and only potential gop candidate to state there will be no cuts to Social Security, medicare and medicaid. April 18th, trump said, quote, every republican wants to do a big number on Social Security. They want to do it on medicare, they want to do it on medicaid and we cant do that. Its not fair to the people that have been paying in for years and now all of sudden they want to be cut. August 10th, trump said, i will save medicare, medicaid and Social Security without cuts. We have to do it. People have been paying in for years and now many of these candidates want to cut it. Last quote, march 29th, 2016, trump said paul ryan wants to knock out Social Security, knock it down, way down, he wants to knock medicare way down and frankly, two things, number one, youre not going to lose the election if youre going to do that, i am not going to cut it and im not going to raise ages and im not going to do all of the things they want to do. But they really want to cut it and cut it substantially, the republicans and im not going to do that. That is quotes from the president of the United States when he was on the campaign trail. Now, the election is over, mr. Trump, President Trump still sends out a whole lot of tweets but surprisingly enough i have not seen that tweet where he says i am going to keep my Campaign Promise and i will not cut Social Security, medicare and medicaid. I am waiting eagerly for that tweet as are millions of seniors and working people in this country. The issue that we are discussing today is a, will the president keep his Campaign Promises and will he appoint people to his cabinet who will help him keep those Campaign Promises. And now we get to congressman, i want to thank him for coming into my office. His views are exactly opposite of what trump campaigned on. Let me run through record. Congressman mulvaney said on fox business, quote, we have to end medicare as we know it, end quote. April 28th, 2008, congressman said medicare as it exists today is finished, end quote. August 1st, 2011, congressman said, quote, you have to raise the retirement age, lower a pay cut, change the reimbursement system, you simply cannot leave Social Security the way it is. On may 17th, 2011 congressman mulvaney said, i honestly dont think we went far enough with the budget. In fact, just last year congressman mulvaney voted against the budget proposed Committee Chairman tom price and House Speaker ryan opting instead to voting in favor of a more extreme budget by the republican study committee. This radical rightwing budget that congressman mulvaney supported to cut medicare by 69 billion more than the priceryan budget 84 billion more and cut medicaid and other programs by 255 billion more than the budget proposed by chairman price and speaker ryan. Moreover, this is also interesting. In may of 2009, congressman mulvaney was in state senate, he voted for amendment declaring Social Security, medicaid and the u. S. Department of education unconstitutional. Let me read the text for that amendment, quote, whereas many federal mandates such as those which created the u. S. Department of education, medicaid and the United States Social Security administration are directly in violatation of violation to the tenth amendment in the constitution. That amendment in the Carolina Senate was defeated by a vote 35 to 6. Mr. Mulvaney was one of the six. In my view, the opinions and ideas of mr. Mulvaney are way out of touch with where the American People want and more importantly, they are way, way out of touch with what President Trump campaigned on and while we can all disagree on many issues, i would hope we can agree that if somebody campaigns, as im sure Many Republican colleagues have, you campaign on a set of issues, that you keep your promise and i suspect chairman does that, he tells people how he feels and he keeps his word. We disagree, he keeps his word but does not make sense to me to have a key adviser to the president having views directly in opposition to what the president campaigned on. Last point, i have come to learn during the confirmation review process, we have come to learn during the nominating process here that mr. Mulvaney fail today pay over 50,000 in tacks for a nanny that he employed from 2000 to 2004. Here is what the congressman wrote about the issue in response to a question that i asked him on january 11th, quote, i have come to learn during the confirmation review process that i fail today pay federal and state unemployment taxes on a household employee for the years 2000 through 2004. Upon discovery of that short fall i paid the federal taxes, the amount in question for federal unemployment was 15,583 and 60 cents exclusive of penalties and interest which are not yet determined the state amounts are not determined, end of quote. Mr. Chairman, this is a serious issue. As you will recall eight years ago, senator withdrew his nomination of secretary hsf after it was discovered that he fail today pay his fair share of taxes. Mr. Chairman, on this issue, i agree with minority leader schumer who said, quote, when other previous cabinet nominees fail today pay fair share in taxes, Senate Republicans forced those nominees to withdraw from consideration. Failure to pay taxes was disqualifying for democratic nominees then the same should be true for republican nominees, end of schumer quote. In 2015 congressman mulvaney voted for a bill in the house that clearly stated, and i quote, any individual who has delinquent tax should be ineligible to be appointed or continue serving as an employee of the federal government. Mr. Chairman, i look forward to asking mr. Mulvaney questions and thank you for the time. Hes my buddy. We dont agree on everything, what i think hes one of the most capable people ive met during my time in public service. And we have a real friendship. We played dots. He always beats me. I accept that. He has a beautiful wife and triplets just remember that when you talk to him. Hes sincere. Clearly, senator sanders would not have chosen him for his omb director. I think weve established that. Why would trump, President Trumps, pick a man, according to senator sanders, that doesnt agree with anything he stands for . I would argue that he picked congressman mulvaney because he understands he knows the budget. He will be a good overseer of the government. Hes a practical guide and he will follow the president vision. President trump understands everything he said about congress been mulvaney, and he has confidence in this mans ability to do a job for his administration. I sure that confidence. To those on the defense side. He will follow the call of the president to increase defense spending. He does believe in entitlement reform and i think hes right to do so, to save these programs. So from a personal point of view, ive never had an occasion where he would not tell me exactly what he believed even if he knew i disagreed with him. And he is able to disagree with people in an honorable fashion. Hes incredibly smart. Hes made it his life work to understand whats wrong with our government and he will be dedicated to fixing it. One final point of personal privilege. I voted i think for every nominee of president obama. I think every one of them. I asked myself why i did that now. The reason i did is i think elections have consequences. And why i disagreed with almost every nominee about the basic structure of government, i understood the president obama needed his team and deserve his team, if they were qualified. And heres what i would ask this committee to consider. Given this mans life experience, his background, the Public Sector in the private sector, his time in congress do you believe he is qualified to understand how the federal Government Works and to reform it, consistent with what the president will direct him to do. I believe that with all my heart and soul and i appreciate you listening to congressman mulvaney and any hard question you can ask, you are doing your job. Just realize elections have consequences for you as they did for me. Thank you. Senator cotton. Chairman enzi, senator sanders, thank you for allowing me to hear today. I want to add my voice in support of confirming Mick Mulvaney as the next director of the office of management and budget. We have known each other for many years now. We served together in the house of representatives. Hes a good friend of mine and a trusted confidants i speak from personal expense when i say he will serve our president and our nation with distinction. The way i see it, the directors chief job is to give the president the unvarnished truth. Just tell the president exactly what things cost. Partly to the president agenda but mostly to the taxpayer. The president of course sets the agenda but he deserves a clear eyed view, not rosecolored glasses. And for the last six years mick has been telling many hard truths. Were spending too much. Regulations are strangling our Small Businesses. And shortchange our military will only cost us more in the long run. Also understands perhaps the hardest truth of all, at least for the big spenders in washington. Its the American People to earn this money through the hard work and sacrifice. Mick will treat every taxpayer dollars as if tha if it were hi. And trust me, that means he will watch it like a hawk. In orchids are many people start me to ask a weird thing about National Debt. Its a huge concern. So with this eagle eyed focus on spending, it will be a crucial voice in the cabinet. He will represent millions of americans who are deeply worried about the burden we are getting our children. While mick is deeply principled, he knows how to work with others and make progress wherever we can. In short, mick is a fine choice to run the office of management and budget. So i urge you not only to advance his nomination to do so as soon as possible. Under the law the president is required to submit a budget to congress earl next month which e very difficult without a new director. I hope the full senate will also confirm him promptly. Thank you for your time today and your consideration of a passionate advocate for the taxpayer, a bold truth teller, and my friend Mick Mulvaney. Thank you, senator graham. Senator cotton. Youve done a great job speaking about representative mulvaney so i will keep my own remarks are great. He is known as current as a member u. S. House of representatives representing the Fifth District of South Carolina. He held an undergraduate degree from Georgetown University at a law degree from from university of north carolina. He is a husband and hes the father of triplets. We thank you for joining us today, representative mulvaney, and we look forward to a productive outlook which will begin with you on testimony but first under the rules of the committee, nominees are required to testify under oath. So would you please join me so i can administer the oath . Do you swear the testimony that you will give to the Senate Budget committee will be the truth, the whole truth and nothing but the truth . I do. If asked to do so and if given reasonable notice, will you agree to appear before this committee in the future and answer any questions that members of the committee might have . I will. Please be seated. We now have a chance to hear from you. Thank the committee, thank the chairman, the ranking member. Its an honor to be a today to present my qualifications and my patient for the office of management and budget. I want to think the president for nominating me and showing confidence in the in doing so. I would like to especially thank mr. Graham and cotton, friends of mind, for the kind words. I want to think especially before we get started, my family. As members of this committee know the burdens of our Public Services often fall on those at home, and i am, we dont get a chance to say this new enough and we certainly dont get a chance to separate often on national television. I am extremely proud of the young people that my 17yearold triplets have become. I dont know if its because ive been away from home or despite the fact ive been away from home, but the fact that they are the young people they are is a tremendous testament to my wife whos with me today. The children are back in school. Im extraordinarily happy and proud to have her in my life and i could not view today but for the support of my family. Finally im grateful to members for taking the time of the course of the last couple of weeks to get together and talk about the issues as we talked about my vision for the omb of what type of o. B. Director might be if you see fit to commit me. I look forward to continuing those conversations and getting her guidance and wisdom. Because i think we all know that no one, no one can do this job alone. Perhaps a member of Congress Knows that better than most, several former members of his body censored omb. Senator portman, jim nussle, leon panetta, ill start with distinction and theyll study very high bar and put a good example of how omb is supposed to function just through the president and to work with congress and the American People. If confirmed, i will use them as models to you deserve the truth about budget matters as to the American People and the president and its the ombs directors responsible to tell you of the present the truth even from time to time when that might be hard to hear. One truth is this. For the first time in americas history the next generation could be less prosperous than the previous. I know thats unacceptable to everything the person in this room as it is unacceptable to me. We can turn the economy around. We controlled the country around but its going to take difficult decisions today in order to avoid nearly impossible decisions and more. Our Gross National debt has increased almost 20 trillion. That is a a number so large its almost defy description. I choose a look at in a different fashion, through the lens of the ordinary american family. If you were an ordinary american family, the equivalent to you of 20 trillion debt as a a credit card bill of 260,000. American families know what that would mean to them at this time this government learns what it means to us. I believe as a matter of principle that debt must be addressed sooner rather later. Its fundamental changes are necessary in the way washington spends, and taxes if you want to help the economy. This must include changing our government longterm fiscal path which is unsustainable. Part of that also means taking a hard look at government waste and ending it. American taxpayers deserve a government that is efficient, effective and accountable. They earn their money honestly and they deserve a government that spends it in the same fashion. Fixing the economy doesnt taking a green eye shade approach to the budget. Our country is more than just numbers. A Strong Healthy economy allows us to take care of our most vulnerable. My motherinlaw relied on Social Security in her retirement. She relied on medicare to help her before she died of cancer. Pam and i were happy to have that safety net there for her. Pam and i would also like that safety net to be there for her grandchildren, our triplets. All that being said i know many other members will want to know my positions should have a director as omb director. Not in position and do not presume to know that decisions i might make much less what decisions the president might make after consulting with his cabinet as advised. I do know what i believe, however i havent exactly been a shy member of congress in my security and they dont expect to enter that today or as director if you see fit to confirm it. At the same time i recognize Good Public Service whether in the state legislature, the house, senate, omb, takes both courage and wisdom. The courage to lead, and the wisdom to listen. I have learned in my time in washington that he did not have a monopoly on good ideas. Facts and the cogent arguments of others matter. My commitment to you today is to seek a factbased approach and to listen to various ideas on how to get our financial house in order. Omb also fills Significant Management response goes, a bunch of other responsibilities. I know you folks of may with another four to talking with us today as well. I look forward to talk about all the speeches, by qualifications anything else that Committee Sees fit. I look forward to working with congress and serving the president to address all the challenges on behalf of the American People. Again, mr. Chairman, i thank you for the your time and the opportunity to be here. Spin thank you. Well turn to question for representative mulvaney. Let me explain the process for all Committee Members before we start. Each member will have five minutes for questions beginning with myself and senator sanders. All of the two of us have alternate questions between the republicans and the minority. All members were in attendance when hearing began what we recognize in order of seniority. For those who arrived after the hearing began, you are on the list in the order of arrival. If it is returned to the list to be recognized and youre not here, youll be moved to the bottom of the list and get to ask question at that point when everyone else is done, you will be recognized. Once all the senators present have had an opportunity to question the nominee, ill allow a second round of questions if theres interest in doing that. Representative mulvaney is scheduled to is scheduled to appear before the home is a good and Governmental Affairs Committee Later this afternoon so this hearing will end no later than 1 30 p. M. To accommodate that schedule. With that i have a few questions. I believe that significant savings could be found in eliminating duplication and waste, fraud and overpayment across the federal government. You introduce a companion bill in the house legislation signed into law last congress, the federal and proper payments coronation acts. That was a bipartisan bill that addresses the very real and growing problem that you would be in a position to help tackle as omb director, even saw a recent report the department of defense lost 125 billion. I dont know i dont know what lost means. Do you believe that significant budgetary savings can be found by reducing duplication, waste, fraud and overpayment, and what do you see the role of omb in identifying and addressing these problems . Chairman, i think you mention in your Opening Statement the recent finding that the event of improper payments has now grown to historic levels. Its passed now 109, excuse me, 100 billion, on its way to 200 billion. Its one of the reasons that the improper payments bill, which i believe senator johnson and ms. Mccaskill, senator mccaskill also worked on in the senate, passed on a bipartisan basis. In the house. Ill never forget willie actually started working on that bill in the house that i was working with Patrick Murphy from florida and hes a democrat and we were talking about it one day after, its kind of unusual working on this together. He said im a democrat and i believe the government should be doing more. Youre a republican you rob you believe government be doing less. That we all hate bad government. And i think thats right and i think he hit the nail on the head on opportunity that we have on a bipartisan basis to be better stewards of the taxpayer dollars to improper payments act as i understand it has gotten off to a choppy start. The report that is required by the legislation i believe is either finished a close to being finished. But in terms of actually putting the plan of action into place, it is already behind schedule. And to your point about who can help fix that, the answer is omb. Omb could use the budget function to make sure that these agencies comply with the law. They are required by law to start using these best Management Practices to start using, or several agencies that do a great job of preventing improper payments. Ill never forget when my uncle died a few years ago i got a letter, i was executor of his estate. I got a letter within a week of his death from the Social Security administration sank when you get his next check dont cash it or else youll be violating federal law. Clearly there are agencies that do a good job. The question is why art of those agencies sharing of best practices lacks that was part of an motivation behind the improper payments bill that we passed. I just think its time to take a look or sicily and if given the opportunity i would certainly do that. Thank you. I appreciate your service and your willingness to serve. Was mentioned in the opening remarks the ranking member, and i notice that you chose to bring to the attention of this committee and easy resource identified that resulted in you amending prior tax returns. Can you describe this issue and whether you bought it to the attention of the irs or whether it was discovered through an audit . Have you voluntarily paid any and all additional taxes, fees and penalties that you discovered that you owed . I have. Thank you for that. Happy to discuss anybody who brings it up. In 2000 with triplets. When they came home, we hired someone to help my wife take care of the children. In our mite she was a babysitter. She did not live with us. She did not spend the night. She did not cook, clean or educate the children she helped my wife with the kids. I did not consider her a household employee for purposes withholding and did not withhold. I didnt think about it again until two days after the president nominate me for this position. During the transition i got a checklist can have you ever had a babysitter, nanny, governance, whatever . I suggest. They sent me an irs circular i read it. It was clear to me i made a mistake and that the irs viewed our babysitter as a household employee who we should withheld taxes. I didnt think i do to do which is simply tell everybody what i would care. I told the president , the transition team. I called my cpa and said look, whats the best way to fix this . Its a mistake. Its been made. I now know about. How do we fix it . My cpa and i went to the process of finding lively schedule h for the relevant years we paid the taxes. Also notify the irs of what were doing and why. And that i told everybody on this committee. I told everybody in the senate and apparently told the media as well. Its the only thing i need to do. We made a mistake and is and is was brought to my attention i did it one thing i knew what to do which was take every step to fix it. I will pay any penalties come in interest, late fees and abide by the laws to the best of my ability. Thank you. To put this in context for the committee come in 1992 president clinton nominated mr. Brown to be the secretary of commerce and mr. Frederick opinion to be the secretary of transportation. Both of these nominees had to pay back taxes on domestic employees. And yet both were confirmed. President clinton also nominated ms. Zoe baird to be the attorney general. She withdrew her nomination petition hired an illegal immigrant and failed to pay taxes. While she did that become attorney general, she did serve in the Clinton Administration on foreign Intelligence Advisory Committee and in the Obama Administration on the use second of commerce Digital Economy board of advisors. In 2009 president obama nominated mr. Timothy geithner to be the secretary of the treasury. Even though mr. Geiger failed to pay 35,000 in Social Security and medicare payroll taxes on his own income. And was in charge of the irs after being confirmed, he was confirmed. Mr. Sanders. Thank you, mr. Chairman. Congressman mulvaney, i talked to members of the house whose views are very different from yours but they say youre a straight shooter. That you are honest, and i appreciate that. Thats a good quality in a member of congress. Over the weekend i havent to bump into a psychologist. And she told me that her patience are getting very nervous. Those who were on disability benefits. That they might lose their benefits. And the fact that conditions are getting worse. Ive heard that all over country. That people now are worried that the mailer Social Security, may lose medicare, may lose medicaid disability benefits. I happen to believe that Social Security is one of the most significant and important and positive programs that the United States government has, that medicare by large is an enormously Successful Healthcare Program and infect majority of the American People would like to see medicare expanded to all americans and, in fact, something ugly and medicaid right now is saving the lives of millions of people. But you are on record time after time after time, and i read the quotes. You say cut Social Security, cut medicare, medicaid. What concerns me is your more than entitled to your views. You got elected by the people in your own district, but what does distribute is we have a president who ran on a set of principles that he would not cut Social Security, medicare and medicaid. And yet he has nominated somebody whose views are very, very different. So i have a real problem with that. So my question to you is, what will you kil tell the president n he says i ran on a set of principles that it will not cut Social Security, medicare and medicaid . Will you tell the president of the United States, mr. President , keep your word to be honest with the American People, not cut Social Security, medicare and medicaid . Senator, your question is what would i tell the president. I listen as senator cotton was getting his introduction and a really liked what he said. I did know what is going to say intel he said it. But he gave you the answer, which is the only thing i know to do is to tell the president the truth. And the truth is that it we do not reform these programs that are so important to your constituents in vermont and to mine in South Carolina, i believe in nin nitrogen use the Medicaid Trust fund isnt it. Roughly 17 or 18 years the Social Security trust fund is empty. We can choose to do something about that now, or we can choose to do something about forgive me for interrupting. I only have five minutes. There is a lot we can do, including lifting the cap on income above 250,000 which would enable us to extend and expand Social Security there is significantly. But the problem that im having right now is not just your nomination but the integrity and the honesty of somebody who ran for office on one set of principles nominating somebody else whose views are very different. Let me ask you another question. When you were a member of the South Carolina senate, you voted for proposition visit Social Security is unconstitutional. Do you believe that Social Security is unconstitutional . No, sir. I was brought to my attention this way before the hearing. I dont remember the vote but i can assure you as i sit a debate i do not believe that Social Security or medicare are unconstitutional. You were one of six members of the South Carolina state legislature to vote on a proposition that said Social Security the department of education, medicaid are in violation of the 10th amendment. You no longer hold of unit cells is good is unconstitutional . I believe you said i have no reason to disbelieve that but as i said i will not be arguing to the president of United States that Social Security or medicare are unconstitutional. Mr. Mulvaney, in july 2015 you wrote a a letter stating and i quote, i urge House Republican leadership to use every available tool to strip planned parenthood any at all taxpayer funds and to take measures to prevent the group from receiving taxpayer dollars in the future, end quote. Some two and a half million americans, many of them low income women, now get their health care through planned parenthood. At a time when with 28 Million People have no Health Insurance today, despite the gains of the Affordable Care act, you really believe that we should tell two and half million americans, many of them low income women who get high quality care at planned parenthood, that they should no longer have access to planned parenthood . I hear a lot of talk in this body from a republican friends about choice. We want to give people choice. Two and half million americans, many low income women choose planned parenthood as their choice for healthcare. Why would you deny them that choice . Senator, i dont have a little funny but i do remember the debate and i remember what i voted for. And that may been addressed in the letter. The proposal that the house put forward in july of 2015 would have moved the money from planned parenthood to these federally qualified health care clinics, which are more prevalent, more available and actually serve more needy women that i know a lot about the Community Health centers. Im one of the leading advocates for them, helped increase funding for them. But t two and half million peop, mostly women, have chosen planned parenthood. After all the talk about choice but we want a healthier system which allows people to go anyplace they want, your recommendation is that we should deny two and half million women their choice of healthcare. Thank you, mr. Chairman. Thank you. Senator graham. What percent of gdp will be spent on defense if we go back into sequestration by 2021 . Lets see, its going to be down, well below 4 . And maybe closer to two but between two and four. 2. 2 . Whats the historical average of defense spending since world war ii . Fourish. Closer to five. Do you support President Trumps initiative to increase defense spending . I do. Are you wear almost 50 of defense spending in pauls personal calls . I do. So if you want a bigger army to a more personal costs, bigger navy, personal cost spirit thats what the numbers would tell you. Are you willing to reform personal programs to make a more sustainable . Im looking for to having the opportunity to do just that. Entitlement reform. What drives the debt . What the chief driver of the debt . The intel the programs, medicare, medicaid and Social Security speared the deficit of that are different things. Explained it very quickly speak the deficit is this in years shortfalls between revenues and expenditures. That debt is a chelation of deficits over the years. The baby boom generation will be retiring en masse here. What happens to medicare and Social Security over the next 25 years . They go up. Okay. In 1950, how many workers were there for every socialist duty recipient . I think 15, 16 at some point. How many today . Three. How many in 20 years . Two. How can two people do with 16 people used to do . Short answer is that they cant. Are we living longer or shorter . Longer. So were living longer, fewer workers and more people are retiring. Those those are the hard facts speak what you tell President Trump ignores that he can never get us out of debt . Yes, sir. Will you tell him that the amish made about medicare and Social Security is going to lead to their demise if you dont change that promise . Yes, sir. Will you tell him that therethat is abipartisan way ts been studied extensively without gutting the program that is saving the program . I am familiar with that, yes, sir. Would you agree that for younger workers they may have to work longer before the end of the program to save the Program Speakers ive already told my children to prepare for exactly that spirit waddled reagan and tip oneill adjusted to save Social Security. Is that i could . Thats true. Do we need to look at adjusting the age again because we live longer . I do. Do people of my income level should get a subsidy to pay the medicare bill . I believe that medicare benefits should and could be means tested. What percentage of medicare comes from the general treasury . Center, thats one i dont know. I think its over 60 . Dramatically increase taxes or cut benefits in the next decade to 15 years. If we do nothing by the time i retire there will be 22 percent cut across the board to Social Security benefits. Are you in a situation where you could give up some of your promised benefits from Social Security if you had to . Center if i may, i enjoy this at this is what we do only talk, right . But i would take a second to tell a story. I talked about the ideas to save Social Security at a sun city retirement community. And i talked about slowly raising the retirement age. There was a gentleman there 59 and your 355 to live there. And he said i dont want to live until im 70 and i said no we would require you working at your two months. And he was flabbergasted. He said you mean i can fix this by working two more months . And i said yes. And he was angry was actually that easy to do. And i said well if you want to really be angry, we can do two extra weeks but wait another 10 years it could be two years. Lets get back, very well said. Senator sanders says one way to save Social Security is increase the people who make over 250,000. Can you repair the gap between medicare and the undefended liability by doing that . No sir. You cannot even come close. No, sir. So everything including dogs, can you you can confiscate everything in the answer would be no. Could you grow the economy at eight percent and close the gap . No, sir. Thank you. Thank you very much determine. Welcome. Congressman mulvaney and to you and your family. I have to say after that interchange, i think i would be really worried. Just demonstrated the difference between the President Trump as indicated he would do and what in fact he would be advising him congressman mulvaney if in fact, as you indicated an senator cotton indicated you would give him the unvarnished truth. I believe people sitting on this side of the athey created healthcare and certainty for many americans. Im thinking after that exchange that or the 57 million seniors and those with disabilities and surviving spouses and children who receive Social Security benefits, the alarm bells should be going off right now. But let me go back. As a straight shooter which i certainly respect. You did indicate that Social Security is a ponzi scheme. Is that something you will say to the president . And you did indicate that most Social Security and medicaid and the department of education were unconstitutional. So just keeping it to Social Security, do you intend to indicate to the president that you believe Social Security is a ponzi scheme way. Thank you senator. And i had a very similar conversation with senator sanders and his ass. He asked me about that in his office and i said i described it as a plan that takes money from people now in order to give money to people now. And he explained it i think is accurate in doing so the Social Security has always been like that. So i would not read much into the description of it as a ponzi scheme as simply describing to people healthy cash flows and the difficulty that we face was contained in what mr. Graham displayed through which was 50 years ago, 15 people were paying in and one person was taking out. By the time the kids are paying for my retirement two of them will be paying and for everyone paying out. It is also true though, you and i spoke in the office about the fact that the camp was set in 1983, it a while ago at 90 percent of wage income. And it goes up a little bit. But one significant way to take the burden off of Social Security and keep it going strong for those who rely on it and by the way about one third of seniors basically live on the money solely from Social Security. Maybe a little bit of a pension. But pensions are being challenged right now as well. So do you think the should be increased as a basic sense of fairness and in terms of the fact that the last was set in 1983 . Thank you for that. If the senate feels fit to come from the center and had this conversation with everyone from both parties i met with including the independence not from any party. There are really five letters of Social Security. I understand all five. I just have one more question after this. I know there are five. Im asking you about one. And you have mentioned one may think you pulled one letter you have to put a long way. And if you pull three or four or five lovers you do not have to pull them nearly as much. Thank you. And you want to completely change to something that may be the only one to raise although a couple of colleagues on the other side may as well. And that is a very important part of the budget called the farm bill. Which is less than two percent of federal spending. It affects every small town in michigan. Every farmer as well as our Food Assistance programs. And in the last go around we were very proud on a bipartisan basis to be the only committee to actually cut spending in our own jurisdiction of 23 billion. And we are not coming to another time where we fully expect to Work Together on a bipartisan basis to invest in rural economies, small towns, agriculture, food programs and so on. We are in a better position in the sense that food programs have gone down because of the economy getting better. But do you intend to propose reduction to farm bill and investments in Rural America in your budget . Despite the fact that farmers and families are ready contributed significant savings towards deficit reduction . Senator i know the farm bill is critical to you as it is too many other members including mr. awith whom i spoke about this with. I am not in a position to give you an intelligent answer to the question. But reported talking to members of all parties how to contain and improve and make more efficient the farm bill. Thank you. Senator toomey. Thank you very much mr. Chairman and congressman mulvaney. Welcome, thank you for being here. Thank you for your willingness to serve. Thank you for the great work you have done and house of representatives. Let me follow up on a couple of the subject matters that have been raised. First of all, is it your earnest investor . The reason we have had a cap on the wages subject of the Social Security tax is because we also have a cap on the benefits . That are paid out to somebody. Is that your understanding . It is my understanding. Yes, sir. And that remains the case. Yes. And if we raise the cap we would not have the problem. Yes. Getting up to the bigger picture. It is my understanding that the revenue the federal government takes and is greater than the postwar average. Correct. We have a 17. 9. So we are taking in more revenue than we have historically. Discretionary spending has been declining. In fact even in some recent years an absolute terms is that your understanding . That is correct. Revenue is higher than it is. Discretionary spending is lower and yet we have large deficits and a projection that it will get worse. Is it pretty unavoidable . I think congress has done a pretty good job over the course of the last couple of years. To deal with the discretionary part of the budget. One of my colleagues suggested that people on Social Security should be concerned about the things you have said. If you are a pennsylvanian who is in her or his 70s, with a modest income depending on Social Security are you advocating cuts to benefits . No sir. You are not . What about someone who is 69 and are you advocating their benefits be cut . I do not think any proposal that the house has come up and certainly no proposal i would take to the president , should i be confirmed, would suggest we touch both anywhere. Im not making my parents go back to work. There 74 years old. That is not what this is about. Its about trying to preserve the programs. The folks who are 75 years old and relying on Social Security, and pennsylvania or in michigan, they do not have to worry about Social Security. Anybody of any age on Social Security where you would want to cut their benefits that they are receiving now . No. You do not want to cut any existing benefits . No. And it is not there was someone currently Social Security needs to be afraid of this. How about someone was 40 years old and is expected to work for another, i dont know 25 or 30 years . Can we deliver on a promise that Social Security currently makes to that person . Is anyway without change to the structure of the program that we will be able to follow through on that commitment . Without changing the current Social Security program, a 40yearold today will receive roughly 77 percent of what they have been promised for their adult life. To continue to suggest that we do not have to do anything here is just being dishonest. To the young people and if i understand correctly, the change that you would advocate would be for people who have many years left in their working lives to plan accordingly and to prepare for the eventuality. Is that fair . Correct may require think one of the proposals would require me to working extra couple of months before i retire. And my children. You are how old . [laughter] i am still 49. I think it is public information. I am 49. Lets go to the regulatory side. When i met with Small Business owners and other people who are working across pennsylvania, they have been stunned by the avalanche of regulations and the cumulative weight whether it is obamacare, dodd frank, epa, the entire alphabet soup of agencies in my view, and i heard this from them is having a devastating effect on economic growth. The omb director is responsible for the office of Regulatory Affairs and in that capacity, you have a lot to say about new regulations. Number one, do support the rains act which would hold that any major new regulation has to be approved by congress before it goes into effect . I do certainly voted for that. How do you feel about a regulatory system where before we impose new regulations we look at outdated excessive counterproductive regulations and fill them before we oppose new ones . Actually think law currently acquires them to do retrospective analysis of regulations and has probably been falling short on that. I would approve of such a system and think it is already the lot. And lastly, how high a priority do you think the administration should assign unrolling of the current level of regulation and do you have any other procedures or analysis that you intend to use to achieve that . Thank you senator. I think you sublimation yesterday that he wants to cut 75 percent of the regulations. He is absolutely dead serious about this. I think hes the first person to campaign for president on Regulatory Reforms since ronald reagan. I have some plans ideas on how we can help to do that and i think this should be a priority for President Trump. Thank you mr. Chairman. Let me lead with an observation mr. Chairman. The time that i have been on the senate i do not think ive actually ever seen a sincere effort at Regulatory Reform or relief. What i have seen is a really good game of talk about Regulatory Reform. But every time it rears its ugly head it is for one of two special interests. Wall street or polluters. And sure enough the two examples that the senator from pennsylvania just use my guess what . Dodd frank on wall street and the epa on polluters. I would suggest to you that on our side of the aisle there may be a much broader for those Regulatory Reform if it werent simply a curtain. I urge you to explore that. The fact that you indicated in response to the question that regarding lifting the Social Security contribution so high earners are not contributed to Social Security. The question was we raise the taxes we would solve the problem and you answer a simple yes. It isnt it true that that would contribute significantly to solving the problem . Is one of the levers that should be on the table. Sure, and you can raise the retirement age to 100 and that will solve the problem. You can pull every lever along the way. And fix it i guess you can take the tax rate at 75 percent. I just want to make sure you do not dismiss that particular lever some . Because of the high income people. ,again, my attention is to lay this out like you and i discussed. If you want to look at Social Security, here are your five levers. Where would you like us to focus . One of the issues we focus on the committee is how to balance the budget. And what we have here is Different Levels of expenditure were different kind of things. Over on the far right is 560 billions in 2015 for nondefense discretionary. The entire budget. Our entire military operation, 910 billion out the door on Social Security. Not counting what comes in. And 1. 1 trillion for the federal Health Care Programs together. Medicare, medicaid, veterans benefits, the works. Whats here is tax expenditures. And we have had your former speaker say that expenditures are just another way of spending money for people. Weve had Ronald Reagans budget advisers say if you want to get after the budget problem had to get after these expenditures. It is another way of spending money. But it tends to help people who pay their taxes so they can get big benefits to the tax code. Corporations, billionaires and so forth. It tends to be built into the tax code. Unlike an appropriation you have 2548 year after year and he gets reviewed by the Appropriations Committee year after year. There is, there it sits, there it stays. The problem i have some right colleagues on the other side of the aisle as they talk a really beginning about the debt and the deficit but when it comes to the biggest expenditure, the tax expenditures we cannot get them to budge on anything. Not the carried interest exception, then there fossil fuel Companies Make more money than at the end of companies on the face of the planet. They get big subsidies from the taxpayer. It makes no sense. Private jet owners can depreciate their jet faster than the airlines can fly regular people around. It makes no sense. We cannot get one piece of that through the other side of the aisle. They will go to the mass to defend every special interest in my experience. Never been able to do it. So if you want to put something together on this i think this should be different from Everything Else before and not just to special interests on the republican side. Really take a hard look at the tax expenditures. More money goes out the back door of the tax code then goes out to any of these individual programs. One word answer. Yes, sir. Maybe if you and the president get to the same place in the different avenue but made it effective case by why we need tax reform in the country. That being said, if i can borrow your graph that would be great. You got it. Thanks. Thank you mr. Chairman. Mr. Mulvaney thank you for being here. He told me in the office that the omb director was your dream job. He was slightly odd but i think you for . [laughter] for your desire to want to do this. I was looking at the forecast laid out today. Have 20. 355 trillion in debt and over the next 9. 7 years, excuse me, over the next 10 years will add 9. 7 trillion in debt. In spite of some of the comments that are said, i think they realized the immorality. People speak a great deal about jerking the rug out from under seniors but nothing anyone has ever proposed anything like that. With the immorality of living today, and comfort here in the United States senate and congress and not dealing with these issues which we know are going to be hugely problematic. Do you believe that this is one of the greatest threats to our nation today . I do. And that really sent in for me senator. My very first week here. When i arrived in 2011 i was fortunate enough to get on the budget committee. Over in the house. We had a presentation and i care member who is there some talk about his presentation with the chairman of the joint chiefs of staff had made a comment that he thought the National Debt was the greatest threat to the security of the United States. Enough of the fear of god in me. Like that of a percent of expenditures and discretionary spending. I find what you said earlier about five levers, i certainly would not want to focus on my runs on the other side of the aisle but i guess there are numbers of them that would be willing to look at all five of those levers to solve problems, so actually i find your views take to be very much in the mainstream. That these are the kinds of things that we all know we need to deal with. With two workers done work for every one person retired. I think most of us fear that we are not going to deal with the issue and that we are going to be in a crisis mode. My question is, mr. Trump did say some things during the campaign that i wish he had not said. Theyre totally unrealistic. They make no sense whatsoever. I just wonder if you are, we talk with him about the five weavers and we talked to him about the fact that there is, it is impossible for us to balance the budget with 31 percent of spending being discretionary. Without done with his other programs to think he understands that . Senate and senator graham made this during his Opening Statement. Which is that and as i mentioned, i have not been quiet and shy since i been here. It has been easy to find quotations for me and so forth. Dont take too much time with the answer. The president knew what he was getting when he asked me to fill this role. So i look forward. But you think he understands that we have to deal with all of these issues . I like to think thats what he hired me. I think all of us love the men and women and respect greatly the men and women in uniform like tim kaine son and the two people you know when people serve in our military we have the utmost of respect and admiration. Weve been doing some things around here with funding. Do you think it is an intelligent way of building a budget using overseas Contingency Operations year after year as a way of solving these problems . No, sir i do not. I think it is beyond not being intelligent. It is dishonest, isnt it . That is the word i was going to use. Love the men and women in uniform the server in our behalf. Even the pentagon as well, . I think it does a tremendous job defending the nation. And acquisitions programs do think it is a wellrun organization . I look forward to doing more education possibly reforming where possible. What bothers me is we all need patriotism gets the end of a budget and just about the time we are getting some pressure on the pentagon to start doing some things that it should do, we let the pressure off by dealing in the way that we do in me i hope you will correct that. I know my time is almost up and i talked about two programs out there with housing and reform. Is it your belief anything nonrelative to reforming the Housing Finance system and dealing with the conservatorship of fannie and freddie, that any of that should be legislated by congress and not done by administrative but executive branch. Is that correct . I think the law needs to be changed. Thank you so much. Thank you mr. Chairman. I want to go into this but first i want to follow up with senator corkers last comments. On this issue of fannie and freddie. I was greatly concerned about legislation that you introduced that allowed basically a recap and release and hearings and that we need to do this through legislation. That recap and release that has greatly enhance the financial position of the hedge fund the recap and release, would there be a system in place that would allow private sector again when things are going well and tax players in 2008 we had to put up billions of dollars. My hope is that you would be working with congress on reform. Thank you senator, i think that various members of both the house and senate have different ideas on fannie and freddie. I am heartened by the that we are all trying to get to the same end which is to protect the taxpayers to make sure that does not happen again. Is not the time to go through but i believe the legislation we introduced would not address that. And there are some others i want to get cleared up with you. Again, last week with mr. Mnuchin one of the things i did like about what he said was, the United States is the preferred currency, United States debt obligations are absolutely awe should never jeopardize that. He said the Us Government should absolutely not prioritize our apushing us uncertainty when it comes to paying our bills. Although in the house, you produce for prioritization is a safe to say were going to repay bondholders at eight higher level than perhaps payments of state or fbi or cia employees. I think that would dramatically undermine this and i think most experts have said that prioritization would be a disaster. Do you still share that view of the prioritization of our debt is a reasonable approach . And wouldnt that jeopardize this in the . I think it is desirable to get to a situation where this the relevant conversation. If we are simply talking about the principles involved i do believe that the gao letter from 1985 still not love a good guidance. I sincerely disagree with you. Perhaps we can continue this. I want to also, i appreciate your comments about Social Security. I would take exception to what the senator from pennsylvania said. It is true that federal revenues are slightly above the average. I would point out that the 50 year average we have deficits every year with everyone at the average. As a matter fact, United States when you consider federal, state and local taxes combined, as at the 31st out of 34 . In terms of total revenues. We can argue, you have also signed a no tax pledge. If youre going to be willing to take a look at revenues on Social Security or revenues in terms of tax reform, are you going to remain faithful to the Taxpayer Protection pledge or do think having all things on the table would be a more appropriate role . Senator very briefly because i know you dont have longer but i think this applies to candidates for office which i am giving up in order if you all see fit to confirm me. I will not be bound by the. Lb bounced on the president the truth and what i believe are options to me. I hope that would mean as you have said here today that that we look at both sides of the Balance Sheet and clearly as you have the various levers and Social Security one of those would be looking at additional revenues. When we met, i am concerned about the administration on federal workers. Many federal workers serve their country, they do jobs with passion and pride. And they view it as a calling. Another president elect or president has put in place a federal employee hiring freeze. And he says that was to address the dramatic expansion and federal workforce in recent years. But mr. Mulvaney i knew aware that the workforce in comparison to the publishing has declined dramatically . And it is smaller now . I was not aware that piece of data. Are you aware that putting the gop nearly one third of the federal workforce is eligible for retirement between now and 2019 to. I was not aware of that. It does not surprise me. You agree that if we are going to recruit and retain the best workers, they will have to do a job that continues to be a challenge as well look at ways that we can get our budget into balance. How are we going to do that when we have got disparity between public and private sector payment when we send these kind of messages about the value and federal workers. And how you reinforce the value statement to the workforce that right now is very concerned. You and i discussed it in the federal government probably to do better in dealing with employees who are exemplary. And better dealing with employees of that fall below our expectations. I look forward to working on this. Congressman, i am new here which means i lived in america longer than i have been in washington. I want to share a perspective. A lot of americans are very frustrated. Not all of them but many of them. They believe our country was founded by geniuses. And it is being run by idiots. They look around and they see incredible things happening in our country. Our people can unravel the human genome. They can take a disease human part and replace it with anyone and make it beat. They can send a person to the moon. But their representatives cannot balance a budget. Like they have to do at home or in the Small Business. Here is what i would like to know. I do not have enough time for you to give me an elaborate answer but if you can give me the points. If you are king for a day, how we balance our budget . Thats a very tempting question senator. To ask any elected official and im trying to remind myself that my goal is to advise the president. I understand, but im asking you. What would we do . We would grow the economy first senator. In fact, that is probably the only way that we ever balance the budget truly given the political situation that exists in washington d. C. Therefore samosas that would like to take a bigger slice of the existing pipe. I do not think that the formula for a healthy economy for their success. For the economy is one. If you grow the economy, if you end up with 10 years or three or four percent growth, youre talking about doubling the size of the economy which doubled the size of federal receipts which allows you to balance the budget. In fact i believe it was mr. Warner or maybe mr. Whitehouse that correctly pointed out one of the times we were able to balance the budget was when the economy was growing. I dont mean to interrupt you have five minutes. Anything else . I would like to find a way to end ways to aif even assume it is 10 percent, within discretionary budget that is 1 billion. 2012, a very accomplished physician, harvard trade ran cms for president obama. He testified before congress that 10 percent of the spending is fraud. Okay. Not just fraud by patients but by providers. In some states, they get two dollars of federal money for one dollar of state money. So for some, not all, there is not an incentive to combat fraud. Is there any way that you can use the power to give them incentive to try and combat medicaid fraud . I do not know off the top of my head. I would like to take a look at that and again, i think i will get specific instructions from the president to explore doing that. One thing about this president is that, he will not tolerate these federal waste and fraud that you mentioned. Okay. I hear from a lot of louisianas and americans, not all but many. They believe that, and i will ask you if you agree to this, they believe part of the problem in American Society today and with our economy, and with our culture, is that we have too many undeserving, and i want to say that again undeserving. We have too many undeserving people at the top getting balance. As sheldon pointed out. And we have too many undeserving, not all, but too many undeserving people at the bottom getting handouts. And the people in the middle get stuck with the bill. And they cannot pay it anymore. Because the Health Insurance is gone up and their taxes have gone up and their kids tuition has gone up. Do you agree with that . Senator, i think this book should be heartened by what they saw out of the president on saturday. Because i believe that was the theme of the inaugural speech that he gave. Those folks who have been forgotten for song will not be forgotten anymore. He will listen to them and if i get the opportunity to work at omb i will do whatever i can to help do just that. Thank you congressman. I think youll do a great job. Thank you senator. Senator kane. Thank you. A great meeting in my office. The rest of the confirmation hearing and all of the confirmations hearings video in our Video Library at cspan. Org. Debating to continue work on them of live Senate Coverage on cspan2
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