[Senate Hearing 112-28]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 112-28
 
NOMINATION OF HEATHER A. HIGGINBOTTOM, OF THE DISTRICT OF COLUMBIA, TO 

     BE THE DEPUTY DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

=======================================================================



                      HEARING & EXECUTIVE MEETING

                               before the

                        COMMITTEE ON THE BUDGET

                          UNITED STATES SENATE

                      ONE HUNDRED TWELTH CONGRESS

                             FIRST SESSION

                               __________

March 17, 2011--NOMINATION OF HEATHER A. HIGGINBOTTOM, OF THE DISTRICT 
OF COLUMBIA, TO BE THE DEPUTY DIRECTOR OF THE OFFICE OF MANAGEMENT AND 
                                 BUDGET

April 5, 2011--EXECUTIVE BUSINESS MEETING ON THE NOMINATION OF HEATHER 
A. HIGGINBOTTOM, OF THE DISTRICT OF COLUMBIA, TO BE THE DEPUTY DIRECTOR 
                 OF THE OFFICE OF MANAGEMENT AND BUDGET




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                        COMMITTEE ON THE BUDGET

                  KENT CONRAD, North Dakota, Chairman

PATTY MURRAY, Washington             JEFF SESSIONS, Alabama
RON WYDEN, Oregon                    CHARLES E. GRASSLEY, Iowa
BILL NELSON, Florida                 MICHAEL ENZI, Wyoming
DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
BENJAMIN L. CARDIN, Maryland         JOHN ENSIGN, Nevada
BERNARD SANDERS, Vermont             JOHN CORNYN, Texas
SHELDON WHITEHOUSE, Rhode Island     LINDSEY O. GRAHAM, South Carolina
MARK R. WARNER, Virginia             JOHN THUNE, South Dakato
JEFF MERKLEY, Oregon                 ROB PORTMAN, Ohio
MARK BEGICH, Alaska                  PAT TOOMEY, Pennsylvania
CHRIS COONS, Delaware                RON JOHNSON, Wisconsin

                  Mary Naylor, Majority Staff Director

                Marcus Peacock, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                               __________

                                HEARING

                                                                   Page
March 17, 2011--Nomination of Heather A. Higginbottom, of the the 
  District of Columbia, to be the Deputy Director of the Office 
  of Management and Budget.......................................     1

                     STATEMENT BY COMMITTEE MEMBER

Chairman Kent Conrad.............................................     1
Ranking Member Sessions..........................................    12

                     MEMBER AND WITNESS STATEMENTS

John F. Kerry, A United States Senator from the State of 
  Massachusetts..................................................     2
Heather A. Higginbottom, Nominee to be the Deputy Director of the 
  Office of Management and Budget................................    16

             ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD

Statement of Biographical and Financial Information Requested of 
  Heather A. Higgingbottom to be the Deputy Director of the 
  Office of Management and Budget................................    27
Pre-hearing questions and responses..............................    35
Post-hearing questions and responses.............................    51

                       EXECUTIVE BUSINESS MEETING

April 5, 2011--Executive Business Meeting on the Nomination of 
  Heather A. Higginbottom to be the Deputy Director of the Office 
  of Management and Budget.......................................    61
Committee Votes..................................................    62


NOMINATION OF HEATHER A. HIGGINBOTTOM, OF THE DISTRICT OF COLUMBIA, TO 
     BE THE DEPUTY DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                                       U.S. Senate,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:02 p.m., in 
room SD-608, Dirksen Senate Office Building, Hon. Kent Conrad, 
Chairman of the Committee, presiding.
    Present: Senators Conrad, Whitehouse, Begich, and Sessions.
    Staff present: Mary Ann Naylor, Majority Staff Director; 
and Marcus Peacock, Minority Staff Director.

              OPENING STATEMENT OF CHAIRMAN CONRAD

    Chairman Conrad. The hearing will come to order. Welcome to 
the Senate Budget Committee. Today we are considering the 
nomination of Heather Higginbottom to be Deputy Director of the 
Office of Management and Budget.
    I understand Senator Kerry is coming and is on his way. We 
will allow him to make remarks when he arrives.
    We are under a very tough time constraint today because of 
a series of things that are happening. There is a hearing that 
is on a sensitive matter that is going on right now, and I 
think Senator Kerry may actually have to leave here to go to 
that. There are also other negotiations that are going on this 
afternoon. And, of course, we are going to have votes on the CR 
this afternoon. So I hope that we are able to complete work on 
this nomination quickly.
    Given the fiscal and economic challenges facing the Nation, 
it is important that the President has his complete budget team 
in place. And as capable as he is--and he is capable--Director 
Lew needs to have a Deputy Director to help handle the workload 
and manage the day-to-day operations of the Office of 
Management and Budget.
    Ms. Higginbottom has served as Deputy Assistant to the 
President and Deputy Director of the Domestic Policy Council at 
the White House. She previously served as Policy Director for 
the Obama Presidential campaign and Legislative Director for 
Senator Kerry, among other positions. And there he is. Welcome, 
Senator Kerry.
    Senator Kerry. Thank you, Mr. Chairman.
    Chairman Conrad. I think I will suspend at that point 
because I know that you are expected at an important briefing 
as soon as you discharge your responsibilities here. So why 
don't you proceed? We are delighted to have you here in the 
Budget Committee.

   STATEMENT OF THE HONORABLE JOHN F. KERRY, A UNITED STATES 
            SENATOR FROM THE STATE OF MASSACHUSETTS

    Senator Kerry. Thanks very much, Mr. Chairman. I am 
delighted to be here. And thank you for interrupting and 
allowing me to go forward. And, Senator Sessions, it is a 
pleasure to be here with you. And I thank you both for the 
critical work that you are engaged in, and we obviously look 
forward to working with you on that.
    Mr. Chairman, this is--you know, we use the words 
``privilege'' and ``pleasure'' around here, but I have to find 
a new way to describe how that really is true on this occasion 
because Heather Higginbottom is very special, very capable, 
enormously impressive. I think you will find that in the course 
of your questions, which I certainly and I think she invites 
you to probe and have at it. I think you will sense her 
knowledge.
    But, you know, for a lot of us who have--you served, both 
of you, with our late good friend Ted Kennedy, and I had the 
privilege over all the years I was here with him to see how he 
took such pride as he found these enormously qualified staff 
folks who went on to leave the Senate and serve in various 
administrations spanning decades. And he told me once it was 
not just that he took pleasure out of it, but it was good for 
the Senate, good for all of us involved in Government, to have 
people at the other end of Pennsylvania Avenue, and in all the 
departments that we work with and count on to deliver to our 
citizens, to have people there who understand not just the 
issues but also understand how Capitol Hill works and what the 
needs are of Senators on both sides of the aisle, who knows the 
inside and the outside of the process and the pressures that we 
all face as we wrestle with very tough issues. And knowing 
that--I know you know this, both of you--is often the 
difference between getting it right or getting it wrong or 
getting nothing done at all. And more often it is the voice at 
the other end of the line who, if they did not agree with us or 
at least understand where we are coming from, a lot of things 
would not happen.
    So I now know what Ted Kennedy was talking about, why it 
made a difference to have people who have Hill experience. And 
I am particularly proud today to introduce Heather as the 
person both President Obama, who understands the tough choices 
he has to make, and Jack Lew, about whom I think everybody here 
would agree there are fewer people that we know who have more 
respect about budget issues than Jack Lew, about whom Heather 
is his choice to serve as his Deputy. That is a judgment he has 
made, and I think it is an important judgment.
    Now, I say this, you know, about Heather because she did 
not just serve here and she did not just understand the Senate. 
She really excelled here. About 12 years have now gone by since 
she first came to work for me in the Senate. And, frankly, she 
stood out for her public policy expertise in that period of 
time, and I would say to you she is sort of the definition of a 
policy wonk. She understands the policy. She understands the 
issues. And that is critical in trying to fashion a budget that 
saves money, balances the budget, reduces the deficit, but 
still tries to keep many of our obligations intact. She was 
adept, and I will tell you, I would not have made her my 
Legislative Director if I did not have confidence that she 
understood those things.
    I was a deficit hawk. You may remember, Mr. Chairman, I 
came here as one of the first three Democrats to join with 
Fritz Hollings and Chris Dodd on Gramm-Rudman-Hollings, and it 
was heresy back then. And I worked together with you and others 
to try to get the balanced budget amendment. And Heather was 
central to all of that. She understands the choices we have to 
make. She did not come in here with a doctrinaire point of view 
about, you know, how we get things done.
    In her first assignment, she worked with Senator Gordon 
Smith on education reform very effectively. Later she worked 
with Senator Santorum and his staff in what we did together on 
the Workplace Religious Freedom Act. And ultimately she worked 
on and helped develop my proposal for a constitutional line-
item veto, which, I might add, is now almost word for word the 
same proposal circulating and has about 40 cosponsors in the 
Senate today.
    So I saw her put aside ideology, I saw her attack waste, 
and I saw her do tough-minded budget reforms that were 
necessary. And she worked with me, Mr. Chairman, through seven 
budget cycles, and through it all I saw someone who knows how 
to look at the budget with a pretty critical eye.
    Now, she also has experience nationally in her experience 
in the White House in the last 2 years, which, incidentally, is 
part of what gives the President and Jack Lew the confidence to 
nominate her for this job at a tough time when they know they 
have got a tough job ahead of them. She has worked with 
Governors; she has worked with legislators; she has worked with 
mayors and Members of Congress. And she has learned how to 
balance looking at the budget and seeing the bottom line, but 
also seeing the people who are involved in these choices and 
understanding the programs themselves: health care, technology, 
poverty, education, infrastructure. She knows about all of 
them, and I think she will look at every single one of those 
priorities and ask whether they are working, whether the 
American taxpayer is getting their due. And I do not think Jack 
Lew could have chosen a stronger or more competent Deputy.
    Now, when he announced Heather's nomination, he said that 
she was known for ``dedication to sound public policy that 
makes a difference in people's lives.'' And, again, I think 
both the Chair and the Ranking Member would agree, this is a 
guy speaking who spent 7 years at OMB previously and 7 budgets 
in the Clinton administration, and we balanced the budget. We 
also had to turn deficits into surpluses, which is the 
challenge today. And if he has confidence in Heather, I think 
we should respect that together with the experience that she 
brings to the table here in the Senate.
    Now, another person who understands the ins and outs of 
this is the Senator from Ohio, Senator Rob Portman, and he was 
President Bush's last OMB Director. And what did he say about 
Heather at the first hearing she had? He said, ``One of the 
things that underscores our qualifications is she helps to put 
the `M' back into OMB.'' It is the question of management that 
we also need to think about here. And in the 9 years that she 
worked for me, I knew her as an effective, tough manager who 
knew how to get the best out of the staff, knew how to direct 
things, knew how to make things happen on time, knew how to set 
objectives and goals, and followup on them. And I never, I do 
not think once ever had to say, ``Why isn't this done?'' or 
``Why aren't we moving on this?'' She was always ahead of me, 
and she always gave her staff and other people the credit for 
doing it. So I think she is a leader, and I think she is 
prepared to take this on.
    Now, a couple of reservations I have heard from the 
previous hearing, some people have said--you know, it is 
amazing to me they ask this, but some question her age. But, 
look, it is not the age you measure; it is the experience you 
measure. You know, it is not how old you are; it is how smart 
you are and how capable you are. And the fact is that her age 
is zero departure from those who have done this job before, and 
even those here in the Senate who are charged with writing and 
voting on the budget, making the decisions. And I know a lot 
about that. I came here when I was 40 years old, and, you know, 
two Republican freshman Senators now, Senator Rubio and Senator 
Lee, are just a few months older than Heather. They are going 
to be making the same decisions, and they have had less 
experience up here with the budget and with the process, 
obviously, than she has.
    So I am confident that, you know, if you just add Peter 
Orszag to that list, he was unanimously confirmed as the 
Director of the Office of Management and Budget in 2009 at the 
ripe old age of 41 during the most serious fiscal crisis since 
the Great Depression. And Jack Lew was first confirmed as OMB 
Director during the Clinton administration back in 1998 at age 
42, and his efforts, as I said, are legendary now. We know what 
he accomplished.
    So, Mr. Chairman and Mr. Ranking Member, Senator Sessions, 
I know that if you probe and look at this objectively, you will 
see that as she answers the questions, as you get to know her, 
you are going to find somebody who, as I have said, is smart 
and skilled and knowledgeable and not doctrinaire and not 
ideological, who is going to be practical and look at these 
issues in the way that she does. I am grateful that the 2 years 
in the West Wing have not dampened her desire to go take on a 
tough job and to be involved in this. So I am confident. Her 
roots are in the Senate. She will be responsive to all of us, 
and that, too, is the reason why I am very proud to recommend 
her swift confirmation as Deputy Director of the Office of 
Management and Budget.
    Chairman Conrad. Thank you, Senator Kerry. That was a 
ringing endorsement and I think clearly heartfelt. You have 
confidence in her. I know Jack Lew does because Jack Lew called 
me yesterday and said, ``This is a choice I made.'' There are 
very few people I have higher regard for than Jack Lew. Jack 
Lew was in charge of the Office of Management and Budget the 
last time we balanced the budget, and not only balanced it but 
quit using Social Security money to fund the general operations 
of the Government. So he has got real credibility with me. And 
when he calls me and tells me that Heather Higginbottom is his 
choice and gives me very clear reasons as to why, I put a lot 
of stock in that.
    Obviously, I put a lot of stock, when my colleague Senator 
Kerry, who has been a very strong ally of those who want to 
change the fiscal course for the country, tells me that this 
person has served him well and he has full confidence in her 
ability to discharge the responsibilities of this job. That 
makes an impression on me because I know the good judgment that 
John Kerry has brought to his responsibilities here.
    So we thank you, Senator Kerry. I know that that other 
briefing is now underway, and I know that you are expected to 
be there in your role as Chairman of the Foreign Relations 
Committee. So we will excuse you at this point and hope that we 
are able to join you at that briefing later.
    Senator Kerry. Thank you, Mr. Chairman. I really appreciate 
your courtesies, both of you. Thank you.
    Chairman Conrad. Thank you.
    I think we have heard that Ms. Higginbottom brings a broad 
knowledge of Federal policy and the operations of the 
Government with her. I am also pleased that she is a former 
member of the Senate family because my experience is that that 
matters in terms of responsiveness and the ability to 
communicate. So I look forward to hearing more from her on her 
background and her goals for OMB.
    As I have indicated, I know that Director Lew made this 
decision and chose this person because of the very special 
needs that he has in the agency. Several of our recent hearings 
have focused on the long-term budget crisis, so I want to begin 
today on a slightly different note by reviewing our current 
economic situation.
    I think it is important to remember how much the economy 
has improved over the last 2 years. I believe that it is clear 
that the Federal response to the recession and the financial 
crisis, including actions taken by both the Bush administration 
and the Obama administration, has successfully pulled the 
economy back from the brink. And I believe that deeply. I 
believe that history will record that that is indeed what has 
happened.
    Although we do not have the recovery running at the level 
of strength we would like, nonetheless we see a clear 
turnaround. In January of 2009, the economy was losing more 
than 800,000 private sector jobs a month. Private sector job 
growth returned in March of 2010, and now we have had 12 
consecutive months of growth. Just last month, the economy 
gained 220,000 private sector jobs. Obviously, unemployment 
remains too high, but the turnaround in private sector job 
growth we have experienced is significant.

[GRAPHIC] [TIFF OMITTED] 66824.002


    The next slide, if we can. Economic growth has also 
returned. In the fourth quarter of 2008, at the end of the Bush 
administration, the economy contracted by 6.8 percent. It was 
going full speed in reverse. Positive economic growth returned 
in the third quarter of 2009, and we have now six consecutive 
corridors of growth. In the fourth quarter of 2010, we saw 
positive growth of 2.8 percent. And although credit is still 
tight for many small businesses, the crisis in the credit 
markets has subsided.

[GRAPHIC] [TIFF OMITTED] 66824.003


    This chart shows what is known as the TED spread. It is 
essentially a measure of the risk that banks see in lending to 
each other. You can see at the height of the economic crisis, 
in the fall of 2008, the TED spread went through the roof. 
Banks were largely unwilling to lend to each other. That spread 
has now returned to normal levels.

[GRAPHIC] [TIFF OMITTED] 66824.004


    In fact, at the height of the crisis, the TED spread was 9 
times the normal level. In fact, it was one of the first tip-
offs that we had that something very serious was occurring.
    We have also seen a dramatic rebound in the stock market. 
After falling to a low of 6,500 in March of 2009, the Dow has 
now risen back up to above 11,000.

[GRAPHIC] [TIFF OMITTED] 66824.005


    Two highly respected economists--Dr. Alan Blinder and Dr. 
Mark Zandi--completed a study last summer that measured the 
impact of Federal actions to shore up the economy, including 
both what the Federal Reserve has done as well as the fiscal 
policy actions taken by the Bush administration and the Obama 
administration. They looked at the effect of TARP and the 
stimulus.
    Here is a quote from their report. ``We find''--referencing 
the actions of the Federal Government--``that its effects on 
real GDP, jobs, and inflation are huge and probably averted 
what could have been Great Depression 2.0. When all is said and 
done, the financial and fiscal policies will have cost 
taxpayers a substantial sum, but not nearly as much as most had 
feared and not nearly as much as if policymakers had not acted 
at all. If the comprehensive policy responses saved the economy 
from another depression, as we estimate, they were well worth 
their cost.''

[GRAPHIC] [TIFF OMITTED] 66824.006


    It is worth noting that this was not a partisan-driven 
conclusion. Dr. Zandi was an economic adviser to the McCain 
Presidential campaign.
    This chart shows that Dr. Blinder and Dr. Zandi's estimate 
of the number of jobs we would have had without the Federal 
response would have been substantially less. It shows we would 
have had 8.1 million fewer jobs in the second quarter of 2010 
if we had not had the Federal response--the TARP and the 
stimulus. In fact, they say unemployment today, absent the 
Federal response, would be 15 percent. So I think it is clear 
that the actions taken at the end of the Bush administration 
and during the Obama administration played a critical role in 
helping to avert a financial crisis far worse than any we have 
seen since the Great Depression. I think those policies have 
been about right in the near term, and the steady economic 
recovery we have experienced demonstrates that.

[GRAPHIC] [TIFF OMITTED] 66824.007


    Where I have taken issue with the administration is on the 
longer term. I believe deeply that we must do more than what 
the administration has so far proposed to address the long-term 
fiscal challenge this country confronts. We are borrowing 40 
cents of every dollar we spend. We cannot do that much longer. 
We are headed for a circumstance in which we will be adding $1 
trillion to the gross debt of this country every year for the 
next 10 years. That cannot be our fiscal future.
    That is why I believe we need a bipartisan, compromise debt 
reduction plan of the size and scope proposed by the 
President's own Fiscal Commission. The Fiscal Commission took a 
balanced approach that included every part of the Federal 
budget--mandatory spending, domestic spending, defense 
spending, and, yes, the revenue side--and came up with a plan 
to reduce the debt $4 trillion over the next 10 years.
    I am going to stop there because of the time constraints 
that we are under and ask Senator Sessions for his opening 
remarks. Then we will go to the witness for her comments, and 
then we will go to questions.
    I again thank Senator Sessions for accommodating this 
afternoon's scheduling of a hearing given all of the other 
things that are occurring in the Senate today. Senator 
Sessions.

             OPENING STATEMENT OF SENATOR SESSIONS

    Senator Sessions. Thank you, Mr. Chairman.
    I join our Chairman in welcoming you to the Committee 
today, Ms. Higginbottom, and we appreciate you, and Legislative 
Director is an important thing in a Senate office, and I am 
sure Senator Kerry has confidence in you in policy and Senate 
matters, or he would not have appointed you to it. But I do not 
understand that during that period of time you had direct 
responsibility over budget issues, nor was the Senator on the 
Budget Committee, I do not think, during that time.
    But you have been nominated for a critical position at a 
critical agency at a critical time. It just is. Right now we 
are on a dangerous path. We are borrowing 40 cents of every 
dollar. Our deficit this year is projected to be $1.65 
trillion, the largest ever by any Nation in the world, and 
certainly the largest in our country. The amount of money we 
owe will be greater than the value of everything we produce in 
our economy.
    This crushing debt burdens growth. It undermines economic 
confidence and threatens our Nation with a severe debt crisis. 
We have been told that repeatedly. A study from economists 
Reinhart and Rogoff explained that when a Nation's debt-to-GDP 
exceeds 90 percent, GDP growth each year is a percentage point 
lower than it otherwise would have been. And when that growth 
is 2 percent, 2.5 percent, a 1-percent reduction is very 
significant. Our debt is now over 90 percent and will reach 100 
percent by September 30th. That means we could already be 
losing a million jobs a year as a result of 1-percent GDP loss.
    Week after week experts have testified before this 
Committee to sound the alarm. The co-chairs of the Deficit 
Commission, Erskine Bowles and Alan Simpson, declared that if 
the United States failed to curb our growing debt, the country 
would face ``the most predictable economic crisis in its 
history.''
    Echoing Alan Greenspan, they said that such an event could 
occur relatively soon, in just 1 or 2 years--their testimony, 
not mine--if we do not take significant action. The effects of 
an event like that would be felt most severely by everyday 
working Americans and could easily be greater--we hope not--
than the last financial crisis that we had. But even any kind 
of knocking us down into another recession would be damaging to 
this fragile growth path that we hope we can stay on.
    Given these dangers, you can understand my concern that the 
President and Budget Director Lew, your potential boss, have 
presented the President's budget as practically solving this 
situation. Both have said this budget allows us to live within 
our means, spend only what we take in, and begin paying down 
the debt. That is their words, the President's words, Mr. Lew's 
words. And I think to some degree you affirmed that in a 
previous hearing.
    Simply put, these claims are detached from reality, and 
they undermine efforts to tackle our growing debt danger. If a 
CEO made these statements to investors that his company was 
living within its means and paying down its debt and asked them 
to invest and people later found out that they were running 
massive deficits, do you think he would not be subject to 
liability?
    To confront these challenges, we need leadership and candor 
from the White House and from OMB. Sadly, both have been 
lacking. The President has yet to look the American people in 
the eye and explain the basic fact that we have run out of 
money and can no longer sustain this bloated Federal budget. 
Instead, he presents a budget that doubles our gross national 
debt in 10 years and increases spending year after year. And I 
am certain that tomorrow when CBO issues its analysis of the 
President's plan, they will confirm that it contains hundreds 
of billions more in spending and debt than your OMB report has 
suggested--or the OMB report.
    So we need honest budgeting. We have got to have that, 
facts-based budgeting, not fantasy budgeting. Your testimony 
today, I hope, will not repeat the spin that we have seen from 
the White House so far. I cannot support any nominee to this 
position, especially in such a time as this, who is unable to 
discuss the budget with clarity and candor. There are some 
matters on which we can agree to disagree, of course. There 
will be some disagreements. But facts are facts, and there can 
be no debating that the President's budget does not live within 
our means.
    I must admit I also have concerns about your lack of 
experience. On average, nominees for your post have had 6 or 7 
years of professional experience in budget and finance. Many 
have had much more than that. You concede you do not have such 
a background. I will be interested to hear your explanation as 
to what qualifies you for the post and will keep an open mind 
on that.
    Our financial challenges are immense, but I am optimistic 
about the future. I know we can meet the challenges that are 
before us and put this country on the path to prosperity. We 
have got to get off the road of spending and borrowing and get 
on the road to a lean and productive Government that allows the 
private sector to grow and thrive. We need to reform our Tax 
Code that penalizes productivity, unlock domestic energy 
sources, keep energy prices down, remove the cloud of debt that 
is pulling down growth in our economy.
    America occupies an exceptional place in the history of the 
world, but if we continue down this path of spending and 
borrowing recklessly, we will leave America weakened and 
diminished. But if we rise to the challenge today, we will be 
stronger now and stronger tomorrow.
    Thank you, Mr. Chairman.
    Chairman Conrad. Thank you, Senator.
    Under the rules of the Committee, the nominee is required 
to testify under oath, so at this point, if you will rise, I 
would like to swear you in. Do you swear that the testimony 
that you are about to give will be the truth, the whole truth, 
and nothing but the truth, so help you God?
    Ms. Higginbottom. I do.
    Chairman Conrad. If asked to do so and if given reasonable 
notice, will you agree to appear before this Committee in the 
future and answer any questions that members of this Committee 
might have?
    Ms. Higginbottom. Yes.
    Chairman Conrad. I thank you for that. Please be seated. 
Welcome to the Senate Budget Committee and please proceed with 
your testimony.

  TESTIMONY OF HEATHER A. HIGGINBOTTOM, NOMINEE TO BE DEPUTY 
           DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

    Ms. Higginbottom. Thank you, Mr. Chairman, Ranking Member 
Sessions, members of the Committee. I am honored to come before 
you as President Obama's nominee to be Deputy Director of the 
Office of Management and Budget. I would like to thank Senator 
Kerry for taking time from his very busy schedule to introduce 
me to the Committee today. As he mentioned, for over 7 years I 
had the privilege of serving in many capacities for Senator 
Kerry, and in many ways what I have learned about public 
service and Government I learned in this body and I learned 
from him. I am grateful for that, and I am confident that I 
would not be before the Committee today without the 
opportunities that that experience afforded me.
    I am also deeply grateful to President Obama not just for 
nominating me for the position, but also for the tremendous 
opportunity that he gave me when I joined his campaign as 
Policy Director over 4 years ago. Over the course of the 
campaign and for the past 2 years in the White House, I have 
had opportunities to contribute to the Nation in ways I never 
could have dreamed of.
    Mr. Chairman, the serious fiscal challenges facing the 
country make this an extraordinarily important and humbling 
time to be nominated to join the Office of Management and 
Budget. We have only recently turned the tide on the worst 
economic downturn in a generation, and once again the economy 
is growing and the private sector is creating jobs.
    The policies deployed to rescue the economy necessarily 
added to this deficit in the short term. As the economy 
strengthens, it is time to make the tough choices necessary to 
place the country on a responsible fiscal path and focus on our 
long-term challenges. This means cutting where we can, making 
the investments necessary to foster continued growth and job 
creation, and for our long-term competitiveness. It also means 
managing the resources of the Federal Government in a way that 
gets the most from every taxpayer dollar, cuts waste, boosts 
efficiency and effectiveness, and gives all Americans the means 
to see how their money is being spent and to hold their 
Government accountable for its actions.
    The President's budget is an articulation of his agenda, 
which requires making choices among competing interests within 
the constraints of a recovering economy and with the best 
interest of the taxpayer in mind. In each position I have held, 
as Senator Kerry's Legislative Director, managing policy in two 
Presidential campaigns, and for 2 years in the White House 
Domestic Policy Council, I have worked on a wide range of areas 
from economic policy to national security to domestic policy, 
and I have had to work through the budgetary implications of 
each. I have guided processes that made choices about what we 
could afford, what programs and initiatives were the most cost-
effective and how to implement them.
    If I am fortunate enough to be confirmed, I will bring this 
experience developing policy within our budgetary constraints 
to OMB in the Deputy Director role.
    If confirmed, I will work closely with the Director, Jack 
Lew, and the Deputy Director for Management and Chief 
Performance Officer, Jeffrey Zients, to help our Government run 
as efficiently and effectively as possible. I also look forward 
to working with all of you on this shared goal, if confirmed.
    I thank you for your consideration, and I would be happy to 
answer any questions.
    [The prepared statement of Ms. Higginbottom follows:]

    [GRAPHIC] [TIFF OMITTED] 66824.033
    

    [GRAPHIC] [TIFF OMITTED] 66824.034
    
    Chairman Conrad. Thank you. Thank you for that statement, 
and thanks for your willingness to serve. Thanks for your prior 
service both in the Senate and in the White House.
    I would like to begin by asking you about your service to 
Senator Kerry as his Legislative Director. In that position 
were you involved in overseeing his work on budget issues and 
budget concerns?
    Ms. Higginbottom. In the role of Legislative Director for 
Senator Kerry, I had responsibility for managing his entire 
legislative agenda. That included the development of his 
proposals, his work relating to the budget, as well as his 
appropriations work. As I developed various policy proposals 
and managed that process, we worked through the cost 
implications and how to pay for those proposals in addition to 
the budget and appropriations work.
    Chairman Conrad. I can just say, my Legislative Director 
has been with me now almost 20 years, is involved in every 
serious deliberation that involves my responsibility on this 
committee. I think that is typically the way it is done here, 
that a Legislative Director is involved in all of the major 
issues that a Senator is involved in.
    Let me ask you, with respect to your positions at the White 
House as Deputy Assistant to the President and Deputy Director 
of the Domestic Policy Council, I am much less familiar with 
how the Domestic Policy Council functions, but I would ask you, 
were you involved in budget issues there as the Deputy 
Director?
    Ms. Higginbottom. Yes. For the past 2 years, as a member of 
the Domestic Policy Council and a senior member there, we 
worked very, very closely with OMB in the development of the 
President's budget, specifically on the domestic agenda. We 
worked on the education reforms and many of the proposals from 
the very first days of the administration.
    Chairman Conrad. And Director Lew tells me that he 
personally selected you to be his Deputy, is that your 
understanding?
    Ms. Higginbottom. Yes, that is my understanding.
    Chairman Conrad. And can you tell us why you think Director 
Lew thought you would be especially valuable to him?
    Ms. Higginbottom. Yes. When I spoke to the Director about 
this position, this opportunity, he explained that there were 
essentially three major functions that he would expect a deputy 
to perform. The first would be working closely with him to 
develop the President's annual budget. The second is internal 
management of OMB. And the third is to lead and coordinate 
OMB's participation in the policy-making process, both in the 
Executive Office of the President as well as with the agencies. 
It is very important that OMB's equities and sensibilities are 
part of those conversations and that is part of the experience 
that he thought I would contribute to.
    He knows that the experience that I have had throughout 
over a decade working in different policy positions in the 
legislative and the executive branch have given me a breadth of 
experience on policy that is suitable to the task at OMB, which 
is to work to assemble the President's budget, and in those 
varied experiences I have had the opportunity to make tradeoffs 
and decisions and choices about what we need to do, what we 
need to propose, and how to pay for it.
    Chairman Conrad. I would just say, I have now looked at 
previous Deputies and their backgrounds. Mr. McMillin served 
from July of 2006 to January of 2009. He had been an advisor to 
the White House Chief of Staff. He had been on the Senate 
Banking Committee staff.
    Mr. Kaplan, who served as OMB Deputy Director, had been 
Special Assistant to the President, much as you have been, in 
the Office of the Chief of Staff and had been a policy advisor 
to the Bush-Cheney campaign, just as you were an advisor to the 
Obama campaign, and before that had been actually a law clerk 
for Justices at the Supreme Court.
    And Nancy Dorn, who was a previous Deputy Director, had 
worked in legislative affairs for Vice President Cheney, was a 
defense and foreign policy advisor to Speaker Hastert, had been 
a lobbyist here in Washington and a member of the Inter-
American Bank Foundation and an Assistant Secretary of the 
Army.
    So it is interesting, really, how close your background 
matches the backgrounds of three previous Deputy Directors of 
the Office of Management and Budget.
    We have just been advised that votes may start as early as 
2:45, so I am going to cut my questioning short. We will do 7-
minute rounds. We will go to Senator Sessions and then Senator 
Whitehouse and whatever other members appear.
    Senator Sessions?
    Senator Sessions. Thank you, Mr. Chairman.
    Ms. Higginbottom, let me first ask you, you would agree, I 
am sure, that OMB must be honest with the American people and 
honest with Congress when it produces its reports and its 
analysis and its statements that it makes publicly, would you 
not?
    Ms. Higginbottom. Yes, I would.
    Senator Sessions. Let me ask you this. Maybe we can ask you 
to look at this chart. Your Director, Mr. Lew, has used the 
same phrase. This happens to be President Obama's statement. 
``We will not be adding more to the debt.'' He is referring to 
this budget, the one that he has submitted to us, and he has 
stated to the American people, and Mr. Lew has stated to the 
American people, that we will not be adding more to the debt. 
Is that a correct statement or not?
    Ms. Higginbottom. What both the Director and the President 
are referring to is the idea----
    Senator Sessions. No, I ask you, heard by the American 
people, fairly heard by the American people, is that a true 
statement or not?
    Ms. Higginbottom. I cannot express how the American people 
would hear that. What I can say is that, of course, the 
interest payments on the debt will add to the debt. The point 
that both the President and the Director have made is that this 
budget takes steps----
    Senator Sessions. I do not know what you are talking about, 
interest payment will be added to the debt. President Obama and 
Mr. Lew have looked the American people in the eye without any 
qualifications, without talking about interest payments, and 
said, ``We will not be adding more to the national debt.'' So 
you are asked to assume this important role. I ask you if you 
stand by that and if you believe that is accurate.
    Ms. Higginbottom. Senator, I would like to explain what 
they are referring to, which is a----
    Senator Sessions. Well----
    Chairman Conrad. Let us let her----
    Ms. Higginbottom. Senator----
    Chairman Conrad. We have got to be fair here.
    Senator Sessions. I will ask----
    Chairman Conrad. No, wait, wait, wait, wait, wait. You have 
asked her a question. She has a right to answer the question. 
We are not going to have this committee function--we are not 
going to ask people questions and not let them answer the 
question.
    Ms. Higginbottom. Both the President and the Director are 
referring to an effort to ensure that we pay for the programs, 
the government's operating costs, as they are proposed. That 
does not--that is a concept of primary balance, which I know 
you and the Director have discussed. That notion does not speak 
to the interest payments. When the President came to office, 
there was a $1.3 trillion deficit. We have to borrow money to 
pay on that deficit. But what that statement refers to is an 
effort to get our----
    Senator Sessions. Well, could I ask you this question. Did 
Mr. Lew or the President of the United States, when they made 
that statement, ``We will not be adding to the debt,'' did they 
say, by the way, American people, what we really mean is some 
arcane idea about not counting interest payments that the 
United States must make as part of our debt? Did they say that?
    Ms. Higginbottom. I am not sure exactly what they did say. 
I would----
    Senator Sessions. Well, if they did not say that, would 
that be an accurate statement?
    Ms. Higginbottom. The interest costs on the debt add to 
the--the interests costs on what we are borrowing on our 
deficit add to the debt.
    Senator Sessions. Well, you are correct, and Mr. Geithner 
acknowledged that after Mr. Lew stood by his statement in this 
committee, after the President's own Press Secretary, when 
asked how could he make such a statement, did he stand by it, 
said, ``Absolutely.'' So to me, it is--what about the statement 
that Mr. Lew made that it pays down our debt?
    Ms. Higginbottom. I am sorry, which statement?
    Senator Sessions. That it pays down our debt, this budget 
that has just been----
    Ms. Higginbottom. I am not familiar with that statement. I 
think what is clear about the----
    Senator Sessions. Well, if he said that, would that be 
accurate or not?
    Ms. Higginbottom. The fiscal year 2012 budget stabilizes 
the debt as a percentage of the economy. It is what we have 
referred to, the President has referred to as a down-payment or 
a first step in being able to tackle the long-term issue and 
really paying down the debt.
    Senator Sessions. Well, that is not what he said. He said 
we will not be adding more to the national debt.
    Look at that chart up there. That is from the President's 
budget numbers. Is there a single year in which we do not add 
more to the debt?
    Ms. Higginbottom. No.
    Senator Sessions. It goes up and it doubles in 10 years, 
does it not?
    Ms. Higginbottom. As I mentioned, when the President took 
office, there was a $1.3 trillion deficit. Payments on those 
are quite expensive and that adds to our debt. The concept both 
the President and the Director are referring to is achieving a 
point of balance with the programs that we are proposing and 
paying. That is a milestone. That is not an end point. And the 
President's budget makes very clear that we need to go far 
beyond that to really tackle our long-term deficit and debt 
issues.
    Senator Sessions. So you are saying that, well, what the 
President really meant but what he did not say is that in 1 
year or so, you calculate that if you do not count the 
interest, which is about the first thing you have to pay on 
your business debt in responsibility of payments, that if we do 
not count interest, then we can tell the American people we are 
not adding to our debt. Do you think that is a legitimate way 
to discuss with the American people the debt crisis we now 
face?
    Ms. Higginbottom. Senator, I think if we are trying to lay 
a responsible fiscal path coming out of this severe economic 
downturn, one of the first things we have to do is stop digging 
into the hole with the programs that we are proposing and 
funding.
    Senator Sessions. Does this budget do that?
    Ms. Higginbottom. The budget provides a path to ensure that 
the programs that are proposed----
    Senator Sessions. Does the budget--I do not know what a 
path means. I am saying, within 10 years, does it do what you 
said?
    Ms. Higginbottom. Does it not add to the debt?
    Senator Sessions. You said it puts us on a path to----
    Ms. Higginbottom. Puts us on a path to stabilize our debt 
as a percentage of the economy, which is a very important first 
step to eventually being able to pay it down, which is the 
large task in front of us. And that is not just what I have 
said. Both the Director and the President have said this is a 
down-payment and a first step that we need to take.
    Senator Sessions. Well, let us take the last 3 years of the 
President's 10-year budget. Do the deficits go down those 
years, eight, nine, and ten, or does the annual deficit go up 
in eight, nine, and ten?
    Ms. Higginbottom. I do not have the deficit table in front 
of me, but I----
    Senator Sessions. Well, it is an important matter. I know 
what they basically say.
    Ms. Higginbottom. The President's budget reduces the 
deficit, takes it to about $600 billion and stabilizes it. But 
as we have said----
    Senator Sessions. No, it does not stabilize it. In years 
eight, nine, and ten, it goes up every year and reaches 
approximately $900 billion from $600 billion as the low point 
in the entire 10 years. The highest debt Bush ever had was $450 
billion.
    Ms. Higginbottom. And----
    Senator Sessions. You do not have a single year in which 
the deficit falls below $600 billion, do you, based on the 
budget that has been submitted here?
    Ms. Higginbottom. That is correct, and Senator, both the 
President and the Director, in discussing this budget, have 
talked repeatedly about these being the first steps that we 
need to take and that we need to come together in a bipartisan 
fashion, as the Chairman and some of his colleagues are doing, 
to really look at these longer-term issues. So this is not the 
end of the road. It is a first step. The President's budget is 
a first step in the budget process.
    Senator Sessions. Well, thank you very much, and thank you, 
Mr. Chairman. I just believe that we are off track here with 
the language that we are hearing. I respected Mr. Lew and was 
pleased to support him, thought he would do fine, but I have 
been stunned by his public statements about the debt and my 
confidence in him has been reduced. Thank you.
    Chairman Conrad. Let me just say on this question of 
primary balance, because this is, frankly, something that did 
not start with the administration and actually started in the 
economics community, and it is this notion that if you get down 
to a deficit less than 3 percent of GDP, that you stabilize the 
debt. The debt is then no longer growing as a share of the GDP. 
And it is a way of balancing current expenditures against 
current income, not counting debt service.
    I happen to agree with you that the use of this language, 
and I know economists like it because they like the idea of 
stabilizing the debt so that it is not growing as a share of 
GDP, and I understand the concept of matching current 
expenditures and current income. That is the notion of primary 
balance. It does not count previous debt service.
    The trouble I have with it, and I think the trouble the 
Ranking Member has with it, is it can lead to the American 
people maybe hearing this and concluding that we have got the 
problem under control. And I think the point that the Ranking 
Member is making, and it is a point that I have made, is that 
the debt continues to grow.
    It is true, it is stabilized as a share of GDP, and that is 
really what Director Lew was talking about, I think what the 
President was talking about. It is true they are matching 
current expenditures with current income, not counting previous 
debt service. But I think the trouble that I have, and I cannot 
speak for the Ranking Member, but from his comments, I think 
the problem he has, is that it might lead some casually 
listening to the conversation to conclude we have solved the 
problem, and I think you know, I think the President knows, I 
know for sure Jack Lew knows the problem is not solved.
    Senator Sessions. Could I just say that five different fact 
check organizations have found that statement to be false, 
which it plainly is. Qualified in the fashion that the Chairman 
said, it might be a legitimate argument to make, but 
unqualified is misleading to the American people and should 
never be repeated.
    Ms. Higginbottom. And if I could, I think it is important 
that we have a very honest conversation with the American 
people about what the large task ahead of us is and what it is 
going to entail. I think that is a very important point.
    Chairman Conrad. Senator Whitehouse?
    Senator Whitehouse. Thank you very much.
    I am glad to have you here, Ms. Higginbottom.
    Ms. Higginbottom. Thank you.
    Senator Whitehouse. I want to make one comment, which is 
that we in the--I have been in a lot of budget hearings 
recently and I have heard nearly relentless call from the other 
side of the aisle for more engagement by the White House with 
us in the budget process. There has been no criticism that the 
White House is too engaged with the Senate in the budget 
process. It is virtually a unanimous chorus that the White 
House and OMB are not engaged enough with the Senate in this 
budget discussion.
    And so along comes the Director of the Office of Management 
and Budget and he chooses for his deputy somebody who would 
be--who is ideally situated to bridge that gap between the 
White House Office of Management and Budget, where you will be, 
and the Senate, where you have served so long. And the 
criticism that I have detected of the propriety, I guess, of 
your selection for this position seems to me to be what do you 
not--you know, it is like, what part of yes did you not like?
    As far as what I can tell, what you bring to this is the 
message to us, yes, we hear you. Yes, we want to be more 
engaged, and we particularly want to be more engaged with the 
Senate. I think the House might have a grievance because of 
your Senate background, but I would have expected my colleagues 
on the Senate to welcome your appointment and to see your 
really immense qualifications as ones that track precisely in 
the direction that they want the OMB to go, which is higher, 
better, and more detailed coordination with the Senate.
    So I am a little bit mystified at some of the comments that 
I have heard, but as far as I can tell, I want to let you know 
that to the extent that the Director's position in selecting 
you reflected a desire for that kind of more intense 
relationship with the Senate and with this committee, I applaud 
it and I think it is a great step. You have a wonderful 
reputation in the Senate, so I am delighted to add that to the 
equation.
    Chairman Conrad. Senator, could I interrupt----
    Senator Whitehouse. Please.
    Chairman Conrad [continuing]. To just advise the other 
members, there are now 10 minutes left on a vote. So what I 
would propose is that we divide up--you have got about 4 
minutes remaining. If we could do your 4 minutes and then go to 
Senator Begich, then we would be able to close the hearing and 
go to the vote.
    Senator Whitehouse. I can probably be less than 4 minutes, 
because the other point that I wanted to make is that--let me 
frame this as a question. Is there a way to separate out in 
government budget choices from policy choices? Is there such a 
thing as a budget choice that does not have a policy impact or 
consequence?
    Ms. Higginbottom. Thank you, Senator. In my experience and 
in my estimation, the answer is no. When you look at the series 
of decisions that led to taking us from the surplus to the 
deficit that occurred over the last decade or so, those are a 
series of policy choices about what we are paying for and how 
to do it.
    The path forward, dealing with our long-term fiscal 
challenges is going to require a set of decisions about 
policies, how we are going to address entitlements, how we are 
going to address spending, what the programs will look like, 
how they can be made more efficient and effective.
    So I would agree with the premise of your question that 
these are very interrelated, and I think that when the Director 
approached me about this position, it was along those lines 
that he thought that my experience was well suited to that.
    Senator Whitehouse. And as some of my colleagues have said, 
these are not ordinary times. These are extraordinary times 
from a budget point of view, which means that we can expect 
extraordinary policy consequences from the decisions we make. 
So, for instance, if we make the policy choice to eliminate 
Planned Parenthood, to eliminate the Americorps program, to 
eliminate TIGER grants, to cut the heck out of the Head Start 
program, but to preserve every corporate tax loophole on the 
books, it is important to evaluate that choice as a policy 
choice, is it not?
    Ms. Higginbottom. It is, indeed, and the President's 
proposal for freezing non-security discretionary spending is 
not an across-the-board cut for the reasons that you 
articulated. It is important that we go through and learn what 
we can live with and what we can cut.
    Senator Whitehouse. Let me close out with one point that 
the Chairman has heard me make in every hearing that we have 
had, and that is that if we are going to solve our health care 
problem, we are going to have to do it as a systemic solution 
in health care. It is not just a government program problem. It 
is a health care system problem that affects both government 
programs and private companies and insurers who are seeing the 
same increases from the underlying problem in the health care 
system.
    And I applaud the fact that you have this policy background 
because people who come at this only from a budget background, 
take a look at the delivery system reform piece of the 
equation, look to the fact that OMB and CBO cannot, because of 
its nature, put an instant dollar calculation on it and say it 
saves X, and then they move on to other things. And I think it 
is a blindness in the budget mindset that is really dangerous 
as we deal with our health care problem, and I think you, 
having the broader policy mindset and understanding that some 
things are worth the trip, even if you are not sure when 
various benchmarks will be made and when those enormous 
prospective savings can be realized, is still worth the policy 
emphasis and the necessary budget emphasis to support it.
    So I am here to say that I think you are the right person 
at the right time in order to have the right relationship 
between this committee and this body with the White House as we 
try to get to the right policies for the American people in 
this budget discussion. I thank you for your willingness to 
serve.
    Ms. Higginbottom. Thank you, Senator.
    Chairman Conrad. Senator Begich?
    Senator Begich. Thank you very much, Mr. Chairman. I will 
try to be brief, too, because I know we have these votes.
    First off, thank you very much for your willingness to 
serve. My philosophy is fairly simple when it comes to 
executive appointments. I am a former mayor. I had to appoint 
people and go through a process, but I also served on a 
legislative body, in the local city council for nine-and-a-half 
years, and my view has always been, even when I maybe disagreed 
philosophically with the person who was at that time a mayor 
and I was an assembly member, they had the choice to pick their 
team. They live and die by that choice.
    Now, that is how I look at it, so however you move forward 
in a sense of hopefully you will be appointed to this position 
and we are going to hold you accountable, I will probably have 
a lot to say, especially to OMB, because I think they are 
sometimes confused on what Alaska is about and I sometimes 
wonder if they know that Alaska is part of the United States, 
so we will have those conversations.
    But to Senator Whitehouse's comment, in all due respect to 
my colleague earlier who has left, I am not mystified what is 
going on. I may be new here, but I am not lost on what is going 
on here. They do not necessarily like who you worked for. They 
do not like the policies of the OMB Director. They do not like 
the President. I can go through the shopping list. And you are 
the victim today. And I appreciate the Chairman kind of 
bringing it back to cordial commentary rather than interrupting 
you all the time on your attempting to try to answer the 
questions.
    I would encourage my colleague who had left earlier, if he 
has an issue with Jack Lew's comment, he should call Jack Lew. 
That is who could probably answer his question, rather than 
putting you through that. But you did a good job.
    I know some, and I have heard the buzz words before, 
because as someone who entered the public service at a very 
young age, serving for a mayor at the age of 20 and then being 
elected to the city council at 26, I know when they use the 
words, ``experience'' is a buzz word for age. I understand 
that. It is a code word.
    If there is anything this government needs more of, people 
that are younger generation and understand what the heck is 
going on. So I truly appreciate that you are part of this OMB 
team, because I sometimes think that folks that have been here 
way too long in the sense of the bureaucracy and also people 
who have many, many, many decades in government service--no 
disrespect to them--they need some new blood in there to shake 
it up. And so I appreciate your willingness, again, to serve.
    My question is just a real simple one, which probably is 
not an easy answer, and that is my frustration with these stop-
gap measures of funding, which again in about 3 minutes or so 
we will be voting on them, I think these are appalling, this is 
the way we operate in a three-plus-trillion-dollar budget. But 
I am curious, do you have any thoughts of what you feel is a 
way, not the political way, but how you can make it easier for 
us to do our job to really help move this system a little bit 
faster?
    Ms. Higginbottom. Well, first, Senator, thank you very much 
for your comments.
    With respect to the process that is underway now for 
closing out fiscal year 2011 funding, I think there are steps 
that, if the regular order is followed and in a regular year, 
can really be very effective. One of the reasons why I am 
excited to serve this President, but specifically with Director 
Lew, is because he is very deft and experienced at the budget 
process from the executive branch perspective.
    The President's budget is the first step. This committee, 
the House, as well, will lay out theirs. And if we follow that 
process and work and have real dialog and discussion, I think 
we can get to a place where we are not simply passing short-
term spending bills and have a more comprehensive and serious 
look at the fiscal picture.
    Senator Begich. Thank you very much.
    Mr. Chairman, I just want to say, I think the applicant has 
great qualifications. You will hear more from me. I am hoping 
that you will get appointed. I know there is a lot of 
information that was put on earlier, you know, what debt or 
deficit we started this fiscal year with. I think there was a 
few hundred million my colleague was off when he said 400. I 
think that President Bush's actually last budget proposal was 
over a trillion dollars of deficit spending. People get a 
little foggy on the numbers around here because it is good 
spin.
    But I hope when you come forward, that we work on the 
numbers in a forthright way. It sounds like you will. And when 
we disagree, we disagree, but hopefully we will move through 
this together as a country to deal with these deficit issues. 
Thank you very much.
    Ms. Higginbottom. Thank you, Senator.
    Chairman Conrad. I thank the Senator.
    We only have about 2 minutes left on the vote, so we are 
going to close the hearing.
    First of all, let me say I intend to fully and strongly 
support your nomination. I believe you are fully qualified for 
this job. I note on this question of age, I was 38 years old 
when I was elected to the U.S. Senate, served on this 
committee. So age--I look back at others who have served in 
that position, in fact, the ones who ran the agency were in 
their early 40's. So I do not think that is the issue.
    Look, the issue for all of us is our country is in the 
ditch. We can debate all day and all night who put us there. I 
have got a view, a very strong view about who is responsible, 
and it is not this current President. This current President 
inherited this disaster. There can be no question about that. 
If we want to get into a factual debate about what this 
President inherited, it is as clear as a bell. He inherited a 
country that was on the precipice of a financial collapse. That 
is what he inherited. And thank God he and others have taken 
the steps, and I would also credit the previous administration 
at the end of the administration for the steps that they took 
to prevent a collapse.
    With that, we thank you, and the hearing will stand 
adjourned.
    Ms. Higginbottom. Thank you.
    [Whereupon, at 3 p.m., the committee was adjourned.]



   STATEMENT OF BIOGRAPHICAL AND FINANCIAL INFORMATION REQUESTED OF 
                         PRESIDENTIAL NOMINEES

                      A. BIOGRAPHICAL INFORMATION

1. Name: Heather A. Higginbottom

2. Position to which nominated: Deputy Director Office of 
Management and Budget

3. Date of nomination: January 26, 2011

4. Address: (Redacted)

5. Date and place of birth: July 15, 1972; Binghamton, NY

6. Martial status: Single

7. Names and ages of children: N/A

8. Education:

Secondary: Chenango Valley Jr. Sr. High School, Binghamton, NY, 
June 1990
Undergraduate: University of Rochester, Rochester, NY, 1990-
1994, B.A. in Political Science, May 1994
Graduate: George Washington University, Washington, DC, 1997-
1999, MPP, May 1999

9. Employment Record: 

  Transportation Research Board, National Research Council, 
Administrative Assistant, Washington, DC November 1999-June 
1995
  Communitites In Schools, Government Relations Assistant, 
Alexandria, VA, June 1995-July 1997
  Office of Senator John Kerry, Legislative Assistant, Deputy 
Legislative Director, Legislative Director, Washington, DC, 
July 1999-March 2004; November 2004-May 2005; January 2006-
February 2007
  John Kerry for President, Deputy Policy Director, 
Washington, DC April 2003-November 2004
  American Security Project, Executive Director, Washington, 
DC, April 2005-February 2006
  Obama for America, Policy Director, Chicago, IL, February 
2007-November 2008
  Obama Presidential Transition Team, Staff Secretary, 
Washington, DC, November 2008-January 2009
  The White House, Deputy Assistant to the President and 
Deputy Director of the Domestic Policy Council, Washington, DC, 
January 2009-Present

10. Government Experience: List any advisory, consultative, 
honorary or other part-time service or positions with Federal, 
State, or local governments, other than those listed above.

None.

11. Business relationships: List all positions currently or 
formerly held as an officer, director, trustee, partner, 
proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business 
enterprise, educational or other institution.

American Security Project, Executive Director, Washington, DC, 
April 2005-February 2006

12. Memberships: List all memberships and office currently or 
formerly held in professional, business, fraternal, scholarly, 
civic, public, charitable and other organizations.

  Platform Drafting Committee, Democratic National Committee, 
Member 2008

13. Political affiliations and activities:

(a) List all offices with a political party which you have held 
or any public office for which you been a candidate.

None, except for positions held in connection with political 
campaigns as described below.

(b) List all memberships and offices held in and services 
rendered to all political parties or election committees during 
the last 10 years.

John Kerry for President, Deputy Policy Director, Washington, 
DC April 2003-November 2004
Platform Drafting Committee, Democratic National Committee, 
Member 2008
Obama for America, Policy Director, Chicago, IL, February 2007-
November 2008

(c) Itemize all political contributions to any individual, 
campaign organization, political party, political action 
committee, or similar entity of $50 or more for the past 5 
years.

$401 to Obama for America in 2008

14. Honors and awards:

  University Fellowship from George Washington University that 
covered graduate school tution and provided a stipend for 
expenses.

15. Published writings:

  The White House blog, ``Taking America from #12 to #1'', 7/
23/10, http://whitehouse.gov/blog/2010/07/23/taking-america-12-
1
  The White House blog, ``Ensuring Your Success'', 9/27/10, 
http://www.whitehouse.gov/blog/2010/09/27/ensuring-your-success
  The White House blog, ``The Results are In.'' 4/30/10, 
http://whitehouse.gov/blog/2010/04/30/results-are
  The White House blog, ``Race to the Top High School 
Commencement Challenge,'' 3/4/10, http://www.whitehouse.gov/
blog.2010/03/04/race-top-high-school-commencement-challenge

16. Speeches:

  Remarks about Obama Administration's education policy agenda 
at Board Meeting Dinner of Communities In Schools, 5/14/09
  Commencement address, Political Science degree ceremony, 
University of Rochester, 5/17/09
  Remarks on child welfare to Every Child Matters conference 
on child welfare, 10/22/09
  Remarks at conference on Promise Neighborhoods, 11/9/09
  Remarks about Obama Administration Domestic Policy Council 
agenda to Grantmakers Income Security Taskforce and Grantmakers 
for Childrem, Youth, and Families 2/25/10
  Remarks to Voice for America's Children national conference, 
6/25/10
  Remarks to First Focus Children's Budget conference, 7/14/10
  Remarks at Department of Education conference on Promise 
Neighborhoods, 11/8/10

Additionally, I made the following informal remarks in the last 
5 years.
  Heather Higginbottom Reacts to the Citizen's Briefing Book 
http://youtube.com/watch?v=L6Vtsy5kWA8, 1/13/09
  Open for Questions: The State of the Union http://
youtube.com/watch?v=3SF8bSbHD4M. 1/27/09
  Remarks about Obama Administration Domestic Policy Council 
(DPC) policy agenda at White House briefing of American Hotel 
and Lodging Association, 3/16/09
  Remarks about DPC policy agenda to the Children's Leadership 
Council, 4/2/09
  Remarks about DPC policy agenda at White House briefing of 
Hebrew Immigrant Aid Society
  Remarks about DPC policy agenda at White House briefing of 
National Caucus of Hispanic State Legislators, 4/24/09
  Remarks to high school students about professional career 
path, 10/23/09
  Remarks at dinner honoring inductees into Chenango Valley 
High School Hall of Fame, 10/24/09
  Remarks about immigration reform at White House briefing of 
Irish American organizations, 1/15/10
  Open for Questions: More Questions from You Tube http://
www.whitehouse.gov/photos-and-video/video/open-questions-more-
questions-you-tube, 2/5/10
  2/5/10 White House: Open for Questions via YouTube Part 1 of 
4 http://www.youtube.com/watch?v=GcqTpJ16b78, 2/5/2010
  Remarks to student in the YouthBuild program, 3/24/10
  Remarks at closing of White House summit on Community 
Colleges, 10/5/10
  How the President Stays in Touch with Young People http://
www.mtv.com/videos/news/583083/how-president-obama-stays-
connected-with-young-people.jhtml#id=1649327, 10/13/10
  Remarks at reception for winners of Promise Neighborhoods 
planning grants, 11/8/10
  Remarks about DPC agenda to White House briefing for 
attendees to Hanukkah reception, 12/3/10
  Remarks about DPC agenda to White House briefing for 
attendees to White House holiday party, 12/16/10
  Remarks at reception for Promise Neighborhoods applicants, 
12/16/10
  West Wing Week: Student Loans http://www.youtube.com/
watch?v=jFMQT-10lWI, 12/30/10
17. Selection:

(a) What do you believe in your background or employment 
experience affirmatively qualifies for this particular 
appointment?

Over nearly a decade of public service, ranging from non-
profits to congress to the White House, I have worked hard to 
improve the efficiency and effectiveness of government; to make 
critical programs respond better the needs and priorities of 
ordinary Americans. Out Nations faces hard budgetary choices in 
the coming years. The experience I gained as the Legislative 
Director for Senator Kerry, as a Policy Director for two 
national Presidential campaigns, and most recently as Deputy 
Director fo the Domestic Policy Council has prepared me to 
tackle those challenges as Deputy Director of the Office of 
Management and Budget. This position demands policy 
sophistication as well as technical budget expertise. I possess 
both. I have been involved with numerous budget and 
appropiations-related issues during my career. This was 
essential for me to develop national platforms for two 
presdential candidates. Similarly, my roll at the Domestic 
Policy Council has required significant involvement with the 
budget processes during the Obama Administration. Yet, I have 
been responsible for managing such complex processes throughout 
my professional life, all of which have had multiple contraints 
on decision-making, and often many sources of informatin to 
process and competing equities to balance. These skills are 
critical to ensuring that policy initiatives are affordable, 
cost-effective and have long term returns for the taxpayer, 
which in turn are essential for the Administration to be a good 
steward of government.

(b) Were any conditions, expressed or implied, attached to your 
nomination? If so, please explain.

No.

(c) Have you made any commitment(s) with respect to the 
policies and principles you will attemt to implement in the 
position for which you have been nominated? If so, please 
identify such commitment(s) and all persons to whom such 
commitments have been made.

No.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations 
if you are confirmed by the Senate?

If confirmed, I will remain an employee of the US Government.

2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your 
service with the government? If so, please explain.

No.

3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation 
or practice with your previous employer, business firm, 
association or organization?

No.

4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? If so, please 
identify such person(s) and commitment(s) and explain.

No.

5. If confirmed, do you expect to serve out your full term or 
until the next Presidential election, whichever is applicable? 
If not, please explain.

Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

1. If confirmed, are there any issues from which you may have 
to recuse or disqualify yourself because of a conflict of 
interest or the appearance of a conflict of interest? If so, 
please explain.

In connection with the nomination process, I have consulted 
with the Office of Government Ethics and the Office of 
Management and Budget's designated agency ethics official to 
identify potential conflicts of interest. Any potential 
conflicts of interest will be resolved in accordance with the 
terms of an ethics agreement that I have entered into with 
OMB's designated agency ethics official and that has been 
provided to this Committee. I am not aware of any other 
potential conflicts of interest.

2. Identify and describe all investments, obligations, 
liabilities, business relationships, dealings, financial 
transactions, and other financial relationships which you 
currently have or have had during the last 10 years, whether 
for yourself, on behalf of a client, or acting as an agent, 
that could in any way constitute or result in a possible 
conflict of interest in the position to which you have been 
nominated.

In connection with the nomination process, I have consulted 
with the Office of Government Ethics and the Office of 
Management and Budget's designated agency ethics official to 
identify potential conflicts of interest. Any potential 
conflicts of interest will be resolved in accordance with the 
terms of an ethics agreement that I have entered into with 
OMB's designated agency ethics official and that has been 
provided to this Committee. I am not aqare of any other 
potential conflicts of interest.

3. Describe any activity during the past 10 years in which you 
have engaged for the purpose of directly or indirectly 
influencing the passage, defeat or modification of any 
legislation or affecting the administration and execution of 
law or public policy other than while in a federal government 
capacity.

While I have had extensive experience in the formulation of 
legislation and public policy as a federal government employee 
in the legislative and executive branches, as well as during 
olitical cmaigns, I have had minimal engagement in these 
activities during the short period in which I was neither a 
government nor a campaign employee during the relevant time 
period.

4. Do you agree to have written opinions provided to the 
Committee by the designated agency ethics officer of the Office 
of Management and Budget and by the Office of Government Ethics 
concerning potential conflicts of interest or any legal 
impediments to your serving in this position?

Yes.

5. Explain how you will resolve potential conflicts of 
interest, including any disclosed by your response to the above 
questions.

In connection with the nomination process, I have consulted 
with the Office of Government Ethics and the Office of 
Management and Budget's designated agency ethics official to 
identify potential conflicts of interest. Any potential 
conflicts of interest will be resolved in accordance with the 
terms of an ethics agreement that I have entered into with 
OMB's designated agency ethics official and that has been 
provided to this Committee. I am not aqare of any other 
potential conflicts of interest.

                            D. LEGAL MATTERS

1. Have you ever been disciplined or cited for a breach of 
ethics for unprofessional conduct by, or been the subject of a 
complaint to any court, administrative agency, professional 
association, disciplinary committee, or other professional 
group? If so, provide details.

No.

2. To your knowledge, have you ever been investigated, 
arrested, charged or convicted (including pleas of guilty or 
nolo contendre) by any Federal, State, or other law enforcement 
authority for violation of any Federal, State, county or 
municipal law, regulation, or ordinance, other than a minor 
traffic offense? If so, provide details.

No.

3. Have you or any business of which you are or were an 
officer, director or owner ever been involved as a party of 
interest in any administrative agency proceeding or civil 
litigation? If so, provide details.

It is possible that my former employers were involved in 
litigation during the periods I worked for them; however, to my 
knowledge, no suit involved allegations related to my own 
conduct, and I was not personally involved in any legal 
proceedings.

4. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered 
in connection with our nomination.

None.

                     E. TESTIFYING BEFORE CONGRESS

1. If confirmed, are you willing to appear and testify before 
any duly constituted committee of the Congress on such 
occasions as you may be reasonably requested to do so?

Yes.

2. If confirmed, are you willing to provide such information as 
may be requested by any committee of the Congress?

Yes.

                           F. FINANCIAL DATA

    All information requested under this heading must be 
provided for yourself, your spouse, and your dependents.

1. Please provide personal financial information not already 
listed on the SF278 Financial Disclosure form that identifies 
and states the value of all:

    (a) assets of $10,000 or more held directly or indirectly, 
including but not limited to bank accounts, securities, 
commodities futures, real estate, trusts (including the terms 
of any beneficial or blind trust of which you, your spouse, or 
any of your dependents may be a beneficiary), investments, and 
other personal property held in a trade or business or for 
investment other than household furnishings, personal effects, 
clothing, and automobiles; and

(Redacted)

    (b) liabilities of $10,000 or more including but not 
limited to debts, mortgages,loans, and other financial 
obligations for which you, your spouse, or your dependents have 
a direct or indirect liability or which may be guaranteed by 
you, your spouse, or your dependents; and for each such 
liability indicate the nature of the liability, the amount, the 
name of the creditor, the terms of payment, the security or 
collateral, and the current status of the debt repayment. If 
the aggregate of your consumer debts exceeds $10,000, please 
include the total as a liability. Please include additional 
information, as necessary, to assist the Committee in 
determining your financial solvency. The Committee reserves the 
right to request additional information if a solvency 
determination cannot be made definitively from the information 
provided.

(Redacted)

2. List sources, amounts and dates of all anticipated receipts 
from deferred income arrangements, stock options, executory 
contracts and other future benefits which you expect to derive 
from current or previous business relationships, professional 
services and firm memberships, employers, clients and 
customers. If dates or amounts are estimated, please so state. 
Please only include those items not listed on the SF 278 
Financial Disclosure form.

(Redacted)

3. Provide the identity of and a description of the nature of 
any interest in an option, registered copyright, or patent held 
during the past 12 months and indicate which, if any, from 
which you have divested and the date of divestment unless 
already indicated on the personal financial statement.

(Redacted)

4. Provide a description of any power of attorney which you 
hold for or on behalf of any other person.

(Redacted)

5. List sources and amounts of all gifts exceeding $500 in 
value received by you, your spouse, and your dependents during 
each of the last three years. Gifts received from members of 
your immediate family need not be listed.

(Redacted)

6. Have you filed a Federal income tax return for each of the 
past 10 years? If not, please explain.

(Redacted)

7. Have your taxes always been paid on time including taxes on 
behalf of any employees? If not, please explain.

(Redacted)

8. Were all your taxes, Federal, State, and local, current 
(filed and paid) as of the date of your nomination? If not, 
please explain.

(Redacted)

9. Has the Internal Revenue Service or any other state or local 
tax authority ever audited your Federal, State, local, or other 
tax return? If so, what resulted from the audit?

(Redacted)

10. Have any tax liens, either Federal, State, or local, been 
filed against you or against any real property or personal 
property which you own either individually, jointly, or in 
partnership? If so, please give the particulars, including the 
date(s) and the nature and amount of the lien. State the 
resolution of the matter.

(Redacted)

11. Provide for the Committee copies of your Federal income tax 
returns for the past 3 years. These documents will be made 
available only to Senators and staff persons designated by the 
Chairman and Ranking Minority Member. They will not be 
available for public inspection.

(Redacted)

12. Have you ever been late in paying court-ordered child 
support? If so, provide details.

(Redacted)

13. Have you ever filed for bankruptcy or been a party to any 
bankruptcy proceeding? If so, provide details.

(Redacted)
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EXECUTIVE BUSINESS MEETING ON THE NOMINATION OF HEATHER A. HIGGINBOTTOM 
         TO BE DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

                              ----------                              


                         TUESDAY, APRIL 5, 2011

                                       U.S. Senate,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 12:33 p.m., in 
Room S-216, The Capitol, Hon. Kent Conrad, Chairman of the 
Committee, presiding.

    Present: Senators Conrad, Murray, Wyden, Nelson,
    Stabenow, Cardin, Whitehouse, Warner, Merkley, Begich,
    Coons, Sessions, Enzi, Cornyn, Portman, Toomey, and 
Johnson.
    Staff present: Mary Ann Naylor, Majority Staff Director; 
and Marcus Peacock, Minority Staff Director.
    Also present: Dylan Morris, clerk.
    Chairman Conrad. If I could have everybody's attention.
    The meeting will come to order. We are meeting to vote on 
the nomination of Heather Higginbottom to be the next Deputy 
Director of the Office of Management and Budget.
    We will withhold statements for now. Anybody that wants to 
submit a statement may do it for the record.
    Senator Whitehouse. What, no statements?
    Chairman Conrad. Yes, there are statements but they will be 
offered in writing.
    Unless Senator Sessions has anything to add, we can move 
directly to a vote.
    Senator Sessions. So we will have time throughout the day 
to offer--
    Chairman Conrad. Yes, sir.
    Senator Sessions. Well, I am comfortable with that 
circumstance. I got to express myself at the committee and will 
be voting no.
    In light of cooperating and getting this matter done, I 
will submit a written statement.
    Chairman Conrad. I appreciate it.
    Senator Sessions. Maybe some of the other committee members 
would want to speak. I think they should be allowed to say a 
few words here before we vote.
    Chairman Conrad. Let me just say that everybody will have a 
chance to submit it in writing. I think we know that people 
have made up their minds. So why don't we go to a vote.
    The question now before the Committee is the nomination of 
Heather Higginbottom to be Deputy Director of the Office of 
Management and Budget. A quorum being present, I now move the 
Committee report this nomination to the Senate with a 
recommendation the nominee be confirmed.
    Is there a second?
    Senator Cardin. Second.
    Chairman Conrad. A second is heard.
    Senator Sessions. Can we have a roll call?
    Chairman Conrad. Yes. The clerk will call the roll.

    The Clerk. Mrs. Murray?
    Senator Murray. Aye.
    The Clerk. Mr. Wyden?
    Senator Wyden. Aye.
    The Clerk. Mr. Nelson?
    Senator Nelson. Aye.
    The Clerk. Ms. Stabenow?
    Senator Stabenow. Aye.
    The Clerk. Mr. Cardin?
    Senator Cardin. Aye.
    The Clerk. Mr. Sanders?
    [No response.]
    The Clerk. Mr. Whitehouse?
    Senator Whitehouse. Aye.
    The Clerk. Mr. Warner?
    Senator Warner. Aye.
    The Clerk. Mr. Merkley?
    Senator Merkley. Aye.
    The Clerk. Mr. Begich?
    Senator Begich. Aye.
    The Clerk. Mr. Coons?
    Senator Coons. Aye.
    The Clerk. Mr. Sessions?
    Senator Sessions. No.
    The Clerk. Mr. Grassley?
    Senator Sessions. No, by proxy.
    The Clerk. Mr. Enzi?
    Senator Enzi. No.
    The Clerk. Mr. Crapo?
    Senator Sessions. No, by proxy.
    The Clerk. Mr. Ensign?
    Senator Sessions. No, by proxy.
    The Clerk. Mr. Cornyn?
    Senator Cornyn. No.
    The Clerk. Mr. Graham?
    Senator Sessions. No, by proxy.
    The Clerk. Mr. Thune?
    Senator Sessions. No, by proxy.
    The Clerk. Mr. Portman?
    Senator Portman. Pass.
    The Clerk. Mr. Toomey?
    Senator Toomey. No.
    The Clerk. Mr. Johnson?
    Senator Johnson. No.
    The Clerk. Mr. Chairman?
    Chairman Conrad. Aye.

    Do we have Senator Sanders' proxy?
    Senator Sessions. We have proxies on this side.
    Chairman Conrad. Well, can we hold open the vote until 
Senator Sanders has a chance, under the rules?
    Ms. Naylor. Yes.
    Chairman Conrad. For how long?
    Ms. Naylor. I think we have held it open for 10 or 15 
minutes in the past.
    Chairman Conrad. I think we should ask if that's 
acceptable.
    Senator Sessions. Well--
    Chairman Conrad. What is the rule?
    Mr. Gaeta. It is Chairman's discretion.
    Ms. Naylor. You can report it out if you want, or you can 
hold it.
    Chairman Conrad. Senator Portman, will you cast a vote?
    Senator Portman. I am going to abstain.
    Chairman Conrad. All right. I think we should--we can go 
ahead and report it as is, we will just do that. We will not 
wait for Senator Sanders. I mean, everybody was advised. So we 
can report it out as 11-10.
    With that, I want to thank everyone. I know this was 
disruptive to schedules and there is so much else going on.
    I very much appreciate everybody coming here to cast a 
vote.
    With that, we will report the nomination.
    [Whereupon, at 12:37 p.m., the Committee was adjourned.]

                                 
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