>> voices around the state on c-span. >> landmark cases returns with a look a of 12 new supreme court cases each week historians and experts join us to discuss the issues and personal stories behind the significant supreme court decisions beginning monday february 26 live at 9 p.m. eastern and to help you follow w off both cases we have a companion guide written by this record a journalist landmark cases volume two. president trumps budget proposal spends $4.4 trillion edward at $984 billion to the national debt. white house budget director

discusses the spending proposal at a hearing in the senate budget committee. this hearing begins with committee chair mike enzi and ranking member bernie sanders. good morning. i will call to order the budget committee hearing. good morning and welcome to the hearing on the president's budget proposal for fiscal year 2019. the budget submission comes to us on the heels of a very busy first year for president trump. i'm proud of all of the hard work and leadership that went into passing the tax cuts jobs

act and progrowth tax bringing investments back to america and boosting take-home pay for workers. in the new submission i mentioned in the administration proposal to build on this momentum into further strengthen the economy. one of my greatest concerns as the united states senators on the country's national debt that is now eclipsed $20 trillion. to secure the economy long term for future generations, we must tackle this problem while lowering taxes is proving to bolster the economy that will bring new revenue, we must work closely to examine the spending priorities and habits of the federal government. the administration believes we can use the tax payer dollars more efficiently today we have the opportunity to hear from the

budget director thank you for coming to discuss the budget request. swe look forward to the testimoy and opportunity to discuss possible solutions to the budgetary woes. i want to congratulate you on how commonplace and explicit they are in the difficulties you went to not only to explain the budget also the savings and reforms that are being suggest suggested. the submission of the budget proposal marks the important first step in what should be an orderly budget process over the

years however under successive congresses and administrations, this process is broken down veleaving behind a a maze of legislation and ad hoc governing. a perfect example of which was on display last week in the latest spending deal instead of funding the federal government weekly weeweek by week or month, we must address the deficiencies of the process of returning to a system that actually works serving on the budget committee for 15 years i tried to work to solve all fiscal problems and devoted much of the year to the ideas to fix america's broken process. we were able to get a conversation started with hearings o and meetings and whie we made someon good progress at the committee level for a variety of reasons we didn't succeed in advancing the kind of reforms we need. i am hopeful learning from the

experience of the continuing resolutions and deals the time to reform the budget process is now. we have to have bipartisan support which is why we are looking for willing partners to join me. i hope this call for the budget reform receives support from reform receives support from colleagues in t the senate if we would hear from the director this morning. i welcome all of my colleagues ideas on budget process reform and other programmatic proposals the president's budget. this is the way the process is supposed to work with the way to approach thehe task ahead is to focus on what i call for 80% rule.

rather than the 20% we've been fighting over for years that we are not sidetracked only the results that's the way ted kennedy and the formerd shoe salesman were able to get things done in years past. the american people are working on -- counting on us. ignoring the problems will not make them disappear. every year we spent $4 trillion. i don't think anybody knows how much that is but it is a lot of money if we try to spend that amountmo of every year. we really don't make changes we just increase for inflation and what i call thege panic factor.

we add new programs but we do it without eliminating or consult dating the existing programs or even updating the old programs. the spending deal has a provision for fixing the broken budget process. the budget is supposed to be the roadmap to the future. we talked about the need forpo infrastructure. budget is one of those infrastructures that we better be working on if we are going to have a better budget process. it is a tough road ahead but i'm confident we can find success together. >> thank you for holding this hearing and for being with us this morning. i don't have to tell anybody that in america today there is a lot of political demoralization.

congress is held at one of the lower favorable times in history. the majority of the people think we do a terrible job. president trump has the lowest ratings for a president that has served in length of time. people look at washington and they don't seeed much that they feel very good about. there's a couple of reasons for that. number one, there are politicians who run for office and say one thing. when he was a candidate he ran for office and said i'm a different type of republican. i am not a dog mulvaney type of .epublican it turns out they did exactly the opposite and this is a clear

amount that's been giving exactly the opposite. and then the second of all i think what the american people understand is their one vote and one voice matters relatively little in the congress designated r with the wealthy campaigns to spend some $400 million iny the coming campaign. this is the budget of the coke brothers and the billionaire class and american people understand that. this is a budget that will make it harder for our children to get a decent education, hard for theil working families t get heh care theto get thehealth care ty need and harder to protect the air we breathe and watern. we drink the cup and two without retirement years with dignity and respect. thisti is not a budget as the

candidate donald trump talks about his takes on the political establishment, this is a budget of the political establishment. this is the principle in the reversed budget that takes on the poor and gives to the wealthy. the rich will not be gaining at all under his tax reform plan, but the tax reform registration key signed into law provides 83% of benefits the top 1% that raises taxes on millions of middle-class families and tribes so that the deficit by a 1.7 trillion by the end of the decade. if you are wondering how he plans to pay for the massive tax cuts to millionaires, billionaires and large corporations, this budget

answers that question for you by breaking the campaign pledge not to cut medicare, medicaid and social security. in fact the budget would/medicaid by over $1.3 trillion cut medicare over 500 billion reduce social security by nearly 25 million. as you know, medicaid now pays more than two thirds of all nursing home care in our country. what happens to senior citizens who have their nursing home coverage paid for by medicaid if that program is cut by $1.3 trillion. i think about it people now in nursing homes with alzheimer's and serious illnesses,on massive cut, what happens to them and their families. today medicaid covers millions of children with special needs.

we are the major country on earth to offer healthcare to all anhealth care toall and the buda millions more off of the health insurance they have. we have an opioid epidemic that every person out here talks about every day that when you/medicaid by trillion dollars, do make it harder for the communities and states to deal with this terrible crisis. during the campaign, donald trump told the american people he was going to provide health insurance for everybody with much lower deductibles. there is an estimated 32 million people thrown off the healthcare they currently have, 32 million people. and at the same time it would substantially raise premiums for older americans. what this is about is a massive

transfer of wealth from working families, children, the sick and the poor and the most vulnerable people in our country to the top 1% in large corporations. as the candidate said he understood the pain that working families acrosbut workingfamilie feeling. you were not responding to that when you proposed a budget that would throw over a million children off of their afterschool programs. you are not a campaign of working families in c the respoe in campaign wit with the budget would take half a million families out their homes by cutting affordable housing. we have a massive crisis and this budget would make it much, much worse. you don't help by throwing more than 100,000 children off of head start. we need to move to universal pre- k..

every family in americaea should know they have good child care. you don't throw 100,000 children off of head start. you don't help when it would eliminate financial aid for more than 1.5 million low-income students. kids are graduating school 30 to 40 of the $100,000 in debt. you're not a different kind of republican by proposing a budget that would eliminate assistance to nearly 7 million families in this country. it gets cold in vermont and many other parts of the country. many of our elderly g people kep more in the winter time. mr. chairman and while the presidentt tells us we don't hae enough money to help the working people w of the country come he does believe we have enough to provide a massive increase in the pentagon and agency of

government that hasn't been able to doiv an audit in study after study shows that there are hundreds and hundreds of millions of dollars in waste. so mr. chairman, the good news is the budget is going nowhere. everybody knows that, but it does indicate where trump and his friends are coming from into the american people have got to understand that and we've got to stand up and say no. these are not the priorities of the country. thank you mr. chairman. t >> thank you, senator sanders. the witness is mr. mulvaney the director of the office of management and budget. he's held this office since februarymu of 27 e. and charged with assisting the president to fulfill his vision through the production of the central budget and its implementation across the executive branch. prior to his time as the

director of the office of t management and budget he served the people ofio this district south carolina as their congressman where he was first elected in 2010. duringn, this time he served on both the budget committee and the joint economic committee for the informational colleagues, he will take less than seven minutes followed by questions. we look forward to receiving your testimony. f please begin. >> thank you, mr. chairman. my mother would be glad to know i finally did get that doctrine. appreciate the opportunity to be here. i've already submitted a formal opening statement for the record and i would depart from that to say a few things before i start taking questions. we have the sketchy -- skinny

budget right now and this year i've come down with two budgets would resent the last couple of hours actually justs. since yesterday. to bring the budget last year into compliance or into the line with the cap deal on friday. we also have sort of 219 budgets that we have been working on in the officthe office of managemed budget since last summer which we also tried to bring up to speed. it is impossible to do six months worth of work on the weekend. the numbers today are solid but

expect over the course of the next couple of weeks and months to see additional tweaks in the example. it extends the mandatory sequester a two years it will take to run through the system instead of however waiting until april or may to give the budget we decided to come forth with these numbers here today. it is a messaging document weekend beats you to the punch if it is dead on arrival.

what we bring to you today you don't have to spend all of the money just allocated are provided for in the caps but if you do, here is how the administration would prefer to spend it. you don't have to spend it all and that's what we put in the 19 budget. the second half is if you do spend it here are the priorities and that is the 18 budget we have added back i think $117 billion worth of nondefense spending to spend up to the caps in the team in addition to the 26 billion to the 18 budget forr defense spending. the two positions you don't have to spendav it all and if somethg

happens between now and thewo appropriations bill passed in march were between the end of march and september of this year if you decide not to spend all the way up to the caps it is in our 19 budget and if you decide in 18 or 19 or both, that is the 18 budget. that is what we have sent you. ifha we do believe that message still has value even though you folks change the numbers in the last three days. wefo all did it together. we respect that. but interestingly and i said to my democratic folks, if the budget is evidence of the administration of the applied agreement in the deal again i say if you are interested in spending all the way up which is what they contemplate, keep in

mind of the 18 and 19 are only $10 billion difference. the difference between i thinkn the 18 number is 60 to 80% and 63 for nondefense and they were 8568 is only a $10 billion difference between the two years, so they do stand as information on how we would spend it. and we will close by saying this it doesn't balance in a ten year window. i know i said to my members in the house i worried that when i came to you last year that it would be the first chance i get and i said at that time if congress didn't take steps last year into the administration didn't take the steps to change the trajectory of the spending i wouldn't be balance within ten years and that has been the

case. i would contend that the numbers were even y more solid. i know my good friend and i would like to go back and forth about the solidness of the numbers and i can tell you i am even more comfortable this year that the numbers are more solid because we have had a chance to die just tdigest to put the polo numbers and as the numbers firmed up it would have been possible to bring you today a balance that i would rather bring you the numbers that are true and honest and set forth the conditions and light to you. so it doesn't balance but in the ten years we talked about that well. i appreciate the opportunity to make an opening statement. now we will turn to questions let me take a moment to explain the processnk each member will have five minutes for questions and following the two of us we will alternate questions between

republicans and the minority in all of thosandall of those membn attendance we will be recognizing in order of seniorityec and it will begin order of arrival if you are not here at the time that you are called with that i will begin by questions. the broken budget process thatmi discussed in my opening statement was on full display last week with the latest deal and the legislative action occurred too late to incorporate into budget proposal. i appreciate your explanation you did release an addendum on petition for spending in light of the bipartisan budget act. canig you explain how the administration proposes to adjust the spending levels as a result of the past last week ann what extent it's using this opportunity to address some of the more egregious budget gimmicks and fa

>> i will deal with the gimmicks separately we took advantage off the deals in both et and 19 to do a couple of things. we moved a tremendous amount of money off of the budget and into the base and we did that for the defense and nondefense and i think that it was $12 billion of nondefense i can't remember the total budget that we started to transition off into the base as part of the longer-term projection you will see we reduced in 2020 if we take the total back to no more than 20 billion in the projection in the20 out years. we also got rid of a lot that immediately put everybody to sleep. the gimmicks for the lack of as better word to justify additional spendings so we took as much opportunity as we could given the additional money that

was available to try to give more transparent view into our actual spending and as regards to the actual when we went back for the $26 billion of defense fo,$117 billion to the nondefene and 34.5 billion of that was for infrastructure of which roughly 20 contemplate the package and an additional 15.7 billion for border security that would bring the total from the border wall to 18 million for the southern border security or the 18 billion is for the wall and the rest of it is for technology

personality and so forth. what does that mean? the proposal that we sent you contemplateea an immigration bil being done because we recognized the fact you have no interest in giving us money for the full border wall suite fully contemplate that the deal is reached in the yes we asked for small amounts. but we fully anticipate in the proposalshe that a daca is reacd and we have full funding for the wall we have $3 billion additional opioid spending for 2018. we spent about 80 billion v a year. the overwhelming majorities for maintenance of outdated system

to haveve an additional $9 billn of research and development keeping in mind the total spending increases. i won't take a lot of the time to go down but the biggest increases would include an ad back up almost $16 billion to the health and human services of which over $9 billion is the nih budget i gave to you last year and i don't know if you are aware of this but i came to you with a proposal to reduce the budget. if they spent as much money on the administration as they did

from private grant money than we could actually reduce the spending by $9 billion get the same amount of research. not only does that not sway many people in the legislature but it added something in the april omnibus said that it's against the law for us to look at the administrative costs. so we actually added back the $9 billion but there is a long list as we try to re- prioritized and the additional money is made available. budgets deal with trillions of pages of and i forgot the numbers after numbers but the

truth the a director knows these numbers have real meaning and there's an article from the fact 2017. without going into all of what the article says if you basically confirms that when you throw many millions of people off of the health insurance they have, thousands of them will die. this budget calls once again for the affordable care act and some will lose their health insurance and with study after study shows is when you throw 32 million people off of their health insurance, tens of thousands of them will die.

actor divvied codirecto -- dires 32 million people off of the centuries they have resulting in the deaths of tens of thousands. do you really think this is something that we should be doing in the year 2018? >> i don't think it is something that, we are actually doing. i'm not familiar with the article mentioned. my guess is it is various republican proposals to be. replace obamacare. i do remember one of the major points of contention regarding the way the cbo scored the proposal is that it would assume several tens of millions of people would be to use the short term about which to be kicked off of health insurance by the repeal of the individual mandate and when we drill down into that what we found is that they assume that we got rid of the

individual mandate that millions of people would voluntarily give up medicaid expansion. we don't havent enough time.

tion, will receive a tax break of up to $1.4 billion a year from the trump tax plan. meanwhile, this budget eliminates funding as i indicated earlier for the liheap program that keeps almost seven million families warm in the wintertime. the vast majority of these families have children or they are >> so explained to me the process by which the third wealthiest family in america over $1 billion now we cut a program.

>> here is that morality senator, those that got that benefit is not moral to take your money orr my money. >> 11000 people? >> but 7 million people get that program. >> to say 11000. >> i agree. >> they all have individual programs to prevent the cut off of utilities during the summer or the winter in the north that is how they were originally designed to do. >> i come from the state that tries to do its best vermont and i other states don't have the resources to keep people warm when it is below zero.

>> to create a situation that is not what we should be doing in p america. >> in all my years in the united states senate i have never seen such positive results just because we passed a tax bill so soon. to see positive results but not within one month of passage of the bill. so i appreciate the administration's focus to maximize economic growth with the budget but we simply cannot settle for the anemic growth of under 2% under the last administration passage of the tax bill is a key component to achieve annual average economic growth of 3%

which is the average of the 50 years before 2008. starting to see the positive effects of pay raises and employee bonuses with the increase investment additionally this month see bigger paychecks. so with reconciliation we can only pass tax legislation for ten years. so director can you speak to the importance of tax permanent in achieving long-term sustainable growth with the presidents budget? >> i can. so now we assume for the largest portions of the tax bill, that in our budget even

though past with the individual tax rate reduction we assume its permanence and in fact you will see there is a variation between the baseline for revenue and the budget with half a trillion dollars added associated with that extension. so there are some specific programs not extended but under that proposal the individual tax rates in corporate tax rates are. >> i have heard the ruled the administration put out to strike or implement regulations to be repealed with hundreds of regulations being reduced. can you give me some data

which will show the benefits of such? those that have not been in force for the last 20 years i am not bad mouthing with the president is trying to accomplish because i think less regulation has a great dealre to do with the economic growth but can you put into quantifiable terms so we can see how this benefits the economy? we make a couple different ways.. thanks for taking up under the cra provision these regulations and to enforce the fact that the administration can take steps for these regulations. it could be tedious and maybe not permanent. to make sure no future administration makes that so thank you on behalf of the work you have undertaken.

that actual ratio was 22/one with 22 major rules revoked maybe only three or four brand new ones with the total number of rules and o regulations that were withdrawn is approaching 1500. so the benefit of that was $1 billion. so in fact talk about economic growth with improvements before the tax bill was fleshed out let alone past. so they do rollback that regulatory curtain and that is sustainable not a sugar high that fixes the economy long-term.

and they continue to make it a priority for the administration and will continue. >> i have three seconds left. i don't expect you to answer but i want to make sure you know it is important to me instead of an e-mail, the senate has been trying to stabilize durable medical equipment benefit. it is important to allow patients to remain in their home in the obama administration put in place a rule that puts competitive biddingn rates on those that were excluded from the program and in some w cases these had rates below the cost incurred for providing serviceses and equipment and i was encouraged august of last year when i saw cms sent a rule to mitigate

these changes and it has been pending since then. so i want you to tell me in writing the specific steps you are taking that omb releases that rule. >> thank you. >> thank you very much. welcome. so to start director mulvaney, i cannot believe here you go again. this last year the administration zeroed out the great lakes restoration initiative which is a bipartisan initiative strongly supported in the house and in the senate to make sure we have dollars available for emergencies as well as water quality issues.

after last year he put the full funding w back in with strong support and now you are back again. soso i don't understand it. maybe if it was a local issue but there is another country that cares aboutsu this called canada we have initiative with eight states it is local and federal and international with the administration doesn't seem to understand so explained this to me. and we did zero that out last year. with $30 billion in with the

chesapeake bay the research indicated a in with the house and senate from both parties with a long-term monitoring program.e but we do consider this to be regional something the states are capable of doing and we would very much like to get out of that. >> this is major for our country. have you seen the great lakes? one out of five jobs with the voting industry. and this is just michigan sous the idea of taking a commitment of those 300 million to tackle things

that we try to keep out of the lakes and instead put in the 30 million we will go right back at it to make sure that doesn't happen. but i don't understand why this natural major resource with 40 million people get their drinking water is something thisun administration does not understand. so we will go back again and hopefully be able to keep the funding going. related to michigan and canada again we treat across the bridge in the tunnels except prescription drugs. probably the highest prices of prescription drugs in the world and we can drive across the bridge often times 40 or

50% for seniors and others. we are not talking about luxuryry but if people will get their medicine or their insulin it is life-and-death. trump has made promises to lower the cost of prescription drugs in the administration could open the border right now with the safe d importation and senator sanders and may cosponsor i take trips with seniors over thee years. we haven't seen action so far so is it fair to say the president doesn't support opening the border for safe prescription drugs into the united states? >> i will say that i do believe it is a promise the president has started to keep what we have done already the sheer with changes ofdeasea cmsd

we have 40 saved seniors this year over $300 million. >> i'm sorry prices are going down? >> this is first time since 2012. >> on reimportation? >> but there are other ways. you may have heard the president actually mentioned lowering drug prices in the state of the union address there are proposals including doubling of the funding with the next hundreded thousand dollars we do look forward to supporting us back i do support genetics and that is important but there are things he could do like his own commission that looked at the opioid crisis to recommend those immediate negotiations to bring down the prices could

be done and has not been done or to open the border for lower cost prescriptions. i am very concerned at this point when we look at what is actually happening talk about prices going down then it is prices going up but i am concerned major windfalls from the tax cuts and not to have the effective tax rate cuts 9% and and the corporate rate was 35 and others as well to say i haven't seen anybody with a windfall and that is something that would be very nice for the president to focus on. >> mr. chairman and director

mulvaney, welcome. it seems every year we have these budgets that balance in ten years it doesn't matter who the administration gets her on what side of the iowa with a fictitious budget to create imaginary things that will never occur. thank you for that. i know you and i care deeply about the deficits and issues at hand as you were a strong proponent of balanced budget when you were in the house. now you are in this position wew are on an unsustainable path and not to get into specifics right now but we all understand and we are discouraged that the bill was reached last week even far

above what the president asked for so i think we have to say that congress in this particular case has gone way beyond even with the president requested with strong military supporter as we are and congress went way beyond military spending so you have had to jack up your budget and getting a hard time today about deficits but you requested last -- less money but then they elevated everything to takeon into account to create even bigger deficits. so philosophically, where do we go? by 2028 we will be at 91% debt and gdp that military leaders

say that is the greatest threat to the nation not isis or the things we are doing in the middle east i know that you care about that but philosophically, tell me where we go from here? >> the budget gives insight into that. keep in mind even what doesn't balance in the ten year window it has a 3 trillion-dollar reduction of spending that is the second-largest reduction ever only one larger is what we did last year. $1.7trillion of that is mandatory spending and to senator sanders.we absolutely keep our promises we do not make any reforms to retirement or medicare recipients but

there are n other monies they can be saved saving $1.7 trillion a mandatory spending looking at the way drugs are priced with medicare , with tremendous new ideas like food stamps and the farm bill. there are some good ideas out there that the legislature could take up to make a dent in the gdp ratio. we are getting close in terms of the gdp we are down below so that is a tremendous move in the right direction. >> we know this will go on for some time but longer-term based on the way you see congress acting and the pressures we have like

infrastructure are you more hopeful?re it doesn't feel that way to me as itt relates to sovereign. >> i consider myself to be an optimist but i will tell you it is an interesting dynamic going to the budget it's harder to reduce spending long-term and i think it is incumbent upon all of us to decide together as the legislature are these differ so -- deficits what we are willing to tolerate? so we hope the legislature takes up the ideas that we offer. >> in several areas they take

some of those agencies for this landfill including the pentagon making sure the military has what it needs but you could have a situation where people are just getting the contracts out the door to take advantage of the money available so what you doing to ensure we don't do multiple items in light of this money in one year? >> in addition to increasing spending for the first time everer and now tell us starting the process about the pentagon's ability that is a good thing that we could expose and fix. so we take that risk seriously.

>> thank you mr. chairman. >> we share frustrations with where we are and mr. chair has expressed similar frustrations with a ridiculous process and as a result a ridiculous budget. this is going no place. we know that cooked up in the laboratory of the coke brothers and creepy billionaires who want to make america an image cooked up in the laboratories of polluters under no regulation in $1 trillion of medicaid going to place with the funding that the president signed and touted.

with a nine defense one -- nondefense discretionary bill. a 21% cut from hhs from the bill that we just passed with $6 billion of opioid funding that america desperately needs. a funding bill passing that $20 million cut it by 40 billion part of the reason that they are in here is it is so silly. it is completely partisan white is cooked up in extraneous laboratories and unrelated to the funding process we have a budget process over here that produces then a funding process by the appropriators

that put those funding measures ofhe government together and there is no relationship between the two. budget goes off with a big bang with zero effect on the people who make the decisions year in and year out and i think it is a shame and first of all there is no bipartisanship, a vehicle for one party to express his political persuasion and to create a path to reconciliatione measure. >> that is all that accomplishes. also with tax expenditures money goes out the back door

and dispenser appropriations. we don't look at that. the healthcare expenditure of the federal government the ten year out. is $3 trillion that is a big number and we don't know why. i think that is with reform and changes of treatment at i the local level to drive down year-over-year costs, we should be vitally interested and we can make more my god what could be more important instead ofe going after preposterous cuts? >> we have to have that effect if it is meaningful right now with the 60 vote penalty for

appropriations. we have absolutely no effect and finally look at revenues. if our republican friends for crying out loud he cannot have passion about deficits and at the same time abandon our passion withef a carried interest exception for the biggest billionaires on wall street. we cannot maintain a passion forir deficits bumping up against those tax benefits for crying out loud. those that need the tax relief but yet there is a magic disappearing passion about deficits going up against obviouss ways. so we each have our own

politics so if we can ricochet back and forth that until and unless that bipartisan process that looks at tax expenditures and healthcare to reduce cost and looking at revenue and has parliamentary effect all the rest is noisemaking and then everybody knows there is no effect whatsoever in the appropriators can get together and that will continue. with that rogan budget process we had a bicameral committee the way it works is with

bipartisanship and here ends my statement. >> by the way i sincerely your leadership on this question you may not agree with every word but we believe the budget process needs reform and i appreciate your leadershi leadership. >> thank you for your comments. >> mr. chairman and also mr. mullaney for your time and your service asking about budget reform process that has been in place for 70s this is a disaster for the american people and we have to offer reform that can hold the stick for the american people but

today more crumbs were announced for the american people bonuses from the developer in maryland metlife receiving minimum wages and benefit packages and raises and this is important to talk about the fact people are earning more dollars in wages are going up and packages are increasing now we have seen people reducing their utility rates so chairman what happens when people earn more money from a revenue standpoint? >> it goes up that is our projections so one of the things he mentioned was the revenues one of those beneficial impacts is that the revenues are up on projections ands in 2027 the government will take $350 billion.

>> those are just crumbs? >> what about $1000 if dollars if it came in the form of a government check? you make averaging $120 a month with 300,000 customers to cover a years worth of utility is that a crime? >> i do not that is a minimum wage boost or salary bonus is a crime? >> only a very wealthy person from san francisco. >> i'm excited fort. what we have. >> but now to get to the other ideas in the legislation one of the most important things with our economic driver look at the outdoor economy making

sure it is part of the overall economic activity of $1 trillion in terms of economic development for the recreation economy but the budget does zero route land acquisition. i am concerned about that and now funded through other revenue mechanisms. and then and then but also if

you move that blm office out of washington d.c. that would save a little bit of money and also energy dominance american energy dominance but that budget does have the energy efficiency that could affect to the laboratory. >> so but no labs will close number one number two senator gardner that those places using more applied research

that is staff what the private sector should take care of. >> and to summarize those questionss debating daca hundreds of thousands right now in colorado and the back of the page math. but also looking at gdp for those people that were supposed to be eliminated would have a detrimental effect as we try to achieve that.le so nafta is critical to the economy and critical with the gdp assumption so any decision on nafta with the trade dominance in a negative way

could affect gdp growth and finally a quick question when we were talkingne about concerns have you given g any thought to monetize fannie mae or freddie mac? >> that is a longer discussion for another day but yes that is in part by treasury and what to do about the government-sponsored enterprise enterprises. >> senator? >> welcome director. first i cannot talk about this at length but i am very disturbed of the administration with the long-standing plan to consolidate the fbi campus in a way to provide more security. we can have that conversation later.

back in 2016 during the campaignla candidate trump called himself the king of debt it is pretty clear this is one of the promises he has kept as president into my friend senator corker who said the first time we have seen an honest budget doesn't balance actually obama presented budgets that were very honest and did not balance in ten years and raked over the coals for that but looking at those windfall i tax breaks for corporations but legislatures now trying to pass laws to stopve big tax increases there is 350,000 households to see a tax i increase including 3000 households with incomes between 25,050,000. that is not a middle-class tax cut but increase.

so now what you say about the trunk economy -- the trenton administration economy with the obama economy so talk about president trump economics are working and those jobs that were added that is fewer jobs created in 2016. >> i don't have that in front of me. >> it is somewhat fewer andy year before and 2015. >> i have historical data. >> but the reality is not since 2011 so it is interesting this is heralded as a great t2 economy but i

want to look at the rate of economic growth last year was slower than it was 2015 and 2014.om i went back and looked at the cbo projections for economic growth in 2017. do you know what they project? >> i don't have the historical numbers we projected 2.3 and accused to be way too optimisti optimistic. >> i did not that was the same number cbo had. what i said was last year's budget was optimistic compared out year. >> but. >> here is my question i am puzzled with the first year of the trumpos administration cbo

projected 2.3% growth in 2017. that was not based on any assumptions of trump but the economy. in fact the economy grew at 2.25.us so i'm trying togr figure out the basis for your comment the first year of deregulation with growth but it was slightly lower than what cbo projected and they did not take into account any of those claims. >> look at the last few quarter quarters, the fourth quarter was just under 3% including tremendous financials. with a 5.4 everybody admitted the economy grew faster than expected. >> i don't think so. cbo projected that.

>> actually was slightly lower so it sounds more like puffery so put on your other hat because your predecessor filed a lawsuit against an escape artist in the payday lending charging 950% interest rates higher than loan sharks and reported you dropped a lawsuit and the spokesperson for cfpb that you are not part of the decision but then said you were so were you part of that decision to drop the case? >> yes or. >> i will follow-up with that i think it iss outrageous. >> we are always very candid so it is unlikely i can answer questions other than what you just asked stomach i will be

very clear in my rewarding one -- wording there is an ongoing investigation that it is not appropriate for me to comment i cannot answer specific questions. >> senator bozeman? >> thank you for being here today we appreciate your hard n.work. the debt to gdp ratio or begin toto decline below the pre-recession levels of the 25 year horizon. presumably with that economic growth as well as restraining spending and then to put the country back on a fiscally sustainable path what is a

healthy debt to gdp ratio? >> a lot of the academic literature was that 80% is that l danger zone so keeping it below that or 60 with those prerecession numbers but we too much now is the short answer but on the revenue side when we mentioned the budget assumed those individual tax rates that expire five years into the current window i will tell you the assumptions for long-term growth we encourage you to keep our eyes on the revenues we expect revenues to

decline in the short term but they start to increase almost immediately and almost $350 billion as they continue to watch the revenue line so we can maintain that. on the spending side with $3 trillion over the course of the budget i thank you and i share at that fiscal restraint ofer any form has mandatory spending to be helpful. >> where we are now? >> right now the deficits are approaching five in the next year or two by the end of the

ten year window that is better zero but if you run a little bit of a deficit it would be advisable. >> i would love to see revenues growing faster to shrink the size of the deficit if you run a business and expenses go faster than revenues you are in trouble. >> that is a good point. >> so where are we now with daca funding? trying to get that sorted out is securing the border knowing that we have a significant amount of money that we do that in a way to get money up

front? but also making sure we have what we need going forward? >> as you said looking at the deal that was signed it does have considerable funding and we take a big chunk of that towards border security including the wall. in fact i said earlier the budget assumes the immigration agreement with daca. and for that reason and one of those early proposals so while they have the money available that we set aside that money not to have a situation like

2006 for border security. >> i agree totally so with oversight how do you oversee the trust fund? >> we don't have the details yet so finally the defense department after many years of trying we will give several administrations credit for doing that finalize september of this year we encourage the same level of oversight if not more. >> it is important. >> one of o the risks of the ordinary appropriations not that it isn't spent but spent to get the appropriation out the door that year so that is not the longer-term view. >> i agree we do need to be creative and create a hybrid

that both are accomplished even through simple good oversight. >> i agree. >> mr. chairman, the budget can take for line items health, medicare, and food that's 1.5 trillion right there. so let's take 1.5 trillion to the wealthiest americans with the health and commitment to seniors cut the affordability of college and the richer okay okay they can pay their o college. don't write about the rest of america but those hungry americans? too bad. let them go hungry they are from poor families. they don't matter.

this is for working families? the challenges of living wage right here with health and education to be hit enormously those foundations there are more cuts and that what about $3.4 billion with the offset of a tax cut to wells fargo for the same amount? what is more important? the program or the tax cut? which is more important to you? i have familiar i am happy to review that. >> but i'm asking what is more important the tax cut to wells

fargo? >> i would have to challenge that. >> you never answer questions from democrats i'm not expecting you to but i would give you the chance what about $4.3 billion cut to rental assistance? with the high cost of housing way above the living wage you took the $1.3 billion cut while giving 6 million to someone else? what about exxon mobil back. >> what i mentioned. >> the public would like to no space i will also not ask loaded questions that are rhetorical i'm not even sure that's right. >> you should be aware of your budgetet. what about afterschool programs with the ability to undertake high-tech

advancement? 1.4billion so what is more important feeding our children? >> again i cannot even see that. >> do you think that is a goode investment to spend a quarter of the million dollars for the next election then get $4 billion on their taxes? >> i have no clue what that $1.4 billion range is. >> everything we see in this budget is helping the powerful with an assault on working americans. so to help lower income putting a provision into the tax bill to raise health

premiums that in itself white cell any gains from the tax bill. i'm disappointed to see the philosophy this administration ran on is an administration to undermines opportunity for others to thrive. >> you seem to take great pleasure to allow interest rate far more than the mafia would charge. >> i think it is accurate to sa say. >> did you or did you not suspend limitation? >> i i gave notice. >> as far as i know it is still in effect.

>> you can call it whatever you want but preventing it from going into effect i don't know why you're dancing around about it with those payday loan companies charging 500%. >> i'm sorry was there a question there? >> when you are so happy about having payday loans while dodging the question what about equifax? those that lost integrity of their data with no accountability. >> what about accountability? that whichch is embedded of the watchdog the consumer rollover? >> with equifax there is nor change of the previous position regarding equifax. >> okay.

if you make these decisions you might as will loane them -- on them. >> good morning. >> about priorities thank you for negotiating the budget agreement with long overdue relief to the military you have been asked to do a lot with a little bit. thank you. t i cannot tell you how important it is we set aside the sick -- disgraced mom --dash that cuts for the future. >> so can you explain to the committee why that is important? >> it transfers control of

this issue and that is a more efficient way with the south carolina state legislature i absolutely believe in my heart ofof hearts they know what is better in south carolina than we do in this chamber and the gramm cassidy bill goes to the heart of that to provide funding necessary for the states to do that. they say let's give to the states but don't give them the funding necessary to do that. so gramm cassidy does not do that so we think are different places that it is by far the best that has come down the pipe in a long time. >> i still don't know what you said those that have received money under obamacare as it is today massachusetts and new york and california 22% of the population but under gramm

cassidy we tried to level outia the funding it would be the same no matter where you live so do you think that is a fair way for healthcare? >> no. that is one of the reasons we support the gramm cassidy bill and i hope it passes. >> he will try to make a difference to have the states get most of the money. i have three questions i asked two years ago with the alternative so can i send thesest directly? >> copy us both because with the secretary we are aware of your concern and your interest in you are aware of hours there needs to be a more cost-effective way.

>> so i will copy those basic questions about the alternatives but do you think 70% complete? >> my concern that the projections are in the 2030s i think when asked they could not give an answer and that worried me.ll >> i just don't think there is a viable alternative. if you don't find the state department fully sitting as the commander do you? >> i don't look at the state department budget the president ran sing about giving money to countries overseas that is what represents those reductions.

>> that was a reduction? payment to increase spending and to lower commitments to the multilateral institutions to right side those contributions and that is what ambassador haley is doing are aware of your concerns. >> but do you believe it is national security? >> war is just diplomacy by otheru means. >> so we will work with you to make sure we do not take off the table diplomatic options not only on the battlefield are not lost but to say it is a steep cut to end stability i

appreciate your steady hand you have provided with your willingness to negotiate a compromise. thank you very much. >> i wish i got that moreng often. >> before i turned to the director i want to comment on the new committee on budget andof appropriations included in the deal i suspect we will hear about that in the coming months to make my views clear republicans spent time hijacking the budget process for the attempt to take healthcare away from millions of families which crashed and burnedn also setting up for the wealthiest americans thosey tax cuts and big corporations with ways to help the middle class. now in 2018 things are different on that key budget

deal with healthcare and other domestic and military priorities. now they have clarity they can get to work by the march deadline so with all due respect we don't need a subcommittee to tell us what the problem is. that is obvious they have been unwilling to do its job so we have to lurch into one crisis and another before congress can come together to clean up the mess i continued to hold this committee can do his job to not rely on the subcommittees and i just want to make that clear. >> is this a normal budget hearing? i would comment those statements of values and priorities to take into the

proposal what type of country we are. if this were a normal budget committee i would point out the immigration proposals are wasteful and divisive and misguided to ask what incoming people who need a handout to suffer massive cuts while trillions areui spent on the rich but also with prosperity to the normal budget committee hearingg how absurd that is to cut $200 million of financial aid for college while students are struggling to afford college and i would point out serious concerns for veterans. i may even praise the attention during the opioid crisis but this is anything

from a normal budget. president trump just signed a two-year budget agreement into law that makes it irrelevant. democrats and republicans ignore the request before in interest to try to get something done. . . . .

approaching a trillion dollars this year and next, and you describe thidescribed this in tf the budget proposal and don't even try to hold ourselves to the standards you hold president obama to when you were a member ofry congress. i heard if you were in congress he would vote against the legislation so i want to give you the chance to take a step back from the hypocrisy. if you were in congress would you have voted for this budget that you are presenting? >> as a member of congress representing the fifth district of south carolina i would have found shortcomings to vote t against it and the director of the office of management and budget and my job isis to find e president's priority is

republicans have a -- this asks the middle class to pay for that. you saidan that he woul you wouo cut social security and medica medicaid. the proposals that you se but yt touch on social security do not feel. we try to address the reforms. >> what do you propose flex data >> we don't propose any changes to any benefits or any services to beneficiaries. the trick to focus on prices

with medicare. the number i heard by the time a couple of times today is we propose to cut medicaid by half a trillion dollars. the number is 236 billion most of that has turned up in drug reforms and some other proposals. thank you but i don't know if you know this or not, your medicaid money you paid goes to the trust fund actually goes to pay for graduate medical school tuition and to pay for bad debts from non- medicare patients at hospitals and we've prepared to move on to another part of the budget so that we pay them out of the trust fund.

>> mr. director, i'm over here. [laughter] i know you to be a fiscal conservative. conservatives believe, curiosity, i don't understand why taking care and robbing the next generation. i want to thank you in your budget for emphasizing the need to do something about improper payment. we have $104 billion of improper payments being made every year

but we are not going to stop all of them. we can stop 20%, $30 million. i introduced a bill with senator carper called to stop paying big people act and i'm amazed we have a data file with social security that they won't share it with its sister agencies. so, people are getting checks and they are being cached. obviously there is fraud. in some states you can vote wheo when you did that casting the government check as a bridge too far as far as i am concerned. in the few minutes i have left,

we talk about the need for a balanced budget which sometimes, and i support a balanced budget, but sometimes i think that we complete balanced budget with government spending and here is what i mean. we have a 20 trillion-dollar economy of goods an all the good services we produce every year. if the government is spending $4 trillion, government spending $4 trillion taking 4 trillion out of that let's say 23 do you think america would be better off if we had a balanced budget

of $4 trillion f of taxes or wod we be better off in terms of personal liberty if we had to trillion dollars worth of spending and $1 trillion of taxes. >> from the individual liberty side if you assumed that the larger the government is, the less individual freedom by definition you would be better off having the 2 trillion-dollar expenditure. take individual liberties out and look at capital. if i give $4 trillion to the government that is likely to misapply a lot of that stinted inefficiently by allowing people to keep more of their money and by definition they are goingo to

apply people spending their own money is allocated more efficiently than the free market so you would be better off by having a smaller footprint. >> i support a balanced budget and i know you do too. do you think the president would support somethingng like that? >> i know it came up a couple of times in the house and you and i talked about this before, but i think that actually came up in the past as part of a debate where we cap the government expenditures as a part of the overall economy. the theory being that was okay to grow the government as long as you were growing the economy

at the same time giving back to mgoing back tomy comments before growing revenues. it's wrong to grow the government faster than the economies for the people that can pay t for it. >> i have time. thank you mr. director for your service. we've got to fix this budget process.

the size of the government in 2000 bus tri2000 bus trip is $2n last year 4 trillion. there is our problem. everyone in the last administration it looks like overly the next ten years ago barbara somewhere north of 30% which means every time we spend discretionary is fundamentally barcode. i know your heart and what you have done historically. understand the concept. i know the white house has in terms of dealing with the debt

there are things we have to invest and build the infrastructure and all that. are we moving towards a longer-term solution to a. a. the balance is 350 of all of the domestic discretionary programs that we still have and they've been cut dramatically over the last decade so give me some comfort that we have at least ignored by the long-term solution on this mounting debt crisis. >> we have an example that works we balanced the budget during my total flighmike both lifetime ie 1990s on a per year basis.

i recognize there was some funny accounting when it came to the regime but if you look at the concept of what happened was we figured out a way to grow the economy faster than expected and had them take credit for it at the government grew slower than the economy and if you couldn't do that long enough, revenues will catch up to. wewe talked about prioritizing deficits. there's different types of deficits that allow people to keep more of their own money because of the application that is fairly robustt and efficient. in the middle you might have stuff on infrastructure where you might get some return on that. it would be something from the wealth transfer payment for the big picture required just to figure out how to grow the economy faster than the government.

>> one last question with regards to infrastructure investment as you just said hopefully they will produce a on mike to trillion dollars that we threw towards the infrastructure in 2011 that was not made with that priority. i call out one type of investment in particular when we talk about spending the money we talked about infrastructure. the question is are we prioritized based on the return ut we get in terms of economic growth and contribution plan and turned to reducing this long-term debt. and i call out on an issue that is caught between the current authorizations and future infrastructure investments those are in states like texas, louisiana, florida, your home state of carolina in the new jersey committees are the eastern ports that are all trying to accommodate shifts that would dramatically improve the ability to compete around the world.

they are being caught up top moved over and they offer a higher rate of return than some of the infrastructure investments. can you address that? >> to the risk of making small corrections we anticipate it's partth of the infrastructure bil and the largest part of the infrastructure over 50% of the $200 billion is sort of inol our minds satisfied for programs that can contribute their own portion of the funding and as you know it does exactly that. is exactly that. so we have specifically. from your confusion about gdp, the president should projects gdp growth in average of 3%

annually the long-term trend is nine tenths percentage points higher than the 1.9% forecast which was published in the tax cuts and jobs act. there's been downward pressure due to the demographic changes. how does the administration reach its growth projections and how will the tax cuts encourage the labor force participation? >> we were fairly disappointed in the numbers in the quarter and expected ifourthquarter ande north of three. one of the things you>> will see that's how you do it, senator into the critical part of the corporate tax rate and a deep

appreciation rules in order to get the type of gdp growth that we need long-term and get into e democratic challenges that we face we need individual productivity to increase we have seen the seeds of the planted almost immediately. someone mentioned that we had seen the benefits far quicker than we thought we would. we think we see the seeds planted for the long-term structural improvement and that is our economic healt. >> i'm planning on that. i did ask for a status score because we asked for a dynamic score and i found out that i was going to require six weeks for

every amendment to be evaluated so i was not able to do that. i want to thank you for your testimony today and you're for state anthe state and will be id in w the record. and i think you did an outstanding job of presenting the suggestions and priorities and that's whate the president's budget is suggestions and priority is because the institution specifies that we are the ones that are going to be giving the actual work.

it seems like one or two good ones and reauthorize might be better and there's also comments about housing programs. i checked at 160 housing programs administered by 20 agencies and nobody is in charge or setting goals or checking to see if they are being met. so how can we see if there is a deep crease and housing funding that would put people out on the streetsn . a little note that i found him reading througinreading throughs was the suggestion that colleges have some risk accepted on student loans as kind of a novel concept we need the for-profit schools do the same thing and put them out of business, but

there will be some kind of risk acceptance. i've been talking about capital budgeting since i got here and i think separating that out might make their job a little bit easier. i would mention that if anybody has additional questions they can be submitted for the record by 6 p.m. today and with a high tv cosigned hardcopy will have seven days to respond to those questions.

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included remarks by a former mayor michael bloomberg. senator marco rubio, group founder richard branson and investor warren buffett. it begins with commerce secretary ross.