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supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. eak at a different aspect of your money. this week, we are focusing on the u.s. debt and deficit and to do that we are joined by christopher mihm, who serves as the strategic issues management director at the accountability office. and maybe just define those terms, debt and deficit, and the difference between them. is the annualicit number, the difference between the revenues and actual expenditures that go out of the federal government each year. the debt, like in our personal lives, is how much you are building up over a long time of what you owe that you are not paying down each year. host: the report we are about this money from the government accountability office, the fiscal health and action needed to address the physical feature

of the government. we have a phone lines for democrats, republicans and independentss. . a good place to look at is the u.s. debt clock.org. the national debt approaching $21.2 trillion, the deficit expected to be over $800 billion, which two of those numbers concerns you more? guest: they are both of concern in a sense that -- our report focused on the end of 2017, taking us through last september, but as you said the numbers you have are both big and the real concern is they are both growing. our concern and what we have been urging congress and the executive branch to do is to put in place a plan that will deal with both of those. we are on track to hit our historical high of jet to pdb -- to gdp ratio. we are on track in a few short

years, depending on which assumptions you use between 14-22 years, we will hit 106% and keep going. so we need to manage both of those. host: are there lessons to be learned from looking back to that time when we were in the fiscal position to maybe bend the curve we are seeing today? guest: very much. the report you mentioned has a chart that shows from 1790, the founding of the republic, debt to gdp ratios. and what you see consistently over time is that as, during the wartime, economic downturns, recessions and depressions, the ratio goes up. we spend more than -- we spend more. during peacetime, historically, and economic upturns, we pay down that debt. and so we had that 106% after world war ii, then over the next, into the mid-70's or so we were paying the down.

we did go up periodically over time, but postwar it has been about 45%. the concern is, over the last two decades, the historical pattern has been broken. we have not been paying down the debt during better times, and as a result we are on this, but we would refer to as an unsustainable fiscal path. those are the hard decisions we have to make about spending and revenue going forward. we need to get back in place and put a plan in place to deal with long-term challenges. host: the term you referred to in the report available at jdo.gov, but i can show it to viewers, the percentage of growth domestic product, the debt held by the public as a percentage of gross to meta-product. you can see the changes from 1790 to 1800, to the 1900s, through to today. in the report, if you take a look at it, you will see numbers from jdo, cbo, explain the

gao?rence -- what is guest: we are, like cbo, we are part of the congress and legislative branch where an independent nonpartisan agency an independent nonpartisan agency. we are basically the congressional watchdog. we do program evaluations, audits at the request of congress. we do about 800 a year. the overwhelmingly majority of those available on our website. people pay my salary and this out of my colleagues, so that information is there information. people can search, find basically the valuation of or assessment of anything the federal government does, virtually everything the federal government does on the website. host: is the power in the tell an to, can gao stop spending money a certain way? guest: i wish we had enforcement

authority, but we do not have direct enforcement authority, but fortunately for us the power of what we have, over time, close to 80% of our recommendations are implemented, so the authority we have is through the quality of the work that we do and in the gao we were closely with congress and getting action on our recommendations, whether they be actions for those agencies or legislative actions that need to take place. ofend up saving tens billions of dollars each year in the american people, thousands of other benefits like management improvements within agencies, so we are a good return on investment. host: if you want to join the conversation, lines for democrats, republicans and independents. democrats, 202-748-8000. republicans, 202-748-8001. independents, 202-748-8002. christopher mihm will be with us until the bottom of the hour. this chart shows the three biggest drivers of long-term

fiscal spending, health care, social security, interest on the debt. which of those is the easiest to bend down? guest: it would be great if any of them were easy to bend down. the viewers with the last segment saw the challenges we have on health care costs. medicare, just on social security and interest on the debt, we are projecting a $3 trillion increase in federal spending over the next decade, two thirds of that increase will come from those three kind of broad program areas. and so, you know, i would not characterize it as being easy, but to the extent we can begin to pay, or piling less debt on and decreasing the ratio, we are about 76% debt to gdp now, that is money that comes back without any other different choices that need to take place. host: what is the tipping point? you talk about using hard

decisions, these fiscal pictures look decades into the future. when did these decisions need to be made? guest: we need to put in place a plan of against the start dealing with it now. the sooner you start dealing with these challenges, the broader array of options you have and the less painful decisions you need to make on that. let me give you context. we often talk about using a device called, something called the fiscal gap, the amount of either spending reductions or revenue increases that we need to be taken immediately and permanently in order to achieve a certain target by any given point in time. as an example, say you wanted to keep for over 75 years, where we are now on jet -- on debt to gdp. that would require, it would probably end up being a mix of them, it would require a 37% decrease, or rather increase in revenues, or 27% decrease in spending.

that would have to be permanent. we are not going to do that, but it would have to be a mix of those. the sooner you take action, the broader the array of options we have and the less people any decision needs to be made. host: on a day that the debt is $21 trillion, $184 billion and rising, we are talking about the nation's's fiscal health. michael is up first in illinois, the line for independents. good morning. caller: this is a mobile number. woodbridge, illinois. host: go ahead. caller: ok, thank you so much. mr. mihm, i want you to comment on why is it that every time, you are not the only person that is talking about this, the concorde coalition, i do not know if it exists, but they used

to talk about these things and you know, there is this a equation in front of us -- we are spending more than we are taking in -- the only solution i ever hear is, we have to cut social security and cut medicare and yada yada. look, the fed has been managing the economy with low interest and thathelp the rich, is why the debt has been manageable. it is all smoke and mirrors. tell me, why don't we talk about putting the maximum tax bracket back up to 90%, like it was i think in the 1950's after world war ii, and squeeze the top 10% in the nation that has profited from all of this "economic growth," and led them pay for this stuff. because i earned my benefits. host: that is the revenue side.

guest: i completely understand where the caller is coming from and that is why we have been saying the solution will have to be a mix of spending and revenue issues. you are not going to get a lot of spending, not all out of entitlements, for exactly the reason the color was mentioning -- caller was mentioning. those are difficult policy decisions, the how and where and how big on each, that is something that is not a question i can answer, it is a policy that is up to congress and up to voters. host: the report from gao, viewers will not find a specific tax bracket that you are recommending to solve the problem. guest: absolutely not. that is a policy call. and tickets to political views and values that is not appropriate for an audit office to make. host: new york, good morning. caller: hi.

i have a comment. , my firstntleman question is how old were you in wasral -- when greenspan concerned about the biggest problem that might be paying isn the national debt, which why i supported the bush tax cut ? host: why you concerned about age? caller: because he has been watching the money for it is why i supported the bush tax wh. guest: i am a proud member of the baby boom generation. host: do you have a follow-up question? caller: my point being, $21 trillion is a very large chunk of change. it was about $5 trillion when they cut taxes. and at that point, that is when it started to boeing. - -- balloon basically the money has been

transferred out of the treasury and into the hands of the top 1%, maybe 1.5%, maybe 1.25%. so you cannot just rip that back. said,ke the caller before what is the problem with raising tax rates? not to mention the fact that the people before talking about drug prices. donald trump talks about how we are getting ripped off by other countries. meanwhile, other countries are mostly ripping us off by letting us pay the high price of drugs that they get reduced prices for. host: we will take thehost: point. i will show this chart, showing the total u.s. public federal 1966 through the -teens. this from business insider story on the rising federal debt.

guest: one of the things, the c aller mentioned international dishes, but one thing to keep in mind is over the $20 trillion of that, about 1.7 chilean dollars of that is debt held by the public. what that is is that held primarily by international investors, the message investors, the record is of that is the two categories, and some held by the federal reserve and state and local governments. of the $14 trillion, a large and growing share is held by international investors. in fact, in about 2001, about public debtebt was being held by international investors, now it is around 39% and it continues to grow. host: explained debt held by government accounts. guest: that is primarily intergovernmental, intro governmental accounts. ans that the

government is making to itself. it gets repaid, so it is not a subsidy on that. it is a concern and is legitimate to talk about the entire 20 drilled -- the entire ire $20- ent trillion. host: 5.6 train dollars held by the governments. eddie in massachusetts, go ahead. caller: i was interested in your ratio of debt to gdp. trillione a $21 deficit and to be at 100%, does that mean our gdp is $1 billion? trillion for goes to mr. product? -- gross domestic product? guest: if we get to 106% within 14-22 years, the amount of debt that is owed by the federal

government is about the size of the economy. so back to the earlier discussion that we were having come it does not mean that there is some sort of apocalypse or tipping point that happens there. world war ii, we were able to take actions and worker way out of it. but what it does mean is that that the array of options that will be available to congress and the market people in terms of spending will decrease or be more constrained over time, flexibility in terms of meeting new priorities will be constrained. this is what we mean when we refer to an unsustainable path. host: this is a chart from your report. the important part showing that it goes all the way out the 2090, and various lines showing the baseline for malaysians by the gao, alternative simulations, how flexible are all of these lines? how much do they allow for cushion in case of something unexpected like a natural disaster, some sort of war? guest: that is -- there are a

couple things of concern. on the direct point, they are all about the -- it is a simulation, not a projection, in the sense that we believe the country will take action before you get to those ciccone and really -- draconian really bad situations. so our point is that the sooner we take action the greater the array of options, less typical it is those decisions we need to take. host: certainly a point you have emphasized throughout the report. guest: even using different assumptions, basically the models -- they work off of each other. using different assumptions, they all point in the same direction, whether it is ours, our baseline versus , where ines, the cbo the fiscal report of the united states, that comes from the treasury, they all show -- facts are facts.

any all show we are on unsustainable path. host: caller from ohio, good morning. caller: good morning. thank you for taking my call. to set up my question, correct currencym wrong, ithe in this country is the federal reserve notes and it is not actually money. we as it predicated on the confidence we have to purchase with it. it seems like the debt you are talking about is correlated to money, but the federal reserve notes are just securities. there is really no substance. so the substance is the value of the labor pools that brings the value into existence, in a matter if you are paid $5 or $50. help me gain a perspective on how the debt-based economy represents the value of

labor of individuals and how it is reflected in the $21 trillion debt. thank you. guest: one thing that is consistent with the point you are asking about is that, right now we are borrowing and a lot of money. we are borrowing it generally by historically standards, low to moderate and just rates. a spike in interest rates would cause us, it would obviously increase our debt costs, interest costs, quite significantly. it gets to a point, the confidence point the caller was raising, was in 2011-2013, when there was a question as to whether or not the congress would raise the debt limit, we did quite a bit of work on looking and talking with the investor community and tracking interest rates, and found there was a decline in confidence in u.s. securities. investors were not willing to

hold them, that they would mature in the short term. it led to the increase in borrowing costs. so playing with the fate of the federal government, making sure that investors have confidence in treasury securities, is absolutely vital. not.t costs us if it does that is why in our report we've advocated that congress change the way it deals with the debt level, solely with appropriations and budget decisions in the congress and i am an article i guy in terms of constitutional issues. keeping those spending decisions with the congress. but not, but better joining debt and it spending decisions together rather than separating them artificially the way they are now, which leads to a reduction in confidence. host: less than 10 minutes left. if you have a question as we talk about physical health. we have lines for democrats, republicans and independents. good morning, william. caller: thank you for taking my

call. you said earlier, somebody said that obama pretty much the book the national debt, but in reality a lot of that debt came from tax cuts, two unpaid wars, there is art b, and lot of spending that goes towards vets as it relates to their injuries and benefits as a result of these wars, so how much of that debt really did come from barack obama, and not with previous administrations did and chose not to put the debt on the books? guest: in terms of more recent numbers, that i am more familiar was, is the debt in 2017 the deficit rather, was $666 billion, that was a $23 billion increase from the preceding

year. cbo has estimated because of legislative action, including the tax cuts, bipartisan budget agreement, the appropriations taken at the end of last year, this was after 2017 when we finished the work on this report, that there will be an increase in the and a deficit in the coming years on this -- debt and deficit in the coming years on this. this is a long-term, bipartisan issue, which is why it is so difficult. if it was just a matter of either one party or one set of decisions or one set of programs, or easy fixes we could make, we probably would've done that moment of. the challenge is for a lot of very good reasons this is very hard to deal with and again, it is because of good reasons it is hard to deal with, because we have priorities we want to spend on and things we want to fund. host: the top economic advisor, larry kudlow, made statements

about the deficit that raised eyebrows. there is a headline from the hill newspaper. lyric of the claims the rising deficit is coming down. he is quoted as saying, as the economy gears up, more people working in better jobs and careers come as revenues come rolling in, the deficit is coming down and it is coming down rapidly. growth solves a lot of problems. is the deficit coming down? guest: obviously, i saw the press accounts of that and i also understand that he later clarified and talked about some of the comments that he was making. projected is we are looking at a big increase in the deficit and debt in 2018, including the 10 year window as well in the neighborhood of in the trillions over the next 10 years. obviously, the larger point he was making is economic growth is obviously very good, and it reduces the size of your

challenge, but i should underscore that just like we are not going to tax our way out of this problem, or cut our way out of this problem, we will not grow our way out of this problem. there is no scenario that lets us know we will be able to get sustained economic growth at the levels that would have me back here in a couple years saying, it was overblown, sorry. host: the projection has the deficit over $800 billion this year by 2024, 1 $.2 trillion. those are some of the numbers from cbo, fox news research on responding to mary kudlow. and -- larry kudlow. and we have dave on the republican line. good morning. caller: first, a quick,. comment. it would bother to work if the government to 90% of what they earn? a question about medicare. once therstand it,

biggest contributor to the growth in our national debt, tens of trillions of dollars in future liabilities for a program that people pay into for about 50 years and take out of for about 15 years, yet i hear more and more democratic politicians composing -- proposing medicare for all. what do you think that we do to our national debt? guest: there are a couple things on medicare. i made a reference about being a member of the baby-boom generation. i am on the backend of that as it were, but beginning in 2010 is when the first of the baby-boom generation became eligible for medicare. 65 years old. we now have for the next 15-20 years, between 10,000-11,000 per day that turn 65 and become medicare eligible on that. that is putting enormous pressure on obviously federal

spending. and i do not say that as being a bad thing, this caller and a number of others have indicated that people have paid into that and they have made a life assumptions that that would be available to them, but the accommodation of demographics, the retirement and baby-boom generation, and on the whole we are living longer, although obviously very sadly we have some racial interregional disparities on that, but life expectancies are going up. the cost of beneficiary, which you heard about earlier, that is also going up because of new technologies and health care inflation. that is outstripping the general economy, but new technologies and procedures -- so dealing with health care aspect is very difficult on that. now, the second part in terms of medicare for all or any changes we would make in terms of general national health insurance coverage, it is very difficult to say exactly what the implications would be, because of just the complexity

of all the moving parts that would have to be put together and really understand what the relationships of the moving parts and when they would be. host: ok, the land of lincoln. robert is a republican from illinois. am in marion at park. quick question on a follow-up. i heard rand paul say if you took a penny from every dollar we spend you will get knocked down quickly, although i do not have much confidence in our congress nowadays, but is that true, just one penny you would be able to knock down the deficit pretty rapidly? guest: i would have to see the context of the senator's comments on that. obviously even small savings can make big differences for you. one thing that we outline in the report is some opportunities to

really make improvements on that. for example, each year at the request of -- based on statutes, the congress has this release a report of duplication overlap fragmentation, and also cost savings and enhancement revenue opportunities within the federal government. over the last few years, it has resulted in over $100 billion in savings that has a ready taken place, as well as a combination of those that are booked into the future. the point is that that is tens of billions of dollars in additional savings that if congress and the executive branch acted on a recommendations, already costed out, that that could come to the federal treasury. likewise, there is the each year we have a $400 billion in all tax gap, the difference in that, the difference between what is legally owed and what is actually paid. that is money that is out there that would not require any conversation about, we should increase taxes or not increase

taxes, this is already legally owed. and it needs to be recovered. host: what it costs more to collect those taxes, to get the people out there to make sure that the taxes are actually being collected, will there be an expense on that side? guest: in some cases, yes. we have shown that you need a three-pronged strategy. first, clarity in the tax code. we find a great deal of the problem is people wanting to do the right thing, intending to do the right thing, but just making a mistake because of the complexity of the tax code. the lower hanging fruit on that is actually two elements, one, better customer service. making sure that the irs is answering questions quickly and accurately. increasedird is enforcement action where those are needed. to the extent integrated third-party information, that is information from mortgage

dealers or whatever, that goes into the tax system, that will help people pay their taxes and will help with enforcement actions. host: last call. gregory, republican. go ahead. caller: thank you. mr. mihm, secretary mnuchin just served our gold reserves. know am just curious to how the gold reserves of the united states, which is the greatest of any nation on earth, 80 some hundred or thousand tons, plays into this deficit. and are we buying gold at prices today in order to enhance our holding, or is it going out, how does it work? and what comes to mind is hillary, how could she possibly drop the sale of uranium to russia? it is unimaginable. i appreciate your comment on

gold as it plays into her deficit and debt. need ai'm not sure i minute or so on that particular question. that is not something we are particularly looked at. we are focused on the combination of spending and revenue decisions that need to be made. it requires us as a country and congress to come up with a long-term plan on how to deal with that. we have had short-term needs, whether it is another economic downturn, or a catastrophic weather event, hurricanes, those have to be dealt with. so our point is the sooner we get a plan in place the greater array of options we have, the less draconian we have. at some point we begin to see big problems because of this. host: the report is the nation's fiscal health, gao.gov. easy to find all these reports. we appreciate it, christopher

mihm, >> c-span's washington journal, live every day with news and policy issues that impact you. previewp, we will washington with chris cadelago and stphen dinan. we will also speak to john donnelly. washington journal, live at 7:00 a.m. et. join the discussion. hawking's joins us. he is senior editor with cq and roll call. as congress comes back from their break, what do you see as the priorities for mitch mcconnell and house speaker paul ryan in the coming weeks? david: to keep things running as smoothly on drama-free as