recognize senator thune, what are other areas where there's opportunity for common ground? in other words, we know that there's difference of opinion on revenues. any thoughts on other areas we might stake out given this tax code is a disfunctional mess. i call it a rotten carcass of an economic system. it clearly doesn't work. what are the other possibilities for some common ground early on as we tackle this in a bipartisan way? >> mr. chairman, i know you worked for years trying to put together bipartisan approaches here and we've talked about some of the technical issues in there and what it takes to have bills that truly are revenue neutral. i think that on the individual side right now, we've seen for several years the challenge of getting beyond the fiscal debate, and i think the notion of doing revenue neutral

individual tax reform is something that would be very challen challenging without doing a broader fiscal agreement because it's not likely in a generation dumais jor tax reform and come back and address the tax code again. that led the president to the view in july while he wants to pursue comprehensive tax reform and hopes we're in an environment we have a fiscal frame that permits us to make progress there, on the business side there is much more of a coming together of views. there's kind of convergence of general approaches, if we were able to succeed we would do something very good for the economy by having the business tax rate, the statutory tax rate come down. our average tax rate is already lower because of all the loopholes that are bringing many companies special benefit. but our statutory rate is one of the highest in the world.

th that's an extra burden for companies when they want to have their headquarters in the united states. it's an issue in terms of base erosion and our international conversations about making sure we don't have stateless income. i think it has the added benefit that there are one time savings where you really have two choices. you can either use that money to reduce the deficit which is a la laudable objective so we don't discredit that as an objective or use it for one time expenses. what you can't do is lower rates as if the one time savings is genuine forever because you would in the next period of time be losing revenue. that's why the president proposed pairing business tax reform with an infrastructure initiative. i think there is the basis there where you've seen proposals on both sides that have elements of agreement. i think that it's something the more we talk about across party lines and with each other the more we have an opportunity to get something important done. >> very good. senator thune. >> thank you, mr. chairman.

secretary lew, nice to have you here. welcome back. i also want to welcome our new chairman and really look forward to working with him. as chairman wyden mentioned we worked together on a number of issues, digital goods and digital trade and a letter we spearheaded by 33 senators for charity and tax reform. we believe it's very strongly the importance of encouraging charitable contributions. i noticed the budget this year did have the 28 appearance limitation on itemized deductions many of us think will negatively impact charitable giving. i'm wondering the rational for doing that. shouldn't we do everything we can to increase charitable giving to reach those government can't or hasn't been able to assist? >> senator, i think we totally agree we ought to provide incentives for charitable giving. the limitation doesn't take away the incentive for charitable giving. what it does is say the value of

a deduction should be capped at 28 percent roughly where the $250,000 a year income puts the value of your tax deductions right now. i would point out we've seen tax rates higher and lower. we haven't seen the small changes on the margin lead to a decline in charitable giving. most people give because they want to give. there's a tax benefit that goes with it. i don't think we've seen historically when tax rates went down we saw a decline in chartible giving. i don't believe our proposal would have the adverse effect some have worried about. we expressed an interest in working with congress on this because we do share the goal making sure there is a strong encouragement to charitable giving, there's so much important work that goes on in this country not through government or commercial activity but not-for-profit sector. i think we're in total agreement on the importance of it.

we perhaps don't have exactly the same view what the impact of the limit is. i think the history of experience with different tax rates supports our analysis. >> i've seen a lot of analysis. i don't think people give because of the tax deduction but i think it does affect the amount they give. it does have impacts and i've seen a good amount of analysis that suggests capping it would in fact reduce the amount that people are giving. i think people are still going to give to those causes but i don't think it's going to be on the same levels >> the only point i would make we didn't see the amount of giving go down when rates came down. it argues it's not quite as variable. we're happy to continue this conversation because we really do have the same goal. wanted to ask, too, you probably answered many questions on this already, i get from my c constituents and people across the country to the whole issue of the bonuses that went out to the irs employees.

whether or not it's appropriate for bonus s es to go out to an organization that so brazenly destroyed the public trust, even if you don't agree and i don't think you probably do the targeting of conservative groups was politically motivated it's hard to not agree there wasn't gross negligence there how they processed these organizations. do you think that these employees associated with that decision whether politically motivated or not, to target these tea party group deserve bonuses? >> senator, i think it's really important not to describe such a large agency as the irs as if everyone was involved in one activity. we've made clear that what happened in the c 4 experience was unacceptable. we believe it was bat judgment. you'll reach your own conclusion when you complete your investigation. we've seen no sign of political inference in any of the reviews

we've done. i think the policy on compensation for the irs broadly has to reflect the fact we have an enormous number of people who are tireless hard working public servants who do a fine job under very difficult circumstances and we're not seeing the level of funding for the irs to make it possible for them to do everything we really need them to do. in that world, making sure that we have proper compensation and fair compensation is an important thing. i just note that there was a pause in the -- in those payments. there were some collective bargaining issues that arose and in resolution of it, there's a new policy in place. >> i would just say, i know there's a lawsuit and the union issue that you referenced there, collective bargaining thing, there were an awful lot of bonuses paid out to executives who weren't a part of that lawsuit, too. i just think it's awfully hard to justify to the american

people in an agency that has been so -- whose credibility has been so badly damaged somehow you could pay out bonuses. i think it flies in the face of everything that's logical to the american people. to have them -- to have the american people have to see what happened with this whole episode i think reflected very badly with the irs and then find out they're being awarded with bonuses. >> i would point out other things happening with the irs on a bipartisan basis applaud over the same period of time. we implemented a law that passed with bipartisan support to make sure we would have transparency across country lines so illegal tax evasion could be stopped. the work done by our irs on this has become the world standard. we now go to international meetings and from what i hear other finance ministers saying we want fatka for all. we have fine people who have

done work during this period and recognize it's a large agency doing a lot of things. >> if that's true. big mission, big agency, but we know for sure there are certain folks in certain offices who were associated with these actions that have i think reflected so unfavorably and so negatively upon the agency, knowing i guess last comment i'll make and perhaps a follow-up question, is there a way you can selectively figure out how not to reward the people who are doing these sorts of things? we ward the people doing the good things you just alluded to but please don't reward the people responsible for this behavior? >> obviously the irs commissioner would be more responsible than myself. i would note the senior managers in the chain of command that exercised bad judgment running the program are no longer there. i think that reflects the seriousness with which we took the bad judgment and consequences of it and the fact that we had an acting

commissioner who took quick and decisive action. any who was responsible for doing things that they shouldn't have done does have to be held accountable. >> thank you, mr. chairman. thank you, mr. secretary. >> thank you, senator thune. a couple business matters and then we can wrap up on the question of hearing from you with respect to ukraine, secretary lew. all we're interested in is getting a sense from the department what kind of guidelines and principles we ought to be using in evaluating those of proposals that have been advanced by senators in terms of holding russia accountable for the incursion into the ukraine. obviously, matters like timeliness, effectiveness is what we want to hear from you on, if you could get that to senator hatch, that would be great. althou also, i expect senators may want

to submit questions to you in writing and hold the record open until friday on that. also, just because i know members and staff have some questions with respect to the business meeting that have been noticed for this morning, we obviously don't have a quorum at this time. we do have some organizational issues to work through. it's my intent to consult with senator hatch and have a business meeting off the floor. thank you for your patience. it's been a long morning and we didn't expect all these votes. on a personal level i want you to know how much i look forward to working closely with you. >> thank you, mr. chairman. i look forward to the same. >> finance committee is adjou adjourned.

now entering the room, chairman of the committee, paul ryan. hearing will come to order. the committee will come to order. good afternoon, everybody. i want to start -- i think this is director burwell's first time here. >> it is. >> so welcome for your first time here at the budget committee. i'm sure you're going to really enjoy this. >> i hope so. >> that's right. i can't say that i envy you right now. regardless, i want to thank you for being here and for coming back into government service. that we truly appreciate.

this is the fifth time in six years that the president has submitted his budget past the statutory deadline. it's the worst record in history for any president. and it will further disrupt an already very much broken budget process. in fact, the administration won't deliver key details of this budget until next week. all i can say is next year i hope the president will submit his budget full time and on time next year. i realize you came in late in the game, and we had other circumstances. hopefully next year we'll try and get a better record going here. even if it had been on time, in our judgment, this budget is nothing to write home about. last month's cbo said the deficit will start to grow again in just two years. by 2022, we will be running a $1 trillion deficit again, even though we will be taking a historically higher share of our revenues. that is because spending will grow twice as much as revenue. over the next ten years, we will

add $10 trillion more to our national debt for a grand total of $27 trillion, according to cbo. spending is out of control. we have to take back the reins. we have to address this before it gets too late. the president's budget would only loosen the grip. it is just more of the same from our judgment. higher taxes, more spending, and weak economic growth. take a look at some of these major proposals. the president wants to increase spending by $791 billion over the budget window. he also wants to increase spending from the already insolvent highway trust fund by $90 billion. the president has abandoned his proposal to adopt what omb called a more accurate measure of inflation. soin stead of doing anything to reform our sbietmentes, the president is backing away from the one significant reform that he had embraced in the past. he's going in the other direction. and the president wants to increase taxes on families and job creators by another $1.8 trillion on top of the $1.7 trillion in tax increases that he's already imposed.

meaning families will pay more so washington can spend more. this is a moment that calls for leadership and collaboration. we had something to start with earlier, or at the end of last year. we have to fix this spending problem before it's too late. we've got to start moving toward common ground. instead, this budget goes in the other direction. instead of meeting legal deadlines and building on bipartisan progress, the president continues to miss those deadlines and seems to want to undo last year's bipartisan agreement. instead of looking for more ways to preserve and strengthen entitlements, he's abandoned the one proposal he recommended last year. so i'm disappointed to say that 2014 is shaping up to be yet another missed opportunity. i had wished that we would start tackling our fiscal and our entitlement problems. usually leaders do that. this president has chosen not to do that. so what i see in this budget is basically a white flag on tackling our fiscal challenges.

more tax increases, more spending, and more debt are not going to get people back to work. they're not going to increase take-home pay. they're not going to grow the economy. that's what we should be doing. we should be talking about how to do that. instead, what we have here is more of a campaign document, if you ask me. promising more for everybody but not tackling the challenges for those people who don't have a vote, our children and our grandchildren. so hopefully we can turn this around and go in the right direction. with that, i'll yield to mr. van holland. >> thank you plrks chairman. i want to join the chairman in welcoming you, director. thank you for your service. as the chairman indicated, this it your first time before the committee. early in your tenure, you experienced a baptism of fire in having to confront an unnecessary and destructive 16-day government shutdown. i hope those antics are behind us now. this budget zeros in on three

major goals. boosting job growth, making vital investments in our future, and responsibly reducing our budget deficits. combined with an increase in a badly needed minimum wage, these policies will ensure a growing economy and shared prosperity. it lays out a detailed plan that adheres to the spending caps established in the bipartisan budget act. but throughout the budget, the president makes the case that the status quo is not good enough, that america cannot stand still. even though we've seen steady job growth and more than 8 million prooit sector jobs have been created over the last 47 months, we know we can still do better. that's why the president's budget proposes an opportunity growth in security initiative for the jum coppi upcoming year. this would fund break-through scientific research and advanced manufacturing. it would also boost our military readiness. the president's plan would also

boost our economic growth by ending the perverse tax provisions that encourage companies to move american jobs overseas and instead use those savings here at home to build out our infrastructure, the lifeline of part of our economy. and to ensure that the next generation of americans are equipped to thrive and win in the global marketplace, the president has again asked congress to support an early education initiative. this budget establishes a responsible plan for steadily reducing the size of our deficits as a share of the economy. it has been cut by more than half since the president took office, and this budget reduces it to 1.6% of gdp by the end of the budget window. the president achieves this with a mix of policies that cut spending, raise revenue, including policies that make medicare more efficient and closing special interest tax breaks. and at the same time, embracing the pro-growth benefits of comprehensive immigration

reform. interestingly, chairman camp's tax plan identifies some of the same tax loopholes for closing as does the president. the difference is that the republican budget would apply every one of those pennies saved to reducing tax rates for the very highest income earners and not a penny for investing in our future or for deficit reduction. finally, mr. chairman, let me say a word about the war on poverty. we had a good hearing in this committee on january 28th. all three witnesses recognized while we still have unacceptable levels of poverty in america, that the array of economic security programs has kept tens of millions of americans out of poverty. in fact, the january report by the council of economic advisers concluded that those programs had cut poverty by nearly 40% from 1967 to 2012, lifting 45 million americans out of poverty in the year 2012.

you would not know that from reading the report that was issued by the majority of the committee just two days ago on the poverty programs. if the goal of this committee and the majority is to improve the performance of various programs and help more people climb out of poverty, we again say, as we did at the earlier hearing, we're willing to work with you. what we will not accept are trojan horse policies that use the rhetoric of helping people actually cut huge holes in important safety nets and push more people into poverty. the real test will be the republican budget this year. last year's budget here in the committee slashed those important safety nets while providing windfall tax breaks to the very wealthy. we hope this year will be different. we could start by allowing this house to vote to extend the unemployment compensation safety net to 2 million struggling

americans who lost their jobs and remain out of work through no fault of their own. let's vote on that measure. that would be something different. i look forward, mr. chairman and director burwell, to today's testimony. thank you for being here. >> great. thank you. director burwell, the floor is yours. >> thank you, chairman ryan, ranking member van hollen. thank you for welcoming me here today so that i have an opportunity to present the president's fy-'15 budget. the president's budget provides a fiscal road map for accelerating economic growth, expanding opportunity, and ensuring fiscal responsibility. it includes fully paid for investments in infrastructure, job training, preschool and prowork tax cuts. at the same time, it reduces deficits and strengthens our long-term fiscal outlook. through additional health care reforms, tax reforms, and by fixing our broken immigration

system. and recognition of the important bipartisan funding compromise reached by the congress in december, the budget shows the president's funding priorities at the 2015 spending levels agreed upon by the bipartisan budget act. however, we believe those levels aren't sufficient, both in 2015 and beyond, to ensure that the nation is achieving its full potential. for that reason, the budget shows how to build on the progress made with the compromise agreement with a fully paid for $56 billion opportunity growth and security initiative that supports investments in critical areas such as education, research, manufacturing, and defense. building on the model established in the ryan/murray compromise, the initiative is split evenly between defense and nondefense and is fully paid for with a balanced package. supporting what the president has said in the state of the union, the budget includes a series of measures to create

jobs and accelerate economic growth. for example, the budget lays out an ambitious four-year, $302 billion transportation proposal that's paid for with transition revenue from progrowth business tax reform. it invests in american innovation and strengthens our manufacturing base by supporting the president's goal of creating a national network of 45 manufacturing institutes. it maintains u.s. leadership in research by making rnd tax credit permanent and continuing to support groundbreaking basic and applied research in a range of fields. and it enhances the administration's management efforts to deliver a government that is more effective and more efficient while supporting economic growth, focusing on areas directly impacting citizens and businesses. the budget also includes measures designed to expand opportunity for americans. for example, it doubles the

maximum value of the earned income tax credit for childless workers to build on the success in encouraging people to enter the work force and reduce povertpov pover poverty. and it invests in new efforts to drive greater performance and innovation in work force training to equip american workers with the skills they need to match the employer's needs. to ensure the nation's long-term fiscal strength, the budget focuses on the primary drivers of long-term debt and deficits, particularly health cost growth and inadequate revenues to meet the need of our ageing population. it builds on the savings and reforms of the affordable care act with another $400 billion in health care savings aimed at continuing to slow health care cost growth at the same time we improve the quality of care. it curbs inefficient tax breaks

that benefit the wealthiest and ensures everyone is paying their fair share. it also calls for progrowth immigration reform, which we know would promote economic growth and reduce the deficit. under the president's leadership, the deficit has already been cut in half as a share of the economy and has the largest sustained period of deficit reduction since world war ii. by paying for new investments and tackling our true fiscal challenges, the budget continues that progress, reducing deficits as a share of our gdp to 1.6% by 2024, and stabilizing debt as a share of gdp by 2015 and putting it on a declining path thereafter. the budget shows the president's vision for moving the country forward. it provides a responsible, balanced, and concrete plan for accelerating economic growth, expanding opportunity for all americans, and ensuring fiscal responsibility.

i look forward to working with the congress and this committee throughout the year on this effort. >> great. thank you. let me walk through a few things. let's get back to -- thank you. i want to walk through some discretionary just to be very clear. you support the current level of fy-'15 at 1014. and you support the appropriations process moving forward at that current 3028 level. you would like to go more and had this proposal to do more, but you support where we are and support keeping the agreement where it is, correct? >> we are providing our budget. we have provided our budget as quickly as we can in seven weeks after we received our budget. usually we receive numbers october 1st. we received our numbers seven weeks and one day ago. we did that because we want the appropriations process to move forward. that is correct. we're providing the details of our budget, our 1400-page appendix as well as this budget

so the committee can go forward. >> but the white house does support 1014. if you can't get what you want on the extra 56, you support 1014. >> that is correct. we have given the numbers so we do that. we also have expressed our vision of what we think are appropriate trade-offs. >> you also propose extending the discretionary caps through 2024, correct? >> extending the caps -- >> the discretionary caps. right now they expire in 2021. you support extending them through 2024, if i'm not mistaken. >> what we do is we just do current surfaces growth after 2021 in terms of the question of is it a cap or not a cap because we have the levels. but the question of a cap is not addressed specifically. >> okay. but you carry the cap levels through the window. you don't believe we should just keep the caps on place? >> basically, we keep the levels. once we've replaced the nondefense discretionary, we just continue -- >> your letter says the budget provides comparable increases to the defense and nondefense caps and extends both caps through 2024. >> yes, yes.

we don't have the official caps from the congress beyond 2021, though, but that is the way we would do it. >> i'll just interpret this letter as saying you extend the caps through 2024. you think that's a good thing, by the way. i'm not trying to blow back defense. two years ago we had then-secretary panetta in here. he presented that a $487 billion reduction to the defense budget. he said if we cut any more than then we would, quote, hollow out the force, close quote. since he testiftestified, the sequester took another out of defense. i think there are strong bipartisan concerns here and throughout congress about those continuing cuts to the defense budget. when i was working through the bca in this latest round of negotiations, i was beginning to get a little concerned. it seemed to me that defense was being used as sort of a

bargaining chip to get higher domestic spending and higher tax increases even though it seems clear to us from prior administration statements that they didn't think defense could go any lower. i hope that's not the case. so here's my basic question. would the administration be willing to revisit the fire wall to increase just defense spending if it was offset with other savings? >> we've stated in our budget what we believe is the appropriate approach. i'm thrilled to hear -- >> i know that, but -- >> -- that we should be at the president's level of defense spending. >> no, actually, i don't. that's my next question. we're way below where leon panetta said we could go. so the question is, if we're below where the administration had said we could go, are you willing to set aside your preferences for higher domestic spending and higher taxes to address this issue on defense on its own? >> with regard to the levels as the chairman has said and as the

secretary of defense has said, if we fund at the president's level, we can fulfill the strategy -- the defense strategy of the nation. i think that argues that the president's levels are those appropriate levels because we do buy back sequester. we believe that in addition to doing that on the defense side, you need to do it on the nondefense discretionary side. >> right, but if you can't get nondefense, would you do just defense? >> we've propose what had we believe is the best approach. that is to do both of those. both are important to the nation. both are important to the national security. as you heard secretary hagel throughout the year and even chairman dempsey, the importance of education and other issues to our national security in making sure we have the fighting force we, those things are important. >> well, we can go on and on on that point, but i won't. let me get into the numbers themselves then. looking at your spreadsheet, you proposed increased in defense spending above the caps through 2021 by $185 billion. then you cut defense in the last

few years by $141 billion. at the same time, dod's proposing to delay investments in weapons, which as we know increases costs in the long run. you have a growing problem with compensation funding. so how do you achieve your savings? where does that drop of $141 billion from the dod line come from if you're pushing weapons out to those years and if you have this compensation issue? >> what we have proposed and what the secretary has proposed is a defense budget that does a number of things. number one, in terms of achieving the numbers that we have in our budget, the first thing is we believe we need the president's numbers, which buy back portions of the sequester. number two, we believe that what we need to do is we need to ensure that the secretary and chairman dempsey, as he said yesterday, have the flexibility to do the things that they need to do and whether that's brack or other changes, need that flexibility in order to have our troops get the funding they need for modernization, training, and

readiness. and finally, we believe, and has been articulated by the secretary and the chairman, is we need certainty in terms of the ability to plan over the five-year defense planning window. >> but that doesn't explain how do you get the $141 billion in save in addition the last three years? >> in terms of the specifics of where those savings come from? >> yeah, because you're pushing weapons procurement out. you've got compensation growing up. so where is it coming from? >> the defense plans that have been put together to show what happens at the lower levels, both of those plans -- the five-year defense plan does it within the five-year window. >> all they've given us is five years. we don't see how you're getting the second five years. >> i think that will be dependent on how the first five years is achieved. and in the ten-year plan -- >> here's my concern. this is a budget-driven strategy, not a strategy-driven budget. so we've got these numbers to make your total add up. it sounds like to me, you don't know where you're going to get

this savings from. we have leon panetta coming here a couple years ago and say, the sequester is death. we can't go below that. here's 487 and that it. no more. otherwise we're hollowing out. now your budget takes half of that sequester, absorbs it. you give relief for about half of it. so you've moved this line down every year. now you're saying we're going to have an even lower line that where we said two years ago we would be past the breaking point of hollowing out our forces. now you're pushing money into the out years saying you're cutting this spending but you're not telling us where you're going to cut it with. my fear is next year it will be worse than this. >> mr. chairman, our levels are above the current congressional levels. they're above the current ryan/murray agreement. they're above the current legislative law. and if the question is that we believe nondefense discretionary spending and defense spending should be even higher than the president's budget levels -- >> so that's back to my original point.

>> if that's a question and the point being made, that's one we would be open to having a conversation about. >> on defense only is what we're asking. if you can only get the guns and not the butter, would you take that? >> and what i've said, mr. chairman, is we believe that keeping the two things together are very important. it was the philosophy that your approach and the deal that you led with chairman murray on kept the two things together. and that's the way we can make progress as a nation. both are important. we need to do both. both are important for our national security and for our economy. >> i've got two more. i see my clock going. i want to be mindful of time. i've got a number of concerns. my other one is you're beginning to take discretionary programs and shift them over to mandatory. there are several cases where you convert discretionary to mandatory like amtrak, federal land acquisition, pre-k funding. there are many, many more. why do you propose doing this? are you doing this to avoid

discretionary caps or avoid congress spending annual, you know, doing annual discretionary appropriations and therefore annual overset on these things? what's the reason for shifting these? >> in various accounts, it's for differing reasons. as you know, with regard to the question of mandatory, sometimes mandatory proposals are done that way because the policy is set. with regard to how one is going to spend, it's ooert for a limited amount of time or it is onset policy. so various cases are in various approaches in terms of how we do it. one of the things on the mandatory spending we do is make sure that we are paying for it because one of the things that i think is an important thing that you're indicating is the importance of fiscal responsibility and making sure that we're constrained. if you are going to do something on the mandatory ensuring that it is paid for is a part of some of those changes as well. >> i see that it's taking fiscal responsibility in the wrong direction, but let me leave it at that. this is one you might have to get back to me in writing. the bipartisan budget act provided enhanced protections for the so-called death master

file. i'm not sure if you're up to speed on this or not. in order to protect people from identity theft, we were witnessing a lot of identity theft occurring with this unlimited access to the file. during the congressional debate, we made very clear that the ideas to ensure continued access for those with legitimate uses of the information while denying it to fraudsters. after the bill's enactment, the department announced they intended to keep the file publicly available through the rule making needed to implement the law. my understanding, though, is that commerce has been overruled by omb on this. can you give me an update on what's happening here and what you're doing to ensure that legitimate users of this data? for example, insurance companies that use this information in order to pay claims will not see an interruption in their access to this information. >> certainly will get back to you on the specifics of the question of the rule make. it's not one that i'm familiar with. in terms of the legislation, we believe that was part of program integrity and some of the positive things that were

included. >> we all agreed on that and agreed there are legitimate users who ought to get access to this data so they can keep doing their businesses. omb has stopped that. look into it, please. >> i will do that. >> mr. van hollen. >> thank you, mr. chairman. i want to spend a little time on defense spending. i have to say, i've been a little stunned by the comments identify heard from our republican colleagues in the press claiming that somehow the president's budget hollows out our defense spending. that is an absurd claim. it's important to remember, number one, that the fiscal year 2015 defense number was negotiated as part of the ryan/murray bipartisan budget agreement. >> can i get you there fast? >> my niece's name is murray ryan. let's go with ryan/murray. >> now that we realize the impact it has on defense, it's murray/ryan. i'm kidding you.

so that agreement, just to remind all members here, set the levels for fiscal year 2015 defense. i would urge everybody to look at the testimony delivered today in the senate armed services committee by chief of staff general dempsey as well as secretary hagel saying that those resources are adequate to meet all of our defense requirements. i would also emphasize what director burwell said, which is the president's budget for fiscal year 2015 sets aside an additional fund, both to help grow our economy, because that's important to our national defense as well as our kids' future, as well as restoring additional funds to defense to increase our military readiness. so if our republican colleagues would join us in supporting that effort, we would welcome it. yes, mr. chairman, we do believe that paying for those additional tax -- you know, those additional defense costs by

closing special interest tax loopholes like hedge fund loopholes and others, is an important trade-off and one that we would make and would hope our republican colleagues would join us in that effort. i would also just point out that some of the reasons for the numbers changing like that in the out years has to do with different baseline assumptions, which we're happy to go over with you. i should say, the president's budget increases defense above what is the law of the land today, which is sequester, and continues that upward trajectory even after the sequester ends. i think that's an important point. i'd also just like to put up a chart here as to how u.s. defense spending currently compares with the rest of the world. as you can see, you know, we're the 100-pound gorilla, 1,000-pound gorilla, whatever you want to call it. i would point out many other countries on this chart are our nato allies. you can see russia in the top right-hand corner. i have to say, it's been a

little astounding to hear some of our republican colleagues, not on this committee, but many others in congress making the absurd claim, the absolutely absurd claim that somehow the president's defense budget consistent with the bipartisan budget agreement has emboldened russia and putin to go into ukraine. it's reached new levels. i would urge all my colleagues to read the piece by david ig nashs in "the washington post" today that says former secretary bob gate, of course a republican, tells republicans to cut back on the criticizing of obama's ukraine policy. i would point out to my colleagues that in 2008, after we'd had seen dramatic increases in defense spending under president bush and after we had invaded iraq, somehow putin was not too worried to go into the state of georgia.

okay? so to suggest that somehow it's president obama's defense policies that are them boldening putin, that's just nonsense. what we should be doing is, number one, making it absolutely clear that there will be economic penalties to pay if the russians continue the policy that they pursued and continue to maintain troops in crimea. and we're working with our european allies as we speak to do that. second, we should do everything we can to support the current government in kiev as they transition toward elections. and our european partners moved in that direction today. and the president is going to be asking congress for loan guarantees and frankly to deal with the imf so we can leverage some of our funds, the rule changes and reforms that the united states is asking for at the imf would leverage additional funds for ukraine. so i hope in the midst of all this rhetoric that we hear people focus on substance and

join the president in taking these concrete actions to actually help in ukraine. now, i want to go to another part of the budget, which deals with the immigration reform legislation, which as we know has passed the senate on a bipartisan basis. we have other legislation here. you incorporated the economic growth benefits that cbo calculated from that change in your budget, did you not? >> we incorporated the cbo score of the senate bill into our budget. >> right. i just again think for our mutual benefit, the cbo estimated that legislation would increase economic growth by 3.3% in the year 2023 and by 5.4% by 2033. a good engine of economic growth. so we again ask our colleagues to let us vote on comprehensive

immigration reform legislation. in fact, i might point out that if you compare the economic growth benefits of the comprehensive immigration reform legislation to the claimed economic growth benefits of chairman camp's tax reform proposal, i think our colleagues might be surprised with what they find. because the reality is when the joint tax committee looked at that proposal, they ran eight different scenarios. now, our republican colleagues seized on the scenario that had some very unrealistic assumptions that said by the year 2020, you'd have 1.6% increase in growth. the lowest one said, ready, it would have a whopping 0.1% increase in economic growth. and some others were in between there. we also know that from all outward signs, in the second ten

years, that plan would lose revenue, increase the deficit, and actually be a drag on economic growth. so i just want to point out that in the year 2023, the comprehensive immigration reform would get about twice as much extra gdp boost as the most optimistic joint tax projection of chairman camp's plan and 30 times more economic boost to gdp than the lowest one. whether you take the highest or the lowest, comprehensive immigration reform is good for the economy. and so i really hope that we will move forward on that, mr. chairman. it's not only right thing to do, it's the smart thing to do and the economic thing to do if we want to grow our economy. finally, let me just turn to the earned income tax credit. as i indicated in my opening statement, we had a good hearing in this committee back in

january. and all three of the witnesses if i recall correctly agreed that the eitc had been an effective tool for promoting work, making work pay, and it has been a bipartisan policy tool and agreement. so i was pleased to see the president decide to expand eitc coverage to childless adults, and i hope we can move in that direction. i was a little disappointed that in chairman camp's plan, it actually scaled back some of the out-year benefits for the eitc. in fact, the center for budget priorities estimated that a mother with two children who works full time at the minimum wage would lose about $2,000 a year if chairman camp's plan were put into effect with respect to eitc. so rather than scaling back what i thought we all agreed was an effective bipartisan policy

tool, i hope we will move forward on that. and if you could, director, talk about the eitc and the child tax credit and the other sort of tax provisions, tax cut provisions to help working families. >> i think the two that you highlight are probably two of the most important in terms of supporting those who want to work. and that's the idea behind the earned income tax credit. it's something that has been in place for many, many years and was actually started under a republican administration. the idea of an earned income tax credit is so that you're encouraging those who are working to not be in poverty. we think that's an important way to encourage work. we think that's an important way to address poverty. in addition, when one thinks about the needs of those who are working, the issue of childcare is something that anyone and i'm sure everyone in this room, many people who are parents in this room have faced the issue of how does one make sure that if you have to have two parents working

you're able to do appropriate childcare for your children. so that is a place where we think it's important and we do the tax credit. at the same time, we also emphasize making sure that some of the childcare that is out there is of a better quality. and we try and do that by not building existing things but using existing channels such as building on some of the better head start programs in terms of what we would do. >> dr. price. >> thank you, mr. chairman. and i, too, want to add my welcome, director burwell and thank you for your service. budgets, you know -- people's eyes glaze over when you talk about budgets, but it really is about priorities. how are we going to set priorities for the country? sadly, when we read through the president's budget, once again it's more spending. significantly greater spending. greater taxes, increasing debt, and no significant addressing of the fundamental drivers of spending here in washington. that is social security, medicare, and medicaid. to a great degree.

so when i look at it and review what the president's proposed, it's really disappointing. budgets also reveal whether or not the assumptions that are made are honest and objective. if businesses and families don't honestly e vail wait their situation, where they are, they'll never be able to put in place a course correction. so i want to visit the growth assumptions that omb makes. by way of doing that h i want to revisit where we've been in the past couple of yeergs. omb in 2010 projected that the ten-year growth projection would be 3.4%. the actual for the first four years of that period of time has been 2%. so significantly off. 2013, omb projected that the growth rate would be 4.2%. actual, 1.9%. so why is it that the american people should believe the administration now when they project a growth rate of 2.7% for ten years? >> a couple of things. one is, with regard to all of

the projections that occur during that period, whether it's the blue chip, the fed, or even cbo, the growth that the nation has experienced has been slower than all projections thought. i would also say that many of the proposals -- we believe our proposals could cause and create growth. what we've seen in the past several years is a very strong fiscal drag that has come from policy pursuit. that comes in a number of different forms. >> wait, wait. i don't have the ten minutes that the chairman gets. let me just suggest that we would agree that it's related to policy, but we would agree it's related to the administration's policy and the policies that have been put in plait, oftentimes unilaterally without the congress agreeing to them, sometimes extralegal, we would suggest, are putting a huge drag on the economy. that's why we're seeing the decreased performance. let me give the 2.7 number over

ten. you all project 2.7 over ten. cbo projected 2.5 over ten. the ranking member says 0.1. doesn't make a lot of difference. what does 0.1% difference in growth rate make? what difference does that make? if the growth is actually 0.2% lower than omb projects, what's the increase in the deficit? >> congressman, if i may, i want to reflect that sequestration and the shutdown in terms of their ramifications on gdp, in terms of cbo estimated and job growth are in the 0.6 range in terms of bhapd there. in the shutdown, we lost $2 billion worth of productivity. so -- >> we didn't want the president to shut down the government either. 2.7 is what omb projects. 2.5 is what cbo projects. if cbo is right, what is the increase to the deficit? >> in terms of the direct translation, when one looks at those numbers and you look at where we are with cbo in the front years, it flips in terms

of when we're above and below cbo. the question of the last five years in terms of where we are -- >> how much though? how much money? >> specifically, i do not know the exact number. >> think 0.1 as about $300 billion. so if in fact omb is not correct and cbo is correct, then your projections would be off by $600 billion after the deficit. one more minute and i want to visit one more topic. i've got ten more topics. i think i'm going to get to one. the independent payment advisory board. i can tell you the doctors out there are shuddering about how they're going to be able to care for patients. last year your budget projected that $4.1 billion in savings would be able to be arrived at because of the independent payment advisory board. that's decreasing services to many seniors, we would suggest. that number, i thought, was fictitious. this year y'all have a projected savings triple that. is there any objective

information that you can provide us that evidences how you're going to be able to get triple the savings? >> in terms of some of the changes occur, i think you know the averaging is over five-year windows. those windows change. another thing that's happened is because of the changes in the cbo baseline because we actually are seeing a decrease in health care costs in the cbo baseline. in period from now until 2020, you see a $1 trillion change in the cbo baseline, which are reduced health care costs. how those interact are how the numbers change. and as was raised by the chairman, the issue of long-term deficits and entitlement reform, we see that as an important way to control those costs. >> thank you, mr. chairman. >> ms. kessler. >> thank you, mr. chairman. welcome, director burwell. i was very pleased to see in the president's budget a very substantial investment in america's infrastructure. our roads, our bridges, ports,

airports, transit systems. this is very important for job creation. it's very important for the expansion of businesses across the country. but it's also important because america's infrastructure is in need of great modernization. everyone across every district in this room has a bridge, a transit system, something happening at their airport where we've kind of fallen behind. so we have great challenges ahead here. i'd like to know in greater specificity where the administration, through this budget, is placing the priority for investments in infrastructure, growth, and opportunity for the folks that would find jobs in these kind of businesses and expansion. >> with regard to infrastructure, the president has talked about a $302 billion plan to do both two things. one is to meet the gap that we're going to have this year with regard to our funding, our highway trust fund funding.

that comes to its end in the august/september time frame. to meet that so we can continue on the path that we're on. in addition to that, we believe there should be additional investments in infrastructure. those are paid for by transition that comes from international corporate tax reform. i would also just build on your point and expand the concept of infrastructure. we often think of roads, bridges, railways when we talk about infrastructure. infrastructure is also veterans hospitals and the repair to those hospitals. and in the president's opportunity growth and security initiative, if we were able to take -- to do other spending cuts and some revenue changes and do that, those are also the kind of infrastructure that's important to job creation. another type of infrastructure i would just reflect on is it's the 100th anniversary of the park system in this country. our park system, for those of you who have parks in your district, you know some of those parks from infrastructure issues. we're hopeful -- we have some in the budget, the base budget, but

we also in the opportunity growth initiative. that's another place we believe job creation, especially in the veterans area, it's going to be important. if we can get those funds, to do that infrastructure. so infrastructure we define specifically in the lane you described but even more broadly as we try and take care of needs in the country and promote economic growth. >> so back to the -- your funding aspect of it. i mean, we have a real problem because the gas tax ref knew doesn't go as far as it used to. some of that is due to cars getting better gas mileage, electric vehicles. there's one parked in the congressional garage right now. you can go down and check it out. but this is going to -- this is a real problem because how does the federal department of transportation and the other transportation agencies meet the obligations to our states and local communities with this dwindling revenue source. you said you proposed some gap funding. could you go into that in

greater detail? the gap funding and then what does the future hold here? because we're going to fall further and further behind. it's going to end up costing us more unless we can create jobs and modernize america's infrastructure. >> so as part of our international tax reform proposal, there will be one-time transition revenue. it's important how that revenue gets used. what we would do is use that revenue, a portion of that, to cover the gap that you're speaking of in terms of the highway trust fund. and then another portion of that to fund additional investments that we believe are ready now and appropriate for the nation to go forward. that's how we do it. with regard to it the long-term issue, i think one of the things that's happening right now is that there are bipartisan efforts on both sides in the house and the senate to work on that. and in our budget we've committed to work on legislation and work with a bipartisan effort that's already ongoing. we mentioned that both in our written budget as well as our conversations about the budget.

we look forward to working with the congress that has started on these issues. our plan is hopefully a place to start. >> thank you, mr. chairman. >> mr. garret. >> thank you, mr. chairman. thank you, director. so doing budgets is obviously very complicated. we probably never get exactly what we want. i assume you think you're presenting a good budget. >> that's correct. >> one that you would -- if you had your druthers and write your own budget, would this be the budget you presented? >> it would be. it would be. >> okay. i hear a number of different things from my constituents back at home on budgets and what have you. one of which is that we borrow too much and that we never seem to balance soon enough. so a simple question. when did this budget balance? >> in our current window, it does not. however, the -- >> okay. and people back at home don't know what that means. current window means ten years. >> in the ten years.

>> okay. outside of the ten years, can you tell us when it balances? >> the question of a balance budget and something that i've had the opportunity -- >> yeah, that's the question. so outside of the ten years, when does it balance? >> the question of a balanced budget is not a question of just when you do it. the question of a balanced budget is actually related to what those constituents want on a day-to-day basis, which is jobs. >> but this is a question they always ask me. >> they don't ask you about the economy? they don't have you about, do they have jobs? >> i just want to throw the question out so i can get a yes or no or what year. the year this budget balances is -- >> the balance in terms of our budget, there is not -- our budget is in a ten-year window. it does not balance in that window. but i think it's extremely important -- >> give me one quick answer so i can go back to my constituents. what year does this budget balance, or does it never balance? >> within the window of the budget, we don't -- >> no, no, no. >> congressman, we don't do -- we did a ten-year budget. >> so i can go back home and say the president's budget doesn't balance. >> congressman, may i finish?

>> i asked for an answer two minutes ago. you still haven't given it. if you can give me a year, that's fine. if not, no. >> then you will be wrong as to how much we borrow. what dr. price was pointing out is if you are off by one tenth of one percent, how much more would you have to borrow? you didn't answer. he told you the answer. $311 billion over ten years simply by being off by one tenth

of one percent. it could be $3 trillion over ten years. you didn't know the answer. and of course your answer is we never do. >> congressman i have had the opportunity to work on balanced budgets. i worked on the three of the four balanced budgets. >> my other question is why is the law so complex. on your website you talk about trying to fix the situation in regard to faxes and say we would like to have tax reform which would be the simpler tax reform but i see nothing in this proposal. what i see is you make it overly complex with additional rules, new taxes and regulation. is there anything in this

proposal that would actually shrink the 72,000 pages. >> you would not give me an answer to that. >> congressman you don't want to let me complete my statement? >> i gave you two and a half minutes to give me a year and you still wouldn't. is there anything in here that will actually reduce the complexity of the tax code? you are not lowering any individual tax rate and adding more regulations. would the size of the tax code increase or decrease. >> the question of pages is something i would defer to the department of treasury. it will simplify the way

reductions are done. >> would tax rates for individuals go down? >> the question of tax rates and the commitment. >> would they go down? >> for higher income folks they will not go down. >> first come first serve. i will try not to ask you a question about deficit but about job creation and jobs. >> so a number of things in terms of things we will promote. we believe they are things in terms of infrastructure and manufacturing and in terms of the investments that we're

making in education, we're down to benefits later on. the plan is about short term and long terp. >> can you talk some about in a infrastructu infrastructure? >> certainly. many people, unfortunately the agreement that was reached, the ryan murray and the other, what that did is that made double digit increases in infrastructure in the tiger grants which are directly going to infrastructure right now. >> i just want to thank you for that. i was the chair of the finance committee during infrastructure dollars passed down to the

states. so we saw what it did before and we know what it can do now. how about on the side of job training? often that is about making sure you're training for the right things. those are the investments that you will see. the public and private sector

believe lead to greater employment because people have had the opportunity to do as they learn. >> okay. and i would like to also associate with the chairman's remarks earlier. if we could find a solution that protects privacy it is something that is important to a lot of people in wisconsin. >> i was a former member of the met life. i have some familiarity. >> thank you. and finally unemployment insurance. >> the importance as we think about our economy and what we need to do in terms of encouraging people and one that has been taken many times under republican administrations when

the unemployment rate was at a lower rate. >> i just wanted to announce that we are expecting votes around 3:00 or shortly therefore. the director has agreed to stay following that. >> thank you. thank you. isn't this fun? i think you got to do it again sometime. >> everything but cpi is in there including all of the other

entitlement reforms. in the written volume of the budget you will see we are sill committed. we stick by what i have proposed and would be willing to do that. >> last year the president did something in his budget which is an unusual step, which is to present a deal, an offer, a negotiation if you will. we have chose on the return to what is the regular order of what budgets do. this would not be our first choice.

>> this was simply an olive branch? >> the administration did and still wants to create a larger agreement. we're pleased by ryan murray. but believe there is still an opportunity for more. in doing that we understand there will be compromises and we want to bh a part when we're trying to show that. >> okay. well, i understand what you're saying. this is the president's vision. no attempt to compromise and olive branchs at least this time. they will all say the deficits are not sustainable. maybe you will disagree with that. i will let you finish your response on that if you want to. they will all say a deficit is

not sustainable. and a number of these programs will be bankrupt, out of money, fail, require something radical. >> i think the issues are very important. they relate to the issues of the economy that we were discussing before. i think the real question that we are all talking about on both sides of this is the slope of the line. the slope of the line of deficit reduction. that gets to the very question of when you are in balance or not. and in terms of the slope of the line it has been the steepest it has been since world war ii. we believe we have it on the right path. in terms of doing more, what are the benefits and cost.

>> in the budget the slope line goes back up for a bit. >> it goes down. >> okay. the entitlements, the president doesn't believe that we need any entitlement reform? >> no, we have entitlement reform in our budget and it builds on top of what is already a trillion dollars in savings that is built in the baseline. since the affordable care act has passed, there is now a trillion dollar adjustment. so the starting point. >> disability has got a real

problem, quick. >> there are proposals for funding to make sure that we check that the people that are applying for disability really a arel limgable. >> let me just say this. i'm not trying to be difficult. we have to deal with them. or they will go away for the people receiving them or the country will go broke or both.

i would hope that the president would do something and i hope that you do. >> there is a model program. not go on to stay employed. we do want to see changes and improvements to the program. >> thank you. my understanding is that you're able to stay after votes? i want to confirm that? >> that is correct. >> we will have one more question with mr. huffman. >> thank you.

>> so the question of a deficit is not really what is important to them. we believe that the growth can be better and we believe you can do policies to do that. we believe that contractionnary policy policies are not the way to do that. we have talked about in the job creation that it can occur. i worked on three. i have on my shelf at home a black budget because it was in the black. i believe that there is a time and a place but i don't believe it's an end in and of itself.

i think we have to make choices and that does get to the question of the slope of the line and the deficits that are the deficits in terms of dollars and in terms of national security readiness. >> special depreshuation rules and the field seems to be permanently tipped in favor of fossil fuels.

i want to ask what this bumgt does. >> you see investments in rtt and different forms throughout the energy budget as well as things that are impacted in the department of interior. you will also see a climate resiliency fund. much of the research will impact how we make choices.

>> access driven by low reimbursement rates. what does this budget do to try to make sure that we continue to provide access to folks who desperately need it. >> number two the focus focuses on graduate medical education so that we can ensure that there are trained physicians to go into the communities to serve that. it's through our investments and the extension. >> i yield the balance. >> we will continue for at least

one more. >> as you know the department of defense has a history over all administrati administrations they are later proven to make it -- let's say they were overly optimistic. this trend certainly undermines the ability of congress to make well informed decisions and set priorities. cost rejections. would you agree that perhaps a better way would be through -- rather than relying on services? >> you know, i'm going to apologize and say i have not

spent as much time on the cape in terms of how we get the estimates. as the director i'm sure you're talking about it in defense. we continue to put pressure. >> it would be helpful. we would like accurate projections. the next question. and this is coming from former secretaries and controllers in department of defense. specifically the high proportion are not performing as -- has raised some red flags. the secretary has told us that it was easier to shrink the size

of the farce than to discharge a single civilian you share your thoughts and reduce the number of civilians would provide cost savings in both the near and long term? >> one of the things you will see in the current budget volume. which is a part of omb's mandate and you will see. i won't go through them all.

and motivated to do that.

-- >> and in particular, i would like to supply to us what specifically is going to happen in the area of nuclear weapons.

my understanding is that actually the numbers that are projected are understated. that it's very likely we will be looking at up to $700 billion over the next ten years on three redundant systems of delivery. to be able to keep it could be upwards of $700 billion on weapons, that haven't helped us in the challenges that we face today, that are dangerous, and sapping the strength for other areas of our nation's defense that at least two, three, four, $500 billion might be used more effectively. if we could use a deeper dive on what the projeks really are, so we could have it, it would be

very, very helpful. i appreciate your reference to infrastructure. both of those i noted were declared dead on arrival. there was no support on either side. because of how.

>> if we continue to play a game of chicken and we don't have stable longer term infrastructure funding. there is another proposal floating around. i announced legislation that would house bill 3636 which would increase the gas tax 15 cents over three years. now of course people said that's a bit of a lift but it was interesting. i was joined by the afcio, by the chamber of commerce, one of my favorite pairings was the truckers and triple a said raise our taxes the administration and people in congress might take a step back and look at something

that actually has broad bipartisan support with the world out there. something we have been used to and in fact, ronald reagan could sign a nickel a gallon gas tax increase back when that was real money. if you could help us understand where we're at. and i got to ask that people look at this before they dismiss it because the other proposals are going nowhere. thank you for your time. >> i am certain that the secretary, the secretary of the department of energy will be speaking to that. office five ys

ago, the president came in with a visorvision or agenda, in thi

vision that he had, it led to the following policies. $1.7 trillion in new taxes and $800 million in stimulus spending. and it cost hundreds of millions of dollars. lesions of unelected beurocrats that have put the boot on families and paychecks and a growth of $7 trillion of federal debt that is going to be polila on the backs of our kids and grand kids. the middle class has shrink. we have middle class in class has shrunk. the ranks of those living in poverty has increased

dramatically. the labor force has dropped dramatically and there has been explosion of families that live off taxpayor provided benefits and the economic dpfailures of those pollyicies the president s proposed new spending. $1.8 trillion in new taxes. more warning top rwashington re trillions of dollars of new debt for future generations. i think in the ipt of time i would like you since we are running late today answer these in writing for me. if the president's policy's failed the first time and they first families and paychecks.

this is about jobs and paychecks and the first round of the apologipol policieies have failed, why aree going to do the same thing again. and the second one is, please reconcile omb's forecast which are more optimistic than cbo's forecast which are less optimistic and talk about the deficit impacts of those and those on the impacts on diploemtive. i yield back. >> mr. jeffreys. >>th >> thank you mr. chairman.

in an earlier exchange there was a statement made by you. you made the point that there are also have been actions reference was made to the notion that the president's economic policies have failed to create economic growth. am i correct that during the last several months jobs have been created? >> that is correct. we all recognize that there is still significant action that is

needed to completely turn our economy around. but, in in order to move forward, the first thing that we could all agree that should happen is that congress needs to stop doing things that could shurt our economy. >> that is true. the adding fiscal drag needs to slow it. and allowing the sequestration to take effect. it could cost $750 thous jobs. >> that is correct. the cbo projection was that it point 0.6 off our gdp. >> the government shut down that was un-necessary, that it cost

us about $24 billion in lost economic productivity. i think we can all agree that it was harmful to our economy. yes, the estimates are 0.2, to 0.6 gdp. was the ceconomy hurt in anyway createded by what i would term serial flirtation with a default on our nation's debt? >> i believe we had fiscal drag that was being created by unseru uncertainty and the shut down last year. are we hurt by the failure? >> yes a drag on the economy.

could you tell us why that would be a positive thing for the c econo economy? >> i think it is in two ways. in terms of what these projects are ready and able to move but what it does to roads and infrastructure which is providing that for our nation's economy. having come from a retail organization that uses the roads to transport goods. these are the important parts of the backbone whether it is roads or rail. >> can you speak about the earned income tax credit as it relates to low income individuals and or working individuals in this country? >> the erped ip come tax credit

encourages people to work. by focusing on this category of people, by extending from 25 year olds down to 21 year olds you are getting a key group of people that we want to encourage to be in the workforce. is it fair to say that providing america with a raise that i believe is supported in the budget would also help turn the economy around and move it forward? >> we believe it is an important part of the picture. >> thank you, i yield back. >> thank you. mr. chairman. thank you, for being here. we talk a lot about problems

with guaranteed benefits in our entitlement program. you referenced your experience as being on a board of directors. the independent kcaters tell us in terms of congress taking the efforts in terms of reallocation of the trust at the same time taking some of the steps that we believe that work to improve the

lift of the trust. is that outlined in the budget plan? >> in terms of the changes, there are two specific changes that gets to the issue that i think is a concern to all of us. those who are receiving disablity are appropriately qualified. so that we have the right people in the pool. the second thing is working on models that prevent people from going onto disability. if you can catch people before they make that shift and you can keep them employed. to see if there are people that you can keep them in the workforce. we believe that is another way to extend the life. if we enact the two

registrations when will it amend the bankruptcy date? >> 2023. we'll need to see how much money we get to do the program integrity. we are going to do a pilot before next year. >> in terms of social security, the president has laid out principles that he believes are important to the question making sure that we extend the life of the trust. we have seen at different times such as in the kate case of immigrati immigration, we in the process that chairman ryan and murray, we tried to put forward our principles so you new where we

stand and engage in a significant way. >> last year the administration's budget said you were going to under take review of the top ten valley authority. what have been the results of that review? >> one of the things are the ways and approaches that the tva is taking to thinking about it's long-term needs. still want to know and understand the way in which those have been implemented. make sure that they consider the impact ip the state of tennessee. >> what about mississippi? >> as well. >> when will the comments of the stakeholders of that review be made public? >> i will be honest and say i

don't know the answer to that question. >> we can get back to you on that. >> tba spends $100 million a year on non power related activity. and i'm not convips convipt con that any talk of paying for pva. any future budget remditions that you have on that subject. >> thank you mr. ryan and mr. chairman. i think we can see where the philosophical differences are in the proposed budget of the administration. and i think it is helpful to go back the last couple of connectcaconnec decades

and i was here and we had several instances and the economy collapses and democrats come in and others exactly how we pieced things back together. so i want to say thank you for your hard work. i know you did this in seven weeks in a day and i'm sure you needed the extra day. this is the philosophy that we've had. there have to be investments that are made that are going to yield growth hire people. 20 million jobs. every sector of the economy and

group went up because of the deals that were made and then we passed the bush tax cuts. if you look at the years in the 2000s it was stag nais the stag best. you are proposing that we go back to that. we have the first of the 45 instituted in youngstown. i will share what has happened with the small amount of money. since that has happened, we have had every major corporation who is interested in manufactures in the heart of the old steel belt downtown.

we had siemens come in and they donated $440 million worth of software to the university. the people who manufacture printers are calling saying that they want to expapd nd in that region. in kent, ohio we got a tiger grant, $20 million bucks it stimulated $150 million worth of investments. there are investments all over the country. that is one of the key instances where investments help businesses and they help grow

the economy. this has then that holistic approach. and i appreciate what you said on how the entitle many reforms. he tell me about p the business tax reform and how that will fund the projects. there is one time transition money. that happens in any system. you see it in terms of this one time revenue. we would like to see that as a part of investing in transportation. while you would encourage growth

anden investment in the u.s. you will also encourage both india, infrastructure. in tefrps rms of tax reform. trying to put together two things that are about growth and the economy and things that we can come to agreement on. >> i think when you look at the provisions. raise the minimum wage. saying that people can reduce the hours of work. if you look at the credits in here for expending child and other family tax credits.

this is the toughest it's been for main street. with all due respect as i listen to you today and see the budget, this budget is anything but fiscally responsible. we have heard the numbers over and over. we have heard $8.3 trillion in debt. and $25 trillion in debt by 2024. my constit wepts of my district are expected to balance their budgets. i'm going to tell you the budget is the issue with people. they understand the importance of balancing the budget.

as a member of the transportation intrastructure committee we are working on how to maintain our highways and waterbays and intrastructure. and make it profit anl for fute twr future generations. it is recommended that congress pass a reauthorization bill that relies on extra revenue. it covers the protected shortfall. the future trust fund would receive a $150 billion. yet the program continues to ignore the real problem where we get future revenues. my question to you is as our

economy continues to recover, because she's are the people lake myself will be able to hire more people why do you think that is taxing and regulations helps the economy instead of bur developing me. so i understand an appreciate there have been 18tieen differe cuts and whether that is encouraging contracting or it looks like this year for the first time we will meet the goals. >> do you frl think increasing

taxes though in the short-term really solves the problem? >> how am i supposed to pay for the minimum wage increase. >> we believe it is a thing that will be hopeful to our economy overall. >> i think with regard to a number of states have done it and not seen negative economic impacts. and when actually when people employees have more money, general lly speaking. >> car dealerships. >> it does make a difference freps in terms of their ability to purchase and be a part of the economy. >> how is the small business opener supposed to pay for it. >> we believe as people have more money it will increase business's ability to grow. >> does the president address funding the highway fund in the

near future. >> you addressed the difficult fiscal situation we are in. and we have discussed issues of defense spend iing and we have discussed revenue. we suggested that what we believe is the best approach to make progress on this sish. do you think raising the federal fuel tach x is the way to do th >> we are willing to work with the congress on a bipartisan basis. in the house with chairman schuster on finding theclusi s n solutions thank you very much and i cheeyield back. >> thank you and i hope you are

having a good day. you are a breath of fresh air. let's go to the record. >> during the last years of the bush administration we had 1.4 million jobs into the economy. that is public and private. now in the private sector, in the private sector between 10 and 2008, we lost 462,000 private sector jobs. let's go to the record. so in the past 47 months that is almost how long -- that is the

record. there are no increases on taxes. strength in our middle class. and it is not good policy. is really doing any justice to the public? forget about the politicians, our title certainly comes and goes.

le less than 2% of gdp. their plan called for the deficit $819 billion in 2013. what was the deficit for 2013? >> $680 billion. >> well, that is much less than what simpson bowles projected sit not? >> it is. >> so last year, 2013, president obama exceeded the deficit reduction goal of simpson bowles of $139 billion. am i correct? >> yes, sir.

>> yes, sir i would have to look at what numbers they have at what years. >> do you know what the number will be? >> it is 2016 and it will be 531. gee have to look at these numbers. give the president and this administration some credit. i have been pretty tough on them. give them some cd. they did something else. they did something that bass wa positionti positive. but you are never going to give any credit to anybody except the pat on the back at the christmas party. superintendant th isn't that wonderful?

>> does this plan raise the age for social security? >> no, sir. >> does it change the measure of inflation for social security? >> so this administration has managed to reduce the deficit in 2013 below bowles simpson to social security. >> so now we are going to wait for the response from the other side and debate the issue gagai. thank you and good luck in your job. >> ten seconds to spare. a new record. >> mr. mcclintock. >>ter mr. chairman. welcome director berbell. did i under stand you