[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE PRESIDENT'S FISCAL YEAR
2018 BUDGET
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, D.C., MAY 24, 2017
__________
Serial No. 115-5
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Printed for the use of the Committee on the Budget
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COMMITTEE ON THE BUDGET
DIANE BLACK, Tennessee, Chairman
TODD ROKITA, Indiana, Vice Chairman JOHN A. YARMUTH, Kentucky,
MARIO DIAZ-BALART, Florida Ranking Minority Member
TOM COLE, Oklahoma BARBARA LEE, California
TOM McCLINTOCK, California MICHELLE LUJAN GRISHAM, New Mexico
ROB WOODALL, Georgia SETH MOULTON, Massachusetts
MARK SANFORD, South Carolina HAKEEM S. JEFFRIES, New York
STEVE WOMACK, Arkansas BRIAN HIGGINS, New York
DAVE BRAT, Virginia SUZAN K. DelBENE, Washington
GLENN GROTHMAN, Wisconsin DEBBIE WASSERMAN SCHULTZ, Florida
GARY J. PALMER, Alabama BRENDAN F. BOYLE, Pennsylvania
BRUCE WESTERMAN, Arkansas RO KHANNA, California
JAMES B. RENACCI, Ohio PRAMILA JAYAPAL, Washington,
BILL JOHNSON, Ohio Vice Ranking Minority Member
JASON SMITH, Missouri SALUD O. CARBAJAL, California
JASON LEWIS, Minnesota SHEILA JACKSON LEE, Texas
JACK BERGMAN, Michigan JANICE D. SCHAKOWSKY, Illinois
JOHN J. FASO, New York
LLOYD SMUCKER, Pennsylvania
MATT GAETZ, Florida
JODEY C. ARRINGTON, Texas
A. DREW FERGUSON IV, Georgia
Professional Staff
Richard E. May, Staff Director
Ellen Balis, Minority Staff Director
CONTENTS
Page
Hearing held in Washington, D.C., May 24, 2017................... 1
Hon. Diane Black, Chairman, Committee on the Budget.......... 1
Prepared statement of.................................... 3
Hon. Pramila Jayapal, Vice Ranking Member, Committee on the
Budget..................................................... 5
Prepared Statement of.................................... 7
Hon. Mick Mulvaney, Director, Office of Management and Budget 9
Prepared statement of.................................... 12
Hon. Lloyd Smucker, Member, House Committee on the Budget,
letter submitted for the record............................ 54
Hon. Michelle Lujan Grisham, Member, House Committee on the
Budget, article submitted for the record................... 72
Hon. Barbara Lee, Member, House Committee on the Budget,
questions submitted for the record......................... 90
Hon. Debbie Wassermen Schultz, Member, House Committee on the
Budget, questions submitted for the record................. 93
Hon. Jim Renacci, Member, House Committee on the Budget,
questions submitted for the record......................... 95
Director Mulvaney's responses to questions submitted for the
record..................................................... 96
THE PRESIDENT'S FISCAL YEAR 2018 BUDGET
----------
WEDNESDAY, MAY 24, 2017
House of Representatives,
Committee on the Budget,
Washington, D.C.
The committee met, pursuant to call, at 9:34 a.m. in Room
1334, Longworth House Office Building, Hon. Diane Black
[chairman of the committee] presiding.
Present: Representatives Black, Rokita, Diaz-Balart, Cole,
Woodall, Brat, Westerman, Renacci, Johnson, Lewis, Faso,
Smucker, Ferguson, McClintock, Sanford, Bergman, Smith
Grothman, Palmer, Gaetz, Arrington, Higgins, Boyle, Khanna,
Jayapal, Lee, Carbajal, Schakowsky, Wasserman Schultz, Jackson
Lee, DelBene, Jeffries, Moulton, and Lujan Grisham.
Chairman Black. The hearing will come to order.
Welcome to the Committee on the Budget's hearing on the
President's fiscal year 2018 budget. Today we will hear
testimony from the director of the Office of Management and
Budget, the Honorable Mick Mulvaney.
Good morning, once again to everyone, and thank you for
being here today. I want to especially thank Mr. Mulvaney, the
director of the White House Office of Management and Budget,
for being here today to discuss the President's budget and
spending priorities. And we look forward to hearing his
remarks.
While Article I of the Constitution gives Congress the
power of the purse, the Federal budget is a collaborative
process. The administration, this committee, and our
counterparts in the Senate work together to build a budget that
reflects our unified priorities. For the last 8 years, we have
seen budgets from the White House that reflect the status quo
of more spending, more regulation, and never even trying to
achieve balance. Over the same time period, economic stagnation
lead the Congressional Budget Office to continually downgrade
their projections for economic growth.
And what is the result of more spending, more regulation,
and slower economic growth? It is a large debt burden on the
future generation of Americans, a burden that reflects a moral
failure to face head on our challenges.
This administration and this committee agree wholeheartedly
on our responsibility to improve our country's fiscal situation
and put us on the path to a balanced budget that allows us to
start paying down our national debt.
Our friends across the aisle will no doubt defend the
status quo of the Obama years where the national debt increased
by over $9 trillion, the largest increase of any Presidency.
Their solutions which are to simply keep on doing what we have
been doing are not only unsustainable, they are an abdication
of our responsibility to current and future generations.
Our fiscal situation is not just problematic, it is dire.
According to the CBO, the Federal debt held by the public,
which currently stands at 77 percent of gross domestic product,
will rise to 150 percent of GDP in the next 30 years if nothing
is done. Over the same period of time, deficits will rise from
2.9 percent of GDP to 9.8 percent of GDP. These are levels of
debt and deficits that have never been seen like this before in
American history and are well beyond what the economists
predict would result in a crisis.
The CBO says that maintaining the status quo would, and I
quote: ``reduce national saving and income in the long-term;
increase the government's interest costs, putting more pressure
on the rest of the budget; limit lawmakers' ability to respond
to unforeseen events; and increase the likelihood of a fiscal
crisis,'' end quote.
Let me repeat a piece of that, the last line, quote: Doing
nothing and continuing the status quo will result in a fiscal
crisis. Put simply, the status quo is not an option. And this
committee and this administration are committed to building a
Federal budget that begins to deal with our out-of-control
spending, incentivizes economic growth through tax and
regulatory reform, and makes sure that the government works for
the people, not for the bureaucrats.
Our committee and this administration also agree on the
commitment of funding our military. The threats to our national
and homeland security continue to grow. The previous
administration left the world less safe and secure with growing
threats from all corners of the globe. Ensuring the safety and
security of our Nation is our first and foremost responsibility
of the Federal Government, and we should give our men and women
in uniform the resources they need to complete their mission.
I applaud the President for making our national defense a
top priority once again as our committee and our Senate
counterparts go through this process of building our budget
resolution. The input from the administration officials, such
as Mr. Mulvaney, is an invaluable resource to provide
information background and details on the goals of President
Trump.
Balancing the budget over 10 years presents major
challenges, but also a great opportunity. And for the first
time since I have been serving on the Budget Committee, we have
a President who is willing to take action to reform government
and to get our fiscal house in order.
Our budget resolution is no longer a vision document; it is
a blueprint for building the better America we have promised
our constituents for years. It is our opportunity to show our
real progress in limiting the size and the scope of government,
ensuring our children and grandchildren aren't burdened by our
unsustainable levels of debt, and persevering for a safe and
strong America. I know that working together we can find the
right solutions for the American people.
Thank you. And with that, Ms. Jayapal, you are recognized.
[The prepared statement of Chairman Black follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Jayapal. Thank you, Chairman Black, and vice ranking
member, and also ranking member John Yarmuth [off mic].
Director Mulvaney, it is good to see you. Congratulations
on your new position.
As you know, this hearing traditionally gives the American
people the chance to see the differences between the priorities
and values of our two parties. Those contrasts will be made
absolutely clear today. The Trump budget is shockingly extreme;
the antithesis of what the American people have said they want
from their government. It leaves no question of what this
administration values: greater gains for millionaires and
corporations at the expense of American families, economic
progress, and our national security.
Yes, the President's budget is a betrayal, a line by line
tally of broken promises. But above all, it is a shattering of
dreams and a loss of hope and opportunity for millions of
families. This budget starts by taking away healthcare, then
food, then housing, then education, then job opportunities. For
nearly every American family struggling to get ahead, this
budget makes that much harder, if not impossible.
The level of cuts to investments that Americans need is
astonishing and, frankly, immoral. This budget cuts nondefense
discretionary funding for 2018 by a massive $54 billion from
the already austerity level spending cap. Then the budget goes
haywire, cutting NDD more and more each year until 2027 when
investments are decimated by nearly 30 percent, and that is
without adjusting for inflation. A 30 percent cut in nondefense
discretionary spending, which includes Homeland Security,
education, medical research, veterans healthcare,
transportation, and much represents a total disinvestment in
our Nation and a complete departure from every standard of
responsible governing.
But it gets worse. We know that at least 24 million
Americans will lose healthcare coverage because this budget
includes the Republican healthcare repeal bill. This budget
cuts Medicaid by another $600 billion, that is a total cut of
$1.4 trillion to a program that is the only source of
healthcare for tens of thousands of individuals in every single
congressional district in the country. The vast majority of
those people are children, seniors in nursing homes, and the
disabled.
This budget actually targets help for people with
disabilities, cutting Social Security disability insurance by
as much as $72 billion, despite the President's pledge to not
touch Social Security at all. And it cuts $193 billion from the
Supplemental Nutrition Assistance Program. This is the program
that makes sure our poorest families have at least some chance
to put a meal on the table. It provides just $1.42 per person,
per meal, again, mainly to seniors, children, and the disabled.
The President's budget eliminates or eviscerates 14
education and arts programs. It makes it harder for Americans
to get needed skills to compete for jobs, guts investments in
rural and urban communities, jeopardizes the safety of our
food, air, and water, and leaves roads and bridges to crumble.
The Trump administration makes all these cuts for one
simple and, frankly, disgraceful reason: to hide the fact that
their huge tax breaks for millionaires, corporations, and
special interests will explode the debt, and they even do that
in a dishonest way. This budget relies on absurd economic
projections and pretend revenues that no credible economist
would validate. It provides no real information on tax reform,
other than to claim that it is revenue neutral. I guess this is
the President's ``believe me'' part of his budget.
With all due respect, we aren't going to take the
President's word for it, particularly when no one else will.
And, Ranking Member Yarmuth, would you like me to turn it
back over to you or finish your statement?
Okay. So let me go ahead and finish this. We have been down
this road before more than once, and I know you believe it with
all your heart, but you are wrong. Tax cuts for corporations
and the wealthiest Americans do not pay for themselves. They
drive up our deficits and rob our country of needed
investments, and that is the truth. And it is also true that we
can't trust a budget that sets up false choices.
This budget increases 2018 defense spending by $54 billion,
while cutting NDD by the same amount. We don't have to choose
between updating tanks or textbooks, and we should not be
pitting teachers against soldiers. To strengthen our national
security we have to ensure that our military and American
families have the tools needed for success. And that is our
responsibility, to invest in the future of American families
and help grow our economy.
Education, healthcare, job training, innovation,
infrastructure, programs that help individuals with nowhere
left to turn, and a Tax Code that helps families get ahead.
Those are American priorities and they should be the priorities
of this Congress and this committee.
Thank you.
[The statement of Ms. Jayapal follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Black. Thank you, Ms. Jayapal, and welcome. I know
that there was a little confusion in the time. So welcome,
Ranking Member Mr. Yarmuth. I look forward to hearing
discussion a little bit later.
So, now, I would thank you--in the interest of time, if any
other members have opening statements, I ask that you submit
them for the record.
And I would now like to recognize Director Mick Mulvaney.
Thank you for taking your time to come here today. The
committee has received your written statement and it will be
made part of the formal hearing record. And you will now have
10 minutes to deliver your oral remarks, and you may begin when
you are ready.
STATEMENT OF HON. MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT
AND BUDGET
Mr. Mulvaney. Chairman Black, thank you so much for having
me. Vice Ranking Member Ms. Jayapal, thank you for the opening
statements. Ranking Member Yarmuth, thank you for making it. So
I wouldn't dream of doing this without you. So thank you all
for having me here today.
It is really an honor to be here, to be back in this
committee. For those of you who I don't know, I served in this
committee for 2 years. And it is an honor and a privilege to be
here on behalf of the Trump administration.
Mr. Lewis, welcome. You are sitting in my chair.
So it is an honor to be here. I am not going to read my
opening statement. I am going make a couple of comments and we
will get right to the question and answers.
When we looked at the budget for the very first time, I
picked it up on Friday, the New Foundation for American
Greatness, I spent most of the weekend, as you can imagine,
reading it. And as I went through it, it struck me that we
could have come up with a different title. And the title could
have been the taxpayer first budget. Because the first time in
my memory, at least, this is a budget that was written from the
perspective of the people who actually pay for the government.
And we went line by line through what this government does
and asked ourselves, can we justify this to the folks who are
actually paying for it? If I am going to take money from Mr.
Diaz-Balart in taxes, and I am going to spend it on a program,
can I justify to him actually spending that money? If I am
going to take money from you, Ms. Schakowsky, and do the same
thing, can I justify it to you? Can I look you in the eye and
say, I need to take this money from you in order to give it to
a disabled veteran? And I think that I can.
I am not sure I could look at Mr. Woodall and say, Mr.
Woodall, I need to take some of your money so that I can give
it to a program that is completely ineffective, doesn't help
anybody and is rife with waste, fraud, and abuse. And that is
the perspective that we brought to this bought from the very
beginning. And maybe that is what is new about the New
Foundation for American Greatness budget.
The other thing that is new, by the way, is that it does
balance. And for those who have been here for a long time, you
know that it has been a long time since the President's budget
has balanced. It certainly hasn't happened since I arrived in
Washington, D.C., in 2010.
Someone mentioned on the news today this is a moral
document, and it is. And here is the moral side of it: If I
take money from you and I have no intention of ever giving it
back, that is not debt, that is theft. If I take money from you
with an intention to pay it back and I can show you how I
intend to pay it back, that is debt. And what we have been
doing for too long, both parties by the way, in this city have
been taking money from people without laying out a plan for how
we are ever going to pay it back. And we start doing that with
this budget. This budget does balance within a 10-year window.
Something that is completely new in this town.
What is the foundation? The foundation for the plan is 3
percent growth. In fact, that is Trumponomics. People ask me,
you know, you are the budget director, what do you think about
Trumponomics? Trumponomics is whatever can get us to 3 percent
growth. And I can assure you when I am in the Oval Office with
the President and we are talking about trade policy, we are
talking about energy policy, we talk about tax policy, we talk
about healthcare reform, we talk about budgets, we are figuring
out--trying to figure out a way to get to 3 percent growth.
I have news for you, both parties: If we do not get to 3
percent growth, it is unlikely we will ever balance the budget
again. And that is not a plan. That is not a plan for the
future. That is not moral, to continue to take money from
people without having a plan to pay it back. So we do
everything we can to try and get to 3 percent growth. I look
forward to the questions today about how we do that.
We do all of this, by the way, and still fund the
President's priorities. You have heard it by now we wanted more
money for national security, border security, law enforcement,
veterans, school choice, even paid parental leave. For the
first time ever, President Trump, the first President of either
party, is proposing a national paid parental leave program.
There is $20 billion in this budget to do that. We don't touch
Social Security and Medicare, following through on his campaign
promises.
And we're able to do all of that and still balance. Why?
Because what we did here is try and change the way that
Washington looks at spending. We no longer want to measure
compassion by the number of programs that we have or the number
of people that are on those programs. We want to measure
compassion, true compassion, by the number of people we help to
get off of those programs. We don't want to measure our
commitment to the country by the amount of money that we spend,
but instead on the number of people that we help get off of
these programs and get back in charge of their own lives. That,
that is what we think makes this the American Greatness budget,
because we are going to try and get the country back to where
we have a healthy economy, people are working again, people are
optimistic about the country again.
I remind you, if you are under the age of 30, you have
never had a job as an adult in a healthy American economy. And
a healthy American economy is very, very different than what
you have seen for the last 10 years. And the dynamism and the
optimism that comes from that is what this administration is
about. It is what this President promised. It is what we are
going to do everything in our power to deliver, and the budget
is a start to that.
So with that, Madam Chairman, again, thank you for having
me today. I look forward to the questions and in explaining the
budget to members.
[The prepared statement of Mick Mulvaney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Black. Thank you, Mr. Director. And I look forward
to the conversation. And thank you for yielding back those 5
minutes, and members will have more time and opportunity to ask
you questions.
So now we will begin the question-and-answer period. And I
am going to begin with the first question. You mentioned,
during your opening comments, about a moral obligation of
balancing the budget. And around here in Washington, you will
hear some folks say, this is just kind of a quaint anachronism
that we should balance a budget, that somehow that would not be
something that would be very important.
And you mentioned about it being a moral obligation. I
certainly as a mother and a grandmother and hopefully a great-
grandmother some day do feel that it is our moral obligation to
make sure that we leave a strong country without huge deficits
for our children and grandchildren. And so will you talk a like
bit more about your view on the fiscal and economic well-being
and what will happen if we continue these chronic budget
deficits and ever-rising debt on the moral issue for the future
generations?
Mr. Mulvaney. I will approach it this way. Thank you,
Chairman Black. Everybody around this table owes the Federal
Government $60,000. I have three 17-year-olds. Okay? They are
not even out of school yet and they owe this government $60,000
each. Every man, woman, and child in this room owes the Federal
Government $60,000. I am not sure if they know that. I am not
sure if we have done a good job as both parties of explaining
to people what government truly costs. In fact, I happen to
believe we have done a really good job of hiding the true cost
of government from the American people. I don't believe that
people are willing to pay for as much government as they have.
And I don't think that we have been entirely honest with them
for about the last 40 years on what government truly costs.
I and do think there is a moral imperative to tell them.
Say, look, this is how much it costs and this is how much we
have to take from you in order to do this. Do you really want
us to take from you that much money or do you want us to try
and find a way to balance and to spend less? And balance is
something that it seems foreign in this city, which completely
stuns me. I don't know how many of you used to be on the State
legislatures. I was. I know that Governor Sanford was when he
was my Governor in South Carolina. But a balanced budget was
the ordinary course of business for just about everybody in the
world except this body. States have to do it, families have to
do it, businesses have to do it. My goodness, my church has to
balance its budget or else they cease to function.
And I think there is a disconnect between the American
people and the government when we don't lay out a path to
balance. When you talk about the financial impact of that,
Madam Chairman, what you look at as we go forward is every
single year we talk about more and more of our money going to
pay interest payments on the debt. And I don't know the exact
numbers, but at some point in the very near future, we expect
to be paying more money for debt than we do for defense. And
that worries me.
I was in, not this room, because this is a temporary room,
but I was in the old Budget room my very first year when I saw
the Chairman of the Joint Chiefs of Staff sit in front of this
committee and say that he thought the greatest threat to this
Nation was the national debt. Great countries are not destroyed
from without; they rot from within. And that debt, that
crushing debt that we have on every man, woman, and child is
part of that rot, and that is what we are trying to address in
a very candid, open, and honest way in this budget.
Chairman Black. And I do appreciate that. And I appreciate
you putting it in a context as well, that we would look at our
students in high schools and say to them, would you like to
have a $60,000 car or would you like to just pay your share of
the debt to the Federal Government? So I appreciate putting it
in a real context where folks understand that when we talk
about trillions of dollars, I know even before I came here to
Congress and serving in the State legislature, we talked about
millions and billions. We don't talk about trillions of dollars
in State legislatures.
And, honestly, you sometimes think that is a fictional
amount, because people cannot wrap their heads around trillions
of dollars. But when you put it in a real context of your share
of that is $60,000, and you are really, at the end of the day,
not paying off even the debt that we are continuing to build
up.
Along with that, I do want to say it is gratifying to see
that the administration is taking a stand on some Federal
entitlement programs and reforming them. Do you consider
entitlement reform an indispensable part of reaching that
balanced budget, especially as we look at how we are only
spending one-third of our total dollars on everyday spending
and the rest of it is over in that column with the debt and the
entitlement, Social Security, Medicare, and the other
entitlement programs? So do you consider that an indispensable
part of what we must be doing? And along with that, do you
agree that even if we weren't facing a fiscal crisis, that
reforming these entitlement programs really is the right thing
to do?
Mr. Mulvaney. Let me answer it this way, Chairman: I don't
believe it is possible. In fact, I know it is not possible to
balance the budget solely using the discretionary portion of
the budget. There have been years that I was here, 2010, 2011,
I believe, where we could have taken discretionary spending to
at or near zero and we still would have had a deficit.
In our budget, we do address mandatory spending, what some
people call entitlement spending, but we do not address the two
that the President simply didn't want to touch, which was
Social Security retirement and Medicare. I have told this story
many times, I actually sat across the desk from him in the Oval
Office with my list of mandatory reforms. And at the end of--I
think we had four meetings on it, he would go, yes, yes, no,
no, no. And the noes were all Social Security retirement and
Medicare. And when I pressed him on that, he said, look, I made
a promise. I made a promise to people that I would not touch
those. And we didn't.
And I will be perfectly frank with you and candid: I didn't
think we could balance the budget, and that is why I was
extraordinarily impressed with my team when they were able to
figure out a way to balance the budget without touching those
things. I will tell you it is probably the last time we could
do that. It will be very difficult in the future to do that
because of the role that those programs do play in our future
spending, but I was excited to be able to keep the President's
promise.
By the way, the budget is nothing more than a collection of
his promises. That is how we wrote it. If he said he wanted to
spend more money on something during the campaign, we spend
more money here. If he said he wanted to spend less, we spent
less here. If he said he wanted to add to Defense, he wanted to
add to border security, wanted to add to school choice and
veterans affairs but didn't want to add to the deficit in year
one, that is the framework for the budget.
But to your larger point, yeah, you cannot address our
long-term drivers of our debt without looking at the mandatory
side of the budget. It is three-quarters of what we spend going
to 80 percent in the near future. So, yeah, you would be hard
pressed to be able to balance the budget without looking at
mandatory spending.
Chairman Black. And along those lines, and then I will
conclude my questions here, but along those lines, we sat and
talked privately about some of the ideas that you had. And you
shared with me that we don't want to hurt people who really
need the kinds of services that we want to be sure they get. In
other words, we don't want somebody who is unable to afford
their heat and air conditioning to go without getting those
services, but there are wastes in these programs. And I think
that is important that we talk about the waste in the programs,
at the same time acknowledging that we are not heartless
people. We want to make sure we take care of people. We also
want to make sure our dollars are well spent.
Would you give an example of it, just in the LIHEAP
program, about how there are ways that we need to make sure
that we are cleaning up?
Mr. Mulvaney. Sure. And I know it fits a certain narrative
that our party doesn't care about poor people, and that is--
that seems to always filter out during budget time. In fact, it
filters out all the time.
I believe in the social safety net. I really do. I actually
think that it helps us get to that 3 percent growth. And I have
made that exact argument to the President, that a healthy
social safety net gives people that confidence that we need
them to have in order to take risks, in order to start your own
business, in order to go out on your own, to bring the sort of
dynamism that we need into the economy to get 3 percent growth.
And that a healthy safety net is part and parcel of that. And
we can absolutely afford to do that for folks who really need
it.
Part of the difficulty, I think, and we will talk about
this, I know, as we go through the various programs, though,
is, are there folks who are on these programs who shouldn't be?
Again, when we have a chance to go into more detail, I will
answer your specific question about LIHEAP. Eleven thousand
dead people got this benefit a few years ago, dead people. One
of your States, I can't remember which one it is, has a
requirement that they approve three-quarters of the
applications, regardless of merit.
When you look at that through the perspective of the folks
who pay for the program, it is an entirely different
perspective than, oh, my goodness, you are going to put--you
are going to put people out on the street or people are going
to freeze to death. No, they aren't. We are not going to kick
any deserving person off of any meaningful program. We want to
help people just as much as you do. Republicans care about poor
people as much as Democrats, just the same as we care about
clean air and healthy drinking water.
But we look at it from a different perspective, which is to
balance those who receive the benefits with the folks who pay
for the benefits. And you show me a program where 11,000 dead
people are getting benefits, I have a problem with that,
because I think taxpayers would as well. I look forward to
having those conversations as we move forward.
Chairman Black. Thank you, Mr. Director.
And I now recognize Mr. Yarmuth for questions.
Mr. Yarmuth. Thank you, Chairman Black. And, Director
Mulvaney, nice to see you. Welcome back to the committee, and
thank you for your work.
The first thing I want to do today is thank you, because
one of the things that I think you have done by submitting this
budget to Congress is highlight some incredibly important vital
programs that--and investments that the Federal Government
makes that help working families throughout this country and
that support much of the economy in this country.
You know, it is one thing to say, well, we can do without
CPB, we can do without NEA, we can do without NEH, we can do
without CDBG. And people just hear initials and they don't
really know what we are talking about. But when they say would
you like arts programs in your community? Would you like
historical displays in your rural community? Would you like
Meals on Wheels to help your seniors survive? Then they
understand that these are critical, critical programs that are
worthy of government investment. So I thank you for
highlighting that for the American people.
I just have to respond to one thing. That guy who is
deciding whether to buy a $60,000 car or pay $60,000 to the
government, I wonder what he would answer if you said, you can
have a $60,000 car or your senior parent can come live with
you, because the money that would put her or him in a nursing
home that is paid for by Medicaid is not going to be available
to you. I think you would probably get a little bit different
perspective on that.
And, Mr. Mulvaney, you said on several occasions that you
would not ask--you could not ask a single mother, I think you
said in Detroit, but it obviously doesn't matter where that
single mother would be, whether she would be willing to pay for
her share of public television or NEA and so forth. And I would
say most single mothers that I would know, if you asked them
whether they would pay $1 a year for children's programming or
would they rather pay $2,000 a year for their share of the
Defense budget, they wouldn't have any problem paying that $1
for children's programming, but they might balk a little bit at
the $2,000 payment for Defense.
So what we are really talking about in this budget, I
think, is this is the age old guns versus butter argument, and
I think we will continue to have that debate. And I think it is
really unfortunate in a way. And I thank Ms. Jayapal for that
impressive rendition of my opening statement, but this really
is pitting one against the other, this budget. That is what it
does. It pits Defense investment against investment in
everything else. And that is a frightening concept, I think,
for this country if we have to ignore the portion of the
Federal budget that invests in people, whether it is job
training, education, important medical research, and other
innovation, or whether we buy guns. But that is what we are
being asked to do in this budget.
So, you know, you have justified many of the cuts in this
budget by saying that there is no evidence to prove that these
programs actually work. For example, you have suggested that
Meals on Wheels doesn't work. I would think that just by nature
of the fact that you are keeping people alive by feeding them
is pretty good evidence. But beyond the question of morality of
providing meals to seniors, there is abundant evidence that it
does work, including evidence that even small increases in that
program pay dividends in the form of lower Medicaid spending.
Granted, there are many other programs where the evidence may
be more nuanced, but that doesn't mean the programs don't work
and should be eliminated, pulling the rug out from working
people, children, and the elderly who need them.
So if direct empirical evidence that something works is the
only standard for funding, then what is the direct empirical
evidence that an additional submarine or one more F-35
increases our security? That kind of evidence would be
difficult, if not impossible, to produce. Does that mean we
shouldn't buy submarines or F-35s? No, of course not. We rely
on a comprehensive body of information, including opinions of
our military leaders and national security and foreign policy
experts to make those decisions.
So the administration is asking for an additional $54
billion above the caps. And there has been plenty of evidence
and reports indicating waste and mismanagement at the Pentagon,
including it is the only agency that can't pass an audit, there
have been hundred of billions of dollars in weapon system cost
overruns, reports of significant bloat and the overhead. The
Defense Business Board concluded $125 billion in savings over 5
years could be achieved. The GAO has identified a myriad of
high-risk management areas in DOD's business operations. And
just this past weekend, the Washington Post reported on gross
overpricing of fuel in DOD, which created billions of dollars
in reserve cash for the Pentagon to spend on new priorities.
So my question to you is, how have these reports of
mismanagement and waste factored in the administration's
decision to add $54 billion for national defense?
Mr. Mulvaney. A couple of different things to that, Ranking
Member Yarmuth. Thank you for the questions. On the DOD, a
couple of things. I am just as interested and you are I
believe, in waste at the Department of Defense. And I am happy
to announce, once I got over to OMB, I started asking questions
about what we are going to do about that. And I am told by the
DOD--in fact, I think they just filed a confirmation of this a
couple of weeks ago--that they intend to be fully audit ready
by September of this year. That is pursuant to law I think they
are required to hit that deadline. They told us they are ready
to hit that deadline. In fact, I think certain subparts of the
Department are already ready. But I do look forward to continue
to work on those with you.
Regarding Meals on Wheels, I will come back to that for a
second, you know I have no intention to embarrass you because
you are a friend of mine, but I do believe that the article
that you read about that has been withdrawn by the Washington
Post. We never said that Meals on Wheels was ineffective. As is
too often the case, the story got printed like this and the
redaction got printed like this.
Mr. Yarmuth. Okay.
Mr. Mulvaney. But let's talk about the Meals on Wheels,
because we don't reduce it. Okay? Most of that is funded
through, oh, it is an HHS program--no, ma'am, CDBG is not--the
primary funding for Meals on Wheels comes through the senior
nutrition services. I believe that is at HHS, it could be HUD.
I lose track of the alphabet soup.
There is no reduction in that program. Yes, we do cut the
CDBG program, but that is a program that accounts for less than
1 percent and it is optional by the States. We block grants for
the States, and some States do choose to use some of that money
for Meals on Wheels. But that funding accounts for 1 percent of
total Meals on Wheels. So I just wanted to clarify that.
Regarding the Corporation for Public Broadcasting, look, I
mean, my mom tells me I saw the very first Sesame Street. Okay?
In fact, I was curious that there is a printer in the back room
here with Bert's picture on it. They have evidently named the
printers here Ernie and Bert. It is a for-profit corporation,
and it does extraordinarily well. I don't know if Henson
Associates is owned by Disney or has a licensing agreement with
Disney. I can assure you Big Bird makes more money than
everybody in this room. But when I do go to that family in
Grand Rapids and say, look, is this what you want your money to
go to? I think they might tell me no, that maybe they can
afford to do it without us. So that is why I talk about we are
looking through those----
Mr. Yarmuth. Would you think the same family in Grand
Rapids would say, oh, I am very happy paying $430 million for
military bans?
Mr. Mulvaney. I think that when we look at the priorities
that the President has given us--it is not just Defense, by the
way. You said all of the money is going to Defense, and it is
not. But I will answer your question, then I will fill in some
gaps.
Yeah, I think folks understand that a function, a proper
and appropriate function of the government is to defend the
Nation. I think, in fact, if we got together and came up with a
list, if everybody from every different wing of both parties
came up with a list of what they thought the priorities of
government should do, my guess is defending the Nation would be
fairly high up on everybody's list.
Mr. Yarmuth. Everybody on both sides of this committee, I
am sure, this Congress.
Mr. Mulvaney. I think one of the knocks against your party
is that you don't believe in national defense. I don't happen
to agree with that. I know that you think it is a priority just
like we do. Okay. So I think that family in Grand Rapids, if
you ask, do you think some of your money should go to defending
the Nation, the answer would be yes, sir.
Mr. Yarmuth. Oh, no question about that. I am just asking
about military bans, because you are cutting out NEA and NEH
cultural enrichment programs, and then you have got this other
program that I would argue really provides no service.
But let me say one other thing, and this is just in
relation to the methodology that was used here. And I think the
media are doing a pretty good job of documenting many of the
problems with the assumptions that were made in this budget:
the 3 percent growth rate that no economist thinks is
reasonable; the possible double counting of $2 trillion; the
notion that tax cuts pay for themselves, which even
conservative organizations don't necessarily support. But I
just have to repeat what was written today by Michael Grunwald
when he said, you know, I can say that I want to dunk, and I
can make the assumption that I am going to grow a foot and
return to the athleticism of my 20s, but that is probably not
going to happen. And I think that is what many of us are
concerned about with the construction of this budget, it relies
on things that just aren't going to happen. So to make the
claim that it balances with basically fantasyland predictions,
to us is a claim that is not valid.
So I thank you for your appearance, and I yield back.
Mr. Mulvaney. Thank you, Mr. Ranking Member.
Chairman Black. Thank you, Mr. Yarmuth.
I now recognize the vice chair of the committee, the
gentleman from Indiana, Mr. Rokita.
Mr. Rokita. I thank the chair.
And, Mick, it is good to see you back at committee again. I
really appreciate the leadership that you and the President and
the administration is providing. As you said in your opening,
you are putting forth priorities. And they are priorities that
are responsible in light of the fact that we are $20 trillion
in debt going to $100 trillion before too long.
I also take notice that you said this is probably the last
budget we are able to do that. That is to say if we implemented
every word of your proposed budget or something similar, very
similar in terms of the numbers--we reflect our Article I
priorities--that means in 10 years, we are going to have to
look at Social Security, Medicare, again look at Medicaid
perhaps, in order to be responsible and sustainable again,
because those three programs are eating up so much of our
budget.
And I really think that Republicans--when we started out,
Mick, 6 years ago, we were saying the same thing as the
President, we don't want to effect anyone on or near to be on
these programs. But we are looking for something to do for the
next generation so that these programs are strengthened,
sustainable, and around. And not speaking for the President, of
course, but that is how I interpret his promise. In fact, we
are doing the responsible thing and are saying the same thing.
And I also appreciate your announcement that DOD will be
auditable by the end of this year. I think that is something
that you and I both care about.
And I thank you for our prioritizing school choice,
something I work on in the K through 12 Education subcommittee
that I chair. We stand fully ready and behind what the
President wants do to make sure that parents can pick the
choice that is best for their kids and not be shackled to a
particular ZIP Code. When parents have a choice, you know, the
kids have a chance. And I thank the President and you for doing
that.
I want to focus something that is come up in my
Transportation Committee that I am also on, and that is this
ATC privatization. When the CBO scored H.R. 4441 last year,
which was the AIRR Act, CBO said that privatizing air traffic
control would cost nearly $20 billion over the 10-year window.
And if our goal is to reduce deficit and not add to the debt,
like you said, why are we embracing things that are going to
cost $20 billion?
Mr. Mulvaney. Thank you for the question. And by the way, I
will apologize in advance to addressing all of you today by
your first names. It is a bad habit I got into when I was a
Member. I am going to try and call you Mr. Rokita. If I call
you Todd, I apologize.
Mr. Rokita. I am going to call you Mick.
Mr. Mulvaney. Yup. And I have been called a lot--you have
called me a lot worse, as I recall.
Here is why we do it: Because we think the current system
is broken and we think it supports the expenditure. When we
look around the world, we look at the technology, when it comes
to air traffic control, we are behind the curve. We are way
behind the curve, as a matter of fact. And we do support the
efforts that are currently moving through the House.
Mr. Rokita. With regard to that, I fly in the system, I use
the system, 145 hours a year that I am flying in the system,
not just as a passenger. And for the size that we are, which is
the biggest in the world, it works well. We continue to search
for, many of us, the actual problem that it is trying to solve.
We don't think really one exists. How you can say Canada, like
I think your counterpart mentioned the other day, Gary Cohn,
said, quote, ``Everyone else has done it, so we know it is
relatively easy to do,'' unquote.
So that is the view of the administration that--he was
referencing Canada, by the way, which is one-third the
transactions and the size of our system. Just because it was
easy to do it--and it took Canada nearly a decade, by the way--
that all of a sudden it is going to be easy for us to do?
Mr. Mulvaney. I don't think anything on that scale, Mr.
Rokita, would be easy, but I do think the system that you see
in other countries that is much more modern is a satellite-
based system, instead of a ground-based system. It is scalable,
but you can take it up to something----
Mr. Rokita. Yeah, but you don't need to take the governance
and the dispassionate third party that is the FAA to decide
disputes in an ecosystem that has different interests, and
sometimes a competing interest, and turn it over to--it is a
monopoly, and you are going to turn it over to the airlines is
the problem. That is going to be the effective result of this
board. And so that is concerning.
But do you guys support all parts of that ATC privatization
proposal, even the labor agreement that is been codified in the
proposal?
Mr. Mulvaney. Yeah. Mr. Rokita, I don't get into that level
in my budget, because we look at the monetary impacts of the
proposals, not the----
Mr. Rokita. Well, that is part of the $20 billion cost is
this labor agreement that you are taking from the FAA, the
controllers, and you are actually codifying it and baking it
into law, if you--you know, if you agree with that part of the
proposal, which was my question.
Tax rates on this very thing, the budget states that you
will work with Congress to establish successor tax rates if
this new ATC corporation is created. Does the administration
have a general idea of what those tax rates would be, and would
the administration support moving to a user fee for all
segments or any of the segments instead of creating new tax
rates?
Mr. Mulvaney. And I am not trying to dodge your question,
Mr. Rokita, it is just we don't get to that level of detail. I
understand that Secretary Chao I think is on the Hill today or
tomorrow. You may get a chance to ask her that question as
well.
Mr. Rokita. Okay. Well, these just go--this goes to the
bottom line budget numbers, so that is why I asked.
Mr. Mulvaney. Yes, sir.
Mr. Rokita. Mick, thanks for being here.
Mr. Mulvaney. Thank you.
Chairman Black. The gentleman's time has expired.
And I now recognize the gentleman from New York, Mr.
Higgins, for 5 minutes.
Mr. Higgins. Thank you, Madam Chair. And welcome, Budget
Director Mulvaney.
Under your budget, 3 million wealthy Americans get a
$213,000 tax cut; 240 not so wealthy Americans get a $210 tax
cut. I appreciate all the concern about debt, but the White
House budget increases the national debt by $5.5 trillion over
the next 10 years, this according to the nonpartisan committee
for responsible Federal budget. Economists right, left, and
center say the tax cuts don't pay for themselves and they never
have.
You want 3 percent annual growth, so do I. The
Congressional Budget Office projects lower than 2 percent
growth each year over the next decade. You want growth in the
United States economy, you have to invest in that growth.
I think China is serious about their growth and I don't
think that we are. And let me explain. China's America's
largest trading partner. Last year, we sold $115 billion to
China, and they sold to America $462 billion. Our trade deficit
last year with China was $347 billion for stuff, for goods.
China wants to overtake the United States as the global
economic leader. China just announced a $1 trillion
infrastructure investment to open up China to 47 other Asian
countries to sell the stuff they make to 47 new markets much
more efficiently.
Under your budget, you want $1.4 billion to build a $40
billion wall that we were told that Mexico would pay for. Your
budget spends $3 billion a month for a 16-year war in
Afghanistan. In response to a $2 trillion need for American
roads and bridges with a pathetically weak $200 billion, maybe.
China is making an aggressive move to challenge the United
States' global leadership. And the President in his first
budget does nothing, absolutely nothing to seriously grow the
American economy and to reclaim economic share from China and
other countries.
Your thoughts on that.
Mr. Mulvaney. Again, you have given me a bunch to work
with. Let me take them in turn, and we can backfill if you
would like to.
You talk about investments in China. Investments are
absolutely critical, absolutely critical to get economic
growth. We all agree on that. I think the difference between
you and I and China and myself might be where we think the most
effective investments are made. We happen to believe that
private capital investment is always more efficient, more
effective, and more accountable than government investment. And
when you say that we make absolutely no provision for investing
in this country, sir, I have to disagree. The whole tax plan
that we have come up with is designed to try and drive capital
investment, businesses investing in new technology, investing
in people, trying to figure out new markets; that that is a
much more effective way to get to 3 percent growth. And I can
assure you that we are fairly confident that we can beat the
Chinese at that.
Regarding the trade deficit, we share your concerns. And I
think that is why you have seen a focus on trying to rebalance
some of our trade agreements, renegotiate some of our trade
agreements. We have made some small progress on that already in
the first couple of months. You have seen some progress, I
think, on some agricultural exports to China.
You mentioned that China is doing a massive $1 trillion in
infrastructure, and we are only doing a--I can't remember what
the----
Mr. Higgins. $200 billion.
Mr. Mulvaney.----$200 billion. And what I would point out
to you is that we are proposing to figure out a way, and there
are ways, to leverage that, to at least a trillion dollars
worth of spending. Let tell you how that is. Let me give you an
example of how that might be.
You are a governor and you want to build a road, okay, and
the road is going to cost you $100 million. Okay. And you have
tried to figure out a way to pay for it and you just can't. And
you can only raise $80 billion--$80 million. What if we kicked
in the extra $20 million? That is a $100 million road that
would not have otherwise been built with a $20 million Federal
investment. That is a 5 to 1 return on that investment.
Mr. Higgins. Let me just reclaim my time, respectfully,
because I only have a few minutes.
We spent $108 billion rebuilding the roads and bridges of
Afghanistan. We spent $78 billion rebuilding the roads and
bridges of Iraq, and they were all deficit financed in the
traditional way that goes back to Lincoln and how you do it. He
called them land improvements. You issue debt over the length
of an infrastructure project. Cities, villages, towns, and
States do it all the time. And what the infrastructure
investment does, sir, it unleashes the resources of the private
sector, and you see that from Buffalo, New York, to Boston,
Massachusetts----
Chairman Black. The gentleman's time has expired.
Mr. Higgins. So I just think that we need a more serious
attempt to get away from building walls and build bridges and
roads that are in desperate need of repair throughout America.
Chairman Black. The gentleman's time has expired.
Mr. Higgins. I yield back. Thank you.
Chairman Black. I don't mean to interrupt when you are
making a comment. I really appreciate the fact that you want to
finish your comment. But if I could ask everyone to try to stay
within the time, because these committee meetings do run very
long, and I know everybody has other meetings they need to go
to.
So I now recognize the gentleman from Florida, Mr. Diaz-
Balart, for 5 minutes.
Mr. Diaz-Balart. Madam Chairwoman, thank you very much. Mr.
Mulvaney, good to see you, sir.
Let me first thank you for being accessible. You have been
exceedingly accessible to all of us who have had questions,
issues, and that is refreshing and grateful. I am not going to
talk to you about some of the issues. You know that in my other
life I was an appropriator, I chaired THUD, and will have an
ample opportunity to talk. And I know that the President and
you are emphasizing again infrastructure, and that is something
that I am very happy about, and we will have ample opportunity
to talk about in detail.
So let me kind of shift to talk a little bit about national
security. I am pleased that this budget recognizes the
importance of our military and national security. I don't have
to tell you that for the number of years in the last
administration military spending was, in essence, was held
hostage to nonmilitary discretionary spending. That is
something that was broken, fortunately, in the 17 Omnibus that
was just passed. And I don't have to tell you, sir, about the
growing threats around the world, how the world is in flames.
And again, I believe that having a strong military is essential
for our security, for the stability of the world, for ourselves
and our allies, and the United States must continue to lead.
And I also believe that, by the way, part of however that
is investing not only in defense, but also in targeted soft
diplomacy and funding there. Obviously, a big part of having a
safe world and a safe Nation is that when the President of the
United States sets a red line, that that red line is enforced.
So let me talk to you a little bit about, again, where you
see that spending, military spending being, going, how you see
the future of our Armed Forces. That is one issue that I would
like you to elaborate a bit on.
The second thing, and if we have some time and I am going
to open it up to you, is I keep hearing that 3 percent growth
is not possible anymore in the United States of America. We
have to give up on 3 percent growth for the future, for our
children, and our children's children, that that is not
reasonable anymore. I refuse to acknowledge that and believe
that if we do some things, that my 11-year-old son will
inherent the same country that we inherited, which is not a
country growing at 2 percent growth. And the forecasts are that
if we don't change a track, that that is exactly what we are
going to be condemning our children for.
So if you would talk a little bit about, obviously, you
know, tax reform, reg reform is key, domestic energy production
is key, a little bit as to how you foresee this budget and,
frankly, this administration, looking at ways to make sure that
our kids do not inherit what some believe is inevitable, which
is a country that will never grow above 2 percent.
Mr. Mulvaney. Thank you, Congressman. A couple of different
things that you asked me. Where we thought the defense spending
is headed and, of course, what is driving all of this is the
President's promise. And I will come back to this again and
again during the testimony today, the President's promise to
undo the sequester. And that was what drove the decision.
The top line spending number that you see in our budget,
which is $603 billion this year for defense, I think is the
exact number it would have been but for the sequester. So that
is what we see is a presequester spending level, informed by
what is going on right now. We are in the middle of our new
national defense strategy, and we are looking forward to
getting that information from Secretary Mattis.
The President also made promises, again, coming back to
that theme on the campaign trail, about the size of the Forces.
And you will see funding to try and get us in that direction. I
will be perfectly candid with you, it is very difficult to do,
given some of the industrial base that we have now, but we are
working on ways to try and address those problems.
So the President is just as committed as you are to trying
to figure out a way to fix some of the damage that may have
been done during the previous administration within the Defense
Department.
Regarding 3 percent growth, I am stunned. I mean, there was
an article the other day, I think again in The Washington Post,
said it was an outrageous assumption. How pessimistic do you
have to be to assume that 3 percent growth, which is less than
the historical average going back to the founding of the
country, less than the historical average going back to the end
of World War II, that that is somehow unreasonable? What does
it say about the previous administration? What does it say
about the CBO, about their view of the country that they don't
think we are ever going to be able to do that again?
We refuse to accept it as well, Congressman, as you
mentioned. We think that if that is where you are, then don't
accept it. Help us figure out a way to get back to 3 percent
growth. Taxing doesn't do it, but come up with other ideas and
work with us and try to figure out a way to get to 3 percent
growth, because everybody around the table will benefit in
terms of your role as lawmaker, every one of your children will
benefit in your role as parents. Three percent growth should
not be something we are just sort of talking about; it should
be what drives everything that we do.
Mr. Diaz-Balart. I yield back the balance of my time.
Chairman Black. Thank you.
I now recognize the gentleman from Pennsylvania, Mr. Boyle,
for 5 minutes.
Mr. Boyle. Thank you, Madam Chair. And welcome back, Mick.
There was something I wanted to ask you about. You said a
few moments ago that we shouldn't worry about Sesame Street and
the rest of the PBS programs because Big Bird is making more
money than any of us in this room. Well, I guess the good news
is that if Big Bird really is a billionaire, he is standing to
get a huge tax cut from the Trump budget that does more to help
billionaires and less to do working people and middle class
people that happen to populate my district.
I want to key in on one broken promise of this budget, and
that is as it relates to transportation and infrastructure. You
know, many principal conservatives, such as yourself, don't
necessarily agree with a big transportation and infrastructure
plan. And I respect that viewpoint.
President Trump is someone, though, who clearly does. When
he came dozens and dozens of times to my State of Pennsylvania,
he talked, frankly, like a Democrat and said things that I
happen to agree with and many of us agree with on the need to
repair our historically decrepit infrastructure, which the
American Society of Civil Engineers has given us a D plus. We
don't even rank in the top 20 anymore in the world. That should
bother all of us as Americans.
So President Trump, as a candidate, talked about a $1
trillion infrastructure plan. When the Democratic nominee for
President released her plan, he as the Republican nominee
criticized it, not for spending too much, a historically
Republican position, but for spending too little. Well, here we
are now with the budget plan. And instead of having that $1
trillion plan, something that I would sincerely like to work
with him on in this administration in a bipartisan way, instead
it is actually $200 billion. Just a fraction of the $1 trillion
that he talked about and that is the bare minimum that we need
as a country, according to the experts.
And it turns out that that $200 billion isn't even real,
because included in the same budget is a $95 billion cut in the
Highway Trust Fund. I don't think anyone driving America's
highways drives them thinking, boy, we are spending too much on
highways, these are just so state-of-the-art and don't need any
repair.
So I want to ask you about that, about why it falls so
short of what Donald Trump says, the candidate.
And I also, before you do that, just want to make a point
about spending and investment. Not all spending is the same.
Granted, if someone took $60,000 and spent it on some sort of
luxury car, that would be, while perhaps fun, wasteful
spending. That has no return on investment. It depreciates the
moment you buy it. However, if you take instead that amount of
money and invest it, for example, in the Community Development
Block Grant program--there is one program I know about in the
neighborhood that I grew up in in Philadelphia, an area that
has been overlooked for decades. They took this small Community
Development Block Grant on the North 5th Street corridor and
invested it into the main business thoroughfare, something that
once was thriving and had really fallen down for decades.
With just that little bit amount of money, they were able
to improve, not just the storefronts that they worked on, but
then to actually bring business back to that area. It had, in
other words, a multiplier effect. And now you see that business
thoroughfare, that corridor thriving again and good things
happening. That was an investment. That is quite different from
just taking the same amount of money and spending it on
something wasteful.
So I think too often those of us in Washington, D.C.,
especially my friends on the other side, treat all spending as
the same, when really we should look at the return on
investment of these dollars. And any time we spend on
education, or I would argue, the Community Development Block
Grant program, we are actually investing in rebuilding this
country.
So with that, as I say again, welcome back. And you are an
example of someone who I have many disagreements with on
policy, but shows that good people can still be friends and
work together on these issues.
Chairman Black. Mr. Director, do you think you can answer
that in 20 seconds?
Mr. Mulvaney. I can do Big Bird in 20 seconds. Big Bird
actually does get a fairly large tax cut. And we want him to,
because Henson Associates that owns Big Bird has been paying
the highest corporate tax rate in the world for the last
several years. And we want them to have more money to reinvest
in that type of creativity that created Big Bird in the first
place, because we believe that Henson Associates is a lot more
creative than we are. And we believe that money will be much
better invested by a private corporation, by private
individuals, than it would be by the government. And I am happy
to talk about infrastructure. I am sure I will get that
question again. So thank you.
Chairman Black. Thank you.
I want to remind the members one more time that you have a
total of 5 minutes, so if you leave the director 20 seconds, we
are only going to be able to give him 20 seconds to answer the
question.
With that, I would like to recognize the gentleman from
Oklahoma, Mr. Cole, for 5 minutes.
Mr. Cole. Thank you, Madam Chairman. And, Mr. Director, it
is really great to have you back here again. Full disclosure,
shortly after my questions, I am going to have to get up and
leave because I have got to go chair a hearing for Secretary
DeVos. So please don't take anything----
Mr. Mulvaney. We will let Mr. Yarmuth read your closing
statement. How about that?
Mr. Cole. I want to start and compliment you, frankly. It
is a huge seat change to see a representative of the President
of the United States bring us a budget that tries to balance
and does balance within 10 years. We haven't seen that in a
long time. And just the shift in emphasis that that represents
is a really welcomed change. And I want to congratulate you for
it. I think, you know, we can all disagree with this or that,
but that one change is fundamentally going forward.
I also want to thank you for the emphasis on defense. I sat
on the Defense Appropriations Subcommittee. I think that is a
wise choice. And to some of my colleagues that are critical, I
want to also point out that the President could have gone a lot
further here. There is a lot of people in, certainly on my side
of the aisle and the House Armed Services Committee, that
wanted a $640 billion line.
Mr. Cole. So I think this is actually a pretty prudent
balance of letting us move back in the right direction. But
even that number to me shows fiscal restraint. You could have
gone a lot further. And in some ways, I would have liked it,
but I think you made the wise decision financially for the good
of the country.
And there are a lot of your proposed cuts in here that I
strongly support. You know, I suppose you probably had--you
won't take credit for it, but I am going to give you credit for
Social Security disability. I know the President, this is an
area which he has not wanted to go, and I am glad you talked to
him about this, because I think, ultimately, that is the big
crisis we are going to face, as my friend Mr. Rokita, suggested
down the road, entitlements are where we are going to have to
come back to at some point. I just think the math drives you
there.
I have got two areas I want to ask you about: One is with
respect to entitlements. What is the spending balance between
mandatory and discretionary spending today? And in 10 years
under your budget, what will that balance be?
Mr. Mulvaney. I don't have the numbers in front of me, Mr.
Cole, but I think right now, you are looking at sequence of 74,
-5 percent of the budget, 72 percent of the budget is
mandatory. And that will continue to grow, because what we, in
essence, do is we keep the BCA caps in place on total
discretionary but allow defense to grow.
So under--should not change from current law in terms of
the distribution. Mandatory will continue to get larger and
larger as part of our total spending.
Mr. Cole. Again, I would suggest that bears some more
thought, and I hope we see it in your next budget. Because,
honestly, that math can't be sustained. And it will crowd out,
eventually, defense and other areas that I think are important
to national investment.
Mr. Mulvaney. And we look forward to talk with you about
that, begin this conversation.
Mr. Cole. I know you will, because I know from our time
together on this committee how serious you take that sort of
thing. So, again, I don't question anybody. You work for a
President. It is your job to advance and defend his views, but
I hope over time, we can have that dialogue, because I don't
think we are on a sustainable course.
One place where I do think we are being in your budget
penny wise and pound foolish are National Institute of
Development and Center for Disease Control. Those are
relatively modest investments, and they are investments of
Congress on a bipartisan basis has increased in the last 2
years. And let me tell you why we have done it. We have done it
partly because we think that, obviously, it is the right thing
to do. You want a good health outcome for the American people.
But it is also the fiscally prudent thing to do.
Right now in your budget, in Medicaid, we are spending $259
billion a year taking care of Alzheimer's patients and people
with dementia. Right thing for us to do. But that will rise to
over $1 trillion in uninflation adjusted dollars but 2050. We
have now, back to back, the two largest increases in
Alzheimer's funding, really, ever.
The reason, again, is to try to deal with a dreaded
disease, but also to get ahead of this things fiscally so we
can either cure it, hopefully, or even slow down the
progression.
You know, I am going to give you an opportunity to respond.
But I think there you should look. And I will also tell you,
sometime in the President's terms, you will have a pandemic.
You will have a Zika; you will have Ebola. And cutting the
Centers for Disease Control, I think, leaves you very
vulnerable and the American people very vulnerable. So I want
to give you an opportunity to reply to those things.
Mr. Mulvaney. Let me address very briefly--thank you for
that--the NIH, because we actually, despite what you may have
heard in press, we wholeheartedly support research in this
area. We especially support research, what we call basic
research, which the stuff that is early in the process, that is
far away from marketability, the stuff that will not get done
or is less likely to get done unless the government does it.
But I encourage the entire committee to consider this, which is
the biggest change we have made in the NIH is to look at the
overhead costs. If a private foundation gives the university
money, typically, the university is required to spend 90
percent of that money on actual research, only 10 percent goes
to overhead costs. With our money, it is 72 percent actually
goes to research. So I would encourage you to look at ways to
lower the overhead. Because if you look at the numbers, Mr.
Cole, at 90 percent research in our budget, you would actually
be roughly spending the same amount on actual research as you
did in previous years.
Mr. Cole. We will have that debate another day.
Mr. Mulvaney. Yes, sir.
Mr. Cole. But, again, I want to thank my friend for being
here and thank him for his service.
Mr. Mulvaney. Thank you.
Chairman Black. The gentleman's time has expired.
I now recognize the gentleman from California, Mr. Khanna,
for 5 minutes.
Mr. Khanna. Thank you, Madam Chair.
Thank you, Director Mulvaney, for being here.
I want to recognize Representative Cole's thoughtful
comments on the NIH, and I appreciate your speaking out on
that.
We have very strong philosophical disagreements about the
budget, but I don't want to spend my 5 minutes on that. I am a
freshman, new around here, so I am going to try on two concrete
issues where I hope we may find common ground, and I hope you
keep an open mind.
The first is the Manufacturing Extension Partnership. This
was a program that President Reagan started. I worked at the
Department of Commerce. It helps small and medium-sized
manufacturers, many of whom that--the way it helps them is--you
know, you look at my district, Silicon Valley, they have cloud
technology. This program says, how do we get our small- and
medium-sized manufacturers using cloud technology, other
things, to be competitive to work--to create jobs in an
environment where trade is unfair.
My sense is it was zeroed out at 0.003 percent of the
budget by some junior staffer. I am convinced if the President
actually met with the manufacturers who are benefitting from
the program, or if you met with them, he would probably want to
quadruple the budget given how he campaigned.
And my question is, could we, at least, have the President
meet with some of the manufacturers who are benefiting with
this program, or could you take a look at it? Because,
honestly, it was a Reagan program. It is bipartisan, and it is
probably the biggest thing we can do to help manufacturers.
Mr. Mulvaney. It was a Reagan--thank you for that,
Congressman. It was a Reagan program. And I had a policy when I
sat in your chair, which is that I was always careful about my
Reagan quotes and my Bible quotes, because my guess is you
could always find something on the other side of the argument
from the same source.
So I am going to be very careful of my Reagan quote. I also
think you said one time there was nothing as permanent as a
temporary government program. This program was funded under the
Reagan administration, was designed to be temporary. In fact,
you are only to be supposed on it for 6 years. There have been
folks who have been on it literally decades. And that is why it
got our attention. Again, coming back to the folks who paid for
it, said look, yes, maybe we can justify giving seed money to
businesses so they can get a start and get their feet
underneath them, but it is supposed to be temporary, and it is
not. And that was the reason, we think we sourced this--we
focused on this program.
But to your request by having the President get first
involved in it, I think the President's already shown a
tremendous interest in talking with manufacturers. A lot of his
focus so far, in terms of the executive action, has been on
manufacturing, and your invitation is welcome, indeed, sir.
Thank you.
Mr. Khanna. I appreciate that. I just would ask that you
take a look at it and the manufacturers benefiting.
The second area, I had the privilege of going down to
Congressman Hal Rogers' district in Appalachia near Ranking
Member Yarmuth's district. And, as you know, Hal Rogers is one
of the most distinguished members of this body. He is a
Republican, chaired the Appropriations Committee. What I saw
there were coal miners' kids getting apprenticeship programs,
jobs, learning IOS software for Apple, learning android
software at Google. I mean, these are jobs in Appalachia, jobs
in middle America, future jobs.
The Appalachian Regional Commission funded this program.
And I think you could talk to Congressman Rogers about it. I
urge that, again, the President may visit this area and see
what is happening. Because this is--you know, this is how he
campaigned. He said, I want to help folks here get the jobs.
The Appalachian Regional Commission does exactly that.
Again, my hope would be that he would quadruple the
funding. You know, people often say, well, the Democrats
participate in supporting things that the President doesn't. If
the President were to say, let's quadruple funding for the
Appalachian Regional Commission, I would vote for it. But that
is zeroed out.
And is there a way we could have the President visit there
or you visit there and see firsthand the jobs that are being
created for coal miners' kids and others in that area?
Mr. Mulvaney. And I appreciate that. I believe the
President and I keep--I don't keep track of his travel schedule
probably as closely as I should. I think he has already been to
that part of the country at least once. I know he has been to
Kentucky at least once. Whether he even got into eastern
Kentucky, I can't remember.
Your points about the Appalachian Regional Commission are
well taken. And certainly, there are anecdotes of success
within that program. It is just when we sat down to look at it,
as we have mentioned with our new perspective, it has been a
very difficult time confirming that it was regularly as
successful as you mentioned.
That being said, we still recognized the need in the area.
So while we did zero out the Appalachian Regional Commission,
we moved the money around to programs that we thought were even
more effective, or at least we can prove are more effective.
So the budget provides an additional $80 million for the
Department of Agriculture's rural economic infrastructure grant
program, which includes community centers, housing repair,
distance learning, telemedicine, broadband grants and the like.
It also provides an additional $66 million for job training and
employment services through the Department of Labor.
So, again, your points are well taken. And we tend to agree
that those areas are a place that do deserve Federal attention.
I guess I can come back to folks in southern California and
say, can I take some of your money to move to the Appalachian
region because of the challenges that it faces? The answer is
yes, but we would like to do it through more effective programs
than we are able to identify at the Appalachian Regional
Commission.
Chairman Black. Thank you. The gentleman's time has
expired. I now recognize the gentleman from Arkansas, Mr.
Westerman for 5 minutes.
Mr. Mulvaney. Did I guess right, by the way, in southern
California? By the way I guessed at that. Was--is that not
right.
Mr. Khanna. Northern California.
Mr. Mulvaney. Okay.
Chairman Black. Mr. Westerman, you are recognized.
Mr. Westerman. Thank you, Madam Chair.
Director Mulvaney, thank you for being here today, and
thank you for the hard work that you have put into this budget
proposal. It is refreshing to see a proposal that actually
balances in 10 years.
You are in a tough situation. Any time you talk about
cutting anything, somebody is not going to be happy about that.
But it takes courage to put these cuts on the table. We may
not all agree with the same areas where we need to prioritize
spending, but I think we all, at least on this side of the dais
agree, that we have to do something about the debt that is in
our country and the burden that it is putting on our children,
our future generations.
So I appreciate the courage, that you took in putting forth
this.
I have read the headlines about draconian cuts and deep
budget cuts. So, you know, I would like to go back and look at
the numbers. And as I studied these numbers, there is a
phenomenon here that I think the general public may not
understand and maybe even a lot of people in D.C. don't totally
understand. But we have this process called the baseline
budget. And if I look at the baseline budget, over the 10-year
window, it is--we--it starts at $4.1 trillion and it goes to
$6.7 trillion. That is $2.6 trillion of increase over the 10-
year window. That is a 63 percent increase. So if you simplify
it and average that, that is 6.3 percent increase in each of
the 10 years for the next 10 years. That is the baseline. So if
we look at the budget, this so-called draconian budget that you
have proposed, it starts at $4.1 trillion. It goes to $5.7
trillion in 2027, which is a $1.6 trillion increase over the
10-year window, or 39 percent increase, or 3.9 percent per year
over that 10-year window.
Could you explain in a little more detail about how, when
we say cut in Washington, D.C.--and I served in my State
legislature as well where we had to balance the budget. I had--
worked in a business where we talked about a cut, it meant that
it was less money next year than it was the year before. And my
home and the people--the other families I know in my district,
when they talk about a cut to their budget, it actually means
you spend less money next year than you spent last year.
However, in D.C. in budgeting, we can still spend more
money than we spent last year and call it a cut somehow. Would
you explain that in more detail?
Mr. Mulvaney. Sure. Here is how I used to do it back home
when I was trying to explain it to people.
In Washington, D.C., if we spent $100 on a program last
year and $100 on a program this year, back home we would call
that a freeze. In Washington, we call that a cut.
If you spend $100 on a program last year, and $104 on a
program this year, back home we would call that an increase. In
Washington, D.C. we call that a cut. Back home, if you spend
$100 last year and $106 this year, back home you call it an
increase, here we call it a freeze. And it is not until you
spend $100 last year and $108 this year that we call it an
increase in both normal back home English and Washingtonese.
And that is because of what you mentioned, baseline
budgeting. The baseline assumes that we are going to grow the
government at population plus inflation, I think, every single
year, and it leads to that.
I can't tell you the number of people who used to come to
my office, Mr. Westerman, and say, Oh, 2 years ago, oh, you cut
my budget on this. I am, like, No, we didn't. They say, well,
everybody is telling me you cut my budget. I said, no, all we
did was grow it slower than otherwise. And they said, well,
that sounds an increase. I said, yes, it does.
They said, well, why everybody telling me it is a cut? I
said so you will come to Washington and tell me to give you
more money. That is how the system works. And that is why I am
a big fan of zero-based budget, getting away from the baseline
and actually using English language that people can understand.
If you want to be real cynical about it, under the world
where we spend $100 last year and $104, okay, to your
conservative friends back home--and we all have them in both
parties--you can say, you know what, I cut that program.
Because in Washington, that is a cut. But to your more liberal-
minded friends back home--and we all have those in both
parties--you say, You know what, I like that program, too. We
spent more money on that. And both of those statements are
right; one using back home English and one using Washingtonese.
And I think it is part of the thing that undermines the
credibility of the institution. We have to start speaking a
language up here that everybody can understand. So I thank you
for drawing attention to the effort. I do encourage this
committee to continue to look at ways to articulate how we
spend money better, go back to my opening statement, explain to
people how much government really costs them, because I think
in the long term, folks in both parties will be well served by
that.
Thank you for that question.
Mr. Westerman. I yield back.
Chairman Black. Thank you. The gentleman yields back.
I now recognize the gentlelady from Washington, Ms.
Jayapal, for 5 minutes.
Ms. Jayapal. Thank you, Madam Chair.
And thank you Director Mulvaney. I am very pleased that I
had the opportunity to give the opening statement on behalf of
our excellent ranking member.
So I just wanted to highlight a couple of things and then
get to some questions. Let's talk about clear language and
telling the American people exactly what is happening in this
budget.
We are slashing in this budget--you are slashing Medicaid
by $610 billion. Combined with the healthcare cut, that is
almost $1.5 trillion of cuts to a program that currently serves
74 million Americans. So in plain language for the American
people, that is a dramatic cut to their healthcare for most
people, healthcare that they wouldn't be able to get elsewhere.
A $1.2 billion cut to Centers for Disease Control, clear
English, cuts drug addiction treatment and prevention services.
A $1 billion cut to housing assistance programs, including for
veterans who are struggling to keep a roof over their heads. We
talked about infrastructure already, so I won't go into that.
Mentioned SNAP. This is nutritional assistance for the most
needy families in our country. And let's just talk about the
border wall for a second. This is a $1.6 billion investment
into what I call the wall to nowhere. This is a wall, a down
payment on a wall, that is ultimately going to cost the
taxpayers $40 billion according to a recent MIT study.
And as Janet Napolitano once said when she was governor of
Arizona, show me a 100-foot wall, I will show you a 101-foot
ladder. This is not the solution to any of our immigration
issues.
Now you said, Director Mulvaney, that you should have
called this a taxpayer first budget, but I have to ask you,
which taxpayer? Out of the almost $1 trillion in tax cuts in
this budget, which are on the backs of all these other cuts we
have mentioned, 50 percent of those tax cuts are going to go to
the top 1 percent. And 75 percent of the tax cuts are going to
go to the top 75--top 75 percent of income earners.
So what we are doing is taking away essential benefits for
working families across this country, positions that the
President ran on, and putting them into the top earners in the
country.
So when you talk about Trumponomics, I think that was the
word you used in your opening statement, and you said let's do
anything that gets you to 3 percent growth, is that the
statement philosophy that got the President to six separate
bankruptcies, $1.8 billion for debt in Trump hotels before he
declared those bankruptcies? I am not really sure what
Trumponomics is when you look at the President's record.
So what I would like to ask you, Director Mulvaney, is can
you explain how taking away from programs like the Children's
Health Insurance Program, the disabled and student loan
repayments, one of the top issues in this country Republicans
and Democrats alike, $1.4 trillion in student loan debt right
now, can you explain how that benefits the economy or working
families across this country?
And I might reclaim my time, too, just to make sure. But
let's start there.
Mr. Mulvaney. I can try. Because folks are throwing me
notes. You have raised a bunch of issues, so let's do this in
as rapid a form as I possibly can. CHIP is being extended; it
is not being reduced. Total spending on drug treatment goes up.
It is not being reduced. You used the word ``plain language,''
slashing Medicaid. To most people, plain language, slashing
Medicaid means we spend less next year than we did this year.
That is what a slash means--right? No, that is not true. I
think it is one year in 10-year window where we have a little
tiny, tiny dip because of the cliff that is caused by the AHCA
on the Medicaid expansion stage. But generally speaking across
the budget, all we do is slow the rate of growth, which is to
say, we will be spending more on Medicaid every single year,
again, I think except one, and you can call that a slash but I
am telling you back home, people say you slash spending on
something, I think they would expect you to think that you are
spending less money one year versus the previous year.
The SNAP. What we do on SNAP is a couple of differently
things. Again, we can take more time on this if you would like.
We do ask for an able body work requirement. We can go into the
fact that SNAP went up dramatically during the downturn. I
think roughly 28 million people on the program before the
recession to 47 million people on the program at the height of
the recession. I think the most recent number we have is
roughly 42 or 44 million. We are back near what we like to call
full employment. We have had several years of slow but growing
economy. Don't we think----
Ms. Jayapal. I am going to reclaim my time----
Mr. Mulvaney. I apologize----
Ms. Jayapal. We are limited, so I am sorry for that. I
think if you look at what the American people thought about the
Republican healthcare bill, you will see that that slash in
Medicaid is, in fact, a slash in Medicaid. But even Republican
Governors spoke out against. Let me ask you about Social
Security, because you consistently said you are not cutting
Social Security. $72 billion----
Chairman Black. The gentlelady's time has expired.
Ms. Jayapal.----including Social Security disability
insurance.
Thank you, Madam Chair. I yield back.
Chairman Black. If I may, and you have additional questions
that you are not able to get in your 5 minutes, I know that the
Director would be happy to get those in writing for you.
So now I would like to yield 5 minutes to the gentleman
from Ohio, Mr. Renacci.
Mr. Renacci. Thank you, Madam Chairman.
I want to thank you, Director Mulvaney, for your service to
the House of Representatives, and now as OMB director. It has
always been a pleasure working with you. And I continue to
admire your passion for public service and understanding of the
fiscal challenge facing our Nation.
I applaud the President, your office, for putting together
a budget that balances, over the next 10 years, your commitment
to addressing the debt and deficit crisis that faces our
country. While I may not agree with all the policies, I am
encouraged to finally have an administration that understands
that we need to get our fiscal House in order.
Right now we are quite simply on an unsustainable path, and
this proposed budget is recognition of that reality.
I am going to use a few words my colleagues on the other
side said, slashing and cutting. But would you really agree
that your budget is reducing what we borrowed from China to pay
for programs we don't have money to pay for?
Mr. Mulvaney. Absolutely.
Mr. Renacci. That is what I thought. And would you also
agree that today, our corporate tax rate of 35 percent is the
highest in the world, so we can continue to say we don't charge
corporations enough, but if we continue to do that, they will
just go overseas, and then we will have less money to spend.
Would you agree with that?
Mr. Mulvaney. Which is exactly what they have done for the
last several years.
Mr. Renacci. Exactly. On the personal side, today, 70
percent of our individuals actually pay as passthroughs
corporate businesses, so they are businesses that employ people
and eventually, since 70 percent of them are paying a rate that
is higher than most worldwide tax rates, they are going to find
places to go other than the United States which will also take
revenues away from us if we don't come up with a plan to reduce
taxes.
Mr. Mulvaney. Taking jobs with them as they go.
Mr. Renacci. Absolutely. So we can continue to say you are
slashing and cutting and all the other words you want to use,
but clearly, what you are doing is you are looking at a budget
and saying we can't continue to borrow, we can't continue to
pass this on to our children and grandchildren. Shame on
anybody that continues to do this year after year after year
and doesn't realize that all we are doing is handing our
children and grandchildren a debt they can ever pay. So I
appreciate what you are doing.
Would you also agree that if we do nothing, and we don't
start looking at the programs that aren't valuable and that
aren't working, that our debt will become one of our greatest
concerns and our interest costs will start to begin to swallow
the budget? In fact, the Congressional Budget Office says our
interest, if it stays as it is, will still triple in 3 years
based on the debt growing?
Mr. Mulvaney. I think they used to put out a report that
says it would take 100 percent of revenues under certain
circumstances by the 2050s, but I think they took down that
graph.
Mr. Renacci. So we are clearly at a real problem here with
budgeting and how we spend money, because we can continue to
say we are slashing and cutting, but clearly, what we are doing
is we are borrowing money we don't have, and are continuing to
spend money we don't have. And we are continuing to be willing
to pass that on to our children and grandchildren, and only say
that the only way to fix it is to raise more revenues from
people when, again, as I said, if we continue to raise our
taxes, business will just leave, companies will just leave, and
we will have less and less revenue.
So I want to make sure we understand that. So I want to
switch gears over to tax reform, which I really believe is an
opportunity. And I appreciate you talking about getting a 3
percent, because if we don't at least set a goal around here of
3 percent, you are exactly right. We might as well say that we
will never be able to balance a budget. So whether people agree
we can get to 3 percent or not, I think we should all be
focused in on 3 percent, and that is why I am a big believer on
tax reform and growth.
I have a question for you regarding the budget window. Do
you believe that Congress should consider expanding the budget
window beyond 10 years in order to make tax reform more
permanent, increase the likelihood of Congress to be able to
pass some type of tax reform?
Mr. Mulvaney. I do. And my understanding is that you can do
that without legislative change. That you all have the ability
to look at different periods of time. My understanding is over
the course of the last couple of administrations, some budgets
have been 5 years, some have been 7, but we sort of settled on
the 10-year budget window for the last couple of years. And we
will continue to do it like that.
We are exploring the possibility of also looking a little
further out, especially when you start to talk about changes in
the mandatory spending, even putting aside for a second Social
Security and Medicare, if you don't look out beyond the 10-year
window. If you want to phase some changes in, a lot of the
benefits aren't reaped until outside the budget window.
So I think it is a more reasonable way to look at the
budget window, and I think it is important for us to look at
whatever options give us the best and most commonsense view of
the economy and our proposals to change it.
Mr. Renacci. You would also probably agree, and I know you
and I have served on the Budget Committee, but also on other
committees. In the old days, with a 10-year budget, we passed
legislation that really dumps everything into the 11th year in
many cases. All the problems in the 11th and 12th year. I even
think that Affordable Care Act dumped a lot in the 11th and
12th year. Wouldn't you agree?
Mr. Mulvaney. It is possible, Congressman, to game the
system in order to move the costs of a program outside of the
budget window. We are coming very close to the outside budget
window of the original Affordable Care Act, and now you are
starting to see the costs rack up at an exponential rate.
Mr. Renacci. I agree. And I know I am running out of time,
and I will yield back.
Chairman Black. The gentleman yields back.
I now recognize the gentlelady from California, Ms. Lee,
for 5 minutes.
Ms. Lee. Thank you very much. Good to see you, Mr.
Director. I really want to, first, say to you that never
before, really, have I seen such a cruel and morally bankrupt
budget. It dismantles our Nation's basic living standards,
which Americans have turned to for decades. This budget--and
you know this--it will push millions of people into poverty and
over the edge. This budget destroys people's lives. This
budget, what you are doing is you are asking people to fend for
themselves, and you are really leaving them out in the cold.
And our moral obligation is to make sure that every American
has a decent standard of living.
This budget is a broken promise, and it is really a
betrayal to every American in favor of tax cuts for
millionaires, billionaires, and corporations.
I would like to just ask you, how are people going to eat
when they need a temporary helping hand with a cut of $190
million in food assistance? Then you add these onerous work
requirements, and then, yet, you cut $1.3 billion in workforce
training program so people cannot be trained or retrained for
jobs, which I don't see much in terms of investment in job
creation in this budget either.
How are people going to get health insurance with a cut of
1.3 trillion in Medicaid? And how are people going to get a
house to either purchase or rent with elimination of the
housing trust fund and a $2 billion cut in rental assistance?
You are forcing families to choose between putting food on
the table and a roof over their head. That is just down right
wrong. You are forcing them to choose between lifesaving
prescription drugs and higher education.
Again, that is wrong. And I guess I just have to say with
looking at these percentage of cuts: EPA, 30 percent;
Department of State, 29 percent; Ag, 20 percent; education, 13
percent; housing, 13 percent; Interior, 10 percent; Health and
Human Services, 16.2 percent; Department of Labor, 19.8
percent; Department of Commerce, 15.8 percent; you wipe out the
Minority Business Development Agency; the Department of
Transportation, 13 percent cut.
For the life of me, I just have to remind my colleagues
that Steve Bannon said that part of the goal of this
administration was deconstruction of the administrative state,
and I think what we see here is really the elimination of the
public sector.
And so, Director Mulvaney, I just want to ask you, one is,
are these SNAP cuts, for example, how do you think people are
going to survive when they need this helping hand? Most people
on SNAP don't rely on this for a lifetime. It is a bridge over
troubled waters.
Mr. Mulvaney. Thank you, Congresswoman. I will deal with a
couple of things in reverse order, if I can.
SNAP, as I may have mentioned--I have forgotten how many
times I may have answered the question----
Ms. Lee. And also, let me remind you, Secretary Perdue
mentioned that it was a program that was working, why fix it if
it is not broken? And he appeared to not be aware that you all
were going to recommend these cuts.
Mr. Mulvaney. I think it is reasonable to ask if you had 28
million people on SNAP before the recession, 47 million people
on it at the height of the recession, and 42 or 44 million
people today, it is not unreasonable to ask if there are folks
on SNAP who should not be, because we should have seen that
number go down. SNAP should be countercyclical; it should go up
during bad economic times, it comes down during better economic
times. We have not seen that. The EPA was a promise that the
President made----
Ms. Lee. Mr. Mulvaney, at least 20 percent of people who
are eligible for SNAP don't even receive SNAP because of stigma
and other reasons. So there are more people who need SNAP
benefits.
Mr. Mulvaney. Let me be--let me deal with the every
American deserves a decent standard of living. Does that
include our kids?
Ms. Lee. And you have a 13 percent cut in the Department of
Education. Those are the most vulnerable kids who need----
Mr. Mulvaney. What about the standard of living for my
grandchildren who aren't here yet, who will end up inheriting
$30 trillion in debt, $50 trillion in debt, $100 trillion in--
what about their standards? Who is going to pay the bill,
Congressman? That is what this bill is all about. That is what
new perspective is. Who is going to pay for all the stuff you
just mentioned? Us? Or somebody else? And I suggest to you if
it is important enough for us to pay--to have, then we should
be paying for it, because right now, my unborn grandchildren
are paying for it, and I think that is morally bankrupt.
Ms. Lee. I have grandchildren also, and I want to make sure
that they have the opportunity to get a job so that they can
help pay for our government, which is a government that should
be enhancing the standard of living and making sure everyone
has a chance for the American dream.
Chairman Black. The gentlelady's time has expired.
I now recognize the gentleman from Ohio, Mr. Johnson, for 5
minutes.
Mr. Johnson. Thank you, Madam Chairman.
And Mr. Director, first of all, congratulations on your
selection for this position.
Mr. Mulvaney. Thank you, Bill.
Mr. Johnson. You got an awesomely tough job, and I
appreciate having worked with you for the last 6 years.
I associate my position with yours in the sense that our
children and grandchildren are expecting us to address this
problem now, because it is not going to get any easier. And I
hear the cries from my colleagues on the other side calling for
more opportunities. Well, I don't--I don't know that the
Federal Government has ever created jobs. That is a--that is a
private market-driven economy that creates jobs. And if we are
over $20 trillion in debt, that is just going to get that much
worse.
I appreciate that we finally have an administration that
understands how critically important it is to bend the spending
curve in the other direction. And I certainly accept that there
are some very, very tough budget decisions to make to get us
there. And so I think you and the team have done a remarkable
job putting together a budget that does exactly that.
Now, we all know that this is a proposal. That ultimately,
the final say will come from Congress, because that is where
the power of the purse resides. But I--this is a--a significant
step in the right direction.
That being said, I do want to bring one thing to your
attention. You and I actually talked about this a little bit
yesterday as we met outside of this room.
I am concerned with the rationale about the Appalachian
Regional Commission. I understand the logic. I understand what
you are saying about moving that money around. My concern stems
from two basic premises. One, I think the study that you cite,
Mr. Director, indicating that there is not a lot of evidence
that ARC has lived up to its reputation. If I am not mistaken,
that is a nearly 30-year-ago study. That is a 1996 study by
GAO. And I think if you look at what has happened, let's take
last year, for example. $175 million investments by the ARC
into 662 projects across the region, that money being matched
with another $257 million by the local governments, and an
additional $443 million in leveraged private investments, you
know, that brings us to a total of $866 million of investment
in--through the Appalachian Regional Commission into 93
counties that are--76 percent of that money is going to those
93 counties that are considered economically distressed.
And so my first point is, I think that 1996 study is
probably outdated. I would urge either you or the GAO or
someone to take another closer look at what the Appalachian
Regional Commission has been doing over recent years.
And, number two, I understand giving the States and the
governors the--moving this money around so that they have more
flexibility. But, look, I live in Appalachia, and I can tell
you that governors are concerned about the region where the
voters are, the big metropolitan areas. And when the money gets
doled out, I know, personally, from history, where that--how
that money gets allocated.
So while I am very optimistic on the budget and think you
guys have done a great job, I would just urge you to go back
and take another look.
And one final thing, I really was pleased to see the
administration reversed its position on the Office of National
Drug Control Policy. Funding for the--right now, with the
opioid epidemic being what it is, the President's task force is
in place, we need to make sure we have a national focus on
that. So I appreciate that.
And I have taken up all the time with my comments.
Mr. Mulvaney. I appreciate that, Congressman, and we will
look into that study for you. Thank you.
Mr. Johnson. I yield back.
Chairman Black. The gentleman yields back.
The gentleman from California, Mr. Carbajal, is recognized
for 5 minutes.
Mr. Carbajal. Thank you, Chairman Black.
Thank you, Mr. Mulvaney, for being here.
I must say, I have to start with your comment about
Democrats not supporting defense and military.
Have you ever served, Mr. Mulvaney?
Mr. Mulvaney. Actually, Congressman, I think my comment was
that we do believe in defense.
Mr. Carbajal. I heard it otherwise.
Mr. Mulvaney. I am sorry. Then I would like to correct the
record. I think I said you were accused of not supporting
national defense, and I thought that that was wrong.
Mr. Carbajal. Thank you. I misheard it. So I appreciate you
setting the record, because I had some choice words for you, so
thank you.
Let me just say that for a number of years, the Department
of Defense Overseas Contingency Operations, known as OCO
designation, which has been used as a budget practice to
circumvent budget caps. There are now billions of dollars in
OCO funding being used to fund so-called base budget
activities. This practice obfuscates the true cost of regular
government operations. Disincentives--disincentivizes trade-
offs in the budget and inhibits long-term planning.
Director Mulvaney, does using OCO designation in this way
adhere to your notion of sound budgeting and accounting
principles? You have been a fierce critic of the OCO budget as
a Member of Congress, and has characterized it as a gimmick,
and you have sponsored legislation to curve this practice.
Does your budget include OCO funding for nonwar activities?
Mr. Mulvaney. Congressman, our budget does include OCO
during the 10-year practice. And your criticism is well-taken
and well-put. It can be and has been a way to get around budget
caps in the past. It has included things that, perhaps, are not
properly defined as OCO. I simply suggest to you a couple of
things: First of all, both parties seem to be interested in
using it that way, that the reason that it is used that way is
that there is a bipartisan support for using it that way. What
I encourage you to look at is this: If you look at the tables
in the budget, you will see that we slowly reduced the OCO in
the outyears in hopes, in hopes that we can instill some
discipline in the OCO line item so that it is used for what it
is supposed to be used for, which is Overseas Contingency
Operations.
I would also suggest to you that one of the reasons I think
it has been used in the fashion in which it has been used for
the last several years is because the top line defense number
was simply not enough to accomplish the missions that we were
on.
So--but your criticisms are well taken, and I could assure
you that I am as skeptical of long-term use of the OCO in ways
that are not as intended, and will continue to look at them
very closely at the Office of Management and Budget.
Mr. Carbajal. Mr. Mulvaney, you know that past Democrat and
Republican administrations, as well as Congress and the Armed
Services Committee, have failed to get the DOD to do an audit
to really look at the waste.
Clearly, you would agree that there are many examples of
waste in the Department of Defense. And having said that, it is
quite disappointing that we look to waste and domestic
programs; we point those out extremely rapidly, but we kind of
just gloss over them when it comes to increasing the Department
of Defense spending.
There seems to be a hypocrisy. And I guess I ask you, why
is that the case?
Mr. Mulvaney. And I apologize, Congressman. Again, I may
have covered this before you came into the room on a previous
question.
I share, as does the President, your interest in finding
more efficiency, more accountability inside the Department of
Defense. In fact, I can assure you it is a priority for the
President, a priority that I have discussed at length with
Secretary Mattis, and he is as interested as you and I are in
trying to drive out that waste within the Defense Department,
because a wasted dollar is a dollar that is not going to defend
the Nation.
Regarding audits, what I mentioned earlier in the hearing
was that the DOD, I believe, is required by law to make itself
auditable by September. They just gave an update on that a
couple of weeks ago, and they intend, and they tell me, and
they tell you that they intend to hit that deadline.
One of the reasons that you see more focus on the domestic
side and not on defense--or defense, domestic nondefense
discretionary, is that we have the ability to sort of look at
those programs. There are tools available to us that don't
exist in the Defense Department, because they are not
auditable. But I am looking forward to them following through
on their promise to be fully audible by September, and I hope
that is the first step in a long process to drive the
efficiencies at the Defense Department that we are all
interested in.
Mr. Carbajal. Thank you, Mr. Mulvaney.
And lastly, there is a 30 percent cut projected for the
U.S. EPA. Have the impacts to the health of our water, of our
air been tabulated, the impacts they would have in the health
of Americans in this country?
And when we talk about grandkids, what does that mean? I
have future grandkids coming. What is the impact to them when
we have degraded regulations?
Chairman Black. The gentleman--if you would, please answer
that by written--as I say, you have 5 minutes. And so if you
wait until the end, you are probably going to get your answer
in writing. So if the Director will answer that in writing.
Thank you.
I now recognize the gentleman from New York, Mr. Faso, for
5 minutes.
Mr. Faso. Director, thank you for being here today, and
thank you for your service to the country.
I wanted to ask if you could clarify the Medicaid spending
in the proposal.
We are aware of the reduction in expected increase in
Medicaid spending through the American Health Care Act. And
there is some confusion as to how the calculation of that
reduction and projected increase is also included within the
President's budget proposal. I am wondering if you could
clarify this issue for me.
Mr. Mulvaney. I could do my best, Mr. Faso, and if I don't
satisfactorily do it, I would be happy to meet with you outside
or get something to you in writing. But here is how I explain
it to folks, is that the largest line item deals with the
scored version of the American Health Care Act, which is all we
had available to us when we started writing the budget. The
budget--by the way, for those of you, and I learned this the
first time, the budget for 2019, we start work on that in
September of 2017. So that is how long a lead time is when you
work on budgets.
So what we had available to us is the first scored version
of the American Health Care Act, and that accounts for a big
part of our Medicaid savings, because that is how that proposal
was scored.
We added to that an additional change on the growth rates.
We believe that the growth rate that is contained in the bill
is actually higher than what we expect to see in the real
world. So we propose a growth rate that we think is closer to
actual growth rates in these types of costs. What you get when
you do a couple of different things, then, and the reason that
so many folks talk about the $1.4 trillion number, if you have
two large numbers--roughly, I am going to round now, $800
billion in savings from one, and $600 billion savings in
another. Okay? But my point to you is that it is almost
impossible for those two numbers to be added to get to $1.4
trillion, because they contain within them the sum of the same
factors.
Mr. Faso. There is double counting?
Mr. Mulvaney. There is double counting. So what you end up
is, you are going to take the 800--some of the 800 is contained
in the 600 and vice versa. So when you put it together and you
actually have a proposal, it would never get as high as 1.4
trillion. In theory, it is possible, but it is highly unlikely.
Number would be between 8 and----
Mr. Faso. Thank you. And I also appreciate your discussion
about the debt. The CBO informed us earlier this year our debt
is going to go from $19 trillion to $29 trillion in just 10
years. And so many of my friends on the other side believe that
the problem is we are not taxing certain groups within our
country enough.
And I recently noted the Forbes 400. And if you calculated
the net worth of all the Forbes 400; in other words, pretend we
are in Venezuela or the old Soviet Union for a second, and we
just confiscated all of their net worth, not what they pay
every year on taxes, but take all their money away from them.
If you confiscated the net worth of the richest 400 people in
America, all you would do is cover the Federal budget deficit
for about 4 years. And that is it. So I do think one of the
problems in our country is that we are not speaking frankly to
the American people as to the true nature of our debt and
deficits.
I wonder if you could comment also as to the risk in terms
of servicing our national debt, if we have a 1 percent increase
in long-term interest rates, and what that would mean in terms
of additional national debt service that we have to pay every
year?
Mr. Mulvaney. Sure. To your previous point, what I like to
tell people, if we could tax our way to growth and if we could
tax our way to prosperity, every government in the world would
have done it a long time ago. You simply can't do it. You have
to figure out a way not to tax yourself into lack of growth.
Regarding the 1 percent, it is fairly simple. When we talk
about the $20 trillion debt, that is the total debt, we call
total debt, gross debt, subject to the cap. Some of that
obviously is contained within the Social Security system, the
private debt. But the bottom line answer is, roughly speaking,
1 percent increase in long-term rates cost us $200 billion a
year.
Mr. Faso. A year. So over a 10-year period, that is about
$2 billion?
Mr. Mulvaney. Would also make it the second largest line
item in the budget after defense.
Mr. Faso. Lastly, the discussion of SNAP--and I also served
on Agriculture, and I do want to see--to make sure that people
who are in need of food assistance are able to receive it.
However, in our discussions in the Agriculture Committee, we
learned this year that the taxpayers are paying $3 billion a
year for folks on SNAP to buy soda, for which there is no
nutritional benefit.
I am wondering what the administration's position might be,
if you have thought about this as trying to restrict SNAP to
actually things that are nutritious rather than things that are
not.
Mr. Mulvaney. Congressman, in all fairness, it is an
excellent point. And we have not--I don't know that we have
given that some consideration. I would be happy to talk to the
policy council and get back to you on at that.
Mr. Faso. Great. Because there is $3 billion there you
could probably save.
Thank you, Madam Chairman. I yield back.
Chairman Black. The gentleman yields back.
I now recognize the gentlelady from Illinois, Ms.
Schakowsky, for 5 minutes.
Ms. Schakowsky. Thank you, Mr. Mulvaney.
You have mentioned that the President promised that he
would not cut Social Security, Medicaid, and Medicare. And
after he won the election, with the help of plenty of older
Americans, I think we are seeing today a tremendous betrayal of
that promise, and of the people who rely on those programs. And
I think it is in order to give enormous tax cuts to the
wealthiest individuals and corporations. He never did say
Social Security retirement. He said Social Security, Medicare,
and Medicaid. And the trust fund, the Social Security trust
fund, has two major components. The OASI, Old Age and Survivor
Insurance, and SSDI, the Social Security Disability Insurance.
The contributions come from the same payroll tax. They go into
the same Social Security trust fund, and together, make up what
we know as the Social Security program.
Yet, this budget makes dramatic changes to SSDI that would,
among other things, cut the retroactive benefits that a serious
disabled construction worker, for example, can receive for the
time the Social Security Administration takes to work through
its backlog of cases and finally give approval which can take
rates--can take years.
So, Mr. Mulvaney, what I am asking, yes or no, does the
President's budget cut $72 billion from the Social Security
Disability Insurance program?
Mr. Mulvaney. I am not sure--I don't have the number in
front of me, but yes, we do make reforms and reductions within
the Social Security Disability Insurance program. A couple of
things. I think you may have----
Ms. Schakowsky. I am sure your staffer could provide you
with a number. That is really what I am asking.
Mr. Mulvaney. You said the money goes into the same trust
fund as old age. It does not. They are separate trust funds. So
that is important to know, because they are on different
timelines.
This is how I explain Social Security Disability Insurance,
Ms. Schakowsky, which is that we also propose a parental--paid
parental leave program. We are running that, funding that
through the unemployment insurance programs in the States,
which is, by the way, the same way Canada does it. New York,
New Jersey, California, one of the States----
Ms. Schakowsky. Mr. Mulvaney, my time is so limited, and I
am not asking about that particular program.
Mr. Mulvaney. No, you asked about SSDI, ma'am, and I am
happy to get to that. The point of the matter is that many
States fund their parental leave through disability, we propose
through unemployment insurance.
Does that mean having a baby is unemployment? No. Does it
mean having a baby is disability? No. It just happens to be
that that is how the program is structured because the
infrastructure is there.
Social Security disability is not Social Security. Social
Security Disability Insurance is disability insurance. It is a
welfare program for the disabled.
Ms. Schakowsky. Okay. We disagree on that. I think most
Americans disagree that Social Security Disability Insurance is
part of that guaranteed program.
Mr. Mulvaney, the President pledged not to cut Medicaid.
Now, I just want to point out, we have dealt with this a little
bit today, but we are talking about half the births in the
United States, 30 million children, and half of all nursing
home and long-term care nationwide for senior citizens and
people with disabilities comes out of Medicaid.
So it is really yes or no if the--does the President's
budget cut $1.3 trillion from Medicaid over 10 years?
Mr. Mulvaney. I will ask you a question, Congresswoman.
When you say ``cut,'' are you speaking Washington or regular
language?
Ms. Schakowsky. Will the President's budget mean that
Medicaid gets $1.3 trillion less than it would otherwise?
Mr. Mulvaney. In the CBO baseline score, the answer is yes.
It will spend more money every single year over the previous
year with the exception I mentioned; that, in my mind, is an
increase in Medicaid spending.
Ms. Schakowsky. Okay. I want to quote you, Mr. Mulvaney.
You said that in regard to after-school programs, they are
supposed to be educational programs, right? They are supposed
to help kids who don't get fed at home and--so they do better
in school. Guess what, there is no demonstrable evidence they
actually--they are actually helping result--they are helping
results, helping kids do better in school.
The way we justified it was these programs are going to
help these kids do better in school, and we can't prove that
that is happening.
You--this budget cuts the 21st century learning program. It
eliminates it entirely. And this is a program that does before
school, after school, and summer programs that do include food
for children. What the heck is going on?
Mr. Mulvaney. Less than 20 percent of the children who
enroll in that program actually move from not proficient to
proficient. 20 percent is a failing grade.
Ms. Schakowsky. So let's just not feed them. My time is up.
Mr. Mulvaney. How do we justify--thank you.
Chairman Black. The gentlelady yields back.
I now recognize the gentleman from Minnesota, Mr. Lewis,
for 5 minutes.
Mr. Lewis. I would thank the chair and welcome Director
Mulvaney. Glad to have you back in the Budget Committee.
Let me start with a couple of quick questions and a short
yes-or-no answer on a couple of these things, and then we will
get into more substantive give-and-take a little bit.
It is interesting to note, especially from the other side,
that the first balanced budget in over 8 years, or in 8 years,
has been greeted by moral outrage, shockingly extremes, I think
is the phrase I heard.
Do you find it shockingly extreme that our debt has gone
from $10.6 trillion to $19.9 trillion in just the last 8 years?
Mr. Mulvaney. I absolutely do.
Mr. Lewis. Do you find it shockingly extreme that we are
mired in 1.9 percent growth over the next 10 years.
Mr. Mulvaney. Frustratingly so, yes, sir.
Mr. Lewis. Do you find it shockingly extreme that we have
had a record tax revenue last year over $3.2 trillion and yet
we have a $600 billion deficit this year?
Mr. Mulvaney. It is unacceptable.
Mr. Lewis. Shockingly extreme that net interest expense is
projected to be $768 billion, but if interest rates go back to
their post World War II average, 10-year Treasury at 5.7
percent, it will be well over $1 trillion?
Mr. Mulvaney. We will be broke.
Mr. Lewis. Is it shockingly extreme that Federal budget
outlays has gone from $1 trillion in 1987 to $2 trillion in
2002 to $4 trillion today.
Mr. Mulvaney. Growing much faster than every other measure
of economic outgrowth.
Mr. Lewis. Is it still shockingly extreme that Federal
revenue is above its 50-year average of 17.4 percent of GDP?
Now, it is 17.8 percent of GDP and yet, we are told it is not
enough?
Mr. Mulvaney. It is never enough. Is it?
Mr. Lewis. Shockingly extreme that Federal outlays are
above their 50-year average of GDP 20.3 percent, today at 21
percent, scheduled to go to 23.4 percent of GDP?
Mr. Mulvaney. It is unacceptable.
Mr. Lewis. Federal debt held by the public, 77 percent of
GDP, but actually, total Federal debt is almost 100 percent of
GDP, correct? Is that shockingly extreme?
Mr. Mulvaney. And going to have long-term, detrimental
economic impact on our economy.
Mr. Lewis. And the civilian labor force participation rate
back to 1977 levels at 60, what, at 62.8 percent?
Mr. Mulvaney. Even lower than it should be, giving the
graying of the American work force population.
Mr. Lewis. And finally, is it shockingly extreme that the
top 25 percent of taxpayers, those households making $78,000 a
year or more, two teachers making $40,000 a year, actually pay
87 percent of all income taxes collected?
Mr. Mulvaney. That is where the money is. Right.
Mr. Lewis. So despite of all of the debt, all of the money,
all of the Keynesian stimulus, we are stuck at 1.9 percent
growth. The CBO says it is going to be 1.9 percent growth for
the next 10 years, and I am wondering why that is if that is
all supposed to be so stimulative, and we are going to have the
multiplier effect and demand side economics is going to pull us
out of this, is it the President's budget and what you are
defending today an attempt to make certain that we grow at
historical averages by not focusing on this pumping up or
priming of demand, but getting investment and productivity back
into the economy?
Mr. Mulvaney. Private investment is what is going to save
the company--save the country, because that is where innovation
comes from; that is where productivity comes from, and that is
where GDP growth comes from. But we have tried it the other
way. We have tried it with huge Federal funding for the last 30
years.
And now, here we are where a large portion of the
population, a large portion of this body thinks that 1.9
percent is the best we are going to--ever be able to do, and
that just speaks of pessimism about the country that we simply
refuse to accept.
Mr. Lewis. And we have heard this notion of malaise, we are
stuck in slow growth, just can't move. Jimmy Carter talked
about malaise, and yet, we have had 5 consecutive quarters
after the progrowth policies in the early 1980s of 7 percent
growth. Where is the empirical evidence that we can't grow at
3, 3.5 percent?
Mr. Mulvaney. Well, I think the empirical evidence is that
we can grow at 3 percent.
Mr. Lewis. So the emphasis of this budget is to say we have
got the highest corporate tax rate in the developed world of 35
percent. We have got $2.6 trillion in profits that could be
repatriated. We have got a passthrough tax rate subchapter S,
LLC, small business men or women, paying not 39.6 percent, but
43, 44 percent when you take out the PEP and Pease and the
itemized deductions, lowering those tax rates is going to
provide more capital, which is going to increase productivity.
The truck driver, is it not true, Director Mulvaney, is always
more productive with the truck?
Mr. Mulvaney. Always.
Mr. Lewis. And, therefore, that is what the budget is
supposed to do. And we have got data that show it has been done
in the past, in the 1960s, in the 1980s, and even in the 1990s.
Mr. Mulvaney. Not only that, we need to do it to save the
country.
Mr. Lewis. In fact, without this sort of growth and this
investment in productivity, we will never balance the budget?
Mr. Mulvaney. No, sir. Well, I take that back. At some
point, we will balance the budget. The question is, do we do it
on our terms or on someone else's, because at some point,
people will start to refuse to lend us money. And I would much
rather do it on our terms than somebody else's.
Mr. Lewis. Thank you, Director Mulvaney. Good to see you
again, and I yield back.
Chairman Black. The gentleman yields back.
The gentlelady from Florida, Ms. Wasserman Schultz, is now
recognized for 5 minutes.
Ms. Wasserman Schultz. Thank you, Madam Chair.
Since, Mr. Mulvaney, you began the meeting by providing a
better name for this budget, you described it as the taxpayer
first budget. I describe it as the taxpayer shaft budget,
because that is really what you are doing to millions and
millions of people who simply are trying to make sure that they
can keep their head above water and live a decent lifestyle.
And I find irony in your lamenting that there is some kind
of double counting in the total costs of the cuts in TrumpCare.
Because let's be clear, this budget, as you have described,
does not balance; hubris doesn't solve basic math problems.
The Trump budget counts the savings from tax cuts and
projects that these same tax cuts will stimulate growth in the
economy and generate so much new revenue that it will produce
$2.1 trillion in additional Federal revenue.
Now, you can't balance the budget by ignoring the reduction
in revenue from tax cuts, and then count the cuts as generating
unprecedented, never-before-realized growth attributable to
those tax cuts, and then trying to use that growth and revenue
as a pay-for for the tax cuts. That is what is called double
counting.
So let me give a real--a real-life example. If I bought
solar panels for my house, and I reduced my electric bill
through the savings by disconnecting from the grid, but then I
didn't count the cost of the solar panels in my household
budget and just ignored that there was a significant cost, and
then I tried to also count the savings in my electric bill as
an offset to the costs of the actual solar panels, then that
would be double counting, particularly, if I say that the
offset is more than the cost of the solar panels.
If I went to my accountant and said, my household budget,
using this configuration, is balanced, he would laugh at me.
Your Treasury Secretary, when confronted with the double
counting, said that it was premature to put in any changes as a
result of taxes since you are not far along enough--far enough
along to estimate what the impact would be.
So, I mean, look, we can all go through this exercise, and
that is certainly what we are doing. We can pretend that we are
actually going to come up about a budget that we can all agree
on and send to the President when we haven't done that in
years. One thing, though, that is absolute certainty is that a
budget is an expression of our values. And your values and your
boss's values are appalling.
If this is a reflection of our Nation's values, then we
really are in an internecine battle for the heart and soul of
this country.
So with that in mind, and I would love to have you respond
to that, I will ask both of my questions and then leave you the
remaining time: 65 percent of seniors who rely on Medicaid to
be able to afford a nursing home or nursing care in their homes
do it through Medicaid.
How can States continue to implement innovative programs to
deliver long-term care to seniors and people with disabilities
in their home when you are taking $610 billion from them? So if
you will could answer both of those questions. If you just
illuminate the committee on your math.
Mr. Mulvaney. Sure. I could try. Yes. And I will start,
Congresswoman, with the pushback on the never before realized
growth. That is what is so depressing, because people think
that 3 percent growth is never before realized. It used to be
an annual thing. And yet, here we are assuming that that is how
we describe below average, long-term growth in this past.
Ms. Wasserman Schultz. Please address the double counting.
The double counting, that is my question.
Mr. Mulvaney. Yes, the double counting. Mr.--Secretary
Mnuchin was right. It is and was too early to make any
assumptions about the final tax bill, looks like. We gave a set
of principles to the House, and the House and the Senate are
both looking at them right now.
Ms. Wasserman Schultz. So then clearly you representing
that this budget is balanced is inaccurate.
Mr. Mulvaney. No, it is not.
Ms. Wasserman Schultz. You can't both say it is premature
and say that the budget balances.
Mr. Mulvaney. I would be more than happy to answer your
question if you would give me the chance. But I am absolutely
not suggesting that the budget balance is inaccurate. So if I
may continue.
We assumed--we had to make assumptions regarding what the
Tax Code would look like. There are three assumptions you could
make: Either it adds to the deficit, subtracts from the
deficit, or is deficit neutral. And we assumed for sake of
doing the budget that it would be deficit neutral, that
removing the exclusions, the deductions, the loopholes, would
lead us to a deficit-neutral tax plan. The dynamic benefit is
only counted one time and that is towards the 3 percent
economic growth.
And I am happy to explain that further to you in writing,
if you would like.
Ms. Wasserman Schultz. You can explain whatever you would
like. You are counting revenue twice and saying that that
budget was balanced. And anyone running their household budget
that way would be in serious financial trouble down the road as
you are heading us towards.
Chairman Black. The gentlelady's time has expired.
Ms. Wasserman Schultz. I yield back.
Chairman Black. I now recognize the gentleman from
Pennsylvania, Mr. Smucker, for 5 minutes.
Mr. Smucker. Thank you, Madam Chair.
Good morning, Director.
Mr. Mulvaney. Good morning.
Mr. Smucker. As a previous small-business owner, I
understand the need to balance a budget. Each year we had to
match expenses to revenue or you threaten the future of the
company. And of course as families we need to do that on an
annual basis as well. So I have talked about the Federal budget
in those terms. We expect families, businesses to do that, why
can't we do at that the Federal level?
In the States we have had a tool. We have a balanced budget
amendment in Pennsylvania, I served in the State senate there.
That required us to--it imposed discipline on the process, if I
will.
But I brought this up at a--I spoke at a Rotary recently
and the first question from the constituent said that the
Federal Government is different. We cannot compare the two. We
can't compare the Federal Government to businesses because at
the Federal Government we can print money, so it is not the
same thing.
That is, by the way, very different than--we had a hearing
in this very room, CBO Director Hall was here, and he used a
term called sovereign debt crisis. If we don't change the
trajectory of our annual deficits, there is growth in those
deficits--so I am curious, what is your thought on that? What
happens if we continue down the path that we are on right now?
Mr. Mulvaney. Well, let me speak to the point someone
raised to you at the Rotary meetings, which is technically I
suppose they are right, you could simply print money. But what
does that mean? But what does that mean in the real world? It
is not free to do that. If it were, we would do it every single
day, right?
When we print money to pay off debts, when we print money
to pay for things, what it essentially does is make the
existing dollars in your pocket work less. That is why they
call inflation one of the cruelest taxes, especially on the
older generations that have saved for retirement, now living
off investments and so forth.
So when you print money, you do nothing but essentially tax
the people who are already there, to tax in a different form.
So you can go back to your folks at Rotary and say, ``Look, I
guess you are probably right. Why don't you give me, say, 20
percent of the money in your pocket and we will call it even?''
Because that is what it would take to effectively balance the
budget. Actually I think the number this year is going to be
about 14 percent.
But where are we headed? We are headed to where I talked
about before, which is we will balance the budget eventually,
one way or the other, on our terms or on somebody else's,
either by balancing the budget the proper way, printing a bunch
of money that impoverishes our citizens, or having somebody
else who won't lend us money force certain considerations on us
in order to get us to balance as a condition to lending us
money.
Only one of those outcomes is desirable, Congressman, and
that is the one about figuring out a way do it ourselves before
it is too late.
Mr. Smucker. Which requires tough decisions.
Also, as a business owner, I saw the real impact. We talk
about 3 percent, 2 percent, 1 percent growth. And when you are
just talking figures it doesn't seem like a lot. But we had
about 150 employees in our business, and I have been through
times of recession, times of low economic growth, and the jobs
just weren't available. We were a construction company. So a
small enough company we knew the employees and we knew the
families and saw the impact when we with had to tell people we
simply don't have enough work and had to lay people off.
One of the reasons that I think we are all here is to
provide opportunity for our kids, our grandkids, to help lift
people out of poverty, provide that economic mobility. And I
think the best possible thing that we can do is have the higher
economic growth that will provide that opportunity. I would
just like to hear your response to that.
Mr. Mulvaney. I am interested to hear a story about your
family. My family is in the home building business. And one of
the things my dad, he turns 75 this year, and one of the things
I think he is most proud of is the number of folks who are
making more than $100,000 at his company--this is 20 years ago
now--that didn't have a college degree, in fact many of them
didn't have a high school degree, because you could make that
kind of living in a healthy American economy in the
construction business. And I think that growth cures so many
ills.
Bill Clinton gave more people--``gave'' being the wrong
verb--but provided health insurance for more people than
HillaryCare would have simply by having economic growth. It
solved so many of our problems and in fact would probably cure
a lot of the ills between the two parties because it is a lot
more fun to govern in a growing economy than it is in a
sluggish one.
Mr. Smucker. I think there is a lot we can agree on here in
both parties.
But I do want to mention one other aspect of the budget and
this was brought up. Our Nation faces a growing heroin and
opioid epidemic that is shattering the lives of families in my
district and devastating communities across the Nation. This
public health crisis claimed the lives of more than 3,383
Pennsylvanians and 33,000 Americans in 2015 alone and is
getting worse.
I sent you a letter last week, which I would like to submit
to the record, Madam Chair, if I could.
Chairman Black. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Smucker. And I again laud you for recognizing the
severity of this crisis and for prioritizing lifesaving
investments into the Office of National Drug Policy.
I was wondering if you could explain to the members of this
committee just exactly how the President's budget requests
increases in the Federal Government's response to the opioid
crisis.
Mr. Mulvaney. I can, Congressman. I see that my time has
expired. But I would be more than happy to both talk to you
about that and send you a letter in writing.
Mr. Smucker. Thank you. I appreciate that.
Mr. Mulvaney. Madam Chair, if I may be so bold, would it be
possible to take like a 90-second break?
Chairman Black. It absolutely would. Let's take a 90-second
break for the committee.
[Recess.]
Chairman Black. The committee will come to order. I now
recognize the gentleman from Georgia, Mr. Woodall, for 5
minutes.
Oh, excuse me, I think that I did not--excuse me, Mr.
Woodall. I need to go to the Democrat side. I apologize. I am
incorrect. You are next.
I now recognize Ms. Jackson Lee from Texas for 5 minutes. I
apologize.
Ms. Jackson Lee. Mr. Mulvaney, you indicated in your
statement that reducing lower priority, nondefense,
discretionary spending was going to be a core of this budget's
success. I interpret that as a betrayal, betrayal of the
children, seniors, working families, people who voted for
Trump, cities, counties, and States. That is the interpretation
that I believe the American people will understand.
In the course of your budget you have gutted or cut the
National Endowment for the Arts, the National Endowment for the
Humanities, and something that the Gulf region needs
desperately, coming from South Carolina you should understand,
the Army Corps of Engineers.
You repealed the Affordable Care Act, but $880 billion,
that is your premise, when the Senate said that that repeal is
dead on arrival. They said the budget was dead on arrival.
You are going to eliminate the Community Services Block
Grant, you are going to eliminate the Community Development
Block Grant, you are going to eliminate Federal Emergency
Management Agency State and local grants, all lifelines for
Americans.
I won't have to worry about shutting the government down
because Americans will shut it this government down if the
Trump betrayal budget ever passes.
So let me ask you these questions. And as I do so, let me
remind my fellow Texans that they get $70 billion from the
Federal Government for their budget and they just balanced
their budget on the $70 billion from the United States
Government Federal Government of which you eliminate.
I also want to put on the record that the trips that Trump
takes to Mar-a-Lago in the past 5 months cost $20 million. If
we keep going at this rate, it will be in 4 years $200 million.
I would like to suggest that one of the things you do is to cut
not only his trips to Mar-a-Lago, but his trips overseas,
because you are cutting $9 billion from the State Department.
So my question to you involves the Army Corps of Engineers,
why you would be so much against the important flood work that
counties like mine need, number one.
The other question is I want to ask about a letter you
wrote last week to the Director of the Office of Government
Ethics, Walter Shaub. The letter appears an effort to try and
shut down the investigation of Trump, giving waivers to so many
billionaires who are working in his administration, number two.
Number three, you have a comment: That doesn't mean we
should take care of the person who sits at home and eats poorly
and gets diabetes. Are you saying that you support a healthcare
plan that makes distinctions between the deserving ill and the
undeserving ill in deciding who can get Federal support and how
much? Is that why you have the audacity to cut $800 billion
out?
My third question is, Director Mulvaney, is it reasonable
to assume that the budget includes $1.4 trillion or more in
cuts to Medicaid? And I just met with the State of Texas, they
are begging for their Medicaid so they can provide for the poor
in their State.
I would appreciate you answering the question. And would
you answer the question, are you betraying those who voted for
Trump looking for a lifeline? And are you betraying the
American people?
Mr. Mulvaney. Thank you, Congresswoman.
In reverse order, are we betraying the American people? No.
In fact we believe that giving them 3 percent growth is giving
them exactly what they wanted when they elected this President.
Is it true or untrue to state that we have cut $1.4 from
Medicaid? That is untrue, for the reasons I stated earlier.
Regarding my statement week on diabetes, I was speaking at
a healthcare conference. What I was trying to do is draw a
distinction between type 1 and type 2.
Ms. Jackson Lee. But you did say it.
Mr. Mulvaney. Again, I am trying to put my comments into
context, ma'am. I am aware of the difference between type 1 and
type 2 diabetes.
On the OGE----
Ms. Jackson Lee. But you are not a doctor.
Mr. Mulvaney. I am not a doctor. Are you?
Ms. Jackson Lee. I know diabetes. It is my in family and it
is in my community and it particularly impacts African
Americans. And we will be devastated by this budget along with
American working families.
Mr. Mulvaney. Regarding the OGE letter, I got a letter from
the Office of Government Ethics that I thought was
inappropriately broad and violative of statutes. So I did what
I think is the exact right thing to do when there is a dispute
between two pieces of the administrative--of the executive
branch, we referred the matter to the Department of Justice and
the Office of Legal Counsel, which I think is the statutory
thing I am supposed to do.
Regarding infrastructure, we are, as I mentioned before to
an earlier question----
Ms. Jackson Lee. Army Corps of Engineers.
Mr. Mulvaney. The Army Corps of Engineers, writ large with
infrastructure, is that we are focusing, trying to focus our
attention on getting to the $1 trillion worth of new
infrastructure, leveraging $200 billion of new spending.
Ms. Jackson Lee. Your budget is full the tricks and
trickery. It does not work. No economist will approve your
budget in terms of it working. There will not be a 3 percent
growth because the working population is expired. This is a
betrayal of the American people.
Mr. McClintock. [Presiding.] The gentlelady's time has
expired.
Ms. Jackson Lee. Thank you. I yield back.
Mr. McClintock. Mr. Woodall.
Mr. Woodall. Thank you, Mr. Chairman.
I want to thank the Director for being here. I remember
when he was a young freshman, I was a young freshman. In fact,
our current chairwoman, Ms. Black, was a young freshman. We got
here having been just elected in that giant class of 2010, and
the first thing we got to do was write the budget. And, oh,
golly, what an amazing honor that is. You get elected to serve
your folks back home and you get to come up here and start
making priorities.
And I remember that first moment, and I suspect you
remember it too, Mr. Mulvaney, when you realize the budget
doesn't actually get signed into law, that the changes that you
make don't actually become the new law of the land, that the
conversations that we have here are simply about vision and not
about how policy is going to change tomorrow.
Do you remember that moment of realization?
Mr. Mulvaney. Realization is a positive spin to put a on
it, yes, Mr. Woodall.
Mr. Woodall. I asked you that because I heard my friend
from Florida say that your values are appalling, and I
apologize for that. We are not talking about your values here.
I know you. I know you to be a man of integrity. And you are
exactly the right guy to have in this job.
We are talking about choices. I think in the ranking
member's opening statement as read by Ms. Jayapal it was said
that these are false choices, that we don't have to choose.
What I hear you saying is that in the spirit of finding
reputable economists, that you cannot find a reputable
economist that says continuing as we are continuing is a recipe
for success. Is that accurate?
Mr. Mulvaney. Not a single one. No, I don't think you will
find any reputable economist that says we can do what we are
doing forever.
Mr. Woodall. And, in fact, over the last 8 years we haven't
been making choices. It is hard to make these choices. But in
all of the doom-and-gloom conversation about cuts, explain it
to me in simple terms that I can understand, exactly which
year, going from one year to the next, are you going to spend
less money on behalf of the American people?
Mr. Mulvaney. Not one.
Mr. Woodall. Let me make sure I am understanding you. You
are saying that in all of this conversation about the cuts and
the erosion of public spending, you are spending more every
single year proposed in this budget?
Mr. Mulvaney. Yes, sir.
Mr. Woodall. I know that there is more that unites this
country than that divides it. And I believe we can find that
pathway forward together.
If I could put a slide up here on the screen. This is what
I have seen in my short time in Congress. This is CBO-projected
growth. And of course OMB has one projection of growth, CBO has
a separate projection of growth.
But time and time again in this committee hearing I have
heard folks say that your projection of 3 percent growth is
just outrageous, that it is unsubstantiated, that absolutely no
one would ever agree that such a thing was possible. As I look
back on my chart, even we here in Congress agreed that such a
thing was not only possible, but probable just 5 years ago.
When you talk about 3 percent growth going out on the
horizon, is that the same 3 percent growth that CBO was
projecting just a short time ago?
Mr. Mulvaney. And other administrations, previous
administrations were actually projecting higher than that.
Mr. Woodall. Now, when you move from 1.9 percent economic
growth to 3 percent GDP growth, what does that translate into
in terms of revenues for the Federal Government?
Mr. Mulvaney. I can't remember what the topline number is,
Congressman, but it is a substantial sum. Remember the
difference between 2 percent growth--and I always cringe when
people say when you go from 2 percent to 3 percent growth, that
is only a 1 percent increase. It is not, it is a 50 percent
increase.
Mr. Woodall. So my understanding of that revenue means we
would be looking at something close to a balanced budget. If
these numbers had stayed at 3 percent going back to the time
you and I got started, we would be looking at a balanced budget
today so significant would be that revenue.
Mr. Mulvaney. I have seen studies that, based on what
assumptions you want to make, that would say you are very, very
close to getting there.
Mr. Woodall. What I have heard the President say and what I
would like to hear from you is that every single thing that he
is doing is geared towards returning us to these 3 percent
growth figures. Is that accurate?
Mr. Mulvaney. Every single thing that he is doing is geared
towards getting us back to 3 percent growth.
Mr. Woodall. There is not one family in my district that
doesn't believe that is going to make a difference.
I will close with this. You all just sent a $10 million
check to the State of Georgia to rebuild a bridge that
collapsed in our district. That was a fire. Twelve lanes of
interstate collapsed. We rebuilt it in 6 weeks--6 weeks--a
performance budget going out to that contractor.
There is not a conservative family in my district that was
not proud to pay their tax dollar to go to that project because
they got value for that dollar. Thank you for trying to squeeze
those dollars and bring that pride back in what we do together.
Mr. Mulvaney. And I would encourage you to look at the
permit process that was necessary to build that in 6 weeks. It
would stun you as to how much time we spent.
Mr. Woodall. I thank the gentleman.
Mr. McClintock. Ms. DelBene.
Ms. DelBene. Thank you, Mr. Chairman.
And thank you, Director Mulvaney, for being here with us
today.
My background is as a businesswoman and an entrepreneur,
and I know how incredibly important it is to have a budget that
is responsible. And I must say that this budget is incredibly
irresponsible and dangerous. It would be an enormous setback in
pretty much every area that affects American families,
particularly for children, seniors, and people with
disabilities. It would have a negative impact on critical
research, on healthcare, job training, our environment,
affordable housing programs, education, and that is just to
name a few.
Rather than gouging programs--and important programs--that
the middle class relies on just in order to give the wealthiest
Americans a tax break, we should be working on a bipartisan
budget. That is what works. A bipartisan budget that provides
working families certainty and stability.
And so let's start with farmers. Under your budget, more
than 5,200 positions at USDA would be eliminated. This is part
of a larger 8 percent cut. The Farm Service Agency alone, which
my farmers rely on for critical assistance, would lose 973
people, USDA Rural Development would lose 925 employees, and on
and on. This was a bad idea when it was proposed in the past
and it is still a bad idea.
What is the rational for making a farmer drive hours out of
his or her way to get to one FSA office that is open three
counties away because you decided that rural America is doing
just fine as it is? Farmers lead incredibly busy lives, and
making their lives more difficult through cuts like this is
incredibly shortsighted. So why are we cutting important
programs for farmers.
Mr. Mulvaney. Congresswoman, I appreciate the question. And
while I have received some questions about some of the farm
supplement and subsidy programs, I have not received that exact
question before. So I apologize if I am only going to be able
to give you half an answer. I am not satisfied with half an
answer, so I want to give you a full answer in writing
afterwards.
Mr. Mulvaney. But I am looking at my notes very quickly on
a the topic I am not as familiar with as some of the other
things, and I see that the farm loan programs are up $564
million in the budget. So I am not saying----
Ms. DelBene. The Farm Service Agency alone would lose 973
people, and we already know that access is hard. I have heard
that from my farmers directly. I just heard it from a farmer
last night. So I would appreciate more information on that.
Mr. Mulvaney. And I apologize for not having it on the top
of my head.
Ms. DelBene. This budget would also cut the National
Institutes of Health, the NIH, by $6 billion, which is a truly
stunning and irresponsible cut. In the last few years Congress
has worked on a bipartisan basis--bipartisan basis--to boost
NIH funding by nearly $4 billion. And I would remind you that
Federal finding for NIH supports more than 400,000 American
jobs and generates more than $60 billion in new economic
activity.
Unfortunately, the Federal Government's contribution
towards basic research at the NIH has consistently failed to
keep pace with inflation, which has allowed the agency's
purchasing power to diminish by nearly 20 percent since the
year 2003. So if we are serious about breaking new ground in
our understanding of complex and life-threatening conditions,
then it is absolutely essential that we increase funding for
the NIH. We can't hope to accelerate development for new cures,
therapies, vaccines without additional resources for research,
and these need to be consistent, stable resources.
We just agreed through the end of this year to make sure we
increase funding for NIH in a bipartisan fashion. So why can we
not support bipartisan ideas, important ideas, that have a
positive impact on our economy and a positive impact on our
communities in terms of the innovation and the impact it would
have on people's lives? I would like to understand your
rationale for setting back medical progress and research across
many critical areas.
Mr. Mulvaney. Sure. I think we probably can agree on more
than you realize, Congresswoman. I don't know if you were here
when I answered a similar question from Congressman Cole
earlier. But the administration wholeheartedly believes in the
commitment to research.
We would like to see more focus on what they call basic
research, which is research further away from the marketability
of products, because that is one of the gaps that the
government can and should fill. When you look at the long lead
time on developments of new drugs, for example, many companies
cannot afford----
Ms. DelBene. And that is why consistent dollars are
important.
Mr. Mulvaney. It absolutely is.
Ms. DelBene. And so here we have had continuing resolutions
and we disrupt that ability for scientists to see their
research. Partial research doesn't work. If you are going to
fund something it has to be funded all the way through.
We are running out of time, so I just want to say this is
critically important, it is a bipartisan issue, something we
agree on. You are cutting dollars, you are not adding dollars,
and I think we have to focus on that.
Mr. Mulvaney. As I mentioned, in the last 3 seconds, if you
look at the way we have proposed to spend the money, we can
actually spend as much money on research next year as we did
last year.
Ms. DelBene. I yield back.
Mr. McClintock. The gentlelady's time has expired.
Mr. Ferguson.
Mr. Ferguson. Director, thank you for coming today.
And it is interesting, as I sit here and listen to a lot of
the comments on both sides, but particularly from those here on
the left, it reminds me so much of where I was just a few years
ago in my hometown.
I lived and come from a hometown and governed in a hometown
that lost its manufacturing backbone. We lost tens of thousands
of textile jobs. And no matter in the coming decade and a half
after that, no matter how many government programs the
communities relied on, no matter how much public assistance
went to those in poverty, education, community block grants, no
matter what those small wins may have looked like, you could
not pour enough money into the problem to address those issues.
It simply did not change until we created the environment for
advanced manufacturing to call our community home.
And it is when we put 16,000, 17,000 people back to work
that we really begin to see our fortunes change. It changed our
city budgets, budgets that we had had to cut doing the same
things that we are doing now, really programs that communities
valued, but we simply did not have the mechanism to pay for
them. It wasn't until we grew our local economy, that we grew
our city revenues and cut taxes, that we were able to have the
revenues needed to put back into those important programs that
our community wanted.
So with that, the things that we had to do is we had to
create the right tax environment. We had to have the right
regulatory environment where we partnered with our industry,
not penalized it. We had to have an education system that
developed a viable workforce. And we had to make strategic
public investments in infrastructure to support it.
So with that I will ask these very few questions. Does this
budget and is it the desire of the President to do those
things, create the right tax environment for business?
Mr. Mulvaney. Absolutely.
Mr. Ferguson. Create the right regulatory environment?
Mr. Mulvaney. Drives everything we do.
Mr. Ferguson. Create the right education environment that
really prepares people for a job in the 21st century economy?
Mr. Mulvaney. Yes, sir.
Mr. Ferguson. Does it create strategic public investments
in infrastructure that allowed the public sector to come in
behind it and to work the public investments.
Mr. Mulvaney. One of the reasons we talk about increasing
spending on infrastructure.
Mr. Ferguson. If we do all of those things, can we in fact
get above 3 percent GDP growth?
Mr. Mulvaney. Yes.
Mr. Ferguson. If we do that, can we develop the resources
that we need to build a bridge to really effectively deal with
what is ultimately the biggest cost driver in the budget, and
that is the mandatory spending curve?
Mr. Mulvaney. As I said before, I think you are moving to a
point where you won't be able to balance the budget if you
don't address mandatory programs.
Mr. Ferguson. Okay. If we are able to do that, if we are
able to have significant deficit reduction, or at least be
neutral as this much it does, I think it is important that we
recognize that we are fighting over a small part of the budget.
If we want to make those strategic investments in these
programs that our members on both sides of the aisle feel are
valuable, we have to address the mandatory spending curve.
There is no doubt about it. We have to address issues with
Social Security and Medicare and Medicaid and interest on the
debt.
Typically, when those conversation are had, the first thing
that happens is one side or the other throws up some wild
headline that says: Hey, Bergman over here or Ms. Wasserman
Schultz wants to cut your Social Security or Medicare.
We need to have an honest conversation with the American
public about where that is and where we are headed. And every
single Member of Congress has an obligation to address the
programs in such a way that we protect those that are receiving
them now, those that are close to the finish line, but be very
transparent about the fact that we are going to have to change
something long term and we are going to have to create enough
economic activity to be able to build that bridge to get us
from where we are right now until when those programs changes
can actually go into effect.
Mr. Mulvaney. I think it is absolutely valuable,
Congressman, that you have the perspective of someone who is
either a councilman or a mayor, judging by what you mentioned,
that folks who have to balance the budget at the town level and
the city level get it. Folks that have to balance the budget at
the State level get it.
And for some reason this body--and I count myself amongst
you because I was one of you until recently--we just don't get
it. And I don't know why we lose that commonsense approach,
where that reasoned look at economics and life goes away
because somehow we get elected to Congress. So I appreciate
that input. It is extraordinarily refreshing.
I want to clarify one thing I said before, because I hate
being wrong on numbers, I probably have done it more than once.
But I got asked earlier the size of the nondefense
discretionary budget versus mandatory. I think I said mandatory
was 72 percent; 66 is what my staff told me is the right
number. But either way you look at it, it is the 800-pound
gorilla in the room.
Mr. Ferguson. There is no greater program that we can give
our American people than the dignity of work.
Mr. McClintock. Thank you.
Mr. Jeffries.
Mr. Jeffries. Thank you, Mr. Chair.
And thank you, Director Mulvaney, for your presence and for
your service.
The Trump budget balances itself on the backs of working
families, middle class folks, senior citizens, the poor, the
sick, the afflicted, as well as rural America. It does this, in
my humble opinion, largely to just provide a massive tax cut to
the wealthiest 1 or 2 percent of the people in this great
country. That is reckless and that is irresponsible.
Now, the Trump budget as proposed balances itself and
eliminates the deficit in 10 years. Is that right?
Mr. Mulvaney. Yes, sir.
Mr. Jeffries. And part of the reason why it is able to
balance itself is that it assumes that there will be increased
revenue in the amount of $2 trillion connected to exponentially
more significant job growth. Is that right?
Mr. Mulvaney. It assumes a 3--you are referring to the GDP
growth, because I think--I don't know if we talk about full-
time----
Mr. Jeffries. Economic growth.
Mr. Mulvaney. Yeah, it is economic growth. We do have some
numbers on unemployment as well. But, yes, you are correct,
that we do assume additional government revenues through
economic growth.
Mr. Jeffries. And that is $2 trillion in additional
revenue, not $2 million or $2 billion, $2 trillion in
additional revenue. Is that right?
Mr. Mulvaney. I think that is right, yes, sir, 2.1, 2.0, I
can't remember the exact number.
Mr. Jeffries. And the projected economic growth of
approximately 3 percent is due in large measure to the theory
that significant tax cuts disproportionately benefiting the
wealthy and the well-off will stimulate the economy. Is that
right?
Mr. Mulvaney. Congressman, that is part of it. When we
looked at the CBO baseline of 1.9, the way that we moved
towards 3.0 included tax reform, but it also included
regulatory reform, which we think actually can have a larger
impact on GDP, it included our trade policies, our
infrastructure spending. So there was a basket of policies that
we think moved us from 1.9 to 3.0.
Mr. Jeffries. But it is fair to say that a substantial part
of the theory as to the increased economic growth is anchored
in your strong, authentic, principled belief in tax cuts. Is
that right?
Mr. Mulvaney. Again, it depends on what your definition of
substance part is. We also assumed the repeal of ObamaCare,
which the CBO said actually added 0.1 percent to economic
growth.
Mr. Jeffries. Okay. There is no scintilla of evidence,
certainly for the last 25 years, that tax cuts in part are
responsible for stimulating any meaningful economic growth. Is
that fair?
Mr. Mulvaney. No.
Mr. Jeffries. Okay. Well, let's look at the record at least
at the Federal Government level. Bill Clinton was President for
8 years and during his 8-year Presidency there was substantial
economic growth. Is that correct?
Mr. Mulvaney. That is a true statement, yes, sir.
Mr. Jeffries. And the tax rate when Bill Clinton came into
office was at 31 percent, correct?
Mr. Mulvaney. I don't remember the tax rate, Congressman.
Mr. Jeffries. Okay. We can stipulate the highest tax rate,
easily ascertainable, 31 percent. He immediately with the
support of Congress changed that top tax rate from 31 percent
to 39.6 percent, correct?
Mr. Mulvaney. Again, Congressman, I don't remember. I was
not paying much attention to national politics in the mid-
1990s.
Mr. Jeffries. Okay. And 20 million-plus jobs were created
during the 8 years of the Clinton Presidency, true?
Mr. Mulvaney. I believe there was substantial economic
growth. I don't remember the number of jobs.
Mr. Jeffries. Okay. George Bush was elected President in
2000, correct?
Mr. Mulvaney. That is correct.
Mr. Jeffries. And the top tax rate at the time was 39.6
percent, true?
Mr. Mulvaney. Again, Congressman, I take you at your word.
Mr. Jeffries. Okay. Thank you. And the Bush tax cuts that
were put into place 2001 and 2003 resulted in the top tax rate
being dropped from 39.6 percent to 35 percent, correct?
Mr. Mulvaney. I think that is correct.
Mr. Jeffries. And how would you characterize economic
growth and job creation during the Bush Presidency?
Mr. Mulvaney. Congressman, if you are trying to get me to
say that the cause of the Clinton economic boom was an increase
in taxes and that the cause of the recession of 2008 was a
decrease in taxes, you are just not going to get me to go
there. If we could tax our way to prosperity, we would have
done it a long time ago.
Mr. Jeffries. I am just asking a factually based question.
Actually during the 8 years of the Bush Presidency when the top
tax rate was dropped, this country lost 400,000 jobs.
Now, during the subsequent 8 years we have got, again, 25
years of a record here. Barack Obama comes into office, the top
tax rate is 35 percent, it is raised to 39.6 percent. And
during the Obama Presidency, 12 million private sector jobs
were created.
I simply say that there is no evidence anchored in any
reality as to this theory of dynamic scoring and trickle-down
economics yielding substantial economic growth.
I yield back.
Mr. Rokita. [Presiding.] The gentleman's time has expired.
The gentleman from California Mr. McClintock, is recognized
for 5 minutes.
Mr. McClintock. Mr. Director, welcome.
I would like to continue that very line of analysis. As I
recall, Bill Clinton reduced Federal spending by 4 percent of
GDP. He approved what amounted to the biggest capital gains tax
cut in American history. He overhauled entitlement spending, in
his words ending welfare as we knew it. And we did have a
period of profound economic expansion.
Mr. Mulvaney. As I recall, over his objection and at the
insistence of a Republican-controlled Congress.
Mr. McClintock. And I understand that the growth
assumptions are at issue here, but the growth assumptions,
which are very relevant to whether and when the budget
balances, are really irrelevant to the policies that are
required to produce that growth. Are they not?
Mr. Mulvaney. Policies will drive everything, yes, sir.
Mr. McClintock. And with respect to the policies, this
budget reminds me a great deal of the first Reagan budget, when
he rebuilt our defenses, restrained the growth of nondefense
spending, enacted the tax and regulatory reforms that were
necessary to grow the economy, where wages are growing and
opportunity to prosper expands to include every American.
What was the result of these policies that you are
restoring to our Federal fiscal plan?
Mr. Mulvaney. We built an American economy that was the
envy of the entire world and can be again if we can have the
sense to reinstill some of those same policies.
Mr. McClintock. In fact, we averaged 3.5 percent growth
every year for 8 years, compared to the Obama policies that
increased taxes, increased the regulatory burdens, increased
our deficits dramatically, and produced one of the slowest
growth rates in the history of the country. I believe we
averaged 1.5 percent every year for his 8 years. Is that
correct?
Mr. Mulvaney. I think that sounds right, Congressman. In
addition, I think in his very first budget he assumed that he
would get 3.5 percent growth, 4.4 percent growth, 4.6 percent
growth, and 3.8 percent growth.
Mr. McClintock. And when Reagan took office the top
marginal income tax rate was 70 percent, getting to the
question of these terrible tax cuts for the very wealthy. Top
rate was 70 percent when Reagan took office. He cut that rate
from 70 percent down to 28 percent. And the result was our
income tax revenues went from $285 billion to $456 billion in
the same period. Is that correct?
Mr. Mulvaney. Again, I don't remember the exact numbers,
but I will take you at your word as I did with the previous
Congressman.
Mr. McClintock. And the share of taxes paid by that top 1
percent actually went up dramatically, from 17.6 percent to
27.6 percent. So when we cut the top marginal tax rate, the
economy expanded dramatically, revenues to the Federal
Government expanded dramatically, and the proportion of taxes
paid by the wealthy actually increased, it didn't decrease.
Mr. Mulvaney. And don't forget President Reagan also
dramatically simplified the tax plan, which is something we are
talking about doing as well.
Mr. McClintock. So this isn't theory, this is practice, and
it has been practice under both Democratic and Republican
administrations, when you cut the tax and regulatory burdens
the economy expands. We saw that under Reagan, we saw that
under Clinton. We saw that under Coolidge and Harding. We saw
that under John F. Kennedy. These are the plans that actually
work. This isn't theory, this is longstanding practice.
And it is so good to see an administration returning to the
policies that work and for the first time in 16 years having a
President who actually gives a damn about balancing the budget
before it bankrupts the country.
That is the one point I wanted to differ are you on, you
said that if we continue down this path our grandchildren will
have $30 trillion, $40 trillion of debts on their shoulders. I
don't think we would get that far.
You mentioned the sovereign debt crisis. When the
government loses access to capital, pension systems implode,
basic services, including public safety, falter, while
ultimately you have runaway inflation and the economy
collapses.
I asked a leading economist from Mercatus, how long do we
have? And his answer was, well, you can't really make a
prediction like that because a number of different factors will
influence the onset of a sovereign debt crisis. But he said,
``I can tell you this. When we reach a trillion dollars a year
in annual deficits, the markets will be destabilized at that
point and you will set the stage for a sovereign debt crisis.''
Your budget turns us away from that bleak future. But that
day comes, according to the Congressional Budget Office, if we
don't change course, 5 years from now. We don't have a lot of
time left.
Mr. Mulvaney. And I hope the House Budget Committee takes
your words to heart as well, Congressman.
Mr. Rokita. The gentleman's time has expired.
The gentleman from Massachusetts, Mr. Moulton, will be
recognized for 5 minutes.
Mr. Moulton. Thank you, Mr. Chairman.
Director, thank you very much for joining us here today.
I would like to touch on your comment about Washington-
speak versus regular language for the American people.
Director, do you believe in inflation?
Mr. Mulvaney. I believe that it is very real, yes, sir.
Mr. Moulton. Do you believe in population growth?
Mr. Mulvaney. I do, yes, sir.
Mr. Moulton. Okay. So I think that people back home
understand that if you flatline budgets for things like
Medicare and Medicaid, that, you know, let's say my parents are
counting on getting cataract surgery so they don't go blind
today, but if there is enough money in the budget to cover them
both today and that budget is flatlined going forward and the
price of cataract surgery goes up or there are simply more
people in America who need that surgery, then they won't be
both covered in the future. One of my parents will go blind.
That is why in Washington that we account for inflation and
population growth when we do budgeting. I think people back
home understand that the cost of bread is not the same today as
it was 10 years ago or 20 years ago because of inflation.
And I am concerned that in the same way that you are
returning us to the failed President Bush policies of tax cuts
to spur economic growth that when only directed at the
wealthiest don't in fact spur any economic growth at all, that
we are getting back to the fuzzy math of the Bush era as well.
But I would like to talk for a second about your cuts to
the State Department. General Mattis in 2013, who was then
Commander of U.S. Central Command, said before Congress that:
If you don't fund the State Department fully, then I need to
buy more ammunition. And that quote, ``The more that we put
into had the State Department's diplomacy, hopefully the less
we have to put into a military budget as we deal with the
outcome of an apparent American withdrawal from the
international scene.''
Do you agree with his assessment, Mr. Director?
Mr. Mulvaney. I will answer the question this way,
Congressman. What you see there is the President doing exactly
the same thing he has done on other line items in the budget
that I have talked about today. I recognize the fact there are
folks in this room who do not appreciate or support the
reductions in the State Department line item, just like there
are folks over on this side of the room who probably do not
agree with our decision not to tackle Social Security and
Medicare.
Mr. Moulton. Director, I am actually not talking about
Members of Congress, I am talking about our own Secretary of
Defense.
Mr. Mulvaney. I am going to answer you this way, is that
this is what the President promised he would do. I understand
what Secretary Mattis said before he was Defense Secretary----
Mr. Moulton. Well, the President also promised he wouldn't
cut Social Security, Medicare, and Medicaid, and he is cutting
them. He also promised us a healthcare plan that would see
everybody get beautiful coverage, and that is not what we are
getting from the AHCA, which, in fact, is guaranteeing that a
lot of people, like my parents, will see their healthcare costs
go up over the next 10 years if it is passed.
Mr. Mulvaney. Go back to your basic assumption,
Congressman, though, which is that the government most grow.
That is what the CBO baseline says, that you are required to
grow at inflation plus population growth. And I think we
simply--there are many of us who simply reject that. There is
no reason that the government must on auto pilot----
Mr. Moulton. Mr. Director, I would love to see the
government not grow because we would get more efficient. I
share your belief that we ought to be able to achieve that. But
I am not going to dismiss inflation, I am not going to dismiss
population growth when we talk about budgeting.
Director Mulvaney, do you disagree with the statement of
General David Petraeus, former CIA Director, retired General
John Allen, retired Admiral James Stavridis, and 120 other
retired generals and admirals who expressed their opposition,
just like Secretary Mattis, to cuts in diplomatic programs.
They said the State Department, USAID, Millennium Challenge
Corporation, Peace Corps, and other development agencies are
critical to preventing conflict and reducing the need to put
our men and women in uniform in harm's way.
Do you disagree with that assessment?
Mr. Mulvaney. Yes, sir, I don't necessarily agree with
that, and the budget does not agree with that.
Mr. Moulton. But why do you disagree with that? It sounds
an awful lot like our President who says that he is smarter
than the generals. Is that your view?
Mr. Mulvaney. What you are seeing----
Mr. Moulton. There are 120 respected generals who say you
are wrong. Your own Secretary of Defense says you are wrong. So
why is it that you are willing to put our troops at risk by
cutting aid to diplomatic programs that keep them out of harm's
way? Why is that? That is not fair to our troops, that is not
fair to those of us who are on the ground, Mr. Director, with
all due respect.
Mr. Mulvaney. Putting troops at risk is what this body has
done with the sequester that we are trying to undo.
Mr. Moulton. Mr. Chairman, I yield back.
Mr. Mulvaney. Thank you, sir.
Mr. Rokita. The gentleman yields back.
Mr. Sanford, the gentleman from South Carolina, you are
recognized for 5 minutes.
Mr. Sanford. I thank the gentleman. I thank the Director as
well for his time here.
I want to say how much I applaud your goal of balancing the
budget. As has already been noted, the last administration did
not have that as a goal. It didn't balance in perpetuity. I
very much admire that. I admire your willingness to make cuts
both in taxes and in spending. We have had much conversation on
the Appalachian Regional Commission because you have actually
proposed cuts, and it is something a lot of administrations
have not proposed.
I admire you. We have worked together over any number of
different years in different capacities. I think you are
bright, capable, and caring.
Mr. Mulvaney. You have to write that down.
Mr. Sanford. Yeah, I will, I will. And I generally
sympathize with the fact that you are doing an executive branch
budget, which I did for 8 years of my life, and that is a
difficult process.
But--and we will go to the ``but''--I want to go back to
what we talked about yesterday. You have said that the
foundation of your budget is 3 percent growth. And I have
looked every which way at how you might get there and you can't
get there. And as a consequence, I think it is just
disastrously consequential to build a budget on 3 percent
budget. The Bible says you can't build a house on a sandy
foundation.
What it does is it perpetuates a myth that we can go out
there and balance the budget without touching entitlements. It
the not only a myth, it is, frankly, a lie. And if it gets
started at the executive branch level, it moves from there.
And so I think that this notion of 3 percent--I heard
literally the Speaker of the House talking today about the
notion of 3 percent growth and how we can balance the budget. I
just again, as earnestly as I have looked at this, I don't know
how you get there.
And what this does is it creates real debates from
happening. I mean, legitimately, myself and Democratic
colleagues can see things quite differently, but for us to have
a real debate we have to base it on real numbers.
I would also say it is important, because I am a deficit
hawk, as you well know, and if you are wrong on these numbers,
it means all of a sudden we have created a $2-plus trillion
hole for our kids and grandkids here going forward.
So I want to walk through a couple different numbers with
you. One, this budget presumes a Goldilocks economy, and I
think that that is a very difficult thing on which to base a
budget.
If you look at the average economic expansion in the
history of our country, it is 54--58 months. The current
expansion that we are in is actually the third-longest economic
expansion in American history. We are at 94 months.
But what you presume in this budget is not only will we not
have a recession, though we are in the third-longest economic
expansion in history, but it is going to keep going for another
214 months. It is not only unprecedented, I would think that to
be unreasonable. It assumes that the stars perfectly align with
regard to economic drivers.
Can you guess the last time we had an unemployment rate of
4.8 percent, growth at 3 percent, and inflation held at 2
percent?
Mr. Mulvaney. I can't remember.
Mr. Sanford. It has never happened. The last time that
growth was at 3 percent where we were held for a sustained
period of time, the 10-year bond yield below 5 percent, you all
presumed 3.8 percent, can you guess the last time that has ever
happened?
Mr. Mulvaney. Again, I am trusting you on the assumptions--
--
Mr. Sanford. Yeah, it has never happened. So we are going
way out there on a curve in terms of assumption.
And then in terms of the ingredients of growth, I actually
broke out some numbers here, capital formation would have to go
to the record level that we have seen in terms of capital
growth from 1965 to 1974, though capital formation actually
goes down as people retire. They withdraw from the savings
accounts.
Labor force growth would have to go to see what we saw in
1970s and 80s when women were joining the work force en masse.
And even if you include the labor participatory rates took them
back up to the numbers that we saw in the 1990s, we would see a
two-tenths of 1 percent, a decimal increase, not a percentage
increase. It would require either radically opening immigration
or a radical change to demographics as we are having adding
10,000 baby boomers retire each day.
If you look at productivity growth, it would require
numbers, again, that we haven't seen since the golden days of
1958 to 1967 in the final wave of electrification, consumer
appliance, and the completion of the highway system to achieve
what we are seeing. Even if we went to 1990 numbers, we would
only see one-quarter of what is necessary to achieve 3 percent
growth.
Mr. Rokita. Time is expiring.
Mr. Sanford. The Rand Corp says that a reduction of 15
percent is to be presumed with aging.
I would just lastly submit this for the record, which is to
say, if you look at the correlation between OMB and CBO----
Mr. Rokita. Entered for the record, without objection.
Mr. Rokita. I am sorry, the gentleman's time has expired.
The gentlewoman from New Mexico, Ms. Lujan Grisham, is
recognized for 5 minutes.
Ms. Lujan Grisham. Thank you, Mr. Chairman.
And welcome, Director.
That wasn't the strategy I was going to take, but maybe I
can finish up just a little bit of what my colleague, Mr.
Sanford, was hitting on.
This committee, as you well know, it is very difficult for
us to have--and I mean no disrespect to my colleagues and I
don't think that you mean any disrespect to us on this side of
the Budget Committee either--but we don't have these earnest
dialogues about how you might look at this and what your
priorities could or should be. And I agree, if with a want to
have kind of a Cadillac growth in the economy and GDP, you want
that and you want to get kind of a balanced perspective about
who thinks that can happen, do comprehensive immigration
reform.
Now, we might disagree about the policies related to that,
but I think it is going to be very hard for members of this
committee to disagree that that in fact will grow the economy.
You want to make sure that government is lean and
efficient, you want to make sure that we are not hoarding money
or not being accountable? Well, let's deal with $125 billion at
the Pentagon.
There are things that we can do. If we are concerned about
population issues that are very expensive, boy, I spend a lot
of time doing aging policy. It is a very delicate effort here.
You want dignity and respect and quality of life for older
Americans. But we recognize unequivocally that they are
chronically ill, they are on an average of seven medications,
most need long-term care, including my mother, who, by the way,
is only 77. And the amount that we spend, unsustainable.
So if we are interested in that, then you bet, get NIH and
CDC and every research arm and institution, public or private,
in the United States and get them to prevent and cure
Alzheimer's, and we have got a boon to the economy and we have
lowered our risks.
And I realize that particularly the last one, you know,
there is a not a one of us here who doesn't wish we could do to
that and eliminate all chronic disease, but we aren't going to
invest in addressing that at all. And, in fact, we are saying,
look, because there have to be sacrifices to deal with a
balanced budget and to really address some serious issues, we
are just going to have one side of the American population, you
sacrifice, and everybody else.
And I want to talk to you a little bit how I am living
that. NBC News just put out a report, I will submit it for the
record if that is----
Mr. Rokita. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Lujan Grisham. I will then. And here it is. It says,
look, New Mexico would be hit the hardest. All right. So I am
living in a State that is using many of the trickle-down
economic and cut policies, agendas that are clearly embedded in
this budget document. And let me tell you a little bit about
our--and we are a defense State with two labs, right? So a lot
of the stuff that you are proposing should really work in a
State like ours, except NBC says not so much.
And let's talk about my State. And if you remember from
being on this committee, I talk about it a lot, because it is a
huge problem.
Ten years ago we had a 3.7 unemployment rate. Today, we
have the highest unemployment rate in the Nation at 6.7 percent
for the third month in a row.
Our graduation rate is the worst in the Nation with only 69
percent of our students graduating on time.
Twenty percent of New Mexicans live in poverty, 28 percent
of New Mexico children live in poverty, second highest in the
Nation.
Half the State is on Medicaid with some of the worst
healthcare outcomes, second for infectious diseases, fourth for
teen pregnancy, third for suicide, first for chronic liver
disease, eighth for drug overdose.
One-third of New Mexicans rely on SNAP and nutrition
assistance, half of New Mexico's children under 4 are, in fact,
receiving State or SNAP benefits.
Now, we might argue about, well, see, Medicaid is not
working, but we have a Governor that has actually been cutting
Medicaid and being more draconian about work requirements and
not being very smart about reinvesting. Cut, cut, cut, cut,
trickle-down economics, which, in fact, have driven out
businesses. We have the highest teacher vacancy rates in the
country.
I could spend way more than just the 40 seconds I have left
to tell you that we are the only State losing population,
people have lost hope. And in fact embedded in every decision
that our current conservative leadership both at the local
level and at the State level have made mirror many of the
priorities in this budget with none of the outcomes that you
project for the Nation's economy.
So I would like to just point to a different perspective,
that while States are working to get ahead and balance these
issues and sacrifices, shared opportunities, shared returns on
those investments, that, in fact, exactly what you are
proposing, and I didn't get to any of the other stuff, student
loans, Pell grants any of it.
Mr. Rokita. The gentlelady's time has expired.
Ms. Lujan Grisham. We are, in fact, a disaster using your
budget blueprint.
Thank you, Mr. Chairman.
Mr. Rokita. Mr. Bergman is recognized for 5 minutes.
Mr. Bergman. Thank you, Chairman.
Director Mulvaney, thanks to you and President Trump for
all the hard work in crafting the fiscal year 18 budget
proposal.
I am encouraged by the strong conservative reforms the
President has proposed and the consideration shown for our tax
dollars. As a freshman member of the Budget Committee, one of
the most interesting documents I have read, it was about 26
pages, it was called the Evolution of Federal Budgeting. I have
subtitled that, when 2 and 2 ceased to equal 4.
We have got challenges and we have heard it in different
ways. As a career member of the military, I am encouraged by
the investments made in our national security and the military
in general. I applaud the President for taking our national
security threats seriously and for responding in a serious way.
But I would suggest to you that this is not a plus-up of the
military, it is a catchup over the last 8 years.
So I just have one question that I would like to discuss or
hear your thoughts on this afternoon, and it regards overseas
contingency operations, or OCO, as we call it.
The President's budget slowly brings down OCO spending.
Could you explain briefly the rationale behind the reduction?
And in your opinion, would the administration support
establishing a set of criteria, prioritized criteria, for
allocating OCO dollars in the future to ensure that the money
that is being spent is actually being spent on security needs
and to ensure we don't allocate more than necessary into the
OCO account in future years?
Mr. Mulvaney. We have not had a chance to talk about that
in particular, Congressman, but I can assure you that I welcome
that conversation. We simply haven't had a chance to do it yet
because we have been doing budget since the day I got there.
But I share your concerns, as I mentioned with one of our
colleagues earlier today, that OCO be used for OCO and that it
not be used in other ways.
Because of the nature of the account where it is not quite
as accountable, it is not quite as transparent, it is not in
anybody's benefit to use it as a place to park other spending.
It is an important piece of how we operate the Defense
Department, a necessary piece of how we operate the defense
department, but it does need to be properly used.
Mr. Bergman. Thank had you. And this is something we
haven't heard much this morning.
I yield back the balance of my time.
Mr. Mulvaney. And you won't hear that much in this
committee, Congressman.
Mr. Rokita. I thank the gentleman.
I see that we have no more speakers, at least at the
present time, on the Democratic side. So we will continue on
the Republican side with Mr. Grothman from Wisconsin for 5
minutes.
Mr. Grothman. Thank you very much for coming all over here,
glad to see you on that side. Dream come true.
Right now the average debt per person, as you pointed out,
in this country is about $60,000. I know this is going to be a
difficult next 4 or 5 months for us all because there are a lot
of people, both on the Democratic side and I guess what I will
refer to as the Bush Republicans, who feel that $60,000 can get
higher.
But I would like to thank you for trying to hold the line
on 60. And in this budget over the next couple of years how
much higher do you think that is going to get or do you think
we can kind of hold it at 60 for now? Or do you expect by the
end of this year it is going to be up to 63, 64?
Mr. Mulvaney. Well, it depends, Congressman, on what sort
of assumptions we make about what you all do. Keep in mind, our
budget is a message document, it contains the vision of the
administration. You all control the power of the purse. So when
it comes to spending, that will fall to you.
I think the CBO baseline number has us adding $9 trillion
of debt in the next 8 years. If you allow that to happen by not
changing the current law, that is exactly what is going to
happen.
Mr. Grothman. Okay. I know you have a little bit more in
here for border enforcement. Do you plan on in the next year
doing a lot of work towards building the wall?
Mr. Mulvaney. Yes, sir, we do. We asked for an additional
plus-up of the Department of Homeland Security of $4.5 billion,
of which 2.6 will go to actual border security.
Mr. Grothman. And how much of the wall do you think we will
build, first of all, by the end of our current fiscal year, and
then beginning the year that we are talking about in this
budget, how many miles do you plan on building?
Mr. Mulvaney. It is really difficult to say for a couple of
reasons. I am not trying to dodge the question, I am just
trying to give you the variables that we deal we deal with. We
haven't picked the ideal kind of fence yet. We are going
through a prototype process where there are a bunch of folks
trying to build small sections of wall to sort of see what they
look like, see how they might function. And then we have not
decided if one size fits all on a wall or if different parts of
the border need different types of barriers.
Mr. Grothman. What is your goal? You must have a goal.
Mr. Mulvaney. The goal is securing the border.
Mr. Grothman. I know. On November--on October 1 of this
year how many miles, if I tell my constituents back home, if I
have a town hall meeting?
Mr. Mulvaney. You all appropriated $341 million in the 2017
appropriations bill for replacement, and we plan on spending
all of that money this year.
Mr. Grothman. You have no idea, guess, 100 miles, 500
miles? No idea?
Mr. Mulvaney. Mr. Grothman, again, it depends on the kind
of wall that you build. I think the bollard wall is roughed out
at $8 million a mile. But I think that is an all-in cost and I
think it is actually cheaper to do it when you replace wall
that is there already, because you already own the land, the
infrastructure is there. So it is very difficult to give you
that number, sir, and I apologize. We can give you our best
estimates, though, in writing after the meeting.
Mr. Grothman. Why don't you come back and give me an
estimates as to when we are going to start billing and how many
miles we will get at the end of this fiscal year.
Mr. Mulvaney. Work is going on today. Work is going on on
the southern border today.
Mr. Grothman. Good. Okay. Next question.
I think your increased border enforcement will result in a
savings, but I wondered if you could work towards, in three
areas, work towards the amount of savings we could get if we
kept certain immigrants here we wouldn't want here. And I am
thinking of three areas.
I am thinking about crime, because we all have heard about
stories about crimes-committing people who broke the law to get
here. Welfare payments, even though they shouldn't be getting
welfare payments. And providing medical care for expensive
illegal immigrants coming here. Do you have any numbers on all
three, how much savings we could have in all three areas?
Mr. Mulvaney. I don't have the numbers at my fingertips,
Congressman, but I can tell you that the budget does provide,
or propose that we require Social Security numbers for
recipients of both the childcare tax credit and the earned
income tax credit, which we think would result in dramatic
savings.
Mr. Grothman. I hear from my, like, social workers or
maintenance workers sometimes because they are sanctuary cities
or sanctuary counties, is not able to ask questions, but that
people are just taking advantage of our general income support
programs, low-income housing, food share that I hear are
illegal. Can we do anything to crack down on those people?
Mr. Mulvaney. Yes. We also propose, Congressman, as part of
the policies contained in the budget, switching from a current
lottery system to a merit-based system, to ensure that folks
who come here can actually contribute more quickly to economic
growth.
Mr. Grothman. I am glad you are working on that regard. One
of the things that I have been trying to do since I have been
here is do something about the marriage penalty, and which
apparently is the current policy of the American Government to
discourage parents of children from getting married. You know,
it is not hard to think of a hypothetical, $20-, $30,000 a
year, assuming $20,000 a year for not getting married. I don't
see anything specifically dealing with that problem here. Would
you be willing to work with Congress as we work our way through
the system to try to not pay people so much not to get married?
Mr. Mulvaney. Yes, sir. I would be happy to do that,
because we agree with the principles.
Mr. Rokita. [Presiding.] I thank the gentleman. The
gentleman's time has expired. Continuing with questions on this
side of the dais, Mr. Smith from Missouri, you are recognized
for 5 minutes.
Mr. Smith. Thank you, Mr. Chair.
Director, it is a pleasure to have you here.
When I am home and talking about the budget to our
constituents, they--they have never seen $1 trillion, and so
the best way to talk about the fiscal--the fiscal situation of
the Federal Government is to take off eight zeros when I talk
to them.
And you could take off those eight zeros right now, and I
put it in perspective that the folks back home make roughly
$36,320 a year, give or take a little bit. That is the revenue
that comes into the United States in this past--past year,
roughly, estimated, but yet, that same individual would be
spending $42,680 a year, almost $6,000 more a year. But when
you add the eight zeros, which is the Federal Government, that
is a whole lot more than $6,000. But when we talk to the people
back home, it is, you make $36,000, you spend $42,000, but yet,
on your credit card, you have $190,000. It is unsustainable, as
you know, as the President knows, and that is why I want to
thank you and thank President Trump for offering a solution
that comes towards a balanced budget in 10 years.
So then, we are at that point that you make $36,000, and
you spend only $36,000, and then you can stop reducing the
debt.
Do you have the numbers of where we would be if we leave it
as a status quo of how much the debt would be over the next 10
years?
Mr. Mulvaney. Again, I think the 10-year number is--I think
the 8-year number is $9 trillion, according to the baseline, if
you leave status quo, if we simply go home and don't do
anything different for the next 8 years. I think it is $9
trillion versus 10 years, but roughly $9 trillion, to answer
your question.
Mr. Smith. So $9 trillion not to do anything. But if we
pass this President's budget, we would add $5 trillion?
Mr. Mulvaney. Yes. I think it is half that, because we
actually get to balance in the 10th year, was a $16 billion
surplus, I think.
Mr. Smith. Okay. Is there any items that you feel like that
would be great that you would love to express that you may have
been cut off in prior testimony that might be helpful?
Mr. Mulvaney. No. I have to admire the way you articulate
the numbers. Because I think what is so frustrating, we talked
earlier today about regular language, regular English versus
Washingtonian English. And at some point, Congressman, I wish
we didn't have the word ``trillion.'' I can't tell you the
number of times I have gone out, I asked folks that I used to
represent, what do you think is more, $952 million or $1.1
trillion? And some people actually think 952 is more. It is a
thousand times different. It is actually more than a thousand
times different.
And so you are right to get it down to the numbers that
people can understand. I don't like using trillion dollars in
OMB, because I have never seen $1 trillion either.
I had a constituent one time give me a calculator that
actually could do trillion dollars, which it was about this
big. And it will absolutely frustrate you. I think you are
absolutely doing the right thing, trying to explain to people
what that real world looks like, because that credit card debt
that you mentioned, $190,000 is absolutely right. And though
know what it would mean for their families if their families
had that kind of debt. And it is not mortgage debt, as you
pointed out; it is credit card, which is entirely different.
Mr. Smith. It is unsecured.
Thank you, Director. I appreciate you being here.
Mr. Mulvaney. Thank you.
Mr. Rokita. The gentleman yields back.
The gentleman from Alabama, Mr. Palmer, is recognized for 5
minutes.
Mr. Palmer. Good you to see, Director Mulvaney.
I want to ask a question that was asked by one of our
colleagues. Did one of our colleagues on the other side say
that she had never seen economic growth of 3 percent?
Mr. Mulvaney. No. I think she was what I was proposing was
never before seen growth.
Mr. Palmer. I would like to enter into the record----
Mr. Rokita. Without objection.
Mr. Palmer.----this document that shows that our average
growth since--for the 7 years has been 3.21 percent.
Mr. Rokita. Without objection.
Mr. Palmer. Thank you, Mr. Chairman.
I want to ask you a few questions and try to go through
this fairly quickly.
In your budget, you show $142 billion over the next 10
years in reductions and improper payments. I want to know why
so little when last year, the improper payments alone was
133.7?
Mr. Mulvaney. Thank you. We never had a chance to talk
about that yet. That was a conscious decision. We only took 10
percent of the improper payments. We didn't want to be accused
of using different numbers, so we tried to be as conservative
as possible. I think it would have been reasonable for us to go
as high as 40 or 50 percent on that. I think that is a goal
that you should shoot for.
Mr. Palmer. I think it would be reasonable, and I would
like to have the opportunity to help you with that.
Mr. Mulvaney. And keep in mind, if we do what the budget
suggests, and we get to that 40 or 50 percent, that is a faster
path to balance.
Mr. Palmer. Thank you. Thank you, Mr. Director.
Let me ask you this: How does the administration define
success when it comes to social programs? Do you consider
adding more people to the welfare rolls a success? That is the
answer to that?
Mr. Mulvaney. No. It is so frustrating to me when I see
incentives at the State level to get people on the programs.
That is not how you decide--that is not how you measure
success. Success should be somebody who was employed, became
unemployed, used the benefits available to him or her, whether
it is unemployment, SNAP, whatever, as the bridge to get to the
next job, get back into the workforce, back in charge of their
own life, back providing for their own family. That is what the
safety net is for. That is what it needs to be for. And it
needs to provide that type of comfort, but it can't be a
permanent dependency.
Mr. Palmer. So you are aware that when the government puts
people on support that really shouldn't be there, that it
disadvantages people who should be on there.
For instance, there is a report out at the Department--
Illinois Department of Human Services, that indicated they were
given preference to the able-bodied working age adults because
they were in Medicaid expansion, that resulted in thousands of
people at the lower reimbursement rate being--having to wait
for care. As a matter of fact, 752 died between 2013 and 2016.
That is a bad policy. Wouldn't you agree with that?
Mr. Mulvaney. It is. But the people who pay the highest
price for the abuse within the safety net are the folks who
really should be on and need the safety net.
Mr. Palmer. Well, let me ask you this: My Democratic
colleagues cast many of the things that are in this budget as
cuts when in fact, they should really be talking about savings.
For instance, eliminating LIHEAP payments to dead people.
Wouldn't that be a savings and not a cut?
Mr. Mulvaney. Last time I checked, that would be a savings,
yes, sir.
Mr. Palmer. When you--when an able-bodied person, who is
working age, that doesn't have young children, is encouraged to
get a job when--in order to continue to get Medicaid or food
stamps or some other government program, and that able-bodied
person actually improves the quality of their life, they raise
their income, and they get off of government support, is that a
savings or a cut?
Mr. Mulvaney. That is a win for that person and that
person's family, and a win for the country, and we should claim
it as such.
Mr. Palmer. As a person who grew up pretty much dirt poor,
I can tell you that work is the right path. I can tell you that
from personal experience.
Let me ask you something else.
Mr. Mulvaney. I would suggest to you, Congressman, it is
probably the only path.
Mr. Palmer. It is the only path.
Let me ask you something else in regard to the tax reform.
And I also have a chart here that indicates that a high tax
burden damages economic growth. And it is particularly damaging
to small business. Everybody gets caught up in the big
corporations, but it--the employment engine of our economy is
small business.
And over the last 8 years, we have really seen that damage
in full-blown, livid color. The Gallup put out a report that
indicated that prior to 2008, we had 100,000 more businesses
starting up than closing. By 2014, we had 70,000 more
businesses closing than starting up. It is a disaster for
employment in the United States.
Can you briefly tell us how you think the tax reform
policies----
Mr. Mulvaney. Yes. It is the dynamism in the market that
you are talking about, new business formation is at
embarrassingly low levels, and we believe that tax policy
certainly has an impact on that. We also actually believe that
regulatory policy has more an influence over that than even tax
policy. I have started a small business; I have started a
restaurant. I want to tell you, figuring out how to handle all
the regulatory requirements was harder than rolling a burrito.
Business people want to be in business. They don't want to be
in the business of filling out government paperwork.
Mr. Palmer. Mr. Chairman, I just would like to address the
chair for a moment. I think it is wonderful. While I don't
agree with everything that is in the President's proposed
budget, I think it is wonderful that we have a Budget Director
that supports a progrowth economy, that supports small business
formation and supports getting people back to work.
I yield back.
Mr. Rokita. The gentleman's time has expired. I thank the
gentleman.
The gentleman from Florida, Mr. Gaetz, is recognized for 5
minutes.
Mr. Gaetz. Thank you, Mr. Chairman.
I just find it ludicrous that Democrats in this hearing has
suggested that President Trump has betrayed his voters by
presenting a balanced budget. So, Director Mulvaney, please
share with the President that the folks in Florida's first
congressional district who voted for the President are proud of
the fact that you have worked so hard to bring a balanced
budget forward for our consideration and review.
I honestly wish that we could vote out the President's
budget today and make it the law and use it as a device to
constrain the growth of government.
I don't want to see the swamp of this town submerged and
swallow up the bold decisions that you and the President have
made together to put us on a path to fiscal responsibility.
My question for you, Director, is this: Detail for us the
ideas that Democrats on the Budget Committee have brought to
your office to balance the budget.
Mr. Mulvaney. It is none.
Mr. Gaetz. Is it safe, then, to assume that a balanced
budget is not truly a priority or objective of those who have
been asking you these questions today?
Mr. Mulvaney. You can certainly assume from the experience
on this committee, for example, over the last 8 years, that
since the previous administration never offered a balanced
budget, that that administration representing their party are
not interested in balancing the budget.
Mr. Gaetz. I want to speak for a moment about work
requirements. This committee, in the context of healthcare,
took the position that able-bodied, childless adults should
have to meet a work requirement if they want someone else to
pay for their healthcare. What is the position of the President
in this budget relative to work requirements?
Mr. Mulvaney. Actually, we support that, both within the
affordable--the American Health Care Act, which we support, and
that you all have already voted on. We also take that same
sentiment and apply it to food stamps, under the theory that if
you are an able-bodied person with no dependents and you are
able to work, we should require you to prove that you are
trying to work in order to get food stamps.
Mr. Gaetz. Should that be a mandatory requirement within
these Federal programs that we have work requirements, or
should States be able to choose whether or not to have work
requirements?
Mr. Mulvaney. Well, both is the answer to your question. I
think in the American--in the AHCA, we allowed the States to do
it, because I think that deals with Medicaid, which is a State-
administered program. In our budget, we introduced that concept
into SNAP, which is, I believe--it is a federally run program.
I am sure the States are involved in providing the services,
but I think we are a lot heavier involved in food stamps, SNAP.
Mr. Gaetz. And if you tell folks in the food stamp space,
the SNAP space, and the Medicaid space that the path to greater
progress is not further dependence on the government, it is
actually getting the benefit of work, what impact do you think
that will have on our aspirations for broader economic growth?
Mr. Mulvaney. In order to get that 3 percent growth, we
need folks to work. Okay? And we need to figure out a way to
provide them with the economic opportunity so that they can go
to work. I didn't get a chance to talk here today about the
difference between the U-3 measure of unemployment and the U-6
measure. U-3 is the measure that we use most traditionally. It
is folks who are defined as being in the workforce but unable
to find work.
U-6 is those people, plus folks who are--I think we
described it as marginally attached, who are working part-time
for economic reasons against their will. Okay? That difference
is, I think, over 6 million people. Those are folks who want to
work full-time but haven't found the opportunity to do that
yet. That is the folks we want to go to and say, look, if we
can get the 3 percent growth, we can get you into the full-time
job that you want.
Mr. Gaetz. Director Mulvaney, please also share with the
President the gratitude from the folks in my district who are
so grateful to see a President willing to prioritize our
military, and the capabilities within our military to meet the
challenges presented by our adversaries.
As a member of the Armed Services Committee, I have seen
time and again our adversaries invest in next generation weapon
systems, testing, evaluation. And so, maybe, could you speak to
the opportunities that would be presented for our military and
our capabilities in the test and evaluation mission if we were
to accept the budget that you and the President have proposed?
Mr. Mulvaney. Yes. And I think if you are encouraged, I
will have you reach out to Secretary Mattis, but, yes, what I
think you will hear him say is he wants this money now so that
he can modernize and get readiness up to where it needs to be.
That is his first priority is taking what we already have and
making sure it is able to be used to defend the Nation.
We are all interested longer term at looking at larger
troop numbers, larger ship numbers, larger plane numbers, but
his first priority is making sure the defense capabilities we
have can be used if necessary.
Mr. Gaetz. Thank you, Mr. Chairman. I yield back.
Mr. Rokita. The gentleman yields back.
The gentleman from Texas, Mr. Arrington is recognized for 5
minutes.
Mr. Arrington. Thank you, Mr. Chairman.
And thank you, Director Mulvaney, for your service to our
country in the House, and now your new role with the President.
Growing up in Plainview, Texas, my dad said that money--
repeatedly, that money didn't grow on trees, and I believed
him, until I came to Washington. And now I have got to tell him
I found the money tree, and it is the United States Treasury.
And I am just grateful that you are presenting a budget
that is not a money tree trimming budget, but it is a money
tree cutting budget. And that is what we have got to do if we
are going to get our country back.
I want to applaud you and the President for proposing a
long overdue balanced budget, and one that begins reducing our
national debt, which I believe is the greatest threat to my
children's future in this great country.
And we know what to do. You know what to do. I know what to
do. The committee's know what to do. The American people know
what we have to do. They are waiting on politicians to have the
courage to do it.
I commend you on your courage, and I commend the President
equally.
I agree with your growth projections. I think there is
pent-up growth demand in this country. If we would just unleash
it, unleash the economy, unshackle it from the $2 trillion in
regulatory costs, the highest corporate income tax in the
industrialized world, and relieve the American people, middle-
class and working-class families, from this disaster called
ObamaCare.
We are not going to agree on every item of the budget. You
know that. I know that. Let me highlight for you what is, I
think now, after Ms. DelBene has expressed her thoughts, a
bipartisan concern, with all due respect: Our food, fuel, and
fiber producers in rural America are feeding and clothing the
American people, and they are fueling the American economy.
That is not just economic development for West Texas. That
is ag and energy independence for the entire Nation. That is
national security for every American citizen.
Now, I have got a question, and I will qualify it with four
very important facts. Agriculture is the basis for the economy
in rural America. In the last farm bill, we cut billions of
dollars from foreign programs. The last 3 years, we saw a 50
percent decline in farm income, the steepest decline since the
Great Depression. And you know this, Director Mulvaney, but
farm policies represent a mere 0.26 percent of the entire
Federal budget.
Here is my question: Recognizing that we need to make cuts,
recognizing there are cuts to be made everywhere, why now, and
why such deep cuts to our farm sector safety net?
Mr. Mulvaney. Thank you, Congressman.
As I mentioned earlier, and I can't put my hands on the
piece of paper, there is actually--I think we dramatically
increased spending on some ag programs, not the least of which
I think is the farm loan program.
We have also, as I am sure you have listened to farmers to
find out what their priorities are, what can allow them to
change that trend you talked about in terms of farm incomes?
And what we hear from them again and again and again is more
favorable trade deals, because the world is their market and
the world needs to be their market, and we need to be able to
ship U.S.-grown agricultural products everywhere, and right
now, we lack the ability to do that. So I applaud the
President, as I am sure you do, being from West Texas, even the
incremental benefits we have been able to get with the Chinese
in terms of our meat exports. It is a big deal for our folks
back home.
I was from a rural district as well. You look, then, at the
regulatory climate and what we were doing to our farmers in
terms of waters of the U.S. and clean streams and regulations
from top to bottom. Farmers are farmers, and they want to grow
stuff, and they want to be productive. They don't want to be
paper pushers who try and figure out how the Federal Government
is going to punish them for doing something that they thought
was right.
So we hear those farmers and again and again. They are down
at the White House on a regular basis. To your point--I won't
be Pollyannish--yes, we do make some proposed changes in some
of the farm programs.
I think we deal with--let me put it to you this way: We
focus exclusively on what we would call corporate farmers,
protecting, I think, 96 percent of farms in this country.
Mr. Arrington. If I may, just because I have a little time.
Mr. Mulvaney. Yes, sir.
Mr. Arrington. We need freer markets, as you suggested. We
need fair trade, better trade deals as the President has
suggested. They will never be able to compete, though, with
China and India and others that don't have an EPA, they don't
have an OSHA; they don't have these costs. So we need a safety
net, a reliable strong safety net.
I yield back.
Thanks for your time.
Mr. Mulvaney. Thank you, sir.
Mr. Rokita. I thank the gentleman for yielding back.
The gentleman's time is expired.
Let me recognize the ranking member, Mr. Yarmuth, for
closing remarks.
Mr. Yarmuth. Thank you, Mr. Chairman.
Mick, thanks so much for being here.
Just for the record, when I--as you know, when I was
alerted that you were a possible appointee for this position, I
wrote a note to the transition team saying that I consider Mick
Mulvaney a man of the highest character, principle, and
intelligence, and one with whom I agree on almost nothing. But
that as ranking member on the Budget Committee, that I know we
would have an amicable working relationship and a mutually
respectful one, and I haven't changed my opinion about any of
that.
Thank you so much for your work and your appearance, and I
look forward to discussions as we go along.
Mr. Mulvaney. If I may, Congressman, I want you to know
that I have protected that secret with my life over the course
of the last several months. I am glad that you were the one to
out that and not me.
Mr. Yarmuth. Absolutely.
Mr. Mulvaney. I do appreciate those words and also your
efforts during the transition process. Thank you.
Mr. Yarmuth. Thanks.
I yield back.
Mr. Rokita. I thank you the gentleman. Secrets. Secrets.
I am going to use my closing, Director Mulvaney, to clean
up some of the record, if I could, or establish more of the
record.
I don't think we have talked much about the debt ceiling
concept, and I know you were worried we were going to get to
that. So let me ask a few questions in that regard.
Mr. Mulvaney. Sure.
Mr. Rokita. Of course, the statutory debt limit was
reinstated on March 16, 2017, at just under $19.809 trillion.
Treasury Secretary Mnuchin at that time informed Speaker Ryan
beginning that day, the outstanding debt of the United States
would be at the statutory limit immediately in that he would be
using, quote, unquote, ``extraordinary measures'' to
temporarily continue to meet all the Federal Government's
financial obligations.
Mnuchin also wrote that he was declaring a, quote, ``debt
suspension period,'' or DISP, to allow him to use additional
extraordinary measures to extend the debt limit, and that is
something his predecessors had declared under similar
circumstances, you remember as well.
He encouraged the Congress to protect the full faith and
credit of the United States by acting to increase the statutory
debt limit as soon as possible.
So the two questions, I guess, would be: Does the
administration have a preferred legislative approach to the
debt limit issue; for example, specific amount or specific time
period? And then, secondly, how soon do you think we need to
act?
Mr. Mulvaney. Thank you for that. Very briefly, the answer
to your first question is, no, we do not have a final stated
policy yet. I can tell you that I met for about an hour
yesterday with Secretary Mnuchin to discuss this exact topic.
We look forward to Director Cohn, who is the third person of
the troika, so to speak, that sort of run lead on economic
issues within the West Wing, within the White House returning
from overseas so we can continue that conversation.
We look forward to working with the Hill on the best way to
go about that.
Secondly, regarding the timing, my understanding is that
the receipts currently are coming in a little bit slower than
expected, and you may soon hear from Mr. Mnuchin regarding a
change in the date.
Mr. Rokita. Okay. I thank the gentleman for coming. Again,
let me add my appreciation for what you are doing. I thank the
President for prioritizing, as he had done in this budget, and
I appreciate the respect he has given us to do our Article 1
duty.
I think, Mick, the President is lucky to have you, the
administration is happen to have you, and, indeed, the country
is lucky to have you in this position. Thank you for being here
today.
Mr. Mulvaney. Thanks, Todd, I really appreciate it.
Mr. Rokita. With that, the meeting is adjourned.
[Whereupon, at 1:03 p.m., the committee was adjourned.]
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