tv OMB Dir. Shalanda Young Testifies on 2023 Budget Request - PART 2 CSPAN April 8, 2022 5:42am-6:57am EDT
thank you for you being here so we can ask you all these questions. i'm sure that in your 26 years of work in this field, you have developed enough experience to be called director of the budget office, thank you. >> thank you. >> gentleman yields back. per our agreement with director young, the committee will recess
hinson. >> thank you, mr. chairman, for holding this hearing and thank you, director young, for coming before us today. i would like to start off by thanking ranking member smith that raising taxes on working families in iowa, it raises taxes on our small businesses, on firefighters, on teachers, on shift workers building tractors and on the health care heroes who have dedicated their lives to making others healthy, especially through a pandemic. we will reward them with a tax increase. i just finished my fifth county tour across the district and held a town hall last night and what i heard on the ground and what i heard on that last night was the concern about rising prices. so whether it's farm repairs, farm inputs, the price at the pump for gas and increases in every day goods like bacon, eggs, milk and working families continue to struggle to put food on the table because of the administration policies.
we know increased federal spending is driving up these costs and yet the president's budget request proposes $73 trillion in spending over the next ten years with an impact on the deficit. that is a tab for the next generation to have to pay. we're leaving that for them. inflation at 7.9%, the highest it has been in four decades and the president's budget plans assumes inflation only 2.3% for the next foreseeable future here all the way to 2032. this is just out of touch. we heard why that is so. but i asked you about the same issue last year. here we are a year later with even worse inflation than what we had a year ago. so, my question is, why is the administration continuing to make these claims that are out of touch about inflation, low inflation here, high inflation with what we're paying at the grocery store and what consumers are actually facing because that's affecting iowans every single day. >> we hear you mrs. hinson and
hear your concerns. we might disagree on how to get inflation under control, but the president is concerned about these costs pressures on americans. you mentioned farmers. we have worked with the administration, for example, to ensure that those who work farms can, for example, fix their own equipment. we have found that there is not competition always -- >> right to repair is completely different issue from what i'm asking about here. i'm asking why specifically or not being accurate in your accounting of inflation here because i mean if you're making a budget projection based on numbers that are wrong, that is irresponsible to taxpayers. >> actually the numbers were in november, that's how budgets work. we have to close the books at some point and send you a budget. but, i hope you know that inflation both has an offsetting effect. both revenues usually go up with higher inflation as well as spending. therefore, the long-term projections are not impacted by
different inflation rate. you're right, it is higher than our estimates were in november when we affectionately call database. >> i hope going forward we can be cognizant of the fact of theb ins going forward. we work with you and your office being cognizant these numbers are not right is going to be crucial as we're making the right decisions. i'm glad you mentioned farmers in this administration because americans are struggling with the cost of fuel and this includes billions of dollars for evs and charging infrastructure. these taxpayer dollars do nothing to drive down the cost of fuel for iowans and on the campaign trail, the president came to iowa and looked iowans in the eye and quoting the president, lip service won't make up for nearly four years of retroactive damage that has desinated our trade economy and forced ethanol plants to shutter. we heard it is already not in this budget. but i'm wondering why. why is it not in this budget? why does the administration
break their promise here to iowans and americans to not support biofuels, domestic fuels, domestic energy production like ethanol? >> thank you for bringing this up. i'm sorry i didn't get to address this with mr. feenstra. this starts october 1. many of the increases in gas have to do with the russia/ukraine situation. we have to deal with that fluid situation before this budget even takes effect. so, we are happy with the $13 billion this congress provided to help with the assistance to ukraine, but the gas situation in addition to selling 60 million barrels will also be looking to other things in which to bring down cost to americans. but that is going to be before this budget takes effect. >> we're looking at projections here for many years out. i think iowans want to know why it is not included. if you're having conversations about other things in the future, why are biofuels
noticeably missing. we had two million encounters at the southern border and we saw increased funding for cpd and these cuts to propose cuts, and, again, why is that happening? >> 5% increase to dhs including for agents. many in our party will disagree. but we believe there is a necessity for additional personnel to ensure we have an orderly immigration system. in addition to that, we have an increase for immigration judges to make sure we move people through the legal system. so, we absolutely put forth what we believe is a balanced approach to deal with the border. >> gentle woman's time is expired. >> thank you, i yield back. >> i now recognize the gentleman from massachusetts mr. moulton for five minutes. >> thank you for being here with
us. a lot of my questions are about modernization. how we face the future and meet the challenges and the opportunities that it presents. can you talk to me for a second about how we're modernizing our military, our national security. here we are watching russian tanks get destroyed by drones on tv. one of the biggest threats that americans face from this ongoing war in ukraine is a threat of cyber attacks here at home. and our biggest adversary in the world is china. china has not only invested in future capabilities like advance missile systems, space systems and artificial intelligence but they've made important cuts to make those investments possible. we used to quite frankly be thrilled that china had a million man army because it wasn't that good. they cut that army to invest in future capabilities. how is the administration meeting that challenge? >> thank you for that. we are increasing the department of defense budget by 4%. it is in line with the national defense strategy. last year the administration was
new, still working on how we saw the military of the future. but we are investing more ai and we're investing in hypersonics. in addition to legacy equipment, f-35s, submarines that many, many of you are interested in. so, we have to do both. we have to invest in our traditional capability, as well as look to the future including our cyber threats. >> it's often been said that congress gets in the way of the cuts we need to make to invest in the future. would you agree with that? >> out of deference to my former place of employment, i'm just going to say this is the beginning of a process and i look forward to working with you throughout it. >> if you won't agree to my statement, i will. i think we have a lot of work to do here to make sure that we're not just protecting parochial interest at the expense of our national security. china is also trying to
outcompete us in foreign aid by attacking one of our strengths and that's the allies and the partnerships that we have around the globe. you can look at how much they are investing in places like africa. this budget puts $682 million towards ukraine support, is that correct? >> that is correct. but remember that is the longer term objective. what we're really using for enhancing aid now is the $13 billion congress thankfully provided to us earlier this month. >> it's amazing to compare $682 million that we're investing or proposed to invest in ukraine with the amount that trump proposed investing in ukraine when he tried to blackmail zelenskyy, which was exactly zero. director young, it's also important that we take this opportunity having passed this historic infrastructure bill to invest in the future of transportation. is it the administration's position that we should invest
in investments that have a high roi and a high return for the american taxpayer? >> that's what we believe. we also believe projects should have high benefit cost ratios and we certainly have put out guidance at the some that focuses in innovating and modernizing ways. >> highest rois in transportation which is frankly why the rest of the world is investing in it. china has been in the last 12 years the largest high-speed rail system in the world. are you familiar with the size of the united kingdom's budget compared to our own? >> i'm not actually. >> well, the united kingdom, a country that is 1/40th our size is investing $120 billion on a single high-speed rail line to the north of the country.
how does that compare with our investments in high-speed rail? >> clearly, mr. moulton, we have to work with congress as you've pointed out that represents many different parts of the country. >> i would just say if america is 40 times bigger than the united states, we shouldn't be moving around much more slowly than the rest of the world. can go three times as fast as we can on the interstate system on the new high-rail line. investing in more highways creates more traffic jams. investing in a lot of electric vehicles makes those traffic jams silent but we still have a lot of traffic jams. we passed this historic bill and i think the administration has an opportunity to make investments for the future. we can build more 1950s era trail, railways and i hope you take that opportunity. >> thank you. >> gentleman yields back and now recognize the gentleman from florida, mr. donalds for five minutes.
>> thank you, mr. chair. director, thanks for being here. i really do appreciate it. obviously, you know, a budget in five minutes we're not going to be able to deconstruct this entire thing. let's try to focus in. number one, the corporate tax agreement under your budget, under the president's budget goes up to 28%. is the administration's beliefa belief that an increase in the corporate tax rate will have no impact on an already inflationary environment with higher prices for consumers? >> we don't believe it will change the operations of how corporations make decisions, no, we don't. >> no, no. the question, director young, is, does the administration believe that higher corporate income taxes will have an -- will force an increase in prices in an already inflationary environment that a lot of people believe was unleashed by the american rescue plan from last february? >> mr. donalds, we do not believe that is the case. >> so the administration doesn't
think higher taxes will lead to higher prices on top of an already inflationary environment? >> for corporations, are you assuming they pass on their tax rates -- >> director, corporations always pass on cost increases. they're doing it with inflationary costs, they need to create their products to sell to consumers. when the price of freight is up, the cost of wheat is up. >> mr. donalds, we don't believe it will increase inflationary pressures. >> director young, does the administration acknowledge the fact that when the corporate tax rate was cut from 35 to 21 the united states raised more revenue from corporate income taxes that in the any other point in history? >> what we saw was a continued use of legal loopholes that prevented -- i mentioned this earlier -- 50 corporations in
the fortune 500 from paying any taxes. >> i actually would argue if you're going to have a fair code, we should adopt a flat tax or a fair tax. i mean, i don't think that's the administration's position. that's my position. we're going to have a fair code. but to talk about what they use in the current legal structure of the tax code, you can't make that argument and say, oh, they're using these things. i'm talking about did the government raise more revenue from corporate income taxes, yes or no. >> and corporations continue to make more. that is the point. >> let's move on, i know we're not going to get anywhere there. in your proposal i'm reading like the expanded -- >> the green book. >> yes, i'm reading the green book right now. right now we have a serious situation in the united states associated with gas prices and rising oil prices which is going to impact every american whether they are richer or poorer, whether they are black or white. the one thing that will be consistent is that it will affect everybody. there will be no inequality
associated with rising energy prices. in your budget proposal, the administration is actually saying they're going to unwind every tax benefit associated with fossil fuels in the united states. does the administration believe that completely eviscerating all oil and natural gas tax treatments that we've had in our country, frankly, for 30, 40 years, do they believe that that will actually lead to lower prices on oil and natural gas? >> we don't believe the tax structure offered will lead to increased gas prices. but you're right, mr. donalds, we have to do something to bring down the cost. but i hope you would agree that costs have gone up since the russian aggression in ukraine. >> director young, we have to acknowledge that oil prices went up far before vladimir putin invaded ukraine. the price of a barrel of oil was up significantly, the price of gas was already significantly
higher than what it's been over the last four years in the united states. do you acknowledge that? >> i acknowledge that there were increased energy prices that have further increased since russian aggression. >> director young -- okay. so we understand that prices are higher now since february 24. we are going to acknowledge for the record that prices have been higher under the president's administration currently. the president has talked about how he wants to get away from fossil fuels. is it the administration's position that essentially eliminating all tax treatment which makes oil and gas production in the united states far easier, that that's actually going to be to the betterment of the united states from an energy perspective going forward in the country? >> mr. donalds, we think we need a comprehensive approach. i will remind everyone here, our country is one of the three, before russia took this route, that produced over 10 million barrels a month. this country does not have an oil production problem. >> quick followup on that. that's under current tax treatment.
i would argue that if the tax treatment on oil and gas companies goes up, we are going to have a production problem. but to that point, one of the main talking points from the administration is that you want an economy that works for everyone, you want a tax system that is fair. is it fair for the green energy portion of energy in the united states to have significantly more favorable tax treatment than oil and natural gas? >> as we know, these are developing systems. we need to ensure that those systems, as many -- >> so it's okay for oil and natural gas to be treated unfairly? >> the gentleman's time has expired. >> let her answer, mr. chairman, come on, we were good. >> i'll let her answer but you can't continue to debate. >> thank you, mr. chairman. director young, please. >> mr. yarmuth, thank you. many of the subsidies for people who want to buy electric vehicles, this is to help consumers. many consumers want solar panels, many consumers want electric vehicles. the government, we believe, the
best way to help them achieve that and also a cleaner world is to provide subsidies through our tax system. >> the gentleman's time has expired. >> thank you, director young. >> as always, you have the opportunity to submit questions in writing to the director, she can then subsequently answer for the record. i now yield five minutes to the gentlewoman from washington, ms. jayapal. >> thank you, mr. chairman. director young, it's great to see you and to call you director, congratulations again on your appointment. and i wanted to say first of all that there are many things in this budget that we appreciate, including the taxes on the wealthiest. as you know, i'm a lead sponsor of the ultramillionaire tax act. we also appreciate the stock buybacks and what you mentioned earlier, the investment in judges, the legal counsel, and community-based alternatives to detention, we appreciate all of those things. thank you for those. switching gears, america has a
monopoly crisis that's strarngdz strangling small businesses. that's just one piece. as you know, we have very bipartisan efforts here in congress to give federal agencies more tools to ensure competition. director young, do you agree those efforts should be prioritized? >> we do, and that's why we talked earlier, increasing competition is one way we have to deal with inflation in this country and why you see a $273 million request for the antitrust division and department of justice. $88 million increase, 48% over 2021, and a $498 million request or a 40% increase over 2021 for the ftc. >> thank you. and i also appreciate the
department of justice's recent letter stating the department's views that the, quote, rise in dominant platforms represents a threat to open competition and we're looking forward to moving our package along. now, you won't be surprised to know that i need to express my deep concern with the 4% increase in defense spending. this is on top of the unprecedented increase over the president's fiscal '22 request that just became law. director young, can you tell me how much the pentagon has given to just five contractors? >> are we just picking contractors? i'm sure -- i'll get back to you, congresswoman, on the top contractors i assume you're interested in. >> let me tell you that up to one-third of pentagon contracts after 9/11 went to just five contractors and in fiscal year 2001 to 2020, these companies received $2.1 trillion in 2021 dollars and in fiscal 2021 alone
the pentagon gave $75 billion in contracts to lockheed martin which totals more than one and a half times the budget. is it the only agency that has not never passed a budget? >> that is correct. >> and it's actually failed its last four audits and yet we are continue to pile money on top. i would just say that to representative moulton's questions, i would argue that there are more efficient ways to spend the money we have. it doesn't mean that we can't have solid and secure national security if we actually cut out waste, fraud, and abuse and focus on the technologies that are going to provide us with the biggest bang for the buck. and yet it seems that our only strategy on military spending is bigger is better. do you think that bigger is better forever and ever, director young? >> i think a defense budget has to be strategy based.
congresswoman, you have been a longtime advocate here on getting rid of waste, fraud, and abuse in the department of defense, that is accurate. we've also heard from the other side of the aisle who believe our number isn't large number. that is why we believe the right thing to do here is use the long term defense strategy to build our budget. >> director young, i assume that the other side also would agree that we don't want waste, fraud, and abuse in our pentagon budget. and i remember last year or last term under a republican president we actually had a republican budget director come and testify that the pentagon should pass an audit. what work is going on to make sure that the pentagon passes a budget before we continue to increase military spending indiscriminately just to thump the patriotic banner and say that somehow because we increase military spending, even though they can't pay for veterans at
home, even though we can't invest in education the way we want, even though we have debates over whether we have enough money for childcare, something which the president has advocated for, more childcare, as we have those debates, how are we going to make sure that the taxpayer dollars we are spending are actually going to an audited agency that has cut out waste, fraud, and abuse? >> there is no reasonable person who would disagree that the pentagon should be able to pass a basic audit. but i do want to reiterate we think the need here is to put forward a budget that's tied to a national strategy. whether or not you agree with the strategy is another thing. but as you have heard, there are a lot of opinions on what the defense number should be. >> director young, you know how i've been advocating on this for a long time and i just don't understand, there's nothing that is contradictory to a national defense strategy when we talk about making sure the pentagon passes an audit and cuts out waste, fraud, and abuse, before we heap more dollars on it.
so thank you again for your tremendous service to our country and the role that you currently occupy and everything you've done before this and i hope we can work together to actually make taxpayer dollars mean something instead of just profits. >> the gentlewoman's time has expired. i now recognize the gentleman from ohio, mr. carey, for five minutes. >> i appreciated the conversation we had on the phone, thank you very much. i just want to make a few points, then i'll ask my question. number one, it's what is said and what is not said. in going through the document, i realized there is zero mention, i think congressman cline brought up this, zero mention of a debt crisis or an inflation crisis. yet it mentions climate crisis over 33 times. the other -- some of the other mentions that i found
interesting, it mentions tax, fee, or penalty 127 times. it does not mention the keystone pipeline nor does it mention, zero, any plans for new domestic oil and natural gas production, while it mentions 27 times green, greenhouse, and 187 mentions of climate. now, you've had a lot of questions today with regards to the price of gas. but again, i'm going to go back to just some of the other things. in this -- in this document, there are zero mentions of border security in the budget. zero mentions. there are four mentions of police. zero mentions of parents in the budget as well. so again, just some things that i have observed as the newest person on this committee, that the things that have been mentioned and the things that
haven't. but my question is going to be this, really simple. how does it budget spend for other countries to combat climate change? >> we are making an historic investment, about $11 billion in our international climate pledge to ensure that low income countries who do emit, can join all of us in the developing world in bringing down their pollution so our kids, future generations, have an earth to call home. >> a followup to that, mr. chairman. what is the total level of funding provided including tax incentives for climate-related policies in this budget? >> congressman, we devote about $45 billion in climate activities. i'll get our exhibit to you, i don't want to misquote where we are in the budget, but i'm happy to provide that on the record so
you have specific numbers. >> one last thing. i'm going to -- i wrote the question down, to make sure i said it correctly. there's also a provision, here it is. would any of the $30 billion in mandatory spending to prevent combat and prevent crime be used to enforce gun control on any u.s. citizens? >> the idea, not -- the $30 billion pot is supposed to be a comprehensive look to supply local officials with tools on mental health. we do have increases in atf to make sure ghost guns and other guns that find themselves into the hands of criminals, that we do something about it. >> another question, how will spending $1.4 million on a new office of environmental justice at doj help our law enforcement agencies do their job and tackle the crime crisis in america? >> i think we have to tackle the
crime crisis in america while we tackle an environmental justice system. i read in "the new york times," there's one county, i won't say what state, where people's sewage actually goes into their backyard. they've never had a sewage system at their homes. people of color, low income. we think something is wrong with that. >> and that should be part of the law enforcement agencies? >> where there are illegal activities, doj absolutely needs the tools to make sure all americans are treated equally under the law, even when they're environmental issues. >> okay. all right. thank you, director, you answered my questions and i appreciate your time. >> i appreciate it. >> i yield back. >> the gentleman yields back. i now yield five minutes to the gentleman from michigan, mr. kildee. >> thank you, mr. chairman, and thank you, director young, for being here today to discuss this budget proposal and of course congratulations on your confirmation.
you and i have talked about a couple of these issues i want to raise. i represent mid-michigan. i do appreciate the focus of this proposal on infrastructure, on strengthening the middle class, on supporting law enforcement in particular, which is important in the communities that i represent. and for doing what we can to lower costs for families. i was, as i've expressed to you, disappointed that the budget request calls for funding the flint registry at a lower level than was passed in the most recent government funding legislation and for those who are not familiar, the flint registry is run through the centers for disease control and prevention. it was created by congress to respond to the water crisis in my hometown, to connect families to health care, to nutrition, to lead removal services. it's a powerful tool, it's improving the lives of people who suffered through this
terrible moment, and also helps other communities. newark, new jersey. the consolidated appropriations act of 2022, the bipartisan government funding bill, included $5 million in funding for the registry. so the michigan delegation, democrats and republicans, support this. and i just ask if the administration will support fully funding the flint lead registry so we don't have to reduce that commitment that we're making to the families of flint. >> absolutely, mr. kildee. you've heard many times, we talk about the earliness in which we have to do things to get a budget to you. >> right. >> i will say the flint registry was a result of that, we did not have time to incorporate many of the omnibus final decisions. we absolutely support, we talk about environmental justice, how can we support many
environment al justice things without fully supporting flint. so you have my and the administration's full support. >> thank you for that. it is a good example of when we invest in environmental justice as you have in the proposed budget, perhaps we avoid the very high cost, both in human and financial cost, that the people of flint have experienced. so thank you for that effort. one other issue that i do want to raise, and it has to do -- and again, you and i have spoken about this -- the delphi salaried retirees. when gm filed for bankruptcy during the great recession the pbgc unfairly, in the minds of myself and many others, cut as much as 70% for 20,000 delphi salaried retirees, more than 5,000 in michigan. the pbgc assumed responsibility for the terminated benefits but couldn't pay more than the statutory benefit would allow. these salaried workers suffered
significant losses to their benefits. they were, i believe, unfairly targeted in the discharge of that bankruptcy. i've introduced legislation, along with senator brown of ohio, bipartisan legislation. it would restore the benefits to these retirees. a bankruptcy, by the way, which was largely engineered by the u.s. government, so we do bear responsibility. can we work with you to ensure that congress and the administration together deliver the restoration of these hard-earned benefits to the delphi salaried retirees? >> mr. kildee, thank you for your long work on this. i've told you privately, i'll tell you publicly, we're happy to look at the legislation. we know those pensioners worked their entire careers and deserve their pensions.
so we absolutely will work with you and provide whatever assistance we can. >> thank you for that. as we've discussed, i mean, the delphi salaried retirees have exhausted other remedies. and so that's why we're at this place where i think action by congress is important. and we just want to be able to see the administration as a partner in helping get this resolution through to the president's desk. thank you for that and thank you for your testimony and all the great work you're doing. again, congratulations. >> the gentleman's time has expired. i yield five minutes to the gentleman from wisconsin, mr. grothman. >> wow, great, thank you for coming over here. not all of our witnesses nowadays come over and see us in person, so i would like to thank you for that. >> second year in a row, sir. >> very good. a little comment before, i think there was a comment that the 17% increase in americorps might not be quite enough. i'll point out, given the current situation, nobody should ever get 17%, shouldn't even get
a 5% or whatever, there's my comment. i was recently looking at some graphs and in them it showed that the -- there are different measures of monetary supply but m2 might not be the best measurement. recently it's been 40% year over year. and i'm old enough to remember the inflation of the '70s. at the time, m2 was going up about 7% a year and that was considered out of line. so i'm just alarmed out of my mind that we have so much money apparently being printed by the federal reserve at this time. and of course one can try to blame it on something else but i think clearly the inflation, which i think is well over 7%, because when i talk to my farmers or talk to my manufacturers, their costs of production are frequently up 80, 90%. so i can't help but think when their final product gets to market it's going to be a lot
more than 7%. could you comment on the massive increase in the money supply? do you think that might have something to do with inflation? and don't you believe, with the relatively high spending in this budget, that the money supply is going to go up even more which means inflation is going up more? >> sir, you probably know this, and be frustrated, be we leave monetary policy for the fed, for exactly the reason, we don't want monetary policy to be subsumed in our great political process and it is outside of that process. so i will leave monetary policy for the reserve. and i'm sure -- and they have the tools in which to manage most of our inflation crisis. but i've gone over what the president believes we can do as an administration to deal with this. i would also point out many have talked about the arp legislation. i sat with moody's economists yesterday who truly believe that we would have seen a double dip
recession had it not been for arp. but we might have different solutions, but we agree, we have to do something to bring down pressures on pocketbook issues for americans. >> i guess i would think, well, ultimately it's up to the fed to make those decisions, when we pass budgets with sizable deficits, i think the fed may feel they're in a corner and can't do anything else but print more money. but in any event, am i correct in looking at this budget that the nondefense discretionary spending, and i assume we're going to pass bills separate from the budget as well or separate from the regular appropriation bills, is up about 12%? >> from the omnibus, it is up about 9.5%. with defense up about 4%. >> okay. do you think, given the huge amount of debt and the huge increase in the money supply, that it's prudent to spend 10%,
9.6%, on a nondefense discretionary spending, doesn't that alarm you? when you began to put this document together, what was your target number? >> remember, mr. grothman, the president is offering to pay for his proposals. so we are putting forget spending with tax reform. i get that many may disagree with our tax proposals. but he does believe we should pay for our proposals. in this budget we show over $1 trillion decrease in deficits over ten years. >> okay. and what is it based on projected inflation -- because inflation determines kind of the -- what type of inflation or interest rates are you guessing when you put together the budget ten years out? >> so the inflation rates -- >> i'll say interest rates. >> interest rates are using now are lower than in the budget, because we did it in november, are about 2.1% for this year. right now i think we're really around 2.3, so we're slightly
lower than interest rates. what we do believe, over the ten-year period, we're still paying a lower interest rate than historic norms. >> okay. i'm going to ask you a little more of a bipartisan question. you're raising the corporate rate here to 28%. and it's something i kind of disagree with the republicans on. historically, because we are in a worldwide competitive situation, we treated manufacturing a little bit different, because manufacturers have to compete with other businesses abroad, and i think in a variety of ways we're seeing the problems that come when we're not competitive manufacturing with other countries. when -- other than more likely have to be done some bill through reconciliation. but would you be open to the idea that we go back to the old system in which manufacturing -- and i think barack obama was in favor of this, hillary was too, i might be wrong on that -- that
the tax rate for manufacturing would, since they've got to compete abroad, would be lower than the tax rate for other sort of businesses? or there's some sort of credit. >> the gentleman's time has expired. the witness may respond. >> thank you. mr. grothman, the global minimum tax proposal, secretary yellen met with other countries to ensure exactly that, that people don't move a lot of these manufacturing bases to other countries where they pay workers less, low or no tax rate. we believe a global minimum will help bring jobs back to the u.s. >> the gentleman's time has expired. i yield five minutes to the gentlewoman from texas, ms. jackson lee. >> mr. chairman, thank you so very membership for the opportunity. very, very important. ms. young, let me acknowledge that the nation is better off for the leadership of president joe biden and in fact your
leadership and support in his efforts. let me immediately start by headlines that i've heard from some of the papers that we read here on the hill that says that this is a "building the deficit and spending budget." i take issue with that. would you comment on the alternative minimum tax? i just want to frame this particular aspect of the budget. thank you. >> i believe you're speaking of the billionaire minimum tax. billionaires pay about 8% tax rate and other regular americans, nurses, firefighters, teachers, pay at least double that. so we would like them to pay a minimum rate closer to what most americans pay. >> so you're speaking about fairness and equity, if i hear
you correctly. >> that is correct. >> what will it do for the budget, the revenue that may come in? >> thank you for that. that is why this budget is deficit reducing. so we are looking to reduce the deficit, are on track to reduce the deficit, $1.3 trillion this year, and reduce even further by over a trillion dollars with these policies. >> thank you so very much. mr. chairman, i want to introduce into the record a childcare need under the 2019 texas childcare facts that is produced by child aware. i ask unanimous consent to place it in the record. >> without objection. >> in my state there are about 1,812,000 families in poverty. but here is the big number. children under 6, 1,372,687 who are needing childcare. let me briefly comment on the investment you made, $7.6 billion in discretionary funding for childcare and development block grants.
tell me, children in texas, 1 million of them under 6 needing childcare. >> not only do we support that amount, the $7.6 billion as you talked about, it will go to the states to help childcare businesses. as you know, during the pandemic, many couldn't keep their doors open, families, especially women, are finding they can't reenter the workforce and we have to do something about that. >> a poll of my constituents in houston who are part of the 1.6 million children needing childcare, this may enhance their opportunity and their opportunity for women to get back into the workforce. >> that and, congresswoman, i would also point out that the president has been supportive of childcare as part of further legislation still under consideration. this would be one part. >> absolutely, and we support that, to ensure 7% cap on any families' childcare costs. let me thank the administration quickly for its covid action, unlike the awkward and
unprepared of the last administration. you have a $11.6 billion as it deals with the pandemic and public health preparedness. how important is that, as my time runs out? i've got a few more questions. >> that looks at future pandemics so we aren't left in the same predicament we were if another pandemic were to occur. we need to invest in future pandemics. >> thank you. that's going to go a long way to rural hospitals, local urban hospitals, and others dealing with pandemic increases that may come in the near future. i chair the subcommittee on judiciary, very interested in the question of reduction of crime. that would include enhancing training or responses to law enforcement but more importantly as well, the complementary support of mental health support, support to stem the tide of domestic violence. what is the administration doing on that, very quickly? >> the budget would propose $56
million to issue grants to support behavioral health services to individuals within our during reentry from jails and prisons. also asking for $500 million to be split between doj and hhs with recognition that there has to be a comprehensive answer to crime, not just from the law enforcement standpoint. >> the one thing we know is that the administration and democrats are not soft on crime and that we recognize we must be in the crime reducing business. i want to thank you for your support of public housing. and so my final questions are, public housing emphasis, and then the commitment of the administration for taking refugees from ukraine under the present capping that we have not utilized. i appreciate your answers to those two questions. >> as you know, we have a robust housing supply initiative, $50 billion on the mandatory side to ensure we have affordable housing. also, as you point out, the budget provides funding to resettle 125,000 refugees in
2023, including the commitment for ukraine that the president recently announced. >> i look forward to working with you on these matters. mr. chairman, thank you so very much. this is a robust budget for the american people and it is a deficit busting budget and we need to move forward on the president's goals. thank you so much for your leadership. i yield back. >> the gentlewoman's time has expired. i yield five minutes to the gentleman from california. >> thank you, mr. chair, and director young, congratulations on your confirmation, thank you for the introductory phone calls, i'm certainly looking forward to getting to work with you. i would like to continue a line of questioning that a number of other members of the panel have raised about the assumptions that were made on the rate of inflation when the budget was created. my understanding is that the rate of inflation that was assumed for this year is 4.7%, obviously we're trending towards nearly twice that, and for the rest of the budgetary forecast was nearly 2.3% which i think
the federal reserve and most every economist would agree it's going to be substantially more than that and you have explained that that was because the budget was crafted in november, before the recent spike in inflation. do i have all that right? >> that is correct. >> so i'm curious as to, because i'm hopeful, mr. chairman, as members of this panel on both sides of the aisle have testified, i'm hopeful we can do what congress is meant to do, take this budget and craft an actual budget proposal out of it and pass that budget. so we have to rely on the figures that you're giving us and try and craft our own budget out of that. what changes do you think the fact that the assumptions that you made about inflation when you crafted the budget were incorrect, what effect do you think that has on the numbers in the budget? >> as i mentioned earlier, inflation has an offsetting mechanism. so typically with higher inflation, revenues are also higher. we believe our debt and deficit
targets remain about the same. i would also point out, it's a ten-year budget. our long term inflation numbers are still in line with our private forecasters. i point out the word "forecasters," just like the government forecasts, so do private markets. and the long term estimates are still in line with those private forecasters. >> okay. so the department of labor just recently came out with statistics showing real wage growth is actually negative by about 2.5% right now and the congressional budget office says that that actually is going to have, as inflation goes up, that has a negative effect on budgets because although revenues go up, they don't go up enough to compensate for higher expenses. and as the interest rates rise, a greater percent of the budget has to be spent on debt service. so would you say that given the fact that actual inflation is running about twice what the
assumption was, you say that the long term deficit reduction is going to be the same? >> it will be about the same. but you're right, the more interest rates, not inflation, goes up, i was speaking to inflation, on interest rates, you're right, that does have an impact on what you pay in debt service. we also look at what the historical rates are and what we pay on the debt based on historical averages. we're still in line, we're paying less than historical norms on debt service. even with our interest rates, by the way, our budget does account for interest rates growing in this budget. >> i think we all join you in hoping that the rate that we have to pay on our national debt does not go up substantially. but, you know, pessimistically, i'm not sure that's going to be the case. long term, i was very happy to see the president concentrating on deficit reduction. that certainly was not the case
with his proposed budget last year. that's a concern that many of us on this panel have. one of the things that you touted in your opening statement about the budget is that it's going to reduce the deficit by over $1 trillion over the forecasting period. but i wanted to be clear, you're talking about cumulatively, because our deficit is about $1.3 trillion right now, so we're not going to reduce it from 1.3 to 0.3. we're going to reduce it by a trillion over that ten-year forecast period, right? >> there are two deficit numbers i talked about, they're important to get right. we're on track, absent this budget, to reduce the deficit by $1.3 trillion year over year, largest ever decline in one year. the budget policies represent, if congress takes them up, we believe, another $1 trillion in deficit reduction. >> total, over the ten-year period. >> correct. >> so $100 billion a year, not a trillion in a single year. >> right. >> we're still going to have a substantial deficit by the end of the forecast period. >> but remember, we're also
looking at bringing down the deficit $1.3 trillion -- >> we're on the same team here. let me ask you about that, actually. it's kind of a final question here. as i said, i was very encouraged to see the president focusing on deficit reduction. what, as director of the omb, what's your long term philosophy on that? do you think we need to get to a balanced budget? if so, how do we do that? >> mr. obernolte, i think the better measure to look at than to try to get to zero debt, because you know this, the most spending in this budget are beneficiaries, to social security, to medicare, to make sure we preserve those benefits to our elderly or close to to make sure they get those benefits. we believe the most appropriate thing to do is look at whether the debt level is crowding out our country's ability to make
investments. we don't think we're at that point. there's not a specific number that makes sense. you can't just say 60 trillion gets to be too much or 40 or 50. it really is depending on the size of the economy. and we believe we can handle the debt service payments given that interest rates remain historically low even if rising. >> on that we might disagree but i see my time has expired and i yield back. thank you very much. >> i now yield five minutes to the gentleman from colorado, ms. boebert. >> thank you, mr. chairman. what is the current national debt? >> the current debt is about $24 trillion. >> [ inaudible ]. how much [ inaudible ] to cover that debt? >> that's not how debts work. we have not calculated that. >> [ inaudible ]. the answer is 91,207 per
american citizen. how much does each taxpayer -- thank you -- how much does each taxpayer owe to cover our current debt? >> i'm sorry. i have 22.3, so i'll correct myself downwards since we're using different numbers. again, we don't calculate the debt by person -- >> reclaiming my time, excuse me, director, the answer is $242,500 per taxpayer in america. now, you may have been on track with some of these answers if your numbers were correct with the $30 trillion debt that we actually are at right now but i would have hoped that you would have the correct answers in your position to all of these questions as the president and this regime really should keep this debt at the forefront of our thinking and proposing a, uh, a budget. umm, but this budget that was created is proposed to spend another $5.8 trillion this
fiscal year and $73 trillion over the next ten years and sadly, uh, it's pretty apparent that you're more concerned with continuing to spend trillions of dollars of taxpayer money on liberal wish lists rather than doing any substantive to rein in wasteful federal spending. the federal government does not have a revenue problem, it has a spending problem. director young, biden likes to say show me your budget and i'll tell you your values so let's see what the democrats really value. the word "military" appears 26 times in this budget but "gender" is used 43 times in your budget. "equity," that's used 75 times. and "climate" is used 187 times in this budget. and americans sure do understand what democrat priorities are and their values. they know that the real cost of
these woke policies and so-called values are impacting them and the bill has come due for these bad democrat policies, proposing to spend trillions of dollars on more woke wants not needs is absolutely shameful and really you should be embarrassed to be testifying today and trying to defend this $5.8 trillion budget. now, during the state of the union joe biden said that his plan to fight inflation, uh, was for businesses to simply lower their costs not their wages. director young, i'm a small business owner and i can tell you that that's not how it works in the real world, i understand that we use washington, dc math here but that's not how it works for real small business owners, meat is up 13%, milk is up, uh, almost 12%, electricity is up 9%. now, as a restaurant owner how am i supposed to lower my costs
if everything that i use is going up? and i certainly wouldn't be able to pay employees higher wages. so with this skyrocketing inflation that's taking place, umm, madam director, can you please, uh, simply describe to me, define to me what inflation is? >> sure. the cost of goods are more expensive. it costs more for the same goods than it did last year. the president is very aware of that. that is why he called on congress to send him legislation to -- >> reclaiming my time, thank you, director, that's not exactly what i was getting at. let me answer this for you. so milton friedman who won the nobel prize in economics said that inflation comes from too much money being printed in dc, specifically, and i quote, he said inflation is the result of too much money and more rapid increase in the quantity of money than an output. moreover in the modern error --
era, the important next step to recognize that today governments control the quantity of money so that as a result inflation in the united states is made in washington and nowhere else. so director young, in short, inflation comes from washington, dc, where the products we use aren't created but the products we use are made more expensive, uh, director young, uh, shamefully this biden budget proposes the largest tax increase in american history and, uh, i really think that bears repeating. it is the largest in american history. uh, the biden regime either has no concept of how inflation is impacting americans or simply has no concept for americans who find the cost of gasoline too expensive because after all, they can't just go buy a tesla, how about that for democrat priorities, thank you, madam director. >> the gentlewoman's time has expired. i think i'm the last questioner, and i now yield myself ten
minutes. first of all, let me say thank you for being here, director young, i think you have more than justified the judgment of the president to name you to this position and the senate's wisdom in confirming you. i love going last, because it's like cleanup on aisle 6. i get to deal with a lot of the things that have been said and messed up. i'm going to start with mr. donalds' comment about raising the corporate tax rate. he said if you raise the corporate tax rate, that it's going to cause inflation because you're going to -- they're going to pass it along to consumers. that would imply that if you lowered the tax rate, that they would pass the savings on to consumers, when republicans cut the tax rate from 35 to 21% in 2017, did that result in any
cost-cutting for consumers that you're aware of? >> it has not. >> as a matter of fact, if that were true, we wouldn't have the inflation we have now, because they're still paying at a 21% rate. so that just doesn't make sense. and you were here in 2017, you were in the congress, and the justification republicans gave at that time for cutting the corporate tax rate was that this would encourage them to invest in new equipment, new capacity, new productivity. did any of that happen? >> it did not. >> as a matter of fact, most of the money that was saved by lowering the tax rate was spent on buying back stock and increasing dividends, not in actually being reinvested in their businesses. let's talk about gas prices for a minute. how are gas prices set? what are they dependent upon? >> they're dependent on the market. >> right, and it's a global market, gas is produced all over
the world. and when there is higher demand for less gas, prices go up, and conversely, when there's less demand and too much gas, prices go down. i think it was the ranking member, it may not have been, i apologize if i didn't get it right, that said back several years ago you found -- somebody found gas at 90 cents a gallon. and was that during a period when the government was shut down? i mean, the country was shut down, not the government. the country was essentially shut down and nobody was driving. >> right. >> so prices are naturally going to be lower. now, as the economy is recovering, part of the reason, forget in the last month or so, which i think we can consider an aberration, we saw a much greater demand for gasoline. prices went up to a level that
basically we've seen before. we saw that level in 2011, '12, '13, '14, and into the bush administration when gasoline prices were much higher than they were in 2020 and 2021. when -- well, you mentioned, i think, the annual production now of gasoline in the united states. the number i saw, which i mentioned last week or two weeks ago, was 12.1 million gallons a day. russia produces about 10.5 million barrels a day. and saudi arabia, 8.5 million barrels a day. there's no country on earth that produces as much oil as we are producing right now. so is it fair to say that anything that the biden administration has proposed or
implemented has anything to do with -- has had the impact of reducing oil production in the country? >> absolutely not. >> the keystone pipeline keeps coming up. the keystone pipeline, if they resumed construction of the keystone pipeline today, how long would it be before the keystone pipeline was finished? >> not in any time to deal with any of the increases we're seeing now. >> i think the estimate is 11 years from now. and somebody mentioned that that was oil that was going to be used in the united states. is that correct? >> i don't believe that's correct. you pointed to oil production here, most is shipped other places and not kept here. >> exactly. let's talk about the defense department budget for a minute. the statement has been made -- and i know a lot of republicans are calling for 5% in addition to inflation. does inflation, the figure that we see now, 7.9% annual rate,
does inflation affect every entity the same way? >> it does not. >> so if you're in the pentagon and you're using a lot of gasoline, you probably are not going to the pump every day and filling up the tanks in the jeeps and those things. you make contracts for that gasoline, don't you? >> that is correct. and you typically lock in a price. >> exactly. and to say that we automatically have to assume that the defense department is going to be -- their costs are going to go up 7.9% isn't based on the way things actually work. >> we don't believe this is a real increase. >> and one of the things that you're proposing is a 4.6% increase in the salary of military personnel. >> military and civilians. >> civilians, which actually does kind of accommodate the inflation that those military families are experiencing. >> it's a part of the formula, actually, that developed the 4.6. >> so when the defense
department analysts were drawing up their budget request, they didn't say that inflation didn't exist, did they? >> that's right. and i would like to point out, unlike i think some relationships some may have heard between omb and the departments, omb and the department of defense worked closely hand and hand. and i think the secretary of defense would tell you this is the budget he needs to have a ready military. >> then going back to gas prices for a second, one of the things that came up earlier was a mention of the equity of favoring support for gasoline prices versus support for environmentally beneficial energy sources. and the question was asked, do you think that's fair. personally, i think it's very fair. i mean, i think as a country, there is broad consensus that we
need to be moving away from fossil fuels toward renewables and other clean energy sources. but i remember, and you may, i remember when george bush, george w. bush, was president, and he said that once gasoline prices get higher than $55 a barrel, that there is no need for incentives for producers to produce. do you remember that comment? >> i do not. >> he did, that's getting back a little ways. and gasoline right now or oil is double that amount. >> yes. >> basically 110, $115 a barrel. so according to the man from the biggest oil producing state in the country, he would say they're not necessary at this point. talking about the american rescue plan, i think the ranking member said that until the american rescue plan was enacted, job growth was
performing at a lower rate than had been projected. is that a fair characterization? didn't say that? okay. you said the first few months of the biden administration, job growth was not performing as the projections were. and that was the reason, one of the reasons we passed the american rescue plan, to stimulate the economy to help people get back on their feet. and the fact that we created 6 million jobs after that in 2021 is pretty good evidence that the american rescue plan was successful. >> as i mentioned earlier, i sat with mark xander from moody's yesterday who believes we would have ended up in a double dip recession had it not been for arp. not only did that not happen, and we're seeing record growth out of the pandemic. >> since you mentioned moody's, a lot of people on the republican side, none of whom voted for the american rescue plan, are trying to lay the 7.9
inflation rate on the money that flowed from the american rescue plan. moody's made an analysis that said that the american rescue plan was responsible for less than 1% of that inflation rate. did they reiterate that you to? >> they did. >> do you have any analysis that would contradict them? >> i do not. >> and the federal reserve in san francisco did a similar analysis and came up with the same result. i think i'm almost done. one question i do have in my 30 seconds left. in considering tax reform, one of the things that a lot of people, including myself, think would be very important and useful and justifiable is to increase the carried interest rate. you don't do that, none of my colleagues -- well, at least the leadership of the ways and means committee, has not proposed to do that.
is that something the administration has considered, and why has it decided not to approach that, if they've considered it? >> mr. chairman, i'm happy to talk to you about that proposal. i think treasury is our lead on tax proposals. but i think it's a worthy conversation and i'm happy to take that offline and have a real conversation about it and tell you if there are concerns, what they are. >> okay. i would love to hear that. so i'm over my time by 20 seconds but i've been pretty generous most of the day so i don't feel guilty about that. but once again, i thank you for spending so much time for us. thank you for your responses. thank you for your work. once again, we look forward to continuing to work with omb as we move forward in this process. >> thank you so much. >> unless there's any further business, this hearing is adjourned.