[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
MEMBERS' DAY
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 30, 2011
__________
Serial No. 112-8
__________
Printed for the use of the Committee on the Budget
Available on the Internet:
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COMMITTEE ON THE BUDGET
PAUL RYAN, Wisconsin, Chairman
SCOTT GARRETT, New Jersey CHRIS VAN HOLLEN, Maryland,
MICHAEL K. SIMPSON, Idaho Ranking Minority Member
JOHN CAMPBELL, California ALLYSON Y. SCHWARTZ, Pennsylvania
KEN CALVERT, California MARCY KAPTUR, Ohio
W. TODD AKIN, Missouri LLOYD DOGGETT, Texas
TOM COLE, Oklahoma EARL BLUMENAUER, Oregon
TOM PRICE, Georgia BETTY McCOLLUM, Minnesota
TOM McCLINTOCK, California JOHN A. YARMUTH, Kentucky
JASON CHAFFETZ, Utah BILL PASCRELL, Jr., New Jersey
MARLIN A. STUTZMAN, Indiana MICHAEL M. HONDA, California
JAMES LANKFORD, Oklahoma TIM RYAN, Ohio
DIANE BLACK, Tennessee DEBBIE WASSERMAN SCHULTZ, Florida
REID J. RIBBLE, Wisconsin GWEN MOORE, Wisconsin
BILL FLORES, Texas KATHY CASTOR, Florida
MICK MULVANEY, South Carolina HEATH SHULER, North Carolina
TIM HUELSKAMP, Kansas PAUL TONKO, New York
TODD C. YOUNG, Indiana KAREN BASS, California
JUSTIN AMASH, Michigan
TODD ROKITA, Indiana
FRANK C. GUINTA, New Hampshire
ROB WOODALL, Georgia
Professional Staff
Austin Smythe, Staff Director
Thomas S. Kahn, Minority Staff Director
C O N T E N T S
Page
Hearing held in Washington, DC, March 30, 2011................... 1
Hon. Austin Scott, a Representative in Congress from the
State of Georgia........................................... 1
Prepared statement of.................................... 3
Hon. Kevin Brady, a Representative in Congress from the State
of Texas................................................... 6
Prepared statement of.................................... 12
Hon. G. K. Butterfield, a Representative in Congress from the
State of North Carolina.................................... 14
Prepared statement of.................................... 16
Hon. Hansen Clarke, a Representative in Congress from the
State of Michigan.......................................... 17
Prepared statement of.................................... 19
Hon. Bill Posey, a Representative in Congress from the State
of Florida................................................. 20
Prepared statement of.................................... 22
Hon. Scott E. Rigell, a Representative in Congress from the
State of Virginia.......................................... 23
Prepared statement of.................................... 25
Hon. Jason Altmire, a Representative in Congress from the
State of Pennsylvania...................................... 28
Prepared statement of.................................... 29
Hon. David N. Cicilline, a Representative in Congress from
the State of Rhode Island.................................. 32
Prepared statement of.................................... 33
Hon. Charles J. ``Chuck'' Fleischmann, a Representative in
Congress from the State of Tennessee....................... 35
Prepared statement of.................................... 36
Hon. Judy Chu, Chair, Congressional Asian Pacific American
Caucus (CAPAC)............................................. 37
Prepared statement of.................................... 38
Hon. John Garamendi, a Representative in Congress from the
State of California........................................ 46
Prepared statement of.................................... 47
Hon. James E. Clyburn, a Representative in Congress from the
State of South Carolina.................................... 49
Prepared statement of.................................... 50
Hon. Henry C. ``Hank'' Johnson, Jr., a Representative in
Congress from the State of Georgia......................... 51
Prepared statement of.................................... 53
Hon. Charles F. Bass, a Representative in Congress from the
State of New Hampshire..................................... 54
Prepared statement of.................................... 55
Hon. Cynthia M. Lummis, a Representative in Congress from the
State of Wyoming........................................... 57
Prepared statement of.................................... 59
Hon. Peter Welch, a Representative in Congress from the State
of Vermont................................................. 60
Prepared statement of.................................... 62
Hon. William R. Keating, a Representative in Congress from
the State of Massachusetts................................. 63
Prepared statement of.................................... 64
Hon. Pete Olson, a Representative in Congress from the State
of Texas................................................... 67
Prepared statement of.................................... 68
Hon. Jeff Duncan, a Representative in Congress from the State
of South Carolina.......................................... 70
Prepared statement of.................................... 71
Hon. David Loebsack, a Representative in Congress from the
State of Iowa.............................................. 72
Prepared statement of.................................... 74
Hon. Colleen W. Hanabusa, a Representative in Congress from
the State of Hawaii........................................ 75
Prepared statement of.................................... 76
Hon. Mazie K. Hirono, a Representative in Congress from the
State of Hawaii............................................ 79
Prepared statement of.................................... 81
Hon. Laura Richardson, a Representative in Congress from the
State of California........................................ 83
Prepared statement of.................................... 85
Hon. Gene Green, a Representative in Congress from the State
of Texas................................................... 91
Prepared statement of.................................... 92
Hon. Lynn C. Woolsey, a Representative in Congress from the
State of California........................................ 94
Prepared statement of.................................... 95
Hon. Janice D. Schakowsky, a Representative in Congress from
the State of Illinois...................................... 97
Prepared statement of.................................... 98
Charts................................................... 100
Hon. Richard B. Nugent, a Representative in Congress from the
State of Florida........................................... 100
Prepared statement of.................................... 102
Hon. Xavier Becerra, a Representative in Congress from the
State of California........................................ 103
Prepared statement of.................................... 107
Hon. Cedric L. Richmond, a Representative in Congress from
the State of Louisiana..................................... 108
Prepared statement of.................................... 110
Hon. Ed Whitfield, a Representative in Congress from the
State of Kentucky.......................................... 114
Prepared statement of.................................... 115
Hon. Theodore E. Deutch, a Representative in Congress from
the State of Florida....................................... 117
Prepared statement of.................................... 118
Hon. Donna M. Christensen, a Delegate in Congress from the
U.S. Virgin Islands........................................ 120
Prepared statement of.................................... 122
Hon. Sandy Adams,, a Representative in Congress from the
State of Florida, prepared statement of.................... 123
Hon. Judy Biggert, a Representative in Congress from the
State of Illinois, prepared statement of................... 124
Hon. Michael C. Burgess, M.D., a Representative in Congress
from the State of Texas, prepared statement of............. 125
Hon. Emanuel Cleaver, a Representative in Congress from the
State of Missouri; Chairman, Congressional Black Caucus,
prepared statement of...................................... 125
Hon. Eni F.H. Faleomavaega, a Delegate in Congress from the
Territory of American Samoa, prepared statement of......... 142
Hon. Rick Larsen, a Representative in Congress from the State
of Washington, prepared statement of....................... 144
Hon. Barbara Lee, a Representative in Congress from the State
of Texas, prepared statement of............................ 145
Hon. Ben Ray Lujan, a Representative in Congress from the
State of New Mexico, prepared statement of................. 147
Hon. Steven M. Palazzo, a Representative in Congress from the
State of Mississippi, prepared statement of................ 149
Hon. Donald M. Payne, a Representative in Congress from the
State of New Jersey, prepared statement of................. 150
Hon. Stevan Pearce, a Representative in Congress from the
State of New Mexico, prepared statement of................. 152
Hon. Mike Quigley, a Representative in Congress from the
State of Illinois, prepared statement of................... 153
Hon. Betty Sutton,, a Representative in Congress from the
State of Ohio, prepared statement of....................... 154
Hon. Niki Tsongas, a Representative in Congress from the
State of Massachusetts, prepared statement of.............. 156
Hon. Timothy J. Walz, a Representative in Congress from the
State of Minnesota, prepared statement of.................. 156
Hon. Frederica S. Wilson, a Representative in Congress from
the State of Florida, prepared statement of................ 158
MEMBERS' DAY
----------
WEDNESDAY, MARCH 30, 2011
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m., in room
210, Cannon House Office Building, Hon. Diane Black presiding.
Present: Representatives Garrett, McClintock, Stutzman,
Black, Ribble, Mulvaney, Huelskamp, Amash, Rokita, Guinta,
Woodall, Van Hollen, Schwartz, Yarmuth, Castor, Tonko, and
Bass.
Mrs. Black. This hearing will come to order. Good morning
and welcome to the Budget Committee's annual Members' Day
hearing.
This hearing, which is directed by Section 301(e)(1) of the
Congressional Budget Act, is intended to provide a forum in
which Members can relay their priorities for their districts,
for their States, and indeed for our country. We are pleased to
have a diverse group of Members from both sides of the aisle.
And we look forward to receiving their testimony.
Before we begin, I would like to turn it over to my
colleague, the ranking member, Mr. Van Hollen, for comments he
has.
Mr. Van Hollen. Thank you very much, Congresswoman Black,
and I just want to join you and others on both sides of the
aisle in welcoming our Members and their testimony today.
We look forward to hearing your thoughts on issues as they
relate both to your Congressional districts as well as the
whole Nation.
So I thank you for coming together at this hearing and,
without further ado, turn it back over to you.
Mrs. Black. Thank you, Mr. Van Hollen.
Just as a reminder, Members will have 5 minutes to give
their oral testimony. And their written statements will be
submitted for the record.
Additionally, members of the committee will be permitted to
question the witnesses following their statements. But out of
consideration for our colleagues' time and to expedite today's
proceedings, I ask that you please keep your comments brief.
I now will call on our first witness.
Mr. Austin Scott from Georgia, you are recognized.
STATEMENT OF THE HON. AUSTIN SCOTT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Austin Scott of Georgia. Thank you, Chairman Black--
that has a nice ring to it I might add--Ranking Member Van
Hollen, distinguished members of the committee. Thank you for
the opportunity to share my thoughts on the fiscal year 2012
budget.
As president of the 87-strong Republican freshman class,
President Obama's fiscal year 2012 budget reminded of the
wisdom of the late cowboy and comedian Will Rogers. He once
quipped, ``Government programs have a beginning, a middle, and
no end.'' I usually would find that funny, except for the fact
that it is frighteningly true. Our debt is a threat to our
national security.
Senator Obama recognized this. Senator Obama recognized
this. On October 1 of 2008, and I will quote then-Senator
Obama, we cannot mortgage our children's future on a mountain
debt. It is time to put an end to the runaway spending and the
record deficits. It is not how you would run your family
budget, and it must not be how Washington handles your tax
dollars.
Yet on February 14 of 2011, the President submitted his
budget request to Congress, which proposed $1.6 trillion in
deficit spending. As the father of an 11-year-old son, I
couldn't agree more with what Senator Obama said when he talked
about the threat of our national debt to our security.
We need to be a Congress that supports personal freedoms,
individual liberties, and economic opportunities for all
Americans. My freshman classmates and I are outraged that
wasteful, duplicative, and ineffective government spending is
so out of control.
My constituents in the Eighth District of Georgia, like
many of yours, would be outraged to know that their scarce tax
dollars are used to fund examples like the National Science
Foundation provided more than $200,000 to study why political
candidates make vague statements. The Department of Veterans
Affairs spends $175 million every year to maintain hundreds of
buildings it does not use, including a pink octagonal monkey
house in Dayton, Ohio. Medicare paid out over $35 million to a
vast network of 118 phantom medical clinics allegedly
established by members of a criminal gang to submit phony
reimbursement claims. The Internal Revenue Service paid out
$112 million in undeserved tax refunds to prisoners who filed
fraudulent returns, according to the Treasury Department's
Inspector General for Tax Administration. The National
Institute of Health spent nearly $442 million to study the
number of male prostitutes in Vietnam and their social
settings. A $700,000 Federal grant paid for researchers to
examine greenhouse gas emissions from organic dairies, which
are caused by cow burps among other things.
These are just some of the many examples that can be found
in Senator Tom Coburn's 2010 Waste Book, which was released
December 20, 2010. As you can guess, there are countless more.
They illustrate very well the mind set that guides spending in
Washington with the bureaucracy that has been created here. To
quote Ronald Reagan, I would venture as far as to say that our
government spends money like drunken sailors, but that would
insult the sailors because at least they spend their own money.
It was exactly this mind set that the other 86 Republican
freshmen and I were sent here to reverse. My freshman
colleagues and I were sent here to turn Washington's culture of
spending on its head. We have started down the right road by
proposing to cut $100 billion in the continuing resolution. Now
we have to continue with a responsible budget that puts us on
the road to fiscal responsibility.
I appreciate this committee's recognition of this problem
and willingness to have a serious consideration about it.
Please do your due diligence to get our runaway spending out of
control. Thank you for the opportunity to testify before this
distinguished committee today. I look a forward to working with
you to address the issues.
[The prepared statement of Austin Scott follows:]
Prepared Statement of Hon. Austin Scott, a Representative in Congress
From the State of Georgia
Chairman Ryan, Ranking Member Van Hollen, distinguished members of
the committee, thank you for the opportunity to share my thoughts on
the Fiscal Year 2012 budget.
As president of the 87-strong Republican Freshman Class, President
Obama's Fiscal Year 2012 budget reminded of the wisdom from the late
cowboy and comedian Will Rogers who once quipped that, ``Government
programs have a beginning, middle, and no end.''
I would usually find that funny except for the fact that it is
frighteningly true. Our debt is a threat to our national security.
Yet, on February 14, 2011 the President submitted his budget
request to Congress which proposed $1.6 Trillion in deficit spending.
This is despite the fact that then Senator Obama said on October 1,
2008:
``We cannot mortgage our children's future on a mountain of debt.
It's time to put an end to the runaway spending and the record
deficits--it's not how you would run your family budget, and it must
not be how Washington handles your tax dollars.''
As the father of a 11 year old son, I couldn't agree more. We need
to be a Congress that supports personal freedom, individual liberties,
and economic opportunities.
My freshman classmates and I are outraged that wasteful,
duplicative, and ineffective government spending is so out of control.
My constituents in the 8th District of Georgia, like many of yours,
would be outraged to know that their scarce taxpayer dollars are used
to fund examples like:
The National Science Foundation provided more than to
$200,000 to study why political candidates make vague statements.
The Department of Veterans Affairs (VA) spends $175
million every year to maintain hundreds of buildings it does not use,
including a pink, octagonal monkey house in Dayton, Ohio.
Medicare paid out over $35 million to a vast network of
118 ``phantom'' medical clinics, allegedly established by members of a
criminal gang to submit phony reimbursement claims.
The Internal Revenue Service paid out $112 million in
undeserved tax refunds to prisoners who filed fraudulent returns,
according to the Treasury Department's Inspector General for Tax
Administration (TIGTA).
The National Institutes of Health (NIH) spent nearly
$442,340 million to study the number of male prostitutes in Vietnam and
their social setting.
A $700,000 federal grant paid for researchers to examine
``greenhouse gas emission from organic dairies, which are cause by cow
burps, among other things.''
These are just some of the many examples that can be found in Sen.
Tom Coburn's 2010 Wastebook which was released on December 20, 2010. As
you can guess, there are countless more.
They illustrate very well the mindset that guides spending in
Washington. To quote Ronald Reagan, I would venture as far to say that
our government spends money like drunken sailors, but that would insult
the sailors because at least they spend their own money.
It was exactly this mindset that the other 86 Republican freshmen
and I were sent here to reverse. My freshman colleagues and I were sent
to here to turn Washington's culture of spending on its head.
We've started down the right road by cutting $100 billion in the
CR, now we have to continue with a responsible budget that puts on the
road to fiscal responsibility.
I appreciate this committee's recognition of this problem and
willingness to have a serious consideration about it. Please do your
due diligence to get our runaway spending out of control.
Thank you for the opportunity to testify before your Committee
today.
Mrs. Black. Thank you, Mr. Scott.
Do any of the Members have questions for the witness?
Mr. Woodall, you are recognized.
Mr. Woodall. Madam Chair, I would just be remiss if I
didn't welcome my friend from Georgia and my president of my
class.
Tell me this, Mr. Scott, when you were back home over those
last 10 days, did you feel some coalescing around the kind of
what I would call more aggressive budget cutting and balancing
that you are trying to bring out in the freshman class?
Mr. Austin Scott of Georgia. Absolutely. And Mr. Woodall,
what I will tell you is that the amount of fear, absolute fear
that I think the United States citizen has right now, whether
it is the business owner who is worried about renewing their
note to keep their operations going or the person who works at
that business who may be changing the oil at the car
dealership, every American out there has had to adjust their
budget down to deal with the realities of this economy. And
they expect us to do the same thing. And they are very scared
that they don't see the courage or the political will to turn
this country and get it back on the right track.
And you know, we are out there trying to reassure them that
that political will is there and that we are going to get this
turned around and back on the right track.
Mr. Woodall. Where is the courage? That is a good message I
may quote you on.
Madam Chair, thank you.
Mrs. Black. Mr. Rokita, you are recognized.
Mr. Rokita. Thank you, Madam Chairman.
Thank you, Mr. Scott.
I appreciate your leadership as well. I have been reviewing
your testimony here. And I completely agree with your testimony
that there is this waste in the Federal Government. And I
appreciate the examples that you have given. I appreciate the
examples the Senator has given in his publication.
What this committee has been studying, however, is the fact
that--and it is a fact, and it is a bipartisan fact--that the
drivers of our debt really are the three major social
entitlement programs.
Mr. Austin Scott of Georgia. Yes, sir.
Mr. Rokita. Social Security, Medicare, Medicaid. Your
testimony, unless I am missing something, doesn't seem to
address that in much detail.
So to follow up on Mr. Woodall's question, what kind of
feedback are you getting in your district from your
constituents or from what you hear from other freshmen about
the appetite for addressing the drivers of our debt, those
three programs? Do your constituents have the courage and the
political will to take less largesse now so that our kids don't
have a bankrupt country?
Mr. Austin Scott of Georgia. Yes, sir. I think absolutely
that Americans understand that we must address this problem--
these problems I should say--now.
I think that they understand the fiscal realities,
especially when you put graphs up that show the growth of the
national debt. I think that what confuses them, if you will, is
the doublespeak of some elected officials, for example, when we
have someone who says that we cannot mortgage our children's
future and then they present a budget that has a $1.6 trillion
deficit in it. That is where the disconnect is between
Washington and back home.
I think what they want is absolute transparency with where
we are. They want a plan for where we are going. They
understand that we are all going to have to give some now so
that our children and our grandchildren can again have the
benefit of being an American.
Mr. Rokita. And one quick follow up, if I could. You
mentioned the deficit. In this budget that we are working on,
do you have an idea what level of deficit in the proposed
budget your constituents are willing to live with?
Mr. Austin Scott of Georgia. No, sir, I don't. I think,
again, that what they expect us to do is to take steps in the
right direction. And I think that if we are totally transparent
with them and we start making those steps in the right
direction, that we will start to get the economy back on track.
And as you know, if we can start getting that economic growth,
if we can get 4 percent economic growth, which is something
that quite honestly I don't think--and I hold myself
accountable for this, too--I don't think any of us talk about
how do we get to 4 percent economic growth again. I personally
think you get there by more access to capital markets and
reducing the regulatory burden on small businesses. But if we
can get that 4 percent economic growth, then the dynamics of
the problems that we have shift.
Mrs. Black. Thank you, Mr. Scott.
We appreciate your testimony.
Mr. Austin Scott of Georgia. Thank you, Madam Chairman.
Mrs. Black. I am sorry, excuse me.
Mr. Yarmuth, you are recognized.
Mr. Yarmuth. Thank you, Madam Chair.
When I was home over the last weekend, most of my
constituents were asking me why, in the Republicans' budget, or
continuing resolution, H.R. 1, that we did not share the
sacrifice equally among society; that the people who seemed to
be hit hardest by the proposed cuts in that budget were the
most vulnerable population.
So, Mr. Scott, you mentioned a few things that you
considered wasteful spending, so I am just going to ask you a
couple. Do you consider nutrition assistance for low-income
women and their children wasteful spending?
Mr. Austin Scott of Georgia. It depends. I will tell you
this. I think that the administration of those programs should
be handled at the State level. And right now, the biggest
problem that I have with what we have, whether you are talking
about the WIC program or whether it is the SNAP program, is
Washington trying to administer those programs and absolutely
prohibiting the States from getting involved in getting rid of
the fraud and the waste in some of those programs.
Mr. Yarmuth. I think we can all agree on that. But just in
general principles, do you consider spending on those types of
programs wasteful, or spending on Pell Grants, or spending on
heating assistance for low income citizens?
And do you consider wasteful spending the $4 billion in tax
expenditures that we give to oil companies every year?
Mr. Austin Scott of Georgia. I am certainly willing to put
all of those issues on the table and take a look at all of
them.
Mr. Yarmuth. Great. Thanks for your testimony.
Mr. Austin Scott of Georgia. Thank you.
Mrs. Black. Any further questions? Thank you. Thank you,
Mr. Scott.
Mr. Austin Scott of Georgia. Thank you.
Mrs. Black. I would now like to recognize Mr. Brady from
Texas.
STATEMENT OF THE HON. KEVIN BRADY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS
Mr. Brady of Texas. Thank you, Chairman Black, Ranking
Member Van Hollen, each of the members of the Budget Committee,
thanks for allowing me to testify today.
The Joint Economic Committee is charged with reviewing the
economic report of the President and providing an analysis and
recommendations to you as the Budget Committee.
I am disappointed that neither President Obama's budget nor
the economic report really exhibited any urgency toward
addressing our financial challenges in America. In fact, it
seemed to me the report laid out government spending as the
path to economic growth in this country. They were wrong the
past 2 years and have failed, and it is time for a new
approach.
Several months ago, I asked the Republican staff of the
Joint Economic Committee to study published economic reports
over the last 40 years looking at America's international
competitors who got themselves in trouble with too much debt,
what they did to get out of it, and what it did to their
economy. On March 15, the results were published in ``Spend
Less, Owe Less, Grow the Economy.''
[The information follows:]
Mr. Brady of Texas. And I would ask, Madam Chairman, this
document be entered into the record.
Before I summarize its findings, let me show you two
charts. On the first chart--let's go to another one--that one.
The last 40 years in America, we plotted Federal growth,
which is the--the next chart, does that stick with this one? We
charted job growth over the last 40 years compared to private
fixed nonresidential investment; all that really means,
businesses large and small who buy new equipment, new software,
new buildings. The correlation between growth in the private
sector, private investment is nearly identical. In fact, what
this chart shows is that there is no substitute for private
investment to spur the economy. Not rebates, not stimulus, not
even shovel-ready projects.
And I will make the point further in the next chart. Over
the last 40 years, we tracked the size of spending--let's go
back one more--we tracked the size of spending in the Federal
Government along with job growth along Main Street. The blue
line represents Washington spending; the red line is jobs along
Main Street. As you can tell, over the past 40 years, there is
no correlation between the two. In fact, there is a negative
one. As the government grows, jobs along Main Street shrink.
Just the opposite as well.
This shows, in fact, that if you continue to spend more as
the Federal Government, our market will continue to shrink. And
again, there is no substitute for private investment. The
``Spend Less, Owe Less, Grow the Economy,'' it is a report that
provides clear and convincing evidence that countries that
reduced their government budget deficits, and they do it
through spending cuts, can boost their economy and job creation
in the short term. Respected economists found 21 instances
between 1970 and 2007 where 10 of America's international
competitors successfully reduced their government debt-to-GDP
ratio by 4.5 percent points or more, and they did it, not by
raising taxes, but entirely on spending cuts.
For example, here we go, Canada, neighboring Canada had a
very small, less than 1 percent, economic growth as their
government spending grew. They shrunk their spending by nearly
13 percentage points of their GDP between 1994 and 2006. As you
can tell, they boosted their economic growth from less than 1
percent to 3.5 percent over the next 12 years.
Sweden, another example of a developed economy like ours,
it was actually shrinking in the 1990s, their economy. And
after reducing its government spending by over 11 percentage
points of GDP, Sweden's negative growth revived to an average
of 3.4 percent annually.
New Zealand, another example, lower spending, higher
growth. Their spending increased, growth slowed. They got their
financial house in order, and growth was restored.
So you may say, well, these three countries aren't the
United States. But these countries aren't alone. Economists
found 26 episodes in 9 developed economies where reducing
government budget deficits and debt through spending cuts
provided a large boost to economic growth in the first 3 years
after their fiscal consolidation began.
Perhaps the most important finding is this in this report:
While most economists agree that reducing Federal spending
increases economic growth in the long term, what this report
shows is reducing Federal spending boosts economic growth and
job creation in the short term as well. Here is why: What the
report showed was economic growth occurred for two reasons.
Businesses no longer expecting the government to levy higher
taxes on them to pay for excessive spending, they stepped up
private investment, buying new buildings, new equipment, new
software. And business investment, as we have shown, equals
jobs. Secondly, households, no longer facing higher taxes, have
higher expectations. And the combination led to purchase more
homes and cars.
If I am out of time, Madam Chairman, we will summarize the
rest and are available for questions.
[The prepared statement of Kevin Brady follows:]
Prepared Statement of Hon. Kevin Brady, a Representative in Congress
From the State of Texas
Chairman Ryan and Ranking Minority Member Van Hollen, I thank you
for inviting me to testify before the Budget Committee today.
The Joint Economic Committee is charged with reviewing The Economic
Report of the President and providing its views, analyses, and
recommendations regarding the goals set forth in The Report to the
Budget Committees. I must express my disappointment that neither
President Obama's Budget nor his Economic Report exhibited any urgency
in addressing the serious fiscal challenges facing our nation. Instead,
The Report makes clear that President Obama believes that the federal
government, not the free enterprise system, will lead the way in
creating jobs. Moreover, President Obama warns that reducing federal
spending at this time will pose a threat to the current economic
recovery.
Several months ago, I asked the Republican staff of the Joint
Economic Committee to survey the published economic literature on
fiscal consolidations--programs designed to reduce government budget
deficits and government debt as a percentage of GDP--and to study the
results of such programs in other developed countries--our
international competitors--over the last four decades. On March 15,
2011, the results were published in ``Spend Less, Owe Less, Grow the
Economy.'' I ask that this document be entered into the record. Before
I summarize its findings, let me show you two charts.
As the first chart proves, private business investment, not the
government, is the engine of job creation in America. Since 1971, jobs
in the private sector increased when companies bought new buildings,
equipment, and software.
In contrast, the second chart shows little correlation between
federal spending and private sector job growth over the past forty
years. Just the opposite--as federal spending grew jobs along Main
Street actually shrank.
There is no substitute for private business investment in job
creation--not federal spending, not tax rebates, and not even ``shovel-
ready'' projects.
``Spend Less, Owe Less, Grow the Economy'' provides clear and
convincing evidence that countries that reduce their government budget
deficits and debt through spending cuts boost economic growth and job
creation.
Respected economists found 21 instances between 1970 and 2007 where
ten of America's international competitors successfully reduced their
government debt-to-GDP ratio by 4.5 percentage points or more based
predominantly or entirely on spending cuts.
For example, neighboring Canada shrank total government spending by
12.8 percentage points of GDP between 1994 and 2006 and boosted its
annual economic growth from under one percent to a robust 3.4% average
over the next twelve years. Sweden's economy was shrinking in the early
1990's. After reducing its government spending by 11.4 percentage
points of GDP from 1994 to 2000, Sweden's negative growth economy
revived--to an average 3.4% annually. New Zealand did the same.
These countries are not alone. Economists found 26 episodes in nine
developed economies where reducing government budget deficits and debt
through spending cuts provided a large boost to economic growth in the
first three years after their fiscal consolidation began.
Perhaps the most important finding is this: While most economists
agree that reducing federal spending increases economic growth in the
long term, reducing federal spending boosts economic growth and job
creation in the short term as well.
According to the studies of fiscal consolidation surveyed, economic
growth occurs for two reasons:
(1) Businesses no longer expect the government to levy large tax
increases in the future to pay for excessive spending--so businesses
step up their investment in buildings, equipment, and software. And
business investment, as we've shown, equals jobs. When businesses
invest more, the unemployment rate goes down.
(2) No longer facing higher taxes, households have higher
expectations for permanent disposable income and become more confident.
This combination leads them to purchase more homes and cars.
Another important finding is that the absence of tax increases
proved more important for realizing these growth effects than for
achieving budget deficit reduction.
To maximize short-term growth and job creation, the report found
that spending reductions must be ``large, credible and difficult to
reverse once made.'' The savings that produced the greatest economic
growth results include: rightsizing the government workforce and its
compensation; eliminating duplicative agencies and programs;
eliminating subsidies to businesses; and reforming and reducing
transfer payments to individuals.
In the area of entitlements, the study found evidence of strong
economic growth effects from reforming government pension and health
care to make them ``sustainable and solvent'' even when the reforms are
phased in slowly and exempt current beneficiaries from change.
As this study shows, ample real-life data prove there are
significant economic growth and job creation benefits that accrue from
reducing spending and reforming entitlement programs to restore their
sustainability for future generations.
In closing, I'd like to add an observation about the United States.
Many Representatives and Senators point to the late 1990s as a period
of rapid private sector job growth. What is often left out of the
discussion is that the size of the federal government relative to the
economy shrank during the period. From fiscal year 1992 to fiscal year
2001, federal outlays declined by just under 4% of GDP from 22.1% to
18.2%.
So far, President Obama has emphasized the risk of reducing
America's deficits and debt now. But he ignores the risk of delay.
For America's economic future, it's time for a proven path forward.
To grow our economy, it's time for Washington to spend less and owe
less as a nation.
I look forward to answering your questions.
Mrs. Black. Thank you.
Are there any questions?
Mr. Van Hollen?
Mr. Van Hollen. Thank you, Madam Chairman.
Look, I want to thank my friend, Congressman Brady.
Mr. Brady of Texas. Yes, how are you.
Mr. Van Hollen. Good to see you.
Thank you for your testimony. And I have had an opportunity
to look at the Republican staff report, the Republican report
from the Joint Economic Committee. And you have presented the
findings well here. And I don't want to get into debate now.
The only comment I would make is I think you know very well
that many economists, and including those who advised the
bipartisan fiscal commission that made its recommendations to
this Congress that have gotten a lot of discussion, as well as
the Rivlin-Domenici Commission, both said two things: Number
one, yes, we have to reduce our deficits and debt, no doubt
about it in terms of our long term economic growth. But in the
short term, both those bipartisan commissions also said if you
cut too fast too deeply, you will slow down a very fragile
recovery and threaten to put people out of work.
And you know, the chairman of the Federal Reserve, Ben
Bernanke, came up with a low estimate the other day in
testimony before this House, which was 200,000 jobs would be
lost, which he noted is not a trivial number, especially since
we just celebrated last month a good jobs report that was a
little less than 200,000. So I understand, and I know you do,
too, that there are lots of ways to look at these things. But I
think it is important to put those facts on the table because
those are the opinions of a bipartisan group, not just sort of
one side of the House. Thank you.
Mr. Brady of Texas. If I may, a couple points. Thank you
for raising that point. But many of those economists have been
wrong. We actually, after going on almost a trillion dollar
spending spree, we have 2.2 million fewer jobs than when the
stimulus began. Mark Zandi, one of the leading economists who
say we will lose jobs if we make some spending cuts, he
promised 4 million new jobs by the end of 2010. We actually had
3 million fewer. He was 7 million jobs off. And today we were
promised if we went on a spending spree of the stimulus that
our unemployment rate would be 6.9 percent. It is time to stop
listening to the economists who got it wrong and start looking
at a proven approach to it.
Now, I will always put in perspective the spending
reductions of this Republican House, $61 billion, represent
four one-thousandths of the U.S. economy. To put it in another
perspective, if the economy were the length of a football
field, the Republican spending reductions are about the length
of your shoes. The impact on our economy from those economists,
I believe, is wildly exaggerated. Yet the risk of not acting on
our financial crisis and bringing the $2 trillion of business
investment that is standing on the sidelines today to me the
risk to our economy is to not move with some solid financial
rules.
Mrs. Black. Are there other questions for Mr. Brady?
Mr. Van Hollen. If I may just follow up before my time
expires. Again, this is not the place for an extended debate,
and I am not going to engage you in that debate. I will say
that as you know, what we are talking about in the budget cuts
is about 12 percent of the budget. And we are also talking
about cuts within a very short period of time. So that
amplifies the impact, which is why those economists have made
the statements they have. But I have no further----
Mr. Brady of Texas. May I just point out, in the economic
report it showed the countries, our competitors with developed
economies who had the greatest success, their spending cuts
were large, credible, and difficult to reverse. So they sent
the signal to the market that they could have confidence in
reinvesting in business investment again. So I think the
Republican model we are taking forward is proven.
Mr. Van Hollen. All right. Thank you, Madam Chair.
Mrs. Black. Other questions for the witness?
Mr. Brady of Texas. By the way, thank you all for your
service on the committee. You have a big challenge, and I
appreciate it very much.
Mrs. Black. Thank you, Mr. Brady. I would like to now
recognize Mr. Butterfield from North Carolina.
STATEMENT OF THE HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Butterfield. Let me thank you, Chairman Black and
Ranking Member Van Hollen.
And to my colleagues who serve on this committee, thank you
very much for allowing me to come by and spend this time with
you this morning.
I realize that I am not a part of this committee, and so I
am not permitted to engage in debate. But I just want to
briefly respond to my colleague from Texas who just spoke. You
talk to the elected officials in my district, both Democrat and
Republican, and they will tell you that we have not been on a
spending spree with the stimulus infusion of capital into rural
America. It has really been a godsend for the communities that
I represent.
I represent, Madam Chairman, a low-income, rural district
in northeastern North Carolina. And so as we develop the 2012
budget, I want to basically talk about four areas of importance
to the people that I represent. My district is the fourth
poorest district in the Nation. If you would take all 435
districts that we represent, I would be number four from the
bottom. So I want to talk with you about LIHEAP, community
development, hunger, and what I call persistent poverty.
The Low Income Home Energy Assistance Program is a
lifeline, it is a lifeline for low-income families and a
lifeline for the elderly all across the Nation. Well over half
of the allocated funds for this program go directly to home
heating assistance. In fiscal year 2010, 309,000 households in
my State benefited from LIHEAP. With the crude oil price
already reaching $104 a barrel and the very real threat of even
higher prices, many families in my State and across the country
could be pushed beyond the breaking point. Recognizing the slow
recovery and the rising cost of fuel, I urge this committee to
support level funding for LIHEAP.
I also urge strong support for the Community Development
Block Grant program. I represent 88 cities and towns in my
district. And my mayors, both Democrat and Republican mayors,
have made it clear to me that cuts to this program would have a
significant impact on their communities and communities across
the country, especially small rural communities.
As any State, county, or municipal official will tell you,
the CDBG program continues to be a highly flexible and
successful means of helping communities address a wide range of
issues. It is the largest source of Federal financial
assistance for State and local neighborhood revitalization,
housing rehabilitation and economic development activities.
This program provides funding that is often matched with local
dollars to help create local private sector jobs and address
the needs of the communities.
CDBG funds have helped local governments in revitalizing
neighborhoods to create safe, nurturing communities for
families. And we should continue, Madam Chairman, to strongly
support the program with nothing less than level funding.
Let me also talk about hunger. We don't talk about this too
often. A recently released national study on hunger found that
my district, the First District of North Carolina, suffered the
second highest food hardship rate in the country. The Food
Research and Action Center study found that nearly one in five
American households struggled to afford enough food last year
and that nearly one in three faced food hardship in my
district.
We all know that hunger exists in America. We all know
that. It is a fact of life in every congressional district.
Knowing that we all represent people struggling against hunger,
I am deeply concerned about cuts to our Federal nutrition
safety net. Specifically, I urge the committee to strongly
support the Special Supplemental Nutrition Program for Women,
Infants and Children, known as WIC, and the FEMA Emergency Food
and Shelter Program, and the Commodities Supplemental Food
Program.
Finally, let me mention rates of persistent poverty in
counties and Census tracts in your State and mine. You are
going to hear us talk about this more and more and more. We
have got to talk about persistent poverty in our country. We
talk about the middle class, and rightfully so, but persistent
poverty must become a part of the conversation. Across the
country, there are hundreds of communities where 20 percent or
more of the population has been living below the poverty line
for the last 30 years. Repeat that: 20 percent or more of the
population in communities all across the Nation have lived
below the poverty level for 30 years.
These communities are located in Democratic districts and
Republican districts alike. These communities lack access to
quality schools, affordable quality health care, adequate job
opportunities. And so in drafting the budget that seeks to
improve the life of every American, I urge you to include
provisions that direct at least 10 percent of agency funds go
to these communities. Did I hear you tapping?
Mrs. Black. You did.
Mr. Butterfield. All right. I just wanted to make sure I
was hearing that.
Mrs. Black. Sure. I probably did a very gentle tap.
Mr. Butterfield. I think I have one paragraph left. Can I
finish that?
Mrs. Black. You may finish.
Mr. Butterfield. Yes. As a Nation, we can only be as strong
as our weakest link. We need to make sure that every community,
every community is included as we work toward economic
recovery. And I thank you so very much.
[The prepared statement of G.K. Butterfield follows:]
Prepared Statement of Hon. G. K. Butterfield, a Representative in
Congress From the State of North Carolina
I represent a largely poor and rural district in northeastern North
Carolina. As we develop a budget for the coming fiscal year, I want to
talk about four areas of particular importance to the people I
represent: LIHEAP, community development, hunger and persistent
poverty.
As we all know, the Low Income Home Energy Assistance Program is
truly a lifeline for low-income families and the elderly across the
nation. Well over half of the allocated funds for this program go
directly to home heating assistance.
In fiscal year 2010, an estimated 309,161 households in North
Carolina benefited from LIHEAP. With the crude oil price already
reaching $104 a barrel and the very real threat of even higher prices,
many families in North Carolina and across the country could be pushed
beyond the breaking point.
Given how slowly the economy is recovering and the rising costs of
fuel, I urge the committee to support level funding for LIHEAP.
I also want to urge strong support for the Community Development
Block Grant program.
I represent 88 cities and towns, and they have made it clear that
cuts to this program would have a have a significant impact on
communities across the country--especially on small, rural communities.
As any state, county or municipal official will tell you, the CDGB
program continues to be a highly flexible and successful means of
helping communities address a wide range of issues. It is the largest
source of federal financial assistance for state and local neighborhood
revitalization, housing rehabilitation and economic development
activities.
This essential program provides funding that is often matched with
local dollars to help create local, private-sector jobs and address the
needs of the community. CDBG funds have helped local governments in
revitalizing neighborhoods to create safe, nurturing communities for
families, and we should continue to strongly support the program with
nothing less than level funding.
I also need to talk with you about hunger. A recently released
national study on hunger found that my district suffered the second
highest food hardship rate.
The Food Research and Action Center study found that nearly one in
five American households struggled to afford enough food in 2010, and
that nearly one in three faced food hardship in my district.
We all know that hunger exists in America--it's a fact of life in
every congressional district. Knowing that we all represent people
struggling against hunger, I am deeply concerned about cuts to our
federal nutrition safety net.
Specifically, I want to urge the committee to strongly support the
Special Supplemental Nutrition Program for Women, Infants, and
Children, known as the WIC program; the FEMA Emergency Food and Shelter
Program; and, the Commodity Supplemental Food Program.
Finally I want to talk with you about persistent poverty. Across
the country, there are 474 counties where 20 percent or more of the
population has been living below the poverty line for the last 30
years.
These communities lack access to quality schools, affordable
quality health care and adequate job opportunities. In drafting a
budget that seeks to improve the lives of every American, I urge you to
include provisions that direct at least 10 percent of federal agency
investments to communities where 20 percent or more of the population
have lived below the poverty line for the last 30 years.
As a nation, we can only be as strong as our weakest link. We need
to make sure every community is included as we work toward economic
recovery.
Mrs. Black. You are very welcome.
And I do want to say you began by saying you are not part
of this committee. But that is the purpose of this, so that all
Members will have an opportunity to address this committee. So
thank you for your remarks.
Are there questions for the witness? Questions?
Thank you again.
I am told that we are waiting for more Members to show up,
so we are going to take a brief recess until 10:45 so everyone
will have an opportunity to rest a little bit.
[Recess.]
Mrs. Black. We are ready for your testimony.
So, Mr. Clarke, you will have 5 minutes.
STATEMENT OF THE HON. HANSEN CLARKE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Clarke of Michigan. Thank you very much, Madam Chair,
for giving me this opportunity to share with you the
priorities, not only for the district that I represent, but
also for this country.
I am the Representative of the 13th Congressional District
in Michigan. It includes the City of Detroit, the eastern
suburbs of all of the Grosse Pointes, Harper Woods, and the
great downriver communities of Lincoln Park, Wyandotte, River
Rouge, and Ecourse.
All of this is connected by the Detroit River, which is the
busiest international border crossing in North America. It is
also one of the largest metropolitan urban centers in the
country. It has a large hub international airport, as well as a
large regional water system.
All of this puts us at great risk to attack from terrorists
or any other catastrophe. I am a member of the Homeland
Security Committee, which I just left, so I understand the risk
that is posed to this region.
Regardless of the source of the emergency, it will be our
local police, fire, and emergency medical responders that will
need to address that situation. But because of State and local
revenue losses, these first responders really don't have the
resources to be fully equipped or even secure themselves. That
is why I urge this committee to support fully funding
firefighter grants, the Community-Oriented Policing grants, and
other funding to better protect urban areas from these types of
emergencies.
Also, my region is known to be the motor capital of the
world. Now, a lot of the jobs have been sent overseas, other
parts of the country. But we still have the foundation of
America's manufacturing engine in our area. We have experienced
tough economic times in Metro Detroit. But you know, decades
ago, this entire country was suffering economically during the
Great Depression. And at that time, folks in my district
transformed themselves from the Motor City to the arsenal of
democracy and helped save this country and helped save this
world from the threat of fascism.
Again, I believe that Metro Detroit can provide economic
security for our families and also prosperity for the U.S.
economy by now promoting and selling the best manufactured
products in the United States that can be exported worldwide.
In order for us to have that type of manufacturing capacity, I
urge this committee to make sure that we continue our research
and development funding, especially in manufacturing and
advanced vehicle research.
We have great universities, like Wayne State University,
that could partner with the Federal Government to create
businesses that hire a lot of people. The direct investment
that this government took in General Motors appears to be
paying off. GM has recently announced four consecutive quarters
of profitability.
I want to wrap it up, but just to say that in order to
really maintain and attract the investment that we need to
rebuild our manufacturing capacity, we have got to have a well
trained, well educated workforce. Funding for Title 1, which is
the foundation of our young people learning, is very important.
Pell Grants, other grants for low-income students to help give
them access to a higher education is critical, but also funding
in the Workforce Investment Act to keep our great Michigan
Works! job training offices open, to provide continued funding
to Job Corps, Youth Build, and TRIO, other programs that have
helped and motivate people, young people to be productive
citizens.
One point I would like to add, though, there are folks
that, regardless of how prosperous times are, always struggle.
They are single parents like the mother who raised me.
Sometimes they are going through very difficult financial
situations. The Low Income Home Energy Assistance Program,
known as LIHEAP, is very important for many families who are
struggling to make ends meet. I urge you to continue support.
I would also finally like to speak on behalf of citizens
who are not usually represented in the Congress. These are
mostly men that I have met in Detroit who get their meals out
of garbage dumpsters in the alleys of downtown Detroit, which
is outrageous. And what is even worse, not only do they not
have homes and they have lost hope, but in their past, they
have served this country honorably as members of the military.
So I urge you, maintain and strengthen support for funding for
our homeless veterans. Thank you very much.
[The prepared statement of Hansen Clarke follows:]
Prepared Statement of Hon. Hansen Clarke, a Representative in Congress
From the State of Michigan
Thank you, Mr. Chairman, for the opportunity to testify as the
Committee considers a Budget Resolution for Fiscal Year 2012. I thank
you for the opportunity to discuss the priorities that matter to the
13th District of Michigan and Metro Detroit.
These are difficult times for our nation, and I know that the
Committee must weigh the pressing national priorities as you work to
craft a budget that reflects our values, and promotes our security
today and for the long term: our national security, our economic
security, and the financial security of our families and our
communities.
We're going to have to come to some decisions on how we deal with
the debt right away, and that has been the primary focus of the debate
both here in Congress and in the media. However, I urge the Committee
to look more broadly about how to save money. Let's not make deep cuts
that are small in their impact on the deficit but hurt job training,
stop kids from going to college and prevent people from getting the
healthcare they need. We've got to look at the overall big picture, and
make strategic investments that improve our nation for the long term.
I am going to talk about Metro Detroit and the people I represent,
but I want to tell you that investing in Detroit means investing in the
country. Improving our community starts from the financial security of
individuals and families, but means that we are able to improve our
nation's economic security, attract investment, put our budget back on
track, and ultimately make our nation safer and more secure. Each of
these priorities and values is also about attracting investment, making
our communities better places to work and live, and rebuilding the
human capital that we need to excel.
That means that we need to continue critical investments that fight
poverty, improve healthcare, restore our communities, and create
opportunities--through education and job training--that help our people
get jobs. We need to continue investing in infrastructure and
supporting small businesses so that we can put more people back to
work. And we need to invest in the future, in science and technology,
research and development, that were the heart of the American success
story and enabled America, and Detroit in particular, to be ``the great
arsenal of democracy.''
I urge the committee to support funding that puts a priority on job
creation and provides an environment that enables individuals to get
good jobs.
We absolutely cannot shortchange our investments in education if we
want to get out of the deficit and grow our economy. I urge the
Committee to fully fund programs that expand access to education.
Initiatives like Pell Grants, Supplemental Educational Opportunity
Grants, and the TRIO program expand access to higher education, while
Title I and early education programs are essential to supporting the
foundation of learning. Funding for the Workforce Investment Act, and
critical initiatives such as Job Corps and Youth Build make a
difference for those most in need and make sure those who have been
dislocated or chronically unemployed can get jobs and make a life for
themselves and their communities. The Michigan Works! System is using
this funding to create opportunities for those most in need throughout
Michigan. We need to particularly serve those in our society who often
get overlooked but may have the most to contribute.
It may not be the first thing that comes to mind when you think
about job creation, but we are missing an opportunity to restore our
economy if we are allowing the tragedy of homelessness in general, and
homeless veterans in particular, to continue without a response. I urge
the Committee to fully fund homeless veterans programs, including those
at the Veterans Health Administration, the Veterans Benefit
Administration, and particularly employment programs through the
Department of Labor so that these citizens who have contributed to our
nation can continue to serve our country in the economy. Preserving
human capital also means preserving less obvious programs like
weatherization and the Low Income Home Energy Assistance Program
(LIHEAP), which makes sure that people can afford to heat their homes.
And unless a person is warm, has access to good nutrition, and is
secure, they are going to have trouble working or finding a job. I urge
the Committee to fully fund LIHEAP to address the needs of families at
risk.
We also need to support entrepreneurs and small business people who
want to make a better life for themselves and their communities and are
the true job-creators in our economy. That means investing in research
and development and supporting manufacturing for the future. A strong
domestic manufacturing base is essential to maintaining and creating
high-quality jobs that will expand the Nation's middle class and
improve our economy. I urge the Committee to fully fund programs such
as the Manufacturing Extension Partnership, the Advanced Technology
Vehicles Manufacturing Incentive Program, and the President's proposed
Advanced Manufacturing Technology Consortia (AMTech) Program. These
programs help manufacturers, including auto companies in Michigan,
invest in engineering, production, and factory renovation to lead the
world in advanced technologies. The Advanced Technology Vehicles
Manufacturing Incentive, in particular, have enabled Detroit's car
companies to take the lead in plug-in hybrids and restore our
automotive industry. Manufacturing means American jobs now and in the
future.
As a Member of the Science, Space, and Technology Committee, I
strongly urge you to give high priority to scientific research and
development and math and science education. Investing in science will
pay enormous dividends by leading to new medical breakthroughs, new
discoveries, and entire new industries. Innovation has been the
strength of America, and will continue to be so if we continue to
invest strategically.
Finally, as a Member of the Homeland Security Committee, I urge
this committee to support full funding for Assistance to Firefighter
Grants and Community-Oriented Policing Services. Our first responders
are on the front lines of homeland security, working hard every day to
keep our families and communities safe. In the current economy, they
need federal support more than ever to make sure they can continue
their work protecting our communities and preventing crime.
Mr. Chairman, I appreciate the difficulty that faces your Committee
in creating next year's budget. Our nation faces unprecedented fiscal
challenges, and we must put partisan differences aside to achieve
common-sense reforms that can bring us closer to balance. While we
cannot afford to continue in the same way we have in the past, we
cannot afford to eliminate strategic investments that further America's
growth. I look forward to working together to reduce our deficit while
promoting those priorities that make America strong. Thank you.
Mrs. Black. Thank you, Mr. Clarke.
Are there questions for Mr. Clarke?
Thank you for your testimony. It will be on the record.
Mr. Clarke of Michigan. I appreciate this opportunity.
Supporting Metro Detroit is the best way to support our
country.
Mrs. Black. Thank you.
I would now like to recognize Mr. Posey from Florida.
STATEMENT OF THE HON. BILL POSEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF FLORIDA
Mr. Posey. Thank you, Madam Chairman, and members for the
opportunity to appear before you this morning and urge you to
preserve NASA's core mission, which is human space flight.
More specifically, I would ask that as you proceed in
developing a budget resolution, that you include sufficient
funding and language directing NASA to make human space flight
its highest priority. Our Nation is critically near the tipping
point of ceding our leadership in space exploration for our
future generations, as many of you already know.
Direction from NASA administration has been seriously
lacking with respect to their goals. By failing to set
priorities within NASA's budget, the administration has left
NASA with no priorities. As a result, human space flight and
exploration are suffering, and the U.S. will be ceding its
leadership in space to China and Russia.
Should Congress fail to step in where the administration
has left a leadership void, we would be making an unacceptable
compromise in our national security and lose economic and
intangible benefits from our space program. The President
abandoned the Constellation program in his budget, calling for
it to be canceled with no solid alternative or plan for the
future. By doing so, he set our human space flight program
dangerously adrift with vague milestones for the world's
premiere space exploration organization.
Last year, Congress and the administration agreed on an
authorization bill that focused on developing goals after the
space shuttle's retirement. This included plans for a new heavy
lift capacity, while giving limited support to commercial
operations. Unfortunately, the President's proposed budget is a
substantial departure from the authorization bill that he
signed into law in October, cutting $2 billion from the heavy
lift program, while increasing subsidies for the low Earth
orbit commercial companies. This cut is in spite of the fact
that by the administration's own estimate, the 2016 timetable
for a return flight would have been unattainable at last year's
projected funding levels.
The President's budget has misplaced priorities, gutting
vital heavy lift capacity while dealing significantly lighter
cuts to unrelated projects like studying climate change. In
fiscal year 2010, for example, 16--16--different Federal
agencies and departments were funded at over $8 billion to
address climate change. There were no--zero, zilch, nada--no
other agencies funded to pursue human space flight.
Human space flight is a matter of national security. Space
is the world's military high ground, our Golan Heights, if you
will. By ceding our leadership to other Nations, such as China,
Russia, and India, we would be literally giving them the
ultimate military high ground. China and Russia have announced
plans to colonize the Moon. They are not going there to collect
and study rocks like we did.
We must also not lose sight of the major asset that the
human space flight workforce is to our Nation. The workforce is
not a spigot that you can turn on and off whenever you want to.
It has taken decades to build it, and it will evaporate
overnight with no programs in place.
Without a clear vision and a robust investment in our human
space flight program, the community will quickly atrophy, as
the engineers and their expertise are lost to other pursuits
and possibly even other countries.
The administration's plan is to retire the shuttle program
this summer, after over 30 years of service ferrying
astronauts, modules, components to the International Space
Station, launching and repairing numerous satellites, including
the Hubble, launching three interplanetary probes, advancing
scientific experimentation, including microgravity research,
all important goals for this Nation. Despite this incredible
list of accomplishments, when the space shuttle Atlantis
touches down for the final time this summer, it will be more
bitter than it will be sweet. That is because there is
currently no clear vision of the future of America's space
flight program. And it is a step backwards for America's
leadership in space.
The time to refocus NASA on its primary human space flight
mission is now. The Budget Committee has authority to reject
the administration's continued efforts to reshape NASA as yet
another agency without a clear focus, without a clear mission.
Just imagine one day without your cell phones, one day without
your laptops, one day without a weather report, one day without
a GPS, one day not being able to use a credit card nor withdraw
cash from a bank, all satellite-linked communications. Most of
the public realizes the compelling importance of this. And that
is why I ask you to give it your best consideration. And thank
you for your leadership and this opportunity to address you
concerning human space flight. Thank you.
[The prepared statement of Bill Posey follows:]
Prepared Statement of Hon. Bill Posey, a Representative in Congress
From the State of Florida
Chairman Ryan, Members of the Budget Committee, I appreciate the
opportunity to come before you today to respectfully urge you to
preserve NASA's core mission: human space flight.
More specifically, I would ask that as you proceed in developing a
budget resolution that you include sufficient funding and language
directing that NASA's human space flight program is the priority within
the overall amounts made available to NASA in the Budget Resolution.
Our nation is critically near the tipping point of ceding our
leadership in space exploration for generations to come. Direction from
the Administration has been seriously lacking with respect to NASA. By
failing to set priorities within NASA's budget, the Administration has
left NASA with no priorities.
As a result, human space flight and Exploration are suffering and
the U.S. will cede its leadership in space to our adversaries: China
and Russia. This is not in our national security interest nor is it in
our economic security interests.
Should Congress fail to step in where the Administration has left a
leadership void we will be making unacceptable compromises in our
national security and lose economic and intangible benefits from our
space program.
The driver that our investment in human space flight is to our
technological advancement and thus our economic competitiveness is
immeasurable.
The President abandoned the Constellation program in his FY 2011
budget submission, calling for it to be cancelled with no solid
alternative or plan for the future. By so doing, he set our human space
flight program dangerously adrift with vague milestones for the world's
premiere space exploration organization.
Last year, after a robust debate, Congress and the Administration
agreed on an Authorization Bill that focused on developing goals after
the Space Shuttle's retirement. This included plans for a new heavy
lift capability while giving limited support to commercial space
operations. Congress must act now to ensure these objectives are
realized.
Unfortunately, the President's FY 2012 Budget is a substantial
departure from the Authorization Bill that he signed into law in
October--cutting $2 billion from the heavy lift program while
increasing taxpayer subsidies for commercial space companies.
This cut is in spite of the fact that, by the Administration's own
estimate, the 2016 timeline for a return to flight would likely have
been unattainable at last year's projected funding levels.
The President's FY 2012 Budget submission has misplaced
priorities--gutting vital heavy lift capability while dealing
significantly lighter cuts to superfluous projects like studying
climate change.
In FY 2010, 16 federal agencies and departments were funded at over
$8 billion to address climate change. There are NO other agencies
funded to pursue human space flight.
Human space flight is a matter of national security importance.
Space is the world's military high ground, our Golan Heights if you
will.
By ceding our leadership to other nations such as China, Russia,
and India we would be walking away from the ultimate military high
ground.
China and Russia continue to increase the sophistication of their
human space flight programs and are reaping the national security and
economic benefits of those investments.
Unlike the United States, China and Russia do not have civilian
agencies comparable to NASA, so every bit of advancement in their space
programs is a military advancement.
We also must not lose sight of the major national asset that the
human space flight workforce is to our nation. Our human space flight
program attracts and inspires some of the world's greatest minds.
The workforce is not a spigot that can be turned off and then back
on at a later date. It takes years, sometimes decades to build.
Without a clear vision and a robust investment in our human space
flight program this community will quickly atrophy as these engineers
and their expertise are lost to other pursuits and possibly other
countries.
The Administration plans to retire the Shuttle program this summer
after over 30 years of service: ferrying astronauts, modules, and
components to the International Space Station; launching and repairing
numerous satellites including the Hubble; launching three
interplanetary probes; and advancing advanced scientific
experimentation including microgravity research.
Despite this incredible list of accomplishments, when Space Shuttle
Atlantis touches down for the final time this summer, it will be more
bitter than sweet because there is currently no clear vision of the
future of America's human space flight program. And, it is a step
backward for American leadership in space.
The time to refocus NASA on its primary human space flight mission
is now. The Budget Committee has the authority to reject the
Administration's continued efforts to reshape NASA as yet another
agency without focus and absent a clear mission.
Thank you for your leadership, and the opportunity to address the
committee regarding human space flight--a matter of great economic and
national security importance.
Mrs. Black. Thank you, Mr. Posey.
Are there questions for the witness?
No questions.
Thank you very much.
I would now like to recognize Mr. Rigell from Virginia.
STATEMENT OF THE HON. SCOTT RIGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF VIRGINIA
Mr. Rigell. Thank you, Madam Chairwoman, and members of the
committee. I really appreciate this opportunity to share with
you my perspective and grave concern on the state and
trajectory of our Nation's budget and overall fiscal condition.
I have the privilege of serving on the House Armed Services
Committee and the Committee on Homeland Security, which gives
me a full appreciation of the range of external threats to our
Republic. Yet as I see it, the gravest threat to our country is
being addressed right here as you prepare our budget for fiscal
year 2012. You know, as an entrepreneur with 30 years
experience in reading financial statements, I came to the
sobering conclusion years ago that our Nation's deficits were
placing us at serious and increasing risk. Indeed, that is why
I sought this office.
You know, Americans instinctively know that no family, no
business, no country, not even America, can stay on this path
of borrowing more than 40 cents out of every dollar that we are
spending. That is truly going to lead, in my view, to
catastrophic consequences.
You know, in a recent committee hearing, I was stunned to
hear a Member say that we are not headed toward bankruptcy.
Well, I truly believe that we are well beyond heading toward
bankruptcy, that we are indeed bankrupt. When unfunded mandates
are placed on our Nation's balance sheet, as they should be,
our obligations eclipse the sum of all foreseeable revenue
streams.
Like the dangerous mind set of invulnerability that took
hold of the captain of the Titanic, I just don't think we can
quite grasp the painful reality that America is indeed subject
to the laws of finance. Lenders will eventually stop lending.
Higher risk will be reflected in much higher interest rates. If
we do not change course sharply, there will be a day of
reckoning. And that day, in my view, is much closer than most
think.
I often hear this in conversations about our budget,
``Scott, you are right, it is not fair to our grandchildren to
leave them this debt.'' And it is not only our grandchildren
that are at risk. I sound the alarm today that the day of
reckoning must be brought up, not one, but two generations. It
is each one of us here today. And our debt makes no distinction
of party affiliation, ethnicity, gender, or age.
You know, and I have always believed that if you present a
problem you should also present a way forward. Now, after all,
confronting big problems is what we do as Americans. And it is
in that spirit that I respectfully share with you this morning
a way forward that I would ask you to consider as you prepare
our budget. I ask that you consider studying the budget of our
country in a manner similar to what every American family does
when looking over the family checkbook. First, prioritize and
pay the most important and critical bills, like a home mortgage
payment and food. And then you back into everything else. It
may sound simplistic, but it works. That is the path to
ensuring a bright financial future.
Our first national budget priority is to raise an Army,
broadly defined, to ensure that we meet our constitutional duty
to keep the American people safe. Now, good and reasonable
people can disagree on the amount, but we can get that right.
Our second, our second national budget priority, as I see
it, is to meet the deep obligation that we have to our seniors
who are receiving Social Security and to those who are near to
be eligible for Social Security. You know, common sense tells
me that we have got to change the dates at which people are
eligible for Social Security. We have a different obligation to
my 88-year-old father than we do to my 22-year-old son.
And after defense and Social Security are paid for, we take
the steps in this Congress this year so that over a reasonable
period of time, 5 to 7 years, all other expenses match our
remaining tax revenues, which ideally are growing because our
economy would be growing.
And I want to share this with you today, that as an
entrepreneur I know instinctively that cutting expenses is in
and of itself an act of job creation because it restores
confidence in our future and confidence in our economy. I
believe that we need to have an overall program that shifts
responsibility and funding to the States for Medicaid, for
example, through block grants, unfettered with reams of
regulation. We can give and should give the Governors the
running room that they have asked for.
This is a profoundly challenging time in America. And if we
don't get this right, God help us. But I am convinced that we
will. I am ready to work with each and every Member, regardless
of party affiliation, who is ready to come together and make
those difficult but necessary decisions that will put us on a
better fiscal path. I thank you for the time and the
opportunity to address the committee.
[The prepared statement of Scott Rigell follows:]
Prepared Statement of Hon. Scott E. Rigell, a Representative in
Congress From the State of Virginia
Mr. Chairman and Members of the Committee, it's a privilege to be
here today to share my thoughts on what, I believe, is by far the most
urgent issue facing our nation--the 2012 federal budget and the overall
financial health of our nation.
I often say that we are a nation at serious and increasing risk. I
truly believe this now more than ever before. We simply cannot continue
to borrow 42 cents of every dollar we spend and expect to dig ourselves
out of this debt crisis. No family, no business and certainly no
country can stay on that course without dire consequences.
America is vulnerable and we can no longer be a debtor nation
beholden to foreign creditors in Europe, the Middle East and China.
There is a day of reckoning ahead and it is much sooner than many
realize. The consequences of not acting now will spell disaster for
future generations. Our national debt is not only jeopardizing our
children and grandchildren--it's an immediate threat to every single
one of us here today.
We must balance our budget, sharply reduce the deficit and stop out
of control spending in this Congress, with this President. We must find
a way to say that an American dollar spent is an American dollar
earned--not borrowed.
As an entrepreneur with more than 25 years of business experience,
I know firsthand what it takes to grow and maintain a successful
business. We need to start running this government more like a business
and it begins with addressing head-on the challenge of entitlements.
Entitlements are a significant portion of our federal spending with
three programs alone--Medicare, Medicaid, and Social Security--
accounting for almost $1.5 trillion a year.
In my view, when looking at spending cuts for the 2012 budget, we
need to fulfill our national obligation to our military in defense
spending and to our senior citizens in mandatory spending on Social
Security. From there, we back into everything else; this includes
Medicare and Medicaid. As I see it, we have a far different obligation
to my 88-year-old father than we do to my 22-year-old son.
Federal entitlement programs are massive, bureaucratic giants that
are wildly above projected costs. For example, when Medicare was
created, Congress projected its cost for FY 1990 to be $12 billion.
They were off by more than 800%
And this spending shows no sign of slowing down: according to the
Congressional Budget Office, Medicare spending will double by 2050 and
the federal share of Medicaid will double by 2016. Furthermore, when my
children are placed on Social Security and Medicare in a matter of
decades, entitlements will consume all federal revenues with nothing
left over for defense, education, highways, law enforcement, or other
necessary expenditures. I cannot even fathom what this fiscal situation
will look like for future generations.
Based on the information before us, we must address entitlements
this Congress, this budget, this year! We must not waver; we must take
immediate action that includes focusing on both discretionary and
mandatory spending. Our nation's spiraling debt has each one of us
keenly aware that we face demands for government services and programs
that far exceed our revenues. It will take courage and the desire to do
what is right for America--regardless of the political pain that may
follow.
And so, I ask my colleagues here today to address entitlement
spending as you look for meaningful and impactful budget reforms in the
2012 budget.
It is through difficult times that America finds its greatest
moments, and I have no doubt that we will once again rise to meet these
challenges. Thank you for allowing me to speak to you today.
Mrs. Black. Thank you.
Are there questions for the witness?
Ms. Schwartz, you are recognized.
Ms. Schwartz. I appreciate your comments and your
commitment to reining in the deficit. Obviously, it is a
sentiment that we all share. How we do it is really the debate.
So you do know that the cuts are being made in only 12
percent of the budget as we are proceeding, the way you define
it as well in terms of really eliminating real opportunity for
a real conversation about defense, although you suggest that
there is some opportunity there to cut that back.
You believe just if we cut, we will just grow. I assume as
an entrepreneur, I don't know what kind of a business you were
an entrepreneur of, but I assume you occasionally trained an
employee, that you might even have borrowed some money or made
an investment in a piece of equipment?
Mr. Rigell. Many times.
Ms. Schwartz. So given that you think that, that you
suggest that the government ought to run the way you ran your
business, and I don't, again, know about the specifics of your
business, do you think the government has any role in either
educating or training the future workforce or in making certain
kinds of investments that might grow the economy, or do you
think those have to be off the table?
Mr. Rigell. No, I think that there are many legitimate uses
of tax revenues, investments, and infrastructure. I think
transportation in particular is something that only government
can really do.
And so I have supported investments in infrastructure, for
example, and it is really a challenge, of course, in 5 minutes
to cover all of this and to say how you would fix the budget.
But entitlements, in my view, need to be on the table.
I believe, for example----
Ms. Schwartz. On the infrastructure, what would you cut to
pay for that money, to get that money, or how would you raise
the revenue for infrastructure?
Mr. Rigell. Well, we have a revenue stream now going to
infrastructure.
Ms. Schwartz. Which is kind of empty.
Mr. Rigell. Well, there is still some money there. And I
appreciate the opportunity, I really do, to engage in a
conversation about this critical topic. I believe that, for
example, means testing of Medicare, we should talk about that.
I am trying to find, as I am sure you are, these ways in which
we can come together, and this party, I have been an elected
official for all of about 11 weeks now, and there is something
broken here. Something is wrong, putting us all at risk.
Ms. Schwartz. Many of us believe that if we could get past
some of the immediate sense of the only answer to our deficit
reduction is to either undermine our commitments to our seniors
or to our children and to only focus on a very, very narrow
window of where we cut, and then we actually could make some
investments, that is a different conversation than we are
actually having as you know.
So I appreciate the fact that you have some interest in
potentially finding common ground that at the moment we are
having, we are experiencing difficulty in actually being able
to do that at all.
Mr. Rigell. Thank you.
Mrs. Black. Mr. Yarmuth you are recognized.
Mr. Yarmuth. Thank you, Madam Chair, I just want to ask one
question by way of clarification.
You talked about a family meeting its obligations and
spending only what it takes in. But isn't it a fact that the
vast majority of families do considerable borrowing? They
borrow to buy their homes. They borrow to buy their cars, and
they borrow to pay for their education.
So the question is not whether you borrow. It is a question
of priorities and whether there is a long-term return on that
investment.
Mr. Rigell. Without question. I personally have borrowed
many times both for business reasons and, of course, for a
home. I think the difference is here that the path that we are
on--I really don't think it is in dispute. I trust it is not
with members of the Budget Committee, that the path that we are
on, that is far different than a family buying a home or
something like that.
Even the President's own projections have us spending,
having a deficit of over $1 trillion for the foreseeable
future. And it is just, it is my strongly held view as a
business and still a businessowner and entrepreneur and having
a master's degree in business that this is placing every
American at risk.
Mr. Yarmuth. I don't disagree with you at all. I just
wanted to make sure that we agree on the point that there are
circumstances in which borrowing is a very useful tool.
Mr. Rigell. It can be. Sure.
Mr. Yarmuth. For government or for a family.
Thanks very much for your testimony.
Mrs. Black. Mr. Guinta has a question, and I am also going
to turn the chair over to him.
Mr. Guinta [presiding]. Thank you, Mrs. Black.
I just had one question for Mr. Rigell. Thank you for
coming and spending some time. Do you think it is good public
policy to run deficits to the extent of $1.6 trillion a year,
and if so, if you do feel that way, how long could we sustain
that kind of deficit before we put our financial, our country
at greater financial risk?
Mr. Rigell. Mr. Chairman, thank you for the opportunity to
respond to that. I wake up concerned about this. When I go to
bed at night, I am concerned about it. It takes just about
every waking moment that I walk around with this sense that our
country is at serious risk. I don't think we can long stay on
this path. And I want to just lay out with a scenario. I am
inherently a very optimistic person. As an entrepreneur, as a
business owner, I am; I go to work every day believing we can
do better than the day before.
But I think it might go something like this. I know that
lenders, they will work with you, work with you, work with you.
But at one point, they will turn, and it when it turns, it
turns very, very quickly. It could be a trader, for example, in
China who says you know let's just reduce a little bit of
exposure here, let's sell $5 billion of Treasuries, what could
frankly be a modest amount, that could be picked up by a trader
say in Denmark. He says, what happened there, $5 billion? Let's
just take ours down by a half a billion.
And this idea that the world is entirely rational, that
doesn't comport with world history and markets. We have seen
it, the Internet bubble, for example, and this latest rash of
where we had housing prices increase so rapidly that it wasn't
really justified by an underlying economic model.
So my point in this is that once people start selling, we
could be going along in a normal day thinking that everything
is all right, and it can turn very, very quickly. And I truly
believe and I take, in fact, it pains me to say this, Mr.
Chairman, that my America, your America, our America,
Independent, Democrat, Republicans, we are all at risk, and I
think we are much closer to that date than many realize.
Mr. Guinta. Thank you, sir.
Are there any other questions for this Member?
Thank you for testifying.
Mr. Rigell. Thank you for the opportunity to address the
committee. I appreciate it.
Mr. Guinta. Our pleasure.
Next is the gentleman from Pennsylvania, Mr. Altmire.
STATEMENT OF THE HON. JASON ALTMIRE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. Altmire. Thank you, Mr. Chairman, and members of the
committee for the opportunity to testify on the fiscal year
2011 budget resolution. I believe there is an urgent need to
address our Nation's budget deficit and secure our long-term
fiscal stability. This effort is going to require more than
just spending cuts and budget freezes. It is going to force us
to re-evaluate how every Federal dollar is spent.
I join you and the committee in support of those goals but
urge caution against making misguided cuts that may jeopardize
our national security and global competitiveness.
And while I recognize the fiscal constraints we face, we
must also recognize we cannot balance our budget on the backs,
in particular, of American's veterans. And as the committee
prepares this year's budget resolution, I want to emphasize our
duty to fulfill the promises we have made to our Nation's
veterans and urge the committee to fully fund their medical
care and disability benefits for our Nation's veterans.
Since 2007, Congress has provided historic increases in
funding for veterans' programs and succeeded in enacting
advanced appropriations to ensure the Department of Veterans
Affairs' ability to care for veterans is never compromised by
politically-charged budget debates. The President requested
$61.8 billion for the VA in 2012, a 10.6 percent increase in
funding from 2010. And while this is not a small increase, I
believe we should respect the recommendations of the
independent budget written by the veterans' community
themselves, which estimates that more than $65 billion is
necessary to properly care for our Nation's aging veteran
population and meet the needs of those returning from overseas
operations.
It is vital that we make the necessary investments in
suicide prevention, claims backlog reduction, care for female
veterans and the elimination of the terrible injustice of
veterans' homelessness.
I urge the committee to prioritize the needs of veterans as
you draft the fiscal 2012 budget.
And in light of America's immigration and national security
challenges, I also ask the committee to support the President's
request of $43.2 billion for the Department of Homeland
Security. This level of funding will demonstrate a commitment
to ensuring our immigration laws are enforced and our borders
are secure. It is particularly important that we provide
adequate funding for the E-verify and Systemic Alien
Verification for Entitlements programs. These programs make
sure certain jobs are being filled by American citizens.
The first step to addressing the problem of illegal
immigration is to secure our border. I ask the committee to
adopt the President's request for funding to support 21,370
Border Patrol agents and to hire additional 300 Customs and
Border Protection officers. As the thwarted attacks of cargo
planes last year showed, terrorists are still determined to
inflict harm on our country. Additional officers will improve
passenger and cargo screening, both here and abroad.
I am concerned that the President's budget does not include
funding for border fence construction. The 2,000-mile board
between the U.S. and Mexico is still not properly protected. I
disagree with this decision to suspend construction of the
physical fence and believe we need to support funding to
complete the fence so we can further strengthen our national
security and stem the tide of illegal immigration.
Finally, it is imperative that the committee continues the
tradition of excellence and innovation in research in the
National Institutes of Health by agreeing to the President's
request of the $32 billion budget for NIH. This level is
critical for the NIH to remain an international leader in
science and biomedical research. In the past year alone, the
NIH has taken great strides toward development of a universal
flu vaccine, and its work in gene research is opening up new
pathways to individualized treatment for a variety of diseases.
Through the NIH, America can continue to be the leading source
for development of cures and treatments that help millions of
individuals live their life to the fullest.
The NIH is also a key to our continued economic recovery.
It generates high quality and high-paying jobs in cutting-edge
fields and protects America's competitive advantage in these
fields. I believe we must continue to make investments in the
NIH so the next great medical breakthrough is discovered in
America and not imported here from abroad.
Mr. Chairman and members of the committee, again, I thank
you for the opportunity to testify. I yield back the balance of
my time and would take any questions.
[The prepared statement of Jason Altmire follows:]
Prepared Statement of Hon. Jason Altmire, a Representative in Congress
From the State of Pennsylvania
Thank you, Mr. Chairman and members of the Committee. I appreciate
the opportunity to testify today on the fiscal year 2012 budget
resolution.
There is an urgent need to address our nation's budget deficit and
secure our long term fiscal stability. This effort is going to require
more than just spending cuts and budget freezes. It is going to force
all of us to reevaluate how every federal dollar is spent. I join you
in support of those goals, but urge caution against making misguided
cuts that may jeopardize our national security or global
competitiveness. And, while I recognize the fiscal constraints we face,
we must also recognize that we cannot balance our budget on the backs
of America's heroes.
As you prepare this year's budget resolution, I want to emphasize
our duty to fulfill the promises made to our nation's veterans and urge
the Committee to fully fund their medical care and disability benefits.
Since 2007, Congress has provided historic increases in funding for
veterans' programs and succeeded in enacting advanced appropriations to
ensure that the Department of Veterans Affairs' (VA) ability to care
for veterans is never compromised by politically-charged budget
debates. I believe we can continue this tradition and honor the
commitment we made to the brave men and women who fought to defend our
country.
The president requested $61.8 billion for the VA in 2012, a 10.6
percent increase in funding from 2010. While this is not an
insignificant increase, I believe we should respect the recommendations
of the Independent Budget, written by the veteran's community, which
estimates that more than $65 billion is necessary to properly care for
our nation's aging veteran population and meet the needs of those
returning home from overseas operations. It is vital that we make
necessary investments in suicide prevention, claims backlog reduction,
care for female veterans, and the elimination of the terrible injustice
of veteran homelessness. Mr. Chairman, on behalf of the selfless and
heroic veterans residing in western Pennsylvania and across the
country, I urge the Committee to prioritize the needs of veterans and
incorporate the recommendations of the Independent Budget as you draft
the fiscal year 2012 budget.
In light of America's immigration and national security challenges,
I also ask the Committee to support the president's request of $43.2
billion for the Department of Homeland Security for Fiscal Year 2012.
This level of funding will demonstrate a commitment to ensuring our
immigration laws are enforced and our borders are secure.
It is particularly important that we provide adequate funding for
the E-Verify and Systemic Alien Verification for Entitlements (SAVE)
programs. These programs make certain jobs are being filled by U.S.
citizens and legal immigrants. During a time when too many Americans
are unemployed and searching for work, we must ensure that jobs are
going to those who are legally eligible to work in this country.
The first step to addressing the problem of illegal immigration is
to secure our border, of which a crucial component is maintaining the
proper number of Border Patrol agents. I ask the Committee to adopt the
president's requests for funding to support 21,370 Border Patrol agents
and to hire an additional 300 Customs and Border Protection Officers.
As the thwarted attacks of cargo planes last year showed, terrorists
are still determined to inflict harm on our country, and these
additional officers will improve passenger and cargo screening, both
here and abroad.
I am concerned, however, that the president's proposed budget does
not include funding for border fence construction. The 2,000 mile
border between the U.S. and Mexico is still not properly protected.
While the Administration's cancellation of the overly expensive and
incomplete SBInet virtual fence program is a good example of targeting
inefficient government spending, I disagree with the decision to
suspend construction of the physical border fence while a more
effective technological solution is studied. I urge the Committee to
support funding to complete the physical border fence so we can
strengthen our national security and stem the tide of illegal
immigration.
Finally, it is imperative that the Committee continues the
tradition of excellence in innovation and research at the National
Institutes of Health (NIH) by agreeing to the president's request for
$32 billion. This level is critical for the NIH to continue its mission
and remain an international leader in science and biomedical research.
In the past year alone, the NIH has made great strides toward
development of a universal flu vaccine, and its work in gene research
is opening up new pathways to individualized treatment for a variety of
diseases. A recent trial for immunotherapy for a rare pediatric cancer
was so successful that the trial ended early. Patients undergoing
standard treatment were given the option to use the new method because
of the highly positive results.
Through the NIH's role as the preeminent medical research
institution in the world, America can continue to be the leading source
for the development of cures and treatments that help millions of
individuals live their life to the fullest despite the disease or
illness they may suffer from. Every day, NIH researchers bring us one
step closer to improved methods of early detection and further progress
against major diseases and conditions. The NIH is also key to our
continued economic recovery. It generates high-quality and high-paying
jobs in cutting-edge fields, and protects America's competitive
advantage in these fields. We must continue to make investments in the
NIH so the next great medical breakthrough is discovered in America and
not imported from abroad.
Mr. Chairman and members of the Committee, thank you again for the
opportunity to address the Committee and outline my priorities for the
fiscal year 2012 budget. I yield back the balance of my time.
Mr. Guinta. Questions from the committee?
Mr. Garrett.
Mr. Garrett. Just a brief one. So I agree with you on two
points and that is, first, the purpose of coming and setting
priorities as to where we need to spend; that is what we all
need to do, families, businesses and, most importantly, in
government. And secondly on the priorities that you picked, I
think those are good priority items.
I guess my only question is, as you come and sit down and
made that list of priorities and I guess figured out what each
one of those priority items cost, did you then at the same time
say, recognizing as we are with the fiscal situation we are in
with $1.6 trillion deficits and that is not sustainable and all
the rest, I don't want to use the word offsets, but did you do
the nonpriority items on the bottom of your list that you can
report back to us and say, these are the items that I would
specifically say that to get us on the trajectory we all want
to be, how do you do it?
Mr. Altmire. I appreciate the question. It is what every
Member here should be doing. We need to eliminate waste and
duplication, the things that the committee are discussing. We
need to talk about across-the-board belt tightening, shared
sacrifice in the country, and I look forward to the committee's
budget on that and working with, as the bill moves to the
floor, to support the initiatives that are going to offset the
cost of some of these things.
But I want to be clear. No one should stand ahead of our
Nation's veterans when it comes time to making funding
decisions.
Mr. Garrett. And I always say the same thing here and back
in the district. So we are on the same page as that.
But those vets, when you talk to them at the VFW Hall or
the American Legion Hall, they also say, well, we are concerned
about--and they are, about their kids and their grandkids and
the debt.
The waste, fraud and abuse aspect which you allude to is
good, but when we have panels here and the experts are from all
stripes, left and right, and they talk about that, and you ask
them, well, what does that really mean as far as dollars and
cents or maybe percentages, they will give you numbers, I don't
know, one, two, three, sometimes a little higher as far as
overall that you could find in any program. So, assuming even
if it is 5, 5 percent, then we can implement a program to save
that 5 percent somehow, because that is not always done, right?
That is not enough. So besides the waste, fraud and abuse and
across the board, can you help us out with----
Mr. Altmire. Right. As the gentleman I am sure understands,
during the debate on the CR and the amendment process, I
supported I think more than a dozen of the majority's
recommended cuts, in addition to what was recommended in the
CR. So I look forward to making the difficult decisions and
stand ready to work with the gentleman and anyone on the
committee on specific line items and go line by line through
the budget. And it has to be shared sacrifice. It has to be
across the board, again, with the exception of the veterans and
some of the programs I laid out.
Mr. Garrett. Great. Appreciate that. Thanks much.
Mr. Guinta. Any other questions from the committee?
Seeing none, I thank you for your testimony.
Mr. Altmire. Thank you.
Mr. Guinta. Next is the member from Rhode Island, the
gentleman from Rhode Island Mr. Cicilline.
STATEMENT OF THE HON. DAVID N. CICILLINE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF RHODE ISLAND
Mr. Cicilline. Thank you, Mr. Chairman and members of the
Budget Committee. The economic recovery of my district, the
State of Rhode Island and our whole country demands that we
work collaboratively and focus our energy and resources on
those initiatives that will help spur job growth now while
providing our workers, our entrepreneurs and our businesses,
particularly smaller enterprises and manufacturers, with the
tools they need to compete in the global economy.
During this time when Congress must make the tough choices
required to lower the deficit and cut spending, we must sustain
those investments that help us create jobs, innovate for the
future and remain competitive in the global marketplace.
While there are so many vital programs to defend throughout
this budget, I am here today to call your attention to several
programs that are critically important to creating jobs and
growing the economy in the near term for my State and for our
country.
Within the Department of Commerce, the President's fiscal
year 2012 budget proposes $143 million for the Hollings
Manufacturing Extension Partnership; $526 million for the
International Trade Administration; and $325 million for the
Economic Development Administration, in part to support
programs authorized by the America COMPETES Reauthorization
Act.
Employment in manufacturing shrank from 20 million jobs in
1979 to fewer than 12 million jobs today. In Rhode Island, we
have experienced the loss of more than 30,000 manufacturing
jobs in the last decade alone. Despite these sobering
statistics, the American manufacturing sector is really in the
midst of a resurgence. Yet if this vital economic engine is to
be sustained, Congress must continue its investments in
programs that help manufacturers compete in the global economy,
retool to be more efficient and effective businesses, and
retrain their workforce so that skill sets utilized in
declining segments can be transferred to those that are
expanding.
Through the Hollings Manufacturing Extension Partnership,
small- and medium-sized manufacturing firms are given the tools
and expertise to improve productivity and competitiveness.
For every dollar of Federal investment, the Manufacturing
Extension Partnership delivers $32 in economic growth. It is a
vital program that helps strengthen our economy and enhances
our competitiveness and generates robust job growth.
Beyond helping American manufacturers retool and increase
efficiency, if our Nation is going to compete in the global
economy, we must guarantee that manufacturers are not
disadvantaged by an uneven playing field in foreign trade, and
we must ensure they have expert assistance services they need
to access foreign markets.
If businesses, particularly manufacturers, are going to be
able to compete in the global economy, they must have increased
access to the global market. The International Trade
Administration within the Department of Commerce provides
America's businesses with access to trade specialists in
industry and market access experts through their expert
assistance centers.
The ITA plays a critical role in monitoring the compliance
of foreign countries to trade agreements with the United
States, while also working to identify potential obstacles
American businesses make confront in accessing foreign markets.
Research in the Department of Commerce indicates that for every
additional $100,000 in annual export sales, one new job is
created. For Rhode Island alone, that meant 54 million jobs
created or retained in our economy in 2009.
In addition, I applaud the administration's efforts to
thrust innovation to the forefront of our Nation's economic
agenda. Initiatives, such as the Regional Innovation Program,
will help assemble the many stakeholders in economic
development, all levels of government, private firms, regional
interests, colleges and universities and beyond, to drive
regional innovation, collaboration and job growth.
Just as we must encourage innovative thinking among
stakeholders in our economy, we must also promote innovation in
government programs that support small businesses and
entrepreneurs. The Small Business Administration's $3 billion
in authorized leverage annually through the SBIC program.
However, each year, the SBA has between $1 billion to $2
billion in additional leverage authority that remains untapped.
Through these two new initiatives, the Early Stage Innovation
Funds and the Impact Investment Fund, the SBA will leverage
existing untapped authority, propelling much-needed capital in
the hands of startups and entrepreneurs. Both of these programs
at no additional costs to taxpayers provide entrepreneurs with
the tools and resources to support innovation and grow concepts
into commercialized products thereby creating jobs and driving
economic growth.
Through the Hollings Manufacturing Extension Partnership
and the ITA as well as programs conducted through the EDA,
Economic Development Administration, and the SBA, Federal funds
are effectively leveraging resources from State and local
governments as well as the private sector.
I thank the committee for the time today and for the
opportunity to provide testimony on this issue and for your
thoughtful deliberation. And I ask that you fund these job-
creating programs. I respectfully urge this committee to fully
fund these critically important economic initiatives at the
levels requested in the President's fiscal year 2012 budget.
Thank you, Mr. Chairman.
[The prepared statement of David N. Cicilline follows:]
Prepared Statement of Hon. David N. Cicilline, a Representative in
Congress From the State of Rhode Island
Thank you Chairman Ryan, Ranking Member Van Hollen, and members of
the Budget Committee. The economic recovery of my District, the State
of Rhode Island, and the nation as a whole demands that we work
collaboratively and focus our energy and resources on those initiatives
that will help spur job growth now, while providing our workers, our
entrepreneurs, and our businesses--particularly smaller enterprises and
manufacturers--with the tools they need to compete in the global
economy.
During this time when Congress must make the tough choices required
to lower the deficit and cut spending, we must sustain those
investments that help us create jobs, innovate for the future, and
remain competitive in the global marketplace.
While there are so many vital programs to defend throughout this
budget, I am here today to call attention to several programs that are
critically important to creating jobs and growing the economy in the
near term for my state and our nation.
Within the Department of Commerce, the President's Fiscal Year 2012
Budget proposes $143 million for the Hollings Manufacturing Extension
Partnership, $526 million for the International Trade Administration,
and $325 million for the Economic Development Administration, in part,
to support programs authorized by the America COMPETES Reauthorization
Act.
Employment in manufacturing shrank from 20 million jobs in 1979 to
fewer than 12 million jobs today. In Rhode Island, we experienced the
loss of more than 30,000 manufacturing jobs in the last decade alone.
Despite these sobering statistics, the American manufacturing sector is
in the midst of resurgence. Yet, if this vital economic engine is to be
sustained, Congress must continue its investments in programs that help
manufacturers compete in a global economy, retool to be more efficient
and effective businesses, and retrain their workforce so that skill-
sets utilized in declining segments can be transferred to those that
are expanding. Through the Hollings Manufacturing Extension
Partnership, small and medium sized manufacturing firms are given the
tools and expertise to improve productivity and competitiveness. For
every $1 of federal investment, the Manufacturing Extension Partnership
delivers $32 in economic growth--it is a vital program that helps
strengthen our economy, enhances our competitiveness and generates
robust job growth.
Beyond helping American manufacturers retool and increase
efficiency, if our nation is going to compete in the global economy we
must guarantee that manufacturers are not disadvantaged by an uneven
playing field in foreign trade, and we must ensure they have the export
assistance services they need in order to access foreign markets. If
businesses, particularly manufacturers, are going to be able to compete
in the global economy they must have increased access to the global
market. The International Trade Administration (ITA) within the
Department of Commerce provides America's businesses with access to
trade specialists and industry and market access experts through their
Export Assistance Centers. Moreover, the ITA plays a critical role in
monitoring the compliance of foreign countries to trade agreements with
the United States, while also working to identify potential obstacles
American businesses may confront in accessing foreign markets. Research
from the Department of Commerce indicates that for every additional
$100,000 in annual export sales, one new job is created. For Rhode
Island alone, that meant 5,400 jobs created or retained in our economy
in 2009.
Additionally, I applaud the Administration's efforts to thrust
innovation to the forefront of our nation's economic agenda.
Initiatives such as the Regional Innovation Program will help assemble
the many stakeholders in economic development--all levels of
government, private firms, regional interests, colleges and
universities, and beyond--to drive regional innovation, collaboration,
and job growth. Furthermore, just as we must encourage innovative
thinking among stakeholders in our economy, we must also promote
innovation in the government programs that support small businesses and
entrepreneurs. The Small Business Administration has $3 billion in
authorized leverage annually through the Small Business Investment
Company program. However, each year the SBA has between $1 billion to
$2 billion in additional leverage authority that remains untapped.
Through two new initiatives, the Early Stage Innovation Fund and Impact
Investment Fund, the SBA will leverage existing, untapped authority--
propelling much needed capital into the hands of start-ups and
entrepreneurs. Both of these programs--at no additional cost to
taxpayers--provide entrepreneurs with the tools and resources to
support innovation and grow concepts into commercialized products,
thereby creating jobs and driving economic growth.
Through the Hollings Manufacturing Extension Partnership and the
ITA, as well as programs conducted through the Economic Development
Administration and the Small Business Administration, federal funds are
effectively leveraging resources from state and local governments as
well as the private sector.
I thank the Committee for their time today and their thoughtful
deliberation to fund these job-creating programs. I respectfully urge
this Committee to fully fund these critically important economic
initiatives at the levels requested in the President's Fiscal Year 2012
Budget.
Mr. Guinta. Thank you.
Questions from any member of the committee?
Seeing none, I just want to thank the gentleman from Rhode
Island for testifying. We share a common bond in that we both
represent New England and look forward to working with you
through this challenging process but one that I feel optimistic
in our opportunities for success.
Mr. Cicilline. Thank you, Mr. Chairman.
I look forward to working with you as well.
Mr. Guinta. The gentleman from Tennessee, Mr. Fleischmann.
STATEMENT OF THE HON. CHUCK FLEISCHMANN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mr. Fleischmann. Thank you, Mr. Chairman and members of the
Budget Committee.
I want to thank you for the opportunity to testify
regarding the 2012 budget. I appreciate the hard work ahead of
you and wish you the best during this challenging process.
I will keep my comments short, because I am not here to ask
for additional funding in certain areas or spending that might
help with a pet project or a campaign promise. Rather, as a
recently elected Member of Congress, I want to stress the
problems of our massive debt and uncontrollable spending and
encourage you all to set us on a path of fiscal sustainability
and stress my desire to help with this process.
As you know well, the current fiscal outlook is bleak, and
it has gotten dramatically worse over the last few years. A few
key facts: Our current national debt is $14 trillion, which
amounts to $45,000 for every U.S. citizen. The total national
debt held by the public is $9.5 trillion and has increased 43
percent in just the last 2 years.
Our public debt is on a path of being 100 percent of our
gross domestic product in just a few years, and 47 percent of
that debt is owned by foreign sources. Currently, the Federal
Government is borrowing more than 42 cents for every dollar it
spends.
Mr. Chairman, the cause of this problem is not a lack of
revenue; it is increased spending.
Since 1970, the Federal Government has grown eight times
faster than the median household income. Since World War II,
tax revenues have averaged about 18 percent of the economy, and
these revenues are predicted to remain about at that level for
the foreseeable future. During this time, spending has averaged
around 20 percent of the economy. However, recently spending
has gone well above this 20 percent average and is now
predicted to explode to nearly 80 percent of the economy in
future years, a massive and unsustainable increase. The effect
of this massive debt is more than simply depressing numbers;
there are real-world consequences.
In the short term, the debt drives out private investment,
worries financial markets and slows economic growth. In the
long term, it pushes us to financial instability and threatens
our global leadership financially, politically and militarily.
It even threatens our national sovereignty as foreign
governments buy our debt and puts at risk important programs,
such Medicare and Social Security.
Every day we wait to address this problem, it gets harder
to solve. Of course, other parts of big government, like
excessive regulations, also contribute to a stagnant economy
and a high unemployment rate. But the debt is certainly a key
contributor.
The American people and certainly the people of the Third
District of Tennessee understand this problem. They may not
know every fact and figure, but they know the Federal
Government has gotten too large and the current fiscal path is
simply unsustainable.
Mr. Chairman, there is a very real sense that we might be
the first generation of Americans to pass along an America in
worse shape than the one we inherited. And the massive debt is
the main reason.
However, there is some good news. There is, as always in
America, reason for hope. Simply put, the public is ready for
action. I hear it in every town hall meeting and in almost
every constituent discussion: Please make the tough decisions
now so we can pass along a better America to future
generations.
With the American people ready for meaningful action, it
seems like we, as Members of Congress, should seize this
opportunity and begin the long, hard process of putting our
fiscal house in order.
I sincerely think that H.R. 1 was a good start in
addressing this problem. Congress showed that we are ready to
have a robust and honest debate about spending priorities, and
in the end, we are willing to make tough choices. But this
critical legislation was just one small step in the right
direction. We obviously have a long way to go.
Mr. Chairman, again, I wanted to use my time today to
stress the need to address the debt in a real and meaningful
way. I do not pretend to have all the answers. But I want to be
part of the solution. I look forward to working with you and
Members from both sides of the aisle in the coming months to
make the hard choices and put us on a financially sustainable
path. Thank you.
[The prepared statement of Chuck Fleischmann follows:]
Prepared Statement of Hon. Charles J. ``Chuck'' Fleischmann, a
Representative in Congress From the State of Tennessee
Chairman Ryan, Ranking Member Van Hollen and members of the Budget
Committee, thank you for the opportunity to testify regarding the 2012
budget. I appreciate the hard work ahead of you and wish you the best
during this challenging process.
I will keep my comments short because I am not here to ask for
additional funding in certain areas or spending that might help with a
pet project or a campaign promise. Rather, as a recently elected Member
of Congress, I want to stress the problems of our massive debt and
uncontrollable spending, encourage you to set us on a path to fiscal
sustainability, and stress my desire to help with this process.
As you know well, the current fiscal outlook is bleak, and it has
gotten dramatically worse over the last few years. A few key facts:
Our current national debt is $14 trillion which amounts to
$45,000 per every U.S. citizen.
The total national debt held by the public is $9.5
trillion, and it has increased 43% in just the last 2 years.
Our public debt is on a path to being 100% of our GDP in
just a few years, and 47% of that debt is owned by foreign sources.
Currently, the federal government is borrowing more than
42 cents for every dollar it spends.
And the cause of this problem is increased spending, not a lack of
revenue:
Since 1970, federal government spending has grown 8 times
faster than median household income.
Since World War II tax revenues have averaged about 18 %
of the economy, and these revenues are predicted to remain at about
that level for the foreseeable future. During this time spending has
averaged around 20% of the economy. However, recently spending has gone
well above this 20% average, and it is now predicted to explode to
nearly 80% of the economy in future years--a massive and unsustainable
increase.
The effect of this massive debt is more than simply depressing
numbers. There are real world consequences. In the short term, the debt
drives out private investment, worries financial markets and slows
economic growth. In the long term, it pushes us to financial
instability and threatens our global leadership financially,
politically and militarily. It even threatens our national sovereignty
as foreign governments buy our debt and puts at risk important programs
like Medicare and Social Security. Every day we wait to address the
problem, it only gets harder to solve.
Of course, other parts of big government, like excessive
regulations, also contribute to a stagnant economy and our high
unemployment rate, but the debt is certainly a key contributor.
The American people, certainly the people of the 3rd district of
Tennessee, understand the problem. They may not know every fact and
every figure, but they know the federal government has gotten too large
and the current fiscal path is simply unsustainable. Mr. Chairman,
there is a very real sense that we might be the first generation of
Americans to pass along an America in worse shape than the one we
inherited, and the massive debt is the main reason.
However, there is good news. There is, as always in America, reason
for hope. Simply put, the public is ready for action. I hear it in
every town hall meeting and in almost every constituent discussion--
``please make the tough decisions now so that we can pass along a
better America to future generations.'' With the American people ready
for meaningful action, it seems like we, as Members of Congress, should
seize this opportunity and begin the long, hard process of putting our
fiscal house in order.
I sincerely think that H.R. 1 was a good start in addressing this
problem. Congress showed that we are ready to have a robust and honest
debate about spending priorities; and, in the end, we are willing to
make the tough choices. But this critical legislation was just one
small step in the right direction. We obviously have a long way to go.
Mr. Chairman, again, I wanted to use my time today to stress the
need to address the debt in a real and meaningful way. I do not pretend
to have all the answers, but I want to be part of the solution. I look
forward to working with you and members from both sides of the aisle in
the coming months to make the hard choices and put us on a financially
sustainable course. Thank you.
Mr. Guinta. Thank you for your testimony.
And without objection, we will move on to our next member,
the gentleman from California, Mr. Garamendi.
Mr. Garrett. Ms. Chu was first.
Mr. Guinta. Without objection, thank you very much.
The gentlelady from California.
STATEMENT OF THE HON. JUDY CHU, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Ms. Chu. Thank you, Mr. Chair.
I thank you for the opportunity to submit testimony as
chair of the Congressional Asian Pacific American Caucus. I
have submitted a longer and more detailed testimony for the
record.
Asian Americans, Native Hawaiians and Pacific Islanders are
a diverse community with diverse needs. Unfortunately, the
population is often aggregated together during data collection,
which leads to false impressions about our community.
I would like to share with you the top five issues that are
facing the Asian Pacific American community and how Congress
can play a role in helping our community.
Unemployment is a significant issue for our community.
Certain sub groups are dealing with far higher levels of
unemployment than the 9.5 national rate. For example, Native
Hawaiian and Pacific Islanders face a 13.2 percent unemployment
rate. Samoans are dealing with a 17 percent unemployment. That
is why we must fully fund the President's budget request for
the Employment and Training Administration.
Educational attainment is also a problem for several
populations within the Asian Pacific American community. In
2006, a staggering 40 percent of Hmong, 38 percent of Laotians
and 35 percent of Cambodian populations did not complete high
school. This creates a strong need within the Asian Pacific
American population for education programs to target our
community early in school and to ensure Asian Pacific American
students graduate and go on to some form of post secondary
education.
To that end, it is critically important for your budget to
include the President's full request for both the Early
Learning Challenge Fund and TRIO programs, which help 4,700
Asian Pacific American population participants pursue and
complete postsecondary education.
On housing, Asian Pacific Americans who defaulted on their
mortgage loans are more likely to enter foreclosure than ever
seek a loan modification. In fact, the Asian Pacific American
population has suffered the largest percentage decline in home
ownership of any racial group. In order to assist these
homeowners, we must fully fund the President's budget request
for the Housing Counseling Assistance Program.
On immigration, the Federal year 2012 budget recommended an
increase of $1.75 million over last year for immigrant
integration and citizenship. I strongly support these requests
because these funds are critical to the success of the United
States and greatly benefit the Asian Pacific Islander
community, two-thirds of whom are immigrants and refugees.
Immigrants who integrate into U.S. society go on to become
informed voters but, most importantly, entrepreneurs and future
job creators.
However, funding for programs that support a humane
immigration system is dwarfed by the size of budget for border
and interior immigration enforcement. We must ensure that our
immigration budget is balanced and that it supports both
programs that benefit immigrants and also enforces our
immigration laws.
And lastly is the issue of civil rights. Protecting our
civil rights is essential. The Asian Pacific American community
continues to face a myriad of problems in this arena. Hate
crimes are on the rise. Voting rights are under attack, and
employment discrimination is rampant. By having the proper
resources, the Civil Rights Division would be able to ensure
that hate crime offenses are aggressively investigated and
prosecuted and that voters are not discriminated at the polls
and that employment discrimination is eradicated from the
workplace. I ask you to fully support the President's budget
request for the Civil Rights Division of the Department of
Justice.
In conclusion, I strongly urge you to support these
programs. Thank you for your consideration.
[The prepared statement of Judy Chu follows:]
Prepared Statement of Hon. Judy Chu, Chair, Congressional Asian Pacific
American Caucus (CAPAC)
Thank you for the opportunity to submit testimony as Chair of the
Congressional Asian Pacific American Caucus (CAPAC). I am honored to
have the opportunity to share with you the issues that are facing our
community and how Congress can play a role in helping our community.
Asian Americans, Native Hawaiians, and Pacific Islanders (AANHPIs)
are a diverse community with diverse needs. Unfortunately, this
population is often aggregated together during data collection which
leads to false impressions about our community. Asian Americans, in
general, are thought to be the ``model minority'' when in fact our
community has tremendous unmet needs that threaten the prosperity of
the AANHPI community and the prosperity of our country.
My testimony will focus on sharing data that might surprise you
about our community. It will demonstrate what programs in the budget
are the most crucial to AANHPI needs, and hopefully, can be
incorporated in the roadmap this committee sets for our future.
economic development
Unemployment
Unemployment is a critical issue for a significant portion of our
community. Aggregate data for 2009 shows that the unemployment rate for
the Asian American civilian labor force (7.9%) is lower than that of
the overall population (9.9%). However, disaggregated data shows that
the unemployment rate is higher for certain subgroups such as Southeast
Asians, including Cambodians (11.4%), Hmong (12.4%), and Laotians
(13.1%). The data also indicates that the unemployment rate for the
Native Hawaiian and Pacific Islander (NHPI) civilian labor force
(13.2%) is much higher than that of the overall population and is
particularly acute among Samoans (17%). Finally, the data confirms that
no AANHPI group has been left untouched by the recent economic
downturn, with every subgroup experiencing increased unemployment
between 2008 and 2009. Recent news\i\ has shown that while aggregate
unemployment data shows low unemployment rates for Asian Americans, the
period of unemployment lasts longer in our community.
The pervasive and deep unemployment within our community means we
need job creation solutions for not just the unemployed, but for the
long-term unemployed. High-quality job training and education services
to meet the needs of workers and employers are essential to putting
Americans and our community back to work. The Department of Labor
spearheads Workforce Investment Act programs that provided job training
and reemployment services to over 8 million Americans last year,
including disadvantaged youth and workers who have lost their jobs as a
result of plant closings or mass layoffs. Over 4 million workers gained
the employment-related assistance and training they needed last year
through these programs to reenter the workforce. While funding has
remained steady for Workforce Investment Act programs over the past few
years, participation rates have jumped 234% in the past two years alone
with workers struggling to regain their footing during the recession.
The President's overall budget request of $9,948,356 for the Employment
and Training Administration maintains this commitment to workforce
programs critical to our community so that as the economy recovers and
job growth returns, workers will have the education and skillsets they
need to reenter the labor market.
Business Development
Supporting minority businesses is key to economic recovery and
long-term growth. Minority firms currently provide nearly 5 million
people with steady jobs, but have the potential to create 16.1 million
jobs, leading to stronger communities and bolstering America's economy.
The U.S. Census Bureau projects that by 2050, the minority community
will represent 54% of the total U.S. population indicating that over
the next 40 years the growth of America's workforce will primarily come
from minorities. Minority-owned firms have the potential to contribute
significantly to our long-term economic progress and stability.
Asian-owned firms account for over 1.5 million of all minority
firms and employ nearly 52 percent of all employees in these firms.\ii\
The economic impact of Asian firms to the economy is significant, but
the potential for greater economic growth and contribution to our
economy is vast. In order to tap into the potential growth, we must
invest in business development programs targeted at minority firms such
as the Minority Business Development Agency.
In FY 2010 MBDA's return on investment was 123x and they created
6,218 jobs. Their performance speaks for itself and we must keep
programs such as these funded as our economy recovers. That is why the
President's request for $32.322 million for the Minority Business
Development Agency (MBDA) is important to promoting AAPI business
growth and the growth of all minority businesses.
Another focus for business development is developing exports for
minority firms. Increasing exports of our products and services to
global markets can help revive the fortunes of U.S. companies, spur
future economic growth and support jobs here at home. Minority firms in
the United States are primed for exporting and are twice as likely to
generate sales from exporting as non-minority-owned firms. Some of the
reasons are due in large part to language capabilities, cultural
compatibility and business agility. AANHPI firms are especially capable
of export to one of the largest markets in the world: Asia. However,
the Trade and Competitiveness Coalition has reported that small
businesses, compared with large firms, are especially dependent on U.S.
government initiatives to open foreign markets. Unlike big companies,
most small businesses do not possess offshore business affiliates or
contacts that can be used to circumvent trade barriers and gain market
access. It is vital to that the House Budget support the President's
request for expanding exports for small businesses, especially at the
Small Business Administration and the Department of Commerce.
education
Early Education Programs
For children in poverty, achievement gaps begin well before
kindergarten. Study after study has shown that investing in quality
early learning programs can yield a huge return-on-investment by
reducing the costs of special education, high school dropouts, teen
pregnancy, crime, incarceration, and dependence on social services
later in life and increasing the likelihood of college attendance and
completion. As nearly thirteen percent of Asian Americans live below
poverty,\iii\ and certain subgroups such as the Hmong and the
Vietnamese have poverty rates of 29.9% and 15.5% respectively,\iv\ this
issue is critical.
Thus, we urge you to include in your budget the President's request
for $350 million for the Early Learning Challenge Fund to expand access
to high-quality early childhood education.
TRIO
Educational attainment is also a problem for certain populations in
our community. In 2006 a staggering 40 percent of Hmong, 38% of Laotian
and 35% of Cambodian populations did not complete high school.\v\ TRIO
programs provide hundreds of thousands of students with the necessary
support to enroll in and graduate from college and, ultimately, help
narrow the gap between low-income, first-generation students and their
peers. The President's request of $920.1 million for TRIO programs is
essential to helping the estimated 4,700 AANHPI participants pursue and
complete postsecondary education.
AANAPISI
Although Asian Americans are sometimes portrayed as universally
excelling in school, disaggregated data shows a significant portion of
the community falls well below national averages. These students are
from low income backgrounds, are the first in their families to attend
college, and struggle to secure the financial resources to support
themselves while in school.\vi\ Based on analysis of the National
Postsecondary Student Aid Survey (2008), AANHPIs also have greater
financial need than other racial groups taking into account expected
family contribution and total aid
The authorized Asian American and Native American Pacific Islander-
Serving Institution (AANAPISI) program was created to better support
low-income AANHPI students with a variety of targeted services, helping
them overcome barriers to a college degree and putting them on the path
to success. It is important to our community that the committee
provides $4.575 million to the AANAPISI program to serve AANHPI
students.
civil rights
Civil Rights Enforcement
The Civil Rights Division of the U.S. Department of Justice is more
important than ever due to:
Hate Crimes. The AANHPI community continues to face a myriad of
problems in this arena: hate crimes are on the rise, voting rights are
under attack, and employment discrimination is rampant. According to
the FBI, the total number of hate incidents reported by law enforcement
agencies was 7,783 in 2008--up from 7,624 in 2007.\vii\ More than half
of the attacks were racially-motivated, with anti-Asian bias accounting
for 3.4 percent of the incidents and anti-Muslim bias 7.5
percent.\viii\ These numbers are likely to go up because of the growing
anti-Muslim sentiment in our country. By having the proper resources,
the Civil Rights division of the U.S. Department of Justice would be
able to ensure that hate crime offenses are aggressively investigated
and prosecuted.
Voting Rights. AANHPIs continue to face discrimination at the polls
and numerous barriers that successfully disenfranchise certain
communities.\ix\ With more resources, the Civil Rights division can
expand efforts to guarantee citizens' voting rights by addressing
voting rights violations.
Employment Discrimination. A record number of Muslim workers in the
United States have experienced alleged employment discrimination,
including claims that co-workers called them ``terrorist'' or ``Osama''
and employers barring them from wearing head scarves or taking prayer
breaks.\x\ Muslims make up less than 2 percent of the United States
population, but they made up about one-fourth of the 3,386 religious
discrimination claims filed with the Equal Employment Opportunity
Commission in 2009. This is a problem for the Asian American community
as many of these practicing Muslims are Asian Americans. If we ensure
that the Civil Rights division has enough funds, they will have what
they need to increase efforts to eradicate this type of discrimination.
For these reasons, we support the President's request of $161.8
million for the Civil Rights division, which is a $16.3 million boost
from FY 2010.
Community Relations
Not only must we protect our civil rights, but we must foster an
environment where all citizens feel respected and accepted by their
community. The Community Relations Service (CRS) in the Department of
Justice can help promote these types of attitudes. CRS serves as the
Department's ``peacemaker'' for community conflicts and tensions
arising from real or perceived discriminatory practices based on race,
color, or national origin and helps communities prevent and respond to
alleged violent hate crimes committed on the basis of actual or
perceived race, color national origin, gender, gender identity, sexual
orientation, religion or disability.\xi\ To carry out its goal, CRS
implemented several strategies and programs including an Anti-Racial
Profiling Program and Sikh (AMS) Cultural Awareness program.\xii\ We
support the President's request of $11.5 million for this program,
which is a $1.5 million increase from FY 2010.
housing
Housing Counseling Assistance Programs and Foreclosure Relief Programs
Housing counseling programs that are able to work with the
community in a linguistically and culturally appropriate manner have
been integral to ensuring the community development needs of AANHPI
communities. In fact, AANHPIs make up a substantial portion of the
population in 6 of the 10 US cities with the highest foreclosure rates.
AANHPIs have suffered the largest percentage decline in
homeownership of any racial group.\xiii\ A new study by the Asian Real
Estate Association and the UCLA Asian American Studies Centers saw
AANHPIs experience a significant loss of equity following the national
foreclosure crisis.\xiv\ Asian Americans average loss during 2007-2009
was -$42,900 and for Native Hawaiians and Pacific Islanders (NHPI) was
-$47,000. The national equity loss during that same period was -$9,100.
Financial and foreclosure assistance is also much needed in AANHPI
communities. It has been observed by advocates working in the community
that of the AANHPIs who defaulted on their mortgages loans, they are
more likely to enter into foreclosure, rather than seeking alternative
means of staying in their homes like loan modifications or other
alternatives.
In order to assist these homeowners, we must also consider how to
best reach and serve these communities. The AANHPI community is
comprised of two-thirds immigrants and refugees, represents 50 ethnic
groups, and 100 language groups. Additionally, there are nearly a
million Native Hawaiian and Pacific Islanders. With these diverse
needs, it is critical that there is support for housing counseling
organizations supported by the Housing Counseling Assistance Programs
that provide linguistically and culturally appropriate services to
these constituencies. The President's FY12 budget requests $88 million
for the Housing Counseling Assistance program and should be funded at
this level.
Affordable Housing Programs: Senior Housing Programs (Section 202) and
Section 8 Vouchers
AANHPIs are often concentrated in dense, overcrowded neighborhoods
and frequently live in areas where housing and rental markets are
expensive. In order to create housing opportunities for those most in
need in the community, we need to preserve funding for affordable
rental developments, senior housing, and rebuilding aging public
housing.
Some parts of the AANHPI community are living at 38% poverty rates
and have average households larger than the average for the total
population. With an inability to own a home due to financial hardship
and/or limited access to credit, many are renters who live in
overcrowded conditions in order to afford rent. At the national level
and for seven metropolitan areas, Asian homeowners live in overcrowded
conditions at a greater proportion than the total population. The
largest difference in overcrowded homes occurs in the Minneapolis
metropolitan area, where Asian households are 25% more crowded than the
total households in the area.\xv\ The severity of these conditions is
also felt within ethnic subgroups as well particularly in areas where
rental prices are usually high. For example, one-fourth of South Asian
American rental households are overcrowded by federal and municipal
standards of no more than one person per room compared to 8.2% of New
York City's general population.\xvi\
The AANHPI population age 65 and older increased 52% between 2000
and 2007, while the overall increase nationwide was 6% over the same
time period. This dramatic increase represents a major demographic
shift in the community. Nationwide, 1 in 8 AANHPI seniors are living
below the federal poverty threshold compared with 1 in 10 of all
seniors. The number of seniors living in poverty increased by 52% from
95,244 in the Census 2000 to 144, 537 in the 2005-2007 American
Community Survey.\xvii\
We should support the increased support for the President's FY2012
budget for $9,429 million for Section 8 Vouchers. Section 202, however,
the President requested $757 billion represents a decrease from FY2010
enacted figures of $825 million. To provide for the rising elderly
population, we should fully restore this figure to the FY 2010 levels.
Native Hawaiian Block Grants
The Native Hawaiian Block Grants have been critical for new
construction, rehabilitation, acquisition, infrastructure, and various
support services for Native Hawaiian and Pacific Islanders.
There are nearly 1 million Native Hawaiians and Pacific Islanders.
One out of five in this population lives in poverty. They are a
population highest risk of foreclosure and renters continue to
experience adverse treatment at levels of Hispanic and African American
renters.
The President's FY 12 budget funds the Native Hawaiian Block Grant
at $10 million, which is a $3 million drop from FY 2010 enacted levels.
healthcare
Access to Healthcare
Access to healthcare remains a key issue for many in our AANHPI
community. Aggregate data for 2009 show that the rate of uninsured
people among the Asian American population (14.1%) is lower than that
of the overall population (15.1%). However, disaggregated data show
that the rate of uninsured people is much higher for certain groups. In
particular, South Asians, such as Bangladeshis (22.5%) and Pakistanis
(22.9%), and Southeast Asians, such as Cambodians (21.3%), Hmongs
(15.9%), Laotians (18.5%), Thais (19.9%), and Vietnamese (18.7), are
impacted by a lack of health insurance coverage.\xviii\
The Affordable Care Act will provide these individuals and their
families with improved access to affordable health care and essential
health care services. Under the new law, Medicaid coverage will be
expanded to cover children and adults with incomes up to 133 percent of
the federal poverty level. Almost 1.3 million AANHPIs will be newly
eligible for Medicaid. This Medicaid expansion will provide coverage to
many AANHPI individuals and families who would otherwise go without
quality, affordable health coverage.\xix,xx\
In addition, the new law will expand coverage through the creation
of state health exchanges for individuals who do not qualify for
Medicaid or who cannot get affordable coverage from their employer.
These exchanges will allow individuals to shop for insurance and easily
compare prices and benefits. To ensure that health insurance is
affordable, the law will provide refundable tax credits to offset a
portion of the cost of health insurance premiums. It is estimated that
close to 1.5 million AANHPI will be eligible for premium tax credits to
purchase coverage.
These coverage expansions should have a significant impact on
AANHPIs with low or moderate incomes. It is critical that the FY 2012
Budget fully funds the Affordable Care Act to ensure that we are on
track to providing health coverage to the neediest members of the
AANHPI community.
Healthcare Disparities
For far too long, the health challenges of AANHPIs have gone
unnoticed and the deadly effects of this lack of knowledge and
awareness have been deeply felt by the community. Among one Pacific
Islander-American group, 20 percent of births are pre-term. Deaths from
breast cancer are four times higher among some Asian-born women
compared to their U.S.-born counterparts. Rates of vaccine-preventable
liver and cervical cancer among the Hmong community in California are 3
to 4 times higher than those of other Asian American groups.
One important way to address these disparities is to fund community
health centers. These centers play a critical role in expanding access
by serving as a trusted safety net for AANHPI communities because they
provide culturally and linguistically competent services that address
some of the key barriers that confront our community. The expansion of
community health centers is one of the cornerstones to helping the
AANHPI community. It is important to maintain the funding for community
health centers and provide $2.19 billion in FY 2012 Budget.
Hepatitis B
Among the most serious conditions affecting the AANHPI community is
hepatitis B, an infection of the liver and the leading cause of liver
cancer. About 1.3-1.5 million people in the U.S. are chronically
infected with hepatitis B, with approximately 5,000-6,000 people dying
each year from hepatitis B related liver disease or liver cancer. Over
half of the chronic hepatitis B cases and resulting deaths are
represented by AANHPIs. What is tragic about these deaths is that they
are completely preventable with a vaccine that has been available for
20 years.
The President recommended a $101 million boost to the Centers for
Disease Control and Prevention. We support this increased level in
funding in order for the Centers for Disease Control to increase
awareness, testing, and vaccination for Hepatitis B.
immigration
Immigrant Integration and Citizenship
In the last decade, the government has become increasingly aware of
the value of speeding the integration of immigrants into our society.
During the Presidency of George W. Bush, the Office of Citizenship was
established. In its early days, that office concentrated on, among
other things, improving access to citizenship education and
instructional materials.
The Office of Citizenship plays a key role in immigrant integration
by, among other things, leading initiatives to promote citizenship
awareness; supporting national and community-based organizations that
prepare immigrants for citizenship by providing grants, educational
materials, and technical assistance; and building collaborative
partnerships with state and local governmental and non-governmental
organizations to expand integration and citizenship resources in
communities.
The President recommended $19,749,000 for Immigrant Integration and
Citizenship for FY2012, an increase of $1.75 million over the FY2011
request. This funding will support immigrant integration efforts,
including funding for new programs supporting English language
acquisition and citizenship education.
We strongly support this request because these funds will greatly
benefit the AANHPI community and are critical to the success of the
United States. Immigrants who integrate into U.S. society go on to
become informed voters, active community members, innovators,
entrepreneurs and future job-creators. Whether they come on family or
employment visas, through the asylum or refugee program, or through
other much smaller legal immigration programs, legal permanent
residents come to this country with the dream of becoming U.S. citizens
and giving back to their adopted home.
The Office of Citizenship has already helped thousands more people
prepare to become citizens through Congress's support and it has helped
to reinforce the network of excellent state service providers around
the country. Strong support for integration programs boost human
potential and make us a stronger nation.
Immigration Enforcement Efforts
However, funding for programs that support a humane immigration
system is dwarfed by the size of the budget for border and interior
immigration enforcement. Compared to a meager $1.75 million increase
for integration services, the FY2012 Budget spends an additional $64
million on the controversial Secure Communities Program, increases
detention services by $158 million and institutes an all-time high of
over 21,000 Border Patrol agents. The FY2012 Budget is too strongly
focused on border enforcement.
Instead, we must ensure our immigration budget is balanced, that it
supports both programs that benefit immigrants, the foundation of the
American nation since it was established, and also enforces our
immigration laws. Immigration enforcement alone will not fix the broken
U.S. immigration system. We urge you to robustly support immigration
services and create a more equitable immigration budget that does not
rely on enforcement-only immigration policy.
territories
The Office of Insular Affairs (OIA) carries out the Secretary's
responsibilities for U.S.-affiliated insular areas. These include the
territories of Guam, American Samoa, the U.S. Virgin Islands (USVI),
and the Commonwealth of the Northern Mariana Islands (CNMI), as well as
the three Freely Associated States (FAS): the Federated States of
Micronesia (FSM), the Republic of the Marshall Islands (RMI), and the
Republic of Palau.\xxi\ OIA is the primary federal program aimed at
combating the economic and fiscal problems in the insular areas.
Unfortunately, the President's request included a $1.1 million
reduction from fiscal year 2010 levels. It is understandable in these
tough economic times everyone must make sacrifices, but reductions in
the OIA funding will translate to cuts to vital projects which foster
development of the insular areas in accountability, financial
management, tax systems and procedures, insular management controls,
economic development, training/education, energy, public safety,
health, immigration, labor, and law enforcement. We are requesting the
committee to restore the $1.1 million cut in funding to the Office of
Insular Affairs.
endnotes
\i\ Semuels, Alana. ``Unemployment lasts longer for Asian
Americans,'' LA Times. 7 September 2010. http://www.latimes.com/
business/la-fi-asian-jobless-20100907,0,1053141.story
\ii\ ``Fact Sheet: Minority-Owned Business Growth & Global Reach,''
MBDA. Department of Commerce. March 2011. http://www.mbda.gov/sites/
default/files/Minority-OwnedBusinessGrowthandGlobalReach--0.pdf
\iii\ ``Asian Americans and Pacific Islanders--Facts, not
Fiction,'' The Steinhardt Institute for Higher Education Policy, NYU.
2008.
\iv\ ``American Community Survey,'' US Census Bureau. 2009.
\v\ ``American Community Survey,'' US Census Bureau. 2006.
\vi\ ``Federal Higher Education Policy Priorities and the Asian
American and Pacific Islander Community,'' The Asian and Pacific
Islander American Scholarship Fund. 2010.
\vii\ US Department of Justice, Federal Bureau of Investigation,
2008 Hate Crime Statistics.
\viii\ Ibid.
\ix\ Meeting the Challenge: National Platform for Advancing
Justice. Policy Priorities & Recommendations for Achieving Equity,
Equality, and Justice in Asian American & Pacific Islander
Communities.'' http://www.advancingequality.org/attachments/files/391/
Platform--for--Action.pdf
\x\ Greenhouse, Steven. ``Muslims report rising discrimination at
work,'' The New York Times. 23 September 2010. http://www.nytimes.com/
2010/09/24/business/24muslim.html?--r=3&pagewanted=1&ref=business
\xi\ U.S. Department of Justice, Budget and Performance Summary.
Fiscal Year 2012.
\xii\ Ibid.
\xiii\ Veiga, Alex. ``Homeownership fell in '08; Asians hit worst''
Associated Press. 21 September 2009.
\xiv\ Asian Real Estate Association of America. ``AAPIs Experience
Significant Loss of Home Equity,'' AsianWeek. 26 January 2011. http://
www.asianweek.com/2011/01/26/aapis-experience-significant-loss-of-home-
equity/
\xv\ ``A New Path to Homeownership for Asian American Home
Buyers,'' Asian Real Estate Association of America and UCLA Asian
American Studies Press.
\xvi\ Finding a Path to South Asian Community Development, Chhaya
Community Development Corporation.
\xvii\ ACS http://www.aafny.org/cic/briefs/usseniors2009.pdf
\xviii\ American Community Survey, 2009.
\xix\ ``How Health Reform Helps Asian Americans,'' Families USA,
September 2010.
\xx\ ``How Health Reform Helps Native Hawaiians and Other Pacific
Islanders,'' Families USA, September 2010.
\xxi\ ``Budget Justifications and Performance Information Fiscal
Year 2012,'' Office of Insular Affairs. Department of the Interior.
2011. http://www.doi.gov/oia/budget/FY2012--Budget--Justification.pdf
Mr. Guinta. Thank you, very much, Ms. Chu, for your
testimony. I look forward to working with you through the
upcoming budget process.
Ms. Chu. Thank you.
Mr. Guinta. Mr. Garamendi, I will either allow you your 5
minutes, unless you would prefer to yield to Mr. Clyburn, and I
will let you decide.
STATEMENT OF THE HON. JOHN GARAMENDI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Garamendi. I think I better get on with it, despite my
high regard for Mr. Clyburn.
Thank you, Mr. Chairman. It is an honor to testify before
you today on the Federal budget. It is true it is the truest
reflection of our Nation's value carried out through public
policy.
The budget also reflects our priorities. I think we can all
agree that the priority number one is growing the economy. How
do we grow the economy? We simply must make it in America and
use our Nation's treasure wisely. In all that the Federal
Government does, we must always achieve the utmost efficiency
and effectiveness, especially in this economy. We must also
prioritize the investments that create jobs now and lay down
the foundation for a healthier economy in the future. Programs
that are inefficient, for example, much of the military
procurement, and programs that are ineffective at creating jobs
must be modified.
While there are many proposals for immediate cuts in the
halls of Congress, it appears that very little thought has been
given to the actual efficiency and effectiveness of those cuts.
The continuing resolution passed by this House earlier this
year would actually hinder economic growth and destroy some
700,000 jobs. This is contrary to America's interest. Without
policies that promote strong economic growth and job creation,
our economy will be hampered.
We must adequately invest in the following six categories:
elementary, secondary and higher education; research;
infrastructure; manufacturing; export enhancement; and, of
course, national defense. I believe we must prioritize these
six critical investments and urge the Budget Committee to set
budget levels that meet our present and future needs, keeping
in mind that efficiency and effectiveness and job creation are
of paramount importance.
We must also remember that America's manufacturing sector
is the backbone of middle America. If America's manufacturing
sector were a country, it would be the ninth largest in the
world. People working in the manufacturing sector earn $25,000
more than per year than employees in the other sectors--the
service sector. Yet one-third of all jobs lost during the great
recession were in manufacturing, despite manufacturing only
represents one-tenth of the jobs in America. Without the return
of manufacturing, America's future economic prosperity is
jeopardized. We need to make it in America if America is going
to make it.
National defense is a compelling fact and must be
addressed. I urge the deficit commission--excuse me, I agree
with the deficit commission that we must take--let me start
this paragraph over. The national deficit is a compelling fact
and must be addressed. I agree with the deficit commission that
we must take the long view, that is 5 to 10 years, in
addressing the deficit and not engage in precipitous, immediate
cuts that will harm the economy and only have a minor effect on
the overall deficit. I believe the President's 2012 budget is
appropriate, given the current economic situation.
One critical way to reduce the deficit is to let the Bush
tax cuts for millionaires and billionaires expire sooner rather
than later, bringing those taxes to the level that existed
during the Clinton administration. I would include the Defense
Department's base budget as part of the package of reductions
in the coming years. I would further reduce the deficit--excuse
me, the defense budget by accelerating the removal of combat
troops in Afghanistan, completing that withdrawal by 2013.
The deficit cannot be significantly reduced unless we also
address the runaway medical costs in this Nation. Our economy
will have difficulty competing on an international stage if
medical costs continue to absorb an ever increasing share of
the American economy, thereby squeezing out other necessary
activities. Cost containment must apply to all public and
private medical activities.
I bring your attention to a comprehensive study on this
issue that I conducted in 2005 while California's insurance
commissioner. The study, ``Priced Out: Health Care in
California'' was based on a panel of national experts who
compiled data and made 45 concrete recommendations across all
segments of the medical system. Those recommendations run the
gamut from requiring full disclosure of health expenditures at
hospitals to pay-for-performance incentives to wider generic
drug availability. Recommendations address the benefits and
cost sharing, health care quality, Medicare and Medicaid
reform, prescription drugs and the broadbased public health
programs. In my view, Congress must pursue all of the paths
recommended in the report. And we happen to do most of it with
the health reform. It should not be repealed.
I note that this report, ``Priced Out,'' is California-
specific, but the issues in it address both State and Federal
level concerns.
Social Security will undoubtedly be on the agenda. However,
it is wrong to address this issue as a driver of the deficit.
It is not. Long and appropriate separation of this essential
program for retirement should be addressed, as it has in the
past, with minor tweaks over time so as to maintain Social
Security strength. In any case, this program is both effective
and efficient for the foreseeable future. So long as we do not
raid Social Security trust fund or make substantial changes to
the program, we will not have a Social Security crisis. Any
effort to privatize Social Security must be categorically
rejected.
Mr. Chairman, I thank you for this opportunity to address
you on the subject of the budget.
[The prepared statement of John Garamendi follows:]
Prepared Statement of Hon. John Garamendi, a Representative in Congress
From the State of California
Thank you Chairman Ryan, Ranking Member Van Hollen, and members of
the Budget Committee. It is an honor to testify before you on the
federal budget, which is the truest reflection of our nation's values
carried out through public policy. The budget is also a reflection of
our priorities. I think we can all agree that priority number 1 is
growing the economy. How do we grow the economy? We Make It In America,
and we use our nation's treasure wisely.
In all that the Federal Government does we must always achieve the
utmost efficiency and effectiveness. Especially in this economy, we
must also prioritize the investments that create jobs now and lay down
the foundation for a healthier economy in the future. Programs that are
inefficient (for example, much of our military procurement) and
programs that are ineffective at creating jobs must be modified.
While there are many proposals for immediate cuts in the Halls of
Congress, it appears that there has been little thought given to actual
efficiency and effectiveness. The Continuing Resolution passed by this
House earlier in the year would hinder economic growth and destroy
700,000 jobs. This is contrary to America's interest. Without policies
that promote strong economic growth and job creation, our economy will
be hampered. We must adequately invest in the following six categories:
Elementary, secondary and higher education
Research
Infrastructure
Manufacturing
Export enhancement
National Defense
I believe that we must prioritize these six critical investments
and urge the Budget Committee to set budget levels that meet our
present and future needs, keeping in mind that efficiency,
effectiveness, and job creation are of paramount importance.
We must also remember that America's manufacturing sector is the
backbone of our middle class. If America's manufacturing sector were a
country, it would be the 9th largest economy in the world. People
working in manufacturing earn an average of $25,000 more per year than
service sector employees and usually have better benefits. Yet one-
third of all jobs lost during the Great Recession were in manufacturing
despite manufacturing only representing one-tenths of the jobs in
America. Without the return of manufacturing, America's future economic
prosperity is jeopardized. We need to Make It In America to make it in
America.
The national deficit is a compelling fact and must be addressed. I
agree with the Deficit Commission that we must take the long view (5 to
10 years) in addressing the deficit and not engage in precipitous
immediate cuts that will harm the recovery and only have a minor effect
on the overall deficit.
I believe that the President's 2012 proposed budget is appropriate
given the current economic situation. One critical way to reduce the
deficit is to let the Bush tax cuts for millionaires and billionaires
expire, bringing them to the levels that existed during the Clinton
administration. I would include the Defense Department's base budget as
part of a package of reductions in the coming decade. I would further
reduce the defense budget by accelerating the removal of combat troops
from Afghanistan, completing that withdrawal no later than 2013.
The deficit cannot be significantly reduced unless we also address
runaway medical costs. Our economy will have difficulty competing on
the international stage if medical costs continue to absorb an ever
increasing share of the American economy thereby squeezing out other
necessary activities. Cost containment must apply to all public and
private medical activities.
I bring to your attention a comprehensive study of this issue that
I conducted in 2005 while California Insurance Commissioner, ``Priced
Out, Healthcare in California.'' We convened a panel of national
experts who compiled data and made 45 concrete recommendations across
all parts of the medical system. These recommendations run the gamut,
from requiring full disclosure of health expenditures at hospitals to
pay-for-performance incentives to wider generic drug availability. The
recommendations address benefits and cost sharing, health care quality,
Medicaid reform, prescription drugs, and broad based public health. In
my view Congress must pursue all of the paths recommended in the
report. I note that this report is California specific, but the issues
it addresses apply to both state and federal levels.
Social Security should not be on the agenda. It is wrong to address
this issue as a driver of the deficit. The long and appropriate
separation of this essential program for retirement should be addressed
as it has in the past with minor tweaks over time so as to maintain its
strength. In any case this program is both effective and efficient. For
the forseeable future, so long as we do not raid the Social Security
trust fund or make substantial changes to the program, we will not have
a Social Security crisis. Any effort to privatize Social Security must
categorically be rejected.
Thank you for this opportunity to address you on this subject.
Mr. Guinta. Thank you, Mr. Garamendi, for your comments.
I wonder, on a personal request, if you wouldn't mind
sharing the results of the study with me and any other Member
who may want it. I would be curious to take a look at it.
Mr. Garamendi. I will be happy to do so, and I will present
it to you within an hour.
Mr. Guinta. Thank you. Thank you very much.
Next is the gentleman from South Carolina, Mr. Clyburn.
STATEMENT OF THE HON. JAMES E. CLYBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF SOUTH CAROLINA
Mr. Clyburn. Thank you very much, Mr. Chairman. Thank you
so much for holding this hearing here today. I have submitted a
written statement to the committee and request permission to
revise and extend it based upon what I may say here today.
Mr. Guinta. Without objection.
Mr. Clyburn. Thank you so much.
Mr. Chairman, I want to take just a few moments to talk
about an issue pertaining to the budget that is very, very
important to a significant number of citizens in our great
country. It is a concept. I am not here today to talk about
particulars, but a concept, a concept that is budget-neutral.
I am not here to ask that you increase funding in any
category. I am here to ask today that we tackle the issue of
the widening gap between the haves and the have-nots in our
society. I saw this as a very serious problem when we were
putting together the Recovery Act, at which time I brought
before the appropriate bodies a concept that we called a 10-20-
30 concept. It says simply that 10 percent of the resources in
the category, in this instance it was the rural development
section of the agricultural bill, that 10 percent of those
resources ought to be targeted to those counties and
communities where 20 percent or more of the populations have
been locked beneath the poverty level for the last 30 years.
Now I have vetted this with the White House. I have vetted
this with OMB. I vetted it with some of the most well known
constitutional scholars. And they all tell me that this is a
constitutional and an equitable way to deal with the issue of
persistent poverty that exists in various communities across
the country.
This is not about skin color. It is about what I would call
``stressed'' communities. If you are in South Carolina, North
Carolina or maybe even Georgia, they would be African-American
communities. If we are in South Dakota or Alaska, they would be
Native American communities. If you are in Kentucky and West
Virginia, they would be white communities, Appalachian. If you
are in Arizona and New Mexico, they would be Latino.
So what we are discussing here has got nothing to do with
targeting communities based upon skin color or ethnicity. It
has to do with basing--with targeting communities based upon
the persistent poverty that has existed in these communities
for a long, long time.
Now we all went back in our research for 30 years, and here
is what we found. We found 474 counties for the last 30 years
in the United States of America where 20 percent or more of the
populations have been beneath the poverty level for the last 30
years. Of those 474 counties, 7 of them are in my congressional
district, 7 out of the 15 that I represent. But my good friend,
Hal Rogers from Kentucky, represents 24 congressional
districts; 23 of his 24 counties fall in this category. Two-
thirds of the counties of those 474 counties are represented by
Republicans. Only one-third are represented by Democrats, so
this is not about politics.
It is about people who are locked and why the gap is
continuing to get wider. Because I don't think this is by
design. I think that when we put together budgets up here and
we send moneys over to the various Departments and people apply
for the money, they come in using what sophistication they
have. And let me tell you what happened in Marion County, South
Carolina, communities that have been trying to get water--where
the water is contaminated, they have to buy water, they have to
go and haul water from across town or some place else in the
county--they have been trying to get water for 50 years.
Because this little formula was there in the recovery package,
South Carolina was obliged to direct 10 percent of its money
into these communities. And Brittons Neck, South Carolina, in
Marion County is now getting water for the first time.
Communities in Orangeburg County, Bowman, Branchville are
getting water for the first time.
So I come today to say, Mr. Chairman, as we put lists
together for this budget, I would ask the committee to look
into this and to see whether or not it makes sense for us to
begin targeting resources where the needs really are. These
people do not have the sophistication to hire, nor do they have
the resources, to hire big grant writers to write their grants
and compete for the money.
And I will close with this. I have been around a long time.
I have sat on committees evaluating grant applications. I will
tell you, Mr. Chairman, I am a graduate South Carolina State
College, now University. I have sat on the panels with people
who were Stanford University graduates and Yale University
graduates, and they are seeing these proposals written by their
colleagues. My community have no chance. People tend to respond
in a positive way to people they know well. And so Branchville
would never have water if they had to hire a grants writer.
They don't have the resources to do it. They don't have the
sophistication in their communities. I do believe that we are
responsible for responding to need. And I would hope that when
this budget is put together, we will take a hard look at these
persistently poverty communities because they are there in the
Census tracts, in the numeration districts, and they are crying
out for a response from us.
Thank you, Mr. Chairman. And I will appreciate any
consideration you would give my request.
[The prepared statement of James E. Clyburn follows:]
Prepared Statement of Hon. James E. Clyburn, a Representative in
Congress From the State of South Carolina
highly distressed communities
Thank you very much. I thank the Chairman for holding this hearing
today.
I want to take just a few moments to talk about an issue pertaining
to the budget that's very, very important to a significant number of
citizens in our great country.
The Wharton School of Business recently held a conference named in
honor of Whitney Young, a leader and friend in the struggle for social
justice, equality and civil rights.
Whitney Young is probably known best for growing and transforming
the Urban League from a sleepy little organization into one of the
country's biggest and most aggressive crusaders for social justice.
What he is less known for is his call for a ``Domestic Marshall
Plan''--a program to eradicate poverty and deprivation in the United
States, similar to the Marshall Plan that was launched to reconstruct
Europe after World War II.
I'd like to use that call for a Domestic Marshall Plan as a jumping
off point for my remarks this morning.
Some of Whitney Young's ideas were incorporated into President
Lyndon Johnson's War on Poverty over 40 years ago. Yet the scourge is
still with us.
Before the War on Poverty and the Great Society, we had the New
Deal. All of these investments in America helped to move us forward as
a nation. But some communities have been left behind each time, and we
have begun to call them highly distressed communities.
Some of these communities are in the Sixth Congressional District
of South Carolina, which I proudly represent. For many years, the I-95
corridor of South Carolina was passed over for economic development.
Federal funds found their way to South Carolina but mysteriously did
not find their way into the Sixth Congressional District.
The I-95 corridor is plagued with health disparities. The Sixth
District has the dubious distinction of leading the state in incidents
of stroke, heart disease and diabetes. We lead the state in amputations
for both adult and juvenile diabetes. This region is known as the
buckle of the stroke belt and is home to the highest rate of prostate
cancer deaths among black males in the South.
Scientists tell me that many of these health problems are directly
related to water quality. In some of the places in my district, the
water is not fit for human consumption. One particular instance in
which my office was involved: the Health Department would not allow a
water hookup to a home because of the contamination. Yet the people
still drink the water, because they have no choice.
Two years ago, I authored a provision in Rural Development section
of the Recovery Act or Stimulus bill that we called the 10-20-30
formula. It stipulated that at least 10 percent of the funds be
targeted to persistent poverty counties--counties where at least a 20
percent poverty rate has persisted for the past 30 years.
The formula is working--Marion County South Carolina received a $3
million loan and a $4.7 million grant to build 71 miles of water lines
and three water projects in Orangeburg County benefited from this
formula, including a $5.6 million grant to bring potable water to these
communities.
Citizens in these counties will soon be enjoying their first clean
glass of water from the faucet, free of contaminants and pollutants,
thanks to this formula.
I am reaching out to Members who represent highly distressed
communities and am bringing together a bipartisan task force to ensure
that these areas are not overlooked as we emerge from the recession.
Hopefully, his task force will work to ensure that future budgets
provide desperately needed resources to all highly distressed
communities going forward--including empowerment zones, renewal
communities, and empowerment communities.
I thank the Chairman once again for holding this important hearing
today.
Mr. Guinta. Thank you for your compelling testimony.
I will certain convey your request to the members of the
committee, and I thank you for your time.
Mr. Clyburn. Thank you.
Mr. Guinta. Next is the gentleman from Georgia, Mr.
Johnson.
STATEMENT OF THE HON. HENRY C. ``HANK'' JOHNSON, JR., A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA
Mr. Johnson of Georgia. Thank you, Mr. Chairman, very much
for holding this hearing and allowing me the opportunity to
testify.
Let me say that I am astounded and it is amazing to me that
persistent poverty in this country would yield communities
where there is no safe running drinking water. It is just
totally amazing to me that in the year 2011, that that is the
case in America. And those kinds of facts are not particularly
well known and well publicized. But I certainly think that
Americans who are well off or relatively prosperous should take
a few days to maybe ride through some of these areas of
persistent poverty so that they can understand what it is like
to live in those areas and then perhaps their hearts may change
from a knife attack on the budget to a buttery, a buttery
approach to making sure that the budget reflects our values and
takes care of people, particularly the least of these.
America is now digging itself out of the worst recession
since the Great Depression. As State and local governments cut
back during this difficult economic time, President Obama had
to make some tough decisions with his budget proposal. The
President's budget proposal invests in America's future, which
will grow our economy, lead to job growth and lift low-income
and middle class families.
I strongly urge this committee to give high priority to
Workforce Investment Act funding, viral hepatitis funding,
legal services for low-income individuals, and housing and
foreclosure prevention programs.
The key to jump-starting our economy is to put Americans
back to work. Workforce Investment Act funds provide employment
and workforce development services to low-income adults. In
DeKalb County, where I represent, these funds have been used to
provide career training to more than 65,000 individuals over
the past 2 years. With the national unemployment rate at 8.9
percent and with Georgia's unemployment rate being stuck at
10.2 percent, it is essential that this program remain a
priority to the President's budget proposal.
It is also important to ensure that we have healthy
Americans. Healthy Americans are working Americans who
contribute to our society. This is why I strongly support
adequate funding for viral hepatitis programs at the Centers
for Disease Control and Prevention. Viral hepatitis diseases
affect nearly 6 million Americans, the majority of whom do not
know that they are infected. The President's budget proposal
requests $25 million for viral hepatitis programs. While the
President's budget requests a $5.2 million increase, it is not
enough. At least $50 million should be requested to ensure the
CDC can adequately fund prevention and treatment of viral
hepatitis.
Further, because of the current economic conditions, more
Americans are in need of legal assistance. This is why the
Legal Services Corporation is so critical. Nearly 57 million
Americans nationwide are eligible for LSC services. In my home
State of Georgia, Legal Services Corporation provides essential
legal services to seniors trying to save their homes from
foreclosure and veterans seeking benefits.
I am also here today to speak on the importance of
homeownership and foreclosure prevention programs in the
President's budget proposal. Foreclosures remain at an all-time
high, and Georgia ranks sixth in the Nation for foreclosures. I
am deeply concerned about this issue. In Gwinnett County, which
is also a part of my district, 1 in every 174 homes is facing
foreclosure.
As more homeowners become renters, it is important to
ensure that they have access to affordable housing. This is why
I support full funding of the Home Investment Partnership
Program. This program is a primary source of funds used by
nonprofits and other developers for homes and apartments to
house low-income families. In an economy where nearly 14
million Americans are unemployed and foreclosures are on the
rise, it is vital that affordable housing is available to those
in need.
It is important to remember that the budget is a document
that reflects America's core values. We must not balance the
budget on the backs of the unemployed, middle class families,
government workers or seniors.
Again, thank you for holding this hearing and giving me the
opportunity to testify.
And I yield back the balance of my time.
[The prepared statement of Henry C. ``Hank'' Johnson, Jr.,
follows:]
Prepared Statement of Hon. Henry C. ``Hank'' Johnson, Jr., a
Representative in Congress From the State of Georgia
Thank you, Chairman Ryan and Ranking Member Van Hollen, for holding
this hearing today and giving me the opportunity to testify on
President Obama's fiscal year 2012 budget.
America is digging itself out of the worst recession since the
Great Depression. As state and local governments cut back during this
difficult economic time, President Obama had to make some tough
decisions. The President's budget invests in America's future, which
will grow our economy, lead to job growth, and lift low-income and
middle-class families.
As this Committee develops the FY12 budget, I strongly urge you to
give high priority to Workforce Investment Act funding, viral hepatitis
funding, legal services for low-income individuals, and housing and
foreclosure prevention programs.
The key to jumpstarting our economy is to put Americans back to
work. Workforce Investment Act funds provide employment and workforce
development services to low-income adults. In DeKalb County, GA these
funds have been used to provide career training to more than 65,000
people over the past two years. With the national unemployment rate at
8.9% and Georgia's unemployment rate at 10.2%, and even higher in my
district, it is essential that this program remains a priority in the
FY12 budget.
It is important to recognize that healthy Americans are working
Americans who contribute to our society. This is why I strongly support
adequate funding for viral hepatitis programs at the Centers for
Disease Control and Prevention. Viral hepatitis affects nearly 6
million Americans, the majority of whom do not even know that they are
infected.
The President requests $25 million for viral hepatitis programs in
his budget. While this is a $5.2 million increase, at least $50 million
should be requested to ensure the CDC can adequately fund prevention
and treatment of viral hepatitis. As an American battling this chronic
illness, I know firsthand the importance and cost-effectiveness of
prevention and treatment.
Because of the economy, more Americans are in need of legal
assistance. Nearly 57 million Americans are eligible for assistance
from the Legal Services Corporation (LSC). In Georgia, LSC provides
essential legal services to seniors trying to save their homes from
foreclosure and veterans seeking benefits. I strongly support LSC
funding.
I also want to speak on the importance of home ownership and
foreclosure prevention programs in the President's budget. Foreclosure
rates remain at an all time high and Georgia ranks sixth in the nation
for foreclosures. In Gwinnett, which is part of my district, 1 in every
174 homes is facing foreclosure.
As more home owners become renters, it is important to ensure that
they have access to affordable housing. This is why I support full
funding of the HOME Investment Partnership Program which is a primary
source of funds for homes and apartments to house low-income families.
With nearly 14 million Americans unemployed, and foreclosures on the
rise, it is vital that affordable housing is available to those in
need.
I speak today in support of these programs because it is important
to remember that the budget is a document reflecting America's core
values. We must never balance the budget on the backs of the
unemployed, middle-class families, government workers, or seniors.
Again, thank you for holding this hearing and I yield back the balance
of my time.
Mr. Guinta. I thank you Mr. Johnson for your testimony and
also look forward to working with you through this process and
how we confront our challenges and ensure that we have adequate
funding for different programs that may affect Georgia and
other States in our country.
Thank you so much.
Mr. Johnson of Georgia. Thank you, Mr. Chairman.
Mr. Guinta. Next is the gentleman from New Hampshire, Mr.
Bass.
STATEMENT OF THE HON. CHARLES F. BASS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW HAMPSHIRE
Mr. Bass of New Hampshire. Thank you very much, Mr.
Chairman.
It is indeed a unique pleasure to see you chairing this
distinguished committee here today. You should be proud of
that. I had the honor of serving on this committee for 8 years,
and I joined the committee at the time that Congressman, now
Governor of Ohio, John Kasich assumed the chairmanship of the
committee, and the Nation at that time faced many of the same
opportunities that we face here today.
That was 1995. We were faced with what we considered to be
chronically institutional deficits that appeared to be endless.
And under the leadership of John Kasich and our leadership in
the House and Senate at that time, we were able to send
President Clinton budgets that brought us not only into balance
but into surplus within 4 years.
We have the same opportunity today, although the challenges
are much greater. But I think this committee can make these
difficult choices. But within that context, I have a couple of
recommendations. Number one, I believe that every single dollar
that is expended by this government should be subject to
scrutiny and should be on the table. That includes all
entitlements. It includes defense. And it includes nondefense
discretionary spending. There is no item or line item in the
Federal Government that should not be subject to budgetary
oversight and scrutiny.
Secondly, I recommend to you, having been through eight
budget cycles on this committee, that the simpler the budget
is, the more likely it is to be able, A, to pass and, B, to be
implementable through reconciliation by the committees that
have jurisdiction over the entitlement side of spending.
I know that the committee will be discussing all sorts of
different recommendations that will be provided by research and
by staff and by the CBO and by other interest groups. But to
the extent that you can give the authorizing committees--and
the major ones, of course, are Ways and Means and Energy and
Commerce--the ability to do as much as they can and be as
innovative as they can with a minimum amount of direction, if
you will, from the Budget Committee, I think it is more likely,
A, that we will pass the budget and, B, that the committees
will be able to do their work.
To the extent that you do provide recommendations, watch
out for downshifting. One program in particular comes to mind
which I fought hard for when I was on this committee, and that
is full funding of special education, otherwise known as IDEA
funding. Because we set the rules here in Washington but
provide an unfortunately small percentage of the funding,
States and localities have to come up with the funding to meet
the goals of the law. So if we decide to cut IDEA funding, we
are going to be shifting on a dollar-per-dollar basis that
additional cost to cities and to States.
And you, Mr. Chairman, would know as well as anybody
because of the years of distinguished service that you gave New
Hampshire's largest city as its mayor.
Fourthly, I am glad that the committee is bringing up the
budget sooner rather than later and sticking with the statutory
schedule that was outlined in the Budget Empowerment Control
Act of 1974. We are now embroiled in a controversy over last
year's budget, which was not a controversy that we wanted to
have, but we inherited it from the previous administration.
Don't allow us to get tied up in that so that we wind up where
the previous leadership was last year with no budget, no
appropriations, no reconciliation. That would define failure.
I am glad that we are bringing the budget out and we are
bringing it out soon and that we can move forward with fiscal
year 2012 funding as quickly as possible.
As I said in the beginning of my testimony, this is a
unique opportunity, once again, to turn the direction of
America away from runaway spending and toward getting our
spending under control and moving toward a goal of living
within our means.
However, at some point, I think the Budget Committee and
the Rules Committee should have some serious and detailed
hearings on the issue of budget process reform and get
testimony from people like myself and others who have ideas as
to how this system can work better than it does today. I myself
have discussed for some time the reestablishment of a committee
that was established back in the early 1940s called the
Reduction in Nonessential Federal Expenditures Committee
established by Harry F. Byrd in the early 1940s. It is credited
with the fact that most of the Depression-era make-work
programs that were enacted by the Congress in the 1930s are no
longer in existence today. The committee should look at
mechanisms that create incentives for Members of Congress to
want to vote to reduce spending rather than to increase
spending. And one way to do that is to give either to this
committee or a permanent select committee the ability to bring
spending reduction proposals from any portion of the budget
directly to the floor of the House in the form of a resolution
for a vote. And then let the general public decide whether they
think this is a good idea or not.
So, having said these things, Mr. Chairman, I believe that
this committee has enormous challenges over the next month or
two, but also enormous opportunities. You will be cutting new
ground as occurred back in 1995. Don't let it pass. I know it
won't. I know that the Members of this Committee are dedicated
to fiscal responsibility, to low taxes and to a government that
will promote job creation and economic recovery.
And with that, I thank you for your time and wish you well.
[The prepared statement of Charles F. Bass follows:]
Prepared Statement of Hon. Charles F. Bass, a Representative in
Congress From the State of New Hampshire
Chairman Ryan, Ranking Member Van Hollen, I appreciate the
opportunity to come before the Committee today and testify on my
priorities for the upcoming Fiscal Year 2012 Budget Resolution.
Today we find ourselves in a unique situation in which Congress is
not only establishing spending for the next fiscal year under regular
order, we are also still trying to finish last year's work. For the
first time in modern budget history, Congress failed to pass a federal
budget and enact any of the appropriations bills. While we finish the
process for this fiscal year, we also have the challenge of
establishing future spending levels after years of irresponsible and
out-of-control spending. I think all of us here today can agree that
one of the keys to job creation and economic growth is reducing
government spending and getting a handle on mandatory spending. Future
budget resolutions must reflect this reality.
While H.R. 1 was a strong statement about our commitment to cutting
federal spending, simply taking the ax to government programs without
careful consideration of the consequences is risky. We need to take a
hard look at the least effective government programs and target those
for cuts or elimination. Taxpayer dollars should not be allocated to
programs that are ineffective or duplicative.
A recent GAO report highlighted 34 examples of duplicative programs
within the federal government. We need to take a close look at these
programs and eliminate the redundancy. According to the GAO report, the
federal government's efforts to address financial literacy are spread
across more than 20 different agencies and roughly 56 programs. Five
agencies within the Department of Transportation administer over 100
programs related to surface transportation, totaling $58 billion. These
are just some of the unnecessary and fragmented programs that the
federal government should consolidate or eliminate to operate more
efficiently.
The effects of the failure to pass a budget or any of the
appropriations bills last year are already being felt in my home state
of New Hampshire. In Berlin, New Hampshire, we have a federal
corrections institute that is sitting idle and waiting to be opened.
Because we are operating on one Continuing Resolution after another,
there isn't funding available to hire guards or transfer prisoners.
This state-of-the-art, $276 million federal prison is estimated to
create more than 300 new jobs and have a $40 million annual impact on
my Congressional district, but right now it sits empty. What's worse,
each year that this facility sits vacant, the Bureau of Prisons will
spend $4 million just to maintain it.
We must also recognize that reducing spending in some federal
programs will cause even more spending at the local level. One such
program is the Individuals with Disabilities Education Act (IDEA).
Under IDEA, the federal government promised local communities that it
would fund up to 40 percent of the cost to educate students with
disabilities. To date, we are funding this program at about 18 to 20
percent. Local communities are required by law to provide a federally-
mandated level of services to students with special needs. The federal
government's failure to live up to its promise and fully fund its share
only diverts local education resources that either have to be made up
through cuts to other programs or by raising local taxes. We all agree
that students with special needs deserve these extra services, but
insufficient federal IDEA funding continues a broken promise that has a
direct impact on each and every school district across the country.
There are many worthwhile programs that need funding, such as the
Low Income Home Energy Assistance Program, community health centers,
and the Land and Water Conservation Fund, all of which have positive
impacts on our economy and way of life in New Hampshire. As we work
through the budget process, we will have a lot of tough choices to make
to sufficiently fund these programs while at the same time learning to
live within our means. The first place we can start is by eliminating
wasteful programs, but this cannot be our only action.
While there has been a lot of talk about cutting discretionary
spending, if want to truly address the crushing debt that inhibits our
economic recovery, we must examine mandatory spending, which consumes
two-thirds of the federal budget. As Congress crafts next year's
budget, this issue must be a part of the debate. The first step this
Committee and Congress as a whole can take is to grant the authority to
reform mandatory spending to the Committees of jurisdiction, which can
use their expertise and examine reform measures much more closely. We
must also ensure that we include the American people in this important
debate.
If we don't deal with this issue now, we will doom our children and
grandchildren to a future of unsustainable debt that threatens our
nation's economic competitiveness. We need to start the discussion now,
and I commend the Chairman for his leadership on bringing this issue to
the forefront.
Thank you again Mr. Chairman for the opportunity to speak today
about New Hampshire's priorities and how we can work together to get
government spending under control and learn to live within our means.
Mr. Guinta. Well, I thank you, sir, for coming and
testifying and sharing the challenges and opportunities that
this Nation faced back in the mid-1990s.
And I thank you for your service and bringing fiscal
responsibility and discipline again to our Nation. And I, too,
feel that while the challenges remain probably some of the
greatest that we have ever faced, I, too, am optimistic that we
are up for the challenge. And difficult decisions have to be
made, but I look forward to continuing our work on behalf of
New Hampshire and the Nation.
I have appreciated your counsel and the responsibility that
you have assumed in this 112th Congress and look forward to
many more moments of dialogue with you and hopefully that we
can implement some of the things that you have talked about
here today. Thank you.
Mr. Bass of New Hampshire. Thank you very much, Mr.
Chairman.
Mr. Guinta. The committee welcomes the gentlelady from
Wyoming, Ms. Lummis, thank you for coming before the committee
today.
STATEMENT OF THE HON. CYNTHIA M. LUMMIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WYOMING
Mrs. Lummis. Mr. Chairman, I deeply appreciate this
opportunity to testify. I loved serving on this Budget
Committee in the last session. I miss this committee, and I
have great respect for the task in front of you.
I am here to share my thoughts and the ideas of my
constituents in Wyoming about the fiscal challenges facing our
country.
I have been listening to Wyoming's commonsense-minded
people, everywhere from the feed store to the grocery store.
They want Congress and the President to put America on a path
to fiscal stability by halting this country's spending spree
and tackling our long-term debt problem.
But the President's 2012 budget proposal would have the
taxpayers shell out $844 billion in annual interest on our debt
by the next decade, over triple what we pay currently. That is
an unacceptable projection, and we need to make reforms now to
change course.
This is no longer a fiscal issue; it is a moral issue. I am
a Member of the House Appropriations Committee. And I have had
the opportunity to help reduce our discretionary spending, but
discretionary spending alone will not get our country on sound
fiscal footing. Discretionary spending accounts for less than
40 percent of our government's budget.
In fact, if you take away defense spending and mandatory
spending, that only leaves 12 percent that is nondefense
discretionary and nonmandatory spending. So I am here today to
stress the urgency of tackling entitlements in the 112th
Congress. Medicare, Medicaid, and Social Security will
eventually collapse under their own weight if they are left
unchanged. We must address this unsustainable entitlement issue
if we are to preserve entitlements for future generations.
The chairman of this committee, Mr. Ryan, is no stranger to
ideas for reforming entitlements. I support his Roadmap for
America's Future, and I look forward to seeing many of its
provisions in the House budget for fiscal year 2012. For
example, proposals to raise the Social Security retirement age
for younger generations have received backing from leaders in
both parties. I have heard Steny Hoyer discuss it. I have heard
John Boehner discuss it. And the roadmap has recognized the
need for this change. And the National Commission on Fiscal
Responsibility and Reform included it in their final report.
Now, that is why I have introduced a stand-alone bill to
increase the retirement age for today's 4-year-olds by 3 years,
from the current law of 67 to age 70. It would not affect
anyone in their 50s, 60s, 70s, 80s, 90s, or 100s. It only
affects people 49 and younger. It is H.R. 837. It is called
Alex's Law, named after a 4-year-old child of a member of my
staff. This is a commonsense approach to help save Social
Security for future generations. It is necessary because the
life expectancy after 65 for today's retirees compared to 1940
is 5 years longer.
We all know that the Social Security trust fund will be
exhausted by 2037, which means every retiree will see a 22
percent cut in benefits. And the cuts will continue to get
worse if Washington looks the other way. So my bill is just a
first step. It only closes between one-third and one-half of
the Social Security shortfall. But changing the retirement age
is a gradual adjustment. We will not begin to see the full
effects of this reform for decades. It comes in the outyears.
But it is still the most commonsense and well understood
reform, one that seems to have generated the most bipartisan
support. And it is a starting point for a more comprehensive
package to make the program solvent.
I also want to talk a little bit about Medicaid. We need to
work with States, and specifically the Nation's governors, to
cap or limit the Federal financial commitment to Medicaid and,
in exchange, give States the flexibility to manage their
Medicaid programs as they see fit. By capping and then block
granting the Federal dollars to the States that are actually
running Medicaid, we can return the decision of how best to run
these programs to the States, their elected officials, and the
citizens to which they are accountable. And we will learn best
practices from the States. They will be the incubators, the
laboratories for great ideas.
A State-centered Medicaid program could provide better care
for beneficiaries at lower costs. In Wyoming, we absolutely
know that. Because we have the smallest population in the
Nation, we were able to survey 100 percent of children on
Medicaid. And we compared and analyzed claims data under both
Medicaid and Blue Cross Blue Shield, and found that it was more
than twice as expensive to cover children under Medicaid than
Blue Cross Blue Shield and almost 1.5 times more expensive to
cover adults. But our State Medicaid programs are currently at
the mercy of a bureaucracy that disallows them from trying
alternative coverage mechanisms, including a health savings
account-type of arrangement for the uninsured. And that is
under development by the State of Wyoming using entirely State
dollars.
Entitlement programs along with other mandatory spending
consume roughly 60 percent of the Federal budget. We can't
afford to continue ignoring their importance in our fiscal
future. Appropriations bills and discretionary spending have
been the first focus. And we have done that in the last number
of weeks. But in order to really get at the problem of our
fiscal trajectory, we must provide that same platform for
entitlements. We must have the debate in committees, on the
House floor, on the Senate floor if we are to find solutions
for our future safety net. The fiscal year 2012 budget is the
opportunity to bring these entitlement reforms to the budget.
Mr. Chairman, I deeply appreciate the opportunity to appear
before you today. I can assure you, America is ready for this
discussion, and they are demanding that we put politics aside
in the interests of our Nation. I look forward to working with
all members of this committee, both sides of the aisle, to
address this crisis situation.
[The prepared statement of Cynthia M. Lummis follows:]
Prepared Statement of Hon. Cynthia M. Lummis, a Representative in
Congress From the State of Wyoming
Chairman Ryan and Ranking Member Van Hollen, thank you for
providing members with the opportunity to testify before the House
Budget Committee today about the Fiscal Year 2012 budget. I miss
serving on this committee, and I have great respect for the task in
front of you. I am here to share my thoughts, and the ideas of my
constituents, about the fiscal challenges facing our country.
I've been listening to Wyoming's common-sense minded people from
the feed store to the grocery store. They want Congress and the
President to put America on a path to fiscal stability by halting this
country's spending spree and tackling our long-term debt problem. But
the President's 2012 budget proposal would have the taxpayers shell out
$844 billion in annual interest on our debt by the next decade--over
triple what we pay currently. It is an unacceptable projection, and we
need to make reforms now to change course. This is no longer a fiscal
issue; it is a moral issue.
On the House Appropriations Committee, I have the opportunity to
help reduce our discretionary spending. But discretionary spending
alone will not get our country on sound fiscal footing: discretionary
spending accounts for less than 40 percent of our government's budget.
I am here today to stress the urgency of tackling entitlements in the
112th Congress.
Medicare, Social Security and Medicaid will eventually collapse
under their own weight if they are left unchanged. We must address
these unsustainable entitlement programs if we are to preserve them for
future generations.
Chairman Ryan, you are no stranger to ideas for reforming
entitlements in order to save entitlements. I support your Roadmap for
America's Future, and I look forward to seeing many of its provisions
included in the House budget for Fiscal Year 2012. For example,
proposals to raise the Social Security retirement age for younger
generations have received backing from leaders in both parties. The
Roadmap has recognized the need for this change and the National
Commission on Fiscal Responsibility and Reform included it in their
final report.
That is why I have introduced a stand-alone bill to increase the
retirement age for today's four-year-olds by three years, from the
current law of 67 to age 70. It would not affect anyone in their 50s,
60s, 70s, 80s, 90s or 100s. H.R. 867 is named Alex's Law after a four-
year-old child of a member of my staff. This common-sense approach to
help save social security for future generations is necessary because
the life expectancy after 65 for today's retirees compared to 1940 is 5
years longer. We all know that the Social Security trust fund will be
exhausted by 2037, which means every retiree will see a 22 percent cut
in benefits. The cuts will get worse if Washington continues to look
the other way.
Alex's law is a first step, which can close between one third and
one half of Social Security's shortfall. Changing the retirement age is
a gradual adjustment, so we will not begin to see the full effect of
this reform for decades. But it is still the most common-sense and well
understood reform, the one that seems to have generated the most
bipartisan support, and is a starting point for a more comprehensive
package to make the program solvent.
We must also address medical entitlement programs--Medicare's
financial situation is worse than Social Security's and Medicaid's
unsustainable trajectory is putting the future of state budgets and our
social safety net at risk. While both need to be reformed, Medicaid is
an immediate threat to state budgets and deserves immediate attention,
particularly in light of the massive expansion of the program under
Obama Care. We need to work with the states, and specifically the
nation's governors, to cap or limit the federal financial commitment to
Medicaid and in exchange give states the flexibility to manage their
Medicaid programs as they see fit. By capping, and then block granting
the federal dollars to the states who are actually running Medicaid, we
can return the decision of how to best run this program to the states,
their elected officials, and the citizens to which they are
accountable.
A state-centered Medicaid program could provide better care for
beneficiaries at lower costs. In the State of Wyoming, a comprehensive
analysis of claims data under both Medicaid and the private Blue Cross
Blue Shield plan found that it was more than twice as expensive to
cover children under Medicaid, and about one and one half times more
expensive to cover adults. But state Medicaid programs are currently at
the mercy of a bureaucracy that disallows them from trying alternative
coverage mechanisms, including a health savings account type
arrangement for the uninsured that is under development by the State of
Wyoming using entirely state dollars.
Entitlement programs, along with other mandatory spending, consume
roughly 60% of the federal budget. We cannot afford to continue
ignoring their importance in our fiscal future. Appropriations bills
and discretionary spending have been the first focus--the requirement
to pass spending measures to keep our government running has provided a
platform for Congress to debate cuts. We must provide the same platform
for entitlements. We must have the debate in committees and on the
House and Senate floor if we are to find solutions for our future
safety net. This Fiscal Year 2012 budget is the opportunity to bring
entitlements to the forefront.
Thank you Chairman Ryan and Ranking Member Van Hollen for allowing
me to testify in front of the House Budget Committee today. I came here
to not only offer my proposals for consideration during the upcoming
Fiscal Year 2012 budget, but also to express my willingness to work
with any Member who is serious about entitlement reform. We need to
have a serious conversation about any reform option that is put on the
table, have a debate on the merits, and stop the demagoging and scare
tactics on both sides. America is ready for this discussion and they
are demanding we put politics aside in the interest of our nation.
Mr. Guinta. Thank you, Ms. Lummis, for testifying here
today and representing Wyoming so ably.
And I look forward to working with you and every member of
this committee and this Congress. Thank you so much for your
testimony today.
We will now take a brief recess as we wait for additional
Members to come testify. It should be no more than 15 minutes.
[Recess.]
Mr. Mulvaney [presiding]. Gentlemen, thank you very much
for coming in.
I apologize for being a few minutes late.
We are just wrapping up a Members-only Budget Committee. I
have Mr. Welch going first. Are you gentlemen planning on doing
this together, or is it individually?
STATEMENT OF THE HON. PETER WELCH, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VERMONT
Mr. Welch. I think individually. Thank you very much, Mr.
Chairman. I appreciate the opportunity to appear here.
I want to say a couple of things. First of all, I applaud
the Budget Committee and your chairman for focusing much needed
attention on the fiscal crisis in our country.
Number two, I applaud the new majority. They ran on a
commitment and a platform of restoring fiscal stability, and
they won. The American people support that.
Three, this committee is putting forward a plan for the
consideration of Congress. And that is where I have real
questions about the wisdom of the plan that has been put
forward.
We do have to get our fiscal house in order. The only way
we are going to accomplish that goal is by putting everything
on the table. It means that defense has to be on the table. It
means tax expenditures have to be on the table. It means line
items in the appropriations bill have to be on the table. And
it means that we cannot continue to pay for wars on the credit
card.
The way we are going right now is that we are trying to
attack the problem to get 100 percent of the solution by
focusing on 12 percent of the budget, the nondefense
discretionary spending. And it means that the decisions that
are being asked of Congress are basically to do such things as
to cut low-income heating assistance, cut back on scholarships
for students that are trying to get ahead, to cut back on
economic development aid that is essential to our communities,
to cut back on Community Development Block Grants. All of these
are legitimate questions.
But if the goal, if the goal of this committee is the
stated goal, and that is to restore fiscal solvency to this
country, then the only way we can be successful is by putting
every element of the budget on the table. And that, as I
mentioned, is defense. It is entitlements. It is tax
expenditures.
The proposal that we are dealing with in Congress right now
has two problems with it. Number one, it will fail. It will
fail in achieving the goals that the Budget Committee majority
states is its goal, and that is to restore fiscal stability to
this country.
It happens to be a goal I share. We have a chance of
getting from here to there if we put everything on the table so
that those tough choices that we have to make about eliminating
government inefficiencies, by eliminating tax breaks that no
longer have any economic value, any growth potential; if we put
everything on the table, we have a chance of succeeding
together.
Everything is not on the table now. And that is going to
guarantee failure. That is my major criticism of what we are
doing in the budget.
Second, we are starting down a road of playing Russian
roulette with the American economy. And we are on the brink of
doing real damage. There are many in this body who are
suggesting that we should stiff the creditors of the American
government by saying ``no'' on extending the debt limit. I
believe that is reckless, and it is irresponsible, and it is a
politically loaded decision that will do great harm to this
country.
My view is that we have got to acknowledge the obvious, and
that is America pays its bills. Extending the debt limit is not
about incurring new obligations; it is about honoring past
obligations, some under Democratic administrations, some under
Republican administrations. And it is true that we have many
debates about what the shape and form of the budget should be.
But those debates should be resolved in the budget. We should
not use the debt limit ceiling as a hostage. That is going to
have real consequences, detrimental consequences to American
families and American workers.
So my view, we should be in agreement to support a
continuation of the debt limit on a clean extension, not to use
that as political leverage to get your position or ours. We can
get to where we need to be, but not if we have an approach on
the budget that limits what we can consider.
I mean, why is it that we continue tax breaks for oil
companies that are doing well? A trillion dollars in profits in
the past 10 years.
Why is it that Goldman Sachs paid 1.1 percent of its income
in taxes, even though it had a profit--this is in 2008--of $2.3
billion and received, courtesy of the American taxpayer and the
Federal Reserve in the form of subsidized interest rates, $800
billion?
Those types of distortions have to be part of our
discussion. If we consider everything, we can succeed in
achieving your stated goal of restoring fiscal stability to
this country.
Thank you, Mr. Chairman. I yield back.
[The prepared statement of Peter Welch follows:]
Prepared Statement of Hon. Peter Welch, a Representative in Congress
From the State of Vermont
Thank you Mr. Chairman,
America has a debt problem. There is no denying that fact. The
question for this Congress is, how do we address this issue
thoughtfully and in a manner that moves our nation forward.
Unfortunately, the debate thus far has advanced neither of these
aspirations.
There are two issues with the current approach to tackling this
nation's budget problem. The first is that this approach simply won't
work. Thus far, this Congress has been focused solely on 12% of the
federal budget, the so-called non-security domestic discretionary
spending. We could eliminate the entirety of non-security domestic
discretionary spending and this nation would still have a yearly budget
deficit of nearly $1 trillion. Trying to accomplish 100% of the
necessary cuts by looking at 12% of the budget just doesn't work. To
truly and effectively address our nation's budget problems, this
Congress needs to put everything on the table. We need to put the
nearly $40 billion in taxpayer subsidies that go to mature, profitable
oil companies on the table. We need to put the bloated Pentagon budget
on the table. And yes, we need to put entitlement programs on the
table.
There is a second problem with this Congress' approach to solving
the nation's debt problem. While I salute my friends in Congress for
trying to cut the federal budget, I have to ask, why must we do so in a
way that destroys institutions? This Congress is making no distinctions
in its zeal to slash and threatening institutions along the way.
Vermont Public Radio is one of these institutions. Vermont Public
Radio is the link between 251 towns, cities and villages in the state
of Vermont. Farmers listen to it in their barns, parents listen to it
on their way to bringing their kids to school, people at work listen to
it for the weather reports and it welds together the political
discussion in the state of Vermont, which is vibrant, which is varied,
which has people with different points of view having a common
reference point. Just this month, however, the House voted to prohibit
federal funding of Vermont Public Radio.
The Low Income Heating Assistance Program is one of these
institutions. LIHEAP provides badly-needed help to low-income folks
throughout the country struggling to heat their homes. Nearly 20,000
Vermonters rely on this help. Laura is one of them. She is a single,
disabled mother with an adult disabled child. She relies on a Seasonal
Fuel benefit for just over $1,000--plus a $611 bonus--to keep herself
and her daughter warm in the winter. At a time when fuel prices are
rising to nearly $4 a gallon, we're going to cut the assistance to
Laura but hand nearly $40 billion dollars in tax breaks to oil
companies that made over $1 trillion in the past 10 years? That just
doesn't pass for common sense.
If this Congress continues down its current path of cutting the
federal budget, it will fail. And worse, it will destroy important
institutions that make this country what it is. We have a serious
problem that needs to be addressed. But as we work to address it, we
would be wise to remember that the federal budget is more than a series
of appropriations. We need a real plan, Mr. Chairman and I hope to work
with you for common ground.
Mr. Mulvaney. Thank you, Mr. Welch.
I appreciate that.
For what it is worth, I will speak very briefly to your
point on the budget. I think if you are serious about, and I
believe that you are, seeing everything on the table, I think
you will be relatively pleased with what you see coming out of
the budget this year. There are many of us who tend to agree
with you that the only way to do what we want to do, which is
to restore fiscal responsibility and some semblance of balance
in this world, is to put everything on the table.
Not only is it the only way that we can actually do it
numerically, it is probably the only way to do it with a sense
of shared sacrifice, because we are going to be calling on a
lot of folks to give up a lot of things. The more things that
are on the table I think the better. So I think you will see
some things you may like in this year's budget based upon the
early discussions.
Thank you, Mr. Welch.
Mr. Welch. Thank you, Mr. Chairman.
Mr. Mulvaney. Mr. Keating?
STATEMENT OF THE HON. WILLIAM R. KEATING, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MASSACHUSETTS
Mr. Keating. Thank you very much, Mr. Chairman.
And thank you for the opportunity to testify on the budget
today.
My constituents in the South Shore, Cape, and islands in
Massachusetts have very strong opinions on how their taxpayer
money should be spent. And what I want to do is just
communicate some of those views to you. We sent out to several
thousands of people solicitations, and we had tremendous
response from those people. And let me just pick more specific
parts of that to communicate what they feel, because the
responses I got, frankly, were overwhelming. And the people
wanted me to communicate their specific ones in today's
testimony.
Most of my constituents wanted the budget to reflect their
top priority. And amazingly and not surprisingly, however, that
is job creation. As the country emerges from the worst economic
disaster since the Depression, the people of Massachusetts want
more action, more priority on jobs. They want tax credits to
hire veterans returning from Iraq and Afghanistan, who have
some of the highest unemployment rates in the country,
incentives for businesses to keep jobs right here in America
rather than offshore, a renewed focus on green jobs, because
these are the jobs of the future. America must be prepared to
lead the world in this important sector.
Many of the constituents understand that the key to job
growth is effective education. Cutting education priorities is
the wrong move at the wrong time. The Federal Government has an
obligation, a sacred responsibility to prepare our children for
a competitive global economy and the challenges of the 21st
century. Education is the great equalizer. So cutting the
Workforce Investment Act, job training initiatives, or cutting
Pell Grants for needy college students threatens job and
economic growth and America's overall competitiveness.
Education has allowed Massachusetts to become the hub of
technology and innovation. Americans and people all over the
globe know that they will encounter world class ideas, get
world class care at Massachusetts' institutions. And we are
proud of the contributions that we can share with the rest of
the country. But these very initiatives are at risk without
proper funding.
And let's be clear. The Federal Government should be
funding these initiatives. They save American lives, and most
importantly, they create American jobs when we need it the
most.
We also need to consider those who have done this before
us, like our seniors and our veterans who have made this
country what it is. I am particularly concerned that the budget
that is being proposed by the majority will target benefits
that seniors in my district depend on, like Social Security and
Medicare. For the majority of retirees, Social Security
provides more than half of their annual income. Reducing
benefits would not reduce the deficit but would greatly harm
our seniors in my district more than any in Massachusetts. I
represent the highest number of our seniors and elder citizens.
An overwhelming majority of my constituents do not want
this Congress to cut Federal initiatives that serve them, their
neighbors, and their families, or our most vulnerable
populations.
I leave you with a story of Sheara Whalley of Scituate,
Massachusetts, one of my constituents, to remind you that
through targeted cuts, we should be very careful and surgical
about how we approach these things. This is a personal story. I
admired her for sharing this with us. And it is important to
realize this is just not issues; these are faces. These are
people. And it is behind every dollar we spend.
Ms. Whalley had contacted my office because of the threat
of budget cuts to cancer research. You see, Mr. Chairman, Ms.
Whalley chose to live in Massachusetts precisely because of the
access of cutting-edge research that occurs in that State. She
is a survivor of advanced ovarian cancer, and she has
participated in clinical trials that she credits with her life
nearly 5 years after the diagnosis.
There is still much work to be done in cancer detection,
treatment, and prevention at the National Cancer Institute, the
Centers for Disease Control and Prevention, and the Department
of Defense Ovarian Cancer Research Project. Ms. Whalley wrote
to me that the cancer that she suffered through is still a
short-term death sentence for many today.
As a new Congressman, I take these budget negotiations
seriously, knowing that my constituents are relying on me to
share with Congress their personal stories and to make sure
that they be heard over the political rhetoric that often
consumes us.
Thank you again for the opportunity to testify. I look
forward to working with you and your colleagues in a bipartisan
manner to ensure that the American people's priorities are
reflected in this budget. Thank you very much.
[The prepared statement of William R. Keating follows:]
Prepared Statement of Hon. William R. Keating, a Representative in
Congress From the State of Massachusetts
Mr. Chairman, thank you for the opportunity to testify before the
Budget Committee today. My constituents on the South Shore, Cape and
Islands in Massachusetts have strong opinions about how their taxpayer
money should be spent, and I am here to communicate their views.
Last week, I emailed my constituents to make sure that they had the
opportunity to share with me their priorities on the budget. What's
most important to them? The responses I got were overwhelming. The
people of Massachusetts want to be heard.
Most of my constituents want this budget to reflect their top
priority: job creation. As this country emerges from the worst economic
disaster since the Great Depression, the people of Massachusetts want
more action on jobs.
Tax credits to hire veterans returning from Iraq and
Afghanistan, who have some of the highest unemployment rates in the
country;
Incentives for businesses to keep jobs in America--rather
than offshore;
A renewed focus on green jobs because these are the jobs
of the future and America must be prepared to lead in this sector.
Many of my constituents understand that the key to job growth is
effective education. Cutting education priorities is the wrong move at
the wrong time. The federal government has an obligation--a sacred
responsibility--to prepare our children for a competitive global
economy and the challenges of the 21st century. Education is the great
equalizer, so cutting the Workforce Investment Act job training
initiatives or cutting Pell grants for needy college students threatens
job and economic growth and American competitiveness.
Education has allowed Massachusetts to become a hub of technology
and innovation. Americans and people all over the globe know that they
will encounter world--class ideas and get world-class care at
Massachusetts institutions. We are proud of the contributions that we
can share with the rest of the country, but these initiatives are at
risk without proper funding. And, let's be clear: the federal
government should be funding these initiatives. They save American
lives and create American jobs.
We also need to consider those who have done for us before, like
our seniors and our Veterans. I am particularly concerned that the
budget that is being proposed by the majority will target benefits that
seniors in my district depend on, like Social Security and Medicare.
For the majority of retirees, Social Security provides more than half
of their annual income. Reducing benefits would not reduce the deficit,
but it would greatly harm our seniors.
An overwhelming majority of my constituents do not want this
Congress to cut federal initiatives that serve them, their neighbors,
their family and our vulnerable populations.
I leave you with the story of Sheara Whalley of Scituate,
Massachusetts, one of my constituents, to remind you that though
targeted cuts must be made, there is a person--a story--behind every
dollar we spend. And a person--a story--behind every tax dollar we
earn.
Ms. Whalley contacted my office because of the threat of budget
cuts to cancer research. You see, Mr. Chairman, Ms. Whalley chose to
live in Massachusetts precisely because of access to cutting edge
research. She is a survivor of advanced ovarian cancer, and she has
participated in clinical trials that she credits with her life nearly
five years after diagnosis. There is still much work to do for cancer
detection, treatment and prevention at the National Cancer Institute,
the Centers for Disease Control and Prevention, and the Department of
Defense Ovarian Cancer Research Program. Ms. Whalley wrote to me that
the cancer that she suffered through is still a ``short-term death
sentence for many today.''
As a new Congressman, I take these budget negotiations seriously,
knowing that my constituents are relying on me to share their stories
and make sure that they are heard over the political rhetoric.
Thank you again for the opportunity to testify. I look forward to
working with you and our colleagues in a bipartisan manner to ensure
that the American people's priorities are reflected in this budget.
Mr. Mulvaney. Thank you, Mr. Keating.
Ms. Bass, I will defer to you if you want to make a
comment.
Ms. Bass of California. Yes, thank you for your testimony,
Mr. Keating. I did have a question.
You described several areas that you didn't feel should be
cut. And I believe you had some proposals that you put on the
floor a few weeks ago. So perhaps you could tell us if we don't
cut those areas, how could we afford to close the deficit?
Mr. Keating. Well, thank you very much. And it is great to
see you here as a fellow freshman participating so fully.
We do have to look at those areas. We have to do it in a
way--one area I do believe divides America and will not save
money is raising the retirement age of Social Security. That
does not mean that we have to look at other alternatives, maybe
indexing above the $106,000 should be explored, if necessary.
If necessary.
In the areas on the floor I took action on certainly to
jump out I think that could have savings without affecting the
quality of life of the people that I serve, that was an
opportunity to save $43.6 billion in oil subsidies.
Now, I have done my research and talked to the think tanks
that are involved, nonpartisan think tanks and asked them where
these moneys go. And the answer was to shareholders. Now, that
is great if you are a shareholder of an oil company. But that
does not serve any need. And that is a significant amount of
money that could be cut.
I also think in the defense budget looking at the moneys we
are expending right now--and there was an amendment offered I
believe by Mr. Paul--about cutting some of our expenditures in
Europe in areas where the vestiges of the Cold War still
remain, and we are still out of date in funding needs that are
no longer needs, not only for this country nor even the
countries involved. And those are a couple of examples. But
there are areas, approached surgically, where we can do things.
But the one thing that we shouldn't do is just look at what
I think is an artificial number of $100 billion. Look further
about what is done. I am concerned and have shared on the floor
as well the fact that people like Mark Zandi from Moody's, who
was an adviser for Senator McCain, has said that moving ahead
with those type of cuts right now would cost us 700,000 lost
jobs by 2012. And I am concerned of the effect of those lost
jobs.
Now, Massachusetts is doing slightly better than the rest
of the country. Ninety-seven percent of our citizens have
health insurance. We were the first State to come out of--
statistically come out of the recession. We are fifth right now
in creating new jobs. But we are still doing that with much too
high an unemployment rate and people suffering from the effects
of not having a job. So that will remain my priority, getting
people back to work. That is the best way to address all of our
country's problems.
Ms. Bass of California. Thank you very much.
Maybe California could borrow some money from
Massachusetts.
Mr. Keating. Thank you.
Ms. Bass of California. Thank you, Mr. Keating.
Mr. Mulvaney. Mr. Keating, very briefly, thank you for your
testimony.
Thank you, by the way, for taking the time to actually come
up with specific proposals. We are going to need as many of
those as we can get in the coming days.
I will reference the report that you mentioned, however,
regarding the 700,000 jobs that are lost. I have seen a similar
report I think from Goldman Sachs that said we would cut 2
percent off of the GDP. If you run the math at that multiplier
level, then the stimulus bill should have created 9 million
jobs and added 26 percent to GDP. So I think the gild is off
the lily when it comes to the multiplier effect of government
spending.
But to your larger point, all of these cuts have faces
attached to them. There is no question. Every single person in
this Congress has folks in their constituency who will be
affected by them. I just hope we don't lose the sight of the
other faces, which are the folks who are paying the debt. I
have three 11-year-olds who are faced with a crushing debt in
their future and a dramatically lower standard of living. So I
know that we share some of the same goals. I think we probably
have different ideas on how to get there. But I do appreciate
your testimony today.
Mr. Keating. Thank you, Mr. Chair. And if I may----
Mr. Mulvaney. Certainly.
Mr. Keating. If we are making cuts, I do want to see that
applied to the deficit. And I think there is a real question
that the cuts will not translate into deficit reduction. So
that is something with we can discuss together and work
towards, because I agree with you, the deficit reduction is
important.
And I also believe, seeing what is happening in my State,
that delicate balance of maintaining and creating new jobs
while at the same time creating a framework to deal with that
deficit remains all of our--all of us here in Congress--that
remains our number one priority.
Mr. Mulvaney. Thank you, Mr. Keating.
Mr. Keating. Thank you.
Mr. Mulvaney. Next up, Mr. Olson from Texas.
Mr. Olson, thank you for joining us today.
STATEMENT OF THE HON. PETE OLSON, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS
Mr. Olson. Mr. Chairman, thank you for the opportunity to
testify today.
I appear before you to express my strong and unwavering
support for the principles of American leadership in human
space flight. As the former ranking member of the Space and
Aeronautics Subcommittee and a proud Representative of the 22nd
Congressional District of Texas, home to the Johnson Space
Center, I call for careful consideration of human space flight
funding within the overall NASA budget.
Since the first Mercury flight of May 5, 1961, the U.S.
human space flight program has been a source of pride and
inspiration for our Nation. A strong commitment to human space
exploration is vital to America's national security and
economy. And I respectfully submit that our Republican budget
should reflect this national priority. NASA is a unique agency
that has spurred private-sector job growth and fuels the
economy with American ideas and innovation.
The extraordinary challenges of achieving access to space
have also motivated and accelerated the development of
technologies and industrial capabilities that have widespread
applications and have contributed to the technological
excellence of the United States. Human space exploration also
continues to inspire our young Americans to pursue careers in
the key areas of science, technology, engineering, mathematics.
Unfortunately, the Obama administration's budget for NASA
cedes our historical dominance in human space flight to
countries like China, Russia, India, who are anxious to seize
the mantle of space supremacy. The President's budget also
dismisses the priorities that Congress defined and the
President signed in the NASA Authorization Act of 2010. The
President's budget calls for more funding for advancing the
development of private commercial crew services at the expense
of developing a space launch system and a multipurpose crew
vehicle to replace the retiring shuttle.
With the cancellation of the Constellation program, we are
also facing a gap between shuttle retirement and America's
ability to independently access low-Earth orbit and beyond.
America will be forced to rely solely on Russia to get our
astronauts to the International Space Station, which the United
States has paid the overwhelming share to build. Russia has
learned the value of capitalism and recently announced that
they are hiking the price of rides to the space station from
$56 million to nearly $63 million per astronaut starting in
2014. This lack of independent access stems from a failure on
the part of Congress to provide adequate resources to complete
the mission we gave NASA.
As a strong fiscal conservative, I know that our Nation is
on an untenable economic path. We face a tidal wave of debt. In
getting our fiscal house in order, we must focus on ensuring
that we preserve critical capabilities and guarantee that
agencies are focused on their primary mission. For NASA, that
mission is human space flight, plain and simple.
However, for years Congress has charged NASA with
completing tasks that fall outside the scope of its primary
mission. Specifically, NASA spent over $1 billion in fiscal
year 2010 on global warming research and climate change
studies. Yet climate change research is currently being
conducted by 16 different agencies in our Federal Government.
Our Federal Government spent over $8.7 billion on these
programs in 2010 alone. In this time of limited resources, we
must take a commonsense approach to Federal spending by cutting
duplicative programs. We must focus our limited resources where
they will most be effective, by reorienting NASA's mission back
toward human space flight. If we reduce funding for climate
change research, we have can lower the overall NASA budget
while maintaining our human space flight at levels that do not
cede our Nation's global leadership to other Nations.
NASA's core mission is providing exceptionalism through
human space exploration. America and the world have reaped
benefits of this investment. The commitments we make to
continuation of human space flight today will yield meaningful
and sustained economic returns for decades to come.
Thank you for this opportunity. I yield back my time, and
am happy to take your questions.
[The prepared statement of Pete Olson follows:]
Prepared Statement of Hon. Pete Olson, a Representative in Congress
From the State of Texas
Mr. Chairman, thank you for the opportunity to testify today.
I appear before you to express my strong and unwavering support for
the principles of American leadership in human space flight.
As the former Ranking Member of the Space and Aeronautics
Subcommittee and the proud representative of the 22nd district of
Texas--home to the Johnson Space Center--I call for careful
consideration of human space flight funding within the overall NASA
budget.
Since the first Mercury flight on May 5, 1961, the U.S. human space
flight program has been a source of pride and inspiration for our
nation.
A strong commitment to human space exploration is vital to
America's national security and economy, and I respectfully submit that
our Republican budget should reflect this national priority.
NASA is a unique agency that has spurred private sector job growth
and fuels the economy with American ideas and innovation.
The extraordinary challenges of achieving access to space have also
motivated and accelerated the development of technologies and
industrial capabilities that have widespread applications and have
contributed to the technological excellence of the United States.
Human space exploration also continues to inspire our young
Americans to pursue careers in the key areas of science, technology,
engineering and mathematics.
Unfortunately, the Obama Administration's budget for NASA cedes our
historical dominance in human space flight to countries like China,
Russia, and India, who are anxious to seize the mantle of space
supremacy.
The President's NASA budget also dismisses the priorities that
Congress defined--AND the President signed--in the NASA Authorization
Act of 2010.
The President's budget calls for more funding for advancing the
development of private commercial crew services at the expense of
developing a Space Launch System (SLS) and Multi-Purpose Crew Vehicle
(MPCV) to replace the retiring Shuttle.
With the cancellation of the Constellation program, we are also
facing a gap between shuttle retirement and America's ability to
independently access low earth orbit and beyond.
America will be forced to rely solely on Russia to get our
astronauts to the International Space Station, which the United States
has paid the overwhelming share to build.
Russia has learned the value of capitalism and recently announced
they are hiking the price of rides to the Space Station from $56
million to nearly $63 million per seat starting in 2014.
This lack of independent access stems from a failure on the part of
Congress to provide adequate resources to complete the mission we gave
NASA.
As a strong fiscal conservative, I know that our nation is on an
untenable economic path; we face a tidal wave of debt.
In getting our fiscal house in order, we must focus on ensuring
that we preserve critical capabilities and guarantee that agencies are
focused on their primary mission.
For NASA, that mission is human space flight. Plain and simple.
However, for years Congress has charged NASA with completing tasks
that fall outside the scope of its primary mission.
Specifically, NASA spent over one billion dollars in FY2010 on
global warming research and climate change studies.
Yet, climate change research is currently being conducted across 16
different federal agencies.
Our federal government spent over $8.7 billion on these programs in
just 2010 alone.
In this time of limited resources, we must take a common-sense
approach to federal spending by cutting duplicative programs.
We must focus our limited resources where they will be most
effective, by reorienting NASA's mission back toward human space
flight.
If we reduce funding for climate change research, we can lower the
overall NASA budget while maintaining human space flight at levels that
do not cede our nation's global leadership to other nations.
NASA's core mission is proving American exceptionalism through
human space exploration.
America and the world have reaped the benefits of this investment.
The commitments we make to the continuation of human space flight
today will yield meaningful and sustained economic returns for decades
to come.
Thank you again for this opportunity, I yield back the balance of
my time.
Mr. Mulvaney. Thank you, Mr. Olson.
Ms. Bass?
Ms. Bass of California. No questions.
Mr. Mulvaney. Mr. Olson, I have no questions.
Thank you very much for your testimony today. I appreciate
the effort.
Mr. Olson. Thank you.
Mr. Mulvaney. Gentlemen, we are sort of operating on a
first come, first served at this point.
So if it is okay with you, Mr. Loebsack, we will move now
to Mr. Duncan.
Mr. Duncan, thank you for coming in. You have 5 minutes,
please, sir, to make your presentation.
STATEMENT OF THE HON. JEFF DUNCAN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF SOUTH CAROLINA
Mr. Duncan of South Carolina. Thank you, Mr. Chairman. It
is good to see you in the chairman's chair, as just a side
note. Mr.
Chairman, thank you for the opportunity to discuss the
Federal budget priorities which are of importance to the
American people this afternoon. Our Nation faces an
unprecedented spending and debt crisis that threatens our whole
economy. And I appreciate the committee's willingness to hear
from Members of Congress on these issues.
Mr. Chairman, as I traveled across the Third District of
South Carolina last week, I encountered one overarching theme
from the people in the Palmetto State: Government spending is
out of control. Our Federal Government is too large, spends too
much money and is out of touch with the needs of the American
people. What we need to start doing today is roll back the size
and scope of the Federal Government.
As you know all too well, we are now more than $14 trillion
in debt, and we are in our third year of deficit spending in
excess of $1 trillion. To make matters worse, the budget we
received from President Obama is projected to run an additional
deficit of $1.6 trillion for fiscal year 2012. We must stop the
spending insanity.
If the people of South Carolina made one thing clear in
November, it was that our government must make significant
spending cuts now in order to build surpluses, reduce our
Nation's debt, and jump-start real job creation. Congress needs
to accept the same financial realities that families and
businesses are facing all across the country. We must look for
practical ways to lower costs and control the runaway
government spending, which represents one of the greatest
threats to our national security. That is why we need to make
fighting Washington's urge to grow government one of our top
priorities.
We begin this process by going back to the basics. And that
starts by adhering to the United States Constitution. Mr.
Chairman, when I read this document, I don't see run a car
company. I don't see take over banks. I don't see fund
America's largest abortion provider. And I don't see run a
national health insurance scheme listed in my copy.
Ending these government takeovers of private-sector
functions and questionable line items should be the first
things we address when we cut this budget.
In addition, the GAO has found duplicate programs within
our government that could save another $200 billion a year. If
we decide that a government program is a legitimate answer to a
problem we face, then let's only have one program that is
responsible for the problem, not 17, or as you heard Mr. Olson
say, many, many more addressing certain issues.
Beyond that low-hanging fruit, my constituents want me to
make sure there are no sacred cows in this budget. Everything
has to be on the table. For decades, both Republicans and
Democrats have helped to fuel our addiction to government
spending. But the American people expect this Congress to
finally cut up the credit cards and get spending under control.
A lot of these cuts won't be easy. But we are all going to have
to row this boat if we are going to get this country headed in
the right direction.
This means reforming our entitlement systems, eliminating
programs, reducing the size and scope of government, which will
in the end ensure a future for our children where the
government is solvent and secure. As a small business owner,
when times were tough, I had to cut back. I had to set
priorities and really address my spending. We all know that you
can't dig your way out of a hole, and our country can't spend
its way out of debt. Only by managing our government the same
way that we manage our homes, our small businesses, and our
large businesses will we be able to tackle this fiscal crisis.
If this is not the time to cut Federal spending and begin
to work toward a balanced budget, I ask, when is the time? I
would contend that the time is now. The time is now. Let
history show that this Congress took this Nation back from the
brink of financial disaster and put it on the right path to
fiscal sanity. Again, Mr. Chairman, I want to thank you for
giving us as Members of Congress and not members of the Budget
Committee an opportunity to have a voice in this process.
I yield back the balance of my time.
[The prepared statement of Jeff Duncan follows:]
Prepared Statement of Hon. Jeff Duncan, a Representative in Congress
From the State of South Carolina
Mr. Chairman, thank you for the opportunity to discuss these
matters of importance today. Our nation faces an unprecedented crisis
that threatens all of our economy, and I appreciate your willingness to
hear from members on these issues.
Mr. Chairman, as I toured the Third District last year as part of
my campaign, I encountered one, overarching theme among my
constituents--Government has gone out of control. Our federal
government is too big, tries to do too much, and spends too much hard-
earned taxpayer money in the process. What we need to start doing today
is to roll back the size and scope of the federal government.
Mr. Chairman, as you know all too well, we are now more than $14
Trillion dollars in debt. That number equates to approximately 94% of
our Gross Domestic Product. Economists tell us that debt over 90% of
GDP costs us 1% of economic growth per year. Mr. Chairman, when you
extrapolate that over the size of the American market, that means we
are losing one million jobs per year in this country because of our
debt. It is no wonder that our national unemployment rate remains far
too high--and I can tell you that in the Third District of South
Carolina, our unemployment rate remains above the national average.
Mr. Chairman, to make that worse, the budget we received from
President Obama purports to run an additional deficit of $1.6 trillion
dollars for Fiscal Year 2012. Some suspect that number to actually be
much higher, possibly as high as $2 trillion dollars. Mr. Chairman, for
the voters of South Carolina, this would be an unacceptable outcome.
If there has been one message I have heard as a Congressman from my
constituents it is this--cut spending now. Cut discretionary spending,
cut entitlements, but balance the budget in a way that does not
mortgage the future of my boys and my future grandchildren.
Mr. Chairman, we need to start this process by going back to
basics. If this Constitution, which I carry in my pocket every day, Mr.
Chairman, if this Constitution doesn't specifically enumerate powers to
this government, then this government should stop doing those things,
and we in this body should ensure that taxpayers stop having paying for
them. I do not see ``run a car company,'' ``takeover banks,'' ``pay off
Planned Parenthood,'' or ``run a national health insurance scheme''
listed in my copy of the Constitution. Ending these government
takeovers of private sector functions and questionable line items
should be the first things we cut in this budget.
In addition, Mr. Chairman, the GAO has found duplicate programs
within our government that could save another $200 billion dollars a
year. If we decide that a government program is the legitimate answer
to a problem, let's only have one program that is responsible for that
problem, not seventeen.
Beyond that low hanging fruit, Mr. Chairman, my constituents want
to make sure that there are no sacred cows in this budget. Everything
has to be on the table. No pet project, no pet program, no constituency
is safe from the debt crisis that we face, so none of those spending
priorities can go unscathed. This means reforming our entitlement
systems, dialing back the pensions of federal employees, eliminating
programs, and in the end returning our financial future to solvency.
Common sense dictates that we cut up the credit cards and live
within our means, just like every American household has to do.
Mr. Chairman, if we cannot make the tough choices in this crisis,
facing a debt meltdown not unlike what the failed Socialist euro-states
have faced, when can we? If this isn't the time to cut federal spending
back to a balanced budget, to surpluses that help us pay down this
debt, when is that time? I would argue that this time is now. Mr.
Chairman and members of this Committee, I hope that you also will be as
committed to ending these deficits and this debt, and will produce a
budget that does not spend more than it takes in. Prudence, and our
constituents, demand no less.
Thank you for this time, Mr. Chairman.
Mr. Mulvaney. Thank you, Mr. Duncan.
Ms. Bass?
Mr. Duncan, all I can say is I appreciate your testimony.
It sounds like you are speaking to some of the same people that
I may be speaking with, but that would cover the fact that our
districts touch each other. So maybe that explains that. Thank
you, sir. I appreciate you coming in.
Mr. Loebsack, thank you for waiting, and thank you for
coming in a little bit ahead of time today. You can go ahead
and have 5 minutes, please, sir.
STATEMENT OF THE HON. DAVID LOEBSACK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF IOWA
Mr. Loebsack. Thank you, Mr. Chairman, thank you, ranking
member, for the opportunity to testify today about my
constituents' priorities for the 2012 budget.
As we know, our country is facing great challenges that
demand tough choices and really very serious bipartisan work.
We must come together to make thoughtful decisions that
eliminate unnecessary spending and prioritize job growth,
economic recovery, and the long-term fiscal health of our
Nation. We must work together to get our fiscal house in order.
However, at a time when so many families and businesses are
still struggling, we must ensure that the choices we make do
not set back our economic recovery but instead pave the way for
ongoing economic growth. I have heard time and again from my
constituents that especially in these tough economic times, we
cannot divest in the areas that promote economic growth, job
creation, and strong communities. Renewable energy development
that will create jobs, training to ensure American workers lead
the 21st century global economy, infrastructure that businesses
and farmers need to support economic growth, research that
promotes innovation and industrial competitiveness, and
equipment that our first responders need to keep our families
safe are just some of the areas that my constituents have told
me are critical to our communities, to our State, and indeed to
our Nation.
Furthermore, there are two overarching issues that continue
to be important in my district and are pressing as you consider
the budget, flood recovery and education. As I have testified
the past 2 years before this committee, Iowa suffered the worst
natural disaster in our State's history in 2008, and our
communities are still struggling to recover. It is vitally
important for not only my district but districts across the
country that FEMA be provided adequate resources to respond to
natural disasters and also fulfill its obligation of previous
recovery commitments.
I also hope that FEMA and the other Departments involved
will be provided resources to examine reforms to the disaster
recovery system. Additionally, the Army Corps of Engineers
provides vital disaster response, recovery, and flood-
prevention functions. I urge you to consider the critical need
for a new WRDA bill and funding for new flood protection
projects, such as the proposal to protect Cedar Rapids in my
district.
Flood protection can also be a community effort. And I am
fortunate to come from Iowa, where civic engagement and a sense
of community are the norm, not the exception. The outpouring of
support during the 2008 floods was humbling. But those who
responded to the flooding in my district told me that they had
to send away volunteers who wanted to help, if you can imagine
that. This wasn't because they didn't need the assistance but
because they didn't have the infrastructure and planning tools
to utilize the sudden influx of people.
That is why I helped to create the Volunteer Generation
Fund, to invest in volunteer recruitment and management, and
help States, cities, and towns develop the infrastructure to
effectively respond to natural disasters and other emergencies.
It is vital, I believe, that the Volunteer Generation Fund be
included in budget discussions.
I would also like to talk today about the importance of
education for America's future. The investments that we make in
education now determine our country's future competitiveness.
That is why I believe that this is not the time to make cuts in
education. I grew up in poverty. And if it hadn't been for
student loan programs and financial aid, I would not have been
able to attend Iowa State University and, indeed, I would not
be here where I am today.
Earlier this year, I spent a week visiting colleges and
community colleges across my district, speaking to students
about the importance of financial aid and Pell Grants. They
told me that Pell Grants made it possible for them not only to
get a higher education but also to enhance their future. I was
proud to sponsor an amendment to create year-round Pell Grants
in 2008. In its first year, 760,000 students nationwide took
advantage of the chance to access financial aid over the summer
in order to graduate faster and with less debt. This program is
making a big difference for many students, and I believe it
should be maintained.
Mr. Chairman, I urge you to consider these priorities. This
debate is not about sacred cows or about pet projects; it is
about moving America forward. Thank you again for allowing me
to testify today, and I yield back the balance of my time.
[The prepared statement of David Loebsack follows:]
Prepared Statement of Hon. David Loebsack, a Representative in Congress
From the State of Iowa
Chairman Ryan and Ranking Member Van Hollen, thank you for the
opportunity to testify today about my constituents' priorities for the
2012 budget.
Our country is facing great challenges that demand tough choices
and serious, bipartisan work. We must come together to make thoughtful
decisions that eliminate unnecessary spending and prioritize job
growth, economic recovery, and the long-term fiscal health of our
nation.
We must work together to get our fiscal house in order. However, at
a time when so many families and businesses are still struggling, we
must ensure that the choices we make do not set back our economic
recovery but instead pave the way for ongoing economic growth.
I have heard time and again from my constituents that, especially
in these tough economic times, we cannot divest in the areas that
promote economic growth, job creation, and strong communities.
Renewable energy development that will create jobs; training to
ensure American workers lead the 21st century global economy;
infrastructure that businesses and farmers need to support economic
growth; research that promotes innovation and industrial
competitiveness; and equipment that our first responders need to keep
our families safe are just some of the areas that my constituents have
told me are critical to our communities, state, and nation.
Furthermore, there are two overarching issues that continue to be
important to my District and are pressing as you consider the budget--
flood recovery and education.
As I have testified the past two years before this Committee, Iowa
suffered the worst natural disaster in our state's history in 2008 and
our communities are still struggling to recover.
It is vitally important for not only my District but districts
across the country that FEMA be provided adequate resources to respond
to natural disasters and also fulfill their obligation to previous
recovery commitments. I also hope that FEMA and the other Departments
involved will be provided resources to examine reforms to the disaster
recovery system.
Additionally, the Army Corps of Engineers provides vital disaster
response, recovery, and flood prevention functions. I urge you to
consider the critical need for a new WRDA bill and funding for new
flood protection projects such as the proposal to protect Cedar Rapids
in my District.
Flood prevention can also be a community effort and I am fortunate
to come from Iowa where civic engagement and a sense of community are
the norm. The outpouring of support during the 2008 Floods was
humbling, but those who responded to the flooding in my district told
me that they had to send away volunteers who wanted to help. This
wasn't because they didn't need the assistance, but because they didn't
have the infrastructure and planning tools to utilize the sudden influx
of people.
That is why I helped create the Volunteer Generation Fund to invest
in volunteer recruitment and management and help states, cities, and
towns develop the infrastructure to effectively respond to natural
disasters and other emergencies. It is vital that the Volunteer
Generation Fund be included in budget discussions.
I'd also like to talk today about the importance of education for
America's future. The investments that we make in education now
determine our country's future competitiveness. That is why I believe
that this is not the time to make cuts in education. I grew up in
poverty and if it hadn't been for student loan programs and financial
aid, I would not have been able to attend Iowa State and would not be
where I am today.
Earlier this year, I spent a week visiting colleges and community
colleges across my District, speaking with students about the
importance of financial aid and Pell Grants. They told me that Pell
grants made it possible for them to not only get a higher education,
but also to enhance their future.
I was proud to sponsor an amendment to create year-round Pell
grants in 2008. In its first year, 760,000 students nationwide took
advantage of the chance to access financial aid over the summer in
order to graduate faster and with less debt. This program is making a
big difference for many students and it should be maintained.
I urge you to consider these priorities. Thank you again for
allowing me to testify today.
Mr. Mulvaney. Mr. Loebsack, thank you very much for coming
in today. We appreciate your presentation.
Mr. Loebsack. Thank you.
Mr. Mulvaney. We will move right now to Ms. Hanabusa from
Hawaii. Thank you for coming in as well.
STATEMENT OF THE HON. COLLEEN HANABUSA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF HAWAII
Ms. Hanabusa. Thank you very much, Mr. Chairman.
And I appreciate the opportunity to testify on behalf of
several programs that are not only very critical to Hawaii but
also you will find, when I mention them, are very timely and
have great significance to not only Hawaii but all of the
Pacific Rim.
First of all, I would like to ask this committee's
consideration on the Pacific Tsunami Warning Center. As you
know, the H.R. 1 was cutting about 21 percent from the NOAA
budget. By doing that, of course, the National Weather Service
would be cut and in addition to that the Pacific Tsunami
Warning Center. I need not tell you about the impact of what
happened with the tsunami, earthquake, and the devastation that
happened to Japan. What prevented Hawaii's loss of lives was
the fact that the Pacific Tsunami Warning Center was really on
the mark on all of its projections, telling us exactly when the
waves would hit, the height of those waves, and where we would
be in danger.
It doesn't mean we didn't suffer damage. We have at least
$30 million suffered on the Big Island alone. But we were
fortunate in that there were no loss of lives.
It is also critical not only for Hawaii, but it is critical
for the whole Pacific area. The Pacific Tsunami Warning Center
works in conjunction with Alaska. And through that, they both
protect not only protect Alaska, Hawaii, all the territories we
have in the Pacific, but Oregon, California, Washington. Those
coasts are also taken care of.
We cannot afford to lose what this institution does. It is
about $25 million. I will admit to you right up front the
Pacific Tsunami Warning Center has been an earmark for Hawaii,
and we no longer will see earmarks. But that doesn't eliminate
or in any way diminish the importance that this establishment
serves.
Think about what has happened. It caused one of our
colleagues to say we need something like the Pacific Tsunami
Warning Center on the Atlantic side, in the Caribbean, to also
give people the proper warning. We are talking about lives; $25
million, yes, but the lives of the people, the preparation, and
the years and years of experience.
I would like to share with you that my staff was there just
about a week ago. And while they were being given a tour of the
Pacific Tsunami Warning Center, another earthquake hit off the
coast of Japan exactly in the same place. And they were told--
it was about 5 points on the Richter scale--they were told then
that a tsunami would not be generated. That is the kind of
information that we need. That is the kind of information,
because fear and people acting in a frantic manner causes as
much problems as anything else.
In addition to that, I would like to also ask this
committee's consideration for the East-West Center. The East-
West Center was created by Congress about 50 years ago. The
East-West Center has been cut, and yes, I will also say that in
President Obama's budget, it is cut to $10 million. It is a $21
million necessity. It has traditionally always been plussed up.
What this means for the Pacific area is really the future of
economic development. It shows us that at a time when Japan, a
major ally of ours, is going through great changes, it also
provides the institution that brings the Pacific Nations
together, like China, like Korea, and it gives everyone the
opportunity to meet, to meet in an academic, as well now with
APEC, in an economic setting. This is very critical. And we ask
that this committee also look at that and realize that it is
very significant, especially with the devastation that we must
now rebuild in the Pacific.
I have also pointed out two other programs. One is the
Native Hawaiian Housing Block Grant program. That has been cut
to zero. Today there has been a bill introduced to make things
right with the native Hawaiians, the last of the indigenous
people that we must make right. And in light of that bill, I
ask that this also be restored. Because we know that part of
our commitment when the native Hawaiians were given by way of
the Hawaiian Homes Commission Act by Congress in 1920, it was
the necessity of homes.
And finally, last but not least is the rail project.
Honolulu is second only to the ranking member's Los Angeles in
terms of congestion. And we do not have mass transit of that
nature. This project needs to continue. It also reduces our
dependence on fossil fuels. We are the most fossil fuel-
dependent State in the Nation because we are in the middle of
the Pacific. Please assist us in getting free of fossil fuel
dependence.
Thank you very much, Mr. Chairman. Thank you, ranking
member.
[The prepared statement of Colleen Hanabusa follows:]
Prepared Statement of Hon. Colleen W. Hanabusa, a Representative in
Congress From the State of Hawaii
Mr. Chairman, I appreciate this opportunity to testify in support
of several programs that are of importance to the State of Hawaii: the
Pacific Tsunami Warning Center, the East-West Center, Native Hawaiian
Housing Block Grants, and the Honolulu Rail Transit Project.
pacific tsunami warning center
Within minutes following the recent devastating earthquake off
Japan, NOAA's Pacific Tsunami Warning Center was able to issue warnings
for Japan, Russia, Marcus Island, and the Northern Marianas Islands.
Additionally, NOAA's West Coast/Alaska Tsunami Warning Center issued a
tsunami information statement (assessing potential tsunami threats) for
Alaska, British Columbia, Washington, Oregon and California. These
centers later issued tsunami warnings for Hawaii, Alaska, Washington,
Oregon and California. This advanced warning allowed local emergency
managers and the public to take life-saving actions such as local
evacuation orders.
In their haste to cut every program no matter its value, the House
Republican's budget which passed in February slashed $1.2 billion, or
21 percent, of President Obama's proposed budget for NOAA. Part of the
NOAA budget is the National Weather Service which includes the Tsunami
Warning Program.
The FY 2011 request for the Tsunami Warning Program was $25
million. This provides for 24 hour/7 days a week tsunami monitoring,
maintenance of the DART buoy tsunami warning system, advanced computer
modeling of the coast lines most at risk to tsunamis and the issuing of
tsunami advisories, watches and warnings for the entire coastline of
the U.S. and its territories as well as many nations in the Pacific.
If these drastic cuts from H.R. 1 were to take effect, a NOAA-wide
rolling furlough scenario would likely be inevitable, impacting Buoy
Center employees, contractors, and Tsunami Warning Center personnel.
NOAA would attempt to plan any furloughs to ensure at least one Tsunami
Warning Center would remain fully staffed. However, the risk to
forecasts would increase by creating a single point of failure.
Additionally, most NOAA observing systems would be maintained on an
emergency-only basis.
These reckless cuts put considerable stress on national tsunami
monitoring, hindering scientists' ability to forecast weather and alert
communities about imminent, dangerous events. Ultimately these
irresponsible cuts put American lives at risk.
east-west center
The East-West Center, which was established by an act of Congress
50 years ago, is a national institution headquartered in my Honolulu
district and employs 190 of my constituents. It needs an appropriation
commensurate with previous levels approved by Congress--at least $21
million--in order to sustain its core functions, which I believe are
vitally important to our national interests.
This brings me to the budget, and I want to make four main points.
First, this is a government-sponsored program that for good reason is
set up outside the government but with a great deal of governmental
involvement. The Secretary of State appoints a third of the members of
the governing board of the East-West Center, and an assistant secretary
of State sits ex officio on the Center's board. The Center works
closely with governmental authorities, but it can be far more flexible,
far less expensive, and can reach groups that government programs have
a harder time working with, such as Muslim journalists, minorities, or
Taiwanese authorities.
Second, this is a program that brings a significant share of non-
appropriated resources to the public good that it provides, unlike the
big government bureaucracies. The high point in the governmental budget
for the East-West Center was during the administrations of former
Presidents Reagan and George H. Bush. Last year's Congressional
appropriation was still less than that during the administration of
George H. W. Bush.
The Center's gets a big bang for the Federal buck by using the
appropriated money to leverage other income. Over the years, the Center
has evolved into a true public-private partnership. The effect of any
reductions in the appropriated level would be to dramatically undermine
the Center's ability to leverage Federal funds to obtain private
monies. Most of the appropriated income goes to salaries and
infrastructure, while most of the programmatic money comes from non-
appropriated resources. Thus, the Center estimates that if the
appropriation is reduced from the levels that Congress has appropriated
in recent years to the OMB request--which would amount to a decrease of
more than 50 percent in one year--it would have to eliminate 120
positions. This would inflict a staggering blow to the Center's ability
to conduct its public diplomacy activities.
Third, as you know, the President's budget request for the Center
in FY 2012 is $10.830 million. In previous administrations as well as
the current one, it has been widely understood that the President's
budget request for the Center is artificially low in expectation that
Congress will plus this figure up to enable it to implement programs
and activities that complement and add critical value to State
Department's efforts in Asia. Indeed, for the past five fiscal years,
the OMB figure generally has hovered in the $10 million to $12 million
range, which if left unaltered, would incapacitate the Center.
Fortunately, Congress has approved appropriations for the Center
ranging from $19.240 million in FY 2005 to $21 million in FY 2009 and
$23 million in FY2010. And importantly, neither the State Department
nor OMB has objected to the ``plus up''--precisely because they expect
it.
Finally, I would like to underscore a policy point. Funding for the
Center at the $10.8 million level would have an immediate and
potentially disastrous impact on this country's foreign policy and
national security interests in one of the most dynamic regions of the
world, the Asia Pacific. I want to reiterate that the East-West Center
is not a foreign aid program. It serves as a key instrument of public
diplomacy aimed at projecting US values and interests by working
directly with our regional counterparts on key issues of mutual
concern. At the President's proposed budget, it simply would not be
able to carry out these core functions.
A more than 50 percent cut in the East-West Center's funding would
send a powerful negative signal of US disinterest in Asia Pacific just
ahead of the summit in Hawaii this November of the heads of government
of the Asia Pacific Economic Cooperation forum (APEC)--a group that
includes China, Russia, Japan, Australia, and many other of our
partners and allies in the region. The East-West Center has long been
involved in APEC. It would be unable to provide meaningful help to the
State Department in hosting this year's meeting. In addition, draconian
cuts to the Center's current budget will mean that it no longer could
serve as the organizing US committee for the Pacific Economic
Cooperation Council (PECC), an official ``second track'' to APEC--an
activity it assumed some years ago at the request of the Department of
State.
The Center has been a key partner with the State Department and
with state and local officials and the business community in providing
staff and facilities for the APEC meeting and leading national outreach
efforts focused on the trade and foreign policy implications of APEC.
In short, without the Center's help, the United States risks falling
short as an APEC host in the eyes of the nations of the Asia Pacific.
To conclude, Mr. Chair, and particularly in light of tight fiscal
resources, I urge the committee to support the East-West Center at the
Congressional level in the past fiscal years--$21 million--so it may
continue to provide vital, cost-effective support for U.S. foreign
policy and security interests in a critically important, fast-growing
region of the world. This is truly an example of public diplomacy that
works--an effective program that gives the taxpayers the best value for
their money.
the native hawaiian housing block grant (nhhbg) program
The Native Hawaiian Housing Block Grant (NHHBG) program fulfills a
trust obligation which Congress created in 1920 through the Hawaiian
Homes Commission Act, recognizing that it is necessary to return Native
Hawaiians to the land for the preservation of their culture,
traditions, and values. This grant program provides affordable housing
opportunities to low-income Native Hawaiian families eligible to reside
on the Hawaiian home lands. Funds are used to develop new and existing
units and the infrastructure to support them, as well as support
services, housing counseling, and community facilities for residents. A
disruption in funding would have a devastating impact on the 20
regional plans in development statewide--including a new 18-home
community designed to zero out electricity costs through sustainable
energy technologies. According to the Department of Hawaiian Home
Lands' 2010 Native Hawaiian Housing Plan, there are 7,300 Native
Hawaiian families living on Hawaiian home lands; 25,000 Native Hawaiian
applicants on the wait list to reside on Hawaiian home lands; and an
estimated 32,000 potential Native Hawaiian applicants.
honolulu rail transit project and support for the department of
transportation's proposed fy 2012 budget
The Administration's Department of Transportation FY 2012 budget
proposal includes $3.2 billion for Capital Investment Projects (New
Starts Account). This includes $250 million in funding for the Honolulu
Rail Transit Project. The $3.2 billion proposal is an increase of $1
billion over the Administration's FY 2011 request.
While some of my colleagues may push back on this increased
funding, the reality is that our country faces nearly $4.00/gallon gas
on the mainland and is already an average of $4.14/gallon in Honolulu.
It is essential that the country increase its investment in public
transit as the cost of daily commuting by car becomes prohibitive and
struggling middle class families are forced to choose between meeting
essential family needs like paying the mortgage, rent, medical and
grocery bills or spending $80 just to fill up the family car.
According to a recent study, Honolulu was the 2nd most congested
Metro area in the country in 2010, only behind Los Angeles and worse
than San Francisco, Washington DC and New York. Public transportation
is extremely well utilized in Honolulu as ridership statistics show.
Honolulu has the 4th most annual transit boardings per capita and the
4th most annual transit passenger miles per capita in the country.
Individuals completed 77 million unlinked trips in 2009 and
utilized an active fleet of 531 buses. With a 41 cents operating
expense per passenger mile, Honolulu had the best bus cost
effectiveness among the nation's top 50 transit bus operators.
The population of O'ahu continues to grow, thus the demand on
ridership and car traffic will be higher in the coming years. By 2030
it is estimated that compared to 2005, O'ahu will have 200,000 more
residents, 100,000 more jobs and 750,000 more daily trips.
This new 20-mile rail system will connect East Kapolei to the Ala
Moana Center with 21 stations including stops at Honolulu International
Airport and Aloha Stadium. This $5.5 billion project will be paid for
through local and federal government funding. 70 percent coming from
the state/local government and 30 percent from the federal government.
The local government is holding to its end of the bargain with over
$613 million in General Excise & Use Tax collected to date.
Mr. Mulvaney. Thank you, Ms. Hanabusa.
Ms. Bass?
Ms. Bass of California. I just wanted to make a comment.
Thank you, Congress Member, for testifying. I just really,
one, want to express my sympathy for what happened on the
island after the earthquake and my really appreciation to you
for bringing it to our attention about the tsunami center,
because I think living on the West Coast in California, we have
the tsunami warning center as well. And I think most of the
times we think ourselves beyond the realm of possibility of
facing a tsunami. And you have put a human face on that. But
also coming and giving us a specific example about how that
benefited in this last crisis.
And I could imagine that if that center had not been there
when the earthquake happened last week, I could imagine that
people would have just been very fearful. Because I remember
watching the news when that actually happened, and the tsunami
warning went off in Japan. So thank you for your testimony and
for raising our awareness about the significance of that to
Hawaii.
Ms. Hanabusa. Thank you.
But I would also like to add that the Pacific Tsunami
Warning Center does serve the Pacific. Yes, it is in my
district. It is in Hawaii, but it does service the whole
Pacific. And everyone looks to them for any information. CNN
was telling the rest of the Nation what was going on by reports
by the Pacific Tsunami Warning Center. Thank you. Thank you
very much.
Mr. Mulvaney. Thank you, again. We are going to take a
brief recess to round up some more testimony, and be back in
about 10 minutes.
[Recess.]
Mr. Stutzman [presiding]. The House Budget Committee will
come to order.
And the chair will recognize Congresswoman Mazie Hirono for
5 minutes. Thank you for being here. I look forward to your
testimony.
STATEMENT OF THE HON. MAZIE K. HIRONO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF HAWAII
Ms. Hirono. Thank you.
Mr. Chairman, members of the committee, thank you for the
opportunity to testify before you today. This committee has an
important job. Crafting the congressional budget resolution is
a statement of our national priorities. And I appreciate the
opportunity to offer my views on what some of those priorities
should be.
While I recognize that over the long term we must rein in
our budget deficit, arbitrarily cutting our Federal spending
back to fiscal year 2008 levels, which has been proposed, is in
my view a meat-ae approach to fiscal discipline. It is also an
inadequate response to the domestic and global challenges that
we face. This approach fails to recognize something very
important about the programs being slashed and what they mean
to our local communities. Our local communities are the
backbone of our Nation. They are where we make our homes, where
we raise and educate our children. They are also where small
businesses get their start, sometimes on the road to becoming
big businesses.
In short, our local communities are the bedrock on which
our national strength is built. Continuing to adequately fund
the programs that mean the most to these communities is vitally
important to our long-term success. Today I would like focus on
three programs that provide critical support to all of our
communities. First, Community Development Block Grants, CDBG;
second, Community Services Block Grants, CSBG; and third, Head
Start.
Programs like these are highly successful because they are
community identified and community led. It is not the Federal
Government telling them what to do at every step. Earlier this
month, hundreds of county leaders converged in D.C. for their
annual National Association of Counties meeting. All of the
county council members from my district impressed upon me the
importance of these programs, because they fulfill important
needs of the people they represent. I am sure your local
leaders conveyed the same message to you. In fact, leaders of
this bipartisan group adopted two resolutions that support full
funding of programs like CDBG and CSBG.
Since 1974, the CDBG program has been a lifeline to people
from all of the four counties in Hawaii. CDBG funds have
supported economic development, job creation, and facility
needs for the most disadvantaged in Hawaii. It has also given
some of them a much needed hand up when times are tough, a hand
they wouldn't have received without the Federal funding.
For example, CDBG funds helped families on the Island of
Kauai access affordable housing. The lack of affordable housing
in a place as expensive as Hawaii is a serious concern for many
people in Kauai and indeed throughout the State. More than
1,300 residents are on Kauai Habitat for Humanity's affordable
housing waiting list. With CDBG funds, Kauai Habitat for
Humanity will complete the final phase of infrastructure
improvements and build affordable homes for over 125 low- to
moderate-income families.
Turning to Community Service Block Grants, the Community
Action Network supported by these grants helps 20 million
people, 20 million people in need across the country. One
Community Action Program in my County of Maui, called the Maui
Economic Opportunity, MEO, receives about $466,000 annually in
CSBG funding. This funding helps generate $18 million a year in
services to low-income individuals and their families and to
small businesses.
With CSBG funds, MEO provided a wide variety of services to
some 22,000 people in that county, which includes the Islands
of Lanai, Molokai, and Maui last year alone. These include
comprehensive programs like early childhood services, business
development and job programs, transportation for seniors and
the disabled, and an array of other services that strengthen
the community and provide opportunities to all ages.
The third area I ask the committee to support is robust
funding for Federal programs that help our keiki, a Hawaiian
word meaning children. In Hawaii and nationwide, helping our
children thrive is an investment in our future. For children in
poverty, achievement gaps begin well before kindergarten. Study
after study has shown that investing in quality early learning
programs can yield a huge return on investment by reducing the
costs of special education, high school dropouts, teen
pregnancy, crime, incarceration, and dependence on social
services later in life. Quality early-learning programs
increase the likelihood of college attendance and completion.
So, robust support for programs like Head Start makes sense.
I recently med with Family Support Services of West Hawaii.
And this program was recently able to open a new Head Start
center in the rural community of Ka'u on the Island of Hawaii.
A target of our Race to the Top reform efforts, Ka'u remains
one of the most economically disadvantaged areas in my State.
Head Start not only supports our children; it creates
opportunities for others in our communities and for people of
all ages. Let me tell you about Regina. Regina enrolled three
of her children in the Head Start at Maui Economic Opportunity.
She started out as an active volunteer of the program,
transitioned into a position as a family case manager,
continued her education at Maui College, and now works as a
disability and mental health specialist. Head Start provided
Regina and her family with the educational resources and the
vocational skills needed to improve their lives.
So you can see there is a tremendous multiplier effect when
we support these kinds of community-led, community-identified
programs. Without them, low-income families would have even
less of a chance to reach the middle class one day. They help
our children to grow up safe and healthy, and give them a leg
up in an increasingly competitive world.
I urge the committee to authorize robust funding for
programs that have proven to be successful in strengthening our
local communities and creating greater opportunities for all of
our citizens. And I thank you for this opportunity.
[The statement of Mazie K. Hirono follows:]
Prepared Statement of Hon. Mazie K. Hirono, a Representative in
Congress From the State of Hawaii
Mr. Chairman, thank you for the opportunity to testify before the
Committee today. This Committee has an important job. Crafting the
Congressional Budget Resolution is a statement of our national
priorities, and I appreciate the opportunity to offer my views on what
those priorities should be.
While I recognize that over the long term we must rein in our
budget deficit, arbitrarily cutting our federal spending back to fiscal
year 2008 levels, which has been proposed, is in my view a meat-axe
approach to fiscal discipline. It is also an inadequate response to the
domestic and global challenges we face. This approach fails to
recognize something very important about the programs being slashed--
what they mean to our local communities.
Our local communities are the backbone of our nation. They are
where we make our homes and where we raise and educate our children.
They are also where small businesses get their start--sometimes on the
road to becoming big businesses. In short, our local communities are
the bedrock on which our national strength is built. Continuing to
adequately fund the programs that mean the most to these communities is
vitally important to our long-term success.
Today I would like to focus on three programs that provide critical
support to all of our communities: first, Community Development Block
Grants (CDBG), second, Community Services Block Grants (CSBG), and
third, Head Start. Programs like these are highly successful because
they are community-identified and community-led. Earlier this month,
hundreds of county leaders converged in D.C. for their annual National
Association of Counties meeting. All of the county council members from
my district impressed upon me the importance of these programs because
they fulfill important needs of the people they represent. I'm sure
your local leaders conveyed the same message to you. In fact, leaders
of this bipartisan group adopted resolutions that support full funding
of programs like CDBG and CSBG.
Since 1974, the CDBG program has been a lifeline to people from all
of the four counties in Hawaii. CDBG funds have supported economic
development, job creation, and facility needs for the most
disadvantaged in Hawaii. It has also given some of them a much needed
hand up when times were tough--a hand they wouldn't have received
without this funding.
For example, CDBG funds help families on the island of Kauai access
affordable housing. The lack of affordable housing is a serious concern
for many people in Kauai and throughout the state. More than 1,300
residents are on Kauai Habitat for Humanity's affordable housing
waiting list. With CDBG funding, Kauai Habitat for Humanity will
complete the final phase of infrastructure improvements and build
affordable homes for 125 low- to moderate-income families.
Turning to the Community Services Block Grants--the community
action network supported by these grants helps 20 million people in
need across the country.
One community action program in Maui County, Maui Economic
Opportunity (MEO), receives about $466,000 annually in CSBG funding.
This funding helps generate $18 million a year in services to low-
income individuals and families, and to small businesses. With CSBG
funds, MEO provided a wide variety of services to some 22,000 people in
Lanai, Molokai, and Maui last year alone. These include comprehensive
programs like early childhood services, business development and job
programs, transportation for seniors and the disabled, and an array of
other services that strengthen the community by providing opportunities
to all ages.
The third area I ask the Committee to support is robust funding for
federal programs that help our keiki, or children, in Hawaii and
nationwide. Helping our children thrive is an investment in our future.
For children in poverty, achievement gaps begin well before
kindergarten. Study after study has shown that investing in quality
early learning programs can yield a huge return-on-investment by
reducing the costs of special education, high school dropouts, teen
pregnancy, crime, incarceration, and dependence on social services
later in life. Quality early learning programs increase the likelihood
of college attendance and completion.
So, robust support for programs like Head Start makes sense. I
recently met with Family Support Services of West Hawaii. Family
Support Services was recently able to open a new Head Start center in
the rural community of Ka'u on the island of Hawaii. A target of our
Race to the Top reform efforts, Ka'u remains one of the most
economically distressed areas of our state.
Head Start not only supports our children. It creates opportunities
in our local communities for people of all ages. Let me tell you about
Regina Agcaoili. Regina enrolled three of her children in Head Start at
Maui Economic Opportunity. Regina started out as an active volunteer of
the program, transitioned into a position as a family case manager,
continued her education at Maui College, and now works as a disability
and mental health specialist. Head Start provided Regina and her family
with the educational resources and the vocational skills needed to
improve their lives.
As you can see, Mr. Chairman, these programs have a tremendous
multiplier effect in our communities. Without them, low-income families
would have even less of a chance to reach the middle class one day.
They help our children to grow up safe and healthy and give them a leg
up in an increasingly competitive world. I urge the Committee to
authorize robust funding for programs that have proven to be successful
in strengthening our local communities, and creating greater
opportunities for all of our citizens.
Mr. Stutzman. Thank you. And I want to clarify the number
that you mentioned. What is the waiting list for the Habitat
For Humanity.
Ms. Hirono. Thirteen hundred residents, and that is just on
one island. And if you have ever been to Hawaii you know how
expensive it is. Housing is very expensive. We don't have
enough affordable housing. They can barely keep up. But if we
didn't have the support of CDBG funding, then there would be an
even greater number on that list.
Mr. Stutzman. What is the unemployment rate in Hawaii?
Ms. Hirono. It is a little bit less than the national
average, but it is still--I think it is about 7 percent. But
different islands have higher unemployment. For example, the
island of Molokai has very high unemployment. The island of
Hawaii, I think the unemployment figures are the lowest for
Oahu.
Mr. Stutzman. Mr. Tonko, do you have any questions?
Mr. Tonko. I thank the gentlelady for coming, and she has
done a great job clarifying everything.
I will share with you I heard a lot in my district about
the block grants and the empowerment that comes with investment
from working families, and so certainly across the country
there are grave concerns about leveraging new programs.
Ms. Hirono. I think, as I mentioned, the hundreds of our
local leaders who have converged in Washington, D.C., earlier
this month, and they visited all of their Members of Congress,
bipartisan, they were to a person supportive of these kinds of
grants. And the beauty of these grants is that the communities
themselves with their local leaders identify what their
priority needs are, and they use this money not only to provide
the programs but it leverages into many times over in benefits,
economic as well as otherwise.
Mr. Tonko. Thank you.
Mr. Stutzman. Thank you very much. It has been very
helpful, and it is always good to hear what is happening in the
beautiful State of Hawaii. We know we all have challenges.
Thank you for representing your district, and thank you for
your testimony here to the Budget Committee.
Ms. Hirono. As we say in Hawaii, mahalo nui loa.
Mr. Stutzman. Next, we have Congresswoman Laura Richardson
to testify. Thank you for being here. You have 5 minutes.
STATEMENT OF THE HON. LAURA RICHARDSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Richardson. Thank you. Really directed to Chairman
Ryan, Ranking Member Van Hollen, and those of you who are the
brave member souls of this committee, I thank you for giving me
the opportunity to come before you.
I am here to speak for the people I represent, the
hardworking and really hard-pressed men, women, and children
and businesses of the 37th Congressional District. The
unemployment rate in California still hovers around 12 percent,
but in some areas of my district like Compton it is over 20
percent. The foreclosure rate for California is one out of 239.
That is more than twice the national average, and in Compton in
my area the foreclosure rate is four times that amount.
Today, I would like to focus my statement on areas of the
budget that I think could create jobs, rein in unnecessary
spending, and invest in our Nation's infrastructure that will
help keep our people working and also safe. These priorities
will set America on a path towards fiscal responsibility,
economic growth, prosperity, and will also provide us with
needed investments that will help us get into the future.
First of all, in terms of jobs for Americans, as we
consider our budget priorities for full year 2012, we must
enact a budget that will actually create jobs and invest in our
future prosperity. At the same time, however, I am committed to
reining in spending and I have some ideas of how we might do
that.
Last session, I introduced a bill and I plan on
reintroducing it. It is called the The Cost Recovery and Fair
Value for Services Act. I will reintroduce that bill. What it
essentially does is it encourages Federal agencies to set their
user fees for services provided at a cost recovery basis.
Now for the accountants and those of you who are into
finance here, we have many agencies and departments who are
providing services, and yet they are not really getting the
full cost recovery dollars of it. So for every person who might
be happening to work, whether it is a national park,
administrative fee, any fees that we have, we need to do an
overall analysis to make sure that, for the services it costs
us to provide that, that we are gaining in the full cost
recovery for it.
Now if we are bringing in too much money, we should
evaluate that, too; and if we are charging more than what we
should, we should make the appropriate reduction.
By setting appropriate user fee rates, agencies can
contribute to the shared fiscal responsibility that our current
economic situation demands. Specifically, The Cost Recovery and
Fair Value for Services Act requires the chief financial
officer of every Federal agency to provide a report to the
Director of OMB reviewing fees charged for services provided.
The second area I would like to suggest is transportation
and infrastructure. When it comes to creating jobs, there is no
more effective way. And I would say all you had to do is look
at all of the Sunday talk shows and when we talked about the
successes of the stimulus and the American recovery dollars all
of them would turn to the success of the dollars that we have
spent based upon transportation and infrastructure.
In my district, we happen to move 40 percent of the entire
Nation's cargo. The President's budget has proposed a 66
percent increase in the full year 2010 levels in overall
funding for transportation infrastructure so that we might pass
our $556 billion 6-year surface transportation reauthorization
proposal.
I just came from a Budget Committee on transportation about
this very topic. And everyone agrees that, given the money and
the resources, we could actually get results, which is to
improve our deteriorated roads and highways, put people back to
work; and right now those resources are at a very economical
cost, and we can actually save money.
Where the time that we wait--I will give you an example in
my district. A bridge that we should have fixed that now we
have a diaper underneath it to catch the concrete that is
falling that covers 20 percent of our Nation's goods are going
over this bridge, 5 years ago it cost $600 million, now it
costs $1.6 billion. So it is not going to cost us less. It is
just going to cost us more.
Also, I think that we should seriously consider taking away
the dogma feeling of no taxes at all. I have a bill, the
Freight FOCUS Act, that would establish a freight planning
office within the Department of Transportation and would
consider increasing the diesel tax, which has not been
increased since 1993. Now no one can disagree with the impacts
of the roads, of what has happened by the trucks on our roads
and our highways.
Now interesting, what I wanted to make sure was clear for
the record, ATA, which is the American Trucking Association,
supports this. If we have industries that agree to tax
themselves for a dedicated funding source to be able to pay for
roads and highways to improve so we can move our goods, we, as
Members of Congress, should not be in the way.
The fourth point that I wanted to bring up had to do with
homeland security. My district is home to many high-value
terrorist targets, such as the Port of Long Beach, water
treatment facilities, CERT facilities and so on. I am deeply
troubled by the proposed cut of $93 million, 58 percent, in
funding for international cargo screening. We haven't had an
incident of cargo screening. However, we have in air cargo. And
when you look at the vulnerabilities of people who live in port
communities, that is an area that we should not confuse and
view it as not an area to focus on.
The President's budget proposal requests only $1.8 billion
for FEMA's disaster relief fund. All we have to do is look at
what happened recently in Japan, what has happened in American
Samoa with their tsunami, and look at Hurricane Katrina to say
this is really a not smart decision.
In full year 2011, FEMA's disaster fund required $3 billion
to cut out of its operations and significant cuts to fund all
the resources that we needed. So to cut this to $1.8 billion is
not the answer to the problem.
I applaud the President's request to provide $420 million
for the Staffing for Adequate Fire and Energy Response, SAFER,
grants. However, I do not support the administration's decision
to cut $140 million from the Assistance to Firefighters grants.
Finally, I want to talk about Member responsibility, and I
would hope this committee would consider working with me as I
get ready to approach House Administration with Mr. Lungren.
As a Member of Congress and a new Member, when I went to
replace the furniture in my district office, to lease a
vehicle, I believe we need to consider a kind of form of a
private GSA. Currently, other agencies utilize Government
Services Administration, which is their funding mechanism. We
as Members, there should be a Toyota price for all hybrid
vehicles. There should be a company who provides furniture that
all of us could use, that we could utilize that price and save
money.
I thank you for the time that you have given me, and I look
forward to any questions you might have.
[The prepared statement of Laura Richardson follows:]
Prepared Statement of Hon. Laura Richardson, a Representative in
Congress From the State of California
Chairman Ryan, Ranking Member Van Hollen, and Members of the Budget
Committee: Thank you for convening this hearing and allowing me and our
colleagues the opportunity to share with the Committee our budgetary
priorities for Fiscal Year 2012. I ask that my entire statement be
included in the record of this hearing.
Coming as we do from all regions of the country and both sides of
the aisle, the testimony you hear today is a fair reflection of the
collective hopes and dreams of the American people. This Committee has
the daunting task of crafting a budget resolution that expresses the
values and reflects the character of our country.
I am here to speak for the people I represent, the hard-working and
hard pressed men, women, children, and businesses of the 37th
Congressional District of California.
Mr. Chairman, my state and my district have experienced, and still
are going through, the toughest economic times in recent memory. The
unemployment rate in California still hovers around 12 percent, but in
some areas of my district, like Compton, it is closer to 20 percent.
The foreclosure rate for California (1/239) is more than twice the
national average (1/577). In the City of Compton, the foreclosure rate
is over 4 times the national average (1/137).
The budget priorities that I will outline today are what I believe
is needed to restore the American dream for the millions of Americans
who have been most affected by the difficult economic environment that
we are just starting to overcome. These priorities will set America on
a path toward fiscal responsibility, economic growth and prosperity,
and will provide us with needed investments that will pave the way to
the future.
priority #1: jobs for americans
As we consider our budget priorities for FY 2012, we must enact a
budget that will reflect the need to create jobs and invest in our
future prosperity. Although we have been encouraged by signs that the
economy is recovering, we can't make reckless cuts at the expense of
our ongoing recovery. Instead, we must take a prudent approach to
addressing the deficit, making targeted cuts in some areas and targeted
investments in others. We need to ensure that every American who is
willing to work to get ahead has the opportunity to do so. That is why
creating jobs--good paying jobs with benefits to sustain families--must
be our central objective.
The fiscal challenges that our nation currently faces are real and
must be addressed with an honest dialogue between members on both sides
of the aisle. We need to create a budget resolution that makes smart
investments in job creating programs and projects that will put
Americans back to work. At the same time, we must make an effort to
rein in spending on programs that are not producing adequate results.
Making these targeted cuts will help put us down a sustainable fiscal
path, while maintaining support for programs that are proven to help
the American people succeed.
An initiative that I believe will help reduce the deficit, and rein
in unnecessary spending is a bill that I introduced in the last
congress entitled ``The Cost Recovery and Fair Value for Services
Act.''
priority #2: cost recovery act
The Federal government has an obligation to the American people to
be stewards of their hard-earned taxpayer dollars by operating in an
efficient manner. There are hundreds of federal agencies in the
executive branch offering an array of services and programs. It is
critical, especially in times when the national debt is high, for these
agencies to ensure that the services and programs they offer are self-
financed to the greatest extent possible.
The Cost Recovery and Fair Value for Services Act that I will soon
reintroduce will help meet this obligation by ensuring that the federal
agencies set their user fees for services provided at rates that are
both equitable and cost-effective. By setting appropriate user fee
rates, agencies can contribute to the shared fiscal responsibility that
our current economic situation demands without overburdening the public
or inhibiting public engagement.
Specifically, the Cost Recovery and Fair Value for Services Act
requires the chief financial officer of every federal agency to provide
a report to the Director of the Office of Management and Budget
reviewing fees charged for services provided. The report will contain
recommendations on possible adjustments to those fees rates taking into
account the following factors:
1. The extent to which the fee will cover the agency's cost for
providing that service;
2. The extent to which each user is paying an equitable amount
considering that user's ability to pay; and
3. The extent to which the use of the service provides a public
benefit.
priority #3: help for small business
As a member who spent 14 years working in the business world before
coming to Congress, I understand that small business is the backbone of
our economy. The 26.8 million small businesses in the United States
represent more than 99.7 percent of all employers, employ just over
half of all private sector employees, and generated 64 percent of the
net new jobs created since 1995.
Clearly, if we are to grow our way out of this economic mess, small
business is going to help lead the way. I therefore support the
President's request to provide small businesses with access to the
credit needed to expand and create new jobs.
As a New Democrat and a former business owner, I am a strong
proponent of fiscal responsibility and deficit reduction. We have
already helped companies deemed ``too big to fail.'' Now it is time to
provide help for small business so that they do not remain ``too small
to succeed.''
priority #4: education
We have a responsibility to provide Americans with the skills and
opportunities they need to be successful in the global marketplace.
Pursuant to the request of President Obama to out-educate, out-
innovate, and out-compete the rest of the world, it is important that
Congress make key investments in education and job training programs
that are essential to the future health of our economy.
Nothing is more crucial to our nation's long-term future than an
educated citizenry. That is why I am pleased that the President's
budget requests $77.4 billion in funding for the Department of
Education for FY 2012, a 20% increase over FY 2010 enacted levels. I
also support the President's budget proposal because it increases
investment in K-12 education to ensure that our children receive a
quality education that will enable them to compete in the global
economy. Investing in our nation's future through public education will
help to ensure long-term economic growth and prosperity for our nation
by creating a more educated and higher earning workforce.
However, I would like to point out a few areas of the President's
education budget that can be improved:
First, we need to make sure that Title I funding is being allocated
to the schools and the children who need it the most. Child poverty is
on the rise, and it is our responsibility to ensure that children who
come from disadvantaged families have the same opportunities as their
peers whose parents belong to a different socioeconomic background. In
2009, research shows that over 20 percent of children lived in poverty.
That is clearly unacceptable and targeted investments in Title I
funding to schools in economically disadvantaged neighborhoods will
provide the foundation needed for these children to succeed. That is
why I support a 10% increase in funding for the Title I program over FY
2010 enacted levels.
Second, while I am generally supportive of the Administration's
focus on ensuring that competitive grant programs provide an important
incentive for our nation's public schools to improve curriculum and
overall student performance, we need to ensure that the Administration
balances its emphasis on competitive grant programs with formula grant
programs that provide funding to schools that need it the most.
These formula-based grant programs are essential to schools in
urban areas that are already facing stark fiscal realities. During
these tough economic times we cannot rely solely on competitive-based
grants, but need to ensure that federal funds are being allocated in a
manner that reflects the needs of underperforming schools.
Third, the President's budget proposal provides a modest increase
in funding for the IDEA special education program, but funding levels
remain inadequate. I would like to see an 8% increase in funding for
IDEA over FY 2010 levels. This will bring the federal share of the
program back to the 2006 level of 17.6%.
The modest increases in funding do not go far enough to ensure that
every child who suffers from a disability that requires special
accommodation will have access to an education. Failing to provide
grants to states at necessary levels will prove detrimental to the
overall health of special education programs across the country.
The Administration's budget proposes a modest cut to the program.
As a strong supporter of Career and Technical Education State Grants, I
do not support this decrease in funding. These grants provide a needed
service to those in disadvantaged communities to develop hands-on,
career-oriented postsecondary training. At a time when unemployment
rates are high, cutting funding for programs that helps individuals
gain skills that will make them more competitive in the job market is a
wise policy. Conversely, a 6% increase in funding over FY 2010 enacted
levels will go a long way in preparing participants in vocational
training programs for careers in a wide array of industries.
priority #5: older americans
When older Americans, those 50 and older, lose their jobs, they
remain unemployed for much longer periods than younger counterparts.
Many get discouraged and leave the labor market altogether. If they are
fortunate enough to secure a replacement full-time job, invariably the
pay is less, the hours are fewer, and the benefits are minimal or non-
existent.
One way to provide targeted and immediate relief for jobless older
Americans is to fully fund the Senior Community Service Employment
Program. I am discouraged by the President's FY 2012 budget proposal
which cuts funding for this important program by 45 percent from FY
2010 enacted levels. In FY 2010 this program was funded at a level of
$825 million, a significant increase in funding from past years.
However, the President's budget proposal will cut funds for this
program nearly in half and significantly impact low-income senior
citizens' ability to find work. I strongly urge that funding for this
vital program be maintained at not less than $700 million for the next
five years. And I will soon reintroduce legislation that will make this
program more accessible by lowering age and income eligibility
requirements.
priority #6: transportation & infrastructure
When it comes to creating jobs, there is no more effective means
than investing in infrastructure. It has been demonstrated time and
again that for every dollar invested in infrastructure, at least $1.63
is economic activity is generated.
Our most recent example of effective investment in infrastructure
is the Recovery Act, which thus far has created nearly one million jobs
over the first year of investment while at the same time improving the
lives of virtually every American who can enjoy the roads, bridges, and
transit systems that were built or improved through this funding.
I come from the district that embodies the nation's transportation
needs, with the largest ports in the country, three airports, major
freight rail lines, and 40% of the nation's goods moving along our
rails and four major interstate highways. And as a member of the
Transportation & Infrastructure Committee, I understand how sound
transportation and infrastructure investments will make our nation
globally competitive and enhance the quality of life in our
communities.
The President's budget proposes a 66% increase above FY 2010 levels
in overall funding for transportation and infrastructure. This increase
also includes a $556 billion six-year surface transportation
reauthorization proposal that will provide a $50 billion ``up-front''
investment to be distributed in the first year to spur job creation and
economic growth.
Passing a surface transportation reauthorization bill that provides
funding for projects that are critical to national greatness needs to
be a top priority of this Congress. One such project is the Gerald
Desmond Bridge located in Long Beach, California. The Desmond Bridge
may not be as famous or glamorous as the Golden Gate or the Verrazano,
but it carries a larger percentage of the nation's cargo--10 percent--
than any other bridge.
That is why it is so shocking and short-sighted that we have not
rebuilt this 40 year-old bridge, which is now reduced to wearing a
``diaper'' to catch the concrete and debris that falls daily from its
underside. It is imperative that programs such as the Projects of
National Significance and the Freight Improvement Program receive ample
funding so essential projects like the rebuilding the Desmond Bridge
can be completed.
I have recently introduced H.R. 1122, the Freight FOCUS Act to
establish an office of Freight Planning in the Department of
Transportation that will be responsible for freight planning and
creating a merit based, competitive grant program. This bill provides
for public and private sector involvement in the process, and
prioritizes major goods movement corridors and projects to alleviate
choke points. This comprehensive national freight policy will
facilitate the movement of goods across the country and will also help
the American economy grow.
Investing in our freight infrastructure is vital to the creation of
jobs in the manufacturing industry and will allow us to boost exports.
I am pleased to report that my legislation enjoys the support of
industry and key stakeholders, which is willing to accept a 12 cent
increase in the diesel fuel tax paid by trucks to raise revenue for the
creation of new freight infrastructure projects. The bill also creates
a Goods Movement Trust Fund, which would be dedicated to funding such
projects, and contains safeguards to ensure that funding generated from
a specific mode is used for projects benefitting that mode.
When it comes to transportation funding, we must also be forward-
thinking and pro-active to position our country to compete and win in
the global economy. Nowhere is this more important than in the area of
high-speed rail. As the founding co-chair of the California High-Speed
Rail Caucus, I applaud the President for requesting $53 billion over
the next three years to invest in the construction of a national high-
speed rail network.
But a larger commitment is needed. It will cost about $40 billion
to bring high-speed rail to California. But with it will come a
revolution in travel and a model for the rest of the country. The
benefits include a cleaner and quieter environment, reduced traffic
congestion, and 450,000 new jobs in California to build the line. High-
speed rail is the wave of the future and we must make a real commitment
to it to remain competitive.
priority #7: housing
The need for housing and redevelopment assistance is great in my
district, my state, and across the nation. California ranks third in
the nation, trailing only Nevada and Arizona, in the rate of housing
foreclosures. Therefore, I strongly oppose the President's proposal to
cut $300 million from the Community Development Block Grant (CDBG) from
FY 2010 enacted levels. This drastic reduction would have a devastating
impact on communities all across America, including my district, and
hinder our ability to continue doing our part in aiding the Nation's
economic recovery. CDBG works. In Los Angeles County, for example, CDBG
funding has provided a direct benefit to low- and moderate-income
residents and their neighborhoods, something that simply would not have
been possible without this federal-local partnership.
I also do not support the President's decision to request a $68
million reduction in funding for the Section 202 Housing for the
Elderly program and a $104 million reduction for the Section 811
Housing for Persons with Disabilities Program, which funds the new
construction of housing for those groups. Our seniors and the disabled
are among the most vulnerable populations in society and we cannot
neglect their housing needs.
priority #8: homeland security
I am the Ranking Member of the Homeland Security Emergency
Preparedness, Response and Communications Subcommittee. In addition, my
district is home to many high-value terrorist targets, such as the Port
of Long Beach. I am therefore deeply troubled by the proposed cut of
$93 million (58 percent!) in funding for international cargo screening.
This decrease reflects an emphasis on remote screening of freight
instead of physical inspection. The 9/11 Act established the goal of
100 percent cargo screening by 2010; the proposed budget cut will not
bring it closer to achieving this national objective.
I am also troubled by the President's proposal to cut 8% from FEMA
Grant Programs. Similarly, the President's budget proposal requests
only $1.8 billion for the FEMA's disaster relief fund. These funds are
integral to the mission of keeping the American people safe in the
event of a natural or man-made disaster. In FY 2011, FEMA's disaster
relief fund required $3 billion to carry out its operations and
significant cuts to the fund will curtail FEMA's capability to save
lives by being able respond appropriately to unforeseen disasters.
I applaud the President's request to provide $420 million for the
Staffing for Adequate Fire and Emergency Response (SAFER) Grants to
rehire laid-off firefighters and retain veteran first responders. These
funds will enhance the ability of local fire departments to meet
community needs and maintain the readiness of local first responders
during all types of emergencies. However, I do not support the
Administration's decision to cut $140 million from the Assistance to
Firefighters Grants which allow fire departments and EMS agencies to
provide the training and equipment necessary to save lives.
I also strongly believe that we should substantially increase
funding for the Fire Station Construction Grant Program so cities like
Compton, in my district can have the resources needed to protect the
local citizenry and to assist in the protection of a vital national
asset like the Alameda Corridor. This corridor splits the city down the
middle, while it transports the nation's cargo to and from the Ports of
Long Beach and Los Angeles.
Finally, I would also like to stress the importance of full funding
for the State and Regional Preparedness Program, which provides grants
to fund programs such as the Citizens Corp and Interoperable Emergency
Communications Grants. A recent GAO report stated that only about half
of American households had disaster supplies in their home and a
household emergency plan. Clearly, there is more that must be done to
get our people in an optimal state of readiness.
priority #9: native americans
Perhaps nowhere is the need more urgent than in Indian Country,
which is grappling with an average unemployment rate of 22 percent,
which is higher than any state. Addressing the disparities in health
care, education, housing, and crime in Indian Country also remains a
challenge. I therefore am pleased that the President's budget requests
$4.6 billion for the Indian Health Service, an increase of 14 percent
over the FY 2010 enacted level. I am also pleased that the FY2012
request for Indian Affairs focuses on core programs and services that
are vital to Indian country, such as the $424 million for criminal
justice programs, a 29 percent increase over FY 2010 enacted levels.
priority #10: international affairs
Finally, I wish to briefly address the Function 150--International
Affairs budget and say that I strongly support the President's request
for $59.64 billion, a 5.1% increase over the current funding level.
Although America's domestic needs are great, it is in our interest
and consistent with our tradition and character to be engaged in the
world. Whether it is providing diplomatic, development, peacekeeping,
security, and humanitarian assistance, or combating human trafficking
and modern day slavery, American leadership and involvement is
indispensable.
The $59.64 billion requested for the International Affairs budget
is to be sure a lot of money. But to put it in perspective, the entire
International Affairs Budget is just 1.6% of the total FY 2012 Budget.
Even at this level of funding, the International Affairs Budget
represents only 0.42% of GDP.
The diplomatic role of the United States in the international
system cannot be understated. By supporting economic development, human
rights, and democracy throughout the world, the International Affairs
Budget is a bargain and one of the best investments we can make.
conclusion
In conclusion, let me say that while a budget is a record of
expenditures, outlays, and revenue receipts, it is much more than that.
It is an expression of our most cherished values, a reflection our
character, and the fulfillment of the social contract among
generations, tying the present to the past and future. In a budget we
commit ourselves to the actions needed to keep faith with our
obligation to our forefathers and to generations unborn to do all we
can to make this a more perfect union. It is in that spirit that I have
suggested the priorities outlined above.
Thank you for listening.
Mr. Stutzman. Thank you very much.
I think you clarified or you mentioned that 40 percent of
the Nation's goods come through--is it the Long Beach Port that
is where those goods come through or----
Ms. Richardson. It is the San Pedro complex. Both the Port
of Long Beach and Los Angeles are adjoined, and 40 percent of
the entire Nation's cargo goes through my district. So, for
example, the Gerald Desmond Bridge, which is the bridge that
connects the two, 15 percent of the entire Nation's cargo. But
out of San Pedro complex, 40 percent.
Mr. Stutzman. Most of the infrastructure there is Federal
infrastructure?
Ms. Hirono. No. It is shared. For example, the Gerald
Desmond Bridge, it included Federal money, State money, and
also bonding from the taxpayers.
Mr. Stutzman. Thank you.
Mr. Tonko.
Mr. Tonko. I share your opinion that, with putting off an
infrastructure project, the price tag just escalates. And we
are trying to have more effective government and rid it of
waste and inefficiency. I think you are prudent to have an
appropriate level of funds set aside for infrastructure
improvements and projects, not only addressing that sticker
shock situation but also the employment issue.
Ms. Richardson. Exactly. Thank you, sir. And history tells
us that if we invest in our infrastructure it has proven to be
a very prudent financial decision.
Mr. Stutzman. Okay, thank you very much.
I think we have time for one more witness before we have to
go to vote. Thank you, Ms. Richardson; and at this time the
chair recognizes the Honorable Gene Green from Texas.
Mr. Green.
STATEMENT OF THE HON. GENE GREEN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS
Mr. Gene Green of Texas. I want to thank you, and I will
speak as fast as a guy from Texas can.
I am pleased to be here to provide my views on the fiscal
year 2012 budget resolution and to follow, although she has
left, our basketball coach tonight, because Members of Congress
are playing the Georgetown law faculty.
And we also share--I represent the Port of Houston, which
is the largest foreign tonnage port in the country. Of course,
most of our tonnage is petrochemical, both crude oil coming in
and refined products and chemicals going out.
The Budget Committee is faced with difficult choices that
crafts this congressional budget. Democrats and Republicans
must work together to produce a budget that simultaneously
helps meet our economic, health care, energy, and social
challenges.
The two issues I want to address is, one, energy
provisions. Unfortunately, the President's budget again
includes several tax increases aimed at America's natural gas
and oil industry, which has been part of the U.S. code since
1926 and another that was created to help U.S. manufacturers
maintain and create well-paying jobs. I am concerned about this
because increasing costs on our domestic energy industry would
jeopardize small business jobs and increase our reliance on
foreign sources of energy.
While instability in the Middle East continues to threaten
our supply, we should not punish our offshore and onshore
producers with punitive tax hikes but instead encourage the
safe and responsible production of our domestic resources in
order to reduce this reliance on foreign imports and in turn
increase our economic growth.
The oil and natural gas industry is one of the largest
employers in our country, supporting more than 9.2 million
jobs. And while people love to talk about ``big oil'', the
average independent producer company has only 12 employees, the
definition of a true small business. Yet the administration's
fiscal year 2012 budget proposal includes almost $90 billion in
tax increases on this industry alone. I urge the Members to
avoid these punitive taxes.
The second issue is NASA. I am sharing your concern with
the current direction of NASA. Last year, Congress passed an
authorization bill that represented a compromise and provided a
solid path forward for the agency. Congress spoke with what
many of us thought was unmistakable clarity that NASA's mission
is to continue human space exploration. I would like to ask
this committee to include language that adheres to the
compromise included in last year's authorization bill. I think
the provisions enjoy broad support in Congress and would be
welcomed by the tens of thousands of engineers, scientists, and
employees that work directly and indirectly on NASA projects
every day.
The harsh reality of the situation is the space shuttle
program will end this June. I was encouraged about our Nation's
future in human space flight when the NASA authorization bill
was signed last year into law. The plan in the authorization
would provide for immediate transition to our next generation
human space program.
Unfortunately, my encouragement turned to disappointment
when I saw NASA's budget proposal. Their plan reflects an
approach that is dismissive of the will of Congress and
exhibits unbelievable lack of respect for the law that was
signed by the President, the final decision maker in their
chain of command.
NASA and our country deserve far better than a
jurisdictional and philosophical spat between bureaucrats. The
law is the law, and NASA's job is to follow it to the letter,
not spend time and resources in an attempt to be evasive. If
NASA follows its own plan, human space flight will be put in
limbo once the space shuttle missions conclude. If our budget
incorporates the compromise of NASA's authorization bill, we
can use the valuable work accomplished during the Constellation
program for the next generation of human space flight.
We can maximize cost savings and offer the best value by
leveraging taxpayer dollars that are already being spent for
the biggest benefit. These are goals that we must pursue during
such difficult fiscal times.
If we do not effectively guide NASA back toward a plan that
is within the confines of the law, it will result in
significant duplicative costs and unnecessary job losses. Not
only that, but it will also cost more to wind down many
efforts, only to ramp them back up years later.
Local economies like my home in Houston, home of the
Johnson Space Center, will be hit hard when we have just begun
to recover. It is estimated by the human space flight industry
that at least 10,000 employees will be laid off under the more
expensive, less effective NASA budget proposal. A failure to
maintain preeminence in space flight will have ripple effects
that damage our education system, our industry's capability to
innovate, and could handicap our global competitiveness for
years to come.
We spend so much time talking about the importance of
inspiring our students to pursue science, technology,
engineering, and math disciplines. NASA serves as the biggest
catalyst for this inspiration. Under the NASA budget proposal,
there will be no new jobs for STEM students. We must change the
trajectory of NASA. The plan in the authorization bill costs
less, does more, and will allow our Nation to maintain its role
as the leaders in space.
Again, I appreciate the time today and would be glad to try
and answer any questions.
[The prepared statement of Gene Green follows:]
Prepared Statement of Hon. Gene Green, a Representative in Congress
From the State of Texas
Chairman Ryan, Ranking Member Van Hollen and Members of the
Committee:
I am pleased to be here today to provide my views on the Fiscal
Year 2012 Budget Resolution.
This committee is faced with many difficult choices as it crafts
this year's congressional budget.
Democrats and Republicans must work together to produce a budget
that simultaneously helps meet our economic, health care, energy, and
social challenges.
energy provisions
Unfortunately, the President's budget again includes several tax
increases aimed at America's natural gas and oil industry--one of which
has been a part of the US code since 1926 and another that was created
to help U.S. manufacturers maintain and create well paying jobs.
I am concerned about this because increasing costs on our domestic
energy industry could jeopardize small business jobs and increase our
reliance on foreign sources of energy.
While instability in the Middle East continues to threaten our
supply, we should not punish our offshore and onshore producers with
punitive tax hikes, but instead encourage the safe and responsible
production of our domestic resources in order to reduce this reliance
on foreign imports and in turn, increase our economic growth.
The oil and natural gas industry is one of the largest employers in
our country, supporting more than 9.2 million jobs.
And while people love to talk about ``Big Oil,'' the average
independent producer company has only 12 employees--the definition of a
true small business.
Yet, the Administration's Fiscal Year 2012 Budget proposal includes
almost $90 billion in tax increases on this industry alone.
I strongly urge the Members of this committee to avoid these
punitive taxes.
nasa
I am extremely concerned about the current direction of NASA. Last
year, Congress passed an authorization bill that represented a
compromise and provided a solid path forward for the agency.
Congress spoke with, what many of us thought was, unmistakable
clarity that NASA's mission is to continue human space exploration.
I would like to ask this committee to include language that adheres
to the compromise included in last years' authorization bill.
I think these provisions will enjoy broad support in Congress and
would be welcomed by the tens of thousands of engineers, scientists,
and other employees that work directly on NASA projects every day.
The harsh reality of the situation is that the Space Shuttle
program will end in June. I was encouraged about our nation's future in
human space flight when the NASA Authorization bill was signed into
law.
The plan in the authorization would provide for an immediate
transition to our next generation human space flight program.
Unfortunately, my encouragement turned to disappointment when I saw
NASA's budget proposal.
Their plan reflects an approach that is dismissive of the will of
Congress and exhibits an unbelievable lack of respect for the law that
was signed by the President, the final decision maker in their chain of
command.
NASA and our country deserve far better than a jurisdictional and
philosophical spat between bureaucrats. The law is the law and it is
NASA's job is to follow it to the letter, not spend time and resources
in an attempt to be evasive.
If NASA follows its own plan, human space flight will be put into
limbo once the Space Shuttle missions conclude.
If our budget incorporates the compromise of the NASA authorization
bill, we can use the valuable work accomplished during the
Constellation program for the next generation of human space flight.
We can maximize cost-savings and offer the best value by leveraging
tax payer dollars that have already been spent for the biggest benefit.
These are goals that we must pursue during such difficult fiscal times.
If we do not effectively guide NASA back toward a plan that is
within the confines of the law, it will result in significant
duplicative costs and unnecessary job losses.
Not only that, but it will also cost more to wind down many efforts
only to ramp them back up in later years.
Local economies, like my own in Houston, home of Johnson Space
Center, will be hit hard when we have just begun to recover.
It is estimated by the Human Space Flight industry that at least
10,000 employees will be laid off under the more expensive, less
effective, NASA budget proposal.
A failure to maintain preeminence in human space flight will have
ripple effects that damage our education system, our technology
industry's ability to innovate, and could handicap our global
competitiveness for years to come.
We spend so much time talking about the importance of inspiring our
students to pursue science, technology, engineering, and math
disciplines. NASA serves as the single biggest catalyst for this
inspiration.
Under the NASA budget proposal, there will be no new jobs for our
STEM students. We must change the trajectory at NASA. The plan in the
authorization bill costs less, does more, and will allow our nation to
maintain its role as the leader in space.
Thank you for the time to testify today.
Mr. Stutzman. Thank you, Mr. Green.
I know we are running real short on time to get to the
floor to vote, but I would have one quick question. How many
are employed by NASA in south Texas?
Mr. Gene Green of Texas. It is actually represented by Pete
Olson. Our district is just north of it. But we are in the
thousands of people. But literally we worked real hard last
year to pass the authorization bill to provide a glide path for
NASA, but the President's budget doesn't reflect what is in the
statutory law now.
Mr. Stutzman. Mr. Tonko?
Mr. Tonko. No. I think you have highlighted everything
well, and as a member of Science and Tech I know of the
struggles to get NASA up to its appropriate levels.
Mr. Gene Green of Texas. Thank you for being on the
committee last year to be able to work hard for a good
authorization. Now we need to make sure they spend the money
like it is supposed to be.
Mr. Tonko. I hear you. Thank you so much, Representative
Green.
Mr. Stutzman. Thank you for your testimony.
At this time, we will take a brief recess as we vote; and
we will begin when Members appear to the committee to testify.
[Recess.]
Mr. Stutzman. The House Budget will come to order, and we
will continue with our testimony. Our first witness for this
session will be Ms. Woolsey from California.
Ms. Woolsey. Thank you.
Mr. Stutzman. You are welcome, and you have 5 minutes.
Thank you for being here.
STATEMENT OF THE HON. LYNN WOOLSEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Woolsey. Thank you, Mr. Chairman, and thank you,
Ranking Member Castor, for being here.
Like you, I recognize the challenges facing your committee
and facing our country. I believe our success will depend on
how we invest in our people and how we understand their values.
The Congressional Progressive Caucus has been focused on
ways to advance job creation, invest sustainably, and cut
unnecessary and wasteful spending. And for many years now the
CPC has offered an alternative budget resolution that embodies
these goals and principles.
Nothing has been a larger strain on this country's finances
than the two wars in Iraq and Afghanistan, which have now cost
us more than $1.1 trillion. Poll after poll confirms that the
public no longer supports endless wars that don't advance the
interests of working families, and they are asking this
Congress to end these military quagmires.
The CPC alternative budget does this by providing for the
responsible and orderly redeployment of our troops and military
contractors from Iraq and Afghanistan, saving more than $1.5
trillion above current law spending levels over 10 years.
Our caucus looks for ways to reduce excess spending as well
at the Pentagon, so that we will not jeopardize our national
security but save. Working with Congressman Barney Frank, we
have come up with a list of defense cuts totaling $800 billion
over 10 years. This includes reducing our nuclear arsenal to
1,000 deployed warheads, it includes reforming missile defense
spending and canceling outdated Cold War-era weapons systems.
We can gain robust and immediate savings also from paring
down the Pentagon's budget. We must look further for ways to
reduce spending and to improve the efficiency of government
services.
To that end, we achieved historic reform with passage of
the health care reform bill. However, we believe the reforms
could go farther by including a public option that would
provide competition to private insurers and reduce the cost of
health care for working families and the Federal Government.
This year, the Congressional Budget Office, the CBO,
announced that the increased competition resulting from a
public option would save the government $68 billion between the
year 2014 and 2020. In fact, CBO included the public option as
a recommendation in its biennial report outlining ways to
reduce spending. The co-chairs of President Obama's Fiscal
Commission, Erskine Bowles and former Senator Alan Simpson,
also included the public option in their set of final
recommendations to reduce the deficit.
Working families are struggling right now to make ends meet
and to give their kids a viable future. The budget resolution
must include a substantial job creation initiative to get our
economy moving. It must provide a safety net for people who
have exhausted all other resources. And it must provide for
quality education for all.
So, Mr. Chairman, members of the committee, I ask that you
introduce a budget resolution that includes substantial
reductions in defense spending and a robust public option, both
of which will help set our country on a prudent and sustainable
fiscal path.
With that, I thank you very much; and I look forward to
your questions.
[The prepared statement of Lynn Woolsey follows:]
Prepared Statement of Hon. Lynn C. Woolsey, a Representative in
Congress From the State of California
Chairman Ryan, Ranking Member Van Hollen, and members of the Budget
Committee, thank you.
Like you, I recognize the challenges facing this Committee and our
country. I believe our success will depend on how we invest in our
people and their values.
The Congressional Progressive Caucus (CPC) has been focused on ways
to advance job creation, invest sustainably, and cut unnecessary and
wasteful spending. And for many years now, the CPC has offered an
alternative budget resolution that embodies these goals and principles.
Nothing has been a larger strain on this country's finances than
the two wars in Iraq and Afghanistan, which have now cost us more than
$1.1 trillion. Poll after poll confirms that the public no longer
supports endless wars that don't advance the interests of hardworking
families, and they're asking this Congress to end these military
quagmires.
The CPC alternative budget does this by providing for the
responsible and orderly redeployment of our troops and military
contractors from Iraq and Afghanistan, saving more than one and a half
trillion dollars above current law spending levels over ten years.
Our caucus looks for ways to reduce excess spending at the Pentagon
in ways that will not jeopardize our national security. Working with
Congressman Barney Frank, we have come up with a list of defense cuts
totaling more than $800 billion over ten years. This includes reducing
our nuclear arsenal to 1,000 deployed warheads, reforming missile
defense spending, and canceling outdated Cold-War era weapons systems.
We can gain robust and immediate savings from pairing down the
Pentagon's budget. But we must look further for ways to reduce spending
and improve the efficiency of government services.
To that end, we achieved historic reform with passage of the health
care reform bill. However, we believe the reforms could go farther by
including a public option that would provide competition to private
insurers and reduce the cost of health care for working families and
the federal government.
This year, the Congressional Budget Office (CBO) announced that the
increased competition resulting from a public option would save the
government $68 billion between 2014 and 2020. In fact, CBO included the
public option as a recommendation in its biennial report outlining ways
to reducing spending. The Co-Chairs of President Obama's Fiscal
Commission, Erskine Bowles and former Senator Alan Simpson, also
included the public option in their set of final recommendations to
reduce the deficit.
Working families are struggling right now--to make ends meet and to
give our kids a viable future. The budget resolution must include a
substantial job creation initiative to get our economy moving. It must
provide a safety net for people who have exhausted all other resources.
And it must provide for quality education for all.
Mr. Chairman, members of the Committee, I ask that you introduce a
budget resolution that includes substantial reductions in defense
spending and a robust public option, both of which will help set our
country on a prudent and sustainable fiscal path.
Thank you and I look forward to any questions you may have.
Mr. Stutzman. Thank you for your testimony, and you have
helped us get back on track a little bit by a minute.
One question I quickly have--and you addressed the wars in
Iraq and Afghanistan and I understand the toll that it is
taking not only our military but our budgets as well. Is the
Progressive Caucus going to address the Libyan conflict at all?
And what were some of the feelings there? Obviously, we are in
the beginning stages.
Ms. Woolsey. I can't quite speak for the entire caucus. We
are 77 members at the moment.
We are very concerned about what this is going to cost us
by having a third war in the Middle East, if it goes into that;
and we are asking our administration for clear guidelines on
what would be the end, when will we know we can leave, and how
can we be sure that we are not going to have ground forces in
that area?
We all know that if NATO is involved, which of course they
are now, the United States carries much of the burden for the
NATO troops and for the expenses. So, right now, they say they
have already spent over $5 million in a week and a half in our
involvement in Libya. So you can know it will be $1 billion in
a year.
Mr. Stutzman. Absolutely. I know we are all concerned about
the situation. Thank you.
Ms. Castor, do you have a question?
Ms. Castor of Florida. No questions.
Mr. Stutzman. Thank you very much for your testimony; and
we will move to our next witness, the gentlelady from Illinois,
Ms. Schakowsky.
STATEMENT OF THE HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Schakowsky. Thank you, Mr. Stutzman. I appreciate it.
And thank you, Representative Castor.
I served, along with the chairman of the full committee,
Mr. Ryan, on the President's National Commission on Fiscal
Responsibility and Reform. And from that experience, I know
that we do bring very different perspectives to the debate on
how to address our large deficits while encouraging economic
growth. But as you know from our meetings, experts that
appeared before us said we cannot solve the problem only by
making cuts. Revenues must be a key part of any deficit
reduction strategy. Not only do we need revenues, but we need
to do it in a fair way. Those who have been enjoying the
prosperity of recent years should have to pay their share.
It pays to remember that just 10 years ago we had a budget
surplus--easy to forget--and the debt was rapidly decreasing.
During the Bush years, those surpluses disappeared and huge
debt accumulated due to two unfunded wars, two unfunded tax
cuts that mainly enriched the already wealthy, and a blind eye
to the recklessness of Wall Street, which caused 8 million
Americans to lose their jobs and devastated our economy.
And now we are on a so-called ``unsustainable fiscal
path'', to quote the commission report, which threatens our
economic viability. But the alarming redistribution of wealth
that is shrinking the middle class is another grave threat to
both our economy and our democracy.
Over the last 30 years, there has been a dramatic and
deliberate transfer of wealth from the middle class to the
very, very rich. Income inequality is now at highest levels
since 1928. Wages have stagnated for middle and lower income
families, despite enormous gains in productivity.
We have the most productive workers in the world. So where
has the money gone? From 1976 until 2005, the bottom 20 percent
of households saw their incomes increase by $200. That bottom
fifth is way at the left. You can see what you need to see just
by this chart. But this is 20 percent of Americans who saw
their income go up $200.
Over the same period, the top .1 percent saw income growth
of nearly $6 million a year. That is growth. Their average
income here is $27 million. The average income for the bottom
90 percent is around $31,000.
Twenty-seven million, 31,000.
Meanwhile, Republicans, who squandered a budget surplus,
created the huge deficit, and whose policies allowed Wall
Street recklessness to bring our economy to near collapse, are
now demanding that the middle class foot the bill. And the
solution to our fiscal mess that they suggest is to drop vital
programs like Social Security, Medicare, and Medicaid and to
make cuts in domestic spending that would cause an additional
700,000 Americans to lose their jobs.
There is another way. I have introduced H.R. 1124, the
Fairness in Taxation Act, which would create new tax brackets
for millionaires and billionaires, starting at a rate of 45
percent and rising to a top rate of 49 percent for
billionaires. It would also address a fundamental inequality in
our current law by taxing capital gains and dividends at
ordinary income rates in those brackets.
Historically, those rates are relatively modest. During
most of the Reagan administration, the top income tax rate was
50 percent; and in previous decades the top rate was as high as
94 percent.
According to Citizens for Tax Justice, the Fairness in
Taxation Act would raise nearly $62 billion in fiscal year
2012, allowing us to avoid the harsh cuts that will hurt the
middle class.
It is time for millionaires and billionaires to pay their
fair share. This isn't about punishment or revenge. It is about
fairness.
This is an idea that the public supports. In a recent poll,
81 percent of respondents supported placing a surcharge, a
surtax on Federal income taxes for those who make more than $1
million a year in order to reduce the deficit.
So I would like consideration of the Fairness in Taxation
Act in the budget resolution. It will allow us to stop the war
on the middle class, restore fiscal integrity and fairness, and
fund those initiatives that reflect our American values and
goals. Thank you.
[The prepared statement of Jan Schakowsky follows:]
Prepared Statement of Hon. Janice D. Schakowsky, a Representative in
Congress From the State of Illinois
Mr. Chairman, we served together on the President's National
Commission on Fiscal Responsibility and Reform. From that experience, I
know that we bring very different perspectives to the debate on how to
address our large deficits while encouraging economic growth.
But as you know, from our meetings, experts that appeared before us
said we cannot solve the problem only by making cuts--revenues must be
a key part of any deficit reduction strategy.
Not only do we need revenues, but we need to do so in a fair way.
Those who have been enjoying the prosperity of recent years should have
to pay their share.
It pays to remember that just 10 years ago we had a budget surplus
and the debt was rapidly decreasing. During the Bush years, those
surpluses disappeared and huge debt accumulated due to two unfunded
wars, two unfunded tax cuts that mainly enriched the already wealthy,
and a blind eye to the recklessness of Wall Street which caused 8
million Americans to lose their jobs and devastated our economy.
Now we are on an ``unsustainable fiscal path,'' to quote the
Commission report, which threatens our economic viability. But the
alarming redistribution of wealth that is shrinking the middle class is
another grave threat to both our economy and our democracy.
Over the last 30 years, there has been a dramatic and deliberate
transfer of wealth from the middle class to the very, very rich. Income
inequality is now at the highest levels since 1928. Wages have
stagnated for middle and lower income families despite enormous gains
in productivity.
Where has the money gone? To the very top.
From 1979 until 2005, the bottom twenty percent of households saw
their incomes increase by $200. Over the same period, the top 0.1
percent saw income growth of nearly six million dollars--each year.
The top one-hundredth of 1 percent now make an average of $27
million per household per year. The average income for the bottom 90
percent of Americans? $31,244.
Meanwhile, Republicans, who squandered a budget surplus, created
the huge deficit, and whose policies allowed Wall Street recklessness
to bring our economy to near collapse, are now demanding that the
middle class foot the bill.
Their solution to our fiscal mess is to gut vital programs like
Social Security, Medicare and Medicaid and to make cuts in domestic
spending would cause an additional 700,000 Americans to lose their
jobs.
There is another way.
I have introduced H.R. 1124, the Fairness in Taxation Act, which
would create new tax brackets for millionaires and billionaires,
starting at a rate of 45 percent and rising to a top rate of 49
percent. It would also address a fundamental inequity in our current
law by taxing capital gains and dividends at ordinary income rates in
those brackets.
Historically, these rates are relatively modest. During most of the
Reagan Administration, the top income tax rate was 50 percent, and in
previous decades, the top rate was as high as 94 percent.
According to Citizens for Tax Justice, the Fairness in Taxation Act
would raise nearly $62 billion in fiscal year 2012, allowing us to
avoid the harsh cuts that will hurt the middle class.
It's time for millionaires and billionaires to pay their fair
share. This isn't about punishment or revenge--it's about fairness.
This is an idea that the public supports. In a recent poll, 81
percent of respondents supported placing a surtax on federal income
taxes for those who make more than $1 million in order to reduce the
deficit.
I encourage you to include the Fairness in Taxation Act in the
budget resolution. It will allow us to stop the war on the middle
class, restore fiscal integrity and fairness, and fund those
initiatives that reflect our American values and goals.
Mr. Stutzman. Thank you, Ms. Schakowsky.
Ms. Castor, any questions?
Thank you very much for your testimony. I know obviously
here on the Budget Committee we are all concerned about
spending and revenue, and we have a lot of work in front of us.
Ms. Schakowsky. And I hope fairness as well.
Mr. Stutzman. I look forward to working with you in a
bipartisan manner.
Mr. Schakowsky. Thank you.
I am wondering if I could put into the record these two
charts.
Mr. Stutzman. Without objection.
Ms. Schakowsky. Thank you.
[The information follows:]
Mr. Stutzman. Next on our list for testimony is the
gentleman from Florida, Mr. Nugent. Thank you for being here. I
am looking forward to your testimony.
STATEMENT OF THE HON. RICH NUGENT, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF FLORIDA
Mr. Nugent. First, let me thank the chairman and ranking
member from Florida for having us here today.
I am sure everyone here agrees that our respective
congressional districts are different. We have different
industries, different economic issues, and different
demographics. Mine is no exception. With over a quarter of a
million seniors living in my district, more than any other in
the country, the overriding concern that I have for long-term
deficit reduction should be clear.
In case it is not clear, I want the committee to know that
my constituents and I cannot support any reform that would cut
benefits to those on or near retirement. I view those benefits
as a sacred promise this government has made and that my
constituents and yours have paid into over their lifetimes in
good faith.
My district may be different in the unusual size of its
senior population, but I would argue that each and every senior
citizen across this country has paid the same, been promised
the same, expects the same, and deserves the same thing from
this government.
And while our individual districts and States may have a
great deal of variation between them, we bear the burden of our
national budget together. As you all know, every single man,
woman, and child that we represent owes $46,000 as his or her
share of the national debt; and that number is growing fast.
We in Washington wax on about how much we love this country
and how we want to do right by the people we represent, but the
bill that we are currently running up in their names suggest
otherwise.
The blame goes beyond any particular party, any particular
President, or any particular generation. It has been a
collective failure of leadership over many decades. Politicians
of all stripes have made promises that they knew could not be
kept. They have squandered precious resources, hidden their
misdeeds behind the false belief that America could always pay
for it later.
The 112th Congress has a choice to make. We can kick the
can down the road again and tell the American people that
everything is fine and there is nothing to worry about, or we
can step up to the plate and do what our predecessors should
have done long ago.
Make no mistake about it. This responsibility falls to us,
Republicans and Democrats alike. The President has made it
clear that he is not going to lead on this issue. And while I
would prefer to have a strong commitment from the White House,
I am not willing to wait for it. So we are here left with a
question of what to do.
While negotiations continue between the House and the
Senate about funding for the remainder of this year, I know the
Budget Committee is wrestling mightily with the much larger
question of what funding will look like over the next 50. It is
not a simple task, but I know it is one that you all take very
seriously. In my short time here, I have yet to find an elected
official in Washington who refuses to acknowledge the
unsustainable nature of our budget, but I found plenty who
refuse to do anything about it. The American people should know
that the members of this Committee will be different.
In closing, I would like to ask the committee that, as you
move forward with your work reforming the budget, can you
assure me that you share my commitment to protecting those on
or near retirement from any benefit cuts?
With that, I yield back the balance of my time.
[The prepared statement of Rich Nugent follows:]
Prepared Statement of Hon. Richard B. Nugent, a Representative in
Congress From the State of Florida
First, let me thank the Chairman and Ranking Member for having us
here today.
I'm sure everyone here would agree that each our respective
congressional districts are different. We have different industries,
different economic issues, and different demographics. Mine is no
exception. With over a quarter of a million seniors living in my
district--more than any other in the country--the overriding concern
that I have for long-term deficit reduction should be clear.
In case it is not clear, I want the committee to know that my
constituents and I cannot support any reform that would cut benefits to
those on or near retirement. I view those benefits as a sacred promise
that this government has made and that my constituents and yours have
paid into over their lifetimes in good faith.
My district may be different in the unusual size of its senior
population, but I would argue that each and every senior citizen across
this country has paid the same, been promised the same, expects the
same, and deserves the same thing from this government.
And while our individual districts and states may have a great deal
of variation between them, we bear the burden of our national budget
together. As you all know, every single man, woman, and child that we
represent owes $46,000 as his or her share of the national debt and
that number is growing fast.
We in Washington wax on about how much we love this country and how
we want to do right by the people we represent, but the bill that we
are currently running up in their name suggests otherwise.
The blame goes beyond any particular party, any particular
president, or any particular generation. It has been a collective
failure of leadership over many decades. Politicians of all stripes
have made promises that they knew could not be kept. They have
squandered precious resources and hidden their misdeeds behind the
false belief that America could always pay for it later.
The 112th Congress has a choice to make. We can kick the can down
the road again and tell the American people that everything is fine
that there is nothing to worry about. Or we can step up to the plate
and do what our predecessors should have done a long time ago.
Make no mistake about it, this responsibility falls to us--
Republican and Democrat alike. The President has made it clear that he
is not going to lead on this issue. And while I would prefer to have a
strong commitment from the White House, I am not willing to wait for
it.
So, we are left with a question of what to do.
While negotiations continue between the House and Senate about
funding for the remainder of this year, I know the Budget Committee is
wrestling mightily with the much larger question of what funding will
look like over the next fifty. It is not a simple task, but I know it
is one you all take very seriously.
In my short time here, I have yet to find an elected official in
Washington who refuses to acknowledge the unsustainable nature of our
budget, but I have found plenty who refuse to do anything about it.
The American people should know that the members of this committee
will be different.
In closing, I would like to ask the committee, that as you move
forward with your work reforming the budget, can you assure me that you
share my commitment to protecting those on or near retirement from any
benefit cuts?
Mr. Stutzman. Thank you, Mr. Nugent.
I am interested--your district obviously has a lot of
seniors. What do you hear----
Mr. Nugent. There are 260,000 seniors out of 1 million.
Mr. Stutzman. What do you hear when you go home regarding
not only spending in Washington, Social Security, and Medicare,
obviously--and I agree with your position on protecting those
who have invested in Social Security for years and years. What
do you hear? Is there an openness to reforming Social Security?
What kind of ideas? What do you hear generally from your
constituents?
Mr. Nugent. In general, first of all, obviously, from the
260,000 that are currently retired they are concerned about how
do they plan for the future? They want to make sure that their
benefits are secure today; and those that are near term, 55 and
above, they need to have the ability to plan for their future
and retirement.
But reform is not a dirty word. Reform is really what I am
hearing from those that are not currently drawing from Social
Security. Just like my sons who are all in the military, they
understand that Social Security is going to look very different
in the future than how it does today.
I think that the American people really--you hear this a
lot--but I really think they get it. They get the fact that we
can't sustain where we are today in the way we spend.
In the hearings that I have had, the town hall meetings--I
have had five in 2 days--we laid out exactly the budget and
that we are actually putting half of our expenses on a credit
card every day. And they understand that they couldn't do that
in their own home, and they don't believe that the Federal
Government should be doing that today up here with their tax
dollars and what they owe in the future.
Mr. Stutzman. I believe that the American people are
expecting us to move and to make responsible, wise choices for
the future, not only for themselves but also for future
generations of our country.
Mr. Nugent. Absolutely.
Mr. Stutzman. I appreciate your testimony. That is very
insightful, and I appreciate your being here.
Mr. Nugent. I appreciate the committee's hard work and God
bless you.
Mr. Stutzman. Thank you.
Next, we will take testimony from the gentleman from
California, Mr. Becerra. Thank you for being here, and I am
looking forward to your testimony. You have 5 minutes.
STATEMENT OF THE HON. XAVIER BECERRA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Becerra. Mr. Chairman, thank you very much and good
luck to you as you try to make it through all the testimony
that will be coming before you. I served on the committee the
last few years. It is an interesting place to be because you
are on top of it, and I wish you much luck.
I would like to focus on what I think is the most important
part about the budget and that is that it is a reflection of
our priorities. What we do with the budget tells Americans what
we think about America and how we believe we should move
forward as a country together.
And I must say to you, looking back at the last 10 years--
and I have been here now 18 years--when I look back at when
President Bush took office in 2001, the Congressional Budget
Office, the nonpartisan scorekeeper, told us that we were
looking at somewhere around $5\1/2\ trillion over the projected
10-year period of record surpluses in our budget; and we were
actually beginning to pay down the national debt. But by the
time President Bush left office in January, 2009, he had handed
over the keys to the White House to President Obama with
unprecedented budget deficits. In fact, at the time, we also
were losing--we were hemorrhaging some three-quarters of a
million American jobs a month.
And so I must say to you, Mr. Chairman, that right now I
believe that most Americans would agree that the biggest
deficit we face in this country is a jobs deficit. When some 14
million American aren't working, the greatest task we have
before us to is to come up with sound budgets, smart budgets
that put America back to work.
I don't believe that folks back in my district are any
different from folks anywhere else throughout the country. But
if they were to look at this chart that I have up before you
and they were to take a look at what were the contributors to
these Federal deficits that we have today, they would be
somewhat startled to find just how much the deficits are due
not just to the recession but to things like the Bush tax cuts
of 2001 and 2003. The greatest contributor, in fact, to today's
deficits are the fact that the Bush tax cuts, which went mostly
to very wealthy people, drained the Treasury of a great deal of
money. They were never paid for; and, as a result, many of the
other programs, whether it was defense, whether it was health
care, whether it was education, had to figure out how to cover
their costs without the resources from the lost tax revenues
from the Bush tax cuts.
You can also see, of course, the Afghan and Iraq wars,
again unpaid for during that decade; and, as a result, those
added about $1 trillion to the deficits of this country, to the
national debt. And you can see how quickly it adds up.
And so when folks in my district and I daresay folks
anywhere throughout the country take a look at what caused the
mess, they certainly would hope that we would focus on those
contributors to help now contribute to the resolution of the
mess.
Unfortunately, it seems that this House through H.R. 1, the
2011 budget bill, are not focusing on those that contributed to
creating these deficits but in other ways. A quick example in
my own District in Los Angeles, there is an art teacher who I
have gotten to know, Mr. Garcia, who works at Jefferson High
School. Before Mr. Garcia arrived at Jefferson, very few
students participated in his specialty, which is arts. But,
after just 6 years, he has been able to encourage so many of
the young people at Jefferson to participate in the art
competitions throughout the city of Los Angeles. And in fact he
was the winner of our local congressional arts competitions--
one of his students was the winner of our local congressional
arts competition.
At my coffee this past weekend, I talked to a seasoned
teacher from Eagle Rock Elementary School in my district as
well, a school which is a National Blue Ribbon and Title 1
Achievement School. She told me this year eight teachers will
be laid off from the school, which, of course, will increase
class size. The stories go on and on.
So when we hear that in the House continuing resolution,
H.R. 1, we are cutting money for education for our schools, I
suspect a lot of these teachers are wondering why are they
paying for the sins that were done by others? As we see from
this chart, I don't think any teacher had anything to do with
spending money in Afghanistan and Iraq. I doubt that any of
those teachers got anything in tax cuts from the Bush tax cuts
that went mostly to wealthy folks.
But perhaps, if I could, I would like to focus the rest of
my time on chart number 2 and what I will have as chart number
3, and that is what seems to me a trend now to claim that
Social Security is part of the cause of our deficit problem.
When, in fact, Social Security, as you can see from this chart,
has never contributed one dime to the national debt or any of
our deficits because, over the years of its existence, more
than 75-plus years, we have, as Americans, paid into the system
over $13 trillion.
And we have had to pay out to those who are retired or
survivors of workers or who are disabled Americans, who receive
Social Security as well, some $12 trillion. So just from what
we have contributed over 75 years as Americans more than covers
what we have had to use as benefits by over a trillion.
When you add the interest that has been earned on those
contributions that have been provided by Americans over those
75 years, that is over a trillion dollars in interest that has
been earned. You can see that over $2.5 trillion of additional
resources are within the Social Security system to pay for
benefits to those who are retiring.
So to now hear that some people believe we have to cut
benefits for Social Security for our seniors who are receiving
Social Security in order to balance the budget, we have to
wonder what is going on? Well, I will tell you that as much as
some people will say, well, Social Security has its problems,
the reality is that Social Security by law can never go
bankrupt. By law, it can never pay more than it has available
to it. And therefore, it is one of the greatest programs we
have ever seen generated by the public or private sector of
this country.
I would say looking now at the final chart that I have,
that we can see if Social Security has any challenges, and
those would be long term in the next quarter century, we can
address those very easily. One quick way, simply by removing
the tax cuts, the Bush tax cuts for the top 1 percent of
American earners, the wealthiest 1 percent. You would more than
cover any type of challenge that Social Security might face
into the future.
So, Mr. Chairman, as you move forward in trying to help
craft a budget, I hope everyone will agree that we should have
those who really partied during the first decade of the 21st
century and made the deficits that we have today pay for their
sins, while not putting the onus on our seniors to cover for
the mistakes made by those in the past. So, with that, I yield
back the balance of my time, and I thank you for this
opportunity to testify.
[The prepared statement of Xavier Becerra follows:]
Prepared Statement of Hon. Xavier Becerra, a Representative in Congress
From the State of California
Good afternoon Chairman Ryan, Ranking Member Van Hollen and members
of the Budget Committee. Thank you for the opportunity to address this
Committee.
The Budget Resolution that this Committee is considering is about
choices and priorities. As a former member of the Budget Committee, I
know what a difficult task you face. But before making those choices,
we must first ask: how did we get here?
When President Bush took office in 2000, the Congressional Budget
Office was projecting a record surplus of $5.6 trillion over 10 years,
and we were paying down the debt. Then, President Bush and the
Republican Congress made fateful policy choices where they cut taxes
that disproportionately benefited the wealthiest Americans and entered
into two unpaid for wars. A total of $1.3 trillion--93%--of the 2009
budget deficit was directly attributable to decisions made on President
Bush's watch.
On top of all this, the Bush Administration was at the wheel when
our economy entered into the Great Recession of 2007-2009. This was
America's worst economic collapse since the Great Depression, a direct
result of underfunding regulatory agencies that were supposed to
protect consumers from the abusive practices of Wall Street. Eight
million people lost their jobs. Now, a recession caused by failed
economic policies and Wall Street greed and recklessness is being used
to blame the average American for being too greedy.
From labor protections being stolen from Wisconsin workers to the
conscious decision to strip seniors of their earned benefits, the
middle class is under assault. Instead of tackling the cause of the
budget deficit, many want to attack the middle class. This strategy is
already on display at the state level.
Facing a $2 billion budget deficit, Republican Gov. Rick Snyder
chooses to leave Michigan seniors with the bill by taxing their
retirement income so that corporations can pay $1.8 billion less in
taxes.
In New Jersey, Republican Gov. Chris Christie proposes spending
$200 million in corporate tax breaks even though the state is looking
at a $10.7 billion budget deficit.
In Florida, Republican Gov. Rick Scott chooses to address the
state's $4.7 billion deficit by making students and workers pay for the
bill. His proposal would send 6,700 state workers to the unemployment
line and cut education funding by $4.8 billion in the first year. Yet
he's willing to add to the state's deficit by spending $1.5 billion
over two years on corporate income tax cuts.
In Ohio, the Republican-controlled House proposed spending up to
$10 million in tax breaks for the petroleum industry even though the
state has a $463 million budget deficit.
In Wisconsin, Republican Gov. Scott Walker targeted teachers and
workers to pay for the state's $3.4 billion deficit while he chose to
spend $140 million in corporate tax giveaways.
The choice my Republican colleagues have made to focus spending on
tax cuts for the wealthy instead of investments in education and
healthcare for the middle class have real world effects. In my own
district, Louis Genaro Garcia, an art teacher and alumni of Jefferson
High School, was just given the pink slip. Before Louis arrived at
Jefferson, students rarely submitted works of art in local art
competitions. In just six years since he's been there, he has
encouraged and inspired his students to realize their potential. His
students have won city art competitions and in fact, one of his
students, Francisca Rodriguez, won our local Congressional Art
Competition last year.
At a coffee I held in my district last weekend, a seasoned teacher
at Eagle Rock Elementary, a national Blue Ribbon and Title I
Achievement School, told me that eight teachers will be laid off this
year. The principal at another school in my district, Frank Del Olmo
Elementary, said that he will have to let six teachers go this year.
For one of the families in my district, the Affordable Care Act has
made a world of difference. Maria Gama's daughter suffers from Type 1
diabetes, requiring daily insulin shots. And because diabetes is
considered a `pre-existing condition,' Maria's insurer wouldn't cover
her daughter.
Maria was forced to pay over $400 out of pocket each month for
medication for her daughter.
Now, thanks to the Affordable Care Act, Maria has the right to add
her daughter to her insurance policy. Say good-bye to $400 per month
out of pocket expenses!
The attack on the middle class is about to be on display here in
Washington. From what I hear, many in the House Republican majority are
targeting senior citizens' Social Security, Medicare and Medicaid. As
the Ranking Member on the Ways and Means Social Security Subcommittee,
I want to make one thing clear today. Social Security has not added one
dime to today's current deficit.
Social Security and seniors didn't cause the current deficit, and
destroying Social Security will not fix it. Over its lifetime, Social
Security has collected $14.6 trillion and has only had to pay out $12.0
trillion in benefits and administrative costs, leaving a healthy $2.6
trillion balance in its trust fund. These balances are invested in
interest-bearing U.S. Treasury bonds, the safest investment money can
buy, sought by investors the world over. Even if Social Security's
trust fund had never earned interest, the tax contributions alone--
$13.1 trillion--have more than covered the cost of providing family and
retirement security to hundreds of millions of Americans.
Social Security is not a budget resolution issue. Social Security
does face challenges in the out years--some 25 years from now. As
Ranking Member of the Subcommittee that oversees Social Security, I am
committed to engaging in a thoughtful, bipartisan discussion about
strengthening it for the future. But the budget resolution is the wrong
place for this discussion--Social Security's challenges do not occur
within the five year time horizon covered by this budget resolution,
and Social Security should not be used as a piggybank to plug holes in
other parts of the budget.
Cutting Seniors' benefits in Social Security, Medicare and Medicaid
will have devastating effects on seniors and their children and
grandchildren who will be forced to replace the income from the Trust
Fund. For so many seniors across our country, whether they live in
rural, urban or suburban America, Social Security is a lifeline to a
life of dignity.
Social Security is essential to seniors. The average social
security retirement benefit is $14,000 per year. The median overall
income of a senior household is $24,000 per year. Six in ten senior
households rely on Social Security for the majority of their income.
One in three beneficiaries depend on Social Security for 90 percent or
more of their income. Its benefits lift nearly 13 million seniors out
of poverty. In my district, 32,560 retirees depend on the social
security benefits they've earned through a lifetime of work.
Social Security is necessary now more than ever. Less than half of
workers have a pension or savings plan through work. In 2007-2008
alone, the value of American's private retirement accounts dropped by
$2.8 trillion and their overall net worth plummeted by $11.8 trillion.
Seniors are counting on us to make the right choices in this
budget. One fact in particular makes clear the real choice before us:
Social Security's entire 75-year shortfall is less than the cost of
extending the Bush tax cuts for the top one percent of taxpayers--
people who earn nearly half a million dollars a year. Seniors are
counting on us to protect the benefits that they have earned through a
lifetime of work.
As I said Mr. Chairman, budgets are about priorities. For most of
our history we've had our priorities straight: invest in Americans
ready to work, children preparing to learn and lead, and repaying our
seniors for building a better America. Let's continue to build on that
heritage by producing a budget that is smart, lean and invests in
America.
Mr. Stutzman. Okay. Thank you.
Next we have the gentleman from Louisiana, Mr. Cedric
Richmond. Thanks for being here. And you have 5 minutes to
testify.
STATEMENT OF THE HON. CEDRIC L. RICHMOND, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF LOUISIANA
Mr. Richmond. Thank you, Mr. Acting Chairman.
Thank you for having me today. And thank you for listening
to the needs of Louisiana's Second Congressional District,
which I think mirror the needs of most urban cities around the
country at this time.
I will tell you that while I was home last week, I spoke to
many of my neighbors, both in Jefferson and Orleans Parishes.
Again and again and again, they asked me to fight for Federal
investments in our district. They told me that at this crucial
juncture in our economic recovery and our physical recovery
from Hurricanes Katrina and Rita, and our recovery from the BP
oil spill, that now is just not the time to cut investments in
our area.
So as you prepare the allocations of spending authority for
the next fiscal year, please remember that only smart,
strategic, and focused investments will keep our America great.
One thing that I like to focus on, especially in my time in the
State legislature, with the responsibility of doing what we do
here, is to make sure that the money we spend, we look at the
return on investment that we receive as we spend money and
invest.
I will say that in today's global marketplace, children in
Kenner and the Lower Ninth Ward of New Orleans are competing
with children in New Delhi. Small businesses in New Orleans
place their products on the shelves besides products from
Beijing. If America is going to continue to be a leader in the
global economy, then we must act like economic leaders and
continue smart, strategic investments in our economic tools.
China and India are investing at the Federal level in their
massive populations, and we must not be left behind. We must
invest in our small businesses and in economic development for
hard hit communities. We must protect investments into
education. We must invest in infrastructure, a proven job
creator, and vital to moving people and goods.
So today I will just focus on three areas that I think are
very critical in economic recovery and smart investment that
gives us a return on our dollar. The first, we have to invest
in our waterways and the maintenance of them to make sure that
we can compete. So that means for me that this committee must
appropriate the full amount in the Harbor Maintenance Trust
Fund for dredging. And once we consider that roughly 60 percent
of all U.S. grain exports are shipped via the lower Mississippi
River and we as America have a goal of doubling our exports in
the next 5 years, we have to have a commitment to dredge our
Nation's most traveled waterways. Those waterways are our trade
superhighways.
Waterways are a huge economic engine; with cargo activity,
just the port of New Orleans alone generates $2.8 billion in
Federal taxes each year. Shippers have paid billions of tax
dollars into the Harbor Maintenance Trust Fund, specifically
for the purpose of keeping channels dredged to authorized
depths.
Unfortunately, much of this funding is just sitting idle in
the Harbor Maintenance Trust Fund and not being used for its
intended purpose. Maintaining the Mississippi River will lower
shipping costs, allowing U.S. growers, producers, and
manufacturers to compete in the global economy. This will
create good-paying jobs here at home. But more importantly,
these jobs do not require an advanced college degree. What it
requires is the willingness of a person to work hard and earn
an honest day's work.
So, for these reasons, I would urge the Budget Committee to
allocate the full amount in the fiscal year 2010 trust fund
proceeds to dredging. And just as a side note, last year, the
trust fund collected almost $1.4 billion, and we spent $828
million on dredging, which that balance we need and we should
invest in it.
The second thing I would urge us to continue to invest in
and reduce the cuts to would be Community Development Block
Grants, Pell Grants, and Head Start. When you had look at early
childhood education and our investment as a society, for every
dollar that we invest in early childhood education, we get a
nine to one return. And right now, although we are facing tough
economic times and we have to make the tough decisions of
balancing a budget, I think we have to look very carefully at
investing in things that in years to come will reap such a
return that we are not in fact still trying to cut in those
years. So, as we look at that, I would again point to the Pell
Grants, CDBG, and Head Start as ways that we help urban areas
and we prevent future drains on our economy.
And the last thing I will talk about is just our investment
in small businesses and our lending community. If we are going
to stay competitive and we are going to out-innovate around the
world, we have to invest and we have to provide access to
capital for those small businesses. So as a member of the Small
Business Committee, I want to go on record as opposing the
views and the estimates that came out of the Small Business
Committee in terms of the President's fiscal year 2012 budget.
Also, we can't strip support from America's small
businesses by decreasing the funding to the Small Business
Administration. The SBA is the only government agency
responsible for supporting our Nation's small businesses. So I
would urge you to remain serious about job growth and our small
businesses, which are one and the same. I urge the committee to
allocate spending authority that is consistent with the
President's fiscal year 2012 budget request for the SBA, which
is $985.4 million. So those are the things that are very
critical to I think the future of where we are going.
I would just add as an aside, while I talk about investment
and especially our Community Development Financial
Institutions, our CDFIs are very critical in terms of providing
access to capital to businesses that otherwise wouldn't get it.
And that investment turns over sometimes and gets leveraged as
much as 17 to 1. So, again, when I talk about the budget, I am
very mindful to specify that we invest in things that we know
we are going to get a return, and we are spending our money
wisely, as any homeowner, any small business person, any big
business person would do.
And lastly, Mr. Acting Chairman, I would just encourage us
to meet the President's goal in terms of funding the Bureau of
Ocean Energy Management Regulation and Enforcement so that we
can get those permits through the system so that we can
continue to drill out in the Gulf of Mexico; 330,000 jobs in
Louisiana are tied to oil and gas exploration. We have to make
sure that we give them the tools to make sure that they are
drilling safely, that we regulate them, and that we can get the
permits through the process quickly so that we can continue to
move this country forward.
So, with that, Mr. Chairman, I would thank you for allowing
me to talk about the importance of those things that I
articulated here, and I yield back the balance of my time.
[The prepared statement of Cedric L. Richmond follows:]
Prepared Statement of Hon. Cedric L. Richmond, a Representative in
Congress From the State of Louisiana
Chairman Ryan and Ranking Member Van Hollen, thank you for hearing
the needs of Louisiana's 2nd Congressional District.
While at home last week, I spoke with many of my neighbors in both
Jefferson and Orleans Parishes. Again, and again, and again they asked
me to fight for federal investments into our District. They told me
that, at this critical juncture in our economic recovery, we can't axe
investments.
As you prepare the allocations of spending authority for the next
fiscal year, please remember that only smart, strategic and focused
investments will keep our America great.
In today's global marketplace, children in Kenner are competing
with children in New Delhi. Small businesses in New Orleans place their
products on shelves beside products from Bejing. If America is going to
continue to be a leader in the global economy then we must act like
economic leaders and continue smart, strategic investments in our
economic tools.
China and India are investing at the federal level in their massive
populations and we must not be left behind. We must invest in our small
businesses and in economic development for hard hit communities. We
must protect investments into education. We must invest in
infrastructure, a proven job creator and vital to moving people and
goods.
I will focus on three priorities.
First, we must invest in our waterways. This Committee
must apportion the full amount of the Harbor Maintenance Tax for
dredging.
With roughly 60% of all U.S. grain exports shipped via the
Lower Mississippi River, America's goal of doubling exports in the next
5 years depends on a commitment to dredge our nation's most traveled
waterway. Waterways are a huge economic engine, with cargo activity
within the Port of New Orleans alone generating $2.8 billion in federal
taxes each year.
Shippers have paid billions of tax dollars into the Harbor
Maintenance Trust Fund specifically for the purpose of keeping channels
dredged to authorized depths. Unfortunately, much of this funding is
just sitting idle in the Harbor Maintenance Trust Fund.
Maintaining the Mississippi River will LOWER SHIPPING
COSTS, allowing U.S. growers, producers and manufacturers to compete in
the global economy. This will create good paying jobs here at home.
Most importantly, these jobs to not require an advanced college degree,
but if a person is willing to work hard, a man or woman can make a fair
salary and provide for their family.
For these reasons, I urge the Budget Committee to allocate
the full amount of the FY2010 Trust Fund proceeds to dredging. This
will create jobs and decrease consumer products inflation. It's a no-
brainer.
Second, we must continue to invest in the renewal of our
urban areas.
I urge this Committee to reject the wrong headed
priorities set out in HR 1.
HR 1 would make hurtful cuts to priorities such as
Community Development Block Grants, Pell grants and Head Start. My
constituents rely on funding to these programs to help move their
families and communities forward.
HR 1 would make cuts to these programs at the same time
that State budgets are constrained--this is unacceptable.
I urge my colleagues to fully fund Pell Grant awards at a
maximum level of $5,550, only $819 above 2008 levels.
I urge the Committee to meet the President's requested
$3.7 billion for CDBG to help local governments survive these troubled
times and keep their communities going.
I urge my colleagues to allocate spending authority above
$8 billion for Head Start.
Third, we must invest in small businesses and community
lending.
As a Member of the Small Business Committee, I go on the
record as opposing the views and estimates provided to you by the
Majority on that Committee.
Those Members want to strip support from American small
businesses by decreasing funding to the Small Business Administration.
The SBA is the ONLY government agency responsible for supporting our
nation's small businesses.
I urge you to remain serious about job growth and our
small businesses. I urge the Committee to allocate spending authority
that is consistent with the President's FY 2012 Budget Request for the
SBA, $985.4 million.
Additionally, I urge the Committee to recognize the
importance of investing in Community Development Financial
Institutions.
The CDFI Fund invests in underserved communities,
leverages out federal funds 17 to 1, gives taxpayers bang for the buck,
and brings lending to areas big banks have neglected.
These investments create jobs and ultimately help
contribute to the tax base for investments in schools, hospitals,
police and fire departments in hard hit communities.
I urge the Committee to set the allocation of spending
authority for the CDFI Fund at FY 2010 enacted levels.
Thank you Mr Chairman, and Ranking Member Van Hollen. I yield back.
Mr. Stutzman. Thank you, Mr. Richmond.
I guess I would like you to elaborate a little bit more.
You mentioned the infrastructure challenges, and obviously with
the disaster of Hurricane Katrina, you mentioned dredging. And
also, what are some of the other infrastructure challenges that
you have? And how are things progressing in New Orleans and
around the Gulf Coast in Louisiana?
Mr. Richmond. Well, I will tell you, and that is just a
long story, but as a person who is responsible for our budget
and what we do and the direction we are going in Congress, I
will tell you that through the storm, we learned some things
that make a lot of sense. And we learned some things,
unfortunately, that make no sense at all, which I think are
what taxpayers get furious about. And even myself, a couple
times I found some things that just don't make sense.
And I will give you one short example of that, and I will
answer the rest of your question. But for example, down in St.
Bernard Parish in Louisiana, there is a trailer park community.
And those trailers cost anywhere from $60,000 to $90,000.
People live in them. It is a great way of life, and they are
happy. After the storm, when those trailers washed away,
because of the Stafford Act, we could not put or invest in
buying them new trailers to match their money. We spent as a
government $60,000 to $80,000 to put temporary trailers there
for them until we could find out a way to help them buy
permanent trailers. Well, our investment at the end of the day
was far more than what it cost to just get them a new trailer.
So we spent, in some examples, over $100,000 or $150,000 just
to get them the benefit of a $60,000 to $90,000 new permanent
home.
Those are the types of things that I think that we have to
go in and look at. But overall, I want to thank Congress for
what they did because they are helping us come back. In terms
of the levees--go ahead.
Mr. Stutzman. How would one of those homes be insured? Is
there any insurance?
Mr. Richmond. They do have insurance. And part of what we
went through during the storm, and I can give examples of that,
once people paid off their mortgage they didn't have the
requirement to maintain all of those insurances that they had
before because their mortgage is now gone. And so people who
worked very hard, worked 30 years, who are now at an age of
retirement, who were really just, for lack of a better
description, off and minding their own business and living the
best years of their life, they were at a financial point where
they paid off their homes and they weren't mandated or they
weren't informed to keep that flood insurance and, more
importantly, to raise the value of it with construction costs.
So that is why we found so many homes underinsured.
But those trailers did have insurance. Most of them were
underinsured. But for us to come in and spend $60,000 to
$80,000 just to put the 400-, 500-square foot temporary trailer
on that piece of land when that is the cost of a permanent
trailer only because the Stafford Act dictates you can't pay
for permanent housing sometimes just didn't make sense. And
those examples of paying for temporary housing that cost just
as much as permanent housing, those are the types of things
that we just shouldn't duplicate effort.
But in terms of where we are now, I want to thank Congress
for taking the interest and the commitment to put $14 billion
aside and in the Corps budget that they already have to secure
our levees and continue our flood protection.
One issue that is coming up now and it will come up in the
budget process is who will regulate or who will operate and
maintain the flood structures at the east bank and the west
bank? And both of them are massive structures that have cost
hundreds of millions of dollars to build. But what they do,
although they are flood control, and one of the structures, the
west closure, I live--the east closure, I live maybe a mile or
two from it, which is a great structure in terms of flood
control. However, it blocks off a waterway. So if our flood
authority decides to close it, then it affects interstate
commerce by the tune of millions and millions and millions of
dollars.
So the Corps of Engineers, they are the body that
consistently handles, operates, and manages those types of
things because that is more of a commerce as opposed to flood
control. The Corps agrees that they should manage it. We agree
that they should. But they don't have the money to do that. And
that is to the tune of I think somewhere around $5 million a
year. But we don't want $5 million a year to start to affect
the commerce coming up and down the Mississippi River, the port
of New Orleans, and the port of South Louisiana, which are two
of the largest 10 ports in the country. So that I think is
something we should all pay attention to, especially those 30
States and Canada that depend on the Mississippi River to do
it.
. So those are just small things in the grand scheme of a
budget. But I think that they have the ability to affect tens
of millions, if not hundreds of millions of dollars, worth of
commerce. But the investment that this country and this
Congress has in the metropolitan region of New Orleans is a
wise investment. It is coming back very strong. And we continue
to spend the money as carefully and prudently as possible to
make sure that we get the bang for every penny that we put in.
So we are safeguarding the money. We are spending it
wisely. And every indication is June 1st this year, when
hurricane season starts, the Corps will have lived up to its
commitment to provide the 100-year flood protection; 500 year
would be the goal. However, President Bush and President Obama
both said that they wanted to get up to a 100-year flood
protection by this June 1. They put the money there. They have
lived up to the commitment to invest in it. And so that is
where we are right now.
Mr. Stutzman. I know, coming from the State of Indiana,
obviously the Mississippi River is very important to us and
agriculture.
I also appreciate your comments mentioning the drilling off
the coast. That is obviously very important for the entire
country. And I know the country has been watching. We
appreciate your testimony, and thank you for being here. I know
we have a lot of challenges in front of us, budgetary problems
and challenges. So I am looking forward to working in a
bipartisan manner to meet those needs. So thank you very much.
Mr. Richmond. Thank you again for having me.
Mr. Stutzman. Next, we have the gentleman from Kentucky,
Mr. Whitfield. Thank you for being here. Looking forward to
your testimony. And 5 minutes.
STATEMENT OF THE HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF KENTUCKY
Mr. Whitfield. Chairman Stutzman, thanks so much.
And I appreciate this opportunity to visit and talk about
some issues of concern. In 1974, Congress passed the
Congressional Budget and Impoundment Act, which was intended to
give the President and Congress a timeline on which to base a
budget and appropriations bill. Interestingly enough, during
the 36-year history of the Budget Act, Congress has met the
deadline for completion of a budget resolution only six times.
And last year, for the first time ever, there was no Budget
Committee markup and no floor consideration of the budget
resolution.
About 6 years ago, David Dreier and I, along with Senator
Pete Domenici of New Mexico, introduced a 2-year biennial
budget and appropriation act. The whole thought was that every
year Congress is so tied up with the budget process, with the
appropriation process, the authorizing committees waiting for
their numbers, and it is like a major train wreck; everything
just comes to a grinding halt. And as a result of that, in my
view, we end up exacerbating a lot of problems with authorizing
legislation, because frequently the only bills that will be
moving during this time period are appropriation bills.
And so appropriators naturally will try to do little fixes
on substantive law without hearings or the involvement of the
authorizing committee. And as a result of these Band-Aid
approaches, it basically makes substantive law sometimes even
worse than it is today, makes problems worse than they are
today.
So our thought was if we could pass this 2-year budget
appropriation bill, that one year the appropriators could
totally focus on the financial aspect of the Federal
Government, oversight, and then, in the second year, the
authorizing committees could totally focus upon what is wrong
with current law, what needs to be changed. It would give
appropriators and authorizers more time for oversight.
And on the executive branch of government, it would
certainly give OMB and others more time to develop in a more
thoughtful way a budget instead of being hung up every single
year with a complicated budget process.
First President Bush supported this. President Clinton
supported this. George Walker Bush supported this. And I
understand that even President Obama supports a 2-year budget
cycle. But going back to about 5 years ago when David Dreier
and I introduced it on the House side, we actually had a vote
on the floor and received a little over 200 votes in support of
this legislation.
Now, historically appropriators have been opposed to it
because, obviously, if they have annual appropriation
opportunities then they like that. But I will say that in the
last time we voted on this on the floor, the chairman of the
appropriation bill at that time supported it. So I am here
today simply to say that this bill has been reintroduced. It is
referred to as H.R. 114, the Biennial Budgeting and
Appropriations Act of 2011.
I genuinely believe that one of the major problems facing
Congress today is our budgetary and appropriations process. And
if we could simplify it in this way to provide more oversight
and more opportunity for meaningful review, I believe the
American people would benefit from it.
So I hope that, Mr. Chairman, you and others, as you move
forward in addressing the serious budget issues, would consider
this, and hope that you all might be able to support it, as a
matter of fact. We do know that there is renewed interest on
the Senate side to do this. And this may be our opportunity to
really make a difference.
So, with that, I would yield back the balance of my time
and thank you again for giving me the opportunity to be here.
[The prepared statement of Ed Whitfield follows:]
Prepared Statement of Hon. Ed Whitfield, a Representative in Congress
From the State of Kentucky
Thank you, Mr. Chairman, and thank you, Members of the Committee,
for giving me the opportunity to be here to testify before you today.
As you well know, we are currently in the midst of uncertain and
difficult economic times.
While the White House says we are on the road to economic recovery,
working families in my District, the First Congressional District of
Kentucky, are still struggling to hold onto their jobs, their home and
their health care.
While the national unemployment rate has fallen to 8.9%, Kentucky's
unemployment rate remains at an alarming 10.4%.
In fact, many counties in my District have an unemployment rate
that is even higher then Kentucky's state average.
Adding to our economic troubles is the national debt, which has
skyrocketed over the past few years, reaching almost $14.2 trillion
today.
The last time the nation's debt was this high as compared with
gross domestic product was immediately following World War II.
According to a 10-year baseline projection issued by the
Congressional Budget Office in January, if Congress continues to spend
at the rate it is doing now, the federal debt is projected to equal 76
percent of the GDP by the end of 2020.
In order to maintain our global competiveness it is essential that
we drastically reduce our federal spending.
One way to cut wasteful government spending is to reform and
streamline our budget process.
In 1974, Congress passed the Congressional Budget and Impoundment
Act, which was intended to give the President and Congress a timeline
on which to base a budget and appropriations bills.
As we well know, even when followed, the Budget Act has resulted in
an annual rush which results NOT ONLY in a poor process but also
reduces the amount of time available for careful oversight and
management of existing federal programs.
During the 36 year history of the Budget Act, Congress has met the
deadline for completion of a budget resolution only six times.
Last year, for the first time, there was no Budget Committee markup
and no floor consideration of a Budget Resolution.
Even now, as we discuss the Fiscal Year 2012 Budget Resolution, the
Senate has yet to pass and the President sign, a FY 2011 Continuing
Resolution.
With these procedural problems in mind, Representative Dreier and I
have introduced H.R. 114, the Biennial Budgeting and Appropriations Act
of 2011.
Specifically, this bill will require the President to submit a two-
year budget and Congress would consider a two-year budget resolution
and a two-year appropriations cycle.
I believe that a biennial budget cycle will result in better
scrutiny of federal spending and the elimination of wasteful and
duplicative government programs.
As you begin to craft the Fiscal Year 2012 Budget Resolution, I
encourage you to consider how procedural reform could positively affect
the fiscal management of our nation.
In closing, I ask that you keep in mind the hardworking Americans
in rural areas like my District, where unemployment remains much higher
than the national average.
We must substantially reduce our federal spending so that America
will remain globally competitive and our economy will get back on
track, but in doing so we also must make sure that any reductions give
some priority to programs that help people get through this rough
economic period.
Thank you again, Mr. Chairman and Members of the Committee, for
letting me testify before you today.
At this time, I would be happy to answer any questions you may
have.
Mr. Stutzman. Well, thank you.
I appreciate you bringing this matter to the Budget
Committee and for consideration.
As you know, many States pass 2-year budgets. And I know in
the State of Indiana, where we have a 2-year budget, it has
worked quite well. And from my experience there, seeing exactly
what you are saying, is after we pass the budget, we have a
year of oversight.
Mr. Whitfield. Right.
Mr. Stutzman. It seems here as a freshman legislator,
freshman Congressman, there seems to be more attention on
spending in the next budget rather than oversight on the
previous. And it seems that sometimes you have to one up the
last one. So I know for myself, I would be very interested in
supporting your proposal. And I think that there is definitely,
from the discussions that we have had on the Budget Committee,
an interest in reforming the process. Because there seems to be
a disconnect, or there seems to be a better way than what we
currently have.
Mr. Whitfield. Well, I hope the freshmen can lead the way
and help us resolve this. Because as I said, when you consider
that in the 36-year history of the Budget Act, Congress has met
the completion deadlines only six times, so we need help.
Mr. Stutzman. And I appreciate your experience, and as a
neighbor to the south, know the experience that you have and
others have here and am anxious to hear more and learn about it
and anxious to consider myself personally and maybe even spread
the information around to the other Budget Committee members.
And maybe we can renew some interest in this. So thanks for
proposing it.
Mr. Whitfield. Chairman, thanks so much. I look forward to
working with you.
Mr. Stutzman. Thank you.
. Seeing that there are no others to testify, we are going
to recess until 3:45, and resume approximately quarter until 4.
The Budget Committee is in recess until 3:45.
[Recess.]
Mr. Huelskamp [presiding]. We will call this meeting back
to order.
I see a few more witnesses here. I know we have been busy
with other meetings.
Next up, I will call the next witness, Theodore Deutch from
the State of Florida.
Hopefully, I have pronounced that correctly. Welcome to the
witness stand. I appreciate you coming before the Budget
Committee. Thank you for being here.
STATEMENT OF THE HON. THEODORE DEUTCH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Deutch. Thank you. Thank you, Mr. Chairman.
I am grateful for the opportunity to testify before you
today and give voice to the constituents that I am so
privileged to serve.
We need a healthy debate about our Federal Government's
expenditures, and I welcome that discussion. However, in these
5 minutes before you today, it is unfortunate that I feel the
need to talk about an issue that does not belong this this
conversation at all. That is the issue of Social Security, a
program forbidden by law from drawing upon our Nation's general
budget revenues and contributing to our deficit.
We all agree that our Federal budget must reflect our
priorities, our priorities as a Nation. Today, I respectfully
request that my colleagues ensure that our Federal budget also
reflects reality. No matter how many times that you say Social
Security is broken, the reality is that Social Security's
independent revenue stream and its trust fund's investments
maintain the program's solvency until 2037. Social Security is
legally prohibited from contributing to the deficit. It cannot
use debt to pay out benefits, not today, not tomorrow, and not
in 2037.
If Congress fails to address this modest shortfall sometime
in the next quarter century, Social Security will then pay out
reduced benefits to the tune of 78 percent of what is owed to
beneficiaries. Having introduced the Preserving Our Promise to
Seniors Act, legislation that would address this shortfall, I
am the first to say that we should take action to overcome this
challenge and extend Social Security's solvency for future
generations.
However, it would be disingenuous for me to promote my
legislation using the deceitful claim that Social Security
faces an imminent crisis. We have a quarter century to shore up
Social Security. The motion imminent crisis we face is one that
we can address right now in our 2012 budget, and that is
America's economic crisis. Our economy is riddled with
chronically high unemployment, ever worsening income
inequality, and a middle class lacking any sort of economic
security. These challenges have consequences for Social
Security and for the retirement security of all Americans.
Painfully stagnant wages and the growing divide in earnings
account for more than half of Social Security's projected
shortfall since the last reforms were enacted in 1983.
Rising income inequality has led more revenue to escape
Social Security taxes, which are currently capped at $106,800.
More than 80 percent of income growth since 1980 has gone to
the top 1 percent of earners, people who stopped contributing
to Social Security beyond their first few paychecks. Our
economy has grown these past few decades, but the paychecks of
most Americans have not grown with it. They struggle to put
food on the table, afford health care, pay for college.
And for many, saving for retirement is not even an option.
Over 50 percent of American households, regular, hardworking
people lack any retirement savings. And of those with
retirement savings, over 50 percent have saved less than
$50,000, certainly not enough to sustain a secure retirement.
In addition, the pillars of financial stability that many
retirees in America have relied on in the past are not as
dependable as they used to be. Traditional pension plans have
become virtually nonexistent. Home values are down. The facts
on the ground trouble me even more when considering some of the
proposed reforms to Social Security floated by my Republican
colleagues, instead of plans to create new jobs or bring
economic security to middle class families.
One such ill-advised proposal is raising the retirement
age. Washington may have a new fixation on rising life
expectancies, but the statistics show our gains in longevity
have excluded low-income workers. Raising the retirement age
would mean an immediate benefit cut for men and women of
America who toil on their feet for 50 years as grocery clerks,
coal miners, janitors, and nurses. Every year the retirement
age is raged is another 7 to 8 percent benefit cut for all
individuals, whether they retire at 62, 67, or 70. This is not
an equitable solution, nor do the American people support it.
Another reform apparently on the table is something called
means-testing, which would exclude Americans defined as
affluent from Social Security benefits. Social Security is
strong because all Americans contribute to it and believe in
it. Turning Social Security into a welfare program for lower-
income Americans instead of a wage insurance program that we
all count on is not the answer.
These proposals such as raising the retirement age,
shifting wealthier Americans to private accounts, and turning
Social Security into a welfare program offends the very wisdom
of this stalwart program. Social Security was created on the
simple premise that we are all entitled to a secure retirement
after a lifetime of hard work.
My disagreement with these proposals goes beyond the fact
that they differ from my legislation, which phases out the
unfair cap on Social Security contributions, extends solvency
for 75 years, and allows people who put more in to take more
out, even guaranteeing adequate cost-of-living adjustments.
What I most vehemently object to is the insertion of these
proposals into our budget debate when they have nothing to do
with our Federal budget. Social Security was created with an
independent revenue stream and barred from contributing to the
deficit to avoid subjecting the benefits of disabled Americans
and current and future retirees to politically charged budget
battles like this one.
Mr. Chairman, I urge you to keep Social Security benefits
off the table in this budget debate, because that is exactly
where they belong.
[The prepared statement of Theodore Deutch follows:]
Prepared Statement of Hon. Theodore E. Deutch, a Representative in
Congress From the State of Florida
Mr. Chairman, distinguished members of the House Budget Committee:
I am grateful for the opportunity to testify before you today and give
voice to the constituents I am so privileged to serve. We need a
healthy debate about our federal government's expenditures. I welcome
that discussion. It is a conversation we need to have.
However, in these five minutes before you today, it is unfortunate
I feel the need to talk about an issue that does not belong in this
conversation at all. That is the issue of Social Security, a program
forbidden by law from drawing upon our nation's general budget revenues
and contributing to our deficit. We all agree that our federal budget
must reflect our priorities as a nation. Today, I respectfully request
that my colleagues ensure our federal budget also reflects reality.
No matter how many times you say Social Security is broke, the
reality is that Social Security's independent revenue stream and its
Trust Fund's investments maintain the program's solvency until 2037,
when it may begin to fall short. The reality is that Social Security is
legally prohibited from contributing to the deficit. It cannot use debt
to pay out benefits, not today, not tomorrow, and not in 2037. If
Congress fails to address this modest shortfall sometime in the next
quarter century, Social Security will then pay out reduced benefits, to
the tune of 78 percent of what is owed to beneficiaries.
Having introduced the Preserving our Promise to Seniors Act,
legislation that would address 2037's projected shortfall, I am the
first to say we should take action to overcome this challenge and
extend Social Security's solvency for future generations. However, it
would be disingenuous for me to promote my legislation using the
deceitful claim Social Security is broken or faces an imminent crisis.
We have a quarter century to shore up Social Security. The most
imminent crisis we face is the crisis we have the opportunity to
address right now in our 2012 budget, and that is America's economic
crisis. Our economy is riddled with chronically high unemployment,
ever-worsening income inequality, and a middle class lacking any sort
of economic security.
These challenges have consequences for Social Security, and for the
retirement security of the American people at large. Painfully stagnant
wages and the growing divide in earnings account for more than half of
Social Security's projected shortfall since the last reforms were
enacted in 1983. Rising income inequality has led more revenue to
escape Social Security taxes, which are currently capped at $106,800.
More than 80 percent of income growth since 1980 has gone to the
richest 1 percent of earners--people who stop contributing to Social
Security beyond their first few paychecks.
Our economy has grown these past few decades, but the paychecks of
most Americans have not grown with it. Middle class families struggle
to put food on the table, afford health care, and send their children
to college. For many, saving for retirement is not even an option. Over
50 percent of American households--regular hardworking people--lack any
retirement savings. Of those with retirement savings, over 50 percent
have saved up less than $45,000--certainly not enough to sustain a
secure retirement. In addition, the pillars of financial stability that
many retirees in America have relied on in the past are not as
dependable as they used to be. Traditional pension plans have become
virtually nonexistent. Home values are not reliable sources of equity
as they once were. The rise of 401(k)'s left many seniors vulnerable to
more risk, as was the case for many of my constituents who retired to
South Florida and saw their lifesavings shrink during our latest
financial crisis.
The facts on the ground trouble me even more when considering some
of the proposed reforms to Social Security floated by my Republican
colleagues instead of plans to create new jobs or bring economic
security to middle class families.
One such ill-advised proposal is raising the retirement age. Soon
to be 67, let's put aside the fact this retirement age is already
higher than most industrialized countries. Washington may have a new
fixation on rising life expectancies, but the statistics show our gains
in longevity have excluded low-income workers. Raising the retirement
age would mean an immediate benefit cut for the men and women of
America who toil on their feet for 50 years as grocery clerks, coal
miners, janitors, and nurses.
Every year the retirement age is raised is another 7 to 8 percent
benefit cut for all individuals, whether they retire at 62, 67, or 70.
This is not an equitable solution, nor do the American people support
it.
Another reform apparently on the table is something called means-
testing, which would exclude Americans defined as ``affluent'' from
Social Security benefits. Social Security is strong because all
Americans contribute to it and believe in it. Turning Social Security
into a welfare program for lower-income Americans instead of a wage
insurance program we all can count on is not the answer. For my
constituents who tragically lost their lifesavings in the Madoff Ponzi
scheme, Social Security is the one reliable source of income they have
left. Under this system, if someone earns too much money, they would
risk losing their Social Security benefits. We should be encouraging
Americans to save up for retirement, not discouraging them.
These proposals, such as raising the retirement age, shifting
wealthier Americans to private accounts, and turning Social Security
into a low-income welfare program offends the very wisdom of this
stalwart program. Social Security was created on the simple premise
that we are all entitled to a secure retirement after a lifetime of
hard work. My disagreement with these proposals goes beyond the fact
they differ from my legislation, which phases out the unfair cap on
Social Security contributions, extends solvency for another 75 years,
allows people who put more in to take more out, and even guarantees
adequate cost of living adjustments.
What I most vehemently object to is the insertion of these
proposals into our budget debate when they have nothing to do with our
federal budget. Social Security was created with an independent revenue
stream and barred from contributing to the deficit to avoid subjecting
the benefits of disabled Americans and current and future retirees to
politically charged budget battles like this one. I urge you to keep
Social Security benefits off the table in this budget debate, because
that's exactly where they belong.
Mr. Huelskamp. Thank you, Congressman.
I appreciate your testimony. Seeing no questions, we
appreciate your time here.
Next turn to recognize the next witness, the honorable
Donna Christensen from the Virgin Islands. Welcome to our
committee as well.
STATEMENT OF THE HON. DONNA M. CHRISTENSEN, A DELEGATE IN
CONGRESS FROM THE STATE OF VIRGIN ISLANDS
Mrs. Christensen. Thank you, Mr. Chairman.
And thank you for the testimony to testify before the
Budget Committee. I have come here just about every year that
there has been a Member hearing.
And generally, I come to talk about the need for an
investment in health care, particularly funding to eliminate
disparities in health care that are faced by people of color,
people who are poor, people who live in our rural areas, and
people who live in our Territories. These are disparities that
cause preventable, premature deaths in individuals primarily
because of their race, ethnicity, gender, gender identity, and
geography.
All of us want to be responsible in spending the taxpayers'
money, and of course, we want to reduce deficits. But we also
have an obligation to improve the health of all Americans. And
I believe that we can do so with the proper investment and that
that investment would reduce costs over time. So today I want
to focus on the health care aspect of the 2012 budget.
First, it is critical that we protect the Patient
Protection and Affordable Care Act in its entirety so that we
can expand coverage, put health decisions back between the
patient and their provider, prevent medical errors, expand
prevention, make care better coordinated and affordable,
address the health care needs of those who, because of lack of
access to quality care for many reasons, most of which are
outside of their control, and eliminate the health disparities
that those barriers cause.
While there are cuts in the President's 2012 budget that I
don't support, there is much that I do, although there are
funding levels that are inadequate in some areas, in my
opinion. For example, those that I support: The President's
budget supports the Prevention and Public Health Fund at $1
billion. And I think that is a necessary investment, where
incredible public health improvements could be realized, and
savings will be realized as well.
While the following are some of the amounts that I would
like to see increased, I think the 2012 budget does a credible
job in supporting numerous of our Congressional Black Caucus
Health Braintrust priorities: Including $2.4 billion for the
Ryan White Program; $161 million for the Minority AIDS
Initiative; $940 million for the AIDS Drug Assistance Program;
$221 million for the Community Transformation Grant Program;
investments in the Office of Minority Health, Rural Health, and
Women's Health at the Department of Health and Human Services;
strong investments across several key and highly effective
health workforce diversity and data collection efforts; $105
million for the Healthy Start program; $269 billion for
Medicaid; and $9.98 billion for the Children's Health Insurance
Fund.
And we hope that as we go through this budget process that
all of those particular areas will remain funded at, at least,
that level and particularly that there will be no cuts in the
Medicaid program.
We are concerned, though, about funding for the new
National Institute for Minority Health and Health Disparities
at the National Institutes of Health. The 2012 budget provides
$214 million, far much less than would be required to carry out
its mandate. It would be funded at a much lower level than all
of the other institutes at a time when even the government's
2010 National Disparities Report, issued just a few weeks ago,
stated that the disparities in health care are not improving,
that they affect all population groups, all population groups,
and that many require urgent attention.
I also want to talk briefly about a change on how we budget
that I have promoted through legislation that I introduced last
year and will introduce again. If we included in this budget
prevention scoring, extending beyond the 10-year window, I
believe there would be significant cost savings which could be
reinvested. And I think we ought to find a way to score
prevention and to score outside of that 10-year window. For
example, a recent Joint Center report found that if we as a
Nation had eliminated health inequities and premature deaths
for African Americans, Hispanics, and Asian Americans, we would
have saved total of $1.24 trillion. There are similar reports
on the savings from accountability care organizations, from
early treatment of diabetes, from early treatment of end stage
renal disease.
So, Mr. Chairman, in summary, we need to ensure that
funding is there to implement the Patient Protection and
Affordable Care Act, even though adjustments may have to be
made. We need that full funding to remain in place. We need to
ensure that prevention and health equity programs are robustly
funded. And I hope that the Budget Committee will support a
methodology for scoring prevention, because I think we
shortchange the American public if we don't.
Thank you, Mr. Chairman, for the opportunity to testify.
[The prepared statement of Donna M. Christensen follows:]
Prepared Statement of Hon. Donna M. Christensen, a Delegate in Congress
From the U.S. Virgin Islands
Thank you, Chairman Ryan, Ranking Member Van Hollen and Members of
the Committee, for this opportunity to give testimony and weigh in on
the FY 2012 budget during such a historic time.
While I--like my colleagues on the both sides of the aisle--am
interested in supporting a budget that is bold enough to tackle current
fiscal challenges, I am also interested in ensuring that we accomplish
this in a manner that is thoughtful, based on the needs and wants of
most Americans and that truly makes this nation stronger today and in
the future.
As in years past, as the Chair of the Congressional Black Caucus
Health Braintrust and as a physician who practiced for more than two
decades, I come before you today to discuss what I consider to be one
of the--if not the--most important aspect of our federal budget:
responsible and necessary health and health care spending to improve
the quality of and access to health care, and to close the many gaps
that exist in the health care system.
When we enacted the Patient Protection and Affordable Care Act, we
set the nation on a course that--over the next decade--will:
lift 32 million people out of the ranks of the uninsured;
put health care decision-making exactly where it belongs:
between the patient and their provider;
protects health care consumers from unnecessary and
medically irresponsible practices that compromised the patients, as
well as their providers;
expand access to life-saving preventive care to nation's
most vulnerable residents;
bolster support for community health centers, which not
only are core elements of the larger the health care system, but which
also create jobs;
increase the number and expand the diversity of health
care providers, particularly those at the primary care level; and
improve coordination and bolsters accountability and
evaluation across and throughout not only the Department of Health and
Human Services, but also throughout the health care system.
The FY 2012--despite making several cuts in an effort to be
fiscally responsible--includes support levels for key health and health
care programs that will keep this nation on the right course following
the enactment of health care reform. As such, the FY 2012 will ensure
that these important objectives and goals that we identified and seek
to achieve through health care reform come fruition.
For example, the FY 2012 budget robustly supports the Prevention
and Public Health Fund to the tune of $1 billion--a necessary
investment in a fund that supports programs that will show that an
investment in prevention on the front end yields incredible public
health results and cost savings on the back end. Before I continue, I
would like to propose an idea that builds on this notion and that I
have been championing for several congressional sessions. If we
included in this budget prevention scoring that extended beyond the 10-
year window, I guarantee that the cost savings--which would be
significant--could be re-invested in the nation. Until then, however,
it is important that we support a budget that funds prevention because
those dollars invested today will boast savings that are ten-fold.
While some of the amounts are those that I would like to see
increased, the FY 2012 budget includes support for numerous CBC Health
Braintrust priorities, including: $2.4 billion for the Ryan White
Program, $161 million for the Minority AIDS Initiative and $940 million
for the AIDS Drug Assistance Program; $221 million for the Community
Transformation Grant Program; investments in the Offices of Minority
Health, Rural Health and Women's Health at the Department of Health and
Human Services; strong investments across several key and highly
effective health workforce diversity and data collection efforts; $105
million for the Healthy Start program; $269 billion for Medicaid and
$$9.98 billion for the Children's Health Insurance Program; and $214
million for the new National Institute for Minority Health and Health
Disparities at National Institutes of Health.
Each of these provisions and programs will bring this nation
several significant steps forward toward health equity and the
elimination of all health disparities. And, in addition to making
millions of hardworking Americans who are disproportionately and
detrimentally affected by health inequities--such as people of color,
low-income populations and those who live in rural communities--this
also will save the nation more money over three years than the total
costs associated with the entire health care reform bill.
In fact, a recent Joint Center report found that if we--as a
nation--had eliminated health inequalities and premature death for
African Americans, Hispanics and Asian Americans, we would have saved a
total of $1.24 trillion dollars in direct and indirect costs--and,
those savings would have occurred over a three-year time frame! Those
savings are not only impossible to ignore; it would be downright
irresponsible for all of us to do so.
But, those savings will never be realized unless investments in
programs to eliminate health disparities and to achieve health equity
are an integral part of the FY 2012 budget. Currently, we are heading
in the right direction and I know that developing and moving a budget
that includes health care expenditures that address and tackle health
disparities and achieves health equity will require the willingness to
take bold steps and the visionary leadership to ensure that more than
one step is taken. However, I also know that we have both today--both
in this Congress and in this Administration. Additionally, we have an
economic and public health incentive to work together to achieve this
very achievable goal.
Together, we can develop and pass a budget that meets all of the
unmet needs of Americans and that champions health equity to improve
the health and well being, and thus life opportunities of all
Americans. And, together Mr. Chairman, we can make this nation--one
person and one community at a time--healthier, stronger and prepared
for tomorrow.
Thank you!
Mr. Huelskamp. I appreciate the testimony for the
committee. It is very important to hear from our other Members
as we work forward on the budget process. And seeing no
additional witnesses at this time, the hearing is now
adjourned.
[Additional statements submitted follow:]
Prepared Statement of Hon. Sandy Adams, a Representative in Congress
From the State of Florida
Chairman Ryan and members of the Budget Committee: thank you for
the opportunity to speak to you today in regards to the Fiscal Year
2012 Federal Budget.
Specifically, I would like to express my concerns with the budget
for the National Aeronautics and Space Administration, the new VA
hospital in Orlando, as well as ways to preserve and strengthen Social
Security and Medicare, all important issues for constituents in my
district in Florida.
As many of you are aware, I represent Florida's 24th District, home
to the Kennedy Space Center and the epicenter of this country's
adventures to space. The hardworking men and women of Florida have
supported every mission of NASA. The Human spaceflight program has
shaped and defined this community for fifty years and continues to be
an identifying symbol for the entire region. The coastal community
which has grown out of America's investments in NASA is even commonly
referred to as ``The Space Coast''. As we continue the discussion on
our Republican budget for the 2012 fiscal year, the establishment of,
and commitment to, human space exploration is critical to our country's
national security and economy.
NASA is a unique agency that has spurred private sector job growth,
fuels the economy with American ideas and innovation, and contributes
to the development of industries which even twenty years ago may have
been considered pure fantasy. The extraordinary challenges of achieving
access to space have motivated and accelerated the development of
technologies and industrial capabilities. These capabilities have
widespread applications and have contributed to the technological
excellence of the United States. In practical terms, space exploration
continues to inspire our young people to pursue careers in science,
technology, engineering and mathematics--the so-called STEM
disciplines. Likewise, NASA's future space missions are critical to the
continued development of new American technologies, as well as our
high-tech infrastructure throughout all sectors of the economy. It is
my belief that the commitments we make to the continuation of human
space flight today will yield meaningful and sustained economic returns
for decades to come.
NASA and the aerospace industries are a symbol of pride and honor
for our country and represent the best hopes and ideals of our nation.
Thus, I believe the issues surrounding the development of space
technology and the continued use of human spaceflight in the United
States should be one of the priorities of this Congress. NASA's future
space missions are critical to the continued development of new
technologies, as well as our high-tech infrastructure and an industrial
base which will help create jobs and grow our economy.
Our country needs to set a clear path to success for NASA and we
need to have a defined way forward, something that so far the Obama
Administration has been unable to provide for all the stakeholders of
the space program. Continuing to give NASA the resources they need is
only a small piece of what we are facing and it is important to think
beyond the most immediate needs. The best way to define this way
forward is through prioritization of resources.
As our nation faces critical economic challenges, we must look to
cut funding in places that will be challenging to accept. We appreciate
your leadership in putting together a budget that not only honors our
children by doing what is necessary to alleviate the debt that has been
placed upon them, but also prioritizes current spending where it can do
the most with the resources we have. I do believe that NASA's budget
can be reduced. Within the NASA budget specifically, I believe there is
an opportunity to cut funding within the Earth Science account where an
overabundance of climate change research is being conducted. This is
why I ask for any substantial reductions in programs or budget lines
within the NASA budget would spare human spaceflight.
Mr. Chairman, I would like to take this opportunity to also discuss
with you ways to strengthen and protect Social Security and Medicare.
For generations hard-working Americans have paid into these social
safety net programs, and making changes to Social Security and Medicare
that would radically change the participation of retirees and near
retirees in the current program is unfair and something I cannot
support.
According to the 2010 Annual Reports from Social Security and
Medicare Board of Trustees, these programs, along with Medicaid,
comprise 40% of the federal budget and represent almost 9% of the size
of our economy. As you already know, the trustees of the Social
Security and Medicare programs announced that Social Security and
Medicare funds will be exhausted sooner than expected: Social Security
in 2037 and Medicare in just six years (2017). In fact, by 2045,
literally every single dollar we raise in revenue will go to pay for
Social Security and government health care programs. It is clear that
something must be done.
Given the demographic makeup of my Congressional district and the
number of senior citizens reliant on Social Security and Medicare, I
welcome all ideas from you and our colleagues how to strengthen these
programs while protecting the benefits of seniors at or near retirement
age. Congress must make it a priority to address the long-term funding
problems of these two programs. I truly believe our nation must keep
our promise to those who worked their entire lives to prepare for their
golden years, while also ensuring that future generations will have the
same opportunity for a bright retirement in the future.
One other issue that is of great importance to Central Florida is
the construction of the new VA Medical Center at the Lake Nona site in
Orlando. Recommended for construction through the CARES selection
process, the new hospital is sorely needed to keep up with the health
care needs of Florida's veteran population. With hundreds of thousands
of veterans in the Central Florida region, ensuring that the hospital's
construction continues on schedule is extremely important to my
constituents and me. If there are funding constraints that the Budget
Committee feels could inhibit the construction and completion of the
hospital, I would hope that Committee members would be willing to work
with me to find other areas within the VA's budget to reduce in order
to ensure an on-time delivery of these life saving health care
services.
Thank you, Mr. Chairman, for the opportunity to express my views
and explain my concerns. I would like to extend my hand to work with
you and your staff to identify other areas within the FY2012 budget
that will reduce unnecessary spending and get our nation's debt under
control, as well as to find solutions to strengthen and preserve Social
Security and Medicare for future generations.
Prepared Statement of Hon. Judy Biggert, a Representative in Congress
From the State of Illinois
As you work to craft a budget for Fiscal Year 2012, I respectfully
request that you preserve funding for the Department of Energy's Office
of Science.
The Office of Science is critical to lllinois. According to the
Illinois Science and Technology Coalition, the state's research
enterprise in university and laboratory R&D supports 68,000 high-tech
jobs. Their leadership in key scientific fields offer the public and
private sectors the tools they need to turn groundbreaking research
into jobs, revenue, and tangible benefits for consumers.
Specifically, developments in nanotechnology, materials science,
biotechnology, and supercomputing are all areas in which our research
infrastructure helps manufacturers reduce costs, increase consumer
choice, and ultimately, drive economic activity in essential sectors
like health care and energy.
Preserving our investment in the Office of Science preserves jobs
now, and for the future.
I appreciate your consideration of my request and look forward to
working with you as you finalize the budget for Fiscal Year 2012.
Prepared Statement of Hon. Michael C. Burgess, M.D., a Representative
in Congress From the State of Texas
Chairman Ryan, thank you for allowing me to speak before your
committee.
In your budget resolution, there are several items I hope you will
include. First and very importantly, the funding and implementation of
the health care law must be addressed. As I am sure you agree, we
cannot afford to spend any money on the implementation of the Patient
Protection and Affordable Care Act. It has already proven to paralyze
job growth while also increasing premiums for America's families.
The law is also affecting states which are unsure if this law will
withstand legal challenges. Funding by states and the federal
government to implement the changes should be withheld until the legal
status of this law is settled. My desire would be to see this law's
funding be addressed in a way that best helps American doctors and
patients by reducing the bill's influence over our health care system
and economy. Any spending that can be touched, mandatory or
discretionary, needs to be examined.
Another item to be addressed is the Sustainable Growth Rate, also
known as SGR. This patch must be repealed to create a permanent system
for Medicare reimbursement for our nation's medical system. The current
payment system is not only unsustainable, it is unreliable. Continuing
to operate on short term fixes puts our most vulnerable Americans in a
perilous situation. Their ability to access care is becoming more
difficult. In my home state of Texas just last year, 69% of providers
cited cash flow problems resulting from back payments from the
government. The longer we procrastinate on this problem, the more
costly it will become.
Equally as important is the federal government's revenue and
spending provided by our tax system. Many in Washington have discussed
fundamental tax reform but I am here today with a specific proposal. My
bill, HR 1040, the Freedom Flat Tax, is a common sense alternative to
the burdensome tax filing system we have today. Allowing taxpayers to
pay a flat rate of tax on their income with only a standard deduction
will eliminate some of the 6 billion hours Americans spend each year
preparing their tax returns.
This proposal is just one idea we can use in changing our
ineffective and unfair tax system. I am willing to discuss any idea
that makes filing simpler and creates fewer distortions in economic
choices.
I look forward to this committee approaching these problems with
determined, comprehensive, and intelligent alternatives.
Thank you.
Prepared Statement of Hon. Emanuel Cleaver, a Representative in
Congress From the State of Missouri; Chairman, Congressional Black
Caucus
Thank you all for allowing me, as Chairman of the Congressional
Black Caucus (CBC), to present our Fiscal Year (FY) 2012 Budget
priorities. First of all, I want to acknowledge all 43 Members of the
CBC, but especially our Budget, Appropriations, and Taxation Taskforce;
our Commission on the Budget Deficit, Economic Crisis, and Wealth
Creation Co-Chairs; and finally, our FY 2012 Budget Chairs, Congressman
Bobby Scott and Congresswoman Gwen Moore.
In January, the CBC hosted it's first-ever Commission on the Budget
Deficit, Economic Crisis and Wealth Creation. The primary goal of the
Commission was to provide an opportunity for the CBC to have a
thoughtful reaction to the FY 2012 Budget instead of an emotional
reaction. Our Budget Commission report, which I have provided copies of
today, enabled us to give thoughtful input into the congressional
budget process.
In 1981, the Congressional Black Caucus first presented its own
``Constructive Alternative Budget Proposal Initiative'' and we continue
to present sound and responsible alternatives to the budgets offered by
both Republican and Democratic majorities in Congress forty years after
our founding.
Generally, a glaring omission from various debt reports and budget
proposals is a thoughtful analysis of how recommendations will affect
the nation's most economically vulnerable populations. Recognizing
this, our Commission was formed to focus on the recession--particularly
in communities of color--and the long term implications for all of our
nation's communities.
Our FY 2012 alternative federal budget will address the budget
deficit while protecting important safety net programs needed by our
communities. Top African-American economists from around the nation
provided critical recommendations for this important document and we
found that yes, we need to cut the deficit and spending, but we cannot
do this on the backs of the most vulnerable.
As Congresswoman Maxine Waters stated, ``Government investment in
people, education, infrastructure and innovation can create jobs and
these jobs pay for themselves and then some over time.'' Investment
allows people to earn, learn, spend, save, and invest. Dr. Algernon
Austin of the Economic Policy Institute provided these sobering
statistics to understand how important it is for our country to invest
in its citizens:
The US ranks 20th out of 24 countries in providing early
childhood education;
The US ranks 12th out of 36 countries in college
completion rates;
US schools need nearly $300 billion of required
maintenance;
The US ranked 15 out of 30 nations in broadband
penetration; and
The American Society of Civil Engineers recently issued a
grade of ``D'' to the country's roadways.
Cutting funding to programs that assist hard working Americans,
help families with their most basic needs, maintain our crumbling
infrastructure, and expand access to educational opportunities will
only make these statistics worse. We cannot win the future by leaving
people behind. Our success as a nation is interwoven in the success of
all communities. Until we grasp that concept, as a Nation, we will
never see the full potential of this country and for that I am truly
concerned.
The CBC's top priorities for the 112th Congress promotes the
success of all communities. We focus on job creation and economic
development, providing lifetime educational opportunities, and
protecting access to the health care that we worked so diligently to
ensure last Congress and over the past forty years. We can only make
these goals a reality by sustaining and strengthening the programs that
invest in people. Whether it is workforce investment, unemployment
insurance, community development block grants, or Temporary Assistance
for Needy Families (TANF), we must continue to invest in people. These
programs are vital to national interests as they train our workforce,
stabilize our economy, and provide funding for our cities. I understand
that now is the time for us as a nation to sacrifice in order to
protect our children. However, I struggle to understand how the
proposed majority budget helps achieve this goal.
The CBC is committed to the creation of jobs and economic
development. One of our top budget priorities is the full funding of
the Workforce Investment Act. This Act provides adult literacy and
education, providing employment and workforce development services to
adults. This allows them to increase their incomes through occupational
and related skills acquisition. We would also like to see a $6 billion
increase in the infrastructure investment. This will help maintain and
improve everything from our dilapidated schools to our deteriorating
roads and bridges across the nation. Investing in our crumbling
infrastructure will create jobs and help our economy get back on track.
The New America Foundation reports for every $1 billion in
infrastructure investment, over 35,000 jobs are created. In times like
these where the overall unemployment rate hovers near 10% and African
American unemployment is approximately 16%, it is wholly necessary to
train people for the jobs that are available now and invest in areas
where we know jobs will be created.
Overall, the Budget should focus on funding programs that have the
most return on investment to get our economy moving. As a former mayor,
I know that Community Development Block Grants (CDBG) do just that.
Data from the Recovery Act website shows that for every $7000
investment at least one job in created. This rate is eight (8) times as
effective as the rest of the jobs programs funded under the Act. For
this reason, it is necessary to fully fund Community Development Block
Grants. It provides the greatest return on investment for creating
jobs. Also in the area of education, training and employment, we want
to see programs for our young and our elderly. This includes additional
funding for the Senior Community Service Employment Program that aides
our elderly. Additional dollars for the Youth Activities Fund will
helps to create summer jobs for young people to learn on-the-job skills
and gain vital work experience bolster family income and explore career
opportunities.
Finally, the Congressional Black Caucus worked diligently for the
passage of the Affordable Care Act. However, this is not enough. It is
necessary that the Caucus remain diligent in addressing health
disparities to holistically improve African American communities.
Furthermore, it is important to protect health equity and the access to
affordable healthcare. African Americans have long-suffered from poorer
health and premature mortality as a direct result of their
disproportionately high rates of uninsurance, HIV/AIDS, cancer,
diabetes, heart disease and overweight and obesity, as well as from the
social determinants of health that not only sustain, but that
exacerbate racial and ethnic health disparities. Furthermore, it is
important to protect health equity and the reliable access to
affordable healthcare that this new law will ensure. This is why we
want to ensure funding is maintained to successfully implement this law
which
Expands access to health care to more than 30 million
currently uninsured Americans;
Empowers patients and their providers--not health care
executives--to better collaborate around health care decisions;
Protects patients with strong consumer protections;
Supports and collaborates with the new Institute on
Minority Health and Health Disparities at NIH and the new Offices of
Minority Health across HHS;
Works with health equity advocates and researchers across
the nation to reduce racial and ethnic, as well as gender and
geographic health disparities;
Strengthens the racial and ethnic diversity in the health
workforce; and
Strengthens Medicare and Medicaid to ensure that our
nation's most medically and financially needy residents have access to
reliable, affordable, high-quality health care;
A fiscally sound budget that invests in our people is necessary to
get our nation back on track. Investments in job creation and economic
development measures, lifetime education and healthcare are what is
truly needed to avoid the economic crisis that our nation has suffered
through over the past few years. I encourage my colleagues in Congress,
especially those sitting on this Budget Committee to peruse the CBC's
Commission on the Budget Deficit, Economic Crisis and Wealth Creation.
We must create a budget that not only cut the deficit and spending but
fund programs that have the most return on investment to get our
economy moving. This will provide a more sustainable solution to our
budget deficit crisis and put us on a path to bettering our nation.
executive summary
The Congressional Black Caucus (CBC) has a long history of
presenting fiscally sound and responsible alternatives to the budgets
offered by both Republican and Democratic majorities in Congress. In
light of the deficit reduction recommendations made by the National
Commission on Fiscal Responsibility and Reform, we are concerned that
draconian austerity measures will directly impact and harm our
communities.
A glaring omission from various debt reports is a thoughtful
analysis of how their recommendations will affect the nation's most
economically vulnerable populations. Recognizing this, the CBC formed
its own debt commission to focus on the recession--particularly on
communities of color--as well as approaches to deficit reduction and
their implications for vulnerable populations and the nation at large.
The CBC's first-ever ``Commission on the Budget Deficit, Economic
Crisis, and Wealth Creation'' addresses the federal budget deficit
while protecting important safety net programs needed by our
communities.
The national debt--that is the total amount that the Federal
government owes to others--has grown rapidly in the past decade and
reached 62 percent of Gross Domestic Product (GDP) in 2010. This is a
source of concern for many. A large debt can be problematic for at
least two reasons. First, the larger the debt the more concern there is
that creditors might not be willing to continue to hold it or increase
their holdings. Second, this debt has to be serviced through interest
payments
There are a number of ways of approaching deficit reduction without
making vulnerable populations bear a disproportionate burden. One
solution is to put at least part of the burden for closing the gap on
the revenue side, through increases in taxes or introduction of new
taxes. There are also ways of reducing or modifying programs so the
entire burden is not placed upon low-income and vulnerable communities.
Today, many Americans are facing the challenge of economic
recovery, enduring weakness in the housing market, and persistently
high unemployment. Our nation's communities of color have been hit
hardest by the effects of the recession as they continue to experience
disproportionately higher rates of unemployment, home foreclosure,
educational disadvantages, and economic hardship. In fact, the most
recent unemployment numbers show the African American unemployment rate
in January 2011 at 15.7%--several points higher than the overall
number. As a result, vulnerable communities are increasingly relying on
public programs to meet their basic needs.
In this economic climate, lawmakers dedicated to addressing the
core interests of their constituents must make rapid, private sector
job growth a top priority. This objective cannot be effectively pursued
if the United States loses its standing as a leader in the global
economy. A vibrant and dynamic marketplace is the bedrock of long term
declines in unemployment. As such, the US must make significant
investments in education, infrastructure, and research and development
and all programs that provide a high return on investment for every
dollar spent. An example of this is Community Development Block Grants
which give a $1.62 to $4 return for every dollar invested.
The FY 2012 budget should encourage programs that help to the
economy to recover and to spur additional growth, and eliminate
programs that while popular with powerful interests, do little to grow
the economy overall. Our economic recovery is too fragile right now and
draconian spending cuts to vital programs could jeopardize our
recovery. Simply ``cutting'' our way out of the deficit is not
possible. We have to remember that with the Federal budget touches
lives all over the country. Our fiscal problems are very complex and
they need to be addressed, but there is no simple, one-size-fits-all
solution. Building upon the recommendations made by this panel, the
Congressional Black Caucus will propose a FY 2012 alternative budget
that will put us back on the path towards fiscal stability, but not on
the backs of the Americans that can least afford it.
section 1: balancing demand for resources and fiscal constraints
In 2010, the United States' debt obligation reached 62 percent of
Gross Domestic Product (GDP), rising from 33 percent in 2001 when the
federal budget was last balanced. In addition, in 2010 federal spending
was 24 percent of GDP. Only during World War II was federal spending a
larger part of the economy. Also, tax revenues stood at 15 percent of
GDP, the lowest level since 1950.
According to Margaret Simms, Director of Low Income Families
Project, the larger the debt the more concern there is that creditors
might not be willing to continue to hold it or increase their holdings.
In addition, this debt has to be serviced through interest payments.
Therefore, current debt will require future interest payments that
will, in combination with growing Medicare, Medicaid and Social
Security payments, crowd out all discretionary spending.
According to the National Commission on Fiscal Responsibility and
Reform, the economic recovery will improve the deficit situation in the
short run because revenues will rise as people go back to work, and
money spent on the social safety net will decline as fewer people are
forced to rely on it. But even after the economy recovers, federal
spending is projected to increase faster than revenues, so the
government will have to continue borrowing money to spend at its
current level. The Congressional Budget Office (CBO) projects that if
the United States continues on its current course, annual budget
deficits will remain high throughout the rest of this decade and
beyond, and debt will spiral even higher, reaching 90 percent of GDP in
2020.
In order to move forward in earnest with reducing the national debt
and budget deficits the following questions will need to be answered:
1. When should the sincere effort to reduce the debt and deficit
begin?
2. How fast should the budget gap close?
3. How much of the budget gap should be reduced through spending
reductions and how much through tax increases?
pathway(s) to reducing the national debt and deficit
There are many ways to reduce the national debt by closing federal
budget deficit and suggestions have been made by numerous
organizations. Four paths drawn from a report of the National Academy
of Sciences Fiscal Futures Committee are:
High Path: Would move revenue up toward spending, with the budget
eventually reaching about one-third of GDP. As a result, this would
create a much larger public sector.
Intermediate Path 1: Spending and revenues rise gradually to about
one-fourth of GDP and spending on the elderly population would be
constrained to support only modest expansion of other federal spending.
The growth rates for Social Security, Medicare, and Medicaid would be
slower than under current policies. This path reflects the view that
the federal government should make selective new public investments to
promote economic growth, preserve the environment, and build for the
future.
Intermediate Path 2: Spending and revenues would eventually rise to
a little more than one-fourth of GDP. Spending growth for health and
retirement benefits for the elderly population would be slowed but less
constrained than in the intermediate-1 path. Spending for other federal
responsibilities would be reduced. This path reflects the view that the
government's implicit promises for the elderly are a higher priority
than other spending.
Low Path: Pull spending towards revenues which will be in the area
of 18-19 percent. However, this would require a much smaller public
sector and ultimately lead to cuts in many public programs.
programs to protect
LOW-INCOME SUPPORT PROGRAMS BY RACE AND ETHNICITY
[U.S. total, percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
African
Program White American/ Hispanic Other Native Asian Hawaiian Multi- Unknown Total
Black American Racial (Number)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Temporary Assistance for Needy Families 31.5 34.2 28 NA 1.3 2.3 0.6 1.2 0.3 1,629,345
(TANF)--Active Cases, Percent
Distribution of TANF Families by
Ethnicity /Race, October 2007--
September 2008*........................
Supplemental Nutrition Assistance 34.4 21.4 9.7 NA 3.6 2.5 NA 0.1 21.5 14,981,000
Program (SNAP)--Participating
Households by the Race of the Household
Head, FY2009**.........................
Medicaid--Distribution of the Nonelderly 43 21 28 8 NA NA NA NA NA 44,144,600
with Medicaid by Race/Ethnicity,
2009***................................
Earned Income Tax Credit (EITC)-- 50.8 22.2 20.7 6.3 NA NA NA NA NA NA
Characteristics of the EITC-Eligible
Population, Tax Year 1996****..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
African Americans are 12.4 percent of the U.S. population and
Hispanics are 15.1 percent, but they represent a much higher percentage
of the participants in a number of government programs.
safety net & workforce development
Public programs like Temporary Assistance to Needy Families (TANF),
Supplemental Nutrition Assistance Program (SNAP), Social Security,
Medicare, Medicaid, Earned Income Tax Credit (EITC), and others are
necessary to maintain the stability of vulnerable communities.
Social Security
The Joint Center for Political and Economic Studies with the
support of the American Association of Retired Persons reported that
African Americans benefit significantly from the Social Security
program. This includes as retirees, as disabled workers or their
dependents, and as survivors of deceased workers. Although black
Americans are more likely than white Americans to receive retirement
benefits and survivor benefits, their return from taxes paid into the
Social Security system exceed that of white. In addition, older African
Americans are more dependent on these benefits. Conversations about
this reform must include these population whose dependence Americans
and other racial/ethnic subpopulations whose dependence on the system
is great but whose patterns of usage may differ from the ``norm.''
Social Security is an integral part of the nation's social safety
net. In the event of disability, death or retirement, Social Security
benefits are available to a worker and/or to the worker's dependents.
Social Security benefits are often the only source of income for
African Americans, especially for retirees. For two of every five
African American retiree households age 65 or older, Social Security
benefits are the only source of support.
Unemployment Insurance
The unemployment insurance system, like Social Security, is one of
the great innovations in federal policy that came out of lessons
learned during the Great Depression. Helping stabilize demand for goods
and services by smoothing the income of unemployed workers keeps more
people employed--if a loss of income means a drop in consumption, the
drop in demand for food and clothes means a drop in demand for grocery
clerks and salespeople. If we rely on workers increasing their savings
to ``insure'' themselves from unemployment spells, that only makes
drops in demand steeper; precisely what occurred in 2009 when the
unprecedented drop in demand for automobiles brought the U.S. auto
industry to bankruptcy. The multiplier effect--the circulation of
spending--from unemployment benefits is among the largest for any
federal outlay.
The unemployment insurance system is run at the state level, with
states setting eligibility and benefit amounts, and the federal
government establishing minimal guidelines on unemployment insurance
tax levels. During job expansions, states build up reserves in their
system because more taxes come in than benefits are paid out. Ideally,
states would build up reserves into a trust fund large enough to cover
benefits if the economy started losing jobs.
The budget proposes addressing the potential increase in payroll
taxes that would tax place this year. But, the National Urban League
Policy Institute and the Kirwin Institute at the Ohio State University
have documented a sizeable disparity in unemployment benefit recipiency
for African American and Latino workers. Those disparities are the
result of variations in the state unemployment insurance programs; the
same variation that has resulted in the insolvency of the program.
States should be required to set uniform standards that make access to
unemployment insurance the same for all American workers. States with
low recipiency rates, and low benefits, make the unemployment insurance
system less effective as a stimulus to protect jobs; so we all lose
from those states that have small unemployment insurance programs.
African Americans have the highest unemployment rates, and so solving
the current crisis in solvency should also address the lower rate of
African American unemployed workers who get unemployment benefits.
Workforce Investment Act (WIA):
African Americans are almost twice as likely to be enrolled in a
workforce program as their representation in the overall population
would suggest. At a time when the nation is recovering from the deepest
recession in our lifetime, it is unwise to cut spending. However, if we
must cut spending, the nation's safety net should be preserved since so
many Americans rely on that safeguard for their survival.
Medicaid
During this recession, Medicaid enrollment has grown by 8%
nationally. Medicaid is only 7% of the budget but provides healthcare
for 19% of the population. Almost half of these persons are children.
Medicaid is also an important source of health insurance coverage for
African Americans and Hispanics as over 21% of African Americans and
27% of Hispanics are enrolled in Medicaid. The current economic climate
and state fiscal environment threaten access to healthcare for Medicaid
beneficiaries since many states have proposed Medicaid cuts to close
their budget gaps. The 2009 American Recovery and Reinvestment Act
provided relief to states through an enhancement in the federal
matching rate (FMAP). This relief prevented cuts in Medicaid in FY
2010. Unfortunately, the enhanced FMAP has expired and states are
announcing cuts Medicaid for FY 2011. States are announcing reductions
in benefits (e.g. dental, hearing, vision, transplants, and adult
services), eligibility, provider reimbursements (nursing homes,
physicians, and hospitals) and an increase in cost sharing. Medicaid
cannot sustain current levels of reduction at the federal level.
Further reductions in the FMAP or failure to authorize spending to
support Medicaid expansion will jeopardize care for poor especially low
income African Americans and Hispanics. Cuts will result in the poor
delaying care until they are forced to seek expensive emergency
services, a practice which will only increase healthcare costs in the
long run.
Medicare
Opponents of Medicare grossly underestimate the importance of the
program to the most vulnerable pockets of society. Medicare is the
safety net for our seniors, especially minority seniors, as 67% of
African American and 70% of Hispanic Medicare beneficiaries are poor or
near poor, i.e. below 200% of federal poverty levels. These low income
beneficiaries cannot afford to supplement their coverage with Medigap
policies nor do they have employer-sponsored insurance for retirees.
Without Medicare, younger generations will be responsible for the
overwhelming cost of care to their parents and grandparents which could
wipe out families' savings and jeopardize financial resources needed to
sustain homes or fund children's educations.
Because African American and Hispanic Medicare beneficiaries have
limited financial resources to supplement their Medicare coverage, the
closing of the Medicare part D `doughnut hole' is a very important
provision for minority seniors. More than one in four beneficiaries
reach the Medicare coverage gap where they face the full cost of their
prescribed medicines. The Affordable Care Act (ACA) addresses this
access problem by reducing the price of brand name drugs by 50% thereby
allowing seniors access to their prescriptions and a eliminating the
need to choose between medicine and other life necessities. Opponents
of Medicare spending fail to recognize that cuts will eventually result
in higher costs and threaten families' financial viability.
Proposed Avenues to Maintain the Medicare budget:
Only 43% of Medicare's budget comes from general revenues.
Medicare has a dedicated tax base that could be adjusted to meet the
needs of future generations.
Raising the payroll tax ceiling and adjusting the
eligibility age are appropriate measures to take to preserve Medicare
for another generation.
DISTRIBUTION OF MEDICAID AND MEDICARE BENEFICIARIES BY RACE AND HISPANIC
ORIGIN
[In percentages]
------------------------------------------------------------------------
Medicaid Medicare
------------------------------------------------------------------------
Black......................................... 21.2 10.6
Hispanic...................................... 27.2 7.6
Asian......................................... 4.0 3.0
White......................................... 44.1 77.7
Other......................................... 2.9 1.1
Total................................... 100.0 100.0
------------------------------------------------------------------------
Source: Table C-2 Health Insurance Coverage by Race and Hispanic Origin:
1999 to 2009 DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica
C. Smith, U.S. Census Bureau, Current Population Reports, P60-238,
Income, Poverty, and Health Insurance Coverage in the United States:
2009, U.S. Government Printing Office, Washington, DC, 2010.
PERCENT OF POPULATION ENROLLED IN MEDICAID AND MEDICARE
------------------------------------------------------------------------
Medicaid Medicare
------------------------------------------------------------------------
Black......................................... 27.1 11.9
Hispanic...................................... 26.5 6.7
Asian......................................... 13.9 9.3
White......................................... 10.7 17.1
Total................................... 15.7 14.3
------------------------------------------------------------------------
Source: Table C-2 Health Insurance Coverage by Race and Hispanic Origin:
1999 to 2009 DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica
C. Smith, U.S. Census Bureau, Current Population Reports, P60-238,
Income, Poverty, and Health Insurance Coverage in the United States:
2009, U.S. Government Printing Office, Washington, DC, 2010.
community public health infrastructure and the affordable care act
(aca)
Smaller health agencies like the Centers for Disease Control and
Prevention (CDC), the Health Resources and Services Administration
(HRSA) and Substance Abuse and Mental Health Services Administration
promote community health and are particularly beneficial to vulnerable
populations. Programs sponsored by these agencies are critical to
addressing health and health care disparities that negatively affect
communities of color. Communities of color suffer from, among other
things, higher rates of mortality and morbidity and have lower access
to quality healthcare services. A number of agency-sponsored programs
promote disease prevention and access to health screening, fight
against communicable and chronic diseases, fund community health
centers, train physicians and other healthcare workers, provide
substance abuse treatment, and offer many other community-based
services to which low-income citizens would have little access
otherwise. Even small cuts to these agencies can have a large impact
that will be disproportionately felt by the most defenseless members of
our society.
Efforts to hinder the ACA could have devastating effects on African
Americans, Hispanics and other communities of color. Currently, African
Americans and Hispanics currently have extremely high rates of
uninsurance (i.e., 23% and 34% respectively). Under the ACA, the number
of uninsured persons will drop dramatically from 49.9 to 22.1 million,
many of whom are below 200% of federal poverty line (FPL). This is due
to the proposed Medicaid expansion to 133% of FPL, the inclusion of
childless adults, and the creation of Health Insurance Exchanges and
subsidies to small businesses that will make health insurance more
affordable for small businesses, their employees, and low wage earners.
Also, the ACA provides resources to expand community health centers in
underserved communities which will reduce geographic barriers to care
for communities of color that disproportionately face health provider
shortages.
The ACA also positions the nation to address health and health care
disparities that cost the government $1.2 trillion every four years.
ACA elevated the National Center for Minority Health and Health
Disparities to institute status to help elucidate the causes of
disparities and find solutions. ACA also requires the collection of
health information by gender, race, ethnicity, primary language, and
disability status to help public health agencies and other health
organizations address health and healthcare disparities.
how to reduce the deficit without cutting programs
Taxes:
One of the proven successful options to close the budget
gap on the revenue side is through increases in taxes or introduction
of new taxes. The economy would be in better shape had the 2001 and
2003 tax cuts had not been enacted. These cuts alone cost the nation
$1.3 trillion dollars in revenue. It is estimated that the extension of
those cuts in 2010 are going to cost $860 billion. Reinstating these
taxes would do much to lower our deficit. New taxes such as a financial
speculation tax would also help. It would generate revenue and not
incentivize short-term speculating and would be a help build a safer
financial sector.
Reducing or modifying programs:
Modify the Social Security programs by increasing the
contribution cap, that is the percent of earnings on which FICA payroll
taxes are levied, to 90% of earnings, schedule modest future rate
increases now so people have time to adjust their private retirement
planning, and treating all supplemental retirement annuities like
401Ks, which would mean they would be subject to FICA and Medicare
taxes (but not income taxes). These measures would generate sufficient
revenues to close the projected gap in the Trust Fund and allow for
better benefits for vulnerable populations. (Source: National Academy
of Social Insurance, Strengthening Social Security for the Long Run,
2010)
Reduce domestic discretionary programs through selective
combinations of funding reductions to some programs and block granting
of other programs that go to state and local governments, based on
program objectives and effectiveness measures. Programs that were not
judged to be effective would be reduced or eliminated. In the case of
block granting, states would be responsible for program administration
and could choose to supplement the block grants with their own funds.
(Source: National Academy of Sciences, Choosing the Nation's Fiscal
Future, 2010)
section 2: surviving the recession and accelerating the recovery
Today many Americans confront a tenuous economic recovery, enduring
weakness in the housing market and persistently high unemployment. This
context demands that lawmakers sharpen their focus on strong economic
growth, enhanced competitiveness and increased job creation. In
January, according to the Bureau of Labor Statistics, overall
unemployment fell 0.4% and rests at 9%. Even with this decline, the
January unemployment represents the twenty-first consecutive month with
rates this high since the Great Depression.
The January decline in African American unemployment was even more
modest. African American unemployment fell 0.1%, from 15.8% in December
2010 to 15.7% in January 2011. While African Americans make up only 12%
of the population, they represent 20% of the unemployed. Innovative and
carefully conceived policy measures are needed to improve the
employment prospects of over 2.8 million unemployed African Americans
and more than 14 million unemployed Americans from all walks of life.
Obviously in this economic landscape, lawmakers dedicated to
addressing the core interests of their constituents must make rapid job
creation a top priority. This objective cannot be pursued effectively
if the United States loses its standing as a leader in the global
economy. A vibrant and dynamic marketplace is the bedrock of long term
declines in unemployment. As such, the US must make significant
investments in education, infrastructure, and research and development.
Recent decades have seen a marked decline in US competitiveness in
these sectors.
The American Society of Civil Engineers recently issued a grade of
``D'' to the country's roadways. America's higher education system,
once the envy of the world, was recently ranked 18th out of 36
industrialized nations by the Organization for Economic Cooperation and
Development. Math, science and reading proficiency levels among US
elementary students received similarly average rankings. Dr. Algernon
Austin of the Economic Policy Institute foregrounds a range of sobering
statistics that place these deficiencies in context:
The U.S. ranked 20th out of 24 countries in providing
early childhood education
The U.S. ranked 12th out of 36 countries in college
completion rates
U.S. Schools need nearly $300 billion of required
maintenance
29% of all U.S. transit assets are in poor or marginal
condition
The U.S. ranked 15th out of 30 nations in broadband
penetration
In the immediate wake of ``The Great Recession'' lawmakers must
intensify efforts to confront these challenges and to counter the
attendant prospects of long term poverty and unemployment. Targeted
investments in clean energy, highway infrastructure, biomedical
research and information technology can stimulate growth in the short
term and expand economic capacity in the long term.
If carefully instituted, these types of targeted investments can
operate in conjunction with much needed attempts to cut the deficit. As
President Obama remarked in the State of the Union Address, ``Cutting
the deficit by gutting our investments in innovation and education is
like lightening an overloaded airplane by removing its engine.'' The
ill-conceived approach to deficit reduction captured by the President's
analogy should be particularly worrisome for lawmakers who seek to
directly address the daily needs of African Americans. As is widely
known, even in good economic times the unemployment rate for African
Americans has hovered at approximately twice that of the overall
American population. Moreover, the lending and hiring practices of much
of the private sector have done little to inspire broad confidence
among African Americans. As a result, legislation must be crafted that
incentivizes the creation and development of minority-owned and woman-
owned businesses and hiring of the chronically unemployed.
Recently, competing policy and budget priorities have left early
childhood education grossly underfunded. According to the National Head
Start Association, less than 40% of children eligible for Head Start
and less than 2% of toddlers eligible for Early Head Start have been
able to fully access the services offered by these programs. Investing
in these programs not only prepares a new generation of Americans for
academic excellence, but also expands the range of employment
alternatives that can be pursued by low-income parents desperately in
need of quality childcare.
Investments in the formative years of childhood development have
proven essential as a means of inculcating strong cognitive and social
skills in all children. Since the program's inception in 1965 nearly 25
million low-income children and families have benefited from Head
Start's comprehensive approach to childhood education. And from a
fiscal standpoint, the return on investment is extremely encouraging.
According to a recent study, the US receives $9 in benefits for every
$1 dollar invested in Head Start. Children who have reaped the rewards
of Head Start are less likely to engage in criminal behavior later in
life, less likely to become a drain on America's social safety net and
more likely to graduate from high school and college. These higher
graduation rates greatly increase the earning potential of former Head
Start participants so that they can substantively contribute to the tax
base of economically marginalized communities.
Even when fully prepared for prevailing employment opportunities,
African American youth confront discrimination in labor markets. Field
experiments have demonstrated that white employees generally are
preferred over black employees, regardless of the relative
qualifications of the latter versus the former. For example, a field
experiment in Milwaukee demonstrated that among males of similar age
and educational attainment, whites with criminal records have greater
odds of landing employment than blacks with no criminal record. Among
young adults, 18-25 years of age, the unemployment rate consistently is
10-12 points lower for whites who have not finished high school than
blacks who have had some college education. Therefore, mechanisms need
to be put in place to insure that there is greater equity in the
opportunity to work after young people successfully have navigated the
schooling experience.
In addition to molding healthier and more academically proficient
children, early childhood education often provides mothers the
opportunity to effectively enter the labor force. Numerous studies
indicate that in many low-income households, African American
households in particular, the mother is the sole breadwinner. According
to the Department of Labor roughly 3 out of every 5 single mothers with
children under age 6 are employed and often face an economically
debilitating ``time crunch.'' These women need access to affordable and
quality child care, not only to help improve their children's lives,
but even more critically to improve the prospect of social mobility for
the entire family.
In sum, investments in early childhood education are more necessary
than ever. Short-sighted deficit reduction will hamstring opportunities
for all disadvantaged children to attend high-quality schools in
general, especially pre-kindergarten and will compromise ongoing
efforts to increase the number of teachers dedicated to serving
impoverished communities. Substantive educational investments now will
create durable job growth in the field over the long term--while at
same time helping to ensure that all children in the United States
receive a 21st century education. Nothing is more pivotal as America
seeks to maintain its economic competitiveness and dynamism.
Likewise, increased economic productivity hinges upon progress in
revitalizing our nation's infrastructure. As a string of recent
tragedies suggests, vital sectors of the US infrastructure are
crumbling. Investing in roads, dams, sewers, bridges and ports--the
lifeblood of daily commerce--is one of the most efficient means to
rapidly boost economic growth. For example, investments in
transportation infrastructure have produced demonstrable economic
ripple effects. It is estimated that for each billion dollars spent on
transportation infrastructure, 47,000 jobs are created. Mark Zandi, a
leading economist, determined that every one dollar invested in
infrastructure yields $1.57 of additional economic benefit.
Improvements in transit systems are also critical in order to
secure gains in the quality of life of millions of working Americans.
Public transit is obviously cheaper than owning and operating a
vehicle. The rising cost of maintaining a vehicle--fuel and parking,
for instance--make public transit an even more vital resource for low-
income populations. Modernizing and expanding transit systems could
help these populations to save money and provide them access to
employment opportunities across greater distances. The President's
commitment in the State of the Union Address to provide 80% of
Americans access to high speed rail within the next 25 years is a
pioneering step in the right direction.
Advances in transportation infrastructure make the United States
economy as a whole more competitive. To illustrate, if roads are
deteriorating and transit systems are unreliable, the flow of American
goods and services is hampered. Poorly maintained highways and railways
cripple shipping routes, deliveries run late or products are never
received. In order to ensure that myriad opportunities for economic
innovation are not squandered, investment in transportation
infrastructure is of singular import.
This investment will also help to sustain one of the industries
most impacted by the recent economic downturn: construction. While
employment in manufacturing, retail and healthcare is growing, the
construction industry remains in decline. According to The Bureau of
Labor Statistics, in the month of January alone, 22,000 construction
jobs were lost. Investments in infrastructure today will fuel enduring
job growth in construction, transportation and technology tomorrow.
Facilitating the expansion of these industries will ensure that United
States remains a dominant economic force for years to come.
This vast array of needs in the maintenance and expansion of our
nation's human and physical infrastructure motivate the establishment
of a major public sector jobs program. Such a program would afford all
citizens guaranteed employment. In many instances--including the
current economic crisis--the private sector has not been able to take
care of the public need in the realm of job creation. Furthermore, it
has been shown that it always more difficult for the private sector to
end the disparity in unemployment and wages between African Americans
and the overall population, particularly given the presence of
discrimination in hiring.
A proposal similar to that jobs programs created in the 1930s and
1970s, but one that would be permanent and universal, would address
America's employment crisis in a direct fashion. The scale and funding
of the program would change counter-cyclically in response to increases
and decreases in private sector hiring nationwide. For example, if all
of the 15 million persons unemployed during the Great Recession were
put to work in the public sector jobs program at a mean expense of
about $50,000 per person (salary, materials and equipment, benefits
including health insurance), the program would cost $750 billion.
The net expense would be considerably lower because the existence
of program of this type would facilitate substantial savings in other
social insurance programs, including unemployment compensation, food
stamps, free and reduced lunch benefits in public schools, TANF, EITC,
and so forth. Indeed, the federal job guarantee could function as a
mechanism to eliminate poverty among both the unemployed and the
working poor by providing a guarantee of the opportunity to work at a
decent wage. Incomes received by employees in the public sector jobs
program also would alleviate the home foreclosure crisis, which now is
increasingly driven by the lost wages associated with high
unemployment.
Run by local elected officials who are closest to our communities
and best understand their needs, this jobs program would collaborate
with community organizations, labor and other community leaders to
identify the projects that would be most beneficial.
Predicated on the discussion above, projects that newly employed
people might undertake include:
Paint and repair schools, community centers, and
libraries;
Clean up abandoned and vacant properties to alleviate
blight in distressed and foreclosure-affected neighborhoods;
Expand emergency food programs to reduce hunger and
promote family stability;
Augment staffing in Head Start, child care and other early
childhood education programs to promote school readiness and early
literacy; and
Renovate and enhance maintenance of parks, playgrounds and
other public spaces.
The program envisioned would place special emphasis on delivering
job opportunities and needed services to low-income communities and
communities of color suffering depression level unemployment and
distress. If acted upon quickly a jobs program like this could put
hundreds of thousands of people to work during this calendar year and
would continue to provide a quality job option for all citizens on a
permanent basis.
Finally, investments in workforce also are essential, particularly
for minorities and women in the financial services industry. According
to the Securities Industry and Financial Markets Association, the
financial services industry accounts for 6 percent of total private
non-farm employment in the United States or about 10 million jobs, and
represents 6 percent, or $828 billion, of the nation's Gross Domestic
Product. Employment opportunities in certain sectors of the industry,
like securities, are expected to increase by 12 percent over the next 7
years. Jobs in the financial services industry are highly profitable.
For example, according to the Bureau of Labor Statistics, in 2009
financial analysts earned an average hourly wage of $40.98 an hour,
$25.03 more than the national average hourly wage for all occupations
of $15.95. It is clear that the financial services industry offers jobs
and opportunities that can lift families and individuals from poverty,
can improve their living situations, and can assist in building strong,
vibrant communities.
However, opportunities for minorities and women in this industry
remain limited. According to a 2008 report by the Government
Accountability Office (GAO) from 1993 to 2006, the level of minority
participation in the financial services profession only increased
marginally from 11 percent in 1993 to 15.5 percent in 2004.
Participation rates among African-Americans rose slightly from 5.6
percent to 6.6 percent. Asian participation rates rose from 2.5 percent
to 4.5 percent and the participation rate of Hispanics only rose from
2.8 percent to 4 percent. In addition, the GAO found that only 12.4
percent of management level positions at holdings and trusts are held
by minorities and that the securities industry is the least diverse of
all financial services industries with minority men and minority women
making up 8.7 percent and 6.4 percent of management positions in this
sector.
The employment of minorities and women by the government's
financial services agencies is limited also. According to the Office of
Personnel Management, minorities comprise only 17.4 percent of Federal
economists; 18.1 percent of Federal financial management positions; and
18.7 percent of financial institutions examiners. At the Treasury
Department, for example, minorities only make up 17.2 percent of
employees at senior pay levels. Meanwhile, nationally, minorities
comprise 30.5 percent of the civilian labor force. The level of
minorities at senior pay levels in the government's financial services
agencies is also problematic. Still using Treasury as an example, the
average pay grade for African-American employees is 8.8. The average
grade for Hispanic employees is 8.3. Compared to the average grade for
White employees, which is 9.6, it becomes clear that there's a clear
disparity in, not only earnings, but seniority at Treasury in
particular.
Minority- and women-owned businesses face significant challenges in
participating in the financial services industry, including starting up
their businesses, raising capital, and contracting with the Federal
government, including contracts related to the economic recovery. Only
2.4 percent of all minority-owned firms and 2.6 percent of women-owned
firms are in the finance and insurance industries. According to data
from the Minority Business Development Agency, minority-owned
businesses were more likely to rely on credit cards as a source of
start-up capital than non-minority firms and were less likely to rely
on savings or loans from banks. In addition, only 5.7 percent of
African American firms and 5.6 percent of Hispanic firms obtained bank
loans to start their business, compared to 12 percent of non-minority
firms. According to a 2006 GAO report, minority-owned business have a
higher rate of having their loans denied or of paying higher interest
rates, even after controlling for creditworthiness and other factors.
Due to these challenges and lack of participation of minorities and
women, Section 342 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (Public Law 111-203) directed each financial
services agency to establish an Office of Minority and Women Inclusion
to develop standards to ensure equal employment opportunity and the
racial, ethnic and gender diversity of the agency's workforce and
senior management; increase the participation of minority-owned and
women-owned businesses in the programs and contracts of the agency,
including the coordination of technical assistance; and assess the
diversity policies and practices of entities regulated by the agency.
The legislation required the Offices to be established by January 21,
2011. These Offices will increase the participation of minorities,
women, and minority-and women-owned businesses in the financial
services industry and should be supported. The model presented by the
Offices could provide a template for other industries and agencies
where minority participation is lacking.
section 3: using the 2012 budget to address deficit reduction
The FY 2012 budget should encourage programs that help to the
economy to recover and to spur additional growth, and eliminate
programs that while popular with powerful interests, do little to grow
the economy overall. Our economic recovery is too fragile right now and
draconian spending cuts to vital programs could jeopardize our
recovery.
The Dow Jones Industrial Average has already recovered to pre-
crisis levels. Corporations are sitting on hundreds of billions of
capital in relatively comfortable positions. The interventions taken by
the government to bolster the financial industry were successful, but
the government has not had the same success addressing the root of the
crisis and the one that still impacts the lives of the most Americans--
the foreclosure crisis.
A key place the FY 2012 budget could address the continued economic
hardships of Americans and the deficit problem would be to re-program
funds for the Home Affordable Modification Program (HAMP) and develop
successful solutions to help millions of families keep their homes. By
investing in programs that promote and assist asset building in
minority and low income communities, the FY2012 budget can begin to
lift millions of Americans, of all races and backgrounds out of poverty
and placed on the path towards the middle class.
Extending all of the Bush-era tax cuts, especially those for the
wealthiest Americans, for two years is not the best way to begin
addressing the deficit. In the forum I proposed an analogous statement
``I plan to start my diet by eating cake and ice cream'' to illustrate
the hypocrisy. We need to get serious about our deficit but we must
also maintain focused investments to accelerate our recovery.
The FY2012 budget should adopt many of the President's proposals
outlined in his 2011 State of the Union address--continued and
sustained investments in education, advanced research and development,
clean energy, and our nation's crumbling infrastructure. The United
States will not be able to compete in the global economy if we can't
ensure a quality education for every American child, if we can't
effectively address our energy needs, and if we can't manage to
efficiently transport goods and services.
The U.S. has a long structural racial inequality problem,
particularly in the realm of wealth, which is a paramount indicator of
well-being, and the only way to address this problem is with public
actions. Ironically, the nation's wealthiest households and
corporations have and continue to receive the disproportionate share of
public subsidies.
Getting the economy moving is the prime way to reduce the deficit.
Recognizing this it is vital we bolster economic opportunity for all
American's through both short- and long-term investment--investment
that not only improves individual American citizen's economic
opportunity, but expands the productive capacity of the broader
American economy. The current focus on deficit reduction focuses on
further limiting government's spending on programs that generally aid
families that need that help the most and that have received the lest
support during the current economic downturn.
Efforts to increase savings among the general public through tax
reform and policy programs will increase the national saving rate, even
while the government invests more to encourage growth. Stabilizing the
mortgage crisis and promoting asset development will have the most
impact on helping lower and middle class Americans recover from the
recession, and in turn help the overall budget deficit picture. One of
the most direct programs to increase savings and create wealth through
asset development across all income brackets would be the development
of some type of mandatory savings or endowment program instituted at
birth.
There is no silver bullet to addressing the federal budget deficit.
However, we must have an honest discussion on how we can get our fiscal
house in order. President Clinton left President Bush with a ten year
projected surplus of $5.6 trillion in 2001 but President Bush on
January 20, 2009 left President Obama with a $ 1.2 trillion deficit.
Additionally, that this was the deficit on day one of the Obama
Administration, weeks before the President enacted a single piece of
legislation and the American Recovery and Reinvestment Act.
The failed economic policies of the Bush Administration led to this
enormous deficit----
the 2001 and 2003 tax cuts totaled $1.3 trillion over ten
years, in which most of the tax relief went to the top 1% of income
earners;
a Medicare Prescription Drug benefit with a ten year cost
of nearly $1 trillion that was not offset;
Two overseas wars that are nearing a cost of $1 trillion;
A $700 billion bailout of Wall Street banks; and
All these unpaid for policies were compounded by the worst
economic recession in 70 years that began in 2007 which led to huge
shortfalls in federal tax revenue and increased reliance on
unemployment insurance and other federal social safety net programs.
America is in need of a long-term economic competitive strategy
that ensures more than just positive GDP but provides full employment,
economic mobility, and shared prosperity for all. To that end, American
needs a savings and investment system for the 21st century. America
should strive for refitted tax policy that operates through robust tax
credits to promote new savings amongst low- and moderate-income
Americans in an effort to foster new investment and financial stability
to help grow our economy. The federal government should take a long
hard look at their asset promoting policies in general given that the
most affluent benefit far more from the programs than the less
affluent.
While the personal savings rate is only one component of overall
national savings, an analysis of 2005 data found that increasing the
personal savings rate among the bottom 40% of households by only about
$10 per week ($500/year) would increase the overall net national
savings rate by 26% (Johnson, Mensah, Steuerle, 2006). A substantial
transformative policy like the ``baby bonds'' is such a policy. The
``baby bond'' plan would progressively rise to $50,000 or $60,000 for
children in families in the lowest wealth quartile and accessible once
the child turns 18 years of age. Eligibility for such a program would
be based upon the net-worth position, rather than the income, of the
child's family. Although this seems large, it costs much less than what
we currently spend on policies like the home mortgage deduction tax
credit which is far less progressive and in general benefits the most
affluent Americans.
As efforts go forward to improve American adults retirement savings
and preparedness, policymakers should ``Add the Kids'' to our nation's
savings system. Child Accounts are a long-term investment in children
and their financial futures. At a time when the outlook for our
Nation's youth is fraught with mounting concerns, it is vital we make a
significant investment in our children that helps build a secure
financial future. By giving every American child a head start on
saving, Child Accounts would help every American child build a
financial asset for their future, expanding educational,
entrepreneurial, and job training opportunities.
It is also imperative to address meaningfully and immediately, the
foreclosure crisis that is stripping families of their homes and wealth
and weighing heavily on the economic recovery. Failure to move
aggressively and tackle the major economic challenges facing the
nation, with urgency and commitment, will be detrimental to America's
economic leadership and will foster greater economic inequality and
further erode public trust and confidence in government.
In order to get these large deficits under control, we have some
tough choices to make. How much longer can we afford to extend the
Bush-era tax cuts? The President and Congress extended all of them
through 2012 at a two year cost of $800 billion and ten year extension
of all these tax cuts will cost $3.8 trillion--$3 trillion of which are
the popular middle-class tax cuts.
In late January, the Congressional Budget Office released its
latest projections of the Social Security Trust Fund. Although Social
Security does not contribute to the budget deficit, the treasury has
borrowed It was previously projected to go into a cash deficit in 2017,
but now CBO has projected that the trust fund is now running a deficit.
The trust fund is expected to be exhausted in 2037 and will only take
in enough money to fund 75% of promised benefits.
Simply ``cutting'' our way out of the deficit is not possible. We
have to remember that what we do with Federal budget touches everyone.
Our fiscal problems are very complex and they need to be addressed, but
there is no simple, one-size-fits-all solution. Building off the
recommendations made by this panel, the Congressional Black Caucus will
propose a FY2012 budget alternative that will put the budget on a path
towards fiscal stability but not on the backs of the Americans that can
least afford it.
congressional black caucus commission on the budget deficit, economic
crisis and wealth creation
Balancing Demand for Resources and Fiscal Constraints
Darrell J. Gaskin is Associate Professor of Health Economics at the
Johns Hopkins Bloomberg School of Public Health and Deputy Director of
the Hopkins Center for Health Disparities Solutions. He has also served
on the faculties of the University of Maryland--College Park and
Georgetown University. His primary research interests are healthcare
disparities, safety net providers, and access to care and quality of
healthcare for Medicaid, minority, uninsured, and other vulnerable
populations. Dr. Gaskin earned his Ph.D. in health economics at The
Johns Hopkins University, a MS degree in economics from the
Massachusetts Institute of Technology and a BA degree in economics from
Brandeis University.
Dr. Maya Rockeymoore is an American policy scholar, noted speaker,
author, and media commentator. She is best known as an advocate and
analyst in the areas of health, income security, education and civic
engagement having appeared as a frequent contributor in print,
television, and radio. Prior to her current position as President and
CEO of Global Policy Solutions in Washington, DC, she served as Vice
President for Research and Programs at the Congressional Black Caucus
Foundation, as Chief of Staff to Congressman Charles Rangel and as a
professional staffer on the U.S. House Ways and Means Committee. She
received her BA from Prairie View A&M University and both her MA and
Ph.D. from Purdue University.
Margaret C. Simms is an Institute Fellow at the Urban Institute in
Washington, D.C., where she directs the Low Income Working Families
project. Prior to joining the Urban Institute in July 2007, she was
Vice President for Governance and Economic Analysis at the Joint Center
for Political and Economic Studies. She began working at the Joint
Center in 1986 as Deputy Director of Research and held positions of
increasing responsibility during her 20 year tenure. Prior to joining
the staff of the Joint Center, she was a program director at the Urban
Institute. Before coming to Washington, DC, Dr. Simms served on the
faculties of Atlanta University and the University of California at
Santa Cruz. In 1977 and 1978, she was a Brookings Economic Policy
Fellow at the U.S. Department of Housing and Urban Development.
William Spriggs was nominated by President Barack Obama as
Assistant Secretary for Policy. He was confirmed by the Senate on
October 21, 2009.Dr. Spriggs is a recognized expert in labor policy and
research. For over 25 years, he has worked as an educator, researcher
and advocate for working families and low-income communities. Born in
Washington, DC, Dr. Spriggs attended the public elementary schools of
the District in the midst of the Civil Rights era, spurring his
commitment to public service. After graduating cum laude from Williams
College in 1977, he attended the University of Wisconsin-Madison--where
he earned a Ph.D. in Economics and served as co-president of American
Federation of Teachers Local #3220.
Surviving the Recession and Accelerating the Recovery
Algernon Austin directs the Economic Policy Institute's Program on
Race, Ethnicity and the Economy (PREE). PREE works to advance policies
that enable people of color to participate fully in the American
economy and benefit equally from gains in prosperity. As director of
PREE, Austin oversees reports and policy analyses on the economic
condition of America's people of color. Prior to joining the Economic
Policy Institute, Austin was a Senior Fellow at the Demos think tank
and assistant director of research at the Foundation Center. From 2001
to 2005, he served on the faculty of Wesleyan University. He received
his Ph.D. in sociology from Northwestern University.
William A. (``Sandy'') Darity Jr. is Arts & Sciences Professor of
Public Policy Studies and Professor of African and African American
Studies and Economics at Duke University. Previously he served as
director of the Institute of African American Research, director of the
Moore Undergraduate Research Apprenticeship Program, director of the
Undergraduate Honors Program in economics, and director of Graduate
Studies at the University of North Carolina. Darity's research focuses
on inequality by race, class and ethnicity, stratification economics,
schooling and the racial achievement gap, North-South theories of trade
and development, skin shade and labor market outcomes, the economics of
reparations, the Atlantic slave trade and the Industrial Revolution,
doctrinal history and the social psychological effects of unemployment
exposure.
Donna Sims Wilson is the new Executive Vice President of Castle Oak
Securities. Ms. Sims Wilson, formerly President of M.R. Beal & Company,
a leading investment bank specializing in municipal and corporate
finance, will be responsible for helping to drive revenue growth and
for overseeing new business generation across the firm's various
business lines. Ms. Sims Wilson joins CastleOak Securities with over 25
years of experience in equity sales and corporate and mortgage finance.
Donna Sims Wilson serves as Chair of the Legislative Committee of the
National Association of Securities Professionals, and is Vice Chairman
of the Kohl Children's Museum of Greater Chicago and a Board Member of
the John G. Shedd Aquarium. She is a graduate of Yale University where
she studied political science.
Using the 2012 Budget to Address Deficit Reduction
Jim Carr is Chief Business Officer for the National Community
Reinvestment Coalition, an Executive Committee member of Americans for
Financial Reform, and a Braintruster (blogger) for the Roosevelt
Institute's New Deal 2.0 initiative. Jim is also a former Visiting
Professor at Columbia University in New York. Prior to his appointment
to NCRC, Jim was Senior Vice President for Financial Innovation,
Planning, and Research for the Fannie Mae Foundation, Assistant
Director for Tax Policy with the U.S. Senate Budget Committee, and
Research Associate at the Center for Urban Policy Research at Rutgers
University. Jim testifies frequently before the United States Congress
and has appeared on various news outlets. Jim holds graduate degrees in
urban and regional planning from Columbia University and University of
Pennsylvania and an architecture degree from Hampton University.
Darrick Hamilton is an Associate Professor at Milano The New School
for Management and Urban Policy, an affiliated faculty member in the
Department of Economics at The New School for Social Research, a
faculty research fellow at the Schwartz Center for Economic Policy
Analysis, an affiliate scholar at the Center for American Progress, and
a former Associate Director of the American Economic Association Summer
Research and Minority Training Program. He earned a Ph.D. from the
Department of Economics at the University of North Carolina, Chapel
Hill in 1999. Professor Hamilton was a Ford Foundation Fellow on
Poverty, the Underclass and Public Policy at the Poverty Research and
Training Center.
Lisa Mensah is an expert in using financial tools to improve the
economic security of the working poor. At Aspen IFS, Ms. Mensah leads a
team of financial security experts who study the financial products and
public policy solutions that help build wealth from birth to retirement
for America's working families. Ms. Mensah began her career in
commercial banking at Citibank prior to working 13 years with the Ford
Foundation. Serving as Deputy Director of Economic Development for the
organization, Ms. Mensah led the Foundation's work in microfinance and
women's economic development. She became the leading national funder of
individual development accounts (IDAs)--an innovative savings account
structured with matching incentives and personal financial training
used to finance homeownership, entrepreneurship and education. Under
Ms. Mensah's leadership, IDAs grew from an experiment at a handful of
sites to become a tool used by hundreds of community organizations in
all 50 states. Ms. Mensah holds an M.A. from the Paul H. Nitze School
of Advanced International Studies of The Johns Hopkins University and a
B.A. from Harvard University.
Prepared Statement of Hon. Eni F.H. Faleomavaega, a Delegate in
Congress From the Territory of American Samoa
I thank you for the opportunity to provide testimony on the budget
resolution for FY 2012. I appreciate the difficult task facing the
committee especially in light of the current fiscal environment. It is
my hope to make a small contribution by way of this statement to be
made part of the record.
Mr. Chairman, controlling the national debt is one of the goals you
described eloquently in your roadmap for America in the next five
years. While I appreciate the goal to cut spending and reduce the
deficit, which is projected to hit $1.6 trillion this year, getting
there appears to me the real issue for debate. In this respect, I am
pleased with the overall approach taken by President Obama. In his
budget proposal for FY 2012 and beyond the President makes the case for
selectively cutting spending while increasing resources in areas like
education and clean-energy initiatives that hold the potential for
long-term payoffs in economic growth. This common sense approach will
help rein in spending to within reasonable levels without undermining
programs that are vital to job creation and economic development.
Mr. Chairman, I draw your attention, however, to such programs that
are especially critical to Americans living in the territories, but
face cuts under the President's proposed budget for FY 2012.
In particular, the budget proposal for the U.S. Department of
Interior's Office of Insular Affairs (OIA) includes $84.1 million for
the Assistance to Territories program, a net reduction of $1.1 million
based on the FY 2010 enacted level. The proposed reduction will
significantly impair OIA's ability to provide technical support
critical to economic growth and meaningful changes in the territories.
I am pleased to highlight two recent developments in the
territories funded through OIA technical assistance. First, the OIA in
partnership with the U.S. Department of Energy implemented two
initiatives--the Energy Development in Island Nations (EDIN) pilot
project in the U.S. Virgin Islands (USVI); and a partnership with the
National Renewable Energy Laboratory (NREL) in the Pacific for energy
options analysis and strategic plan support. These initiatives are in
accordance with federal policy that was first established by Congress
in 1980, and most recently revised in 2005, to direct the Secretary of
Energy, in consultation with the Secretary of Interior, to prepare and
submit to Congress a comprehensive energy plan with emphasis on
indigenous renewable sources of energy for the territories and insular
areas. The overall goal is to create energy strategic plans to
transition to renewable energy and help bring down disproportionate
energy costs in the territories.
Moreover, in 2010, the first official set of gross domestic product
(GDP) data for the territories was made available through an OIA
partnership with the U.S. Department of Commerce, Bureau of Economic
Analysis (BEA) and funded by OIA's technical assistance grant. Prior to
2010, BEA economic data was only available for the 50 States and DC,
but not the territories, which made it very difficult to gauge the
impact of federal policies on the economies of the territories and
insular areas.
Mr. Chairman, as illustrated above, it would be a major setback for
economic development in the territories if the President's proposed
funding levels for FY 2012 are enacted. Reductions in the OIA budget
will seriously have an impact on the effective delivery of services to
Americans living in the territories and insular areas. I urge you to
restore OIA funding to FY 2010 levels.
I am also concerned with the President's proposed cuts to the U.S.
Department of Health and Human Services, Health Resources and Services
Administration (HRSA), budget for FY 2012. In particular, the proposed
budget of $2 billion for HRSA's Health Center program is a net
reduction of about $120 million from the FY 2010 level of $2.1 billion.
Reduction in the Health Center budget will only increase health care
costs and add to the national debt.
For over 40 years, HRSA-funded health centers have provided
comprehensive, affordable, high-quality primary and preventative health
care services to low income and medically underserved communities.
These include communities with limited English proficiency, migrant and
seasonal farm workers, homeless individuals and families, and those
living in public housing. Currently, 1,200 health centers deliver care
through over 8,000 service delivery sites in every state and territory.
These health centers are critical to improving the overall health
of the American people. Overall, they reduce health disparities,
increase access to high quality and regular care, and boost local
economies. Furthermore, continuing funding for the Health Centers
Program ensures that fewer Americans would have to rely on costly
sources of care such as the emergency room, thereby saving tax payers
money and making the overall health care system more efficient. Funding
health centers is a win-win situation and I urge that funding for the
Health Centers program is restored to FY 2010 levels.
Finally, I object to cuts requested in the President's FY 2012
budget for the Institute of Museum and Library Services (ILMS), which
includes $20.3 million cuts for Library Services and Technology Act
(LSTA) from FY 2010. Through LSTA grants to states, libraries can
better provide training on resume development, help on web searches of
job banks, workshops on career information, links to essential
educational and community services, assistive devices for people with
disabilities, family literacy classes, homework help and mentoring
programs, and much more helping America get back to work.
For my district of American Samoa, the loss of these critical LSTA
funds would force the interruption of services essential to American
Samoa's residents of all ages, including but not limited to: annual
summer reading programs; weekly reading programs for pre-school aged
children; free monthly introductory computer courses; and the
Polynesian Photo Archives, an IMLS funded program which now consists of
over 700,000 historic Samoan images digitally preserved, catalogued,
and archived in the Feleti Barstow Public Library's Pacific Collection
Room. As the only source of free access to the Internet on the Island,
public libraries in American Samoa are also active in assisting the
public with online job searches, e-government services, and lifelong
learning.
Mr. Chairman, I urge you to fully fund LSTA at $232 million, the
level authorized in FY 2010.
In closing, Mr. Chairman, I appreciate the tough task before you
and the committee members. My hope is to provide justification to stave
off proposed cuts to the programs that are critical to Americans living
in the territories and for my district of American Samoa. I thank you
again for this opportunity.
Prepared Statement of Hon. Rick Larsen, a Representative in Congress
From the State of Washington
Thank you Mister Chairman and Members of the House Budget Committee
for providing me with the opportunity to voice my concerns regarding
the federal budget.
I am working to find solutions to get the economy back on track and
fuel job growth. This means making investments in local infrastructure
that creates private sector jobs, supporting research that promotes
innovation and building our manufacturing base to grow jobs through
exports-all in order to maintain U.S. economic leadership in the world.
But the majority's budget proposals in the 112th Congress take the
first steps to undermine these efforts to grow our economy and create
jobs. These cuts are putting local jobs, law enforcement and help for
hardworking families on the chopping block.
That is why; as Congress continues to move forward making reckless
cuts that we stand together to protect those programs that help our
long-term economic recovery.
If we cut these programs, we harm our ability to grow the economy
and create jobs and make it more difficult--if not impossible--to cut
the debt and deficit.
I agree that the Federal government must get its fiscal house in
order and bring down the $1.5 trillion deficit.
However, these budget proposals make reckless cuts into the
investments necessary for economic growth.
We need a responsible budget that protects the economic progress we
have made and lays a foundation for future economic growth.
I will continue to work with colleagues to identify areas we can
responsibility cut. In fact, during this Congress I have supported
nearly $50 billion in responsible budget cuts.
However, we cannot have credibility on reducing the deficit or
controlling the debt unless our economy is growing.
And, unfortunately, the cuts proposed by the Majority would have a
devastating effect on local programs and our economy.
Among the programs slashed by the majority's budget are Pell
Grants-need based student aid that helps many low-income families send
their children to college.
We should be telling young adults ``America will invest in you,''
but the Republican budget cuts delay and may end the dream of higher
education for many. In my district, over 8,000 students received Pell
Grants that helped them attain the higher education and career training
they need to secure good jobs after graduation.
Unfortunately, Pell Grant funding is facing a funding shortfall.
The recent spending bill passed by the House--that I opposed--would cut
this year's maximum Pell grant by $845.
Again, I strongly support efforts to reduce the deficit and cut the
debt.
However, we will not be able to reduce our deficit unless we
continue to grow our economy and the proposed cuts are aimed at
precisely the programs we are going to need for future economic growth.
I have also made a commitment not to support efforts to balance the
budget on the backs of those most in need in our communities.
As a Member of Congress, and one who is committed to growing the
economy and cutting the deficit, I have hard choices to make.
The Majority continues to bring proposals to the floor that cut
programs that are critical to our communities and our economic
recovery.
I will continue to partner with my Congressional colleagues to
identify cuts we can make.
But, my first priority is to support those programs that help small
businesses create jobs and unless we in Congress do that first we will
not be able to form a long-term plan to cut the deficit.
Another area of the budget where we must put the necessary
resources is the global non-proliferation program.
Under the National Nuclear Security Administration, our efforts to
secure and dispose of loose nuclear materials and nuclear weapons is a
paramount national security priority.
Ensuring that our efforts toward the President's goal of securing
loose materials by 2012 is critical.
The Global Threat Reduction Initiative--which is already seeing
delays due to the current fiscal year's uncertain funding levels--
identifies and supports efforts by foreign governments to secure
material.
GTRI faces delayed shipments of highly enriched uranium from
nations like Belarus, Poland, Uzbekistan and Hungary.
The longer we allow these materials to stay out there, the more we
put our allies, our troops and our nation at risk.
I greatly hope that this national security priority is one that the
committee acts on judiciously as it decides where to decrease funding.
Prepared Statement of Hon. Barbara Lee, a Representative in Congress
From the State of Texas
Thank you Chairman Ryan, Ranking Member Van Hollen and the members
of the Budget Committee for giving me the opportunity to testify today.
As a founding co-chair of the Congressional Out of Poverty Caucus,
a member of the Congressional Black Caucus, the Congressional
Progressive Caucus, and the Congressional Asian and Pacific American
Caucus, my colleagues and I have been working to diligently to put
together our budget priorities and ensure that the needs of the poor
and the most vulnerable are addressed in the FY 2012 Budget.
Mr. Chairman, let me remind this committee that a budget is a moral
document. It shines a light on what the priorities of our government
are. It also defines what we as a community, as a society and as a
nation hold dear.
Do we believe that our nation has a responsibility to help poor
children get an education, proper nutrition, and have access to quality
health care? Do we believe that its right to take away critical funding
for small business innovation, and job training programs when a company
that turns a $14.2 billion profit with over 130,000 employees in the
United States pays no federal taxes?
While it is true that our deficit is high, we must not allow a
false sense of panic to force us into making shortsighted choices. Such
a course will only hurt our economic recovery, result in more job
losses, and lead to the elimination of critical safety net programs
that millions of Americans around the country, both in my district and
in your districts, have come to rely on.
In short, we cannot and we must not balance the budget on the backs
of our most vulnerable; we must instead build up the budget and reduce
the deficit through the success of the working class.
We must take a hard look at our priorities and make some smart
choices about how to get our fiscal house in order.
To begin with, we must bring the war in Afghanistan to a
responsible end. Each year America's longest war costs the American
people $107 billion a year.
And what have we gotten for it?
Have we captured Osama bin Laden? No.
Do we have an efficient, effective and democratic ally within the
government in Kabul? No.
Is our continued military engagement in Afghanistan the most
effective strategy for reducing the threat of global terrorism, when we
know Al Qaeda is no longer in the country? As many experts have said
the answer is, no.
It's clear that we must end the war in Afghanistan and instead make
smart security investments to safeguard our nation's interests and
improve our long term security. That means significantly reducing the
bloated $700 billion plus, Pentagon budget which consumes over half of
all federal discretionary spending.
And it means being realistic about our obligations to our nation's
seniors who rely on Medicare and Social Security.
First of all, let's be clear--if you support the repeal of health
reform--you are contributing to the destabilization of Medicare. As
study after study has shown, the only way to truly bring down health
care costs is to broaden the number of people who are utilizing health
insurance and services so that risks and costs are shared among more
people.
Providing tax credits to expand access in health reform was a good
start, adding a public option would have been better. The fact is
however, that the best approach to broadening the risk pool and
bringing down costs is to extend Medicare for all individuals and
establish a single payer system.
Secondly: Social Security does not affect the deficit. The trust
fund ensures that we will have funding available to pay out benefits
for many future generations. Instead of jeopardizing the retirement
security of millions of Americans through privatization, we must ensure
that the wealthiest among us pay their fair share by raising the cap on
the social security payroll tax.
At the same time that we address these issues--we've also got make
the kinds of investments that will stimulate the economy, spark
business innovation, and create jobs.
It's clear that the economy is along way from a full recovery, and
that many families are still struggling to get back on their feet.
Today 43.6 million Americans are living in poverty, including 1 in 5
children.
With rising costs for gas, food, and rent--proposing drastic cuts
to education, housing, and healthcare will place additional burdens on
the most vulnerable among us--jeopardizing the lives of millions of
Americans.
Instead we must embrace a budget that provides a proven pathway out
of poverty to prosperity for all Americans.
We must, increase funding for job training by increasing funding
for the Workforce Investment Act to $4.5 billion. Green jobs innovation
should be a priority of this Congress, and we should provide $1.5
billion to reauthorize 21st Century Community Learning Centers.
We must address the chronically unemployed who have grown by 441%
since 2008 by providing $16 billion in emergency funding to extend
Unemployment Insurance to those who have exhausted their benefits.
We must increase support for our States, whose budgets have been
drastically cut due to the recession. We must increase, not cut,
funding for Community Service Block Grants, Community Development Block
Grants, and Social Services Black Grants.
We must ensure that every American has a roof over their head by
funding $2 billion in the Affordable Housing Trust Fund, that children
have access to early education via Head Start, and that every community
has access to a health center.
Further we must commit to increasing support for federal nutrition
programs to address the stunning growth in enrollment in the SNAP and
WIC programs so that we lift the specter of hunger from the shoulders
of the American family.
Ex-offender re-entry programs in the Departments of Justice, Labor,
Education, and Health and Human Services must be fully funded so that
states can develop and maintain comprehensive programs to support the
safe and productive re-entry of the formerly incarcerated.
We must also make sure that our communities are safe by restoring
funding for COPS hiring and COPS programs.
Finally, we must make sure that our commitment to the fight against
HIV/AIDS at home and abroad is strengthened.
In order to carry out the Administration's new National AIDS
Strategy we must provide a minimum of $610 million to support the
Minority AIDS Initiative, and an additional $1.95 billion for the CDC's
prevention programs, while ensuring that we fully fund the Ryan White
CARE Act and eliminate waiting lists for lifesaving AIDS treatment
through the AIDS Drug Assistance Program.
We must meet the bipartisan commitments to fight global AIDS that
Congress and President Bush made in 2008 by providing $7.25 billion for
the President's Emergency Plan for AIDS Relief and $2 billion for the
Global Fund to Fight AIDS Tuberculosis and Malaria.
These small investments pay huge dividends in terms of the number
of lives saved, the economic and health benefits that accrue to
countries we help, and the goodwill that these programs generate.
We can do all these things and more, but first we must have a
serious discussion about our priorities and how we can pay for them.
Mr. Chairman, I support reducing the deficit. But cutting non-
defense discretionary spending alone will not solve the problem. We
need to talk about raising revenues, about repealing tax cuts to the
most wealthy, and ending the longest war this country has ever faced.
Americans want a land that is rich with opportunity for all and not
just the privileged few.
We cannot and should not judge the success of our country by the
size or health of the stock portfolios of the super rich or how easily
multinational corporations avoid paying taxes by sheltering their
profits in offshore havens.
The only way we can measure the success of our country is by
looking at the success of the middle class, and at the effectiveness of
our efforts to reduce and eliminate poverty in America.
Instead of a government by lobbyists dedicated to the wellbeing of
the rich and the privileged, we must recommit our nation to a
government by the people that is committed to investing in the future
and wellbeing of all Americans.
My colleagues and I in the Democratic Party stand ready to present
our ideas to balance the budget and invest in our country again.
I urge all my colleagues to join with me and stand together for
future of our nation and for all our people.
I thank the Committee once again for the opportunity to share my
testimony and I respectfully request that my full statement and a
detailed list of the budget priorities I have outlined be included in
the record.
community and regional development (450 and 550)
I urge an increase to full funding of the Community Development
Block Grant to $4.4 billion and funding of $700 million for Community
Services Block Grants. I also urge support for the President's request
of $75 million for new Veterans Affairs Supportive Housing vouchers.
Additionally, I recommend in function 550 an increase in the HOME
Investment Partnerships Program to $1,825,000, a funding of the Low
Income Home Energy Assistance Program at $5.1 billion, and providing $2
billion for the Affordable Housing Trust Fund. Furthermore, I advise
increases of $250 million to the Choice Neighborhoods Initiative and
$150 million to the Sustainable Communities Initiative.
healthcare (550) and international affairs (150)
I recommend the Division of Viral Hepatitis be funded at $50
million, the President's Emergency Plan for AIDS Relief received an
additional $1.651 billion to $7.25 billion total. I also urge an
additional $700 million for the Global Fund to Fight AIDS,
Tuberculosis, and Malaria, providing and additional $200 million to the
Minority AIDS Initiative for a total of $610 million, and fully funding
Community Health Centers at FY 2010 levels.
education, training, employment and social services (500)
The Green Jobs Innovation Fund should receive $120 million, 21st
Century Community Learning Centers merit $1.5 billion, and I recommend
$1.2 billion for Career and Technical Education. Pell Grants should
also be funded at $180 billion, TRIO at $950 billion, and Historically
Black Colleges and Universities at $95 million.
income security (600)
Given the continuing economic crisis, I urge providing $16 billion
for Emergency Unemployment Initiatives through Emergency Funding and
restoring Supplemental Nutrition Assistance Program to the President's
proposed levels. Additionally, I recommend $4.5 billion for the
Workforce Investment Act, $1.8 billion for Job Corps funding, and $8.1
billion for Head Start.
community safety and justice (750)
Within function 750, I recommend $298 million for the COPS hiring
initiative, $203 million for other programs within COPS as well as
providing $5.2 million to the Legal Services Corporation.
general government (800)
I recommend providing $1 billion to the Internal Revenue Service to
fund closing the tax gap, $500 million to completely close off shoring
of corporate profits. Additionally, I urge $100 million in funding for
Way of Small Business Tax Compliance and $400 million for its general
enforcement.
Prepared Statement of Hon. Ben Ray Lujan, a Representative in Congress
From the State of New Mexico
Dear Chairman Ryan and Ranking Member Van Hollen: As our uncertain
economic times continue, it is as important as ever that this Congress
craft a fiscally responsible budget that invests in our most urgent
priorities and the vision we all share for the direction of our
country. As we confront the realities of our federal budget, we cannot
undermine the nascent recovery by making arbitrary cuts to programs
that drive economic growth or support our struggling middle class. Our
fiscal 2012 budget must honor the commitments we have made to our
seniors and to those seeking work, but must also continue laying a
foundation for a stable, secure, and prosperous future.
As the interest payments on our national debt continue to increase,
it is clear that immediate action is needed to address the
sustainability of our federal budget deficit. Our approach to the
deficit must be effective, but also cognizant of the fragile state of
our economy and the middle class. I strongly opposed the extension of
the 2001 and 2003 Bush tax cuts for millionaires and billionaires last
year because I believe it is inappropriate to extend extra tax breaks
for the wealthiest one percent of taxpayers at a time when extreme
budget cuts are being considered for many vital safety net programs.
The House budget for the next year should put an immediate end to these
expensive and unnecessary tax cuts. Further, the House should return to
the responsible pay-as-you-go budgetary practices that were enforced in
the 111th Congress and prevented new government spending or revenue
reductions from jeopardizing our nation's future economic stability. We
must get our deficit under control before debt payments increase to the
point of being insurmountable.
With so many Americans seeking additional work, we need innovation,
courage, and a commitment to develop new technologies more now than
ever before. Our ability to get our country's economy back on track
relies on our ability to change the way our country brings new ideas
and businesses from the drawing board to the showroom floor. We must
harness the incredible innovation of the great National Laboratories in
my home state of New Mexico. By directing investments towards the
research and development projects done by the labs at Los Alamos and
Sandia, we will reap enormous benefits down the line. The labs are
working on new technologies that will make America safer, more energy-
efficient, and environmentally sustainable. The technologies under
development at the labs include new ways to transport and store
renewable electricity more efficiently as well as the next generation
of airport screening technology. We must invest in their research
capabilities as a source of jobs today and of innovation for the
future. In order to reap the full rewards of these investments in
research and development, we should fund technology maturation programs
that encourage promising new technologies, often in partnership with
private entities. Without this important step many promising
technologies are left undeveloped.
If our goal is a stronger, better economy--education is how we get
there. As global competition in the development of advanced
technologies increases, our country risks losing its preeminence in the
global community for innovation in the sciences, mathematics, and
engineering. As a Congressman from a minority-majority state, I know
firsthand of the severe shortage of Hispanic and Native American
students in science, mathematics and engineering fields. The continuing
under-representation of Hispanic and Native American students and the
growing shortage of scientists, mathematicians and engineers require
serious investment in the development of STEM education pipelines for
minority communities. The higher education needs of our Native American
and Hispanic students are often unique, and Tribal Colleges and
Universities and Hispanic Serving Institutions provide vital
educational opportunities for these under-represented communities. As
you draft the FY12 Budget, I urge you to resist weakening our edge in
technological innovation and support strong investments in our nation's
STEM education programs and in our Tribal Colleges and Universities and
Hispanic Serving Institutions.
In the difficult economy it is more important than ever to train
workers for careers in emerging industries--especially clean energy.
With investments in clean energy, we can create new jobs in a variety
of industries and get our economy back on track. I ask that you
consider targeting funding toward investments in renewable energy
production as well as energy efficiency initiatives that can grow the
domestic clean energy industry. I urge you to consider providing
funding to community college clean energy training programs in wind,
solar, geothermal and biomass energy sectors; energy-efficient
construction and retrofitting.
As our economy continues its recovery, I am concerned with the
effects of rising oil prices on transportation and production costs.
While the global stock of petroleum has remained stable, recent unrest
in the Middle East has spurred a dramatic increase in fuel prices. Last
year, Congress passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act to provide regulators at the Commodity Futures Trading
Commission and the Securities Exchange Commission with necessary
oversight capabilities over the oil and natural gas markets. We must
ensure that these vital regulatory agencies are adequately funded and
staffed to monitor the markets and prevent speculative practices that
result in higher prices and instability. Additionally, as the United
States diversifies its energy supply toward new sources of domestic
energy, clean burning natural gas will play a critical role in
providing a safe and reliable fuel source to generate electricity and
to power our vehicles. With sufficient investment, natural gas can be
used directly in vehicles and produce significantly less emissions than
traditional gasoline. Our nation will benefit from cleaner modes of
transportation, which will reduce pollution and improve overall air
quality in our communities. Production and use of natural gas vehicles
has the potential to create thousands of American jobs and spur
regional economic development. To support accelerated deployment of
natural gas vehicles, we must support the build-out of natural gas
refueling infrastructure. Making natural gas refueling stations
available and accessible to all drivers encourages the use of natural
gas vehicles and underscores our commitment to reducing harmful
emissions.
An additional threat to our economic recovery is the troubling
financial state of our local and municipal governments. Many of the
leaders of small towns and rural counties in my district have been
forced to cut their budgets for basic services and longstanding
infrastructure needs. These local governments are facing a number of
threats to their budgets simultaneously--the weak economy has decreased
tax revenue while state governments have cut back on local support and
the municipal bond market has frozen. For our economy to thrive, we
must support these local governments as they provide our constituents
with good jobs supporting our communities. I urge you to increase
funding for programs such as Community Development Block Grants and the
Payment in Lieu of Taxes program. These programs provide the seed money
that spur local economic development and provide the services that
support healthy and prosperous communities. Additionally, we must
continue to support the workforce needs of our local police forces,
firefighters, school districts, and health departments so that they can
continue to keep our neighborhoods safe, clean, healthy, and educated.
We must remember the unique needs of our returning veterans. About
a third of Iraq and Afghanistan veterans are estimated to have a
serious mental-health problem such as depression or Post-Traumatic
Stress Disorder. As many as 7,000 New Mexico veterans are homeless.
Many have lost their jobs after extended deployments and are forced to
start over once they return home. They not only need the health care
they are entitled to, but we need to provide them with access to higher
education and job training and offer the resources to help them
successfully reintegrate into their families and communities. In
recognition of the service provided by our veterans, this Congress must
generously support the Veterans' Health Administration and the Centers
of Excellence for Veteran Student Success.
In New Mexico, my constituents continue to address the aftermath of
severe winter weather in early February. During the storm, the effects
of historic cold temperatures were exacerbated by a statewide shortage
of natural gas to residential and commercial gas customers. To this
day, many New Mexicans are struggling to pay for the expenses of broken
pipes, flooded homes, and degraded natural gas transmission
infrastructure. The lingering effects of this disaster, which President
Obama recently declared to be a national emergency, are a reminder of
the need for more sophisticated natural gas and electrical
infrastructure as well as for adequate support to those affected by the
occasional failures of those networks. Programs designed to provide
support during natural disasters, such as the Federal Emergency
Management Agency, and resources to help low income communities provide
heat during the winter, such as the Low Income Housing Energy
Assistance Program, are life-saving necessities and should be exempted
from larger efforts to cut government spending.
Millions of Americans rely on Social Security and Medicare to make
ends meet and to get the health care they need. Seniors in my district
are concerned about the future of these programs and their ability to
meet future obligations. The concerns of my constituents have been
exacerbated by rhetoric from some in Congress suggesting that Social
Security should be ``reformed'' by privatizing individual accounts.
This proposal has been rejected by the American people and would do
nothing to provide additional income security for seniors. These
proposals would put Social Security in the hands of the same Wall
Street banks that plunged our economy into a recession by taking
excessive risks and engaging in unscrupulous lending practices. My
constituents are opposed to these efforts, and I believe that our
budget should reflect the need to keep our promise to New Mexico's
seniors. Instead of endangering these programs and threatening benefit
cuts, we must work in a bipartisan way to make common sense adjustments
that will strengthen Social Security and Medicare for future
generations. I urge you to reject efforts to endanger the capability of
Social Security and Medicare to provide for our seniors into the
future.
Thank you for your attention to these important issues as you craft
the Fiscal Year 2012 budget. Investing in priorities that will create
jobs and strengthen the middle class are critical to our efforts to
build a sustainable economic recovery that benefits people in New
Mexico while also reducing our budget deficit.
Prepared Statement of Hon. Steven M. Palazzo, a Representative in
Congress From the State of Mississippi
Thank you Mr. Chairman, and Ranking Member Van Hollen, for the
opportunity to testify today.
Our nation is on the brink of an overspending-induced disaster. Our
national debt is at an all-time high--over $14 trillion. We are now in
our third straight year of trillion dollar deficits and will see four
straight in fiscal year 2012. Over the next decade this overspending
will cause us to spend over $900 billion per year in interest payments;
in essence the minimum payment on our national credit card. Before the
economic crisis, our highest national deficit had been $458 billion, or
one-third the estimated deficit for our current fiscal year.
As a CPA and former small business owner, I understand what it
means to balance a budget and meet payroll. It requires discipline and
it is not easy. As the father of three children I know what it means to
make tough choices when times are tough. Our nation must show similar
discipline. While it may not be easy, cutting spending to lower our
deficit, and eventually balance our budget, must be our primary goal.
It is not right for us to saddle our children and grandchildren
with these enormous amounts of debt. For years previous Congresses have
spent too much. Just like a family or small business cannot continue to
spend beyond its means forever, a nation cannot survive when it fails
to be fiscally responsible.
Let me be clear: Washington has a spending problem, not a revenue
problem. Higher taxes are certainly not the solution. They would lead
to negative economic effects that will stifle future economic growth
and make it harder to balance the budget. Moreover, the solution that
some propose--to increase taxes to fix our budget problems--reflects a
fundamental confusion of the proper role of government. It is the duty
of government to defend liberty for its citizens. Our founders devised
our government on the principles that it serves its citizens, not the
reverse.
Washington has lost touch with the American people--that was the
lesson in November and yet some still refuse to listen. We need to
alter our mindset when considering how much to spend. There are
opportunity costs to all federal spending. Instead of considering how
we can spend every last dime the government can borrow, we should be
asking what Americans could be doing with that money if it stayed in
the economy instead of being spent by the government.
To force Congress out of a mentality that assumes spending
increases are inevitable from year to year, we should also adopt a
zero-based budget mentality. While the Appropriations Committee will
allocate funding to specific programs, this Committee should find the
lowest amount of spending possible that can adequately fund our total
budgetary needs.
First among these needs is our national defense, and I urge my
colleagues to keep in mind that fact. If we keep overspending, our
interest payments will become an increasingly larger part of our
budget, which will severely hamper our ability to fund our own defense.
That would be an astounding turn of events in our nation's history. The
reason our nation reached superpower status in the world is our
preeminent military and the ability of Americans to earn a living and
build strong communities, but decades of irresponsible federal spending
could crumble our status as a superpower.
I also urge the Committee to include mandatory spending reforms in
the budget resolution. Programs like Medicare and Social Security
provide an important service for Americans, a service that has been
paid for through taxes during one's working years. However, due to
demographic trends, those programs will not be available for younger
generations. In 2012, Medicare Part A will begin to run annual
deficits. Just two years after that, in 2014, Social Security will
begin running annual deficits.
We need to ensure future generations can enjoy these programs. If
we want to preserve these programs for the children and grandchildren
of today's retirees, these programs must be reformed now. Otherwise
they will go bankrupt and leave all Americans out in the cold. I urge
the Committee to strengthen these programs by making them solvent, but
without affecting retired Americans or those near retirement.
I can certainly understand the fact that there are many different
spending philosophies in Congress. However, deficit spending takes
money out of the pockets of working families and small businesses at a
time when we need more capital in the economy. We need to encourage
private sector job creation, not grow bureaucracies inside the beltway.
In closing, Mr. Chairman, you have a very difficult job to do. I
urge you and your colleagues on this Committee to take bold steps to
reign in our deficit and curb our national debt. There are no easy
choices when dealing with our long-term budget problems. But the time
has come to make hard choices to ensure that our children are not
sentenced to a lifetime of trillion dollar deficits. The American
people expect us to make tough decisions and they deserve nothing less.
Thank you, Mr. Chairman
Prepared Statement of Hon. Donald M. Payne, a Representative in
Congress From the State of New Jersey
Mr. Chairman Ryan and Ranking Member Van Hollen, thank you for
convening today's hearing.
Our national debt recently reached $14 trillion and our deficit
continues to rise annually. However, as you draft the FY 2012 budget,
be reminded that in addition to our economic deficit, we have a job
deficit which continues to worsen in part by an ever growing education
deficit. Yes, we must work to rein in on spending. But, we must not,
and cannot, indiscriminately cut funding in the areas of education,
infrastructure, and employment, which will hamper our immediate and
future economic growth. As we remain vigilant in cutting the debt and
reducing the deficit, we must remember that the most powerful driver of
both is a growing economy.
During this recession, unemployment has impeded economic growth.
One of the challenges in addressing unemployment has been the rapid
decline in certain occupations and industries and our labor marker's
inability to meet the demands of new occupations and industries. More
than two-thirds of workers in occupations and industries that are
growing have at least some post secondary education, compared to one-
third of workers in occupations and industries that are declining. The
demand for post secondary education, coupled with the rapid increase in
baby-boom retirements, is predicted to result in a shortage of more
than 14 million college educated workers by 2020. This is the deficit
that should garner our national attention. We can only address this
through our continued focus on education, training, employment, and
social services, which only accounts for 2 percent of our federal
budget. For the sake of our progress as a nation and our global
competitiveness and full recovery from this recession, I encourage an
increase of funding to support these areas and strongly oppose any cuts
to the already existing 2 percent.
I strongly oppose the adaptation of ``H.R. 1'' style cuts to the
FY2012 budget. Specifically, I oppose cuts to employment and training
programs, which serve millions of Americans in diverse communities
daily. I oppose proposed cuts to Title I programs, which provides
supplemental support to help districts and schools meet the needs of
low-income children. I oppose cuts to School Improvement Grants, which
provide important resources for states to turn around their lowest
performing schools. I oppose cuts to Head Start programs, a vital tool
which levels the playing field for millions of low income preschoolers
nationwide. I oppose cuts to Pell Grants, an investment which has
historically provided access to higher education across the economic
spectrum and continues to serve as a contributing factor to the
creation of a more competitive workforce. I oppose cuts to TRiO
programs, which send the largest amount of low income students to, and
through college, resulting in productive, responsible, taxpaying
citizens. All mentioned programs, in fact, do just that: create a
foundation which ultimately results in added growth to our economy.
I also oppose cuts to infrastructure projects, which have improved
our communities and neighborhoods and created millions of jobs.
Specifically, I oppose cuts to the Community Development Block Grant
program, which creates over 100,000 jobs in construction, renovation,
and community services each year and generates over $300 million
annually in program income for cities and states. Such cuts also affect
our commerce and transportation structures, which would further cripple
our already challenged economy.
Further, I am deeply concerned that many of the calls for cuts in
international spending are based on the belief that the United States
spends far more than it actually does. Annual polls by the University
of Maryland show that Americans vastly overestimate the percentage of
the federal budget allocated to foreign aid, with a median estimate of
25 percent. When asked how much they think would be an appropriate
percentage, the median response is 10 percent--a response that has
remained unchanged for the past fifteen years. In reality, of course,
foreign assistance accounts for about 1 percent of the federal budget.
Also of great concern are the negative consequences cutting the 150
budget would do to our job growth here in America. Since more than one
in every five U.S. jobs is linked to exports and imports of goods and
services, we must support the work of our export agencies in advocating
for U.S. commercial interests overseas and creating new and stable
markets for U.S. exports. As the U.S. Chamber of Congress wrote to
House Members during consideration of H.R. 1, approximately half of all
U.S. exports go to developing countries, and our contributions to
international financial institutions play a vital role in helping
developing countries become reliable trading partners.
On an global-health level, it is troubling that the House budget
bill includes deep cuts in critical funding for life-saving AIDS
medication, childhood vaccines, malaria prevention and treatment, and
agriculture programs that help teach people living in poor countries
how to grow more food for their families and lift themselves out of
extreme poverty. These programs, which have cut malaria deaths in half
in many countries across Africa and saved the lives of millions of men,
women and children infected with HIV, make up just a tiny fraction of
the US budget--less than 1 percent--but they are literally the
difference between life and death in some parts of the world. An 8% cut
for PEPFAR would directly impact a program to prevent HIV from passing
from mother to child, just as we are on our way to ensuring no child is
born with HIV by 2015. Approximately 20,000 babies will be born with
HIV as a result of budget cuts that will deny HIV positive mothers the
simple, affordable treatment that can stop the virus from passing from
mother to child. Half of those babies born infected with the virus will
die before their second birthday.
The House's cuts to overall maternal and child health funding will
mean that two brand new vaccines to fight pneumonia and diarrhea--the
two biggest disease killers of kids in the developing world--won't make
it out to all the children who need them. Overall, millions of children
won't be vaccinated against diseases that are easily dealt with here,
but are the biggest causes of childhood death and disability in Africa.
Vaccines represent some of the best investments in global health
because they are affordable and, once a child is vaccinated, he or she
is protected for life.
I strongly support President Obama's decision to consider Function
150 as part of the national security budget, in recognition of
overwhelming evidence that defense, diplomacy and development must go
hand in hand. Whether in Iraq and Afghanistan, where U.S. troops have
been engaged in combat operations, or Haiti and Sudan, where complex
humanitarian emergencies threatened to deteriorate into large-scale
violence, USAID's operations are every bit as important as the U.S.
military's to protecting the health and safety of American citizens.
The State Department/USAID core budget request of $47 billion
represents a 1 percent increase over the comparable FY 2010 levels. The
portion of that request for foreign assistance--$32.9 billion--limits
growth to 0.5 percent over 2010 levels while making hard decisions
about program funding in many critical areas. For example, the
President's budget cuts $115 million (15%) in assistance for Europe,
Eurasia, and Central Asia, eliminates six bilateral country programs
($4.5 million), cuts foreign military financing (FMF) to 16 countries
by 50 percent or more ($39.5 million), and decreases development
assistance to over 20 countries (saving $144 million).
The President's FY 2012 International Affairs budget request
reflects tough choices and significant savings in a difficult economic
climate. In a world characterized by great turmoil and uncertainty, the
budget request represents the resources needed to protect Americans and
American national security interests around the globe. I strongly urge
support for the President's FY 2012 budget request for the Department
of State, USAID and related agencies.
Again, I urge all to discuss cuts in a manner that sets us up for
sustainable economic security, superior educational opportunities, and
a stronger national presence through humanitarian efforts and solid
alliance-building. To do the opposite would result in further
devastation.
Prepared Statement of Hon. Stevan Pearce, a Representative in Congress
From the State of New Mexico
Mr. Chairman, thank you for holding this hearing. With the entire
nation engaged in the spending debate, now is the time to strike when
the iron is hot. Congress has a tremendous opportunity to fundamentally
change the expenditure of taxpayer dollars so it is accountable, within
the federal government's means, and fairly distributed so as not to
hamstring struggling, rural, western states.
The reality of our nation's spending is light-years past the point
of talking about solutions, and we've now reached a critical mass. It's
time to put words into action and I think the chairman of this
committee feels the same. I suspect his budget will reflect that
sentiment.
You would have to ask yourself exactly what the basis is of all of
the discussions that we are having in committee and on the floor of the
House, and of those discussion our constituents are having in their
communities. I'd like to make things as simple as possible to
understand, and much of this can be boiled down into simple
subtraction. Annually, the federal government takes in $2.2 trillion
dollars and spends $3.5 trillion dollars. Over time this deficit has
snowballed into a massive debt. It's that debt we must take head on and
grow our revenue. By growing revenue, we move people out of the $3.5
trillion column.
But, we must be smart about where we grow and where we cut. Western
states, those that have the highest concentrations of federally owned
lands suffer immensely when budgets are cut and local revenue cannot be
tapped for local expenses. This is a considerable disadvantage compared
to the rest of the nation and a situation not many states fully
understand. In moving forward, the budget must reflect the hardships
each region of the nation experiences to the appropriate scale. As long
the federal government owns major tracks of land, as is the case in
many western states, I fear these states will receive a proportionally
lower level of consideration from the federal government.
There has been some evidence of this in our current discussion on
appropriations running through the remainder of FY2011. One such
example is, regarding an important program to the Navajo Technical
College in Crownpiont, New Mexico, which receives funding through
Perkins Section 117. Perkins Section 117 has been misidentified as an
earmark and is now facing elimination through H.R. 1 and the two short-
term continuing resolutions. Section 117 is not an earmark though in
that it is authorized by Congress as a competitive discretionary grant
program. It is open to applications for any accredited tribally-
chartered postsecondary career and technical institution, and since the
program's inception in 1990, Congress has consistently appropriated
funding each fiscal year pursuant to the existing authorization.
Further, in the relevant section of the Perkins statute, attached,
neither Navajo Technical College nor the United Tribes Technical
College, the current recipients of Section 117 funding, is named in the
legislation.
Additionally, my concerns extend to treatment of the National
Laboratories. Under the current funding process which will take us
through the remainder of FY2011, the National Laboratories face
significant budget cuts. Although much of their funding comes from the
Department of Energy, the National Laboratories have a distinctly
defense and national security mission. They maintain our weapons
system. They work directly on projects for the Department of Defense.
They perform in this manner in concurrence with their work through
funding from and under the direction of the Department of Energy.
I look forward to seeing the committee's budget and it is my hope
that it will reflect the smart budgeting levels that returns the
federal government to sensible spending levels without harming our
states to the west.
Prepared Statement of Hon. Mike Quigley, a Representative in Congress
From the State of Illinois
Mr. Chairman and Mr. Ranking Member, thank you for the opportunity
to testify today.
Our country is on an unsustainable fiscal path.
The CBO projects that by 2030, the federal government will be
spending 30 percent of GDP but collecting only 20 percent in tax
revenue.
By 2050, the government will be collecting that same 20 percent,
but spending 45 percent--our deficits will only get worse from there.
Rising health care costs to blame--since 1970, health care spending
has quintupled as a percent of our budget.
Its growth closely correlates with the projected growth in deficit
spending.
Deficit spending will also generate its own costs--eventually, the
accumulated costs of past deficits will be the drivers of new ones.
The CBO projects that just 9 years from now, the interest we'll pay
on previous borrowing will cost $778 billion.
This will account for all of 2020's projected $685 billion deficit
and then some, crowding out important programs.
For a country with the proud history and vast resources of the
United States, this is unacceptable--it is unacceptable because
government's mission matters.
Strong national defense and accessible health care are among the
priorities that will have to fall by the wayside if our fiscal path is
not adjusted.
Step one in righting our course is agreeing on what defines fiscal
sustainability.
Some would have us believe that any deficit whatsoever is a threat
to government's solvency.
Others would prefer to ignore deficits altogether and continue
spending vast sums of borrowed money.
I disagree with both of these extreme positions.
While deficits can help smooth dips in the economy and put
unemployed Americans back to work, they can also exacerbate future
deficits and slow economic growth.
Either way, this should be a choice that future leaders can make if
so needed, and not be one forced upon them by the reckless fiscal
planning of previous generations.
As it stands now, we are leaving them no choice at all.
Step two must be fixing our broken budget process.
Trillions of dollars in hidden spending persist with close to zero
accountability.
Huge organizations like the Department of Defense cannot keep track
of their cash flows.
Right now we're flying blind, and that's making it tougher to find
savings in the budget.
Greater transparency and accountability can help us fix our budget
and then help us keep it on a sustainable path.
In November 2010, I released Part One of a multi-part series on
reinventing the federal budget.
I am submitting Part One, which discusses these reform proposals,
as my written testimony for today's hearing.
[The report may be accessed at the following Internet address:]
http://quigley.house.gov/images/stories/pdf/
quigley_reinventing_government_the_federal_budget_part%201.pdf
Step three in this process is making hard decisions on how to move
forward with a responsible deficit and debt reduction package.
Guiding these decisions must be a sense that pain will be felt on
both sides.
There can be no sacred cows--everything must be on the table--and
both sides must negotiate in good faith.
Many domestic spending programs are duplicative or just plain
wasteful.
Defense spending goes so far beyond what's reasonable that the
Defense Department doesn't even want what we're giving them.
The tax code is full of hidden spending programs consume $1.2
trillion in taxpayer dollars each year.
And entitlement programs should be reformed to reflect changing
times and lifestyles.
My point is this: each of these areas of the budget must be
targeted in a deficit reduction plan--15 percent of the budget cannot
account for 85 percent of the savings.
Government's mission matters, and we should keep that in mind as
work to plan a sounder fiscal future.
In the next month, I will release Part Two of my report series on
reinventing the federal budget.
Part Two will make specific recommendations for each area of the
budget, all told amounting to hundreds of billions of dollars in
savings.
Thank you for the opportunity to testify, and I yield back.
Prepared Statement of Hon. Betty Sutton, a Representative in Congress
From the State of Ohio
Thank you, Mr. Chairman, for the opportunity to present testimony
to the Budget Committee today.
I am very proud to have served on the Budget Committee in 2007, my
first year in Congress, and I am pleased to speak about the budget
issues of most importance to Ohio's 13th Congressional District.
The budget is a moral document that reflects the priorities and
values of our nation. The proposed 2012 Budget makes considerable
sacrifices, while continuing to make critical investments that create
jobs and keep our economy growing.
While we all appreciate that we need to address our fiscal
challenges, we need to be smart; eliminating programs that create jobs
is the last thing we need to do. We need to make smart cuts, but every
cut is not the same. Every cut does not equate with efficiency, nor
does every cut strengthen the overall health of our economy. And
similarly, every dollar spent does not equate with waste. We need to
make smart, efficient cuts and we need to make smart investments.
For example, regarding some smart cuts we should make immediately,
we need to end tax subsidies to big oil companies. This would save the
taxpayers around $43 billion over ten years. In a time where middle
class families across our nation struggle to make ends meet, we can no
long afford to give these tax breaks.
As a member of the Armed Services Committee, I look forward to the
upcoming Defense Authorization process and advocating sensibly on
behalf of our brave men and women and in support of the manufacturing
and industrial base in my district. However, I have also already
supported an amendment to H.R. 1 that would reduce funding by $18.75
million for operations and maintenance throughout the Department of
Defense, and I look forward to working with members of the Committee to
find other areas to make smart cuts where possible to save taxpayers
money.
I urge the Committee to support $810 million for the Staffing for
Adequate Fire and Emergency Response grant program and the Assistance
to Firefighters Act grants. This is flat and level funding as enacted
in FY 2010. Now more than ever, these grant opportunities are important
to prevent the layoffs of needed fire fighters and to ensure that our
Fire Departments will have the necessary equipment and training to keep
our families and communities safe.
I support the President's request for an additional $302 million
for the Community Oriented Policing Services, also known as COPS
funding, which will bring total hiring program funding to $600 million.
This will add an additional 4,500 police officers on our streets to
prevent crime. Every day our first responders work in our communities
and provide essential services we need to keep our communities safe.
The federal budget must encourage job creation, provide funding for
research and development, and support programs to ensure our workers
have the education and skills necessary for the jobs of the future.
I support the President's request for $148 billion for research and
development. To give an example of how important this is to our
District and our future, The University of Akron, a global leader in
polymer research, is now home to the first bachelor's degree program in
corrosion engineering in the nation. The cost of corrosion in the U.S.
is an astounding $276 billion each year. Through research in corrosion
mitigation, we can help curb drain on our economy. The Department of
Defense has completed 160 corrosion demonstration projects showing a
return on investment of 50 to 1. Research investments in these areas
lead to job creation, new marketable technologies, and in the case of
corrosion mitigation, substantial savings for the federal government
and taxpayers.
I also support the President's request for $200 million to support
the Innovation Fund, which will offer funding for high-tech
entrepreneurs in the gap--when personal assets are exhausted and before
later-stage financing kicks in. This program was modeled after the
successful Innovation Fund founded by the Lorain County Community
College and its Foundation in Elyria, Ohio. Since 2007, the Innovation
Fund, and its partners have provided $4.1 million to 60 companies that
have attracted more than $41 million in subsequent investment and
sales, and created 100 new jobs.
I also urge the Committee to support the President's request of
$143 million for the Manufacturing Extension Partnership. This program
has helped create or retain over 466 jobs in my district alone over the
last four years. And it is the only national initiative to support,
strengthen, and grow manufacturing.
For decades, the Community Development Block Grant program has been
an essential component to help local governments retain small
businesses, make critical infrastructure improvements, and promote
neighborhood development. I cannot stress enough the positive impact
these grants have had on my congressional district and I urge the
Committee to maintain the FY 2010 level of $3.9 billion in formula
funding for the program.
It is important that our men and women who serve our country
receive the world-class care and benefits they have earned. And I
strongly support the President's request for $939 million in funding to
help end Veteran homelessness, an increase of 17.5 percent over the
2011 level.
No one, especially a veteran, should ever have to live without a
roof over his or her head.
There are 890,300 veterans in Ohio and 22.7 million nationwide, and
they deserve nothing less than our full support. I support the
President's request of $6.2 billion for veterans' mental health care.
Far too many of our service members return from Iraq and Afghanistan
with Post-Traumatic Stress Disorder (PTSD) and Traumatic Brain Injury.
The VA estimates that, in 2012, it will provide care to nearly 537,000
veterans returning from Iraq and Afghanistan. Taking care of our
service members, veterans, and their families, especially in times of
war, is of the utmost importance.
I will continue to support robust funding levels within NASA's
budget in areas such as Exploration Technology Development and Space
Environmental Testing that take advantage of the unique roles and
expertise of NASA Glenn Research Center and Plum Brook Station in
Northeast Ohio.
I also urge the Committee to fully fund the Great Lakes Restoration
Initiative. Restoring, protecting, and conserving our Great Lakes, and
Lake Erie in particular, is critical to maintaining public health, the
conservation of endangered wetlands and coastal areas, and maintaining
natural areas for sportsmen, anglers, and recreational users, and
economic activity associated with these activities.
As a member of the Natural Resources Committee, I support the
President's request of $900 million for the Land and Water Conservation
Fund. In the last decade, nearly $7.8 million in LCWF funding has been
invested in land acquisition to expand the Cuyahoga Valley National
Park, which is located in my district. Currently, the National Park
Service is using the Fund to acquire 580 acres surrounding Blossom
Music Center to aid in its expansion and protect its natural habitat.
I also urge the Committee to save the Children's Hospitals Graduate
Medical Education Payment Program that was eliminated in the
President's proposed budget. The proposal to eliminate this program
would be extremely detrimental to the children's hospitals in my
district, and detrimental to our national goal to strengthen the
primary care workforce and to ensure timely access to necessary, high
quality specialty care.
As one who has served on this esteemed Committee, I understand the
challenge we face as we balance the competing priorities before you and
make smart cuts to things we must live without.
However, I urge you as to keep the needs of working families in
mind as you make your decisions. We cannot afford to turn our backs on
hard-working Americans and those who want to work during these
difficult economic times.
Prepared Statement of Hon. Niki Tsongas, a Representative in Congress
From the State of Massachusetts
Chairman Ryan and Ranking Member Van Hollen, thank you for
providing me with the opportunity to testify before this Committee
about the need to craft a responsible budget, one that protects our
fragile economic recovery, makes critical investments in our nation's
future, and returns our country to the fiscally responsibly path we
charted during the 1990s.
As a member of this Committee for three years, I recognize how
challenging your task is and how critical it is to the well-being of
every single American that we get it right. The choices that lie ahead
of us are not easy. They require a more honest assessment of the
challenges that face our country than the House has engaged in thus far
this year. As you know, non-defense discretionary spending represents
the smallest fraction of federal spending, far smaller than defense
spending or entitlement spending, yet it has borne the full brunt of
cuts thus far. These cuts will significantly impact our nation's food
and drug safety, community development and services, border security,
criminal prosecutions, health, education, and global competitiveness-
and put our fragile economic recovery at risk in the process, according
to multiple independent economists-but will do little to address the
very serious fiscal crisis we face.
As conservative columnist David Brooks recently wrote, ``In
Washington, the Republicans who designed the cuts for this fiscal year
seemed to have done no serious policy evaluation.'' He wisely argues
that to be effective, ``the cuts have to be spread more or less
equitably among as many groups as possible,'' noting that the path the
House has taken to deficit reduction is ``as unsustainable as the
current tide of red ink.''
I was an early and strong supporter of the President's bipartisan
commission on the debt, which included several members of this
Committee. While I did not agree with all of the commission's
recommendations, I recognized that their report to the President
offered an important starting point for debate. Perhaps most
importantly, the report made a serious effort to tackle all parts of
the budget instead of allowing ideological lines drawn in the sand to
handicap its recommendations.
I believe the commission's approach should serve as a model as the
Committee crafts its budget: everything must be on the table. We must
address all manner of spending, including the tax expenditures and
loopholes that allow firms like Exxon-Mobil to pay less in taxes than
small businesses in my district. But the Committee should be extremely
careful that it not harm programs like Social Security, Medicare, and
Medicaid under the guise of deficit reduction.
During the last Congress, we proved that it is possible to
undertake significant entitlement reform without undermining bedrock
benefits upon which the American people rely, eliminating $500 billion
in wasteful spending while shoring up the long-term sustainability of
Medicare. In stark contrast, attempts to turn Medicare into a voucher
system that provides less and less coverage for seniors each year or to
privatize Social Security, leaving it vulnerable to financial crashes
like those that rocked Wall Street during 2008 and 2009, will
significantly increase costs for American taxpayers.
In conclusion, I want to thank you for providing this opportunity.
I look forward to working together to pass a budget that reflects a
responsible path forward and that makes serious attempts at reform
spread equitably across the entire federal budget.
Prepared Statement of Hon. Timothy J. Walz, a Representative in
Congress From the State of Minnesota
Thank you for the opportunity to testify here today In my view the
country faces two very serious problems as it relates to the federal
budget, which are interrelated--the growing national debt, and weak
economic recovery.
First, our current fiscal policy is unsustainable. The simple fact
of the matter is that we are currently spending far more than we are
bringing in. We are living on credit, and we need to start paying our
bills before they overwhelm us. Real solutions to the national deficit
must include three elements: we must make targeted cuts to eliminate
wasteful or unnecessary programs; we must continue to reform the way
government operates to make it more efficient and more accountable; and
we need to overhaul the tax code to close loopholes and restore a sense
of fairness to the system.
I believe strongly that addressing the deficit requires us to make
smart but significant cuts to spending. Over the last six months alone,
I voted for more than $55 Billion in cuts across the federal government
and I am certain more can be done. This will have to include the
Pentagon's budget, the largest agency in the federal government.
I am confident we can do that in a way that does not undermine
national security.
We have already taken the first steps in that direction with the
elimination of the V-22 Osprey, and the Marine Expeditionary Fighting
Vehicle--but we need to keep looking. At the same time that we are
making cuts, we also need to look for ways to consolidate and reform
government to make it more efficient. That is why I support a five year
discretionary spending freeze that will reduce the overall cost of
government relative to the economy By putting a cap on government
agencies overall budgets, we push them to make smarter use of the funds
available for achieving their goals by canceling out unnecessary
programs, and redirecting funding to where it does the most good. This
includes things like VA's Inspector General; last year, their office
produced $26 in saving from waste, fraud and abuse for every $1 spent.
Increasing funding for OIG actually frees up money to improve care for
our veterans without increasing overall spending.
Finally, if we want to be serious about tackling the deficit, we
need to pass fundamental tax reform When America's largest and most
profitable corporations can game the system to the point where they
don't pay any taxes at all--or worse yet, are getting Billion dollar
rebates--something has to change. And continuing to extend these
massive tax breaks for millionaires and billionaires leaves America's
small businesses and middle class families shouldering more and more of
the burden. It's time to restore a sense of fairness to our tax system
in a way that encourages growth and investment, and ensures that when
the tide rises, it raises all boats By following this commonsense
approach, we can get back to primary balance by 2015--the first step to
eliminating the deficit--without jeopardizing the economic recovery.
But H.R. 1 takes the wrong approach. The House Continuing
Resolution seeks to reduce the deficit by making indiscriminate cuts to
a small part of the federal budget. These cuts would hobble the
recovery and weaken our ability to compete in the global economy
without actually solving the problem. If enacted, the cuts included in
H.R. 1 would destroy about 700,000 jobs, worsening the unemployment
crisis and imperiling our still-fragile economic recovery. At the same
time, H.R. 1 turns its back on those still struggling with the economy,
including young mothers and homeless veterans Worse yet, the bill makes
us less competitive as a country going forward For generations, America
has led the world in innovation, especially in the health sector.
In southern Minnesota, we're proud of our own tradition of medical
innovation with Mayo Clinic.
But H.R. 1 includes billions in cuts to the National Institutes of
Health (NIH); it also makes significant cuts to research and
development programs, from the National Institute of Food and
Agriculture (NIFA) programs such as Soybean Genomics research at U of
M. H.R. 1 also cuts investment in our children by kicking over 200,000
kids out of the highly successful Head Start program.
While there can be no doubt that we need to make major changes to
our fiscal policy to bring our books back in order, the most important
thing we can do to improve the budget outlook is to grow the economy
and create jobs. There is no doubt that increasing unemployment now
will only make the deficit problem worse. We need to promote policies
that support economic growth and investment. This includes promoting
stability in the regulatory environment so that businesses have
confidence in their models and will invest. It also includes
encouraging credit markets to lend and make resources available to our
small businesses--the real engine of our economy.
Finally, businesses are looking to Congress for certainty in the
budget as well. We need to put the partisan gamesmanship aside and pass
a budget to get us through FY11, and start talking seriously about what
to do for FY12 and beyond.
The current budget deficit is a serious problem that needs to be
addressed. No matter how daunting it may seem, I firmly believe that
American political system is up to the challenge. Remember, we've done
it before--and we can do it again. We have to come together for the
good of the counry to pass a budget that makes smart cuts, improves
efficiency, reforms the tax system and grows the economy.
With that, I yield back the balance of my time.
Prepared Statement of Hon. Frederica S. Wilson, a Representative in
Congress From the State of Florida
Dear Chairman Ryan and Ranking Minority Member Van Hollen: On
behalf of the citizens of the 17th Congressional District of Florida, I
am honored to present my testimony to you today regarding our nation's
budget for the 2012 fiscal year. I know that you have many, many
difficult decisions to make as we face both a record deficit and debt.
Within those limitations, we still have the ability to have care,
compassion and courage in our deliberations. We must care for those who
cannot care for themselves. We must have compassion for individuals and
families who, despite their hard work and determination, find
themselves staring at record unemployment, home foreclosures, and
business failures. We must have courage to make the right decisions
that may be politically unpopular but necessary to save our country for
our children, grand children and great grand children. I remain ready
and willing to work with you and all of the Members of this august
committee in that regard.
As you make your deliberations, I respectfully and humbly request
the following recommendations.
We must protect our investment in education.
Before I became an elected official, I was a school teacher and
principal. Two of my children are principals. My parents emphasized the
importance of education. Education is the great equalizer for many
Americans, especially minorities. The greatness of our country is the
fact that you don't have to be wealthy, well connected or come from
privilege in order to be great. If you are willing to hustle, work
hard, and go to school, you can do great things.
The organization that I founded, the 5000 Role Models of Excellence
Foundation, is committed to guiding minority boys, through education,
to the success that college gives us. If not for the 5000 Role Models
of Excellence Foundation, thousands of little African American boys
would not be in college. Too many would be, instead, in prison, in
trouble, and unproductive citizens in America. I am proud of the
history and success of this program, and there are many more similar
organizations doing the same thing with little if any headlines in our
nation. With the reductions to the budget as proposed, thousands of
other after- and before-school programs will simply not be able to
ensure that another generation or two of children will get the
important guidance, mentoring, and organized leadership they so
desperately need.
Also, the House Budget's proposed reductions to the Head Start
program, the Pell Grant program, and to grant programs for worthwhile
after-school organizations cannot be sustained. The Pell Grant, which
has only been increased in funding in the last year after not being
increased for more than five years, enables hundreds of thousands of
low-income students to realize the more elusive dream of attending
college. The Pell Grant is need-based, meaning that you get it because
your financial situation warrants its use. The Head Start program has
enabled hundreds of thousands of children to learn how to read, write,
do arithmetic and be successful in elementary school. I served as the
first Educational Coordinator of Head Start in Miami-Dade County. As a
Head Start teacher, I wrote, produced, and starred in an educational TV
show called 3.4 Knock On The Door for training pre-school teachers. I
testified before the Committee on Education and Labor to save Head
Start from being abolished. Today--I ask again--preserve Head Start. It
is a precious jewel that helps our precious children.
We must preserve our funding for international relief programs,
specifically, programs supported by the U.S. Agency for International
Development.
As you know, the U.S. Department of State received $49.9 billion
for FY 2010; the President is requesting $52.7 billion for the next
fiscal year. In a hearing before the House Foreign Affairs Committee,
Secretary of State Hillary Clinton illustrated the deep cuts and the
elimination of redundant and outdated programs. This budget only
contains what is necessary to accomplish America's goals abroad and
advance American security interests.
H.R. 1, the Budget Resolution for the next fiscal year, would
reduce funding for this budget by a whopping 41 percent. This reduction
would, in particular, affect USAID's work in Haiti. You might not know
that USAID, along with other international organizations no longer
conduct universal food distribution in Haiti. However, USAID is still
working with the World Food Program to distribute to approximately 1.9
million Haitians who need food, including children under five, pregnant
and lactating women, school children, orphans and vulnerable people in
institutions. More than 24,000 people per day on average participate in
USAID's cash-for-work program across Haiti, with most of the money that
is distributed being used to purchase food, often for households of
five or more people. In addition to providing a direct economic
stimulus, these program help to prevent malnutrition for thousands of
Haitians. I shudder to think what would happen to those 24,000 Haitians
who receive USAID assistance, or the 1.9 million more that need food?
Furthermore, the budget for the Western Hemisphere's request is
$477.6 million. Of that total, Haiti is expected to receive $146.3
million. This request funds long-term development in infrastructure and
energy, food and economic security, health--and we know that cholera is
a huge problem in Haiti, and is one that could be solved with clean,
safe drinking water. The proposed reduction in this funding would leave
a dire impact upon the ability of eliminating the problem of cholera in
Haiti.
We must preserve our funding to protect Israel and our allies.
The State Department's budget found, and I quote, ``administrative
savings and efficiencies that will streamline operations.'' The State
Department also found savings from reprioritizing its foreign
assistance. The Secretary has clearly made many difficult decisions.
For example, the State Department has eliminated entire bilateral
programs in six countries. Foreign assistance for Europe, Eurasia, and
Central Asia has been reduced by $115 million. These cuts will make way
for higher priority funding--such as for Israel, Pakistan, and
``programs that are critical to containing transnational threats
including terrorism and trafficking in narcotics, weapons, and
persons,'' as the Secretary stated in her budget. During these
calamitous times in the Middle East, with Egypt, Libya and Tunisia
witnessing revolutionary change, our country cannot afford further cuts
to the budget that may affect the safety and security of Israel.
We must preserve funding for the Community Development Block Grant
program.
The Community Development Block Grant (CDBG) program the flexible
program that provides communities with resources to address a wide
range of unique community development needs. Started in 1974, the CDBG
program is one of the longest continuously run programs at HUD. The
State of Florida has received between $18 million to $35 million in
funds through the CDBG program, which has works to ensure decent
affordable housing, to provide services to the most vulnerable in our
communities, and to create jobs through the expansion and retention of
businesses. CDBG is an important tool for helping local governments
tackle serious challenges facing their communities. The CDBG program
has made a difference in the lives of millions of people and their
communities across the Nation. Congress has approved a 61% reduction in
this worthwhile program. This is simply unconscionable. Our nation's
local elected officials--mayors and county commissioners--cannot afford
the cut in this program that provides local flexibility to help save
communities.
We must preserve funds for Planned Parenthood.
The elimination of funds for Planned Parenthood would mean that
hundreds of thousands of women no longer have access to the valuable
information to prevent pregnancies and protect their health. Planned
Parenthood has been a reliable source of information about
contraception and reproductive health, at little or no cost, for more
than three decades. During a time of heightened sexual awareness by our
nation's teenagers and young adults, we need Planned Parenthood more
than ever.
We must invest in jobs.
The Comprehensive Employment Training Act, or CETA, worked wonders
to reduce unemployment during the presidencies of both Jimmy Carter and
Ronald Reagan. I believe that if our budget invested in a program,
whatever we called it, that would direct funds to cities, counties and
qualified non-profits like the CETA program once did, we could
immediately reduce unemployment, get people back to work, and get
vitally needed tax dollars to our local communities. We need to invest
in a federal direct-hire program to get people back to work, like the
CETA program, now.
I know, again, that you have many difficult decisions that you have
to make. I know that by working together we can make the correct and
smart choices that will create jobs, defend our nation, protect the
most vulnerable, grow the middle class, and reduce the deficit as we
embark upon a fiscally responsible future. The American people demand
and deserve no less.
[Whereupon, at 3:52 p.m., the committee was adjourned.]