those human rights warriors in china so that they can be con l consoled when they are fighting in the tark. this kind of support not only can bring china's human rights efforts to a more bright a era and this will also encourage and support more people to bring out their human nature, the light of the human nature and it will provide tremendous courage for all the human rights warriors in china when they struggle in the dark and hopefully this kind of support can bring much more encouragement to these warriors and i'm sthanking all of you frm the bottom of my heart. thank you. >> thank you for your

testimonies, the people of china deserve better than what they are getting from the dictator ship, you and others like you who are in prison, are the future of china, thank you so much, the hearing is adjourned -- oh, bob fu. >> to bring another point to bring the true change to china. i think it's important for congress to work together to pass the global internet freedom act. i think the lead of congressman wulf and to champion for this, that will provide a tremendous efficient tool to break down this firewall, in china and i will enhance and improve the chance for rapid

democracy in china. thank you. >> thank you. as you know, mr. fu, the global freedom act, we hope to on have it in the sub committee, it's an idea of whose time has come. the enabling of high tech, to enable a dictatorship, to find, apprehend people of faith and the to destroy movements throughout the world calls out for this legislation, i hope to have this bill out of committee very shortly. thank you for bringing it up. without further adue the hearing is adjourned.

we are live on capitol hill this morning as acting white house budget director will testify to 2013 budget request. yesterday he testified in front of the senate budget committee facing accusations from republicans of having failed to

respond to previous budget agreeme agreements, the president has proposed $3.8 million --

shhh, committee will come to order. welcome all to this important hearing and mr. zienz i do not envy your task today, you are new to the job and got thrown into the breech and you came late with respect to preparing this pudge and you have got a very tough job ahead of you. with the departure of jack lou, you got thrown in at the late moment. i want to tell you first bring get into this. thank you for serving our country. you came from a successful private sector career back to government and we applaud that. i think that these things go without saying but they are -- they bare repeating.

problem is, you're in the position of defending a budget that dodges the most difficult challenges that our country faces. the new york times reported that this is more a budget that is a for the campaign. it's hard to disagree with this. the associated press quotes, takes a pass on reigning in government growth, instead it leaves the drivers of thei itde and entitlement programs largely unchecked and the programs threaten to end the guarantee of the security that they provide for the nation's seniors and it breaks the president's promise to cut the deficit in half by the end of his first term. as abc news reported, this budget doesn't come close. we have heard a lot of excuses

from this administration ask to why the president broke his promise but we have not heard any accountability. to the best of my knowledge, no one in the white house has taken responsibility for this failure instead we get a blame game that does not stand up. jack lou, your former boss, claimed that the reason that the senate democrats have not passed a budget in over 1,000 days because republicans have threatened to filibuster, and that is false. we all know, that budget resolutions cannot be filibusterered, they can be passed with a majority vote, but the senate democrats chose not to do so, the source of dysfunction comes from the members of the president's own party who have been unwilling for three years now to go on record in support of his budgets or passes budgets of their own. more to the point. it was not so long ago that the

president's party held total control of the white house and both branchs of government, he was able to pass into law, massive spending and taxes t creation of new open ended entitlements and a regulatory onslaught that is hurting our economy and trillions of dollars of new debt and after all of this, the new house majority offered him an opportunity to make tough decisions. we were and we remain eager to work with the president to stop spending money we do not have. to reform government programs that are not delivering on their promises. and to enact pro growth policies that raise revenue by getting our economy growing again. instead of working with us, though, the president has demonized our ideas to save and strengthen health and retirement programs. he fought to keep his spending

spree growing and continues to insist on taking money from hard working americas not to take the deficit but to fuel his ongoing spending. the failure of serious solutions represents a stunning d the dereliction of duty. some of us have been working on common ground, there's growing bipartisan support for refoms that are needed. but it cannot happen with the president standing to outside looking in. it's my hope that this hearing can shed light on why this is occurring. we see a debt crisis coming, we know our president is making promises that cannot be kept. it's time to be honest. both parties got us into this mess, but this is the fourth

budget from this president with a trillion dollar deficit each year. obviously obviously obviously, a breaking of that promise and no credible solution to deal with our debt, to deal with this great threat to our economy and tomorrow's future kids. instead we get the politics, smoke and mirrors, accounting tricks and budget gimmicks. if we are going to save this country from a debt crisis and give our kids a better future, we have to have leadership, i'm dispointsed that we are not getting this from the president. with that, i look forward to questions and i yield to the ranking member. >> thank you, mr. chairman. and mr. zients, i want to add my word of welcome, after your testimony in the senate yesterday, you are already battle tested. welcome to the job and thank you for jumping into the breech as

the chairman said, and i believe you have gotten off to a very good start. sometimes we are all guilty of selective quoting. i'll point out that the "new york times" editorial's headline was responsible budget and this is a responsible budget and it turns the corner in terms of deficits and job creation. it's important to remind everyone that when the president took office, that he inherit today worst economy since the great depression. that is not an execution, it's a historical fact. if we can put the chart up here. you can see the red was in the last administration where we were losing jobs rapidly. when the president was sworn in, the economy was conattract at a rate that we now know was 8.9% of gdp, contracting at almost 9%

of gdp, 800,000 jobs were lost in 2009 at the time that the president put his hand on the bible and was sworn in. where are we today? with the efforts to save the auto industry and other measures that have been taken we have added 3.7 million private sector jobs over the last two years and 257,000 just last month. we all remember -- we all recognize that we have a long way to go, too many americans are still out of work and hurting economically and we have turned the corner and have to build on it. but we should not go back to the same policies that got us in that mess in the first place. now the fastest and most effective way to reduce the deficit is to put americans back to work. and in fact, the congressional budgets of recently estimated that we could cut the deficit by

1/3. how do we do it? pass the payroll tax cut extension and we begin by making sure the millions americans that are out of work and unemployed through no fault of their own continue to get support. that helps their families and the whole neighborhood and economy around them. but the president's jobs plan that he submitted in september includes other elements that are just sitting in this house of representatives. and has not moved. it includes $50 billion for immediate infrastructure investment, putting people back to work helping to expand broad band and building roads and bridges and it contains a long-term plan for infrastructure development.

it stands in great contrast, i'll say, to the infrastructure bill that we are taking up on the floor of the house this week which doesn't begin to do the job in which a former republican congressman, ray lahoud, called the worst transportation bill he has seen while in congress. that does not get the job done. as we nurture the recovery, we have to support the economy growing in a steady and predia e predictable way. this budget lowers the deficit as a share of the economy until it is under 3% of gdp and it stabilizes the debt as a percent of the economy. the president does this not by slashing defense and domestic investments as would happen under the sequester but by

taking a balanced approach. the question is how do we reduce the deficit and the president's approach is the balanced approach. it's the frame work from the bipartisan commissions, it adopts the very -- the cuts that we made in discretionary spending. it cuts mandatory spending. and it does something else. it lieliminates the special interest tax rates and asks t wealthy americans to go back to paying that tax rate that was in force during the clinton administration. if they take a lopsided approach

and further slash invests in education, and science and research and infrastructure and they do slash the social safety net in that they cut $700 billion from medicaid that goes to help people like the vulnerable seniors in nursing homes and they do ask seniors on medicare to carry the entire risk of rising health care costs. that is their choice. but that is not a balanced approach. and i think what we see here in the president's budget is a responsible approach that takes that balanced approach to dealing with a very serious problem. with that, mr. chairman, i thank you for the opportunity. >> my pleasure. mr. zients, the table is yours. >> thank you, thank you mr. chairman and members of the committee. thanks for having me here today

to present the 2013 budget. as the chairman said before i joined omb three years ago and i feel i'm in a good position today to talk about the president's budget. but before that, i spent thmore than 20 years in the private sector and one thing i found helpful was to boil things down to a few graphics. so if it's okay i thought i would use my minutes walking through the highlights of the budget using, i hope, these two screens. i'll cover four topics, first the policy baseline, and the key elements of deficit reduction and the investments of the areas that is important to aggravated burglary -- that is important to jobs and growth and how it puts us on a sustainable path.

let's start with the baseline. we believe we have a baseline that reflects current policy. in essence this is business as as usual. the baseline includes the extension of the 2001, and 2003 tax cuts, estate and gift taxes. second, the permanent extension of a and t and sgr, we believe this presentation is more honest than patching these year after year. enforcement of the bca caps and joint committee sequester and accounting for future disaster costs rather than ignoring them. the baseline results in annual deficit of 4.7% of gdp at the end of the budget window in

2022. let me turn to our deficit reduction policies. last april the president put forward a frame work to achieve more than $4 trillion in deficit reduction. he maintained the $4 trillion in his proposals to the joint committee last september. this year's budget is very similar to the september proposal. with the addition of a year to the budget window, so as you can say to the far right in that green bar, this budget includes $5 trillion of deficit reduction. i will walk from left to right across the blue bars. you start on the far left, you'll see $676 billion in savings from the appropriation bill enacted last year, including the 2000 a11

appropriations in april and the oko in 2012 savings. next, over a trillion dollars in discreti discretionary spending, and next, $362 billion in reductions from medicaid, medicare and other health programs. $272 billion in savings from reforming, in such areas at agriculture and retirement and the pbgc, these are the net costs of newman tore initiatives. the next category is $1.5 trillion of revenue, for deficit reduction. including the expiring of the tax cut for high earners and the elimination of unfair tax

breaks. it's a net number as we further cut taxes for the middle class and small businesses. next, $617 billion in net savings from capping oko and investing in a six-year service transportation reauthorization. capping oko closes the back door on security spending. and then their other net savings of $141 billion, these include disaster adjustments, program integrity and general fund transfers for transportation that are no longer necessary. as a result of the proposals, debt service decreased by $800 billions. in that pink bar next to the green bar. there are $176 billion in investments in short-term job initiatives. so it cuts the other way. these are investments. these are job initiatives not

spent in 2012. i want to be clear that we do not count the sequester in our total deficit reduction. we believe it is bad policy and we propose that it be replaced by this larger more balanced package of deficit reduction. but be clear, the sequester is still in place, the president believes it's an important enforcine -- it's an important enforce balanced debt reduction. even as we achieve the deficit reduction we continue to make key investments in priority areas. these are short-term measures for job growth totaling $354 billion and tax breaks for the middle class and small businesses amounting to $352 billion and continued investment in our long-term priorities including education and job training for american workers. innovation in r and d, and clean

energy and infrastructure, and we abide by tight spending caps and we make hard trade offs. let me compare it for you. i compared the adjusted baseline that i talked about in the first slide with the results of the president's policies. as you can see in 2022, deficits from the president's policies are blow 3% of gdp, compared to 4.7% in the baseline. furthermore, debt as a percent of the baseline is stabilized from 2018 on. the president's budget replaces the sequester with a balanced approach to deficit reduction, with $2.50 in spending cuts for every dollar of revenue increases. we have made tough choices and we all need to work together to maintain this balanced approach. in closing, as a business

person, and now omb acting director i believe the president's budget makes the right investments to make us more competitive in the global marketplace. and achieving declining deficits is critical. this is good for business, good for the middle class good for america. i would be happy to take a question. >> thank you, mr. zients, we will do great if our answers are not so long. and we do not filibuster here in the house. i think they are going to bring me a powerpoint in a second here. that is fast. thanks. so, let's put aside the fact that we are using different tenure windows to get from the $4 trillion claim to the $5 trillion claim. this is confusing enough, so let's go to the $4 trillion

claim. there's a difference in tenure windows and we all agree on that. so you are saying that the policy changes in the budget reviews the deficit by $4 trillion, correct? >> right. >> so bring up figure two -- there it is. let's walk through that. using your numbers. these are not cbo numbers these are omb numbers. to make the $4 trillion claim stick that the budget does this. the top bar, the blue bar claims credit for the budget control act. $2.3 trillion. this is a law that was already passed. i don't know how one can claim that this budget achieves these things when this is something that congress passed already. i would add to that, congress passed this over the president's initial objections. he wanted a tax increase of the debt limit and only because of this house majority did we get the bca. so, let's take away that claim

because that is not in your budget. you cannot claim you're achieving this when it's a law that is already passed. and now let's go to the war gimmick. which is let's claim savings on money that is never going to be spent or requested and claim it saves us $850 billion. i don't know what part of the private sector you come from, if we are saying we are saving money that we were never going to request or spend, i don't know how you can say you are saving money. and now the doc fix, nobody wants to see this cut occur. but we cannot just assume it away. it's here, it's happening, it happens at the end of the month. so, we are just assuming that they are not going to get cut and that is, you know, $430 billion in your numbers. and then let's take off the interest savings that you are