[Senate Hearing 117-49]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 117-49
 
            THE PRESIDENT'S FISCAL YEAR 2022 BUDGET PROPOSAL

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET

                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              June 8, 2021

                               __________

           Printed for the use of the Committee on the Budget
           
           
           
           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 




                 U.S. GOVERNMENT PUBLISHING OFFICE 
45-280                    WASHINGTON : 2021 

                                     
                                     

                        COMMITTEE ON THE BUDGET

                   BERNARD SANDERS, Vermont, Chairman
PATTY MURRAY, Washington             LINDSEY O. GRAHAM, South Carolina
RON WYDEN, Oregon                    CHARLES E. GRASSLEY, Iowa
DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     PATRICK TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             RON JOHNSON, Wisconsin
JEFF MERKLEY, Oregon                 MIKE BRAUN, Indiana
TIM KAINE, Virginia                  RICK SCOTT, Florida
CHRIS VAN HOLLEN, Maryland           BEN SASSE, Nebraska
BEN RAY LUJAN, New Mexico            MITT ROMNEY, Utah
ALEX PADILLA, California             JOHN KENNEDY, Louisiana
                                     KEVIN CRAMER, North Dakota
                Warren Gunnels, Majority Staff Director
                 Nick Myers, Republican Staff Director
                 
                            C O N T E N T S

                              ----------                              

                         TUESDAY, JUNE 8, 2021

                                                                   Page

                    STATEMENTS BY COMMITTEE MEMBERS

Chairman Bernard Sanders.........................................     1
Ranking Member Lindsey Graham....................................     4

                                WITNESS

Statement of the Honorable Shalanda D. Young, Acting Director and 
  Deputy Director, Office of Management and Budget (OMB).........     5
Prepared Statement of............................................    35
    Questions and Answers (Post-Hearing) from:
        Ranking Member Lindsey Graham............................    65
        Senator Mike Braun.......................................    44
        Senator Kevin Cramer.....................................    50
        Senator Mike Crapo.......................................    56
        Senator Charles E. Grassley..............................    83
        Senator Rick Scott.......................................    85




          THE PRESIDENT'S FISCAL YEAR 2022 BUDGET PROPOSAL

                              ----------                              



                         TUESDAY, JUNE 8, 2021

                                       U.S. Senate,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 11:04 a.m., via 
Webex and in Room SD-608, Dirksen Senate Office Building, 
Honorable Bernard Sanders, Chairman of the Committee, 
presiding.
    Present: Senators Sanders, Murray, Stabenow, Whitehouse, 
Kaine, Van Hollen, Lujan, Padilla, Graham, Grassley, Crapo, 
Toomey, Johnson, Braun, Scott, Sasse, Romney, and Kennedy.
    Staff Present: Warren Gunnels, Majority Staff Director; 
Nick Myers, Republican Staff Director; Joshua Smith, Majority 
Policy Director; and Becky Cole, Republican Policy Director.

         OPENING STATEMENT OF CHAIRMAN BERNARD SANDERS

    Chairman Sanders. Okay. Thank you all for being here and 
Senators who are in attendance virtually. And let me thank 
Shalanda Young, the Acting Director of OMB, for being with us. 
And let me thank Senator Graham for his help as Ranking Member.
    A Federal budget speaks to who we are as a Nation and where 
we want to be in the future. And I think as everybody knows, 
this last year has been one of the worst years in our lifetimes 
for our country and, in fact, for the world. In the United 
States, we have endured the worst public health crisis in 100 
years. We have lost over some 600,000 people to COVID, and we 
have also endured the worst economic collapse since the Great 
Depression of the 1930s.
    The very good news is I believe we are making significant 
progress in fighting our way out of both of those disasters. In 
terms of the pandemic, more and more Americans are being 
vaccinated, and the death rate is going down significantly. In 
my own State of Vermont, we are up to about 80 percent of our 
people have been vaccinated, and that type of trend is going on 
all over the country. Obviously, we still have an enormous 
amount of work to do, but the good news is we are making 
progress.
    Economically, we are also moving forward in the right 
direction. Millions of jobs have been created in the last few 
months as the economy reopens all across America. And one of 
the reasons, in my view, for our success has been the American 
Rescue Plan (ARP) that the President signed into law in March. 
The $1,400 direct payment that about 85 percent of our people 
received was enormously helpful in easing the anxiety and the 
pain and the distress that so many people were feeling. I do 
not know if any of you had the opportunity to talk to people 
who received those checks, but for a family of four, that was 
just life-saving.
    The American Rescue Plan in a major way has begun to cut 
childhood poverty because of the $3,600 child tax credit that 
we are providing to working families all across America.
    During the pandemic, in my State, and I expect in all of 
your States, there were long lines of people lining up for 
emergency food. Hard to believe that is taking place in 
America. It was. We are making progress in reducing hunger in 
America.
    We are expanding, as a result of the American Rescue Plan, 
health care for people who need it. We are improving 
educational opportunities. We are providing summer and after-
school programs for our kids.
    The American Rescue Plan provided an extra $300 a week in 
unemployment benefits to millions of workers who lost their 
jobs through no fault of their own. And the American Rescue 
Plan also is preventing millions of Americans from being thrown 
out onto the streets because they could not afford their rent.
    It is also preventing over a million workers and retirees 
from seeing their pensions slashed by up to 60 percent. In 
other words, that is a very significant piece of legislation 
that came at a time when working families in this country 
desperately needed help. But let us be clear. While we are 
making progress in protecting working families, an enormous 
amount of work remains before us.
    In the richest country in the history of the world, the 
working families of this country continue to struggle 
economically with millions of our people continuing to live in 
desperation. Sometimes inside the Beltway, we can forget that 
reality. Literally speaking, three blocks from this building, 
there are people sleeping in tents out on the street, and the 
desperation exists from one end of this country to the other in 
every one of our States.
    Real wages, inflation accounted for wages in America, are 
lower today than they were 48 years ago. Think about that. A 
huge explosion in productivity, in technology, average American 
worker in real wages making less than he or she did 48 years 
ago. And, frighteningly--and the young people know this--the 
younger generation stand an excellent chance, if we do not turn 
it around, of having a lower standard of living than their 
parents. In other words, we are moving in exactly the wrong 
direction.
    Today in America, over half of our people are living 
paycheck to paycheck, and millions are trying to get by on 8, 
9, 10 bucks an hour, which, in my view, is a starvation wage.
    In terms of health care, we remain the only major country 
on Earth not to guarantee health care to all people, and yet we 
pay the highest prices in the world for health care. Ninety 
million people are uninsured. One out of four people cannot 
afford the cost of a prescription drug their doctor prescribes 
because we pay the highest prices in the world for prescription 
drugs.
    Over half a million Americans are homeless today, and some 
18 million households spend at least half of their incomes on 
housing. How the hell do you survive when you are spending half 
your income on housing?
    Meanwhile, while working families struggle, the very 
richest people in this country are doing unbelievably well. Two 
people own more wealth than the bottom 40 percent of the 
American Nation.
    And let me be as clear as I can be. The decisions that we 
make as a Congress will determine the very future of this 
Nation. I am not just talking about the movement toward 
authoritarianism and the attacks on democracy, which we are 
seeing every day. We are determining whether or not we are 
going to have an economy that works for all of us or just the 
very wealthiest people in this country. And in my view, the 
budget that President Biden has submitted to Congress 
constitutes a significant, significant step forward for the 
working families in this country. Now he has done his job; his 
staff has done their job. They have given us an excellent 
budget. It is our job to take that budget, to refine it, and to 
make it a document that works for all of our people.
    At a time when tens of millions of Americans continue to 
struggle economically, the President's budget would create 
millions of good-paying jobs--underline ``good-paying jobs''--
in this country by rebuilding our crumbling roads, bridges, 
water systems, wastewater plants. We have talked about 
infrastructure--Debbie, how many years have we talked about it? 
Decades since we have been here. Infrastructure, Republicans 
talk about it, Democrats talk about it. Every State in this 
country has crumbling infrastructure. We have done nothing or 
very little. Now is the time to put our people back to work 
rebuilding our crumbling infrastructure.
    We need to build millions of units of affordable housing. 
We need to combat climate change. The scientists are very 
clear. Every day that we delay is another day that we endanger 
the well-being of our children and our grandchildren with more 
droughts, more floods, more extreme weather disturbances. That 
is the bad news.
    The good news is that we can create millions of good-paying 
jobs going forward in addressing climate change, and that is 
certainly incorporated in the President's budget. The 
President's budget extends the child tax credit for at least 5 
years. No, in America, we should not have the highest rate of 
childhood poverty of any major country on Earth. And this 
budget takes us a good way forward in helping us to address 
that.
    This budget deals with the outrage that the pharmaceutical 
industry owns the United States Congress--the Republican Party 
and the Democratic Party. For too many years, their lobbyists, 
their campaign contributions, have resulted in the fact that we 
pay by far the highest prices in the world for prescription 
drugs. The President's budget begins to tell the pharmaceutical 
industry, yes, Medicare will negotiate prices. We can raise up 
to $500 billion, which, among other things, we can use to 
expand Medicare to cover dental, hearing, eyeglasses, and lower 
the age of eligibility. Millions of younger workers want to get 
into Medicare.
    By enacting universal child care and pre-K legislation in 
the President's budget, we can make sure that every child in 
America, regardless of income or Zip code, gets a good start in 
life. How absurd it is that we still, many of us, continue to 
live in the 1950s here dad went to work and mom stayed home 
with the kids. Well, you know what, folks? Mom is working, dad 
is working, and the children of this country are entitled to 
high-quality child care. That is what this President's budget 
begins to address.
    By passing paid family and medical leave, I believe we 
remain the only major country on Earth--is that right, Ms. 
Young?--that does not guarantee paid family and medical leave. 
If a working mother has a baby today, she has got to go back to 
work in a week from now. Really? Is that what a civilized 
society is about? Only major country on Earth not to guarantee 
paid family and medical leave. This budget begins to move us in 
the right direction.
    This budget, the President's budget, begins to move us 
forward in terms of providing progressive tax legislation that 
finally asks the wealthy and large corporations to begin paying 
their fair share of taxes so we can begin not only to raise the 
revenue that we need, but to end the grotesque level of income 
and wealth inequality that exists in America.
    So here we are, folks. We have come to the worst year in 
our lifetimes. We are making progress. But I would hope that 
everybody recognizes that we still have a very long way to go. 
I want to congratulate the President, Ms. Young, and the 
administration for giving us the framework to move forward.
    Now, they have done their job. Now we have got to take the 
ball and run with it. We have got to refine that budget. It is 
not a perfect budget. That is our job. That is what the 
Congress does. So I look forward to working with my colleagues 
in the Senate and the House and with the administration to make 
this just an extraordinary piece of legislation that finally 
addresses the needs of working families. Thank you.
    Senator Graham.

          OPENING STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Mr. Chairman. And to our 
witness, welcome. I have a high respect and regard for you. 
Your budget, like every other President's budget, is probably 
not going to go very far, but that is just the way it is around 
here.
    Let me tell you why this budget probably will not go very 
far. There are some things you can fix. This budget is not one 
of them. What does this budget do? Over a 10-year period, it 
increases $5 trillion in additional spending on top of what we 
are already spending. Five trillion over 10 years. It raises 
taxes to $3.6 trillion. What does that mean for everybody 
working out there? This budget will come to your neighborhood 
soon. There is just not enough 1-percenters to bear all the 
load of this.
    In terms of debt to gross domestic product (GDP), we will 
be at 117 percent, the highest since World War II.
    What does it do in terms of taxes? Twenty percent of GDP 
will be taxes, the highest level in the history of the country. 
And we are competing in a world where people are trying to be 
more competitive. Businesses can go anywhere in the world to do 
business, and I think a lot of them will be choosing another 
spot other than the United States because we will drive them 
offshore.
    This tax-and-spend budget will break the back of our 
economy and will destroy future generations' ability to achieve 
the American dream that most of us have had a shot at, because 
we will sink them with debt. We will have an economy with a tax 
structure that very few businesses will look to America as the 
place to locate.
    Other than that, it is fine.
    The real problem with the budget is on the defense side. 
You know this gun-butter debate? There is enough butter in this 
bill to call a heart attack for everybody in the world. This is 
the most cholesterol-laden budget I have ever seen: a 16-
percent increase for nondefense spending; 1.7-percent increase 
for defense spending. In a dangerous world, this budget 
increases defense spending less than inflation, increases 
nondefense spending by 16 percent. If you do not have a 
television, you need to buy one. Look what is going on in the 
world. The Iranians are marching toward a nuclear weapon, 60 
percent enrichment. We have Russia riling the neighborhood it 
lives in. In Afghanistan, we are about to withdraw, and ISIS 
and, unfortunately, al Qaeda types are going to reemerge. We 
have got North Korea threatening every day to expand their 
nuclear program. The Chinese are up to no good on every front. 
The incursions into friendly airspace by Russia and China are 
at an all-time high. So our response is to basically neuter our 
defense capabilities.
    Mr. Chairman, how do you grow the Defense Department to 
compete with the technologies being developed by Russia and 
China if our defense spending is less than inflation? Their 
spending is not less than inflation. So this budget, I think, 
is blind to the world in which we live in in terms of military 
threats. It has an approach to the role of the Federal 
Government that will destroy free enterprise. It will create a 
tax-and-spend policy in perpetuity. It will make it very hard 
for the next generation of Americans to grow their own 
business, start their own business, and raise their families 
with some hope of acquiring wealth.
    Seventy-one percent of all taxes in America are paid by 
people that make over $500,000; 53 million Americans pay zero 
Federal income tax. Where are we headed? This budget, in my 
view, will destroy the ability to create new jobs in this 
country, will create a debt burden on future generations that 
would be devastating, and would at a time of great danger strip 
America of being able to maintain a qualitative edge over those 
who wish us harm.
    This is a very ill conceived budget. It will get no support 
on this side, and I hope working with Democrats and Republicans 
we can find a way to have a budget that does not have a 16-
percent increase for nondefense and a 1.7 increase for defense 
spending in this dangerous world in which we all live and that 
we do not institutionalize tax rates and debt that are beyond 
the ability of the American people to flourish and survive.
    Thank you.
    Chairman Sanders. Thank you, Senator Graham.
    Shalanda D. Young is the Acting Director and Deputy 
Director of the Office of Management and Budget, and we are 
delighted that she is before us today. Ms. Young?

 STATEMENT OF THE HONORABLE SHALANDA D. YOUNG, ACTING DIRECTOR 
      AND DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

    Ms. Young. Thank you, Chairman Sanders, Ranking Member 
Graham, and the rest of the distinguished members of the Budget 
Committee. Thank you for the opportunity to be here today to 
testify on the President Biden's fiscal year 2022 budget 
request.
    We released this budget at a moment in our country where we 
are emerging from one of the most challenging periods in our 
history. At least 63 percent of American adults have now 
received one vaccine shot. The economy has added 2 million jobs 
since the President took office. The unemployment rate has 
dropped to 5.8 percent, the lowest since the start of the 
pandemic. A very encouraging sign is the decline in the long-
term unemployed by 431,000 last month, as well as a decline in 
those seeking initial claims of unemployment by about half of 
what they were in January.
    And yet we also know that it is not enough to simply go 
back to the economy we had before the pandemic. Instead, we 
must seize this moment to reimagine and rebuild a new American 
economy that invests in the middle class and those trying to 
break into the middle class.
    The President's fiscal year 2022 budget details his agenda 
for this year to help grow the economy, create good-paying 
jobs, and power an equitable economic recovery. It includes the 
two historic plans the President has put forth--the American 
Jobs Plan and the American Families Plan--and reinvests in 
education, research, public health, and other foundations of 
our country's strength through the discretionary request. And 
it does all of this while proposing tax reforms that will 
improve our country's long-term fiscal health and lay the 
foundation for shared prosperity in this country.
    The budget starts with the American Jobs Plan--a once-in-a-
generation investment in America that will put millions of 
people to work rebuilding our country: fixing highways, 
rebuilding bridges, and upgrading our transit systems; 
replacing all lead pipes and service lines into our homes; 
investing in the infrastructure of our care economy and 
creating new and better jobs for caregiving workers; and more.
    The budget also includes the American Families Plan, a 
historic investment to help families cover the basic expenses 
that so many struggle with now, lower health insurance 
premiums, and continue the historic reductions in child poverty 
that began in the American Rescue Plan.
    Alongside these investments, the budget also reiterates the 
President's strong call to Congress during his Joint Session 
address to make progress on health care by reducing the cost of 
prescription drugs and expanding and improving health coverage. 
Moreover, the budget details a robust set of discretionary 
proposals to help reinvest in the foundations of our strength 
and to begin reversing a decade of chronic underinvestment in 
priorities like public health.
    In total, the budget's discretionary investment would 
restore nondefense appropriations to its historical average 
share of the economy. Importantly, the budget makes all of 
these investments in a way that is responsive to both near- and 
medium-term economic landscape and longer-term fiscal outlook.
    In the near term, the decades-long global trend of 
declining interest rates gives us the fiscal space to make 
necessary up-front investments. Under the budget's policies, 
the real cost of Federal debt payments will remain below the 
historical average through the coming decade, even as the 
budget assumes that interest rates will rise from their current 
lows, consistent with private sector forecasts. Over the long 
run, when we face larger fiscal challenges and more uncertainty 
about interest rates, the budget will reduce the deficit and 
improve our Nation's finances. That is because its front-loaded 
investments are more than paid for through the permanent tax 
reforms that will ensure corporations and the wealthiest 
Americans pay their fair share. The budget policies reduce 
annual deficits beginning in 2030 and reduce deficits by over 
$2 trillion in the subsequent decade, while the American Jobs 
Plan and American Families Plan are fully offset within 15 
years.
    As a whole, the President's budget will improve our 
Nation's long-term finances while making the growth-enhancing 
investments we need right now.
    Thank you for the opportunity to appear before the 
Committee today, and I look forward to taking your questions.

        [The prepared statement of Ms. Young appears on page 35]

    Chairman Sanders. Thank you very much.
    Ms. Young, let me start off with an issue that I have 
worked on for a long time, as others have, and that is the high 
cost of prescription drugs, the fact that the United States 
through our Medicare program does not negotiate drug prices. 
What does the President's budget do in terms of lowering drug 
prices and demanding that we get fair prices from the 
pharmaceutical industry?
    Ms. Young. Senator Sanders, the budget makes clear that the 
President expects action on this this year, that we expect a 
bill from Congress that allows Medicare to negotiate drug 
prices, that saves at least half a trillion dollars for the 
American people through lowering of drug payments, which you 
know is an extreme cost not only to beneficiaries but to 
taxpayers through the Medicare program.
    Chairman Sanders. To my mind, in the richest country on 
Earth, it is hard to believe that millions of seniors do not 
have teeth in their mouths, do not have the hearing aids that 
they need, do not have the eyeglasses they need. What does the 
President's budget propose in terms of expanding Medicare?
    Ms. Young. Not only does the President want and expect 
action this year, as he called for in the joint address, on 
prescription drugs, he expects those savings and others to be 
used to strengthen the Medicare and Medicaid programs with 
plans to enhance dental, vision, and hearing aids through those 
programs.
    Chairman Sanders. Ms. Young, you may be aware that, 
unbelievably, you know, I hear my Republican colleagues talk 
about problems, and somehow they forget issues like we have the 
highest rate of childhood poverty of almost any major country 
on Earth while the very rich are richer. What does this bill 
finally begin to do, the President's budget, in terms of 
childhood poverty in America?
    Ms. Young. One, it looks at the issues you brought up about 
women in the job force and the need for child care for all 
families that is affordable and equitable. So it invests 
heavily in child care spending. It reinvests in Head Start. 
Today the discretionary budget serves 95,000 fewer children 
than it did 10 years ago. So it looks at a full picture to 
allow families to educate their children in a way that is fair 
to all families, no matter of income level.
    Chairman Sanders. Why is that important--I mean, I am 
asking you such an obvious question, but some apparently still 
do not appreciate this. Why in today's economy is it important 
that we have a strong child care and pre-K system?
    Ms. Young. I am here before you as a woman. Families look 
very different than they did 30 years ago. We need all the 
tools available to allow women and fathers to enter the 
workforce while not worrying about child care for their 
families.
    Chairman Sanders. The United States, I say to my 
colleagues, used to be the best-educated country on Earth. If 
my memory is correct, we used to have the highest percentage of 
college graduates of any major country. That is no longer the 
case. And Senator Graham mentioned that this is a very 
competitive economy, world economy, and it certainly is. But 
you know what? You are not going to succeed in a competitive 
world economy unless we have the best-educated workforce in the 
world.
    What does the President's budget do in terms of improving, 
allowing working families to get the higher education that 
right now they cannot afford?
    Ms. Young. This budget would allow 2-year community 
colleges to be free for Americans, which we think is the 
appropriate thing to do. As the President has said over and 
over, we developed an education system decades ago that said 12 
years was the right amount of years. We need to relook at that, 
and I think if we look at now what the educational requirements 
are for most jobs, that does not make sense anymore.
    Chairman Sanders. That is an area, by the way, we are going 
to maybe expand a little bit on the President's ideas. I think 
we can go beyond community colleges, making them available to 
working families.
    My last question is while some of my colleagues may not 
appreciate it, the scientists are pretty clear that climate 
change is an existential threat to this planet, and not only 
the United States but China and India and countries all over 
the world are going to have to work extremely aggressively to 
transform our energy system and in the process create millions 
of good-paying jobs.
    Ms. Young, what does the President's budget do in terms of 
finally getting us to move forward aggressively on climate 
change?
    Ms. Young. The discretionary budget invests $36 billion to 
combat climate change, an increase of $14 billion, Senator 
Sanders. Also at agencies you would not typically think of, but 
all agencies are being impacted by climate change, including 
the Department of Defense, including the Small Business 
Administration. We have to look at this government-wide, and 
that is what this budget is doing. In addition, that is in 
addition to the billions of investments in climate change we 
are putting forth as part of the Jobs Plan.
    Chairman Sanders. All right. My last question is there are 
communities all over this country, often communities of color, 
that have been ignored for many, many years. What does the 
President's budget do in terms of improving life in those 
communities?
    Ms. Young. Sir, you will see an increased amount--we just 
talked about climate change--in the environmental justice 
space. This is an area we have put out an Executive order 
requiring all agencies, as they implement, as they think about 
the budget, as they think about programs, the Government should 
work for all people no matter their race, gender, and make sure 
we are providing equitable service to all Americans. So it goes 
beyond the budget and asks agencies to relook at everything we 
are doing to make sure we are reaching all Americans.
    Chairman Sanders. Ms. Young, thank you very much.
    Senator Graham?
    Senator Graham. Thank you. Thank you very much for the job 
you do, and we will try to work together here.
    Do you agree we need to fund the Government this year?
    Ms. Young. Absolutely.
    Senator Graham. Do you agree we need some top line sooner 
rather than later?
    Ms. Young. We have some for you here to consider.
    Senator Graham. Yeah, some that would work. If we say no to 
this, is that the end of the discussion?
    Ms. Young. Senator Graham, the budget has always been the 
beginning of a process.
    Senator Graham. Right. So you know that we are going to say 
no, and I think a lot of Democrats will be uneasy with some of 
the priorities in this budget, or the lack of priorities in 
terms of defense. So I just want to encourage you, let us try 
to pass a budget--I mean, no, excuse me, fund the Government 
through the appropriations process. We can do it. Do you agree 
that continuing resolutions are a bad way to run the military--
--
    Ms. Young. Absolutely.
    Senator Graham. --and everything else?
    Ms. Young. Everything else.
    Senator Graham. Okay. So the reason I want to beat you up 
on the budget is because I like you, and I am trying to get to 
where we are all going to be. We are going to be here fairly 
soon as appropriators trying to find a way to pass a budget 
that our colleagues can support. So I think Ms. Young is 
uniquely qualified to help us get there.
    So when do you think we should have these discussions about 
a top line we could all agree upon?
    Ms. Young. Senator Graham, I know the House Appropriations 
Committee will start its work soon. I am hoping the Senate 
Appropriations Committee follows suit. And I think both bodies 
have to work their will, starting with where the President 
would like to see both go.
    Senator Graham. Okay.
    Ms. Young. But both have a history of putting Member 
interest where Members of both bodies can come together. It has 
to be a bipartisan process.
    Senator Graham. Okay. Good. The sooner that process can 
start, the better, as far as I am concerned.
    A bunch of States are basically canceling the Federal 
unemployment benefit for their State because they believe it 
hinders the ability to hire people back as the economy 
reemerges from the COVID pandemic. Do you understand that 
logic? And what is your view of that?
    Ms. Young. Well, one, I would like to state the way we do 
unemployment, the Governors have the right to make those calls. 
But I would also like to point out the jobs report we saw last 
week, before any of these payments were pulled back, we saw 
what I think is tremendous growth in the jobs market. We added 
559,000 jobs. We are down to the lowest unemployment level 
since before the pandemic.
    So we will see the results of what those Governors have 
done, but we are also seeing a big return of the economy before 
that $300 was pulled.
    Senator Graham. Well, their belief is that the enhanced 
unemployment benefit is deterring people from reentering into 
the workforce. There are a lot of jobs out there that are 
unfilled and will never be filled until you change the benefit 
structure.
    Does that logic make sense to you given where we are at in 
our economy?
    Ms. Young. I understand the logic, but I have also not met 
Americans who would prefer not to work. There is a dignity to 
work in this country that most Americans----
    Senator Graham. Well, I have got a lot of people in my 
family that are not working because they are getting--I will 
show you some in my family. So the bottom line is I think there 
are people out there--they are not bad people, but they are not 
going to work for $15 an hour if they make $23 unemployed. That 
does not make you a bad person. If you are working for $15 an 
hour, that makes you almost a chump. So I do not buy that at 
all. I think there is a real problem we have created here to 
incentivize people not to work because simply they make more 
money. I am not blaming them. I am blaming us. But our 
employers and our economy need some help out there.
    Finally, on the defense side, how do you see the world 
right now in terms of threats that the United States and our 
allies face? Is it small, large, medium?
    Ms. Young. Well, I am not, you know, a national security 
expert. It is clear the world remains a complex place with a 
lot of dangerous players. But you being the State Foreign 
Operations Subcommittee Ranking Member on Appropriations, I 
think you have to look at this budget--I know we have gotten 
into the habit of looking at defense versus nondefense. But the 
investments in diplomacy, I think General Mattis said it best, 
a reduction there means he has to buy more bullets. So what you 
see when you do not see the defense numbers where you want them 
is a reinvestment in our diplomacy, making sure that this 
complex environment, this complex world we live in is not all 
handled militarily.
    Senator Graham. I could not agree with you more, and I will 
end on this, Mr. Chairman. The President's budget I think ups 
the Foreign Operations Subcommittee to, I think, $62 billion. 
That is still less than 1 percent. Count me in for more 
spending on soft power. It does make sense. But it is by no 
means a substitute for having a robust military with a 
qualitative advantage over the enemies of this Nation and our 
allies. And I can say one thing without any hesitation. This 
budget is a disaster for the American military over time. This 
budget will entice bad actors to be more bold. And this budget 
sends absolutely the wrong signal in a dangerous world. While I 
appreciate more developmental aid spending, we are not going to 
defend America through developmental spending. Our adversaries 
are growing in capability. This budget does not allow us to 
stay ahead.
    Thank you.
    Chairman Sanders. Thank you, Senator Graham.
    Senator Stabenow.
    Senator Stabenow. Well, thank you very much, Mr. Chairman. 
And, Ms. Young, welcome again.
    I first want to start, because I am sure we are going to 
hear from Republican colleagues, now that we have a Democratic 
President, about how deficits will destroy the country, which 
is always happening under a Democratic President but not under 
a Republican President. So just in the time that I have been 
here, just for the record for folks listening, I came into the 
U.S. House in 1997 and President Clinton, a Democrat, balanced 
the budget for the first time in 30 years. I was proud to be 
able to do that.
    I came into the Senate, President Bush, two tax cuts geared 
to the wealthiest Americans, wars not paid for, huge deficits, 
nobody said anything about the deficits. We went into a 
financial crisis at the end of his term.
    President Obama comes in, right-sizes the Government, the 
financial crisis, suddenly deficits matter again, they are 
horrible and will ruin the country. By the end of his term, 
deficits are coming down.
    President Trump comes in, deficits really do not matter, 
everything gets exploded in terms of the deficits. Republican 
colleagues do not say anything.
    But now we have President Biden and deficits matter again. 
So I think we ought to just say, as we hear this going forward, 
understand where it is coming from.
    I want to thank you for a budget that reflects the needs 
and values of the people of Michigan. I want to thank you for 
supporting the Great Lakes. It is the first time in 5 years I 
have not had to come to the Budget Committee and talk about how 
eliminating the Great Lakes Restoration Initiative would be a 
bad thing for protecting the Great Lakes. So thank you for 
investing in that as well.
    I wondered if you could speak a little bit more about 
closing the tax gap, which I think is so important. President 
Biden has proposed a significant investment in the IRS' ability 
to enforce the tax laws on the books. I think everybody in my 
State thinks that is a good idea, and if they are required to 
pay their taxes, that everybody should be required to pay their 
taxes. And it is pretty simple. People should pay what they 
owe. Every year there are hundreds of billions of dollars in 
taxes that are owed that are not paid. In fact, in the Finance 
Committee, I was really amazed to hear the former IRS 
Commissioner say he thinks it is $2 trillion in unpaid taxes. 
And when you look at it, it is unreported income; it is income 
hidden because of complex business arrangements and so on, and 
compounded by staffing cuts over the years that have made it 
harder to do complex tax-consuming audits. And the result is 
that low-income taxpayers with a simple tax filing get audited; 
billionaires with complicated finances have a much better 
chance of not being audited. So when we are looking at roads 
and bridges and education and health care and Department of 
Defense and all the things that we need to fund, these are big 
numbers.
    So I wondered if you would talk more about the role that 
revenue from closing the tax gap plays in funding the critical 
investments that I am sure everybody will be talking about this 
morning.
    Ms. Young. Senator Stabenow, we do pay a lot of attention 
on the spending side, with pointing out the President's 
proposal is completely offset through tax reform. Also, before 
you even get to tax reform, through asking those who are 
supposed to pay a certain amount of tax, to pay that. The IRS 
has been woefully underfunded for decades, the last decade even 
more thanks to the Budget Control Act. So we are saying--you 
said $2 trillion. We are tracking closer to $1 trillion. That 
is what people owe under these tax laws with no changes. So we 
do think we need robust investments in the IRS to make sure 
that regular Americans are not paying their fair share while 
those under our current laws are getting away without paying 
anything into the system close to what they owe, and then we 
have to skimp on these investments in infrastructure and child 
care.
    Senator Stabenow. Thank you very much. Well, on behalf of 
the people of Michigan, we need to get that done. People want 
to make sure our tax system and enforcement is fair.
    One other question. I have many I would love to talk to you 
about, but I want to talk to you more about what we have talked 
about privately in terms of a really important piece of health 
care, which is behavioral health, health care above the neck, 
mental health, substance abuse services and so on. We have had 
dramatically positive things happening through new certified 
community behavioral health clinics. Senator Roy Blunt and I, 
Republican and Democratic colleagues together, pushing forward 
on a new way to provide quality services in the community that 
keep people out of the jail and instead they are getting help, 
out of the emergency room, out of homeless shelters, getting 
help.
    The budget includes a $125 million increase in startup 
funds, but does not address the need to make these clinics 
fully available and funded across the country. So I wonder if 
you could speak to some of the successes of this approach in 
community clinics. And will you work with Senator Blunt, 
myself, and other colleagues to make sure that we can put in 
place the legislation necessary to provide these services 
across the country?
    Chairman Sanders. Briefly.
    Ms. Young. Senator Stabenow, as I said privately, of 
course, we will work with you to make sure we get the right mix 
and are servicing people the best way when it comes to 
behavioral and mental health. So we will absolutely work with 
you.
    Senator Stabenow. Thank you.
    Chairman Sanders. Thank you.
    Senator Grassley.
    Senator Grassley. Yeah, I want to--I do not have an easel, 
so I want to show you a 50-year history of taxes and taxes 
coming into the Federal Treasury just to show you that your 
wish of getting more revenue from higher tax rates just does 
not pay off.
    The blue line is a 50-year history of tax rates up and 
down. The red line is the actual revenue that actually comes 
in, which tells me that the history over 50 years is that the 
taxpayers in this country have decided they are only going to 
give us in Washington so much money, averaging about 17.4 
percent of gross national product.
    Now, you want to raise that about 20 percent to an average 
of about 19.9, I believe. It just is not going to happen. 
People are going to decide that they are going to take leisure 
instead of working for the Government. They have decided that 
this is the amount of money that is going to come in.
    And so taking this into consideration, how do you think you 
are going to fund, with the tax rates you get, you are 
suggesting that money is going to come in, but it does not come 
in.
    Ms. Young. Senator Grassley, one, I think I need some of 
the visual aid that Senator Sanders talked about earlier, but 
from what I can see of the lines, I think not all but partly 
can be explained by what I just talked to Senator Stabenow 
about. We need to make sure that we have an IRS, a Government 
that is collecting what the tax law says we should be 
collecting. And some people absolutely do not pay what they are 
supposed to pay--not because they are staying home, but because 
they have found loopholes that we are beginning to close in 
this budget.
    So, you know, I think it is troubling, the line you have 
shown, and we are trying to do something about that to make 
sure people are paying what the tax law says they are supposed 
to pay, and it is usually the very wealthy who find loopholes 
that we need to close.
    Senator Grassley. On another matter, the President's budget 
tries to justify unprecedented levels of spending and debt by 
assuming interest rates will remain historically low. Recently, 
Secretary Yellen is quoted as saying interest rates have been 
``too low now for a decade'' and that we should welcome higher 
rates. But if interest rates do increase, that could be 
catastrophic given escalating debt under the President's 
budget.
    As Brian Riedl of the Manhattan Institute recently 
highlighted in testimony before the House Financial Services 
Committee, interest rates that are only 1 percentage point 
higher than Congressional Budget Office (CBO) currently 
projects would add $30 trillion of interest costs over the next 
three decades.
    Given Secretary Yellen recognizes the potential of higher 
interest rates, doesn't proposing a budget that results in 
public debt reaching 117 percent of GDP by 2031 and continues 
to rise thereafter risk leading us down the path that we have 
seen in other countries--Greece is an example. I suppose Italy 
would be another example--towards a debt crisis?
    Ms. Young. Senator Grassley, one, I would like to point out 
what we tried to do is present a reasonable budget that was 
honest about our assumptions. So we do actually include a rise 
in interest rates over time in this budget. When it was 
developed, it was absolutely in line with where market 
forecasters are. Even with that, we show a deficit savings of 
$2 trillion in the subsequent decade from this budget. We also 
see some rise in interest that are month-to-month, temporary, 
but we also see our long-term indicators showing us it will not 
be a long-term issue, and we remain a historically low point, 
which is a good thing because our real debt service payments 
remain low by historical standards.
    So we do account for rising interest, and we do still show 
$2 trillion in deficit savings with the budget proposals, with 
the offsets and tax reforms we have talked about today.
    Senator Grassley. Since the end of World War II and prior 
to the pandemic, spending as a percent of GDP exceeded 24 
percent of GDP in only one year. That was 2009 at the height of 
the financial crisis when spending reached 24.4 percent of GDP. 
That was in 2009.
    Under the President's budget, spending as a percent of GDP 
would average 24.5 percent for the next decade. It seems to me 
that the administration is taking the concept of ``never 
letting a crisis go to waste'' to a whole new level. How does 
the administration justify permanent spending levels that once 
were reserved only for periods of world wars or economic 
crises?
    Ms. Young. Senator Grassley, what we see, one, our 
proposals here are fully offset. You may not agree on the 
offsets, but we took the responsible route of providing 
offsets. We also know that the changing demographics in this 
country means that we spend more, but we think it is important 
to make sure our seniors know we have a commitment to those 
social safety net programs like Social Security, so you will 
not find cuts to those programs here. But our changing 
demographics have as much to do with the GDP numbers, as you 
have mentioned, as the proposals here. But to ensure that we do 
not create more of a fiscal problem down the road, we do 
believe these policies should be offset by reforming the Tax 
Code so it is more fair to all Americans.
    Senator Grassley. Thank you, Mr. Chairman.
    Chairman Sanders. Thank you, Senator Grassley.
    Senator Kaine.
    Senator Kaine. Thank you, Mr. Chair. Thanks, Ms. Young.
    I want to talk about budget honesty. I appreciate this 
about the budget in a couple of ways. Your spending proposals 
are offset with proposed revenue increases. That is good. You 
do not propose a defense number but then have a President who 
wants to take money out of the Pentagon to use for nonmilitary 
projects like a wall. President Trump took about $12 billion 
out of the Pentagon to use for the wall, so while the top line 
for defense may only go up a little, actually if you count in 
the fact that President Biden is not going to raid the defense 
budget for nonmilitary emergencies, it is actually a larger 
increase in defense spending within the Pentagon.
    And let us get to this: You use fairly conservative revenue 
forecasts, so you have projected trillions of dollars of 
deficit savings over the two decades using conservative revenue 
forecasts. Now, as I read the budget, what it suggests to me is 
this: We are still in the middle of a once-in-a-century public 
health crisis that has killed 600,000 people and ravaged the 
economy. We are seeing some signs of growth. That is good. But 
we are not out of the woods yet.
    And so you include conservative revenue projections, and 
maybe the most recent evidence would suggest that the growth 
will actually be stronger. Wouldn't you agree with me that one 
of the best ways to deal with debt and deficit is to have 
strong economic growth?
    Ms. Young. Absolutely, and the growth numbers we have for 
this upcoming year is 5 percent in the budget. We developed 
those economic assumptions in February. Clearly, our vaccine 
program has outperformed our greatest thoughts on what it 
would, and it has allowed the economy to grow. Organisation for 
Economic Co-operation and Development (OECD) and other 
forecasters now estimate that our growth will be more like 6.5 
percent. So there are very conservative estimates here. Even 
with those, we show deficit reductions, and there is proof 
through market forecasters and others that we are doing better 
than even this budget----
    Senator Kaine. And when the time is right, you can come 
back to Congress--if you feel like you need to adjust the 
revenue projections, you can come back to us, and we might even 
see the anti-deficit effect that you testified earlier being 
even stronger because of the potential for robust growth.
    Ms. Young. And we are required to do something called a 
``midsession review,'' and I certainly do not want to get ahead 
of myself. But given where the market is and market forecasts, 
I expect we would see much stronger growth.
    Senator Kaine. On the theory that economic growth is the 
best anti-deficit strategy, I also want to point out analyses 
for the last decade have always indicated that comprehensive 
immigration reform is something that you can do that will 
significantly increase economic growth without really adding a 
penny to the deficit. And it would be my hope that we would 
grapple with that. If we are interested in fiscal 
responsibility, comprehensive immigration reform is one of the 
most important things we could do.
    I am right, am I not, that President Biden is not proposing 
to raid the Pentagon budget to take money out of it for 
nondefense emergencies? Am I correct in that?
    Ms. Young. You are correct, absolutely correct in that.
    Senator Kaine. Over the course of about a year, in the 
calendar year--it straddled two fiscal years--President Trump 
took $12 billion out of the Pentagon budget, and so the top-
line numbers that Ranking Member Graham showed actually were 
sort of artificial. Those were indeed top lines that did not 
reflect what was actually spent by the previous administration, 
because they spirited monies away.
    Senator Graham also talked about the notion that the 
discretionary budget was increasing at a significant percent. 
The money on diplomacy is in the discretionary budget, but it 
is important to the national defense, correct?
    Ms. Young. Right.
    Senator Kaine. The Department of Energy, which is over our 
nuclear arsenal, is really important to national defense, but 
that is in the discretionary budget, isn't it?
    Ms. Young. That is right.
    Senator Kaine. Department of Homeland Security (DHS) is in 
the discretionary budget, very important for national security. 
Isn't that correct?
    Ms. Young. Exactly.
    Senator Kaine. The Department of Justice, Drug Enforcement 
Administration, there are so many parts of the discretionary 
budget that are critical to national defense that just simply 
looking at defense versus nondefense and saying one is 
benefiting and the other is not is sort of artificial and not 
particularly accurate, isn't it?
    Ms. Young. It is a completely artificial split.
    Senator Kaine. The last thing I want to ask you is in the 
past administration we often saw efforts, I thought, to really 
go after Federal employees by limiting cost-of-living 
increases, by undercutting retirement benefits. Tell me about 
what this budget does for our Federal employees.
    Ms. Young. So, one, it provides an adequate cost-of-living 
increase of 2.7 percent----
    Senator Kaine. And that is parity for both defense and 
nondefense employees, correct?
    Ms. Young. It makes no sense that someone sitting next to 
someone in a uniform would not have parity, that a Central 
Intelligence Agency (CIA) intelligence officer----
    Senator Kaine. Or a Coast Guard officer serving on the Navy 
ship, they would get different pay increases, that makes no 
sense, does it?
    Ms. Young. It does not.
    Senator Kaine. So parity, that is strong.
    Ms. Young. We do parity in this budget. The President is 
very clear. The Government works for the people, and we have to 
have a strong civil service, rebuild that service. Just at OMB, 
we have seen the reduction in staff over the last 10 years. It 
has significant impacts on what we are able to do for the 
American people, and we have every intention to turn that 
around.
    Senator Kaine. Thank you, Ms. Young.
    Thanks, Mr. Chair.
    Chairman Sanders. Thank you, Senator Kaine.
    Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman. Ms. Young, 
welcome.
    Real quick, how much, approximately, is left unspent from 
the close to $6 trillion of COVID relief that the Congress has 
passed over the last 18 months?
    Ms. Young. Senator Johnson, you know ARP was just passed, 
so a significant amount of that remains unobligated. But I can 
get that for the Committee.
    Senator Johnson. Well, the reason I ask is when we passed 
the $1.9 trillion, in air quotes, COVID relief package, there 
was about $1 trillion left unspent of the previous $4 trillion 
we spent in 2020. According to the numbers I saw from CBO, 
about $700 billion of the COVID relief package, the $1.9 
trillion partisan package, is not even going to be spent until 
2022 to 2028. Is that correct?
    Ms. Young. Yeah, I think it is appropriate to make sure we 
roll these programs out in a responsible way.
    Senator Johnson. But that is not COVID relief. That is 
something else.
    Ms. Young. It absolutely is COVID relief--COVID relief can 
take time to get out to ensure that some long-term inequities 
that will last past the pandemic are dealt with.
    Senator Johnson. Well, I hope COVID is over before 2028. 
Can you get me that number, though? I would like to know as of 
today, you know, how much of the $6 trillion of COVID relief 
remains unspent.
    Ms. Young. We will make sure all the members on the 
Committee have that data.
    Senator Johnson. Just real quick, because you were talking 
about equity and taxes, right now the top 1 percent make about 
21 percent of the income, and they pay 40 percent of the income 
tax. The top 10 percent make about 48 percent of the income, 
and they pay 71 percent of income tax. And, by the way, the top 
1 percent will always make, you know, a larger share of income 
because that is the definition of 1 percent and the definition 
of 10 percent.
    What do you think would be more equitable? Again, top 1 
percent, 20 percent of income, they pay 40 percent of tax; top 
10 percent, they make 48 percent of income, pay 71 percent of 
the income tax. What do you think would be more equitable? What 
should those percentages be?
    Ms. Young. Senator Johnson, the question I have is they are 
paying--the percentages, let us take your numbers are fact. 
That does not mean that they are paying a fair share compared 
to what regular Americans----
    Senator Johnson. So, again, if you are making--let us 
concentrate on the top 10 percent. If you are making almost 50 
percent of the income, what percentage of the income tax should 
you pay?
    Ms. Young. What we are suggesting is the wealthiest 
Americans go back to paying what they paid before the tax cuts 
of the last administration. So we are moving those tax rates 
back to 39.6 percent.
    Senator Johnson. What do you think is the maximum amount 
any American should pay out of a dollar of income to the 
Federal Government, recognizing certain States take 10 percent 
or even more? But what should be the max amount an American 
should pay for every dollar of income should contribute to the 
Federal Government? What should that percent be?
    Ms. Young. So we have a tax plan. What it says is no one 
that makes under $400,000 should pay more than they pay now, so 
we have a commitment not to raise those taxes. But what we are 
saying is those that make more than $400,000 should pay----
    Senator Johnson. What is that percent? I mean, what do you 
think--so what is the percent that an American will pay out of 
a dollar of income?
    Ms. Young. Senator Johnson, overall we think the right tax 
rate is 39.6 percent for the top----
    Senator Johnson. So about 40 percent, okay. Senator 
Stabenow was talking about the glory years of budget surplus, 
which, trust me, I wish we were back there in the late Clinton 
years. The reason we got there is, first of all, an extremely 
strong economy through the 1990s, and I would argue that it was 
set up by what Ronald Reagan did in terms of supply side 
economics and setting up the conditions for business 
investment. So revenue actually did grow in 2000 to 20 percent 
of GDP, but that was short-lived, because Senator Grassley is 
right, long term, no matter what the top marginal tax rate, we 
get about 17.4 percent. That is kind of what the American 
people in the end say that is about all we are going to pay, 
and they figure out some way to avoid paying the high top 
marginal tax rate. But the reason we had the surplus is because 
spending was 18.5, 18, 17.7, 17.7 percent of GDP during those 4 
years.
    Now, historically it has gone up during recessions, like in 
the early 1980s to about 22.9. The first 4 years of President 
Obama--again, he came into office in the recession--it was 24 
to about 22 percent. The last 4 years it was about 20.8 
percent. The President's budget is calling across the board for 
24.5 percent of spending of GDP. Don't you think that is way 
too much?
    Ms. Young. So, one, I will point out that those times that 
Senator Stabenow and you mentioned, the top tax rate was 39.6 
percent, so we are trying to go back to those levels. So, you 
know, we talk about spending as a problem. One thing we think 
we should do is change the tax rates to make sure we do go back 
to fair rates at a time of a strong economy. And we do not 
think people are paying their fair share. We have seen that in 
the data. We have had a tax cut that did not do what we claimed 
it would do. So we are trying to go back and make sure that the 
top earners and corporations do something to make sure we can 
spend on infrastructure.
    Senator Johnson. A final point. What I was pointing out, 
those outlays are going from averaging about 20 percent over 
the last 4 years of Obama to 24.5 percent. That is a massive 
amount of spending increase when we have, let us face it, a 
very strong economy, 5.8 percent unemployment. When I went to 
college, that was almost considered full employment. In my 
State it is 3.8 percent. I just do not get all this spending 
when we are $28 trillion in debt.
    Thank you, Mr. Chairman.
    Chairman Sanders. Thank you.
    Senator Toomey should be available on video.
    Senator Toomey. I am. Thank you, Mr. Chairman.
    My first point I would make is our distinguished witness I 
think misspoke, suggesting that she would like to go back to 
the wealthy paying the share of the tax burden they paid prior 
to the Tax Cuts and Jobs Act (TCJA). If we went to that, then 
the wealthy would pay a lower percentage of all the taxes that 
are paid, because when we did the tax reform of 2017, the TCJA, 
we shifted the tax burden from middle income people to higher-
income people. We made the Tax Code more progressive than it 
was prior to the TCJA. So unless I am mistaken, I think the 
administration's position is they want wealthier people to pay 
even more, not less, of the tax burden. So I just want to make 
that clear.
    So this budget that we have before us, of course, massive 
increase in nondefense discretionary spending, almost 17 
percent. That is on top of the $1.9 trillion of partisan 
spending that was signed into law in March. The Biden proposal 
never returns spending to pre-pandemic levels as a percentage 
of our economy. For 50 years, average spending has been about 
20 percent of GDP, just a little more than that. Under the 
President's budget, spending remains at about 25 percent of 
GDP. So it is a massive 25-percent increase in Government 
spending as a percentage of the economy, which would be a huge 
distortion and misallocation of resources.
    To pay for part of these spending hikes, we have got huge 
tax increases. The President is proposing we increase the 
corporate rate, we double global intangible low-taxed income 
(GILTI), we eliminate the foreign-derived intangible income, 
which is a way to encourage taxes paid in the U.S. instead of 
overseas, raise individual income tax rates, eliminate the 
stepped-up--it goes on and on, all kinds of tax increases of 
all sorts. And one of the ironies of this was that prior--I 
wish we could all agree on certain facts that are indisputable, 
and one of them is that prior to the hit of the pandemic, prior 
to that, we had the best economy in 50 years. And that is if 
you measure it by objective metrics. We were at full 
employment. We had more job openings than there were people 
looking for jobs. We had a record-low poverty rate. We had an 
all-time record-low unemployment for African Americans, for 
Hispanic Americans. Wages were growing, and not only were wages 
growing, but they were growing fastest for the lowest-income 
people. So we were actively witnessing a narrowing of the 
income gap.
    I would have thought that there could be bipartisan 
agreement that those are good things, because I think those are 
very good things. And, therefore, I think it would be good to 
try to get back to that. But that is not where we go here. 
Instead, we go on this massive spending and tax hike binge that 
would make it probably impossible to ever get back to the best 
economy of the last 50 years, which we had a year and a half 
ago.
    Now, along the way, because of the Government having shut 
down the economy, for understandable reasons even if not always 
best in hindsight, in 2020 Congress passed five bills, $4 
trillion, then the Democrats insisted on another almost $2 
trillion. It was clear already that the economy was roaring 
back. COVID was already receding dramatically. We had 
discovered by then--or before then that States had an all-time 
record year for tax revenue in 2020. State and local 
governments combined set an all-time record. Separate and apart 
from that, we had sent them $500 billion. And then the 
administration says we have to send them another $350 billion, 
of course. That is just unbelievable, the spending, everywhere 
you look.
    California is a great example. Here we go. In California, 
they announced that this fiscal year they run a $75.7 billion 
surplus. That is just their surplus. They are going to get 
another $42 billion from the Federal Government, so they do not 
know what to do with all this money. They are going to send 
checks out.
    So here is one thing that I have suggested, that since 
there is bipartisan agreement on physical infrastructure 
spending, why not spend some of this money that has been 
approved but it has not gone out the door? I think our witness 
testified that much of it could not possibly have been spent 
yet. I agree with that. But I have a concern, and my concern is 
how much detailed information we have about what is actually 
available to be repurposed.
    So if the administration is really proud of the 
achievements of the American Rescue Plan and presumably 
confident that the American people would support this massive 
spending blowout even though the economy was recovering and 
COVID was receding, my question is: Why haven't you provided 
the reports and the drawdown reports, right down to account 
level detail, reports that, by the way, the Trump 
administration did provide, to Members of Congress and staff so 
that we can see exactly how much has been spent and how much is 
yet to be spent? Acting Director Young, could you explain to me 
why we have not been able to get that information from you?
    Chairman Sanders. In 25 seconds or less.
    Ms. Young. Yes, Senator Toomey, I think I told Senator 
Johnson I am happy to provide that information. I also 
understand the relitigation of ARP, but I will remind everyone 
that in March, close to 55,000 Americans were still contracting 
COVID every day, and 11 million people----
    Senator Toomey. All right. I am out of time, but, really, 
you should be posting this information. It should be available 
in as close to real time as possible. We should not have to 
wait for a hearing to ask you to provide the information about 
how quickly money is being spent.
    Chairman Sanders. Thank you.
    Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman. And thank you, 
Madam Director, for your leadership.
    Just on the ARP, as we know, actually there are some funds 
that have already been exhausted. I think the restaurant fund 
that had been set up and others have been oversubscribed. 
Monies that went to local and State governments were not 
intended to be out the door and spent right away. I know many 
of my local governments are putting together good plans to make 
sure those monies are very well spent.
    Thank you for the budget request that was submitted by the 
Biden administration. I want to talk about education funding 
for one moment, because I appreciate the proposed increases in 
some fundamental education programs.
    What we have seen over years when both Democrats and 
Republicans have been in the majority is chronic underfunding 
of our Federal education funds. Last year Title I was 
underfunded by $29 billion, just in one year, and Individuals 
with Disabilities Education Act (IDEA) was underfunded by $23 
billion. So that is the gap between what Congress authorized 
and said was necessary from a policy perspective to provide our 
kids with quality education compared to what we actually 
delivered.
    In fact, I have introduced legislation--it has been my 
first bill every year in Congress. I am glad to see a budget 
now that is proposing some of the increases contained in that 
bill.
    I am also pleased to see the focus on community schools, 
because we want our teachers to be focused on teaching. But we 
all know that many kids come into the classroom with lots of 
other challenges and issues, and so community schools are the 
right model.
    So can you just talk a little bit about the increases? You 
have got a $20 billion increase in Title I, equity grants; $2.6 
billion in IDEA, which has had bipartisan support; $443 million 
in full-service community schools. Can you just talk about how 
this supports an opportunity agenda for the country?
    Ms. Young. One, I would point out that 90 percent of the 
children in this country go to public school, so the investment 
here is absolutely necessary. I think you have pointed out 
there has been historically bipartisan support for many of--
this education budget: $20 billion increase for Title I 
schools, IDEA, as you pointed out. We think you also have to 
look at our preschool investments so we get children in early 
childhood. As we have seen, kindergarten is too late. You have 
missed the boat if you wait until kindergarten. So we are 
trying to make sure that children, especially those at risk, 
have access to quality education as young as we can find them. 
And I think this budget is transformational as a first step, 
but we certainly hope Congress takes this and runs.
    Senator Van Hollen. I agree with you, and I want to ask you 
also about the issue of long-term unemployment. You have $4 
billion in here to create subsidized job programs for short 
periods of time to help the long-term unemployed get back on 
their feet. We had over, you know, about 1.5 million long-term 
unemployed even before the pandemic hit. We are well over 4 
million. Even as we come out of the pandemic, I am very nervous 
that many people are going to be unable to find work and 
looking for a very long time.
    So this is not a radical idea. I remember back in 2010 
during the economic meltdown, you know, no less a flaming 
liberal than Governor Haley Barbour at the time thought that 
this was a really important program, and I do think that to 
address the chronic issues of long-term unemployment, not just, 
you know, after a pandemic or after a meltdown like we saw in 
2008, we have that ability--for people who are looking for 
work, they want to support their family, they are out there, 
that is by definition they are looking--to help them with a leg 
up. Can you talk briefly about that?
    Ms. Young. Yeah, while we see some indicators that we are 
doing better here, over 400,000 removed from the rolls of the 
long-term unemployed, but the long-term unemployed, because it 
has historically been difficult to find jobs, and they are the 
most likely to be left behind as the economy takes that out. 
There are always inequities in our economy. That is why you see 
the Jobs and Families Plan. It is not just a recovery from 
COVID. It is to make sure we take this opportunity to build an 
economy that is fair for all Americans, and that program you 
have highlighted absolutely targets a community that would 
absolutely be left behind, stay on the rolls of the unemployed. 
We need targeted investments for that community and others to 
make sure there is fairness in our economic system.
    Senator Van Hollen. Thank you.
    Thank you, Mr. Chairman.
    Chairman Sanders. Thank you.
    Senator Braun.
    Senator Braun. Thank you, Mr. Chairman.
    Before I get into the general discussion that Senator 
Toomey and Senator Johnson had a moment ago, something has been 
conspicuously absent from the discussion of raising revenues, 
and that would be the qualified tax deduction for small 
businesses that was put in place in 2017. It in effect took 
small business rates from 40 percent down to 30, 39.6 to 29.6. 
Is that something you believe, even though it is due to sunset 
in 2025, should remain there? Or do you believe when that was 
differentiated in the ordinary rate between individuals and 
small business income, that ought to be something that stays in 
place? I would love to hear your answer and be on record of 
where you would like to go there.
    Ms. Young. Senator Braun, not surprisingly, I will point 
out that there are a lot of things we did not speak to with 
TCJA expirations in 2025. We believe we have between now and 
then to deal with some of those expiring provisions. That is 
one of them, so I am not going to get ahead of where we might--
--
    Senator Braun. Do you have an opinion on that in terms of 
has it been beneficial in terms of driving the economy pre-
COVID?
    Ms. Young. One, I think we need to see where Congress ends 
up with the tax proposals we have to date to see where we end 
up for a 2025 budget. I am not going to get ahead of that.
    Senator Braun. So as a Main Street entrepreneur, I will 
tell you--and I have been doing it 37 years prior to becoming a 
Senator--that was clearly the biggest driver when you look at 
corporate income taxes going from 35 to 21, I believe that that 
particular tax adjustment was behind why we were creating 
record revenues pre-COVID. Keep that in mind.
    When it comes to this discussion of having any chance to 
pay for the additional spending, which correctly was pointed 
out averages about 20 percent of our GDP, now 24, even with all 
of the tax increases proposed, you still will be adding to the 
structural deficit. Implicit in all of this, and I think, to be 
honest with the American public, is that we choose to borrow 
this from our kids and our grandkids. Do you think that is 
healthy public policy to spend in that fashion when we are 
really asking future generations to pay for it? Because since I 
have been here, anything that is done defers something to 6 to 
10 years down the road, spends like crazy in the present. We do 
not do offsets, which means we are willing to borrow from our 
kids and grandkids. Do you buy that as good policy long term?
    Ms. Young. Senator Braun, I buy that there are puts and 
takes in every decision in life, and we better do something 
about our infrastructure, our education, our systemic 
unfairness in the tax system, or we do risk future generations 
being worse off.
    Senator Braun. So I will take that as a declaration that 
you are willing to borrow from future generations on end to get 
these policy proposals across.
    I would point out that that does not work anywhere else--in 
any State government, it does not work in any entity that has 
got the rigor of competition in the private sector, and it is a 
very poor example of what we do at a place that so many people 
look to, so many businesses do. And I think it sets us up as a 
bad business partner for any of the good policy that we choose 
to pursue, whether it is infrastructure, education, any of the 
things that people look to the Federal Government maybe to do 
more of. This ends up with a series of crises down the road, 
maybe starting with completely depleting the Medicare Trust 
Fund here in a little over 5 years; Social Security, the other 
driver of our structural deficits along with Medicaid. All 
might be, you know, good policy that we have kind of woven into 
our fabric. That is all at risk as well.
    So I think that as long as we are on this pathway, we need 
to be honest about it, and to also acknowledge that we were at 
the sweet spot of maybe what Government should do pre-COVID 
based upon especially that incentive built into making the 
productive economy healthy with that qualified income tax 
deduction for small businesses.
    I do not think you can paint this in any other way other 
than it ends up with a calamity, and even though it feels good 
in the short run that we are spending money on so many things 
all of us are interested in, but it is derelict to the American 
public to do it when we are borrowing every penny of it, 
because let us face it, raising taxes, that is not near as 
certain as spending the money at the tune of creating these $1 
trillion to $1.5 trillion deficits and the debt that it adds in 
the future. I think that is part of what journey you are on.
    Ms. Young. Thank you, Senator. I see we are out of time, 
but I will just point out that we absolutely agree, you should 
pay for your proposals, and that is what we do here. And I get 
there are disagreements, but we have put forward a set of 
proposals that would pay for the spending.
    Senator Braun. Thank you.
    Chairman Sanders. Thank you.
    Senator Murray.
    Senator Murray. Mr. Chairman, thank you. Acting Director 
Young, welcome. Good to see you today.
    I was really pleased to see President Biden's budget lay 
out a plan to make our economy actually work for working 
families and not just those at the very top. I think we all 
know that the budget is really a reflection of our values and 
our priorities, and this budget really pushes forward strong 
investments in our workers, in our families, in our kids that 
are going to help our communities succeed in our present and in 
the future.
    So my question for you today is, with everything we have 
learned during this pandemic, coupled with the erosion in wages 
and living standards that lower- and middle-class families have 
experienced over the last actually 40 years plus, why are the 
investments included in the American Families Plan critical to 
make sure all our workers and families can share in the 
economic recovery? And what is the economic case for taking 
these very decisive actions now?
    Ms. Young. Thank you, Senator Murray. We have talked about 
this, touched on this a little, but I would like to make clear 
we are recovering. The economy is roaring back. What the Jobs 
Plan and Families Plan are intended to do is take this 
opportunity to make sure we do better than we were pre-
pandemic: those without college educations, that they have 
good-paying jobs; that we fundamentally give everyone in this 
country an opportunity; that we admit that there are inequities 
in the system before the pandemic that the pandemic 
highlighted; that we do better with our opportunity here.
    So, you know, we are recovering from COVID. We think ARP 
gave us a leg up given where we are in vaccines. But we have an 
opportunity here to make sure everyone can take part in the 
American dream, maybe in a way that they were not able to do 
before the pandemic. So we have been talking about 
infrastructure for a long time. The President has talked about 
Infrastructure Week since he was a Member of this distinguished 
body. He would like to stop talking about it and do something 
about it, and I think most Americans feel the same way, and we 
would like the chance to put forward a proposal while asking 
the wealthiest Americans, while asking big corporations to pay 
their fair share.
    Senator Murray. Well, thank you, and I think we need both 
the American Jobs Plan and the American Families Plan if we 
want to build back a fairer and a stronger economy on the other 
side of this pandemic.
    So before I close, I just wanted to raise two issues of 
critical importance to my home State of Washington, and that is 
the cleanup of the Hanford nuclear site and efforts to restore 
the salmon runs in the Pacific Northwest. It was really good to 
see this administration move away from the harmful cuts that 
have been proposed within the environmental management account 
at the Department of Energy, and I want you to know I look 
forward to continuing to work in close partnership with you to 
make sure the Hanford mission is on a cost-effective trajectory 
without compromising the cleanup.
    And on salmon recovery, I was really pleased to see an 
increase in funding for the National Oceanic and Atmospheric 
Administration (NOAA) and continued funding for the Pacific 
Coastal Salmon Recovery Fund. On that issue as well, I look 
forward to working with you closely and the administration to 
save salmon in the Pacific Northwest. And I am really committed 
to continuing and expanding funding for direct recovery 
projects, including habitat restoration, hatchery 
infrastructure, culvert repair and replacement, as well as some 
of the other investments that will really contribute towards 
species recovery like clean water infrastructure and more clean 
energy capacity and storage solutions.
    So I really appreciate you're looking at that and look 
forward to working with you on all of that.
    Ms. Young. And just like Senator Stabenow talked about the 
Great Lakes, you know, we are proud of the work the Puget Sound 
has done for cleanup, and we know how important salmon is in 
the Pacific Northwest, including the tribes. So we look forward 
to being a partner there.
    Senator Murray. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Sanders. Thank you.
    Senator Scott.
    Senator Scott. Thank you, Chairman. Thank you, Ms. Young, 
for being here.
    What do you think our Federal receipts will be in this 
fiscal year 2022?
    Ms. Young. Senator, let me see if the team has the exact 
number.
    Senator Scott. I think it is estimated to be a little less 
than $3.5 trillion, and then for next year, I think your budget 
suggests that we are going to get $4.1 trillion. Does that 
sound right?
    Ms. Young. Well, I have it as a percent of GDP, so that 
would not equal up to yours. But, historically, post-war 
average, 17.2 percent of GDP are receipts, and our 10-year 
average is 19.3.
    Senator Scott. So if you look at the way I think about it, 
you are going to go from about a little less than $3.5 trillion 
to over $4.1 trillion. I think that is about a 17-percent 
increase in receipts in 1 year. Do you think we have ever done 
that, a 17-percent increase in Federal receipts? I have never 
seen it.
    Ms. Young. Well, if we take the investments we have offered 
for IRS and others to make sure we collect what the Federal 
Government has asked of people, what the tax law says, that is 
our hope to increase it by that much.
    Senator Scott. I have never seen the Federal Government be 
able to increase its receipts by 17 percent in 1 year. And so I 
think what you said, when Senator Braun asked you, your belief 
is that we ought to do everything we can to live within our 
budget and pay for things. So let us assume that the Senate 
does not pass all these tax increases. What would you do? How 
would you deal with your budget then?
    Ms. Young. Senator Scott, I can make a lot of predictions, 
but my guess is that if the Senate does not pass the offsets, 
the spending is also in danger. So we would have to see the 
full package that the Senate and House would move on.
    Senator Scott. So right now we are getting close to $30 
trillion total debt. I think public debt is over $24 trillion, 
which is bigger than our GDP, right?
    Ms. Young. Yes.
    Senator Scott. So if you look at that now, if you look at--
I think the 10-year average for Treasury is over 5 percent. So 
your projection after this year, we are going to see, I guess--
it looks like people are talking about a 6-percent increase, 
but after that it would be 2 percent or less per year of GDP 
growth.
    Ms. Young. Yeah, and I talked to Senator Kaine about we 
have seen growth since these budget estimates were assumed, so 
you should expect some update of that through our midsession 
review.
    Senator Scott. So how do we ever balance the budget if we 
already have our Federal debt in excess of our GDP, our GDP is 
going to grow at around 2 percent, and realistically we are not 
going to have low interest rates forever? As a matter of fact, 
we have been at a historical low, so if you look at history, 
things go to above actually historical averages. So how would 
we ever pay--how do we ever get a balanced budget? And if we do 
not, how is that going to impact our poorest families with 
inflation?
    Ms. Young. Senator Scott, there are a lot of assumptions in 
there, in that scenario I would question, including the 
interest rates. We are not seeing long-term indicators that 
show we are going back to the 1970s with interest rates. So we 
do think we have the fiscal space to make these investments, 
but we also do believe that you have to put forth a proposal to 
pay for these investments over time, which is why we have done 
that. So we are reducing the deficit. But as you know, we have 
an aging society, which is part of the structural growth in 
spending we are not addressing, because we do not think we 
should be cutting Social Security or Medicare at this time. And 
if the choice is between that and asking the wealthiest to pay 
more, that is what we need to do.
    Senator Scott. So we know that the Medicare Trust Fund and 
the Social Security Trust Fund are not--they are clearly 
depleting. So what did you do in the budget with regard to 
them?
    Ms. Young. So the budget--actually, I am glad you brought 
this up--suggests that we would switch to the general fund to 
pay for those programs so benefits would not be cut. So we do 
still have to deal with larger structural offsets, how you pay 
for that, how you grow the economy. But we would assume that 
those benefits would be paid for out of the general fund if the 
trust funds do run out of money.
    Senator Scott. So when you think about getting a return on 
investment, so you said we are going to make these investments, 
then we are going to get a return, how do you see that we get a 
return when you look at the numbers we never get to a balanced 
budget?
    Ms. Young. A balanced budget is certainly one goal, a goal 
you speak to. I think another goal is to make sure that we are 
flattening the curve and debt as a percentage of GDP does not 
grow. But we also do really care about and most economists tell 
us it is a better indicator to look at what we are paying on 
real debt service, and we do think those payments will remain 
low. But we also think we need to grow the economy, which these 
investments would do.
    Senator Scott. Thank you.
    Chairman Sanders. Thank you.
    Senator Padilla.
    Senator Padilla. Thank you, Mr. Chair.
    Ms. Young, first I just wanted to share a few comments 
similar to what several of my colleagues have already shared, 
just in thanking you for the 2022 budget, which as crafted I 
have no doubt will accelerate our recovery from the COVID-19 
pandemic and, more importantly, as you pointed out, help us 
build a more equitable and prosperous economy for all 
Americans. I believe the President is rightfully rejecting the 
failed theory of trickle-down economics and instead making 
strategic investments to help families enter and stay in the 
middle class. So, with all due respect to some of my 
colleagues' new-found concern about deficits and debt, I know 
that this proposal meets this moment to rebuild our Nation's 
infrastructure, combat climate change, create millions of good-
paying jobs, reduce income and wealth inequality, expand access 
to child care, redress systemic inequities, and so much more. 
So I look forward to working with you and the other members of 
this Committee and others to advance this bold vision to 
deliver the equitable investments that the American people so 
direly need.
    I do have a couple questions, a couple in the category of 
wildfires--I am from California--and another in regards to 
housing.
    First, wildfires. California's most recent wildfire season 
was the worst on record, with more than 4.2 million acres 
burned. And we know that without bold action to combat climate 
change and to improve the resiliency of high-risk areas, we 
will continue to see more severe and frequent wildfires. It is 
important to recognize that 50 percent of forestland in 
California is owned by the Federal Government, so wildfire 
management in California is indeed a Federal issue.
    Unfortunately, we have seen decades of underinvestment by 
the Federal Government, so I am pleased to see that the U.S. 
Forest Service's budget request proposed a $400 million climate 
funding allocation to accelerate the restoration of degraded 
forests and rangelands. In total, the U.S. Forest Services 
proposes an increase of $170 million for wildfire management 
and $80 million for its Wildfire Suppression Operations Fund.
    Director Young, a simple yes-no question: Will you commit 
to working with Congress and the Department of Agriculture to 
ensure that the Forest Service's Region V receives the 
additional staffing and resources it needs to address the 
hazardous fuels backlog and reduce risk in California?
    Ms. Young. Yes, sir.
    Senator Padilla. All right. Next, I want to call your 
attention specifically to ongoing delays in transferring 
critical wildfire air tankers from the Air Force to CAL FIRE 
for fire suppression efforts. The Air Force was directed in the 
2019 National Defense Authorization Act to modify seven Coast 
Guard HC-130H aircraft with state-of-the-art wildfire 
suppression equipment and transfer them to California for use 
by CAL FIRE. Delays in transferring these seven air tankers are 
especially troubling because of the crucial role that air 
assets play in fighting California wildfires. So given the 
severe wildfire season anticipated now and in the foreseeable 
future, will you commit to working with my office to expedite 
the congressionally mandated retrofit and transfer of these 
aircraft?
    Ms. Young. We will call those agencies and work with you to 
see where we are.
    Senator Padilla. Thank you so much. And in my final minute, 
I want to get to the issue of affordable housing and 
homelessness. As our Nation begins to recover from the COVID-19 
pandemic and the American Rescue Plan continues to deliver 
critical relief in our communities, our longstanding affordable 
housing and homelessness crises are returning to the forefront. 
California needs to build an estimated 3.5 million new homes to 
meet the demand for new housing. And that is just California.
    According to a recent analysis by the Center on Budget and 
Policy Priorities, more than 1.8 million California renters 
have not been able to catch up on their rent as of mid-May. And 
the lack of affordable housing and rising rents are pushing 
more and more people into homelessness. There are now more than 
160,000 individuals experiencing homelessness in California, so 
the need to make significant long-term investments sort of 
speaks for itself.
    I am pleased that the Department of Housing and Urban 
Development's budget incorporates the President's American Jobs 
Plan and calls for investing $147 billion to bolster the 
Nation's housing infrastructure while creating jobs.
    Director Young, will you commit to ensuring that the 
administration continues to push for essential investments in 
affordable housing as you work in advancing the infrastructure 
package?
    Ms. Young. Yes, Senator, and I am also pleased that we have 
a significant voucher increase in the discretionary budget.
    Senator Padilla. Yes, which has also been very, very 
helpful. Thank you for your leadership and your work.
    Ms. Young. Thank you.
    Senator Padilla. I look forward to working with you.
    Thank you, Mr. Chair.
    Chairman Sanders. Thank you.
    Senator Romney.
    Senator Romney. Thank you, Mr. Chairman.
    Ms. Young, you said a moment ago that the 2017 tax cut did 
not do what it claimed it would do. I would note that prior to 
COVID, I believe the economy was at a record level of growth 
and record levels of low unemployment for minorities and for 
the entire population. So I would think--I was not here in 2017 
and did not vote for that tax plan, but I think those who did 
would say actually it was doing what it said it would do. COVID 
came, and I do not believe the tax cut was related to COVID.
    Of course, we recognize that every country, every major 
developed country in the world has a capital gains tax rate 
lower than ordinary income rate, and the reason they do that, I 
presume, is because they want to encourage individuals and 
entities to make risky investments because starting a business, 
for instance, is a risky thing to do or investing in basic 
research is a risky thing to do. And so rather than having 
people just put their money in the bank and earning interest, 
they want them to do things that, if you will, create new 
businesses and new jobs.
    The President's plan suggests that we are not going to have 
a lower tax rate for capital gains. Do you believe there is a 
relationship between growth and capital gains tax rates?
    Ms. Young. Senator Romney, clearly we have maybe a 
difference of opinion on capital gains. We are trying to ensure 
that what you pay based on your labor, your work, is taxed the 
same as your investment income, which a lot of Americans do not 
have the opportunity to have. So is there inherent unfairness 
that I would pay more taxes based on the work that I do every 
day and those who might be the wealthiest pay half that in some 
instances because of the investment income they get? We clearly 
think so, and we think those things should be more equal.
    Senator Romney. So you think that unlike every other 
developed country in the world, we should have the same tax 
rate--or, actually, a higher tax rate for investment in risky 
startup businesses and so forth than we do for ordinary income?
    Ms. Young. I think some of the things you heard Senator 
Padilla talk about and some of the inherent issues we had as an 
economy before COVID----
    Senator Romney. I think that is a yes or no. Does that mean 
you believe that, in fact, there should be a higher tax rate on 
capital gains than ordinary income?
    Ms. Young. We do. We think it should be taxed----
    Senator Romney. Okay, okay.
    Ms. Young. --close to labor.
    Senator Romney. I would note that I think--do you not 
believe that the capital gains tax rates relate to growth? You 
said that the best way to get at the deficit we have is high 
growth. But if we have the highest capital gains tax rates in 
the world, do you think that might depress growth?
    Ms. Young. We think the middle class is an avenue to 
growth, and this would allow us to put more income--or 
resources into infrastructure and into education rather than 
allow the wealthy to pay in some instances half or even less 
than half of working Americans.
    Senator Romney. Well, do not forget that the top 10 percent 
earners in America are paying 71 percent of the income tax. Is 
that not their fair share? You keep saying they should pay 
their fair share, they should pay their fair share. What is the 
fair share that should be paid by the top 10 percent of 
Americans? If 71 percent is too low, will you say what share it 
should be?
    Ms. Young. Senator Romney, I think you have to look at what 
they are making compared to what they are paying, and I think 
most Americans would find it objectionable given the percentage 
they are paying of their income. Big Chief Executive Officers 
(CEO) now make close to 300 times----
    Senator Romney. Well, as noted, 53 percent of Americans pay 
no income tax at all. Should that number get higher? Should 
there be a higher percent that pays no income tax at all?
    Ms. Young. We have to compare that to what they make 
compared to the top 1 percent and what they are making.
    Senator Romney. Well, you know what the numbers are in 
terms of the top 10 percent earn 40 percent of the income and 
are paying 71 percent of the taxes. And so should they be 
paying 80 percent of the taxes? Eighty-five? Ninety?
    Ms. Young. I think we have to look at what they are paying 
compared to what they make, which is--I know it is hard to 
believe, but they are not paying the same percentage as 
workers.
    Senator Romney. Well, they are--when you say they are not 
paying the same percentage as workers, 53 percent of Americans 
pay zero, pay no income tax at all. So if 53 percent of 
Americans are not paying any tax, how is it those top 10 
percent are paying a higher share? So I would note that it 
would be helpful to understand exactly where you think we ought 
to go to reach a fair share.
    Let me ask one more thing, and this is just simple math. I 
guess my time is almost up. That is, you are proposing that the 
capital gains tax be applied at death, the so-called tax run-up 
at death, tax adjustment at death is eliminated and they should 
pay a capital gains tax. Help me with this. Let us say an 
individual who died, let us say her $1 million exemption was 
being used elsewhere, and so she went from an asset that she 
bought for dollars is now worth $1 million. I just want to do 
the math here. So she would then pay the capital gains tax of 
43.4 percent on that $1 million, as I understand it, which 
would be $434,000, and then she would also pay--when I say 
``she,'' her estate would also pay an inheritance tax on the $1 
million, which would be $400,000. So in total she would pay--
her estate would pay $834,000 on a $1 million gain or some 83 
percent. Does that--that does not seem like a fair share to me. 
That seems confiscatory. Have I missed the math somehow in 
that?
    Ms. Young. I would say if you look at it in maybe more 
round numbers, if I want to leave a $5 million house to a 
child, $2.5 million remains tax free. So there is, as you point 
out, a $1 million exemption per individual.
    Senator Romney. I understand, and so I am talking about an 
individual that has multiple assets. But it is saying that once 
that $1 million has been used up, that at that point the 83 
percent tax rate is a fair share, not confiscatory.
    Ms. Young. I mean, you have to look at the exemption, which 
is $1 million.
    Chairman Sanders. Senator Whitehouse I believe is with us 
on video.
    Senator Whitehouse. I am with you, Chairman. Thank you very 
much.
    Hello, Director Young. How are you?
    Ms. Young. Hi, Senator.
    Senator Whitehouse. I wanted to talk with you a little bit 
about climate risk. As you will recall, at your confirmation 
hearing we talked about the economic risks of climate change 
and the almost amazing array of very serious warnings coming 
out of banks, economists, insurance companies, Freddie Mac, all 
sorts of sovereign and central banks. And since then, Swiss Re, 
the humongous reinsurer, has put out a report in which it 
concluded that if we did not successfully mitigate carbon 
pollution, global GDP would be 18 percent lower in 2050 than it 
otherwise would be. Eighteen percent lower than it otherwise 
would be. That is essentially one in every five dollars coming 
out of the global economy.
    And I would note that there is no basis to believe that the 
trajectory between now and 2050, as we got to 18 percent less 
GDP, would be gentle. In fact, there is every reason to believe 
that at some point in that period the transition or transitions 
would be abrupt and would be sudden and would provide economic 
shock to the system.
    What I would like you to do is to comment a little bit on 
when you hear about an 18-percent loss of GDP, what kind of 
human and economic casualties does that cause? And what do 
those scenarios look like if you add in the element of 
suddenness, of abruptness, of shock? I mean, it is bad enough 
if we went on a smooth trajectory to have 18 percent less GDP 
in the world than we otherwise would have. But if it all 
happens in a calamitous shock, that obviously worsens things 
considerably. So if you could reflect on those and give me your 
thoughts, I would appreciate it.
    Ms. Young. Thank you, Senator Whitehouse. The President has 
stated many times the belief that climate change is an 
existential threat from our national defense. To look at what 
we are spending now on disaster relief, I am from South 
Louisiana. The money we have to invest to make sure that our 
coastline does not continue to slip into the Gulf of Mexico--I 
see Senator Kennedy here, so I am reluctant to talk about our 
home State. But----
    Senator Whitehouse. If I could interrupt for one second, 
Ms. Young, I think the quotation from the New Orleans newspaper 
from the scientists about this was really simple with regard to 
South Louisiana. If I recall correctly, it was, ``We are 
screwed.'' So I sympathize. But go ahead and answer the 
question.
    Ms. Young. So what we have not done in this budget but I 
think others have in academia is see what the economic effects 
would be for climate change. Look, the few investments we are 
making here and the impact it has on the top line is nothing 
compared to if we allow this--you know, one State we see what 
the fiscal hit would be and the economy could not continue if 
we allowed climate change to continue in that manner along the 
coast. So there is no doubt to me that this spending is 
necessary to see if we can even catch up to what we have 
unfortunately allowed to happen around the world with regard to 
climate change. And we see it as not a partisan issue. It is 
certainly one that has attracted partisan rancor. But I think 
anyone who lives along the coast can see not only the human 
impact but the economic impact it has on those who live there, 
who work there, and it cannot continue.
    Senator Whitehouse. And for the record, there is not nor 
ever has been serious dispute about the basic elements of this 
in the scientific community. The dispute was manufactured by 
the oil and gas industry and its front groups in order to 
create political space for itself.
    A last quick question. Has America ever seen revenues at a 
similar share of our economy to what President Biden is 
proposing? And if so, how was the economy doing back then? And 
how was the budget doing back then?
    Ms. Young. Senator Whitehouse, I think the important thing 
is when everyone, you know, talks about debt, and we absolutely 
have to look at debt as a share of GDP, but it would be unfair 
to not look at the revenue side of the ledger to make sure that 
we are not falsely restricting ourselves to make investment in 
climate, in infrastructure, and make sure--we do see a role for 
the wealthiest Americans. We do see a tax rate where they are 
paying less than working Americans as a percentage of what they 
bring in, we do see the use of loopholes and offshoring that 
keep us from investing in areas that both parties agree on.
    Senator Whitehouse. At the macro level, when we last saw 
revenues at around 20 percent of GDP, we had a booming economy 
and budget surplus, correct?
    Chairman Sanders. Okay, Sheldon. All right. Thank you.
    Senator Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman.
    Madam Director, how are you?
    Ms. Young. Good.
    Senator Kennedy. I am going to fuss a little bit. But I am 
not fussing at you. I am one of your big fans. But I suspect 
you can get the White House on the phone quicker than I can. If 
I make it to heaven, the first question, or at least one of the 
first questions I am going to ask is: Why do bad things happen 
to good people? But they do. And as Americans, when that does 
happen, we help each other. That is why we spend about $1 
trillion a year helping American citizens who are less 
fortunate.
    Some bad things happened to good people in southwest 
Louisiana, as you know. We were hit by Hurricane Laura and 
Hurricane Delta in a very short period of time, and if you go 
even today, a year after they hit, it still looks like a 
fantastic impression of hell. We have asked President Biden for 
block grant disaster relief, and in the Senate, as you know--
the House can move on its own, but in the Senate, we have to 
have a request from the White House. We do not have to. It is 
more custom than statute. But many of my Democratic colleagues, 
when I lobby them on getting some assistance, they say, ``Well, 
what is the White House's position?'' And I do not blame them. 
If the shoe were on the other foot, that is what I would ask.
    We cannot get an answer from President Biden about our 
request. We have begged, we have pleaded, we have cajoled. I 
talked directly with the President when he honored us by coming 
to our State and New Orleans. Let me choose my words carefully 
here. I want to be candid, but I do not want to be ugly. Look, 
I understand politics. I get that. And I am not saying that the 
President's decision is based on politics. But we live in a 
political world. And I understand that President Biden did not 
carry Louisiana in the last election. I am not saying that is 
dispositive of his decision or lack thereof. But a lot of 
people who really stuck their necks out for President Biden are 
very supportive of this request. Governor John Bel Edwards in 
my State, who happens to be a Democrat, he supported President 
Biden enthusiastically. My colleague Congressman Cedric 
Richmond supported President Biden enthusiastically. They went 
way out on a limb for him. And they deserve and the people of 
Louisiana deserve an answer.
    Now, obviously, I hope the answer from the President is 
yes. But we deserve an answer, and I cannot get one. Can you 
help me?
    Ms. Young. Senator Kennedy, I am going to give you an 
answer, and we absolutely for every Democratic Senator, 
Republican Senator, we want to see aid move to Louisiana and 
every other State. I believe the last time--which I worked on 
the congressional side, the last disaster declaration or 
disaster package that moved through Congress took care of the 
front half of 2019 storms. We do not earmark disaster storms. 
There is no room for politics in disaster response period.
    Senator Kennedy. Agreed, agreed.
    Ms. Young. Absolutely. So we need to do something for those 
storms from the second half of 2019 and 2020 up to date. So not 
a disagreement on strategy, but, you know, I worked on the Hill 
for a long time, moved disaster bills. We did not get a 
disaster supplemental request from an administration. But let 
me put clearly on the record we support moving aid for 
Louisiana and every other State that has been hit by a 
declaration since the last time we passed a supplemental.
    Senator Kennedy. Could you ask the President to send us a 
letter to that----
    Ms. Young. I believe he asked me to respond, and you may--
--
    Senator Kennedy. Yes, ma'am, and I got your letter. No 
disrespect, but it did not say that.
    Ms. Young. The President asked me to call the mayor of Lake 
Charles, which I did, and we had a great conversation, Baton 
Rouge, my home city----
    Senator Kennedy. Could you send me a letter--or let the 
President send it--however you want to do it--that says 
categorically, unequivocally, unconditionally, ``I support the 
block grant disaster relief for southwest Louisiana with 
respect to Hurricanes Laura and Delta''?
    Ms. Young. I thought we did that, but I am happy----
    Senator Kennedy. No, ma'am.
    Ms. Young. --to do it in more stronger terms.
    Senator Kennedy. Would you?
    Ms. Young. Yeah, we absolutely----
    Senator Kennedy. Do you want me to draft the letter for 
you?
    Ms. Young. No.
    [Laughter.]
    Ms. Young. Help is needed, Senator, and we are there with 
you.
    Senator Kennedy. Thank you, Madam Director. Thank you so 
much.
    Thank you, Mr. Chairman.
    Chairman Sanders. Thank you.
    Let me thank Ms. Young. It has been a long morning, and 
thank you very much for being with us today. Her full written 
statement will be included in the record.
    As information for all Senators, questions for the record 
are due by 12 o'clock noon tomorrow with signed hard copies 
delivered to the Committee clerk in Dirksen 624. Emailed copies 
will also be accepted. Under our rules, Ms. Young will have 7 
days from receipt of our questions to respond with answers.
    With no further business before the Committee, this hearing 
is adjourned.
    Ms. Young. Thank you, Mr. Chairman.
    [Whereupon, at 12:50 p.m., the Committee was adjourned.]

          ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

    [Prepared statement and responses to written questions 
submitted for the record follow:]


      

              Prepared Statement of Ms. Shalanda D. Young
              
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