the figure is higher for women than men. an article in the "washington post" showing women are more supportive of this. we need to continue to have leads and debates, move legislation people can agree on and we have to show works that it is effective. without military's consequences the life issue i think is an example of how to continue to press on a difficult issue and make progress because people

listen. they may not listen intently over the short run but there's an openness to listen as they we see what certain decisions that brought. i think we need it that way. >> any other questions? okay, if not thank you all for joining us for this panel and i will invite tim chapman up for some closing remarks. >> thankthank you, panelists, for a great discussion. [applause] >> next congresscongress man tom price, the new budget committee chair, he outlines the budget priorities for this year and his hopes for reducing the debt. debt. from the heritage foundation, conservative policy summit, this is one hour 10 minutes. [applause]

>> all right, look at that. okay, thank you, everybody, for sitting tight and waiting. all right here we go. congressman price assumes the budget chairmanship at a very important time in our nation's history. as we all know the country has enormous challenges right now. the house budget committee is at the forefront of addressing all of these challenges. the distance to the chairmanship with big shoes to fill confront with the congressman paul ryan has been a very effective advocate for reform. in his tenure as chairman he ended his orion roadmap which became a national conversation about where we go in the future by that element reform tax reform, have revealed obamacare what to put in obamacare's place but before the ryan budget, medicare reform, third rail of

politics. reform those at your own political peril. was a lot of criticism at a time when the ryan budget first came out but this is too dangerous for republicans. we see what happened with republicans. their numbers in the house of representatives keep going up. the numbers innocent people do. this is not the third rail of politics anymore. liberal scaremongering about this has become fairly ineffective. not that this has something to still be considered that we've seen it can be beaten back. remember the ad, pushing granny off the cliff? those didn't work so well in this last election. what we've learned about this is the american people are plenty smart, have plenty of wisdom, and when they see you take a bold stand for something that will help them in their daily lives, they will rally to your site. it's a reason to be encouraged and it's a reason for more members of congress to have

political courage to address these kinds of issues. so congressman price picks up the mantle on the successes of the past and we really think there's not a better person to do this right now. he's been an ally of ours at heritage on conservative issues for a long time. he's always been a reliable staunch conservative in the house of representatives. are taking this chairmanship and then pushing the ball further down the field is going to be something that we enjoy partnering with them on. he will be the tip of the spear in 2015. we look forward to hearing from him today about what we can expect to be working with them on in 2015 and where we can go. please join me in welcoming tom price to the stage. [applause] >> thank you, tim so very, very much. good afternoon all. great to be with you and back at heritage year. i want to thank heritage for the opportunity to be here at heritage action for the work that you all have done. it is incredibly important work

to continue the advocacy on behalf of all americans and we appreciate what you have done. i want to thank all of you for showing. i see some familiar faces in the audience and some not so familiar, so welcome. you may have just stumbled in out of the cold and rain and found yourself at a fascinating opportunity, but hopefully this was the spot where you intended to be during the summer. i've got a hard stop at 1:00 about make remarks at in the movie some q&a and i'm happy to talk about whatever you all would like to speak about. talk about house budget committee and some of the deadlines that are coming up early in the year so that you can hopefully get a handle on what we're looking at. i can tell how excited i am about the opportunity to chair the house budget committee. the opportunities that we have a really remarkable. the past four years if we are honest, have been a model the mess with what we have seen --

muddled mess. the kind of activity the house struggled to get through the floor even though they would put, we would put good policy in the senate, it just got shoved into harry reid's bottom drawer. i can't tell you how excited i am about the opportunity to work with a set that i believe really wants to get something done and hopefully get things to the president's desk. i think we are in a win-win situation. if we can get anything to the president's desk, we win because if he signs it would be good policy for the american people. if he vetoes it then it begins to demonstrate to the american people that contrast it with an a in able to do so because of the muddled mess that contrast between the folks are really trying to solve the challenges and the problems that we face in this country into a standing in the way. the president will be later and the emperor has no clothes. i can't tell you how excited i am about moving forward with the budget committee. the budget as you isn't just

numbers. on a sheet of paper. it's our vision. it's the kinds of policies and programs that we would put in place to address the problems and johnson would have so we can provide for an opportunity for all americans to greater opportunity to succeed. that's what a budget is so we will lay out our path for real hope and real opportunity as we move forward. a few years ago many of you will recall that the chairman of the joint chiefs of staff, then mike mullen was asked what he thought was the greatest threat to national security for the united states. the greatest threat this is the highest ranking military officer in the country was asked what the greatest threat was to our national security. you all know what he replied. the debt. the debt. $18 trillion growing at this

point. now the total debt now exceeds the gross domestic product in this country and would on absolutely unsustainable path. the budget committee is where we begin to get our fiscal house in order. why do we want to do that? as i say it's not just numbers on a page, not making things add up to zero at the bottom line when we get there to get a balanced budget, but with a debt that size, paying the interest on the debt servicing that debt every single dollar that services that did is a dollar that can't be used for education, can't be used or health care, can be used for transportation, can be used for energy, can't be used for national security. it is literally at a point where it is approaching choking off the actual vitality of our great country. that's the reason that it's not just numbers on a page. it is making certain that we provide for a greater amount of opportunity for all americans.

you all know now and we find ourselves in a situation where we as a nation are spending about $3.6 trillion a year. $2.6 trillion is medicare, medicaid, social security and interest on the debt. interest on the debt by the way is scheduled to go, to approach $1 trillion within a 10 year period of time within the budget window. all money that we can't use for something else. so 3.6 is the big number 2.6 is the amount of money we spend for medicaid medicare, interest on the debt. leaving about a trillion dollars for everything else. so when you think about the federal government and you think about roads and energy and education and national defense and all the kinds of things, legislative branch, commerce justice, everything else everything else except for medicare, medicaid, social security and interest on the

debt, you'll argubright audience big enough for of the last sutures with the deficits of greater than a trillion dollars which means you could do away with the entire federal government with exception of medicare medicaid, social security, the entire government, everything. and those four years you would need to balance the budget. that's the magnitude of the challenge that we have before us. so when your folks say you don't need to worry about the medicare, medicaid, subsidy, they are just doing fine, not a problem. that's not only irresponsible, it is deceitful. they are just not telling you the truth. so we can continue as a nation to stick our heads in a sandalwood not going to be able to save strengthen and secure the programs that are vital for so many of our fellow citizens. that's at the same time on the revenue side the money coming into the federal government as

you all well know is at its highest absolute rate ever. more money collected in the last quarter from the american people than ever. so if you're that kind of debt and growing debt and those kind of deficits and jeb those kind of revenue numbers increasing tousled numbers coming into the federal government, the problem isn't revenue. the problem is spending, and you all know this so very very well. the three ways to solve problems, you can raise taxes, our favorite way to do that from our friends on the other side of the aisle, or you can decrease spending, and to be honest with you, the house has done a pretty doggone good job holding down the spending that it has that has been able to it on the discretion aside, not automatic site. those numbers have been coming down in real numbers minimally but coming down each of the last four years. where the problem is, the big

spending is the automatic spending, medicare, medicaid, social security. so you can raise taxes decrease spending, and/or you can grow the economy. that's where we hope to put our major efforts at the budget committee is putting in place are laying out the vision for how we would grow our economy in a very positive way expand success for the american people. how are we going to do that? our intent on building on the success that we've had already at the budget committee over the last four years but as tim mentioned the budget that has been laid out has demonstrate i get the balance, demonstrated some of the remarkable things that can be done if you think creatively and have faith in the american people and have faith in the free market system that made us the greatest nation in the history of the world and we will build on that success. we will lay out a budget this

year. the budget has to be done by the end of march. we will lay out a budget this year that will come to balance within what's called a window, within a 10 year when the time but i hope it six sure that an upside with the new members on the budget committee, 10 or 11 new members on the budget committee and we will challenge them to come up with creative solutions so that we can get to balance in a shorter period of time. second, one of the most important things we can do at the budget committee is something tim mentioned that is to normalize the debate about controversial issues. as tim mentioned, four years ago nobody would've given us a prayer to be able to lay out a solution to save and strengthen and secure medicare and thought we would be able to sustain the onslaught of the challenge on the other side everybody said no, you can't do that. we worked and worked and we convinced our colleagues and convinced our friends and move forward and move forward with a

positive solution, so positive that the romney-ryan team on that proposal won the senior vote in this country. what that says to us is that we are to make certain we continue to find the other areas where we can begin to normalize the debate about how you truly solve the remarkable challenges that we have. we believe that it is important to save and strengthen and secure medicare, medicaid social security. safe, strengthen and secure. the other side of everglades there all right with him going broke because everyone of those program is appropriate every single one. so-so security disability in churns -- insurance program runs out of all of its money next year. this isn't in 2080. this is next year. the urgency is huge. so we believe it's important to put in place the programs and the policies, the positive solutions to save and strengthen and secure medicaid, medicaid

and social security. i can't wait of our new members on the budget committee sink their teeth into these wonderful issues that are so important to solve, going to get our fiscal house in order and be able to great an economy that will thrive and that will grow. third, i think that we have on the conservative side we have either ignored or put on the back burner or lost the whole principle of federalism when it comes to federal government spending and federal government policy and budgeting. it's one of those areas that help to normalize again, that debate from the federal budget committee. federalism is so important to isn't just having states and localities doing the kinds of things that have to be doing as opposed to the federal government. federalism is a policy a principle that puts in place solutions that allow greater amount of choices and greater amount of opportunity for every single american. that's what federalism does.

so that's a we ought we are going to work hard on trying to identify those areas are got to be able to move forward in a big, big way. fourth, regulatory reform. the burden the incredible burden of the regulatory operation that is come out of this town for years and years but it's been on steroids for the last six years has to be addressed. we all talk about how the corporate tax rate ought to be decreased, 0% tax rate cut, corporations pay taxes by the way as you know. individual attacks of the corporations collect the taxes. corporate taxes in this country, we collect about $300 billion a year in corporate taxes. the burden from federal regulations for americans and large businesses, small businesses and americans across this country is at least five times that, at least five times that annually. the amount of money that goes

into complying with all this federal regulatory scheme is over $1.5 trillion a year. those are monies, we all believe in regulation, ought to be appropriate, right sized accountable regulation. not just because someone in this town is a grand idea about how somebody else to do something and has a position. i can to you there are are a lot of folks a lot of folks in this kind of thinking of how to practice medicare and take care of patients. they don't. out not be able to write the regulations that dictate individual physicians and other areas endeavor come individuals, they know nothing about what that kind of practice but with the kind of endeavor is. we believe the budget committee is a place to begin to get more of a handle on the regulatory oppression that is going on. fifth you've heard a lot i suspect about reconciliation. reconciliation is a powerful tool of congress that can be

used. it's an important tool but it's not a silver bullet but it doesn't solve all problems. reconciliation is absolutely important comes to the budget committee. we will provide reconciliation directives that we hope we're able to get the senate to agree upon. the reason it's important is because they can come back when it's agreed upon by the senate and house they can come back to the floor of the house and senate in expedited fashion and it only takes a majority vote to pass. doesn't take a super majority. all sorts of reconciliations have been used for all sorts of things, good and bad. reconciliation in some variety was used for obamacare. reconciliation was used for the tax reductions of the previous decade. reconciliation was used for the balanced budget act of the late 90s when we actually got to a balanced budget. as i say it's a powerful tool but it's not a silver bullet but we believe it's an important tool that we out to be using.

finally, the budget committee we believe that budget process reform is absolutely merited. we are imprisoned right now but budget process that was written 40 years ago by folks who wanted to -- default in this town spend and spend and spend more and more and more. i look at budget process reform in cuba areas. one short term. we got off to a pretty doggone good start with house rules, with the macroeconomic scoring that we put in place to house a more that in a second. and there's some other short-term things we can do baseline issues that we might be able to do. in the long-term, not in this congress, because i don't believe the president has any interest in truly reforming budget process, but in the long-term i believe it's imperative we rewrite the 1974 budget act. we write it anyway much more responsible, more accountable

and makes it so the federal government's role in terms of spending isn't default to spend less, not a default to spend more. i look forward to working with folks on the committee to make certain we move in that direction. that's a longer-term prospect. let me touch on some very specific issues and then i'm happy to address any questions that folks may have. macroeconomic analysis or scoring, sometimes called dynamic scoring, i called accurate and realistic is going to cbo is i believe in prison by rules right now the makes it so that they can't get to the right answer. over the past two months i've spent a lot of time on the telephone with economist from around the country, bright minds, minimum who spent their lives in economic arena and asked them what they think i've to be done. one of questions i've tried to get the answer from each and everyone of them was on macroeconomic analysis the macroeconomic scoring. accurate is going to almost to a

person, almost what person they would wholeheartedly support this. some of them had great description of what that means. one of them said we can either do what we're doing right now which is to be precisely incorrect, or we can do we opted do, and that is to be imprecisely correct. another one said when we send an issue to the congressional budget office and we don't allow them to account for the human activity that occurs when you change policy we change policy in this town because we think it will affect something, and yet presented to the congressional budget office to have been escorted and say don't assume it will change anything. in fact, you can't assume it will change anything. so that number is zero. the other economist said we know it's not zero but it may be somewhere between one and seven, but we know it's not zero so why would we say it is a row? doesn't make any sense at all.

in our rule we passed last week and house, we included in we're dipping our toe in the water. this is not changing the sun sun and the earth as it relates to scoring at cbo. what we said is if a policy would result in a change, that was greater than .25% of gross domestic product, about $40 billion, three bills in the last congress would have, under that provision to then you ought to be up to look at what the effects would be. you ought to account for those effects and you ought to be able to use those in a process from the squid standpoint. this is a small step in the right direction. second big issue that's coming up quickly is the sustainable growth rate, sgr, the doc fix to it expires as you know on march march 31. it is time to fix this. this has been broken since it was instituted that could be

broken for the last 12 to 13 years to every single year congress runs around try to figure out how to find the money to cover the whole, to cover the patch to make a so we don't push more and more physicians out of the practice of medicine or caring for medicare patients. this is important in a real way to get not just make the numbers add up on the page but to make it so that position are able to see seniors in care facilities. one out of every three physicians in this country who has a practice that would normally care for seniors has limited the number of seniors that they see. not because they don't want to take care of them not because they forgot how to practice medicine but because the numbers just don't add up from a financial standpoint because the federal government is imposing these restrictions on the. one out of every eight physicians in this country who is in a practice that would normally see seniors would say we're not going to see more. not because they forgot that practice but because of the policies and rules that come out

of this town. we need to change that and one way that we can begin to do that is to fix the sgr formula of them hopeful we are able to do the that buy into this court the third issue is that the ceiling as you are coming due 15th. with extraordinary measures that are able to be taken it probably runs into june july august time frame. i think it's important we appreciate that the debt ceiling provides focus on this issue but the problem isn't the debt ceiling but the problem is the debt. the problem is the debt and that's why we need to get our arms around this debt, get our arms around the policies and procedures that we need to put in place to put us on a path to balance ended up as a path to be able to pay off that debt. again, a great opportunity to focus and the budget committee will be front and center on the. finally, in terms of an issue is, i would be remiss if i didn't mention health care and obamacare.

obamacare is not only harming the quality of health care provided in this country, it is harming our economy. harming our economy. it's doing so in ways big and small. not just for medical practices not just for physicians and hospitals who are trying to care for patients but for businesses small and large who of their own volition want to provide health care fridge for their employees and found much more difficult to one gigabyte more folks and have a cap on of individuals that they can hire so they don't come under the forces in the regulations and rules of obamacare. that's not a system that works for people. it may work for government. it may work for insurance companies but it doesn't work for people. it doesn't work for patients. i'm excited about the opportunity to put forward positive solutions that help were able to use our budget to put forward some of those programs as well. great, great opportunity will come i believe in june when the supreme court will rule on king

versus burwell. this is the case coming before the court that will do the argument in march rule likely the last week of june and probably the last day of the ruling this is the one that says the law itself the bill has passed a law put in place did not provide for subsidies to be able to be utilized to provide health coverage for those who get the coverage through a federal exchange. very clear. the law is very clear. this law, if this position of the supreme court agrees with what we believe to be the letter of the law, then this unravels obamacare of the dog on quickly. that's a good thing but it's not a good thing to not have any replacement, not have any solution ready and available for congress to act upon. so we need to be ready, willing and able to move forward but we are making certain we stick to the pencils of healthier, accessibility, affordability,

quality, coverage and choices. not destroy those principles. if we do that i think will have a great opportunity that the president supports positive reform would come to help you. exciting and challenging times. let me thank you for your interest today. let me thank you for the work you're doing and thank heritage and heritage action once again for the wonderful advocacy on behalf of of the american people. thank you so much. god bless. [applause] >> we've got questions online. we've got a lot of folks watching online and pressed and attained easier so we try to cycle through all the various questions. first question right here. >> there's lots of things that can be done to save costs through manage reformed in the proxy. are looking at those things and

related to your discussion about dynamic scoring, have you thought about doing anything on the cost side? currently you can't legislate management savings because they're not scorable. there's estimated $50 billion a year potential cost savings just by squeezing of redundancy and streamlining government back office without touching and all of program. every the but look at those kinds of savings and may be considering a way to get around the byrd rule in the future? >> eating around the byrd rule is i think going to be a real challenge without the comprehensive reform of the center for budget i. i do that as a long-term solution to admit anybody on the senate side who appears to be willing to tackle that. because its statutory it would take i think that's better done in the rewrite of the 74 act. if you look at other items however that's why in terms of where we can find savings the

gao and heritage and all others pointed immediate savings that can be, have been identified and could be utilized. and it's the energy and enthusiasm and excitement of the 10 or 11 new members on our committee, the budget committee that we are going to rely on to help us push those kinds of solutions. so absolutely. we've got to be more creative. we've got to be more inventive and how we're solving the challenges on half of the american people from a budgetary standpoint. these challenges get worse every year, more difficult every year. the president who refuses to act on these kinds of things makes it much were difficult for us to get our fiscal house in order. we are up to the task. i know we're up to the task i know the american people are interested in making certain that we fulfill that task. >> just to follow up on your comments on obamacare.

are you suggesting then that you would have an alternative ready to go if you will, once the supreme court rules? and if so, could you give us a little preview of what you have in mind? >> toyshop, i sure hope so. i've hope so for the last five six years. as i mentioned the principles of health care the vast majority of the american people regardless over ideological standing or position, the vast majority of the american people support principle is that we out of a system that provides for greater affordability greater accessibility of coverage to greater quality of care and more choices for the american people. almost everybody believes in that. the problem we have ryan is what the president has put in place with this law something that violates every single one of those principles. affordability is going down. costs haven't come down by $2500 a family. they have gone up at least that on average per family.

accessibility has gone down. you've heard of the narrowing of the networks. patients are to able to find accessibility with physicians. the quality is decreasing to talk to my former colleagues and they will play the quality of health care in this country is being diminished because of the law, and choices are clearly limited to a few steps i consider want to put in place a policy that would easier to those principles, it doesn't look like? it looks like something that says when you make certain it's affordable for got to expand the affordability and all sorts of ways. those folks and individuals, small group markets were truly threatened by increasing costs and by the pre-existing illness exclusion that has existed in those folks need to build access a insurance risk pool is large enough to go to spread the risk so that their costs come down, don't go up. i think we need to build to say to folks in health coverage

policy are able to purchase that is approved by your state, insurance commissioner or state insurance department, and even when that they deem to be appropriate coverage, you want to have access to. not be dictating to watch and what you must buy, forcing it down your throat and for your pocketbook. quality measures need to be determined and settled by professional site field of medicine, not bureaucrats in washington, d.c. choices the expansive for patients. if you step back and you accept those principles, the principles of the american people as athletes to health care and then you pretty much have a clear path to what the policies will be. >> dr. price, should you when the supreme court case on obamacare in june, the obama administration is critical have at least two responses. one of congress change the law and it will be up to you. but you also go to the states

and say, lots of people of us in subsidies, please set up an exchange and to construct the subsidy money flowing again. what would be your advice to the states, a 35 of 37 states that would be pressured by the obama administration? sure that asked for complete freedom on medicaid spending? what should they ask for? they can't ask for? hhs it were not go to set up an exchange and not negotiate spent the message to the states is there's a better way. there's a way that respects your constituents and the citizens of your state to make certain that we follow those principles that are so dear to all americans as it relates to help the medicaid we believe state flexibly as an absolute vital component. in my state of georgia there are about 1.8 million individuals on medicaid. 1.2 million of those folks are healthy moms and kids for whom the health care costs are minuscule compared to the overall system. and yet we don't allow the state of georgia as a federal government, we don't allow the state of georgia to come up with

a more realistic way to build to cover all of the medicaid population. thereby saving money for the sickest of the sick. huge flexibility we believe it's important to indian is doing great things as relates to medicaid we have to be able to have the states be the laboratory of ideas when it comes to health coverage for the medicaid population. message is there's a better way. we believe we are going to be able to get to that point. i think the president is going to be open to a better way. we are not interested in having the states tournament that's okay, we'll set up our exchange when we aren't encumbered by the rules and regulations for washington, d.c. nothing will change from the day before the decision is given if it is given in favor of our position to the day after as is a relates to the states and the decision they made two or three years ago and they said no it

didn't make any sense for us to set up an exchange, and it doesn't. it doesn't from a financial standpoint and who makes decisions choices and opportunities decision. >> thank you. congratulations on your new position, doctor. you said you want to bring down the debt and you said 3.6 trillion, 2.6 joy of the 3.6 trillion budget is in medicare, medicaid, and social security and images but you also said that you want to say strengthen and secure these three programs, these entitlement programs. so my question would be, where are you looking to find the savings? our personal retirement accounts on the table for social security, vouchers to buy insurance and medicaid? where exactly we cut if the goal is to save and strengthen and to secure these programs that are costing? >> that's where the good news lies, and that is that these

programs, medicare, medicaid, and social security, all of them are destined to go bankrupt on the current course with the current policies. and began as a mentioned, apparently our friends on the other side want them to do so because they have a proposed anything to say to any of these programs. the good news is that you can save, strength and secure them and save money at the same time. the model that we have proposed for saving and strengthening and securing medicare actually covers more individuals, saves money for the individual and saves money for the federal government all of the same time that you respect the principles providing greater choices and higher quality of care for seniors. why would you turn your back on that? it astounds me that our friends on the left side i see that that would make more sense, you spend less and have higher quality care and greater choices for the american people. but no we don't want to do that. we want to make certain we can continue to control the system. medicaid, state flexibly from future state flexibility

actually saves money. a more productive a line item for the federal government, the more predictable line item for the state government provides greater choices for patients higher quality of care greater access to care. we as a federal government say no, let's not do that. this is lunacy. in the areas of social security, it has indeed been the third rail as to mention, and i'm hopeful that with the budget committee will be able to do is begin to normalize the discussion and debate about social security. this is a program that right now on its current course will not be able to provide 75 or 80% of the benefits that envisions invaders have paid into in a relatively short period of time to that's not a responsible position to say you don't need to do anything to it. so all the kinds of things you know about whether it's means tested, whether it's increasing the age of eligibility, the kind of choices, whether it's providing much greater choices for individuals to have

voluntarily select the kind of manner in which they believe it out to be able to invest their working dollars as they go through their lifetime to but all those things ought to be on the table and discussed. again, that's what i'm so excited about the new members on my committee because they have great enthusiasm and energy about this one issue. >> last question in the back. [inaudible] >> is mitt romney the kind of partner you would want to have her budgeting in the oval office, or is there somebody you would rather be working with? >> anybody that effort is thinking about running on the republican side is the republican side is a better partner than the one we got right now in the oval office. [applause] speak at of the choices you have -- >> what i'm hopeful we are able to do at the budget committee is begin to lay out that vision and have it be so exciting and so

positive and so productive that whoever is able to escape through the comet of the nomination process on the republican side looks to the budget committee and looks to the house and says those are the kinds of policies that i support and will take the american people. >> thank you, congressman. >> thank you all so much. take care. god bless. [applause] >> okay, thank you, congressman price. great stuff. now i'd like to introduce two panelists. will have a conversation about all the things we just heard and what we might be able to expect in 2015 budgetwise. grover hermann fellow in budgetary affairs here at the heritage foundation and will be our point person on these issues. jason fichtner is a senior research fellow at the center. he works on those issues. thanks for coming up to assist. please welcome them and will

have a 30 minute conversation here and then a break. [applause] >> i've asked both jason and romina to give a brief opening remarks, and then we'll open it up for questions. romina, could you begin? >> thank you for the introduction, tend to thank you all for being here today. i want to focus my remarks on how the new congress can control government spending and reduce waste. and so i'm so pleased to follow representative price with those remarks. the first thing the house and senate have an opportunity do now is agree on a budget resolution. and that budget resolution needs to address growing, spending and debt at its root. the current half a trillion dollars deficit of this year has been hailed as a great improvement but the extent that it is an improvement, it is a very fleeting one in deed because he for the end of the decade, the deficit is projected

to exceed trillion dollar levels again. so when order to rein in this growing deficit, it's important we understand what's driving it and then we can control it. what's driving this growth in spending and the debt? 85% of the projected growth in spending over the next decade is driven by health care and retirement entitlements and interest on the debt. so that's where reforms need to target. to balance the budget before the end of the decade, we saw in the last house budget it takes more than $5 trillion in cuts. that is assuming you start cutting right away. if you decide to cut in future years and not address spending next year it takes bigger cuts to get to that balance point. so those the sooner lawmakers can start cutting, the better. where exactly should they start?

repealing obamacare has to be the first minority simply because 44% of the growth in health spending is driven by the health care law. so if you're to rein in growing spending and debt, obamacare is what we need to start. this needs to be combined with reforms to medicare, medicaid and social security. during this process lawmakers should be guided by focusing benefits on those individuals with the greatest need and delivering those benefits in a more efficient manner. as we'll hear from my colleague jason fichtner, improper payments are a big issue and health care entitlements are were some of the highest improper payment rates are in the federal government. now beyond that there's also still too much waste, duplication and overlap in the federal budget. sequestration has helped to get some of that but to sequester

itself is very small and is a very blunt instrument. so we need other reforms that really get at reducing overlap and duplication and rooting out waste, fraud, and abuse. one recommendation is to adopt a waste commission that operates similar to bracket. what the commission would do, it would have to be bipartisan and be guided by objective criteria and go through the federal budget to the domestic budget by agency by programs that identify those areas also guided by work from the government accountability office, identify those areas we can reduce waste, duplication, and make government work better and more efficiently for taxpayers. so that's another reform that i think would help to root out expanding. while we're talking about sequestration, it was intended

to be mechanism that forces lawmakers to agree to import budget reforms that actually address our spending and debt crisis is unfortunate that mechanism failed by the sequester will return next year and so we have another opportunity to have this debate. to honor the original intent of the budget control act and was the sequester was intended to do, we need to focus on what is our core court national priority which is national defense, national defense has been underfunded in the base budget and lawmakers have been debating the budget cap using the war account to fund things that should be part of the base budget. recognizing that come recognizing that we need to fully fund our defense needs and cut spending in those areas where it's going the fastest and cutting those things that the government shouldn't be engaged in in the first place, namely priorities that are purely private osha begun on a state and local level those are the

kinds of guidelines that should guide the budget committee and that should guide lawmakers this year and the following year. >> thank you, romina. jason. >> thank you. first of all i want to start by saying i was really hard and by the chairman stalker for a lot of us, i would choke on in the 22nd of my five year plan in d.c. i've been here longer, studying politics and policy. oftentimes we hear sometimes members say one thing to another, sometimes they miss speak don't understand the issues. congressman price would do a longer list of things he wants to change this to our list for a long time. it's heartening to see the underlying issues and laid them out and being honest about them what the challenges are in front of us. that was the question that you asked about you don't get statutory changes, or you can get budget changes for management changes. we have to look at these because

they are some very important issues. improper payments. these are not just brought to their fraud, waste, and abuse the base with something that happens when you give the wrong check into to the wrong person or the wrong amount. it could be doctors overbilling company billing people are not eligible for program but still get benefit. to give you an idea, take medicare fee-for-service. last you with $30 in improper payments to medicare. that's 10% of the programs cost. take something that seems popular amongst both democrats and republicans, the earned income tax credit, had a 25% improper payment rate. that's $14 billion. 25% of the program costs. these are things we look at again, try to cut down a improper payments. better management of the program, not just fraud the waste and abuse considers way. was a ghost in the face i cannot should be things we look at an approach agencies to do better. on a similar note congressman

price did talk about how the budget act imprisoned a lot of these actions we see going on notches in the administration but also in congress. one is gold year in spending use it or lose it phenomena but if the agency still spend all their money elusive. they don't get it back. it goes back to the treasury. we see a kick in september for agencies to spend more and more money on things they may not need just letting go to congress that's a guess what, we spent all of our money to give us more next you. i did research a few months ago because there's more data online and we pulled down contract data, what agency doing by their contracts. if you think about a 12 month cycle, if you can smooth out your context menu it's been a little more than 8% a month. you know what to do more or less at the beginning because you don't know when the money is coming above for example, the department of state at 38% of its spending on contracts the last month of the fiscal year.

seems kind of high, doesn't it? you at hhs, health care 29% in september of the last fiscal year. treasury does 9.9%. d.o.e. does 6% to some can smooth out the we're seeing a lot of what i would call purely wasteful spending happening at the end of the year. we need to look at how agencies are spending year in money and try to get incentives to curtail the total cost. this goes into the idea the baseline. romina talked about how you can balance the budget by cutting. in 2011 when senator connie mack was run we did a look at what you want to call the want any plan which ended up calling the 1% solution. could you cut spending by 1% per year and to do good could you post the budget? you could do it in about four years back in 2011. when we start doing russ research, you have to control the growth of spending to balance the budget in a 10 year window. we did this back in 2011.

the government could grow 2% a year and still get 18% of revenue to gdp and balance the budget in a 10 year window. this is a very funny town because of baseline. congressman price alluded to how we can talk about baselines. they assume a certain amount of spending every year. assume for a minute that a program is a syndicate 3% spending more next year. congress decides only 1% spending to the democrats i you just cut spending. you didn't tied it at all. you're still spending more but you are slowing the growth. we look at what can we control the growth of spending and reduce it to the second thing is where can we make realistic cuts that says you're spending x. this year, we want less next you. and prioritize. we don't have a chance to do that because of the weird scoring with baselines and how they are interpreted by the media and opposition to those who don't want to see government spending curtail. that's very sort of problematic. romina also pointed to some something

soda coming up next year milestones. focus our attention to have a discussion. there's a debt ceiling debate. there's going to be sequestration which will expire or controlled the sequestration will come back in because controls of the murray-ryan plan will cease to exist and expire. we have the di insurance trust fund going unsolved in 2016. of course, the budget process in general. there are issues that we need to focus on. what this means have priorities, which are spending very? >> focus on what are cuts slowing of the growth, what are you so spending what we are not saying all spending is better we have the three major entitlements growing rapidly and went congressman price talks were trying to save the programs, secure them and make sure they are around even with savings, the savings don't have to be cuts from zero custom last you. we need to slow the growth of spending. if we could slow the growth of those programs will go a long way toward balancing those

programs and balancing our financial position and u.s. government. >> thank you. let's open it up for questions. >> you guys have had to have some. right here. >> thank you for the presentation, and i agree. when we start talking about what actually has to be done in social security reform, medicare medicaid, there are some concerns about turning these programs into welfare programs, means testing them. there's concerns to increase retirement age. while i agree with you we can find places to cut budget, we can look for the waste in the city. i have been here longer than i thought as well. so we are looking forward to those opportunities come but to ignore the obvious that these three programs are driving this cities growth, i would like to just your a little bit more

detail about our personal retirement accounts on the table? will there be discussion, and energy towards getting that in social security? number two, on medicaid questions, it sounds like you said we will talk to the states and hopefully they can get this work done. is there any discussion about changing the program from this city to include vouchers for the poor to buy insurance so much of what the federal employees already have? how much new energy to new ideas? >> that's a great question to we are not members of course i can't tell you what there is thinking but what we're also we speak to members and the staff. on the social security side, i think we need to be careful when we talk but increasing the retirement age because when we see increasing the retirement age, the left says that's a benefit cut. so so secure the when it first started, the retirement age to

get full benefits with 65 and the average age people live to was about 6566. you have basically benefits for a year if you lived i want to now the average age if you live on benefits is 78, going into 80s. in some ways without an artificial benefit increased by not tying the retirement age to lunch heavy. we need to go back to a neutral idea what social security meant to now we're trying to find 30 years of retirement on 40 years of work. the program is not sustainable like that. without raising the retirement age, neutral position where people are incentivized to work not going on early retirement for benefits. we need to look at how we increase retirement age to incentivized folks to work longer that provide many benefits for those who can't work past 62 of 63 64 65. that compromise can say the

program can save money but still protects the truly need changing incentives. you've got personal accounts but i don't know whether they're back on the table or not. i can tell you social security disincentivized people from saving. we need to look at how that is an go back to looking at social security that is part of the three-legged stool per capita. right now we are underfunding personal savings. on medicaid, right now begin we are economist. sometimes government programs we call perverse incentive to arguing the wrong incentive to spend money? medicaid basically is an old joke this is a decent one medicaid program, using one medicaid program. you've got 50 states territories, all different. they are statement programs with federal matching dollars. the way the federal government gets money to incentivized states to all sorts of weird games to incentivized money.

part of a block grant is to move incentives. which want to do is get more individuals consumers having a stake in whether health care dollars go and that's not the current system have with the aco or medicaid. >> i just want to add that when it comes to discussing private retirement savings, i think it's so important that people go to war of the retirement decisions and that comes with control of the retirement dollars. social security original purpose was to protect against destitution in old age. the program is very different today and it actually leaves many seniors with benefit levels that are too low where they are in addition to those is to benefit relying on other welfare programs. so when proposal to think is not receiving enough attention is to look at instituting a flat benefit that target some around the federal poverty level so that those individuals who have

worked 35 years to live at a level where it's sustainable but that also means targeting benefits on those who need them the most about, there are many millionaires who receives also security today. the question is does that make sense? do they really need to benefit? is it affordable for us to keep getting social security benefits to millionaires? i think means testing is a provision that deserves more attention. but still keeping in mind that social security is only one part of the retirement safety net, it's not supposed to find a comfortable, generous retirement. that is what private retirement savings are for. there's certain ways and in a interest also on capitol hill to eliminate some of the regulatory barriers that are keeping especially small employers from offering retirement plans to their workers. if you're looking at who has access to a retirement plan today and who doesn't, those

workers who don't attend work for smaller employers and their the ones who need those plans the most because they're less likely to go out and open an ira on their own. so proposals like auto enrollment iras can really do a lot to help more workers save for the retirement and be in control of those retirement decisions. >> one thing to add because romina brought it up and it's a good point, technical term for sosa street for time is actually the old age survivors insurance trust fund. so you're basically trying to ensure against old age it was never meant to be a long-term 20 retirement program. >> we had a question down in the front row. >> i know 40 years ago i worked in the government in a very, very minor way and they were doing that same thing but at the end of the year they were given so much in the budget for the year. they would come up with programs, take trips, go spend the money some way and say ahead

of the about and ask for more. i assume that hasn't changed in 40 years but i don't know if it's ever been a dress. and the other side is all these programs do need to be cut. we need to save on everything. i can number if it was that any plan or whatever you just got back 5% every year. every organization makes its cuts. what is happen with the? >> it didn't get enough attention what i would call excessive our what seems like unusual year in spending habits. part of it is the incentive isn't there. the incentive is to spend as you well know. there have been small pilot projects, department justice had one for the i.t. department that said if you don't spend all your money, you can will overtake additional year. wasted on computer systems. senator coburn to 40 left was interested in these types of plans. where can we find examples where it would be good for a pilot program where we can give agencies and authorities a third

to hold onto some of that money but also the same time it gao or somebody moderate and to report on it so we can get to best practices and see what worked what didn't for face agencies and try to expand. with a penny plan to 1% solution, one of the problems with sequester across the board cut. as we all know budgeting means you've got to set queries, make the decisions. cutting 1% across the board is not a decision but it's taking a blunt instrument. we should cut 1% a year but we will pay you a professional manager and executive utah's with the proper place is. reconciliation sets of directives, targets but you get this amount of revenue this amount of spending, these types of allegations. we can say yes to get 1% to that's the target you figure out where it goes. and to we do that, we've got to basically set the target and those of the understanding of

the program figure out where it has to go. if you look back to defense spending their our first times where departments, such as a defense who have raised the budget for dod were unlike because they had a pet project. they told the generals you can decide where to go from the we need to take a focus that way when it comes to the budget. >> if i may just add one thing. if you look at where sequester is cut, what agency is done to the expense to the extent they have, they have cut some of the conference then, traveling to nice locations to go to conferences. but then on the other hand, it's also affected defense tremendous the. i think about to have lasting cuts we need to start looking at reducing the size and scope of government and that means eliminating programs. programs we know that don't work, programs that are outside the proper scope of the federal government. that's where it gets tough because that's where you really have special interest pressure

the people whose paychecks get paid by those programs, people who benefit from them. they don't care as much if there an efficient use of federal taxpayer dollars but something they been a from correctly. so far lasting spending cuts and reducing the size and scope of government is critical i think a brac commission can help do that but i don't think it's a silver bullet but certainly a good place to get started. ..