[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
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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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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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