there is a pretty big gap between those two numbers. that tax rate, 15.4% of gdp is the lowest i would point out since president eisenhower was in office before social security and medicare were law. before we even had all 50 states, in fact. do you have on hand what federal revenues averaged under the reagan administration as a share of gdp? >> i don't have it readily handy, but my team might have it. i know under clinton -- >> as we saw earlier it was about 20%. >> i believe my information is 18.2%. >> uh-huh. >> and do you have on hand what federal revenues averaged under the clinton administration as a share? >> that was shown earlier. i think right around 20%. >> 19%. so we have 19% under president clinton. 18.2% under president reagan and now 15.4% under president obama. that's not the picture some of my colleagues are painting here. i've heard my republican colleagues commenting this week

that with this budget, the president will increase spending over the course of 11 years by 62%. do we know how much president reagan's increase in spending was over his eight years in office? >> that was higher. i actually do have that data with me if my team can just hand it over. i'm sorry. let me follow up and get you those specifics. >> my information is 69%. >> that sounds correct. >> how much did president george bush increase spending for his eight years in office? >> i believe even higher, but it sounds like you have the data in front of you. >> my information is 89. >> yes. >> my point is, for what has been deemed a tax and spend presidency it seems to me that president obama is cutting taxes more and increasing spending less as a share of gdp than many of our great republican leaders. and we need to restrain our rhetoric, i believe. >> in fact, on the revenue side,

we're bringing it in 2021 right to that 20% level at 19.9 -- i'm sorry, 20.1%. >> tax and spend is a catchy line and it gets thrown around a lot in an election year. another constituent of mine wrote to me a couple of months ago with similar catchy lines. rod is a retired teacher from new york. you might think, he writes, that after the ruinous binge of deficit spending that was the bush administration we would not again hear the old tax and spend song. bush administration in rod's words was an era of spend and pretend and that is what we have seen time and time from my colleagues across the aisle when they control our government. rod went on to write the following president -- the following. president obama is asking congress to invest in value creating enterprises. he believes. and i think if we can spend taxes to train young men and women to fight and kill, we can

spend taxes to teach the same young people to teach and heal. he believes if we build schools in iraq, we can build them in iowa. i'm incredibly honored to represent constituents like these and believe that the important facts here that need to be exchanged in a very logical contrasting way is an important exercise. >> i think what's at the core of both of your constituencies comments or letters is a balanced approach. this is a balanced approach. $2.50 of spending cuts for every $1 of revenue. we need a balanced approach in order to get on a sustainable path. >> i agree with you. and i appreciate that. i am running out of time. i was going to ask you about the investments in research and development. >> we can follow up. >> okay. thank you. >> thanks, mr. chairman and thank you mr. zients for being here. the president promised when he was running for election he would not increase taxes on anybody earning $250,000 or less. do you believe that to be the case, and is that the case

moving forward? >> yes, the sprt committed to no tax increases for those families earning $250,000 or less or individuals at $200,000 or less. >> but he's already violated that pledge, has he not? isn't the medical device tax of 2.3% that's about to kick in, isn't that a tax on people earning $250,000 or less? >> medical -- you need to tell me more about the medical device tax and how that impacts individuals. >> well, anybody if you are earning less than $250,000 then you need to go purchase a medical device you'll have a new tax of 2.3%. >> that's a corporate tax or it's an individual -- >> no, it's an individual tax. i'd appreciate if you'd look into that. >> i will. >> the indoor tanning tax. the tax on tobacco. the individual mandate. there's a long list of things that have already been implemented that i think violate that pledge. i would appreciate your perspective on it. because to say that's true and will continue to be true in the future i think is factually inaccurate. >> let me have your staff follow

up on those and how they relate to individuals. >> you refer to a sustainable rate of debt as a percentage of the gdp. what is that actual number? what do you think is an acceptable level of debt for this country? >> well, this budget has it come down to about 76% of gdp. >> but if you look at the total debt offered by the treasury, the total percentage, what percentage do you think is an acceptable level? >> well, i think that importantly, at this stage is the most important milestone is to stabilize it. as we've talked about, our work is not done. >> it's like 100% now. >> i think that's not the right way to look at it. the right way to look at it is the debt that is held by the public and that currently in 2011 -- >> why wouldn't we look at the total debt? why wouldn't we look at all the obligations -- >> we look at debt that's within the federal government. that's sort of inside the family

if you will. this is looking outside. debt held by the public i think is the right metric what most would agree is the right metric. i just want to get back on the percent. currently in 2012, that's about 74%. >> would i be inaccurate to say if you look at the total debt which is on page 203 of the budget, debt issued by the treasury, that when president obama took office it was in the range of $9 trillion and under this plan that's put forward by the president it would go to $26 trillion. see why people are concerned about this? >> absolutely. and i would say a major root cause of that problem is the fact that in the prior administration, we had -- >> you are actually going to bring president bush -- you are going to blame president bush -- >> if you want to actually have -- if you want to answer your question as to where the bulk -- >> you really oong. >> unpaid for tax cuts. it comes from unpaid for medicare part d. it comes from unfunded or unpaid

for wars. that's a -- and then inheriting the great recession which we absolutely needed to dig ourselves out of. the hole was very, very deep. >> let me move on. i want to move -- i totally and fundamentally disagree with you from top to bottom. the bottom line is the president was elected at $9 trillion in debt and we're going to grow it to over $26 trillion under his plan, under his numbers. i think that is fundamentally -- let me move on. i have a minute and 15 seconds. you said your part. i wanted to say mine. federal payroll continues to increase. the reality is there are 145,000 additional federal workers. not counting the uniform military, postal or census workers. 145,000 additional federal workers. the president has said before the american people and said he's putting a pay freeze in place. i think that was a farce. through accept increases, rewards and bonuses, the payroll went up and it continues to go

up. can you please explain to me at what point do we think we can actually justify increasing the payroll even more and more? >> well, this year's budget actually calls for essentially a flat number of employees in those agencies that you are citing. 145,000 is 89% of that is security related. i think we all would agree our veterans should get care in the hospitals. we should protect our borders at dhs. 89% of the increase -- >> let me ask this last thing, mr. chairman. i know you don't have this whole thing memorized by page 114 it says this pay increase proposal permits savings of approximately $28 billion over ten years and it continues. if your staff could help explain how a pay increase has a savings over the course of times -- >> i want to be very clear the president froze civilian pay for two years. this proposal is for 50 basis points. 0.5% of an increase and the

savings is the difference between that and what happens in the private sector. >> and with that, the federal payroll went up. >> thank you, in zients. i'd like to shift gears here a little bit and talk about a part of the budget that we usually don't ever discuss here in the budget committee. i'm hoping the chairman ican capture his interest and we can talk about this some more in the coming months. and that is what this budget request means for our nation's private sector. the red cross, meals on wheels, habitat for humanity, these and thousands of other non-profits are working to solve problems, improve the quality of life in communeities all across the united states. the country's estimated 1.5 million non-profits are a distinct sector of america's economy and they employ 10% of our country's workforce. now there's no doubts that non-profits then are part of being job creators.

non-profits tackle issues that are often beyond the reach of government and below the bottom line of the business sector. that's why the profits that the work that non-profits do isn't extra. it's essential. every american community depends upon the non-profit sector. the federal government depends upon non-profits to implement many federal programs from worker retraining to crime prevention. all of us in washington and at omb and congress need to start paying attention to the health of the non-profit sector. much like we do with the small business sector. this budget requests $948 million for the small business administration to protect, strengthen and represent the interest of our nation's small business. but the non-profit capacity building program authorized at 5 million is now recommended for

zero. zeroed out. so i'd like to ask you a couple of questions. do we know how much of this budget would be implemented by the non-profit organizations in this country? do we know how much federal funding is being leveraged with local funds by non-profits? do we know how many budget -- excuse me, gentlemen. i'm trying to have a -- you're having a conversation. i'm trying to ask some questions here. thank you very much. do we know how many jobs non-profits will create within the federal funds in this budget? this isn't a gotcha because nobody normal asks these questions. so if you're not prepared to answer these right now -- >> they are very good questions. >> well, i would very much like to work with you as you get these answers because none of us on this committee to my knowledge since i've been on the budget committee, has asked about the non-profit sector. and so i do hope that the chair

takes some interest in this and looks at how this is interrelated. so i'd like to follow up with you about how we increase the focus on non-profit sector to strengthen it. to strengthen local economies because, as i said earlier, they implement a lot of things that the federal government needs to have happen in this country, and they do a lot of the work that the for-profit sector just won't get involved in because there's not profit in it but yet the for-profit sector relies on many of the programs that they provide. i know i asked you some questions you didn't have direct answers for but if there's anything you'd like to say about -- >> no iagree with you that they are essential both to making sure that our programs are effectively implemented in the federal government and to our society rit large. as to your specific questions ilook forward to my staff

following up with you or your staff to address some of the specific data that you are looking for because i do not have that handy. >> sir, i think we need to talk about this because you and i both know in our communities how integral they are to the fabric of our societies. >> these institutions are critical to a civil society flourishing. i would simply say we want to get back to a virtuous cycle because the non-profit sector thrives on donations from the profit-making center. meaning the private sector. and so we clearly need to have a vibrant, profitable, private sector so that we can have a flourishing non-profit sector. >> mr. chairman if i could -- >> it's a virtual cycle. we have different approaches on how to achieve these. >> i'm not even -- let's leave the politics aside. >> no, that's my point. >> i think we need to understand. we need to understand how the non-profit sector is working and how not being as members of

congress sometimes to say, oh, we'll have a private sector do that. we just assume that the private sector can pick up the slack. and to your point, the business sector sometimes says, you know, the bank is closed on that. >> i indulge because we had time and now we don't. and i want to be mindful of this gentleman's time. >> thank you, mr. chairman. i appreciate the opportunity. mr. zients, i appreciate the opportunity to question you today. i appreciate the budget presentation. and going through the budget, i haven't dug into it as much as i will shortly, but if you had to pick one thing as the absolute highlight of this budget, what would it be? what your most proud about in this particular budget? >> i think it's the combination of investing in the short term to make sure that we put people back to work. and at the same time, putting us on a sustainable path by getting

our debt deficits under control. >> when i look -- >> it's doing both at once. it's not an either/or. >> i appreciate that. and we've had earlier question. i stepped out for a little bit. there was another committee visiting with folks about their budget in a particular area. but you did answer the question early ber exactly when do we actually balance? when i visit with constituents, they are worried about a deficit. they are more importantly worried about the debt. they understand the math. do not have a deficit. you can't propose to pay down the debt. maybe i'll ask the question differently. when does the president propose to reduce the debt on america? >> well, he stabilizes the debt in this budget and this budget makes major progress. the president looks forward to working with both houses to continue to bring down our deficits and bring down our debt. >> what year does he actually stabilize the debt? that would suggest there's a year in which -- >> 2018. >> that's when the budget will balance? >> that's when -- i think the

question is when does the debt stabilize? the debt stabilizes in 2018 as a percent of gdp. >> as a percent of gdp. >> which we keep coming back to. you have to think about it that way. nominal dollars don't make any sense. if i told you you could have $1 today or $1 ten years ago we'd all take the $1 today. >> because the debt stabilizer, the additional debt the president's budget proposes, that stabilizes, but the debt load continues to increase as a percentage of gdp. >> debt stabilizes is a percentage of gdp starting 2018. but this budget will never -- the president does not propose to ever actually balance the budget. is that correct? >> we are not at the point in this budget window that -- where we are balancing the budget. this takes us a significant step toward that and then we need to work together to continue to drive toward a balanced budget. >> so the window you discuss is in the next ten years. so there's no balanced budget in

the next ten years but looking long term, it's a question i get from constituents. when will washington, instead of talking about a balanced approach, actually give us a balanced budget. can you foresee how many years, decades, that might occur in -- >> i don't think any of us can project out that far. what i can tell you is this budget makes significant progress. we bring down our deficits to below 3% of gdp. we stabilize our debt as a percent of gdp. that's a major milestone. there's more work to be done. >> but adding another -- in the next ten years, another question, how much more debt is added to the bottom line in this president's budget? >> again, you shouldn't think about it in nominal terms. >> but what is the nominal term. humor me with -- >> i think what your colleague was saying before some numbers. i can try to track them down. the debt held by the public is currently in 2012 about $11.6

trillion. and in 2022, 19.5. >> so to you, stabilizing the situation is just adding debt but not as quickly. this president's comfortable with never having a balanced budget maybe in the next 20 to 30 to 40 years? >> i think what we're talking about is making serious progress in a period of time when you can actually talk about progress. who knows what happens across 30, 40, 50 years of time. we're making that progress. we're making that progress while maintaining the basic compact we have with our citizens. >> i would hope if -- maybe your staff would actually project what the administration would like to see. give us a date when we'd have a balanced budget, not a percent of gdp but actually spend less in one year than we're taking in. and that has not happened in decades. and i would like to see that. another thing. quick question. what part of the -- what part of the budget and particularly the president's tax increases

actually create jobs? i know it's a short time, only 22 seconds left, but i wish your staff would get back to me. i know the president has proposed a bunch of new tax increases. i'm concerned about jobs. exactly which one of these tax increases and how will they actually create jobs. that's what the american people want. >> i think in terms of the medium term, having a balanced approach to deficit reduction which creates an investment environment -- >> and will, as you said, we'll let you get back to him in writing. >> mr. ryan? >> thank you, mr. chairman. i feel like i'm living in an alternative reality. i just left the armed services committee in which -- i am. thank you. i left the armed services ght which secretary panetta were presenting $500 billion worth of cuts to the military making very significant cuts that many

people were uncomfortable with. and it was my friends on the other side of the aisle saying, wait a minute. maybe we shouldn't make those cuts. maybe we've got to be careful about how deep we go. then i come to the budget committee and we're not cutting enough. so i think that's always proof that we are, i think, striking the right balance and i think you guys are doing that. and i think it's also important for us to know that the republican budget adds almost $9 trillion to the debt over the course of the next ten years. republican study committee budget adds almost $6 trillion to the debt over the next few years as well. i think it's also important to point out that the policies that this president and in many instances the democrats passed that stabilized the economy, made investments, the stimulus package, stabilized the economy. got us to where we're going now in the right direction.

they were opposed by the republicans. the auto industry bailout in ohio. thousands of people. one in every eight jobs in ohio is related to the auto industry because of what president obama did. and that is helping us stabilize things. and i think you hit the nail on the head with the issue of medicare. and i will ask you. medicare -- is medicare a medicare problem? is it an entitlement problem or a health care cost increase problem that is leading to the increases in the medicare -- >> we need to make sure we keep the compact we have with the american people. and that we can do that through smart changes to the medicare system. the affordable care act. saved over -- >> medicare costs are going up because health care costs are going up. >> health care costs are going up and the baby boomers are retiring. it's a demographic issue and

it's a health care cost issue. fortunately, some of those health care costs are starting to come down. we still have our demographic issue. >> right. >> and we see in hospitals like in akron, ohio, that is focused on the patient-centered medical home where they are beginning to use that way of reorganizing the system and the delivery of health care to drive down costs. >> well, it makes me optimistic are examples like the one you cite. we have those examples all around the country. let's take what's working and transfer it around the country so we have best practices throughout. and best practice is to find as cost efficient care that has the best possible outcomes. >> right. and i agree with you in that the affordable care act is essential to all of this. and the medical homes and those kinds of things. i think it's important, also, to point out, somebody brought up president reagan. president reagan did cut taxes

and then a few years later, he raised taxes. several times. do you know how many times president reagan raised taxes? >> i don't know. >> six, seven, eight. so i like to remind my friends who worship at the altar of ronald reagan that he would be beneath ron paul in the presidential primary election right now as far as support from the tea party. quickly, the research and development. because i love what you guys are doing with the community colleges. these are youngstown, ohio, akron, ohio, these are decisions in a value-based document which is our budget that are going to help my constituents. $10,000, tax credit for tuitions, pell grants, community colleges. these are the things that are going to save -- >> dwrud the list ensuring that the interest rate does not go up on student loans which it's scheduled to go up to 6.8% from 3.4%. the budget keeps it at 3.4%. >> so the average person is not only going to get a payroll tax cut but if we start implement

something of the budget priorities from the administration, they're going to see more help with their student loans. more money for pell grants. getting them in the community college. >> encouragement to make sure that colleges are more affordable. this is a major emphasis of this budget. >> i appreciate what you guys have done. this has been very, very difficult. and i think what we're seeing now in ohio and around the country is people start to appreciate what has been done as we have weathered the storm over the past few years. and as the question now is now what? now what do we do? now where do we go? i think what you're talking about with stem college and investments in the community colleges, are going to ramp america up to be competitive in the high-end manufacturing we're going to need. i appreciate what you're doing. we're here to support you. >> thank you. mr. mulvaney. >> if the staff could bring up the first slide. mr. zients iwas going to ask you about this originally. the president's promise he made during the -- >> my eyes are not good enough. can i get a paper copy.

>> you can, actually. it's simply a pledge he made when he ran for office and said today i'm pledging to cut the deficit by half during the first term. in response to a "washington post" criticism of this promise yesterday, i understand the administration's official position is now they had to break that promise because things were just -- turned out to be much worse than they thought they were. then i was going to ask you about this next promise regarding about not raising taxes on any families making less than $250,000 a year. but i think you've been asked about a couple of those already. mr. garrett asked you about the individual mandate excise tax for failing to purchase government qualifying health care. i young said that was not a tax. and then i believe mr. chaffetz asked you about the medical devices tax and the indoor tanning service -- >> can i make one ten-second comment. the president has cut middle class taxes by $300 billion. >> except for everything that's on this list. >> $300 billion. >> again, except for everything

that's --n i guess you don't get to say, listen, i'm going to raise it some place and reduce it some place else. my question focuses on something you said early cher is on the next slide which deals with -- >> there is actually no way i'll be able to read it. >> it's right out of your budget table. s-4. you mentioned several times this is a response from the budget as to deficit. and then you are -- loathe at times talk about nominal dollars. i agree when you are talking in 2012 about a dollar, it's not the same thing in 2012 but i would suggest you can talk apples to apples nominal dollars when talking about net interest payments in 2015 versus, say, medicaid payments in the same year. 2015. and i would suggest to you that the budget you offered to us today has net interest payments in 2015 exceeding what we'll spend on medicaid. the budget that you've offered us today has net interest payments exceeding the money that we spent on nondefense -- >> all i'm trying to do is

track. medicare on s-4 -- >> medicaid on s-4 is. >> i thought you said medicare. >> medicaid. $372 billion of spending in 2015. net interest 384. >> yes. >> you go to nondefense by 2017. 553 versus net interest of 4 -- excuse me, 570. by 2020, net interest payments will exceed defense. so what you've offered us is a budget with the fastest growing line item being net interest and a future for this country where net interest by 2020 will exceed what we spend on defense, exceed what we spend on nondefense discretionary and what we will pay also for medicaid. i ask you, sir if you really do believe that that is a responsible budget as to deficit. >> i really want to be responsive and maybe this needs to be done, chairman in follow-up because table s-4 is the adjusted base line. that's not actually the president's budget.

the it would be very difficult for me to comment off of an adjustment -- >> i believe the data is off of your budget. >> this is the base line that at the beginning of my presentation i described as an accurate reflection of business as usual. so i think that if we want to start comparing numbers, we should probably do it off of the actual budget rather than adjusted baseline. and cognizant of the time that we have, i think it's probably best to -- >> just to interject. just go to s-5, the next page in your budget and the same point can be made. >> let's go to the next one. this is back to the president's own word. he said he was going to cut the deficit by half. a line that caught my attention which says ibut i refuse to leave our children with a debt they cannot repay. so i'll ask the same question that's been asked several times. when my children ask me when we can expect to start repaying the debt, what is the answer? >> i think what the answer is that we have to do two things here in this budget. and we're not alone in saying

this. cbo has said this. the fed has said this. major economists have said this. we need to get people back to work. we need to create jobs. we need to put ourselves in a position where we're more competitive as a country. that's step one. step two, and if we don't do step one, we're in real trouble. with step one done, we're able to get ourselves -- >> i thought this budget was designed to put people back to work and create jobs. >> it absolutely is. if you had your way, which is this budget -- when can i tell my kids that the budget is going to -- >> it gets us to a point where our debt is stabilizesed as a point of gdp. that will allow us to be a place to invest in. you can see it in our current credit markets that we're the chosen place. we can maintain that status. american companies will grow here. global companies will grow here. and we'll be on -- in a much better spot than we're in today. there's nor work to be done. >> my last es