Hearing of the House Budget Committee - The President's FY2015 Budget Proposal

Hearing

"Director Burwell, I want to join the Chairman in welcoming you to the House Budget Committee, and thank you for your service to our nation.

"Early in your tenure, you experienced a baptism of fire by having to confront an unnecessary, destructive, and costly 16-day government shutdown. I hope those antics are behind us. I am sure the American public would agree that never again should a political party inflict that kind of harm on the country in pursuit of an ideological agenda.

"Now, these budget documents contain reams of numbers -- but at their core, they are a reflection of our priorities and our values. And when you boil down the President's budget, it is clear that he is focused on three major goals: boosting job growth, making vital investments in our future to sharpen America's competitive edge, and responsibly reducing our budget deficits. Combined with an increase in the minimum wage, these policies will ensure a growing economy and more widely shared prosperity.

"The President's budget lays out a detailed plan that adheres to the spending caps established in the Bipartisan Budget Act. But throughout his budget, the President makes the case that the status quo isn't good enough. America cannot stand still. Even though we have seen steady job growth -- and more than 8 million private sector jobs have been created over the last 47 months -- we know we can do better.

"That is why the President proposes an Opportunity, Growth and Security Initiative for the upcoming year. This fund would finance badly needed investments in education and training, breakthrough scientific research, and advanced manufacturing. He would also further boost our military readiness. These investments to power our economy and reinforce our security are fully paid for by closing tax loopholes for hedge fund owners, well-heeled lobbyists, and other special interests.

"The President's plan would also boost job growth by ending the perverse tax provisions that encourage companies to move American jobs overseas, and invest those savings here at home to put Americans to work modernizing our vital national infrastructure -- our roads, bridges, and transit ways. And to ensure that the next generations of Americans are equipped to thrive and win in the global marketplace, the President has again asked Congress to support an early education initiative.

"The President's budget also establishes a responsible plan for steadily reducing the size of our deficits as a share of our economy. The deficit has been cut by more than half since the President took office, and the President's budget reduces it to 1.6 percent of GDP by the end of the budget window -- resulting in a lower debt to GDP ratio of 69 percent, compared to 72 percent today.

"The President achieves this with a mix of policies that cut spending and raise revenues, including policies that make Medicare more efficient, close special-interest tax breaks, and embrace the pro-growth benefits of comprehensive immigration reform.

"Interestingly, Chairman Camp's tax plan calls for closing some of the same tax loopholes identified by the President. The difference is that the Republican plan would apply every penny of those savings to cutting tax rates for very wealthy individuals and not one penny for either critical investments in our economy or for deficit reduction.

"The Republican claim is that lowering tax rates for the wealthy is needed to significantly boost economic growth. But the facts don't support that trickle-down theory. It turns out that the Joint Committee on Taxation ran eight different estimates of the Republican tax plan's economic impact. The one that Congressional Republicans seized upon -- which contained very unrealistic assumptions -- said it would boost growth by 1.6 percent over the next decade. However, the other seven analyses showed lower growth levels, the lowest a .1 percent increase of GDP. Moreover, all signs indicate that in its second decade, the Republican tax plan would increase the deficit and actually slow down economic growth.

"What would significantly boost economic growth is passage of bipartisan immigration reform. The Congressional Budget Office provides a projection of one approach to immigration reform, showing it would increase economic growth by 3.3 percent in 2023 -- more than two times the most optimistic figure for the Republican tax reform plan and about 30 times higher than the low estimate. And the economic benefits of immigration would continue to grow in the second decade, adding 5.4 percent to GDP in 2033.

"We could start getting some of that economic boost today if the Speaker would only allow a vote on comprehensive immigration reform.

"Finally, let me turn to the war on poverty. We had a good hearing in this Committee on January 28th. All three witnesses recognized that while we still have unacceptable levels of poverty in America, the array of economic security programs has kept tens of millions of American out of poverty. In fact, the report of the Council of Economic Advisers concluded those programs had cut poverty by nearly 40 percent from 1967 to 2012 -- lifting 45 million Americans out of poverty in 2012.

"You would never know that from reading the report released by the Budget Committee Republicans two days ago.

"So, Mr. Chairman, as I said at that earlier hearing, if the goal of your review is to improve the performance of various programs and help more people climb out of poverty, we are willing to work with you. What we will not accept are Trojan Horse policies that -- using the rhetoric of helping people -- actually cut huge holes in important safety nets and push more people into poverty.

"The real test will be the Republican budget this year. Last year's Republican budget simply slashed important safety nets while providing windfall tax breaks to the very wealthy. We hope this year will be different. We could start by allowing this House to vote to extend unemployment compensation to 2 million struggling Americans who lost their jobs and remain out of work through no fault of their own. Let us vote on that measure -- that would be something different.

"I look forward to today's discussion about how the President's budget will help make the country stronger. Thank you."

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