ways to compromise every day. they know it isn't easy, but it is the only way to make progress and work together when there isn't absolute agreement on the path forward. i agree with those that say, the very least this conference should be able to do, the absolute minimum, is to find a way to come together around replacing guest racial -- se guestration and finding a budget. if both sides are ready to come out of their partisan corners and offer up compromises, i'm confident it can be done. let's start with something we can agree on. democrats and republicans have said replacing sequestration should be a priority. with extreme cuts continuing to cost us jobs and slash investment in our children's schools, in cancer research, and in our nation's law enforcement officials, there is clear consensus, this is a terrible

way to cut spending. the question is no longer whether sequestration should be replaced, but how. as every member of this conference committee knows, both the house and senate budget call for changes to the budget control act and replace sequestration in different wales. the house budget fully replaces the defense cut, lists the b.c.a. cap, and pays for that by cutting from key domestic vements -- investments. the senate budget pays for that with an equal mix of spending cuts and revenue caused by wasteful tax loopholes that benefit the wealthiest americans and corporations. so getting a bipartisan deal to replace quest racial is going to require compromise. there is no way around it. i am going into this budget conference ready to agree to some tough spending cuts that unlike the quester -- sequester caps that disappear in 2022,

will be locked into law. i know there are some republicans that would be interested in swapping some of the infish and damaging sequester cuts with programs that would save many multiples of cuts over the decades. i'm ready to listen to their ideas. as long as they are fair for seen yoirs and their families, i'm ready to make some concessions to get a deal. commowmies runs both ways. while we scour programs to find responsible savings, republicans are also going to work with us to scour the bloated tax code and close some wasteful tax loopholes and special interest subsidies. it is unfair and unacceptable to ask seniors and family to bear this burden alone. these are nothing more than wasteful spending. i'm hopeful that we can work together to get that done, and get to a balanced deal.

sequestration is bad policy. democrats and republicans have said it's not sustainable. we need a bipartisan deal that's fair for the middle class. i know by definition, this requires each side to make changes they couldn't make on their own. i know we owe it to the american people to work together. i know there are democrats and republicans in this room and outside this room that agree. if there is one lesson to be learned in the past two weeks, it is this. the only way we can avoid gridlock and crisis, and the only way either side can get what they want is through compromise and bipartisanship. that's what the american people are expecting and want from this conference, and i am looking forward to getting to work to do hat.

>> we reconvene on november 10 at 10 a.m. with that, mr. hamlin. you mr. ryan. it is great to be on the same side of the disable as you. it was just -- the country has paid a steep price for those reckless actions. stoord & poors estimates the shutdown cost our economy $24 illion, and the peterson institute said bipartisanship has cost our country 900,000 jobs since the 2010 elections. i hope every member of this committee, democrats and republicans alike, will put away the threats of future shutdowns and default and focus our efforts to help our economy grow. the house and republican and

senate democratic budgets before us represent very different visions for the future of the country. we're not going to be able to bridge all those differences, but i hope we can make some progress, and that will require tough compromises. it is also important to be honest with the public about the nature of our differences, because to govern is to choose, and our budgets reflect different choices. we need to reduce the long-term deficit in a balanced way. it provides for vital investments to ensure america remains the world's economic powerhouse. we aloe indicate resources to -- allocate resources to put people to work, modernizing our bridges

and our ports and other infrastructure that is the back bone of our commifment these used to be a bipartisan priority. unfortunately, the republican budget assumes very big cuts in our transportation spending. in fact, it would practically eliminate the cost of new highway projects as soon as 2015. our budget also invests in our nation's most valuable resource, our kids, by boosting support for education, including an early education initiative. the republican budget in the house resulted in the cut of 20% below sequester levels to that part of the budget that funds education. these choices have real consequences. we also know that the deep, immediate sequester cuts are hurting our economy. the non-partisan congressional budget office tells us to meet our defense and national priorities will result in 800,000 fewer american jobs by this time next year. we all know there are smarter

ays to reduce deaf -- to equal deficit reduction. in the house, many have offered to plan a quest sequester with balanced cuts to wasteful spending and cuts to unproductive special interest tax breaks. unfortunately we have been denied an opportunity to vote often that plan. finally, this committee should continue to work to shrink the debt. over the last few years, we have cut the 10-year deficit by over 2.7 trillion, excluding the sequester. three-quarters of those savings come from budget cuts. one quarter from revenue. if you factor in the additional trillion dollars in savings resulting from slower-than-expected health care costs, which are due in part to changes in the affordable health care act, the revenue change is 4-1. still, we can and should do

more. there are dramatic differences between our budgets as to how we tackle the challenge. the depement budget adopts the balance approached recommended to every american by every bipartisan group. the republican plan from the house drops the tax rate for the very highest income earners by a full third, providing a windfall to the very top 1%. at the same time, undercuts other important priorities and commitments. any agreement will require difficult compromises. and we should not start the negotiation by taking things off the table. finally, mr. chairman, i would like to mention one other national priority that could both help get the economy moving, help reduce the deficit, and strengthen social security, and that would be to pass the comprehensive immigration bill in the house of representatives. that would accomplish a lot of the goals of this committee, and

we simply need a vote to make it happen. so i hope we will look at all the possibilities before us for growing our economy and reducing our long-term deficit. thank you, mr. chairman. >> thank you. next we'll here from the ranking member of the committee, senator essions. [inaudible] in this room are some of the most educated people in the benl and dealt, and i believe we can make some progress as this committee goes forward. the purpose of a budget is to develop a financial plan for the future of america. it is not easy, and our differences are real, and it is

difficult to bridge them. but there are actions which we can take that we can agree on that would improve the financial standing of america and economic growth. so it is important that we work at it. i think the regular process of a budget conference committee is a positive development for sure. our colleague, ron johnson, is a successful businessman. he's correctly told us, if you want to develop a strategic plan, and we need to, the fiffers thing we have to do is get nn in contact with reality and to agree on the problem. we have ast five years had report -- this agenda, which has been the vision that governs america for the projected and predicted vigorous growth, lasting prosperity, has not worked. we have sign seen it play out. more spending, more taxes, more borrowing, more regulation, in

all aspects of american lives have not added to the improvement of our economy. we have added 6.9 trillion to the debt. tax, spend, regulate, and debt, we believe, will never work. it can never be the foundation for lasting prosperity and growth. it is a plan guaranteed to failed. takehome pay has fallen for the last five years. median household many income is lower today than in 1996. we have the lowest labor force participation rate in 35 years. a small percentage of americans are working today than ain 35 years. we have 12 million more residents than in 2007 and too few workers. what we should do is create a growth-oriented tax system that makes america more globally competitive. we need to eliminate unnecessary

regulations, we need to produce more american energy, we need to ensure that trade is fair and our workers can fairly compete. we need to enforce an immigration policy that serves our national interests, and we need to reject large government programs that we can afford that kill jobs. we need to balance the budget. as congressman ron said, that in itself will be a strengthening factor for an commi committee that's uneasy today. these are common sense programs that will work. knees ideas are consistent with the american ideals that have serve us so well over the centuries. the bebling control act reduced the growth rate and federal spending by $2.1 trillion. that is an important first step. after this year we will see a 2.5% increase in all the programs that that were affected

by the budget control act. so this is a tough year. this is the year we will have the toughest time. after this, growth will occur in our discretionary accounts. congress and the white house must keep their promises to the american people. if we violate the solemn promise contained in the budget control act and the plain law that it is, how can we expect the american people to believe this when we make new promises about what we're going to do in the future. no honest evaluation of the nation's finances can ignore the impact of the affordable care act. in my request, gao has concluded legislation is not paid for as promised and will likely add $6.2 trillion to the debt over the 75-year window. we need to shore up social security, not add another huge unfunded liability. , icare has a far worse debt

adding $2 trillion in unfunded liabilities to the nation over this same period. medicaid, the free health program for our low-income americans has no trust fund and is on a particularly unsustainable course. outlays for this program will reach $4.3 trillion over the next 10 years alone. the budget control act made spending progress, but leads our budget on a path to growth of 6.2% over the next 10 years. as far as discretionary programs, many mandatory and welfare programs are left totally untouched. c.b.o. told us this path is unsustainable. we are not on a sustainable path today. it will create trillion dollar deficits in 10 years. we will be back to a trillion dollar annual deficit within 10 years. yet the budget would -- the senate budget would avoid

reductions in d.c.a. it proposed to spend a trillion over the budget control act levels and raise taxes by a trillion. the truth is, we must recognize that the d.c.a. is only the beginning. more will have to be done. we remain with it on an unsustainable course. but i think there is a different spirit today. i think we have the potential to recognize the differences we may have in vision and somehow we can make some steps that are good for america. mr. chairman, thank you and chairman murray for your leadership. >> now with the opening statements of the chair, i intend on inforcing the five-main oh, minute rule just to accommodate everybody's schedule here. it is what it is. [[laughter] ] we plan to proceed so hopefully some can stay while others go.

with that i want to recognize the vice chair of the budget committee. >> thank you, chairman ryan. two weeks ago our nation surpassed $17 trillion in debt. we're on an unsustainable path that's threatening the nation and morting our children's future. we must act with honest purpose. a lack to do this is immoral and irresponsible. at this point there is not much to be gained by who is to blame for this fiscal mess. what we should be concerned with is how to clean it up. i think there is a path to an agreement. we're blessed to live in the greatest country ever, a nation that has meant every single challenge. we haven't done so, because we viewed those challenges at the -- as a zero sum game where one side wins and the other side loses. we have done so because leaders have worked together and found

common ground and solutions that work. our challenges are huge and they are growing. the federal government is smending over a trillion a year. we have had deficits at a trillion and a half dollars and continued with deficits of $100 billion. unique in the history of the world. this in spite of the fact that the government took in more revenue last year than ever before. there is also more to this than numbers on a page. today, more than 16 million americans, including 20% of all children, live in poverty. nearly 50 million of our americans live on $23,000 a year or less. to make mearts worse, life has become too painful and expensive for almost everyone. unprecedented labor force dropouts, ever increase -- increasing health care costs all result until many americans struggling just to get by.

washington spends more and more and more and yet our problems get worse and worse and worse. taking more out of the pockets of hard working americans will not help. it is a recipe for economic pain. how do we begin to make government more effective and accountable? there is no question we must protect the vital services the government provides. we want to save and secure critical programs for our seniors like medicare, social security, programs they paid into and expect to be there, but programs that according to independent actuaries will not have the resources to survive if they are not strengthened. we want to repair america's safety net so we can protect the most vulnerable among us in a fair and caring manner. we want to strengthen our nation a, the greatest in the world,

remains strong and independent and free. we want to grow the economy so millions upon millions of our americans that are unemployed or under-employed can get back to work and support their families. so opportunity here and in the weeks to come is to identify the common ground for positive solutions. there may also be an opportunity to achieve consensus and savings on better government policy. imagine the saflingse that might be had if we were serious about identifying real waste in government or fraud with every single american every day. or abuse of systems meant to help. or imagine reforms that contemplated on ending due politictive programs to do nothing to further their goals. imagine those savings that get away from the we win, you lose mentality in america. a friend asked me the other day, what are you doing differently today than you were the other

day? if you are not, why do you expect a different result? let's imagine an agreement that will inspire the american people and begin to rebuild the trust so lacking now in all of us that we can actually meet the challenges before us. let's not lose this opportunity. the status quo here in washington is not working. it is not working for millions of americans struggling just to make ends meet. every day that we fail to act positively is a day filled with more debt and less security and less opportunity for the american speesm. i look forward to having all of us put aside our talking points, ignore the routine washington think of we win and you lose, and coming together to meet this challenge and meet it in a way that respects each other, respects our constituents, and the history of our great nation and the leaders who have come before. thank you, mr. sharme. -- chairman.

>> thank you, mr. ryan. the government shutdown has hurt our economy and slowed economic rowth. 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 economic ladder and we want a policy to help those who are to there, get their -- there. i want to give three points. the tax code just turned 100 and it looks every day its age. it is a broken, in efficient mess. it is time to bring it into the 21st century. i'm committed to tax reform. there are ripoffs and loopholes 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 camps, for tax reform and against tax ripoffs. a good place to start --

incentives that push companies to move jobs overseas. second is medicare. the future for medicare is better care at lower cost. it is very different than 1965. chronic disease, cancer, diabetes, and other problems -- 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. fairness -- my view is there has to be parity between defense and nondefense. the rule of the whole sequestration debate -- the 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 equal commitment to health,

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 nd find common ground. i look forward to working with all of you. to change rules in the middle of this debate, i think would be a substantial debate, and it seems to me that what we do with respect to defense, if we are adding money back there, we need to make an equal commitment to help education infrastructure and science investments that will secure our future. those agree areas -- taxes, the question of better care and

lower cost through medicare reforms and budget fairness strike me as three areas where we can, as colleagues have side, come together and find common ground. i look forward to working with all of you to do that. >> thank you. mr. clyburn. >> 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.

we must address the automatic spending cuts that are hurting our economy and undercutting important priorities like education, medical research, and national security. but we must put our nation's 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 -- the red line chops the deficit over the past 65 years. the blue line charts the same years. when unemployment goes down, the 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. unemployment is a double whammy for the federal budget. to lower the deficit, we have to

ower unemployment. advocates for deficit reduction want to cut benefits under medicare, medicaid, children's health insurance program, nutrition assistance, and other vital services -- that nor the fact that when you cut essential benefits, you shift these necessities onto senior citizens to my parents, and lower income people. these cost shifts take the money from consumers that would otherwise be spent in other arts of the economy. helping businesses grow and creating jobs. cutting benefits cuts jobs. cutting jobs is 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. we need to have a strong economy -- by depriving our nation of the physical and human capital we need to have a strong economy in the 21st century to work for s. 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 rowth. 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 ars. 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 target communities that have 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 week that our colleagues said, 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 ound fiscal footing. >> thank you. next, senator nelson from florida. >> good morning. i think it is our intention to 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 floor, has dominated these talk

shows where people are just voices can be heard at things can be accomplished. i look forward to finding common ground and avoid a debt path that is unsustainable. s i get back to a statement president kennedy said. he looked forward to find not democratic or republican answers, but top find the right answers. i hope we will take that approach. the only certain hurdle we have to overcome is ourselves. and the thing that could derail a ipartisan agreement is reversion to the display that , excessive partisan

hipp and ideological rigidity. we need to put aside our differences in favor of finding a bipartisan solution. i am basically an optimist. i am optimistic we will find a new bipartisan spirit here. i am hopeful that we can talk openly and honestly about how to move this country forward. now, there are some of the questions that seem to have obvious answers. for example, we need more 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? need to close some of those

loopholes that low some of the more privileged and the more profitible corporations a system that allows them to avoid paying taxes. and we need to find ways to prevent things like this so-called off-shore tax dodgers. the difference between the house and the senate is about $90 billion. that's just about what published reports say the treasury loses each year from often-shore tax avens. that's just aven example or two that could save more than enough. while we go about trying to negotiate this budget plan, i'd also be mindful -- i ask that we be mindful of the need to

hopefully arong and growing instead of shrinking middle class and the needs of folks on housing and access to affordable health care. to dois senator does want this on the backs of social ecurity beneficiaries. let's judge ideas whether republican or democratic as a good idea. >> thank you. enator grassley. according to the c.b.o., the

long-term budget, the federal biggest secured the debt. federal debt now held by 70% of g.d.p. that percentage is higher than at any point in u.s. history, except for a brief period around the world war ii. our nation's debt will continue to rise with no end in sight if congress does not act. mr. chairman, there is an opportunity here to show the american penal that we can set aside our differences and negotiate long-term reforms. we can succeed where the super committee and other bipartisan working groups have failed. it will b not be easy. our friends in the other body have a different proposal, one that significantly raises taxes, continues funding the affordable care act, and 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

udget proposal that the senate inds objective. i'm hopeful this committee can come to an agreement on limiting the damaging cuts in the sequester by replacing them with changes to mandatory spending, like shows suggested by president obama. -- mr. chairman, we need to provide the appropriations committee with certainty so they can craft bills so they have the possibility of becoming law. we must find ways to deal with our growing debt. there is much work ahead to solve our current fiscal crisis. i am hopeful we can find some smon common sense reform for the future of our children and grandchildren.

in fact, we have cut discretionary spending in each of the last three years. a feat not accomplished since he 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. at the same 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 pro-growth policies that could grow our economy. expanded oil and gas operations, and the like. more revenue should not mean higher taxes. i think we should allow for tax 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 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 we must demonstrate working together to confront our fiscal challenges. there is much cynicism among the 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

eaders where rank-and-file embers 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. the president and the senate 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 face are caused by too much 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. he 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. he said, the tax system creates 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. president obama's budget could be a starting point and should be considered. 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 there. i will put the rest of my statement in the record. >> thank you. >> thank you, mr. chairman. 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 balanced and responsible way. the reckless government shutdown and threat of default caused $24 billion in economic activity and 24,000 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. the house majority did not pass any spending bills at the equester levels. when republicans pulled the 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. sequestration and its unrealistic and ill-conceived discretionary cuts must be brought to an end. end quote. $1.55 billion less for the

national institutes of health to conduct research. every 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 researchers, teachers, students, and technicians.

$221 million less for the department of energy's office of science, risking the united states' leadership role in advanced computing. the return 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 worse, 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 defense employees and reductions to military readiness, the department of defense will lose

$20 billion more in mid-january if we don't act to avoid another ear of sequester cuts. everyone in this conference has reason to find common round. 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 that slashes spending on wasteful special-interest subsidies and tax loopholes that allow a select few to avoid paying their fair share. i hope that we will hold a 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 or me now. if we work together, we can ontrol 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.

our goal 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. in the senate e should've brought up the spending bill on the floor. we would have had time to improve the bill. 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. we 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 consider

my penny plan. we have got to stop spending more than we take in. we have to find a way to start paying down the $17 trillion debt. everything would be on the table. we should focus on reducing the wasteful and duplicate spending before we look to new programs and services. 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 scrutiny as well. we have a spending problem, we don't have a revenue problem. we don't 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 ebt.

we have a spending problem, we don't have a revenue problem. we don't need to raise taxes noord for washington to spend more. we can't spend our way to prosperity. i am a member of the finance committee. we need to move expeditiously on tax reform. 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. it scores positive. some think all that is needed is to replace automatic spending cuts with squefters. sequesters. -- with what we need to do is prioritize

the cuts. we need to start there. it worked in wyoming and it can work here. our governor was faced with an % cut. we can reign in out-of control spending. that should be the path forward. our nation's over-spending has to do 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. i look forward to a robust debate on our nation's fiscal path forward. >> thank you. representative black from tennessee. > thank you, mr. chairman. from the start of this conference, everyone has asked what our expectations are for .his congress

this isn't surprising, as has already been said. anyone who can look at these two budget proposals forward by the house and the senate 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. 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. my constituents september me here to work toward a solution and to find policies to help our economy grow. our nation is now more than $17

trillion in debt, and our economy is so flushed that 90 million 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. we all know that growing the economy is the best way to increase revenue and reduce our deficits. i have three children and six grandchildren. of which i am very proud. 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. my expectation is that everyone in this room will work together to help secure our future by making a down payment on our debt. my expectation is that we will 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. my expectation is that everyone 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. >> thank you, and i yield back. >> thank you. senator tabe now stabe know >> thank you. i want to thank chairman murray 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. ogether, we have the opportunity to take the next step in meeting that goal. a step that needs to be balanced n 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. we can do it again.

as you know, a budget is a blueprint for the country. it is a statement of our 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. not 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 needs to be replacing the 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. let's go to mr. crapo. >> thank you very much. 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. when he to turn the current crisis. we need to recognize the facts 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. the reality is that we do still have a debt crisis. the $2.5 trillion that is talked about is essentially made up of about $5 billion or $6 billion in tax increases and the budget control act -- anybody 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 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. if we stay on this course, we will be spending less in real dollars in this fiscal year than we have in just a few years past. a remarkable achievement. one that must be maintained. as we talk about how to move forward, one of our first objectives should be to protect and assure the reality of the fiscal reforms that we are the have in place. i am talking 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 reform, the fiscal reform, and the budget enforcement reform that we all know needs to be done. what we can set up processes to help us assure that tax reform does move forward. processes that assure that 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. and hopefully, 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.

i would encourage us to focus on laying the foundation for much greater and effective results as we move forward beyond the activities of this committee. thank you. >> senator sanders. >> 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. let me begin my remarks with a radical proposal. let's listen to what the american people are telling us. what are they telling us? in poll after 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. the last one tells us that 80% of the american people do not want to cut medicare benefits at all. 76% do not want to cut social security benefits. second of 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. but they also want us to create 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. the pope talks about this a lot.

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. they also say, when the top 1% in the last few years have

received 95% of all new income, 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, on 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 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 year 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 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.

it is like we're on different political planets here, but what is the nature of the problem. either we have a $17 trillion debt or we don't. we do. the question is why. how do we turn it around? 80 million baby boomers -- mr. chairman, madam chairman, whoever is running this thing -- 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.

our democratic friends -- over 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 us. we will not be able to reconcile 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 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 it as a decade where we try to keep radical islam from acquiring 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. to my 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 whitehouse. >> thank you. we are still 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. to its credit, it was designed to be painful and it has filled that bill. i heard from rhode islanders in

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 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. when 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. we must replace the sequester 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 of government programs has been most. additional revenue has grown only $600 billion. what has been it zero through this entire exercise is another costly area of federal spending. we have done nothing on federal spending through the tax code. i say to all of my fellows, you cannot honestly say that the debt and deficit are mortal threats to our nation and at the same time less important than every tax loophole in the code.

that cannot be our position. our senate budget generates a $975 billion from loophole closing. i would urge everyone to take an honest look at this untouched form of tax spending. the tax loopholes i would like 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 pay lower tax rates. correcting these laws should be fair. the potential savings from health care delivery system reform are enormous. experts 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. progress has begun. since 2010, when the bowles simpson commission recommended cutting our deficits we have seen estimates for medicare and medicaid drop i $1.2 trillion, 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? >> thank you, 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. and it presents an enormous 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 when we were furloughing those american assets. i can assure you, those countries did not put their research on hold during our period of this function. second -- and i think we have 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. in 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. education 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

replace it. 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. but i think that while we may not be able to get to the so- called grand bargain, that we 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 thank you for 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 eude us come in so i would 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 the cuts of the bca puts us on a

more sustainable and reasonably judge a three. the chart we have posted illustrates this. if we had grown discretionary spending since 2000 at the rate 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. and what the bca caps do is return us to that trajectory over time gradually. i will be the first to say, i am very open to alternative ways of achieving the spending discipline. i am not suggesting that we have to enact 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. when we get 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. finally, we also know that we have a dynamic and face -- place i was appropriation bills might exceed the statutory spending caps. if they do, we have a mechanism that 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 family with you -- cut the most 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 overseas when we can't fund the infrastructure and maintain existing infrastructure for manufacturers to succeed here in america? why do we have loopholes that give billions to oil companies while headstart programs have had to turn around eligible children 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. crashing 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. indeed, ending tax ripoffs and growing a successful economy, creating living wage jobs, put these two goals -- thriving 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. the american people expect us to find common ground, expect us to find --esprit de corps. 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. we have not met for four years, 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. per side -- provide some relief 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. my friend and former colleague 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. i think the converse is also 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. finally i want to say, a 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. so, 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 problems, let's not question 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. in 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 10-year problem we aren't 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 decade $6.3 trillion deficit, second deficit, $16.5 trillion, third decade, 33.6, for a whopping total of $56 trillion. in our discussion at the white house we had projections as well i predicted $107 trillion over 30 years, a range. does not matter what you pick. it is a big problem that needs to be addressed. i hear all the time that social 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 of $12.7 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 thing, $27 billion added because 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. >> senator coons? let's i would like to thank chairman ryan and murray for the 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 end the disagreements and 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. there were 600 thousand unfilled 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 murray, 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 as delawarians.

i use that. senator ayotte? >> 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 when you think about where they are. we reached a milestone that none of us are proud of with 17 million in debt for the nation. i am the proud mother of two children. not just words when we think about what is it we are passing on to the next generation? those of us 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. one of them is going bankrupt in 2020 six. the mandatory spending piece of what we spend dollars on is two thirds of federal spending. cbo outlook in the next 25 years looks worse for our nation, not better.

in fact, those important programs 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. so my hope is that we can lay a foundation for the country. because if we do not get at the underlying 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. short 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 savings at about a third of 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 -- odierno 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. let's see 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. lex next from a wisconsinite. senator bolan. >> thank you. i want to recognize the leadership of chairman murray. while i have heard some real

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 conference 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. to be clear, 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 provide economic security -- house republican budget has house republican budget has significant cuts to medicare benefits -- those are the very benefits that provide economic security to millions of middle- class families and has zero dollars of revenues that could be used to invest and the essential pillars of economic growth like education, workforce readiness, science, research and innovation. i believe there are significant 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 pa'