that is not ideal for him for a compromise, therefore, you can decide that is an a la carte menu. we made it very clear that the last offer from speaker boehner that everything -- i'm sorry, the last offer from speaker boehner is not conditioned on investments that we think are best in our budget. the offer that is there from speaker boehner, you can't decide the only concessions that the president has made and not include the concessions from the republican side that can pass both houses. >> if i'm reading this right, you proposed $71 billion over

$10 billion to restore it to the 2009 per parameters. i thought you signed a deal on different level on that. are you proposing to get rid of the deal in the tax deal? >> in 2018. the estate tax reverts to the 2009 as of 2018. >> under current legislation it already does that? >> no. >> so you're proposing to do that? >> yes, we are proposing to do that. >> why so soon after the president signed the bill would you propose to change it? >> it passed very few estates i think there are three out of 1,000.

there is still a $3.5 million individual exemption, $7 million per couple. it takes the rate to 45% from 40%. we believe that in these fiscal times it is responsible policy in 2018 for the state tax to return to the 2009. >> is that the biggest -- aside from tobacco and the deficit reduction tax proposals that you have, is that the biggest new revenue provision that you have even among those used to offset other tax cuts for middle-class? >> i believe so. i'll check for you to make sure. >> two questions. is that a price tag for the whole program? what is the criteria for

communities to take part? >> it was the numbers that i gave, $35 million, which is the department of justice and 400 at hud. aside from that, other agencies are going to align programs but there is not necessarily new funds. then there is a tax credit proposal. agencies are working on the criteria but the goal is if you are the leader of such a community, a county, city, a neighborhood it should feel like one doorway in to partnership with the federal government. it will resources and technical assistance. we will build on a program that we have called strong cities, strong communities, we have staff and we're supporting local leadership and identifying clear goals and clear metrics and breaking down the barriers

within the government make sure we're the best possible partner. >> on the security trust, is that in addition to the increase in the vehicle research budget that you're talking about? >> yes, that's my understanding. >> yes, that is separate $2 billion. >> hello. i want to get into the weeds a little bit about the kindergarten -- full day kindergarten and the opportunities in that issue. talk to me about how many teachers you're excepting to add to this program -- expecting to this programs. how much is the cost? also, what -- i'm trying to marry the issue that this administration is trying to cut

the number of people smoke and then add to the revenue. what kind of numbers are you looking at? >> we have done detailed calculations. when you raise to a certain amount, we know that it has the biggest impact on young people. they are sensitive. we have made it so that young people would choose not to smoke as a result of this tobacco tax. we know a little bit about how impact smoking. that figures into our calculations about the revenue that it would raise. that is essentially the price tag for the early childhood proposal. with respect to your question about the numbers of teachers, this is a federal state partnership.

the same way that the k-12 is a federal-state partnership. providing some directions so we can ensure that providing quality programs is sort of a framework for the states, but they would have some flexibility on how to get there. there is a significant state part as well as a federal part, it is hard to estimate the number of teachers who would be talking about. among the federal standards we would seek to make part of this framework is to make sure that teachers are paid on the same scale as teachers in the k-12 system. >> [inaudible] >> i don't. each state would make their own determination on how best to achieve the goals of the program. >> i want to follow-up on that.

you might have a lower revenue stream tenures out than you do now. doten years out than you now. i would imagine the pre-k needs will be consistent and predictable over many cycles. could this become a mandate that runs out of funds for the future might have to adjust the tax to keep pace with the need? >> we have built that into the calculation. we cannot predict the future. it is limited. we know that there have been increases in cigarette taxes reduce the and we know something about how they work and impact smoking i will kind of revenue we can expect. we build that into the calculation. we believe that we covered the 10 year cost the way we designed it. >> when they do this, when they do the score, they project what the impact is on behavior and

adjust it into the score. it is built into the score, their predictions of how it would affect. >> montgomery. >> thank you. maybe i'm just getting old, but i'm trying to figure out the reduction numbers this year. but your calculations, it would reduce your projection $1.4 trillion which is less than $1.8 trillion. i'm a little bit confused about the difference. there also seems to be a difference between the $5.3 trillion deficit you are racking up over the decade and an

increase in the debt, which is much larger. could you explain? >> well, on the first question, in the current law, the sequester, which is 100% across- the-board, indiscriminate cuts. we are replacing the sequester, which is a balanced deficit reduction. you have across-the-board spending cuts that are hurting the economy. they were never intended to be policy. we want to replace it with balanced deficit reduction. the other thing going on is that we are clear about our willingness to do the $1.8 trillion dollar deficit reduction. that chart that i showed that is deficit and how we are driving

it down year over year below 2%, debt is on a declining path. it can be confusing because we have the $1.8 trillion offer to replace the sequester, which was never intended to be policy, with balanced deficit reduction. we have the investment modules. the president is willing to do the compromise with speaker boehner. >> [inaudible] >> the $2.5 trillion we have achieved today. >> [inaudible] >> it just made up of

healthcare, discretionary, other mandatory, revenue, interest saving. you can walk through that. we can work with you offline to do that. >> [indiscernible] >> that is accumulating on the current debt that we have. >> we always look at the interest of that is accumulating. it is hard to do real-time without seeing the numbers. we focus on where we are driving

debt deficit. that is the metric that everyone uses. it is on a declining path. >> the other reason i think it is important to look at that is, you are right. we are still in a world where people are often using different baselines, etc. all of that comes out when we look at the bottom line. when you look at the bottom line, whether you have $50 billion decrease in something that was supposed to be in the baseline or whether the detective as a revenue or spending, all of those things that you and i and about 18 of peoplether care deeply about, all of them don't matter when it comes to what the ultimate impact is. that is, are you as a country seeing your debt declining as a percentage of your income or increasing? the bottom line is the bottom

line on what matters. >> jessica. >> two questions. how do you want 401k to work? do you see the threshold adjusting every year? what happens in that? how are you supposed to protect the older social security recipients? >> there is an adjustment for older security beneficiaries. it kicks in at age 76. this is consistent with the bowles-simpson recommendation.

>> it goes from 76 to 85 in the adjustment. the ira's rationale for giving tax incentives for retirement is to overcome myopia. make sure that people invest more and do not understand for their't undersave for future. that is good for them. make sure the rest of us have more government spending that is needed. there is not a lot of justification for why you would be giving those tax incentives

for someone who is able to account for over $3 million in the ira for most people are just putting in a few thousand a year. the budget says once you have an amount suspicion to finance $200,000 a year, anything above that should not get a deferral of taxes. you should not get referential treatment. that is a pretty -- when you think of things we ought to do when asking for tough choices, this should be in the heavily no-brainer category that anything above $3 million does not require cash deferral. >> one more. >> the republicans have been

complaining about using savings in the budget, but you're using it to pay for spending on jobs and infrastructure programs. what is the rationale for using war savings to pay for new programs when we never paid for them in the first place? >> this is directly a result of the presidents policy and and -- to end the war in iraq and afghanistan. it is cbo in the baseline. this is consistent with cbo. importantly, it closes the door for additional discretionary spending. we are using it to offset job investments and the $4.3 trillion we have talked about several times, none of the savings are part of that deficit

reduction. >> right, but the republicans say your total reduction is closer to $100 billion in your budget. >> i would to walk through their math. i can tell you we are driven by policy. it is consistent with cbo. it closes the back door on discretionary spending. we are using an amount to offset investment in infrastructure and jobs. we are not counting any of the savings in the $4.3 trillion, which is the result -- of the $2.5 trillion that has d.een achiveeve. it is not in there. >> as jeff said in the offer, a compromised offer, however you want to take accounting in that, it does not affect the bottom line.

it has no effect on the $4.3 trillion. it has no effect on the $1.8 trillion. for the record, the amount is meant to offset the rebuilding and modernizing infrastructure and jobs is perhaps 24th of the amount of the savings. >> to repeat what gene said, there are lots of different ways to look at the numbers. >> i think people care about fiscal discipline and should lock this in and not allow it for a question for people to go to. it is an important fiscal

policy. there is no reason it should not be credited as such. >> people who care about fiscal discipline should know that the republicans who make those assertions are the ones who claim that their budget and get the 5.7 trillion dollar tax cut for that well off, but they will not tell you how. last question. >> thanks, jay. you said it is based on a forecast from november. can you explain why this is so late? why did it take so long to come out? >> the prime budget season is november and december.

given what was going on with the fiscal with negotiations, we had to put much of it on hold to understand what would happen with the fiscal cliff negotiations. there was a deal struck to extend the middle-class tax cuts and increased taxes for families making over a certain amount. there were changes in discretionary caps. those had major impacts on the budget process. we ramped it back up. we had complexity around the sequester. the sequester kicked in unfortunately on march 1. it was made worse. the budget was delayed.

>> go ahead, donna. >> one quick follow-up. on the tobacco tax, doesn't it disproportionately affect the poor who smokes more? what about critics who say this is an infringement on the american people who do not want to pay more taxes, whether it is a great or something else? >> people who don't smoke will not pay this tax. it will also help folks who are trying to quit smoking. folks will have greater support and be able to stop smoking if that is what they choose to do. >> the gentleman from main street radio. >> thank you.

apologies, but when i was handed a mic -- >> go ahead. >> what about this argument when you cut social security and now 50% of social security recipients get -- means testing will be difficult. even when you cut medicare, you added -- if you means test, you're pulling away the broad support for medicare and social security and endangering the programs. that is why they were designed that way in the first place. >> every single thing that this president does that affects medicare is designed to protect it and it's benefit structure.

its universality for all seniors. the measures in our plan -- medicare was opposed to be insolvent in 2016. measures in then ach listed 2024. these measures would push it another four years out. how young and healthy you are versus older and having health issues. this president is dedicated. we do have a challenge. it is not the only challenge, but the costs of medicare -- healthcare growth and medicare cost has come down, the baby-

boom generation, they are great challenges. the president is trying to do sensible work forms that protect that core benefit structure. in terms of the means testing, the only thing that is in this proposal was one of the three things that some of the republican leadership has called for has some means testing on medicare. what the president has done is proposed that in part b, the premium that is paid by those who are well off in their senior years would be higher. right now the average medicare recipient only bears 25% of the costs, part b. people would pay higher than

25%. what this proposal does is it says that if you are above and are an older couple and has income of $170,000 or above, you'll pay a higher percentage of the costs. in all cases, you still have a benefit of being in medicare. if you are making $500,000, you will pay that large fraction of what the costs of the program is so that the rest of the public is not subsidized. in all cases, an older american, anyone is still better off being

part of the medicare part b program. so there is nothing we have done that tears the program apart. quite the opposite. what the president has fought against is things like premium support. there has been a lot of talk talk that he was willing to accept the condition of cpi. the president has not accepted their condition of raising the medicare retirement age to 67. that is something he is both privately and publicly rejected. in terms of social security, nothing in the proposal we have with the adjustments we have would increase the elderly poverty rate. the president is trying to do all of the savings that the cpi has impact on social security, they close about 15% of the solvency gap.

we put savings for older social security recipients. remember this president has fought hard to protect medicaid. we have minimal medicaid savings in this budget. medicaid is where older americans get their long-term health. he has made that a very tough fight. when you look at what this president has done overall, it is a defense of what he considers some of the crown jewels of our government and retire with dignity. everything he does is designed to make sure that they are as strong for future generations as it was for previous generations.

>> [inaudible] >> what's that? >> [inaudible] >> i think it goes to 35. is that what you're talking about? it goes up a little higher as you go up the bracket. the highest being over 420,000 per couple. you are paying for a higher percentage of your medicare part b. everyone still has an incentive to be part of the medicare program. >> [inaudible] >> let me check. i want to make sure that we have the exact details. i will check on that. >> thank you. i want to note, if i could to end on gene's answer, is that

when the president hears demands from republicans to include a proposal that we raise the retirement age for medicare and social security, he rejected that as he felt it was not good policy. thank you. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] , jeffrey dget.s on 2013 bu at 10 a.m. eastern on c-span three. now we will hear about the white house 2014 budget request

was secretary of defense chuck hagel. they will take questions about the pentagon's base budget. minutes.0 >> good afternoon. >> i'm announcing the fiscal year 2014 budget request for the department of defense. this is a base budget of $526.6 billion. this budget continues to balance the compelling needs of supporting troops at war in afghanistan, implementing the president's defense strategic guidance and sustaining the quality of the all-volunteer force all while ensuring the use of every taxpayer dollar and addresses imbalances within the department of defense budget. as i discussed in my speech last week at the national defense university, the cost of acquisitions and personnel come pension must be addressed to put the dugget on a sustainable path

particularly giving the pressures on our top-line budget. this takes important steps in each of these areas. first, the budget continues to maximize our use of resources. it proposes a set of initiatives that saves an additional $34 billion over the next five years by changing the way we do business and reducing support costs. this savings is on top of the approximately $211 billion in ongoing overhead reductions and business efficiencies identified in the last two budget requests, which are still being implemented. the new initiatives being proposed are a restructuring of the work force to meet key needs with fewer personnel and overall military treatment facilities and efforts to control health care costs by taking advantage

of health care costs. these efforts are having some success. with projected health care spending in this budget declining by some 4% compared to our budget two years ago. with this budget, the department's requesting to consolidate infrastructure with the authorization of a base realignment and disclosure, brac in 2015. brac is a tool that allows communities a role in reuse decisions by them for their property. and it provides redevelopment assistance. this process is an imperfect purpose and there are upfront costs for brac. it adds $2.4 billion over the next five years to pay for the costs. there are significant cavings as we have seen. this budget continues the department's efforts to better align acquisition programs with the president's strategic

guidance and eliminate those programs that are performing poorly. the department has canceled or curtailed more than 30 major acquisition programs, rebalancing our portfolio towards better security challenges and making new investments in cyber and advanced intelligence, surveilance. in this budget, the department has continued to shift priorities within modernization portfolios. shifting to achieve an $8.2 billion in savings from weapons programs and restructuring over the next five years. one example by revising the strategy for the army's combat vehicle program, the department will save over $2 billion in development costs. this budget increases d.o.d.'s investments in its cyber work force.

continues to implement our rebalance and makes new investments in the flexible platforms needed for the future. another area of significant spending growth has been pay and been for our military personnel. the current fiscal environment demands that we look at these costs. roughlyly one-third of the fiscal year 2014 budget request. in this budget, the department is submitting a new package of military compensation proposals including a modest slowing of the growth of military pay by implementing a 1% pay raise for service members in 2014. the department is seeking additional changes to the tricare program in the f.y. 2014 budget to bring the beneficiaries cost share closer to the levels envisioned when the program was first implemented. these changes which have the

strong support of the joint chiefs of staff save about $1.4 billion in f.y. 2014 and total of $12.8 billion over the next five years. i'm committed as well as all the leadership at the pentagon to working in partnership with congress and all stakeholders to implement needed reforms because current fiscal realities demand we make tough decisions that have been did he ferd in the past. the longer we put this off, the harder it's going to be particularly the uncertainty that exists about future levels of defense spending. let me now address that uncertainty. as we all know, the department is in the process of implementing steep budget cuts for the current fiscal year as a result of sequester. reductions of up to $41 billion that will lead to the suspension of important activities curtailed training and could

result in furloughs of civilian personnel. if these cuts persist, the defense budget would be by $500 billion over the next decade. the apartment's budget request offers a comprehensive deficit reduction plan for congress to eliminate sequestration. that plan averts what would be another significant reduction in the defense budget, some $52 brillion in 2014 alone and $500 billion over a decade. it calls for $150 billion in defense savings over 10 years, unlike sequester, these cuts are back loaded occurring in the years beyond f.y. 2018. while no agency welcomes further budget cuts, the president's deficit reduction proposal requested in this budget gives the department time and that's important, time, to achieve these longer-term savings without harm to modernization

and readiness. the budget cat norse that will provide the most immediate savings but also encompass most of our military capabilities. we need to plan wisely for a long term future of budget constraints with thorough, clear-headed analysis that was anchored in the president's strategic guidance. i directed the review. the review will examine the choices, posture and investments and identify the opportunities to more efficiently and effectively structure the ept department and develop options to deal with budgetary circumstances and that review is under way. the purpose of the review is to ensure that the department is prepared to defend the nation in america's strategic interests. no matter the outcome of this budget debate. going forward, every decision must be wabde against our

national interests and must be worthy of the service, sacrifice and loyalty of our men and women. these decisions must be made in the partnership of congress and i look forward to having this important discussion about our priorities and in the days and weeks ahead. i'll turn to general dempsey, chairman of the joint chiefs and we'll ask our comptroller and general ramsey from the joint chiefs to respond to specific questions. we'll take a few squess. -- questions. retary.k you, mr. sec we built this budget to prepare the joint force for an uncertain future and aims to restore the versatility of a more affordable military for a more sustainable defense strategy.

the f.y. 2014 defense budget doesn't reflect the full budget. it imposes more time. nevertheless, uncertainty persists about what the top line will be for this and any future budget, nor does it include to restore funds for any lost readiness. we don't know the full cost of recovery from the revenue of shortfalls. as expected, we curtailed or canceled training for many units, specifically those not preparing to deploy and it's more expensive to get ready than it is to stay ready. recovery costs will compete with costs to build the future joint force. so what does this budget do? it invests in our priorities and keeps the force imbalance.

it supports our forward-deployed operations. it upholds funding for emerging capabilities such as cyber and funds those conventional and nuclear capabilities that have proven essential to our defense and lowers manpower costs and reduces excess infrastructure and makes health care more sustainable. it protects investment in what i have described as our real did e advantate and that is our people. it treats being the best trained and best equipped military as we now nongorble imperative. i returned from germany and afghanistan and i had the honor of recognize idges one of our nation's most humble servants and 10 of our nation's sons and daughters. i spoke with senior leaders and our troops in the field. budget uncertainty weighs on their minds. for those on the front lines, they trust that we'll get them what they need and we will.

they are less confident that when they return home to a force that trains hard and stays ready and want to make sure they are part of that training hard and staying ready. we have the opportunity and an obligation with this and any future budget to restore their confidence. the force is looking for us to lead and we can't do it alone. as i have said before, we need a predictable funding stream and full flexibility top keep the ce.to keep the force in balane this is the message i will take to congress tomorrow. >> part of the backdrop to the budget challenges as outlined is a real world crisis that is developing on the korean peninsula. what would be the consequences if a ballistic launch is expected. are they going to war. how close does the u.s. think that north korea is to

being able to reach japan? >> well, i'll begin and ask general dempsey to finish your line of questions. first, this country, the united states of america, our allies, the united nations has been very clear that north korea has been with its rhetoric, with actions -- have been skating very close to a dangerous line. their actions and their words have not helped diffuse a combustible situation and it is certainly the intent and hope of all of our allies and certainly this country that that rhetoric

be ratcheted down, those actions be neutralized and that's in the interest of all countries. now in the event that that does not occur, as we have said many times, our country is fully prepared to deal with any contingency, any action that north korea may take and any provocation that they may instigate. and we have contingencies prepared to do that. with that said, let me ask general dempsey for his remarks and that will get us into your second question. >> proximity of the north koreans to achieving a nuclear device on a ballistic missile is a classified matter.

but they have conducted two nuclear tests. they have conducted several successful ballistic missile launches and in the absence of evidence to the contrary, we have to assume the worst case and that's why we are postured the way we are today. >> mr. secretary, moving on past this budget, last week in your speech, you made specific reference to gold waternick ols and that when it was done where there wasn't cost. in time, will this budget re- examine the gold war-nichols. >> which as you know is familiar what it produced, allow the chairman of the joint chiefs to respond to this more fully, but i think what came out of gold

what ther-nihols as reality of a force structure that was needed at the time and i think brought capability to our armed forces to deal with the realities of what was coming at the back end of the 20th century and how we integrated our forces and our commands. what i was referring to was, as you have noted, i think that environment at that time were budget issues and were not a primary factor? much of that debate.

i wasn't in the congress at the time. i was a citizen and i read and what was going on. after 12 years in the senate, i'm far more familiar than i was as a citizen in 1986. the context of when and what they did at that time is different in one sense on budget on the budget environment, but it's not different, as i tried to note in the speech in that these are defining times. we are living at a defining time in the world order, world events. in the 1980's, it was a defining time for a different reason, but it was an important time and the leadership of our country at that time and interestingly enough through bipartisan leadership came together to make that happen. so i don't know if i have

confused you further or clarified anything, but that was my intent, not to challenge the fundamental context and foundation of goldwater-nichols but what the environment was at the time. the budget is a big environment this time much more so than last time. >> goldwater-nichols was a joint team. the last 10 years of war made it crystal clear. there is no necessity of driving us together, the services understand that their future is in the joint community. >> this budget is predicated on the hope that is balanced deficit reduction plan will be passed by congress and will be

reduced by $150 billion. realistically, you know the landscape, this has not worked out. what are the chances of this package passing? and if it doesn't, when do you execute plan b and come up with a sequestration budget earlier than next january and scare the hell of the industrial base? >> i will give you an answer and general dempsey may want to respond. a couple of observations to your question. that's why i directed the deputy secretary of defense, carter, working with the chairman of the joint chiefs to undertake a strategic choice in management review to address the reality of what we are living with now and that is the reality that you noted, sequestration is law. but interestingly enough, both the house and senate budget

resolutions as well as the president's budget are about the same as it relates to the amount of money for the defense department. now i don't think anybody is minimizing the reality of sequestration as law and i noted and as marty has, we are all preparing for that reality. we are taking cuts this fiscal year. but at the same time, wife as a representative government an opportunity tore get beyond that and hopefully find a budget resolution both in the congress and the president that will allow us not only some new flexibilities, but new numbers. and when you look at -- this is a $600 billion enterprise, the

department of defense. you can't shift budget dynamics and planning in a month or two. these are long-term dynamics. so we have to plan for budgets. it's why any entity has a budget, not unmindful of sequestration and what's coming down the road if nothing is done, if a compromise can't be made on a new budget act. we are playing for everything. again, that's why i directed that strategic review, because it may not happen. but this is uncertain. i think -- i'll end my comments and go with marty. we are living in a world of complete uncertainty. also the flexibility that we need to manage -- any institution needs to manage is not there in the same way that

we need it to be there and hopefully will be there. and the other part of that is time. this is why the president's budget' number are particularly important because of the $150 billion in his budget over the next 10 years, most of that is at the back end and gives this institution the time to manage and respond in a just tore staying fulfilling this strategic guidance in the budget not only what the president has given this institution a couple of years ago but our readiness interest to protect the security of this nation and that's what we have to look at. >> is it a budget gimmick. $150 billion, most of the people in this room is gone. not covering defense.

>> i'm not going to get into -- i'm not going to get into debating it should come at the front end or back end. it is what it is and we have to manage and plan for and to your bigger point, prepare for whatever eventuality that is coming. >> i don't think it's a gimmick, tony. you have heard me say for some time that we need certainty, time and flexibility. time. to your point, using the president's defense strategy from a year ago as the foundation, we are running several excursions, one of which is full sequestration because i want to be able to tell the secretary, this is what this force looks like and what it can and can't do. i think we are doing due diligence here. >> mr. secretary, you have been in congress when this pentagon has tried to change or slow down the costs of health care.

what's difference this time that perhaps you are more optimistic that congress will make the kind of changes that you worry about the budget eating the pentagon? >> my voting record i don't know is in your pocket, but there is a big difference. when i was in congress, i left congress in january of 2009. that was, as you know right at the -- at the front end of the global financial crisis. and all this was coming. so the last four years that i have been out of congress, i haven't had to deal with that as a member of the united states senate. but it goes back to your question. when i was in the senate for those 12 years, we didn't have the kind of pressures at all. they weren't even close. what we're dealing with now.

that's the big difference. the fiscal realities that are forcing down now some tough choices and some big decisions are going to have to be made. we don't have any choice here, because if we don't start getting a hold of this and moving this back towards some high making tough choices, the congress is going to have to be a partner here. we can help manage it and propose and be part of this. but the congress is a hugely critical component of all that all that we need to do. but that's a big difference. marty. >> i completely agree, mr. secretary. we have to absorb cuts of this magnitude. we have to take them across the entire enterprise. >> that's what i instructed in my direction on the strategic choices and management review is to look at everything. everything's on the table. has to be on the table. >> when do you expect the results of that review?

>> the review is ongoing and i have been getting reports, progress reports along the way. we're looking at trying to have this completed by the end of next month. >> can we back to north korea for a moment. what is your thought -- your bottom-line view what kim xiong un is up to right now? and so you said he is walking close to a line. should the american people be worried that we are headed towards war with north korea? >> he doesn't check with me on his decisions or how he's feeling each day. i don't know if he does with the chairman, but -- the reality is

that he is unpredictable. that country is unpredictable. if that is the reality we are dealing with and it is, you prepare for every contingency and we are, which i think has been made very clear. admiral lockleer was on capitol hill yesterday and went into that and a as should the american people be concerned about their safety and security. we have every capacity to deal with any action that north korea would take to protect this country and the interest of this country and our allies. >> you keep saying we have the capacity to take action if they do something. this suggests that the u.s. military strategy is to respond to respond if north korea does take a first step. what if you see something, do you respond before they take the first step?

>> i'm going to hand this off to general dempsey, but i don't discuss -- i don't think general dempsey discusses operations and specifics of what our contingency plans are. general. >> look, the military's job is to do three things equally well, deter enemy actions, assure our allies and prevent and we have options in every one of those bins to offer to our senior leaders and this is no exception. as far as knowing what kim junog un is about. we are in a press conference that the precedent that the good of the american people so the united states of america can get back on a solid foundation and what is un doing? he is starving his people. it is pretty hard for us to figure that out. >> thank you.

[captions copyright national cable satellite corp. 2013] >> acting white house budget director jeffrey zients. the house coverage of budget committee at 10 a.m. eastern on c-span 3. the economy and federal deficit. it is a third prize winning video in this year's student cam competition. ♪ >> dear mr. president, my name is rachel. i'm from indiana.

i understand you are very busy, but i think the most important issue is the economy and the national debt. in fact, the people that i interviewed seem to have the same basic thoughts when i asked them about the economy. >> it is rough. it is hard right now. >> i think it stinks. >> well, it could be better. .> there is no secret businesses are moving overseas. american jobs are being lost. the national debt is increasing. i believe helping our small businesses across america can be important to reviving the economy. many of the stores in our small town in indiana were for sale, rent in the last few years. these buildings are neglected and run down. it is like a ghost town. many housing and job opportunities would be available in small towns throughout

.merica by reviving small towns the economy can continue to pick up. my family moved here from ohio. e-house safed empty in town --- a house i talked to steve and he explains the building is more than a place for business. >> for us, it is a lifestyle. the people that come through here are customers and the other people live around here. >> also, we as a community have put forth the effort together to help bring back our small town and successfully open an art shop, a clinic, two retail stores, a comic book shop, a bed

and breakfast, a coffee shop, a log cabin museum and a 30-acre campgrounds. so what can be done to help the economy? the people i talked to had different thoughts on what we can do to help america. >>ic there's a lot of people expect an awful lot out of government more than me. i don't think the government is responsible for fixing everything. i don't think it is right to pay for our taxes, to pay for the government to be involved in -- i'll do for myself. i work my butt off and we'll make it or not based on my own effort, my own work. >> more tax breaks for people, more government grants, more ways to help people start their business.

because we started from scratch, we had nothing when we started. >> does this sound familiar? >> everyone who -- one that has been unemployed for 26 weeks and has run out of state benefits can get an additional 14 weeks of benefits. >> that's what we do in this country. that's the america dream. that's freedom and i will take it any day over the supervision of the central planners. >> the reason we're here tonight is because senators brown and sanders said why we talk about outsourcing of jobs let's do something about it. that's what we're trying to do tonight. we're trying to do something about it. >> you know, every country, every -- well, town goes through

cycles. things are easy then they are hard but i think, i mean, hard times are just that. they are hard time but they are not the end of the world. hard times force us to get creative, think outside the box and do things differently and this gross us as business people grows us as business people. it takes place under that pleasure. >> my grandmother came up with unone of these unique ideas. on the 4th of july, our town held a fan fair, which is my grandmother's idea is a garage sale to help pay down the nation's debt. people sat out in 114-degree weather that was sent to help pay down the debt.

>> i would say it is not fixable in the next six months or a year. it took a wile to get here and it will take a while to get out of this. >> isn't it the same in washington? there are hundreds of different people with different ideas but when efrpbl talks at once it -- everyone talks at noise it becomes noise. none of that matters is nobody is putting forth the effort to change things. our government sounds like small towns across america, including mine. >> i've been here a lot of years, a lot of business people have been here for 30 years. over 30 years, you know, you got to get over problems that has happened in the past. that is tough for some people.

>> you voted for action, not politics and confusion.-- not politics as usual. you elected us to focus on your jobs not ours. in the coming weeks and months, i'm looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. >> mr. president, you have a powerful voice. the people of america want to help america. sacrifices need to be make because you can't satisfy everyone's wants. small towns may not be important to every -- everyone in this nation but it matters to me and the people who run these small businesses and who are employed by the small businesss. small towns should matter to the economy because the unique atmosphere these small businesses offer. not to mention the job opportunities that could be available to anyone. it is my hope, that you as the

president, continue to set a positive example. we, as americans work together despite the different political view because after all we're all americans and we want the best for america. >> congratulations to all the winners in the student cam competition. to see more videos go to student >> she was her husband's political equal and partner. she never went too far within the boundaries of what a proper victorian or early pictorial lady should the in the 19th century. everyone knew that they shared .n office she was active in discussions at the many -- state dinners they had. but she wasapproved very much a woman who knew what

she wanted and set her rolls out and everyone had to play according to those rules. she was respected for it. she was very popular. rex our conversation on sarah polk, wife of the 11th president, now available on our website. tune in monday for first ladies jane pierce and harriet lane. republican senator rand paul talks to students at howard university. then a conversation with iowa .enator chuck grassley later a confirmation hearing for president obama's choice to lead the white house budget office. the senate has been discussing gun legislation this week. there will be a procedural vote thursday to advance the bill. we spoke with a reporter earlier about the measure. >> the correspondent with the "national journal" it was

announced the expanded background check proposal. what should we know about it? >> it creates a lot of buzz in the senate, which is interesting to watch. -- is different from the porme the proposal that was introduced by the senator of new york because it is not an universal background check. it mandates background checks for gun purchases at gun shows and over the internet. it is not mandating a background check if i'm going sell you a gun. >> what motivated the senators, a democrat and a republican to work together on this compromise? >> it could be any number of reasons. 91% of the public, i think is the latest number that supports universal background checks. it's been the top part of the gun control movement agenda for

years now. it is also considered the one thing that could actually pass the senate. i don't know if the compromise that will pass but it goes a long way for answering our fears that some republicans have put forth about those kinds of neighbor-to-neighbor family sales that they don't think should be part of a big federal background check system. >> does that mean it will get more support from the colleagues and specifically from whom? >> the only person who sounds positive enough is senator senator from maine. she said she is pleased from what she head but there is always that standard i have to review the language and i don't know. perhaps, it will get her support. there's a number of senators who are still on the fence if they will support the motion to proceed, which is happening tomorrow.

that doesn't necessarily mean it will fail, they are just waiting to see which way the political winds blow probably until the last minute. >> you mentioned the a-rating from the n.r.a. how did they respond to the proposal? >> i haven't seen anything from them on that. that might mean they are being under the radar about that. they put out some stuff about their own agenda on school safety last week. they have been quiet, at least to the press about that kind of stuff since then. the gun control act, that is supposed to be the brady campaign, the mayors against illegal guns has been out front and center. a lot of them have put out favorable statements about it but quite frankly -- it is so much better than what they would have gotten in the past.

>> at a news conference a senator indicated their amendment would be considered first. what other amendments are likely to be considered in debate on the bill? >> we know there will be an amendment on banning assault weapons, we expect that to fail. another one on banning high- capacity magazines, the bullets that will spew out 30 or 40 rounds in a few seconds. that is probably not expected to pass but it might pick up a few republicans who would not vote for an all-out assault weapons ban. on the republican side, they are looking to put together their own alternative package. it would include a bill from the senator of south carolina to kind of update the mental health

component of the national debate. the gun trafficking, the illegal sale of guns after they were purchased illegally. it will improve the laws on health care. there are some states that don't want to report mental health cases because they think it violates privacy concerns. so they are already thinking about this. there might be individual amendments on each of those as well. >> senator cruz and lee and paul were set to have a news conference twice today and they were canceled. can you tell us what is going on there? >> i checked in you are w our offices both times and they said they were having problems with scheduling conflicts but they plan to go forward with 11 or 12 senators in bureaucracying the bill. i don't know if -- blocking the

bill. i don't know if they can get the votes they need to do that but i don't know what happened with the press conferences. it seems they have are having trouble getting there. >> you wrote about the political dynamic is definitely evolving in describing the gun control debate. what does that mean as the bill comes to the floor? what would that look like? >> i think it is actually -- it is evolving so fast i can't keep up with it. the senators are really grappling with tough issues on gun control. i've never seen it before in the 15 years i've been covering congress. i think there was talk in 1994, but i have not seen the tough grappling, that if we need to check backgrounds how do we keep their privacy without having a huge list of gun purchasers in the federal landscape? how do we stop gun trafficking? there's conversation going on outside of the senate about what do we do about our drug policy, which is fueling a lot of the crime? that's been going on as well.

i feel like gun control advocates, the people who are limit any kind of gun purchases in the united states, there's a huge victory for them. this is the kind of thing they have wanted to talk about for years and members have not been willing to and all of a sudden they are perfectly happy to. it is awesome to watch. >> you can read her reporting at nationaljournal.com. thanks for joining us. >> pleasure. >> the senate will take a procedural vote tomorrow morning on whether to move the gun bill forward. wasbipartisan agreement between to me -- toomey.

we can see live coverage of the senate at 9:30 eastern on c- span two. >> she was her husband's political equal them harder. she never went too far within the boundaries of what a proper lady should be in the 19th century. everyone knew they shared an office in the private apartment. she was active in discussions at the many state dinners they had. she was not a prude. she was very much a woman who knew what she wanted and set her rules out and everyone had to play according to those rules. she was respected for it. she was very, very popular. >> our conversation on sarah polk. it is available on our website c-span.org/first lady.

tune in monday for first ladies jane pierce and harriet lane. >> senator rand paul spoke to students at howard university. he talked about his party's history of opposing slavery. howard university is a historically black college founded after the civil war. senator paul also took questions after this 50-minute event. [applause] >> thank you. thank you. i would like to thank the president and the faculty and the students letting me come today. people ask me are you nervous about speaking at the

howard, some of the students may be democrats? my response is the trip will be a success if i can get the hilltop to have a headline that says a republican came to howard but he came in peace. my wife asked me last week, she said do you have doubts, do you have doubts about trying to advance a message for an entire country? the truth is sometimes. when i do have doubts i think of a line from t.s. elliott. a line that says how should i presume to spit out the butt ends of my ways. when i think of how political enemies twist my ways i think of those words, when i'm pinned on the wall how shall i presume? here i am at howard, a guy who once presumed to discuss the civil rights act.

some people say i'm brave or crazy to be here today. i'm not one to watch the world go by. i wake up every day hoping to make a difference. i take to heart the words of tony moreyson, who wrote if-- toni morrison who wrote if there's a book that you want to read that has not been written yet, you must write it. i can recite lots of books or i can plunge in the arena, maybe fall but at least i tried. what i'm about is a philosophy that leads you fill in the blank. i came here to not preach or prescribe spom formula l.a. for -- some special formula to you but to say i want a government that leaves you alone. it encourages you to write the book that become yours future. you're more important than any

political party, more important than any partisan pleadings. the most important thing you will do is yet to be seen. for me, i found my important thing to do when i learned to do surgery on the eye, when i learned to restore people's vision. you're still -- many of you have those things ahead of you. i'm an eye surge first and foremost, i find myself in a debate on how we heal the sick economy and how do we get people back to work? i believe we have an economy that could create millions of jobs but we have to rethink our arguments and try to rise above partisan rhetoric. my hope is you will hear me out and see me who i am. if you hear me out, i believe you will discover that what motivates me is the defense of everyone's rights. strong importance of me is the defense of minority rights, not just racial but ideological and

religious minorities. if the government does not protect their rights then majors -- democratic majorities could legislate our freedoms. the bill of rights protect us against the possibility of oppressive federal or state government. the fact that we are a constitutional republic means that certain rights are protected even from democratic majorities. they can't vote to take away your rights. they are yours they are given to you by your creator. i've never waivered in my support for the civil rights or the civil rights act. the dispute, if there is one, has been about how much of the remedy should come under federal or state or private per view. what gets lost is the republican party has always been the party of civil rights and voting rights because the republican party believes that the federal government is limited.

it's function is limited by the constitution, some have concluded that republicans are somehow inheritly insensitive to minorty rights. nothing is further from the truth. republicans believe many rights remain with the people and the states respectively. when they hear that they tune us out. for the states right to segregate and abuse. that is not true. many republicans believe that decentralization of power is the best policy. the government is more efficient, more just, and more personal when it is small earn more local. the republicans also realize there are some occasions and have been occasions of injustices that they do require federal involvement. that is what the 14th amendment was about and the civil rights act was intended to do, protect

citizens from state and local tyranny. the 14th amendment says no state shall -- it did change the constitution to give a role for the federal government in protecting citizenship and voting regardless of race. i did not live through segregation nor did i experience it firsthand. i grew up in the south. i went to schools with whites, blacks, latino, we all got along. for some to say i can't understand. but i don't think you had to be there to be affected by the history of racial strife. the segregation and the jim crow in the south is compounded when you realize that segregation began in 1840's and 1850's. douglas is pulled from the car-- from the white car clutching

his seat so tightly when he is thrown from the train, the seat are still in his hands. within a few years public transportation was integrated in the northeast. it's a stain on our history that it did not occur for 100 more 's, we weree 1960 still fighting to interggrate public strtransportation and schools and thwaat was an embara ssment. but the story of emancipation, voting rights from frederick douglas to the modern era is the history of the republican party. how did the party elect the first black u.s. senator, the party that elected the first 20 african american congressman, how did that is a party that loses 95% of the black vote. how did the republican party loss the trust and faith of an entire race? from the civil war to the civil rights movement for a century most black americans voted republican. how did we lose that vote? to understand how the

republicans lost the african american vote, we must understand how we won the african american vote. in kentucky, the history of the black rights are inseparable from the republican party. democrats in louisville were led by the journal editor, henry waterson. they were opposed to blacks voting. the democrats were opposed to blacks voting. waterson himself wrote to his opposition that blacks voting was founded on the con vision that their habits of life and general condition disqualified them from the exercise of -- of cusuffrage. this was the democrats. in george wrights "life behind the vail" he writes obama john paul her standing before tens of

thousands of slaves when slavery still existed in kentucky and -- countrymen you are free. declaring my coiunountrymen, yoe free. while i command the military forces of the united states we'll defend your right to freedom. the crowd erupted in cheers. this is the history of republican party. while a legislature voted against the 13th, 14th, and the 15th amendments. william worely was a black republican. he was the founder of louisville's naacp, he's a republican.

most of the founders of the ncaap were republicans. worely bought a house in a white section in defiance of the segregation law. the case was finally decided by the supreme court in 1917 unanimously holding that the kentucky law could not forbid the sale of a house based on race. the republican party's history is rich in eman pation and black history. republican still pride the sense of justice that m.l.k. spoke of when he said an unjustice law is any law that a majority forces on a minority but does not make binding upon itself. >> i wasn't sure if my speech would be entertaining but now you've had some entertaining. when m.l.k. talked about an unjustice law what intrigued me was m.l.k. talked about race but he talked about a justice law goes beyond race.

he said an unjustice law, this is a good way to look at any law, an unjustice law is any law that a majority, any majority enforces on a minority but does not make it binding on themselves. any law that is not universally applied. any law applied to just bankers would be unjustice. any law applied to one particular group, he referred to race but he said something about unjusticeness that applies to all law. republicans never stopped believing that minorities whether it derives from the color of your skin or the shade of your ideology. few people remember the sit-in the public library in 1938.in alexandria. samuel tucker a lawyer, recruited five african american

american go to the public library and sit and read until they are removed. in 1938, the sit-ins of the 1960's had a long history before. they brought down jim crow in many areas years before the civil acts right of 1964. i think in our retelling of the civil rights era we don't give enough credit it to the heroism of the disobedience that brought down jim crowe. you might say that is all well and good but that was a long time ago. what have you done for me lately? republicans did champion citizenship but they became imimpatient. african americans were language - were languishing and

they were below whites in every sense. it was especially harsh for those on the lowest rungs at the time. republicans offered something that seemed to be less tan gible the promise of equalizing opportunity through free markets. now republicans face a daunting task several generations of black voters have never voted republican and are not open to the option. democrats offer federal assistance and republican offer free markets, lower taxes. we believe it will create millions of jobs for everyone. the democrat promise is tan gible and puts food on the table but does not lead to meaningful success. we believe that lower taxes, less regulation, balanced budgets, a solvent social security and a solvent medicare will stimulate growth. the republicans point to the reagan rare where the economy grew at 7%.

if we did that again, we could create 11 million or 12 million jobs, we're creating almost no jobs at this point. after four years of the current policy one of six americans live in poverty. in fact, the poor have grown poorer in the last couple of year pppings this is un -- -- last cpuplouple of years. using taxes to punish the rich punishes everyone because we're all interconnected. high taxes and massive debt are not working. this isn't just democrats, this is democrats and the republicans are piling on the debt but the debt is a burden for you. the economy has been growing at less than 1% and contracted in the last quarter of last year.

i would argue that the objective evidence shows that big government is not a friend to african americans. big government relies on the federal reserve, our criminal bank, to print money out of thin air. that leads to higher prices. when the prices of gas rise to $4 a gallon that is a direct result of your government's debt. when food prices rise that is a direct result of $50,000 we borrow every second. inflation hurts everyone, particularly the poor. if you're struggling to get ahead, if you have student loans or personal debt you should choose a political party that wants to create more money in the private sector. you will get a job when the time comes. some republicans, let's call them the moss covered variety mistake war for defense. they forget that reagan argued through peace through strength

not war. the old guard argues for arming ghadafi and then the next year they want boots on the ground to defeat qaddafi. they have to be involved everywhere all the time. there are some republicans who don't clammer for war. many republicans believe in a strong national defense that preserves the peace. in louisville, in the predominantly african american part of the town 18 schools are failing. the graduation rate from high school is 40%. the head of kentucky's education called it academic genocide. john hopkins researchers call these schools dropout factories. i defy anyone to watch "waiting for superman" and argue against school choice. it has been called the civil

rights issue of our day. i think that is right. threw school choice a student was able to attend a school here in d.c. and he learned he has a gift for composing music. he wasn't reading before that. ronald went to go to barry university. there are countless examples of school choice. talk to the parents of these kids. look at the kids who were interviewed in the movie. maybe it is about time that we rereassess the programs that are failing our children. every background deserves a class that will help students succeed. you will make it and do great things. in every neighborhood, there are kids who are not succeeding because they made mistakes or may messed up. they had kids before they were married or old enough to support them or they got hooked on drugs or they left school. republicans are miscast of uncarrying or condemning of kids who make bad choices.

i for one plan to change that. i'm working with democratic senators to make sure the kids who have made bad decisions, such as nonviolent possession of drugs is not put in prison. we should not take away anyone's future over one mistake. let me tell you the story of two young men. both of them made mistakes. both of them were said to have used illegal drugs. one was white from a privileged background. he had important friends, an important father, and an important grandfather. the kind of family that universities name dorms after. this money had more money than you could count. this family could buy justice if he needed it. the other man was of mixed race and single parent household with little money.

he did not have important friends or a wealthy father. you may think i'm going to tell you about racism where the white kid gets off and the black kid goes to jail. in this story, both were extraordinaryly lucky. both young men were not caught and they weren't imprisoned. instead they went on to become presidents of the united states. barack obama and george bush were lucky. [laughter] the law could have put both of them away for their entire young adulthood, neither of one of them would be employable much less president. some argue that our drug laws are bias. but to be against them for that reason misses a larger point. they are unfair to everyone. white, black, brown, largely because of this idea that one size fits all.

this idea that federal sentences should have no discretion. our federal mandatory sentences are heavy handed and arbitrary. they can affect anyone at any time. but they affect those without the means to fight them. we should stand and loudly proclaim enough is enough. we should not have laws that ruin the lives of young men and women who have committed no violence. that's why i have throughed a bill to repeal mandatory sentences. [applause] we should not have drug laws or a court system that disproportionately punishes the black community. jim crow laws were a public of

edited states and local governments. big government has long been the enemy of freedom. we must always embrace individual liberty and enforce the constitutional rights of all americans, rich and poor, immigrants and native, black or white. such freedom is essential in achieving any long-standing health and prosperity. as toni morrison said, write your own story. i hope that some of you will be open to the republican message that favors choice in education and more compassion regarding non-violent crime, and degrading the opportunity of employment. when the time is right, i hope african-americans will look to the party of emancipation on civil liberty, and individual freedom. thank you. [applause]

>> the senator has agreed to take some questions if you would like to come up to the microphone. i know we have some students who have to leave. let them speak. yes, ma'am. >> tell me your name and where you're from. >> my name is joshua. thank you for coming out. during your speech, you mentioned that you have support

for a government that leaves you alone. you have been one of the fiercest opponents. how can you justify killing last year's autonomy bill and also interfering with the local legislation of our locally elected government? [applause] >> good question. when partisans discuss an issue, you only hear one side. i will tell you this, i did not kill any bill. i had no power to stop any legislation. i'm in the minority. i put up amendments they did not want to vote on. they perceive that as killing a bill. but my intention was to get a vote on some amendments. the democrat majority could have

voted mine down, but they did not choose to vote on them. right now we are on a gun debate. they say i'm preventing the debate from happening. i'm not preventing anything from happening. they have to agree to vote to move forward. they chose not to vote. d.c. autonomy, do i think d.c. could have more autonomy? maybe. but also know the constitution put d.c. under congress's purview and we give d.c. money from the rest of the country, from the tax receipts. i think that oversight of the money that we spend is incumbent. it is the responsibility that we have oversight on the money we spend from the u.s. treasury in d.c. it is a tough road to walk. i'm willing to look at it and see if we can come to a resolution. >> good afternoon, sir. >> good afternoon. >> i am a senior political science major. thank you for coming out here. i'm a former intern for president obama. i'm also a national field organizer for one of the only african-american super pacs in the country. you said that the republican

party is a proponent of voting rights. i have been traveling along with men of my organization all over the country across 30 states and registering african-americans to vote because the republican party had been using the state legislature and the government to prevent african-americans from voting because they do not want to reelect president obama. how can we believe what you are saying with regards to voting rights when we feel based on our intellectual ability to gauge whether you can connect with us

are not, how can you say that to us? [applause] >> me being here today and trying to open this dialog is showing that the republican party is interested in the african american community. as far as trying to prevent, i think it is important to note in history what happened. democrats in the south were very harsh. if you were white and came forward, you do not have to take the literacy test. people were scared and intimidated and scared from voting. if you compare the like of using a driver's license to a literacy test, you would demean the horror of what happened in the 40's and 50's.

it was horrific. no republican is in favor of that. showing your drivers license to have an honest election is not unreasonable. [applause] >> thank you for coming. my question is -- i believe that we must first define which republican party. are we discussing the republican party of 19th century? the abraham lincoln republican party? or the 1968 republican party, richard nixon and ronald reagan? which one do you identify with? >> great question. i think that hits the nail on

the head of what our obstacles are. many people perceive that there has been a completely different party. the argument that i'm trying to change is that we do not talk about it. there are some who do not see an abrupt difference. we see horrible jim crow and horrible racism that happened in the 30's, 40's, 50's. it was all democrats and not republicans.

some of them have switched over to become republicans. but the republicans by nearly were not those people. it is an argument of an obstacle. one of the african-american u.s. senators was a guy -- i am blanking on his name. >> brooks. >> brooks. yes. [laughter] his comment was, if democrats had the incredible history of abolition and emancipation and voting rights, you would hear about it all the time because democrats are good at talking about stuff like that. republicans have done a terrible

job. how many of you, if i said, could he think the founders of the -- would anyone know that they are republicans? >> yes. >> ok. you know more than i know. [laughter] and i don't mean that to be insulting. i'm trying to find out what you know. the republican party has not talked enough about the great history and interaction between the public and party and black history and voting rights in our country. i would try to make the argument that it is an uphill battle. it is. for me to try to convince you that we have changed. that is what i'm trying to do. >> good morning. i'm a navy veteran from kentucky. [applause] >> great. >> i'm a doctoral student here at howard university majoring in political science. there is a bill for industrial purposes. my question to you is being from all of those different places in nook and cranny, or has been a

large amount of african- americans who have been incarcerated because of drug use. how will you take this -- the poor to benefit from this industrialization? >> thank you for the question. it is a good question. it is an example of seeing if i can work with both sides. i signed a letter to ask for a waiver from no child left behind. i'm also lobbying the democrat governor working with congressman from louisville on the issue at the federal level. we have a state law passed, but we need to get a waiver on the federal level. it is important we distinguish.

hemp is a crop and not a drug. use it for paper and rope and clothing. a lot of stuff. it was a huge victory. we won with 90% of the vote when we started out. this is what both parties are working on together. i hope that everyone will benefit from it, including african-americans. on the incarceration thing, i have the bill at mandatory minimums. there have been some steps forward. not standing up here and saying that drugs are good. i'm saying that even the most benign of drugs like marijuana, you will not show up for class. i think you eat too many doritos. [laughter] kids forever doing stuff until they are 25 and a light bulb goes and then they get married

or something and they tend to settle down more. i do not want to see them in jail. i will do everything to get them out of jail. [applause] >> thank you for coming, senator. i'm a freshman from new orleans. you can use the filibuster the confirmation based on the obama's lack of transparency on the drone program. your fellow senator gave testimony on the floor against a bill with a provision -- usda has a right to ignore any judicial rulings.

those in your ideological party, the tea party, has spoken out against it. why didn't not deserve the filibuster of the confirmation cia did they? >> did you give me some is this about gmo ? explain to me what - we had a l ot of votes recentluy. i'm not sure i have all of the details about this. >> the democrat from montana was on the senate floor. it would at a provision in a recent appropriations bill, i believe it was, having to do with agriculture. in it was a revision that tells the usda to ignore any judicial rulings or possible rulings on

foods. it could give legal immunity to agriculture business. >> i cannot remember if we had a vote or not. >> it was passed. >> i'm against giving immunity in general. to big corporations. if we give like immunity to google to turn over records for what you search for on your computer, that is a mistake. the same with any company. if there is an obligation to deliver food that is not harmful to you and they can deliver something that a court says is harmful, we should go to the courts and the government -- it is a specific vote i have to look into.

i really do not remember the details. what is the best answer i can give for now. >> good afternoon. i'm a sophomore from chicago. recently the state of maryland repealed capital punishment. i went to get your view on the death penalty. >> i have mixed feeling on the death penalty. if someone came into my house and killed my wife, if i were there at the time, i would have no problem pulling the trigger to defend my wife. a week or two later, i do not know if i would have been a big enough person to forgive. i also know that the system has made mistakes.

i'm a huge fan of our court system of having a trial by jury in having a judge, there is some evidence in some rape cases that involve murder also and it was proven time after time that they were making mistakes. the courts are making mistakes. i do have some reservations. i'm not sure exactly what the answer is. i do in that most penalties for crimes should be done at the state level and not the federal level. i'm not a big fan of federal level except for maybe treason. >> thank you. thank you for coming despite the fact that you spoke up against the voting rights act. aside from the moral reason not to discriminate, when is it ok legally to discriminate? >> i think that is a mischaracterization of my

position. i've never been against the civil rights act ever. i still continue to be for the civil rights act and the 14th amendment. >> [inaudible] >> there was one interview that had a long extended conversation about the ramifications beyond race. i have been concerned about the ramifications of certain portions of the civil rights act beyond race. it is being applied to smoking, menus, listing calories and things on menus, and guns. i do question some of the ramifications and extensions. i have never questioned the

civil rights act or came out against it. your characterization is incorrect. [applause] >> good morning. i'm a native washingtonian living in the colonial city. d.c. residents pay more in federal taxes than they get back in the federal government. my question is this -- the 14th amendment was passed to protect those enslaved coming out of slavery and not corporations. do you believe corporations are people that have the same protections as natural citizens without any of the negativity? second, the constitution requires that congress declare war, the power to declare war is the power that congress has. he allegedly lied about an affair.

george bush be considered a war criminal for getting the u.s. into a war with iraq? should barack obama be impeached for getting into libya without an act of congress? [applause] >> how about yes, no, no, yes. [laughter] no, seriously, corporations are not the same as people. you do not have a trial by jury. i think sometimes corporations use government to get special privileges and i'm against that. i'm against special tax reductions for corporations. i'm against anything that takes your money.

however, on the other side, corporations do have a very important function in our society. let's say when you graduate and you get out and you start a plumbing business and you are doing pretty well and then someone sues you. one of your pipes breaks and it was an accident. now all of your profits and assets are taken by the court. should they be able to get your house? bankruptcy is debated on all the time. it could be toward creditors. there has to be some balance. there needs to be some protection. you will meet people in your life who have been bankrupted the times and then go on and hit it big. if we ruined them and said, we will take your house and something else -- i try to do my best all the time, but i'm human. but should they be able to take

my house and things i have worked for four years? i have a corporation that excludes me from them coming and taking my house. it is not all huge operations. sometimes it is mom-and-pop operations. i'm opposed to republicans or democrat presidents taking us to war without a declaration. [applause] >> just the two with the microphones. >> good afternoon. i'm a graduate student at harvard university in the physics department. my question is in reference to something you said earlier in your speech, namely that you are for the market being free. i'm someone who agrees that the market should be free, but i wonder to what degree?

for example, the idea of there being no longer epa or usda to regulate things that are helpful or not helpful for citizens is a problem. also, the idea that a protection act can be tucked into various cronyism is upsetting to me. to what degree is the republican party and you in particular dedicated to making sure that free markets are in fact free? [applause] >> i think it is a good question. it is something that i think we have done a poor job. the publicans have done a poor job of promoting that we believe in protection for the environment. i believe we can do a better job. i believe that if you believe in strict property rights and no one should pollute their

neighbors property, you should get absolute justice. the clean water act is and has an appropriate purpose or goal.

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[captions copyright national able satellite corp. 2013] [captioning performed by national captioning institute] >> thank you. let me move to the management side of the house. again, i want to echo some of the comments made by some of the colleagues on the other side. senator white house. one of the things we can do is how we save the money in terms of inefficiencies and duplication. ne of the concerns i have as first f gepra, for the time ever, we have a requirement in place where agencies have to identify not only their most successful programs but their least successful programs.

quite honestly o.m.b. has not been as forthcoming as we would like on that. there are have been some times that have been missed. there is also supposed to be a retirement of trying to narrow down each agency's amount of goals. anybody that is managing anything snows you have 50 goals you don't really have any goals at all. this legislation required a targeting of the top three to five goals per department in the agency. we would love to see more collaboration and cooperation. >> with regard to gepra, it has changed since i've been here before. it is also in terms of what i've been briefed on so far. we have actually seen improvements in where that is, a long way to go but i think we have moved from a box-checking exercise to a strategic planning and prioritization. i think this is something where one has to learn the skills and

i think hopefully, as part of, if i am confirmed as part of the leadership at o.m.b. that we can continue to work on it. i think one of the most important parts is back to one of the things i mentioned in terms of lessons learned is culture. in creating a culture. this is not a box-checking exercise. this is a management tool that will help you deliver impact and getting that to be a tool that is embraced in terms of thinking about how can i do my job better? and so that culture shift is something that i'm hopeful that working with this committee and the other committee that i spent time with yesterday that we can work on together to get the kind of savings and clear movement towards impact that is definable and recognizable. >> my next comment, this is the report that just came out yesterday on education. this is not sexy stuff. this is hard, grinded out lots and lots of focus on how we tax and spend but management

component has to be a higher priority. i look forward to working with you. thank you. >> thank you very much. senator sessions? >> thank you madam chair and senator sessions. appreciate you yielding your time. ms. burwell, welcome here. i want to reiterate, i appreciate the fact that you have to sacrifice, you and your husband. this is a big job. i do appreciate you're willing to serve. you mentioned in your opening comment a couple of things that are dear to my heart. problem solving and management or measurement and leadership. i think that is really the key role of o.m.b. i was one of those senators that president obama invited to dinner. it was interesting listening to him behind closed doors describing the problem pretty accurately. he made the comment that the problem with medicare reform is for every dollar that americans pay in they are going to get $3 out in benefits. we have been saying that. he also said most americans

don't understand that, which is a problem in solving a problem. let's talk about that. from my standpoint, and i have solved a lot of problems in business. the first step in a 12-step program is raising your hand and admitting you have a problem. right behind that, you have to properly define the problem. first of all, do you agree with president obama's assessment that the problem with medicare is $1 in and $3 out? >> i agree with the actual dollars in and dollars out. the question is what is that rooted in? numbersoted in costs or going to the next step? >> all i have ever heard president obama say is publicly we just need modest reforms to medicare. it is a $175 billion a year program. you a dollar in and three dollars going out, would you agree that implies more than modest reform is going to be required to save that program? a very important program for americans? >> i think that very important

program to americans, i think what is important to it is thinking about it in terms of how do we meet the appropriate levels of commitment that we have made at the same time that we have addressed that dollar in, dollar out program. >> reform is required, though. not just modest? >> i think that the reforms that are required when we start looking at some of the numbers and again, i'll work off what i have, which is the fiscal offer. when we see that additional $400 billion in that healthcare space, i think we're starting to talk about large numbers that if done in a way, that comes back to that earlier point that i made about bending the cost curve, then we can start to get more over longer periods of time, when you start to get those cost savings embedded. >> let's start with social security. we want to do everything we can to honor those promises. i have some charts we put up on the screen. are we ready with those? this is from the social security administration. i hope you will acknowledge these are accurate. over the next 20 years, social

security will run a cash deficit of $5.1 trillion. i've made the point that i don't believe this is a solvent program. the only reason anyone can claim that is the fiction of the social security trust fund. it is true we ran at surpluses at more than $2.25 trillion. the problem is it holds an asset called u.s. treasury bonds, which in the hands of the federal government really has no value. it is same thing if you had $20 and spent it. when that money is spent, it is gone. wrote yourself note and put it in your pocket that said i have $20. you have a piece of paper that you have to basically offer somebody else and get them to give you $20 in exchange for the promisory note. would you acknowledge that

point? >> when i think about the trust fund and those commitments, i think of those commitments and n the context that we make in the the markets and i think point of harkening back to the years when i had the opportunity to work on balanced budgets. there was the social security lock box. >> do you think that has value to the federal government? do you believe the trust fund has value to the government that it can pay out and meet that $5.1 trillion deficit? >> there is a commitment that we will pay. >> let's go to the next couple of slides here. this comes to the office management and budgets. next slide. hit it. any time. we have a technical problem here. ok. let me paraphrase. these balances, referring to the trust fund are available for future benefits but only in a bookkeeping sense. they are not assets to the government as a whole that can be drawn down to fund future

benefits. it goes on to say basically there are claims on the treasury. in general, when you're talking about a consolidated statement, you have social security trust unds that hollywoods bonds and on the other hand you have the u.s. treasury department that has the liability. so you have an asset in one hand and a liability in the other. the office management and budget claims next to zero. would you acknowledge to the federal government the social security trust fund has no value in terms of paying off that $5.1 trillion in deficit spending over the next 20 years? >> as we consider the deficit numbers, these commitments are in the consideration as we think about it. out s there any value drawn of that social security trust fund to fund the $5.1 trillion worth of promised budget benefits? do you believe that has any benefit to the government? are you disputing what o.m.b. has basically published here?

>> what i do believe is it has value in terms of the trust and how we think about the trust. the first chart didn't -- >> no dollar value? there are no dollars there. there is nothing of value there to pay those benefits. isn't that correct? >> i think when we have some issue on some debts as we do in terms of how we think about that as well now we have a very large deficit. there are investors all over the world purchasing that debt. the question is how do we think about that? >> we have made promises to seniors that we're going to honor. the only way to honor those is for the treasury department to increase taxes on the american public or float more bonds. there is nothing you can cash in the social security trust new and has any value to pay those benefit benefits. isn't that correct? >> until 2033, at that point. that is at the point where we have the interest in those investments stop. >> but the investments are worth

zero to the federal government. that's my point. social security trust fund will give those bonds. how does the federal government fund those bonds? how do they make the payment on those bonds? >> they make the payment -- the trust fund has been self-funding for many years. as you reflected in the chart. there comes a point where that shifts and then we draw down the assets. >> senator, with all due respect, you're over your time. >> thank you, madam chair. >> thank you. >> senator murphy? >> thank you very much, madam chair. irst i wanted to ask you about a specific program important to my community, which i mentioned when we met. it is in the budget that was released today, which is very ood. i wanted to ask if you feel like you have your hands around understanding the role that that program plays as the federal government has changed the mission to have timber stands that have contributed to the enormous success of our timber counties and now they are much

more challenged with those additional restrictions. >> i think i have more to learn in that space. the two things that i do recall is back when i was previously in the administration, the conversations around the spotted owl and other things in the timber space, i learned then. i think there is much going on. the only other thing i would say is reflecting on the comments, senator manchin and senator rockefeller had yesterday. being from a rural community and having my mother at the age of 65 become mayor and talk to me about rural economic development. >> thank you. i'll look forward to continuing this conversation with you. we are working hard to try to create a balance. setting aside environmentally sensitive lands within the forest and having sustaining supplies. the government has changed the

mission of the lands, has undercut deeply the financial foundation for those counties and therefore pledged to compensate for that. that pledge must be honored. that is pledge that i hope you'll continue to understand and support, as i mentioned it is in the president's budget. >> senator, i look forward to having -- continuing these conversations. >> thank you. i wanted to ask you about tax expenditures. they have grown enormously since 1986 when senator packwood ed the reform of the tax code. we spend over a trillion a year on deductions and credits and ways of bypassing accountability for paying taxes including offshore strategies. those areas have grown enormously and include some very wasteful spending. as you envision your responsibility for o.m.b., do you include in your portfolio the challenge of understanding

the money that we spend on tax loopholes? >> my previous experience and my expectation of what will happen is that the economic team are all part of that conversation and i would look forward to being a contributor where treasury leads. >> i think that was a yes. is that a yes? >> i will be a part of the conversation. i do respect that treasury has the analytical capability and plays the lead role as does the finance committee and ways and means here on the hill. taxes register very much impact the budget. i hope you'll understand spending the tax code is very uch spending and needs to be a part of the holistic understanding and the allocation of shaping the way we spend resources in this country. third, i wanted to turn to the

cost-benefit responsibilities of the department of o.m.b. and certainly part of that is to try to quantify the benefits, not that are, if you will, obvious economic plus and minus but also the social impacts and are you kind of familiar with that broad framework and can i count on o.m.b. to address the broad social economic impacts when they are evaluating the impact of regulations? >> yes, as we worked through it at o.m.b. and if i'm confirmed, in the management of it as we think about regulation, we are very conscious what the core objectives of regulation are the sense of public safety, public health and the environment. and that that is part of consideration as one looks at the cost and benefits of any regulation. >> i'm delighted to hear

that. we're seeing in oregon right now just recently massive forest fires. we had the biggest forest fire in a century. one the size of the entire state of rhode island. enormous growth of pine needle infestations because of the warmer winters. we have a big problem in our oyster farming because the oyster seed are having trouble being propagated because of the slight increase of the acidity of the ocean. that is just in the state of regon. when the rules are related to our challenge of controlling the warming of the planet and warming here in america, that impacts my state in so many ways, those are costs that would fit into the framework of o.m.b.'s responsibility to do cost-benefit analysis. >> as we think through those issues, the issues of climate change, i think, are extremely important and some that the president has said will be

prioritized and if i am confirmed, i look forward to having the opportunity to understand how those types of things that you have articulated weigh in to that process. i think e.p.a. will be a part of that and i look forward to a good and strong working relationship with e.p.a. >> thank you. i'm out of time here. i'll put it this way. i realize you can't speak to the individual pieces such as is there really a problem in the oyster seed or is there really a problem with the pine needles, but in terms of your understanding of the theory for cost-benefit analysis, social impacts, are they ones you intend to make sure are waved in that responsibility? >> it was my experience before that certain social impacts in terms of whether it is impact on an individual or others are weighed in the process. >> thank you very much. thank you madam chair. >> thank you.

senator hutchons? -- sessions. >> thank you. ms. burwell, you mentioned the savings under the affordable care act. the savings were spent and are projected to be spent over time on to fund the affordable care act. is that not correct? >> senator, my understanding is that c.b.o. has scored that $100 billion would be the first decade and in the second decade when you start to get the type of positives spiral that i was talking about, they have scored that at a trillion dollars. >> what they said was, and i asked them explicitly this fact that the money that was saved by reducing provider payments in medicare, was used to fund the new affordable care act and can't therefore simultaneously be used to fund medicare.

the money has been spent. this is not a manner of real dispute. i don't want to go into it. but you need to understand hat. they said it is double counting the money in a letter they sent to me. it is exactly correct. there are no assets in the notes that are held by social security and medicare to fund future expenses. the federal government is going to have to borrow that money on the world market or raise taxes to honor those commitments because the money has been spent. there are no assets there. you need to know that. this is going to be an important issue. and the spin has been different over time. but it is not accurate. what i told you is accurate. with regard to the budget, you have talked -- i assume you'll be submitting next year, do you plan to submit a budget that

will balance in 10 years? >> senator, the question of balance comes back to a comment that i made earlier about how i think about the role of the budget. i believe that the role of the udget is a reflection of how we meet, we the government meet our responsibilities to the american people. and i believe that those responsibilities are in three areas. >> my only question is do you expect to submit a budget in which the revenues are equal to the expenditures and balances? >> senator, we are in a very, very deep hole and when one thinks about how quickly one wants to come out of that hole, i think you to connect that to the results for the american people in terms of the economy and -- >> are you not acknowledging the president has not submitted a balanced budget and has -- in each of his years in office and this year will not either. isn't that correct? >> senator, i won't speak to the 2014 budget, as we discussed.

with regard to the historical budget, the 2013 budget, i think what the president has done is proposed a budget, that is, and i know we have disagreements about the word balance. there is balanced budget and there is the word balanced approach. i know they are very different point of view on that. >> my colleagues used that balanced word 230 times in the budget debate and the budget of course did anything but balance. the president is not going to submit a balanced budget, you know it and i know it. and you're not going to submit one. isn't that correct? you're not going to submit a budget that you expect to balance next year? >> senator -- i -- >> can you answer that, yes or no? >> senator, i don't know. if the economy takes off and does an incredible, an incredible job this year, if there are incredible dynamics, one of the things that i don't think i can foresee right now and commit to is we could have never known about 9/11 and the

commitments that we had as a nation. >> ok. i acknowledge that you won't answer my question. i will tell you, you are not going submit a balanced budget next year. the president has dismissed the value of the idea. i disagree and i think the american people disagree. let me ask you this. what is the current level of debt as a percentage of g.d.p.? >> the current level of debt as a percentage of g.d.p. is 77%. >> is that public or gross debt? >> that is public. >> you know what the gross debt is? >> the gross debt numbers is depending on which baseline you use, the c.b.o. baseline, the senate baseline or the house baseline all differ slightly but are around the 100 level. >> 104%. are you aware that the study in e best selling book is different that when gross debt

reaches 90% of g.d.p. that will bring down economic growth? >> my understanding of the analysis was that it is based on a number of international countries and not just the u.s. and that when one compares most comparable thing that you actually have to go to public debt, debt held by the public. >> i have to correct you on that. i want you to look at this. that will be my request to you. hat is so important. it is not when you examine their study. it is based on gross debt. and the european central bank, the international monetary fund and the bank for international settlements have also done studies dealing with the impact of large debt on the nation's economy. they have concluded that debt levels that we are today will pull down growth. and it is the gross debt. you have to look at that number. >> senator, where i think we -- >> if i'm correct, we are seeing

slowed growth today, i believe, and i believe we are as a result f this debt. but you think that is not -- so i'll let you explain that. >> senator, where i think we both agree, is that we both believe debt as a percentage of g.d.p. should be on a downward trajectory. i think that is a place that we all agree and that when one connects to that point which is deloast the american people in terms of jobs, in terms of measures that are closest that help us think about that outcome, that that is a place where we all agree. we want that to be a downward trajectory. with regard to the study, i'm happy to and will look at it again. i have a different understanding of what they were using as a basis for this study and look forward to having the opportunity to look at that again. >> thank you. that is the quote in that report, above the threshold of 90% medium growth rate and followed by 1% and average

growth rates fall considerably more. i would note if we have that chart. i think this is important for my olleagues. debt is already hurting growth in my opinion. look at this chart. the blue line was based on what was predicted for growth two years previously by c.b.o. in 2008, they predicted 3.1% growth. it came in at 2.4%. in 2009, they predicted 4% growth. for 2011, it came in at less than half of that. in 2010, they predicted 4.4% growth. for 20 12, it came in at .2%. i believe we're seeing delayed slow growth as a result of the size of debt we have now and therefore i think it is

imperative for us to have growth to get the debt coming down in a substantial way. not just a token way. >> senator, as i said, i believe there is a place that we do agree and that is the numbers should come down. with regard to these questions of growth, as one of your colleagues earlier said, i think there are different i points of view in terms of why we have the current growth rates that we have and in terms of why those growth rates are not where they should be. the other thing, and that harkens back to a comment i think the chairman made that everyone agrees on. return to regular order actually is an important part of how the economy views things having had the opportunity to be in the private sector for a period of time now, the crisis to crisis lurching and the uncertainty that creates does affect g.d.p. because it affects businesses' willingness to invest and think about how they are going to manage.

i think there are a number of contributing factors to when we think about that number and some differences of opinion. >> thank you very much. senator kaine? >> thank you. i look forward to supporting your nomination. i think you the rights person at this challenging time. i think your background well equips you for the role. i think you bring some good karma having been part of a budget operation and having as part of your legacy balanced budgets. and the president you siveed and the congress and -- served and the congress and people you served with have a legacy we will and i believe that will be brought to bear in a positive way should you be confirmed and i'm confident you will be. my comment is on the regular order point. this is sadly to put pressure on you. i think that concerns about the submissions of budget on time are shared by both parties and i know many have expressed them to you and i did in my meeting.

i'm puzzled about why this president this administration, and i support him so much and feel like so many of the aspects of the president's achievements from, you know, getting bin laden to a stock market that is rising to hiring and job reduction, so many things the president can say and with his team, i put my thumbprints on something that is going in a positive direction. your portfolio is the one where this president really is still looking for a very signature achievement in the budget area. the late submissions of budgets probably, to some, seems inconsequential yet it is statue picture to. the just to tell you from the -- statutory. the people who are doing this work, as you pointed out at o.m.b. and elsewhere are highly comp at the present time and talented.

-- competent and talented. late budget submissions send the message of lack of concern, it is not that important, yet, in terms of where we are now, open any newspaper or turn on any news account for the last few years, everyone has been saying how important this is. one of the things that is really important for you to do is to help us as we wrestle towards finding the big picture budget deal and to cement, you know, this, what by all rights should be the president's account of what is in the budget area. i'm very happy that he has picked you to do this. in this particular area, i think the president is looking far very soiled achievement and you're the person -- solid achievement. i view that as a very weighty

responsibility. my one question is this. in the votes surrounding the passage of the budget, an interesting point came up. an amendment proposed by senator isaacson. it was passed. beginning to explore as many states do a two-year budgeting process, where you would do a years i t over two think many states find this is something that helps them a little bit with planning. it can help a little bit for incoming members of congress to come in. it has some appeal to the legislatures and i can see why it passed when it was proposed in the senate. i just would like your general thoughts about budget process and whether the notion of a two-year budget is something you thought about and if so, what is your take on it? >> the issue is one that i had the opportunity to speak to when i was at the office of budget and management before.

i think there are some positive aspects to the issues that you can do most of what you articulated in your explanation. so what i think is -- i think the question is what is it that will most help us get back to a regular order and a process that works? if i am confirmed as the director of o.m.b., something like that is very much a ledge slavet decision with the -- legislative degrees. -- decision. to think about how we can work together to get to a place where if that can contribute to us getting back to a regular order where we have this prioritizeation. as i'm entering back in and thinking about these issues and studyingened that sort of thing, the thing that is missing is the form for prioritizeation. the conversations are in their

pieces. conversations in their pieces don't require us to bring it together and therefore actually stand above our particular interests as representatives. of course everyone represents their state and distribute to the best of their ability, but they also represent the american people broadly, and it is only in those where we bring everyone together where they have to make the decisions together that you actually act in that other role as well. if things like bi annual budgeting can help with that, that is something i would love to be a part of the conversation. that is a decision of the congress. >> senator king? >> i agree. it is one of the most interesting votes, the two-year budget vote. any vote that curse at 2:00 a.m. -- occurs at 2:00 a.m. i have a slightly different view

of health care costs. i believe that virtually the entire federal budget deficit problem on an ongoing budget is health care. it is the cost of health care that the government buys in very large quantities in terms of medicare, medicaid and federal health benefits. to me, though, the solution isn't to try to squeeze and change medicare. it is to try to deal with the overall health care escalation, which affects all of us as private citizens and businesses and everything else. i think you have touched on this, but what i'm interested in is how can we, as governmental entities, affect the larger issue of health care costs? one way i thought of is we're a very big customer. maybe as a customer we can start to affect, for example, medicare should provide every provider they deal with have electronic

medical records. just say as a customer, this is something we're going to do. iver been hearing about electronic medical records forever. it just doesn't seem to be hang. it is happening on a piecemeal basis. >> you touched upon an issue that i actually raised yesterday in my hearing yesterday. i had the opportunity to be on the board of a major health institution, the university of washington medical center as they were starting on that process of transfering to those records and now i'm in a health care system where they are now fully transferred in northwest arkansas. the experience both in quality of care and cost savings is one that you see err day. i am able -- every day. i'm able to see the results of my children's tests on the demure -- computer. that calling back and forth

worth the hours in is eliminated. forth with the nurse is eliminated. it also helps with preventive care. i had one of the nuns question me on why i had not gotten my flu shot. it is recorded that it was there. >> you see my point? we're the world's largest customer. we can influence these decisions. >> and i think those are questions that we would work through with the office personnel management and how we do that. i think the question of customary influence and how we implement and legislate, i think those are all tools that we have to think through. the customer one is one that i welcome and understanding what we are and not doing. >> i judge them by if they hand you a clipboard when they walk in. if they do, they are behind the times. to change the subject entirely.

you were there at a time of a balanced budget. i think the only balanced budget in the last living memory, 40 years or something like that. it is very easy to spend and it is very hard to tax. my question is do you think the time has come to consider some kind of external restraint in the nature of a balanced budget amendment or something like to to compel the federal government to ultimately get to a balanced budget? i realize we're not talking about next year or five years or 10 years, but at some point, i just wonder if the realities of american politics, the will, if you will, has to be governed by some constraint. all my life, i've been opposed to a thing but i have come to believe given the realities that maybe we have to do that. >> senator, the question of a balanced budget amendment, i think we should be able to make the decisions without the

question of an amendment. i think we have talked about it today. it is where everyone wants to go in terms of taking that debt-to-g.d.p. ratio down. i had the opportunity to work on balanced budgets. those were in a particular context of a number of things. what i believe is fiscal discipline. ref knews at a certain level -- revenues at searn level and good economic health. one needs to take care and that is the job. i believe that we can make our way to our a place without an amendment specifically. >> i guess i would fall back on president reagan. trust but varyify. i think there has to be something to force the verification. just looking at history. final question. one of the rules of o.m.b. is in the regulatory review area. there has been some discussion about that today. when i talked to small businesses in particular, the

regulatory burden is the first thing they mentioned. i hope that you will take very seriously the regulatory review process and should certainly meet the deadlines on a timely basis. to really try to assess what will the impacts of this being b and are there ways this goal can be accomplished without increasing costs, burdens and time. very interesting. i talked to companies about the affordable care act. they are more concerned about the regulatory retirements than they are the costs. at least that's what i'm hearing. the number of forms they have to fill out. these are companies that have their own health insurance. they still have to go through a long regulatory process and i hope that this is -- this will also be an important part of your attention when you're in this position. >> the issue of small business actually is a role throughout o.m.b. you mentioned it in the context of regulatory and rule making.

making sure that is at the table. i think it actually occurs in other places in o.m.b. such as the strategic sourcing initiative and making sure that when one thinks about strategic sourcing leadership council it is the seventh largest department of contracting but it also includes small business. i think there are a number of place where is o.m.b. has a role in ensuring it is expressed and understood. >> thank you very much. i really appreciate your willingness to take on this task. it is one of the most important jobs in the country and i am delighted that you're willing to do what it takes to make this happen for our country. thank you. >> thank you, senator. >> thank you, senator sessions? i'm sorry. senator sanders. >> you confused -- >> no.

i'm going back and forth. >> thank you very much for being here. i look at your opening remarks and you indicate that your primary focus will be deficit reduction. increase the efficiency and effectiveness how our government works and grow the economy and create jobs. it seems to me those are all important initiatives . you're missing one that is very important. dribs of wealth and income the -- distribution of wealth and income in this one. we have seen modest economic growth but it didn't mean anything for working families because all of the increase in income went to the top 1%. as one of the major financialed appointed, if you are through the president, the distribution of wealth and income which is now widest of any major country on earth and worse than any time since the 1920's, is that an issue of concern to you?

>> yes, sir, senator, it is. the issue of that and how a healthy economy, to me the definition of a healthy economy includes the point that you're making, which i think is a very important point. healthy means not just for a few. it means across the economy. as we think about what happens when there is growth. it is something that is important to me, senator. >> is it a major concern to you that between 2009 and 2011 all of the new income went to the top 1%? >> senator, it is a concern. and one, that while i have not seen the president's budget. i think the president's announcement about the minimum wage issue is one that i think is important. >> yeah, it is, but cuts in social security are also important, which would move us in exactly the wrong direction. in terms of revenue, i know senator warner raised the issue. as a 2, 15.8% revenue

percentage of g.d.p., was the lowest in 60 years. and yet at a time when corporate profits are at an all-time high, corporate income tax revenue as a percentage of g.d.p. is near a record low. corporate profits all-time high. percentage of g.d.p. an all-time low. the president has brought forth a budget in which he wants to see tax reform as revenue neutral when one out of four major corporations pays zero in tax, do now not think there might be an opportunity as part of corporate tax reform? >> i think when we think about revenue, i think about it in its entirety. i think we're up to 17%.

moving in that direction, i think you and i have discussed, i do believe there is an opportunity in the revenue space. if we think about the corporate issue, and i will defer to my colleagues at treasury and i think the director will be here tomorrow -- will be on the other side tomorrow, talking about these issues, i would defer to them. but i think the question of how we think about corporate tax issues and tax overall, when i think about tax overall, i think about three principles. simplicity, progressivity and deficit reduction. >> in 2011, corporations paid profit in their taxes. the lowest since 1972. do you not think it is a good idea to look to corporate america for more tax rev snupe >> i think a balanced or comprehensive approach require us to look at all options as we

think through things. i think the question of the corporate tax base are the changes that we need broadening turnover base and a closing of the -- of the base and the closing of the loopholes results in changes in the revenue. >> why do you think -- the issue the end of re, at the day, the united states spends almost twice as much per capita on health care as any other major nation. we are the only major country on earth without a national health care program guaranteeing health care to all people. you think there might be a connection between the fact that , our outcomes are often not as good as other countries and we don't have a national healthcare program? >> i think the issues are ones that are equally important. both the cost issue -- i think the affordable care act is an

important part in the step forward. >> my question was -- is, i don't think we have a medicare or medicaid problem. we have a healthcare problem. our healthcare system spends, as a nation, almost twice as much as many other countries and our healthcare outcomes in many cases are worse. we are the only major nation without a national healthcare system. do you think there is a connection in the fact that we spend so much and we don't have a system? >> i think the question, what is at the root cause probably a number of things. but i think you articulated. i agree with what you articulated is the connection between cost and outcome. then i think the question is what is the best way to get that connection between outcome and ost. we often have trouble doing that. >> do we have a healthcare system?

i was not aware that we had a health care system in america. >> i meant broadly for the nation as a whole and the marketplace. >> do you think that marketplace healthcare system might be one of the reasons we spend nearly twice as much as any other country on healthcare? the role of private for profit health insurance companies? >> i think it is a combination and i will come back to what i think is a core point, which is how do we align the outcomes with what we're paying for? i think that gets to some of the parts of the conversation that we've had in a number of different places and i think at the root of trying to bend those curves and getting the cost down and the quality of the result up, when people are trying to measure what they are doing against an outcome, in other words a health result, i think that makes a difference. we had conversations in yesterday's hearings about this with regard to looking at those results they are having in terms of the quality of their outcome in a cost-efficient manner.

i think that is at the root of the issue. >> my time is long expired. thanks. >> thank you very much. >> thank you so much, madam chairman for the hearing. i appreciate you, ms. burwell. i look forward to working with you. i think things will go well for you. i will say in all honesty, i think you were using some of the spin tactics that the administration has been using on this debt. we're going to have to be able to talk directly about what real numbers are, what the real finances are. we're talking about trillions of dollars. we can't be confusing about his. came in and spun his way and got an election successfully. it is not right way for us to reach a bipartisan agreement. i would note that the president's budget embargo has now just been lifted, is out today. it proposes $1.1 trillion in new

taxes but he proposes $946 billion in new spending. basically it is a tax and spend budget. the idea that we have a balanced plan where we raise taxes in equal amount with the reduction in spending is never what has been presented to congress by this administration. it has always been raise taxes nd raise spending. that's why we remain on an unsustainable course in my opinion. your former boss, mr. bowles said this nation has never faced, in that very seat, a more predictable financial crisis because we're on an unsustainable path. i just would say to you, i look forward to working with you. you're very good to talk with. i think we can have an open relationship. but it is a crisis time and if i'm correct, that the debt already is impacting our growth

rate, then we have an even stronger imperative to reduce t. the ryan budget, which balances, the house budget which balances shows you can grow spending at 3% a year. the budget will balance. it just can't grow at 4.5% a year. that is the kind of concrete goal we need. this vague idea of a sustainable plan or sustainable deficits, that kind of words create no accountability. no firm goal at which we can adhere to and fight for. so i look forward to working with you. it will be a challenge. i'm worried about the growth that we're not seeing and if get this thing on the right course, i think america will bounce back. i believe there is a lot of vibe

there.ancy out a lot of potential but there are some clouds that we need to remove. thank you so much for your testimony today. >> thank you, senator sessions, we'll have a chance to debate those numbers which you put out about the president's budget, and i think we will have a debate about and continue whether or not the ryan budget is a balanced budget in many different aspects as we continue forward. ms. burwell, thank you very much for your testimony today and for your willingness to participate in public service at a very challenging and important time. we greatly appreciate the sacrifice of both you and your family, so thank you very, very much. as a reminder to all of my colleagues, additional statements for today's hearings are due in by 6:00 p.m. today to be signed and submitted and also for the information, my colleagues again, it is my intention to move to ms. burwell's nomination as quicksly

as possible. we have a 48-hour retirement. i would like to do it as quickly as possible. early next week. >> i have a few questions to submit. i think they can be handled expeditiously. >> very good. just a reminder to all of our committee members, we will have the acting director jeff here tomorrow to discuss the president's budget. with that, i will draw this earing to a close. >> acting white house budget director will be on capitol hill this morning taking questions from lawmakers on president obama's budget request for 2014. watch live coverage chaired by congressman paul ryan at 10:00

a.m. eastern on c-span 3. turday, book tv is live from from the book festival. maryland in 1812, war, slavery and opportunity. 11, the changing suburbs and at noon, america's ongoing involvement in afghanistan. evolving roleser of women in society. thisnnapolis book festival weekend on c-span 2. >> two u.s. senators, a democrat and republican, announced wednesday they worked out a compromise on expanding background checks on firearms. we'll hear from senators joe manchin and pat toomey later.

here is some of the gun debate from yesterday. we'll hear utah republican senator mike lee and connecticut's two senators talk sandygun violence and the hook school shootings. >> senator from utah. >> unanimous consent that the phone call be suspended. >> quout objection. >> for several weeks now, washington and the rest of the country have been debating several new gun control proposals. along with a number of my colleagues, including the minority leader, i have declared my intention to resist an immediate vote on any new restrictions that would serve primarily to limit the freedoms of law-abiding citizens rather than reduce violent crime in america. unfortunately, the current gun control proposals would do just that. more than two weeks ago, we informed the majority leader that we will exercise our

procedural right to require a 60-vote threshold in order to bring this legislation to the floor. we have taken this step under our senate rules of procedure for three principle reasons. first, the senate serves an important nunks our republic, by enfunction in our republic making it more difficult for a temporary majority to impose its will unilateraly. unlike the house of representatives, it allows for meaningful debate helping ensure that a fair majority of senators cannot impose controversial legislation on the american people without robust debate, discussion and broad-based and bipartisan consensus. contrary to the statements made by the president and by some of my friends across the aisle and even a few from within my own caucus. we have no intention of preventing debate or votes. quite the opposite.

by objecting to the motion to proceed, we guarantee that the senate and the american people would have at least three additional days to assess and evaluate exactly how this particular bill might affect the rights of law-abiding citizens and whether or not it might have any significant impact on violent crime. already, we have seen consensus against passing any new gun legislation, at least not without broad bipartisan support. during the recent budget debate, i offered an teammate establish an amendment to establish a 2/3 vote requirement. it was 50-49. theyvote demonstrated that believe new gun legislation

should have broad-based support in the senate before it is passed and before it has the opportunity to become law. a 60-vote threshold will ensure new gun laws not forced through the senate with narrow support of just one party. second, this is about a lot more than magazine clips and pistol grips. it is about the purpose of the second amendment and why the right to self-defense is an special part to self-government. it can serve as the first line of defense against our purses and property. it makes us more dependent on our government for our own protection. government can't be everywhere all the time. limiting our rights makes us

less safe. this is deeply troubling to many americans. any legislation that would restrict our basic rights to self-defense deserves serious and open debate. further, as we have seen just today, washington sometimes prefers to negotiate back room deals made in secret far from the eyes of the american people rather than engaging in thorough, open and transparent debate right here on the senate floor. the day before the majority leader has set the vote to proceed, the bill's critical components are still not there. right before we have set the vote for motion to proceed to the bill, we still don't know what these critical components look like. we have no legislative text the evaluate the so-called compromised language on background checks and we have no sense of one amendment, if any

amendments at all might be allowed to be offered. requiring a 60-vote threshold solve solve some of hese problems. finally, many of the provisions that we expect to see in the ll are both constitutionly problematic and would serve to limit the freedoms of law-abiding american citizens. some of the proposals like universal background checks would allow the federal government to surveil law-abiding citizen who is exercise their constitutional rights. one of the provisions we expect to see in the bill based on what we saw and the judiciary committee on which i sit would allow the attorney general of the united states to promulgate

legislation that could lead to a national registry system for guns. something my constituents in utah are very concerned about and understandably so. you see, the federal government has no business wondering where or how often you go to church, what books and newspapers you read, who you vote for, your health conditions, what you eat for breakfast and the details of your private life including your lawful exercise of rights protected by the second amendment and other provisions of the bill of rights. such limitations may, of course, at times, make it harder for the government to do what it feels like it needs do. but we have to remember, the constitution was not written to maximize or protect the convenience of our government. the constitution was written to protect individual lirkt and thankfully so. -- liberty and thankfully so.

we should not allow a bare majority to jeopardize rights of the american people, protected in the first 10 amendments to the constitution. the senate and the american an le are engage engaged in important debate today. i look forward to this debate and i hope that others will join me and my colleagues in demanding that our discussions take place in full view of the american people. thank you madam president. >> call the roll. >> thank you, mr. president. mr. president, it goes without saying that we all do our jobs here and that we seek a seat in the united states senate for a reason. we decided to run for this high office because of issues that we deeply care about, whether it be more affordable health care or better housing or lower tax. in a job like this, you're driven to find the issues that move you.