out of this. the fact is, the republicans in the senate aren't going to go for it for one simple reason -- it repeals aca and this will be the 50 -- i don't know, 56th or 57th time you tried that. but the budget is really out of step with reality by repealing that because so many people, 16.4 million people, are receiving health care benefits today that were not before the aca. the level of uninsured in this country is the lowest point it's been in many, many, many years. and this allout assault on medicare is -- it's been going on since i came here with gingrich. gingrich said "we want this thicke thing to whither on the vine." well, here we are one more time. but the real trick here and i want folks not only on this

committee, but if there's anybody watching this on television they should run and get anybody who's 55 years or older to come and watch and listen. what they are planning to do is set up an exchange. now, they don't like exchanges in the affordable care act. they went to the supreme court over that whole issue. they don't think it's good enough for the ordinary folks in the country, but for seniors, they're going to set up an exchange that they say will be carefully monitored for medicare plans. so it isn't good enough for the rest of the country but we're going to take medicare away from the seniors, give them a voucher and send them out to the exchange so they can choose from whatever plan whatever's been advertised or whatever. now, no one can look at that and think they care anything about the health care of this country. that's why this budget is dead on arrival.

i would now yield to miss grisham. >> i thank my good friend from washington for yielding. in previous hearings republicans on this very committee have said that wages are stagnating, that economic activity is expected to slow over the coming years and the u.s. still has a significant problem with poverty. now, this may come as a surprise to many but i agree with my republican colleagues on many of these points. you rightly mention that many people in this country are, in fact still struggling. however, this budget only perpetuates these problems and does nothing to fix them. to be clear our economy has come a long way since 2008, but the fact is that economic growth has not benefitted everyone equally. even though the stock market is highest it has ever been, the top 1% of earners have accumulated more wealth than the entire bottom 90% of the entire u.s. population the largest wealth gap in history.

even though the unemployment rate has fall on the 5.5% after 12 straight months of at least 200,000 new jobs 2.7 million americans have been unemployed for at least 27 weeks and the unemployment rate for hispanics and african-americans is stubbornly high. even though corporate profits are quickly growing and are at all time highs wages for vast majority of american workers are stagnant and middle-class families haven't seen their real income grow since before the recession many people in my home state of new mexico are hurting as well. one out of every five adults and one out of every three children live in poverty in new mexico. and my community is not unique and there are people in all of our districts that have been left behind despite economic growth. what would happen if we asked our constituents who struggled to feed their family and find a job or pay their medical bills "do you support eliminating the social insurance programs that help you make ends meet?"

after the committee passes this budget, will we be able to assure the millions of americans on medicare, social security snap, and medicate that their benefits will not be taken away? the answer to that question is no. we still have economic issues in this country, i agree with my republican colleagues on that point. but i oppose this republican budget which devastates vital safety net programs that support some of the most vulnerable people in the united states, seniors, the disabled and those living in poverty. hard-working americans pay into these programs and need access to them when times are tough. considering the economic issues millions of americans face removing that support system is the last thing we should do. i yield back. [ inaudible ] >> thank you mr. chairman and thank you, ranking member.

i'm going to be offering an amendment later on the very topic you just mentioned. it's something our side of the aisle has been talking about for a long, long time. look, if this was a play on broadway, it would be shutting down tomorrow. or off broadway, maybe it would make it through the night, i don't know. this is real theater. we needed -- we supplied the votes for the majority on homeland security. i don't want to hear pontiffication here about the security of the nation. democrats supplied the majority on that bill and the transit bill that same week. this budget assumes $760 billion in cuts to non-defense discretionary spending. that's $760 billion in cuts below the levels of the budget control act a level at which the republican majority was forced to pull appropriations bills off the floor because they didn't have the votes to pass them. does anyone think the appropriations committee can realistically do its work under

this even dramatically lower number? second, the budget relies on dynamic scoring. dynamic sleep walking for $146 billion in revenue including the margin to get over the finish line and balance it in the nine to tenth year. your records show that. any economist will tell you how difficult it is to make dynamic revenue estimates. let me show you on the chart that's up there. can the folks in the back see this chart? this is what they predicted. this is dynamic predictability by the republican party in 2001 when they cut quote/unquote "our taxes." look at the result of that. and how many jobs were lost over the next several years up to 2008, which was the final catastrophe catastrophe. this is their record. this is what they want to produce again so we can have

further crisis. you quite simply can't have it both ways. when democrats passed the aca we financed it in a responsible manner. this budget essentially steal this is funding from the poor and the middle-class by repealing the laws' coverage expanses and uses it to finance. finally, the budget assumes revenues will remain the same as the current, despite the majority's demonstrating intent. i yield back, mr. chairman. >> thank you. i now yield five minutes to ms. caster to talk about the contrasts and approaches today. >> great. well i thank the ranking member van hollen. i thank the chairman and look forward to the debate today. i want to talk a little bit about the democratic goals for the budget and our vision for the country. in contrast to the republican budget the democrats will offer a more optimistic and realistic

vision for america. it's a vision that strengthens economic growth so that everyone in america has an opportunity to be successful, not just the wealthy. democrats intend to build on the economic progress and america's success stories of the past few years. a noted economist said just last week -- and you wouldn't know it from my republican colleagues' doom-and-gloom rhetoric of this morning. he said "the u.s. is the strongest economy in the developing world right now. the private sector has added 12 million new jobs over the last 60 months extending the longest streak on record." just over the past few years unemployment has dropped from where was it about 10%? a little bit more than that to 5.5% now. gas prices are low. that's been a great help to families all across america. in fact, the energy information

administration says that on average every american household will save $710 in the coming year. solar and renewable energies clean energy is going gang busters. and america has experienced an all of the above energy revolution. health insurance. my colleagues are correct. over 16 million americans now are newly covered. this has been the broadest expansion of health insurance coverage over the last four decades. and yet most people have employer-sponsored health insurance. well, their health insurance rates grew at one of the most -- at one of the slowest rates in history and health care price inflation is remarkably low. inflation is low. and capital is flowing again into the united states of america. the annual deficit has been cut by two-thirds during the obama administration. the cbo report here when they

came and spoke he said that the deficit has fallen sharply. it is now 2.6% of gdp, the smallest relative to the nation's output since 2007. but we've got to work on the debt and it doesn't help when the republican budget continues tax expenditures and tax loopholes which are the largest problem facing the continuing debt. friends, if you are fortunate enough to have money in the stock market you have seen your 401(k)s grow and this has put money back into the pockets of american families. the market is close to all time highs. cnbc reported that under the obama presidency the stock market has performed better than under any other president. that's positive. we now have a strong dollar and net-net, that's positive because we import more than we export and this gives america stronger purchasing power. but we can't stop there.

we can't take the radical turn that the remember budget proposes. we've got to stay on track. democrats intend to offer amendments to bolster education research modern transportation infrastructure system. we want to keep the cohen tum going, unlike that radical turn the gop offers. we want to strengthen the ladders of opportunity, keep the promise of medicare and build on the economic progress and success we've seen over the fstpast few years. i yield my time to the gentlewoman from michigan, debbie dingle. >> thank you mr. caster and mr. chairman and ranking member van hollen that you are doing and the discussion that we are having among ourselves. but the budget resolution before us today has many things in it that concerns me. it hurts seniors it hurts young people but perhaps most of all it takes away economic

opportunities for the hard-working families in this country. and i am concerned by the assumption that i've heard expressed that there are people that don't want to work. in michigan, i know too many people looking for jobs that can't find them or who are working hard just to get ahedad and working two or three jobs. in michigan -- and i know it's true across the country, people just want the chance to work and to have the opportunity to earn a fair living. for many years, anyone willing to put in an honest day's work in this country could earn a fair wage. that's what built the auto industry in michigan and across the country. hard-working americans who put in long days but left with a paycheck that could support their family. but in the last three decades, the real income of a typical family in this country has barely grown and the last few years we've seen stagnant wages

and consumer costs go up. and a lot of working men and women don't have that chance just to earn a decent living. helping hard-working families is good for everyone in this country. economists at the international monetary fund and at the oecd have both found that growing income equality hurts economic growth it's vital for all americans to have an opportunity to earn a fair wage and unfortunately, the republican budget doubles down on policies that will put working families even further behind. we have one example of a man that's walking the 20 miles a day to work for a $10.55 job. it was on the front page. it's critical we take anxious to strengthen the economic growth for all to make sure hardworking families do well. i look forward to working with my colleagues as we consider our meants to give americans a

chance to earn an honest living for a day's work. thank you and i yield back the balance of my time. >> thank you miss dingle. i yield five minutes to mr. ryan of ohio. >> i thank the gentleman. you know i've heard a lot of rhetoric here today and i think the main issue we agree on as democrats is that we need an opportunity for average people in our country to earn a living. to go to work and earn a living. period. that's all they want from us. and i think we have proven on our side that our philosophy is much better at growing our economy. i don't know how many of you sit on military committees. i know i do. we have hollowed out our military because of sequestration, lack of vision, lack of investment. but we've also hollowed out our domestic economy. when you look at how we got to where we are as a country we

got here because we had public investments and we had private investments. and the republican philosophy of dismanning the public investments has decimated the middle-class. look at our infrastructure today. anyone driving in the northern part of the country after the winter? we need investments to grow our economy in public infrastructure. roads, bridges ports airports. broadband. this is how you grow the economy. but you can't necessarily do that if you cut out public investments. you won't get there. you want to shrink the digital divide? you need to make these kind of investments so that access gets to poorer communities. people want to go to work and they want an opportunity, they want a hand up not a handout. if you look at the public/private investments we want to make in clean energy i

know we've tried even with the issue of natural gas we've had republicans abandon ship. we want to make these investments into wind and solar. you want to resuscitate manufacturing in the united states? drive money into making windmills and solar panels. you know how many component part, gear shifts, steel go into a windmill? tons. that could be made here in the united states. same with solar panels. but if you got the investments in the clean energy you -- if you gut the investments in clean energy you're never going to get there. same thing with the national science foundation. we've down 690 fewer national science foundation grants than we were in 2013. are we going to grow that part of our economy if we continue to gut these programs? clean energy, $90 billion is being spent by china, we're spending 5 billion. we have a more comprehensive public/private partnership

approach that has been proven to work and with that i yield to my friend mr. norcross. >> thank you mr. ryan and ranking member van hollen. it's a great privilege to participate in this markup. certainly as a new member we're looking forward to work with both of you. in congress we talked a lot about the american dream, the american promise that if you work hard you can make a better life for yourself and your children at the center of this dream is opportunity yet this opportunity only exists if american people are given the tools to succeed. today we are marking up a budget that falls short in advancing the cause of economic opportunity by making strategic investments in those tools. we on this committee will have to choice to give hardworking families that will invest in putting people back to work repairing our roads, bridges, ports and other critical infrastructure.

two, provide affordable access to a strengthened education system and three provide a fair tax system that rewards our work. while we have to make tough choices to deal with the deficit and the debt, we remain committed to a strategy that invests in our transportation and energy infrastructure in a sustainable way. that ensures american workers compete and win in the global economy. investing in domestic transportation networks, infrastructure will create jobs, grow our economy, facilitate american exports and increase the return on taxpayers investments. the final tool to create opportunity is a fair tax system that rewards hard work. this means putting money in the pockets of hardworking families so they can invest in their children's education, so they can spend money at the stores, the restaurants, in our communities and they can take trips and vacations to stimulate the u.s. tourism economy all

these pro poleals have designed to give hardworking familys the tools they need to grow the economy from the middle out not the top down. today we will see democrats offer amendments that will reflect this priority in a different way. i urge my colleagues on the other side of the aisle to make hardworking families their top priority as well as voting for these democratic amendments. i yield back the balance of my time. thank you. >> thank you, mr. norcross. i now yield the remaining time to mr. yarmouth. [ inaudible ] >> the budget before us today not only fails to add desz the challenges of hard-working american families it jeopardizes the tools of opportunity that can help them get ahead. the amendments we will offer throughout this process are designed to reflect the needs and protect the priorities of american families. and i'd like to use my state as

an example of what's at stake in this budget process. in addition to massive cuts to medicaid masked under the guise of a block grant program this proposal would end medicate expansion under the affordable care act. in the commonwealth of kentucky with a population of little more than four million people, 375,000 residents were able to get health coverage under medicaid expansion just last year. in my district alone, we reduced the number of uninsured by 81%. over the next six years, this expansion is projected to create are 40,000 new jobs statewide and inject $30 billion into our economy. this combination of taxes revenue, and cost savings is estimated to generate a net budget again of nearly $820 million for state and local governments over that time. now, remember,s in a state that has senates or named mitch mcconnell and rand paul. in fact, the affordable care act and medicaid expansion is quite literally paying off for kentucky. the state is saving money, hospitals are earning more and most importantly hundreds of

thousands of men, women and children across kentucky rest easier everyday knowing they have care that they can rely on. the budget proposal before us today would end the enormous progress being made in kentucky and so many other states across this country and we will do everything we can to offer amendments to reverse that and move forward for the american people and build on the gains that we have made. with that, i yield the remainder of my time to mr. lou of california. >> thank you. as i read the proposed budget, it occurred to me that it's the best argument i've ever seen for the proposition that two plus two equals seven. these are fake, magical numbers. as stated before, you can't just repeal the aca and assume the revenues, you can't just get hundreds of billions of dollars in new revenues by calling in dynamic scoring. it's curious if you're going to use fake numbers, why have such a mean spirited document that does such great dow jones to american people? instead, the democrats will offer an alternative budget, one that instead of eliminating

medicare as we know it will preserve it. instead of cutting social security we'll strengthen it and preserve it. and instead of punishing the middle-class, we're going to help the middle-class. and on top of all that, we want to do it with real numbers. it's important to understand as we go through this that there's very stark choices between the democratic budget and the republican budget. the democratic budget believes that invest in americans and in transportation education, and infrastructure and in the social safety net. that is what grows the economy and past history shows that in fact, that is what has grown our economy. as we go through the markup today, you will see how fake the proposed budget from the gop is. i served in the california state legislature for nearly a decade. we had a constitutional requirement to pass a balanced budget. no one in california in the legislature would be able to vote for this document because this is a madeup document with madeup numbers.

it is one of the most fanciful things i've seen in all my years as an elected official and you'll see through the markup how outrageous these numbers are. i yield back the balance of my time. >> thank you mr. chairman. i just want to thank all my colleagues on the democratic side for putting forward our critique of the republican budget and laying the ground work for the budget we'll friend present next week. >> i thank the ranking members and the other members. we will proceed with the staff walk through of the fiscal year 2016 concurrent resolution on the budget. we need staff to move to the witness stable, please. >> while staff is getting set, let me remind members this is an

opportunity for members to ask questions that are factual and technical in nature. the staff is not here to answer questions or defend policy. that's our job and we'll have great opportunity to do just that. so these questions coming forward ought to be technical in nature. >> how do you want us to do that. do you want us as you're going through the section we have to stop it and do in the that section or can we -- >> what we'll do is -- i appreciate the question. what we'll do is just -- once we begin we will have the first question asked by whomever the minority decides to ask the question and the staff members will respond to the question in that area. >> it has to be about the information in that section? >> there's no walk through of the entire piece of legislation. it's whatever portion of the resolution you wish to discuss. >> if i -- >> i think chairman has agreed

that the best use of our time is to allow members to begin with questions rather than a presentation presentation. >> we have with us today rick may who is our staff director and his name tag says something else but it's rick may. we have with us jane lee and jim hertz, the director of budget review. as i me these questions should be factual and technical in nature. nature. >> thank you, mr. chairman. this provides members of the committee to understand some of the policies that are behind the numbers and we appreciate the opportunity and use this time for that purpose. i'd like to put up a chart i used in my opening statement with respect to what this republican budget does with

respect to what we call non-defense discretionary spending for people listening. those are the funds we invest in our kids' education in scientific research inknee separation homeland security those ongoing that are non-defense piece. as i understand the budget, it would cut below the post sequester level, in other words, below the sequester caps by $579 billion over the ten-year budget window, is that correct? >>. [ inaudible ] >>. >> thank you, now relative to what it would be required to maintain 2015 enacted levels adjusted for inflation, that cuts non-defense discretionary spending in our calculation by about $1.1 trillion. now, there's not much detail on how you would allocate these cuts. you've got function 920 and

function 930 that contain $766 billion in unallocated cuts over the next ten years. in other words you're saying make that huge magnitude of cuts but don't tell us where they're coming from. by our calculation if you were to apply those cuts across the board it would come to a cut of 25% in that category of the budget by 2020. is that square with your calculation? >> mr. chairman, mr. van hollen, i think you have to -- >> would you turn on your mic, please. >> oh, mr. chairman. many van hollen -- >> i don't think your mic is on you. >> there, i'm sorry. mr. chairman, mr. van hollen you have to give us a minute to reconnoiter about what the best answer is. i think the best way to describe as a starting answer then i'll turn to jim and jim for further detail s details remember, the budget resolution is a budget blueprint

designed to provide a vision of where we believe the fiscal policy of the federal budget needs to go over the next ten years. it is not designed to provide every single solitary assumption behind the numbers and the budget committee has a tradition which started with previous chairman and have continued with this chairman is that we give examples of both mandatory or direct spending as well as discretionary site of how we achieve our numbers. this is based upon policies as the chairman eluded to earlier in his remarks. this is not a mathematical exercise, this is a policy-based effort. we are not required to provide every single solitary assumption behind the numbers but we can assure you that there are policy assumptions behind every number. the concern about the discretionary number is a valid one. we just believe the size and

scope of government should be reduced. the best way to do there that is through reduction in the discretionary spending levels. >> thank you mr. may. i would point out as this chart illustrates that this budget does take that category of spending investments in our economy in areas like research and development education to 40% below the lower level in recorded history. and you have as i look in your budget, shown what you would allocate within certain functions over the next ten years. maybe those are illustrative purposes but let's look at 2016 because that's upon us right now now. it appears that the budget as a lower amount for veterans programs than the president's budget. is that your understanding? >> or policy assumptions

regarding veterans -- and, again, if jane needs to chime in, i will defer to her. our assumptions are basically at the cbo baseline. we make a few minor assumptions regarding some direct spending on -- or mandatory spending that mirror the president's budget regarding some veterans benefits. so i think it's the same. >> i hear you. if yours is a baseline i understand the answer. i think at baseline that does put funding for veterans programs at $.9 billion below the president's request for 2016 and $19 billion below the president's request over ten years but we can check that. have you given this huge unallocated cuts to this part of the budget which includes homeland security and the veterans programs? have you made any provision for protecting our investment in veterans programs or is that left to the whim of the appropriators? >> mr. chairman and mr. van

hollen, the -- i'm not certain the appropriators would appreciate they're the -- the decisions they make are simply whims but i think right, the fiscal year 16 numbers are based upon an overall allocation that we provide to the appropriations committee in the infamous 3402-a allocation. appropriate raters have complete maximum flexibility in order to meet that allocation number and they can divide that as they see fit among the various 12 appropriation bills. to decide exactly how the appropriators are going to use those dollars is almost impossible for the budget committee to make those assumptions. >> i appreciate that. just to point out that by our calculation this would result in a 25% cut in the out years to the extent that you cut less for some programs you're going to be cutting everyone more than 25% for others. let me ask you about the cbo

macroeconomic analysis that the budget that was released yesterday because if you look at it on page seven it indicates that as a result of the budget you're presenting, including the budget cuts in part of this portion of the budget that our national gdp, our national economic output would fall by .6% in the year 2016. .7% in 2017 and .3% in 2018 relative to baseline. relative to if we didn't have this budget in place and continued with the existing policies. did you see that cbo outlook report? >> mr. chairman mr. van hollen yes, of course. if you would like for us to explain more. >> we look at the macroeconomic feedback from the cbo as the kwif lent of what the president's budget and what the office of management and budget are able to do.

the president's budget is a post-policy analysis budget. in other words they put various assumptions together as their starting point for their budget just as we do but as the president's budget goes through over the ten-year period they have the ability or the tools to adjust their economic assumptions, their interest rate assumptions, etc., to achieve their policy goals and they say the president's budget will drive the numbers to a certain point. the budget committee however, uses a different approach. we start with the cbo economic assumptions, interest rates, economic growth unemployment et cetera, and until we take that economic feedback approach then we are stuck with the positive things that occur from our deficit reduction efforts. we don't include that until the very last step when we do this economic feedback. you are correct, mr. chairman and mr. van hollen that there is a small change in the front end,

but there is a very, very large change in the back end which we believe verifies the validity of the premise behind our budget that this is good for growth, this is good for job creation, and the numbers by the cbo, these are not budget committee numbers, we don't have our own black box in the back of the offices, these are cbo numbers done by reputable models that provide both positive feedback that we get from our budget. >> and i'd like to add -- >> i'm sorry we're just trying to -- the chairman has given us an hour. we'd like more so if we can try and figure out this big budget here, we need to ask some more questions. >> sure. >> it does raise the question about why we'd want policies that slow down economic growth in the short term and hope we can make it up but let me respond, mr. may. so as i understand it you took as what you call the cbo dividend as part of the budget, is that right? >> that's correct. >> is there anything in the

revenue assumptions you've made that is not based on cbo analysis? in other words, do you have any dynamic scoring assumption in this budget? >> mr. chairman, mr. van hollen we started out with the cbo baseline because we thought that was a reasonable place to start. the cbo -- the economic feedback, the macroeconomic feedback we were talking about does not assume any changes regarding the tax reform assumptions that we are making in this document. we would argue that if we did provide the feedback it would be even higher. cbo would not give that to us because we are not presenting a full detailed plan as we are on the deficit reduction plan of our assumptions in our budget. so that therefore there is no tax provision or tax benefit or feedback. this is simply the feedback you see is simply from lowering the deficit, lowering pressure on interest rates creating growth

because of the substitution, if you will, of borrowing less money in the government and letting the private sector invest instead of using it to pay government bills. >> i understand. so just to -- bottom line is other than what you just described with respect to the cbo cbo. there's no other assumption in the budget about impact from so call died name i can scoring on tax policy? >> no, no assumptions at all, mr. chairman and mr. van hollen, no assumptions on tax policy other than the cbo baseline. >> i'm going ask transportation questions then i know mr. mckahn has education questions. we all have more questions but let me just ask you quickly on transportation. your budget shows the cut of $187 billion in outlays over ten years. it's primarily if discretionary and then you've got a budget authority cut of $166 billion on the mandatory side.

so the combination suggests that this budget does what last year's republican budget does which is that the spending out of the highway trust funds will be cut to the level that's supported by current revenues, is that correct? >> that is correct. i would like to defer to my colleagues here. i don't want to be the hog of the limelight, shall we say, mr. van hollen. so if jane or jim wants to add -- >> i know there's a fund enough your budget that would allow for people to come up with increased spending so my question for now is from this budget does not provide a specific solution to the problem. it assumes unless something is done through the other fund that the transportation trust fund will be funded by current revenue s revenues. >> well, our assumption is that we have to follow the current

law path. the current law presumes that if the expenditures don't match the revenues that are coming in that the expenditure ss will be ratcheted back. right now there will be a shortfall in the highway trust fund later on this year according to cbo so reprovide flexibility for the transportation infrastructure committee to provide solution tos. >> thank you, that would increase the spenting in your budget? >> in a deficit neutral way, sir. >> but it would increase the spending numbers. the answer is there's no provision to dealle with the shortfall within the budget of this fund you have a big cut for budget authority in this account. what's going on there? is there room for new starts in the highway program next year? >> mr. chairman mr. van hollen

i defer that to jim. >> the budget assumes that we will match the spending coming out of the trust fund with the revenue coming in. we the have a definite neutral reserve fund to address that, we have a rule in the budget resolution that was carried is from last year that says congress should pay for any general fund transfer into the highway trust fund. >> thank you. >> i know that function 500 mantdtory spending is cut by about $161 billion below the baseline over ten years and that

your budget document says the maximum pell grant is frozen for the next ten years i have four questions. the first is what does that mean your budget -- does that mean your budget eliminates the $89 billion previously affected mandatory funding for pell grant? >> as the president himself noted in a previous state of the union the pell grant program is facing a funding shortfall ifyn fy-17. so in order to continue the payments through these programs the house budget assumes that the pell grant is fully funded at the maximum grant award for the pell grant program at $5,775 there the out years as well, fully funded, sir. >> all right, let me try back in the yes and no format, if possible. does that mean your budget eliminates the $89 billion

previously funded increases? >> we fully fund the program on the discretion. >> i'm trying a yes or no format. >> yes, it would move the mandatory portion to the -- >> so the answer is yes. >> fully funded in the discretionary sense. >> let's try that form that way everyone can get questions in. >> would the gentleman yield? >> certainly. >> they're moving it from mandatory in the discretionary but that's under discretionary caps. >> which is getting cut. >> so it means other areas would be cut out. >> mr. van hollen, this pell program was traditionally funded on the discretionary ledger. >> the purpose of this time is for questions not debate. technical questions. >> that's why if i can do yes or no answers mr. chairman i can save everyone time so we can try for brevity. how much will the pell grant lose in purchasing power if it's frozen over ten years? do you know that offhand? >> we didn't have that analysis at hand. but we fully fund the program sir. >> if you can get back to us what those losses would be i would appreciate that.

i'll move ahead. past republican budgets have said they eliminated the in school interest subsidyings and undergraduate student loans for need you students and have eliminated funding for social services block grants. does your budget assume those savings? >> yes, sir, those are two assumptions. of course these assumptions -- >> yes is the answer. thank you. so based on that, what policies account for the remaining $20 billion of mandatory cuts in function 500. that's not a yes or no. that's what else makes up the $20 billion. >> yes, sir. we have the repeal of the expansion of the income-based repayment program. this is the expansion. >> how much is that? >> over ten years $16.3 billion. as you mentioned, it's the many school interest subsidy for undergraduates. aligning it to the graduate program has this enacted. it was a bipartisan forum. we eliminate the public sector loan forgiveness program. that's a ten-year savings of $10.5 billion. as you mentioned, the social

services block grant. >> how much is that again? >> it's -- over the ten-year period it would be $16.5 billion. >> thank you very much. >> thank you, sir. >> yield back. >> i thank you. i have some questions. other members have questions. i have a couple questions on medicare. as i look at the budget over the ten-year window there's a net medicare reduction of about $184 billion. is that correct? >> mr. chairman, mr. van hollen, yes. approximately. >> thank you. and does the budget assume what's being discussed as a potential agreement. i say potential agreement on sgr? >> yes. >> and is that at $168 billion, as i understand it is. that right? >> yes. approximately. >> so that would mean if we have a net reduction of 184 and the medicare budget includes a potential sgr agreement, we're

talking about gross reductions of $359 billion. so what i want to do is get a sense of what those reductions in the medicare account are. first of all, as i understand the a piece of that is restructuring parts "a" and "b" of medicare. can you tell me what savings you're assuming if any for that. >> sir, one clarification. in terms of the sgr, and we do assume that the full permanent fix of the sgr is assumed and fully offset in our budget but it pulls from the $5.5 trillion in savings. there's no specific correlation or offset that's attached to the sgr fix. we assume in the our savings. in terms of the combining a and b deductibles in a single deductible deductible, that's over the ten-year window, sir of $94.1 billion. >> those are the two combined medigap plus a and b. thank you. how much do you assume, if any, for medical malpractice reform.

>> for med mall this would be over, again, the ten year window 36.9. >> and for changes in income related premiums? are there any changes in there? what would be the magnitude of the savings? >> sorry, for means testing, sir? >> yes, sir. >> okay, for means testing for parts b and d we have an a assumption of $104.1 billion. >> and then does -- last year's budget assumed an increase of the medical eligibility age to 67. does this budget make the same assumption? >> it does starting by 2024 along with the premium support subsidy. >> and how much savings is assumed from that? >> in total -- we don't have the parse out. in total with the 2024 start it would be $61.1 billion. >> 6$6.1 billion.

with premium support, sir. >> are there any -- is there an increase in medicare advantage payments in this budget? >> we presume that there is a deficit neutral reserve fund sir, to deal with the access issues with the medicare advantage program. >> but there's no actual expenditure -- increased expenditure? thank you. so i'm just -- are there any other medicare programmatic increases in the budget? >> mr. chairman mr. van hollen, i think it's important to note, again, for the nature of full disclosure, you asked about sgr. as i said, we assume the full cost of the sgr fix in our budget, as jane mentioned. i think it's important to note in a state of fairness the president's budget does not provide any offsets. he assumes the cost of sgr fix within the base line, the omb baseline. so that's one distinction between our budget and the president's budget.

just, again full disclosure. second, it's also important to know, though, as you say we have a net or gross number of medicare cuts of approximately $325 billion. the president's budget has got medicare cuts to the tune of about $450 billion. so we're about $120 billion below the president's budget in medicare cuts. >> but of course, one of the major medicare savings that the president has in his budget is from negotiating drug prices with prescription drug companies. i assume that's not in your budget. is that correct? >> we assume the repeal of the affordable care plan -- affordable care act which had pro viegtsvisions that increased drug prices and prescription drug plans. we assumed the full repeal of this act, thereby lowering the costs. >> so that includes, for example, the measures in the affordable care act to close what's known as the prescription drug doughnut hole, correct? >> we assume the full repeal of the affordable care act. again, also have a deficit neutral reserve fund to account

for the replacement of more patiencentric health care system. >> now if you repeal the full affordable care act, of course, you repeal the savings that were achieved through the affordable care act, which the medicare actuaries have indicated led to the reduction in medicare premiums because of that. so if you're fully repealing the affordable care act, i assume we're no longer going get the benefit of those lower premiums? is that correct. >> well the medicare actuaries also predicted that current expenditures with the aca that the medicare trust fund would go bankrupt or insolvent in 2030. so in order to prevent that actuality, that end, the house budget assumes, as i mentioned, the repeal, the full repeal of the affordable care act and assume, unlike that president's plan, that we would apply the medicare savings back to strengthening the medicare program. instead of new expenditures.

>> so, in fact, what you're saying is the savings are included in the budget. >> no, sir. >> let me go to medicaid for a moment. >> oh, absolutely. >> medical liability. i'm assuming that what you've done is assumed savings from the elimination of defensive medicine practice and that you're -- are you using data from states that already have these programs? some kind of medical malpractice preform proposals in place? because i'm not sure if you leave it up to the state house that differs from what the current law is, what the current situation is. >> the specific assumptions will be at the jurisdiction of the committee of authorization. the overall broad assumption is that there's a cap on non-economic damages.

>> a cap on damages? >> non-economic damages. >> okay, thank you. >> thank you, mr. chairman. this -- i have trouble figuring out what -- where things are in this budget. i read your embargo piece that was put out and read all that and i found some language in it that i thought looked familiar. it says "moreover, this system will set up a carefully monitored exchange for medicare plans, health plans that choose to participate in the medicare exchange but agree to offer insurance to all medicare beneficiaries to avoid cherry picking and to ensure that medicare's sickest and highest-cost ben fish a areas receive coverage." now, that same language word for word, was in the puff piece from last budget and i -- it's right here again but i cannot

find where there's any substance in the budget explaining this or putting this in place. is this -- i'm just supposed to believe it there's there? >> mr. chairman mr. mcdermott, that is the same proposal that was in last year's budget relating to premium support from medicare. the assumptions are providing in the no longer embargoed document you mentioned and r and that is -- it's no longer embargo sod you're more than welcome to share with anyone but that's an assumption behind how the premium support would theoretically be implemented in 2024. >> could you tell me the page in the budget where i can read the substance of it? >> mr. chairman, mr. mcdermott, as an experienced member of the committee you know that the budget resolution text itself is simply a series of budget functions, budget enforcement,

budget reconciliation instructions and now we've moved to various deficit neutral reserve funds as well as policy statements and it's not a requirement to spell out within the budget resolution documents. it's not a statute or legislation, it's a condition "courant" resolution that provides as i said earlier to mr. van hollen a budget blueprint that is designed to provide a plan of how we're going to get to balance within ten years. >> so what you're saying is this is to let people know that this is what is planned but we're not going to right any specifics? >> sir, we do in our committee report that will be filed on friday. >> sorry? >> on friday we will fire our committee report. >> on friday? >> yes it's traditional filing. once we report this bill there will be a report with further details specifying our assumptions. >> so we're supposed to go on faith.

it reminds me of first corinthians 13:12 that says "we see through a glass darkly." i don't know what i'm going to be voting on here. am i voting on the exchanges that we have in the aca that's going to be the same exchange you're going to have for medicare? >> no sir, the medicare exchange, the carefully monitored medicare exchange would envision that instead of a government-centered health care plan that it would be private companies that are competing for seniors' business and part of that exchange would be the traditional medicare fee for service program and the assumption would be that the benefits for any plan that is provided by would be equivalent to the traditional medicare fee for service program as well as benefits and actuarial value. >> when you use the word "carefully monitored" you're talking about the government carefully monitoring these insurance plans? >> the premium support plan would be based on the average bid process of cbo itself and a report in 2013 noted that there

be reductions out of pocket costs for consumers as well as have the added benefit of lowering the health care inflation cost as well. >> similar to the ones that have come from aca, then? >> i would respectfully disagree. >> thank you, mr. chairman. >> thank you. the budget includes an extra $36 billion in the overseas contingency operation funding. do you intend for this money to be used for more funding? >> mr. chairman, i think that's a decision that i think is -- jane is our policy director as well as our defense analyst. she probably can provide greater detail but i think the initial question is that it relates to the authorizers and appropriate rater to how to appropriately utilize the oco funds and as was

traditionally done recently those were the committees that make sure that final determination is not within the purview of the budget committee. >> but i think you said this is a policy-based document, a blueprint. so you're laying out the blueprint that says we're going to put this into the overseas account versus putting into the budgets? that's a radical change from any place we've ever been before. >> yesterday we were with the joint chiefs and every one of them said they wanted it in the base account. so we're looking at something that not only yesterday but this morning arms services that's where they need it. not in the overseas account. >> mr. chairman, i think it's important to note that unlike that president's budget we are trying to be responsible and trying to maintain a current discretionary cat for defense

spending which is at $523 billion. >> mr. chairman, i would just say the purpose of this is for us to gather information and not make political arguments. i think the statement should stick to the response. the political sarkization of the president's budget. >> 2 gentleman will yield. the gentleman asking the question wasn't asking a question he was making a statement so i would direct the -- i would direct the witnesses to respond to the question would any opinion as to the nature of the response. >> so let me repeat the question so we have it. did you intend this to be used for war funding. >> the answer would be yes. for the defense of our nation. if you consider that war funding. >> and why wasn't it put into

the base? >> as i was trying to explain earlier, the president -- there's a current discretionary cap of $523 billion on defense spending. we believe that it is very difficult for the budget committee to propose spending something in the current fiscal year that's above the cap. we believe the best way to provide additional funding for defense was through the only mechanism available to us, which was the oco fund. so that we basically had the same -- >> thank you. was this based on in request from the pentagon? >> we based this, mr. chairman, mr. norcross, we based this on the president's request. >> was this based on any request from the pentagon? >> we had on going discussions with dod and the come trollers office. >> you're saying yes they give you a different answer. >> this is the house budget estimate. it's a place holder estimate. >> look, we're not trying to jump around here. it's real simple. the question is real simple. did the pentagon request that it go in over the seas account or was that a blueprint, a policy

decision that you have now made? >> will the gentleman yield? will the gentleman yield? yesterday before the arms services committee, in fact, there was -- the chairman -- the joint chiefs and they said that -- their testimony was that they would prefer it to be in the base but that that takes a change in law a budget resolution is not a change in law and they stipulated that if the global war on terror fund was the only place that it could get to at this point, which is the only place the budget resolution can get it to, then it was better than not having it there. i yield back. >> thank you. so as a policy-based document we're now changing it. instead of putting the request from the pentagon into the base we're now shifting $36 billion over to the oco, is that correct? >> mr. chairman, that is correct. >> thank you. >> but if i can -- >> if i could -- mr. norcross, would you yield for a moment?

i want to read from what this committee's policy was last year as reflected in the report from the committee. it said "abuse of the oco capped a justment is a back door loophole that undermines the integrity of the budget process. the budget committee will exercise its oversight responsibilities with respect to the use of oco gwot designation in the fiscal year 2015 budget process and it will opposeeppose increases above the level the administration and our military commanders say are needed to carry out operations unless it can be clearly demonstrated that such amounts are war-related. is that -- does that continue to be the policy in this budget? >> mr. chairman, mr. van hollen, i -- not to place a -- sword of the burden on jane here next to

me. i think it's fair to say, though, which jane can provide much more of the technical details, i am not a defense expert, but i think what we're trying to say to mr. norcross' question, the president's request was a grand total of $612 billion in both base and oco funding.