Feb 12, 2020
Transcript: House Budget Committee Talks Trump 2021 Budget Plan
A House Budget Committee hearing on February 12, 2020 got heated with disagreements about Donald Trump’s proposed 2021 budget plan. Read the full transcript right here on Rev.com.
Mr. Yarmuth: (00:00)
It’s my hope that today’s hearing will provide an open and honest examination of the priorities set forth by the Trump administration so we can get back to work passing legislation and appropriations bills that reflect the needs and priorities of the American people. I will now yield myself five minutes for an opening statement.
Mr. Yarmuth: (00:21)
Just six short months ago, the President signed a bipartisan.
Speaker 1: (00:25)
Speaker 2: (00:30)
It’s fixed. It’s fixed.
Mr. Yarmuth: (00:32)
Okay. Is it all right? Can everybody hear me?
Mr. Yarmuth: (00:39)
Just six short months ago, the President signed a bipartisan two year budget deal into law. It does everything the President’s proposal fails to do. It’s set rational discretionary top lines, allowing strong investments in our national and economic security. It had bipartisan support including the ranking member and myself and it set Congress up for a successful appropriations process, but now the President is going back on his word. Instead he is once again proposing deep cuts to critical programs that help American families and prepare our nation for the future.
Mr. Yarmuth: (01:13)
Once again, he is breaking his promises and lying to the American people. Less than a week after promising Medicare and social security would be saved from harsh budget cuts, the President went and proposed slashing a half a trillion dollars from Medicare knowing it would hurt seniors. And cut social security by at least $24 billion, knowing you what hurt our nation’s disabled workers. During his State of the Union address, the President said he was working to improve American’s healthcare and he turned around and proposes cutting Medicaid by more than $900 billion, knowing it will result in families losing life-saving healthcare coverage.
Mr. Yarmuth: (01:51)
After talking up his plans to build an inclusive society by making sure that every young American gets a great education and the opportunity to achieve, and that’s a quote, the President proposes slashing discretionary resources from the Department of Education by 5.6 billion, dis-investing in America’s students. He then proposes a $170 billion cut over 10 years to student loan programs, knowing it will make it harder for young people to earn a college degree. The President is trying to cut nutrition assistance by more than $180 billion and that’s before taking his recent mean-spirited regulations into account, knowing all along, it will force more families to go hungry.
Mr. Yarmuth: (02:35)
In his State of the Union speech, President Trump talked about planting trees to protect the environment. You know how you protect the environment, by putting people before polluters and not gutting the EPA by more than 26% like this budget would do. Amid the deadly Corona virus outbreak, the President gave the American people his word that his administration would, “Take all necessary steps to our citizens from this threat.” That was another lie because just days later, his budget included a nearly 19% reduction to the Center for Disease Control and its discretionary budget authority despite this ongoing threat.
Mr. Yarmuth: (03:15)
The bottom line here is that this President and his congressional republican allies have routinely prioritized special interests and the rich and powerful over the health, safety, and economic security of American families. The President’s destructive and irrational budget continues that misplaced allegiance by intentionally going after working families and vulnerable Americans while simultaneously extending tax cuts and giveaways to the very wealthiest individuals and large corporations. Over the course of the decade, the President’s budget would slash non-defense discretionary funds by more than $1.5 trillion taking a wrecking ball to America’s economic future and security. At the same time, it extends expiring provisions in the 2017 GOP tax law adding more than $1 trillion to the debt, a reality the President was unable to hide even with his fantasy growth projections. This President is asking working Americans to sacrifice their safety, their health, their economic security, their futures to cover the cost of Republican’s tax scam. It was never going to pay for itself.
Mr. Yarmuth: (04:21)
While I have come to expect shocking and unthinkable budget cuts from this administration, it never gets any easier to see our President’s complete disregard for the human cost of his budget. Thankfully, with a budget already in place for 2020 and 2021 and the Senate majority leader reaffirming his commitment to the Bipartisan Budget Act of 2019, I’m confident that Congress will stand firm against the President’s warped vision for our nation’s future. Finally, Director Vought, for obvious reasons, there is a lot of interest in your presence here today. This is the first time you have testified since President Trump was impeached. I’m not going to rehash that entire process, but a major finding of Congress’s investigations was that the administration broke federal law when OMB failed to abide by the Impoundment Control Act. That law falls squarely within the jurisdiction of the budget committee.
Mr. Yarmuth: (05:11)
So I think it is critically important that you speak to OMB’s adherence to the ICA today. As director, it is your responsibility, your obligation to make sure that OMB is in complete compliance with the ICA and fully respects that the Constitution grants Congress the power of the purse. I promise that this committee will continue its vigilance and not allow the President to unilaterally substitute this budget for the bipartisan budget already in place and I keep my promises. I look forward to hearing your testimony. I now yield five minutes to the ranking member.
Mr. Womack: (05:44)
I thank the chairman for holding the hearing and thank you, Acting Director Vought for being here with us today. We’re here to examine the President’s budget request for fiscal ’21. It is my hope that we will stay on task. I applaud the President for actually doing a budget. Here in the House, the budget committee hasn’t provided a budget. Interesting to me because our committee majority’s website, there’s a section titled responsibility and the first sentence in the section reads, the committee’s chief responsibility is to draft an annual concurrent resolution on the budget that provides a congressional framework for spending and revenue levels, the federal surplus or deficit and public debt. As we all know, the Constitution gives Congress the power of the purse, funding the priorities of the American people. While addressing our nation’s serious fiscal challenges is no easy task, it requires a lot of collaboration, which is why hearing from the administration today is vitally important.
Mr. Womack: (06:51)
In recent months, we’ve heard from the likes of the Congressional Budget Office and just yesterday from the Federal Reserve and many other outside experts who have all consistently warned that our nation is nearing a fiscal crisis. We ought to pay attention to those warnings. The national debt is over $23 trillion. It’s projected to grow to more than $36 trillion within a decade. Soon thereafter, on this path, the federal debt will reach the highest level in American history as a percentage of the economy. CBO projected by 2049, the federal debt will equal $248,000 per American. That’s almost a million dollars per family of four. From there, it only grows more. Interest payments on the debt will increasingly crowd out other federal spending that is directed toward programs that Americans rely on. CBO projects interest payments on the debt will amount to $382 billion in fiscal ’20. And 11% of federal tax revenue. We cannot continue on this path.
Mr. Womack: (07:56)
We have to lead by example. We have to make the tough choices necessary to reverse course, yet here we are, the greatest nation in the history of the world, and we can’t even manage to come up with something as simple as a doggone budget. But the President is doing his duty and has put forward a budget that takes steps in the right direction. I recognize that there will be others that will push back on his plan, but at least we have a plan to look at. The budget does not achieve balance within 10 years, but the overall 10 year fiscal trajectory puts the budget on a path to balance by 2035. The President’s budget reduces deficits by $4.6 trillion between 2021 and 2030, whereas under current law deficits are more than a trillion dollars annually, and under this proposal, the annual deficit would be lowered to $261 billion by 2030. Further, this budget reduces the share of debt held by the public from 81% of GDP to 66% of GDP. I kind of like that direction. That’s a tremendous improvement from the historically high debt levels projected for 2030 under current law.
Mr. Womack: (09:06)
The President’s budget also does not breach the spending caps called for in the Bipartisan Budget Act of 2019, it meets the defense spending cap and is below the non-defense discretionary cap by $37 billion for fiscal ’21. Additionally, there are several priorities I’m pleased to see in this budget. First, as someone who served in the military, I believe ensuring the safety and security of the American people is probably our most fundamental purpose of the federal government. I appreciate the Trump administration’s clear commitment to this responsibility. Second, I also appreciate the administration’s focus on this budget on improving the longterm health of the American people by investing in measures to combat the opioid epidemic that is crippling communities across the country. Third, we’ve heard in this room many times that our economy is historically strong.
Mr. Womack: (09:56)
The number of jobs available exceeds the number of people looking for work by a million. We must ensure that our workforce meets the demands of our strong economy, which is why I’m pleased the administration is once again investing in career and technical education. but as I’ve said before, the biggest threat to all of these priorities and to the longterm security of our nation is our out of control mandatory spending. It accounts for 70% of all federal spending and is projected to increase to 76% according to CBO 2029. These programs have far outgrown their intended size and scope and they’ve far exceeded what we can afford. I’ve said many times that we cannot have a real conversation about reducing the deficits and debt without addressing mandatory spending.
Mr. Womack: (10:44)
The President’s budget takes steps in the right direction. There’s a lot of work to be done. It’s imperative we work together in a bipartisan bicameral fashion to advance a budget that funds our nation’s important priorities while acknowledging our very real fiscal challenges. I look forward to the discussion today. I thank the chairman. I yield back the balance of my time.
Mr. Yarmuth: (11:03)
Thank the gentleman for his opening statement. Now, once again, welcome Acting Director Vought. You have the floor and you have five minutes for your prepared statement.
Acting Director Vought: (11:16)
Thank you, Chairman Yarmouth and ranking member Womack and members of the budget committee. I’m here today to discuss the President’s budget for fiscal year 2020 which we’ve titled A Budget for America’s Future. This is a budget that reflects and builds upon the pro-growth economic policies of this President, which have unleashed one of the most powerful economies in American history. Unemployment is down across the board. People are coming back into the workforce. Wages are rising. 401ks, pensions and college savings accounts are growing. This budget continues these economic policies and once again provides a path for enduring expansion by attacking the very real problem of deficits and our nation’s debt. The plan offered today proposes to balance the budget within 15 years by proposing more deficit reduction, $4.6 trillion, than any President in history.
Acting Director Vought: (12:10)
Under this budget, our current path of trillion dollar deficits as far as the eye can see, will be reduced to $261 billion in 2030 with a surplus in 2035. Debt as a percentage of GDP, currently at 81% and projected to grow to 100% within 10 years will drop to 66% by the end of the 10 year window, but this budget is not a green eye shades budget. It funds national priorities that this administration believes are vital for the security and prosperity of the American people. Let me give you a few examples. $741 billion for the defense of this country. This amount comes on the heels of defense budgets of $700 billion, $716,000,000, $738 billion in prior years. Nuclear modernization itself will receive a nearly 20% increase from the last fiscal year. At the same time, this budget also reflects at a high level an assumption that our overseas operations will require less funding as the President works to end endless wars.
Acting Director Vought: (13:14)
The budget also makes substantial investments in border security and immigration enforcement, ensures that every high school has a high quality career and technical education program, funds NASA’s return to the moon by 2024 as a platform to Mars and thereafter, and grows VA medical care at 13% to fully fund the Mission Act. It includes substantial resources to fight against the opioid epidemic and proposes a $1 trillion infrastructure package to rebuild our roads and bridges. It also keeps the promises that President Trump has made to the American people such as protecting social security and Medicare for seniors. This President is a promises made/promises kept kind of precedent, and this budget is no different. Despite the predictable, misleading claims by many across the other side, Medicare will grow on average of 6% a year under this budget. The budget does propose good government reforms to lower drug prices, root out improper payments and address wasteful spending.
Acting Director Vought: (14:18)
This budget proposes to remove from Medicare certain programs such as uncompensated care and graduate medical education, which are draining the Medicare trust fund, even though they’d benefit more than just seniors. To be clear, these programs would still be funded outside of Medicare, but with reforms to limit their growth. Similarly, this budget proposes payment site neutrality for the same service being performed at a different healthcare location. So a CAT scan costs the same as an outpatient hospital as it does at the physician office. Lowering the cost of healthcare is not a cut. Medicaid will grow at 3%, which is higher than the rate of inflation, but the program had $57 billion in improper payments last year and HHS lacks the statutory tools to recoup most of these costs. This budget would provide such authority while giving states the option of a block grant or per capita payment. Only in Washington, DC does it look at a budget that grows every year faster than inflation and says that’s a cut.
Acting Director Vought: (15:24)
The budget proposes other common sense mandatory savers such as a universal work requirement for Medicaid, TANF, housing and food stamps. This will ensure that we are helping to lift able-bodied adults without dependents off of a cycle of dependency and onto a ladder of economic opportunity. In terms of discretionary spending, this budget will propose a substantial reduction similar to previous budgets. While budgeting at a defense cap under current law, this budget proposes a 5% cut. This budget continues to be a statement from this President and his administration that we stand with families and businesses across the country who have to balance their budgets. Washington, DC does not stand with them and for too long has operated under a different principle of recklessly spending other people’s money. That has to change and hopefully this budget leads to it. I’m ready to take your questions.
Mr. Yarmuth: (16:17)
Thank you, Mr. Vought, for your opening statement. We will begin our question and answer session now. As a reminder, members may submit written questions to be answered later in writing. Those questions and then Mr. Vought’s answers will be made part of the formal hearing record. Any members who wish to submit questions for the record may do so within seven days. As we usually do, the ranking member and I will defer our questions until the end of the hearing and I now recognize the vice chairman of the committee, Mr. Moulton, of Massachusetts for five minutes.
Mr. Moulton: (16:50)
Mr. Vought, thank you very much for being here today. I want to address my questions to the President’s claim that this budget is good for national security, for national defense. I find that a little bit hard to believe when it conflicts so directly with the advice that he has been given by his own generals. And as co-chair of the future Defense Task Force on the House Armed Services Committee, I’m also particularly concerned about the investments that China is making in R&D to develop a new generation of weapons that we are failing to match. Do you recall, Director, how we responded to the Sputnik moment in 1957?
Acting Director Vought: (17:32)
We increased our national investment to make sure that we were prepared for our adversaries.
Mr. Moulton: (17:36)
Right, and where do we increase those investments?
Acting Director Vought: (17:39)
We increased them in the research and development area.
Mr. Womack: (17:42)
It’s specifically in education, in graduate school education, and yet this budget proposes eliminating subsidized student loans. It cuts 8% from the Department of Education. How does that meet our next generation defense needs, if we’re not doing this basic R&D, if we’re not investing in the people who will make the new discoveries essential for our national defense?
Acting Director Vought: (18:08)
We believe we are investing in our people in this budget. We believe that we are making significant reforms to education as a result of this budget. For instance, there is a new proposal and education block grant to take 30 different programs that we believe can be better reformed and give states more flexibility to have better outcomes and they know their people, they know their schools, they know their communities better. That’s an example where we think for basically the same amount of money, when you control for the fact that we’re eliminating certain programs that are wasteful, for the same amount of money that you all appropriated last year, we’re going to have better outcomes at the state level in the area of education.
Mr. Moulton: (18:47)
So at its best, you’re saying that we’ll have the same amount of money when the President claims that we’re actually investing more, but what I would suggest is maybe you make those reforms first and show how you can save the money before you cut 8% from the Department of Education, because that is not going to help us prepare for a new generation of threats. Let me give you another example. Congress and President Johnson came together and established DARPA to deal with a new generation of defense threats. The kinds of things that in the 1960s are analogous to artificial intelligence and autonomous weapons China’s pouring billions of dollars into today. Initial funding for DARPA was $20 million. In today’s dollars, that’s four thousand, five hundred million dollars. The President’s budget proposes a total of $459 million in defense, AI, R&D. $459 million compared to 4,500. We’re not meeting this threat.
Acting Director Vought: (19:53)
Congressman, we believe we’ve got a substantial investment, particularly in the area of AI and in quantum, that we want to double these important issues.
Mr. Moulton: (20:00)
It’s substantial unless you look at what the competition’s doing. Now, the President’s former Secretary of Defense, General Mattis said, “If you don’t fund the State Department fully than I need to buy more ammunition.” Admiral Mike Mullen who serves as Chairman of the Joint Chiefs of Staff to both Presidents, George W. Bush and Barack Obama said, “this is a moment when more investment in diplomacy and development is needed, not less.” Director Vought, why does this budget do the exact opposite? Cutting the State Department by 21%?
Acting Director Vought: (20:28)
Because there’s a difference between diplomacy, which we fully fund and foreign aid, which we think we have gone on too long with providing.
Mr. Womack: (20:35)
Okay, so I was just in Vietnam. I was just in Vietnam two weeks ago, which has become a critical ally in the growing military and economic competition with China. And what I heard from our military officers, our military officers and from Vietnamese officials on the ground, is that they want to be with us. They want to be with America, not with authoritarianism, but our diplomatic and development effort is not keeping pace with China’s belt and road initiative, so they’re asking for more development money. Our military officers on the ground. You’re doing the exact opposite. I mean, does President Trump know more that our military officers on the ground, more than General Madison Admiral Mullen?
Acting Director Vought: (21:20)
We tripled the funding for the Development Finance Corporation that you just enacted into law, specifically, so we can compete with China. We have an Indo-Pacific strategy in which countries of which you’ve already mentioned would also benefit, but we think it’s high time that we get it out of the situation where we pay for statutes to Bob Dylan in Mozambique and other wasteful spending across the-
Mr. Moulton: (21:40)
Well, Director Vought, I think that the President ought to spend some time on the ground in Vietnam. I know he doesn’t believe in that personally. He was happy to send someone else in his place, but it might teach him a little bit about what development and diplomacy does for our military.
Mr. Yarmuth: (21:58)
The gentleman’s time has expired. I now recognize the gentleman from Ohio, Mr. Johnson, for five minutes.
Mr. Johnson: (22:02)
Thank you, Mr. Chairman. You know sometimes these lines of questioning just appear to me to be very uninformed. When did the Sputnik challenge occur?
Acting Director Vought: (22:16)
Late fifties, early sixties.
Mr. Johnson: (22:18)
When did we put a man on the moon?
Acting Director Vought: (22:21)
Mr. Johnson: (22:22)
When did the Department of Education come into being?
Acting Director Vought: (22:25)
Mr. Johnson: (22:26)
Yeah. Seems to me we’re pretty smart people. We learned how to solve a lot of problems. The light bulb, nuclear energy, space travel, overcoming the Soviet threat, and we did it without help from Washington bureaucrats on how to educate our kids. I applaud what the President’s doing. Mr. Vought, thanks for being here today. You know, we saw the President’s budget. It’s a first important step in addressing the federal spending issue. I look forward to discussing the President’s budget and I hope working with my colleagues here to address our nation’s unsustainable fiscal path and ensuring that our economy remains strong. Over the last few days, I’ve heard a lot of criticism from my Democrat colleagues about the President’s budget, how it’s a blueprint for destroying America and that budgets are more than just physical documents. They are a reflection of our values. Even the Speaker of the House has said the budget is a statement of our values. I find these statements ironic and quite frankly hypocritical, if my colleagues truly believe that a budget is a reflection of our values then they should produce a budget proposal of their own. Why is this the second year that the House have not produced a budget? Why did they not produce a budget the last time they had control of the House if, as they say, it is a reflection of our values. I don’t get that. One of my Democrat colleagues even called the President’s budget proposal, a declaration of war on the American dream. I would like to respectfully remind my colleagues that the President’s budget proposal is just that, a proposal. And I’m grateful that the President’s budget is forcing us to have a discussion that many of my colleagues don’t want to have.
Mr. Johnson: (24:17)
There is no question that federal spending is out of control. Medicare and social security are on a path to insolvency and our congressional budget process is broken. As members of this committee, we must come together and find a bipartisan solution to solve these critical problems. The President submitted his budget to Congress. Now it’s time for Congress to produce a budget. Today we’re here to discuss the President’s 2021 budget proposal, which includes reforms of mandatory spending programs, key investments in national security funding, and a commitment to eradicate waste in government spending.
Mr. Johnson: (24:55)
More importantly, it provides for important and overview investments in rural America, a region of the country that I represent. As a representative of rural Eastern and Southeastern Ohio, I’m happy to see that the President’s budget is investing in rural communities, communities that are facing serious challenges like the need for rural broadband and greater access to health care. Mr. Vought, can you tell me and our colleagues how the President’s budget is investing in rural America, specifically how it invests in telecommunications infrastructure to better provide greater access to broadband in rural states?
Acting Director Vought: (25:33)
Sure, I would. Thank you, Mr. Johnson. I would draw your attention to two things in particular. Number one, the infrastructure package as a whole is something that we believe is going to have a substantial investment in rural America. That infrastructure package is a 10-year reauthorization at higher levels of the current formula for highway spending, but it also includes $190 billion surge to be able to deal with nationally significant areas, rural America, broadband, things of that nature. And we continue to provide high levels of funding for the broadband initiative at the Department of Agriculture. We have another significant, a $250 million investment this year. That’s on top of about $1.8 billion that’s sitting there waiting to be spent of carryover. So we are providing as much money as can be spent in that important area.
Mr. Johnson: (26:30)
Well, you know, last week we passed legislation here in the house to repeal the pre-funding mandate that has cost the postal service an average of $5.4 billion. Postal service in rural America is another very, very important service that our people need. Can you discuss how the budget, the President’s budget, helps puts the postal service on a fiscally sustainable path to avoid a tax payer bailout and protect the benefits earned by postal workers?
Acting Director Vought: (27:03)
Yeah. It’s something we’ve considered in previous budgets and is reflected in this as well. At the high level, we want to make sure that the post office has, while maintaining service to rural America, we want to be able to give them the tools that are necessary to cut costs and to have flexibility to operate as much as a normal business as possible. If you look at postal reform over the last 30 or 40 years, the hope was that the post office, in the 1970s, early in the 1970s, it would be freed up to come as close to operating as a business as possible. Unfortunately, that has not been the case and to the extent that there have been bailouts, that’s been unfortunate. We’re trying to continue to put reforms included in this budget to be able to get them on a better firm foundation going forward.
Mr. Johnson: (27:52)
Thank you. Mr. Chairman, I yield back.
Mr. Yarmuth: (27:54)
The gentleman’s time has expired. I now recognize the gentleman from New York. Mr. Jeffries for five minutes.
Mr. Jeffries: (27:59)
Thank you. Distinguished Chair for your leadership and for yielding. Mr. Vought, prior to you assuming your current position or working at the Office of Management and Budget, you were a conservative political operative, is that right?
Acting Director Vought: (28:12)
I both worked on Capitol Hill in this committee. I grew up professionally working for a number of the members who served on this committee as a budget staffer, and I have a great fondness and affection for this place. I also did work at the Heritage Foundation in getting people involved in the political process.
Mr. Jeffries: (28:30)
Okay. As Vice President of Heritage Action, is that correct?
Acting Director Vought: (28:33)
Mr. Jeffries: (28:34)
And that’s the political wing of the Heritage Foundation, true?
Acting Director Vought: (28:37)
It’s the arm of Heritage Foundation that gets people involved in the political process.
Mr. Jeffries: (28:41)
Okay. I’m interested in trying to get some clarity as to reconciling the public statements that President Trump has made relative to his budget and policy priorities versus what’s actually in the document that he submitted to this Congress. On February 8th, President Trump tweeted, we will not be touching your social security or Medicare in fiscal 2021 budget. Is that correct?
Acting Director Vought: (29:09)
He did say that.
Mr. Jeffries: (29:09)
But the 2021 budget in fact, would result in a $500 billion cut to Medicare over a 10 year period, true?
Acting Director Vought: (29:16)
That is not true. It does not cut Medicare or Medicaid.
Mr. Jeffries: (29:20)
Okay. If it walks like a duck and talks like a duck and looks like a duck, it’s a duck. It’s a $500 billion cut to Medicare over a 10-year period of time. Now, the President’s budget also cuts social security disability by $24 billion, true?
Acting Director Vought: (29:36)
The budget has reforms to the disability insurance program to ensure that people are getting off of a cycle of dependency and getting back into the workforce when they can get jobs in the national economy.
Mr. Jeffries: (29:48)
Right? And that will result in a $24 billion cut, correct?
Acting Director Vought: (29:51)
No, we don’t believe it will reduce a cut. We believe that there are savings to be had from getting people back to work. It’s also $7 billion in improper payments in the disability insurance program and that is reflected in our budget, but there’s no cuts there.
Mr. Jeffries: (30:05)
Okay. If we can stick to facts as opposed to alternate facts, that’ll be helpful. During the President’s State of the Union address, he stated, “I have made an ironclad pledge to American families. We will always protect patients with preexisting conditions.” Did he make that statement?
Acting Director Vought: (30:22)
He did and he believes it and this budget reflects it.
Mr. Jeffries: (30:25)
There’s nothing in the 2021 budget that protects individuals with preexisting conditions, true?
Acting Director Vought: (30:30)
There is a health care allowance that reflects a future proposal that does not reflect it into this budget to the degree of specificity, but this President has proposed, continues to propose.
Mr. Jeffries: (30:42)
Okay. Reclaiming my time. Let me ask you a particular question with precision. Does this budget support the repeal of the Affordable Care Act?
Acting Director Vought: (30:51)
The budget has a series of reforms-
Mr. Jeffries: (30:52)
Yes or no.
Acting Director Vought: (30:53)
The budget has a series of reforms with regard to healthcare reform that tackle some of the drivers, some of which were created as a result of the Obamacare law that was passed about 10 years ago, but we believe Medicaid will continue to grow at 3% and Medicare will grow at 6%.
Mr. Jeffries: (31:09)
Is the President currently in court through his Department of Justice supporting the repeal of the Affordable Care Act as unconstitutional? Yes or no?
Acting Director Vought: (31:20)
The Justice Department is involved. Our view is that we want the court to work its will on a law that’s long been viewed as unconstitutional, but that doesn’t mean that no matter what happens in the court that this administration won’t respond with a clear repeal and replace piece of legislation as we have had specifics in previous budgets.
Mr. Jeffries: (31:42)
Right. There’s nothing in this budget that proposes a replacement for the Affordable Care Act that the Trump Department of Justice is trying to declare unconstitutional. Is that correct?
Acting Director Vought: (31:51)
That’s not true. There is a health care allowance that is meant to look forward to a repeal and replace piece of legislation that fully protects individuals with preexisting-
Acting Director Vought: (32:03)
Legislation that fully protects individuals with preexisting conditions.
Mr. Jeffries: (32:04)
Okay, that’s inaccurate, but let’s move on. President Trump repeated a campaign promise recently that Mexico would be paying for a wall on the southern border. He says, “Mexico is, in fact, you will soon find out, paying for the wall.” Did he make that statement in January?
Acting Director Vought: (32:19)
He has made that statement. I think if you look at what Mexico is doing to help this country-
Mr. Jeffries: (32:23)
I’m sorry, reclaiming my time. Does your budget propose $2 billion in American taxpayer money for the border wall along the U.S. Mexico border?
Acting Director Vought: (32:34)
It continues to propose money for the border wall along the southern border. We believe Mexico is doing a tremendous job in helping us deal with the apprehensions along the southern border. Unfortunately, they’ve had to come up and step up to the-
Mr. Jeffries: (32:48)
Well, thank you. Reclaiming my time. Just simply, the President’s budget is a living, breathing fact-check on all of the public lies that he’s told relative to his policy priorities, and that’s shameful. I yield back.
Mr. Chairman: (33:03)
Gentleman’s time has expired, and now recognize the gentleman from Missouri, Mr. Smith, for five minutes.
Mr. Smith: (33:08)
Thank you, Mr. Chairman. Thank you acting director for being here. Let’s look at some facts real quick. It’s reminded listening to my colleague ask you questions. You’re the budget acting director. I think of the number 302, 302 what do you think that is? Do you have any idea?
Acting Director Vought: (33:31)
I don’t know if it’s a trick question, but I think of in terms of an allocation, but that’s maybe because I’m from this committee.
Mr. Smith: (33:36)
No, it’s how many days have expired since the Democrats have failed to produce a budget from last year. 302 days ago, Congress was supposed to pass a budget. We didn’t pass a budget, but you know what? 63 is another number we need to pay attention to. That’s how many days we have to pass this year’s budget.
Mr. Smith: (34:10)
Let’s see if we can do either one of them. You work for a gentleman who has presented a budget every year that he was required to present. I serve with the Democrats who have failed to even file a budget since they have been in the majority. Every year that the Republicans were in control. We passed a budget out of this very committee. In fact, the Republicans have a budget right now. The President submitted a budget. Just file a budget. Just put it on paper. It’s so funny. I laughed. Start of this week, the leader of the House Democrats, Speaker Pelosi reiterated on Twitter on Sunday. The budget is a statement of your values. Just Sunday, the budget is a statement of your values and then yesterday in a press conference, she says, it’s the heart and it’s the beginning of all things that start out in Congress. Well, I guess we can’t start because the other side can’t file a budget.
Mr. Smith: (35:24)
Just file a budget. Show us your values. Your Speaker says that a budget is a statement of your values. I just wonder, I mean, don’t they have values? Don’t they have initiatives? Maybe it’s because they don’t want the American public to know exactly what their plans are, what their proposals are, what their budget is. More than half of the Democrats on this very committee are sponsors of the Green New Deal and Medicare For All, that needs to be in your budget. If you had a budget, but guess what? That would cost over $120 trillion. That’s why you can’t get a budget because you don’t want the American people to see how out of touch you are. Since our country has been around, our national debt is 22 trillion and growing just their two main proposals that they are campaigning on in New Hampshire and Iowa and now South Carolina.
Mr. Smith: (36:42)
Costs more than $120 trillion. The American people are onto you. That’s why you won’t file a budget. We serve on this budget committee. I want to see your values, if you have them. So, Mr. Vought don’t you think that this committee should present a budget and pass it so it can go onto the floor of the house?
Acting Director Vought: (37:09)
I do, it honestly saddens me to the extent that the House of Representatives have stopped doing budget resolutions. When I was serving in this important body. That was something that was a staple every year that the majority of the minority would put forward alternatives that we’d have it debated in March and we’d be able to see where do the members of this chamber put their values.
Mr. Smith: (37:37)
We need to see the values. I want to tie onto something that was asked to you in the prior questioning about pre-existing conditions. The President was very clear. He’s very clear every time he speaks at a rally that he wants to protect pre-existing conditions. Just because you want to repeal Obamacare and replace it with effective healthcare legislation, you can do that and we will do that by protecting people with pre-existing conditions. It’s not an all or nothing approach. We want to get rid of the garbage of Obamacare and replace it with a great healthcare plan that protects pre-existing conditions. Thank you for being here.
Mr. Chairman: (38:16)
Gentleman’s time has expanded. I recognize the gentleman from New York. Mr. Higgins for five minutes.
Mr. Higgins: (38:20)
Thank you Mr. Chairman. Just for the record, there is only one federal law that protects people with pre-existing conditions and it’s the Affordable Care Act. The President is trying to gut the Affordable Care Act through the federal courts and if he succeeds, there will be no law existing that protects people with pre-existing conditions. That is a fact. Sir, in 2017 with the Tax Cut and Jobs Act, we were told in a letter by the White House Council of Economic Advisers that the result of that action would yield four to $9,000 per American household on a recurring basis. Has that occurred and will it occur?
Acting Director Vought: (39:07)
Since the President took office, we’ve had $6,000 in disposable income for families on average. So far, just from the tax cut. Only a few years into it, we’re at $2,000 of disposable income. That’s substantial savings of people allowing to being able to keep their own hard earned money-
Mr. Higgins: (39:25)
Wait, is it 6,000 or 2,000?
Acting Director Vought: (39:28)
6,000 has the disposable income from the economic agenda and the economic boom of this President-
Mr. Higgins: (39:33)
I don’t understand what that means.
Acting Director Vought: (39:35)
I’m trying to explain it to you. It’s 6,000 since the President took office. There are many things that’s contributing to the economic boom that we are seeing. Everything from the deregulatory initiative to investment confidence in the economy. These are leading to real results in people’s pocket books of the tax cut alone. $2,000 is what is materialized thus far and we believe it’s going to get up to the $4,000 level for sure.
Mr. Higgins: (40:01)
What about the four to nine recurring every year?
Acting Director Vought: (40:04)
We believe that there’ll be significant savings along those lines and-
Mr. Higgins: (40:08)
I don’t believe you-
Acting Director Vought: (40:08)
Mr. Higgins: (40:09)
I don’t believe, sir-
Acting Director Vought: (40:10)
Mr. Higgins: (40:10)
I don’t believe you. We were also told that these tax cuts would pay for themselves. Are they paying for themselves?
Acting Director Vought: (40:16)
We are on track for the economic agenda, this President to pay for the cost of this tax cut and that’s the fully loaded cost of both the original score from CBO. That’s the cost of the extension and that’s the debt service costs.
Mr. Higgins: (40:29)
Are you familiar with the economist Mark Zandi?
Acting Director Vought: (40:32)
Mr. Higgins: (40:33)
Would you characterize him as a conservative economist?
Acting Director Vought: (40:39)
Mr. Higgins: (40:42)
Did he advise Democrats or Republicans presidential candidate-
Acting Director Vought: (40:47)
Tell me Congressman.
Mr. Higgins: (40:48)
John McCain, generally viewed as a credible conservative economists with Moody’s analytics. He had said that the tax cuts of 2017 for every dollar that you give away, you can hope to reclaim 32 cents. That’s a 68% loss on investment, so tax cuts don’t pay for themselves, and because tax cuts don’t pay for themselves, we went from an annual budget deficit of $600 billion to more than a trillion dollars and it’s projected that we will take in $1 trillion less than we spend for this year and the out years moving forward. Because tax cuts don’t pay for themselves. In 36 months of this presidency, there’s been an increase in $3 trillion to the national debt. That’s because tax cuts don’t pay for themselves.
Mr. Higgins: (41:45)
Because tax cuts don’t pay for themselves. You have a Medicare cut of $756 billion over 10 years. You have a social security cut of $24 billion. You have a Medicaid cut of $920 billion. Cancer research has been cut. The community development block grant program has been eliminated. The national endowment for the arts and humanities has been eliminated. Low-income energy assistance has been eliminated. Educational grants have been eliminated. You brought up infrastructure. Your infrastructure program is weak and pathetic. The President promised a $2 trillion infrastructure bill. What we need to do, that’s equivalent in the last 10 years to what we spent rebuilding the roads and bridges in Iraq and Afghanistan.
Mr. Higgins: (42:35)
Those nations are approximately 35 million people. Everything we build for them, they destroy. We should nation build at home. So I would encourage you to encourage the President to fulfill the obligation that he made to do a $2 trillion infrastructure bill, and it’s not just the bricks and mortar of infrastructure, it’s the growth that would occur because the same economists that I’d referred to before Mark Zandi, a conservative economist had said that for every dollar that you spend in infrastructure, you can expect to recapture in future economic growth about a buck 60. The return on investment for infrastructure investment is about 60% I would encourage you to review the infrastructure proposal here and consider making changes with that, I yield back.
Mr. Chairman: (43:25)
Gentleman’s time has expired and now recognize the gentleman from Utah, Mr. Stewart for five minutes.
Mr. Stewart: (43:29)
Thank you, Mr. Chairman and a acting director. Thank you for being here. Thank you for what’s clearly a tough job. I’m going to wax poetic here for a minute. I’m going to quote something. I think everyone here will recognize this is from a great President Theodore Roosevelt. He said, “it is not the critic who counts or how the man points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to he who is actually in the arena.” For heaven sakes. It’s easy to sit upon this dais and criticize an effort, but if you’re not doing that thing yourself, then you have no position. You have no authority in a real way to criticize the effort of this President. If you don’t have a budget, you haven’t stated your values. Again, it’s easy to sit up here and to criticize and to peck like a chicken along the ground, but that’s all you’re doing because you haven’t done the work. You’re not in the arena. It’s saying what you all would do. You’re just sitting on the sidelines and saying and criticizing what others have done.
Mr. Stewart: (44:36)
There’s one other thing, the budget, it’s a serious effort. It should be by partisan or at least as much as it can be, and I get it. I understand that there’s a debate over these issues and there always has been, and there probably always will be. We all I think, can agree that we’re trying to do the same thing. We’re trying to provide for our national defense for equal justice and for the common good. And again, I get it that the debate over those details can be contentious. But when the language is so over the top and it’s so contentious, most Americans don’t believe it. If you accused the President of actually targeting senior citizens as if he hates them and wants to deliberately hurt them. Most Americans don’t believe that. If you accused the President of targeting the poorest and the most vulnerable among us as if the President hates them and actually wants to deliberately hurt them, most Americans don’t believe that.
Mr. Stewart: (45:34)
And when you couch every detail or every disagreement as if it’s a lie or as if it’s pathetic, most Americans think that’s incredibly divisive and they don’t accept it. And that’s much of what we’ve heard here today from those who won’t do the work themselves, who sit on the sidelines and criticize and say things that are so over the top and outrageous. Most Americans think, I don’t think that sounds true to me. I don’t think the President actually wants to hurt the poor and the elderly. Now, maybe if you just hate the President so badly, you actually believe that stuff. There’s a few people who do that. Some of them are sitting up here, but most Americans don’t feel that way.
Mr. Stewart: (46:18)
I’d like to ask you something now, regarding and I think this is a key to to most of what you’re presenting here today. We spend $800 billion annually on more than 90 anti-poverty programs. What is the measure of success? How do we know if we’re doing a good job at that? Is it by how much money we spend? Have we done better if we are enrolled more and more and more people on these programs, or is it better for us to measure that by saying, hey, you know what? We’ve provided jobs for people. We’ve provided an access for them into the middle-class, lifting them out of poverty and allowing them a ladder forward. Mr. Vought, what do you think? How should we measure the success of these programs? This $800 million that we spend?
Acting Director Vought: (47:04)
We believe in outcomes. We believe in measuring how we’re doing based on the results that they have as opposed to figuring out how much from year to year we’re spending as a dollar amount. Washington DC far too often wants you to say what’s the dollar amount and makes that the sacrosanct value for how you’re doing with regards to your commitment. But I would take an example of education for instance, and respond to an earlier question and say we’re providing $50 billion in tax incentives for additional education at the state level in addition to what we’re providing for the department of education. We believe that’s a reflection of our values as well. But if you look at it from a green eyeshades perspective here in DC is just a revenue reduction and it’s anything but that.
Mr. Stewart: (47:49)
Well, and that’s the point. And you know, I think the success of these programs should be determined by Americans graduating off these programs. Providing an economy where they have the dignity of work and the self satisfaction that comes from improving their lives rather than just the dependence on the federal government sometimes generational. And my time is almost up and now I’ll continue with those who again, aren’t in the arena, haven’t put a budget for themselves and they will continue to criticize you and the President for the work that you’ve done. But we’re grateful for that and the American people are very grateful as well. Thank you. I yield back.
Mr. Chairman: (48:30)
Gentleman’s time has expired and now recognize the gentleman from Pennsylvania, Mr. Boyle for five minutes.
Mr. Boyle: (48:34)
Thank you to the witness for being here and thank you Mr. Chairman. Here we go again. A couple of years ago, three years ago now, we sat here debating the massive Republican tax cut. A number of us on this side of the aisle pointed out that this was actually step one in a three step plan. Step one, cut taxes, mostly for the top 1% to the tune of one and a half to $2 trillion. Step two, that would of course spike the deficits, spike the debt and then step three, this white house and our Republican friends would come back, say, my God, there’s a deficit and a huge debt problem. We need to cut social security. Medicare, Medicaid. Step one happened. The massive Trump tax cut, 83% of which went to the wealthiest 1% was passed.
Mr. Boyle: (49:32)
Step two was happening. We have the fastest growing deficit and an expanding economy in American history and now here we are with step three massive cuts to Social Security, Medicare, Medicaid, education, SNAP, transportation funding, et cetera. I want to focus since a number of my colleagues have focused on the massive cuts to Social Security, Medicare and Medicaid. Since I am a co-chairman of the Public Service Loan Forgiveness Program caucus. I do want to focus on that program specifically, but first before I get to that, just in terms of student loan spending, generally, let me read from a report from CNBC just yesterday quote. “As student debt continues to climb, President Trump on Monday released a budget for 2021 that would slash many of the programs aimed at helping borrowers. Student loans spending would be cut by $170 billion in Trump’s plan.” One of those areas that would get cut, forget cut, eliminated is the Public Service Loan Forgiveness Program.
Mr. Boyle: (50:46)
This was a bipartisan achievement, actually signed into law in 2007 by George W. Bush. How in the world does cutting student loans by $170 billion and eliminating the Public Service Loan Forgiveness Program in any way help families afford and pay for college? Bearing in mind that right now we just hit the overall mark of $1.7 trillion in total debt in terms of all of the student loans owed by every American combined. That is a major threat to our economy. So here is a budget that would take that situation and make it far worse.
Acting Director Vought: (51:32)
It’s totally untrue, Congressmen. This budget-
Mr. Boyle: (51:35)
Reclaiming my time. The CNBC report is untrue about cutting $170 billion?
Acting Director Vought: (51:41)
There are savings for $170 billion from-
Mr. Boyle: (51:44)
Acting Director Vought: (51:45)
From consolidated programs into one new program-
Mr. Boyle: (51:48)
It’s what normal Americans would call a cut.
Acting Director Vought: (51:50)
No, because we’re replacing it with an income driven debt repayment plan over 15 years, over 30 years-
Mr. Boyle: (51:56)
Thank you reclaiming my time since we’re time limited for those at home. Anytime anyone from Washington talks about savings. Hold onto your wallet, the savings are coming from you. Let me specifically focus though back to the Public Service Loan Forgiveness Program. I mentioned that I’m co-chair. I have a Republican co-chair, Mr. Joyce of Ohio. This is a program that has had bipartisan support going back to its beginning in 2007. Why did you decide to just flat out eliminate it?
Acting Director Vought: (52:30)
Because we don’t want to pick winners and losers and we were replacing it with a income driven repayment plan that the President has had in every single one of his budgets that he-
Mr. Boyle: (52:38)
Reclaiming my time. What do you think this will do to those who have decided to enter public service? Who forgo higher salary in the private sector have taken on a ton of student debt and now here you are eliminating the Loan Forgiveness Program that they signed up for.
Acting Director Vought: (52:59)
They’d be eligible for the new program that this budget and this administration has been proposing for four years.
Mr. Boyle: (53:06)
So finally with just 30 seconds left, let me say yes, it is true. A budget is a statement of one’s priorities. We see the priorities of this administration. Massive tax cuts for the wealthiest 1% paid for by cuts to ordinary Americans. I yield back.
Mr. Chairman: (53:24)
Gentleman’s time has expired. Now recognize the gentleman from Texas, Mr. Flores for five minutes.
Mr. Flores: (53:30)
So thank you Mr. Chairman. Mr Vought, you didn’t really have a direct vote. You didn’t really have a chance to respond to the questions regarding the student loan program. Would you like to expand so that the American people get the true story of what the President’s proposing in terms of coming up with a more efficient, more fair student loan program?
Acting Director Vought: (53:47)
Happy to. This administration, this budget has put forward an income driven student loan repayment plan that would allow students after 15 years to have debt relief. But in that 15 years they would pay a set amount of their monthly income towards debt repayment. At 12.5% of their income for 15 years. And for graduate students it would be relief after 30 years. We consolidate a number of programs to be able to provide that program and we think that will lead to more simplicity for student borrowers.
Acting Director Vought: (54:19)
So instead of having many different programs out there and trying to figure out what’s the best one for them, we’d have the opportunity to have one simple 15 year debt relief plan for students. This is what the President ran on. It’s been in every one of his budgets.
Mr. Flores: (54:34)
Right. And so in this particular situation to address the claims that were made by the last questioner, if you had somebody that decided to go into public service and selected at a lower income level, then in that particular situation, this loan repayment plan would automatically address that, wouldn’t it?
Acting Director Vought: (54:52)
They would be eligible for this new plan.
Mr. Flores: (54:54)
Okay. And one of the things that the President’s proposed in his budget, and I think it’s pretty wise because all the healthcare providers in my district, particularly the hospitals have talked about the shortage of medical professionals and so the President’s budget proposes to pull graduate medical education out of the Medicare part of the budget. Can you explain the logic for that because it sounds perfectly reasonable to me based on what I’m hearing from real world America?
Acting Director Vought: (55:23)
Sure. This is an example of we;re going to still commit to graduate medical education, but we don’t want the Medicare trust fund to be drawn down from it. We don’t want it to increase the insolvency of Medicare as a result of a program that benefits far beyond today’s seniors. It helps a vast majority of the country and hospitals across the nation. So this is an example where we take it out of Medicare and we allow it to grow each and every year, just not at the same level of medical inflation.
Mr. Flores: (55:57)
Okay. And then you’ve done the same thing with uncompensated care as well. And so the net result of both of these is to strengthen the Medicare trust fund. Is that correct?
Acting Director Vought: (56:05)
Mr. Flores: (56:06)
So Americans that are on Medicare near Medicare are actually better off because of this, because the President taking two things that aren’t really part of Medicare and pull them out and allow Medicare to be more self-sustaining. So I guess, one of the things you hear is that this word cuts a lot. So, what is the Medicare spending level in the 10th year versus the near year in the President’s budget?
Acting Director Vought: (56:33)
Medicare will grow 6% on average each and every year in this President’s budget, there is no cuts to Medicare whatsoever.
Mr. Flores: (56:42)
Okay. So grow is not a cut. And so to the extent that anybody uses this word cut when the dollars are higher in the out year than they are in the near year, then they’re not being truthful with the American people. Is that correct?
Acting Director Vought: (56:54)
That’s correct and we extend the Medicare trust fund solvency by at least 10 years. We do have assumptions that I’ll provide for lower prescription drugs. We thought that that was a bipartisan priority to have a better healthcare at lower costs and we just don’t think that’s a cut.
Mr. Flores: (57:09)
Mr. Vought, thanks for your answers to set the record straight on these important issues and I yield back to balance my time.
Mr. Chairman: (57:18)
The gentleman’s time has expired, now recognize the gentleman from California, Mr. Khanna for five minutes.
Mr. Khanna: (57:23)
Thank you, Mr. Chairman. Representative Langevin yesterday at HASC asked for people to testify about the President’s defense budget. He was told that witnesses had been directed by you explicitly not to speak to the President’s budget requests. This has never happened in the history of Congress, whether it was President Reagan, President Bush. Can you explain why you gave an illegal directive? Obstructing Congress to tell witnesses not to testify?
Acting Director Vought: (58:00)
Mr. Khanna: (58:02)
Are you claiming that your office did not give that directive?
Acting Director Vought: (58:05)
We typically like to have this OMB testimony be the first testimony, so that may be what you’re referring to, but in terms of not allowing agency heads to speak about the President’s budget, that’s not true.
Mr. Khanna: (58:16)
So it’s your testimony that you completely are okay with having agency heads testify and that the witnesses yesterday, if they implied that you are OMB had instructed them not to do so are lying?
Acting Director Vought: (58:35)
Sir, not lying. My gut is that they are reflecting the reality that we want the OMB testimony here in House budget committee to be the first set of testimony on behalf of the President’s budget and then to let agency heads go from there. That’s my guess is what they were referring to. But the idea that we would not want agency heads to go to the Hill and talk about the President’s budget is not true.
Mr. Khanna: (58:58)
Did you tell them in any time that not to talk to the committees until you did?
Acting Director Vought: (59:06)
I’m sure we had communication with agencies along those lines, but I certainly didn’t. I’m sure as I’ve said, we provide guidance to agencies that says we don’t want agency heads to go up to the Hill until we have an opportunity to come before this committee.
Mr. Khanna: (59:22)
For going forward. Now that you have, you will be completely fine with agency heads going to.
Acting Director Vought: (59:28)
Of course, it’s a vital aspect of this process.
Mr. Khanna: (59:32)
In terms of the President wanting to lower drug costs, what is your view on HR bill three and whether that would do that?
Acting Director Vought: (59:41)
We have concerns with that piece of legislation. We put out a statement of administrative policy against it. We appreciate the desire, the intent to lower drug prices, but our council of economic advisors looked at that piece of legislation and said it would lead to shutting down a third of the innovative drugs that are in the pipeline. CBO didn’t have numbers quite as large as that, but they also said that there would be an impact on innovation. So look, we want to get to the same place that you all are in terms of lowering prescription drugs. We would love to have a bill on the President’s desk. This is one of the areas of bipartisan work that we would want to endeavor to pursue.
Acting Director Vought: (01:00:23)
It’s one of the reasons why we’ve had in this budget in years past, we provide a lot of specificity. In this budget, we provide a general allowance to be able to have the house and the Senate work it’s will with us not providing new proposals that-
Mr. Khanna: (01:00:37)
Does the President have a plan? I mean he’s rejecting our plan. Has he offered a plan or what he would support?
Acting Director Vought: (01:00:41)
We’ve certainly offered plans in the past. Things like having a price cap in Medicare part B reforming the Medicare part D plan to put a catastrophic cap for seniors and to change some of the disincentives. Some of those proposals are reflected in HR three but we are very concerned to the extent that we don’t want to fall on the other side of the balance of impacting innovation and I would just say as the father of a child that has cystic fibrosis is about to go on to a medication that is disease halting.
Acting Director Vought: (01:01:14)
That kind of groundbreaking innovative prescription drugs is what we want to make sure that future kids-
Mr. Khanna: (01:01:23)
I think we all want to do, I just want-
Acting Director Vought: (01:01:23)
Have access to in the future.
Mr. Khanna: (01:01:24)
I think we all want to do that. On infrastructure, there’s been a sense that the President wants to work with us, we’ve gone, the Speaker has gone, the Senate leader has gone. They agree on doing an infrastructure bill and then two days later nothing happens because there’s no agreement by the President on how to pay for it. We are going to be working on an infrastructure bill that the House Democrats will propose. Will the President be committed to actually passing it and offering pay-fors through the Senate with it?
Acting Director Vought: (01:01:57)
Congressman, I think your question actually reveals the problem with where we are in infrastructure, which is that we want to pay for it by providing spending cuts and reforms. You all, every time we try to have a conversation about infrastructure, the expectation is that we’re going to roll back the President’s tax cut. We’re not going to do that. We’re not going to have anything that raises taxes on this-
Mr. Khanna: (01:02:20)
Just one final quick followup, but why wouldn’t you be willing to just fund infrastructure, which actually would lead to 3% economic growth? I mean, why are you insist, you didn’t have all pay-fors on your tax cuts and the economists agree infrastructure actually, would lead to great relief to growth. Why doesn’t the President just commit he’s going to do a infrastructure bill?
Acting Director Vought: (01:02:39)
He has committed to doing an infrastructure bill. There’s a trillion dollar infrastructure package in this budget resolution. It continues to be a priority and we put forward savings along those lines because infrastructure has been something that’s been paid for, but we were providing 4.4 in spending reductions and deficit reduction that could be used for potential pay-fors.
Mr. Chairman: (01:03:05)
Gentleman’s time has expired and now recognize the gentleman from South Carolina. Mr. Norman for five minutes.
Mr. Norman: (01:03:10)
Thank you, Mr. Chairman. Mr. Vought, thank you for appearing today. You know some of these comments, I’ve sat here and listened to the last 45 minutes. Are really amazing. One, it caught my eye was that my friends from the left are saying blueprint for financial disaster. Do you live in a house?
Acting Director Vought: (01:03:27)
Mr. Norman: (01:03:27)
What if I, and I’m a contractor, I’m a builder. We build things. I’m probably a deplorable, drive pickups, Bibles, guns we cling to. What if I came to you and said, want to build your house? What would you ask for?
Acting Director Vought: (01:03:39)
Mr. Norman: (01:03:40)
And a blueprint. I couldn’t come to you and just say I want to build your house. You’d say, where are the plans? Where’s the blueprint? Congressman Stewart’s an accomplished pilot. What if I came to him and just said, I want you to learn to fly a plane. He would have a right to say what kind of plane? Give me some, no, I just want you to fly a plane. That’s what my friends from the left are asking the American people to believe. We hadn’t had a budget in two and a half years.
Mr. Norman: (01:04:03)
Asking the American people to believe. We haven’t had a budget in two and a half years. Let me tell you some other things. They’re proposing free medical care. Put it on paper. What’s the cost, unless doctors are willing to work for free, which I don’t think they are. Free college education has been mentioned. Are professors, particularly tenured professors not going to get a salary. Put it on paper. Let’s see what it cost. Free housing I’ve heard. Put it on paper and see what it costs. Somebody has to pay for it. Open borders. Is one of the cuts, and I just heard this yesterday. Are one of the cuts, that my so called friends to the left are saying is that if you come into this country and can’t speak English, then you are disabled. Have you heard that?
Acting Director Vought: (01:04:46)
It is one of the qualifying factors right now within the disability insurance program that we’re trying to reform.
Mr. Norman: (01:04:51)
How dumb is that? If you can’t come into this country, speak English, you are entitled to all the benefits of this country because you can’t speak English. The American people are on to it and they get it.
Mr. Norman: (01:05:03)
Tax cuts don’t pay for themselves. I think we’ve got to growing economy that has the likes we haven’t seen in since this president’s took office. The previous eight years can’t boast the numbers that we’re boasting. All that, tax cuts don’t pay for themselves. All that is is code language. The tax payers are too dumb to spend their own money. Let unelected bureaucrats and my liberal friends spend it for you. That’s why you hear the socialist programs that are coming up. So I applaud you for defending this budget. You’ve at least got a budget and I would ask, for us, we’ve got 60 some days to come up with a budget on paper, defend what you’re promising the American people, which they are simply not doing.
Mr. Norman: (01:05:50)
Could you go into some more… You haven’t been allowed to finish many of your answers. Could you elaborate more on some of the… They’re claiming, as they always do, cuts in Social Security, gutting Medicare, gutting Medicaid. Can you go into some more examples of where this just is untrue?
Acting Director Vought: (01:06:07)
Sure. There’s just no cuts to Social Security and Medicare. The president’s commitment to seniors is fully reflected in this budget. We reform Medicare. It grows at 6%. what we mean by reforms though is lowering the cost of healthcare. $135 billion in savings in prescription drugs for lower costs to seniors. That shows up as a savings, but it’s not a cut in any way.
Mr. Norman: (01:06:28)
But they classify it as a cut because I don’t want anything to change. That’s why they’re not putting it on paper to having a budget. Military, go into some of the dollars where it’s being spent because this is something really to brag about from the Trump administration.
Acting Director Vought: (01:06:43)
Fourth year of high defense spending $741 billion, fully consistent with the budget agreement that was recently passed. Within that top line, we have a 20% increase to the NNSA to make sure nuclear modernization continues to be going forward on track. So we really went big in that area. We continue to have 44 new ships over the next five years within the defense program. We invest heavily with regard to R&D to make sure some of the concerns to be able to compete with our adversaries are fully funded. So this continues what the president promised to the American people to rebuild our defenses and that we want to make sure those continue to grow up in the out years.
Mr. Norman: (01:07:28)
It’s called looking after the tax payers dollars. You’re looking at them and looking at everything is return on investment. What is the taxpayer getting for the dollars as he’s putting in? Well, I applaud you for it. I don’t think, as has been implied, granny is not going over the cliff. What we are going to do though if we don’t get a hold of this $22 trillion deficit, which is the cruelest tax on future generations, then we are leaving our children and grandchildren over a cliff. That’s unfair. It’s unAmerican and thank you for what you’re doing for this country, and we appreciate it. I yield back.
Mr. Chairman: (01:08:00)
Gentleman’s time has expired and now recognize the gentleman from North Carolina Mr. Price for five minutes.
Mr. Price: (01:08:06)
Thank you, Mr. Chairman. Mr. Director, welcome to the committee. I want to ask a quick question first to clear up a little of the rhetoric we’ve heard this morning, but then turn to a more substantive inquiry. The last year our Republican friends were in the majority. That would be 2018. Did they or did they not bring a fiscal 2019 budget resolution to the House floor for a vote?
Acting Director Vought: (01:08:27)
I don’t recall, Congressman.
Mr. Price: (01:08:29)
The answer’s no. The answer is no.
Mr. Price: (01:08:34)
It’s critically important that we all recognize the influence that OMB has, not only over the president’s budget requests that are sent to the Congress, but over the administration of funding that is provided by the Congress. That’s what I want to ask you about. I want to ask you about important investments in infrastructure and disastrous systems that Congress has enacted and the president signed into law regarding Puerto Rico and other areas devastated by natural disasters. Congress has already registered its frustration with the Department of Housing and Urban Development over repeated missed deadlines and a refusal to move this much needed funding out the door. But this isn’t just about HUD, as HUD officials have been very quick to tell us. It’s also about OMB. As the director of OMB, you’re responsible for the prudent execution of these plans. In fact, you’re required by law to make sure the funds are made available to HUD. So I want to ask you two related questions. First, why the demonstrated need for this funding in Puerto Rico and the Virgin Islands and your statutory mandate to provide these funds to HUD, as OMB refused to a portion of the funding as immediately available for obligation. And secondly, HUD has provided testimony saying that OMB as purported to curtail their ability to even request this funding be made available to HUD. Is this true? Have you done this at the president’s direction with regard to Puerto Rico? OMB has no authority in law or anywhere else to control what an agency requests. What an agency requests in the first place. Do you’d really disagree with that?
Acting Director Vought: (01:10:13)
Congressman, with regard to Puerto Rico, $90 billion is projected to be spent to help the people of Puerto Rico recover from the hurricanes from a few years ago. Given the situation politically in that territory where there’s rampant corruption, you had an administration that had to resign, a governor that had to resign because-
Mr. Price: (01:10:36)
Excuse me, but we do have an Inspector General’s Report. We don’t have to just rely on your word for it. And is it not true that actually the finding came up that the administering agency in Puerto Rico was not rampant corruption. Quite the contrary, that they operated according to normal procedures. And any way, that’s not what I’m asking. I’m not asking for your personal judgment about the government of Puerto Rico. I’m asking about your authority in the way you’ve exercised your authority. So these are very specific questions.
Acting Director Vought: (01:11:04)
Sure. We operate with agencies on things like funding notifications. In this case with CDBG, we had to implement the statute, which has never been authorized by Congress. So Congress set up a new appropriate, a new statute for mitigation funding and then just left the agency on its own and said, “Go implement it however,” without any instruction-
Mr. Price: (01:11:26)
I’m sorry. There are many, many programs that aren’t authorized. That’s a red herring.
Acting Director Vought: (01:11:30)
Not new ones at that level.
Mr. Price: (01:11:33)
We need a CDBG-DR authorization, and we’re hoping that our friend Mitch McConnell will agree with that. We’ve passed it here in the House. But my question has to do with the testimony. Let me just move directly to that. The testimony of HUD that you haven’t even authorized them to request the funding. This is duly appropriated funding, a bill signed by the president.
Acting Director Vought: (01:11:57)
We’re a portioning everything that HUD needs to be able to really move forward with the CDBG funding. We provided the initial $1.5 billion that was tranched out and then another $8.2 billion for unmet needs. We were working on getting the grant agreement done right, and here’s the issue, Congressmen, is that we don’t want this money to go to waste. We wanted to actually help the people of Puerto Rico. We want to make sure that they don’t all get one lump sum and it overwhelms their political system where they had a governor that had to resign from corruption and where FEMA fines undistributed-
Mr. Price: (01:12:33)
Has anybody remotely suggested you should simply hand the money over in one lump sum?
Acting Director Vought: (01:12:39)
Well, your question suggests-
Mr. Price: (01:12:40)
No, it doesn’t suggest that. These are in tranches and there are deadlines. There are statutory deadlines. It turns out when deadlines were missed, we put them in statute. There are ample, ample opportunities, checkpoints for judgements to be made about letting this tranche or that go forward. That’s not what I’m asking you. I’m asking you about what the HUD people tell us. That they’ve had trouble even getting authority to request the money from OMB, and I’m looking for what your authority is to do that.
Acting Director Vought: (01:13:14)
Yeah. I’m not going to get into the deliberative process between agencies-
Mr. Price: (01:13:17)
I’m asking your first start. I’m not asking about your delivery process. I’m asking about where this authority comes from.
Acting Director Vought: (01:13:24)
It comes from our portion mid statutes, the ability to make sure that money is spent efficiently and economically to make sure that there are spend plans in place. And it comes from our authority to consider when there are notifications to be able to have new regulatory pronouncements that go out to make sure that they go through a rigid fact-based process.
Mr. Price: (01:13:47)
Mr. Chairman, I’m going to ask for the record a detailed account of your answer to my question with the citations of the authorities you’re talking about.
Acting Director Vought: (01:13:57)
Sure. Happy to.
Mr. Chairman: (01:13:59)
Gentleman’s time has expanded. Now recognize the gentleman from Texas Mr. Roy for five minutes.
Mr. Roy: (01:14:03)
Thank the Chairman. Mr. Vought, thank you for being here. Thank you for representing the president. Trying to stand up to actually put us on a path to some sort of fiscal responsibility and getting us a balance, a budget that balances. While unfortunately my Democrat colleagues want to sit and pontificate and actually do nothing, produce no budget, and not actually do their job. So thank you Mr. Vought for being here. I appreciate it.
Mr. Roy: (01:14:26)
Mr. Vought, is Secretary Mnuchin testifying this afternoon in the Senate, in front of Senate Finance.
Acting Director Vought: (01:14:30)
Mr. Roy: (01:14:31)
Yeah. So isn’t it always the case that that process starts after you come and start this process off here at OMB?
Acting Director Vought: (01:14:37)
Mr. Roy: (01:14:37)
Nothing to hide their, right?
Acting Director Vought: (01:14:38)
Nothing to hide.
Mr. Roy: (01:14:41)
Let me ask you this question. Do you know who said the following just this week? “That doesn’t seem to matter as much right now. Right now it’s not an immediate concern. The size of the debt does not pull well. I don’t see how that’s a potent political issue.” Do you know who said that this week?
Acting Director Vought: (01:14:56)
I have a suspicion, but I’d rather you answer the question.
Mr. Roy: (01:14:59)
The chairman of this committee said that this week as quoted by Chad Program on FOX News. Do you on behalf of the president agree that debt does not matter?
Acting Director Vought: (01:15:08)
Absolutely not. And I think this is one of the things that these budgets are meant to have a debate with the country about is that debt and deficits do matter. That Washington DC has been borrowing recklessly because of spending. I’ve heard you in this committee speak to the level of spending as a percentage GDP compared to where revenues are as a percentage of GDP. This budget would maintain revenues at their post World War II historical average. The problem is on the spending, we need to get a handle on where we are spending. The easiest thing in the world would be to say that debt and deficits don’t matter that we don’t want to balance, but we actually say we’re going to balance in 15 years.
Mr. Roy: (01:15:48)
The national debt is 23.2 trillion and growing.
Acting Director Vought: (01:15:51)
Mr. Roy: (01:15:51)
We’re racking up about $110 million of debt per hour. Is that roughly correct?
Acting Director Vought: (01:15:55)
It’s roughly correct.
Mr. Roy: (01:15:56)
Right. So we’re going to rack up another $2- or $300 million in here while my Democrat colleagues demagogue instead of actually producing a budget.
Acting Director Vought: (01:16:03)
Mr. Roy: (01:16:04)
Chairman Yarmouth this morning said, something in the zip code of, he’s confident that Congress will stand firm against the president’s budget. Let me just say on this, I think the Chairman is most certainly correct and that is unfortunate that we’re not going to start with the president’s budget and try to work with the president’s budget to actually do our job. That’s unfortunate.
Mr. Roy: (01:16:23)
Congress always stands against any attempt whatsoever to spend responsibly, and let me just be clear. This is a bipartisan problem. Let’s look at this in 2017, with respect to the president’s ask, did Congress spend more than what the president asked for in 2017?
Acting Director Vought: (01:16:39)
Mr. Roy: (01:16:40)
Did you all send up a budget that had a 10 year balanced proposal in 2017?
Acting Director Vought: (01:16:44)
Mr. Roy: (01:16:45)
And was it effectively laughed back to the other end of Pennsylvania Avenue from this body?
Acting Director Vought: (01:16:50)
It was not adopted.
Mr. Roy: (01:16:52)
In 2018 was the president’s ask that sent up, did Congress spend more and bust the caps?
Acting Director Vought: (01:16:57)
Mr. Roy: (01:16:57)
In 2019 was the president’s ask honored or did Congress spend more and bust the caps?
Acting Director Vought: (01:17:02)
Congress spent more.
Mr. Roy: (01:17:03)
In 2020 with respect to the president’s ask did Congress spend more and bust the caps by a lot?
Acting Director Vought: (01:17:10)
We spent more than the original budget that the president sent out.
Mr. Roy: (01:17:13)
And reset the caps last summer and spent to those higher cap levels.
Acting Director Vought: (01:17:17)
Mr. Roy: (01:17:18)
So to be clear, do you agree this is a bipartisan problem if you look at that entire four years that Congress has not been effectively doing its job to spend appropriately?
Acting Director Vought: (01:17:25)
Mr. Roy: (01:17:27)
So let’s talk about economic growth and taxes and you referred to it. I asked the CBO director in this room two weeks ago whether or not we will be maintaining revenue as a percentage of GDP at roughly the 17.4 historic rate. And he said, yes. Do you agree?
Acting Director Vought: (01:17:39)
Yes. 17.2% of this budget.
Mr. Roy: (01:17:42)
And in other words, we have a spending problem. We do not have a revenue problem. Whatever the Democrat colleagues want to say about bloviating about tax cuts for the rich. The fact is we have revenues to the treasury that are consistent with historic norms and for the next decade, yet my Democrat colleagues want to demagogue about spending and continue to spend more than we have. Is that correct?
Acting Director Vought: (01:18:00)
Mr. Roy: (01:18:01)
And so the key question here is the fiscal policy, that is tax policy and regulatory policy that will free up the American people to produce. Let me ask you this, with respect to the budget that you put forward, we project 68% debt to GDP by the end of the decade. Correct?
Acting Director Vought: (01:18:15)
We project under this budget, we would go down to 66% as a percentage GDP.
Mr. Roy: (01:18:20)
But that relies on 3% economic growth.
Acting Director Vought: (01:18:22)
Mr. Roy: (01:18:22)
Right, but that is a laudable aspiration. Can we get out of the mess that Congress has created without economic growth?
Acting Director Vought: (01:18:28)
No, this is an all of the above strategy. Economic growth needs to be maintained. Deficit reduction through spending restraint needs to be maintained.
Mr. Roy: (01:18:37)
And you and I both know that my colleagues won’t take this budget request seriously, right? They’ll tear it up essentially like Speaker Pelosi toward the State of the Union to throw it out the daily papers. If we don’t get ahold of the debt, the ballgame is over. No money for defense, no money for Homeland Security, no money for Medicare, no money for Social Security. In the words of Don Meredith, “Turn out the lights, the party’s over.”
Mr. Roy: (01:18:58)
Thank you for sending up a budget that we can actually start with. My Democrat colleagues should actually honor that and let’s work together to do the work of the American people.
Mr. Chairman: (01:19:06)
Gentleman’s time has expired, and I will take this liberty to say that that was my joke I used yesterday that I tried to tear the budget in two. But thank you for reiterating my joke. I now recognize the gentleman from New York, Mr. Morelle for five minutes.
Mr. Morelle: (01:19:30)
Thank you Mr. Chairman for holding this hearing today, and thank you acting director Vought for being here to discuss the the budget.
Mr. Morelle: (01:19:37)
Yesterday, I received a copy of the budget, which has been titled a Budget for America’s Future. Inside it, as far as I can tell and we’re just beginning to go through it, were countless proposals that unfortunately, my view, disregard the realities of our future. This budget, like all budgets is a statement of priorities, but my view of the priorities in this budget are a harm the president future needs of families across the nation. And I mentioned, I apologize, I had to step out so I didn’t hear your testimony regarding savings. But as I see this a half trillion dollar cut to Medicare and $900 billion, nearly $1 trillion cut to Medicaid, reduction of food stamps, the children’s health insurance program, which will jeopardize the livelihood and stability of millions of our vulnerable citizens.
Mr. Morelle: (01:20:25)
And from my perspective, the stark reality is the budget leaves many people wondering what sort of education their children will receive, uncertain of where their next meal will come from. It lacks the kinds of investments that will make America stronger moving into the future and investing in our families, investing in education, investing in infrastructure. I think are the things that have always been my priorities. I think the priorities of this country, and I want to ensure that the values of my community I represented and the voice of working families are heard.
Mr. Morelle: (01:20:54)
Last week I held a town hall, 500 senior citizens came, and most of them voiced their fears about the future of Medicare and whether it would continue to provide support for them. The shortcomings of Medicare as it is, they talked about their struggles with prescription drugs. They talked about how healthcare costs continue to rise.
Mr. Morelle: (01:21:14)
I also spent time in the last two weeks visiting a number of senior citizen centers and continue to hear in depth their real concerns and fear about the future.
Mr. Morelle: (01:21:25)
And so I’m very, very concerned about this. I would like to ask, I apologize if I’m asking you to repeat yourself, but to tell me how you see savings in Medicare where I see cuts. Can you describe how you envision that because I don’t see this at all. I don’t see anything major reorganization. I don’t see bending the cost curve by improving outcomes or improving patient experience. The things that we’re all trying do in healthcare using social determinants. Could you just briefly because I don’t have a whole lot of time, and I have a couple of other questions.
Acting Director Vought: (01:21:54)
Happy to, Congressman. Medicare will grow at 6% every year. One of the things that you mentioned in your question is that lowering the cost of prescription drugs. That’s something that we assume as a savings compared to years past that generates savings even though it will benefit beneficiaries and lead to better outcomes, as you mentioned. That’s $135 billion in this of savings simply by lowering prescription drugs.
Mr. Morelle: (01:22:22)
So in the prescription drug, are you prepared to authorize Medicare to negotiate lower prescription drugs as is done in most of the industrial world?
Acting Director Vought: (01:22:31)
No. We have opposed HR3. That is a proposal that we believe on the wrong side of the balance to be able to cut off innovation that’s currently in the pipeline. That said, we have proposed less specificity even though past budgets have been very detailed in this space because we want to work with Congress, and we hope that between the House and the Senate, a bill can get to the president’s desk.
Mr. Morelle: (01:22:56)
Well, I will editorialize here that every time I’m with folks and they ask about prescription drugs and as you know, this is a growing alarming situation. Every time I talk about even if I don’t mention, but you talk about the federal government using its ability, economies of scale and the force of Medicare to negotiate prices, people are struck by the idea that we don’t do it already. Drug formularies and Medicaid, just about every commercial insurance program begged for this, and I just for the life of me, I don’t understand why the administration… I think the president in the past has actually voiced support for using Medicare as a means of negotiating lower drug prices. I don’t know what’s changed, but frankly I think there’s been very little leadership from the White House on this. And Americans, particularly senior citizens are just crying for relief.
Mr. Morelle: (01:23:43)
But if I can, let me just move to a completely different topic. My home district Rochester, New York has dealt with what in the past would have been deemed hundred year floods every other year. In fact, I met yesterday with the Chair on American side of the International Joint Commission, and we expect record flooding in the Great Lakes again this year. One of the things that we’re really relying on is resiliency studies for the Great Lakes that we hope the US Army Corps of Engineer will conduct. We have appropriated money, the appropriation bill that the president signed to have funding for those resiliency studies. Yet I note in this budget that the US Army Corps of Engineers and their ability to protect us and provide resiliency has their funding cut by a 22%. I wish you could comment on that and how I can help assure people back home that the flooding that they’ve seen, which is at record levels and we expect it to be again this year, is advantaged by significant cuts to the US Army Corps of Engineers.
Acting Director Vought: (01:24:45)
We provided more spending for Army Corps of Engineers than last year’s budget. It’s something that we continue to have challenges in the sense that we want to provide the infrastructure that’s necessary in this space, but we also have concerns with how long it takes Army Corps of Engineer to build projects. We want reforms in this area and so our budgets have focused on making sure that projects that are occurring already get done before we go on to new projects. We’re trying to address the backlog.
Mr. Morelle: (01:25:16)
Well, I will just issue this in my last… I’m sorry, I think I am over. I apologize. Just to say this that the amount, the hundreds of billions that you’ll end up spending in disaster relief instead of providing a much smaller amounts for resiliency, I think we will come to regrets. I certainly hope there’ll be added emphasis on resiliency. Obviously I speak for the Great Lakes, but I know people around the country and waterways are concerned about that as well. So thank you. I yield back my time.
Mr. Chairman: (01:25:42)
Gentleman’s time has expanded. Now recognize the gentleman from Pennsylvania, Mr. Meuser for five minutes.
Mr. Meuser: (01:25:47)
Thank you Mr. Chairman. Thank you Colonel Womack, Republican leader for holding this important hearing, and thank you very much acting director Vought for joining us today.
Mr. Meuser: (01:25:57)
We all talk regularly about and very daily in this committee and throughout the floor of Congress about the unsustainable level of spending our nation is on. Greatly appreciate, in fact, applaud the administration and you for putting forth a budget that exercises fiscal restraint, focuses on rooting out waste abuse and fraud, eligibility requirements, as well as very targeted reforms, which we’ll discuss here, and focuses funding on some critical areas.
Mr. Meuser: (01:26:29)
As the former Revenue Secretary of the Commonwealth of Pennsylvania, we had to balance our budget each year, and we set forth on focusing on eligibility requirements. And over a two year period, saved over $300 million from a $26.5 billion budget. That’s about 1.2%, 1.3% over a two year period. If we did that on the federal government’s side, that would be over $400 billion over a two year period. Certainly a wonderful start towards an infrastructure and transportation funding bill. So thank you for putting your focus there.
Mr. Meuser: (01:27:08)
Also, the focus was on defense spending. Well anybody on this committee or in Congress has to go over to Pentagon, whether you’re Democrat or Republican and hear from them about how far behind we fallen in cybersecurity in space. Dangerous areas to fall behind. And this budget continues that growth. Department of Veterans Affairs, this budget funds in a strong way the Mission Act and the Blue Water Navy Act, which… And veterans suicide issues. So thank you for that. Skills training. Extremely important for my state, my district and for our country, the budget puts over $1 billion towards career and technical training to get more people to work for the 21st century jobs.
Mr. Meuser: (01:27:52)
And also block grants. Have a lot of experience here too. The importance and how effective block grants can be. Most often States will gladly accept a small reduction in order to receive block grants so they can provide and have the flexibility to use the funding and dollars how they feel best for their state. Would you agree block grants provide enormous, more flexibility than the federal government would?
Acting Director Vought: (01:28:22)
Yes, absolutely. We allow states to have more control to design programs that achieve better outcomes for their citizens.
Mr. Meuser: (01:28:32)
Certainly. Thank you. Now, regarding waste abuse and fraud. Relative to the enacted fiscal year 2020 levels, your budget reduces non-defense discretionary spending by 5%. Is this reduction largely attributed to targeted reforms to reduce wasteful, ineffective, and duplicative programs as well as innovation and overall fiscal responsibility?
Acting Director Vought: (01:28:55)
Absolutely. We find efficiencies where we can, we find duplication where we can. We find just outright waste where we can. Give you an example, in cultural and state exchange programs, we have about $400 million savings in that area. There are over 80 programs in that particular space, and they’ve more than doubled since the 2000s. That’s an example of given the global world that we live in, do we really need such high levels of spending in that area? Or can we just begin to ratchet it back? Or just clear ways for an abuse where you’ve got Professional Cricket League in Afghanistan. Those are the kinds of things that lower top lines allow you to get at and really route the waste and the abuse out.
Mr. Meuser: (01:29:40)
That’s great. Reforms, not reductions. Now related to Social Security and Medicare. The president’s budget does not cut or reduce Social Security and Medicare. That’s accurate. Correct?
Acting Director Vought: (01:29:51)
That’s totally accurate.
Mr. Meuser: (01:29:53)
And the benefits and savings will be realized through these reforms that you’re referring to, such as the site neutrality and the lowering of costs of prescription drugs. Can you talk a little bit more about the site neutrality?
Acting Director Vought: (01:30:06)
Sure. Take an example of a CAT scan that she would get at an outpatient hospital that cost $230 versus a CAT scan that you would get at a physician’s office or a physician owned location that would cost $118. We believe that doesn’t lead to a rational policy within Medicare, and it actually leads to worse outcomes from beneficiaries because you have providers referring to different locations based on a higher reimbursement as opposed to making sure it’s the best from a healthcare decision. That’s a substantial amount of savings that we get in that allows us to save money for the taxpayer, have better outcomes for seniors, and continue to have Medicare growing at 6% every year.
Mr. Meuser: (01:30:53)
Great. Mr chairman, I yield back.
Mr. Chairman: (01:30:56)
Gentleman yields back. Gentleman’s time has expired. I now recognize the gentlewoman from California Ms. Lee for five minutes.
Ms. Lee: (01:31:03)
Thank you very much. Thank you very much for being here. First of all, let me just respond to one of our colleagues, who is not here now. When he referenced the fact that some of us over here hate the president, and I’m speaking personally, but I just want to say to you, I don’t hate the president, but I hate his policies. And when you look at how these policies and this budget, how they’re destroying millions of people’s lives, it’s a very shameful budget and it’s something that we need to hate.
Ms. Lee: (01:31:35)
Let me give you a couple of examples. You slash more than a $1 trillion in Medicaid and Medicare, you cut $182 billion in SNAP. You cut $20 billion from TANF. You dismantle and completely eliminate the Social Services Block Grant, the Home Investment Partnership and the Community Development Block Grant. All programs that meet families basic needs.
Ms. Lee: (01:32:02)
It’s hard to imagine how anyone could be proud of this budget, Mr. Director. Someone mentioned the values. Well, yeah, this does demonstrate what the values of this administration are and that’s putting the tax cuts for the wealthy billionaires, millionaires, and corporations, paying for them through these cuts that you have put forth. Those are the values.
Ms. Lee: (01:32:28)
Now, let me talk about waste, fraud, and abuse for a minute. You look at the Pentagon’s budget. DOD has been on an unprecedented spending since 2001. This budget looks more like a wish list for defense contractors and a war hungry administration than something based in reality. The Pentagon has increased their budget by $115 billion over the last three years. The Pentagon cannot even undergo a financial audit, which means we don’t fully understand where the Pentagon spends its money. There continued to be revelations of massive waste, fraud, and abuse at the Pentagon. Let me list a couple for you, which reflects again the values of this administration.
Ms. Lee: (01:33:12)
The Pentagon awarded a $7 million cloud computing contract to a one person company, one person. The defense logistics agency lost track of $800 million in construction projects. Now, national defense spending currently makes up 50% of discretionary spending. Is that correct? At least 50%.
Acting Director Vought: (01:33:35)
Ms. Lee: (01:33:36)
Yeah, and the Defense Department is the only agency that’s not able to pass an audit or hasn’t been able to pass an audit. Is that correct?
Acting Director Vought: (01:33:44)
I think it’s a much more complicated story, Congressman. This is the first time in history that the Pentagon has undergone and completed an audit, and we’ve now gone through the second year of a completed audit. And we’ve reduced the number of issues that were identified by 25% in the first year.
Ms. Lee: (01:34:00)
But we don’t know what is being spent at the Pentagon, and we don’t know what constitutes, at least you don’t, waste, fraud, and abuse. I mean, we don’t know if the right prices for contracts are being paid for. We don’t know whether the goals that we set out in these contracts with the funding that we provide, where they need to go.
Acting Director Vought: (01:34:17)
We made consistent progress every single year. 25% reduction in the items that were identified in the previous audit. But I want to give you an example of the progress being made. $6 billion in savings in fiscal year ’19. $8 billion in savings in fiscal year ’20. $9 billion in fiscal year ’21 projected savings that DOD is doing the hard work to identify waste and redirect it to other programs within DOD.
Ms. Lee: (01:34:46)
But you’re telling me then that you’re not identifying any abuse or real contract fraud in your audit at all.
Acting Director Vought: (01:34:57)
Have not. I’m sure that if you go look at some Inspector General reports, there might be some items there. But to my knowledge, there’s nothing that’s in my mind.
Ms. Lee: (01:35:04)
Okay. A couple of years ago there was a report issued by the Pentagon that indicated there was about $150 billion that could be looked at in terms of waste, fraud, and abuse. And I don’t see $150 billion in savings in any of your budgets so far.
Ms. Lee: (01:35:19)
Let me ask you the cuts in development and diplomacy. Following up from Congressman Moulton’s question in terms of the cuts by 22%, and I heard what you said in terms of there being a difference between diplomacy and foreign aid. But again, given the president’s reference to countries in Africa and in South and Central America, as he called them as asshole countries, many of these cuts reflect that value when it comes to development. We know that foreign aid is really a national security strategy to prevent terrorism, to prevent countries from engaging in warfare. We know that-
Ms. Lee: (01:36:02)
Engaging in warfare. We know that it really is a strategy for global peace and security. And yet your development is being cut by 22%, your development assistance. And yes, China is very active on the continent of Africa and many of the SO countries the president has identified. And so once again, here we go. Your values are definitely reflected in this budget, and it’s really a shame and disgrace if we’re sending this message to countries in Africa, and in Central and South America who really do recognize the importance of foreign aid from the United States as being our strongest national security effort.
Mr. Chairman: (01:36:46)
[crosstalk 01:36:46] Lee’s time has expired and now recognize the gentleman from Tennessee, Mr. Burchett for five minutes.
Mr. Burchett: (01:36:51)
Thank you, Mr. Chairman, ranking member. Thank you Mr. Vought for being here. I sit here and listen to the talk on both sides, and I honestly, I just think about my sweet wife and my pretty little girl back home, and I kind of drift off into that. So, I thank you for being here, and I’ll try not to become that crusty old white dude from either side of the aisle that just sits here and grumbles, and I’m just going to ask you a couple of questions. All right? If that’s okay with you, brother?
Acting Director Vought: (01:37:18)
Mr. Burchett: (01:37:19)
Notice I said both sides of the aisle, so I’m not going after anybody. I do appreciate all of my members waiting to hear my comments as well, so thank y’all. How does your budget plan to reduce and hopefully eliminate the waste of taxpayer dollars?
Acting Director Vought: (01:37:35)
Well, we shine a light on it in a way that we believe is historic. For the first time, we have a whole chapter on waste, fraud, and abuse in this budget. It continues to be something that we work to root out within the top lines that are proposed here. We also want to make sure that we are dealing with inefficiencies and things that just don’t make sense. When you own 25% of the federal, of the land in this country, why do you keep spending on land acquisition? That’s an example where we just feel like from a common sense perspective, we can find savings in addition to waste, fraud, and abuse, and be able to get at some of the inefficiencies in government.
Mr. Burchett: (01:38:16)
Because when you buy it, of course, it takes it off the tax rolls. We did that Knox County. We got out a property we didn’t need, and it put it back on the tax rolls, and it just made the economy move that much better. I appreciate that. And on a separate note, I appreciate the efforts this budget does for our veterans and what they do, and I appreciate our ranking member serving this country. What level of spending does the budget provide for veterans programs in fiscal year 2021, and how does that spending level compared to last year’s funding level?
Acting Director Vought: (01:38:49)
Sure. We have a 13% increase for VA. That’s at $105 billion that fully funds the level that’s required for the MISSION Act. It’s a very robust budget. This is a major investment in our nation’s veterans to make sure that that important law keeps getting fully funded. Last year’s level was $93 billion. So, that gives you a sense of the increase that we’re talking about here.
Mr. Burchett: (01:39:17)
And I think the ranking member or somebody said something earlier about the Bob Dylan artwork, and I actually had a piece of legislation that referenced that earlier on, and understand that that was consumed into a larger bill. So, I was glad to see that. I’m not against artwork. Actually, I have a degree in education, and one of the areas I was certified in was art education, oddly enough. And I like art and I like for my family to see it, like my little girl to see it, but the stuff at these embassies was in back rooms for the embassy big wigs to enjoy it. And it’s supposed to be representative of America. Well, it was back behind a locked-in area and to me, that money could have been spent a lot better elsewhere.
Mr. Burchett: (01:40:00)
I realized 70 or $80,000 for a piece of artwork doesn’t seem a lot to a Washington bureaucrat, but dag gummit, to people back in East Tennessee, that’s a whole heck of a lot of money.
Acting Director Vought: (01:40:09)
Mr. Burchett: (01:40:10)
And so, I appreciate your efforts, brother, and I will relinquish the rest of my time so we can get back to some more rhetoric. Thank you, sir.
Mr. Chairman: (01:40:19)
The gentleman from Tennessee is always generous with his time and helps us move it ahead. Thank you. His time has expired. I now recognize the gentleman from New Jersey, Mr. Sires, for five minutes.
Mr. Sires: (01:40:29)
Well, Mr. Vought, thank you very much for being here. I just want to tell my colleague that I’m not a crusty old guy. As I sit here, I have to say, you have all the lingo. I wrote down some of these expressions that … to defend some of the issues. “We’re on track.” “Commitment to seniors.” “Fully continue.” “Saving into the programs.” Pretty good. Did the report … And then I get attacked, saying that we never do a budget. In your memory, did the Republicans ever not do a budget in the last 14 years that I’ve been here?
Acting Director Vought: (01:41:12)
Did they ever not do a budget?
Mr. Sires: (01:41:14)
No. No, not do it, but introduce a budget and pass the resolution for budget.
Acting Director Vought: (01:41:18)
They certainly did. When I was here, we were doing budgets every year. It was, in fact, it was [crosstalk 00:05:23]-
Mr. Sires: (01:41:23)
Even when Bush-
Acting Director Vought: (01:41:23)
… remains and must pass?
Mr. Sires: (01:41:24)
Acting Director Vought: (01:41:25)
Many, many years under Bush, we were doing budgets. It was one of the major must pass pieces of legislation every year.
Mr. Sires: (01:41:32)
Was the war funded outside the budget?
Acting Director Vought: (01:41:34)
Was the what?
Mr. Sires: (01:41:34)
The war on Iraq funded outside the budget?
Acting Director Vought: (01:41:38)
I believe we were funding the war as that version of the OCO account.
Mr. Sires: (01:41:42)
So, it was outside the budget, basically?
Acting Director Vought: (01:41:45)
It was funded, substantial portions were funded within … There was a budget resolution-
Mr. Sires: (01:41:50)
Acting Director Vought: (01:41:51)
… that accounted for spending that was that versions of the OCO designation. It’s not like it just gets ignored.
Mr. Sires: (01:41:57)
Yeah, but it was outside the budget, the resolution.
Acting Director Vought: (01:41:59)
No, it’s not actually. It’s within the deficit totals that have to be added up over a course of five or 10 years. Whatever your window is.
Mr. Sires: (01:42:08)
One of the programs that I favor always is the CDBG programs. And I think it’s one of the ways where communities can really help their community and save money. Because any time you use money from the CDGB, you’re not passing that on basically to the local community tax. I just don’t know if sometimes people here realize how many places you used the CDBG money for. To help seniors, to help centers, to help job growth, to help fix the streets. And yet every year, we have to fight because you just want to cut it. I mean, this is one of the few programs that helps local communities and at a time where money’s short in these communities. So, I never understand that.
Acting Director Vought: (01:43:06)
Well, Congressman, it’s a program that’s … We’ve spent about $150 billion on it. We still think that there’s too much flexibility within the program. Let me give you an example.
Mr. Sires: (01:43:14)
But that’s the beauty of the program where you give the community-
Acting Director Vought: (01:43:18)
Nearly a million dollars to spend on giving the Greenwich Historical Society upgrades. Greenwich, Connecticut. I live 30 minutes away from Greenwich, Connecticut. They have more than the enough resources as a rich community to pay for all [crosstalk 01:43:30] of the historical upgrades that they need.
Mr. Sires: (01:43:31)
But there’s also communities using for Meals on Wheels and hiring people to take the meals to seniors that can move.
Acting Director Vought: (01:43:36)
No, Meals on Wheels is funded out of the ECL-
Mr. Sires: (01:43:39)
No, we used it. CDBG money was used for that.
Acting Director Vought: (01:43:42)
Mr. Sires: (01:43:44)
Well, but communities do use it.
Acting Director Vought: (01:43:46)
Meals on Wheels is funded fully under the ACL agency under the Department of Health and Human Service under this budget.
Mr. Sires: (01:43:53)
Well, all I can tell you is that we use CDBG money to do that. Okay? Now, the other issue. I was here when Obama took over. How was the economy then?
Acting Director Vought: (01:44:08)
We were in [crosstalk 01:44:09] the midst of a significant recession.
Mr. Sires: (01:44:12)
I remember Paulson coming. I was in financial services. Paulson coming in and telling me that the world was coming to an end. Financial houses are going under. Auto industry are going under. In over eight years, did the Obama administration create jobs?
Acting Director Vought: (01:44:31)
My recollection of the Obama administration is that we lost 200,000 manufacturing jobs. That we’d lost [crosstalk 01:44:41]-
Mr. Sires: (01:44:40)
No, we’re losing the from the manufacturing jobs from this administration [crosstalk 01:44:43]-
Acting Director Vought: (01:44:44)
… under the Obama administration, that this-
Mr. Sires: (01:44:45)
I’m not talking about manufacturing jobs. Were there jobs created during the Obama administration? By the end of his term?
Acting Director Vought: (01:44:53)
I can’t tell you based on where it versus where it ended, but we lost manufacturing jobs.
Mr. Sires: (01:44:58)
No, I just love the selective memory that you have. All I can tell you is this president, in three years, you would think that he has done this wonderful thing that it was never done before. Jobs were created, growth was there by the end of the Obama administration, and I got to put up with this nonsense that we somehow didn’t do anything to save this country. We saved the auto industry, we saved AIG, we saved some of these banks. And yet he thinks he did it all by himself. Like I said, you’re good. You’ve got all the right lingo. Thank you very much.
Mr. Chairman: (01:45:40)
Gentleman’s time has expired and now recognize the gentleman from Oklahoma, Mr. Norman, for five minutes.
Mr. Norman: (01:45:44)
Thank you, Mr. Chairman and ranking member Womack. I appreciate the opportunity today. Mr. Vought, thank you for being here. What I will tell you is, and this is just the facts, we ought to thank the president for keeping his promise to produce a budget. My friends on the other side of the aisle, they love to tear things down, and sometimes like tear things up. The president’s work, but it seemed like the only thing we’re getting done here is arguing about something that we all need to work on. In fact, I’d be wanting to propose that we never have another hearing with anybody until we get our work done. Either side, I don’t care who’s in charge. Our job, the first requirement we have in the constitution, much had been made about what the president’s done with the constitution. I would tell you the first constitutional responsibility we have at Congress is the power of the purse to produce a budget, regardless of who’s in charge.
Mr. Norman: (01:46:32)
So, my colleague from New Jersey is right. We have a real opportunity. But we shouldn’t be here throwing down, beating on the president about his budget because he’s actually done his work and put something out there. I give this same advice to my employees and managers for the years. Don’t offer criticism without offering a solution. As I said, the constitution affords us the ability to create a budget and we shouldn’t be taking that lightly. Passing a budget resolution and subsequently pass the appropriation bills in regular order helps us reign in spending and control our debt. When you have revenues growing at 5% a year, expenses growing at 8% a year, there’s not a person in here, I don’t care what the initial is at the end of your name, thinks that’s a rational way to run a program, run a business, run your personal life.
Mr. Norman: (01:47:20)
We have to get that in order. If you look at it, the sad fact is that we have done such a poor job of this that by 2021, the United States will be spending more money on paying down our debt than for our budgets of the Department of Veterans Affair, Justice, Homeland Security, and NASA combined. That’s pretty scary. Because we’ve done a poor job of controlling our debt, we must borrow, only indebting our children and grandchildren. As my colleague from South Carolina said earlier, we’re not throwing grandma off the cliff. We’re throwing our kids and our grandkids and the future generations off the cliff.
Mr. Norman: (01:47:55)
Just to CBO Director Swagel said confirming at our last meeting, our national debt will become a national security threat if we don’t get our fiscal house in order. For the record, Director Vought, do you agree with that statement?
Acting Director Vought: (01:48:07)
I do believe we will face a national security disaster if we don’t get our fiscal house in order. We need to be able to continue to increase defense spending, but we have to get to the point of being able to deal with our debt and deficits, and former national security leaders like Admiral Mullen have said this on the record as well.
Mr. Norman: (01:48:27)
And General Mattis said this and said it in hearing. Just to get some things on our record here. Much has been said about the president or the republicans in general about preexisting conditions. Is that … The president’s for fixing preexisting conditions, is he not?
Acting Director Vought: (01:48:44)
He is. He is for completely protecting individuals with preexisting conditions. It’s something that he has never wavered at any point, both on the campaign trail and in his presidency to protect.
Mr. Norman: (01:48:54)
In fact, he iterated that to tens of millions, if not hundreds of millions of people at the State of the Union just-
Acting Director Vought: (01:48:59)
Mr. Norman: (01:48:59)
… 10 days ago or so. They claimed that under Trump, the average American is struggling. How do we know this is false? Can you … There was a poll last week that’s not very favorable. Gallup came out and said that six out of 10 Americans are better off financially today than a year ago. 75% say the economy’s in good shape, a 20-year high. In fact, it was 90% of the peoples said they were satisfied with their personal life. From Gallup, somebody who’s never been favorable to this president. Is there anything you want to add to that? Is there any … I mean, you’re going to … I mean, those comments justify that the economy is moving in the right direction, wouldn’t you say?
Acting Director Vought: (01:49:36)
I would. I would say those comments do, as well as the facts on the ground and what we’re seeing, in terms of 10 million people getting off of welfare, seeing people with thousands of dollars of new disposable income to be able to invest in their families and their communities and their charities. All of these things are a sign of success. Record low unemployment, lowest unemployment in basically 50 years. This is the sign of an economy that’s booming, of people that are benefiting from it. If you want to say, “How’s the bottom half doing?” They’ve had their income increased 47%. That’s three times faster than the top 1%. So, this we talk about as a blue-collar boom because we see it at every step of the-
Mr. Norman: (01:50:17)
I just … I have 30 seconds left. But just as a reminder to everybody that’s here today, the ones that will see this video, a 1974 Budget Control Act required that we as Congress start producing budgets, working together with the president to fulfill that and reconcile it. We’ve passed that budget four times in regular order. Got our appropriations done so that we didn’t have continuing resolutions. Last time we did that, it was 1996. Coincidentally, that was the last time we had budget surpluses in America, ’97, ’98, ’99, 2000. I would say that we should start looking at that again instead of being critical and political toward the president’s budget. Mr. Chairman, I yield back.
Mr. Chairman: (01:50:54)
Gentleman’s time has expired and now we recognize the gentleman from California, Mr. Peters, for five minutes.
Mr. Boyle: (01:50:58)
Thank you, Mr. Chairman. I have been around for four terms now. This is my fourth term. And in the last term, my colleague wasn’t here, but the president led an effort to repeal the Affordable Care Act, which is where the protections for preexisting condition coverage came from. Today … That was not successful by the one vote of Senator McCain. Today, his lawyers in the Justice Department are agreeing with states who are trying to overturn the Affordable Care Act. And I would just point out, I have never seen a proposal from the president to actually take care of this idea. So, if there is a healthcare plan from President Trump, I’m looking forward to seeing it. But saying that it’s true [crosstalk 00:15:39], doesn’t make it true.
Acting Director Vought: (01:51:40)
May I address that?
Mr. Boyle: (01:51:40)
I’m not asking you a question, I’m just responding because I want to ask you about the budget though. What does the budget assume for real GOP growth as the average over the next 10 years?
Acting Director Vought: (01:51:50)
About 3%, that we could go to 3.1, then be at 3%, then head down to 2.8% in the last few years of the window.
Mr. Boyle: (01:51:58)
And what is the CBO estimating that the economy is going to grow at the same time period?
Acting Director Vought: (01:52:02)
Roughly about 2%.
Mr. Boyle: (01:52:03)
And how about the Federal Reserve? What’s their projection?
Acting Director Vought: (01:52:07)
I don’t have the Federal Reserve with me.
Mr. Boyle: (01:52:09)
My understanding is it’s 1.9%. So, I have the independent, the CBO, nonpartisan CBO, the independent Federal Reserve projecting about 2%, but the administration projecting about 3%. What is the basis for that?
Acting Director Vought: (01:52:23)
Sure. It’s a post policy budget and this was post policy economic assumptions. Forecasters take the world as it exists without changes in law. Our budget is a fiscal plan for the next 10 to 15 years, where we reach balance in 15 years. It assumes things that will occur in our budget such as extending the tax cuts. It assumes things like ongoing deregulatory initiatives, it assumes an infrastructure bill.
Mr. Boyle: (01:52:48)
Acting Director Vought: (01:52:49)
It assumes better trade deals. So, when we get something done, for instance with Canada and Mexico, it doesn’t sit in Congress for a year waiting to be passed. These are all things that lead us to be able to both aspire and believe that we can get to 3% growth.
Mr. Boyle: (01:53:03)
Okay. Well, last year, you projected the economy would grow at 3.2%, instead we got 2.3%, which is quite a bit of fall off. I don’t think the tax … The testimony you’ve had from other people that the tax bill did not bring nearly the growth that the administration suggested it was going to bring. What would happen if the … What would the deficit impact if the economy grew by 2% as most of the forecasters believe?
Acting Director Vought: (01:53:29)
We would have a hard time. [crosstalk 01:53:32] We would have a hard time right now being able to meet our target of balance because it’s an important part of our budget assumption. But I just would point you to the last four years of the Obama administration, where the Obama administration increased taxes by $653 million [crosstalk 01:53:46]-
Mr. Boyle: (01:53:49)
I don’t want to … I didn’t ask you about that in this.
Acting Director Vought: (01:53:49)
$3 trillion in revenue loss that CBL [crosstalk 01:53:51] never predicted. They just call them technical changes.
Mr. Boyle: (01:53:53)
Well, we could have a lot of discussion about the revenue loss from the tax cuts of 2017, but I’m just suggesting that the forecasts you’ve made in the past have been rosy. They look rosy compared to the independent estimators that we have out there [crosstalk 01:54:11]-
Acting Director Vought: (01:54:11)
We’ve done better than the independent forecasters together the last three years.
Mr. Boyle: (01:54:15)
You got off by, it looks like, 50%.
Acting Director Vought: (01:54:17)
So, we [crosstalk 01:54:19]-
Mr. Boyle: (01:54:19)
Let me ask you about foreign aid. Let me ask you about foreign aid in my remaining time. Former Defense Secretary Mattis once said that, “If you don’t fund the state department fully, then I need to buy more ammunition ultimately.” I represent a military area. I’ve never voted against the military budget. But I am concerned that that by cutting the State Department 20%, the lack of investment in diplomacy makes war more likely, and I think that is of great concern to people that I represent. Can you explain if any analysis was done of the risks taken with respect to cutting the State Department by 20%?
Acting Director Vought: (01:54:59)
Yeah. You’re referring to the state and foreign aid account that goes down by 21%. I’ll continue to maintain that we fund adequately diplomacy because we believe that’s an important aspect of international relations. Well, we are taking [crosstalk 01:55:14] a different view with regard to foreign aid [crosstalk 00:19:15]-
Mr. Boyle: (01:55:17)
The department itself has been cut by $11.7 billion, from 55 to 44. So, if I overstated for 20, it’s still a lot of money, right?
Acting Director Vought: (01:55:25)
It is a significant amount of money, but we believe in diplomacy, understood, is fully funded as was required. Now, we will also say that within public diplomacy accounts there is waste, fraud, and abuse that we attempt to reduce because we’re trying to weed it out.
Mr. Boyle: (01:55:41)
Can you give me an example of waste, fraud, and abuse that you’re trying to cut out?
Acting Director Vought: (01:55:44)
Yeah. I’ll give you three examples. The Bob Dylan statute in Mozambique that was at an embassy.
Mr. Boyle: (01:55:49)
How much is that?
Acting Director Vought: (01:55:50)
That is about … It is about a $1 million.
Mr. Boyle: (01:55:58)
Okay. Only $11 billion to go in waste, fraud, and abuse.
Acting Director Vought: (01:56:01)
Little by little.
Mr. Boyle: (01:56:02)
Yeah, little by little. I think that’s the problem is-
Acting Director Vought: (01:56:06)
How about the $7,500 for the Muppet retrospectable in New Zealand?
Mr. Boyle: (01:56:09)
Acting Director Vought: (01:56:11)
How about $850,000 for them the professional cricket league in Afghanistan?
Mr. Boyle: (01:56:13)
Acting Director Vought: (01:56:14)
What about $4,800 for sending American artists to a poetry festival in Finland?
Mr. Boyle: (01:56:19)
My time has expired, but it would take you a lot of thousand dollar increments to explain this massive cut in diplomacy on the behalf of the leader of the free world. And my time is expired.
Mr. Chairman: (01:56:28)
Gentleman’s time has expired. I now recognize the gentleman from Texas, Mr. Crenshaw, for five minutes.
Mr. Crenshaw: (01:56:34)
Thank you, Director, for being here. You’ve received a lot of criticism over the president’s budget. I’m just curious how it compares to Speaker Pelosi’s budget-
Acting Director Vought: (01:56:43)
Mr. Crenshaw: (01:56:43)
… she proposed?
Acting Director Vought: (01:56:44)
Speaker Pelosi does not have a budget.
Mr. Crenshaw: (01:56:47)
Are you sure?
Acting Director Vought: (01:56:49)
Mr. Crenshaw: (01:56:50)
What about this committee? How does it compare to this committee’s budget? From the majority they have proposed?
Acting Director Vought: (01:56:55)
To my knowledge, this committee is not working on a budget or nor has it produced one.
Mr. Crenshaw: (01:57:00)
That seems strange to me, doesn’t it? The constitution says that the budget is supposed to originate in the House, and then go to the Senate, and then be signed by the president. You’re saying you haven’t seen a budget that you can compare to the president’s budget?
Acting Director Vought: (01:57:14)
I have not seen one.
Mr. Crenshaw: (01:57:17)
Huh. So interesting. Lots of stones being casted, but no actual values being proposed. I’m going to use that word very carefully because Nancy Pelosi likes to say, “Show me your budget. Show me your values.” So, the implication is that there’s no values if you don’t have a budget. But you say that, and yet the stones are cast in a way that would imply that the president’s budget is without values, is without any moral character. Because that really is the implication being thrown around. “You don’t spend enough money on this. You don’t spend enough money on that. How dare you? Have you no heart?” That’s always the shame used. The moral grandstanding used to make the points. Why is it we have unending debt, unending growth in debt? Why is that? Because this body engages in nothing but moral shaming. You don’t have a heart if you’re not willing to spend double or triple the money that we are. Nevermind that there’s no thought put into the second and third order consequences. No thought put into whether or not that money is being well spent. Just moral shaming. Why?
Mr. Crenshaw: (01:58:35)
Well, because as Alexis de Tocqueville said that the end of a republic is when politicians figure out that they can bribe the people with their own money. And they do so by morally shaming their political opponents. Do you want to understand why we’re at where we’re at? That is exactly why. This committee is supposed to set … At least act like adults and set some kind of top line budget and make the appropriators work within that budget. But you’re telling me there is no budget coming out of this committee. That’s a shame. That’s what I thought I came on this committee to do was to have those adult conversations and then force actual choices. If you actually forced choices, well, then maybe we can come to some agreement on what might need to be done, where money’s being wasted, where it’s not being wasted, where we need to invest. But those conversations never happen and negotiations end up just increasing on all fronts. That’s not sustainable.
Mr. Crenshaw: (01:59:39)
This budget, this committee has to be the adult in the Congress that says, “We can’t spend that much more money. It’s not sustainable for our next generation.” Make the appropriators decide what to do with the money we give them, but we’re not doing that. Instead, we’re taking really easy but disingenuous political shots at the president’s budget. Why don’t we actually debate within an adult like top line of a budget what should be in the budget? Oh, but you can’t do that because then you’d have to show your values. Then you’d actually have to have an adult conversation. God forbid.
Mr. Crenshaw: (02:00:21)
Director, would you like to clarify anything that you didn’t get to clarify before? It seemed like you wanted to talk about preexisting conditions.
Acting Director Vought: (02:00:28)
I would love to. This president has fully committed to protecting individuals with preexisting conditions. He has proposed specific policies in the past, including last year’s budget where we actually had an actual plan that was proposed in the budget that would have done so. This budget has a healthcare reform allowance that continues to maintain those protections for individuals with preexisting conditions. We don’t have a specific proposal this year because we continue to work on it within the administration, but when we provide a specific plan, just like the previous plans, it will have an ironclad commitment for individuals with preexisting conditions.
Mr. Crenshaw: (02:01:12)
Which I would agree we need, and it turns out if you’re willing to engage in some kind of thinking that is other than totally simplistic, you can get rid of Obamacare and still protect people with preexisting conditions. Imagine that. Imagine that, you can do it. So, I’m glad to hear that the president does have a plan to do exactly that. Thank you.
Mr. Chairman: (02:01:31)
Gentleman’s time has expired. I will remind the gentlemen that roughly six, eight months ago, we, in this committee, passed a piece of legislation that established top line spending numbers for discretionary spending, and it passed on a bipartisan basis, setting for 2020 and 2021. Gentleman from Virginia, Mr. Scott’s recognized for five minutes.
Mr. Scott: (02:01:53)
Thank you very much. Could we get the chart up while I point out … We’ve heard that it’s not a spending problem, it’s not a revenue problem, it’s a spending problem. The fact is it’s arithmetic. Whatever you spend you have to pay for, and if one goes up, and that’s a problem with not paying for a tax cut. Now, remind people that since Nixon and Ford, every republican president has ended up with a worst deficit situation than they started with, and every democrat has ended up with a better deficit situation than they started with without exception. And this president seems well on track to keeping that trend going. We have the budget projections, we assume a 3% growth. Everybody else in the world is suggesting a 2% or less growth. And so, the numbers will obviously be reflective of that. As the gentleman from Pennsylvania noted, we have a one, two, three plan going.
Mr. Scott: (02:02:50)
If somebody had suggested you’re going to have a $1.5 trillion tax cut and pay for it with cuts in social security, Medicare and Medicaid, you’d have said, “That’s ridiculous. Not going to do it.” But if you do it, one, two, three, one, cut the taxes, two, whoops, we got a big deficit, three, now you expect us to cut social security, Medicare and social security. Now, Mr. Director, you acknowledge that this administration supports litigation that will end the Affordable Care Act, and you promised a replacement. Are you aware in the last Congress that the republican-controlled House and Senate, and that the House passed a repeal and replace with the president’s support that CBO scored showing 20-some million fewer people would be insured, the costs would go up 20%, and significant erosion of protections for those with preexisting conditions? Are you aware of the CBO score?
Acting Director Vought: (02:03:47)
I’m aware that CBO had similar estimates that we rejected at the time.
Mr. Scott: (02:03:51)
Okay. You also recognize that the junk plans that the president supports will allow people, healthy people to get into junk plans making everybody else in a sicker pool? So, if you’ve got a preexisting condition, you’re stuck over there, and there’ll be increased pressure on those with preexisting conditions. You said that the Medicare is not being cut, is that what I …
Acting Director Vought: (02:04:17)
That’s correct. Medicare will grow 6% over this budget.
Mr. Scott: (02:04:20)
Okay. How much does the elderly population increase over that time? And can you tell us what the per capita spending for Medicaid for Medicare will be over that period of time?
Acting Director Vought: (02:04:34)
I don’t have it handy, but I’m sure you have it.
Mr. Scott: (02:04:34)
I don’t have it, that’s why I asked. Well, Jessica’s expenses go up and you caused the expenses to go up, inflation is going up, so you have to keep up with inflation. The population is going up, so you got to pay more because there are more people, is that right?
Acting Director Vought: (02:04:50)
It is correct. We’re way above that.
Mr. Scott: (02:04:52)
Acting Director Vought: (02:04:54)
Medical inflation is-
Mr. Scott: (02:04:56)
Well, the CBO-
Acting Director Vought: (02:04:57)
… three-and-a-half percent.
Mr. Scott: (02:04:58)
CBO has the baseline to keep up with everything and as-
Acting Director Vought: (02:05:01)
CBO has a baseline that includes paying more than we would like to in prescription drug costs.
Mr. Scott: (02:05:06)
Acting Director Vought: (02:05:06)
CBO has a baseline that assumes that we pay more than we would like to for things like CAT scans.
Mr. Scott: (02:05:12)
Okay, that’s right. And you come up about half-a-trillion dollars short of the baseline.
Acting Director Vought: (02:05:18)
We have savings and $135 billion for drug pricing.
Mr. Scott: (02:05:23)
Acting Director Vought: (02:05:23)
We have savings for-
Mr. Scott: (02:05:24)
You don’t have [crosstalk 00:29:25]-
Acting Director Vought: (02:05:25)
… neutrality. We have savings where we take things out of the Medicare Trust Fund and still fund them outside of Medicare at a slower growth rate.
Mr. Scott: (02:05:33)
You come in about a half trillion under the proposed baseline. Is it true the Department of Education cuts are 8%?
Acting Director Vought: (02:05:41)
It is true that we have a consolidated block grant of $20 billion for education spending that takes 30 programs and consolidates and block grants them to the state. It is true that we have basically flat level funding from the year before. Once you control for the fact that we are eliminating programs that don’t work-
Mr. Scott: (02:06:00)
All right, let me ask the question again. Is it true the Department of Education is cut 8%?
Acting Director Vought: (02:06:05)
There is a percent reduction for the Department of Education is based on eliminating programs that don’t work, that don’t lead to better math and reading scores.
Mr. Scott: (02:06:15)
Which is important because the Department of Education’s recent report shows that reading proficiency was lower in 2019. In 2017, you cut $5 billion from elementary and secondary education.
Acting Director Vought: (02:06:28)
And when programs that don’t lead to more proficiency in reading and math, and they proved that in studies, and that’s a given program like the 21st Century Learning Program, we eliminate that program, yes.
Mr. Scott: (02:06:39)
I take that as a yes. You cut $5 billion out of elementary and secondary education. On your student loan plan, under present law, if you’ve paid on an income-based payment after 15 years, the rest of the loan is discharged. What happens after 15 years of payments under your plan?
Acting Director Vought: (02:06:56)
Mr. Scott: (02:06:58)
It’s totally discharged?
Acting Director Vought: (02:06:59)
You have debt relief after 15 years.
Mr. Scott: (02:07:01)
And the public service loan forgiveness?
Acting Director Vought: (02:07:03)
Under the … People benefiting from that program would be benefiting from the new program after 15 years of the income-driven repayment plan, in the same way as the graduate students would have the benefit after 30 years.
Mr. Scott: (02:07:16)
Instead of 10 years under the present plan.
Acting Director Vought: (02:07:19)
15 years under the present plan, 30 years for graduate.
Mr. Scott: (02:07:21)
Under the president’s plan under present law, the student public service loan forgiveness, your discharged, chapter 10.
Acting Director Vought: (02:07:28)
That may be correct.
Mr. Scott: (02:07:30)
Thank you, Mr. Chairman.
Mr. Chairman: (02:07:31)
Gentleman’s time has expired. Now recognize the gentlewoman from Connecticut, Ms. Delauro for five minutes.
Ms. Delauro: (02:07:39)
Thank you very much, Mr. Chairman. I think it’s been stunning this morning and what we have been subjected to this morning is an Orwellian presentation that showcases doublespeak. What is doublespeak and what’s its purpose? Its purpose is to distort reality. So, let’s-
Ms. Delauro: (02:08:03)
Distort reality. So let’s talk a little bit about reality. And Mr. Chairman, you pointed out that top lines were sent over in July, a part of the bipartisan budget agreement. The president signed it, and what we find in this new budget is that he has walked away from that budget agreement. Bipartisan, let’s talk about that. Okay. Now the other thing is, let me just mention the conversation around budget cuts. Determining whether a federal budget proposal counts as a budget cut is simple. If the proposal would reduce funding for programs, benefits, or services, or reduce the number of people who qualify for benefits relative to the levels that would occur under current law, it is a cut. Again, reality. Let me clarify some of the distortions of reality about this budget. The reality about job growth, it has been lagging in key states.
Ms. Delauro: (02:09:09)
Don’t take my word for it. Let’s go to the Bureau of Labor Statistics. Pennsylvania, Michigan, Wisconsin, Ohio, Minnesota, job growth is lagging. That’s what the Bureau says. Reality. Real wages are barely increasing. I didn’t make up this number, Mr. Chairman, it is the Bureau of Labor Statistics. Further, reality. Growth has been essentially the same as under Obama. That comes from the Bureau of Economic Analysis. The growth rate in reality is well below past levels. That comes from the Bureau of Economic Analysis. The historical average is 3%, the Trump administration is two and a half percent. The Bureau of Economic Analysis. Manufacturing, manufacturing share continues to decline to new all time lows. There is no blue collar boom. That is double speak, and that information comes from the Bureau of Economic Analysis because key states lost manufacturing jobs last year. Minnesota, Pennsylvania, Wisconsin, Michigan, Ohio. The data again comes from the Bureau of Labor Statistics. From the Federal Reserve and from the Census Bureau, that the president’s policies have only made wealth and income inequality worse.
Ms. Delauro: (02:11:10)
Those are the facts. You can say what you like. You can distort the truth any day of the week. You can continue to talk about cuts in a Orwellian fashion, but they are cuts. I’m just going to give you one last fact. I did a hearing this morning with regard to the coronavirus. We looked at FEMA and the CDC being the two of the pillars that are going to help us in this effort. What are we watching? We are watching the FEMA budget being cut, both individual assistance, both the federal assistance, the disaster relief funds. We’re watching the CDC budget being cut and the money that they need to deal with this virus, and we’re watching what they’re doing to helping states and localities. I rest my case, Mr. Chairman. This is nothing but an Orwellian distortion of what the reality is. Thank you. Yield back.
Mr. Chairman: (02:12:29)
Gentlewoman’s time has expired and now recognize the gentleman from Nevada, Mr. Horsford, for five minutes.
Mr. Crenshaw: (02:12:34)
Thank you very much, Mr. Chairman. I don’t know where to begin. I’d like to start by pointing out the concern that I know I had and a majority of my constituents back in Nevada had that when the 2017 Congress along with the president passed the historic jobs and tax cut act, that we were worried that this day would come where the proposal would be made to balance those tax cuts on the backs of the working people of this country. We now know that that tax cut has added $1.9 trillion to the deficit. And you’re here today to defend a budget that seeks to balance our budget on the backs of working Americans.
Mr. Crenshaw: (02:13:36)
One of the safety net programs that is most at risk of harm is the Supplemental Nutrition Assistance Program, also known as SNAP. The president cuts $182 billion over 10 years from SNAP by imposing stricter work requirements that have already been rejected by Democrats and Republicans. 130, 000 Nevada families rely on SNAP benefits to put food on their table, and we know that SNAP has a tremendous multiplier effect in our economy, both in our rural and urban areas. Yet president Trump keeps trying to take food out of the mouths of children and needy families to do what? To give tax breaks to big corporations and the very wealthy. Doctor or director Vought, how many individuals will lose SNAP benefits as a result of this work requirement proposal?
Acting Director Vought: (02:14:38)
The way you’re describing our proposal is not true, congressman.
Mr. Crenshaw: (02:14:41)
How many individuals will lose…
Acting Director Vought: (02:14:43)
This budget would merely provide savings and reforms in the food stamp area in two primary ways.
Mr. Crenshaw: (02:14:48)
My question is…
Acting Director Vought: (02:14:49)
The harvest box, let me give you an example.
Mr. Crenshaw: (02:14:51)
No, no, no. I’m asking you a question. The question is how many individuals.
Acting Director Vought: (02:14:55)
We don’t think people are going to lose coverage because of these proposals. We believe that people will get off of food stamps and get off of the cycle of dependency and onto the ladder of economic opportunity with jobs that don’t require them to be on the social safety net program. For instance…
Mr. Crenshaw: (02:15:11)
Director, I’m reclaiming my time. 53 million Americans, 44% of the workforce today, earns barely enough to live on with making $18,000 a year. Putting people on part time jobs that don’t pay livable wages doesn’t get them off a cycle of dependency.
Acting Director Vought: (02:15:32)
We believe that’s inaccurate.
Mr. Crenshaw: (02:15:34)
Reclaiming my time. The president also proposes to eliminate $1.7 billion from the corporation for travel promotion, also known as Brand USA. This is a direct attack on Nevada’s tourism industry. In 2018 alone, Brand USA brought over 1.1 million international visitors to the United States including to Las Vegas, creating 52,000 American jobs, and generated a total economic impact of $8.9 billion. Director, can you explain to me why this administration wants to get rid of Brand USA, which has proven to be an economic engine for Nevada and the rest of the country?
Acting Director Vought: (02:16:20)
Congressman, we believe the true economic agenda is the economic policies that this president has put forward with regard to extending the tax cuts, which are working, which are leading…
Mr. Crenshaw: (02:16:29)
My question is regarding Brand USA. Don’t divert to some broad general talking point. I’m asking about this program that has a tremendous direct impact on our nation’s tourism economy.
Acting Director Vought: (02:16:43)
And I’m trying to answer the question, that our economic agenda is based on a strategy of wanting to…
Mr. Crenshaw: (02:16:47)
So tourism is not a part of your economic agenda, even though it’s a key sector?
Acting Director Vought: (02:16:51)
I’m not suggesting that.
Mr. Crenshaw: (02:16:51)
Moving on. The president directly attacks Nevada by eliminating $230 million in funding from the Southern Nevada Public Lands Management Act, also known as SNPLMA. Just last year, interior secretary Bernhardt provided over a $100 million to support 47 public lands projects throughout Nevada and the California side of the Lake Tahoe basin. These projects include wildfire prevention projects, wildlife habitat conservation and hazardous fuels reduction. Why are you and the president proposing to take away federal money and jobs from Nevadans by canceling SNPLMA funding? And let me point out that 5% of the revenue generated from SNPLMA goes to the state of Nevada general fund, and 10% goes to the Southern Nevada water authority. So this budget actually attacks the education of Nevada’s children and our water supply. Why is the administration doing that?
Acting Director Vought: (02:17:56)
We disagree with that analysis. We find that there’s $800 million in unobligated balances in that program. And the types of projects that this program has funded is slowly over time drawing down in terms of they’re not being able to have applications for this spending. It’s why we have unobligated balances, and all we’re just saying is we want $200 million of that savings for deficit reduction.
Mr. Crenshaw: (02:18:20)
Sweeping money from the children of Nevada to balance your budget on the backs of working Americans after giving a tax cut to the very wealthy and big corporations is not going to happen. Not on my watch.
Mr. Chairman: (02:18:33)
Gentleman’s time has expired. We now recognize the gentleman from Georgia, Mr. Woodall, for five minutes.
Mr. Woodall: (02:18:37)
Thank you Mr. Chairman. I’d like to give Mr. Horsford credit for not letting the president’s budget pass, but I’ve been here 10 years. We haven’t had any president’s budget passed. We used to put the Obama budget on the floor just to see if anybody would vote for it. And generally speaking, folks wouldn’t. So director, I’m grateful to you for going through this exercise because I find that this is the only conversation about priorities we end up having in a line by line way. You take a big risk when you put things down line by line, which is why folks like to talk about principles instead of specifics. And the 74 Budget Act requires it and the administration complies with it just as the Obama administration did, and I’m grateful to you for doing that.
Mr. Woodall: (02:19:21)
I wanted to, you may not have looked at the tax bill that I’ve sponsored, and it’s not a tax cut bill. It was a tax reform bill, the fair tax, and we eliminated the income tax and the payroll tax in favor of a national retail sales tax. And folks would always call and say, “Rob, I think that’s a great idea, but I really want to hang onto my home mortgage interest deduction.” And I’d say, well we’re eliminating the income tax so there is nothing to deduct your home mortgage interest against. “I know Robert, but I really want to keep that deduction.”
Mr. Woodall: (02:19:53)
I think about that while you’re having the conversation about folks losing benefits because they have succeeded into a place where they no longer need those benefits. I’m all about the economic ladder. I want folks to be able to grab it. I want folks to be able to climb it. Some folks are going to come down, some folks are going to go up. It needs to be a dynamic place. As you were looking at budget priorities, could you talk a little bit about whether those were decisions to cut things that you thought were irrelevant or whether those were decisions based on a larger plan where you said we’re not going to need these things as much because we’re going to be succeeding in other areas?
Acting Director Vought: (02:20:31)
Yeah, I mentioned this in my opening testimony. This is not meant to be a green eye shades budget. We have investments where the president believes investments need to occur. Infrastructure, rural America, ongoing funding for addressing the opioid epidemic, obviously our nation’s veterans with an increase of 13% for veterans and a 12% increase for NASA. So these are all areas where we looked at it and we said even with the topline fiscal goals that we’re trying to accomplish, we got to get to these levels. And then we looked at other areas and we try to find waste and inefficiencies, and we try to find waste and inefficiencies everywhere to be honest with you.
Acting Director Vought: (02:21:16)
But we look to find where can we get rid of program duplication? Where does the underlying logic for a particular policy need to change? For instance, I mentioned land acquisition earlier. When we have 25% of the land in this country owned by the federal government, that’s an easy place to find savings just by not pursuing new additional land. So when we write a budget, we try to meet fiscal goals, but we do it with the context of these programs and where we need to find savings and where we need to make investments.
Mr. Woodall: (02:21:50)
I do agree with Mr. Horsford. We can’t cut our way into prosperity. We’ve got to grow our way into prosperity. Candidly, I was disappointed in the last Republican presidential primary. Nobody ran on balancing the budget. Folks ran on new promises, and in many ways, folks ran on tax cuts. Nobody ran on balancing the budget, and that same thing is true in the democratic primary going on now. I listen to some of these very heartfelt conversations about real people losing real benefits. That’s the only place this conversation lands if we don’t get our fiscal house in order. Financial collapses hurt those who need government most the most. Can you tell me a little bit about that long term planning? It’s so easy to get caught up in what this budget says about this year. I’m really more interested in how this budget is going to impact us 10 years from now and 20 years from now.
Acting Director Vought: (02:22:46)
That’s the benefit of this budget. We’ve put forward a 15 year plan to get to balance. We believe that’s a vital fiscal goal. We have to be able to get more along the lines of where American families are of every month balancing their books to make sure that they have enough spending restraint to reflect the money that’s coming in. So that’s going to continue to be our posture. This president’s not running away from deficits and debt. He’s tackling them. He is putting forward budgets. This is the fourth budget he’s put forward. Congress has differing views with regard to whether those budgets should pass, but the president is coming before this chamber and saying this is my plan. This is my plan to get to balance, and I look forward to hearing from your plan.
Mr. Woodall: (02:23:34)
I hope that you will hear from our plan. I’ve had to write budgets on this committee. I’ve had to write budgets for the Republican study committee. Turns out that’s a really hard thing to do. There’s a reason we have open rules on budgets and anybody could offer their budget because it turns out not many people want to offer their budget because it’s really hard to do. I give the progressive caucus credit for doing it, the Republican study committee for doing it, but I certainly give the administration credit for doing it. Thank you for being here. Thank you for your indulgence, Mr. Chairman.
Mr. Chairman: (02:24:02)
Gentleman’s time has expired. Now recognize the gentlewoman from Minnesota, Ms. Omar, for five minutes.
Ms. Omar: (02:24:07)
Thank you Chairman. Thank you to my colleague for the shout out to the progressive caucus for putting out a budget. I wanted to ask how much has the national debt increased under Trump’s tenure so far?
Acting Director Vought: (02:24:23)
Right now, debt as a percentage of GDP is roughly where it was when president Trump came into office as it pertains to fiscal year [crosstalk 02:24:31].
Ms. Omar: (02:24:30)
Can you just say how much?
Acting Director Vought: (02:24:33)
Right now, the national debt is $23 trillion. It’s too high. That’s why we have a budget here to be able to tackle it by $4.6 trillion in deficit reduction over 10 years.
Ms. Omar: (02:24:44)
All right. So it’s increased $3 trillion. And your deficit in 2020 alone will be more than 60% higher than the year Trump took office. Massive tax cuts for the rich, aggressive military spending and excessive immigration enforcement have all impartially contributed to these high deficits. And with revenue as share of the economy at a historic low and income inequality at historic highs, I fail to see how you can realistically balance the budget under your current policies. But you’re still expecting that high income growth will help pay for these wasteful spending policies. When was the last time that the annual GDP has hit your projected growth rate of 3% or higher per year?
Acting Director Vought: (02:25:48)
Our first year, we were way over our economic growth number when the actuals came in at 2% and we were significantly underneath that. So out of the last three years, it’s been closer to our mark than CBO’s two out of the last three years. But I just would say we are trying to actually reduce wasteful spending in this budget. We don’t think of tax relief for American families as wasteful spending. We think it’s their own hard earned money that we’re returning to them so they can invest in their families, their communities and the individuals in their households.
Ms. Omar: (02:26:26)
Yeah. Well we differ in that. It was never during this presidency. Your growth projection is about double the CBO expected during that same time period. However, we know that this administration is not afraid to cut important programs that millions of Americans rely on every single day to try to fix Trump’s policy failures. And yet, it was only four days ago that the president stated that he will not be cutting social security or Medicaid in the fiscal ’21 budget. So I’m glad we’re now getting an opportunity to make sure we have this administration on record for its false promises to the American people. My colleagues on the other side and this administration will lecture us on the academic principles of fiscal responsibility and austerity by limiting deficit spending, unless it means cutting tax cuts for the rich. OMB projects that the federal deficit will top $1 trillion this year, and CBO sees trillion dollar deficit continuing every year thereafter under your current policies.
Ms. Omar: (02:27:47)
Trump ran on this promise, this impossible promise, to eliminate all US debt after eight years in office, but your own projections show that he will not even manage to come close to eliminating a budget deficit until 2035. Republicans will shift our focus to high deficits and raising national debt that they are causing, not only to then push for deep cuts in vital programs for millions of working families, but also to distract us from the even bigger number, $35 trillion. I know that you talk about tax cuts as putting money back into people’s pockets, but I know that most Americans see how their neighbors and everyday citizens are struggling under these cruel cuts that you’re making to programs that are desperately needed by most Americans. Thank you and I yield back.
Mr. Chairman: (02:29:00)
Gentlewoman’s time has expired. I now recognize the gentleman from California, Mr. Panetta, for five minutes.
Mr. Panetta: (02:29:05)
Thank you Mr. Chairman. Thank you for holding this hearing. Ranking member Womack as well as director Vought, thank you for coming up here and attempting to defend this budget, which I admit I do believe is a failure to invest in our communities and does lack the will to invest in our future. This budget I believe takes a step backward. It really creates greater challenges for the families that I represent there on the central coast to California, especially those in need of affordable housing, good schools and healthy meals. It does fail to protect our environment or address climate change, it abandons public servants deserving of student loan forgiveness, and it does make it harder for low income students to afford college. It cuts social security even after the president promised not to do so, ignoring reforms like the Social Security 2100 Act. And it does sabotage our healthcare system by cutting Medicare and Medicaid.
Mr. Panetta: (02:30:02)
It does all of this while increasing spending on political promises such as building the wall. The proposed budget also pushes the notion that cutting spending is the only way to get our deficits under control. I believe that if we don’t have the revenue to make the investments we need in affordable housing, nutrition and education, in protecting our environment and fighting climate change, then we should not be continuing tax cuts that benefit the wealthiest and corporations. Fortunately, Congress, not the president, has the power of the purse and going forward, just like in the past few years, I am confident that we will make more responsible decisions with taxpayer dollars than what has been proposed by this administration. Now the president has promised to eliminate deficits. We understand that promise. We’ve heard it. Yet even under very optimistic growth predictions that are a full percentage point above CBO and the Federal Reserve, the budget would not be balanced until about 2035. Are there any independent or nonpartisan analysts who share those growth predictions, Mr. Director?
Acting Director Vought: (02:31:10)
Congressman, this is a post policy budget with its economic assumptions, and so the forecasters out there are taking the current law as it is and the current economic environment, and that’s what’s based on their forecasting. We assume the policies of this proposal are enacted, whether that’s infrastructure, whether that’s agreeing to the better trade deals, whether that’s getting people off of welfare rolls. All of those things are policies that are assumed [crosstalk 00:02:31:37].
Mr. Panetta: (02:31:38)
Once again, Mr. Director if I can, I’m reclaiming my time. I appreciate it. But once again, are there any independent or nonpartisan analysts who share your growth predictions? Yes or no.
Acting Director Vought: (02:31:45)
There are many economists out there who are advocates of economic growth at three and higher levels, those are forecasters out there, as I mentioned, are predominantly looking at current law and current economic…
Mr. Panetta: (02:32:00)
Thank you, Mr. Director, reclaiming my time and I appreciate it. I just have a short time here. I want to get through this. The CBO has revised its estimates of the 2017 tax laws cost. Have you factored those increased costs into the deficit impacts or is this administration still insisting that the tax cuts pay for themselves?
Acting Director Vought: (02:32:16)
We continue to insist that the economic agenda of this budget, this president, everything from the tax cuts, its extension, the deregulatory initiatives will in fact pay for the static cost of both the original score and the extension of the tax cut.
Mr. Panetta: (02:32:32)
Thank you. Fortunately, I’m on the ways and means committee as well and we had a pretty good hearing yesterday about corporate tax revenues or the lack thereof, I should say, as a share of the GDP. Considering they’re at a historically low rate and lower than almost every other advanced economy, does the administration still believe that taxes should be reformed in any way on corporations?
Acting Director Vought: (02:32:56)
We’re looking forward to a tax 2.0 conversation with regard to reform and there’s a lot of things that will be a part of that conversation. We mainly are proposing to extend the tax cuts, but the administration will continue to work on other tax reform proposals over the next several years. I know there’s probably been news in the press along those lines, and that’s when we attempt to get to that discussion.
Mr. Panetta: (02:33:19)
Thank you. As I mentioned, I’m from the central coast of California, and there are certain things that we are threatened by when it comes to climate change, sea level rise, increased wildfires. Yet this budget cuts funding for the US geological survey by 24% and for NOAA, National Oceanic And Atmospheric Administration, by 14%. Has this administration factored any of the cost of climate change into its models?
Acting Director Vought: (02:33:42)
We have not.
Mr. Panetta: (02:33:43)
Thank you. On the same lines, the budget greatly stifles clean energy innovation. It ends tax incentives for clean energy deployment like the solar investment tax credit. It cuts funding for the Department Of Energy’s office of energy efficiency and renewable energy by nearly three quarters, and eliminates ARPA-E, which is developing clean energy solutions of tomorrow. Without these programs and tax incentives, how will we be able to develop and deploy critical technologies to reduce emissions?
Acting Director Vought: (02:34:16)
If you look at the totality of our budget, we have about eight and a half billion dollars that’s devoted to climate related research and clean energy technology R&D. So look, we do have a shift from applied research to basic research, but we still feel like we’re putting a very strong foot forward with the development of clean energy.
Mr. Panetta: (02:34:38)
Thank you. I appreciate it. I yield back.
Mr. Chairman: (02:34:40)
Gentleman’s time has expired. Now recognize the gentlewoman from Texas, Ms. Jackson Lee, for five minutes.
Ms. Jackon Lee: (02:34:46)
Mr. Chairman, Mr. Ranking member, thank you so very much. And Mr. Vought, thank you for your service to the country. I am in at this moment because I have sit this morning in a markup on Homeland Security and just left a mark up on judiciary, which is still ongoing, but I did not want to miss the opportunity to at least ask one or two questions to the administration. But I would offer to say that this symbol and language is clearly both misdirected and incorrect. This is not about America’s future. This is not about an investment in America’s future. This is a destructive document for ending America’s future, particularly as it relates to the question of investing in all of the people of this country. I am stunned, literally stunned, at the various cuts, including the trillion dollars that is being cut out of Medicare and Medicaid, including close to $4 billion that is coming out of life saving medical research in light of the coronavirus.
Ms. Jackon Lee: (02:36:03)
There’s a briefing coming up in just a minute or so. The reduction in education in districts like mine, $6.2 billion, a focus on charter schools, private rather than public schools. I’m stunned. I’m stunned at the lack of sensitivity to what this country needs. I’m stunned that you would cut FEMA federal assistance coming from a district that experienced hurricane Harvey, 51 trillion gallons of gas, primarily state and local grants critical for terrorism and disaster preparedness by $746 million. I’m stunned. And then finally, I’m further stunned, and I’ll ask a question, that all that it seems to be geared toward is to ensure that the most vulnerable people in this country get the short end of the stick. Let me share some information with you very quickly from the center for the study of social policy, the racist roots of work.
Ms. Jackon Lee: (02:37:04)
Work requirements do not support work. They harm families. At the most basic part of it, in the years since temporary assistance for needy families, welfare, mandated work for families receiving cash [inaudible 00:29:16], hundreds of thousand families have been left with less than $2 a day of cash in America. When Arkansas and other states had begun to implement work requirements in Medicaid, thousands of people have lost their health insurance. This spring, over 700,000 people will likely lose food assistance as states begin to implement the Trump administration’s expanded SNAP time limit. And what they’re gearing it toward is that in slavery, they begin to characterize the descendants of enslaved Africans as lazy. That’s all the stereotypes. And there were laws put in place that if you were picking cotton, you couldn’t get assistance. And so this document is trying to uproot the long belief that poor people, particularly African Americans and now immigrants and others are lazy. This budget clearly emphasized that unfortunately racially charged direction in cutting Medicaid, in cutting nutrition programs, in cutting housing. And so my question is this.
Acting Director Vought: (02:38:24)
Congresswoman, that is ridiculous. [crosstalk 02:38:26]
Ms. Jackon Lee: (02:38:26)
Excuse me, I have the time. I have the time and I’m reclaiming it. I have the time. I have the time. He’s out of order. And my clock needs to stop.
Mr. Chairman: (02:38:37)
Ms. Jackon Lee: (02:38:38)
You don’t have the time.
Mr. Chairman: (02:38:40)
You’ll be given a chance to respond if you want.
Ms. Jackon Lee: (02:38:43)
How can you justify the inclusion of work requirements which are not supported by any evidence that they increase employment and the repeal of the Medicaid expansion? In addition, how do you justify a budget like this that is full with the, how should I say it? It’s full with the highway of damaged human beings. And you continue to do so with this destructive domestic cuts budget. And you also had an agreement where you would agree to fund defense spending and domestic spending the same, and you’ve reneged on the agreement. What is your answer to that? Now I yield to you.
Acting Director Vought: (02:39:23)
Congresswoman, president Clinton signed into law historic legislation to reform welfare that had a work requirement in the TNF program, and it led to historic drops in caseload. Why? Because people were getting off of welfare and getting onto the ladder of economic opportunity. The only thing that we do…
Ms. Jackon Lee: (02:39:40)
I voted against that bill. And it was wrong.
Acting Director Vought: (02:39:42)
The only thing we do in this budget is expand it to food stamps, expand it to Medicaid, and expand it to housing because we think it’s a principle that will lead to more opportunity rather than less.
Ms. Jackon Lee: (02:39:54)
Mr. Chairman, I’d like to put into the record the Washington Examiner, Seven Years Of Change You Can See And Feel by myself, dealing with the collapse of the economy under this administration…
Ms. Jackon Lee: (02:40:03)
“… Myself dealing with the collapse of the economy under this administration, dealing with what President Obama did”.
Ms. Jackon Lee: (02:40:06)
I don’t think that’s an answer because it didn’t work under the past administration, it’s not going to work now. Poverty is on the increase. You have people paying more money under the Trump tax cut for those making 50 to 100 thousand, they’re going to pay more taxes, upwards of $1 billion, and those who are in the top 1% will pay less taxes. That’s what I’m saying about a destructive pathway and I don’t know how, in good conscience, that you could put this budget forward for us to even perceive. You’re doing nothing to reduce the deficit, except on the backs of children, poor mothers, elderly, and the disabled. It’s shameful. Those who seek an opportunity that they can then provide for the greatness of this country. I’m stunned. I yield back, Mr. Chairman
Mr. Yarmuth: (02:40:51)
Gentlewoman’s time is expired. Without objection, her unanimous consent request is so ordered.
Mr. Yarmuth: (02:40:59)
Now I recognize the ranking member for 10 minutes.
Mr. Womack: (02:41:02)
I think the Chairman and I, thank the acting director of OMB for being here and serving as a pinata for my friends on the other side of the aisle to just take as many shots at him as they prefer.
Mr. Womack: (02:41:17)
As I said in my opening, at least the President has produced a budget and has been mentioned many times, the speaker of the house has indicated when you show us your budget, you show us your values. And by the way there was a very carefully worded question by my friend Mr. Price from North Carolina earlier in this hearing, that I want to go back to, and that was about the passage of a budget when the Republicans last controlled this committee, carefully worded in a sense that he said, did Republicans pass a budget? Assuming he’s talking about on the floor. But I want to clarify and make sure for the record, as the chairman knows that this committee where this process begins, did in fact produce a budget and passed a budget out of this committee and referred it to the house. As the director knows, and as my friend, the chairman knows, from there it becomes a matter of leadership to decide whether or not that particular piece of legislation goes to the full house, but just want to be clear that this committee did produce a budget in that year.
Mr. Womack: (02:42:33)
Now having said that, I want to get back to more of a higher level. I’m often amused as to how when a director, like Director Vought or anybody in his position would suggest reforms or savings from programs funded at the federal level, that all of a sudden the world crumbles and lives are destroyed. In fact, Director Vought when the federal government doesn’t fund some programs, that doesn’t mean that people are left out in the cold and in many cases those programs are funded elsewhere. Let me bring up CDBG for just a minute because Mr. Series talked about CDBG and I’m very familiar with the community development block grant because I was a mayor of an entitlement city and just want to ask you, if in fact a CDBG was not funded, is it accurate to say that all of the programs and all the services offered through those CDBG programs would no longer be funded?
Acting Director Vought: (02:43:36)
No, of course not. There would be other opportunities for those activities and initiatives to be funded.
Mr. Womack: (02:43:41)
What would it require of those local governments to do?
Acting Director Vought: (02:43:45)
They would have to either look for other opportunities that the federal government to absorb that or they would have to rely more on the tax base of their local community, so it’s less of a revenue transfer from the federal government.
Mr. Womack: (02:43:57)
But if the menu of things that they already fund outside of the programs funded by CDBG, would it not be fair to say that they would have to go back through their priorities and determine what if any of those programs funded by CDBG would need to be picked up by say, the general fund.
Acting Director Vought: (02:44:16)
Mr. Womack: (02:44:18)
Isn’t that what the federal government should do?
Acting Director Vought: (02:44:21)
We believe that to be the case. It’s time to make tough choices that even programs that have been around a long time, it’s time to figure out in an era of $23 trillion national debt, where do we make trade offs? And one of those areas is the CDBG program because we think that it has not led to the types of outcomes that would lead communities to ultimately get to a point where they didn’t need that money, as a opposed to just continuing to dry it down every year.
Mr. Womack: (02:44:47)
See, my argument is, is that cities and counties that have an opportunity to pull money out of the federal government can save on those expenses at the local level and reprioritize and take what would have been available for those services to fund other things, personnel, equipment and what have you. But I think it’s wrong to suggest it, because a program gets zeroed out that all of those people are left out in the cold because they do have to go through a re-prioritization. Isn’t that what American families do every month that have household budgets?
Acting Director Vought: (02:45:23)
They do. They absolutely do. They go through every month and they figure out what’s coming in and what’s going out, how do you address what you’re spending money, they typically go after what they spend to go out to eat, their hobbies, their shopping budget, and then they make tougher choices from there. But they make tradeoffs and they know that they can’t just get away with just continuing to put it on a credit card.
Mr. Womack: (02:45:52)
So in that spirit, we are $23 trillion in debt. I don’t have the number right in front of me, but I want to say the net interest on the debt is about just short of $400 billion. So to make this relevant to somebody at home, this is like getting a credit card bill in the mail and there is a place on that credit card bill that says minimum payment due, which is effectively the interest in some cases, not all cases, but in this particular case, the 380 or $390 billion that we’re going to pay a net interest, that does not reduce the debt at all, does it?
Acting Director Vought: (02:46:30)
Nope. It just pays for our interest payments. And just to give you a little perspective, that’s about three times the size of the department of VA. Significant resources are going just to pay the interest on the debt.
Mr. Womack: (02:46:43)
So we’re just paying the interest on the debt. All the while, the debt continues to go higher and higher and higher. And so my ultimate point is this, as an appropriator and not just a budget guy but an appropriator, all of that money that goes into net interest on the debt, as I said in my opening remarks, serves to crowd out other funding that might otherwise be available for some of the programs that we are trying to reform to try to find savings so that we can save ourselves from this catastrophe. Would that not be an accurate statement?
Acting Director Vought: (02:47:12)
It is accurate, for sure.
Mr. Womack: (02:47:15)
Now, both gentlemen to my left and right served with me a couple of years ago on the joint select committee on budget process reform and one of the reasons we are in the shape we’re in today is because we didn’t do budgets. Budgets are hard to do these days, and so we end up plucking numbers out of the airs, what we call the 302a numbers and set those in stone as we did in the 20 and 21 time frame and then the four corners of leadership look at those numbers and come to some agreement, then the rest of us are obliged to really go along with that or force a government shutdown.
Mr. Womack: (02:47:50)
The process is no longer working for the American people. Certainly not consistent with the 1974 budget act. So I want to ask you a question about that, in my remaining time. We have advocated both Robin and Mr. Yarmouth as members of that committee. We looked at fiscal targets as an example of a solution. If we can’t balance the books, then at least let’s look at a fiscal target out there and we thought that debt to GDP was probably one of those targets, in your budget, assuming that’s a legitimate strategy, what are those debt to GDP targets from today, to say, in your budget share?
Acting Director Vought: (02:48:30)
Sure. We would go to be roughly around 80% of GDP to 66% of GDP and we’re a big supporter of fiscal goals, that’s why we focus on balance, but there’s a lot of different fiscal goals that you can come up with and as someone who’s written a budget before, it’s next to impossible to make trade offs within a budget and produce these things with any degree of progress with regard to what you’re going to do to the debt and deficits, if you don’t have a fiscal goal.
Mr. Womack: (02:48:57)
You’ve been assailed because you’re trying to find savings on the mandatory side of the spending ledger. We all know that 70% of the federal budget is on the mandatory side and without congressional action, it just continues to go out of sight and the food fights that we have here in the Congress are usually on the discretionary side of the budget and you’ve felt some of that here today, but that’s only about a third, it’s about 30% of the federal budget. A data point that I think is worth repeating is that as a, to illustrate the point, as a percentage of GDP, as a percentage of our economy, mandatory spending continues to go higher, does it not?
Acting Director Vought: (02:49:31)
Mr. Womack: (02:49:31)
As a percentage of GDP, the money left for all of the other things that are included in the discretionary budget, that is the budget that the appropriators will allocate is going lower, correct?
Acting Director Vought: (02:49:44)
It’s a fair point. I think that there needs to be a look at all aspects of the federal budget, but in terms of the main mathematic structural driver of deficit is certainly on the mandatory side.
Mr. Womack: (02:49:55)
Now, if we’re going to get after the mandatory side and some kind of a budget format, doesn’t it stand to reason that we do a budget resolution that includes all the federal spending?
Acting Director Vought: (02:50:03)
Mr. Womack: (02:50:04)
Are there tools in the tool box that the budget committee can use with which to be able to bring down some of the mandatory side?
Acting Director Vought: (02:50:11)
There are certainly tools that budget resolutions can do to be able to propose spending on both the discretionary and the mandatory side. That’s what we’ve tried to do with this budget as well.
Mr. Womack: (02:50:22)
But you got to do a budget resolution in order to be able to get to that particular tool in the toolbox. Right?
Acting Director Vought: (02:50:28)
Yeah. You can’t… Without a budget resolution passed by the house and the Senate, you’re not going to do a reconciliation bill that has a chance of getting through the United States Senate.
Mr. Womack: (02:50:35)
Thank you, Mr, Director. I appreciate you being here today.
Mr. Yarmuth: (02:50:38)
Gentleman’s time has expired and now just under the wire, recognize a gentlewomen from Illinois, Ms. Schakowsky For five minutes.
Ms. Schakowsky: (02:50:45)
Thank you Mr. Chairman. So in 2016, candidate Donald Trump said, “I was the first and only potential GOP candidate to state there will be no cuts in social security, Medicare or Medicaid.” And then after he won the nomination with the help of plenty of senior citizens, and every year since his election, he has posed as a champion for senior citizens, et cetera. But yet every year he has broken the promises. So Mr. Vought, in this years budget, you proposed two slash $ 500 billion from Medicare, almost a trillion dollars from Medicaid and $24 billion from social security… For social security disability. Am I right?
Acting Director Vought: (02:51:43)
No, you’re not.
Ms. Schakowsky: (02:51:44)
Yes I am.
Acting Director Vought: (02:51:45)
The President fully protects social security and Medicare in this budget as he has affirmed each and every time opportunities…
Ms. Schakowsky: (02:51:52)
You’re saying those numbers don’t exist?
Acting Director Vought: (02:51:56)
I’m saying that they do not reflect the reality that these programs are going up each and every year. Medicare will grow by 6%, Medicaid will grow by 3%…
Ms. Schakowsky: (02:52:04)
Well, okay. We really interpret numbers I guess, different from you, when there is almost a trillion dollars cut out of Medicaid. So, Mr. Vought, yes or no, just hours before the introduction of the budget on Monday, did President Trump Tweet, “We will not be touching your social security or Medicare in fiscal 2021 budget.”?
Acting Director Vought: (02:52:31)
Yeah, but that Tweet is fully reflected in the budget that you see today. This budget fully protects social security and Medicare beneficiaries
Ms. Schakowsky: (02:52:41)
I mean, we totally disagree on that, as do all the advocates for social security, Medicare and Medicaid, who are professionals as well. President Trump also loves to say that, “Our air and water are the cleanest they’ve ever been”. So Mr. Vought, yes or no, does this budget propose cutting funding for the environmental protection agency?
Acting Director Vought: (02:53:07)
It does. It proposes to cut the EPA by about 26% and we believe that we will still be able to fulfill the statutory responsibilities of clean air, clean water…
Ms. Schakowsky: (02:53:17)
No. We’ve also seen in the time that he’s been president an increase in carbon emissions going absolutely in the wrong way. And when it comes to education, the President, it seems, is not any different. At the State Of The Union, American saw a spectacle of President Trump giving a young African American girl, who by the way didn’t have a seat there, she was on the stairs, a scholarship to a school of her choice, saving her from the failing government schools. But the Philadelphia Inquirer reported that the student already attended one of Pennsylvania’s top charter schools. So Mr. Vought, yes or no, does the FY 2021 budget cut the department of education funding?
Acting Director Vought: (02:54:11)
There is a $20 billion education block grant in this budget that consolidates 30 programs in a way that allows States more flexibility. It would be at roughly the same level as last year, once you assume the elimination of programs that we have long believed don’t work.
Ms. Schakowsky: (02:54:26)
You’ve long believed don’t work. In fact, every budget President Trump has proposed has cut critical funding for our public schools. We call them public schools, I was a public school teacher, I’m very proud of that and now this idea that they are these “failing government schools”, I’m not sure what the implication was. It is the same story this year with this proposed $5.6 billion in cuts for the department of education. The President’s 21 budget is nothing more than a laundry list of broken promises. I am proud to be part of the house democratic majority that will invest in America’s healthcare, environment and education for years to come and I yield back.
Mr. Yarmuth: (02:55:18)
Gentlewoman yields back and now you have myself…
Mr. Yarmuth: (02:55:21)
Oh, do you like to respond?
Acting Director Vought: (02:55:22)
I just want to quickly correct one thing. I’d refer to nearly a million dollars in waste, I was referring to the professional cricket league and Afghanistan. So I just want to make sure that’s understood for the record and back to you Mr. Chairman.
Mr. Yarmuth: (02:55:33)
Thank you. I now yield myself 10 minutes and I begin by thanking you for your patience, your indulgence. I know these things can get a little heated and contentious, but you’ve handled that very responsively and within a dignified fashion. So I thank you for that.
Mr. Yarmuth: (02:55:50)
And I want to remind everyone just for the record that the majority leader of the Senate has announced that the Senator is not going to do a budget as well. And I raise that not to say because they’re not doing it, we’re not doing it. The fact is, we passed a budget last year for two years. We’ve appropriated to that in the majority here, we showed our values and passing a budget resolution this particular year would change absolutely nothing. And next year if we’re still in the majority, my ranking member friend, you can hold me to a different type of obligation next year.
Mr. Yarmuth: (02:56:28)
A lot of disagreements here on what a cuts and what are not cuts, and I understand with things like Medicare and Medicaid, it’s a legitimate argument. But on the discretionary side of the budget, this year under the President’s budget, total discretionary non-defense spending would be $590 billion. That’s about a $40 billion cut from current year and from the caps that we agreed on in the bipartisan deal. Do you know what the total non-discretionary spending will be in 2030?
Acting Director Vought: (02:57:09)
In 2030, off the top of my head, no, I don’t know that.
Mr. Yarmuth: (02:57:12)
Well, according to Bob Greenstein at the center on budget and policy priorities, it will be somewhere around $406 billion and he characterized it as the lowest level of non-defense discretionary spending as a percentage of the economy since the Coolidge administration, when the federal government was obviously a lot less active and a lot smaller. So it’s hard to say that there’s not been a significant cut to that side of the budget, which has many programs that are very important to moderate and lower income individuals.
Mr. Yarmuth: (02:57:49)
And I have to be a little bit miffed, I guess is the best word, because you talk about savings and waste and fraud and that you’re going to do different types of approaches. But has the administration offered any legislation in any of these areas? The administration has not offered legislation to deal with healthcare, to deal with an alternative education student loan program to do an infrastructure bill. You mentioned $1 trillion infrastructure program, it’s not really $1 trillion, it’s a $190 billion, and that is matched by $800 billion in city and state or private funds. So with the federal commitment, the taxpayer’s commitment is not anywhere close to a trillion dollars. But if you have programs, it’s so, I mean…
Mr. Yarmuth: (02:58:42)
The point is that we’re trying to accept, you’re asking us to accept, the fact that you’re going to save money with all these alternative approaches, but the administrations never offered any legislation to give us any confidence that it can carry out those programs. And when you talk about preexisting conditions, forgive me for being a little bit snarky, but for somebody who has lied, according to the fact checker of the Washington post, 16,000 times in his three years in office, the fact that he says he’s going to protect preexisting conditions when no one, no one in this country has ever proposed a plan to protect preexisting conditions and guarantee price to the American consumer… Yeah, you can have guaranteed issue, they can buy insurance, but they are not going to be guaranteed a price protection, which means they aren’t protected. So I think it’s a little bit disingenuous to say that President’s committed to protecting preexisting conditions because again, nobody’s ever been able to come up with a plan other than the ACA or a program like Medicare or Medicaid to do that.
Acting Director Vought: (02:59:58)
Can I speak to that, Mr. Chairman?
Mr. Yarmuth: (03:00:00)
Acting Director Vought: (03:00:01)
A couple of things. On the 2% reduction for non-defense, all we’re asking to do is go from a 5% in one year and 2% each year. We call it a two penny plan. We believe that’s completely rational and something that over time we can find the reforms and it would require reforms that we put out a government reorganization plan to be able to start this debate about the magnitude of what would be necessary. Similarly, sometimes in our budgets we propose a lot of specificity and sometimes we don’t. Our first year, we had a lot of specifics on infrastructure and the Hill came back to us and said, “Next time we actually want to get something done in this area, we would prefer you not to have as much specifics”. And that’s where we currently are.
Acting Director Vought: (03:00:45)
We have a trillion dollar plan. We assume that higher levels of spending along the lines of what Senator Barrasso has put forward, we fill the highway trust fund with savings from mandatory reforms elsewhere. So we believe we’re putting a credible path forward. What we refused to do is raise taxes on the American people. And then finally, on pre-ex, the President, it’s not just his commitment that he has repeatedly articulated, he has put forward plans or supported plans that do this. We had last year in the budget a specific proposal called Graham Cassidy. It’s not in there this year because the Presidents working on his own plan that we’re not yet ready to reveal, but it will be fully reflected in what he comes forward with and it has been in past plans that he has supported.
Mr. Yarmuth: (03:01:33)
All right. Thank you very much. And now, in your testimony, I think you misspoke. You cited a statistic that this administration has touted in recent months, and you said that the bottom half of the country, the population, has had their, you said today, income grown by 47%, your testimony actually says that their net worth has grown by 47%. Am I correct on, its net worth and not income you’re talking about?
Acting Director Vought: (03:02:00)
Mr. Yarmuth: (03:02:00)
Right. So given the fact that one in five American families has zero to negative net worth, it doesn’t take much. You can take $10 or $100 to get a pretty significant percentage increase, but that’s not the point I’m going to get at. In dollar terms, that increased for the bottom half of the population of households amounted to roughly $500 billion. Do you know what the same dollar increase in net worth was from the top 1%?
Acting Director Vought: (03:02:30)
I don’t have that at my fingertips right now, but we do believe…
Mr. Yarmuth: (03:02:33)
I do have this answer…
Acting Director Vought: (03:02:34)
We do believe that we’re getting people off of welfare, 10 million people have gotten off of welfare, 7 million people off of food stamps and over time their incomes double and triple once they’re off of these cycles of dependency. So while a number, and I haven’t checked that math recently, but to the extent that there’s a smaller number on a chart that you produce along those lines, we don’t think that that’s the dynamic story. We think the dynamic story will be more economical opportunity over the next [inaudible 03:03:01] years…
Mr. Yarmuth: (03:03:01)
I understand that, but the top 1%’s net worth has grown $3.5 trillion. $3.5 trillion versus 500 billion for the entire half of the population. So any idea that this economy has in any way balanced the scales of income and equity or net worth and the country is ridiculous.
Mr. Yarmuth: (03:03:28)
I’m going to conclude by asking you something I mentioned in my opening remarks. I said it’s your obligation as acting director to ensure that OMB is adhering to the requirements of the impoundment control act and fully respecting that the Constitution vests Congress with power of the purse. As acting OMB director, what steps are you taking to ensure that OMB will not withhold duly enacted appropriations again, from the agencies to whom Congress appropriated those funds and what steps are you taking to ensure that information is being shared with Congress and that there is transparency for the American people?
Acting Director Vought: (03:04:04)
Yeah, we believe we’ve been transparent, so up until the point in which the impeachment proceedings began or the beginnings of an impeachment proceedings, I want to be careful because we’ve been able to have a hearing without re litigating the last several months, we were producing information as we normally would with both this committee and the appropriations’ committee of regarding to specific apportionments and things along those lines. That’s how we operate. We’ve given GAO all the information that they have requested, to our knowledge, there’s a recent accusation along the lines of something different, but the letter that we sent to GAO, we believe had the information that they were requesting and there was no followup from GAO. So, the short and sweet answer is yes, we will continue to be transparent with regard to how we manage the people’s money and all that we’re doing is managing it efficiently, economically with spend plans to ensure that money is not wasted in the process.
Mr. Yarmuth: (03:05:06)
But that ultimately is not your determination. If Congress decides to pass the wasteful program, and we certainly shouldn’t do that, do you feel it’s your obligation to implement the spending priorities that the Congress establishes or do you not?
Acting Director Vought: (03:05:22)
We believe that we need to abide by the appropriation that you’ve passed by Congress, that our ability to manage efficiency and economically within that appropriation, we look at the Appropriations law, we look at the Authorization law and we figure out what our flexibilities in within that framework.
Mr. Yarmuth: (03:05:40)
Okay, well, I accept your office. Your answer and your representation and we will hold you to it.
Mr. Yarmuth: (03:05:48)
Thank you very much once again for being here and your work on behalf of the American people and if there’s no further business. The hearing’s adjourned.
Acting Director Vought: (03:05:56)
Thank you, Mr. Chairman.