[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                    INVESTING IN AMERICA'S ECONOMIC
                         AND NATIONAL SECURITY

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

           HEARING HELD IN WASHINGTON, D.C., FEBRUARY 7, 2019

                               __________

                            Serial No. 116-2

                               __________

           Printed for the use of the Committee on the Budget
           
           
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                        COMMITTEE ON THE BUDGET

                  JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts,         STEVE WOMACK, Arkansas,
  Vice Chairman                        Ranking Member
HAKEEM S. JEFFRIES, New York         ROB WOODALL, Georgia
BRIAN HIGGINS, New York              BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania         Vice Ranking Member
RO KHANNA, California                JASON SMITH, Missouri
ROSA L. DELAURO, Connecticut         BILL FLORES, Texas
LLOYD DOGGETT, Texas                 GEORGE HOLDING, North Carolina
DAVID E. PRICE, North Carolina       CHRIS STEWART, Utah
JANICE D. SCHAKOWSKY, Illinois       RALPH NORMAN, South Carolina
DANIEL T. KILDEE, Michigan           CHIP ROY, Texas
JIMMY PANETTA, California            DANIEL MEUSER, Pennsylvania
JOSEPH D. MORELLE, New York          WILLIAM R. TIMMONS IV, South 
STEVEN HORSFORD, Nevada                  Carolina
ROBERT C. ``BOBBY'' SCOTT, Virginia  DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas            KEVIN HERN, Oklahoma
BARBARA LEE, California              TIM BURCHETT, Tennessee
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee

                           Professional Staff

                      Ellen Balis, Staff Director
                  Dan Keniry, Minority Staff Director
                                CONTENTS

                                                                   Page
Hearing held in Washington D.C., February 7, 2019................     1

    Hon. John A. Yarmuth, Chairman, Committee on the Budget......     1
        Letter submitted for the record..........................     4
        Prepared statement of....................................     8
    Sarah Abernathy, Duputy Executive Director, Committee for 
      Education Funding (CEF)....................................    14
        Prepared statement of....................................    16
    Steven Kosiak, Adjunct Senior Fellow, Center for a New 
      American Security (CNAS)...................................    22
        Prepared statement of....................................    24
    Umair A. Shah, MD, MPH, Executive Director, Harris County 
      Public Health (HCPH), Immediate Past-President, National 
      Association of County and City Health Officials (NACCHO)...    30
        Prepared statement of....................................    33
    Gordon Gray, Director of Fiscal Policy, American Action Forum    42
        Prepared statement of....................................    44
    Hon. Steve Womack, Ranking Member, Committee on the Budget...    52
        Prepared statement of....................................    54
    Hon. Bill Johnson, Vice Ranking Member, Committee on the 
      Budget, questions submitted for the record.................    99
    Hon. Janice D. Schakowsky, Member, Committee on the Budget, 
      question submitted for the record..........................   100
    Answers to questions submitted for the record................   101

 
                    INVESTING IN AMERICA'S ECONOMIC
                         AND NATIONAL SECURITY

                              ----------                              


                       THURSDAY, FEBRUARY 7, 2019

                          House of Representatives,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:05 a.m., in 
Room 210, Cannon House Office Building, Hon. John A. Yarmuth 
[Chairman of the Committee] presiding.
    Present: Representatives Yarmuth, Moulton, Higgins, 
DeLauro, Panetta, Morelle, Horsford, Lee, Jayapal, Price, 
Khanna, Kildee, Jackson Lee, Omar; Womack, Woodall, Stewart, 
Roy, Meuser, Timmons, Burchett, Holding, Smith, Johnson, 
Crenshaw, Norman, Flores, and Hern.
    Chairman Yarmuth. The hearing will come to order. I want to 
welcome everyone to the budget hearing, which will focus on 
investing in America's economic and national security.
    I especially want to thank our great panel that is here 
with us today, and I will be introducing them in a second.
    But first I wanted to acknowledge that this is the first 
hearing in the brand new Budget Committee hearing room. And for 
those of you who were here before, it is quite a departure from 
the old days. But we have--we are now high-tech and very 
modern. So we look forward to a productive Congress in our new 
hearing room.
    So our witnesses today, starting at my left, the right of 
the witness table, from their perspective, Sarah Abernathy, 
deputy executive director of the Committee for Education 
Funding. I am especially pleased to mention that Ms. Abernathy 
is a former Budget Committee staffer who is returning today to 
testify as an expert witness.
    Welcome back, Sarah.
    Steven Kosiak, adjunct senior fellow for defense studies at 
the Center for a New American Security, and former associate 
director for defense and international affairs at OMB. Welcome, 
Mr. Kosiak.
    And Dr. Umair Shah, executive director of the Harris 
County, Texas Public Health and immediate past president of the 
National Association of County and City Health Officials, 
welcome to you.
    And finally, Mr. Gordon Gray, director of fiscal policy at 
the American Action Forum.
    Welcome to all of you. Just so you will know, the ranking 
member, Mr. Womack, is on his way from the Prayer Breakfast, 
and he will--he said to go ahead. We have Mr. Woodall here, 
making sure that everything is on the up and up, and I know he 
will.
    So I will now give my opening statement.
    Once again, welcome to our witnesses. Thank you for joining 
us today to talk about the critical need to raise the budget 
caps for 2020 and 2021.
    Put simply, we face $126 billion in cuts to defense and 
non-defense discretionary spending next year. These budget caps 
were never supposed to take effect. They were deliberately set 
in 2011 at destructively low levels to force an agreement on a 
comprehensive deficit reduction plan. That effort failed, and 
we have dealt with this problem ever since.
    We reached bipartisan agreements to raise the caps in 2012, 
2013, 2015, and again in 2018. If we do not act again, 
investments that are vital to our economic and national 
security will face devastating cuts.
    I reject the idea that we must pit defense and non-defense 
discretionary spending against each other, as proposed by the 
Trump Administration in previous budgets. We all understand the 
importance of paying our troops, funding training and military 
operations, maintaining bases at home and overseas, and 
designing and building weapons systems. And we all appreciate 
the important role that a strong military plays in our 
security. But we cannot discount the important role non-defense 
discretionary also plays in building our economic and national 
security.
    As you can see on the screens today, we have listed just a 
sample of the government activities that fall into what we call 
non-defense discretionary spending. They range from homeland 
security, veterans health care, law enforcement, hazardous 
waste cleanup, and natural disaster preparedness.
    [Slide]
    Then there are investments that provide economic security 
in the form of Pell Grants, Head Start, and even mortgage 
insurance. I could easily spend my entire opening statement 
just running through examples. These non-defense discretionary 
expenditures represent about half of all discretionary 
spending. And like defense spending, they are also at risk if 
we do not raise the caps.
    The President's unprecedented five-week shutdown had one 
useful side effect: his shutdown reminded all of us that non-
discretionary investments are security investments. During the 
shutdown American families were worried about food safety, with 
the Food and Drug Administration suspension of inspections. 
Travelers were delayed at airports and worried about aviation 
safety due to employee shortages at the TSA. And we were all 
concerned about the consequences of more than 5,000 FBI 
employees being furloughed and their investigative work being 
impeded.
    Beyond these examples, CBO reported that this shutdown 
resulted in a permanent loss of $3 billion from our economy. It 
left us less safe and less prosperous, and hurt a lot of 
American families in the process.
    Next week we face another deadline to keep the government 
open and funded through 2019. I hope the President has learned 
that no one wins when he shuts the government down, and that we 
can avoid this self-inflicted crisis, particularly when we 
already have another one on the books to resolve.
    As I said at the beginning of these remarks, $126 billion 
of defense and non-defense discretionary spending cuts are 
currently scheduled to take effect next year if we don't act. 
Our witnesses are here today to talk about that. They are 
experts on education, public health, as well as defense and 
national security. And they will help walk us through the 
importance of these investments, and the consequences if they 
are cut to the degree that would be required by the caps.
    I would also like to enter into the record a letter from 
NDD United, sounding the alarm about severe cuts ``affecting 
investments that touch every sector of our economy, from health 
care to infrastructure, scientific research, and education, as 
well as for defense,'' if we don't act.
    Without objection, so ordered.
    [The information submitted by Chairman Yarmuth for the 
record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Yarmuth. NDD United represents hundreds of 
national, state, and local organizations calling for a balanced 
approach to spending decisions.
    Before we get started, I want to raise two other major 
factors that will impact deliberations to raise the caps. Our 
veterans' health programs need an additional $10 billion or 
more per year, starting next year, because of the VA Mission 
Act. This new program is now an unfunded mandate because 
congressional Republicans were happy to make a promise to our 
veterans for expanded health care access, but neglected to 
write the check.
    Second, the constitutionally mandated census will be 
conducted in 2020, requiring up to $6 billion more in funding 
next year. Failure to adequately fund the census would lead to 
significant inaccuracies and mis-allocation of a broad range of 
federal spending. So we need to come up with funding for the VA 
Mission Act and the Census Act out of a pot of money that 
currently faces austerity-level cuts. Clearly, we need to raise 
the caps for both defense and non-defense spending. We have 
done so in a bipartisan manner in the past, and we must do so 
again now.
    [The prepared statement of Chairman Yarmuth follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Yarmuth. And with that, the ranking member has 
said to proceed, he will again be here shortly, and he will 
submit his opening statement for the record.
    So, with no further ado, I will yield five minutes to Ms. 
Abernathy for her testimony.

   STATEMENT OF SARAH ABERNATHY, DEPUTY EXECUTIVE DIRECTOR, 
             COMMITTEE FOR EDUCATION FUNDING (CEF)

    Ms. Abernathy. Chairman Yarmuth and members of the 
committee, thank you very much for inviting the Committee for 
Education Funding here to testify today about the importance of 
federal investments, including investments in education to 
America's economic and national security, as well as the need 
to provide a substantial increase in the non-defense 
discretionary spending caps.
    It is a real honor to be here today. I have spent, 
literally, hundreds of hours in this room--some of which I 
actually recall fondly--over the course of 18 years, when I had 
the privilege of working for the House Budget Committee under 
the leadership of five different chairmen, and with several of 
the members who are on the committee today. But I have never 
sat on this side of the witness table before.
    I am speaking on behalf of the Committee for Education 
Funding, the nation's largest and oldest education coalition, 
which is a non-partisan collaboration of institutions, 
associations, and others that advocate for greater investments 
in education. We represent the entire continuum, from early 
childhood education to K through 12 and higher ed, career and 
adult education, as well as out-of-school needs and 
enhancements like libraries, museums, and PTAs.
    [Slide]
    Ms. Abernathy. In addition to representing its membership, 
the Committee for Education Funding is speaking on behalf of a 
majority of Americans who want to increase these important 
education investments. Seventy-three percent of those polled in 
a December Politico Harvard survey thought increasing federal 
spending on public elementary and secondary education was an 
``extremely important priority.'' And a Morning Consult and 
Politico poll found that the area voters most wanted more 
government spending was education--a higher percentage than 
those who wanted to increase defense, homeland security, border 
security, or health care spending, for instance.
    Next slide, please.
    [Slide]
    Ms. Abernathy. That is because education investments are 
among the best investments we can make for society. 
Participating in high-quality early childhood education impacts 
children's learning and has enormous long-term benefits, a 
return of more than $7 for every $1 invested through better 
outcomes, in terms of increased health, reduced crime, and 
higher incomes.
    Money also matters in elementary and secondary education, 
and in helping people continue education beyond high school. 
Those with more education earn dramatically more over their 
lifetime, and have higher employment rates. Countries with 
higher educational achievement have greater economic growth. A 
better-educated workforce leads to more research and innovation 
and national security in many ways, not the least of which is a 
military ready for today's challenges. Simply put, education 
pays.
    However, the United States currently devotes less than two 
percent of the federal budget to education. We think that low 
level of investment is a mistake.
    For instance, if Congress were to approach its pledge to 
provide up to 40 percent of the additional cost of educating 
students with disabilities, it would benefit all students by 
freeing up state and local special education funding to meet 
other education needs. Head Start currently serves fewer than 4 
of every 10 eligible children. There are two children waiting 
to get into after-school programs for every one child 
enrolled--three in rural communities.
    And Pell Grants help more than 7 million low-income 
students obtain a college education, but the maximum grant 
today covers only 28 percent of the average cost of attending a 
4-year public college, down from 88 percent when the program 
was begun in the 1970s.
    Next slide, please.
    [Slide]
    Ms. Abernathy. While we know these education investments 
benefit society and our economy, in fact, since 2011 funding 
for education has actually declined by $7 billion in real 
inflation-adjusted terms. Congress won't be able to fill 
pressing education needs unless it raises the non-defense 
discretionary cap, which drops 55 billion, or 9 percent, for 
the coming year.
    But it is actually worse than that. As Chairman Yarmuth 
said, the effective cut is at least 65 billion, or 11 percent, 
because of the need to provide extra funding for the decennial 
census and the VA Choice program in 2020. An 11 percent cut 
would be devastating. That is the size of the education cut in 
the President's 2019 budget, which outright eliminated 32 
education programs and cut funding for 25 others.
    Deep cuts like these fly in the face of the need to make 
investments that grow the economy, support our families and 
communities, and make the nation stronger. Today's successful 
students are tomorrow's research scientists who will discover 
cures to illnesses. Today's STEM students are vital to military 
readiness, as they become tomorrow's weapons designers and 
programmers keeping us safe from debilitating cyber crime.
    We urge Congress to make greater investments in education 
by first raising the fiscal year 2020 cap on non-defense 
discretionary funding substantially above the 2019 level, and 
then giving the Labor, Health and Human Services, and Education 
appropriations bill a much larger allocation, which will allow 
for vital investments in education that will enhance America's 
economic and national security.
    Thank you again for the opportunity to testify about the 
need for greater education investments. I am happy to answer 
any questions you may have.
    [The prepared statement of Sarah Abernathy follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Yarmuth. I thank you very much, and now recognize 
Mr. Kosiak for five minutes.

STATEMENT OF STEVEN KOSIAK, ADJUNCT SENIOR FELLOW, CENTER FOR A 
                  NEW AMERICAN SECURITY (CNAS)

    Mr. Kosiak. I want to thank you, Chairman Yarmuth and 
members of the committee, for inviting me to testify this 
morning.
    I was asked to answer the question how much of 
discretionary spending is allocated to national security 
programs. I am going to suggest two answers to that, one based 
on a relatively narrow definition of what national security is 
and what kinds of programs contribute to it, and one based on a 
broader, although still constrained, notion of what constitutes 
national security.
    In either case, though, the answer is ``a lot.'' 
Discretionary spending is primarily--or a majority of the 
funding in the discretionary budget is allocated to various 
national security programs.
    As a starting point we need to recognize that as useful as 
the notion of defense versus non-defense is in terms of the 
budget enforcement act and--or the Budget Control Act and 
enforcing the caps, it is not a very useful concept in terms of 
understanding how much of the discretionary budget goes to 
national security programs.
    We spend a lot of money on the defense portion that--which 
funds the Department of Defense and other smaller defense 
agencies. Those agencies are provided a total of about $695 
billion in 2018 and $716 billion in 2019, including both base 
and OCO spending. So that is a lot of money, and those are 
clearly very critical programs.
    But the non-defense discretionary portion of the budget, 
the NDD portion of the budget, also includes a lot of national 
security-related programs and funding.
    In 2018, even using a narrow definition of national 
security and what contributes to national security, I think a 
reasonable estimate of the amount of funding in the NDD budget 
that goes to national security programs is something like $217 
billion, or about 37 percent of NDD funding.
    Some of you will remember the BCA initially back in 2012 
didn't divide the discretionary pie into defense and non-
defense; it divided it into security and non-security. The 
security category used at that time--and embraced by both 
Democrats and Republicans when they passed the Budget Control 
Act--included, in addition to defense, international affairs, 
the VA budget, and homeland security.
    In addition to these three programs, I include in my own 
definition, narrow definition of national security programs, 
three other programs: the Justice Department, which is largely 
focused on funding law enforcement operations, including the 
FBI; the CDC, which is focused on a broad range of activities, 
but especially focused on infectious diseases, which can be 
spread, obviously, either naturally or through malicious 
actions of terrorists; and the food safety programs of the USDA 
and HHS, which protect against both accidental and potential 
terrorist-related contamination of the food supply.
    Deciding what programs to include in a broader definition 
of national security is more difficult and more subjective. But 
I think the list I am going to share with you now is a 
reasonable starting point, at least.
    One would be the Department of Energy, which is focused 
largely on achieving energy independence for the U.S., which I 
think everyone would agree is a critical national security 
goal.
    NASA is the lead civilian agency on space activities, which 
I think is obvious, both scientific and national security 
implications.
    National Institute of Health, critical, obviously, to 
individual health, but also for the health of the economy. As 
the NIH itself says in its mission statement, it is--one of its 
goals is to enhance the nation's economic well-being.
    I also include in this list several agencies that are 
critical to supporting the development of both the physical and 
human capital of the United States, and I think anybody who has 
followed China's developments over the past couple of decades 
realizes the importance of those kinds of programs.
    And I include here the Department of Transportation and the 
Corps of Engineers, which are both, obviously, critical to the 
physical infrastructure of the U.S.
    And also the Department of Education, which plays the 
leading role in developing the human potential of the U.S., 
and--which is, obviously, even probably more critical to 
economic growth over the long term.
    All together, adding this expanded set of agencies 
increases the total amount of NDD spending that is allocated to 
national security programs from about $217 billion to something 
like $392 billion, or a share of NDD going to national security 
programs increases from about 37 percent to 66 percent. So by 
this broader, definition, almost two-thirds of NDD can be said 
to be allocated to national security-related programs.
    I will wrap up with just a few concluding thoughts. 
Reasonable minds can differ over how much of NDD goes to 
national security. But whether it is 2 out of every $5 or 3 out 
of every $5, it is a lot of money. And to me, that reality 
makes clear the importance of reaching a new budget agreement 
that not only raises the caps on defense spending, but also on 
non-defense discretionary spending.
    Absent such an agreement, as has already been said here, 
the cap on NDD will fall by $55 billion, or about 11 percent in 
real terms. And in that kind of world, the only way to protect 
the national security programs within the NDD portion of the 
budget is to basically gut the other portions of the budget. 
The flip side would be protecting those other portions and 
gutting a national security program, and I don't think either 
of those are either wise or realistic options.
    Again, I emphasize the need to reach a new budget agreement 
that lifts the cap on both defense and non-defense 
discretionary spending.
    [The prepared statement of Steven Kosiak follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Yarmuth. Thank you, Mr. Kosiak.
    I now recognize Dr. Shah for five minutes.

STATEMENT OF UMAIR A. SHAH, MD, MPH, EXECUTIVE DIRECTOR, HARRIS 
COUNTY PUBLIC HEALTH (HCPH), IMMEDIATE PAST PRESIDENT, NATIONAL 
    ASSOCIATION OF COUNTY AND CITY HEALTH OFFICIALS (NACCHO)

    Dr. Shah. Good morning, Chairman Yarmuth and Ranking Member 
Womack. It is wonderful to join you both and other members of 
the House Budget Committee. Thanks for inviting me to testify 
on this very important topic. I am Dr. Umair Shah, the 
executive director of Harris County Public Health and the local 
health authority for Harris County, Texas, which is the third-
largest county in the U.S., with 4.7 million people. I am also 
the immediate past president of the National Association of 
County and City Health Officials, which represents nearly 3,000 
local health departments across the country.
    Today I come bringing multiple perspectives on both health 
and health care. From a public health perspective looking at 
systems from the standpoint of a physician and health care 
provider taking care of patients, and certainly also from the 
vantage point of families and patients, my father just passed 
away several years ago--several weeks ago, due to chronic 
disease-related issues and a traumatic fall. All these 
perspectives are so very important, and they all come together.
    In the interest of time, I won't be able to go into my full 
testimony, so my written testimony is here. But what I would 
like to touch on are three main points: one, that public health 
truly matters, especially at the local level; number two, that 
further reductions in public health funding would worsen the 
health of Americans; number three, that investments in public 
health have a positive impact well beyond health.
    First and foremost, local public health is vital to the 
health of Americans and our communities. Public health often 
works behind the scenes as truly boots on the ground, 
performing disease surveillance, ensuring the safety of our 
environment, spraying for mosquitos, providing immunizations, 
picking up dangerous animals, supporting chronic disease and 
mental health efforts, advancing health equity. And these are 
just some of what local health departments do each and every 
day to keep our communities healthy, protected, and safe.
    We are truly the offensive line of a football team. 
Everybody remembers Tom Brady, but not very many people 
remember his offensive line. When we do our job, it is largely 
invisible. We have an invisibility crisis in public health, and 
as it impacts our ability to be appropriately resourced.
    To address this, I strongly believe the solution is 
centered in what I refer to as the three V's of public health: 
namely, visibility, value, and validation. We must, first of 
all, raise the visibility of our work and, in doing so, bring 
the value proposition to the table. Once valued, we get 
validation, which goes through pro-health policies and/or 
investment in our work.
    This investment would enhance the public health workforce, 
modernization and use of technologies, and for the public 
health infrastructure. This value proposition also underscores 
the investment challenge that we have in our country right now, 
and this challenge certainly has consequences.
    This is particularly true for emergencies. I say this 
coming from a community impacted by a series of them over the 
last several years, with Hurricane Harvey being just the most 
recent. Let me correct that--until we confirmed three cases of 
measles on Monday of this week in our community. Our work never 
ends.
    Number two, reductions in public health funding would 
worsen the health of Americans. Evidence clearly shows that 
cuts to public health create a false economy. By saving pennies 
today, governments wind up spending more dollars tomorrow. 
Investments in local public health continually show positive 
returns on investment. Yet today, rather than investing in 
public health, I can tell you we are doing absolutely the 
opposite.
    Fiscal cuts to public health are too costly, and simply 
unsustainable. Across the board, cuts have unintended 
consequences that lead to worsened health outcomes and 
increased costs. This is especially true for the impact on our 
health care system in large and small jurisdictions alike, and 
those most vulnerable.
    The result of these cuts would further the under-investment 
of public health that we already see today. Decreased 
investment in public health leaves us more vulnerable, 
constantly scrambling to address the next crisis upon us, and 
forces us to rob Peter to pay Paul by taking from elsewhere. We 
must have adequate resources to do our job effectively.
    Number three, investing in public health has a positive 
impact well beyond health. Health influences what happens in 
our sector, such as education, commerce, transportation, 
housing, and the environment, to name but a few of the 
connections. Optimizing health is the driver for true human 
potential and, in turn, it is key for our nation's overall 
collective potential. We need Congress to view public health as 
a key partner to build strong and resilient communities.
    I can confidently testify that public health funding must 
be given priority. Current funding is inadequate, and we are 
losing the battle. If nothing changes, we get more of the same: 
more disease, diminished quality of life, and lower life 
expectancy. This means more heart attacks, more strokes, more 
diabetes, more suicides, more drug overdoses, and the list goes 
on.
    This also means diminished resilience to disasters and 
emergencies. We are truly at a crossroads. It will be up to the 
wisdom and judgement of our elected leaders, all of you in 
Congress, to either act now and invest in public health, or 
react later and overspend dearly to undo that which could have 
been prevented.
    According to the Trust for America's Health, the United 
States spends $3.5 trillion annually on health, but only 2.5 
percent of that spending is directed to public health. We can 
and must do more, and we must do it together.
    On behalf of Harris County Public Health and the nearly 
3,000 local health departments across the country, I appreciate 
again the opportunity to testify. Thank you for all you do in 
building safe, healthy, and protected communities where we 
live, learn, work, worship, and play across this great nation 
of ours.
    Thank you, and I look forward to taking your questions.
    [The prepared statement of Umair A. Shah follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Yarmuth. All right. The last witness is Mr. Gray.
    You have got a--quite a tradition to follow. The three have 
been amazingly observant of the time limit. But you are 
recognized for five minutes.

 STATEMENT OF GORDON GRAY, DIRECTOR OF FISCAL POLICY, AMERICAN 
                          ACTION FORUM

    Mr. Gray. Chairman Yarmuth, Ranking Member Womack, and 
members of the committee, it is an honor to be before you today 
to discuss the need to fund the nation's economic and defense 
priorities. Like Ms. Abernathy, I also was a staffer to the 
Budget Committee--albeit on the Senate side, please don't hold 
it against me--so it is a personal honor to be asked to appear 
before you today and I thank you for that.
    I would commend this committee for holding this hearing 
now, anticipating the need to address responsibly the reset of 
the Budget Control Act discretionary spending limits for fiscal 
year 2020.
    In my testimony I wish to make three basic observations.
    First, the Budget Control Act has been a valuable budget 
mechanism, making a meaningful downpayment on deficit 
reduction, while imposing a useful disciplining mechanism on 
discretionary spending decisions.
    Second, with that said, since the failure of the super-
committee and the imposition of sequestration, Congress has 
essentially been playing catch-up in two-year increments. Some 
of these efforts are more worthy of replication than others, in 
my judgement.
    Third, the congressional budget process is well suited to 
addressing the need to responsibly fund discretionary spending 
priorities in a divided Congress.
    I will briefly discuss these in turn.
    In 2011 CBO estimated that the initial round of the Budget 
Control Act caps was estimated to reduce the deficit by about 
750 billion to nearly $1 trillion over the budget window, 
depending on certain assumptions. That is real money. And given 
the nation's fiscal outlook, was a salutary policy 
accomplishment by the 112th Congress and the Obama 
Administration.
    But between the three major elements of the federal 
budget--discretionary, mandatory, and tax--discretionary 
spending is the easy part. Congress, embodied by super-
committee, failed on the hard part, and the result was 
sequestration, a sub-optimal policy regime that unduly focuses 
on discretionary spending, in my judgement. Realigning this 
policy necessarily means shifting the focus away from 
discretionary spending.
    I believe the first two bipartisan Budget Acts are good 
examples of that tradeoff in practice. Eventually, Congress, be 
it this one or a future one, will need to embark on a 
significant fiscal consolidation, an idea BBA 2020 would 
embrace that approach. Fund our national priorities and more 
than pay for it. A second-best option would at least pay for it 
in the spirit of the bipartisan Budget Acts of 2013 and 2015.
    And my final point is that the congressional budget process 
could facilitate this compromise if members choose to embrace 
it for that purpose. It would allow the chamber to express the 
will of its members, while also facilitating potential 
compromise with the Senate. It has the added benefit of 
beginning now, rather than in the waning days of the fiscal 
year. In short, the budget process is there for a reason, and 
is well suited to the purpose before us today, but is only as 
useful as the members want it to be.
    Thank you again for the privilege of being before you 
today, and I look forward to your questions.
    [The prepared statement of Gordon Gray follows:]
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    Chairman Yarmuth. You did even better than everyone else. 
Congratulations.
    Thank you all for your testimony. And now the ranking 
member has arrived, and he is certainly entitled to make his 
opening statement. I recognize him now.
    Mr. Womack. I thank the gentleman from the great 
Commonwealth of Kentucky for giving me this opportunity. I 
apologize for being a bit tardy. We have been praying for our 
country this morning, and----
    Chairman Yarmuth. You weren't in executive time.
    Mr. Womack. No, no executive time, yes. It was for noble 
purposes.
    But good morning, and thank you to everyone for being here 
as we discuss budgetary caps and our fiscal future. Today we 
highlight the challenges related to discretionary caps and the 
competing spending priorities that will be impacted by them.
    Here is the reality. If money were not an object, we 
wouldn't have to worry about spending and funding all sorts of 
great programs. But federal spending is on an unsustainable 
path. This is exactly why we are here - to budget and set the 
priorities of our nation. The Budget Committee needs to do this 
with an understanding that it is tough work to discern between 
the things that we want and the things that we actually need.
    With regard to the specific topic of this hearing, I 
believe that the discretionary caps imposed since 2011 have had 
value. They still have value today, and should be extended and 
increased gradually, particularly to accommodate for spending 
on defense. Our Founders made providing for the common defense 
a priority from the beginning - it is mandated in the 
Constitution. It is up to Congress to fulfill this duty.
    After years of harmful budget cuts that had previously 
impaired our defense, we finally returned to a point where our 
military leaders and troops have the resources needed, and some 
certainty, to do their duty. Stable funding allows our military 
members to plan and meet growing needs and threats. We can't 
build America's military by drastically cutting resources. We 
need consistent and stable funding as an investment in our 
continued security.
    This also means that we need to address the long-term 
fiscal health of our country as a national security issue - 
which brings us back to the main topic of this hearing. We are 
here to discuss discretionary caps, but this conversation - 
while important - is a waste of time without a plan to address 
the true drivers of out-of-control deficits and debt, and that 
is mandatory spending.
    So I have asked my friends, and I asked them last week, and 
I will ask again: Where is the plan?
    Again, mandatory spending is clearly driving up deficits 
and debt. Our nation's fiscal trajectory will remain unchanged 
if we don't address this fact. The pot of money we have to 
spend also gets smaller and smaller, with ideas for Medicare - 
for - All, ``free college,'' and other initiatives touted by my 
Democrat colleagues.
    Rather than encouraging spending that will financially 
drive our country to the ground, I believe Congress needs to 
face mandatory spending head on. We cannot tax our way out of 
this problem. And to believe we can do so is being 
intellectually dishonest. Eventually, without reform, federal 
revenues will only be sufficient to cover mandatory programs 
and interest payments, and that is a scary scenario for 
everyone.
    We need to work together to confront this issue. In an 
ideal world, we would have a functioning budget process in 
Congress, and the Budget Committee would set the top-line 
spending levels for the appropriators to fill in the details. 
As we keep working toward the goal, I think it makes sense to 
both increase and extend the caps going forward, while finding 
ways to address our out-of-control mandatory spending.
    I look forward to a productive conversation with today's 
witnesses. I thank the witnesses for being here, and I thank 
you, Mr. Chairman. And I yield back the balance of my time.
    [The prepared statement of Steve Womack follows:]
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    Chairman Yarmuth. I thank the ranking member. And if any 
other members have opening statements, you may submit those 
statements in writing for the record.
    We will now begin our questioning. And I yield five minutes 
to Mr. Moulton of Massachusetts.
    Mr. Moulton. Thank you very much, Mr. Chairman. I just want 
to refer briefly to the comments made by the ranking member, a 
good friend and colleague of mine, who rightly brings up the 
challenges that we face as a country. And he said that we 
cannot tax our way out of this. But we certainly have tax-cut 
our way into it. And the deficits that have been created by the 
Trump tax cuts are unprecedented in our nation's history.
    I also sit on the Armed Services Committee, so I have a 
perspective on our national defense from that committee seat, 
as well. And when the Secretary of Defense and the Chairman 
testified before the committee two years ago, I asked them 
whether investment in non-defense discretionary spending was 
important for our national security, and they both made it 
clear, unequivocally, that it is.
    Yesterday General Hecker from the Air Force, testifying 
before the committee about the worldwide counter-terror fight, 
said, ``We have seen that the military solution isn't 
working.'' What he meant by that is that critical to the fight 
against terror is that we have a political plan, that the State 
Department efforts on the ground are critical to the mission of 
our troops. This view has been echoed by General Petraeus, 
General Dunford, Secretary Gates, and many, many other defense 
professionals.
    Mr. Kosiak, can you talk about how cuts to the State 
Department impact the mission of our troops in Afghanistan, in 
Iraq, and in other counter-terror fights around the world?
    Mr. Kosiak. I think, clearly, another quote is General 
Mattis, I think, a year or so ago, who said that, ``If you 
don't fully fund the State Department's budget, you have to buy 
me more ammunition.'' So I think the military and former 
military clearly recognize the importance that international 
affairs spending plays in national security.
    The--obviously, the State Department, USAID play critical 
roles in areas like Afghanistan, trying to build that economy, 
in other areas, trying to build up and prevent failed states. 
In Syria, critical, absolutely critical role in providing 
humanitarian assistance.
    And a large part of the State Department budget and 
international affairs budget, you have to remember, is not--you 
know, it is sometimes referred to as soft power, but they are 
very hard-nosed analysts and decisions made as to where that 
funding goes. And a lot of it goes to protecting diplomatic 
personnel around the world, and embassy security around the 
world.
    A lot of it goes to economic and security assistance to key 
allies, like Israel, Jordan, Egypt. A lot of it goes to funding 
operations in areas of the world where we have UN peacekeeping 
to avoid having to have U.S. forces go there. So it is--I think 
a lot of it is very critically linked and closely linked to 
national security.
    Mr. Moulton. In my experience as an infantry officer on the 
ground in Iraq, there were many times when I was asked to do 
jobs that I was unprepared for and untrained for, because they 
were State Department jobs, but the State Department wasn't 
there.
    We also have a basic recruiting problem, where 70 percent 
of the 17 to 24-year-olds can't meet the basic requirements for 
military service, based on education or health standards.
    Ms. Abernathy, how does the U.S. compare with other 
developed countries, in terms of investment devoted to 
education?
    Ms. Abernathy. So we are right about the middle. It is hard 
to make an apples-to-apples comparison, because the U.S. funds 
public education in a very different way than many other 
nations, and that most of the K through 12 funding is at the 
state and local level, not the federal level.
    But when you look at something that OECD calls public 
education funding----
    Mr. Moulton. So we are basically in the middle.
    Ms. Abernathy. We are about the middle----
    Mr. Moulton. So if we want to be an average country, we are 
doing just fine.
    Ms. Abernathy. Right.
    Mr. Moulton. We are all set.
    Ms. Abernathy. We are about in the middle, in terms of 
investment. We are not about in the middle in terms of 
achievement, though.
    Mr. Moulton. Dr. Shah, I just want to get back to your 
testimony on public health. I want to make a few things clear.
    How will failing to raise the non-defense discretionary 
caps affect dealing with the following: the opioid crisis?
    Dr. Shah. So I think it is really important----
    Mr. Moulton. I am going to go through a lot, so try to be 
quick.
    Dr. Shah. Okay. So really important to remember that we are 
already at a lower investment in public health, so when we 
start to decrease, we are further decreasing where we are----
    Mr. Moulton. So we will make the opioid crisis worse.
    Dr. Shah. It potentially could, and that is----
    Mr. Moulton. What about chronic disease?
    Dr. Shah. Chronic disease is the area that I am most 
concerned about, and I actually bring opioid crisis and chronic 
disease together in the form of mental health issues, as well.
    Mr. Moulton. What about the health of kids in school?
    Dr. Shah. Childhood development is absolutely critical to 
the success of our country, and further cuts would also 
diminish that development.
    Mr. Moulton. What about cancer research?
    Dr. Shah. Cancer research depends on how we go about doing 
the cuts, because there are--obviously, there is cancer 
research and there is also provision of cancer care. But in 
terms of----
    Mr. Moulton. What about the training of U.S. doctors at the 
VA? Seventy percent of all U.S. doctors are trained at a VA 
facility.
    Dr. Shah. So I am proud to--this will be my 20th year of 
working in an emergency department setting at the Michael E. 
DeBakey VA Medical Center in Houston, taking care of veterans. 
And I would say that the VA hospitals are fantastic at caring 
for and--veterans, but also incredibly important for the 
education of our future health care workforce. And any critical 
cuts to those is a real serious deficit to health care 
education, and we have to make sure that we don't let that 
happen.
    Mr. Moulton. Thank you, Mr. Chairman.
    Chairman Yarmuth. The gentleman's time has expired. As we 
do normally, the ranking member and I are going to defer our 
questioning time until the end. So I now recognize Mr. Woodall 
from Georgia for five minutes.
    Mr. Woodall. Thank you, Mr. Chairman.
    The Chairman accurately noted Republicans' past 
improvements to health care opportunities for our veterans 
didn't fully fund those opportunities. I would point out we 
have got a bill coming to the floor today and tomorrow that 
passed by unanimous consent last year that both improved 
opportunities for our veterans and paid for those 
opportunities. And yet, when it came back in this Congress, 
having passed the Committee unanimously last year and passed 
the floor unanimously last year, those pay-fors have 
mysteriously dropped out, and we are once again going to make 
promises to our veterans that we are not going to pay for.
    So I want to ask you, Ms. Abernathy, because you have seen 
it from the inside out. You pointed accurately to a promise we 
have made over IDEA, and absolutely never funded. The 
temptation, though, as a legislator, as you well know, is to 
come up with a new Woodall plan for saving education. It is to 
make new promises, instead of going back and funding old 
promises.
    As you look at the federal role in education and the need 
to invest more, would you dedicate those additional dollars 
towards fulfilling past broken promises, or to make yet a new 
round of promises?
    Ms. Abernathy. I think there is plenty of need for 
education investments along the continuum.
    Mr. Woodall. Need, yes. But money, no. So if we have a 
limited amount of money, do you see new priorities that are 
more important than the old priorities we haven't funded? Or 
should we aim for 100 percent of the past before we make a new 
round in the future?
    Ms. Abernathy. I think it is always important to assess 
what the needs are. You know, 15 years ago we would not have 
thought about the need to have digital learning in schools. So 
if you had focused only on what was undone in the 1960s you 
wouldn't be doing anything that you need to do now.
    So there is a--there has to be a mix of reassessing every 
year what the highest priorities are.
    Mr. Woodall. Of course there does. It would be my hope that 
we would either decide that we are going to fully fund the 
disability funding for our local schools or to say, no, we are 
not going to pay that 40 percent. We said we were, but we are 
not. What we are really going to pay is closer to 10 percent, 
and then let's keep that promise instead.
    The history of broken promises, I think, undermines support 
across the board, because you can't count on what that new 
round is, which means to you, Mr. Gray, I appreciate what you 
had to say. Nobody wanted the caps that we have today. This is 
a function of failure. We created a joint select committee, 
said, ``Look at it all. Look at it all, over a decade's long 
horizon, and agree on something that makes a difference,'' and 
they walked out three months later having agreed on--how much 
did they agree on changing?
    Mr. Gray. I believe that was none.
    Mr. Woodall. Not one penny of change in either direction.
    So you still believe, looking at the Congress as it exists 
today, that we can come together in a way that keeps that 
bipartisan promise of 2011 to say we do want to invest more in 
these domestic priorities, but we also don't want to pass that 
bill on to our children and grandchildren we care enough about 
it to pay for it today?
    Mr. Gray. It would certainly be my hope that every Congress 
has that capacity.
    Mr. Woodall. That would be my hope, as well. Listening to 
the opening statements today, I didn't get scratched by all the 
olive branches that were being extended left and right here.
    I wish folks could have seen these two gentlemen when they 
were working together on the Joint Select Committee on Process 
Reform, a bicameral, bipartisan committee. I wish folks could 
see us at our best. Because if we lock these two leaders in a 
room together, we wouldn't have these conversations any longer, 
because solutions would come out the door.
    Let me ask you, Doctor. I grew up in a lower-middle-class 
family. We went to the public health department for all of our 
vaccinations coming along, because that is where the value was. 
But as I sit here in 2019, most of the families in my district 
don't even know where the public health department is, because 
we have found new avenues for those services.
    It is my estimation that we could build support for funding 
public health if we had more individuals involved in accessing 
public health. What do you see on that continuum, from your--
are we going to get more Americans involved in public health in 
a way that they see the value for their own family? Or is it 
becoming a service of last resort until, forbid the thought, a 
crisis hits?
    Dr. Shah. So thank you for that question. I would say it is 
actually both. But I believe it really gets back to the 
comments that I made about the invisibility crisis in public 
health, is that we have this crisis, where folks do not know in 
the communities often times that public health is there, the 
value proposition that it brings, and the importance of the 
work, and the fact that it really does improve the health and 
well-being of communities.
    And so, when folks are trying to then access the public 
health systems, if they are not even aware it exists, there is 
a big challenge. And so we have to raise that visibility. That 
is the first step of the three Vs that I mentioned in my 
testimony.
    Mr. Woodall. Well, I would love to partner with folks in 
getting us back to two-thirds of the budget going to investing 
in America, only one-third going to income support in America. 
But today that means raising public spending to about 35 
percent of GDP, and that is not okay. But I hope we can get it 
done within the 22 percent of GDP that is available to us.
    Thank you for your indulgence, Mr. Chairman.
    Chairman Yarmuth. Absolutely right. No problem. I now 
recognize for five minutes Mr. Higgins from New York.
    Mr. Higgins. Thank you, Mr. Chairman. Obviously, you know, 
investing in America's economic future and security are 
critically important. But it is also important that we 
recognize the size of the federal budget and its impact on the 
larger economy.
    The federal budget is $4.4 trillion. It is about 23 percent 
of the American economy. When there is uncertainty about things 
like shutdowns, when there is uncertainty about things like 
continuing resolutions, when Congress fails collectively to 
exercise its full constitutional authority to make an annual 
budget, that sends a negative message to the larger economy: 
there is uncertainty, there is instability.
    We have an obligation on behalf of the American people to 
use the federal budget in a way that benefits the people that 
provide fundings to support that budget. And we don't do a very 
good job with it.
    The corporate tax cut last year after one year didn't 
produce the promised result. We were told through the magic of 
dynamic scoring that these tax cuts would pay for themselves. 
There is not a tax cut in human history that has ever paid for 
itself. The best case scenario is for every dollar that you 
give away to a tax cut you can retrieve $.30. That puts you in 
a deficit situation.
    We were told by the White House Council of Economic 
Advisors that every American household would see between a 4 
and $9,000 increase in annual income. That has not happened, 
because it is never going to happen.
    So, looking to use the federal budget more effectively to 
make investments that will produce the kinds of growth that is 
necessary to support a budget, that provides very important 
services, is critical.
    Infrastructure, for example. We have been woefully 
inadequate in addressing the nation's infrastructure needs. We 
have a tendency to view infrastructure in terms of the need. 
And the need is compelling, the 56,000 structurally deficient 
bridges. But we also need to look at it economically, and what 
it would do for this economy.
    For example, if we spent $1 trillion over 5 years, that 
would create 23 million private-sector jobs. That is 4.6 
million jobs every year, for each year, over 5 years. That is 
383,000 jobs each month for the next 60 months. The direct 
spending itself would put $200 billion a year back into the 
economy. That is about one percent of growth attributed to 
infrastructure alone.
    But we know from infrastructure that it also has a 
multiplier effect. So for every dollar that you invest in 
infrastructure, you get about a $1.80 to $2 in return. That is 
another $200 billion in multiplier effect. That is a two 
percent-point increase on an annual basis. And that would get 
us to four percent economic growth. The last time we had four 
percent economic growth was about two decades ago--sustained. 
And it produced not budgetary deficits, but budgetary 
surpluses.
    So when we are talking about economic security, we have to 
talk about smart investments into the growth of the American 
economy. I will just leave you with another piece on this.
    You know, we spend a lot of money on basic research. Every 
technology and everybody's smart phone here has the Internet. 
It has touch screen technology. It has a voice-activated 
personal assistant. It has global positioning satellite. Every 
one of those technologies, every single one of them, came from 
government research: DARPA, Defense Advanced Research Products 
Agency. And a billion smart phones, once they were--could be 
commercialized, all that technology, Steve Jobs took it and now 
makes a billion smart phones in China. All that government 
research, yes, it has improved our lives. But I think, on 
behalf of the American people, we have to do a better job in 
getting a better return on the investment we make on their 
behalf.
    Any thoughts?
    Ms. Abernathy. I agree, we think that investing in 
education has lots of returns for both the person who is being 
invested in, the kid in a school, the teacher who has a better 
pay, the person who can go to college, the person who gets 
adult education who didn't have it and wasn't able to read or 
do math skills, and these are all things that benefit the 
economy by having a better-educated workforce and more 
thoughtful adults who can do good things.
    Chairman Yarmuth. The gentleman's time has expired. I now 
recognize Mr. Stewart from Utah for five minutes.
    Mr. Stewart. Thank you, Chairman. And Chairman and Ranking 
Member, thanks for holding the hearing. And to the witnesses, I 
congratulate you. I think you have done a wonderful job.
    And look, a couple of comments and then I do want to get 
some questions. And this is an example where those of us here 
in Congress view the world very differently. It is a little bit 
of Republicans are from Mars and Democrats are from Venus. We 
just have different perspectives on this. And some comments 
here are a good illustration of that.
    For example, the--it is an economic reality that you can 
cut taxes and increase revenue to the government. The 1980s is 
a great example of that. The Laffer Curve is an economic 
principle that is beyond dispute. If you have a 100 percent tax 
rate, you will have zero revenue to the government. And you can 
cut that tax rate and increase revenue to the government.
    So the question we have--and so I would like to put some of 
that aside and focus, if we could, very quickly on some things, 
very broad principles, that I think we can agree on.
    And I would ask the witnesses if any of you disagree with 
this: unbridled debt, an uncontrollable debt, would be an 
existential threat to this country. Can we agree on that? Okay.
    Mr. Gray. Yes.
    Mr. Stewart. Anyone disagree? I will allow you to disagree 
with that, if you don't. Okay.
    The second one is that there are things that we may want--
and this is true individually, and it is certainly true of the 
government--there are things that we may want to do, but we 
simply don't have the money. Can we agree on that?
    Then the challenge that we have, and that you all are 
trying to help us with, and that is we have this responsibility 
and this challenge of deciding what can we do, what can we 
afford to do, and what are priorities.
    And we have also this idea that we--you know, it is the 
government's money. It is not. It is the people's money. And we 
have this sacred obligation to ask the people to contribute to 
the functioning of their government, and then to be responsible 
with that money that they give us. But it is not our money, it 
is the people's money.
    And I would like to focus on defense, if I could. Some of 
you might see my military wings. These are my father's, 
actually. I come from a military family. I served for 14 years. 
And it is the thing that drives me here in Congress.
    And Mr. Kosiak, I might direct these to you, although, Mr. 
Gray, you may have an opinion on this, as well. But the 
challenge we have had is trying to balance these things.
    I think our debt is an enormous problem. On the other hand, 
I understand the fundamental responsibility of the federal 
government is to keep us safe. It is the one responsibility of 
the federal government as the only entity that can do that. And 
we try to balance those two things. Because, just like others, 
there are some things in the military I would love to do, I 
would love to buy, I would love to purchase. But we don't have 
the money, and we have to decide what are the priorities.
    So Mr. Kosiak, talk to me about--under current law and 
current constructs of the budget functions, should we increase 
our defense discretionary spending? Would you recommend that we 
do? And, if so, by how much?
    Mr. Kosiak. Well, I think the--clearly, we have to, I 
think, lift the caps for defense to at least not have the cuts 
that are currently going to happen under the Budget Control 
Act. I don't have a particular recommendation for how much we 
need, but clearly getting back up to those levels is important.
    Mr. Stewart. And I will accept your answer that--briefly, 
if you could, because I agree with you on that.
    But if I--I am going to allow your answer to make a 
proposition, or a--I think connect something, and that is we 
should base how much we spend on an idea of what the threat is. 
Is that a fair presumption, as well?
    And what would be the basis for determining what the threat 
would--would you support the National Defense Strategy as kind 
of the framework for which we should make those decisions?
    Mr. Kosiak. I think the National--yes, I think the National 
Strategy is--you know, largely reflects a--bipartisan views 
about what is important for the--for American security.
    Mr. Stewart. Then I will ask my last question briefly, and 
that is, absent the budget cap deal, defense non-discretionary 
spending will automatically be cut by 71 billion, relative to 
last year's enacted levels. And do you think Congress should--
would you encourage us to try to ensure that that 71 billion in 
reductions don't occur?
    Mr. Kosiak. Well, I would say--again, as I said in my 
statement, I think we need to--there is security spending in 
both the defense side and the non-defense side, and we need to 
lift the caps on both those areas.
    Mr. Stewart. Okay. Mr. Gray, do you have any thoughts on 
this, as well?
    Mr. Gray. No, I think your point about the need to begin 
with defining what the mission of the national security 
apparatus should be, and the national security strategy, and 
the national defense strategy should do that. And then we 
should resource that mission. That is how it should be. I don't 
think we should come up with a strategy and then later pay for 
some of it.
    Mr. Stewart. Yes.
    Mr. Gray. I think we should have a deliberate approach.
    Mr. Stewart. Well, and my time has expired. I wish I could 
say more, but in deference to the chairman I will yield.
    And thank you, sir.
    Chairman Yarmuth. Thank--I thank the gentleman. I now 
recognize Ms. DeLauro from Connecticut for five minutes.
    Ms. DeLauro. Thank you very much, Mr. Chairman. Just maybe 
three quick points at the moment, here. We need parity between 
the defense and non-defense discretionary spending.
    Secondly, if we do not raise the caps, the drastic and 
unrealistic cuts from the Budget Control Act will occur on 
annual appropriations. I sit here as a representative of the 
Appropriations Committee. Absent a deal to raise the caps, 
defense, yes, will be cut $71 billion, non-defense will be cut 
by $55 billion.
    Now, Ms. Abernathy, in your testimony I was really--I am 
the chair of the Labor, Education, and Human Services 
Subcommittee of Appropriations. And education, quite frankly, 
has been short-changed over the past eight years. You point out 
that from 2012 to 2018 funding for the Department of Education 
remained below the 2011 level.
    You also talk about the higher caps didn't result in 
substantial increases for the bill, the bill that I had 
responsibility for that covers Labor, Health and Human 
Services, and Education.
    Non-discretionary spending, in terms of this subcommittee, 
is one-third--one-third--of all of the non-defense spending. 
The largest non-defense appropriation covers programs and 
services that Americans need, including education. And the 
allocation has been seriously below what is, in fact, entitled 
to in this effort, thereby short-changing the issues that you 
are talking about.
    I would make one more point, because I have made it over 
and over again. If we are going to do anything, we need to 
increase the allocation of--for Labor, Education, Health and 
Human Services. And to some of my colleagues who make this 
point, when you can talk about where our priorities are, and 
you can talk about a $1.9 trillion expenditure on a tax cut 
that isn't paid for, let us get our priorities straight when it 
comes to making this nation strong with regard to education and 
health and, yes, natural security.
    Ms. Abernathy, let me ask you this question. Can you give 
us some examples of the damage done by low education funding 
levels in recent years? Where should we focus to reverse the 
trend? What kind of differences would it make to academic 
success?
    Ms. Abernathy. Sure. So the Committee for Education Funding 
doesn't pick and choose among the many programs in the 
education world. We are fighting for a larger, overall 
investment. But I can absolutely give you examples of where 
cuts have happened that have left students and education 
behind.
    The career and technical education state grant program has 
lost 23 percent of its purchasing power since 2005. That is an 
area where there is generally fairly bipartisan support for 
career and technical education. But the support hasn't 
translated into increased funding to meet the need to keep--to 
let students graduate from high school and enter community 
college wherever they want with training.
    The federal work-study program, which helps low-income 
students get part-time jobs while they are in college, in 2009 
it supported 930,000 college students. Today it helps only 
630,000 students, because the funding has been frozen since 
then.
    The main teacher and school leader training program--has a 
long title, but it used to be funded at 2.9 billion in 2010, 
and now it is down to 2.1 billion. Thirty-five percent of 
school districts use at least some of that funding to hire 
highly-qualified teachers. Sixty-three percent or sixty-six 
percent use that funding to train and provide specialized 
professional development for teachers. Without the money, that 
is classrooms without----
    Ms. DeLauro. I am just going to interrupt you for a second, 
because I want--a quick question to Dr. Shah. This is--so there 
are places where we can go if we increase the funding in these 
areas, which only, by the way, increases the national security 
of this country, if we have an educated workforce.
    Dr. Shah, public health infrastructure, which is what you 
were talking about, just a quick question on--we deal with 
disaster relief in this country, and we say 7 to $8 million 
does not have to go--billion dollars--does not have to go 
through an appropriation process. What I have suggested in the 
past is we have a public health emergency fund. We began to do 
that in the last appropriations bill, with--but about 300--what 
is it, 300--it was $50 million, I am sorry.
    But I--my suggestion is that we look to how we deal with 
public health emergencies through $5 billion in a public health 
emergency fund that can help us deal with whether it is an 
opioid crisis, Zika, Ebola, or anything else that comes up, in 
the same way that we deal with fires and floods, et cetera in 
this country. And that is something we have today.
    I just got--my time is over, but your sense of that?
    Dr. Shah. So I agree. Thank you for that. I agree with you 
that $50 million is a first step. It is initial. It is small, 
though, because, really, the----
    Ms. DeLauro. Budget dust.
    Dr. Shah.----$5 billion is really more in line with--
RESOLVE is a group that brought together some experts. I happen 
to be called, as well, in that group. And they estimated that 
public health infrastructure is about $4.5 billion in the hole. 
And so, really thinking about ways that we can actually get to 
that 5 billion mark, and then, when you get that from capacity 
building as core, the biggest thing to remember is that 
capacity building is one of those core elements.
    And what happens is that if you have an emergency, if your 
capacity is higher, you don't have to stretch as much the next 
time you have an emergency. But if your capacity is lower, you 
have to really stretch. And then we do the whole reactive 
funding issue, which then becomes chasing our tails. And what 
we really need to be doing is proactive capacity building 
throughout.
    Ms. DeLauro. Thank you very much.
    Thank you, Mr. Chairman, for your indulgence.
    Chairman Yarmuth. Mr. Roy from Texas is now recognized for 
five minutes.
    Mr. Roy. Thank you, Mr. Chairman. Thank you to all the 
witnesses.
    Dr. Shah, thank you for coming from Texas. It is always 
great to see a Texan here. And sorry about your recent loss, 
and----
    Dr. Shah. Thank you.
    Mr. Roy.----what you are going through.
    I have--unfortunately, I had to step out for a minute to 
welcome a class of high school students from Alamo Heights in 
San Antonio, which I represent.
    So forgive me if I repeat anything that I may have missed, 
but I have not heard a great deal of conversation about the $22 
trillion of debt that our nation faces. I have not heard a 
great deal of conversation about the upwards of 800-something-
billion, 900 billion, almost $1 trillion of deficits that we 
anticipate this coming fiscal year.
    And so what I wanted to do is just take a second to make 
sure I understand the facts. As a new member to the committee, 
as a freshman Member of the House, I wanted to just kind of 
walk through where we have gone under the cap process over the 
last seven or eight years, and see if I understand things 
correctly.
    So I got a couple questions for Mr. Gray, if you would, and 
I am going to kind of walk through some things and just see if 
you would agree. When--if you go back to when the caps were 
implemented, in the first year, in 2013, in fiscal 2013, if I 
understand it we had a total BCA number at $1.043 trillion of 
discretionary spending for defense and non-defense 
discretionary. Does that sound right, Mr. Gray?
    Mr. Gray. I believe so.
    Mr. Roy. And then we had the sequester kick in and then, 
you know, there is sort of a cliff, and it drops down in 2014 
to a number of 967 billion. So we had a drop-off. Does that 
sound about right?
    Mr. Gray. Yes, sir.
    Mr. Roy. And then, in the subsequent year, in 2015, 995 
billion. And it sort of stair-steps up.
    Now, I didn't know our brand-new, awesome hearing room has 
these fancy TVs. So maybe next time I will bring a chart that 
we can put up on one of these screens. But what I am walking 
through is this sort of--this line where we started with BCA, 
and then the sequester kicks in, and then it steps up and it 
goes up through 2019, the year we are in. And, of course, we 
are now looking ahead to 2020 and 2021.
    The reason I mention that--and we could go through each of 
the years, and I could go through the numbers, I just wanted to 
make sure we were on the same page--is all of the previous BBA 
agreements, if I understand things correctly, in 2013 and then 
in 2015, we busted the caps for both discretionary defense and 
non-defense discretionary in the amounts of 45 billion, 19 
billion, 50 billion, and then 30 billion. Serious numbers for 
any average American out there having to balance his or her 
budget at home.
    But now we jump ahead to 2018 because of the stated goal of 
the President and this body, to make sure our men and women in 
uniform have the tools they need when we give them a mission 
abroad. We busted the caps in 2018 $143 billion. Is that right, 
Mr. Gray?
    Mr. Gray. I believe so.
    Mr. Roy. And in 2019 we busted the caps $153 billion. Does 
that sound right for the 2019 level, Mr. Gray?
    Mr. Gray. I believe so.
    Mr. Roy. And of those numbers, it is not quite dollar for 
dollar, but it was 80 billion of defense and 63 billion in 2018 
of non-defense; 85 billion of defense and 68 billion of non-
defense discretionary in 2018 and 2019, respectively. Does that 
sound about right, Mr. Gray?
    Mr. Gray. Yes, sir.
    Mr. Roy. So my point in bringing that up is there used to 
be in Econ 101, right, the sort of notion of guns and butter, 
right? And having a choice between guns and butter.
    Now, I firmly recognize the track that this country is on 
on mandatory spending. We all do. It is unconscionable that we 
keep ignoring it and that we don't deal with it. But in the 
discretionary pot that we have, I think it is safe to say--and 
I just want, again, for all of us to understand and start with 
the same baseline, to use a loaded budgetary term, that when we 
are talking about the baseline and what we look forward to in 
2020 and 2021, and we are talking about all of this non-defense 
discretionary spending that we need, and that we are hearing--
that we are saying is allegedly needed, that at no point here 
is there a guns and butter question tradeoff.
    At no point is there saying, hey, we need $80 billion of 
additional defense spending because we have got our men and 
women overseas in Syria and Afghanistan and abroad, and doing 
all these things, and we need more training, and we need more 
planes, and we need more bullets. So, gosh, we are going to cut 
butter.
    Have we cut butter to pay for defense, Mr. Gray?
    Mr. Gray. So I believe in the Bipartisan Budget Acts of 
2013 and 2015, those increases denoted in sort of the earlier 
part of that----
    Mr. Roy. Right.
    Mr. Gray.----of that chart included, as--in the overall 
legislation, offsets.
    Mr. Roy. Well, it--but did we still have increases in 
overall non-defense discretionary?
    Mr. Gray. Yes.
    Mr. Roy. And then did we continue----
    Mr. Gray. Relative to----
    Mr. Roy. Right. And so then, in 2018 and 2019 do we 
continue to have increases in non-defense discretionary in very 
large amounts of 60 billion and 68 billion in 2018 and 2019?
    Mr. Gray. I believe that is correct.
    Mr. Roy. I would just posit that, for our conversations 
going forward, that that tradeoff of guns and butter is 
important, not just from a budgetary perspective, but also from 
a defense policy perspective, as we look forward.
    And I look forward to having more questions. Thank you, Mr. 
Chairman.
    Chairman Yarmuth. Thank you. The gentleman's time has 
expired.
    Mr. Panetta from California is recognized for five minutes.
    Mr. Panetta. Thank you, Mr. Chairman. Thank you, Ranking 
Member Womack. Thank you to all the witnesses for your 
preparation and your time today. I appreciate this opportunity 
to hear from you and to ask you a few questions.
    Unfortunately for three of you, I am just going to focus on 
Ms. Abernathy. So you guys can take a break.
    Ms. Abernathy, I want to just talk about something that is 
important to my district, and, eventually, important to all 
congressional districts, and that is the census and the Census 
Bureau.
    I was wondering if you could just kind of give an overview. 
Obviously, you are familiar with the Census Bureau, correct?
    Ms. Abernathy. It is not an education program, but----
    Mr. Panetta. Exactly, exactly. If you could, just kind of 
talk about the Census Bureau's current budget, if you have an 
idea on that, what constraints they are facing at this point, 
beyond being--having to be furloughed in this last government 
shutdown.
    Ms. Abernathy. So I don't know what their budget is, but I 
know what the increased need is for the 2020 decennial census. 
Every 10 years Congress goes through the question about how to 
pay for this every-10-year huge burst in spending that is 
needed. I think it is something like 4 to $6 billion more 
needed for this coming year than it was this last year.
    Mr. Panetta. Why is that?
    Ms. Abernathy. Because of the tremendously much more work 
that the Census does for--you know, reaching every single 
household, and there is work that goes into preparation, and 
there is work into doing it, and there is work into analyzing 
it.
    Mr. Panetta. And would you--are you familiar with how 
important it is to make sure they do their job correctly and 
ensure an accurate count? A complete count, I should say.
    Ms. Abernathy. It makes a huge difference to tons of 
different federal programs, not the least of which are 
education programs, because----
    Mr. Panetta. How?
    Ms. Abernathy.----lots and lots of--lots of the federal 
education funding is formula grant funding that goes out to 
states based on the numbers of, in some cases, low-income 
families. That is the same--true for other programs, as well, 
that are beyond--outside the Education Department.
    Mr. Panetta. And if there were significant cuts to the 
census, would that affect the--its integrity?
    Ms. Abernathy. Absolutely.
    Mr. Panetta. How?
    Ms. Abernathy. Well, if you know that the numbers are 
wrong, you are not providing--some places may be getting more 
funding than they would need, based on their population, and 
some places would be getting dramatically less than they would 
need. And that would leave those folks in a bad situation.
    Mr. Panetta. Any populations come to mind that would be 
harmed by such cuts?
    Ms. Abernathy. So this is definitely outside my area of 
expertise, but traditionally the areas where there has been 
large population growth, some of the areas with more immigrant 
families, and more low-income--some of the urban areas, as 
well.
    Mr. Panetta. And what would it mean for Representatives in 
Congress if the integrity of the census was compromised based 
on budget cuts?
    Ms. Abernathy. So, well, Congress Members represent 
people--their districts are decided based on the size of the 
population. You know, you would want that to be accurate, so 
that each state gets the right number of representatives in the 
House.
    Mr. Panetta. Great, great, thank you.
    I yield back my time, Mr. Chairman.
    Chairman Yarmuth. I thank the gentleman. I now recognize 
Mr. Meuser of Pennsylvania for five minutes.
    Mr. Meuser. Good morning. Thank you. Thank you, Mr. 
Chairman. Thank you very much, as well, Colonel Womack. Thank 
you to today's witnesses for their testimony.
    I do want to start by stating I want to agree with an 
earlier comment made by my colleague, Mr. Stewart, stating in 
reference to our friends on the left that they feel the only 
way of increasing revenues is by increasing taxes. That is 
equivalent to stating that the only way a business increases 
revenues is by raising prices. On the contrary, the best 
companies in the world increase their revenues by lowering 
prices and expanding their customer base, just as we should be 
doing, as lower taxes, create a higher level of employment and 
economic productivity. We create more taxpayers, as opposed to 
more taxes.
    Our revenues are projected--the United States federal 
government revenues for next year are projected to grow in 2019 
by 5.6 percent. That is a very healthy growth rate for 
revenues. Our problem is not in the revenues; our problem is in 
our spending, which exceeds that by quite a bit.
    Mr. Gray, as you likely know, between 2014 and 2018 
discretionary spending by the federal government has increased 
by roughly 7 percent. In that same time, we have seen mandatory 
spending spike by 20 percent. Would it be fair to say and to 
assume that future increases in mandatory spending, including 
interest on our debt, of course, will threaten our ability to 
invest in important discretionary programs such as defense, 
research conducted by the National Institute of Health, 
education grants, disaster relief, homeland security, et 
cetera?
    Mr. Gray. Yes.
    Mr. Meuser. Can you offer any recommendations as to the 
discretionary programs that you think Congress should analyze 
and determine if a funding reduction is appropriate?
    Mr. Gray. So I believe that this committee, the 
Appropriations Committee is well suited to provide oversight 
over individual programs. Though your earlier point about the 
budgetary pressures driven by the growth in mandatory and 
interest payments is a real one, and will constrain choices. 
And so that oversight is all the more important.
    Mr. Meuser. Okay. So you are not prepared to offer ideas--
--
    Mr. Gray. On specific discretionary spending programs? I 
believe they should all be accountable to the Congress and to 
the taxpayer.
    Mr. Meuser. Okay, very good. I served as revenue secretary 
in the Commonwealth of Pennsylvania. Then we did a--we analyzed 
through the Department of Human Resources--Human Services, to 
assure that all people receiving government benefits were, in 
fact, eligible to receive those benefits. In the course of this 
review we did save hundreds of millions of dollars on a--near 
$600 million on a $25 billion or so budget.
    Do you think that similar review of our federal 
government--such expenditures would net a cost savings as well? 
And would it be worthwhile to conduct? And, seeing our federal 
government has a lot more zeroes than a state government, would 
it be in the tens of billions of dollars, should we engage in 
such an effort?
    Mr. Gray. I believe there are estimates of improper 
payments across federal programs that run into that order of 
magnitude. I don't know that it is necessarily practical to 
assume that we could sort of fix all of those and just capture 
those savings. However, it is clear that there is certainly 
areas to improve eligibility and scrutiny over the disposition 
of federal payments.
    Mr. Meuser. Okay. Well, thank you. Is there anything else 
that you could add that might guide us this year from a 
discretionary spending standpoint?
    Mr. Gray. Certainly. So I am broadly sympathetic and--to 
the points raised by my colleagues, that there are national 
priorities in the defense--in particular, in my view--and in 
the non-defense discretionary area. In my ideal sort of 
budget--I have worked on this elsewhere--you can fund those 
priorities while, as I noted earlier, also taking on the 
important work of the fiscal consolidation that is eventually 
going to happen. It is really just about when we decide to do 
it.
    And so I think you can fund those priorities while also 
pursuing, I think, a fiscally responsible budget plan.
    Mr. Meuser. I agree. Thank you.
    Mr. Chairman, I yield back the remainder of my time.
    Chairman Yarmuth. I thank the gentleman. I now recognize 
Mr. Horsford of Nevada for five minutes.
    Mr. Horsford. Thank you very much, Mr. Chairman, and thank 
you for giving us this opportunity to address what is probably 
one of the most important issues, which is the overall budget 
blueprint for our nation and the topics that we are covering 
here today.
    I want to start by asking Mr. Kosiak--you were the 
associate OMB director for five-and-a-half years. During the 
period when these mandatory caps were put in place because of 
Congress's failure to come up with a alternative deficit 
reduction plan. Is that correct? And is it--is that correct?
    Mr. Kosiak. Yes.
    Mr. Horsford. And is it correct that these caps were never 
meant to go into effect, that the perspective was they were so 
austere, in fact, that they felt--it was really impractical 
that these forced reductions would go into effect. Is that 
correct?
    Mr. Kosiak. I think that was a widely-shared view, both on 
the Republican and Democratic side.
    Mr. Horsford. So would you characterize this as a self-
imposed action based on a previous Congress because of their 
failure to address budget reduction efforts in the budget 
process?
    Mr. Kosiak. Well, I don't know whether I would want to 
blame a previous Congress or not, but I do think it is a result 
of a failure to agree on a combination of potential slowing of 
growth and mandatory spending and increasing taxes. I mean I 
think that was--the assumption was that something would come 
that would address those two parts of mandatory spending and 
taxes, and that failure put us in this situation.
    Mr. Horsford. And not--and then, since then, not only have 
we not addressed the revenue equation based on the last action, 
in fact now we have tax cuts that have exacerbated the problem 
further.
    Mr. Kosiak. That is correct.
    Mr. Horsford. So I just want to be clear, since my 
colleagues on the other side repeatedly have this morning 
characterized this as somehow pitting defense and non-defense 
spending against one another, I want to make it absolutely 
clear, at least for myself and I believe most of my colleagues 
on this side, that is not the case.
    In my district I have several military bases, including 
Nellis Air Force Base and Creech Air Force Base. And I support 
military spending, particularly for the men and women who are 
in active duty, who are living on marginal wages, some of whom, 
their families are having to rely on public assistance to get 
by, and have to go to food banks in order to make ends meet. So 
I just don't want that characterization to go unanswered.
    I do want to, though, shift to the point of if we are going 
to support defense spending, do we have an obligation to take 
care of those veterans their families when they return. Do 
you----
    Mr. Kosiak. Certainly.
    Mr. Horsford.----on the panel believe that?
    Mr. Kosiak. Absolutely.
    Mr. Horsford. According to the veterans office, the VA 
office, the last report in 2018, there are 45,000 vacancies in 
the VA health care system as of 2018. I have a VA hospital in 
my district. There are over 400 vacancies across multiple 
positions.
    Dr. Shah, is it true that most VA--most doctors, excuse me, 
health care professionals, get their training in VA hospitals?
    Dr. Shah. A vast majority do, yes.
    Mr. Horsford. About 70 percent. And so, if we are failing 
to properly fund the VA, are we contributing to veterans and 
their family members being able to have the adequate support 
and services from the VA hospital that we allege to be 
offering?
    Dr. Shah. Well, first and foremost, we do have an 
obligation to take care of our veterans. And it is an honor and 
privilege to have done so. And I continue to believe that 
educating our health care professionals in the incredible, 
incredible journey of what it is like to take care of veterans 
is absolutely critical.
    In addition to that we also have to be thinking about the 
value proposition overall that we really need to move from is 
this health care delivery conundrum, where $3.5 trillion is 
spent every year on health care delivery to really shifting 
upstream so that we can prevent people from getting sick and 
injured in the first place.
    And I think not--and I am not just talking about the VA, I 
am talking about in general, the shift from 3.5 trillion on 
health care delivery to public health prevention and upstream 
type of activities that really allow us to keep our 
communities, the people that live in those communities, healthy 
and safe and protected.
    Mr. Horsford. And so, if the caps are not addressed, and 
these cuts to the VA are imposed, what does this mean for the 
profession and our ability to provide that care?
    Dr. Shah. Well, any time you have health care professionals 
who are not being educated in that full spectrum, not just VA, 
but in public health sector, in public hospital systems, and 
being able to really work with an incredibly diverse set of 
communities, understand what that really means, what it looks 
like, what it feels like to take care of people from different 
walks of life and different backgrounds, whenever you 
jeopardize that, even potentially, you have a significant 
challenge in the future that you then have to somehow try to 
make up for that health care education that has been missing, 
that gap that is missing.
    So I would say that any potential challenge to that VA 
system that really allows for or really furthers this inequity 
where all of a sudden you cannot provide for health care 
education to future health care professionals, that is a 
problem and that is something we cannot have. And we have to 
really be thinking about how to address that appropriately up 
front, and not having these across-the-board cuts.
    Chairman Yarmuth. The gentleman's time is expired. Mr. 
Burchett of Tennessee is recognized for five minutes.
    Mr. Burchett. Thank you Mr. Chairman, I appreciate the 
opportunity, and I have one question dealing with education, 
but I do want to offer my condolences. I lost both my parents, 
and that is the worst pain anybody could ever endure. And I am 
sorry for your loss. And Dan Crenshaw says you are a stand-up 
guy, so that is okay with me.
    Dr. Shah. Thank you. I appreciate that.
    Mr. Burchett. Yes, sir.
    Dr. Shah. On both fronts.
    Mr. Burchett. Yes, sir. Thank you. And I am not going to 
ask you any more questions, so you are good--for me.
    But my question dealt with education. I have a background 
in education. Both my parents were career educators. And I 
would submit to the committee the first place I would look for 
money is in the Department of Education itself. Their $68 
billion budget, I dare say that any of the 3,912 employees up 
there has ever taught anybody to read at Sarah Moore Greene 
Elementary School in Knoxville, Tennessee.
    But I would like to know, having said all that, the 
Congressional Budget Office projected increases in deficits and 
debts in fiscal year 2019. And I would ask where would you 
suggest making some of the cuts to the budget to fund your 
priorities? And if you could, go into detail on why those cuts 
should be made.
    Ms. Abernathy. I just want to say that it is possible that 
none of the people who work at the Department of Ed taught in 
your school, but a lot of those people at the Department are 
very dedicated former teachers and former administrators.
    Mr. Burchett. I am sure they are, ma'am. But you know, I--
coming--being a state legislator and being eight years county 
mayor, we really got tired of bureaucrats that were telling us 
how it was done elsewhere, when I think they--we would be 
better served if we trusted our locals and our state 
governments to send that money to them and allow them to decide 
where to go. Because one size definitely does not fit all.
    And any time we were--made a comparison, we would always--
they would use the extremes to compare in their statistics. And 
as I have been told many times by statistics teachers, 
statistics don't lie, just statisticians.
    But I would ask that you would answer that question. Where 
would you suggest making some of those cuts to the budget to 
fund your priorities?
    Ms. Abernathy. I think it is up to Congress to decide where 
to cut funding. I think this is part of the difficult decision 
that appropriators and members of the Budget Committee have to 
make choices about where the priorities are. And I think that 
every year the Appropriations Committee has a chance to re-
evaluate where they think the needs are, and where the spending 
should go.
    The Department of Ed has not had funding increases much at 
all in the last few years. In fact, 2018 was the first year 
that funding went up by any real measure. The funding goes to a 
variety of different programs that help--that go out, much of 
it based on formula grants, to school districts. Some of it is 
competitive grant programs, some of it is money to college 
students, some of it is to institutions.
    Mr. Burchett. Thank you, Mr. Chairman.
    Chairman Yarmuth. The gentleman's time is expired. I now 
recognize the gentlelady from California, Ms. Lee, for five 
minutes.
    Ms. Lee. Thank you very much. I want to thank our panel for 
being here, and my condolences also to you, Dr. Shah. I have 
lost my mother and my dad, and I know that pain, and I hope 
that you and your family are doing well, and----
    Dr. Shah. Thank you.
    Ms. Lee.----through this period.
    Dr. Shah. It is hardest for the grandchildren, as you can 
imagine. Thank you.
    Ms. Lee. Very difficult. So give them my regards, 
condolences.
    Let me ask you--well, first, let me just preface this by 
saying to the panel--and my question goes to you, Mr. Kosiak, 
specifically. I am the daughter of a veteran. My dad served 25 
years in the Army. He served in World War II and the Korean 
War. So I certainly understand the need for a strong national 
defense and providing our brave troops with everything that 
they need to do what we ask them to do.
    But let me just ask you a little bit about this budget and 
the requirements for a strong national defense and supporting 
our troops.
    Now, last year it was widely reported that the Pentagon was 
building its 2020 budget based on a total defense level of 
about $733 billion, including base plus OCO. As late as this 
fall, DoD officials were stating that the 733 billion was 
enough to fulfill our National Defense Strategy. But since then 
President Trump has reversed that position twice. He reversed 
it, then reportedly changed his mind and increased it to about 
750 billion after Secretary Mattis and other Republicans 
objected to the cut.
    So I am concerned that we are going to continue to increase 
defense and OCO with no end in sight, and without meaningful 
oversight.
    Now, as you may know--and I hope you remember or saw this 
report--the Pentagon, it actually buried its own report, but it 
found that--$125 billion in waste, fraud, and abuse. And that 
report by the defense business board, it identifies that 
spending could be saved over five years through reducing 
overhead and reforming back-office business practices such as 
contractor reform, reducing their excessive pay, making better 
use of information technology, and reducing unnecessary staff 
through attrition and early retirement.
    So, to your knowledge, did the Defense Department change 
its strategy, first of all, since last fall?
    Has the Pentagon announced a new threat assessment that 
suggests we need to increase the defense spending over $733 
billion?
    And then let me just ask you, in terms of a reasonable 
defense number, does this sound reasonable to you, given the 
huge number, in terms of waste, fraud, and abuse, and all of 
the other excesses of the Pentagon? I mean why can't we get 
this budget under control?
    Mr. Kosiak. Well, thank you. You know, I think the--in 
terms of the change in National Security Strategy, to my 
knowledge there has not been a change that would have triggered 
that kind of change in views on how much money is needed.
    I think the--there is certainly room in the Defense 
Department for finding savings, efficiency savings, across the 
board in a lot of different areas. That is an effort that I 
think Congress should push with the Pentagon, and it is a long-
term effort. So I think that is something that we should 
continue to focus attention on.
    I think, ultimately, you know, there is a limit to how much 
you are going to get through these efficiency savings, and I 
think they do take time to actually implement those kinds of 
savings, so it is probably not a way of avoiding having to lift 
the caps in 2020 to help Defense, but I think, over the long 
term, certainly that is something that we need to focus 
attention on.
    Ms. Lee. But given at least 150 billion in waste, fraud, 
and abuse, why can't we at least cut the budget by 150 billion?
    Mr. Kosiak. Well, I am not familiar with that, or I don't 
recall that report in particular. I am guessing it was not $125 
billion a year.
    Ms. Lee. The Pentagon sort of kept that report--they 
released it and then pulled it back. They squashed it. But we 
know that there are those kinds of--we know that there is 
waste, fraud, and abuse in the Pentagon. And we know also that 
there are missile systems, weapons systems being built now that 
probably will never, ever be needed or used.
    And so I am trying to get a handle, and I know the public 
wants to see a strong national defense, but they do not want to 
see excessive spending by the Pentagon. And that's what we have 
seen year after year after year. And the political will to stop 
this is just not here until we hear from our officials that we 
don't need that kind of spending any more.
    Anybody else have a comment on that, who would know--give 
us some direction?
    Chairman Yarmuth. Well, the gentlelady's time has expired, 
so----
    Ms. Lee. Okay. Thank----
    Chairman Yarmuth. Let's move ahead. Thank you.
    Ms. Lee. Thank you very much, Mr. Chairman.
    Chairman Yarmuth. Thank you very much. Mr. Holding of North 
Carolina is recognized for five minutes.
    Not here? Then Mr. Smith of Missouri.
    Mr. Smith. Thank you, Mr. Chairman. There is a famous quote 
from my home state that says, ``I come from a state that raises 
corn and cotton, cockleburs, and Democrats.'' It is fairly an 
old quote.
    [Laughter.]
    Mr. Smith. And frothy eloquence neither convinces nor 
satisfies me. I am from the Show Me State, you have to show me.
    And so, listening to a lot of the discussion in here today, 
I think it would be very simple for us to just break down where 
our fiscal house is for the United States. And I know when I am 
back home talking to the people that I have the opportunity to 
serve, they get lost in all the zeroes. When you say a billion 
or a trillion, I get lost when you say those numbers.
    So what I just did here, listening, I am trying to show the 
fiscal house of the Show Me State way, and the best way to 
break it down--and I think we have to understand this--before 
we start deciding what programs are extremely important, and 
which ones we have to keep, and how we continue to manage it.
    But we have $22.5 trillion in debt. You take off eight 
zeroes--eight zeroes--and then that is more of a manageable 
number you can think of. That is $225,000. Okay? So we have 
$225,000 of debt, okay? How much money comes in to the federal 
government? Take off eight zeroes. Then you have $35,000. It is 
more manageable. Median income household in southeast Missouri 
is $40,000, so we can think about it from that perspective.
    Okay, so how much do we spend, as a federal government? 
$4.4 trillion. Take off eight zeroes, you break it down to 
$44,000 a year. So if we are a fiscal house, we make $35,000 a 
year and we spend $44,000 a year. We are spending $9,000 more a 
year, if you take off the eight zeroes, than what we are 
bringing in.
    However, we owe $225,000 on the credit card. That is a 
problem.
    So, before we start talking about all these programs, when 
you are talking about taxing and spending, one thing that--I do 
want to correct the record. I heard some of my colleagues on 
the other side, some of my friends, that said that because of 
Trump's taxes we are at a huge deficit. In fact, we had the 
director of CBO here just in the last couple weeks testified, 
and I asked him the question: How much is the deficit and the 
deficit that has resulted from the Trump taxes? He couldn't 
give us a number. He said he would supply it. We still have yet 
to receive it.
    So there is no document, no proof that this committee has 
been provided showing that there has been any deficits from the 
Trump's tax results as of last year.
    What we do have--and he testified--we have the highest 
historic record of revenues ever for the history of this 
country for 2018, for this past year. And that is the first 
year of the Tax Cut and Jobs Act, the first year. And it is the 
highest number of revenues that came in. He did testify to 
that. So clearly, we have a spending problem, because revenues 
are the highest they have ever been in this country.
    So, when you have a spending problem, you have to look at 
it and decide. How are we going to break it down? How are we 
going to look at the programs that best work us (sic)?
    We also have a debt problem. The rules of this Congress 
have been changed to make it easier to increase our debt. If we 
pass a budget proposal, our debt will automatically go up. Some 
call it the Gephardt Rule. I represent part of Dick Gephardt's 
old congressional district in Missouri.
    So, Mr. Gray, I want to ask you. What do you feel about 
elimination of the debt ceiling?
    Mr. Gray. So on the debt ceiling, it has certainly evolved 
over time. Originally, when it was created it was essentially 
to spare Congress the need to enact individual debt issuances. 
Certainly the practice of financing the federal government has 
changed in a long time, or since. And so it has become somewhat 
of a challenge to the Congress. It has always been a difficult 
vote, I am aware of that.
    I am concerned that, increasingly, it is viewed as a 
hostage that can be shot in political negotiations. And I think 
that would be dangerous.
    Mr. Smith. I see my time has expired. Thank you, Mr. 
Chairman.
    Chairman Yarmuth. Thank you very much. Ms. Jayapal of 
Washington is recognized for five minutes.
    Ms. Jayapal. Thank you so much, Mr. Chairman. And thank you 
all for being here. I would just say before I get started to my 
friend, Mr. Smith, that I actually asked the CBO director about 
the tax cuts, and very clearly he said that they did not pay 
for themselves, that they did increase the deficit. And so, you 
know, maybe you weren't in the room for my questioning, but I 
would just----
    Mr. Smith. Would the gentlelady yield?
    Ms. Jayapal. Just for 20 seconds?
    Mr. Smith. Did he give you a number?
    Ms. Jayapal. He did not give me a number.
    Mr. Smith. Because that is what I asked for.
    Ms. Jayapal. He did not give me a number, but--in my 
questioning. But I have seen----
    Mr. Smith. He made the comment, but not a number.
    Ms. Jayapal. some of the statistics out there. And I 
think--the point I just wanted to make is clearly the Trump tax 
cuts increased the deficit. Clearly, they didn't pay for 
themselves.
    But let me just start by saying that it has been good to 
hear from all of you why non-defense spending makes our country 
stronger and safer. And in particular I wanted to focus my 
questions on education, just as one example of where we might 
put some of our dollars.
    I am concerned that our federal investment in education, 
which is just two percent of our total budget, is still below 
what it was in 2011, inflation adjusted. Meanwhile, Pentagon 
spending has doubled over the past decade, accounting for 17 
percent of the budget for 2019. We spend about 3.5 percent of 
our GDP on defense, which is very out of whack with other NATO 
countries, which spend 1 to 2 percent. I mean if President 
Trump got what he wanted, it would be that European countries 
spent two percent. We are at three-and-a-half percent.
    Every day people are feeling the sting of those warped 
priorities, and particularly our teachers. Public school 
teacher pay fell by $30 per week from 1996 to 2015, while pay 
for other college graduates with years in the workforce 
increased by about $124 per week, inflation adjusted.
    I believe that our teachers and our students need more, and 
I believe that education is actually a national security 
priority. These things aren't--they aren't in competition with 
each other, except when we take money away from one to give to 
the other.
    So, Ms. Abernathy, can you explain why Title I aid, which 
serves our neediest schools, has not kept pace with either 
enrollment or inflation over the past decade?
    Ms. Abernathy. So it is a really big program, so it gets 
minor increases, which are--dollar value, you know, sound 
pretty big. But the reality is that there has been fierce 
competition for non-defense discretionary funding. And in the 
last few years the allocation--I actually have a chart on this, 
because I am a budget person.
    Ms. Jayapal. You can distribute it.
    Ms. Abernathy. If you have it, the fourth chart. It shows 
the change in non-defense discretionary caps versus the change 
in the Department of Ed funding for each year.
    And the reality is that when the caps have been so tight, 
even with the increases, that the Labor, Health and Human 
Services, Education bill has not gotten a lot of funding, and 
there has been--there is a lot of really important programs in 
that bill, as there are in other non-defense bills, and 
priority has been given on a fairly bipartisan basis to some 
increases in NIH and other places, and it hasn't gone to 
Department of Ed. And so the big programs like Title I have not 
been able to get increases.
    [Chart]
    Ms. Abernathy. And there it is. So----
    Ms. Jayapal. Thank you. So austerity measures at the 
federal level that started in 2008 have had a huge impact, I 
think, on state budgets that we have seen.
    Ms. Abernathy. Absolutely.
    Ms. Jayapal. Would you agree with that?
    Ms. Abernathy. Yes. A lot of the--something like half the 
state education budgets have just now gotten back to the level 
they were previous session.
    Ms. Jayapal. And if we don't pick up the pace, we are going 
to continue to see teacher strikes, walk-outs, because our 
students are not getting what they need, and our families and 
communities are not getting what they need.
    As I mentioned earlier, the defense budget in 2019 amounted 
to 17 percent of the federal budget. That is $674 billion. If 
we took just 1 percent of that, just 1 percent, which would be 
6.74 billion, and we applied that to the Department of 
Education budget for 2019, how much of an increase would that 
be, relative to the current education budget?
    Ms. Abernathy. It would--so I am horrible at math in my 
head, I need an Excel spreadsheet to do this, but it is 
something around eight percent----
    Ms. Jayapal. Should I just tell you? Because I happened to 
do the research on it.
    Ms. Abernathy. Is it----
    Ms. Jayapal. It would be about a 10 percent increase in----
    Ms. Abernathy. Ten percent, okay.
    Ms. Jayapal.----the current Department of Education budget.
    And so what would that mean for underfunded priorities like 
Title I aid and IDEA?
    Ms. Abernathy. So, believe it or not, a $10 million 
increase would not even be a drop in the bucket to filling the 
need. Special ed is $15 billion, I think. And I can't tell you 
right now----
    Ms. Jayapal. Remember, this is an increase of 6.74 billion.
    Ms. Abernathy. Right. But special ed is at $13.2 billion, 
and it is less than 15 percent of the full funding.
    Ms. Jayapal. Yes.
    Ms. Abernathy. If you were to add 6 billion to that, it 
would still be less than half of the full funding.
    Ms. Jayapal. So we really need a----
    Ms. Abernathy. Yes.
    Ms. Jayapal.----lot to really address our education needs.
    What about higher education? How many students could be put 
through community college, for example, if we redirected that 
military budget spending?
    This is my last question I see.
    Ms. Abernathy. A lot of--a lot, because the Pell Grant 
program, if you were to increase the maximum grants, you 
would--it actually filters down that the average grant goes up 
for everybody, and it makes it more affordable.
    You could change the expected family contribution, and you 
could let me people benefit from Pell----
    Ms. Jayapal. We pay for over two million students to attend 
a year of community college, just as an example.
    Thank you, Mr. Chairman. I think this is a very important 
hearing, and I appreciate your having it.
    Chairman Yarmuth. Thank you. The gentlelady's time is 
expired. Mr. Crenshaw of Texas is recognized for five minutes.
    Mr. Crenshaw. Thank you, Mr. Chairman. Thank you all for 
being here.
    Dr. Shah, I would like to begin with you, who is from my 
home town. And first I want to say I appreciate all the work 
you have done for Harris County and the City of Houston, and I 
want to point out that you were a huge part in leading the 
medical response to disasters from Katrina and from Harvey. So 
you know a lot about this subject, and we really appreciate you 
being here.
    The line of questioning I want to do here is to really, in 
the couple minutes we have--and maybe we will set up another 
appointment when we are back home--to understand the right 
relationship between local public health entities like yourself 
and the federal government.
    So, you know, we have got some recent experience in Houston 
on disasters. And I think you handled it pretty well. You were 
a huge part of that. Were there any situations, were there any 
lessons learned where federal government intervention actually 
impeded what you had to do, or helped you, or could have just 
done a better job partnering with you?
    Dr. Shah. First of all, thank you for those kind words.
    We have seen in Houston and Harris County an incredible 
number of emergencies, all the way back from when I first moved 
and was part of that emergency department setting with Tropical 
Storm Allison through Hurricanes Katrina, Rita, Ike, Harvey, 
two 500-year floods, certainly the first--the nation's first 
BioWatch hit, and then go down the list of an incredible number 
of emergencies--obviously, Ebola in Dallas, and certainly Zika, 
which was most recent, as well as, as I mentioned, just 
confirming three measles cases on Monday.
    So we have a--unfortunately, but I am proud of the 
incredible work that our public health department and certainly 
our partners do to keep our community safe.
    What I would say is that the partnership between local, 
state, and federal government is absolutely critical. Often 
times the federal government provides that support, but I 
really believe strongly that local entities must be incredibly 
nimble, strong, and have the appropriate capacity, where 
federal government comes in and can integrate into the incident 
command structure that is set up at the local level. It should 
be local communities, local response systems that are making 
the calls, and the federal government coming in to certainly 
support the response that is already in place.
    Mr. Crenshaw. Okay, I appreciate that. And we should--we 
will definitely link up when we are back home.
    My next line of questioning is for--on education. And Ms. 
Abernathy, I saw the notes from your testimony, and they make a 
good case for education, as a whole, of course. But no one 
really disputes that.
    The real question, when we are talking about the budget, is 
spending on the margin. What does this extra dollar do for us? 
You mentioned that is a seven-to-one cost-benefit ratio from 
early childhood, but that is one data point, it comes from one 
study where they surveyed about 123 students. So I don't want 
to dismiss that study completely, but it is just one data 
point.
    And this is the question I want to get at here, because I 
have a whole packet of other studies from a progressive think 
tank, the Center for American Progress, that really 
demonstrates that spending and outcomes are not necessarily 
related. It really depends on how you spend that money. And 
when we are building a budget, I mean, that is really the 
questions we have to ask. Where do we need to invest that will 
result in higher outcomes?
    I mean would you agree with that, generally?
    Ms. Abernathy. Absolutely, although there are some things 
that we do invest in to keep us safe from fires and----
    Mr. Crenshaw. Sure.
    Ms. Abernathy.----things like that, that aren't about 
higher outcomes or about, you know----
    Mr. Crenshaw. Yeah.
    Ms. Abernathy.----safety.
    Mr. Crenshaw. Right. But when it comes to education, we 
want to be investing in the right places because, again, we can 
pour through the data, and we can show that in certain school 
districts they spend a certain amount per student, and in 
others they spend a different amount per--a much higher amount 
per student, and they get way worse outcomes. So there is 
obviously something else at play.
    Also, I want to correct the idea that we should be thinking 
of our spending on education in terms of--as a percentage of 
the federal budget. The reality is that 90 percent of our 
education spending--or about that--is local and state. And what 
we should really be looking at when we compare ourselves with 
other developed countries is how much we spend per student. And 
the United States spends about 20 percent more than the rest of 
the developed nations, OECD countries.
    So I just want to correct the record on that, and then ask, 
like, what are the top three things to invest in on education, 
in your opinion?
    Ms. Abernathy. So again, you know, this organization that I 
am--has 113 different members. And if you ask each of them, 
they would probably come up with a different answer, because 
they are all working on different things that all go together. 
It doesn't make any sense to invest in early childhood 
education and then drop the child and never put any more money 
into maintaining access, equity, things that matter. It doesn't 
do any good to put a ton of money into STEM education in high 
school if you have students who aren't ready to read and do 
math at the high school level, who need that.
    So you need investments all along. And the federal 
investment does a bunch of different things. It fills in niches 
where the state and local funding for K through 12 hasn't been 
able to bear the whole cost because we have a state and local 
education system that is based on property taxes.
    You end up with very big disparities between what different 
localities can afford to do. You end up with programs like 
Impact Aid, which helps school districts that are in areas that 
don't--because of the federal--have a large federal presence, 
either in military bases or Indian reservations, where people 
are not paying taxes, but the students are going to schools, 
and so they have schools and needs, but not a way to pay for 
them.
    So there is a lot of things that federal investments do 
that are not just sort of what is the best dollar for this one, 
how can I get a dollar of achievement for this. It is filling 
in places where it is absolutely needed.
    Mr. Crenshaw. Right, and each local level is going to have 
a different opinion on that, I am sure.
    Ms. Abernathy. Right.
    Mr. Crenshaw. Because of different preferences.
    Thank you, Mr. Chairman.
    Chairman Yarmuth. The gentleman's time has expired. Mr. 
Price of North Carolina is recognized for five minutes.
    Mr. Price. Thank you, Mr. Chairman. I want to thank all of 
our witnesses today. This is very helpful testimony. I think we 
can conclude that the Budget Control Act, which still hangs 
over us--the decade isn't over that that Act covers--has really 
made rational budgeting, responsible budgeting, much more 
difficult.
    Of course, the original Budget Control Act was an 
invitation to failure, given the rise of anti-tax ideology on 
the Republican side. We were never going to get that grand 
bargain that the Budget Control Act anticipated, although 
Speaker Boehner, up to a point, did try. We weren't going to 
replicate the budget agreements, the comprehensive agreements 
of 1990, 1993, 1997, those agreements that contributed not just 
to balanced budgets, but to paying off 400 billion of the 
national debt.
    One would hope that historical lesson isn't too hard to 
learn, but it turns out that it is, and that our current 
economic situation is far more dire, but our political 
situation has not permitted anything like that.
    And, of course, then sequestration came. That failure 
produced sequestration. The sequestration axe fell. And that 
has made, of course, bipartisan appropriating impossible. It 
has actually made appropriating impossible. The Republican side 
of the aisle--we have written appropriations bills to 
sequestration levels year after year, and those bills simply 
can't pass, and we have ended up, then, with these two-year 
budget agreements, two-year budget agreements.
    But we typically reach those agreements after we have--we 
do the right thing after we have tried everything else. A lot 
of budget drama ensues, a lot of shutdowns, threatened 
shutdowns, various crises, and then finally we get a two-year 
deal that lets us write, more or less, adequate appropriations 
bills.
    So what I want to focus--and I will start with you, Ms. 
Abernathy, but any others would chime in--the--you know, we--in 
the end we have gotten these two-year budget deals. I hope this 
time we can do it at the front end of the process with the 
budget resolution, or whatever serves the purpose of a budget 
resolution that lets us write these appropriations bills at 
good levels to start with.
    But clearly, we pay a price for all this drama and all this 
uncertainty, and this lurching from crisis to crisis, from 
budget agreement to budget agreement.
    And so none of you focused particularly on the uncertainty, 
the price of uncertainty. We have been talking mainly about 
just overall funding levels. But I want you--of course, this 
latest shutdown has contributed to this atmosphere, but I would 
like to ask you to address budget uncertainty and what kind of 
stake we have in early-on getting our top-line numbers set 
early on, so that we can write our appropriations bills on 
budget, on time, and everybody concerned will know what we are 
dealing with.
    Ms. Abernathy. So in the educational world many of the K 
through 12 programs are what is called forward funding, which 
means that the funding for the fiscal year comes out not on 
October 1st, but for July 1st, because October 1st is the 
middle of the school year, already.
    But the reality is that if there is no funding certainty 
for programs well beyond October 1st or into January or into 
March, like last year, you have got school districts that are 
having to make their budgets, which--their budgets often start 
July 1st. They have to give out layoff notices to teachers 
because they don't know what their federal funding will be for 
the coming year.
    Years ago, when I was working in Head Start program, or the 
Head Start early childhood program, and we had grantees on an 
Indian reservation, the government was functioning under a 
series of short-term continuing resolutions, and they needed to 
sign leases for their child care centers, and they couldn't 
because you can't make a promise to spend money that you don't 
have yet. And it is the Anti-Deficiency Act, you can't promise 
a year-long lease. And we have to tell them, ``You can't sign 
your lease for your child care center.''
    So the uncertainty has dire consequences for planning and 
ability to effectively use the money.
    Dr. Shah. And I would--from a health standpoint I would 
completely agree with my colleague here, in terms of education, 
but also from the health standpoint. Uncertainty has profound 
impact on our ability to plan, our ability to make assurances 
to our communities, but also to our staff members, as they are 
also in the midst of that community, looking at where--you 
know, where the funding is going to come for their grants or 
the activities that they are involved in, both for themselves 
but also, more importantly, for the community that they serve.
    And so uncertainty is an incredibly important issue, and I 
think it is something that really makes these two-year 
processes very challenging for the local level, because we 
often times, especially in smaller jurisdictions, do not have 
that additional capacity. And so that is a big issue.
    Mr. Price. Mr. Kosiak?
    Mr. Kosiak. Well, I would just add it is--I agree with both 
my colleagues here. And I think in the national security world 
and certainly the defense world, having uncertainty about what 
the level is going to be has a big impact on the ability to 
plan effectively and efficiently.
    Mr. Price. Thank you.
    Thank you, Mr. Chairman.
    Chairman Yarmuth. Mr. Gray, do you want to respond?
    Mr. Gray. Thank you. I would agree with what my fellow 
witnesses said on that point, and that is why I made the point 
in my testimony that the budget process can allow this body to 
sort of get in front of that and take this on proactively.
    Mr. Price. Yes, thank you.
    Chairman Yarmuth. Yes.
    Mr. Price. Thank you, Mr. Chairman.
    Chairman Yarmuth. You are very welcome. The gentleman's 
time has expired. Mr. Norman of South Carolina is recognized 
for five minutes.
    Mr. Norman. Thank you, Mr. Chairman. Thank you for the 
panel, for taking your time today.
    Let me just mention what my friend, Congressman Smith, 
mentioned about, you know, we keep hearing, you know, the tax 
cuts, you know, going against the budget, it is costing us. We 
have never had that number.
    But let me tell you a number that we have seen. And I am 
from the private sector. I am a real estate developer. I am not 
a professional politician. I really never liked politicians 
that much. But let me tell you a number that we can go with: 
350,000 new manufacturing jobs, growth in the economy. The 
last, the previous administration, 1.5 percent growth of GDP. 
We are now three-plus.
    And in the world I come from, there is an enthusiasm, there 
is a reason people are putting equity back in their business, 
and it is due to the tax cut, President Trump, and the 
regulations that are cut. These are real numbers that you can't 
dispute.
    And also I would just say that, as one of my colleagues 
mentioned, that in the private sector, if you just take the 
position you are going to raise prices, you are going to have 
customers saying, ``Bye bye. We have got competition, we are 
not going there.''
    But on the deficit that has been talked about, the 22 
trillion--and by my estimation it is probably over $200,000 
every man, woman, and child--we talk about it, but we never do 
anything about it.
    And Ms. Abernathy, you are exactly right when you said it 
is Congress's role to decide what to cut and not to cut. What I 
find from being up here is that everybody wants cuts until it 
cuts your particular program that affects your particular 
district. And when the hordes of lobbyists come out to assail 
you for doing any kind of cuts, that is what we are facing. And 
what we have got to get back to is needs versus wants.
    And I am tired of hearing numbers. As I said in committee 
yesterday we keep talking about numbers that, you know, that we 
are going deeper and deeper into red. It is like rearranging 
the chairs on the Titanic. It is now time for us to take the 
bull by the horns and do something.
    Ms. Abernathy, do you think--and I keep hearing numbers--
all my friends from the left--free education, free health care, 
free this and that. If you--conservative estimates that I hear, 
10 trillion over the next 10 years. Is it possible to devise a 
tax increase system that will pay for the increases in 
spending, much less making a downpayment on the debt?
    Ms. Abernathy. So I am not an economist, I am not really--
I----
    Mr. Norman. I am asking your opinion. Is it possible to do 
that in government?
    Ms. Abernathy. I think the idea of the government is that 
you have got two choices each time. You measure, you know, the 
same way a family does. You have income coming in and you have 
cashflow going out. And, you know, when you have a kid going to 
college you take on some debt, and then you hopefully earn some 
more money, or maybe someone goes and gets a second job. 
Congress does have a choice----
    Mr. Norman. That is true in the private sector. I am 
talking about in government, where we are right now. Is it 
possible--can--do you think we can just raise the tax rates 
enough, keep this economy afloat, keep the growth, and pay for 
anywhere close to what we are talking about in new spending?
    Ms. Abernathy. I think Congress is talking about some new 
spending--some people in Congress are talking about some new 
spending programs. Some people in Congress are talking about 
looking at entitlement reform. Some people are talking about 
changing marginal tax rates.
    I think that some of the changes would happen gradually 
over time. There is not--there is--the government--federal 
budget is not on a great long-term trajectory, so there are 
also changes that should be made. The talk about drastic cuts 
to non-defense discretionary is not quite decimal dust, but it 
is pretty small compared to the big picture.
    But I think that there are ways you can change a lot of 
different things that would put the economy--or the budget on a 
fiscal path to balance----
    Mr. Norman. Is----
    Ms. Abernathy.----but it would take a while to do it.
    Mr. Norman. It wouldn't take long in the private sector. In 
government it takes longer, because somehow people look on it 
as not our--not their money. They look at it as something that 
drops out of heaven and comes down. But I am telling you the 
Main Street USA is paying attention now, as never before. And 
unless we get a handle on it--and I agree, that is our 
responsibility.
    Let me ask you. We have got so many programs on autopilot. 
They receive funding, we have no debate. As far as 
accountability in wasteful spending, what is your--and I direct 
this to Mr. Gray and then to Ms. Abernathy. What is your--as 
far as accountability and, I guess, measuring it so the 
American people have a number to look at?
    Mr. Gray. So, in terms of wasteful spending, that is--of 
course, is entirely in the eye of the beholder.
    Mr. Norman. The beholder, right.
    Mr. Gray. And so that is a problem and sort of a value 
judgement. And so--rather, I think--and we spoke to this 
earlier, which is, at least in terms of ensuring--of those 
programs that we have, we should make sure that they are well 
functioning and are benefitting the people they are intended 
to.
    Mr. Norman. Thank you so much. I yield back.
    Chairman Yarmuth. The gentleman's time is expired. Mr. 
Kildee of Michigan is recognized for five minutes.
    Mr. Kildee. Thank you, Mr. Chairman, and thanks for holding 
this very important hearing. I appreciate the perspective of 
the witnesses here today. It is hard to ignore the context of 
the hearing. We just had a government shutdown as a result of 
our inability to come, I think, to what could have been a very 
easily-settled conclusion on our priorities here, absent one 
issue. I think we all agree that that is no way to govern.
    And it is interesting that we are talking about self-
imposed cuts that are done without an Act of Congress by 
operation of law. We don't see them willing--and I don't want 
to go too deep in this--we don't see him willing to impose the 
same constraint on ourselves to trigger an automatic continuing 
resolution if we are unable to come to some agreement. We seem 
to think that it is okay to punish the American people for our 
failure to come together, and I think that--at some point--I 
won't get into that, but I think, obviously, that is something 
we need to address.
    Similarly, in this hearing it has been fairly well 
reaffirmed that arbitrary, across-the-board cuts are no way to 
run the United States Government. These cuts have an impact, 
they have consequence on our economy and our growth, and they 
also have consequence on the quality of life for the people 
that we work for. They have a consequence for our ability to 
keep ourselves safe. I think we all would acknowledge that the 
first obligation of our government is to keep us safe, to keep 
our citizens safe.
    And I think it is incredibly important that we point out 
that the mechanisms by which we keep our citizens safe are not 
limited to defense and military spending. The way we keep 
ourselves safe covers a broad range of very important 
initiatives. And discretionary budget cuts to non-defense 
programs will make America less safe.
    And I know that--I may sound redundant when I say this, 
because I know a lot of members have heard me talk about my 
home town--I come from Flint, Michigan, a community that has 
experienced tragic consequences as a result of the failure of 
government at every level to act effectively to keep the people 
safe. Triggering automatic cuts to important domestic 
priorities will put more people in this country at risk of 
great harm.
    So I think it is important that we keep that in mind. If 
our priority is to keep America safe, we ought to act to keep 
America safe, and not simply take the position that there is 
only one way we do that. There are real consequences for our 
failure. And I don't believe that the priorities that we have 
pursued adequately keep America safe.
    The consequences that my home town have felt has changed 
the trajectory of those lives. People died. That little bit of 
magic that was stolen from some of the children in my home town 
one day at a time as a result of being exposed to dangerous, 
unsafe drinking water is not an experience that is limited just 
to that community. Every day other Members of Congress on both 
sides of the aisle come to me and talk about the threat that 
their communities face to the safety of the people that they 
represent because of the inability of our collective 
governments at every level to properly invest in safeguards.
    So let's not fool ourselves into believing that somehow 
this is a question between domestic priorities and our 
obligation to keep America safe. It is the same thing. It takes 
different forms.
    Having said that, if I could just get--because I only have 
a minute left--an answer from Mr. Kosiak.
    Given that as a backdrop, do you think there is some ideal 
equilibrium? Do you have an opinion as to whether there is some 
ideal equilibrium between defense and other discretionary 
programs that keep us safe at home? Are we there? Are we 
getting closer or farther away from that equilibrium, if you 
believe one exists?
    Mr. Kosiak. Well, I--it is a good question. I am not in a 
position to really give an answer on what the right equilibrium 
is.
    I do think, as I pointed out in my statement, that, you 
know, we have to recognize that there is a lot of funding on 
the non-defense discretionary side that is security-related. So 
when you are trying to balance things, you have to think about 
not only how much do we need for national security, but how 
much--you know, what is the right balance between defense and 
non-defense national security, because there is at least $200 
billion in the NDD budget that is----
    Mr. Kildee. But would you agree--my basic premise is that 
national security, I think, often is a misnomer in the sense 
that if you have your life, or your well-being, or the 
trajectory of the life of your child threatened by the fact 
that the federal government is walking away from its obligation 
to protect safe drinking water, isn't that a threat to 
national----
    Mr. Kosiak. I think that is absolutely--the--putting it 
like that, I think, is an absolutely great way of putting it, 
because--you know, one thing that I would--I encourage 
everybody to do is go through the budget and look through what 
these domestic agencies do. And a lot of it, you know, it looks 
a lot like security, whether it is national security or not. 
You know, maybe that is a less important question.
    Mr. Kildee. Thank you. My time has expired. I appreciate 
your comments.
    Thank you, Mr. Chairman.
    Chairman Yarmuth. Thank you. The gentleman's time is 
expired. Mr. Hern of Oklahoma is recognized for five minutes.
    Mr. Hern. Thank you, Mr. Chairman. Thank you, Ranking 
Member, and certainly the witnesses for being here today.
    Mr. Kosiak, thank you for your testimony regarding the need 
to invest in America's economic and national security. I would 
like to read, if I may, a quote from a gentleman that we all, 
Democrats and Republicans--obviously, both sides of the aisle 
are equally admirable of this gentleman when he read this, or 
said this to the Senate committee back in 2017. ``Incorporating 
the broadest issues into your assessments, you should consider 
what we must do if the national debt is assessed to be the 
biggest national security threat we face. As President 
Eisenhower noted, the foundation of military strength is the 
economic strength in our few short years. However, we will be 
paying interest on our debt, and it will be a bigger bill than 
we pay today for defense.''
    ``Much of the interest in money is destined to leave 
America for overseas if we refuse to reduce our debt or pay 
down our deficit. What is the impact on the national security 
for future generations who will inherit this irresponsible debt 
and the taxes to service? Yet no nation in history has 
maintained its military power if it failed to keep its fiscal 
house in order.'' And that was from General Mad Dog Mattis.
    When you look at those issues, I think you testified 
earlier that there is a need to keep the defense going. And 
Mattis actually testified just last year that he felt, to 
maintain--and other military experts--to maintain our economic 
strength, to--first, to continue to catch up, that we needed to 
increase our defense spending two to three percent per year, 
basically, in perpetuity to keep up with the ever-growing 
threats that we have from Russia and China.
    And my colleague on the left mentioned that, you know, we 
spent a lot on defense, more than some of--three or four other 
nations combined. We are not trying to take those countries 
over. We are not trying to invade those countries. They are 
trying to harm us. And so it is unfortunate we are trying to 
defend against multiple nations that are very large nations. It 
is flattering they want to be here, and they want to be like 
us, but we have to defend ourselves.
    So would you agree with Mr. Mattis and other military 
experts we need to continue--get on a regular increase in 
spending in defense? And if not, why not?
    Mr. Kosiak. Well, I would certainly--it is a very good 
question. I would certainly agree that we need to bring defense 
back up to--we can't have a $71 billion cut, that would be 
devastating in 2020.
    I also agree with his comment about addressing the debt 
over the long term. I think we do need to look at raising taxes 
and scaling back some on mandatory spending programs.
    I don't have a particular level in mind for defense over 
the long term. I do think some growth is necessary. Certainly, 
you have to, at a minimum, keep up with inflation. And I think 
we need to look at that both on the defense and non-defense 
side, as I say, since they both have important security-related 
programs.
    Mr. Hern. Mr. Gray, do you think, given the nation's 
projected $11.6 trillion deficit over the next decade, do you 
believe there would be merit in offsetting any increases to the 
discretionary spending with reforms to mandatory spending?
    Mr. Gray. Yes.
    Mr. Hern. And do you have any opinions? Not--you don't have 
to have a spreadsheet, but any opinions on that?
    Mr. Gray. Well, I do have a spreadsheet on my computer, but 
that spreadsheet is part of a overall budget plan that I am 
working on. That is kind of my first best option, would be for 
this Congress--really, any Congress in the future, as well--to 
embark on the fiscal consolidation to get the debt onto a 
sustainable trajectory. That necessarily means making reforms 
to the large and fast-growing entitlement programs.
    And the menu of options that you can sort of deploy in that 
effort are extensive. But I think that would be sort of the 
first best approach.
    The second best option would reflect the compromises made 
in 2013 and 2015. They weren't major entitlement reforms, but 
there were some programmatic reforms, some of which will yield 
substantial savings over time. I think that is--those are good 
models, if the Congress isn't going to sort of do the grand 
bargain under the big fiscal consolidation.
    Mr. Hern. Much has been said about the President's--want to 
be a protectionist country and not look at globalization as an 
opportunity. So for those nay-sayers that are--I am a global 
guy, I think global economies are very, very important. As we 
look at going forward, there has been much said about paying 
for some of these offsets, if you will, to some of these 
increased spending programs, by going back to the corporate tax 
code and moving it from 21 to 25 or 26--pick a number any day, 
how many billions do you want?
    How much harm do you think that would do, in light of the 
fact that many developing nations have actually lowered their 
rates since we lowered our rate?
    Mr. Gray. Right, I don't think that that would be a 
particularly efficient way of offsetting the discretionary 
increases being contemplated here.
    Mr. Hern. So really, we are left just with one option. That 
is just raise income taxes on everybody to the point where we 
run out of other people's money to pay for things that we can't 
afford any more. And there was once a real famous lady who said 
that was the definition of how Socialism actually fails.
    Chairman Yarmuth. The gentleman's time has expired.
    Mr. Hern. Thank you. I yield back my time.
    Chairman Yarmuth. The gentleman's time has expired. Ms. 
Jackson Lee of Texas is recognized for five minutes.
    Ms. Jackson Lee. I thank you, Mr. Chairman. And to the 
ranking member, as well, I look forward to the enthusiasm in 
this committee to do a job that is long overdue. I am 
optimistic. I am, frankly, going to project lifting the budget 
caps. I want sequester to go into the dawn of yesteryear, 
because, obviously, the grand bargain did not rise to the 
occasion.
    But let me put this in the record as I quickly ask 
questions of the witnesses. And let me thank you very much. I 
was delayed because I was in Judiciary, in the midst of 
oversight of this administration, which, obviously, has not 
been done for a period of time.
    But according to the Congressional Budget Office, the U.S. 
will collect 1.74 trillion in individual income taxes in the 
current September-ending fiscal year of last year, and 22.38 
trillion over a decade, a 10 percent reduction than would cost 
174 billion for one year, or 2.24 trillion over a decade. And 
this was October 23rd, 2018.
    Of course, this is to respond to, I think, a question that 
a gentleman made that he didn't have any facts about the impact 
of the Trump tax cut. New estimates of GOP's second tax cuts 
would add 3.8 trillion to the deficit. A second round of 
Republican tax cuts would add an additional 3.2 trillion to the 
federal deficit over a decade, according to a centrist think 
tank.
    So we can find our resources or our numbers in many 
different places, but I think the bottom line is, yes, there 
has been some increase in manufacturing. And who knows? That 
could have been in any setting to create an increase in 
manufacturing. And I am glad that it is. But we do know that 
there are many, many people who are still unemployed.
    And so my questions are going to be around my enthusiasm 
and my optimism of developing a budget resolution that really 
takes the test of Hubert Humphrey: the moral test of government 
is how that government treats those who are in the dawn of 
their life, the children; those who are in the twilight of 
their life, the elderly; and those are in the shadows of life, 
the sick, the needy, and the handicapped.
    And that looks like old-fashioned talk, but it is amazing 
to me that that is considered old-fashioned talk. And it is 
that, because my friends on the other side of the aisle 
continue to use as the only measure of fiscal responsibility is 
the reining in, cutting, chopping away, dismantling, 
dismembering entitlement.
    And I would say that if there was more of a dual 
conversation, that tax cuts as well provide a deficit, and 
don't do much because it certainly doesn't do much for what we 
call working Americans, or others.
    So let me raise these questions. As I do so, let me 
acknowledge Dr. Shah, a dear friend and someone who we have 
worked on (sic). And I just want to emphasize he is truly a 
hands-on physician, having come out of the emergency medicine 
background, and now leading Harris Public Health.
    So first let me say to you, Dr. Shah, welcome. And one of 
the agencies, as you well know, that I have been a champion of, 
the Centers for Disease Control, NIH, and we have experienced 
Ebola and we have experienced Zika. We have experienced a 
measles outbreak as I was leaving. What is the importance of us 
funding Centers for Disease Control, NIH as it impacts public 
health?
    And my time is short and I have two other questions.
    Dr. Shah. First of all, thank you so much for those kind 
words. Absolutely critical. What happens in funding federal 
agencies such as CDC, NIH, et cetera, is that those dollars 
actually, at the end of the day, they come to state level and 
certainly down to local level and to the local communities.
    So ultimately, if we cut those agencies in ways that are 
across the board or even sometimes surgical, the end result is 
that local communities and local members of those communities 
are impacted by those cuts.
    Ms. Jackson Lee. So those trillions of dollars that is 
going into Republican tax cuts, if that is not utilized or 
replaced, we are seeing--because you are in discretionary 
spending, non-defense discretionary spending--you have seen 
dollars go down for Centers for Disease Control, in terms of 
coming back out to local communities.
    Dr. Shah. Well----
    Ms. Jackson Lee. You have actually seen that.
    Dr. Shah. Absolutely. And I think that real shift from 
health care delivery, where we are already spending those 
dollars to shift it upstream to public health and investment up 
front, so we have the downstream consequences diminished, that 
is the absolute. That is the equation. Not increasing the 
dollars necessarily, but trying to find ways to spend them more 
wisely.
    Ms. Jackson Lee. And I join you in that. That is why I 
think this committee can do a budget that they should do 
aggressively.
    To both Ms. Abernathy and the--excuse me, Mr. Gray down 
here, one--you understand that we are trying to construct a 
census that works. You hear the lawsuits about citizenship 
being asked, major budgetary deterrent, as far as I am 
concerned. Your comments on that, and the importance of 
structuring a census right as it ties to funding in a budget.
    And then, Mr. Gray, I am very interested in national 
security issues, but you heard my numbers about the tax cuts. 
Can we find common ground to acknowledge how the tax cuts are, 
but as well to find a common ground as it relates to national 
security that is outside of defense? Could you just answer?
    And I thank the chairman for his indulgence.
    Chairman Yarmuth. You both may answer.
    Ms. Abernathy. Just quickly, that having an accurate census 
count has huge impacts on how education dollars are spent in 
the local and state areas.
    Chairman Yarmuth. Mr. Gray?
    Ms. Jackson Lee. Mr. Chairman, if he can just--one moment?
    Chairman Yarmuth. Mr. Gray, yes, go ahead.
    Mr. Gray. Certainly. That would certainly be my hope. And I 
think that the budget process is the appropriate vehicle for 
trying to find that common ground.
    Chairman Yarmuth. Okay, the gentlelady's time has expired.
    Ms. Jackson Lee. Thank you Mr. Chairman.
    Chairman Yarmuth. Ms. Omar of Minnesota is recognized for 
five minutes.
    Ms. Omar. Thank you, Chair and Ranking Member for this 
important conversation. Oh, it's not on. Alright. Thank you, 
Chair and Ranking Member for this important conversation. I 
truly believe budgets really are a value statement. And I am, 
with my colleague from Texas, on really having an old-fashioned 
conversation about this, and speaking really to what it means 
for us to have an aggressive budget that focuses on the needs 
of our communities and one that speaks to truly having 
prosperity in this country for everyone.
    I wanted to ask--maybe this was discussed while I wasn't 
here, but I was interested in talking to you, Ms. Abernathy--
okay? And see if you can tell us what increase for education 
funding has been for the last 10 years. What percentage has 
education funding been?
    Ms. Abernathy. It hasn't increased. The high water mark was 
2011 until 2018, this last year, when Congress provided a very 
large increase for non-defense discretionary funding in 2018, 
and that was the first year that the Department of Ed funding--
which I am using as a proxy for education, there is actually 
education funding----
    Ms. Omar. So you are saying zero increase since 2011.
    Ms. Abernathy. Now it is at--2018 has had a slight 
increase, so it is now higher.
    Ms. Omar. What percentage was it?
    Ms. Abernathy. It----
    Ms. Omar. Okay. Well, we can look at it----
    Ms. Abernathy. Small.
    Ms. Omar. But, good okay, what is the percentage of 
education funding in our discretionary budget?
    Ms. Abernathy. It is $70 billion for the Department of Ed -
-
    Ms. Omar. Percentage --
    Ms. Abernathy. Out of a discretionary budget of $1.3 
trillion. So I told you I am horrible at math in my head, but 
less than----
    Ms. Omar. Less than two percent?
    Ms. Abernathy. Well, less than two percent, but that is the 
whole budget, not the discretionary budget. I was--I thought 
you were asking for just the discretionary budget.
    Ms. Omar. Okay.
    Ms. Abernathy. But it is less--for the federal budget it is 
significantly less than two percent of the whole budget.
    Ms. Omar. All right, wonderful. And, Mr. Shah, how about 
for health care funding? What percentage increase for the last 
seven years?
    Dr. Shah. I can't give you a specific percentage increase, 
but I will say that the health care, overall health budget, 
has--or expenditures have increased. We are--I think one of the 
challenges is that the public health side, the up-front 
investment, that has decreased, and that is where we really are 
seeing decreases in workforce, decreases in infrastructure, as 
well as decreases in technology and surveillance activities. 
And that is where we need to shift that cost curve.
    Ms. Omar. And how much of our federal budget goes to health 
care?
    Dr. Shah. That is a great question. It depends on which GDP 
you look at, in terms of the numbers. But we are looking at 15 
percent market. But again, it is--health care includes medical 
research, it includes an incredible amount of other dollars 
that go in to both the public sector and the private sector, 
combined. So that percentage is sometimes a moving target.
    Ms. Omar. Wonderful. And, Mr. Kosiak, what percentage goes 
into defense?
    Mr. Kosiak. Three to four percent, typically, of GDP goes 
to defense. And the federal budget, probably about 20 percent.
    Ms. Omar. Okay, I have something like 53 percent. Where is 
the discrepancy in that?
    Mr. Kosiak. I am sorry? Oh, of a discretionary?
    Ms. Omar. Yes.
    Mr. Kosiak. Yes, yes. It is closer--it is around 55 
percent, typically, yes.
    Ms. Omar. Fifty-five percent. So we have something like 7 
percent, 15 percent, and 55 percent for defense. Okay.
    I wanted to ask you in regards to education, is there a 
correlation between some of the domestic threats to security 
and education?
    Ms. Abernathy. Absolutely. I mean we need to have people 
who--the military is a very broad group, and you need people 
with boots on the ground, but you also need programmers, you 
need cyber security people, you need people designing things, 
weapons systems. I mean you need to have a well-educated 
military ready to serve.
    Dr. Shah. And certainly, I--what I would add to that is 
that education and health have so many overplays. And so--
overlaps. And so you--when you have social--what we call social 
determinants of health, which include education and 
transportation and housing, that really impacts health, and 
vice versa. So I think it is really important to remember it is 
not an either-or, it is an and.
    Ms. Omar. So investing in education, investing in health 
care could be an investment in caring for the safety and the 
well-being of all Americans, domestically?
    Ms. Abernathy. Absolutely.
    Ms. Omar. And internationally?
    Dr. Shah. That is right.
    Ms. Omar. All right, wonderful. Thank you. I yield back my 
time.
    Chairman Yarmuth. The gentlelady's time has expired. I now 
recognize the ranking member for 10 minutes.
    Mr. Womack. I thank the distinguished chairman. And let me 
just say as part of the record, unrelated to our hearing today, 
I consider myself to be one of the luckiest Members on the 
Republican side in a leadership position, because I have the 
honor and privilege of sitting side by side with John Yarmuth. 
And I mean that in all sincerity. It is not for show.
    It has been intimated before that if you put Yarmuth and 
Womack in the room and lock the door, we can fix the problems 
associated with budgets in the United States Congress, and we 
are dadgum close to that right now.
    You know, we could lock these doors and, John, I think you 
and I in about 30 minutes could probably fix a lot of the 
problems that have been discussed here today because, while we 
disagree on some policy-related issues, we both recognize the 
need that has been expressed and was expressed in the State of 
the Union the other night, the need for us to work together, 
get to the table, and try to figure out how to make this whole 
thing work.
    And when I hear guys like Dan Kildee and Seth Moulton--
these are all dear friends of mine, and I have an enormous 
amount of respect for them. And while we may disagree from time 
to time on policy, I do think there is a recipe there, a 
chemistry that we can build on to actually do some great 
things.
    And one more addition to that comment is that Mr. Yarmuth 
was a key member of the Joint Select Committee on Budget 
Process Reform and was in the yes column when we got this 
proposal, albeit somewhat limited in scope, to the finish line. 
And two guys sitting right here that are the Budget chairman 
and now the ranking member, had some ideas that could actually 
improve our process. And it is a doggone shame that we didn't 
get that across the finish line. But we will save that for 
another conference.
    One of our--one of my colleagues across the aisle, Ms. 
Jayapal, mentioned earlier, in leading into an education 
funding question, and used teacher pay as kind of the metric 
for us to, you know, basically call for more spending on 
education. So, Ms. Abernathy, what--how much of our federal 
budget in education actually goes to teacher salaries?
    Ms. Abernathy. Not a lot. There is a $2.1 billion teacher 
and school leader state grant program that----
    Mr. Womack. So I think we could just----
    Ms. Abernathy.----some of that goes for.
    Mr. Womack.----agree that it is negligible.
    Ms. Abernathy. It is mostly state and local funding.
    Mr. Womack. Yes. Is that where it should be?
    Ms. Abernathy. That is the system that we have.
    Mr. Womack. So what is the role of the federal government 
in education?
    Ms. Abernathy. It is--there is a multi-fold role. One of it 
is providing student aid to students who want to go to college 
in the form of grants and loans--grants based on income and 
loans are available to everybody who want them.
    Other places the federal government provides federal 
funding in education in the K through 12 world, or in adult 
education, or in CTE, career and technical education, is to 
fill gaps where state and local funding has not been able to 
fully meet the need, for instance, for special education. Some 
of the programs are based on helping schools, districts with 
high numbers of low-income students, where their state and 
local--where the local tax base isn't high enough to support 
the things that schools need, because there are some basic 
things that all schools need.
    Mr. Womack. Yeah, I am a former mayor in a city that put a 
premium on education. We had among the highest property tax 
rates because the people where I lived believed in public 
education. There are other cities, however, that don't look at 
it that way. And therefore, their millage rates are lower, and 
the inability to hire qualified teachers, et cetera, et cetera. 
So it really is a local decision.
    Ms. Abernathy. Right. And there are some places that don't 
have the tax base to do it, some of the rural districts where 
you have got students in a bus going 45 minutes a day, each 
way, to a regional district. I mean there is not a lot of 
people to tax to raise local money for the school. But their 
kids need the education.
    Mr. Womack. Yeah, I totally agree, but--and perhaps maybe 
there are some ways--80 years ago we electrified a lot of the 
rural areas because we knew the electricity was pretty 
important. And maybe we could do some things from an 
infrastructure perspective that could really elevate our 
ability to educate our kids, namely through broadband, and the 
ability to leverage technology to deliver education into some 
of these rural areas. Would you agree with that?
    Ms. Abernathy. Absolutely.
    Mr. Womack. Yeah. And I think it is a big deal, personally.
    I want to shift back to defense for a minute, Mr. Kosiak. 
We talked earlier about how important it is for defense. And 
one of my--I think it was Chris Stewart that indicated how--how 
should we build a defense--how should we fund defense? What 
metric should we use to be able to fund defense?
    Mr. Kosiak. Well, I think, you know, it is hard in the case 
of defense, because defense, unlike a lot of programs, is 
partly what you are doing--the military is doing at any given 
time, but it is also an insurance policy. And, you know, if 
you--depending on what--your view of the threats out there, you 
may think you need more or less insurance. So it is always a 
hard thing to measure, because a lot of what defense does is 
deter, and not actually fight and defend. But it is obviously 
an important deterrence policy, so it is hard----
    Mr. Womack. So we use our National Defense Strategy to try 
to--I am getting to the threat here for just a minute, because 
that is what I believe. I believe that any time you are going 
to spend money on national security--and you can't look at it 
in a one-year window, particularly in procurement areas, 
because that could be a--it is always a multi-year, sometimes 
multi-generational glide path.
    But--so we should be building our national defense budget, 
based on the perceived threats--known and perceived. Would you 
not agree with that?
    Mr. Kosiak. Absolutely. I mean that is the way it should be 
done, that is the way we try to do it.
    I think you also, obviously, have to make internal 
tradeoffs on other priorities, as well, on the non-defense 
side, other areas of security, so it is not all just looking at 
outside threats, looking at, you know----
    Mr. Womack. And it is a constitutional imperative----
    Mr. Kosiak. Absolutely.
    Mr. Womack.----to provide for the common defense.
    Mr. Kosiak. Absolutely.
    Mr. Womack. Is--in your opinion, is the threat greater?
    Mr. Kosiak. Greater than?
    Mr. Womack. Greater than, say, 20 years ago.
    Mr. Kosiak. I mean I--you know, I think it is--it has 
changed, or it has evolved. It is certainly, in many ways, not 
the same--it is a very different threat than when I got into 
this business, back during the Cold War. And in some ways----
    Mr. Womack. So in the old days----
    Mr. Kosiak. In some ways it is safer----
    Mr. Womack. In the old days it was----
    Mr. Kosiak.----in some ways it is more dangerous.
    Mr. Womack. It was force on force, it was state versus 
state.
    Mr. Kosiak. Right.
    Mr. Womack. Now it is multi-dimensional. It is in space, 
and it is next door, and it is all around us, right?
    Mr. Kosiak. Right, and I think you need multi-dimensional 
approaches to addressing that, on both the----
    Mr. Womack. Which is pretty expensive to try to provide. I 
mean you are trying to defend yourself in all territories. It 
is a worldwide threat, it is a homeland threat. So the threat, 
I think we could all agree, is probably elevated right now. If 
you ask 10 people on the street, and ask them about threats to 
the United States, I would guess that they would say, you 
know--they might differ. It may be Russia to one, China to 
another, and Iran or North Korea or ISIS or--pick from the 
menu. But most people would say, I think, that--at least in my 
district--that we have an elevated threat.
    And if we have an elevated threat, and if we are going to 
base our defense budget on the threat, then it stands to reason 
that we are probably going to spend more money on defense, 
right?
    Mr. Kosiak. Well, I think it would be an elevated threat 
compared to 15 years ago or 20 years ago. I am not sure it 
would be an elevated threat across the board and compared to 
the Cold War.
    Mr. Womack. So it--and my colleague from Connecticut, Ms. 
DeLauro, in her questioning said--and I can't quote her--she 
did use the word ``parity''--that if we are going to increase 
defense spending, then we ought to do parity for the non-
defense side. Is that--would that be an imperative for this 
country?
    Mr. Kosiak. Well, I think, given that 40 to 60 percent of 
non-defense discretionary spending goes to security-related 
programs, which is as important, I think, as defense spending, 
in terms of addressing security, I think some level of parity 
probably is necessary.
    Mr. Womack. Okay. Are you familiar with how much debt we 
have?
    Mr. Kosiak. Yes.
    Mr. Womack. Pick the number. What is it?
    Mr. Kosiak. What, $20 billion.
    Mr. Womack. Twenty-two, a little over twenty-two trillion 
dollars.
    Mr. Kosiak. Trillion, yes.
    Mr. Womack. Trillion, with a T. That is another zero. The 
deficit this year, are you familiar with what the deficit will 
be this year?
    Mr. Kosiak. I think about 900 million--900 billion.
    Mr. Womack. Nine hundred billion dollars. That is just to 
pay the minimum payment due. So, obviously, we are going to 
spend more money than we take in. And because of that, we have 
to make some tough decisions. Would you agree with that?
    Mr. Kosiak. Absolutely.
    Mr. Womack. Okay. It is like anybody else at home. If you 
got more going out than you have coming in, you got to figure 
out what likely on the expense side--what you got to cut, what 
you don't need, and those kinds--a lot of things you would like 
to have, but at the end of the day there are some things you 
just can't afford to have, because you are trying to take care 
of the things that you must do, pay the mortgage and put food 
on the table, and those kinds of things.
    The federal government operates a little differently than 
some households, but the concepts, the principles, I think, 
remain the same.
    [Slide]
    Mr. Womack. I put a slide up there. Does that surprise you, 
that in 1965 about 34 percent of this budget went to mandatory 
programs, and today it is commanding 70 percent of the federal 
budget?
    Mr. Kosiak. It has been notable growth. It doesn't surprise 
me, since I am familiar with the figures. But yes, a lot of 
growth.
    Mr. Womack. Okay, and do we have that other slide? Put the 
other slide up there.
    [Slide]
    Mr. Womack. So there is a defense--not that slide, I am 
talking about the--not that one. I am talking about the--
showing the rise in mandatory spending and the cuts in 
discretionary spending.
    [Slide]
    Mr. Womack. All right. CBO--and I know I am about out of 
time. CBO says, ``As a percentage of GDP, spending on mandatory 
programs is going higher. But spending on discretionary 
programs, as a percentage of GDP, is going lower.''
    So, with that said, would you agree, as I said in my 
opening statement, that this Congress, this committee, 
appropriators, leadership in both sides, House and Senate, 
should have a plan for how do we address runaway entitlement 
programs that, unchecked, are going to command in 2029 78 
percent of the federal budget, which is going to cut every 
single thing, and cut into every single thing that we have 
talked about on the discretionary side? Would you agree with 
that?
    Mr. Kosiak. I would agree that it is critical that we 
address the debt over the long term. It is a real challenge 
that needs to be addressed through both tax increases, 
probably, and entitlement reforms.
    Mr. Womack. That is hard, isn't it?
    Mr. Kosiak. That is hard. Both are hard.
    Mr. Womack. Yes. I yield back, Mr. Chairman. Thank you so 
much for the time.
    Chairman Yarmuth. Absolutely. And I now yield myself 10 
minutes.
    And I would like to first thank you for the kind remarks, 
and I think we could make a lot of progress if we didn't have 
to answer to anybody else. That is the big consequence.
    First of all, I want to just establish for the record, 
because Mr. Smith and Ms. Jayapal had a difference of opinion 
as to what CBO has said about the impact of the tax cuts, the 
2017 tax cuts, on the deficit. Their report was that the tax 
cuts contributed $164 billion to the deficit in 2018, 228 
billion in 2019, 272 in 2020, and projected it out.
    The projected impact on the deficit comes down after the 
tax cuts for the middle class expire. But a substantial 
increase. And, of course, he said we have record income, and 
the answer to that is, well, we may, but the income would have 
been that much greater, and the deficit that much less if the 
tax cuts were not in place.
    The ranking member raises, I think, the critical question 
in many of these areas, and we don't dispute that national 
defense and national security is a national priority. It is the 
responsibility of the federal government, and we deal with that 
that way. The questions arise as to many other areas in which 
the federal government is involved--and education is one of 
those--that is controversial to a certain extent.
    And we have heard calls for the abolition of the Department 
of Education. I spent my first term in Congress on the 
Education and Labor Committee, and we spent that entire 
Congress trying to reauthorize No Child Left Behind, ESEA. And 
of course, that was the one question that we had, and this 
relates to what Mr. Burchett said. NCLB was a George W. Bush 
initiative, and it was designed to make up for those gaps, 
those--and so that a child in a state that did not think that 
education was a top priority would have access to the same 
quality education that a child in a state that did take its 
responsibilities for education more seriously.
    And I am not familiar with what goes on in Tennessee or in 
Arkansas. I am familiar with what goes on in Kentucky and 
some--even some localities do a lot better job than other 
areas. But overall, our state--when you look at the budget, our 
state spends more on education than anything else, and has 
still had to cut spending for education over the last few 
years, particularly higher education. So we are all figuring 
out how to fund education, however we package that.
    And I think Mr. Crenshaw talked about the fact that there 
was--it is not just a matter of how much you spend, which I 
fully agree with. But what you spend directly on education--and 
this has been referenced before, Dr. Shah did--does not really 
calculate all the factors that go into whether a child is well 
educated or not.
    The health of the child, the housing of the child--about 10 
percent of my students in my district are homeless at one time 
during the year. It is an astounding number. We have one of the 
largest school districts in the country in Louisville. And we 
have 50 percent of our students change schools at least once 
during the school year because they are being shifted around 
from grandparent to aunt to whoever--they may be homeless 
during that time, too.
    So when we look at non-defense discretionary spending, we 
have to look at housing, we have to look at transportation--you 
mentioned--we have to look at health care, and we have to look 
at nutrition. Because all of those expenditures that the 
federal government makes contribute to, overall, the 
educational attainment of the child, the possibility.
    So one of the things that I wanted to talk to you about is 
that, as part of the tax cut, the Tax Act of 2017, we--well, we 
limited the deduction for state and local taxes. And one of the 
complaints from high-taxing states like Massachusetts and New 
York and so forth is, hey, we are doing what we feel we need to 
do for our children--not just our children, all sorts of areas, 
our citizens--but we are funding education at a certain level, 
and you are penalizing us now for being willing to tax our 
citizens to make those services available.
    My question is have you seen or heard of any assessment as 
to whether that part of the tax code--and it is probably too 
early to tell, but I am just asking--has had any impact on what 
states are doing with education?
    Ms. Abernathy. I don't know the answer to that, and in part 
because a lot of the studies about state education budgets take 
a couple of years to come out, because you have to wait and see 
what happens. So some of the most recent stuff I have seen is 
looking at the 2015 budget, for instance, for education 
funding. I think we will see that borne out in the coming year 
or two.
    Chairman Yarmuth. I appreciate that. I refer to Mr. 
Kildee's talking about water security, and also early on in the 
hearing Mr. Higgins talking about infrastructure. You didn't 
talk about infrastructure as a part of national security. But 
would you consider infrastructure spending as part of our 
national security profile?
    Mr. Kosiak. Well, I did, actually, in my broader definition 
of security. I consider some infrastructure funding--it is--
obviously, what I was looking at was just focused on the 
discretionary portion of the budget, and just the amount that 
Congress actually appropriates. I looked at transportation, 
Corps of Engineers as just sort of examples of areas that 
provide infrastructure. So I think if you have a very narrow 
definition of national security, you are probably not looking 
at those programs. But if you look more broadly, I think, 
clearly, that is important.
    Chairman Yarmuth. I appreciate that.
    And Dr. Shah, I am not sure you said you gave us this 
number, so I will ask. My memory may be faulty. What percentage 
of your budget, or what percentage of national public health is 
funded by the federal government?
    Dr. Shah. So from the standpoint of our budget, we--let's 
see, about 30--I would say about 30 percent of our budget is 
that. And, you know, obviously, it varies across the system. 
Local jurisdictions that are smaller, obviously, they are often 
times more rural. Frontier jurisdictions may have a higher 
percentage. That is why the capacity is really impacted when 
you have a change from the federal system.
    And one thing I did want to make mention is that earlier I 
had heard the dynamic about if it is a family, and really 
looking at some ways that you can, you know, get your--continue 
to have your family afloat. One is to increase revenue and the 
other is to actually decrease expenditures. And I think there 
is another piece that is very important to this, which is the 
investment piece, right?
    So if I have a dollar as a family member, and I invest it 
in something today, it is still an expenditure today. But if it 
yields back $100 a year from now, or 5 years from now, now I 
have actually brought something back. So I don't think it is 
really just this either-or. It is really this holistic concept 
of how we are really looking at how spending and revenue comes 
in, but also this investment. And I believe strongly investment 
in public health and health really helps us in avoiding those 
unnecessary higher-level costs in a health care system like the 
emergency department or health care system in other ways.
    Chairman Yarmuth. Okay, thank you for that.
    Mr. Kosiak, in the wake of the government shutdown there 
has been much interest in legislation--I think one of our 
members mentioned this--in creating an automatic continuing 
resolution. And some of--again, some of our members on this 
committee are interested in that possibility.
    Speaking of your--from your experience in OMB, could you 
expand on the parameters that would be necessary for that kind 
of legislation to be successful, from the standpoint of 
executing it, and implementing it?
    Mr. Kosiak. Well, certainly I--I mean I appreciate the 
people's interest in that, and looking for a solution to avoid 
a government shutdown. It is--my own view is that that is 
probably not a good mechanism to move forward with. I think my 
concern would be that it leads to sort of a default, where 
parts of the government are continually funded on this basis 
automatically, which means you don't get to raise some parts 
and lower some parts, you don't get to change programs within 
different departments that are on this sort of automatic pilot.
    So I think, as bad and as hard as it is to go through 
government shutdowns, I think it is a sort of decision-forcing 
event that makes Congress, you know, make tough choices. And so 
I would not probably advocate that. I do think if you had it, 
you would--obviously, you would have to, at a minimum, grow 
with inflation. But I think it is probably not the best 
mechanism.
    Chairman Yarmuth. Does anybody else on the panel have a 
thought about that, whether automatic CRs are a good idea?
    Mr. Gray?
    Mr. Gray. So I think one of the most important questions to 
always ask in matters of public policy is compared to what? 
What is your counter-factual? I think we would all agree that 
the automatic CR approach is not ideal. And then the question 
is, ``Well, compared to what?''
    And certainly compared to, I think, regularizing shutdowns, 
which I think we would all consider bad, I think it would be 
worthwhile in that context. If that is not going to be the 
custom, going forward, then it may have less utility. So I 
think it is just important to consider the context.
    Chairman Yarmuth. Thank you.
    Ms. Abernathy?
    Ms. Abernathy. I would just say that it is not a--I mean 
Congress has the ability to stop shutdowns, and Congress does 
have the ability to act to get appropriations done. And so I 
think that putting in this default that supports frozen funding 
forever, or a cut in funding, or whatever the automatic CR has 
takes away the oversight and the ability of Congress to do 
this. And I think that, as others have said, you know, the 
shutdown is a horrible outcome. But it is not a--it doesn't 
have to happen. It is not like we can look at it and can't stop 
it.
    Chairman Yarmuth. I appreciate those----
    Dr. Shah. Certainly in local communities such as ours, I 
mean, we--I can't think of anybody that I met or walked and 
talked to who said, oh, you know, the shutdown is a fantastic 
approach that the federal government has taken, and I think 
that is a real challenge, is really looking at ways that we can 
proactively really build that capacity across the system that 
we are talking about here, and not really silo.
    I think the false dichotomy is when we try to silo into 
what is happening, but really thinking broad-based on how do we 
invest in the future of our country, and certainly in the 
American people.
    Chairman Yarmuth. I appreciate that. For the record, the 
Joint Select Committee, which the ranking member chaired, we 
didn't get much resonance for that idea in that joint 
committee, either, for automatic CRs.
    Well, with that, I want to thank the panelists for being 
with us today. Once again, it has been very valuable testimony.
    Members should be advised they can submit written questions 
to be answered later in writing. Those questions and your 
answers will be made part of the formal hearing record.
    Any members who wish to submit questions for the record may 
do so within seven days.
    Without objection, this hearing is adjourned.
    [Whereupon, at 12:44 p.m., the committee was adjourned.]
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