>> the government shut down has hurt our economy and slowed economic growth. congressman van hollen mentioned a couple of the headlines. the one that is particularly painful to me is entitled "consumer confidence collapsed this month -- thanks congress." grow wages, create good jobs, and help our people. we want to make sure that the middle class can stay on the rungs of the middle-class aonomic ladder and we want policy to help those who are to there, get their -- there. i want to give three points. code justhe tax

turned 100 and it looks every day its age. it is a broken, in efficient mass. -- mess. it is time to bring it into the 21st century. i'm committed to tax reform. and loopholesffs for us to close in the meantime without jeopardizing the goals of comprehensive tax reform. my hope is that this conference and put our feet in both can't , for tax reform and against tax ripoffs. --ood place to start incentives that push companies to move jobs overseas.

second is medicare. the future for medicare is better care at lower cost. 965.s very different than 1 chronic disease, cancer, problems --d other current government rules and practices impede our efforts to deliver to these seniors. we are working on a bipartisan proposal to address these issues. we look forward to working with the conference on these issues. there is a better way, colleagues. is there-- my view parity between

defense and nondefense. the rule of the whole -- theration debate rules were that you are going to cut defense and nondefense equally. to change those rules in the middle of this debate would be a very substantial mistake. what we do with respect to defense, we need to make an health,mmitment to education, infrastructure, and finance investment that will secure our future. those three areas, taxes, medicare reforms, and budget fairness strike me as three areas where we can come together and find common ground.

i look forward to working with all of you. >> thank you. cliburn.yburn -- mr. the task of this committee is to an agreement budget. while it would've been prudent to have these negotiations last summer, i am pleased that we are now beginning these important discussions. address the automatic spending cuts that are hurting our economy and undercutting important priorities like education, medical research, and national security. ation'smust put our n fiscal house in order and reduce our debt to a manageable level. there are different ways to do this. some are better than others. on the graph you see on the

screens, there are two lines. the red line tops the deficit over the past six years. the blue line charts the unemployment rate over the same. -- period. down, theloyment goes deficit goes down. when unemployment goes up, the deficit goes up. the reasons for this are clear. when you don't have a job, you don't pay taxes. when you don't have income, you're not paying payroll taxes and you are more likely to need government assistance. whammyyment is a double for the federal budget. to lower the deficit, we have to lower unemployment. advocates for deficit reduction want to cut benefits under medicare, medicaid, children's

health insurance program, nutrition assistance, and other vital services -- they had nor the fact that when you cut shiftial benefits, you these necessities onto cedar citizens, parents -- senior citizens to my parents, and lower income people. the money shifts take from consumers that would otherwise be spent in other parts of the economy. cutting benefits cuts jobs. not the way to reduce the deficit. securing deficit reduction by cutting key investments in education, infrastructure, job training, and research and development would hinder economic growth in the short and long-term.

economyto have a strong for a 21st-century workforce. cutting investment to jobs and cutting jobs is not the way to reduce the deficit. democrats have a different approach. we recognize the importance of fiscal responsibility, but we know from the chart that any budget cuts that destroy jobs will be counterproductive. we know that cuts that fall disproportionately on our most vulnerable citizens make our economy more vulnerable as well. we know that a reasonable, balanced approach involving sacrifice is not only the surest way to cut the deficit, it is the most effective. we also believe that higher levels of revenue are fully compatible with strong economic growth.

we have seen that tax cuts for the wealthy have increased the deficit and do not create jobs. we know that much of our national debt is a result of two wars. and now that we have ended one and are winding down the other, significant savings have been generated and they should be used to eliminate stressors and that havemunities been suffering disproportionately for the last 30 years. it would generate economic growth and begin closing the wealth gap that is threatening family security and our national stability. i was very pleased to read last said,hat our colleagues the reality is, you are going to have to have a deal here and a deal means everybody give something up. i agree with my friend.

i look forward to working toward a deal to grow our economy, protect our vulnerable, and to ensure that we must remain on sound fiscal footing. >> thank you. next, senator nelson from florida. >> good morning. tohink it is our intention address these issues with candor and an open mind and a willingness to listen to the opinions of others. if we are true to that, it will be a refreshing change from the unwillingness, from the shouting past each other that has dominated washington, has dominated our discussions on the has dominated these talk

shows where people are just shouting past each other. you think back to a statement that president kennedy made. he preferred to find not democratic or republican answers, but to find the right answers. i hope we will take that approach. havenly certain hurdle we to overcome is ourselves. the thing that could derail a bipartisan agreement is a reversion to the display that we have seen, excessive partisanship and ideological rigidity. here toa responsibility put aside these political differences in favor of finding a bipartisan solution.

i am basically an optimist. that we are going to find a new bipartisan spirit. i am hopeful that we can talk openly and honestly about how to move this country forward. questions that seem to have obvious answers. need moree, we targeted budget cuts of wasteful government spending coupled with realistic tax reform. who among us does not believe that we cannot do serious tax reform? we need to close some of the loopholes that allow some of the more privileged and the more profitable corporations a system that allows them to avoid paying taxes. preventto find ways to

things like the so-called offshore tax dodges. the difference between the house and the senate is about $90 billion. that is just about what published reports say that the treasury loses each year from offshore taxing. two thatn example or could save more than enough to resolve the differences between us. well we go about trying to negotiate this budget plan, i would be mindful, i ask that we be mindful of the need to support a strong and hopefully a growing instead of shrinking middle class. and the needs of folks on

housing and access to affordable health care. this senator does not want to do this on the backs of medicare and social security beneficiaries. in the meantime, i would say let's stay focused on the problem, not our differences. let's judge ideas not as republican or democratic, but it's a good idea or a bad idea. thank you. congressman coleman, oklahoma. >> the challenges we face are significant. latest long-the term budget outlook between 2000 andnine and 2012 -- 2009 2012, the federal government recorded the largest budget deficits. federal debt is now about 73% of gdp.

that is higher than any point in u.s. history. our nation's debt will continue to rise with no end in sight if congress does not act. here tos an opportunity show the american people to set our differences and succeed where other bipartisan working groups of failed. but it will not be easy. my friends and the other body have a very different proposal from the house position. while it stabilizes the debt, it basically accepts the over $17 trillion of debt already on the books. at the same time, i'm sure there are a number of things in our proposal that the senate finds objectionable. i am hopeful that this committee can come to agreement on

illuminating the damaging and senseless cuts associated with sequester by requesting them -- replacing them. break theke -- pattern of living from crisis to crisis. it has become a dangerous, commonplace habit since 2009. divide the appropriations committee with certainty so they can craft bills that have the possibility of becoming law. we must deal with our growing debt. there is much work ahead and i am hopeful that we can find some common sense reforms that improve our economic outlook and provide a better future for our children and grandchildren. negotiations and reforms don't end here in this committee. this is the starting point. committeeropriations has demonstrated, we can cut discretionary spending. we have cut it in each of the

last three years. a feat not accomplished since the 1940's. it is time for the ways and means and finance committee to do the same. mandatory spending programs comprise three quarters of all federal expenditures. time, i find it quite hard to believe that everyone of these expenditures is necessary and could not be limited in some manner. i have been quoted as saying that revenue should be on the table in the course of the committee. i believe that it should. but not in some of the way that my friends from the other side should suggest. there are a number of program growth policies- that could grow our economy.

operations, and gas and the like. more revenue should not mean higher taxes. for taxwe should allow reform proposal. it has been over 25 years since we have taken a comprehensive look at the tax code. in that time, the fundamental nature of our economy has changed. our tax code should reflect the priorities of the 21st century. edmund burke once said, all government is founded on compromise and barter. while republicans maintain the majority in the house, democrats

maintain their majority in the senate and the president. no party will get everything that it wants and no side can dictate to the other. sadly, compromise has become a dirty word in washington. however, it is even more necessary in divided government. otherwise, the american people lose. it is time to show the american people that we can function, and achieve common ground, that all voices can be heard at things can be accomplished. i look forward to finding common ground and avoid a debt path that is unsustainable. >> thank you. senator grassley. i hope we are successful in getting together. i'm glad to be here to work with our house colleagues to reconcile differences on the 2014 budget. this is regular order.

in recent years, regular order has become an oddity. our country is on an unsustainable fiscal course, yet this is the first time since 2009 we have worked together to reconcile. this is just the first up of this conference. i make a sinful -- simple request regarding process. the deliberation should not be done in the dead of night in the back room with only a few individuals. to regain the trust of the american people would must demonstrate working together to confront our fiscal challenges. among theuch cynicism populace about what goes on here in washington. part of that cynicism comes from the fact in many of the recent budget deals have been concocted in the back office of a few leaders that -- where rank-and- file members were left to take it or leave it. there was no deliberation and nearly no one

had an opportunity to even read them before hand. this is a terrible way to govern. it is part of the reason people don't trust washington to do what is right. we should use this budget conference to change that perception and hold our meetings in public. senatesident and the democratic leadership have insisted upon a balanced approach to replace the sequester cuts. this so-called balanced approach would include tax increases with spending cuts. the problem with this logic is simple. the fiscal problems facing the federal government are not balance. the problem is not that we taxed too little, it is that we spend too much. the offer of a so-called balanced plan -- the problems we too muchcaused by spending. the congressional budget office projects that by 2038 federal spending will be 26% of gdp.

spending on health care entitlements and social security will double over the next 25 years. as a result, deficits will continue to grow and the resulting debt will grow faster than gdp. a path which is unsustainable. the projection included revenue levels higher than the historical average. there is the root of the problem, spending growth outpaces higher revenue. the president talks a great deal about growing our economy, creating jobs, growing the middle class. i don't believe that we need to grow the government to create jobs or create the prosperity of americans. a more prosperous america does not result from an ever larger, more intrusive government. president kennedy knew the virtue that wealth, left in the hands of entrepreneurial americans would create jobs and

grow the economy. system createsx too heavy a drag. it reduces the financial incentives for personal effort, investment, and risk-taking. yet, the senate budget which i oppose, would increase taxes by $1 trillion. president obama got his tax increase on the fiscal cliff deal of january 2013. we increased taxes. now is the time to focus on the other side of the ledger, the spending side. i remain cautious about plans to trade spending reductions that are in the law for the promise of spending cuts or entitlement reforms at some future date. i will not entertain so-called balanced plan that punishes

small business and job creators with higher taxes in exchange for minor entitlement reforms that do not change the deficit or the debt trajectory of our country. if we're going to reform entitlement programs to ensure their viability for future generations, we should do just that. 's budget could be a starting point and should be considered. i am aware that there was a great deal of angst surrounding the sequester cuts, particularly those in defense. i am satisfied that defense is not a sacred cow. i will close by saying that if we can get the department of defense do have an accounting and audit practices and an up- to-date audit control system, we would have a lot less waste their. -- there.

chairman.ou, mr. i come to this conference with the perspective of 2 decades on the appropriations committee. we must continue to grow the economy, create jobs, and strengthen the middle class while reducing the deficit in a way.ced and responsible the reckless government shutdown and threat of default caused $24 billion in economic activity and 124,000 jobs. looming reductions in the house budget and appropriation bills further threaten economic growth. we have a mandate from the american people to ensure that we do not face another shutdown or default showdown. there is bipartisan support for ending automatic, drastic cuts that would cost 800,000 american

jobs next year if left in place. did not passority any spending bills at the sequester levels. pulled theicans transportation hud bill from consideration, the chairman said, with this action, the house has declined to proceed on the implementation of the very budget it adopted just three months ago. the house has made its choice. and it'stion unrealistic and ill-conceived discretionary cuts must be brought to an end. ". ote.nd qui billion less for the national institutes of health to conduct research. dollar generates local

economic growth and supports high-paying jobs. 57,265 fewer children in head start resulting in 18,000 staff members who have suffered pay cuts or lost their jobs. 650,000 department of defense employees for load resulting in $2 billion in lost wages around the country. 2000 fewer national science foundation competitive awards affecting more than 21,000 teachers, students, and technicians. less for the department of energy's office of the unitedsking states' leadership role in advanced computing. on investment for publicly funded scientific

research and development is somewhere between 30% and 100% or more. at a time when economic success in the global market is determined more than ever by the pace of innovation, we cannot afford to reduce our investments in research. these cuts, which will only get are forcing impossible choices for american families. should mothers quit their jobs when their children lose access to head start? should promising young students rethink a career in science because of a lack of available research dollars? in addition to furloughs for andnse employees reductions to military readiness, the department of defense will lose $20 billion more in mid-january if we don't act to avoid another year of scoop -- sequester cuts. everyone in this conference has reason to find common ground.

we have already enacted $2.5 trillion in deficit reduction of which $1.5 trillion have come from discretionary spending. and that does not even include across-the-board reduction. let's work together. let's work together again to replace the automatic spending cuts that are hurting jobs and our economy with a balanced plan ont slashes spending wasteful special-interest subsidies and tax loopholes that allow a select few to avoid paying their fair share. hold athat we will number of open sessions to discuss proposals in considerable detail, so that we really understand how they would affect ordinary people and american prosperity. >> thank you, mr. chairman.

americans are tired of the habitual political promises congress makes to fix the growing national debt. this committee is another one of those promises. members supported more borrowing, then we would talk about controlled bending. what did we hear from the president? the same thing. i will tell you from the start, that was not good enough for me before and it is not good enough for me now. if we work together, we can control spending without a make it hurt mentality. if we don't, we are all in for a real hurt. it is time to move forward, let's do something. should be to address our country's annual deficits and the $17 trillion debt. we should not be in the situation we were in. the government should not have shutdown. thehould've brought up

spending bill in the senate. no one senator or one party has a monopoly on good ideas. instead of identifying good ideas, we got another deal that did not address the underlying spending problem. need to start legislating and stop dealmaking. i hope we can at least make a small move in that direction with this conference committee. i have several ideas for how to keep us out of the situation we were just in and make reasonable, but real progress on our deficits and debt. i have a penny plan, an idea on biennial budget planning, and the shutdown bill, and force prioritization and tax reform. i would like for us to could -- consider my penny plan.

we have got to stop spending more than we take in. find a way to start paying down the $70 million plan that --rillion plan -- debt. everything would be on the table. on reducing the wasteful and duplicate spending before we look to new programs and services. cutso about the spending -- let's be smart about the spending cuts. i have an appropriations bill. the easier bills taken up before elections, the more difficult bills taken up after an election. we have $1 trillion in spending

and that is a lot of money in which to make annual decisions. we could give agency stability for two years instead of one. let's stop making spending cuts hurt and start living within our means. i want to thank my colleague on the end government shutdowns act. it is a smart piece of legislation with incentives. what if we do spending bills one at a time and allow relevant amendment? that would speed up the process but allow script is a in dash scrutiny -- scrutiny as well. we have a spending problem, we don't have a revenue problem. need to raise taxes in

order for washington to spend more. we can't spend our way to prosperity. i am a member of the finance committee. let's make it happen. tax reform will help create additional revenue to reduce the deficits and pay down the debt. i am ready to make that happen. my international tax plan would repatriate money and bring the money back for jobs. some think all that is needed is to replace the yours automatic spending cuts. what we need to do is prioritize the cuts. we need to start there. it worked in wyoming and it can work here. our government -- governor was faced with an 8% cut. we can rein in out-of-control

spending. it should be the path forward. our nation's overspending has to stop. deficits are only going to get worse if we don't take action now him if we don't make cuts now. all of the scenarios down the road are worse than what we are facing now. and little pain now is better than a lot of pain in the future. look forward to a robust debate on our nation's path forward. >> representative black from tennessee. -- >> everyone has asked about our expectations. as has already been said, anyone can look at these two budget proposals forward and see that there are significant differences. these differences are only half of the story. instead of focusing on the differences, we should focus on areas where we agree.

we all agree that our debt and deficits need to be addressed. our economy isat not growing nearly as fast as it should be. i think we all agree that the best way to address these issues is through this process. through the regular order instead of the temporary, short- term, government funding measures. as a member elected in the wave of 2010, i came to washington to work with my colleagues to make tough decisions and to protect the future of our country. i constituents sent me here to work toward solutions. you rein in our out-of-control spending and to pursue policies that will help our economy grow. our nation is now more than $17 trillion in debt and our economy 90 millioned that americans remain on the sidelines, not even looking for jobs. household incomes are at historic lows and unemployment remains unacceptably high.

we need to get americans back to work. getting control of our debt will help our economy grow. growing the economy is the best way to increase revenue and reduce our deficits. i have three children and six grandchildren. every day, i worry about what this country will look like for them and they are my age. i am sure most of my colleagues have a similar concern about the future for their families and also for the american families all across the country. expectation is that everyone in this room will work together to help secure our future by making a down payment on our debt. that we willn is work together to identify mutual, achievable goals that will help us reduce our deficit and get americans back to work. at the end of the day, i plan to tell my children and my grandchildren that i did everything i could to preserve the american dream for them and for all americans. everyoneation is that

on this conference will be able to say the same. i'm grateful to have the opportunity to join everyone here at the table and i look forward to spending the time over the next several weeks finding that common ground. i also want to thank congressman ryan and senator murray for your leadership. >> thank you. murrayto thank chairman for her important leadership as well. it is critical that we are sitting down in a bipartisan way to focus on our priorities as a nation. we know the government needs to do more with less. the good news is, we are. we are streamlining government by getting rid of programs and policies that don't work and don't make sense. we have already cut $2.5 trillion from the $4 trillion to everyone has talked about as a goal. $2.5 trillion. together, we have the opportunity to take the next

step in meeting that goal. a step that needs to be balanced in its approach using smart decisions, not reckless ones. as you know, i chaired the senate agriculture committee and we took this approach on the senate farm bill. it will reduce the deficit by at least 20 billion dollars by consolidating and streamlining programs, and the wasteful subsidies, and eliminating fraud abuse. i served in the house with many of you. president clinton was in office and we balance the budget for the first time in 30 years by making tough choices to grow the economy and strengthen the middle class. you can do it again -- we can do it again. as you know, a budget is a blueprint for the country. ours a statement of

national priorities. for me, the most important goal is to make sure the right people and the right priorities are at the front of the line. that is making sure that our children have access to a quality education, from preschool to college. it means that they can get good paying jobs, own a home, buy a car, and resist family. it means building our middle class by creating jobs and opportunities. innovative jobs that will fuel the economy for decades to come. it means standing up for our seniors and retirees, protecting medicare and social security benefits they have earned. -- that they are entitled they have earned after a lifetime of hard work. this needs to be about moving the country forward because frankly we are never going to get out of debt with more than 11 million people out of work. it is essential that we stop the reckless policy of sequestration.

sequestration blindly cuts everything. it recklessly cuts health care for veterans. it slashes funding for life- saving medical research. it cuts investments in education and innovation. because of that reckless approach we have seen sluggish job growth. it is holding our economy back. that makes absolutely no sense, mr. chairman. i strongly agree with chairman murray that our number one goal thes to be replacing reckless sequester policy with a balanced, smart plan that continues the work we have done on budget deficit reduction, while growing the economy for the future. i look forward to working with our conference committee, all colleagues on both sides of the aisle. people across america are urging us to come together, as we know, to pass a bipartisan budget and they are urging us to put middle-class families at the

front of the line. thank you mr. chairman. >> thank you. to mr. grable. much.nk you very i have listened very carefully to the comments that have been made today and i am heartened by the fact that everyone recognizes that we need to come together and find a consensus. turn the current crisis. factsd to recognize the that we have to deal with. i have started to hear talk recently that we don't really have a debt crisis anymore. the congress has been responsible in the fast two years.

we have passed $2.5 trillion of reform and that we are well on our way to climbing out of the problem that we face. is that we do still have a debt crisis. the $2.5 trillion that is talked about is essentially made up of about five or $600 billion in tax increases and the budget $5 billion or $6 billion in tax increases and the -- anybodyrol act who has watched congress and budgets know that the record congress has in sticking to its budgets is deplorable. one of the things we are to focus on is making sure that this 2.5 trillion dollars we talk about is maintained. we have stayed to that budget for the last couple of years.

at least with regard to discretionary spending, we are starting to bend the curve down. stay on this course, we will be spending less in real thanrs in this fiscal year we have in just a few years past. a remarkable achievement. one that must be maintained. talk about how to move forward, one of our first objectives should be to protect of theure the reality fiscal reforms that we are the have in place. about focusing on the processes. we need to establish processes to help us move forward and assure and protect the existing achievements that have been made.

budget enforcement processes that will assure that congress sticks to the agreements that it does make on the budget. and then said forward some processes to help us move into the larger grand bargain's. we don't have the time in this committee to put together the kind of large deal that would involve tax reform, the entitlement form -- reform him of the fiscal reform, and the budget enforcement reform that we all know needs to be done. what we can set up processes to reform assure that tax does move forward. assure thatat congress does not break its budget as it has almost a perfect record of doing. processes that will help us deal with future lapses in spending in the way that senator portman's bill has proposed.

processes to help us deal with the debt ceiling as we reach the debt ceiling. help us reduce the stress we put on the economy in the political battles that we have here. we have a remarkable opportunity to fix some of the rules and processes by which we function in this conference in a way that will help us protect the savings we now have and achieve further and greater savings as we move forward. to focus onurage us laying the foundation for much greater and effective results as we move forward beyond the

activities of this committee. thank you. >> senator sanders. cox -- >> thank you very much. i think this has been a very good discussion and i hope that we can continue to have more open discussions. -- my begin revenue remarks with a radical proposal. thes listen to what american people are telling us. what are they telling us? poll, they're saying do not cut social security. do not cut medicare. do not cut medicaid. that is what all the polls are telling us. 80%last one tells us that of the american people do not want to cut medicare benefits at all. 76% do not want to calls -- cut

social security benefits. all, they're telling us the deficit is a serious issue and a senator crapo indicated we have made some progress in recent years. the american people want us to continue. to createlso want us jobs. real unemployment in this country is not 7.4%. it is close to 14% if you include those people who have given up looking for work and are working part time when they want to work full-time. lot.ope talks about this a african-american unemployment is over 40%. the american people want us to invest in the economy, create

jobs that we need. use government funds to rebuild our infrastructure. that is what the american people are telling us. i think all of this comes from the fact that we do not talk enough about -- what the american people see in the economy today is the middle- class disappearing, millions of people living in poverty, while the wealthiest people in the largest corporations are doing phenomenally well. while the american people talk about the deficit in jobs, they say, do not balance the budget on the backs of the most vulnerable people in the country. , when the top 1% in the last few years have income, 95% of all new

ask millionaires or billionaires to pay a little bit more in taxes. make it hurt them. when we have record-breaking profits and corporate america, 1 wall st -- that we bailed out a few years ago -- is doing phenomenally well, when corporations don't pay in nickel in taxes, then maybe it might be time to pass some of these -- ask some of these large profitable companies to start paying their fair share. who in this room is going to defend a situation where we lose on hundred billion dollars a to companies putting money on shore? does anyone think that is a good idea? we are now spending almost as much as the rest of the world on defense. we are not fighting the soviet

union. we are fighting al qaeda. meanwhile, the department of defense can't give us an audit. anybody think we can't cut money from the defense department? if we look at a just, moral solution with good economic sense, i think we can do deficit reduction. i think we also have got to create the mill it -- millions of jobs that the american people say we need to create. >> senator graham. >> i disagree with virtually everything senator sanders said. that brings us to what we are trying to do here. reconcile his worldview with mine. they're different. like we're on different political planets here, but what is the nature of the problem. a $17 trillion

debt or we don't. we do. the question is why. how do we turn it around. boomers -- mr. chairman, madam chairman, whoever is running this thing -- is going to retire -- are going to retire. 10,000 baby boomers a day are going into medicare and social security. if you care about social security, we are to try to save it. if you care about medicare, we up to structurally change it so what will be around for people after we are gone. the american people don't want

any change in medicare? i bet if you ask them, they said yes. if that is too much for the country to bear, then our best days are behind us. the country will do what is required of the country because every generation before us as. every generation before us fought whatever war they had to fight, get through whatever problems they had to pass on to the next generation a chance to do better and that is what this committee is about. there are two visions. take the money you have, change the tax rates, create jobs. -- overcratic friends

the next decade, the house republican bill reduces spending by $4.6 trillion. our democratic friends increase spending. two different views of where we want to go and how we create jobs. and what the proper sustainable role of the federal government is. let's pledge to not shut the government down. bernie and i are on different planets come about that we now and january 13, and hope we can find a way to fund this government through september. that would be good for all of this -- us. reconcilet be able to our different divisions between now and september, but we should be able to fund the government. as to the defense department, you say it is well funded. i say we are on a course to got the defense department and the intelligence community over the next decade at the time that we need it the most. it assist oracle in about four percent of gdp. is historically about 4%

of gdp. if you are looking at the next decade as a decade of safety for the american people, i look at a decade where we try to keep radical islam from a wiring nuclear weapons. i would argue that our intelligence community and defense department is going to be crippled beyond measure if we continue with sequestration. having said that, a deal is a deal. we will hold these numbers. there is reasonable and entitlement reform that could replace defense and nondefense sequestration over the next 30 years. you can see how much money we can save. i hope we can do that.

colleagues, first things first. find a way to fund the government and the next coming year. and slowly but surely find a way to bridge the gap between the world that bernie sees and lindsay sees. if we can't bridge that gap, then our best days are behind us and that would be a shame. >> senator white house. >> thank you. recovering from the worst recession of our lifetime and a foolhardy shutdown. a harmful budget sequester is eroding our economy. a debt limit once again looms. we have serious work to do. and poll after poll, americans

have been clear that the most urgent issue facing their families is a weak economy and a lack of jobs. unfortunately, federal budget policy in recent years has been dragged down the dangerous austerity path and largely ignore the role that infrastructure of our research and energy efficiency can play in supporting our economy and jobs. austerity inflicted economic harm while not delivering budget solutions. austerity budgeting show in the sequester. credit, it was designed to be painful and it has filled that bill. ineard from rhode islanders august about layoffs in the defense industry, civilian personnel forced to take unpaid leave, children unable to enroll in head start, and a cruel $40

.r week -- per week we also heard about more lasting damage. these budget cuts are insidious because we will not feel the consequences for a few years. ,hen we do, it will be subtle but devastating in the long run. it will be the absence of innovations in science, technology, and medicine at the pace we have come to expect. it is like deferred maintenance. it will come back to bite us several years from now. we can probably recover from a single year of treading water in scientific discovery, but if this keeps up, the nation's a scientific research center will begin to erode. china and other nations will not step out of the competition while we inflict this damage on ourselves. the sequestere

with policies that support job growth. our efforts to date have been heavily in support of spending cuts. of the deficit reduction since 2011, or cutting spending with government -- of government programs has been most. additional revenue has grown only $600 billion. zero through it this entire exercise is another costly area of federal spending. we have done nothing on federal spending through the tax code. s, youto all of my fellow cannot honestly say that the debt and deficit are mortal threats to our nation and at the thantime less important every tax loophole in the code. that cannot be our position. ar senate budget generates $975 billion from loophole closing. i would urge everyone to take an

honest look at this untouched form of tax spending. would likepholes i to devote to deficit reductions are one we should get rid of anyway. big oil does not need taxpayer subsidy. companies should not be rewarded for shifting assets to other countries. billionaires should not play lower tax rates -- pay lower tax rates. correcting these laws should be fair. savings from health care delivery system reform are enormous. everywhere estimate $700 billion to $1 trillion a year in nationwide health care savings. without compromising health outcomes, likely by improving the quality and experience of care that americans see. addressing things like medical errors and are backward payment

structure, since over 40% of spending is federal, that means huge potential federal savings. since 2010, when the bowles simpson commission recommended cutting our deficits we have seen estimates for medicare and trillion,rop i $1.2 substantial savings that has not been included in the official tallies. i look forward to working with conferees on both sides to support policies that deliver the savings and better health care americans deserve. >> thank you. senator warner? >> and q, mr. chairman, and thank you, senator murray as well. i also have been listening to a lot of my colleagues around the table and i think there are some agreements, and also some major challenges and disagreements. i hope three touchstones will come out. first, let's agree to do no harm. which would mean -- and i think

we have heard this from lots of folks -- another government shutdown or threatening the full faith and credit of the united states of america does no good at all. enormousesents an economic crisis, i think, again, that we all have our numbers on what the price was, but it was unnecessary, unprecedented. we all have our fun factoids. mine is the fact that during the shutdown we furloughed three american nobel prize winners in physics. you kind of wonder what do the folks in china, india, around the rest of the world, think thosee were furloughing american assets. i can assure you, those countries did not put their research on hold during our period of this function. haved -- and i think we heard a lot of commonality -- sequestration was supposed to be set up to be so bad that no rational group of people would let it happen. and i think there is a way that we can protect the savings and

find ways to replace it. i know some of my colleagues may think that, it has not been that bad. more to senator whitehouse's comments, it is almost like a cancer inside. virginia, a little bit of ground zero because of the military. what we are doing in terms of hurting military readiness, what we're doing in terms of costing taxpayers money because we are not able to do the long-term urges contracts that dod has operated in the past, is cold -- is totally irresponsible. i know a lot of us around the table like to say is this experience. i install proud of the fact that i am a business guy longer than on the political side. my time in business was mostly spent as an investor. and if you look at investing in any business plan, you look at three things. you look at a company's plan for their workforce, a company's plan for investment in plant and

equipment, and the company's plan on how they will stay ahead of their comfort edition. they have a business plan to -- we call it a budget. we have the three items as well. and training, plant, equipment, and infrastructure, and staying ahead of the competition is research and development. while i strongly believe most of our job growth will come from the private sector, the government does provide a framework in those three areas to allow the private sector to prosper. and unfortunately, if we go forward with the approaches that indiscriminately cut those areas of investment in infrastructure and education and r&d, we will not have a edges -- business plan that long-term i think will allow our country to prosper. let's find a way that we can find that common agreement to it.ace third -- and this may be a little off script -- i actually hope that we might be able to

exceed expectations. i think we have done an appropriate job of lowering expectations, so that simply avoiding a crisis may be viewed as a success. we mayhink that while not be able to get to the so- , that weand bargain ought to use the opportunity to recognize if we keep coming back to the discretionary bucket -- whether the defense side or non- defense side -- it becomes a zero sum game after a period. i would say, as somebody who acknowledges we need to look at entitlements, would we hear constant references to 50-year revenue totals, i just think it refuses to recognize some of the fundamental changes in our economy right now. we have seen a dramatic transfer from the private sector to the public sector of research and development expenses.

not just in america, but all across the world. there is not a such thing as a dell labs anymore. the public sector is going to pick up r&d. and because we have been blessed with a much longer lifetime ability, the entitlement costs -- even with reforms -- are going to be greater than we have seen in the past because of 80- plus year living expectations. so, i hope and pray that we actually are willing -- we all kind of know what we are going to have to deal with. democrats are going to have to deal with the entitlement reform, republicans will have to deal with revenues. we ought to be willing to at least approach of areas. i will close simply saying we all have lots of ideas about how we can grow our economy. i think there would be nothing that would do more for job creation and economic growth they are removing this the school overhang of governing by crisis. and i hope we can do that and exceed those expectations. >> senator toomey? >>, thank you, mr. chairman, and laying out the

macro challenge. i think you have done a very good job, and i will not repeat that. i will second my friend from virginia's hope that we can achieve something broader than the more modest goals that we have been this cussing. -- this cussing. but i also suspect that he grand bargain, something on a very large magnitude, will probably woulds come in so i suggest we shoot for three modest goals -- modest but achievable goals, in my view. and goals that have all enjoyed bipartisan support at various levels in the recent past. i would like to walk briefly through what those goals are, mr. chairman. first, i want to say i think it is vitally important that we preserve the savings that are embodied in the bca. remember, this was a problem we made to the american people and return of adding nearly $2

trillion of debt to the balance sheet. we agreed to modest reductions in the growth in discretionary spending over 10 years in return for that. i would also strongly underscore the fact that government is not the source of wealth and prosperity in this country, nor any other country, nor has it ever been. it is the private sector that is the source of wealth and employment and innovation, and job growth, and government lives off of that. and to the extent we can curb the size of the spending of government, we will have more prosperity, more job growth, and a higher standard of living, and that is part of why i think it is so important that we keep this modicum of spending discipline we agreed to broadly and that president obama signed into law in 2011. let me also make the case that puts us on ahe bca more sustainable and reasonably judge a three. the chart we have posted illustrates this. if we had grown discretionary

at the ratece 2000 of population growth plus inflation, we would have been on that green dotted line. instead, of course, we had a huge surge in spending over the last 10 years. do ishat the bca caps return us to that trajectory over time gradually. i aml be the first to say, very open to alternative ways of achieving the spending discipline. i am not suggesting that we have exactly this mechanism. but i do think it is vitally important that we achieve the savings that they contemplate. it is my first point. my second point is, you know, i wasn't in favor of the strategy that led to the shutdown did i am sure anybody in this room was. but we got there. there, this kind of government by manufactured crisis is a disaster for the american people and for our economy. so, let's acknowledge the fact

that no one of us here can control the appropriations process. we had only one appropriations bill in the senate floor last year, and since we cannot control that process, let's change the mechanism. let's put in place a standing mechanism that would prevent this from ever happening again. so, i am a big supporter of senator portman's bill that simply says in the event we run out of a fiscal year without having passed appropriation bills, let's just automatically continue funding. let's take the government shut down completely off the table. let's continue funding at the previous year's level until we can pass the appropriation bills we should have passed. know that welso have a dynamic and face -- place i was appropriation bills might exceed the statutory spending caps. if they do, we have a mechanism --t is highly sub optimal across-the-board spending cuts. i am an advocate for giving the administration some flexibility if they need to make the spending cuts.

let's allow them to use the common sense any business and cut the mostou -- important thing and preserve the most important thing. it is not true all government spending is equally important. we know that. let's give the administration complex ability to manage it. remember, waited big argument with the faa funding with sequester first kicked in, and some threatened it was going to be a catastrophe if they had to live with the cuts. it turns out a bipartisan bill signed into law by president obama giving the faa authority to have some flexibility in managing the cuts allowed them to get through the sequester with no furloughs, no layoffs, no caps off lights, no control towers close, no disruptions. that model could be applied more broadly, and we could achieve the savings in a more sensible fashion. mr. chairman, i hope we will be able to work together on even more ambitious goals, but if we can't achieve those, i hope we can achieve this. savings, some flexibility, and preventing government by

manufactured crisis. >> thank you. senator merkley? >> it is a privilege to be in this room to seek a path to invest in america and enhance the success of americans -- american families. the past several years, repeated uncertainty and brinksmanship manufactured here in the capital have done the opposite. hurting families and businesses across our country. a massive drop in the stock markets during the 2011 debt limit debate to the of the $4 billion loss to the economy during the chevrolet -- shutdown, the missed opportunities to address real challenges, washington's dysfunction has attracted from the progress in the area that matters most to families -- and the economy and jobs. living wage jobs. the families live in my neighborhood are worried about holding onto a living wage job if they are so fortunate as to still have one. they are worried about how to afford to send their kids to college and whether kids will

have a big debt and no job when the graduate third they are worried about retirement. and the families who live in my neighborhood -- it like working families across this nation -- are disturbed and angry to see our government lurching from crisis to crisis and these crises must end. but avoiding the neck shutdown is not enough. we need to get back to the basis -- basics that make our economy tick. good jobs and infrastructure, affordable, high-quality education. we took -- retirement, secure retirement for middle-class working americans. these are things that strengthen our economy in the long term. so, let's examine our priorities . as folks on both sides of the aisle have suggested. why do we still have tax breaks for companies that ship our jobs fund thewhen we can't infrastructure and maintain existing infrastructure for manufacturers to succeed here in america?

we have loopholes that give billions to oil companies while headstart programs have had to turn around eligible .hildren across our nation in every single state represented in this room and every others eight, their empty chairs. emptied chairs that represent a broken promise to the next generation, and those empty chairs should want us -- haunt us. if we continue to avoid these kinds of voices, we will lose the middle class that has made america the greatest economic engine in the world. --shing the american question the american dream for working families while having away the national treasury to the few best off is unacceptable. let's be clear, we can invest in america and simultaneously reduce the deficit. anded, ending tax ripoffs

growing a successful economy, creating living wage jobs, put thriving goals -- american families and reducing deficit in a compatible framework. i stand ready, as i know everyone here does, to work within this committee conversation and dialogue to find a path forward. expect us topeople find common ground, expect us to corps. de so let strengthen the economy and rebuild the working class. -- middle class. thank you. quick senator portman? >> i have a brilliant statement with a strong assist from my staff that i would like to submit to the record. i had an opportunity to hear from a number of my colleagues. i feel like we have an opportunity here, but not meeting again until -- it sounds

like mid-november -- we have a lot of work to do among ourselves. i hope that republican and democrat alike would be willing to do that and figure out how we can take this opportunity that has been prevented to us to really make a difference. i would like to simplify it to just three things. four years,met for the budget conference, and during the interim period we added $5.9 trillion to the debt since the budget conference last, about $50,000 per household. i do not think we will do a grand bargain here. i would like to. i am sure a lot of us would. but i think we can do something that moves us in the right direction. and we can call it a good bargain for the american people. and again, i think there are three elements. one, let's do something on the mandatory side. we all know that is the problem. we have done a pretty good job on the discretionary side. the budget control act signed into law. let's not break those caps but let's acknowledge we did a pretty good job on the one third of government spending subject to appropriations. the two thirds on autopilot is a

part we are not going -- doing a job on. it will grow to 76% the next few years. it will bankrupt the country if we don't do -- deal with it. we've got to do something, in my view, to be viewed as credible to at least do a good bargain for them -- for the american people on the mandatory side. specifically entitlements. these are vital programs. they are the safety net. we all want to preserve and protect them. but they are not sustainable on the current format we all know that. there is no secret. my thought was, at least let's do something on the entitlement side did not come again, a grand bargain, but something relatively small. reliefe -- provide some on the sequester side, and show the american people we can make progress on this two thirds of the budget that right now is kind of off limits. nobody is talking about. economic growth. everybody has talked about it. colleagueand former jim clyburn had a chart of showing the correlation would

deficits are and unemployment is. one side of it, the fact that you can't get this under control unless you get people back to work. i totally agree. is alsothe converse true. i don't think we will see the robust economy we hope for unless we take the wet blanket off the economy added that is this amazing level of debt and deficit that we have not had before. it is unprecedented able say as percentage of gdp we had one of the time, during world war ii, but, yes, we did not have the long-term liabilities we now have. it is unprecedented. talk to people back home thinking about investing, creating something, an innovator, job creator. this is a factor. so, i hope we will do something on the growth aside not just dealing with mandatory spending -- which i think is very much related to what jim clyburn showed us in the chart -- but also tax reform. because all of us, i think, agree -- i heard my colleague from oregon talking -- the current system is antiquated. ron wyden said it is 100 years

old and it looks like it. it is obvious to me it is urgent. it is urgent and the corporate side, by the way, because we are losing people, capital, investment, and headquarters overseas. right now people are making the decisions because of our tax code which is not competitive. we will not do it in the next 18 legislative days but let's face it. this group will not do tax reform. but we could put together instructions for tax reform saying let's facilitate and next night the process. i know chairman baucus wants to do that. i am not sure white where the leadership is on this but i think is a group we couldn't say, we know, we can agree not to whether we should raise or cut taxes -- republicans probably will be for revenue neutral reform and democrat would want to raise revenue. that is not the debate we have to have now but we can put off the discussion until we do substantive tax reform. but let's say in the next three months we can do it. we have had dozens of the errands. we have a consensus, i believe, knowing about how to do this, grow the economy, and it is

broadening the base, lowering the rate -- yes, getting rid of the preferences and loopholes -- let's do it with tax reform that really grows the economy. say, a i want to relatively small matter -- but i think it is important. if we can stop government shutdowns through our work -- not bypassing legislations, but by proposing we have a legislative fix like the "end government shutdown" act. if you have not finished appropriation bills by september 30th, whatever bills you have not done you simply have the same spending for the previous year and then of ratchets down every 120 days one percent. it is not anti-appropriator but pro-blog reader. some are concerned about it, i think it would encourage appropriation to get work done. it has been for years as a budget conference in the last four years in the senate only one appropriation bill in the senate has been done out of 40. i hope we can focus on what is global, make a step in the right direction and have a good

bargain for the american people. >> senator johnson. >> thank you, mr. chairman. i really hope americans watching this hearing. i said repeatedly about the dinners we had with president obama, of americans could have been a fly in the wall they would have been heartened i those discussions and i hope they are heartened by this as well. i think there is a genuine interest in solving these problems. i think that is a good thing. i appreciate senator sessions pointed out i have a business background. and i do. i have learned a lot of lessons in business, and i have done a lot of negotiating. and the first thing i learned as a pretty good start to any negotiation -- spend a lot of time in the front end and figure out what you can agree on. we have that mentioned quite a bit. we talked about things what a great upgrade most of us agree, let's not shut down the government. i totally support senator portman's bill on that. let's talk about one big thing that i truly believe we all agree on. we share the same goal.

i certainly want a prosperous america. i am concerned about every american. i want every american to have the opportunity to build a good life for themselves and their family. i think everybody around the table -- i think everybody serving in congress -- shares that goal. i admit we have a wide disparity of opinion in terms of how to achieve that goal. but as we move forward in these discussions trying to deal and grapple with these enormous question let's not each other's motives. it is just not helpful. it is not going to solve the problem. some of what my business background brings to the table is how do you solve a problem. i solved a lot of problems in manufacturing. you go to the root cause. but there is a process you go through to solve a problem that works. and almost any problem solving process charts with the first thing -- admitting you have a problem.

and then that is followed almost immediately by finding that defining a properly. one thing i like to do it hopefully open hearings in this process is let's define that problem. negotiating -- for example, if you've got a seller of a business, on one side of table with one side of table with one- sided books and me being the buyer on the other set -- why are we different? i will guarantee you you will never come to a successful negotiation. you actually have to have an agreed-upon audited set of books. we are not dealing with a 10- your budget problem here, but we are dealing with a 30-your demographic baby-boom generation retiring problem. because if we just deal with the we aren'toblem understating dramatically the size of the problem. i cannot resist. i've got a big screen tv. i can throw some charts up if we have time. here is the cbo's latest long-

term projection. over the next three decades we will experience in the first ,ecade $6.3 trillion deficit second deficit, $16.5 trillion, third decade, 33.6, for a .hopping total of $56 trillion in our discussion at the white house we had projections as well trillionicted $107 over 30 years, a range. does not matter what you pick. it is a big problem that needs to be addressed. . that socialhe time security is solvent until the year 2033 that's only because of the fixture of the trust fund. but here are the facts and the cash deficit. the next best that decade, it will pay out $1.1 trillion more and deficit to than it receives in payroll tax and the second decade, $4 trillion. a whopping total over 30 years trillion.

i don't think any of us in washington can look the american people in the eye and honestly say that that is a sullivan program. it needs to be saved for future generations. and, by the way, chairman ryan can attest to that as it is not particularly popular for republicans trying to reform these programs. it is not like, hey, we are insisting on this. we feel we have to do it. so we stop mortgaging our children's future. last slide. republicans want to increase revenue to the federal government. we agree with that goal. we just want to do it the old- fashioned way, by growing our economy. here is proof of how growing our economy is far more effective than punishing success. since 2000 -- since 2009, low watermark, we increased revenue to the federal government by $1.2 trillion. just last year alone we added $672 billion per year of revenue

, even with a meager economic growth. a yellow -- that little yellow because27 billion added of a tax increase on the fiscal cliff deal. that is an important point to make. yes, we agree on economic growth. a lot of things we can agree on. let's work together to solve the problems. thank you. ns?senator coo let's i would like to thank therman ryan and murray for conference. i agree with senator johnson that we both worked in manufacturing and we both think getting back to economic growth and jobs as a top priority. my hope is that as we work together in the conference committee, we will find ways to andthe disagreements differences that have recently shut the government and instead focused on the things we all agree we want to do together, which is to grow the economy, create good jobs and reduce our deficit. the challenges they sing us are well documented and widely

known, but if we are going to get back on working together and creating jobs and reducing deficits we have to start by figuring out what we really do agree on so we can find common ground and move forward. ed is the way delewarians asking every day working washington. what i think other parties that unite us -- i can safely agree we do all want to grow the economy, to grow good jobs in government -- federal revenue. after the collapse, we had 40 straight quarters of consecutive job growth. but our recovery is still fragile. the national unemployment rate, as several senators and congressmen have said, is far too high. 42,000 unemployed in delaware and more than 11 million in route -- nationwide, and record rates of poverty and income inequality that are series challenges. in all of this, economic growth has to be our northstar. as many know, if we grow our economy just one percentage point more, we will not only reduce our deficit $5 billion over a decade but grow a million new jobs. what are the things we could

agree on to grow the economy? first, replacing the harmful effects of the sequester. cbo estimates sequester it will cost 700 and 50 jobs this year and even more damage next year. second, invest in a skilled workforce. work in partnership with the private sector to deal with significant work or skill deficits. unfillede 600 thousand manufacturing jobs this past year. we need to work together to train workers. third, research and development, as several members said, is absolutely critical to our long- term competitiveness. r&d generates new ideas, products, and in some cases, moment in -- industries. finally, we have a crumbling infrastructure. as we all know, there are far too many highways, ports, tunnels, bridges, critical to our economic growth that are well below international standards. we have to invest in order to grow. but frankly, most importantly, we can all agree, coming to some agreement and a reasonable timeframe is probably the most

important thing this committee can do to help grow the economy. and doing it on a timeline that allows the appropriations committee to deliver a result without shutting down the government or putting it and any risk is about the best thing we can do. i will agree, though, we can't simply grow our way out of problems. we do have to address the drivers of our debt and deficit. we have to continue to reduce our deficits, which we cut in half over the last four years. if we don't, interest expense is a very real threat are crowding out both public and private investment in education, r&d, and infrastructure. over the last three years we made real strides in reducing our deficit. we save more than $2.5 trillion. yet, that has been unbalanced. about 70% has been spending cuts while only about 30% from revenue. we need to do more, but we have to do it, i believe, in a balanced way. we heard from several senators about the need to modernize the tax code, the need to move toward real tax reform. while this committee can't get all of this done, we can move in

that direction and a substantial way. making a modest cut of only five percent of the trillion dollars a year we spend through the tax code would make a huge dent in our deficits. last, we do have to continue to make some reductions in direct spending. although, i will know, that is the area that has taken the hardest hit and i will insist on doing so in a way that puts a circle of protection around the vulnerable and honors our promises to our seniors, veterans, and those about to retire, to protect them from hurtful cuts. chairman ryan, chairman marie, i am glad we have come together and i think when you to focus not on our areas of disagreement but on priorities we all share, focusing on growth, replacing sequester, reducing the deficit and ensuring long-term prosperity. >> thank you. i now know you refer to yourself >> thank you, mr. chairman. i want to thank you and mr. chairman murray for the

leadership and everyone at the table who is coming here i think in a spirit of good faith so we can resolve this for the nation. i represent granite stators and can tell you they are not happy theyyou think about where are. we reached a milestone that none of us are proud of with 17 million in debt for the nation. mother of two children. not just words when we think about what is it we are passing on to the next generation? who are in a position to address the fiscal challenges facing the nation. i would like to say that that is a function of both parties, because it is. it took democrats and republicans to get us in 17 trillion of debt. we added 4.9 trillion to the

debt during president bush's time in office. since president obama, we have added six point 4 trillion to the debt. the truth is, it will take to parties to get us out of the mess. the american people expect us to work together to do it. so what are the big challenges that we faced? i think senator graham talked about them. in of them is going bankrupt 2020 six. the mandatory spending piece of what we spend dollars on is two thirds of federal spending. in the next 25 years looks worse for our nation, not better. in fact, those important ,rograms i just talked about mandatory spending, entitlement programs -- they will squeeze out discretionary prayer 80s we

also care about, defense infrastructure and education, so if we do not take on the larger challenges, then the people relying on the programs are not getting a service, because they are important for the nation and important to many of my constituents and others relying on them for secure retirement and future. lay ahope is that we can for the country. because if we do not get at the ,nderlying fiscal challenges then we will continue to be where we are today. the one thing i do hope we can agree on is let's not take the can down the road again. since fiscal year 2011 we have had this team continuing resolutions. ,hort term funding pieces anyone who interacts with the

government has no certainty in terms of what we will do next. no one would run a business or family this way. i hope that at a minimum we can agree to fund the government through the end of the fiscal year and commit to ourselves that there will not be any more government shutdown. i am a co-sponsor of that. shame on us if we do not at least come up with a spending measure to the end of the fiscal year and and the government by crisis because my constituents are tired of it. i am sure everyone hears the same things from constituents. if you look at the budget control act -- i did not vote for it. the reason for that was because it did not deal with the underlying long-term drivers of the debt. i hope we do get at the larger

fiscal agreement for the country. with 17 trillion in debt, the savings we are realizing from the budget control act should not be ignored, blown off. are there smarter ways we can address spending? absolutely. the budget control act takes the ofings at about a third federal spending instead of looking at the big picture and challenges that we face. i had the chance to meet with general order your know -- oh this morning. the impacts that we are having by only taking a third and cutting from the third and not looking at the big picture is something we should care about in this committee, and i am hoping he can come to ways to do this in the smarter fashion. number one, dealing through waste, fraud, and abuse.

how many gao programs have we had? let's address them finally. if we can work together to do this is a much smarter way. let's not kick the can down the road. i have said it a third time. let's show the american people we can get something done on their behalf and we and the government by crisis, it gets out of the trenches on both side of the aisle and get something done for the american people. wisconsinite.a senator bolan. thank you. i want to recognize the leadership of chairman murray. real i have heard some notes of agreement, including the obvious, the american people are sick and tired, exhausted of

governing from manufactured crisis to manufactured crisis, and we know the faith in us has been badly eroded, but one thing that we have heard echoed around this table today and heartened by that is we need to pass a budget that grows the economy. so it is time to do just that. time for both parties to work together and find a responsible budget forward that invests in economic growth. as we began the budget conference -- the next budget conference, i think it is important to acknowledge what has been done so far. in the past three years significant congress has been made in achieving 2.5 trillion and reduction measures. this is more than halfway to a $4 trillion target. this was laid out five bipartisan fiscal commission's like the simpson-bowles commission.

while we need to do more, we must do it in a way that is balanced and does not put up a roadblock for moving to economic recovery forward. quite frankly, the biggest roadblocks to the economic recovery have come in the broken politics of the city. the government shutdown cost the economy more than 120,000 jobs in october alone and continued sequester cuts are predict it to cost as many as 1.6 million jobs next year if kept in effect. we have the chance in this to leave the damaging path. a new path is before us, and the american people expect us to take it together. the middle-class families and small businesses that are working so hard to move our economic recovery forward deserve to have both parties in

washington working across party lines to pass a bipartisan budget that creates jobs and grows our economy. in order to do this, we know we have to work together. the common refrain is that republicans will not yield on any revenues and democrats will not yield on any changes to programs like medicare and medicaid. the democratic budget includes revenues from cutting tax expenditures and closing tax loopholes. it also includes smart and targeted spending cuts and includes 275 alien dollars in entitlement savings, achieved without cutting medicare benefits that seniors have earned and rely upon. the house republican budget has significant cuts to benefits and --vide economic security house republican budget has

significant cuts to medicare benefits -- those are the very benefits that provide economic security to millions of middle- and has zeros dollars of revenues that could be used to invest and the essential pillars of economic growth like education, workforce readiness, science, research and innovation. significantere are savings that can be achieved in our health care system without compromising the quality of care , and in fact, improving the quality of care. and without slashing benefits that seniors have worked so hard for and earned. former secretary-treasurer he paul o'neill has estimated we can save $1 trillion per year without affecting health care smart,s and i in acting targeted health care delivery

reforms. the institute of medicine beimated the number could 750 billion dollars. no matter what the exact figure or proposal, these are impressive savings that would strengthen the nation's health- care system without shifting cost and burdens to seniors and states. these have the added benefit of qualityg quality, -- outcomes within the health-care system. so before we continue to on thevely but benefits table, i would hope to begin the dialogue about finding solutions that produce health-care cost savings. i am confident that if both parties do in washington what the people do every day in the state of washington, put progress ahead of politics, we can break the destructive pattern and make that progress. >> thank you. senator wicker. -- thank you, mr.

chairman. let me agree with senator baldwin, we need to have solutions and show the american people we are problem solvers. wereor johnson's chart's painful but make the point that has been made over and over today, and that is that we have a debt crisis in still headed in the wrong direction. the deficit is down but down on a temporary basis. it will soon rise again to $1 trillion per year. we are in a week recovery and have not turned the corner and should not approach the budget as if we can turn the corner -- we have turned the corner. no one liked sequestration. i do not like sequestration, but i can live with it. indeed, under sequestration discretionary spending begins to

rise after fiscal year 2000 13. year 2000 14. without replacing it with better savings, we must keep sequestration. senator warner, i will support revenues. and as chairman ryan pointed out and senator kinsey made clear, they must come through economic growth. i think we can do that. i am equally certain republicans in congress will not support tax increases, either directly or indirectly. front door or back door. asking american workers to send more of their paychecks to washington will hurt growth. similarly, taking more tax dollars from job creators will jobs. in fewer i exceed -- agree exactly with

what senator grassley said, the that cameon tax hike with the fiscal cliff legislation at the end of last year was our tax hike. we have gotten the tax hike, and we will not support another one. explore representative idea of an cole's expedited tax reform process to get us the pro-growth tax policies that will give us the additional revenue we need. enactinget's explore savings contained if president -- and president obama's own budget. president obama has outlined budget savings in the

entitlement programs that were courageous, difficult, but they do not cut benefits. these proposals do not cut social security. they do not cut dedicate. no one is suggesting, as has been alluded to, suggested by some members of this conference committee that there is a proposal to slash benefits or cut benefits. all we're talking about and all the president is talking about in the mandatory proposed savings in his own budget is slowing the growth rate of these very important programs to save a fiscal andom debt crisis and to save the very valuable programs. sweetk those are the spot. tax reform to give us economic growth and savings in the growth rate of our mandatory programs.

we can rise to the occasion and be problem solvers for the american people. >> thank you. senator kaine. >> thank you. good to be with colleagues on this. one thing i want to do is confound the cynics who have low expectations of us. there have been years of budgetary dysfunction and has not been a budget conference and a divided congress since 19 86. we start with a low expectation bar. the budgetary dysfunction has hurt us dramatically in virginia. the combination of shutdown and sequester are hurting defense and other key priorities. we feel it, i know you feel it. i want to focus on four areas where i think we are closer together than we might think as an encouragement to finding compromise. first, we should acknowledge the 2014 budget numbers are not that different.

the senate sets discretionary spending at 1.i've 08 trillion. house number 967 billion. is 1.508. number ishink you would argue it smaller, because the republicans would argue the senate numbers might be artificially high because we assume there would be no continuation of sequester. we assume the house number is artificially low. differencethe real is about 1.5%. miss an believe we will opportunity to do something right for the nation, the economy because we could not put close a difference of 1.5%. closer than we might inc. in 2014. number two, we should all agree that growing the economy should

be the primary goal. the major test of the economy is not gdp to debt ratio, whether a government spending plan helps produce a growing economy where people in all regions and stations of life can have a path to economic success. that is what we try to do in the budget and look forward to talking about how it accomplishes economic growth. i think we can all agree the sequester is a bad idea. those who voted for the bill said do not worry we will never get the sequester because we will never make a deal. so everybody agreed at the time it was a bad idea. now in the senate, senate armed services bipartisan have said we need to replace it. house bipartisan have said we need to replace it. everyone thought it was a bad idea at the time. there is no excuse for finding a

better path forward. i hear some people talking, we just cannot do anything about it. we should be able to fix it. fourth tom a we all want to withce sequester reductions in spending. the senate has made a significant concession. we do not propose increasing any tax rates. we think we need to make targeted cuts in spending in the discretionary side. we put in targeted spending cuts on the mandatory side, but we believe we have to be able to look at the tax expenditures. the recognition that tax expenditures have to be waned in is bipartisan. boehnert obama, speaker , mark zandi have all said we need to do this. medicare,we reform affecting millions of seniors and not consider scaling back tax breaks to exxon mobil? tax greenspan said they are

entitlements every bit as medicare might be. it is an entitlement and should be willing to look at all the tax expenditures. if we just reduce the tax expenditures in the budget 55%- six percent, it would create enough revenue coupled with the spending side that we could do --nificant work to sciquest replay sequester. all of my comments have basically been about one thing. i do not a view finding compromise impossible, just doing our job. we always passed a very different budget. we found compromise that kept the government open and kept us with the aaa bond rating him and other states do exactly the same. state legislatures all over the united states can do this year in and year out, why can't we? we have not done a budget conference in many years. isn't this an embarrassment that

we hear should resolve this behind us? our state legislators more talented or more public spirited than members of congress? thes say -- surprised people who say we cannot do this. i know we can. >> fellow citizens, we cannot escape history. we of this congress and the administration will be of ourselves spite -- in spite of ourselves. that was from president lincoln and a member to congress almost exactly 150 years ago. i want to emphasize i think that on breast -- comments have been wonderful. -- almost 250 years ago. this is a historic opportunity and responsibility. the other day after hearing him i ran into an old history professor i have not seen in 45 years, an american history professor. i said have we ever had a moment

in american history with this level of on functionality and chaos and our governmental system? he said of course. i said when was that. he said the articles of confederation. the time before the constitution that provoked the framers to write the constitution was a time when government did not work. we're in a similar time. that is why what we're doing here today is such an important and very heavy responsibility. the importance of doing something. the best thing we can do for the economy is to show the american people we can do it. that week and work together and find a solution. two thirds of the economy is driven by consumer spending. confidence is instilled by the government being at least modestly functional. which it has not been recently. does not have to be a

comprehensive solution. real,s need to be significant. at least needs to take us through september 30, two thousand 14. my second wind is the fiscal situation is serious. -- september 30, 2014. doodling a bitp about what would happen if interest rates went from two percent-four percent on that which is not at all unexpected in terms of public debt. if that is the case, $17 trillion debt, four percent would be 680 billion dollars per year, which exceeds the defense budget and intelligence budgets combined. that is the dead hand that buys us nothing. schools, no jet airplanes, no defense, no nothing. interest on the debt exceeding defense and intelligence budget combined.

a crowd out everyone's priorities. it crowds out everyone's priorities. it is an immoral burden on our children. i want to relay one additional thought on that front. when i was governor, one of the rituals was to go to new york for ass the ring and hope good bond rating and hope for a good rate for your state. i was talking about how prudent we were in may -- maine and did not have much debt and we were paid off in 10 years and careful with expenditures. an analyst optimally and send governor tom i want to remind you that not fixing your infrastructure is debt. it is debt just the same as debt on the books. if you are standing on maintaining your infrastructure, you are building up a debt for children and grandchildren just as if you are borrowing the money. i think that is an important

item to remember. seen charts that show exploding federal expenditures. it is all health care expenditures. that is what is driving the debt. not held grants, department of defense, cia -- it is health- care expenditures. that is what is driving the deficit. that is what we really need to talk about. we're making a grave mistake if we cut those programs on the defense side or domestic side, because health care, like the interest on the debt, will crowd everything else out. what do we have to do? we had to deal with the debt problem, which i have acknowledged is very important, but do in a way that does not compromise the economy. we have to do it in a way that is gradual and thoughtful and credible, but not all at once. we have a saying in maine that

the pass out of the woods is usually as long as the past and. taken as 15-20 years to get into the whole and not get out of it in the next 2-3 years. to have a credible plan that does not compromise the economy and economic growth that everyone has talked about is the very best way to solve the problem. lower debt ande, make the necessary investments. i will not talk about tax expenditures but they are expenditures. both sides agree. in both budgets we mind the tax expenditures. the only question is, what do we do with them? i think there is a compromise to be found there. the rubicon of getting new money from tax expenditures has been crossed by all parties. let's talk about how the tax expenditures are allocated. finally, i will go back to president lincoln.

1, 1862, talked about how to deal with change, difficult problems and how we have to clear our minds and think creatively. the best phrase i have ever encountered about how to deal with change. here is what he said -- the dogmas of the quiet past are inadequate to the stormy present. the occasion is piled high with therefore, wed must rise with the occasion. as our case is new, so we must think anew and act anew. and then we shall save our country. thank you, mr. chairman. >> thank you. i want to thank everyone for attending today's meeting. good closing. i love that speech from lincoln.

i think we have had a good discussion. i think from both sides of the aisle we see signs of common ground. that is a great start. our next legislative schedule does not overlap until november 13. that is when we will reconvene at 10:00. with that, senator murray and i will consult on the next steps beyond that. t this time -- >> i want to thank all of the members for a very thoughtful statements today. i think we have a good committee here and look forward to working with you as we set in place the process of moving forward. >> this meeting stands adjourned.

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discusses a recent study that shows a decline in the safety net of the poorest families with children. at 9:00, andy kroll examines money and politics in this year's campaigns. lauryn williams gives us an update on the political battles over william -- women's issues. ♪ host: good morning. it is thursday, october 31, 2013 on this edition of the "washington journal." we will be featuring several reporters and editors from "mother jones" magazine as we put a spotlight on that publication. for we do that, two very different pictures of the new health-care law were painted yesterday with president obama touting the affordable care act in a speech in boston. just hours before that, his health and human services secretary cap points of bilious --