mr. zients. how does the president's budget strike a balance when it comes to addressing our short-term and long-term deficit reduction needs? i think there's very little we're agreeing on in congress these days. but i think we actually all agree that we need to make a commitment to reducing our deficit in the short term and in the long term. >> agree. >> but the economists that i have heard from across the spectrum, major economists, have really indicated that we need to be careful about not short circuiting what is an obvious recovery that we have begun. >> i think that's right. >> so it's a two-step process. it's a focus on job creation, making sure that we continue to have the economic recovery starting with the payroll tax, unemployment, extending that, the $50 billion of infrastructure, modernizing our schools, just to hit a few of the highlights. at the same time, we move to deficit reduction, across the medium term. the key is that it's a balanced approach. and this is at the core of ever

mr. zients, i'm going to reclaim my time. a budget is a road map as to how you would solve these fiscal problems in the future. all right? it doesn't lay down some weak marker so that in the future we can cooperate. it's supposed to lay out an optimal plan. it's supposed to lay out, frankly, what the priorities of the administration are, which are ideas. and then we can find compromise with that. no, sir, sir, let me continue, please. without any specifics, you know what we're left with? we're left with talking points. we're left with political arguments. if we would lay out a scorable plan for each of these different programs, then we can find common ground which is exactly what the american people want. i'll give you an opportunity to respond to that point. >> i think i've told you about the president's budget and why i think it's the right way to go. i would contrast it with the republican budget which creates vouchers and transfers risk to our citizens on health care. >> mr. zients, i'd be happy to show you in writing how

mr. chairman. i appreciate representsive zients being here. i do concur with my friend, senator from south carolina, that we do need to take on a comprehensive approach to the long term deficit issue. i think one of the -- a lot of statistics are thrown around, but if there is one take away i think constantly i come back to and -- which is that last couple of years we have seen spending close to 24, 25% of our gdp. all-time high. we have revenues in the 15% range. 75-year low. if you look any time over the last 75 years, any time there's anything close to balanced, it's been when revenues and spending have been in that basically 19 to 21% range. and i guess the feeling i have is that while it will require us to take on changes to the entitlement programs and i do wish we would have seen more, it will take us looking at the revenue half of the ledger as well. one of the things i want to take a moment on and i understand the administration -- president's reluctance and need to phase in appropriately long-term deficit reduction. i think we have s

mr. zients. couple quick questions for you. senator reid has said we don't need to bring our budget to the floor this year. do you agree with that? >> i think that the most important thing is that -- >> just a yes or no. >> -- that congress act and that we pass the president's policy. >> so yes? yes or no? do you think we should take a budget to the senate floor, yes or no? >> i think the mechanics and the process are not my area of expertise. what i do -- >> that's -- i'll take that as a no. which is consistent with what the white house has said. i find it pretty amazing. >> i will note that the bca as the chairman said -- >> second question, what do you think is the most significant policy issue facing the country in terms of our fiscal policy? what's the single most important thing in terms of our fiscal posture? >> i think it's -- i think it's actually two things. the short term and the long term. short term is continuing this recovery. and we need to make sure that payroll taxes i talked about and other initiatives like tr

mr. zients, the table is yours. >> thank you, thank you mr. chairman and members of the committee. thanks for having me here today to present the 2013 budget. as the chairman said before i joined omb three years ago and i feel i'm in a good position today to talk about the president's budget. but before that, i spent thmore than 20 years in the private sector and one thing i found helpful was to boil things down to a few graphics. so if it's okay i thought i would use my minutes walking through the highlights of the budget using, i hope, these two screens. i'll cover four topics, first the policy baseline, and the key elements of deficit reduction and the investments of the areas that is important to aggravated burglary -- that is important to jobs and growth and how it puts us on a sustainable path. let's start with the baseline. we believe we have a baseline that reflects current policy. in essence this is business as as usual. the baseline includes the extension of the 2001, and 2003 tax cuts, estate and gift taxes. second, the permanent extension of a and t and sgr, we believe

mr. zients, thank you for appearing before the committee. i wish it were in better circumstances and we had more money. the president of the united states, in my view, has no higher duty or responsibility than to protect the american people from a clear and present danger. every expert and testified before this committee. they said that we are on an unsustainable financial course that can lead to major deficit. or financial crisis. those appearing before our committee have often called for a minimum of $4 trillion in ten-year deficit reduction. many of us, including chairman conrad, would like to achieve savings beyond that figure. what we are really trying to do and should do is layout a plan to balance this budget over a period of years. ten years would be a good goal, in my opinion. we are not attempting to a massive a massive austerity problem. yet, in the face of the existential economic threat, president obama has submitted a budget yesterday which makes no alteration in our debt course. under the president's budget plan, using the whi

mr. zients for being here. the president promised when he n was running for election he would not increase taxes on less anybody earning $250,000 or . less. do you believe that to be the case, and is that the case moving forward? >> yes, the president is committed to no tax increases for those families earning $250,000 or less or individuals at $200,000 or less. >> but he's already violated that pledge, has he not? >> isn't the medical device tax ofe 2.3% that's about to kick in, k isn't that a tax on people earning $250,000 or less? >> medical -- you need to tell me more about the medical devicu tax and how that impacts individuals. >> well, anybody if you are earning less than $250,000 thenn you need to go purchase a medical device you'll have a ne tax of 2.3%. >> that's a corporate tax or it's an individual -- s a >> no, it's an individual tax. i'd appreciate if you'd look -- into that., >> i will. >> the indoor tanning tax. the tax on tobacco.wi the individual mandate.th there's a long list of things that h

mr. zients, there is no spending cuts in this budget! this budget increases spending! surely you know that. it increases taxes. so to say you cut $2.50 in spending for every $1 in tax increase is beyond the pail. >> we have $260 billion of cuts. we have savings from oco. the cbo scores. in total, it is $2.50 of cuts to $1 of expense. >> mr. chairman, this budget taxes more and it spends more. it does not alter the debt course of america. i am disappointed that we can't get an honest response to these difficult questions at this point time in our history. >> i thank the senator for his questions. senator murray. >> thank you so much for your service to our country. we all appreciate it in this difficult time. you know, as we all know budgets are about choices and priorities. they are making investments in our families. they are tough decisions in how we reduce our debt and deficit. spent a lot of time on the committee. i think our work really highlighted the deep divisions on issue and the contrast with the parties on the path forward today. i feel strongly that deficit

mr. zients because i'm going to need your guidance on it. that's why you need to bring the deficits down over the next three to five years to something that achieves primary balance. that is a minimum necessary. does this budget bring us down to minimum balance? >> i'll answer your question -- >> it was not a question. it was a statement. i would like you to answer the question. does the budget bring us to primary balance? >> yes. >> in what period of time? >> five years. >> from now? >> yes. >> okay. so it's -- it is not the minimum that secretary geithner said last year of three to five years from last year. >> the budget achiefs primary balance in 2018 given unexpected economic situations this summer which a lot of it is controllable around the debt ceiling. if we avoided that, we might have -- >> i'm going to have to reclaim my time because i need to get back to the credibility of that statement. in 2009, the president projected a $581 billion deficit for fiscal year 2012. by 2010, his 2012 estimate had grown to $828 billion, an increase

mr. zients. in fact, as the senator from alabama has mentioned, failure to respond to just very direct questions. not questions that are trick questions, questions just as a matter of the facts. i think what i was struck by, too, is when he was asked about whether or not the administration wants majority leader reid to bring the president's budget to the floor, he couldn't give a direct answer. and his comments indicated that they would not be calling on the majority leader to bring the president's budget before the senate. and the other thing that, too, i was struck by is the president's own budget chief could not confirm, verify that the president had added already about $5 trillion to the debt since taking office. those were both -- both things that just seemed like very straightforward questions and should have been very straightforward answers. but the fact of the matter is, it's very difficult i think for him or any other official in this administration to defend this budget. and this budge

mr. chairman and director zients. the bipartisan commission said $4 trillion in deficit reduction as their window. and they set something in that h range. included in their recommendations was reducing expending by over a trillion dollars. as part of the budget control act we passed, we cut passe discretionary spending by approximately $1 trillion. it seems reasonable and i think ordinary americans watching this understands that you should mera count the effort you made towards the $4 trillion. after all it was recommended we do it and we did it.on that is a trillion dollars. and you have a mechanism to m achieve another trillion dollaro through a sequester. it has across the board cuts to defense and nondefense investments and what you proposed is another better, more reduction. it's just because it's built in that this massive $1.2 trillion cut o that nobody in this room thinks that is the best approach, justd because you came up with a better way of doing it doesn't e mean that your budget should not be credited wi

mr. zients, there is no spending cuts in this budget. this budget increases spending. surely you know that. it increases taxes. so to say you cut $2.50 in spending for every dollar in tex increase is beyond the pale. >> well, we have $260 billion of cuts from health care, we have $270 billion of cuts from other mandatory programs, we have savings from oco that cbo scores. in total it's $2.50 of spend being cuts for every dollar of revenue. that's a balanced approach and it's the approach we should have. >> mr. chairman, this budget taxes more and it spends more. it does not alter the debt course of america and i am disappointed that we can't get an honest response to these difficult questions at this important time in our history. >> just a portion of the hearing earlier today before the senate budget committee. you are hearing from senator jeff sessions, the republican of alabama and acting director of the office of management of budget. one of a number of hearings today and all week as members of the president's cabinet appear before various congressional committees

mr. zients, i realized those are your segmented talking points, but if you look at the growth in debt, one year versus another for 2021, the base line last year would have debt at $23.6 trillion. this year's budget shows it at $25 trillion. >> we have a much more honest base line. we have a base line that assumes -- >> but we're now reducing it by $4 trillion. if you were that debt level would go from $26.3 trillion minus $900 billion for the budget control act. so then you'd be at $25.4 trillion and then take away -- we should be at $21.4 trillion. if we were reducing deficit by $4 trillion. >> we're taking into account what is truly business as usual, using a base line that includes annual package of sgr. >> we're not reducing the budget. that is smoke and mirrors, it is not being reduced by $4 trillion. not even close. >> it is being reduce by $4 trillion versus the business as usual approach of patching things like sgr and amt. >> anyway, so everybody understands we are not reducing the debt and deficit in this budget by $4 trillion. it's not happening. in response to what's a fair sha

mr. zients indicated, we e should all find ways to achieve greater deficit reduction as we move no the out years especially. here's what we-the-said.presid in the frameworken the presiden announced in april and what he e submitted to the select en committee, the president embraced many of the goals and principles outlined by the fiscal commission and incorporated some of the policy we proposed. we're pleased the president's latest budget continues to focu on deficit reduction and seek ng real specific policies for red limiting expenditures and reducing spending throughout the government. from that's the quote from the hairs bipartisan co-chairs of the president's fiscal commission. again, i think what the w president has laid out here is that balanced approach that the american people are looking forc rather than a lopsided approachk which will ask middle-class families to teak the brunt of our national effort to put the country on a long-term, fiscal ly sustainable footing. >> i appreciate you being here from the private sector. you probably feel a little lonely sometimes over at the whit

mr. zients i do not envy your task today, you are new to the job and got thrown into the breech and you came late with respect to preparing this budget and you have got a very tough dt job ahead of you. with the departure of jack lou, you got thrown in at the late moment.ch i want to tell you first bring g you into this.go thank you for serving our country. you came from a successful private sector career back to government and we applaud that. i think that these things go d without saying but they are -- they bare repeating. an problem is, you're in the position of defending a budget that dodges the most difficult he challenges that our country ecuy faces.on's the new york times reported that this is more a budget than it is this is more a budget than it ih for the campaign.lity for it's hard to disagree with thist the associated press quotes, takes a pass on reigning in jack government growth, instead it leaves the drivers of the debt and entitlement programs largelt unchecked and the programs threaten to end the guarantee on the security that they provide d for the nation's seniors and it

mr. zients. and you were put to the test by the ranking member, my friend from new jersey, when he asked you that question in different ways in different times. and he claimed that you never answered the question. you know, dante's inferno is a terrace and we're looking at it right now. the budget that was presented to us, not that long ago, mr. chairman, your budget, your budget, was balanced on the positive in terms of the percentage of gdp in 2063. let me finish, please. >> if you want to be accurate -- >> i'm going to get back to you. i always allow you to speak. 2063 -- 50 years. balanced budget. >> that was when the debt was paid off. >> you took, if your budget, i thought you were courageous to present one, so hear me out. i said that to you once before. you took revenue off the table, oil revenue. no increases. the cbo said we had annual deficits of 3.5 and 4.5% of gdp. so it was estimated that in the budget that you presented, and please correct me if i'm wrong, to add 62 trillion to the

mr. zients to explain the white house plans to cut the deficit by $4 trillion over the next decade. >> i look forward to that very much. the dow has a gain of 83 point on the session and the nasdaq is on the plus side of 28 points, 2932.31 and the s&p 500 is trading up 15 points. mary thompson, minus the hoodie footy. private joke. >> minus the hoodie footy forever. >> the day you are in a hoodie footy. >> we are looking forward to -- sglp wh >> what is going on? >> wed a nice day today. the markets are close to the highs of the day, interesting you should note that the s&p 500 is hitting an area of resistance, it's been in a channel lately so investors are wanting to see if it can break through. we have seen strength throughout the day and industrials made a late day surge led by a couple of different companies. as we head toward the closing bell, industrial stocks among the better performers. some talks, or reports that the company is looking to sell some of the flow and control businesses. something that could raise $3.5 billion, so the dow getting a lift there. a couple other stocks,

mr. zients. >> thank you. >> and tonight on the kudlow report, pat toomey will respond to the president's budget proposal. that is coming up here on cnbc later. >> wall street has been high on cloud computing, we will explain why the hot stock could come back to earth. >> all the after hours movers, >> i have a company that increased the dividend 300%, i'll give you the name and news on dow component dupont wheeeeeeeee! ah heads up. wheeeeeeeeeeee! everything you love about geico, now mobile. download the new geico app today. our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would j

mr. zients, there is no spending cut in this budget. this budget increases spending. surely you know that. it increases taxes to reduce it to say you cut $2.50 in spending for every dollar in the tax increase is beyond. >> we have $360 billion of cuts from health care to believe to entered $70 billion of cuts for the mandatory programs, proceedings from oco that is scored in total is $2.50 of spending cuts for every dollar of revenue. that is a balanced approach, and that is the approach that we should have. >> mr. chairman, this budget taxes more and it doesn't offer the debt course of america, and i am disappointed we cannot get an honest response to these difficult questions at this important time in history to this bixby through the senator for his questions you senator marie? >> yes, think you so much for your service to the country. we appreciate it in this difficult time. as we all know, budget or about twice is about priorities. they are about making investments in the workers and families and our future and they are about making some tough decisions about how

mr. chairman and again thank you director zients for being here. let me pick up on a couple point the chairman raised. the simpson's-bowles commission set $4 trillion in deficit reduction as their ten-year wind window. and they set something in that range. included in their recommendations was reducing discretionary spending by actually over a trillion dollars. as part of the budget control act we passed we cut discretionary spending by approximately $1 trillion, it seems reasonable and i think ordinary americans watching this proceeding would agree that you should be able to count the effort that we made already towards the $4 trillion, after all it was recommended we do it and we did it. that is a trillion dollars. we also, as you pointed out, put in place this mechanism to achieve another trillion dollars through a sequester, it has across the board cuts to defense and nondefense investments and what you proposed is another better, more balanced way o achieving that $1.2 trillion deficit reduction. just because it's built in that assumptions tha