>> thank you, mr. chairman. let me start by saying that i respect the work that you and senator crapo and senator warner did on the gang of six and continue to do. and you have done so at some political risk. and yet you're not the budget committee. you know, and you don't have the ability to be able to do as we could do in this committee, take something to the floor for an up or down vote. under the '74 budget act, we can do that. we can actually report something out with just 12 of us around this table. how many do we have right now? can we count you guys? we had 12 earlier. and then it's just mere majority. because, again, the budget act provides for the special expedited and peer majority consideration of a budget proposal that comes out of this committee. so i think that's what we ought

to be doing. and i actually think senator vag itch and senator warner following him made the case as well as anybody i've heard today about why it's important to have a budget. although senator vag itch isn't here to defend himself. he was kind of saying bca provides some of the budget discipline that is necessary on discretiona discretionary spending. he also talked about the need for a long-term plan and blueprint for the future. you think about it. over 60% of the budget this year is mandatory spending and interest on the debt. just looking at it in those terms, hard to say that bca, even if it was a ten-year plan, not a plan for a year and then look at it again next year, is a plan that gets at our problem. it also happens to be the fastest growing part of our budget, the mandatory side. so, look, it's been noted here it's been 1,000 days since the senate last enacted a budget.

$4 trillion later here we are. ooip n i'm not saying that's the only reason we're here $4 trillion later but it sure would be nice to have a plan. during that plan, more than $33,000 in debt for every household in ohio, north dakota, all of our states. i've listened carefully to everybody, argues for us to come up with something, a blueprint. i commend the chairman for trying to move something through the process. i liked your comprehensive presentation this afternoon. charts and all. i didn't agree with everything that you said. toward the end when you got into the substance of the proposal. i think you laid out the problem well. frankly, i think senator sessions did the same thing. i think you all agree with the problem. and you had a little different ideas on the solutions. i would tend to agree with more senator sessions on some of the issues, but we should have that debate and we should have the

amendment process here in this committee and then take it to the floor. i like the tax reform proposals you have in there. federal retirement program reforms you talked about. i think it's a step in the right direction. the tax increases, you know, as part of tax reform i actually as i analyze it is closer to $3.5 trillion. you say it's about $2.4 trillion. that's a debate we ought to have and a discussion we ought to have. like simpson-bowles, i'm concerned it doesn't get at the health care spending costs, in particular the new costs that have been incurred because of our new federal health care legislation that is going to cost trillions more over the next ten years. and we see higher numbers, it seems like, every other week now. senator whitehouse talked about that earlier. his concern that we aren't really getting at the core issue, really, with spending when you include medicare, medicaid and the cost of the new health care bill to the federal government. so that being said, i do have some concerns. but if this is the proposal that

the chairman's putting forward, i think we ought to use it as a starting point for the committee. and go ahead and mark it up. and, again, all we need is 12 votes to get it to the floor. once we get it to the floor, people talked about a votarama and how that could be political. well, it's always political in this place. but ultimately we'd have to vote. we'd have to come down one way or the other. so with $15 trillion national debt, on course to add another about 10 during the next decade with the president's budget about 11, with 10,000 of us americans retiring a day now and moving into social security and medicare systems that are headed toward bankruptcy if we don't make these reforms, it's time to act. people talked a little bit today about what's going to happen at year end. we have this confluence of

sequestration and a 4.5 trillion tl to $5 trillion tax increase debt limit again. the secretary of defense has called defense cuts catastrophic. he said it would hollow out the force. again, senate budget committee should provide fiscal direction here with a blueprint and we should do it now because it is such a critical time. the house did do its job. there's been a lot of talk about that today. some members on the other side criticize the house budget. that's their right to do it. but they should also acknowledge that they actually wrote a budget, voted on it. a lot of amendments on the floor, actually, it's interesting. they had several budget proposals. i think they had seven that they voted on. and they covered the political spectrum. and there was debate. there was argument. people disagreed with each other, but in the end they called the votes and they passed a budget for the united states of america. and if we would do the same and get something into conference, we would have that blueprint.

we've missed the deadline on april 1st. and for our committee, april 15th for the full committee -- for the full house. that's meaning that we've -- we've already missed our statutory deadlines. but that's okay. we can still move forward. and i think it's time for us to do it. we need to be sure that as we're doing this, we think about its impact on the economy. i think we all have some disagreement on that. some folks in this committee have made the point we can't cut much now because if we do it'll slow the economic recovery, which is a weak recovery. the weakest since the great depression if you look at the lack of jobs. i would argue just the opposite. it's all the more reason to do it to add certainty and predictability and to be able to give our economy a needed shot in the arm through some of these reforms we talked about today, including tax reform which is one of the few ways economists right, left and center agree we

can help tim late growth. senator bag itch talked about that before senator wyden got here. took credit for your limitation. so we need that fiscal blueprint. i think the chairman's budget could be a first step. i urge him to move forward wit. let us have the debate here in committee. let us see if we can find 12 votes, take it to the floor and challenge the senate to stop abdicating its responsibility. >> i thank the senator. senator wyden is recognized for a statement. >> thank you very much, mr. chairman. and to you, mr. chairman, ranking member senator sessions and colleagues, i feel badly about coming so late. we just had a hearing on global trade opportunities, a key part of our job in the finance committee. that's why i've been late

coming. with respect to my sense of where we are, it's pretty clear to me that what we have to find are big solutions for big economic challenges. and the history of all of those kinds of approaches, big solutions for big challenges, means you have to come up with a way to fashion bipartisan approaches. when we achieve meaningful progrowth tax reform, you had a republican president fighting for it, working with democratic colleagues, signing it into law in 1986. when we were talking about preserving the social safety net for senior citizens, president johnson championed it, pushed it through the congress with a huge bipartisan majority in 1965. so we have, mr. chairman and colleagues, two concrete examples of major solutions, solutions for the ages, that were achieved in a bipartisan

kind of fashion. progrowth tax reform, president reagan, and democrats of 1986. huge opportunities consummated by president johnson in 1965 in terms of the social safety net. both with a pretty clear bipartisan approach from day one. and there is a reason why this approach is the way to go. because if you try to tackle big issues in a strictly partisan way and you somehow manage to drive it actually through the congress and get it signed into law, there is not the bipartisan consensus that ensures you can keep it. in fact, history shows when you do it that way, almost as soon as the ink is dry on a particular partisan achievement, efforts are made to unravel it. so my sense is we've got some very big opportunities, and i just want to outline a couple of them briefly.

first with respect to progrowth tax reform, i'm very pleased that senator beg itch talked about it. the fact of the matter, senator greg, senator sessions and i have talked about this. we have an understanding of what needs to be done. you have to go in there and close out a huge array of the special interest loopholes, use those very same dollars to hold down rates for everybody, and keep progressivity. when we did this in 1986, we created, according to the bureau of labor statistics, 6.3 million new jobs within two years. i'm not going to say, mr. chairman and colleagues, that every one of those jobs came about through tax reform. but it certainly didn't hurt in terms of setting the climate for growth. and now since 1986, we've had a host of commissions that have essentially said the same thing. the commission that was put together by george w. bush

essentially proposed an updated version of what was done in 1986. the volcker commission proposed the same thing. bowles-simpson. we all sat in this room, and i was frankly thrilled when bowles said we pretty much looked at what senator greg and i had been talking about. we know what needs to be done. the question is whether we muster the political will to do it. but in terms of the benefits to the country, having a president whe -- precedent where we've actually done it that helped create 6 ppt 3 million jobs in two years sounds like a pretty attractive way to proceed. with respect to medicare, mr. chairman, it is clear the challenge is to protect the medicare guarantee. this is what it's all about. is protecting the medicare guarantee. since my days when i had a full head of hair and rugged good looks and was the director of

the senior citizens programs, i've always seen this program as sacred ground. and we know from the trustees that run the program, in a decade we're not going to have the funds to ensure that that medicare guarantee is protected. once again, i think we have an opportunity to come together. i'm attracted to the concept of premium support. premium support is not something that has been rejected which is the concept of medicare voucher. medicare vouchers are rejected because they're kind of like coupons. you give somebody a coupon. it doesn't keep up with their health care costs, and that's clearly not acceptable. premium support which originated with democrats and now has been picked up by both democrats and republicans across the political spectrum, is something very different. it is a way to ensure choice, but unlike vouchers, which don't

keep up with medical costs, a senior's specific contribution under medicare is tiered to the actual health costs they incur in a given area. so it would be tiered in terms of the contribution to a senior's costs in north dakota or alabama or anywhere else. it's not a coupon. it's varied in relation to the actual cost that a senior has in a given area. if we do it that way, mr. chairman, i think we then have a chance to ensure for all time the vitality of traditional medicare and traditional medicare and the new options, the various kinds of other alternatives that emerge, they will make the two, in effect, strengthen each other. you will have a stronger traditional medicare program, and you will have choice much as

seniors have today in communities like my own where more than 50% are already choosing these various kinds of alternatives. so that, colleagues, is a little bit of what i think is in front of us. it's pretty clear this is all about seizing the moment. and maybe it's not all going to come about today. maybe we're not going to get it all done tomorrow or the next day. but i think we have a sense of what needs to be done. i've been pleased to have a chance to participate in bipartisan efforts now for close to a decade in terms of progrowth bipartisan tax reform. and a plan for protecting the medicare guarantee for all time. and i think we've got a path to address both issues which are essentially dri lly driving thiy and driving the budget in a bipartisan passion.

and i just want, however tardy i am, for the day, mr. chairman, to say i look forward to working with you and senator sessions. frankly i look up and down the line. i know colleagues who've logged a lot of time in these bipartisan precincts. and big solutions for big economic collages are going to take that kind of bipartisan effort the way both president johnson and president reagan showed it decades ago. i think it's time to step up and do it again. >> thank you, senator. senator toomey is recognized for a statement. >> thank you, mr. chairman. well, i find it difficult to fully express how disappointed i am with where we are and what i'm hearing today. i think you did a very reasonable job laying out the nature of the fiscal crisis we face. the unprecedented proportions of this crisis. and correctly observed that we desperately need a long-term budget plan. i've heard many people repeat that. the fact is, republicans have offered this plan, and with the

exception of the chairman, democrats are unwilling to vote. this is a stark contrast. i don't think there's any avoiding it. the house has passed the plan. and you can argue all you like and disagree and that's all fine and fair. but they laid out a vision, and it's a plan that would put us on a sustainable fiscal path. i think that's indisputable. and from my point of view, an elected member of congress really doesn't have very much credibility taking pot shots at these plans if they're not willing to offer an alternative. i think it's totally unacceptable. for either party to simply say, well, we're opposed to that but we're not going to suggest anything in the alternative. that's why i give you a lot of credit, mr. chairman, for laying out a plan. and i can't believe we're in an environment, we're in a situation today and apparently tomorrow if this continues, where our democratic colleagues are simply afraid to cast a

vote. afraid to tell us whether they even support this plan. on our side i don't think that's the case. in fact, several of us have drasted our own plans. i put an enormous amount of time and energy and work as did my staff in producing for a second consecutive year a comprehensive budget resolution. this reflects the thinking of many of my republican colleagues. many democratic ideas that are embodied in this. and plenty of ideas from the outside. i'm sure it's got all kinds of flaws. but it's a vision that gets us to a balanced budget. it accomplishes a number of things. and i think we ought to be debating it, amending it, casting votes on it. i think my colleagues on this side are willing to do that. actually, we voted last year on something very similar to this. and almost all my republican colleagues voted for it. and i understand the opposition that came from the other side. but where was the alternative? i just can't believe that someone would suggest to the

american people that they ought to be the majority party in control of the united states senate and not feel an obly fwags to lay out a plan that solves the biggest problem this country faces, which is the unsustainable fiscal crisis that we're in. but that's -- that's what we're hearing. that's what we're seeing today. so, mr. chairman, i think your frustration must be enormous. it's probably maybe even greater than mine. but i want to walk through a few of the big ideas that i've wrestled with, that i've laid out in this budget resolution to illustrate just how frustrating this is not to have -- to have a counterpart that should be a negotiating counterpart, but one that's unwilling to take a stand on anything and therefore makes it very hard to negotiate. for instance, one of the things that i think's important and in my budget, demonstrate a way that we can reach a balance within a ten-year window. that's not ease ciy to do that. you have to make painful decisions. and we could have a reasonable argument about whether that's

even necessary. i think many on the other side probably don't think that that's necessary to balance the budget. i happen to think it is a worthwhile goal and we ought to get there within some reasonable time frame. but we'll never know if we don't have people who are willing to say, here's a different idea. here's a better idea. here's an alternative. because we have this silence from the other side. on tax reform, i actually think there's a lot of common ground, at least in principle. i know there is with senator woten. i think there is with the chairman. i've got pretty detailed parameters my budget would lay out for the committees of jurisdiction that would call for the kind of simplification and progrowth tax reform that have been called for by bipartisan commissions. and we could a very robust discussion about exactly how we should do that and whether, in fact, that's the right thing to do. but what do you have from the other side? unwillingness to take a

position. on medicare. my budget calls for the imp l lemation after ten years of bipartisan plan senator wyden just discussed. and i frankly think that's a very, very constructive idea that puts us on a long-term solution for medicare. not the only one. but it's a solution. it works. in the meantime, i've suggested in the budget that folks who are on medicare now and whose income is less than $85,000 would have no change whatsoever. but if your income's over $85,000, i've suggested that we implement president obama's suggestion whereby those relatively affluent seniors would pay a little bit more in terms of their contribution to their medicare benefit. and if your income is above $150,000 as a retiree, guess what? you're pretty wealthy. for those folks i've suggested they contribute even more than

the president has contributed. now, i don't know whether there's agreement on the other side, and i guess i never will if people aren't willing to take a stand and say here's what i'm for. that's what's so frustrating. we've been willing to offer ideas, proposals. i think they're solutions in some ways. i'm sure they're not perfect. but it's very hard. you know, i hear people say, i hope we'll come together and reach an agreement and do this bipartisan agreement. well, if one side won't tell us what they're for, it's really, really hard to find out where the common ground is. i just want to say, mr. chairman, i am extremely disappointed. i think we are here today witnessing a profound abdication of responsibility, a huge lost opportunity. this is the opportunity today to thrash out, work out, find the common ground so that we can have the long-term solution that we all know we need. and we're choosing not to do it. so i'm very disappointed. >> i thank the senator.

senator merkley is recognized for a statement. >> thank you very much, mr. chair. >> a budget is a statement of value that lays out a guide where we as a country are going in years to come. in statement of a budget we need to think long and hard and determine key questions that will determine our path. will we be spending money nation building abroad or nation building at home. that is, will we be investing in education and infrastructure here in america. will we be granting bonus benefits to millionaires and billionaires. or will we be caring for our veterans, seniors, homeless, hungry. will we be investing in clean energy research that'll help us end our addiction to foreign oil. will we invest in s.t.e.m.

education, science, technology, engineering, math mathics, that's essential to the next generation of those who will do the research and build the products that build the american economy. will we fund the agencies that crackdown on oil speculation or not? will we fund the agencies that keep our air and water clean, or not? will we fund the agencies that enforce our trade laws, or not? we have to be responsible for the answers we give. and in the course of this discussion, it's very important to understand how we came into the currency of red ink. wars in iraq and afghanistan unpaid for. bush era tax cuts, unpaid for. medicare part "d" drug plan, unpaid for. and then on top of all that, the deregulation of the humble home mortgage and associated financial sectors. result? predatory loans surged. bogus aaa securities

proliferated. a multitrillion dollar insurance industry going by the fancy name of swaps and derivatives sprang up from nothing to a $50 trillion business in a short period of time. and tid so without the oversight, the diversity, the reserves that are essential in insurance. all these things creating the biggest bubble and the biggest meltdown since the great depression. based on decisions that were made here. that members around this table, many of whom participated in. so how do we rebuild from here? that's the question of a budget. do we do so on the backs of working people? the very same folks who are pressed by the high interest predatory loans. who are pressed by the collapse of their home prices. who are pressed by the loss of living wage jobs. who are pressed by the

destruction of their retirement accounts. are these the folks that deregulated the humble home mortgage? are these the folks who failed to pay attention to the unregulated swaps and derivatives? are these the folks who were involved in the securities industry? i don't think so. so here are some better ideas. how about we end the war in afghanistan and split the proceeds, $120 billion a year we're spending right now, three ways. a third to paying down the deficit. a third to investing in instra structure. a third to investing in education. how about we end some huge special interest programs in the tax code that waste taxpayer dollars. we voted on one of the floor of the senate just a couple weeks ago. costs billions of dollars a year. but the powerful big oil companies simply put in the bank. they're sitting on more than $50

billion in the bank right now. and i was very fascinated by speeches that said, you know what, we can't close one tax unless we close them all. by folks who realized that they weren't at all prepared to take on the task of closing those tax loopholes. how about we eliminate the $175 billion in defense programs that robert gates, former defense secretary, said don't contribute one bit to national security. how about we end our addiction to foreign oil that's costing us $1 billion a day. it's creating jobs and wealth overseas. how about we spend those energy dollars here in the united states and create wealth and jobs here in america. triple win. improvement in national security. improvement in jobs. improvement in clean air. how about we recognize that we

are systemically undermining the national security of this country through our failure to invest in infrastructure and our failure to invest in education. china is spending 10% of its gdp. europe is spending 5% of its gdp on infrastructure. we're spending 2%. and we're having a debate over whether to continue the fiscal year of 2011 spending or take the house cut. that is not a debate that is going to take us forward to a strong economy in the future. how about we address the fact that we've lost 5 million manufacturing jobs here in the last ten years, and that's 5 million living wage jobs that ordinary families don't have. often jobs with benefits.

and how about we rebuild that manufacturing economy so there will be a middle class in america. because if we don't make things here, we don't have a middle class. these are the type of issues that are embedded in the decisions that we make around a budget. that is the task before this committee. i thank you, mr. chairman, for calling us to this table to deliberate these incredibly important issues to the future of our nation. thank you. >> i thank the senator. senator johnson is recognized for a statement. >> thank you, mr. chairman. it's always fun going toward the end here. you have to remain somewhat flexible. i'll try not to repeat what some of my colleagues have said. first of all, i am sympathetic with your predicament, mr. chairman. i know you actually do understand the problem. i know you've worked hard. and i've appreciated a number of the hearings that have been educational. i mean, let's face it. this is a political process

here. it's our obligation to inform, to persuade, i think to win the argument. but i think the american people also deserve a choice. and they can't make that choice if one side refuses to put their money on the table. if one side simply refuses to vote for what they're for. if one side simply refuses to pass anything. i've listened to a number of words that i've heard. i kind of want to react to them. first one was responsibility. i know when i was elected, i told the voters of wisconsin it's an awesome responsibility. it's one i take very seriously. it's the responsibility of this committee to pass a budget resolution by april 1st. and of the united states senate to pass a budget by april 15th. did i say august 1st? i meant april 1st. then april 15th. that's a responsibility. we should take it seriously. i know mr. chairman, you said