[Senate Hearing 113-230]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-230

NOMINATION OF HONORABLE SYLVIA MATHEWS BURWELL, OF WEST VIRGINIA, TO BE 
            DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               ----------                              


April 10, 2013--NOMINATION OF HONORABLE SYLVIA MATHEWS BURWELL, OF WEST 
    VIRGINIA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET



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                                                        S. Hrg. 113-230

NOMINATION OF HONORABLE SYLVIA MATHEWS BURWELL, OF WEST VIRGINIA, TO BE 
            DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET


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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

April 10, 2013--NOMINATION OF HONORABLE SYLVIA MATHEWS BURWELL, OF WEST 
    VIRGINIA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




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                        COMMITTEE ON THE BUDGET

                   PATTY MURRAY, WASHINGTON, CHAIRMAN

RON WYDEN, OREGON                    JEFF SESSIONS, ALABAMA
BILL NELSON, FLORIDA                 CHARLES E. GRASSLEY, IOWA
DEBBIE STABENOW, MICHIGAN            MICHAEL B. ENZI, WYOMING
BERNARD SANDERS, VERMONT             MIKE CRAPO, IDAHO
SHELDON WHITEHOUSE, RHODE ISLAND     LINDSEY O. GRAHAM, SOUTH CAROLINA
MARK R. WARNER, VIRGINIA             ROB PORTMAN, OHIO
JEFF MERKLEY, OREGON                 PAT TOOMEY, PENNSYLVANIA
CHRISTOPHER A. COONS, DELAWARE       RON JOHNSON, WISCONSIN
TAMMY BALDWIN, WISCONSIN             KELLY AYOTTE, NEW HAMPSHIRE
TIM KAINE, VIRGINIA                  ROGER F. WICKER, MISSISSIPPI
ANGUS S. KING, JR., MAINE

                     Evan T. Schatz, Staff Director

                 Eric Ueland, Republican Staff Director

                                  (ii)


























                            C O N T E N T S

                               __________

                                HEARING

                                                                   Page
April 10, 2013--Nomination of Honorable Sylvia Mathews Burwell, 
  of West Virginia, to be the Director of the Office of 
  Management and Budget..........................................     1

                    STATEMENTS BY COMMITTEE MEMBERS

Chairman Murray..................................................     1
Ranking Member Sessions..........................................     8

                               WITNESSES

The Honorable Joe Manchin Iii, A United States Senator From The 
  State Of West Virginia.........................................    10

                        BIOGRAPHICAL INFORMATION

Statement of Biographical and Financial Information Requested of 
  Presidential Nominee Honorable Sylvia Mathews Burwell to be 
  Director of the Office of Management and Budget................    41


                     ANSWERS TO QUESTIONS SUBMITTED

Chairman Murray..................................................    61
Ranking Member Sessions..........................................    72
Senator Wyden....................................................    87
Senator Portman..................................................    89
Senator Crapo....................................................    90
Senator Enzi.....................................................    93
Senator King.....................................................    96



 
    THE NOMINATION OF THE HONORABLE SYLVIA MATHEWS BURWELL, OF WEST 
    VIRGINIA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

                              ----------                              



                       WEDNESDAY, APRIL 10, 2013

                              United States Senate,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:31 a.m., in 
Room SD-608, Dirksen Senate Office Building, Hon. Patty Murray, 
Chairman of the Committee, presiding.
    Present: Senators Murray, Sanders, Whitehouse, Warner, 
Merkley, Kaine, King, Sessions, Grassley, Crapo, Portman, 
Johnson, and Ayotte.
    Staff Present: Evan T. Schatz, Majority Staff Director; and 
Marcus Peacock, Minority Staff Director.

              OPENING STATEMENT OF CHAIRMAN MURRAY

    Chairman Murray. Good morning. This hearing will come to 
order. I want to thank my Ranking Member, Senator Sessions, and 
all of our colleagues for joining us here today, as well as 
members of the public who are here or watching online.
    Today we are considering President Obama's nomination of 
Sylvia Mathews Burwell to be the next Director of the Office of 
Management and Budget.
    Sylvia, thank you so much for joining us here today.
    I also want to welcome your husband, Stephen Burwell, and 
your sister, Stephanie O'Keefe, who I understand are with you 
today. Welcome to both of you.
    As everyone in this room knows, those of us in public 
service could not do our jobs without the support of our 
families. So we really appreciate your being here and all you 
do, and I want to recognize that at the top.
    I also want to recognize Jeff Zients this morning for his 
outstanding service as Acting Director of OMB. Jeff's 
leadership at OMB has been instrumental during a critical time 
for our country. As Acting Director, Jeff has helped us tackle 
some of our most pressing fiscal issues over the past few 
years, and we have been very fortunate to have his skilled 
leadership, and I want to thank him again for his service. And, 
of course, we will hear from him tomorrow in this Committee on 
the President's 2014 budget.
    As we all know, our country faces serious fiscal and 
economic challenges that we need to work together to address.
    Right now the economy is recovering, but far too slowly. 
Millions of workers are still looking for too few jobs. 
Millions of families are still worrying about staying in their 
homes or putting food on the table.
    And we have serious long-term deficit and debt challenges 
that we need to tackle since we certainly do not want to leave 
our children and grandchildren with a pile of unmanageable 
bills.
    And the American people are, of course, sick and tired of 
the gridlock that has paralyzed the budget process here in 
Washington, D.C. So they are looking to us to end the constant 
artificial crises and political brinkmanship that is 
threatening our fragile economic recovery. And they want us to 
come together around fair solutions that work for the middle 
class, help our economy grow, and tackle our deficit and debt 
responsibly.
    That is why I am proud of the work we did here in this 
Budget Committee and on the Senate floor last month to write, 
debate, and pass a responsible budget plan that puts economic 
growth and the middle class first.
    The Senate budget that we passed invests in jobs and 
economic growth, tackles our deficit and debt fairly and 
responsibly with an equal mix of spending cuts and new revenue 
from the wealthiest Americans, and it keeps the promises we 
have made to our seniors, our veterans, our families, and our 
communities. But passage of our budget is not the end of the 
discussion. The work needs to continue until we get the 
balanced and bipartisan deal the American people expect and 
deserve.
    That is why now, more than ever, it is so important that we 
continue to have strong leadership at the Office of Budget 
Management, which is why I am very pleased that we are here 
today and have a very qualified and exceptional nominee in 
Sylvia Burwell.
    Sylvia knows what it means to invest in job creation in the 
short term while working to put our country on a strong path to 
responsible and sustainable deficit and debt reduction over the 
medium and long term.
    In the 1990s, she was a critical part of President 
Clinton's economic team, serving as Deputy Director of the 
Office of Management and Budget, Deputy Chief of Staff to the 
President, and Chief of Staff to the Secretary of the Treasury.
    During her tenure in the Clinton administration, we saw 
broad-based economic growth and responsible budgets that worked 
for our middle class. As Deputy Director of OMB in the late 
1990s, Sylvia helped preside over three of the four budget 
surpluses experienced in a row.
    Businesses saw Government taking a credible and sustainable 
approach to our Federal budget, and it gave them the confidence 
to hire new workers and invest in their growth. Middle-class 
workers were getting better jobs, spending their money, and 
building prosperity.
    This economic growth, built from the middle out, along with 
the balanced and responsible fiscal stewardship, turned our 
deficit and debt challenges around then. Federal revenue 
increased from 17.5 percent of GDP to 20.6 percent. At the same 
time, responsible spending cuts lowered Federal spending by 
almost four percentage points. And as a result, a 4.7-percent 
deficit was turned into a 2.4-percent surplus in 8 years.
    The lessons of the 1990s are vital to the discussions we 
are having today about our budget and our economy. So I believe 
that Sylvia's experience working on a balanced, responsible 
approach to deficit reduction will bring important knowledge 
and a key perspective to OMB.
    Following her work in the Clinton administration, Sylvia 
continued her public service by leading major organizations in 
the nonprofit and foundation world.
    At the Gates Foundation, she served as the president of the 
Global Development Program and chief operating officer, working 
to expand their global efforts to improve the lives of others 
across the world.
    Most recently, as president of the Walmart Foundation, 
Sylvia has continued to create a positive impact on our 
communities, focusing on critical issues such as hunger relief 
and women's economic empowerment.
    Sylvia's experience managing billion-dollar global budgets, 
combined with her leadership on domestic fiscal policy in the 
1990s, make her a uniquely qualified candidate to lead OMB and 
to help shape our country's economic future.
    And not only does Sylvia's professional experience make her 
a strong nominee for this position; she also brings an 
important personal outlook to the job. Raised in West Virginia 
as the granddaughter of Greek immigrants, Sylvia grew up with 
the values of hard work and the promise of American 
opportunity.
    She has seen firsthand that budgets are not just about 
abstract numbers and the partisan back-and-forth that too often 
dominates the conversation. She knows they are reflections of 
our values and our priorities, and they are about our families 
across the country whose lives and futures are impacted by the 
decisions that we make.
    There are tough challenges before Sylvia and all of us here 
on the Budget Committee.
    I have had the opportunity to sit down personally with 
Sylvia and to discuss the approach she will take to these 
important issues. And I am confident that she possesses the 
kind of experience, integrity, and expertise necessary to 
succeed in this position, and that she will work to tackle our 
debt and deficit issues in a balanced way, by prioritizing 
fairness, opportunity, and a return to the responsible fiscal 
and economic policies that have worked for our country before.
    Especially during these difficult economic times, it is 
critical that we continue having strong and consistent 
leadership at OMB. The Committee's Ranking Member, Senator 
Sessions, and I agree that it is time to return to a pattern of 
stability and continuity with regard to our budget process.
    The Senate budget we passed last month was a key step 
towards that. And Senator Sessions and I agree that confirming 
a permanent Director of OMB is another important part of this 
effort. So I hope that we can move quickly as a Committee on 
this nomination since we cannot continue to have uncertainty in 
this position. And I hope to schedule a Committee vote, for the 
information of our Senators, on this nomination soon so that 
the full Senate can confirm the nominee in a timely manner.
    Senator Manchin will be joining us in just a moment, and he 
will introduce Sylvia. I look forward to asking you some 
questions. And before we do that, I am going to turn to Senator 
Sessions, my Ranking Member, for his comments.

             OPENING STATEMENT OF SENATOR SESSIONS

    Senator Sessions. Thank you, Madam Chairman, and this is 
the third time during the President's administration that we 
have been called upon to advise and consent on a nominee to be 
the Director of the Office of Management and Budget. The 
primary responsibility of OMB is to assist the President in 
overseeing the preparation of the Federal budget. The office is 
supposed to help the President formulate his spending plan by 
evaluating the effectiveness of agency programs, policies, and 
procedures in order to set funding priorities.
    Notwithstanding this, one of the first actions of this 
administration was to eliminate the Program Assessment Rating 
Tool, the PART program, designed to evaluate the effectiveness 
of agency programs, I have to say drafted and the architect of 
that is Marcus Peacock, my chief Staff Director here on the 
Committee. It was a good program. I think it was the right 
thing to do.
    Ms. Burwell will be called upon to right the ship, the 
financial ship of state. The previous Directors have not 
submitted timely or responsible budgets. Indeed, we are going 
to receive the President's budget today, which was due, 
according to Federal law, by the first Monday in February. The 
budget is over 2 months overdue.
    By all accounts, Ms. Burwell is well liked, an able leader 
with a commitment to public service. She brings some relevant 
experience to the task, having previously served as Deputy 
Director of OMB, and has other budgetary experience as the 
Chief of Staff to the Secretary of the Treasury and the Staff 
Director for the National Economic Council.
    But her most recent experience has been in the charitable 
sector with the Walmart and Bill and Melinda Gates Foundations. 
So it has been more than a decade since she has been at OMB.
    The Director of OMB is one of the most crucial positions in 
our Government. There is just no doubt about it. In addition to 
preparing the budget, the OMB Director must evaluate program 
effectiveness throughout the Government, set priorities, 
represent the President, and have the strength to say no to 
agency demands that just cannot be met. The Director needs to 
protect the taxpayers.
    We would normally look for someone with a proven record, 
perhaps like a Governor who has managed a State and balanced a 
budget. But Ms. Burwell will have that opportunity to prove 
that she is up to that task.
    But make no mistake. It is a tough job. The OMB Director 
must be able to say no.
    I believe the next Director should be committed to offering 
a balanced budget. The national debt is currently $16.7 
trillion and growing every week, every month. This is an 
unsustainable debt course. The actions of the new Director will 
reflect whether deficits matter for this administration. We 
will tell immediately by seeing the budget.
    Will the next Director lead or take the path of former 
Director Jack Lew? Mr. Lew said of his 2011 budget, ``Our 
budget will get us over the next several years to the point 
where we can look the American people in the eye and say we are 
not adding to the debt anymore, and we are spending money we 
have each year. And then we can work on bringing down our 
national debt.''
    That was not accurate. It just was not true.
    We must have honesty in the OMB Director. Mr. Lew's--
Senator Manchin, it is great to have you.
    Senator Manchin. It is always get to be here.
    Senator Sessions. And we are glad to have West Virginia 
values before us today in full force.
    Mr. Lew's budget that he submitted never had a single year 
with less than $600 billion in deficit. So it came nowhere 
close to what he indicated to the American people his budget 
would do.
    The American people must be given the truth about our 
financial situation. You cannot ask them to make changes and 
make tough decisions if they do not know what the real facts 
are. You must not repeat that performance. You and I have 
talked about it.
    Will the next Director take the view of liberal economist 
Paul Krugman, who has indicated that even wasteful spending is 
good? This is what he said recently: ``Whether it is 
entitlements or not, even if it is defense, even if it is 
wasteful spending, it is going to hurt the economy if you cut 
it right now. It does not mean we should not look for ways to 
cure waste, but now to a large effect, spending is spending.'' 
In other words, spending is good even if it is borrowed, even 
if it is on a wasteful program. That is not the correct view.
    Just yesterday, the Government Accountability Office 
released its third annual report highlighting extensive 
duplication and overlap in hundreds of Federal programs. In the 
last two reports, GAO has identified more than 1,300 
overlapping programs, costing the taxpayers more than $365 
billion each year. This widespread duplication is costing 
hundreds of billions of dollars in excess Government spending. 
It can be eliminated. It must be eliminated.
    The taxpayers of this country deserve a Government that is 
lean, efficient, and productive. The Nation will benefit from 
such a Government. But, unfortunately, this administration 
seems to be more inclined to spend, more inclined to follow the 
Krugman approach. I hope that will change.
    Finally, it has become clear that our debt level is already 
pulling down economic growth and job creation. The Rogoff-
Reinhart report that dealt with the threshold level of 90 
percent of GDP is pretty well known in this Committee. But the 
International Monetary Fund, the European Central Bank, and the 
Bank for International Settlements have also done studies that 
indicate the debt level of the United States today is already 
above the level at which it begins to slow growth. We have to 
understand that. The recent job numbers, the recent fourth 
quarter sad growth numbers are indicative that we are not 
growing at the level we need to. I am more and more convinced, 
as these studies indicate, that the already high debt level is 
pulling down economic growth, curtailing job creation, and we 
have to get off that path.
    So this is an important hearing, Madam Chair. I look 
forward to asking Ms. Burwell her views on the state of the 
Nation's financial condition and her plans for helping us fix 
it.
    Chairman Murray. Thank you very much, Senator sessions.
    And, with that, we are delighted to have Senator Manchin 
join us today to introduce Ms. Burwell. He knows that she is a 
native West Virginian and shares the values that I think are so 
important to him and to the country. So, Senator Manchin, thank 
you.

  STATEMENT OF THE HONORABLE JOE MANCHIN III, A UNITED STATES 
            SENATOR FROM THE STATE OF WEST VIRGINIA

    Senator Manchin. Madam Chairman, thank you so much. I am 
sorry for my tardiness, but it definitely is important for me 
to be here with my dear friend.
    Sylvia Mathews Burwell to your Committee is going to be 
someone that you are going to enjoy working with, I know. She 
is a great American. She is a great West Virginian from the 
great town of Hinton, West Virginia, in Summers County, a 
little town in the foothills of beautiful New River that flows 
through Hinton Reservoir. And she is going to make just a great 
Director of the Office of Management and Budget.
    I am proud to support Sylvia's nomination for this 
prestigious position, one in which she will be responsible for 
managing our Federal spending as we make the tough decisions to 
put our fiscal house in order. She will be a great partner in 
that effort with each and every one of you.
    Sylvia and her family reflect the heart and soul of West 
Virginia, a State where people are defined by their deeds as 
much as their words. This lady is grounded. She understands 
where she comes from. She understands who she is.
    It does not surprise any of us who know the Mathews family 
count them among our dearest friends. Her parents are truly my 
friends. They are community leaders in Hinton. For over half a 
century, her father, Dr. William Mathews, is a long-time 
optometrist and a leading proponent of his wife, Cleo, which is 
her mother, who is our town mayor. And she was also head of the 
State Board of Education for two terms. So this lady's DNA is 
rooted deep with public service. Not only did Cleo serve as our 
mayor of Hinton; she spent 8 years on the State Board, two as 
the president of the State Board of Education. She was on the 
Development Board, served as vice president of the National 
Association of State Boards of Education. She served on the 
Board of Directors of the West Virginia Municipal League, and 
it goes on and on.
    Indeed, Sylvia has traveled the world over, but she has 
never lost touch with her West Virginia roots. She went off to 
Harvard and was a Rhodes Scholar. But no matter where she is, 
one day each week of her life, each week since she has left 
West Virginia, like clockwork, she is on the phone with two of 
her best friends that she made in the first grade in Hinton, 
West Virginia. That tells you that she is grounded, and they 
are here, right? There we go.
    I would hope that you would give Sylvia's resume a quick 
glance, and you can see that she could earn a fortune in the 
corporate world if she wanted to. But instead she has spent her 
life helping people all over the world.
    I share the beaming pride that her parents and her husband, 
Stephen, have in her life and in her life's work. As many of 
you know, Sylvia dedicated the last 11 years to serving the 
greater good, helping the least fortunate among us both in the 
United States and throughout the world as a visionary leader 
with the Bill and Melinda Gates Foundation and more recently 
with the Walmart Foundation.
    She served as chief operating officer and executive 
director at the Gates Foundation from its inception in 2001 
until 2006 at which point it was firmly established as a global 
philanthropy leader.
    Sylvia then transitioned to the Gates Foundation Global 
Development Program where she served as president until 2012 
and led the foundation's $725 million annual effort to improve 
the lives of more than 200 million people worldwide. Under her 
leadership, the foundation broke new ground in pursuing 
sustainable investments in agricultural development, low-income 
financial services, water and sanitation, global literacy, 
emergency relief, and poverty alleviation.
    Finally, as president of the Walmart Foundation throughout 
2012, she led the company's charitable giving efforts and the 
Global Women's Economic Empowerment Initiative.
    While her philanthropic achievements speak great volumes 
about her character, we should remember that she is no stranger 
to Washington or the Office of Management and Budget. She 
served as Deputy Director of the OMB from 1998 to 2001, our 
last era of fiscal responsibility, when balanced deficit 
reduction gave us balanced Federal budgets. We all know that 
Sylvia was a key part of the Clinton White House team that 
reached across the aisle and negotiated those balanced budgets 
with the Republican Congress. This experience as a problem 
solver and a bridge builder is in high demand these days. We 
should take to heart the advice Clinton White House Chief of 
Staff Erskine Bowles gave her: ``You attract more bees with 
honey.''
    Of course, the 6 years she had previously spent in the 
Clinton administration prepared her well for those tough 
negotiations. Assistant to the President, Deputy Chief of 
Staff, Deputy Chief of Staff to the Treasury Secretary, Staff 
Director for the National Economic Council, and Special 
Assistant to the head of the National Economic Council, Sylvia 
Mathews Burwell is uniquely qualified to serve as the Director 
of the Office of Management and Budget. Not only is she an 
expert on budgetary and domestic policies, but she also has a 
proven record of working in a bipartisan way to produce 
meaningful and enduring results. She understands that a 
bipartisan solution is a lasting solution.
    Madam Chairwoman, I can only say this about Sylvia: She 
understands the value of a dollar. Where we come from, we have 
to stretch that dollar as far as we can, and I implore all of 
my friends on both sides of the aisle to truly accept this 
wonderful lady who is as grounded as any grounded West 
Virginian or American that I know to do the job that she will 
do for this great country. I present to you Sylvia Mathews 
Burwell.
    Chairman Murray. Thank you very much, Senator Manchin, for 
that very gracious statement, and I appreciate your 
participating today. I know you have a very busy schedule.
    Senator Manchin. I am so sorry.
    Chairman Murray. Not a problem if you need to go ahead and 
leave. That is all right. We will go ahead and work through our 
questions with her. But thank you very, very much for that.
    Senator Manchin. Thank you.
    Senator Sessions. Thank you, Senator Manchin. We value your 
opinion.
    Senator Manchin. Thank you, sir. I appreciate it.
    Chairman Murray. Under the rules of the Committee, we are 
now required to testify under oath, so, Ms. Burwell, if you 
want to rise so I can administer the oath. Do you swear the 
testimony that you will give to the Senate Budget Committee 
will be the truth, the whole truth, and nothing but the truth?
    Ms. Burwell. I do.
    Chairman Murray. 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. Burwell. I will.
    Chairman Murray. Please be seated.
    We will now have a chance to hear from Ms. Burwell, and, 
again, thank you so much for being here, to you and your 
family. Senator Manchin?
    Senator Manchin. If I could say one thing, I also have a 
statement from Senator Rockefeller. As you know, we both 
totally are in agreement and extreme support, so I want to also 
present for the record his statement.
    Chairman Murray. Absolutely. We will include that in the 
record as well.
    Senator Manchin. Thank you.
    Chairman Murray. Thank you very much.
    Chairman Murray. With that, Ms. Burwell, it is a delight to 
have you here. I am glad you have your support team of your 
family and best friends. Go ahead and proceed with your 
testimony.

  TESTIMONY OF THE HONORABLE SYLVIA MATHEWS BURWELL, OF WEST 
   VIRGINIA, TO BE DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

    Ms. Burwell. Thank you, Chairman Murray and Ranking Member 
Sessions and the members of the Committee, for welcoming me 
today. It is a privilege to be considered by this Committee as 
the President's nominee to be Director of the Office of 
Management and Budget.
    I want to thank Senator Manchin for his gracious and kind 
introduction and, as a West Virginian, thank him for his 
service both here and in our State when he was Governor. I feel 
very privileged to actually know both of my Senators for an 
extended period of time, so it is a great privilege to be 
introduced by both of them.
    And I am pleased that my family could join me today: my 
husband, Stephen, and my sister, Stephanie. Our 5-year-old 
Helene and our 3-year-old Matthew thought that the park was a 
better option than listening to Mommy answer questions, so they 
are not with us today. I understand the sacrifices entailed by 
public service, and I recognize that the biggest burden falls 
on one's family members. So I deeply appreciate their support 
as I seek to take on this new challenge.
    I am also grateful to President Obama for nominating me to 
serve in this position as the Director of the Office of 
Management and Budget. It is an honor to be considered for this 
position at this important time.
    Finally, I want to thank the members of this Committee and 
their staffs for making the time to meet with me over the last 
few weeks and for sharing your insights. For those of you that 
we have not had the opportunity to meet with face to face, I 
look forward to that. And if I am confirmed, I very much look 
forward to continuing our conversations that we have started.
    I believe in the greatness of our Nation. As a second-
generation Greek American, my family and I have benefitted 
greatly by the opportunities this country has to offer.
    Our Nation has made important progress over the last 4 
years. We pulled out of a deep economic downturn. Our financial 
markets have stabilized. Businesses are hiring again. And we 
have begun the very long journey to put our fiscal house in 
order.
    The President and the Congress together have made progress 
on the deficit, but there is much more to do. And we need to 
focus on making our economy work for middle-class families and 
American business, in both the short and the long term.
    If I am confirmed, my primary focus will be to contribute 
to achieving balanced deficit reduction, increased efficiency 
and effectiveness in how our Government works, and targeted 
investments that grow the economy and create jobs for the 
American people.
    The President is actively engaged with Members of Congress 
on this subject. And if I am confirmed, I will do everything in 
my power to keep this dialogue going and to continue to build 
on the relationships between the administration and the members 
on both sides of the aisle.
    From my experience in the Clinton administration--at OMB, 
the White House, and the Treasury Department--I learned the 
importance of working together in a bipartisan fashion to get 
things done. I saw firsthand how the deficit reduction 
agreements of the late 1990s were reached. I know that when we 
all come to the table, we come with firm convictions and the 
belief that we know the right answer. We also, though, come 
with the same conviction to serve the American people, which I 
hope will drive us to find common ground to move the country 
forward.
    There is no question that the road ahead will be difficult. 
The challenges we face are sobering. But I am confident we can 
come together on a comprehensive plan.
    I am pleased with the prospect of returning to OMB. I have 
tremendous respect for the institution and the incredibly 
talented men and women who work there. I am hopeful that, if I 
am confirmed, I can contribute to ensuring OMB is a place where 
talented people want to go and that the institution is strong 
for other administrations. Although OMB is most well known for 
its work on the Federal budget, the management side of OMB is 
critical as well.
    In the current fiscal environment, it is more important 
than ever that we are operating the Government in the most 
efficient and effective manner.
    I want to credit Acting Director Zients for his strong 
leadership in these areas. If I am confirmed, I want to work to 
build on those efforts and the success and to continue to 
increase the efficiency and effectiveness of taxpayer dollars. 
By governing smartly and being good stewards, we can reduce the 
deficit and increase the value of what that we deliver.
    As someone who has been out of Government now for 12 years, 
I am hopeful that I can bring a fresh perspective to the fiscal 
debates underway. From my positions at the Walmart Foundation 
and the Bill and Melinda Gates Foundation, I have seen the 
important role that both Government and the private sector play 
in the lives of the American people.
    If I am confirmed, it would be an honor to dedicate myself 
to using the tools at OMB to ensuring that our Government 
delivers for the American people.
    Again, I want to thank the President for giving me this 
opportunity and the Committee for considering my nomination. I 
look forward to answering the questions that you may have.
    Chairman Murray. Thank you very much.
    Let me begin. Ms. Burwell, you previously served as Deputy 
Director of OMB for 3 years. Correct?
    Ms. Burwell. Two.
    Chairman Murray. Two years. And before that, you were Chief 
of Staff to Secretary Rubin at Treasury as well as Deputy to 
White House Chief of Staff Erskine Bowles, two people who are 
well known and respected by this Committee. Correct?
    Ms. Burwell. That is correct.
    Chairman Murray. Okay. And following your time at OMB, you 
continued working in similar financial and management roles for 
some of the largest philanthropic institutions in the world. 
Right?
    Ms. Burwell. Yes.
    Chairman Murray. While very different from your Federal 
service, I expect you experienced similar challenges at those 
large nonprofit institutions regarding how best to fulfill core 
missions given scarce resources, competing demands, and diverse 
workforces. Correct?
    Ms. Burwell. That is correct.
    Chairman Murray. And now you are returning somewhat full 
circle back to Government service and facing and political and 
budgetary climate that is pretty different than the one you 
left 12 years ago.
    So I wanted to offer you the opportunity this morning to 
really comment on the challenges and the opportunities that you 
see today and to tell this Committee how you view your 
extensive experience in the Federal and nonprofit sectors as 
helping you meet those challenges.
    Ms. Burwell. Thank you, Chairman Murray.
    In terms of the challenges, I think I spoke to those a 
little bit in my statement. I think we have challenges with 
regard to making sure that the current economic recovery gets 
on its way and continues for the American people. When I think 
about the role of OMB Director, I start at the end and start 
with the people in Hinton, start with the American people. That 
is the end, and that is where our outcome is. Often in 
philanthropy you talk about measurement, and you talk about 
outputs and outcome. The outcome is what we do for the American 
people, and that is why we think about the budget. That is why 
we think about any of the things that we are working on. It is 
about an outcome.
    And I think the challenge is to make sure that we are 
producing the best outcome in terms of a healthy economy for 
working Americans and American business. And I think right now 
that is a particular challenge for a number of reasons. It is a 
particular challenge because we have a very large hole. We are 
in a place where we have--as was reflected in comments, we have 
a large deficit, and we have a large debt. And to work our way 
out of that is a very important thing.
    At the same time, we have recovery that is starting, and 
that is something that we have to consider so that we make sure 
we can stay on the path that we are currently on, where there 
is actually job creation for Americans who want to work, and 
have the ability. The last part that I think is a challenge in 
terms of your question is thinking through the issues that we 
are responsible for the investments now in both the short and 
long term that will keep this economy healthy and be able to 
deliver on commitments we have made as a Nation. I think those 
are three extremely large challenges.
    With regard to my experience, I would say there are a 
number of things. First, working in philanthropy--and this gets 
back to a comment that Senator Sessions made--most of my days 
are filled with no. There are many more noes than yeses, 
actually, when one works in philanthropy. And so that is an 
experience that I have on a daily basis. And being able to say 
no in ways that are respectful, you can imagine the many great 
things that I see every day that people want to fund, and there 
are great things, but doing it in a respectful way. So the 
ability to say no.
    The other things that I think my experience over the last 
years since I was in Government helped with is how I think 
about problem solving and focus. I think about things like 
strategy, structure, people in terms of that framing. I think 
about the importance of measurement and focusing deeply on 
impact. And the other thing that I think I have learned a 
tremendous amount about in the last 12 years is the importance 
of culture of an institution and culture that a leader sets in 
terms of as a leader it is very important that you set the tone 
at the top.
    So those are some of the elements that I hope I would bring 
if I am confirmed.
    Chairman Murray. I am assuming being the mother of two 
small children, the ability to say no in a good way is also 
part of your life.
    Ms. Burwell. It is. As my husband and I experienced this 
morning.
    [Laughter.]
    Chairman Murray. All right. Well, one area that you and I 
talked about when we visited was the importance of re-
establishing regular order. It is something Senator Sessions 
and I have really focused on together. We did our part here 
last month by passing a budget on time through the Senate, and 
I know from our discussions you have similar concerns regarding 
the current overreliance on budgeting by crisis.
    Can you talk a little bit about the importance of regular 
order and the role that it had in creating some of the 
successes that we had in the 1990s?
    Ms. Burwell. Yes, Senator. Thank you. I think that regular 
order was an important part of the process, because I think the 
order that has been set up, the processes that the Congress 
follows and that the executive branch follows--and I will start 
by saying you have my commitment to do everything in my power 
to deliver a budget on time, which is a part of regular order. 
And so in terms of what I can do to do that, that is something 
I would start with.
    But in terms of how the regular order helps the process, 
the regular order is about bringing people together to 
prioritize. I think that is one of the most difficult things 
that we all need to do, and especially in difficult budget 
times, is that prioritization. And it first starts in the 
process of this Committee and what this Committee does to set 
the major pieces to guide the appropriations process so that it 
can do its next level of prioritization. And so that we afford 
both the expertise of the Committees and the experience of the 
Committees to apply and use that order to do that 
prioritization. And I think those were important parts of what 
contributed to a process that afforded us the opportunity to 
get to agreements during that time.
    Chairman Murray. And I assume getting a permanent OMB 
Director is part of that regular order as well.
    Ms. Burwell. Yes, I think it is a part of the regular 
order.
    Chairman Murray. Okay. Before I turn it over to Senator 
Sessions, I just wanted to clarify one thing. I know the 
President's budget is coming out today, sometime here shortly 
if it is not out, and I know a lot of our members are really 
interested in the details. For the record, I want to make it 
clear, Ms. Burwell, you were not involved in developing the 
President's 2014 budget submission. Is that an accurate 
statement?
    Ms. Burwell. That is an accurate statement. This process 
has been different than the last time when I came through the 
process to be Deputy Director. At that point I was in 
Government, so I was in a very different position. At this 
point I am a private citizen and so have not been privy to the 
conversations or the budget itself. So my knowledge is limited 
to whatever knowledge everyone has from a public perspective.
    Chairman Murray. Okay. I appreciate that, and I would 
remind all of our Committee members that Acting Director Jeff 
Zients will be here tomorrow to discuss the President's budget, 
so we will have a great opportunity then to ask questions on 
that side.
    Thank you very much, Ms. Burwell, and I will turn it over 
to Senator Sessions.
    Senator Sessions. Thank you, Madam Chair. I believe we were 
in a position to move forward with this nomination, you know, 
rapidly. I do not know of any problems at this stage. If 
something develops, we will raise that with you, Madam Chair, 
but we would be cooperative in moving forward to a vote.
    At this point I would yield to Senator Grassley, who has a 
scheduling difficulty, and I will allow him to take my slot for 
questions.
    Senator Grassley. I appreciate that very much, and I 
appreciate your coming to my office to have a conversation. And 
I feel that you probably will have smooth riding unless 
something happens here all of a sudden that we do not know 
about.
    You have already answered one of my questions, but I still 
want to go back to it, and it was a question that the 
Chairwoman asked about delivering a budget on time. So, 
obviously, you said--you have expressed it as a concern of 
yours, and you said you do want to improve and deliver a budget 
on time. Considering the fact that--and I was going to start 
out with this statistic. It is not just the recent budget, but 
we have budgets for February, we have a mid-session review, and 
we have a financial report at the end of the year. And all of 
these deadlines, out of the last 15, 14 of them have been 
missed.
    So do you really think that you can improve upon that? I 
hope you can, but, I mean, I am challenging you.
    Ms. Burwell. Senator, I think that I can improve. One of 
the things that I will do when I get into the organization is 
to understand which ones I can influence on which timetable. As 
you know, some of these processes are in train, so you 
mentioned the mid-session and that, of course, is on my mind as 
I think about it and even as the budget is coming out today, I 
was thinking about the mid-session.
    I do not know what processes are in train and that sort of 
thing, but I think that I can over time influence it. The 
immediacy of my influence when I come in is something that is 
fair to ask the question. But over the long term, yes, I think 
I can, and that is something that I believe is an important 
part of putting together plans and approaches to trying to meet 
these deadlines.
    Senator Grassley. Okay. I want to go to kind of the 
management aspect of your--but it also comes from a budget 
decision that we made, and that is sequester. It is my 
understanding that the office now had put out 3 or 4 months 
ago, in anticipation of sequester, memos that there needs to be 
a priority for national defense, law enforcement, health, and 
safety. So you get these oddities about meat-packing plants 
going to shut down, which obviously deals with health or 
safety, because of sequester. Or you are going to lay off 700 
FBI agents or furlough them because of sequester.
    It seems to me those things come in the area of law 
enforcement and health and safety, so what power do you have 
over these agencies following your recommendations that these 
things ought to have priority? Because it seems to me there are 
a lot of things in these departments that ought to be 
sequestered before furloughing FBI agents or shutting down 
meat-packing plants?
    Ms. Burwell. Senator, if confirmed, I think one of the 
first things I would do is try and understand and work with the 
departments to understand how they have thought about the 
prioritization. I think you articulate the part that I do know, 
which is departments were told to prioritize mission, and you 
articulated some specific missions in terms of that. And what I 
would do is work to understand how they are thinking about 
those choices as they work through that.
    I think the budget process itself, as we start to think 
about the next year--because OMB will already start to think 
about the next year--will be an important process for how I 
will engage and the entire Office of Management and Budget will 
engage with departments as they think about that 
prioritization.
    Senator Grassley. Does your office, though, have the power 
to enforce those priorities or not? I mean, that is what the 
law says, not what you might want to do or not do.
    Ms. Burwell. In terms of the enforcement of sequestration 
and exactly how it is implemented, I am going to say I will 
have to check exactly who sits with the authority. But I think 
what one wants to get to a place where we are all working 
towards the same objectives of making sure we are protecting as 
much of the mission as we can and go about doing that in the 
right way.
    Senator Grassley. The next question I ask because of a 
statement that Gene Sperling made. Can you really raise $1 
trillion in new taxes without hitting the middle class? And he 
said that you would not be able to raise that amount of money 
without harming the middle class.
    Ms. Burwell. I think that right now when I think about the 
question, the broad question of revenues and where we are in 
the revenue space, and when I think about ATRA and the work 
that was done in ATRA in terms of $620 billion and I understand 
perhaps it was not everyone's first choice, and I think that is 
part of compromise--that there was an ability to do that. And 
so I think we are talking about at this point, as was 
articulated and what is public--and I understand the fiscal 
cliff portion_is another 580 billion. So I think the number 
that we are then talking about is can you find $580 billion in 
the context of what we would think about is wasteful spending, 
loopholes, things that people agree that people should not have 
certain of these advantages. And I think that is where you 
would get to that larger number.
    Senator Grassley. Without hurting the middle class?
    Ms. Burwell. I think you are hopeful that you can do it, 
and I think some of the examples that have been talked about 
that are public--again, as the Chairman said, I am not familiar 
with all the examples that will be in today's budget, but the 
issue of the 28 percent and what types of deductions people are 
able to take, and so you align that more across the board in 
terms of the maximum amount that many are able to take.
    Chairman Murray. Thank you.
    Senator Whitehouse?
    Senator Whitehouse. Thank you. I want to assure Senator 
Grassley that I can give him a trillion-dollar list that gets 
you there without hurting the middle class. I look forward to 
working with you on that.
    Senator Grassley. He did not agree with you.
    Senator Whitehouse. He did not see my list.
    I have a couple of quick points I would like to see if I 
can get through in my short time. My colleagues know that I 
talk about health care delivery system reform all the time in 
this Committee. There is a bipartisan and nonpartisan agreement 
from lots of leading folks that the savings per year, between 
$700 billion and $1 trillion, and that you get there by 
improving the quality of care.
    In that battle, we need OMB to be supporting HHS as they 
try to implement the 45 noncontroversial provisions in the 
Affordable Care Act that improve our health care system and 
lower cost, and we need you to be working with us to try to 
figure out better ways to fit that into our budgeting process 
because of the scoring dilemmas.
    Will you work with us on that as a priority?
    Ms. Burwell. Senator, as the Director of OMB, it is one of 
the responsibilities to look at the scoring issues and talk 
about the scoring issues, whether those are specific ones or 
broader ones that we might discuss today.
    Senator Whitehouse. And to support HHS in its efforts to 
move that regulation forward, which takes me to my second 
point. OMB has in some places become the place where 
regulations just go to die. You are supposed to get regulations 
out in 120 days. EPA's draft guidance on identifying waters 
protected by the Clean Water Act has been sitting there 414 
days, and the Chemicals of Concern List has been sitting there 
for 1,064 days.
    There are issues I think both with delay and with 
transparency at OMB. Once regulations get into OMB's private 
chambers, who is making the tweaks? And I would like to have 
your assurance that you will work with us on both the delay and 
transparency issues.
    Ms. Burwell. Yes, sir, if confirmed, I will.
    Senator Whitehouse. Regulatory capture is a very well known 
phenomenon. I think that OMB is well suited to be a place that 
sounds the alarm where it looks like there might be instances 
of regulatory capture in the Federal Government. Clearly, at 
Minerals Management within the Department of Interior, at the 
SEC, and Mine Safety, we have seen episodes that sure look a 
lot like regulatory capture by the regulated industry, and I 
hope that we can work together on finding ways that OMB can 
take a more active role in looking for the benchmarks that 
should set off alarms that a regulatory body may now be the 
tool of the regulated industry and not serving the public 
interest. Would you work with us on that?
    Ms. Burwell. Yes, sir, I would. I first learned of the 
concept I guess in 1986, and then it was Hugh Heclo's iron 
triangle in my academic work many, many years ago. So a concept 
I learned about from an academic perspective many years ago, 
and having served in Government, understanding it, would look 
for the opportunity to think about that.
    Senator Whitehouse. A great piece on that not too long ago 
in the editorial page of the Wall Street Journal. It is a 
bipartisan concern.
    And the last thing is on cyber. As a former United States 
Attorney, I can assure you that trying to make cases, criminal 
cases, in cyberspace is an extremely complicated, difficult, 
and expensive proposition. The result is that for all that we 
have heard about the raiding by China of our corporate 
intellectual property through the cyber infrastructure, the 
Department of Justice has yet to bring a single pure cyber 
case. And in terms of cleaning up the Web from botnets, they 
have only brought one case, and the group disbanded after that 
case was done.
    I think that there are resource issues behind that problem. 
They will not talk to me about resource issues because they are 
so scared of you, of OMB: ``Oh, we cannot talk about anything 
because we are locked in with OMB.''
    I really need you to promise me that you will send the 
Justice person at OMB to sit down with me and with folks from 
the Department of Justice and the FBI to have a joint 
discussion about what the right level of support is for our 
prosecutors as they try to pick apart these Chinese networks 
that are raiding our corporations.
    Ms. Burwell. Senator, if I am confirmed, I look forward to 
the opportunity to having the discussion about cybersecurity 
and how we think about its priorities as well as its funding.
    Senator Whitehouse. Thank you. In my last 20 seconds, let 
me point out that we need to distinguish in this Committee 
between what is economics and what is ideology. And the theory 
that you can always cut your way to economic recovery is simply 
not economics. The IMF, Goldman Sachs, Oxford Economics, the 
Financial Times, numerous studies have been presented recently 
showing that our fiscal multiplier is now over 1, indeed well 
over 1, because of the State of our economy and interest rates. 
And the fiscal multiplier being over 1 means that Government 
spending or cuts actually do more good when it is money spent 
and more harm when it is cut than in ordinary times. There is a 
difference between economics and ideology. We need to reflect 
that in this Committee, and I thank the Chairman for the time.
    Chairman Murray. Thank you very much.
    Senator Sessions?
    Senator Sessions. Senator Portman. I would note that 
Senator Portman, of course, is a former OMB Director, and I 
suppose he should get credit for having submitted a balanced 
budget. It did not pass, but he submitted one. Senator Portman?
    Senator Portman. Thanks for that reminder.
    [Laughter.]
    Senator Portman. It was a few years ago. Can you imagine a 
balanced budget today? This was in 5 years, actually, a 5-year 
balanced budget. But there are tough choices to be made. There 
were back in 2007, and, of course, the choices are even more 
challenging today, so thank you for being willing to step 
forward, and congratulations on your nomination. I enjoyed our 
conversations about the job, and as I mentioned yesterday at a 
hearing at the Governmental Affairs Committee, your measure of 
success will be sort of an unusual one, which is not how 
popular you are but how unpopular you are among your Cabinet 
colleagues. And it is a hard job, but you are doing it at a 
historic time. And being the champion for fiscal discipline is 
more important than ever.
    Yesterday we had a discussion that I was a little 
discouraged about because it was just about are you willing to 
follow statutory deadlines, and that had to do with the 
regulatory reviews that I think we need to have here in order 
to be smart on the regulatory front. I know Senator Grassley 
mentioned this, but let me give you some more data on what has 
happened prior to your involvement, of course. And I do expect 
that you will be confirmed, and as you said, you have the 
ability to bring a fresh perspective on this.
    But no administration has a perfect record, but this is an 
extraordinary record. I have looked at all the reports due by 
OMB, 12 of the 19 reports. This includes budgets, it includes 
the Medicare trigger and so on. Twelve of the 19 have been 
late. Another six have never been issued at all. This means 
only one report or budget has been submitted within the time 
frame required by law. These are statutory.
    So I do hope, without getting into a long discussion about 
this, that you will commit to trying to meet these statutory 
deadlines, because when you do not get the mid-session review 
on time, when you do not get the budget on time--we just did 
our budget. We did not have the input from the administration 
because you guys did not submit it-- they did not submit it. 
Sorry. It is not you, yet. But it will be you, and you will 
have the opportunity.
    So, again, I do not want to get into a long discussion of 
this, but just to raise this with my colleagues who on a 
bipartisan basis should want to have what Chairman Murray said 
at the beginning of this hearing, more stability and continuity 
in the budget process. We cannot have it without this 
information. And we are not getting it. And so I would hope 
that your fresh perspective will include that.
    If you would like to respond briefly, I would be happy to 
hear from you, but I think, again, this is not asking too much.
    Ms. Burwell. Senator, as I stated at the beginning, you 
have my commitment that I will do everything in my power to get 
the budget on time, the mid-session on time, the things that I 
can influence as soon as I get there, as well as the reports 
that we discussed yesterday.
    Senator Portman. I would add the Medicare trigger to that. 
I know the administration has talked about constitutional 
issues. CRS, by the way, disagrees with that, as do other 
lawyers, so we also need help on Medicare when you hit that 45-
percent level under, I think it was, the 2003 law. You know, if 
anything, of course, Medicare has become a much more difficult 
problem to deal with from a budget perspective, so we need that 
report as well.
    In terms of fresh perspective, what do you see as the 
problem? What is the nature of the problem we face as a 
country? I will give you the CBO analysis from a few weeks ago 
that I know you have seen, which is that if we do not do 
something on the entitlement side--incredibly important 
programs, vital, safety nets--then they will increase by about 
100 percent. This is Medicare, Medicaid, and Social Security. 
The health care side increases 110 percent in the next 10 
years. And so the President has said he refuses to pass this 
problem on to another generation of Americans. That is his 
quote. But that is exactly what is happening. I mean, if you 
look at what CBO has projected, they have said that if you are 
going to maintain all the promised benefits, it would require 
eventually putting the middle class into a 63-percent tax 
bracket, small businesses into an 88-percent tax bracket. 
Obviously, this is unsustainable. You cannot catch the level of 
spending that CBO has projected with enough revenue.
    Do you have some thoughts on that with regard to what OMB's 
role can be going forward in terms of looking at, again, our 
important but unsustainable entitlement programs, with interest 
on the debt now 62 percent of the budget, the fastest growing 
part of the budget, again, nearly a 100-percent increase over 
the next 10 years? What do you think OMB's role should be 
there?
    Ms. Burwell. I think that the role of OMB is to be a 
partner with the other players that play in the space, that 
Treasury plays as well as HHS and the entire economic chain.
    I agree that the issue of mandatory spending is an 
essential part of what we are looking at with regard to the 
size and magnitude of the current deficit, and as we look at 
what growth occurs because of the baby-boom generation coming 
on, also, and health care costs as we have seen them. And how I 
think about that issue is that we need to have it front and 
center. I think we need to implement some of the savings that 
we knew--that were stated in the Affordable Care Act. That is a 
start on the process.
    As I think about the issue, when I think about the 
mandatory side and health care, a lot of this involves health 
care costs. And coming back from the private sector right now, 
the issue of health care costs are an issue both for the 
Government and for our larger economy.
    And so when I think about those issues, trying to find 
solutions, even though we might not always be able to, that 
actually bend the curve, because the other thing about bending 
the curve is the benefit is to the U.S. Government; it is also 
to the private sector. But usually those types of solutions 
often lead to greater quality, and they actually start to 
benefit--the benefits we will get in terms of savings will 
build on each other. It will be an upward spiral of savings 
versus just a constant. So those are some of the thoughts I 
have about what I consider a very important part.
    I also believe it is important for us to think through how 
we maintain the commitments that we have made as a Nation to 
people who are on that verge of retiring and the most 
vulnerable in our country.
    Senator Portman. I thank you, and I think members of this 
Committee would agree, including those of us who want to work 
on prevention and wellness and other issues in health care, and 
it does drive it.
    Just one final point to your comment about it is a big part 
of the problem. Look at the CBO numbers, look at your own 
numbers, and as a percent of GDP, the spending increase, it is 
the only problem. In other words, all of the increase in the 
debt and deficit projected going out into future years is 
attributable to those very important vital programs. In other 
words, what we are doing here in the annual appropriations is 
actually relatively flat. The other entitlement programs are 
increasing, but not at a level that necessarily catches up to 
the economy. You could argue and it is accurate to say that the 
entire increase and this huge increase in the budget deficit 
and debt is attributable to those three programs based on the 
CBO numbers. So it is not just one of the problems. It is the 
problem.
    Thank you.
    Ms. Burwell. Thank you.
    Chairman Murray. Thank you.
    Senator Warner?
    Senator Warner. Ms. Burwell, it is good to see you again, 
and I look forward to working with you. I very much enjoyed our 
session. I actually want to pick up where my friend Senator 
Portman left off. I concur with him that entitlement reform has 
to be a piece of this debate.
    I would also say that no matter what we cut or tax, we have 
to have a growth economy as well. And one of the things, as a 
former investor and business guy and somebody who did balance 
budgets as a Governor, I am very concerned about, for example, 
the proposals the House laid out that would take domestic 
discretionary spending from its current about 16 percent of the 
Federal budget down to less than 5 percent. I would never 
invest in a company that spent less than 5 percent of its 
revenues on educating its workforce, building its 
infrastructure, staying ahead of the competition through 
research and development. So I hope as well we can talk about 
how we have policies. The private sector will grow most of the 
economy, but the Government has a role as well in providing 
that framework.
    I also think it is important as we talk about both sides of 
the balance sheet, both the spending side and the revenue side, 
that we--and I get terribly frustrated at this at times, and I 
want to keep our taxes as low as possible. But somehow in this 
debate we seem to always forget the fact that while entitlement 
spending continues to go up at an unsustainable rate, on the 
other side of the ledger, when this body made tax cuts in the 
2003 time frame on a 10-year basis, we took $4.5 trillion out 
of the revenue stream on a 10-year run rate. Just as 
entitlement spending may be unsustainable, I think that plan on 
the revenue side was unsustainable.
    And what I sometimes find interesting is that even if you 
take the Senate budget, take the New Year's Eve, and combine 
those together on the revenue side, nobody is talking about 
putting all that $4.5 trillion back into the revenue stream. 
Most of us on our side are not even talking about putting half 
of that back in. We are literally talking about returning about 
a third of that revenue back to the revenue stream as we make 
targeted cuts, as we do entitlement reform.
    Again, I just want us to make sure that we have this 
discussion that is constantly refreshed. We have to deal with 
entitlements. We have to grow our economy. But we have to 
recognize that the revenue base--not to grow the Government but 
just to pay our bills, and a revenue base that--even with 
slimmed-down entitlement programs, with the baby boomers it is 
going to push up the spending as a percentage of GDP no matter 
almost what, that we have to have this balance on both sides.
    I guess my question that will come out of this--and I want 
to come to the management side in a moment--is my concern is 
that in many ways, while we have limped through budget crisis 
after budget crisis, with, I think, not the comprehensive 
approach that we need--we have still got another $2 trillion, 
roughly, to do--I feel and fear that too often we are simply 
redebating the deal points from June of 2011. And what I hope 
that you will be open to in this new role--and I know this will 
be not just your role, but as a leading figure in the 
administration--is new ideas both on the revenue side and new 
ideas on the entitlement reform side that may not even be in 
the President's 2014 budget going forward.
    Ms. Burwell. Senator, if confirmed, I look forward to 
hearing about those ideas. These are hard problems, and so 
innovation and ideas as potential ways to help us all go 
forward in a way that we can agree on I think is an important 
thing, and I hope that you will find me always willing to 
listen to new ideas.
    Senator Warner. Well, thank you.
    Let me move to the management side of the house, and, 
again, I want to echo some of the comments that were made by 
actually some of my colleagues on the other side, and Senator 
Whitehouse. One of the things we can also do is how we save 
money in terms of inefficiencies and duplication. One of the 
concerns I have, as the author of the Government Performance 
and Results Modernization Act, GPRA--and I appreciate this 
Committee's support of that--was that for the first time ever 
we have a requirement in place where agencies actually have to 
identify not only their most successful programs but their 
least successful programs. And, quite honestly, OMB has not 
been as forthcoming as we would like on that. There have been 
some times that have been missed. There is also supposed to be 
a requirement of trying to narrow down each agency's amount of 
goals. Anybody that has managed anything knows that if you have 
50 goals, you do not really have any goals at all. This 
legislation required a targeting of the top three to five goals 
per department and agency. And we would love to see more 
collaboration and cooperation on implementation of GPRA.
    Ms. Burwell. With regard to GPRA, it has changed since I 
was here before, and the GPRA modernization legislation I think 
was an important change. Also, in terms of what I have been 
briefed on so far, we have actually seen improvements in where 
that is. A long way to go, but I think we have moved from a 
box-checking exercise to a strategic planning and 
prioritization. And I think this is something where one has to 
learn the skills, and I think hopefully if I am confirmed, as 
part of the leadership at OMB, that we can continue to work on 
it.
    I think one of the most important points--and it comes back 
to one of the things that I mentioned in terms of lessons 
learned--is culture and creating a culture of this is not a 
box-checking exercise, this is a management tool that will help 
you deliver impact, and getting that to be a tool that is 
embraced in terms of thinking about how can I do my job better. 
And so that culture shift is something that I am hopeful that 
working with this Committee and the other Committee that I 
spent time with yesterday, that we can work on together to get 
the kind of savings and clear movement towards impact that is 
definable and recognizable.
    Senator Warner. My last comment, Madam Chair, is just that, 
you know, example, this is the GAO report that just came out 
yesterday on duplication. You know, this is not sexy stuff. 
This is hard, grind-it-out, lots and lots of focus on how we 
tax and spend, but the management component has to be a higher, 
higher priority, and I look forward to working with you.
    Thank you, Madam Chair.
    Chairman Murray. Thank you very much.
    Senator Sessions?
    Senator Sessions. I will yield to Senator Johnson.
    Senator Johnson. Thank you, Madam Chair, and, Senator 
Sessions, I appreciate you yielding your time.
    Ms. Burwell, again, welcome here, and I want to reiterate, 
as I said yesterday, I appreciate the fact you are willing to 
sacrifice, you and your husband. This is a big job, and I do 
appreciate your willingness to serve.
    You mentioned in your opening comment a couple phrases that 
were dear to my heart: ``problem solving,'' ``management''--or 
``measurement'' and ``leadership.'' So let us talk about those 
because I think that really is the key role of OMB.
    I was one of those Senators that President Obama invited to 
dinner, and it was interesting, as we listened to him behind 
closed doors, describing the problem pretty accurately. You 
know, it is health care spending. He talked about Medicare, 
particularly in the second and third decade. He made the 
comment that the problem with Medicare reform is for every 
dollar that Americans pay in, they are going to get about $3 
out in benefits. And we have been saying that. It comes from a 
study by the Urban Institute. He also said most Americans do 
not understand that, which is a problem in solving the problem. 
Let us talk about that.
    From my standpoint--and I have solved a lot of problems in 
business--the first step in any 12-step program is raising your 
hand and admitting you have a problem. And I think right behind 
that is you have to properly define the problem.
    So, first of all, do you agree with President Obama's 
assessment that the problem with Medicare is $1 in, $3 out?
    Ms. Burwell. I agree that the actual dollars in and dollars 
out, and then the next question is: What is that rooted in? Is 
it rooted in cost? Is it rooted in numbers? Going to the next 
step.
    Senator Johnson. But, again, all I have ever heard 
President Obama say publicly is we just need modest reforms to 
Medicare. But when Medicare is a $575 billion a year program 
and you have $1 in and $3 going out, would you agree that 
implies more than modest reform is going to be required to save 
that program, a very important program for Americans?
    Ms. Burwell. I think that very important program to 
Americans, what I think is important is thinking about it in 
terms of how do we meet the appropriate level of commitments 
that we have made at the same time that we address the dollar-
in/dollar-out problem that you--
    Senator Johnson. That is serious reform that is required, 
though, wouldn't you agree, not just modest?
    Ms. Burwell. I think that the reforms that are required, 
when we start looking at some of the numbers--and, again, I'll 
work off what I have, which is the fiscal offer. And when we 
see that additional $400 billion in that health care space, I 
think we are starting to talk about actually large numbers. And 
large numbers that, if done in a way that comes back to that 
earlier point I made about bending the cost curve, then we can 
start to get even more over longer periods of time, when you 
start to get that kind of cost savings embedded. And so those 
start to become large savings.
    Senator Johnson. Okay. Let us switch to Social Security, 
which is obviously an incredibly important program, and we want 
to do everything we can to honor those promises. I have some 
charts that we are going to put up on the screen here. Are we 
ready with those?
    This is from the Social Security Administration. I hope you 
would acknowledge--these are accurate--that over the next 20 
years basically Social Security will run a cash deficit of $5.1 
trillion. Now, I have certainly made the point publicly that I 
do not believe this is a sustainable-- first of all, a solvent 
program. The only reason anybody can claim that is the fiction 
of the Social Security Trust Fund.
    It is true that we ran the surpluses, accumulated more than 
$2.5 trillion, but the problem is the Social Security Trust 
Fund holds an asset called U.S. Treasury bonds, which in the 
hands of the Federal Government really has no value. It is the 
same thing as if you had $20, spent it, and that money is 
spent, it is gone, wrote yourself a pretty note, said $20 
stuffed in your pocket and say, ``Hey, I got 20 bucks.'' You do 
not. You just have a piece of paper that you have to basically 
offer somebody else and entice them to give you $20 in exchange 
for that promissory note. I mean, would you acknowledge that 
point?
    Ms. Burwell. Senator, when I think about the trust fund and 
those commitments, I do think about those commitments in the 
context of the commitments that we actually make in the public 
markets. And I also think about it in terms of harkening back 
to the years when I had the opportunity to work on balanced 
budgets, that there was the creation of something called the 
Social Security lockbox. And so while those--
    Senator Johnson. Let me just say, do you think that has 
value to the Federal Government? Do you believe the trust fund 
has value to the Federal Government, that it can actually pay 
out and meet that $5.1 trillion deficit?
    Ms. Burwell. What I think it has is value to the trust fund 
and the ability that there is a commitment that we will pay.
    Senator Johnson. Okay. So let us go to the next couple 
slides here. This comes from the Office of Management and 
Budget's 2010 Analytical Perspective. Will you put the next one 
up here? Let me--the next slide. Anytime.
    We have a technical problem here. Okay. Let me paraphrase. 
These balances, referring to the trust fund, are available for 
future benefit, but only in a bookkeeping sense. They are not 
assets of the Government as a whole that can be drawn down to 
fund future benefits. It goes on to say basically there are 
claims on the Treasury.
    So, in general, when you are talking about a consolidated 
statement, you have the Social Security Trust Fund, it holds 
$2.5, $2.6 trillion worth of bonds; but, on the other hand, you 
have the U.S. Treasury Department that has the liability. So 
you have an asset on one hand, liability on the other, and the 
Office of Management and Budget, when you consolidate those 
statements, claims that nets to zero.
    So my point is, as the Director of the Office of Management 
and Budget, would you acknowledge that to the Federal 
Government the Social Security Trust Fund has no value in terms 
of paying off that $5.1 trillion of deficit spending over the 
next 20 years?
    Ms. Burwell. But as we consider our deficit numbers, these 
commitments are in the consideration as we think about our 
long-term--
    Senator Johnson. Does it have any value, is there any value 
drawn out of that Social Security Trust Fund to fund the $5.1 
trillion worth of promised benefits? Do you believe that has 
any value to the Federal Government? Are you disputing what OMB 
has basically published here?
    Ms. Burwell. What I do believe is it has value in terms of 
the trust and how we think about the trust. The first chart I 
think did not--
    Senator Johnson. It has no dollar value. There are no 
dollars there; there is nothing of value to pay those benefits. 
Isn't that correct?
    Ms. Burwell. When we think about the issuance of debt that 
we do on a regular basis in the public markets in terms of how 
we think about that as well. So right now we have a very large 
deficit. There are investors all over the world purchasing that 
debt. And the question is: How do we think about that?
    Senator Johnson. So basically we have made promises to 
seniors which we are going to honor, but the only way we honor 
those promises is for the Treasury Department to basically 
increase taxes on the American public or float more bonds. 
There is nothing that they can cash in from the Social Security 
Trust Fund that has any value to pay those benefits. Isn't that 
correct?
    Ms. Burwell. So until 2033, at that point, that is the 
point where the interest of these investments stop, earlier, am 
I right that--
    Senator Johnson. But the investments are worth zero to the 
Federal Government. That is my point. The Social Security Trust 
Fund will give those bonds, and then how does the Federal 
Government fund those bonds? How do they make the payment on 
those bonds?
    Ms. Burwell. They make the payment--the trust fund has been 
self-funding for many years. As you reflected in the chart, 
there comes a time and point where that shifts. And then we 
draw down on the assets, because during--
    Senator Johnson. How do you pay off with assets?
    Chairman Murray. Senator, Senator, with all due respect--
    Senator Johnson. Okay. I am sorry.
    Chairman Murray. --you are over your time.
    Senator Johnson. Thank you, Madam Chair. Thank you, Ms. 
Burwell.
    Ms. Burwell. Thank you.
    Chairman Murray. Senator Merkley?
    Senator Merkley. Thank you very much, Madam Chair.
    First, I wanted to ask about a specific program important 
to my timber communities, the Secure Rural Schools, which I 
mentioned when we met. It is in the budget that was released 
today, which is very good. I wanted to ask if you feel like you 
have your hands around an understanding of the role that that 
program plays as the Federal Government has changed the mission 
of the timber stands that have contributed to the enormous 
success of our timber counties and now they are much more 
challenged with those additional restrictions.
    Ms. Burwell. Senator, I think that I have more to learn in 
that space. The two things that I do recall is back when I was 
previously in the administration, I learned through the 
conversations around the spotted owl and other things in the 
timber space. I think there has been much going on. And the 
only other thing I would say is reflecting upon the comments of 
Senator Manchin and Senator Rockefeller yesterday, being from a 
rural community and having my mother at the age of 65 become 
mayor and talk to me about rural economic development, I have 
some familiarity with the challenges in rural communities 
today.
    Senator Merkley. Thank you, and I will look forward to 
continuing that conversation with you. We are working hard to 
try to create a balance, setting aside environmentally 
sensitive lands within the forest, but then having a 
sustainable supply of saw logs from the balance. But, 
meanwhile, because the Government has changed the mission of 
the lands, it has undercut deeply the financial foundation for 
those counties and, therefore, pledged to compensate for that. 
And that pledge must be honored, and that is the pledge I hope 
you will continue to understand and support. And as I 
mentioned, it is in the President's budget.
    Ms. Burwell. Senator, I look forward to continuing these 
conversations.
    Senator Merkley. Thank you.
    I wanted to ask you about tax expenditures. They have grown 
enormously since 1986 when Senator Packwood led the reform of 
the Tax Code. We spend over $1 trillion a year on deductions 
and credits and ways of bypassing accountability or 
responsibility to pay taxes, including offshore strategies. 
Those areas have grown enormously and include some very 
wasteful spending.
    As you envision your responsibility for OMB, do you include 
in your portfolio the challenge of understanding the money that 
we spend on tax loopholes?
    Ms. Burwell. As a member first having been at the Treasury 
Department, I, of course, defer to the role of Treasury as the 
lead on tax issues. But my previous experience and my 
expectation of what will happen is that the economic team are 
all part of that conversation, and I would look forward to 
being a contributor where Treasury leads.
    Senator Merkley. I think that was a yes. Is that a yes?
    Ms. Burwell. I will be a part of the conversation. I do 
respect that Treasury has the analytical capability and plays 
the lead role, as does the Finance Committee and Ways and Means 
here on the Hill.
    Senator Merkley. The tax expenditures very much impact the 
deficits in the budget and the allocation of resources, so I 
hope you will understand that spending in the Tax Code is very 
much spending and needs to be part of a holistic understanding 
of the allocation of responsibly shaping the way we spend 
resources in this country.
    Third, I wanted to turn to the cost/benefit 
responsibilities of the department, of OMB, and certainly part 
of that is to try to quantify the benefits not just that are, 
if you will, obvious economic pluses and minuses, but also the 
social impacts. Are you kind of familiar with that broad 
framework? And can I count on OMB to really address the broad 
social and economic impacts when they are evaluating the impact 
of regulations?
    Ms. Burwell. Yes, as we work through at OMB, and if I am 
confirmed, and in the management of OIRA making sure that as we 
think about regulation that we are very conscious of what the 
core objectives of a regulation are in the sense of public 
safety, public health, and the environment, and that that is a 
part of the consideration as one looks at the costs and 
benefits of any regulation.
    Senator Merkley. Well, I am delighted to hear that. We are 
seeing in Oregon just recently massive forest fires. We had the 
biggest forest fires in a century, one the size of the entire 
State of Rhode Island last summer, enormous growth of pine 
beetle infestations because of the warmer winters. We have a 
big problem in our oyster farming because the oyster seed are 
having trouble being propagated because of a slight increase in 
the acidity of the ocean. And that is just within the State of 
Oregon.
    And so when the rules are related to our challenge of 
controlling the warming of the planet, the warming here in 
America that impacts my State in so many ways, those are costs 
that would fit into the framework of OMB's responsibility to do 
cost/benefit analysis?
    Ms. Burwell. As we think through those issues, the issues 
of climate change I think are extremely important and some that 
the administration and the President has said that will be 
prioritized. And if I am confirmed, I look forward to having 
the opportunity to understand how those types of things that 
you have articulated weigh into that process. I think EPA will 
be a part of that, and I look forward to a good and strong 
working relationship with EPA.
    Senator Merkley. Thank you. I am out of time here, so I 
will put it this way: I realize you cannot speak to the 
individual pieces, such as is there really a problem in the 
oyster seed or is there really a problem with pine beetles. But 
in terms of your understanding of the theory of the 
responsibility for cost/benefit analysis, are such social 
impacts ones you intend to make sure are weighed in that 
responsibility?
    Ms. Burwell. It was my experience before at OMB and OIRA 
that certain social impacts in terms of whether it is impact on 
an individual or others are weighed in the process.
    Senator Merkley. Thank you very much, and thank you, Madam 
Chair.
    Chairman Murray. Thank you.
    Senator Sessions?
    Senator Sessions. Thank you.
    Ms. Burwell, you mentioned the savings under the Affordable 
Care Act. The savings under the Affordable Care Act were spent 
to fund--from Medicare were spent and are projected to be spent 
over time to fund the Affordable Care Act. Is that not correct?
    Ms. Burwell. Senator, my understanding is that CBO has 
scored that $100 billion would be over the first decade, and in 
the second decade, when you start to get the type of positive 
spiral that I was talking about, that they have scored that at 
$1 trillion.
    Senator Sessions. Well, what they said was--and I asked 
them explicitly this fact--that the money that was saved by 
reducing provider payments in Medicare was used to fund the new 
Affordable Care Act and cannot, therefore, simultaneously be 
used to fund Medicare. The money has been spent. This is not a 
matter of real dispute. I do not want to go into it. But you 
need to understand that. And they said, in fact, it is double 
counting the money in a letter they sent to me. And I would 
submit to you Senator Johnson is exactly correct. There are no 
assets in the notes that are held by Social Security and 
Medicare to fund future expenses. The Federal Government is 
going to have to borrow that money on the world market or raise 
taxes to honor those commitments because the money has been 
spent. There are no assets there. You need to know that. This 
is going to be an important issue. And the spin has been 
different over time, but it is not accurate. What I told you is 
accurate.
    With regard to the budget, you have talked to the 
President, I assume, that you will be submitting next year. Do 
you plan to submit a budget that will balance in 10 years?
    Ms. Burwell. Senator, the question of balance comes back to 
a comment that I made earlier about how I think about the role 
of the budget. I believe that the role of the budget is a 
reflection of how we meet--``we'' the Government--our 
responsibilities to the American people. And I believe that 
those responsibilities are in three areas, and so the question 
of balance--
    Senator Sessions. Well, my only question is: Do you expect 
to submit a budget in which the revenues are equal to the 
expenditures and balances?
    Ms. Burwell. Senator, we are in a very, very deep hole, and 
when one thinks about how quickly one wants to come out of that 
hole, I think you have to connect that to the results for the 
American people in terms of the economy, and that--
    Senator Sessions. You would acknowledge that the President 
has not submitted a balanced budget in each of his years in 
office and this year will not either? Isn't that correct?
    Ms. Burwell. Senator, I will not speak to the 2014 budget, 
as we have discussed. With regard to the historical budgets, 
the 2013 budget, I think what the President has done is 
proposed a budget that is--and I know we have disagreements 
about the word ``balance.'' There is ``balanced budget'' and 
there is the word ``balanced approach.'' And so I know there 
are very different points of view on that and do not--
    Senator Sessions. My colleagues used that ``balanced'' word 
230 times in the budget debate, and their budget, of course, 
did anything but balance. The President is not going to submit 
a balanced budget. You know it and I know it, and you are not 
going to submit one. Isn't that correct? You are not going to 
submit a budget that you expect to balance next year?
    Ms. Burwell. Senator, I want to--
    Senator Sessions. Can you answer that yes or no?
    Ms. Burwell. Senator, I actually do not know that the 
economy--if the economy takes off and does an incredible, an 
incredible job this year, if there are incredible dynamics. One 
of the things that I do not think I can foresee right now and 
commit to is we could have never known about 9/11, and then the 
commitments that we then as a Nation had to make after that. We 
did not know about 2007--
    Senator Sessions. Well, okay. I acknowledge that you will 
not answer my question, and I will tell you, you are not going 
to submit a balanced budget next year, and the President has 
dismissed the value of the idea, and I disagree, and I think 
the American people disagree.
    Let me ask you this: What is the current level of debt as a 
percentage of GDP?
    Ms. Burwell. The current level of debt as a percentage of 
GDP is around the 77-percent range.
    Senator Sessions. Is that public or gross debt?
    Ms. Burwell. That is public.
    Senator Sessions. And do you know what the gross debt is?
    Ms. Burwell. The gross debt numbers, I think, depending on 
which baseline you use, the CBO baseline, the Senate budget 
baseline, or the House baseline all differ slightly, but are 
around the 100 level.
    Senator Sessions. 104 percent. Are you aware that the 
Reinhart-Rogoff study in their best-selling book, ``This Time 
Is Different,'' that when gross debt reaches 90 percent of GDP, 
that begins to bring down economic growth?
    Ms. Burwell. My understanding of the Reinhart-Rogoff 
analysis was that it is actually based on a number of 
international countries, and so not just the U.S., and that 
when one compares, the most comparable thing that you actually 
have to go to public debt, debt held by the public, not gross 
public debt--
    Senator Sessions. I have to correct you on that. I want you 
to look at this. That will be my request to you. It is so 
important. That is not--we examined their study. It is based on 
gross debt, and the European Central Bank, the International 
Monetary Fund, and the Bank for International Settlements have 
also done studies dealing with the impact of large debt on a 
nation's economy. They have concluded that debt levels that we 
are at today will pull down growth. And it is the gross debt. 
You have to look at that number.
    Ms. Burwell. Senator, where I think we--
    Senator Sessions. So if I am correct, we are seeing slowed 
growth today, I believe--and I believe we are--as a result of 
this debt. But you think that is not so, so I will let you 
explain that.
    Ms. Burwell. Senator, where I think we both agree is that 
we both believe that debt as a percentage of GDP should be on a 
downward trajectory. I think that is a place where we all 
agree, and I believe that that is a place that when one 
connects to that point which is closest to the American people 
and jobs in terms of measures that are closest, in terms of 
outputs that help us think about that outcome, that that is a 
place where we all agree we want that to be a downward 
trajectory.
    With regard to the study, I am happy to and will look at it 
again. I have a different understanding of what they were using 
as a basis for the study, and I look forward to having the 
opportunity to look at that again.
    Senator Sessions. Thank you, and that is the quote in the 
report: ``Above the threshold of 90 percent, median growth 
rates fall by 1 percent, and average growth rates fall 
considerably more.'' And I would note--if we have that chart, I 
think this is important for my colleagues. Debt is already 
hurting growth, in my opinion. Look at this chart. The blue 
line was based on what was predicted for growth 2 years 
previously by CBO. In 2008, they predicted 3.1 percent growth; 
it came in at 2.4 percent. In 2009, they predicted 4 percent 
growth for 2011; it came in at less than half of that. In 2010, 
they predicted 4.4 percent growth for 2012; it came in at 2.2 
percent.
    I believe we are seeing delayed slow growth as a result of 
the size of debt we have now, and, therefore, I think it is 
imperative for us to have growth to get the debt middle-coming 
down in a substantial way, not just a token way.
    Ms. Burwell. Senator, as I said, I believe there is a place 
that we do agree and that that is the numbers should come down.
    With regard to these questions of growth, as one of your 
colleagues earlier said, I think there are different points of 
view in terms of why we have the current growth rates that we 
have and in terms of why those growth rates are not where they 
should be.
    The other thing--and that harkens back to a comment that I 
think the Chairman made that everyone agrees on--a return to 
regular order actually is an important part of how the economy 
views things. Having had the opportunity to be in the private 
sector for a period of time now, the crisis-to-crisis lurching 
and the uncertainty that that creates does affect GDP because 
it affects businesses' willingness to invest and think about 
how they are going to manage.
    So I think there are a number of contributing factors to 
when we think about that number and some differences of 
opinion.
    Chairman Murray. Thank you very much.
    Senator Kaine?
    Senator Kaine. Thank you, Ms. Burwell. I look forward to 
supporting your nomination. I think you are the right person at 
this challenging time. Both your governmental and private 
sector background well equip you for the role, and I think you 
bring some good karma, having been part of a budget operation 
and having as part of your legacy balanced budgets. And the 
President you served and the Congresspeople that you served 
with have that as part of their legacy as well, and I believe 
that will be brought to bear in a positive way should you be 
confirmed, and I am confident you will be.
    A comment and just one question. My comment is on the 
regular order point, and this is, sadly, to put pressure on 
you. I think the concerns about the submissions of budget on 
time are shared by both parties. And I know many have expressed 
them to you, and I did in my meeting.
    I have puzzled about why this President, this 
administration--and I support him so much and feel like so many 
of the aspects of the President's achievements from, you know, 
getting Bin Laden and the al Qaeda leadership to CAF? 
standards, to a stock market that is rising, to hiring and not 
job reductions, so many things the President can say with his 
team that I have put my thumbprints on something that is really 
going in a positive direction. But I do view, frankly, your 
portfolio as the one where this President really is still 
looking for a very signature achievement in the budget area.
    The late submissions of budgets probably to some seems 
inconsequential, and yet it is statutory. And just to tell you 
from the outside, the way that it looks, it is not a question 
of competence because the people who are doing this work, as 
you pointed out, in OMB and elsewhere, highly competent, highly 
intelligent, highly talented. And it is not a question of 
decisiveness because in so many ways the President and the team 
demonstrate the quality of decisiveness.
    Late budget submissions send the message of lack of 
concern, that it is not that important, and yet in terms of 
where we are right now, you know, open any newspaper, turn on 
any news account for the last few years, everyone has been 
saying how important this is.
    And so one of the things that is really important for you 
to do is to help us as we wrestle toward, you know, finding the 
big-picture budget deal and to cement, you know, what by all 
rights should be this President's accomplishments in the budget 
area. And I am very happy that he has picked you to do this, 
and that is just a comment. The pressure is on. This President 
has done so many things so well. In this particular area, I 
think he is still looking for a very solid achievement, and you 
are the person that he has relied on to help deliver that. And 
I view that as a very weighty responsibility.
    My one question is this: In the votes surrounding the 
passage of the Senate budget, an interesting point came up, and 
it was an amendment that was proposed by Senator Isakson on the 
floor, and it was passed by a fairly sizable vote, 68-31, the 
notion of beginning to explore, as many States do, a 2-year 
budgeting process where you would do a budget, a full budget 
over a 2-year course, and then use the mid-year as sort of a 
truing-up year, while revenues were not exactly what we 
projected, expenses were not either. I think many States find 
this is something that helps them a little bit with planning. 
It can help a little bit for incoming Members of Congress to 
come in in a true-up year rather than a write-the-full-budget 
year. So it has some appeal to the legislators, and I can see 
why it passed when it was proposed in the Senate.
    I would just like your general thoughts about budget 
process and whether the notion of a 2-year budget is something 
that you have thought about, and if so, what is your take on 
it?
    Ms. Burwell. The issue of biennial budgeting is one that I 
had the opportunity to speak to when I was at the Office of 
Management and Budget before, and I think there are some 
positive aspects to the issues that you can do-- most of which 
you articulated in your explanation.
    I think the question is what is it that will most help us 
get back to a regular order and a process that works. And if I 
am confirmed at the Director of OMB, while something like that 
is very much a legislative decision and a decision with 
appropriators and a decision with this Committee, what I would 
commit to is being a part of that conversation in terms of what 
it would mean from the executive branch standpoint, to think 
about how we can work together to get to a place where, if that 
can contribute to getting us back to a regular order, where we 
have that prioritization, because to me, as I have reflected as 
I am entering back in and thinking about these issues and 
studying and that sort of thing, the thing that is missing is 
the form for prioritization. The conversations are in their 
pieces, and conversations in their pieces do not require us to 
bring it together, and, therefore, actually stand above our 
particular interests as represented--of course, everyone 
represents their State. Of course, everyone represents their 
district to the best of their ability. But they also represent 
the American people broadly. And it is only in those fora where 
we bring everyone together where they have to make the 
decisions together that you actually act in that other role as 
well.
    And so if things like biennial budgeting can help with 
that, that is something that I would love to be a part of the 
conversation, as I say, as appropriate, because I also respect 
that is a decision of the Congress.
    Senator Kaine. Thank you very much.
    Chairman Murray. Senator King.
    Senator King. Ms. Burwell, thank you very much. I agree, 
one of the most interesting votes was the 2-year budget vote. 
Of course, any vote that occurs at 2:00 in the morning you have 
to--
    [Laughter.]
    Senator King. Senator Portman raised a question about 
health care costs. I have a slightly different view of it that 
I would like to share and ask your reaction. I believe that 
virtually the entire Federal budget deficit problem on an 
ongoing basis is health care. It is the cost of health care 
that the Government buys in very large quantities in terms of 
Medicare, Medicaid, and Federal health benefits.
    To me, though, the solution is not to try to squeeze and 
change Medicare. It is to try to deal with the overall health 
care escalation, which affects all of us as private citizens 
and businesses and everything else. I think you have touched on 
this, but what I am interested in is how can we as governmental 
entities affect the larger issue of health care costs. One way 
I have thought of is we are a very big customer, and maybe as a 
customer we could start to affect--for example, Medicare should 
require every provider they deal with to have electronic 
medical records as a customer, just say this is something we 
are going to do. You know, I have been hearing about electronic 
medical records forever, and it just does not seem to be 
happening. It is happening on a piecemeal basis, very 
expensive.
    Thoughts on this idea?
    Ms. Burwell. Senator, you touch upon an issue that I 
actually raised yesterday in my hearing yesterday, the issue of 
electronic medical records. I had the opportunity to be on the 
board of a major health institution, the University of 
Washington Medical Center, as they were starting on that 
process of transferring to those records, and now I am in a 
health care system where they are fully transferred, in the 
Mercy Hospital system in northwest Arkansas. And the experience 
both in quality of care and cost savings is one that you see 
every day.
    So I am able to see the results of my children's tests on 
my computer in the evening, and so that calling back and forth 
with the nurse, that step is eliminated. That is a cost 
savings. It is actually better quality care because I get the 
answers and know the answers as best possible.
    In addition, when I go in or take the children in, when we 
go in with our children, all the tests are there. They know--it 
also helps with preventive care. I had, you know, one of the 
nuns question me on why I had not gotten my flu shot. It is 
recorded. It is there. And so the elements of those types of 
things I think are extremely important to--
    Senator King. But do you see my point that we are the 
world's largest customer, we can influence these decisions?
    Ms. Burwell. And I think those are questions that we would 
work through with the Office of Personnel Management in how we 
do that. I think the question of customer influence, I think 
the question of how we implement and how we legislate, I think 
those are all tools that we have to think through. The customer 
one is one that I welcome, and I welcome understanding what we 
are and are not doing, having been out--
    Senator King. I judge a health care provider by whether 
they hand you a clipboard when you walk in. If they do, they 
are behind the times.
    Changing the subject entirely, you were there at a time of 
a balanced budget, I think the only balanced budgets in the 
last living memory, 40 years or something like that. It is very 
easy to spend, and it is very hard to tax. My question is: Do 
you think the time has come to consider some kind of external 
restraint in the nature of a balanced budget amendment or 
something like that to compel the Federal Government to 
ultimately get to a balanced budget? I realize we are not 
talking about next year or 5 years or 10 years, but at some 
point. I just wonder if the realities of American politics, the 
will, if you will, has to be governed by some constraint. All 
my life I have been opposed to such a thing, but I am coming to 
believe that, given the realities, maybe we have to do that.
    Ms. Burwell. Senator, I think that we should be able to 
make the decisions without the question of a balanced budget 
amendment. I think we have talked about it all today. It is 
where everyone wants to go in terms of taking that debt-to-GDP 
ratio down, getting us to the right place. As you reflect, I 
had the opportunity to work on balanced budgets. Those were in 
a particular context of a number of things, what I believe is 
fiscal discipline, revenues at a certain level, and good 
economic health. And I think how you put those together at 
different times and different needs for the Nation, one needs 
to take care, and that that is the job about the judgment of 
when and how we do that.
    I would be hopeful that we can make our way to a place 
without an amendment specifically.
    Senator King. I guess I would fall back on President 
Reagan: Trust, but verify. I think there has to be something to 
force the verification, you know, just looking at history.
    A final question. One of the roles of OMB is in the 
regulatory review area, and there has been some discussion of 
that today. When I talk to businesses in Maine, small 
businesses in particular, the regulatory burden is the biggest 
thing that they mention. It is the first thing they mention. I 
hope that you will take very seriously the regulatory review 
process and certainly meet the deadlines on a timely basis, as 
Senator Whitehouse talked about, but to really try to assess 
what will the impacts of this be. Are there ways that this goal 
can be accomplished without increasing cost burdens in time?
    It was very interesting. I talked to companies about the 
Affordable Care Act. They are more concerned about the 
regulatory requirements than they are the costs. At least that 
is what I am hearing, and the number of forms they have to fill 
out. These are companies that have their own health insurance. 
They still have to go through a long regulatory process, and I 
hope that this will also be an important part of your attention 
when you are in this position.
    Ms. Burwell. I think that the issue of small business 
actually is a role throughout OMB. You specifically mentioned 
it in the context of regulatory and rulemaking, and I think 
that is an important role that OMB brings, bringing the voice 
of small business, whether it is through the executive branch 
or more broadly, making sure that small business is at the 
table. But I think it actually occurs in other places in OMB, 
such as the strategic sourcing initiatives and making sure that 
when one thinks about the Strategic Sourcing Leadership 
Council, it is the seven largest departments of contracting, 
but it also includes small business.
    So I think there are a number of places where OMB has a 
role in ensuring that the interests of small business are 
expressed and understood.
    Senator King. Thank you very much, and I really appreciate 
your willingness to take on this task. It is one of the most 
important jobs in the country, and I am delighted that you are 
willing to do what it takes to make this happen for our 
country. Thank you.
    Ms. Burwell. Thank you, Senator.
    Chairman Murray. Thank you.
    Senator Sessions? I am sorry. Senator Sanders?
    Senator Sanders. You have confused Mr. Sessions with me?
    [Laughter.]
    Chairman Murray. No. We were going back and forth. I would 
not do that, Senator Sanders.
    Senator Sanders. Ms. Burwell, thank you very much for being 
here. I look at your opening remarks, and you indicate that 
your primary focus will be deficit reduction, increased 
efficiency and effectiveness in how Government works, and 
targeted investments that grow the economy and create jobs. It 
seems to me those are all important initiatives, but you are 
missing one that is very important, and that is the issue of 
distribution of wealth and income in this country.
    In the last several years, we have seen modest economic 
growth, but it did not mean anything to working families 
because all of the increase in income went to the top 1 
percent.
    As one of the major financial advisers, if you are 
appointed, to the President, is the issue of distribution of 
wealth and income, which is now the widest of any major country 
on Earth and worse than at any time since the 1920s, is that an 
issue of concern to you?
    Ms. Burwell. Yes, sir, Senator, it is. The issue of that 
and how a healthy economy--to me the definition of a healthy 
economy actually includes the point you are making, which I 
think is a very important point. Healthy means not just--for a 
few, it means across the economy as we think about what happens 
when there is growth. And so thinking about it broadly is 
something that is important to me, Senator.
    Senator Sanders. So is it a major concern to you that 
between 2009 and 2011 all--A-L-L--of the new income went to the 
top 1 percent?
    Ms. Burwell. Senator, it is a concern and one that, while I 
have not seen the President's budget, I think the President's 
announcement about the minimum wage issues is one that I think 
is important.
    Senator Sanders. Yes, it is, but cuts in Social Security 
are also important, which would move us in exactly the wrong 
direction.
    In terms of revenue--and I know Senator Warner raised the 
issue--in 2012, at 15.8 percent, revenue as a percentage of GDP 
was the lowest in 60 years. And yet at a time when corporate 
profits are at an all-time high, corporate income tax revenue 
as a percentage of GDP is near a record low. Corporate profits, 
all-time high; as a percentage of GDP, corporate revenue is at 
an all-time low.
    The President has just brought forth a budget in which he 
wants to see tax reform as revenue neutral. When one out of 
four major corporations pay zero in taxes, do you not think 
that we have an opportunity to bring in substantial amounts of 
revenue as part of corporate tax reform?
    Ms. Burwell. Senator, I think that the--when we think about 
revenue and think about it in its entirety and those 
percentages and how they work, I think we are up to 17 percent 
when we include ATRA and the effects of that. And so moving in 
that direction, I think as you and I have discussed, I do 
believe there is an opportunity in the revenue space.
    As we think about the corporate issue--and, again, I will 
defer to my colleagues at Treasury, and I think Director Lew 
will be here tomorrow--will be actually on the other side 
tomorrow talking about these issues. I would defer to them. But 
I think the questions of how we think about corporate tax 
issues and tax overall, when I think about tax overall, I think 
about three principles: simplicity, progressivity, and thinking 
about its contribution to deficit reduction.
    Senator Sanders. Well, in 2011, corporations paid just 12 
percent of their profits in taxes, the lowest since 1972. 
Before we cut programs like Social Security or Medicare, do you 
not think it is a good idea that we look to corporate America 
for more tax revenue?
    Ms. Burwell. Senator, I think a balanced or comprehensive 
approach to the issues of deficit reduction require us to look 
at all options as we think through things. I think the question 
of in the corporate tax space, are the changes that we need 
broadening of the base and a closing of the loopholes that will 
then, as the economy gains steam, result in changes in revenue?
    Senator Sanders. Why do you think--the issue of health care 
has, appropriately enough, been discussed by a number of 
Senators. At the end of the day, the United States spends 
almost twice as much per capita on health care as any other 
major nation. We are the only major country on Earth without a 
national health care program guaranteeing health care to all 
people. Do you think there might be a connection between the 
fact that we spend so much, our outcomes are often not as good 
as other countries', and we do not have a national health care 
program?
    Ms. Burwell. I think that the issue of health care costs 
and actually provision of health care are ones that are both 
equally important, both the cost issue and actually the 
provision of care as a Nation, which is why I think the 
Affordable Care Act is an important part of a step forward in 
providing--
    Senator Sanders. My question was--I do not think we have a 
Medicare or a Medicaid problem. We have a health care problem. 
Our health care system spends as a Nation almost twice as much 
as many other countries, and our health care outcomes in many 
cases are worse. We are the only major nation without a 
national health care system. Do you think there is a connection 
in the fact that we spend so much and we do not have a system?
    Ms. Burwell. I think the question of what is at the root 
cause, probably a number of things, but I think you 
articulated--I agree with what you articulated, is that 
connection between costs and outcome. And then I think the 
question is: What is the best way to get that connection 
between outcome and cost? Because I think we often, in the 
construct of our current systems, have trouble doing that, and 
that is--
    Senator Sanders. Do we have a health care system? I was not 
aware that we had a health care system in America.
    Ms. Burwell. When I used the phrase ``health care system,'' 
I meant broadly for the Nation as a whole in terms of the 
marketplace.
    Senator Sanders. Marketplace, yes. And do you think that 
marketplace health care system might be one of the reasons we 
spend almost twice as much as any other country on health care, 
the role of private, for-profit health insurance companies?
    Ms. Burwell. I think that it is a combination--and I will 
come back to what I think is a core point, which is, How do we 
align the outcomes with what we are paying for? And I think 
that gets to some of the parts of the conversation that we have 
had in a number of different places. And I think at the root of 
trying to bend those curves and get those--both the costs down 
and the quality of the result up. When people are trying to 
measure what they are doing against an outcome--in other words, 
a health result--I think that makes a difference.
    We had conversations in yesterday's hearing about this with 
regard to looking at some of the results that both Cleveland 
Clinic and Mayo are having in terms of the quality of their 
outcome in a cost-efficient manner. And I think that is at the 
root of the issue.
    Senator Sanders. Okay. My time has long expired. Thanks, 
Madam Chairman.
    Chairman Murray. Thank you very much.
    Senator Sessions, did you have any final--
    Senator Sessions. Yes, thank you so much, Madam Chairman, 
for the hearing, and I appreciate you, Ms. Burwell, and look 
forward to working with you. I think things will go well with 
you in this confirmation process.
    I will say, in all honesty, I think you were using some of 
the spin tactics that the administration has been using on this 
debt. We are going to have to be able to talk directly about 
what real numbers are, what the real finances are. When we are 
talking about trillions of dollars, we cannot have confusion 
about this.
    Mr. Lew came in and spun his way and I guess got an 
election successful. But it is not the right way for us to 
reach a bipartisan agreement.
    I would note that the President's budget--the embargo has 
now just been lifted--is out today. It proposes $1.1 trillion 
in new taxes--that is one thousand one hundred billion--and he 
proposes $946 billion in new spending.
    So basically it is a tax-and-spend budget. The idea that we 
have a balanced plan where we raise taxes and equal that with 
the reduction in spending has never been what has been 
presented to Congress by this administration. It has always 
been raise taxes and raise spending, and that is why we remain 
on an unsustainable course, in my opinion.
    Your former boss, Mr. Erskine Bowles, said this Nation has 
never faced--in that very seat--a more predictable financial 
crisis because we were on an unsustainable path. And I just 
would say to you I look forward to working with you. You are 
very good to talk with. I think we can have an open 
relationship. But it is a crisis time. And if I am correct that 
the debt already is impacting our growth rate, then we have an 
even stronger imperative to reduce--and the Ryan budget, which 
balances--the House budget, which balances, shows you can grow 
spending 3.4 percent a year and the budget will balance. It 
just cannot grow at 5.4 percent a year. So we can increase 
spending each year and balance a budget, and that is the kind 
of concrete goal we need. This vague idea of a sustainable plan 
or sustainable deficits, those kind of words create no 
accountability, no firm goal which we can adhere to and fight 
for.
    So I look forward to working with you. This will be a 
challenge. I am worried about the growth that we are not 
seeing, and if we get this thing on the right course, I think 
America will bounce back. I believe there is a lot of vibrancy 
out there and a lot of potential, but there are some clouds 
that we need to remove.
    So thank you very much for your testimony today.
    Ms. Burwell. Thank you.
    Chairman Murray. Thank you very much, Senator Sessions. We 
will have a chance to debate those numbers you put out about 
the President's budget, which I think we will have a debate 
about, and certainly continue to the debate about whether or 
not the Ryan budget is a balanced budget in many different 
aspects, as we continue forward.
    Ms. Burwell, thank you very, very much for your testimony 
today and for your willingness to participate in public service 
at a very challenging and important time. We greatly appreciate 
the sacrifice of both you and your family, so thank you very, 
very much.
    As a reminder to all of my colleagues, additional 
statements for today's hearing are due in by 6:00 p.m. today to 
be signed and submitted. And also for the information of my 
colleagues, again, it is my intention to move to Ms. Burwell's 
nomination as expeditiously as possible. This Committee does 
have a 48-hour notice requirement, but-- Senator Sessions, I 
will work with you--I would like to do it as quickly as 
possible early next week.
    Senator Sessions. We have a few questions to submit 
questions, as normal, but I think they can be handled 
expeditiously.
    Chairman Murray. Very good.
    And, finally, again, just a reminder to all of our 
Committee members, we will have Acting Director Jeff Zients 
here tomorrow to discuss the President's budget.
    With that, I will call this hearing to a close.
    [Whereupon, at 12:18 p.m., the Committee was adjourned.]


   STATEMENT OF BIOGRAPHICAL AND FINANCIAL INFORMATION REQUESTED OF 
                         PRESIDENTIAL NOMINEES

                      A. BIOGRAPHICAL INFORMATION

1. Name: Sykvia Mathews Burwell, Sylvia Mary Mathews 

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

3. Date of nomination: March 8, 2013

4. Address: (Redacted)

5. Date and place of birth: June 23, 1956, Hinton, WV

6. Martial status: Married to Stephen Roderick Burwell

7. Names and ages of children: (Redacted)

8. Education:

-Harvard College, Septemnber 1983-June 1987, Bachelor of Art
-Oxford University, Worcester College 1987-June 1990, Bachelor 
of Art

9. Employment Record: 



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10. Government Experience: 

None

11. Business relationships: 



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12. Memberships:



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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)

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

My husband and I were co-hosts of an Obama fundraiser at my 
25th college reunion in May 2012.

(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.



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14. Honors and awards:

Rhodes Scholar
Institute of Politics Fellow, Harvard University
Senior Fellow, UCLA School of Public Policy
Honorary Degrees: West Virginai University, Doctor of Humane 
Letters, 2003Northeastern University, Doctor of Philanthropy, 
2011

15. Published writings:



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16. Speeches:

In my official capacity at the Walmart and the Bill and Melinda 
Gates Foundation, I delivered speeches that focused on global 
development (E.g. increasing productivity for small holder 
farmers) and philanthropy. None of these speeches were on 
topics relevant to the position for which I am being nominated, 
and thus copies are not provided.
17. Selection:

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

I believe that my prior professional experience at Office of 
Management and Budget, the White House, U.S. Department of the 
Treasury, and the National Economic Council as well as my 
private sector experience at Walmart, the Bill and Melinda 
Gates Foundation, and MetLife qualifies me for this 
appointment.

(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 attempt 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?

Yes,

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 aqare 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.

Apart from my duties as a government official during the past 
10 years, I have had minimal engagement in legislation and 
policy-making. While employed by New York University, I had 
occasional meetings with members of congress and local 
government officials on education policy.

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.

As a member of the MetLife Board I may have been named in 
individual matters, however, to my knowledge, none of these 
cases involved allegations of wrongdoing by me in my official 
or individual capacity. Walmart as a company has various 
proceedings and lititgation; however, I was not involved in any 
of these matters.

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

None to my knowledge.

                     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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    Answers to Questions Submitted


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