    [Senate Hearing 117-232]
    [From the U.S. Government Publishing Office]

                                                        S. Hrg. 117-232

      NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF LOUISIANA, TO BE
    DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND THE HONORABLE NANI
      A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

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

                                    HEARING

                                   BEFORE THE

                            COMMITTEE ON THE BUDGET

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                   ----------

    February 1, 2022--HEARING ON THE NOMINATIONS OF THE HONORABLE SHALANDA
    D. YOUNG, OF LOUISIANA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND
    BUDGET AND THE HONORABLE NANI A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY
                DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

         February 9, 2022--EXECUTIVE BUSINESS MEETING TO CONSIDER THE
      NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF LOUISIANA, TO BE
    DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND THE HONORABLE NANI
      A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

                 Printed for use of the Senate Budget Committee

      NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF LOUISIANA, TO BE
    DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND THE HONORABLE NANI
      A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

                                                            S. Hrg. 117-232

      NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF LOUISIANA, TO BE
    DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND THE HONORABLE NANI
      A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

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

                                    HEARING

                                   BEFORE THE

                            COMMITTEE ON THE BUDGET

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

    February 1, 2022--HEARING ON THE NOMINATIONS OF THE HONORABLE SHALANDA
    D. YOUNG, OF LOUISIANA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND
    BUDGET AND THE HONORABLE NANI A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY
                DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

         February 9, 2022--EXECUTIVE BUSINESS MEETING TO CONSIDER THE
      NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF LOUISIANA, TO BE
    DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND THE HONORABLE NANI
      A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF
                             MANAGEMENT AND BUDGET

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT

                 Printed for use of the Senate Budget Committee

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    46-924 PDF                 WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                            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

                                  ----------

                                    HEARING

                                                                       Page
    February 1, 2022--Hearing on the Nominations of the Honorable
      Shalanda D. Young, of Louisiana, to be Director of the Office
      of Management and Budget (OMB) and the Honorable Nani A.
      Coloretti, of California, to be Deputy Director of the Office
      of Management and Budget (OMB).................................     1

                    OPENING STATEMENTS BY COMMITTEE MEMBERS

    Chairman Bernard Sanders.........................................     1
    Ranking Member Lindsey O. Graham.................................     2

                                   WITNESSES

    Statement of the Honorable Kevin Cramer, U.S. Senator from the
      State of North Dakota..........................................     3
    Statement of the Honorable Patty Murray, U.S. Senator from the
      State of Washington............................................     6
    Testimony of the Honorable Shalanda D. Young, of Louisiana, to be
      Director, Office of Management and Budget (OMB)................     7
        Prepared Statement of........................................    32
    Statement of the Honorable Alex Padilla, U.S. Senator from the
      State of California............................................     5
    Testimony of the Honorable Nani A. Coloretti, of California, to
      be Deputy Director, Office of Management and Budget (OMB)......     8
        Prepared Statement of........................................    83

                       MATERIALS SUBMITTED FOR THE RECORD

    Statement of Biographical and Financial Information Requested of
      Presidential Nominee Shalanda D. Young To Be Director of the
      Office of Management and Budget (OMB)..........................    34
    Pre-Hearing Questions from Chairman Bernard Sanders with Answers
      by the Honorable Shalanda D. Young.............................    44
    Pre-Hearing Questions from Senator John Kennedy with Answers by
      the Honorable Shalanda D. Young................................    43
    Post-Hearing Questions from Budget Committee Members with Answers
      by the Honorable Shalanda D. Young.............................    49
        Senator Mike Braun...........................................    52
        Senator Kevin Cramer.........................................    55
        Senator Mike Crapo...........................................    61
        Senator Lindsey O. Graham....................................    64
        Senator Tim Kaine............................................    66
        Senator Bernard Sanders......................................    67
        Senator Rick Scott...........................................    69
        Senator Patrick Toomey.......................................    70
        Senator Chris Van Hollen.....................................    71
        Senator Mark R. Warner.......................................    74
        Senator Sheldon Whitehouse...................................    75
        Senator Ron Wyden............................................    80
    Statement of Biographical and Financial Information Requested of
      Presidential Nominee Nani A. Coloretti To Be Deputy Director of
      the Office of Management and Budget (OMB)......................    85
    Pre-Hearing Questions from Chairman Bernard Sanders with Answers
      by the Honorable Nani A. Coloretti.............................    94
    Post-Hearing Questions from Budget Committee Members with Answers
      by the Honorable Nani A. Coloretti:............................    99
        Senator Mike Crapo...........................................   101
        Senator Patrick Toomey.......................................   102
        Senator Sheldon Whitehouse...................................   103
        Senator Ron Wyden............................................   108

                           EXECUTIVE BUSINESS MEETING

    February 9, 2022--Executive Business Meeting to Consider the
      Nominations of the Honorable Shalanda D. Young, of Louisiana,
      to be Director of the Office of Management and Budget (OMB) and
      the Honorable Nani A. Coloretti, of California, to be Deputy
      Director of the Office of Management and Budget................   111
    Committee Votes..................................................   111

       HEARING ON THE NOMINATIONS OF THE HONORABLE SHALANDA D. YOUNG, OF
     LOUISIANA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET AND
     THE HONORABLE NANI A. COLORETTI, OF CALIFORNIA, TO BE DEPUTY DIRECTOR
                     OF THE OFFICE OF MANAGEMENT AND BUDGET

                                  ----------

                           TUESDAY, FEBRUARY 1, 2022

                                  United States Senate,
                                       Committee on the Budget,
                                                       Washington, D.C.
        The Committee met, pursuant to notice, at 2:37 p.m., via
    Webex and in Room SH-216, Hart Senate Office Building, Hon.
    Bernard Sanders, Chairman of the Committee, presiding.
        Present: Senators Sanders, Murray, Stabenow, Whitehouse,
    Merkley, Kaine, Van Hollen, Padilla, Graham, Grassley, Crapo,
    Toomey, Braun, Scott, Romney, and Cramer.
        Staff Present: Warren Gunnels, Majority Staff Director; and
    Nick Myers, Republican Staff Director.

                 OPENING STATEMENT OF CHAIRMAN SANDERS

        Chairman Sanders. All right. Okay. Apologies for being
    late, and let me thank those of you who are here for being
    here.
        This afternoon we will be hearing from Ms. Shalanda Young
    and Ms. Nani Coloretti, who have been nominated by President
    Biden to serve as the Director and Deputy Director,
    respectively, of The Office of Management and Budget (OMB). And
    I want to thank both Ms. Young and Ms. Coloretti for appearing
    before us today, and thank you both for your many years of
    public service. And thank you to your friends and family
    members who you have brought with you today.
        As we all know, the OMB is responsible for preparing the
    President's budget, reviewing Federal regulations, and
    providing the proper oversight of Federal agencies. It is a
    very, very important task, and I know that both of you are more
    than capable of leading OMB.
        Since last March, Ms. Young has been serving as Acting
    Director of OMB, so she is already doing the job for which she
    is nominated. So she has some real-life experience behind her
    as we discuss her application today.
        Prior to her start at OMB, Ms. Young served for 14 years as
    a top staffer on the House Appropriations Committee, where, by
    all accounts, she did an excellent job working with Democrats
    and Republicans on legislation that must be passed each and
    every year that impacts the lives of every American.
        Ms. Coloretti has more than two decades of experience in
    public service. She previously served as Deputy Secretary of
    the U.S. Department of Housing and Urban Development and
    several positions at the U.S. Treasury Department, where, among
    other duties, she helped stand up the Consumer Financial
    Protection Bureau. Prior to that she was the Policy Director
    and later Budget Director for the Mayor's Office in San
    Francisco.
        Again, the Senate has previously confirmed both of these
    nominees to high-ranking positions in the past on strong
    bipartisan votes, and I hope and expect we will do so again in
    short order.
        This is our first Budget Committee hearing of 2022, and we
    are facing many challenges as a nation, as I think everybody
    knows, and certainly challenges that our nominees are familiar
    with. We have now entered year three of the pandemic, as
    thousands of Americans continue to die from COVID every single
    day and hospitals continue to be overwhelmed with patients.
        In my view, we are moving toward an oligarchic form of
    society where the people on top have incredible wealth and
    power while most Americans are struggling to pay their bills.
    We have a dysfunctional health care system which costs us more
    than any other country, and yet we have over 90 million people
    who are uninsured or underinsured, and we pay the highest
    prices in the world for our prescription drugs. And among other
    things, climate change is an existential threat to the
    existence of the planet. Other than that, not much.
        Bottom line, I think we can all agree, although our
    solutions may be different, this country faces enormous
    problems.
        So with that I would say that I have been impressed by the
    work that Ms. Young has done and look forward to supporting
    her. And now let me give the gavel over to Senator Graham.

                  OPENING STATEMENT OF SENATOR GRAHAM

        Senator Graham. Thank you very much, Mr. Chairman. To both
    of our nominees, congratulations. Ms. Young, you are well known
    to the Committee, particularly those of us on Appropriations,
    and I have always enjoyed working with you. Ms. Coloretti--is
    that right, Ms. Coloretti?
        Ms. Coloretti. Coloretti.
        Senator Graham. Coloretti.
        Ms. Coloretti. Yeah.
        Senator Graham. So I think you are both well qualified. You
    might talk me out of voting for you, but I doubt it.
        But I do want to talk about a few things that I think are
    important to your jobs. Number one, climate change is real and
    I would like to do something about it, but there are a lot of
    threats out there. This is a chart of just some of the problem
    areas of the world. If you are Israel, Iran is definitely an
    existential threat to you. They want to kill all the Jews. I do
    not know why they want to do that, but that is what they keep
    talking about. And I think they would if they could. But it is
    not just the Jewish state. They would go after a lot of folks
    in the Muslim faith to purify the faith and make it in their
    own image of their formal radial Shi'ism, and they would kill
    all of us because we do not agree with them religiously.
        So I just want to highlight, in this chart behind me, North
    Korea, China, Russia, Ukraine, the rise of ISIS back in Syria,
    the debacle in Afghanistan. I do not think I ever remember a
    time this dangerous, maybe since the 1930s.
        So from our point of view, we believe that President
    Biden's 2022 defense budget called for 1.6 percent increase in
    spending--that is well below inflation--with almost a 16
    percent, I think, increase in non-defense spending. Now those
    priorities are just out of sync with the world as we know it.
        The number one job of the Federal Government, to me, is to
    defend our nation, and the Biden budget has defense spending
    below inflation, well below inflation. And the National Defense
    Strategy Commission, a nonpartisan commission of defense
    experts, unanimously agreed that in order to deter China and
    Russia that the United States would need to increase defense
    spending by 35 percent in real growth. That would be above
    inflation. And failing to increase would make it necessary to
    alter the expectations of the U.S. defense strategy and our
    global strategic objectives, which is, I think, a bad idea.
        So the budget, if adopted, would put us at 2.5 percent of
    GDP on national security, which is in the historically low
    arena.
        So we are negotiating, Democrats and Republicans, about
    trying to use the appropriations process, not the continuing
    resolution process, to fund the government. I think people on
    our side are going to be very insistent that the defense number
    meet the reality that we face, as a world and as a nation.
        So having said that, your job at OMB will be to kind of
    ride herd over the regulatory side of government, will be to
    advise the President and run the office, and I think you are
    both very capable people. Whatever differences we have, you
    know, will be honestly held, and I just want to use my time,
    Mr. Chairman, to focus on trying to get us, as a body, working
    with the Administration to top-line numbers for budget
    purposes, to appropriate rather than a continuing resolution,
    that is just a terrible way to run the Department of Defense.
    And I hope that the two ladies in front of us, if they get
    these jobs, can help us in that process.
        So with that I will yield back.
        Chairman Sanders. Thank you very much.
        Is Senator Murray available for an introduction for Ms.
    Young?
        Okay. If not, Senator Cramer, do you want to introduce Ms.
    Young?

       STATEMENT OF THE HONORABLE KEVIN CRAMER, A UNITED STATES
                 SENATOR FROM THE STATE OF NORTH DAKOTA

        Senator Cramer. Well, I would be honored to. I hope I am
    not stepping on Senator Murray's toes by going ahead of her,
    but what the heck. Senator Kennedy is not even here and he is
    from Louisiana, and I am from little old North Dakota. But I
    think it speaks volumes to what relationship means. It is not
    geographic. It is relationship.
        And I want to say, first of all, Mr. Chairman, you did an
    excellent job with Ms. Young's credentials. You did not mention
    that she is a new mom, which is probably the greatest
    credential of all time, and congratulations on that.
        I just want to add a couple of insights, having worked with
    Director Young in this last year. As you pointed out, she has
    been confirmed to be the Deputy but has served as the Acting
    Director. And that, in and of itself, is challenging enough,
    but on top of that, of course, we have this other thing going
    on, this pandemic, and all these other issues, workforce
    scattered about, working as best they can remotely. All big
    challenges, and she has met them all.
        I have found Shalanda to be smart, extremely witty. In
    fact, I would suspect, in a witty-off, you would beat the
    Ranking Member, I am pretty sure. But hopefully he will still
    vote for you.
        She is classy, and here is what I love as much as anything.
    Mr. Chairman, you talked about her role as a staff lead in the
    House, in the Appropriations Committee, and that is where I
    first, of course, learned about her good work.
        What has impressed me so much and what I have seen in
    practice as well as in words is that she has not just an
    understanding of the legislative process but a real respect for
    the institution. And that means a lot. That makes all of us
    better at our jobs, including the folks at OMB.
        I can tell you, from first-hand experience, that in my now
    10 years, roughly, in Congress, I have never worked with a
    budget director that was as attentive, that was as
    understanding, that could drill down as deeply on specific
    issues, and actually took the time to do it, as Director Young
    has. We have a couple of major water infrastructure projects in
    North Dakota that have been authorized many times but never
    really dealt with appropriately by OMB, and they have now, and
    I thank you for that.
        She immediately responded to our concerns about
    metropolitan statistical area definitions, something that, you
    know, when you come from a small state with small cities,
    really matters. Even on manufacturing regulations, when we had
    a question or concern that was raised, her and her staff got
    right on it.
        And I do not know that you could ask for anything more or
    anything better from somebody who directs an agency as large
    and as important as OMB. And for those reasons and a whole
    bunch of others I am, first of all, greatly touched and honored
    that you would ask me to introduce you, Shalanda, and it is my
    great pleasure to do that.
        And, Senator Graham, there is nothing she could do today to
    get me to vote against her.
        Senator Graham. She may withdraw her nomination, actually.
        Senator Cramer. She is very witty. I warn you. Thank you,
    Mr. Chairman.
        Chairman Sanders. Thank you very much, Senator Cramer.
        I think Senator Murray is not yet available so we are going
    to go to Senator Padilla for his introduction of Ms. Coloretti.

       STATEMENT OF THE HONORABLE ALEX PADILLA, A UNITED STATES
                  SENATOR FROM THE STATE OF CALIFORNIA

        Senator Padilla. Thank you, Chairman Sanders and Ranking
    Member Graham. I am proud to introduce President Biden's
    outstanding nominee to be the Deputy Director of OMB. Nani
    Coloretti is a lifelong advocate for economic opportunity and
    the needs of working families. She spent more than a decade of
    her career as a public servant in the city and county of San
    Francisco, rising to become San Francisco's Budget Director in
    the office of then-Mayor Gavin Newsom.
        Ms. Coloretti is an experienced leader in the Federal
    Government as well. She joined the Treasury Department in 2009,
    as the Deputy Assistant Secretary for Management and Budget. In
    that role she helped to shape the newly created Consumer
    Financial Protection Bureau. Her record of success led to her
    appointment as an Assistant Secretary for Management at the
    Treasury Department, where she oversaw and modernized a
    workforce of hundreds of public servants managing our economic
    recovery.
        In 2014, President Obama nominated Ms. Coloretti to serve
    as Deputy Secretary of Housing and Urban Development. She drew
    on her long experience and relationships in local government to
    not only improve public housing but to do so through community
    partnerships, while prioritizing equity at the same time.
        Currently Senior Vice President at the Urban Institute, Ms.
    Coloretti is an insightful advocate for public policies that
    will help more families achieve their American dreams. She is a
    proven skillful manager and empathetic leader. She is highly
    qualified to support the critical work of the Executive branch
    of our Federal Government as Deputy Director of OMB, and I urge
    the Committee to support her swift confirmation. Thank you.
        Chairman Sanders. Thank you, Senator, and you had eight
    seconds remaining.
        I believe that Senator Murray is now available for an
    introduction of Ms. Young. Senator Murray, are you there?
        [No response.]
        Chairman Sanders. Senator Murray? Ah, there you are.
        You are on mute. Mute, mute, mute. How many times in the
    last two years have people said that, ``You are on mute''? All
    right. I say it one more time.
        Senator Graham. You need to say it louder.
        Chairman Sanders. You are on mute. Sign language. Mute.
    [Laughter.]
        Chairman Sanders. We cannot hear you.
        [Pause.]
        Chairman Sanders. All right. See, this is one of the many
    reasons we all hope to God this pandemic is behind us.
        All right. Senator Murray will, I am sure, be back. But why
    don't we, in the meantime, swear our two nominees in.
        Under the rules of the Committee, nominees are required to
    testify under oath. Ms. Young and Ms. Coloretti, please rise.
        Do you swear the testimony that will give before the Senate
    Budget Committee will be the truth, the whole truth, and
    nothing but the truth?
        Ms. Young. I do.
        Ms. Coloretti. Yes.
        Chairman Sanders. Thank you. And will you also agree to
    appear before this Committee in the future and answer any
    questions that the members of this Committee might have?
        Ms. Young. I do.
        Ms. Coloretti. Yes.
        Chairman Sanders. Thank you. Please be seated.
        One last try for Senator Murray.
        Senator Murray. Can you hear me yet?
        Chairman Sanders. We hear you very loudly.
        Senator Murray. Okay. For the record it was not me. It was
    the Committee staff. Bless their souls.
        Chairman Sanders. All right. You are actually now too loud.
    Tone it down a little bit.
        Senator Murray. Yeah. I was using my preschool yell at you
    boys, but okay. Can you hear me now?
        Chairman Sanders. That is great. Okay.

       STATEMENT OF THE HONORABLE PATTY MURRAY, A UNITED STATES
                  SENATOR FROM THE STATE OF WASHINGTON

        Senator Murray. Well thank you so much, Mr. Chairman. I am
    really glad to be here today to provide a brief introduction of
    Shalanda Young and to express my strong support for her swift
    confirmation as OMB Director, a role she has filled already on
    an acting basis for the past year.
        I have actually known Ms. Young for many years, many of us
    have. And we know Ms. Young for her expertise, her unmatched
    work ethic, and maybe, most importantly, a willingness and
    proven track record of bringing both sides, Republican and
    Democrat, together to get things done for the American people.
        When we talk about appointing good people in government,
    people who will do the work, we are all talking about Shalanda
    Young. Any Senator who has worked on any major spending bill
    during Ms. Young's tenure on the House Appropriations Committee
    have seen she knows the budget process inside and out.
        Ms. Young would also make history as the first Black woman
    to lead the Office of Management and Budget, bringing a really
    important perspective as we work to build an economy that
    really works for everyone in this country.
        And on that note I think it is important to mention that
    Ms. Young is a brand-new mom. Working moms have felt some of
    the worst of this pandemic. At a time when a full-blown
    childcare crisis is happening and the lack of a strong national
    paid leave policy, it has been especially hard for our working
    moms, forcing many of them to turn down extra hours or
    promotions, or even quit entirely. I cannot think of anything
    more appropriate than putting a working mom in charge of
    America's budget.
        Mr. Chairman, we are facing more challenges than almost any
    time I can remember--COVID-19, an ongoing threat to our public
    health and our economy. The pandemic has shone a light and
    worsened so many longstanding challenges like childcare and the
    cost of housing. And we are seeing the effects and costs of the
    climate crisis in every part of this country.
        We need a steady hand to help guide our economic recovery,
    and that person is Shalanda Young. Few people understand the
    Federal budget or appropriations process like Ms. Young, and
    even fewer have the benefit of her years of experience
    negotiating tough deals with both Republicans and Democrats.
    Let's waste no time in confirming her so she can keep working
    for the American people.
        Thank you.
        Chairman Sanders. Thank you very much, Senator Murray. And
    now let us hear from Ms. Young.

     TESTIMONY OF THE HONORABLE SHALANDA D. YOUNG, NOMINATED TO BE
            DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

        Ms. Young. Thank you, Mr. Chairman. First I would like to
    thank Senator Murray and Senator Cramer for those wonderful
    words of introduction. You know, I will not promise you lunch
    other than the Senate dining room, but the two who introduced
    me today are testaments to relationships that can be built in
    this institution. Senator Cramer and I have gotten to know each
    other very well over the last year, working together, and the
    same with Senator Murray. So thank you both very much.
        My family has found a new star, my daughter, so they are
    mostly home looking at her sleep and maybe watching me. But I
    want to thank my dad for escorting me here today as the lone
    person who drew the short stick, actually. She really is much
    cuter than watching me do this today. But I still want to thank
    my family, who has been a big support.
        Thank you for the opportunity to testify today as President
    Biden's nominee for Director of the Office of Management and
    Budget. It has been my honor to serve the last 10 months as the
    Acting Director. I am grateful to the President for the trust
    he has put in me as his nominee.
        When I first came before this Committee last March, I told
    you a little bit about my experience growing up in rural
    Louisiana. I talked about my years leading the House
    Appropriations Committee as its top staffer, serving this
    institution I care about so deeply, and I mean that. And I made
    a commitment to you that I would focus my service at OMB on
    restoring regular order, partnering with Congress in a spirit
    of bipartisanship and mutual respect, and delivering results
    for the American people.
        Over the past 10 months, I have kept that commitment,
    working alongside the extraordinary team at OMB, and with
    members of this Committee from both sides of the aisle. I would
    like to briefly highlight just five of OMB's achievements that
    showcase what our team is capable of with the partnership of
    the Senate, and this Committee in particular.
        First, together with Congress, we delivered crucial
    disaster relief funding for communities across the country, not
    only to respond to Hurricane Ida and last year's devastating
    wildfires, but to address unmet recovery needs from Hurricanes
    Laura and Delta. Working with FEMA, we announced nearly $5
    billion last year to help communities prepare for and respond
    to extreme weather events. And with the help of Congress, we
    secured another $4.5 billion through the Bipartisan
    Infrastructure Law to rebuild community resilience.
        Second, we worked with members of both parties to help
    develop and enact the Bipartisan Infrastructure Law,
    permanently authorizing the FAST-41 law, something I committed
    to get done during my confirmation hearings last March. And OMB
    is focused on implementing this law with the highest level of
    effectiveness and accountability.
        Third, we stood up a new Made in America Office that has
    already facilitated billions of dollars in new purchases to
    support American manufacturing. The office has brought
    unprecedented transparency to the waiver review process,
    important progress that matters to many of us in this room. I
    am grateful that the Bipartisan Infrastructure Law expanded
    Made-in-America requirements to all Federal infrastructure
    funding and codified this important office at OMB so that it is
    around for future administrations.
        Fourth, we took action to make the Federal Government more
    efficient, effective, and accountable to the public. Those
    steps include OMB's work to implement a new Executive order to
    streamline government services and improve customer experience,
    as well as much-needed progress on investing in IT
    modernization across the Federal Government.
        And finally, in keeping with the President's longstanding
    commitment to oversight, we directed agencies to focus on two
    important areas: restoring the integrity and independence of
    their inspectors general and working with Congress to ensure
    that IGs can fulfill their mandate. I know that there are
    legitimate differences in this country, in this room, that
    deserve honest debate, and I have appreciated the opportunity
    to speak directly with many of you about them.
        If confirmed, I will continue to work closely with you and
    your colleagues to deliver for the American people, and I will
    continue to find common ground, to be responsive, and to
    rebuild the career staff at OMB who play an essential role in
    ensuring our government works for all Americans, and that is
    across any administration.
        Chairman Sanders, Ranking Member Graham, and other members
    of the Committee, thank you so much for allowing me to be here
    today. I look forward to taking your questions.
        [The prepared statement of Ms. Young appears on page 32]
        Chairman Sanders. Thank you very much. Now we will hear
    from Ms. Coloretti.

     TESTIMONY OF THE HONORABLE NANI A. COLORETTI, NOMINATED TO BE
         DEPUTY DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

        Ms. Coloretti. Thank you. Chairman Sanders, Ranking Member
    Graham, and distinguished members of this Committee, it is a
    privilege to come before you as President Biden's nominee for
    Deputy Director of the Office of Management and Budget. I would
    like to thank the members of the Committee for considering my
    nomination and the many members who took the time to speak with
    me before this hearing. And thank you to Senator Padilla for
    his kind words of introduction.
        I would also like to thank President Biden for putting his
    confidence in me, and it is a honor to be sitting here
    alongside my esteemed and hopefully potential future colleague,
    Shalanda Young. I am honored and humbled by this nomination.
        I would also like to recognize my husband of 24 years,
    David Goldstein, who is here with me today, my son Kaleo
    Goldstein-Coloretti, who is supporting me virtually from
    college, and I would like to thank the many family members and
    friends watching this hearing from Hawaii to the East Coast.
        Finally, I would like to recognize my parents, Tony and
    Marielani Coloretti, who both passed away over five years ago.
    It is through their sacrifices that I am able to sit here
    today.
        My mom and dad both had immigrant parents who came to
    America in search of a better life for themselves and for their
    children. My parents worked hard to support my four sisters and
    me. My mom was a preschool teacher and then a home-based
    childcare provider, and my dad worked in restaurants and on
    cruise ships. Later on, I would also work in restaurants,
    which, along with Federal student loans and Pell grants, helped
    me finance my education.
        My parents taught me to focus on hard work and education as
    well as the importance of curiosity and empathy. It is from
    them that I developed a passion for public service and a
    commitment to expanding opportunity for all.
        I come before you today as a public servant and leader with
    over 25 years of experience in Federal, state and local
    government service and in the private and nonprofit sectors.
    Much of my work has focused on helping deliver better outcomes
    for people, families, and taxpayers. In fact, my first Federal
    service was as a program examiner at the Office of Management
    and Budget many, many years ago.
        I know firsthand that OMB has a critical role to play in
    the implementing the President's priorities, touching every
    spending and policy decision in the Federal Government and
    collaborating across agencies to deliver results effectively
    and efficiently.
        My work during the Obama-Biden administration, as Deputy
    Secretary of Housing and Urban Development, and before that, as
    Assistant Secretary and Acting CFO for Treasury, focused on
    using data to make better decisions, implement new programs,
    and strengthen the organizations that I led.
        At HUD, I managed the Department's day-to-day operations,
    facilitated cross-cutting policy and regulatory issues, and
    oversaw a budget of $45 billion and approximately 8,000
    employees. As Treasury's Assistant Secretary for Management and
    Acting CFO, I helped stand up the Consumer Financial Protection
    Bureau, and helped create Treasury's quarterly data-driven
    decision framework to prioritize projects, align resources, and
    measure progress.
        I also understand how budget and policy decisions made here
    in Washington D.C. affect local policy, having worked in San
    Francisco local government for 10 years. During the 2008
    recession, I helped close a deficit worth half of San
    Francisco's discretionary budget, aided in the end by the
    Federal American Recovery and Reinvestment Act.
        If confirmed, I would be honored to work with the President
    and Congress to create and implement budgets that invest in the
    American people, support our economic recovery, and reflect our
    country's shared values.
        Thank you again for considering my nomination and I look
    forward to answering your questions.
        [The prepared statement of Ms. Coloretti appears on page
    83]
        Chairman Sanders. Thank you both very much.
        I give enough speeches so I am not going to give one today,
    but I just have a few questions that I would like to ask. As I
    think Senator Murray indicated, and I think we all agree with,
    although we come from different perspectives, this a very
    unusual moment in American history. People are struggling. The
    pandemic has wreaked havoc in so many ways, not only in terms
    of illness but in isolation, in the nature of employment.
    People are quitting jobs in record-breaking numbers.
        So we are really in an unusual place in the modern history
    of this country, and one of the issues that has concerned me,
    and I think it does not get enough attention, is the growing
    gap between the very, very wealthy and everybody else. You have
    got two people now who own more wealth than the bottom 40
    percent, and during this pandemic, billionaires have seen an
    increase in their wealth by $2 trillion, just in the last few
    years.
        So let me ask both of you, is that issue of massive income
    and wealth inequality something that concerns you, and what
    ideas do you have as to how we might go forward on that issue?
        Ms. Young. Senator Sanders, I was proud to put President's
    budget forward, which spoke to this very issue. Four hundred
    billionaires own the same amount of wealth as 150 million of
    the poorest Americans. That is why you saw tax proposals from
    this President that sought to not only pay for the investments
    in a fiscally responsible way but also speak to this issue of
    fairness in our tax policy in this country.
        Chairman Sanders. Ms. Coloretti.
        Ms. Coloretti. Senator, thank you for that question. I also
    support the President's ideas and as he has put them forward in
    his policies and in his budget. They aim to build this economy
    back from the bottom up and the middle out, both in tax policy
    and in investments in critical items like childcare, which we
    know will not only help working mothers go back to work but
    will also help increase the labor supply in this country. And
    we need to grow our economy and make it more productive.
        Chairman Sanders. Is it of concern to you that we are the
    only major country on Earth not to guarantee health care to all
    people as a human right, while we pay far more for health care
    than any other nation, and pay the highest prices in the world
    for prescription drugs? Is that an issue of concern?
        Ms. Young. Senator, one of the key priorities for this
    President is to bring down the cost of prescription drugs for
    Americans. You saw the budget spoke to that. It is a price
    issue for the American people, and it is one thing we certainly
    hope to work with Congress on in the near future.
        You are absolutely right. The cost of health care in this
    country is unsustainable. And as we talk about our full
    economic picture debt deficit, you cannot help but look at what
    it costs health care-wise, in our Medicare and Medicaid system.
    So we have to do something to address that.
        Chairman Sanders. Ms. Coloretti.
        Ms. Coloretti. Senator, I started my career in Federal
    service, as I mentioned, many, many years ago working on
    Medicaid and health financing issues at the Office of
    Management and Budget, and I was very proud to pass a small
    expansion of health care in the Children's Health Insurance
    Program, obviously in partnership with Congress.
        So yes, I do support looking for ways to expand health care
    coverage and lower costs.
        Chairman Sanders. You know, I have heard many colleagues
    talk about how much they love America. Well, if you love
    America it seems to me you love the children who are the future
    of America. And yet for a very long time we have had the
    highest rate of childhood poverty of almost any major country
    on Earth. We have tried, through the American Rescue Plan, to
    address that, with some success. Through the direct payments to
    working parents we reduced childhood poverty in this country by
    about 40 percent. That is no insignificant accomplishment.
        What is your thought about childhood poverty and how we
    might address that issue?
        Ms. Young. Senator, before I had a child, now especially
    maybe I am a bit sensitive to this, but as a developed country,
    as the leader of the free world, there is no issue, I think,
    more touching and something I hope we can all come together on
    in reducing childhood poverty. And you are absolutely right.
    The Child Tax Credit, by all estimation of economists, looks to
    have reduced childhood poverty by 40 percent, and that was a
    huge accomplishment for that program.
        Chairman Sanders. Ms. Coloretti.
        Ms. Coloretti. Senator, I will just add to that. Another
    thing I worked on in San Francisco was providing universal
    preschool to all four-year-olds. And so I support the
    Administration's idea, and I think many of you support it as
    well, to provide universal pre-kindergarten for every three-
    and four-year-old in the country, and make childcare more
    affordable for working families.
        I think, as I mentioned earlier, this is critical not just
    for working moms but for also--these investments, actually, are
    shown to pay off over time.
        Chairman Sanders. Right. Last question. We are the richest
    country in the history of the world and yet millions of senior
    citizens today have teeth that are rotting in their mouths,
    cannot afford the outrageous cost of hearing aids, cannot
    afford eyeglasses. Do you agree that hearing, vision, and
    dental care are essential parts of health care and that
    Medicare should be expanded to cover these basic health care
    needs?
        Ms. Young. Chairman Sanders, we spoke about this I believe
    at last year's hearings. That is why the President's budget
    supported providing hearing, vision, and dental coverage as
    part of Medicare expansion, and I was proud to come here and
    talk about that last year.
        Chairman Sanders. Thank you. Ms. Coloretti?
        Ms. Coloretti. Senator, just weighing in to agree.
        Chairman Sanders. Okay. Thank you. Senator Graham.
        Senator Graham. Thank you, Mr. Chairman.
        Ms. Young, as a member of the Appropriations Committee
    staff, did you work on defense budgets?
        Ms. Young. I happened to be Staff Director, so all of them,
    defense included.
        Senator Graham. Yeah. So how do you see the world in terms
    of danger right now?
        Ms. Young. Senator, it is hard to look at the news. It is
    hard to go to the job I have and not hear about the very
    changing global picture we see every day, especially with what
    is going on in eastern Europe.
        Senator Graham. Is that fair to say for you, do you agree
    with that, Ms. Coloretti?
        Ms. Coloretti. Senator, just weighing in to agree.
        Senator Graham. Okay. So the point I am making is, if you
    look at President Biden's budget proposal and project it out to
    2031, 2.5 percent of GDP spending on defense, that will be
    below what we were doing on September 10, 2001, before we were
    attacked. So I just think that is a very dangerous glidepath
    for our nation, and I will be working with people, you and
    others, to try to change that. So I do not want to, you know,
    make a bunch of speeches about defense other than we need a
    budget. Do you agree, we need a budget quickly, Ms. Young?
        Ms. Young. Sign me up for as quick as possible.
        Senator Graham. Okay. What about emergency supplemental? Do
    you think we need one of those too?
        Ms. Young. Senator Graham, we are assessing everything from
    COVID to our situation in eastern Europe, and we clearly will
    be in contact if we think the resources are needed.
        Senator Graham. Well, I got contacted by the Administration
    about $3.5 billion for Afghanistan to go to U.N. agencies, not
    the Taliban. Count me in for that, and I think the best way to
    do that is through an emergency supplemental. The World Food
    Program has been under siege because of COVID, and all kind of
    problems out there. We have got problems at home and abroad. So
    I think an emergency supplemental would be well utilized, and
    also to help the Ukraine.
        As a matter of fact, if we did have an emergency
    supplemental, would you support designating foreign military
    financing for Ukraine as part of that package?
        Ms. Young. Senator, you are looking at someone--I have
    visited Ukraine three times as a congressional staffer and know
    the issues very up close, and it is troubling by what we see
    there. So as you mentioned, we do not have a----
        Senator Graham. Are you inclined to support that?
        Ms. Young. Well, we do not have a regular appropriations
    bill so somewhere in one of those packages. I will not dictate
    to the appropriations leaders how they do it. We certainly
    support Ukraine aid.
        Senator Graham. Okay. Iron Dome. Eight months ago,
    President Biden promised to provide $1 billion to replenish
    Israel's Iron Dome system following the barrage from missile
    attacks from Hamas in Gaza. To this point in time the
    Administration has not yet formally requested the additional
    Iron Dome funding.
        Do you know if that is going to happen? Do you support that
    happening?
        Ms. Young. Senator Graham, I think the Department of
    Defense has been clear with congressional leadership that they
    support that backfilling of Iron Dome. The last legislative
    vehicle I understand is pending in the Senate, but we
    certainly----
        Senator Graham [continuing]. But you have not made a formal
    request of the Congress. Is that not accurate?
        Ms. Young. It is one of many things we have communicated
    through technical assistance to the Capitol. That is the normal
    way.
        Senator Graham. The sooner the better that we can get Iron
    Dome replenished, because the world, and that part of the
    world, is getting more dangerous. So I look forward to working
    with you on that.
        We just passed a bipartisan infrastructure package that I
    voted for, and we had a lot of money for roads and bridges and
    ports. One of the things that bothers a lot of us, just not me,
    is that the Federal Highway Administration issued a memo
    recently that says--that runs counter to congressional intent
    by discouraging the use of Federal dollars by states for new
    highway capacity projects. In South Carolina, we need all the
    highways we can get.
        What is your view about that memorandum?
        Ms. Young. Senator, I was not involved in that memorandum,
    and I am happy to take your concerns back and work with you to
    address any shortcomings.
        Senator Graham. Please do, because a lot of us who voted
    for that bill expected the states to have the flexibility they
    have had in the past to do, you know, appropriately what they
    need to do. In our state we do need more roads, and I
    appreciate if you could talk to people over at the highway
    department about that.
        Finally, when do you expect that we will get the next
    budget?
        Ms. Young. As you know, Senator, the State of the Union is
    March 1. It is typical that the State of the Union would lead
    into a budget. So that is certainly our expectation, that you
    would see that normal course of interaction between the State
    of the Union and the budget.
        Senator Graham. And finally, do you agree with me that
    continuing resolution is really harmful to the Defense
    Department?
        Ms. Young. What does that say behind you, ``The World is a
    Dangerous Place''?
        Senator Graham. Yeah.
        Ms. Young. So every two-week, every three-week increment is
    not the way to budget.
        Senator Graham. Thank you so much.
        Chairman Sanders. Thank you, Senator Graham. Senator
    Murray.
        Senator Murray. Thank you very much, Mr. Chairman. Again, I
    am really pleased to have this opportunity to speak with both
    these great candidates today. Both of these women share a
    wealth of experience that they bring to these roles and the
    right skill sets that I believe we need.
        I already spoke in strong support of Ms. Young's
    nomination. I also want to add my support for Ms. Coloretti's
    nomination. I know she brings a wealth of experience as well. I
    think this is going to be a great team leading OMB for really a
    critical time in our country's history.
        On the COVID-19 response and economic recovery, some people
    thought we went too big last year when we wrote the American
    Rescue Plan, and I think it is plain to see today that is not
    the case. We have seen a stronger and much faster economic
    recovery because of the bill that the Democrats wrote and
    passed--6.4 million jobs back into the economy since a year
    ago.
        But we do know there is more work to be done. We cannot
    recover from this crisis if we do not, at long last, take some
    bold steps to really help lower costs for families, like
    finding and affording quality childcare where they live, giving
    parents the opportunity to enroll their kids into preschool at
    no cost, making a landmark investment in climate action and
    clean energy, because we can see that that climate crisis is
    here and now, and reduce the cost of prescription drugs and
    housing and more.
        We have proposals to address all of these that are long-
    term and fully paid for, that will actually cut the deficit
    over the time. So I wanted to ask both our nominees today if
    you can respond. What is the economic case for these strong and
    decisive proposals included in the Build Back Better, to put
    money back into people's pockets and make sure our economy
    works for us?
        Ms. Young, I will start with you.
        Ms. Young. Thank you, Senator Murray. Look, I know these
    proposals are pending before Congress so I will just speak in
    macro benefits of those things and not necessarily the
    legislative vehicle. I will leave that to the experts here,
    sitting around the table.
        But when you look at our economy you are absolutely right.
    It has grown the fastest clip last year since 1984, 5.7 percent
    economic growth, 3.9 percent unemployment, over 6 million jobs
    added.
        But there is more to be done. I think people around the
    table are rightfully speaking about price pressures and
    people's pockets, and what better way to deal with those than
    to use government investment to bring down the cost of
    prescription drugs that they have to pay out of pocket to even
    stay health.
        Childcare cost, to help the American people not spend more
    than 7 percent of their income on childcare. You cannot go to
    work without adequate childcare, as I am quickly finding out
    with a three-month-old. It is essential to the household.
        So there is an economic case to these proposals, not just
    pandemic-related, but these were things that I would argue were
    deficits, that we need to come out better on the other side of
    this pandemic than when we entered it.
        Senator Murray. Thank you. Ms. Coloretti?
        Ms. Coloretti. Senator Murray, I really appreciate this
    question. I think these proposals are aimed at building this
    economy--we have said it before so I will just say it again--
    from the bottom up and the middle out. And the effort to grow
    the economy and direct investments into people, so that they
    can actually become more productive and contribute to a growing
    economy. And I think that the Biden administration, as I
    observe it from the outside, is directed in the right
    direction.
        Senator Murray. Great. Thank you.
        Look, I am really concerned we have not reached a deal to
    get this year's appropriations bill to the President's desk,
    and the clock is ticking. Ms. Young, can you speak to the
    importance of reaching a spending agreement for fiscal year
    2022, and some of the consequences if we fail to do so?
        Ms. Young. Sometimes I find it hard to find the words to
    this question. It is so incredibly important. You just heard
    Senator Graham talk about the defense needs and the uncertainty
    in the world. We cannot address those by two-, three-week,
    four-week increments. It is a dangerous proposition.
        The same if you go talk to your state and local governments
    who are waiting on critical grant funding. We do not do those
    in a CR, so it delays investments by your state and local.
        So it really is paramount to get an appropriations deal
    done, and we stand willing, from the Administration's point of
    view, to help do what we need to do to bring that to fruition.
        Senator Murray. Thank you. And quickly, before I close, I
    just want to raise two issues of critical importance to my home
    state of Washington. We have discussed these previously, Ms.
    Young, and the first is salmon recovery. And it is so important
    to restore these Pacific Northwest iconic salmon runs. We have
    got to continue our work on that.
        And the second is the Federal Government's moral and legal
    obligation to clean up the Hanford nuclear site. So I want to
    tell you, I am going to be talking to you about this more, but
    we have got to make sure that Hanford is on a cost-effective
    trajectory, without compromising the cleanup mission. We have
    got a lot of work ahead there.
        With that let me thank you both for being willing to do
    these. I look forward to working with the Chairman to get you
    confirmed as quickly as possible. Thank you.
        Chairman Sanders. Thank you, Senator Murray. Senator
    Toomey.
        Senator Toomey. Thank you, Mr. Chairman. Director Young and
    Ms. Coloretti, thank you for joining us today.
        At your nomination hearing back in March of last year,
    Director Young, I asked you about the economic public health
    justification for spending about $2 trillion in the American
    Rescue Plan (ARP) bill, which was devoted mostly to programs
    that had very little or nothing to do with COVID. It was really
    a partisan wish list, and that is how it was passed, after $4
    trillion on a bipartisan basis had been passed the previous
    years.
        Well, the subsequent year has proven almost everything my
    Republican colleagues and I have warned about on that $2
    trillion ARP bill. Just by way of a quick review, it spent $400
    billion on universal government checks; $200 billion on
    unemployment insurance plus-ups that paid recipients more not
    to work than they made working; $126 billion to schools,
    regardless of whether or not they opened; $97 billion for a
    bailout of union pension plans. The list goes on and on.
        But the results, according to the CBO, was zero job growth
    above and beyond what they had anticipated would occur if you
    never passed the ARP. Oh, and COVID cases hit record highs. Oh,
    and we have the highest inflation in 40 years, and a whole lot
    more Federal debt.
        Now you, Ms. Young, maybe have got to get a pass on ARP. I
    know you supported it and I am sure you still do. That was
    proposed and passed before you were confirmed. But now I am
    concerned that the policies being proposed have gotten worse. I
    mean, ARP was counterproductive, but at least it was temporary.
    The so-called Build Back Better bill, as proposed, would be the
    single most damaging domestic legislation in generations. It is
    clearly an attempt to make America's middle class dependent on
    the government, with this free universal preschool, free
    government-paid family leave, free government-funded childcare,
    free expanded child tax credits, expanded Obamacare subsidies--
    dramatic erosion of any sense of personal responsibility. Oh,
    and the largest tax hike since 1968, which would end up being
    paid for, to a very large degree, by American families, and
    make the U.S. spend it.
        Now I understand, thankfully, that that is at least on
    pause right now, and I hope it actually goes on a permanent
    hiatus.
        I want to zero in, for a minute, on a topic that you and
    the Ranking Member touched on briefly, and that is the
    provisions in the ARP that allocated $350 billion for state and
    local governments to spend on pretty much anything remotely
    related to even responding to the pandemic. And what is so
    shocking about that is that it occurs despite the fact that
    state and local governments were not in any kind of fiscal
    crisis in 2020 or 2021. In fact, in the aggregate they were
    taking in all-time record high amounts of revenue, in 2020
    even. I mean, we knew that in March of 2021.
        And then in 2021, they shattered the record from 2020. And
    the increases were quite dramatic. In 2019, state and local
    governments took in a little over $11 trillion. It was well
    over $12 trillion by 2020. It was about an 11 percent increase.
    If you look at the first three quarters of 2019 and compare
    that to the first three quarters of 2021, it is a 27.5 percent
    increase in the tax revenue, which was already a record high
    level of revenue.
        So what has the effect of that been? Well, states are just
    swimming in cash, literally. I mean, California reported a $75
    billion budget surplus for 2021. And as I predicted then, state
    have decided, well, they do not know really what to do with
    this money so they are cutting taxes. Even virtually bankrupt
    Illinois has a plan for a $1 billion tax cut, and the governor
    there says that the state is in the best fiscal position it has
    been in in decades.
        State and local governments have also chosen to waste some
    of this money, not knowing what else to do with it. We have
    Syracuse, New York, spending $2 million to plant new trees.
    Norwich, Connecticut building luxury apartments. The City of
    Chicago has decided to spend $31 million to create a guaranteed
    income program. It goes on and on.
        Again, let me just recap. ARP sent $350 billion to state
    and local governments after Congress had given about $650
    billion of extraordinary money--this is all above and beyond
    what we ordinarily send to the state and local governments--and
    that is all on top of absolute, all-time, record levels of
    revenue collections.
        So when I hear about supplementals for more domestic
    spending I just want to state for the record there is no reason
    that Congress should be providing still billions more on top of
    the $6 trillion it already did when there are hundreds of
    billions of dollars that remain unobligated and more money than
    state governments have ever even seen.
        I do have a question I will send to you for the record
    regarding getting Federal workers back to work in the offices
    to deal with Social Security, VA, and the IRS backlog. I will
    send that as a question for the record.
        Thank you, Mr. Chairman.
        Chairman Sanders. Thank you, Senator Toomey. Senator
    Stabenow.
        Senator Whitehouse.
        Senator Stabenow. Oh no. I am actually here, Mr. Chairman.
        Chairman Sanders. All right. Senator Stabenow.
        Senator Stabenow. Thank you. I am actually here. I am sorry
    that the camera was turned off.
        Thank you so much for the hearing. It is wonderful to see
    the two nominees in front of us, such wonderful, qualified
    nominees.
        I do need, though, to just say something to correct the
    record from my colleague and friend who just spoke about the
    American Rescue Plan. I know that this was something every
    Democrat voted for and every Republican voted against, and so I
    understand that folks on the Republican side want to make it
    seem like it was the worst thing ever.
        But the reality is this, that when President Biden took
    office there were 18 million people that were on unemployment
    insurance and now it is 2 million--18 million to 2 million. We
    helped businesses create 6 million jobs, the greatest year of
    job creation in American history. We have seen the best
    economic growth since 1984. We have seen the biggest single
    year drop in our unemployment rate in our nation's history.
        And so we know that because of COVID-related challenges and
    supply chain breakdowns and so on there is so much more to do
    in lowering costs for people, but the record is very clear in
    terms of the robust economy and what is happening right now. We
    just need to keep it going.
        Ms. Young, again, welcome, and Ms. Coloretti, it is
    wonderful to be speaking to you again. And I wanted to
    specifically start with the Infrastructure Investment and Jobs
    Act, which includes a lot of provisions to ensure Federal
    purchasing and infrastructure spending, to make sure it is
    American-made products.
        You know, we make a lot of things in Michigan. I hear a lot
    about that. We make things and grow things. I happen to think
    that we should be using American tax dollars to purchase those
    things. We were very fortunate to get a provision that I
    authored, along with Senator Braun, to solidify the Made in
    America Office's role within the Federal Government, and to
    have that now be law.
        And so the office is now in charge of enforcing, Buy
    American laws and ensuring that tax payer dollars are used to
    uplift American manufacturing, hire our workers first, our
    small businesses first, and shore up our domestic supply
    chains, which, we know are critical, we need to be making more
    things and then buying more things as a Federal Government,
    made in America.
        So, Ms. Young, could you talk about the Made in America
    Office's role in implementing Buy American provisions from the
    infrastructure bill, and what resources the office needs to
    ensure that the implementation is done effectively? I know
    people in my state, and believe people in the country want very
    much to see this move forward aggressively and be successful.
        Ms. Young. Thank you, Senator, and I want to thank you for
    your help codifying that office in the Infrastructure Law. We
    started that office in OMB through Executive order, and so was
    very happy that the bipartisan law ensured that it will be
    around for future administrations.
        The President was very clear. Even before the
    infrastructure law, he gave us an edict around the table that
    we needed to look at the waiver process. The agencies almost,
    without thinking, issue waivers for Buy American provisions
    that you all worked on and passed, and this office and OMB are
    meant to ride roughshod over this process. It should not be
    just automatic. It needs to be justified. So we are trying to
    bring some rigor to that process, not just for the Bipartisan
    Infrastructure Law but for all that we purchase. We talk about
    appropriations bills--$1.5 trillion a year of basic annual
    spending, and a lot of the waivers are done through that
    process.
        So our intention is to make things in America. If the
    pandemic showed us nothing, supply chains are vulnerable. We
    need to bring American manufacturing back, and that is one of
    the things the office will focus on now--I would say during its
    tenure, but now its tenure will hopefully be for the
    foreseeable future, now that you have helped codify it into
    law.
        Senator Stabenow. Well, thank you. And I know I am just
    about out of time so I want to move to a different topic that
    each of you are welcome to comment on. But one of the things
    that we know from the COVID pandemic is that mental health and
    substance abuse issues have increased substantially, and they
    are going to linger, certainly, past the pandemic. In fact,
    between April of 2020 and April of 2021, more than 100,000
    people died of a drug overdose, and we have so many other
    numbers that relate to young people and suicides and people who
    need mental health help.
        And I have, as you know, been laser-focused with my
    colleague, Senator Roy Blunt, creating a system where health
    care above the neck is funded to help the same as health care
    below the neck. And we are now on the way to doing that with
    community behavioral health clinics.
        And so I would ask for your support for these. I will not
    go through all the pieces, but we have all kinds of information
    about how this is successful in keeping people out of jail that
    do not need to be there, or the emergency room who do not need
    to be there, out of homeless shelters that do not need to be
    there. You know, we have got this program fully operationalized
    in 10 states right now, and 40 different states have startup
    grants. But 10 states are fully implementing this, and we need
    this across the country.
        So I interested and urging you that the President's budget
    do even more. His first budget proposed a $125 million increase
    in the startup grants. We need additional dollars for that, and
    we need to have the full expansion nationwide put in place.
        So I would ask both of you if you would work with me, work
    with Senator Blunt in fully operationalizing this critical part
    of our health care system.
        Ms. Young. We would love to work with you on any mental
    health proposals.
        Ms. Coloretti. Agree.
        Chairman Sanders. Thank you very much, Senator Stabenow.
    Senator Braun.
        Senator Braun. Thank you, Mr. Chairman. Through the ARP Act
    we spent $1.9 trillion, and I think 10 percent of that was
    aimed particularly at COVID relief. And I am curious, with all
    the money we have spent so far, it still astounds me that we
    are nearly $30 trillion in debt and we are looking to borrow
    more money and spend more, regardless of the merits. I think
    there is a lot here that obviously we do need to address, but
    not in the way that we have done it, amassing that much debt
    into the system.
        I would like to focus in--I have a question for Ms. Young.
    How much money is still out there in terms of what you think it
    is, what it really is that is unspent from what we have done
    already, and is that something that we should be looking at
    first before we actually tee up more money, especially when it
    comes to COVID relief items like masks and testing and so
    forth? I know the figure that I think has been given to the
    Committee. I would like to know what you think it is out there
    that is unspent funds that we could tap rather than, you know,
    spending more money for things where we have got the funds
    sitting, unused.
        Ms. Young. Senator, we provided that information to the
    Committee at the request of you and several other Senators, so
    I am glad you have it. Ninety-seven percent of the funds pre-
    ARP have been obligated. As you mentioned, ARP was both direct
    COVID relief, the health care dollars. Most of that has been
    obligated or announced. That is what helped us get through the
    Omicron variant.
        The money that is not obligated is something Senator Toomey
    talked about, state and local funding that represents most of
    the non-obligated funding. So the health care pieces is mostly
    gone, given the response we have had to do for Omicron. The
    other side of the table are the economic state and local money,
    and that is the majority of the funding left from ARP.
        Senator Braun. And is it correct that if we focus on what
    the states have, that that figure is close to $340 billion?
        Ms. Young. That sounds right, Senator.
        Senator Braun. And then, even though that is in the states'
    coffers, would it not make sense that for those states that
    have unspent balances that we would ask them to spend through
    that first before we would give them more money, or we do
    something federally that might duplicate it?
        Ms. Young. Well, Senator, the point of state and local
    funding was to ensure that they could, at the state and local
    level, respond to the pandemic. So I would certainly hate to
    see us do that and another variant come up. We have also, while
    Omicron is extremely contagious, I think we have gone through
    these variants with some level of success, and state and locals
    are utilizing these funds to also do mitigation efforts at
    their level. So we have to be careful about pulling money back
    before we know what the future twists and turns of this virus
    brings.
        Senator Braun. Well, I think, just for anybody in the
    public that is listening, back in '08-'09, I think the total
    that we spent, when it was systemically something actually
    affecting the economy, not a health care crisis, in terms of
    how we were going to remediate it, called for all this
    spending. I think we spent $800-$900 billion. And, of course,
    we have spent $4 trillion, another 2 with ARP, and then a lot
    more requests for more.
        I guess, in a short period of time, hundreds of billions
    has become passe. And the other thing the public needs to know
    is the Fed has pretty well accommodated all that by putting
    that debt on their balance sheet. I think that is largely, you
    know, what is driving now what is not transitory but is
    somewhat of a stubborn inflation rate, 7 to 8 percent.
        One other question. In December 2020, Congress passed the
    Consolidated Appropriations Act with overwhelming bipartisan
    support. The legislation included $1.375 billion for the
    construction of border barriers. On the first day in office,
    President Biden signed a presidential proclamation to pause
    construction and funding for the border barrier.
        Despite a continuing resolution, there is still an
    authorization and appropriation to build out that barrier. What
    will it take for the Administration to follow the law, and are
    there other issues where the Administration plans to ignore
    Congress?
        Ms. Young. Senator, I take the Impoundment Control Act as
    serious as anybody in this room. That is why GAO has found that
    this Administration has acted properly within the confines of
    that law and that we are obligating prudently. It may not be on
    what everyone thinks it should be, but we have environmental
    remediation to be done, we have gaps to be filled, we have
    returned billions of dollars to the Department of Defense where
    it belongs. So we are doing what we not only believe is
    responsible but GAO has validated that.
        Senator Braun. So do you intend to spend the $1.4 billion--
    --
        Ms. Young. We are spending it----
        Senator Braun [continuing]. On a border barrier?
        Ms. Young [continuing]. On utilized efforts. You can only
    spend it on certain things. We cannot even spend it on
    technology.
        Senator Braun. That is what we authorized it for.
        Ms. Young. Yes. So we are spending it on what we are
    authorized to spend it on, and GAO has validated that.
        Chairman Sanders. Okay. Thank you, Senator Braun. Senator
    Whitehouse.
        Senator Whitehouse. Thank you, Chairman. Good afternoon,
    Director Young, Ms. Coloretti. Thanks for being here. I want to
    ask you a little bit about health care costs and then, if I
    have a moment, a little bit about climate costs.
        On health care costs, the Budget Committee staff are going
    to give you a copy of this graph, which I have used before, and
    you may have seen before, and it charts that after the CBO
    health care spend projection of 2010, something began to
    change. Actual Federal health care spending began coming in
    lower and lower and lower compared to what CBO had projected.
    And even with the added spend of COVID we are still below those
    projections.
        And if you look forward, if you extrapolate CBO's
    projection forward and extrapolate forward from the actual,
    between now and the next decade, our budget period, there is $6
    trillion in health care savings that we have experienced,
    again, projected going forward.
        And we do not exactly know why that is, but I very strongly
    believe that it has to do with accountable care organizations
    that we set up in Obamacare, the so-called Triple Aim delivery
    system reform, trying to make health care more patient-
    centered. All of those things that allow doctors to keep
    patients healthier rather than stay on the fee for service
    treadmill ends up saving money because a healthier patient does
    not cost as much in health care expense.
        So what I would like to do is to make sure that in the
    years ahead you will both be keeping your eye on the ball of
    how we do more of whatever it is that has saved us the $6
    trillion while also providing healthier patients, happier
    patients, and doctors who feel more rewarded in their practice.
        Ms. Young. Senator Whitehouse, we have talked a lot about
    debt and deficits here, but the main drivers are the aging
    population, cost of health care. So we are looking for exactly
    the types of solutions that you are bringing attention to.
    These Accountable Care Organizations (ACO) created in the
    Affordable Care Act (ACA) are the type of cost containment
    mechanisms we need to look at and see if there is more of that
    we should be doing.
        Senator Whitehouse. And just one fine Rhode Island point on
    it, we have been working for years in Rhode Island to bring
    these principles to bear on patients who are nearing the end of
    life or in what is called advanced care, and to free up doctors
    to provide the care that they need without wasteful steps that
    Medicare pricing policy demands, and we are seeking waivers
    through the Center for Medicare and Medicaid Innovation (CMMI).
    I just want to flag that for you, because we will be pursuing
    this to make sure that all of the work that we have done in
    Rhode Island does not come to naught at the hands of the
    Federal Government.
        So I will flag that for you. You do not need to respond. We
    can talk more in person, but it is an important Rhode Island
    priority for me.
        Climate costs. Freddie Mac has warned of a coastal property
    value crash that will cascade through the rest of the economy
    the way the mortgage meltdown in 2008 cascaded through the
    economy. Central banks around the world are warning of a carbon
    bubble that could precipitate a global economic collapse when
    the bubble bursts. The Fed is beginning to make similar
    warnings here in the United States, and the insurance industry
    is warning that risks like flooding risks and wildfire risks
    are becoming so unpredictable as to be uninsurable.
        With those warnings out there, do you at OMB take this
    problem of climate costs coming at us seriously, and do you
    have anything to say to us here in the Senate about how
    seriously we should take those warnings?
        Ms. Young. Senator, I think the President's budget speaks
    for itself on the climate investments you see. We see it as an
    existential threat to the economy, to the global economy, to
    the American people. That is why you have seen young people
    around the world look at climate change as an issue they should
    care passionately about, given that their future is very tied
    to it. You heard in my opening statements the billions of
    dollars we spend, from a Federal Government, to respond to and
    rebuild from these catastrophic events that have continued to
    get worse.
        So at OMB we take it very seriously and commit to work with
    anyone who sees this as a threat, and it will take solutions
    from Congress to deal with.
        Senator Whitehouse. Just to put a dollar perspective on it,
    if we can get ahead of the climate problem we will save
    hundreds of billions, if not trillions of dollars. Correct?
        Ms. Young. That is correct.
        Senator Whitehouse. Thank you, Chairman. I wish you both
    well. I cannot wait to be working with you, confirmed in your
    positions, fully and officially.
        Ms. Coloretti. Thank you.
        Ms. Young. Thank you.
        Chairman Sanders. Thank you very much, Senator Whitehouse.
    Senator Scott.
        Senator Scott. Thank you, Chairman. Director Young, it is
    nice to see you again. The last time you were here I asked you
    a few questions on the budget. So the first one is, what is our
    Federal deficit now, or Federal debt now?
        Ms. Young. The Federal debt is in the 30s of trillions.
        Senator Scott. Okay. And what was our deficit last year and
    what do you project the deficit to be this year?
        Ms. Young. I want to make sure I get that right, Senator
    Scott. I do not have the number at my fingertips.
        Senator Scott. Okay. And do you know what our revenues were
    last year, last fiscal year?
        Ms. Young. Clearly not enough that we did not have a
    deficit, but again, I will get those numbers to the Committee.
        Senator Scott. Okay. The deficit last year was $2.8
    billion, and the collections this last year was $4 trillion. Do
    you know what our expenses were last year?
        Ms. Young. Whatever delta those two numbers are.
        Senator Scott. Okay. How about our interest expense on our
    Federal debt?
        Ms. Young. I know it is still at one of the lowest rates in
    decades. We still pay very little on our debt, given that
    interest rates have remained low for the last three decades.
        Senator Scott. We paid $413 billion last year, which is 7
    percent higher than 2020. Do you know what the duration of our
    Federal debt is?
        Ms. Young. I do not, sir.
        Senator Scott. Okay. And do you know, off the top of your
    head, what the amount of unspent COVID money is?
        Ms. Young. We talked about the state and local dollars
    being around $300 billion, but 97 percent of the pre-ARP COVID
    funds remain obligated, and most of the direct COVID response
    dollars in ARP are obligated or spoken for.
        Senator Scott. Do you stay up with what the inflation rate
    is and what the producer price index increases have been?
        Ms. Young. I do.
        Senator Scott. What are they?
        Ms. Young. Seven percent.
        Senator Scott. For which one? For what, CPI?
        Ms. Young. For CPI.
        Senator Scott. Okay. So Ms. Coloretti, can you give us
    those? What is our Federal debt now?
        Ms. Coloretti. I believe we said in the 30s of trillions of
    dollars.
        Senator Scott. Okay. And what do you think our deficit is
    going to be this year?
        Ms. Coloretti. I think you said our deficit last year--and
    again, I am guessing here--but $4 trillion.
        Senator Scott. And so if you think our debt is in the 30s,
    how much debt--either or both of you--what can we have? Is
    there a cap? What is the amount that you think is sustainable?
        Ms. Young. Senator, there are many ways to look at debt,
    many markers. One is, and what we have put forward as a theory
    in the case in the budget we submitted was what is the cost of
    carrying debt? And we remain----
        Senator Scott. Let us assume it is where it is now. What
    would be the maximum debt we should have?
        Ms. Young. Our theory is it really depends on if debt
    becomes so costly to carry that we cannot do other spending
    that we should be doing, and the interest rates remain very low
    at historic rates. So it has not crowded out other investments.
        Senator Scott. So over the last 50 years, do you know what
    the average interest rate for our 10-year Treasury is?
        Ms. Young. I do not.
        Senator Scott. So what if I said it is more--say it is over
    5 percent, and we have, you said, over $30 trillion worth of
    debt. So that would be $1.5 trillion of interest a year. Would
    that be unsustainable?
        Ms. Young. We do not think we are in an unsustainable
    situation. Again, it goes to the real cost of carrying debt,
    and our interest payments on the debt remain low and has now
    crowded out other investments we need to make in this country.
        Senator Scott. But you are not sure what the duration is.
    So if interest rates move, and they moved up this year, as you
    know. They have moved up since the first of the year. So if the
    interest rates continue to move back to, let us say, the 50-
    year average, would that be sustainable then?
        Ms. Young. Senator Scott, of course we would have to re-
    look at all of our assumptions if that historic nature of the
    cost of debt changes, but it has not in 30 years, in any
    measurable form.
        Senator Scott. So, all right. I am surprised that you have
    been in the job, I guess, for almost a year, and these numbers
    are pretty significant. I mean, these numbers are numbers that
    it seems like you ought to know. Because you ought to know the
    exact debt. You ought to know what we are doing in collections
    and what our expenses are, because if you were the CFO of a
    company that is what the expectations are, and that is how I
    think of this job.
        So I think we ought to start looking at reality here--33
    trillion-plus of debt, deficits that we cannot afford. It is
    going to be very difficult. Thank you.
        Chairman Sanders. Thank you, Senator Scott. Senator
    Merkley.
        Senator Merkley. Can you hear me okay?
        Chairman Sanders. Actually, turn it down a little bit. You
    are coming in a little bit loud.
        Senator Merkley. Okay.
        Chairman Sanders. That is good. That is good.
        Senator Merkley. Thank you, Deputy Director Young. I have a
    couple of details I would like to ask you about. One is that we
    are still dealing with the horrific fires in the West, and will
    be forevermore. And one thing that has been helpful has been
    the funding of the National Guard to help provide fire crews
    during these worst moments. And the White House touted those
    investments in the National guard in a press release last
    summer, but the Administration did not put this fire training
    for the National Guard into their budget. And I want to ask if
    you would put it in the budget for next year, because it has
    become such an important additional component when we are in
    those mega-fires.
        Ms. Young. Senator, the timing of the budget, and when fire
    season and many of those initiatives came forward did not
    align, but we are happy to support those additional efforts,
    given the devastating effect of those forest fires. So I am
    happy to go back and work with our agencies, DoD, USDA, and DOI
    to make sure we have adequate resources to fight fires, and we
    will take back that specific proposal.
        Senator Merkley. Thank you. I appreciate that.
        Second, I noted and appreciated President Biden's
    commitment to direct 40 percent of green Federal investments
    towards environmental justice communities, something that is
    often greatly overlooked, and it is so important to have this
    kind of equity screen to track how agencies are spending their
    time and dollars to meet that commitment.
        What do you see as OMB's role in targeting and tracking
    those investments?
        Ms. Young. We are the centerpiece of that initiative,
    Senator Merkley, and it is one of the top priorities we have in
    our office. So we look forward to partnering with you, keeping
    you up to speed on our efforts there. But we are, I think, the
    keepers of that initiative and looking forward to carrying it
    out.
        Senator Merkley. Thank you. Do you anticipate that you will
    probably do annual reports in that regard, to help us wrestle
    with how we are doing?
        Ms. Young. I think that is a great suggestion. You know,
    transparency here should be something that is paramount, to
    make sure we are keeping the word of our value statements. So I
    am happy to take that suggestion back as one way to make sure
    the public understands what we are doing.
        Senator Merkley. Thank you. And then I wanted to turn to
    the challenge we face with each continuing resolution. At the
    end of that continuing resolution the possibilities are we have
    another continuing resolution or we pass the spending bills
    that the appropriate committees have invested so much in, and I
    know as a former staff for an Appropriations Committee you know
    exactly how intense that process is. And the third option,
    which we do not like to talk about much, is that neither
    happens, and in that situation we have a bit of a crisis.
        Do you think it is important to have contingency plans for
    that third option, when a continuing resolution runs out and we
    do not succeed, and immediately having another continuing
    resolution and more spending bills in place?
        Ms. Young. Senator, I truly believe--I have talked to you
    and most of your colleagues during this process and trying to
    do our part from the Administration on getting full-year bills
    passed. Everything I have heard, you know, it is difficult.
    Everyone wants to get there, and understands the devastating
    effects any threat of a shutdown would bring.
        So I am maybe, you know, maybe I will have egg on my face,
    but I am optimistic that the appropriators and the rest of
    Congress can reach a deal, and I think everyone understands the
    devastating effects of continuing resolutions.
        Senator Merkley. Well, I certainly believe that there is
    bipartisan understanding of how devastating option 3, door
    number 3 is, and yet my question was, is your agency planning
    for how we would treat door number 3 if we should have to go
    through it?
        Ms. Young. We have to, Senator. It would be irresponsible
    not to. And I appreciate that the Congress works by deadlines,
    so we have gotten pretty close up to the line, even though we
    knew Congress would come through. So even given that time frame
    the last couple of CRs, we have run exercises to make sure we
    know what our plans are in case a deal is not reached in time.
        Senator Merkley. Well, my role on the Appropriations
    Committee is as Chair of the Interior Subcommittee, and there
    are many key components that we worry about a great deal behind
    door number 3, when we do not succeed and we have another
    continuing resolution or a spending bill, including the
    National Park Service. My staff on that subcommittee has sought
    to discuss the contingency plans for that situation and has not
    been able to get a briefing authorized for them. Can we make
    sure that that briefing happens?
        Ms. Young. Senator, we are happy to provide briefings. We
    are conscientious about when we talk about potential shutdowns,
    given how close in timing we are to needing a deal. So we will
    work something out--I know your staff well--to make sure they
    have the information they need, but also not to portray a sense
    that we think we are headed down a bad road. So we will balance
    that.
        Senator Merkley. Let's wrap the contingency planning in all
    kinds of optimism, but it is important that Congress be part of
    a discussion about the consequences, and hopefully increase the
    absolute motivation and make sure we do not end up in that
    place. This request has been in place for I think going on
    three months now, and I do not really find it acceptable that
    OMB has been blocking Interior from providing such a
    conversation with the Interior Subcommittee staff. And so I
    hope we can remedy that situation.
        Chairman Sanders. Thank you very much, Senator Merkley.
    Senator Romney.
        Senator Romney. Thank you, Mr. Chairman. Ms. Young, as you
    probably know I was one of those that was part of the
    bipartisan negotiating team that put together the
    infrastructure bill. Our largest single investment was in
    highways. You can imagine our surprise when we see the
    Department of Transportation indicating that the highway money
    cannot be used for increasing capacity of highways. This
    direction flies in the face of our intent and our needs.
        I recognize there are some states that are not growing and
    may not need additional capacity--New York, New Jersey,
    Delaware, Rhode Island, and so forth. But there are other
    states that are growing fast--South Carolina, Florida, my state
    of Utah, the fastest-growing state in the nation over the last
    decade. We need to increase the capacity in our highways or we
    are not going to see the economic growth which we projected as
    being part of this bill.
        Could you please get back to me and other members of our
    bipartisan group on progress on this front and what the status
    will actually be?
        Ms. Young. Senator, the Ranking Member has brought this to
    my attention today. I will absolutely look into this, and thank
    you for your work on that piece of legislation.
        Senator Romney. Thank you. A broader topic, which is, I
    have a six-foot chart in my office going back to 2000 BC, which
    looks at the coming and going of great civilizations over time.
    And there is a common characteristic of civilizations in
    decline and that ultimately collapse, and that is that they end
    up spending far more than they take in. They are able to do
    that because other nations see them as being strong and loan
    money to them. They inevitably have a massive inflation in
    their economy. By doing so, they devalue their currency. At
    some point their currency ceases being the reserve currency of
    the world.
        It is a real concern for many of us to see us, year after
    year, spend more money than we take in, and it is a precursor
    of economic calamity. Right now we are seeing the economic
    impact being showered on the people of America that are
    suffering with very high rates of inflation.
        I was, frankly, alarmed that the numbers were not familiar
    to you and to your Deputy Director. The national debt is $29.9
    trillion. It is not in the 30s. It will be. The projected
    deficits are roughly $1 trillion a year on a normal basis. If
    we have COVID relief packages it kicks those numbers even
    larger. This is an ongoing threat to our nation and to the
    well-being of our citizens and has to be a priority for you and
    for the Administration.
        I would note that about one-third of Federal spending is
    the portion that is part of the budget that you work on, that
    we vote on. Two-thirds is automatic, so-called
    nondiscretionary--Medicare, Medicaid, Social Security, and
    interest.
        Contrary to what you indicated in your testimony, our
    interest rates have not been about the same over the last 30
    years. They have come down dramatically and are now ticking
    back up. As a matter of fact, Bill Clinton called me after I
    lost my race, back in 2012, and said his biggest concern was
    that interest rates going back to their normative level would
    take our interest payments to be even greater than our military
    spending.
        So this is a major issue that you need to focus on. I would
    encourage you and hope that you will include in the analysis
    and reports you provide not just the one-third that we vote on
    but the two-thirds that we do not vote on, and project where
    that is going to be heading over the coming decade. This will
    determine whether we are able to keep up with other nations in
    the world and maintain our lead as the hope and guide for
    democracy throughout the world.
        Will you make this a priority of your effort to see what
    the total spending is and to see how our entitlements are
    affecting what our total debt and total deficit will be?
        Ms. Young. Senator Romney, you have my commitment to do
    that, and we have done that. Even off-budget items like Social
    Security, our budget fully reflected what the total outlays of
    the Federal Government are. We think that is the only way to
    present a unified budget. We did that in the 2022 budget and we
    will do that again in the 2023 budget.
        Senator Romney. I very much underscore the importance of
    this for all of us. We simply cannot keep going on spending
    trillions of dollars more than we take in without suffering
    high rates of inflation into the future and potentially losing
    our lead in the world.
        Thank you, Mr. Chairman.
        Chairman Sanders. Thank you, Senator Romney. Senator
    Padilla.
        Senator Padilla. Yes. Thank you, Mr. Chair. I appreciate
    this opportunity to ask questions. As both Acting Director
    Young and the nominee for Deputy Director, Coloretti, know from
    an earlier hearing today at HSGAC, I had a chance to be with
    them.
        I wanted to raise some issues that we talked about by phone
    prior to today. As a follow-up to those conversations, I wanted
    to raise some questions about critical California flooding
    projects to protect the shoreline in and around San Francisco
    as probably the best example.
        Congress passed the fiscal year 2018 Bipartisan Budget Act
    in order to construct urgent flood control projects nationwide,
    including San Francisco's shoreline. However, inflation, supply
    chain issues, and Army Corps' initial underestimation of
    project costs have delayed these projects, which are now over
    budget. Easy to get over budget when the Army Corps initially
    underestimates.
        So I understand that the delays have been exacerbated by
    the Army Corps' decisions, which is not reflected in statute.
    And I would note that unless 100 percent of the project costs
    are in hand they cannot move forward with any piece of the
    project. The Administration has not asked for additional
    funding for this project in its budget, nor did it allocate any
    in the most recent work plan.
        So you can understand my frustration when the Army Corps
    says it cannot do the project until it has more money, yet when
    Congress gives Army Corps more money it does not allocate any
    to the project, and this is a project that the Army Corps
    itself said was critical and urgent, which is why it was on the
    disaster funding list in the first place.
        So, Acting Director Young, you see the absurdity of the
    situation we are in. Any thoughts on how we can resolve this?
        Ms. Young. It is something I focused on. We are working
    diligently with the Army Corps of Engineers on their legal
    interpretations on the mixing of money, depending on what
    bills. You have my personal commitment to find a working
    solution here. You are absolutely right. If the Corps, the
    government tells a community they are going to fund a project,
    it is unacceptable to leave it not completed. So you have my
    commitment to find a workable solution here.
        Senator Padilla. Thank you for that. Another Army Corps
    item while I have you. The Army Corps' projects are essential
    to facilitating commercial navigation, mitigating disaster
    risk, of course, safeguarding ecosystems, and supporting
    economic growth. OMB plays an influential role in the
    implementation of these projects, both clearing the
    authorization of a project and once authorized by Congress,
    approving both funding requests in the President's budget as
    well as funding allocations to the Army Corps' work plans.
        Acting Director Young, will you commit to evaluating
    potential changes to budgeting policies and economic benefit
    calculations that as currently structured disadvantage lower-
    income communities and often communities of color, for example,
    where property values are lower?
        Ms. Young. This is why you see a focus and an entire
    Executive order on the issue of equity. Sometimes the scores do
    not give a full story on the reasons the Federal Government
    should invest in communities. So you certainly have my
    commitment to make sure we look at a wide breadth of things
    when we look at Federal investments.
        Senator Padilla. Thank you. In the time remaining a
    question for Ms. Coloretti.
        I do not need to tell you, from your experience at HUD and
    elsewhere, the urgency with which we need to act on
    homelessness and the affordable housing crisis in America that
    predates the pandemic. The pandemic has underscored the need
    for affordable, safe, and supportive housing. Over the past two
    years, though, many have lost their housing. Others have
    struggled to make rent or mortgage payments for the first time,
    and these hardships disproportionately impacted homeowners of
    color, lower-income families, and those with disabilities.
        With your previous experience, how can you help shape or
    strengthen housing programs to better serve the people of our
    country?
        Ms. Coloretti. Senator, I appreciate that question and a
    chance to talk about this a little bit. My understanding is
    that the Biden administration has a strong commitment to
    increasing the supply and the affordability of housing, and, in
    fact, in the fiscal year 2022 budget added additional dollars
    into housing choice vouchers, affordable housing supply, and
    resources to prevent and address homelessness for our most
    vulnerable.
        One of the things I was privileged to work on when I was at
    Housing and Urban Development was the issue of ending veterans'
    homelessness, and the issue is a coalition of Federal, state,
    and local stakeholders to really address housing needs for the
    most vulnerable. And I believe the Biden administration is
    pointed in the right direction on this.
        Senator Padilla. Thank you very much. Thank you, Mr. Chair.
        Chairman Sanders. Thank you, Senator Padilla. Senator Van
    Hollen.
        Senator Van Hollen. Thank you, Mr. Chairman, and it is
    great to see both of you. Congratulations on your nominations.
    Thank you for your service.
        I know the state of the economy has been discussed a little
    bit today. I just think it is important to remind people of
    some figures, which is that before we enacted the American
    Rescue Plan CBO projected that GDP growth in 2021 would be 4.6
    percent. It turned out that real GDP growth was 5.7 percent,
    ahead of projections.
        And in another hearing in the Banking and Housing Committee
    I asked the Chairman of the Federal Reserve about the impact of
    the American Rescue Plan on unemployment, and he said,
    unequivocally, that it helped to reduce unemployment. In fact,
    it reduced unemployment to under 4 percent four years earlier
    than CBO had projected--4 years earlier than CBO had projected.
        Acting Director Young, you and I have talked about the
    Federal workforce and the need to make recruitment a top
    priority, and retention a top priority. I chair the Financial
    Services and General Government Appropriations Subcommittee and
    have heard from lots of Federal agencies about the concerns
    about the hiring process and how long it takes. I have also
    heard that from people applying for Federal jobs.
        I know OPM has a major role in this area, but of course so
    does OMB. Can you commit to working with us here on this
    Committee and with OPM to identify solutions for improving the
    merit-based hiring process?
        Ms. Young. Absolutely. Look at the infrastructure law. We
    think we need at least 4,000 new Federal employees just to
    implement that law. So OPM, and working with us and our Deputy
    Director for Management, are working on waivers and things we
    can do to bring people in faster.
        We do this in certain places well, but we have got to do
    more to broaden. I have been a civil servant, and you need an
    advanced degree, in some cases, to learn how to get through the
    hiring system. So you have my commitment to work on that.
        Senator Van Hollen. Well thank you. I just think we have
    got to step that up in a big way, especially given the new
    commitments that need to be met with the legislation that has
    been passed.
        It sometimes is overlooked, but the Office of Information
    and Regulatory Affairs (OIRA) is, of course, a part of OMB and
    serves the government as the central authority for the review
    of regulations. Federal agencies submit significant proposed
    and final rules to OIRA, and there are currently over 80
    regulatory actions under review, such as improvements to energy
    efficiency standards.
        How will you prioritize these regulatory actions, if you
    are confirmed?
        Ms. Young. Senator, they are all important. One of the
    greatest learning curves and one thing I have spent a lot of
    time in the last few months is learning the OIRA process. It is
    essential to making sure the President's vision is carried out
    when it comes to regulatory policy and also make sure that we
    are doing a consistent job around competition, equity, these
    values in Executive orders that the President has put forth.
    They need to be represented in our regulatory policy.
        There are some things we have clear direction from the
    President that are priorities that we need to move faster,
    especially in the area of climate change. But there are all
    important, and many of these things have been on the shelf for
    many, many years. So we are working with the staff we have to
    clear all of them out once they come in from agency review.
        Senator Van Hollen. Well, thank you. I hope you will urge
    the President to appoint an administrator for that part of OMB,
    because there are lots of important actions that are awaiting
    final decision.
        Ms. Coloretti, during your time as Deputy Secretary of HUD,
    HUD was the most improved midsized department in the
    Partnership for Public Service's Best Places to Work study.
    Could you talk a little bit about the steps you took to
    accomplish that and about the Biden administration's plan to
    improve employee engagement so that every Federal worker is
    able to do the best job possible for the American people? What
    lessons did you learn there that we can apply government-wide?
        Ms. Coloretti. Senator, thanks for that question and for
    your leadership on this issue. We did use data, first and
    foremost, to help us understand where our scores were when we
    were at the ranked bottom, when I was the Deputy Secretary of
    HUD on the Federal Employee viewpoint Survey. And so we looked
    at the data, and one thing we learned was that only 51 percent
    of employees had filled out the survey. And so what that served
    to do was managers were not convinced that that was a real
    score, even though it was low.
        So one of the things we did was do an effective push to
    actually increase participation in the survey, thinking that if
    we really are at this low of a score we might as well find out
    for sure. And we were able to get our participation rate up to
    75 to 80 percent in one year, and it had been 51. That served
    to get a better set of data to understand what areas and what
    questions were scoring low.
        And so what we learned was employee engagement, there were
    several questions that are targeted at employee engagement, and
    it is important for each agency to look at those and how it
    applies to their agency. For HUD, what we did was we actually
    did a couple of things. We worked with every SES manager and we
    also did some crowdsourcing to get ideas from people about how
    to improve and strengthen HUD.
        And as part of that project, that set of projects and deep
    dive we did, was how we were engaging with employees. And we
    noticed that on those particular scores, all of those scores
    went up. And as you know, and you probably know this from
    looking at the Federal Employee Viewpoint Survey, when
    employees are more engaged it actually serves to increase all
    the scores.
        And so that is really how we did it, but we first and
    foremost used data to help us understand what was happening on
    the ground.
        Senator Van Hollen. Thank you. Thank you both. Thank you,
    Mr. Chairman.
        Chairman Sanders. Thank you, Senator Van Hollen.
        Let me thank Ms. Young and Ms. Coloretti for appearing
    before the Committee today. This is your second committee
    appearance. It has been a long day.
        Your full statements will be included in the record. As
    information for all Senators, questions for the record are due
    by 12 noon tomorrow, with signed hard copies delivered to the
    Committee clerk in Dirksen 624. Email copies will also be
    accepted. Under Committee rules, Ms. Young and Ms. Coloretti
    will have seven days from receipt of our questions to respond
    with answers.
        With no further business before the Committee, this hearing
    is adjourned.
        [Whereupon, at 4:15 p.m., the hearing was adjourned.]

              ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

        [Prepared statements, responses to written questions, and
    additional material submitted for the record follow:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    EXECUTIVE BUSINESS MEETING TO CONSIDER THE NOMINATIONS OF THE HONORABLE
       SHALANDA D. YOUNG, OF LOUISIANA, TO BE DIRECTOR OF THE OFFICE OF
         MANAGEMENT AND BUDGET AND THE HONORABLE NANI A. COLORETTI, OF
       CALIFORNIA, TO BE DEPUTY DIRECTOR OF THE OFFICE OF MANAGEMENT AND
                                     BUDGET

                                  ----------

                          WEDNESDAY, FEBRUARY 9, 2022

                                  United States Senate,
                                       Committee on the Budget,
                                                       Washington, D.C.
        The Committee met, pursuant to notice, at 11:49 a.m., in
    Room S-120, The Capitol, Hon. Bernard Sanders, Chairman of the
    Committee, presiding.
        Present: Senators Sanders, Murray, Wyden, Whitehouse,
    Merkley, Kaine, Van Hollen, Padilla, Graham, Grassley, Johnson,
    and Braun.
        Chairman Sanders. I call this Committee meeting to order.
        We will be voting to report the nominations Shalanda Young
    and Nani Coloretti to be Director and Deputy Director,
    respectively, of the Office of Management and Budget.
        The first question before the Committee is the nomination
    of Shalanda Young to be Director of OMB. A quorum is present.
        I support the nominee and urge a yes vote.
        We will now vote that the Committee report this nomination
    to the Senate with the recommendation that the nominee be
    confirmed.
        The Clerk will call the roll.
        The Clerk. Mrs. Murray.
        Senator Murray. Aye.
        The Clerk. Mr. Wyden.
        Senator Wyden. Aye.
        The Clerk. Ms. Stabenow.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Whitehouse.
        Senator Whitehouse. Aye.
        The Clerk. Mr. Warner.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Merkley.
        Senator Merkley. Aye.
        The Clerk. Mr. Kaine.
        Senator Kaine. Aye.
        The Clerk. Mr. Van Hollen.
        Senator Van Hollen. Aye.
        The Clerk. Mr. Lujan.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Padilla.
        Senator Padilla. Aye.
        The Clerk. Mr. Graham.
        Senator Graham. Aye.
        The Clerk. Mr. Grassley.
        Senator Grassley. Aye.
        The Clerk. Mr. Crapo.
        Senator Graham. Pass.
        The Clerk. Mr. Toomey.
        Senator Graham. No by proxy.
        The Clerk. Mr. Johnson.
        Senator Johnson. No.
        The Clerk. Mr. Braun.
        Senator Braun. No.
        The Clerk. Mr. Scott.
        Senator Graham. No by proxy.
        The Clerk. Mr. Sasse.
        Senator Graham. No by proxy.
        The Clerk. Mr. Romney.
        Senator Graham. No by proxy.
        The Clerk. Mr. Kennedy.
        Senator Graham. Aye by proxy.
        The Clerk. Mr. Cramer.
        Senator Graham. Aye by proxy.
        The Clerk. Mr. Chairman.
        Chairman Sanders. Aye.
        The Clerk. Mr. Chairman, the yeas are 15 and the nays are
    six.
        Chairman Sanders. Thank you.
        The second question before the Committee is the nomination
    of Nani Coloretti to be Deputy Director of the Office of
    Management and Budget. A quorum is present.
        I support the nominee and urge a yes vote.
        We will now vote that the Committee report this nomination
    to the Senate with the recommendation that the nominee be
    confirmed.
        The Clerk will call the roll.
        The Clerk. Mrs. Murray.
        Senator Murray. Aye.
        The Clerk. Mr. Wyden.
        Senator Wyden. Aye.
        The Clerk. Ms. Stabenow.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Whitehouse.
        Senator Whitehouse. Aye.
        The Clerk. Mr. Warner.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Merkley.
        Senator Merkley. Aye.
        The Clerk. Mr. Kaine.
        Senator Kaine. Aye.
        The Clerk. Mr. Van Hollen.
        Senator Van Hollen. Aye.
        The Clerk. Mr. Lujan.
        Chairman Sanders. Aye by proxy.
        The Clerk. Mr. Padilla.
        Senator Padilla. Aye.
        The Clerk. Mr. Graham.
        Senator Graham. Aye.
        The Clerk. Mr. Grassley.
        Senator Grassley. Aye.
        The Clerk. Mr. Crapo.
        Senator Graham. Pass.
        The Clerk. Mr. Toomey.
        Senator Graham. No by proxy.
        The Clerk. Mr. Johnson.
        Senator Johnson. No.
        The Clerk. Mr. Braun.
        Senator Braun. No.
        The Clerk. Mr. Scott.
        Senator Graham. No by proxy.
        The Clerk. Mr. Sasse.
        Senator Graham. No by proxy.
        The Clerk. Mr. Romney.
        Senator Graham. No by proxy.
        The Clerk. Mr. Kennedy.
        Senator Graham. Aye by proxy.
        The Clerk. Mr. Cramer.
        Senator Graham. Aye by proxy.
        The Clerk. Mr. Chairman.
        Chairman Sanders. Aye.
        The Clerk. Mr. Chairman, the total yeas are 15 and the
    total nays are six.
        Chairman Sanders. Thank you all very much for being here.
        All Senator's statements for the record are due by 12:00
    noon tomorrow, with signed hardcopies delivered to the
    Committee Clerk in Dirksen 624. Emailed copies will also be
    accepted.
        With no further business before the Committee, this meeting
    is adjourned. Thank you all very much.
        [Whereupon, at 11:54 p.m., the Committee was adjourned.]

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