director zients. the bipartisan commission said $4 trillion in deficit reduction as their window. and they set something in that h range. included in their recommendations was reducing expending by over a trillion dollars. as part of the budget control act we passed, we cut passe discretionary spending by approximately $1 trillion. it seems reasonable and i think ordinary americans watching this understands that you should mera count the effort you made towards the $4 trillion. after all it was recommended we

do it and we did it.on that is a trillion dollars. and you have a mechanism to m achieve another trillion dollaro through a sequester. it has across the board cuts to defense and nondefense investments and what you proposed is another better, more balanced way to achieve the reduction. it's just because it's built in that this massive $1.2 trillion cut o that nobody in this room thinks that is the best approach, justd because you came up with a better way of doing it doesn't e mean that your budget should not be credited with that. that makes sense. let me is say something about the war savings. alr if you look at the

appropriations budgets today, o they are already using so-called oko or savings as a bit of a slush fund when it comes down to it. the reality is closing the door on that slush fund, i believe whether achieve real savings as we move to the out years and the decisions that the president re made with respect to afghanistan and iraq will help to speed up is that effort. i would point out that the chairman, when he presented the republican proposal here before the budget committee last year n and said that their budget selin achieved a $5.8 trillion cut ou of the cbo baseline, that cath included the oko spending. it does. but, we will have that conversation. because cbo includes that in their baseline as you pointed out. out. >> yes yes >> let me turn to what is the essential question that we face, which is how do we achieve the deficit reduction we all

the ten-year period, how do we, you know, get the balanced do budgets over the longer term an stabilize the debt as a percentage of gdp and really that means that there are a choices to be made. and, you know, 98% of our and, u republican colleagues in the anl house signed this pledge sayinge they will not close one tax loophole for the purpose of deficit reduction. not one penny can go to deficit reduction from closing a tax loophole. you get rid of a subsidy for the oil and gas industry, you cannot use that for the purpose of deficit reduction. re i think what the president proposed is that we want to achieve a net of 1.5 trillion dollars in additional revenue, doing it in a way that protects middle earners and asks those at the top to pay more. we hear, the wealthiest are he paying a growing share of thei

income. it's not because their tax rates have gone up. it's because they have done better than all other americansk productivity gains from the rer 1990s and 2000s, did not accruen to middle income americas, it went wealthiest of americans, and that is great. i should not say that is great, but i hope everyone will look at the cbo report that came out last fall on growing income inequality in the united states. what this chart shows and that red line there at the top are i. the top 1% income gains. again, proportional, and you ca see what people in differentse quintiles did.

this is why the folks at the top are paying more in terms of taxes. because they are making a whole lot more than everybody else.. that is simple math. this is not about the politics t of envy or class warfare. this is how do we solve a . deficit problem in a way that asks for shared responsibility. and what this chart he shows is that we should ask the folks at the top to pay a little more because if we don't, we will to have to do what the republican budget did last year which is cn slash important investments in education and whack medicaid ans end the medicare guarantee. here, we also hear the president's budget will lead tol the huge tax increases that ared going to weigh down the economy. what this chart shows is that it you go back to the clinton years, you had revenue at 21% of gdp.

the simpson-bowles proposal takes revenue to 20.6% and then the president's budget has lessi revenue of a percent of gdp at the end of the window. the point here is that this is o balanced approach which doesn'tn even raise as much revenue as we did during the clinton years when the economy was booming or in the bipartisan simpson-bowles proposals. is here is what i'm going to ask of you, if you could lay out uencea clearly why it's important to day a balanced approach and deal with the revenue side of the ou equation as well as the cutting side of the equation and what the consequences are for middley

income americas and all americans. to dea if you do not take a balanced approach, if you try to deal e l with the deficit issue the way the republican colleagues have suggested which is without este taking one penny of deficit reductions from closing tax breaks. >> i think, first of all, you mentioned discretionary spending. a this budget takes discretionary spending down to 5% of gdp, so we are making very, very hard choices in achieving that. the balanced approach of course which is at the center of the president's plan has been at the center of other plans. you mention simpson-bowles, that has a balanced approach and in fact raises more revenue than we are talking about raising here.b when a serious group looks at . this, there's a recognition that we need to increase our revenues. we cannot increase the revenuesn from the middle class. the president has no tax increases for families less than $250,000.eases in fact there are further tax

cuts. we need to increase revenue from the wealthiest 2% and as you gr pointed out have benefitted extraordinarily and they are in being asked to do their fair . share so we as a country can succeed and have a healthy growing middle class. makes a lot of sense.o as someone who was part of the private sector during the '90s t when the tax rates were the taxn rates that enabled us to have that share that you have on the screen, there was plenty of incentive to grow businesses. plenty of incentive to invest. so we need to have everyone do

their fair share in order for v, the country to get on to a r our better position than we are in today.inve to have us have deficits of less than 3% of gdp by 2018 and to j stabilize debt as a percent of gdp was important for long-term growth.we all >> as mr. zients indicated, we e should all find ways to achieve greater deficit reduction as we move no the out years especially. here's what we-the-said.presid in the frameworken the presiden announced in april and what he e submitted to the select en committee, the president embraced many of the goals and principles outlined by the fiscal commission and incorporated some of the policy we proposed. we're pleased the president's latest budget continues to focu on deficit reduction and seek ng real specific policies for red limiting expenditures and reducing spending throughout the government. from that's the quote from the hairs

bipartisan co-chairs of the president's fiscal commission. again, i think what the w president has laid out here is that balanced approach that the american people are looking forc rather than a lopsided approachk which will ask middle-class families to teak the brunt of our national effort to put the country on a long-term, fiscal ly sustainable footing. >> i appreciate you being here from the private sector. you probably feel a little lonely sometimes over at the white house in thatly respect. but i'm glad that you're here se coming with that experience. one point, though, you did just say that there are no tax increases for those folks who rs are e making under -- >> >> $250,000. family under $250,000. individuals under 200 k. >> if i'm a part of a family in that does no buy health

insurance as a result of the nt public's program that, is not a tax on me? >> the affordable care act savea money. >> is that a tax if i do not pa that or is that not a tax?llowig >> i'm not sure i'm following s the question. >> you said there niece tax increase on people po make under $250,000. if i'm i make under $250,000 answered do not buy health insurance under the affordable health care tax, is that a tax on me or is that not a tax on a? me? a moment ago you said there's no tax on me.ant to that's not a tax?cause th >> no.ration >> i want to be clear on that ls because that's not the argument the administration is making. ae let's move on -- before the supreme court. p i appreciate you are from the private sector, two decades leading companies. in that area of responsibility,h you you always have to present a budget for those companies, flight. >> absolutely. >> and that's why i do sincerelt

commend the administration for i coming forward with this budgeti do you anticipate this budget p will be taken up in the senate? >> i look forward to the policies in this budget input into law. i'm not an expert in process off congress or process of -- but i will tell you i look forward to the policies embedded in this budget -- >> when you were leading a companies woshs it be s. responsible to have a budget in public companies? >> absolutely.comp >> when leading public companies, would it be ponsib irresponsible not to havlee a budget? >> yes. and i woul>>d say that as the c of a public company and if you think of the president as the ,t ceo of this country, that ceo has come forward on multiple occasions with>> serious proposals -- >> i appreciate that and that's why i thank the administration,u i thank you for being here, as e paul did as well.at it's a hard seat to be in. i appreciate the administration putting pen to paper and that is

good because we have something e to dialogue -- sident >> it's not the first time the t president put forward a proposal. >> i'm not going back in om yout history. i'm hearing from you it's be la responsible to have a stbudget. last year the president proposed a bunk to the senate and heap got zero votes if i'm understanding. has recently the senate president said he has no intention of putn putting a budgetg up. so as far as i understand right now, i commend you and i commen the president for coming forward with a budget but as of you sai responsible thing to have a budget, it's irresponsible not n to have a budget.rrespons it would seem irresponsible for senate president reid to not voo take this budget up and have a d vote on it. would you agree with in a. >> the president and legislative bodies put into effect the bca last summer.st sum that serves as a budget. and that's a real accomp accomplishment. -- isdon't know >> it gets us going.et?

what we need is this budget, we need -- the policies embedded i3 this 2013 budget the president has put forward -- >> t >> that will only be done -- excuse me, sir, it's my time. that only will be done if it's t passed into law if senator reid takes this u up in a budget in e senate. we are both on the same page --e >> i hope the senate and house s work to the to makeur sure the i president's policies areci enacw into law as soon as possible.pos to achieve the deficit ion. reduction. >> leto me ask you another quic question. if we pass this budget tomorrow, when does the budget balance in this country under your >> proposal? >> we achieve significant progress -- >> i'm just looking for a a year -- year. >> just a year. s >> we achieve significant -- progress -- >> just a year. ba balance in yr this country under your proposal? >> this budget makes a serious -- >> >> just a year.ll me just a year. can you tell me -- >> that's not a year question. >> sure it is.

you can put a chart up here -- can put a chart up on our budgen and it will tell you exactly but when it will budget. -- i'm looking -- he's not answering the question.question it's a simple question.i' i'm looking for a year.paul paul's budget can tell us when n the balancece of rnc budget, a n simple year. what year does your budget evert balance?his >> this budget makes significant progress across this decade. the president is willing -- er >> is your answer that this do budget never balances?it is it your er th neverat balances? >> your time has expired. obviously he's not going to ab answer the question.oing >> ion wanted to make a comment about the conversation.to, you were gracious not to but you may want to point out the ryan d budget last year b voted by the republican house did not reach balance in the ten-year window. so if that's the standard, i

think the president's doing pretty well.comment, just a comment also about the chairman's not wanting to acknowledge what i understand ts be the budget process, which isn to take currently, which might h be ae law that was passed in th past and apply it to our currena budget and to the ten-year window. he wanted to take away the fact that this president, president obama, actually put war expenditures in the budget them rather than considering them . emergency spending every year and so did anticipate those expe expenditures in the future to be honest about budgeting. >> yes.g. >> and the fact that we're now t goin going to not spend all of that g is a good thing for this countrt but it means it gets acknowledged in the budget, right? >> absolutely.sol >>ut secondly, the same thing o sgr, the anticipated cuts that only happened once in the last decade. again, this budget deals with that in a way, if the chairman is suggesting that we don't have to actually make up for that ce difference in sgr, boy, would

that make it a if we don't have to acknowledge that's the law of the and have o to, quote, pay for it.ge the we may want to change the budgee pros business we're in the ess. middle of a budget process. we f we were at home and home w, budgets and someone said your ye mortgage budget is going to go n down, even though you anticip e anticipated what your mortgage payments wereto going to go dowt change what would spend going es forward. the chairman just said he doesn't consider that process no legitimate. i don't know what he considersi legitimate but that is a process of the way the budget is a determined and how wend deal wi it. you've done dthat.ident the president has done that and to hishe credit he is dealing we reality of both war savings, thl

savings that that accomplishes and the cuts that are not going to happen. i don' so i don't know how we begin to have a discussion about baseline when the chairman of the budget committee just denied the way ws do it. i want to quickly ask you what you think is on the minds of most americans, which is how bug president obama moves forward in the budget in making sure we grow this economy and we don't e do anything to hurt this frajic economic growth and more importantly makes critical investments in the future, trie. particularly in growth o industries. i wanted to just take a couple f minutes, if you would, to talk about the critical invests that are made in everything from basic research and energy and life sciences to investments in innovative industries and advance manufacturing. these are growth industries in our nation. we're excited about the increass in manufacturing that's happening in this country but n this is so important that the

president is making clear investments in an innovative sector that is going to create s jobs for americans right now an. and if not do could seriously hurt our economic growth. >> agreed.we are we are seeing the signs of recovery, but we've got a lot of work ahead. 8.3% unemployment is unacceptable. the president is making investments to continue the jobx growth. it starts with the payroll tax g holiday, which i know you're making progress on, extending sd unemployment, fixing, as you said, sgr. the president looks forward to > signing something soon on that n front. that's a different conversatione but let's get pay row tax x holi holiday done so there is not a tax increase on 160 million st. there's a call for an immediate 50 billion dollar investment in infrastructure, which i think i important for jobs and global competitiveness on manufacturing. we are seeing manufacturing job

growth which is great. manufacturing jobs are are great jobs. gr they'reea well paid jobs. servi our investments in this budget to continue r&d around manufacturing, particularly at agencies. we'reo continuing to do researe around clean energy. at the same time, we're encouraging manufacturing companies to locate here and to manufacture here.e and there are tax incentives for i manufacturer's to do their to do manufacturing here in the uniter states. you mentioned health care, even in this difficult environment, we are maintaining nih's fundin at an increasing the number of l grants. >>el all extremely important to our economy. thank you. >> thank you, mr. chairman. i'm tempted to ask you if you rd were drafted for this job or you volunteered. i won't go there. because it's a tough job you ap

have. andou i appreciate you being hee today to present the president'a budget. we get into baselines and all that kind of stuff, the americaf people really don't care about o baselines, i do find it that interesting that y you're tryint to useo us savings when there it an accounted treasury with all this money in it that we're going to save and not spend. that's the reality. it was the bush administration that signed the status -- what was it, the status agreement, going to be coming out of iraq for a number of years. to count a continued effort as we have had in the last several years and the next ten years ant say we're saving it, is just lt phony, which a lot of this budget is, quite frankly. i'm just a simple guy from idaho. what the american people want t know, is how much deficit are we going to add to our current defi deficit if we were to pass this blueprint this year, which i un understand is 1.3 trillion.ho how much would it be at the endc

of the ten-year cycle which i understand is still going to be around 750 billion.billion what would the total deficit be at the end of a ten-year cycle e if we adopted the president's sp spendingen plan? point one. point two is the point that mr. garrett made, every budget i've seen except for the ones proposed by this president d previously and this year. never put a target out of when we expect the budget to be balanced. and you ought to at least y present a budget that says, i s don't scare, 50 years from now,f give us some time. tell us when if we adopt this ba spending plan, when we will it achieve a balanced budget and quit adding to the debt., does this administration really care about deficits and debt? they talk a lot about it, but their budgets don't reflect at. that. and i alsoso hear a lot of talk about simpson-bowles which i

support. but you know what, this ation administration walked away from it. >> t.well, there's a lot. l let me try to respond. respond i know i will do it quickly, mrm chairman. first of all, i'm honored to bef in the job, and honored to serve this president and honored to present this budget. ma i've made the points, i'll repeat them, it closes the back door. i think we all agree cbo is our referee -- >> what that -- >> as to the deficit, more discretionary spending, second on deficits, i don't think you want to look at this in nominal dollars. no one thinks a dollar today isr worth a dollar tomorrow. so i'd rather have the dollar h today than tomorrow. let's pivot to gdp and percent a of gdp. >> no one cares about that, theg care what the dollar amount -- e >> at thefi end of the day. >> the me, as a percentage of gdp whate is our debt going to be in ten s years. they say, how much are we

spending and how much are we going into debt? gree >> if you -- >> this plan is greece's plan. >> let him answer. >> i think what you're seeing is declining deficits in real whih dollars which is the right way to look at it, you're seeing debt stabilize as a percent of gdp. we are hardly greece.interest this is a place where people want to invest.inue to this budget achieves significans savings in the ten-year window, it is a step. it's an important step, there's more work to be done. and the president has shown hish leadership and willingness to work with congress to achieve deficit reduction. and this -- let's start by getting this budget, the olicie policies in this budget enactedc into law. it's a good way to achieve a t milestone by doing that. >> you do a great job trying to defend it. u i tell you, this budget leads us to greece.his at some point in time we have to balance this budget. i don't see this administration

taking any steps to do that. yes, they make little savings here and little savings there, h and phony comparisons against a baseline they created and say he we're saving money when rear not. >> we're not greece. >> and i'm fed up with this.p >> we're not greece yet. e're >> and we're n not going to be greece. this budget achieves a sustainable level of debt as a r percentage of gdp. be a and we'll make sure this countrv continues to be a good place toe invest in. i believe in our workers, our e competitiveness. >> so does everyone in dghere. so the rhetoric, i wish your i budget matched the rhetoric thae you put forward. but i do appreciate you being here, you have a tough job. inte >> it's interesting for me, just as i have two points of

reference as i listen to my colleagues go back and forth. one is to look at what is proposed on this by the the presidential candidates running for the republican nomination in terms of more defense spending, no revenue adjustments.ments, and even people like george will pointing out that it's just an absolute fantasy land and will t be fun to watch in the circ unfortunate circumstance if you have a budget reconciling what he was talking about with this impassion impassioned rhetoric. when the republicans were in charge, the bush administration, the republicans, what we were i, presented every year looked lo better because it wasn't it

anywhere near an honest budget. i really commend you and the president for fantasy land that somehow these overseas adventures are supplemental funding, it's free money but somehow we're not dealing with the alternative minimum tax, we're not dealing with the sustainable growth rata for medicare ream burgsment for physicians.ipated if we did the fantasy budgetingh this $700 billion number would , look more like -- under 200 billion if you engage in fantasy budgeting, which didn't bother t people when republicans were in charge.

i appreciate you laying it out. i appreciate the notion of looking at some longer term stmt investments, because you could not be more right.d we're not greece and the world would not be lending us billions of dollars at very low interest rates if they thought we were e even remotely. so the -- our challenge is how . do we move forward over the next ten years? >> yes. >> to start bending -- i think you have a number of things here that presumably even republicans and democrats can agree on. wod where there's been some supportt around this table, the chairman and i have worked on some agricultural reforms in the past. and they were even part -- one h of the good parts of the budget. the administration proposes cull reduction in agricultural subsidies.i i wonder you could elaborate on that a little bit. >> absolutely. it is i mean, it is a time of strong

profitability in the farm profib sector. there are direct payments go to some farmers, even though they're not producing.t crop insurance, the returns, the irr on crop insurance is too high.suranc so there are opportunities to save about $30 billion by getting rid of these unnecessary subsidies and, at the same time, you know, continuing to be -- o have a very competitive ve agricultural sector.i that's part of the savings that i mentioned that were part of the other mandatory savings.vins >> well, i think this is an example of where maybe we can stop sort of the posturing. we'll do some political posturing.pot we've done it before, we'll do it again. this is an area where i think e the administration has outlined something that ought to be able on this committee can get behind.