Concurrent Resolution on the Budget for Fiscal Year 2016

Floor Speech

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Mr. VAN HOLLEN. Mr. Chairman, I want to start by thanking the chairman of the committee, Chairman Price, for conducting the business of the Budget Committee in a professional manner. We have sharp differences but have expressed them in a civil fashion.

I also want to agree with him with respect to the great job the Budget Committee staff has done, both Democrat and Republican, and agree with him on one more thing--and it may be the last thing I agree with the gentleman on during this debate. Dr. Elmendorf, the current head of the Congressional Budget Office, has done a great job, and we are going to have a little bit more to say about that later.

We all believe in America, Mr. Chair, but I do not believe this Republican budget reflects the values and priorities. It is the wrong direction for America.

Now, as we gather here today, we are facing some good news, we are facing some bad news, and we are facing some really bad news.

The good news is the economy is improving. More people are going back to work. In fact, the private sector has added 12 million new jobs over the last 60 months.

It is not all rosy. Many Americans are still looking for work, but the unemployment rate has fallen to 5.5 percent, and trends are good.

The bad news is that Americans are working harder than ever, but their paychecks are flat. This is not a new problem, Mr. Chairman. It is not even a problem in the last 2 years or just the last 5 years. It goes back quite a ways. In fact, as this chart indicates, we have seen a growing gap between worker productivity, which has been rising steadily, and the incomes and paychecks of most working Americans.

If you look at this chart, it is very interesting, because it goes from 1948 to the 1970s, and you see these two lines are convergent. That means the additional worker productivity--the hard work of American workers--was translated into higher paychecks and compensation for them.

But starting around the 1970s, you saw the great divergence. Worker productivity went up. People are working harder than ever, better than ever, but their paychecks and compensation have been pretty much flat.

So, where is the value of that hard work going? If people are working harder than ever, why aren't their paychecks keeping track?

Well, that additional value of hard work is no longer going to regular working Americans--people working for a paycheck. It has gone, overwhelmingly, to folks at the top. And I don't mean just the top 10. It has gone, overwhelmingly, to the top 1 percent of Americans, who have seen their incomes rise dramatically even as everybody else has pretty much been running in place and flat.

So, our challenge to all those people working really hard--harder than ever--is: How can we make sure that they benefit from that increased productivity?

Mr. Chairman, we had some hope right after the November election. I remember opening up the newspaper--The Wall Street Journal. There was an op-ed piece by Speaker Boehner and Republican Senate Leader Mitch McConnell, and here is what they said. They said that they were humbled by the opportunity to ``help struggling middle class Americans'' and to deal with ``wage stagnation.'' That is what they said right after the election.

But, Mr. Chairman, the very bad news today for the country is, if you look at this Republican budget, it turns out they were just kidding. This Republican budget is really hard on hard-working Americans and those who are looking hard to find a job. It says, Keep working harder, but you are going to get less.

It will do nothing to increase paychecks and take-home pay for working families. In fact, it squeezes them even harder and tighter. It will increase the tax burden on millions of families--those in the middle class and those working hard to join the middle class.

Amazingly, it just drops the higher education tax credits. It ends the boost in the child tax credit. Millions of Americans will lose access to Affordable Care tax credits.

It is not just working families. Students who are working hard to try and get a job are going to find college even less affordable than today.

This Republican budget cuts student loans. It increases the cost of student loans. It starts charging students interest while they are still in college. It cuts $90 billion from Pell--mandatory--and more.

It is not just students and working families. Seniors who have worked hard to secure a healthy retirement are going to see their costs go up immediately. Prescription drugs will cost more. Copayments for preventive health services go up right away. Nursing home care will get much more expensive as they cut $90 billion out of Medicaid, two-thirds of which goes to help seniors and disabled individuals. Most of the rest goes to families with kids. And then they turn Medicare into a voucher program that will reduce Medicare benefits.

So while this Republican budget squeezes hard-working families, increases the cost of college for students, squeezes seniors--higher costs for them--it is great for those who are already in the top 1 percent. It is great for millionaires. In fact, this budget paves the way for the Romney-Ryan plan to cut the tax rate for millionaires by a third. It paves the way. It green lights it.

If you look at this budget, it is based on a failed and unproven economic theory--top-down, trickle-down economics--the same old theory, the theory that collided with the real world under President Bush in the 2000s, right? It cut the top tax rate. The theory was that benefits would trickle down and lift everybody up. Guess what? Incomes to the top 1 percent went up. Everybody else ran aground. Yachts went up. Everyone else's boat ran aground. That is what happened.

Guess what else went up? Deficits went up, Mr. Chairman, but everybody else was running in place or fell behind.

And here is the thing. While this Republican budget makes life harder right away for hard-working Americans--life will get harder immediately--it also disinvests in our future. It slashes the part of the budget we use to invest in our kids' education--from early education and Head Start to K-12 and beyond.

It is a sad day when we start chopping away at the ladder of opportunity in this country.

It will also devastate the investments our country has historically made in scientific research and innovation, investments that have helped power our economy and keep us at the cutting edge of world technology.

And guess what else? It provides no solution, no answer to the fact that in just a few months, in May, we are going to face a shortfall in the transportation trust fund that will result in a construction slowdown this summer. It does nothing about that in the budget. It says: Oh, we're going to come up with something after today--in a couple months.

So, Mr. Chair, when I say that this budget disinvests in America, it is not rhetoric. It is a mathematical reality.

I want people to look at this chart. This is a chart of the share of our economy that we spend on the investment portion of our budget--the investment in our kids' education, the investment in scientific research like the medical research to help find treatments and cures to diseases like cancer or diabetes or other diseases that plague American families.

Here is what the Republican budget does. It takes that investment budget and throws it off the cliff, to the point that it is 40 percent below the lowest level as a share of the economy since we have been keeping records in the late 1950s.

Here is a country that invested in the GI Bill. We invested in our infrastructure and the National Highway System. We have invested in our kids' education. This Republican budget disinvests in America. So it cuts all those things.

I will tell you one thing it doesn't cut. It doesn't cut one single tax break for the purpose of reducing the deficit. Not one penny. Not one penny to reduce the deficit.

We hear that the highest priority is to reduce the deficit; but, yes, let's cut our investment in education. Yeah, let's cut our investment in innovation. Let's not fund the transportation trust fund--but we are not going to cut one single tax break for the purpose of reducing the deficit, not for corporate jets, not for hedge fund owners, not one.

Despite all that and despite the deep cuts it makes in our investment, the reality is this budget doesn't balance. It doesn't balance, not by a long shot, Mr. Chairman.

This budget takes budget quackery to new heights. It claims to repeal the Affordable Care Act, but it uses the revenues and the savings from the Affordable Care Act to claim balance at the end of 10 years.

Senator Enzi, the new Republican chairman of the Senate Budget Committee, said that was kind of a budget accounting that he didn't think was right. The Heritage Foundation, they called that question as well in comments last time this came up.

Here is the other thing. The budget doesn't account for the almost $1 trillion in tax extenders that our Republican colleagues brought to the floor last fall and are on the way to bringing to the floor now, $1 trillion. If you add that to the deficit, which is real money, it is even farther out of balance.

Then they go and claim a deficit dividend based on phantom deficit reductions. Here is the number. This is in the 10th year. This is in the 10th year when they say their budget is really in balance by $33 billion. Well, it is not.

If you take out the Affordable Care Act revenue, if you take out the Affordable Care Act savings, if you add in the tax extenders costs that our Republican colleagues keep bringing to the floor, you don't come close to balance, not close, Mr. Chairman. This balanced budget stuff, it just isn't true. It is just not true. It would make Enron accountants blush.

I think, Mr. Chairman, most Americans would agree that this budget--cutting tax rates for the very wealthy, while increasing the tax burden on working families, raising the cost to seniors, raising the cost to students, cutting vital investments--will simply stack the deck even more in favor of the very wealthy and the very powerful and make it harder on everyone else to get ahead.

Mr. Chairman, we can do better. We can do much better, and Democrats will propose a budget that promotes a more rapidly growing economy, with more broadly shared prosperity. That will be the right direction for America.

Mr. Chairman, I reserve the balance of my time.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself such time as I may consume.

I listened to my friend and the former chairman and his remarks. The reality is that the President's proposal and the Democratic proposal, we don't increase tax rates; but, yes, we do get rid of some of the tax loopholes in the Tax Code that are riddled with preferences that are there not because they make America more productive, but because someone had a powerful lobbyist who was getting a special interest break for them.

If you think about it, if the government provides a grant of $1,000 to somebody, that is $1,000 in value; but if I say to you, Of the taxes you have to pay, I am going to give you a special break so it is $1,000 less, that is a pretty good deal, too.

The reality is we spend $1.4 trillion, according to the Congressional Budget Office, each year on tax expenditures, more than on Social Security. Now, some of those are for good purposes, good public policy purposes, but some of them are for like corporate jets, and some of them are for hedge fund managers.

Here is the thing. We think that we can get rid of some of those tax breaks to help reduce the long-term deficit. Our colleagues would just prefer to devastate our investments in education and other areas,

Math is math, to the former chairman. The reality is--and he knows it--that the portion of the budget we use to make these investments, the Republican budget does absolutely cut that to 40 percent below the lowest levels of the shared economy since we have been keeping records. That is a fact.

Another reality is that this Republican budget doesn't balance unless you are using phony math.

Mr. Chairman, I am now very pleased to yield 3 minutes to the gentlewoman from Wisconsin (Ms. Moore), a great member of the Budget Committee.

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Mr. VAN HOLLEN. I yield the gentlewoman an additional 30 seconds.

Ms. MOORE. That is $1.4 trillion of entitlements that we spend through the Tax Code for gas and oil subsidies, jets, hedge fund managers. There is talk in this budget of eliminating the estate tax. Millionaires and billionaires are benefiting tremendously on tax income from CEO pay.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself such time as I may consume.

I am a little surprised the gentleman from Indiana brought up what is called the OCO funding. These are the funds in the overseas contingency operations account for overseas contingencies, like wars and other contingencies that come up.

The reality is that what the Republican budget does here is create a slush fund out of the overseas contingency account. It sends a signal that we are confused about how we are going to fund our defense obligations, and it is in total violation of what the Budget Committee itself stood for for years.

I want to read, Mr. Chairman, from the 2015 Republican budget. It is just a year ago, but we have got real amnesia among our Republican colleagues.

Here is what they said in their report:

Abuse of the OCO cap adjustment is a backdoor loophole that undermines the integrity of the budget process;

The Budget Committee will exercise its oversight responsibilities with respect to the use of the OCO;

The Budget Committee will oppose increases above the levels the administration and our military commanders say are needed to carry out operations unless it can be clearly demonstrated that such amounts are war-related.

I didn't write that. Our Republican colleagues put it in their report. It is like, ooh, didn't mean it.

So I am really baffled that our colleagues keep bringing this up. It is a total violation of what the Budget Committee has always stood for on a bipartisan basis.

With that, I yield 3 minutes to the gentlelady from New York (Ms. Velázquez), the ranking member of the Small Business Committee and a great friend to entrepreneurs around the country.

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Mr. VAN HOLLEN. I yield myself such time as I may consume.

Mr. Chairman, Mr. McClintock is right about this OCO slush fund.

To the chairman of the committee, you actually made exactly my point in your remarks. I did support the OCO money--again, this is for overseas contingency operations--at the level requested by the President and the Joint Chiefs of Staff, our military commanders. It was higher a couple of years ago because we had tens of thousands more troops in Afghanistan. The gentleman may recall that we brought a lot of those troops home. As a result of that, we don't need as much money in our war account, the overseas contingency account.

So what I did, Mr. Chairman, is exactly what our Republican colleagues on the Budget Committee said we should do at that time; in other words, I opposed increases above the levels the administration and military commanders said were needed to carry out those operations. Yes, I did support a budget level at the level the President and our military commanders said was necessary, but as Mr. McClintock said, the Republican budget does just the opposite. It does what we said we would not do--and I say ``we,'' Republicans and Democrats alike. So it is important to heed our own words; otherwise, as the Budget Committee itself said, we will undermine the integrity of the budget process. That was the point Mr. McClintock was making as well.

I now yield 3 minutes to the gentleman from Oregon (Mr. DeFazio), the ranking member of the Transportation and Infrastructure Committee. He is somebody who knows we have to fund the modernization of our country's infrastructure.

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Mr. VAN HOLLEN. I yield myself such time as I may consume.

Mr. Chairman, actually, this Republican budget strips away provisions that are in existence today to make work pay. Child tax credits for working families, they get rid of the bump up. They get rid of the enhanced earned income tax credit for working families. As I said, they get rid of the higher education deduction for families so that they can send their kids to school.

I also want to say a word about the transportation trust fund, because as the ranking member, as the senior Democrat on the Transportation and Infrastructure Committee just pointed out, this Republican budget has no provision inside the budget numbers for dealing with the crisis we are going to face in a few months.

Now, the chairman of the committee mentioned the deficit-neutral reserve fund, section 510. I am looking at it now. Deficit-neutral reserve funds can play an important role in signaling a policy direction. After all, these are 10-year budgets. I would understand if we didn't know exactly what we were going to do with our transportation trust fund 10 years from now or 9 years from now, but we are talking about 1 1/2 months from now. We are talking about in the first year of this budget. In the middle of May, we are going to see a construction slowdown.

Now, the Democratic budget alternative, we have a plan. The President put forward a 6-year plan, $478 billion. It is included in his budget numbers. It is not like, okay, a little asterisk, we will figure this out in a month and a half. The President makes sure we don't have a shortfall, and, actually, he says we need to modernize our infrastructure so we can compete in this global economy.

So, Mr. Chairman, it is just reckless to put forward a budget where it doesn't even provide any solution to something that is going to face us in a month and a half.

Now I am pleased to yield 3 minutes to the gentleman from New Jersey (Mr. Pascrell), a terrific member of the Budget Committee.

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Mr. VAN HOLLEN. Mr. Chairman, as we have previously pointed out, this Republican budget keeps the revenues from the Affordable Care Act even as it claims to repeal the Affordable Care Act. Without that level of revenue, along with other savings, it doesn't come close to balancing. No accountant would certify this Republican budget close to balance.

I am now pleased to yield 3 minutes to the gentlewoman from New Mexico (Ms. Michelle Lujan Grisham), a terrific member of the committee and someone who is an expert on all sorts of issues, including health care.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself such time as I may consume.

I don't think that huge disinvestment in education, starting with early education going through K-12, helps our kids in their future. I don't think that the efforts that strip away a lot of the job training programs help hard-working Americans.

The President's budget's priority is to accelerate economic growth and have more broadly shared prosperity. I would remind my colleagues that the day the President was sworn into office we were losing 800,000 jobs every month in this country. The bottom was falling out. Now we have seen over the last 60 months 12 million jobs created. We have got a long way to go, but we are certainly on the right track. And the President's budget provides for additional economic growth in a fiscally responsible way. The President's budget reduces the debt-to-GDP ratio. The President's budget reduces the deficit's share of the economy.

But what the President's budget does not do is disinvest in our kid's education, it does not increase the cost to seniors for prescription drugs and copays for preventive health care, and it doesn't get away from a lot of the important tax credits and relief for middle class Americans and those working to join the middle class. So, no, it does not do that.

Now I am very pleased to yield 2 minutes to the gentlewoman from California (Ms. Hahn), who knows a lot about the importance of economic growth, especially as it relates to small businesses, a distinguished member of the Small Business Committee.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself such time as I may consume.

As I said at the beginning of this debate, the one thing that the Republican budget, unfortunately, will do immediately is make life harder for hard-working Americans. How does it do it? As I indicated, it actually increases the tax burden on working Americans--middle-income Americans and people working their way to the middle--while providing another tax rate cut for folks at the very top.

For people who are working harder than ever and feel that they are just on a treadmill, it doesn't help them at all. In fact, they are going to move farther behind, in addition to the fact that they are going to pile more costs on to students by increasing the cost of student loans.

It is right there in their budget. They are going to start charging you interest while you are in college. They are going to start charging seniors with high prescription drug costs even more because they are going to reopen what is called the prescription drug doughnut hole. I don't know how that is good for seniors in America.

It is hard on seniors, hard on students, hard on working families.

The Democratic budget, like the President's budget, meets those priorities. For example, working families are facing huge childcare costs, so we propose a significant expansion of the child independent care tax credit. We make it a little bit easier for those families who are working but who want to make sure their kids have quality childcare. We make it easier for them by providing them a significant tax credit for that cost.

For couples who are working, we scale back the marriage penalty so the second worker doesn't begin work at the same higher tax rate as the first worker in the household. That is the kind of important relief we provide to middle class families and to those working to join the middle class.

The Republican budget actually gets rid of some of the important provisions that are already there to help those families, but our budget does this in a fiscally responsible way. As we have seen, the Republican budget doesn't balance, not by a long shot.

I mentioned a quote in my opening remarks. I am going to quote the chairman of the Senate Budget Committee, Mr. Enzi, who said:

One of the problems I have had with budgets that I have looked at is that they use a lot of gimmicks. Now, when there was anticipation that ObamaCare would go away and that all of that money would still be there, that is not realistic. I would like to see us get to real accounting with the budget.

That is what Senator Enzi said; yet this budget assumes the revenue from the Affordable Care Act at the same time it repeals the Affordable Care Act.

What the President's and the Democratic budgets do is put us on a fiscally responsible path, reducing the debt to GDP ratio and doing it in a way that improves economic growth and provides for more shared prosperity, not a budget that provides another round of tax cuts for folks at the top with the hope that somehow it is going to trickle down and lift everybody up.

Somebody who knows a lot about these areas is someone who is both a member of the Budget Committee and the Ways and Means Committee.

I yield 3 minutes to the gentleman from Washington (Mr. McDermott).

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Mr. VAN HOLLEN. Mr. Chair, I yield myself such time as I may consume.

I do want to say a word about the impact on seniors. We have already talked about the fact that the Republican budget will immediately increase the cost to seniors with high prescription drug burdens, it will increase the copays immediately for preventive services.

Let me just say a word about what it will do to seniors who are in nursing homes and other settings that rely on Medicaid. The previous gentleman just mentioned the number of people in his district on Medicaid. Let me just say that seniors and people with disabilities account for 85 percent of Medicaid spending; 65 percent of that spending is to the aged and the disabled, 20 percent to kids.

Now, here is what the Congressional Budget Office, the nonpartisan folks, said about the Medicaid cuts of this magnitude in the Republican budget and the impact that they would have on States: even with significant efficiency gains, in other words, even if you imagine that the States are going to somehow come up with incredible efficiencies, even with that, the magnitude of the reduction in spending relative to such spending in other scenarios means that States would need to increase their spending on these programs, make considerable cutbacks in them, or both; in other words, you are just passing the buck down to the States. So they have a choice: either they raise taxes to make sure that folks in senior homes, seniors in nursing homes don't take a hit, or seniors in nursing homes take a hit through fewer benefits. You just can't have it both ways when you are cutting $900 billion out of the program that helps seniors and the disabled; right?

Okay. Here, States, you do it on your own; we are just going to give you $900 billion less. Any nonpartisan person looking at this would arrive at the conclusion the nonpartisan budget folks at CBO concluded, which is: either States are going to increase their taxes to maintain those services, or those people are going to get less services. That is why this Republican budget is hard on seniors, just like it is hard on students and why it is hard on working families around the country.

As I said, it is great if you are already at the top; right? If you are a millionaire, you are going to get green-lighted for the Romney-Ryan tax plan that cuts your rate by 30 percent while increasing the tax burden on working Americans. That is just not right.

I reserve the balance of my time.

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Mr. VAN HOLLEN. I yield myself such time as I may consume.

Mr. Chairman, just a couple of points. Again--and we keep hearing that the Republican budget balances--it does not balance. It is interesting that instead of having the priority right now be accelerated economic growth with rising paychecks and rising wages for Americans, our Republican colleagues have made the absolute priority a balance which their own budget doesn't achieve.

In fact, the Republican budget that was brought to the floor just 3 years ago didn't balance until something like 2047, and yet now instead of having the priority be growing the economy in a way that raises wages for all families, they have got a priority which their own budget doesn't meet.

Now, American families who are focusing on their pocketbooks know that from time to time they do borrow to invest in their future. They borrow to buy a home that can go up in value. They sometimes borrow for education because they know that is a good investment.

Actually, interest rates are very low right now. We should be investing in our national infrastructure so we don't become a pothole nation in the days ahead. You know, the chairman of the committee mentioned again the transportation trust fund a little earlier today.

The reality is that the President's proposal puts forward in the budget a 6-year transportation plan that avoids the shortfall and actually helps to boost our national infrastructure, our investment in roads and bridges and modernizing our national infrastructure, so that we can remain at the cutting edge and don't fall behind. The Republican budget has no plan more than the 10-months plan we have had, and in this budget nothing real at all.

Now, I do want to say one word about what the chairman said about the President's defense spending and the way the President did it. You ought to know, the President did not put it in the slush fund. He put our base defense needs where they always have been: in the defense budget for the Defense Department. In fact, I was really surprised to hear the chairman say that, because the Republican study group budget--I believe the Republican study group budget represents a majority of Republicans; I am not sure--does it the same way the President did it, in a straightforward manner. They put the funds that the Joint Chiefs of Staff say they need for our base defense needs, they put it in their budget. They do exactly what the chairman said the President was doing in some indirect way.

Look, I really am pretty surprised that our colleagues keep coming back to this point because it is a total violation of what they, themselves, said, wrote down on paper a year ago, that you shouldn't be funding our defense needs as part of the ongoing defense budget by putting them in a slush fund for the overseas contingency account when the military leadership says they don't need that money for that purpose.

I am pleased the President did this in a straightforward manner, in the manner that the Joint Chiefs of Staff and the military leadership said. In fact, it turns out the same way the Republican study group did, but apparently not the way the Republican majority wants to do business anymore.

I am pleased to yield 3 minutes to the gentlewoman from California (Ms. Maxine Waters), the distinguished ranking member of the Committee on Financial Services, who understands the impact that the Republican budget decisions are going to have on everyday Americans, including in their pocketbooks.

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Mr. VAN HOLLEN. Mr. Chairman, not only does the Republican budget not balance, but it doesn't eliminate one special interest tax break for the purpose of reducing the deficit. Not one. These are tax breaks that powerful interests have put into the Tax Code over many years.

Apparently, it is okay to deeply cut our investment in our kids' education. Apparently, it is okay to increase the cost of prescription drugs for seniors on Medicare, but, for some reason, we are not going to get rid of one corporate tax break for the purpose of reducing the deficit. Those are not Americans' priorities.

Mr. Chairman, I yield 2 minutes to the gentlewoman from Maryland (Ms. Edwards), someone who understands the importance of moving America forward, my colleague and friend and a member of the Transportation and Infrastructure Committee.

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Mr. VAN HOLLEN. Mr. Chairman, this budget doesn't make tough choices. The Republican budget makes bad choices. It doesn't cut one single special interest tax break in the Code while it makes deep cuts to our kids' early education. That is a bad choice, not a tough choice.

Mr. Chairman, I yield 3 minutes to the gentleman from Virginia (Mr. Connolly), a distinguished member of the Oversight and Government Reform Committee.

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Mr. VAN HOLLEN. Mr. Chairman, just for all Members listening, the last gentleman was talking about the differences between the two versions of the Republican budget.

I want to point out that the President of the United States funds our defense budget in the straightforward way and in the way that the Joint Chiefs of Staff have asked for, funding the base budget as it should be and funding the OCO budget as it should be.

I now yield 3 minutes to the gentleman from Virginia (Mr. Scott), the ranking member of the Education and the Workforce Committee who understands that growing our economy depends on our kids getting a good education.

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Mr. VAN HOLLEN. Mr. Chairman, I think our colleagues can hear that there is an awful lot of confusion and uncertainty among our Republican colleagues about funding our national defense. The President's budget is very clear. He funds the national defense the way the Joint Chiefs of Staff proposed is best for the country.

Mr. Chairman, I am now pleased to yield 2 minutes to the gentlewoman from Texas (Ms. Jackson Lee), a distinguished member of the Judiciary Committee who fights for justice and other really important causes.

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Mr. VAN HOLLEN. Mr. Chairman, I just point out to my colleagues that both of what we are referring to as Price 1 and Price 2 are a total violation of what the Budget Committee, on a bipartisan basis, has said we would not do with respect to using the overseas contingency account as a slush fund. Both Price 1 and Price 2 do that to different degrees. If you want to fund defense in the straightforward manner that the military leadership has recommended to the President and the President has put in the budget, then you should support the Democratic alternative.

Mr. Chairman, I reserve the balance of my time.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself such time as I may consume.

Let me just start with some comments about the importance of making sure we make investments in defense in a straightforward and honest way.

The chairman's comments were directly contrary to the position he took 1 year ago. Here is what he said as part of the Republican majority: ``Abuse of the OCO''--that is the overseas contingency account--``is a backdoor loophole that undermines the integrity of the budget process.'' That is what our Republican colleagues said. They said they weren't going to allow it. They are using the overseas contingency account as a slush fund for moneys that should be invested in the normal Defense Department accounts. That is what they said last year. They have done a 180 here. That is a discredit to this House.

We keep hearing all day about Price 1 and Price 2. What is that all about? I am sure colleagues listening have got to be going: What is going on, Price 1 and Price 2? It is because our Republican colleagues haven't figured out how they are going to fund the defense of the country. But both Price 1 and Price 2 are a violation of the position our Republican colleagues took just a year ago.

So let's do this in a way that honors our commitment to our defense and do it in a straightforward manner, the way that the Joint Chiefs of Staff and others have recommended.

Now, it is always interesting to understand people's different perceptions in morality. I would just ask a question: Is it right to have a budget that refuses to cut a single special interest tax break in order to reduce the deficit while cutting our investment in our kids' education? Is it right to have a budget that won't cut a corporate tax break, like the corporate jet loophole, but cuts our investment in our kids' education, increases the cost of prescription drugs to seniors, says to students you are going to pay more for your student loans?

I was really interested to hear the chairman's comments about the student loan program. What the Democrats did when they were in the majority was get rid of a system where the big banks were making guaranteed returns off of taxpayer dollars that were not going to students. They were making guaranteed 9 percent returns.

So we said: Why should we have a system where the big banks are getting these guaranteed taxpayer-subsidized returns? And we moved to a direct loan program. That meant every dollar could go farther in terms of providing student loans. Cut out the big banks. They were just siphoning off dollars that were intended to go to students. That is what we did. But we also understand that despite those improvements, our students are finding it costly to go to college.

That is why actually in our budget we provide for increased opportunity and more affordable college, the opposite of what our Republicans do, which is they say they want to increase interest rates on student loans and cut $90 billion-plus from Pell grants.

Is it moral or, I should just ask: Does the country really think it is right to have a budget that paves the way for cutting the top tax rate for the wealthiest people in the country, the people who have done just great over the last 20, 30 years? Is it right to cut their tax rates by one-third, from 39 percent down to the mid-20s, while increasing the tax burden on working families, middle class families, and those who are working their way into the middle class, getting rid of the deduction for higher education, getting rid of the increase in the child tax credit, getting rid of the Affordable Care Act tax credits that help people afford education?

The Tax Policy Center did a study that said a proposal like the Romney-Ryan plan would provide about an average tax cut of $200,000 to millionaires and increase the tax burden on middle-income families by $2,000. Is that right?

Look, the issue here is whether you believe that we should grow our economy and accelerate economic growth in a way with more shared prosperity, or whether you believe in an economy that grows through trickle down, the idea that cutting tax rates for the top will somehow lift

everybody up. That theory ran into the hard wall of reality. Folks at the top had their incomes go up, everybody else was running in place. We should not go back to that.

I reserve the balance of my time.

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Mr. VAN HOLLEN. Mr. Chairman, I am just a little puzzled by the comments from the gentleman from Florida since the Republican study group's budget--and I understand the Republican study group consists of about 170 members of a big majority of the Republican caucus--funds defense in a straightforward way that the President's budget does and that the Democratic alternative budget does.

I am interested to hear the Republican study group's budget approach to defense characterized as a fake. I think that would be a surprise to the members of the Republican study group.

I reserve the balance of my time.

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Mr. VAN HOLLEN. Mr. Chairman, I yield myself the balance of my time.

When we are talking about the budget and priorities, the chairman of the committee left out one of the biggest areas of ``spending'' in the Tax Code according to the Congressional Budget Office, and that is the amount of spending that goes through a whole range of tax breaks.

If you look at this chart, you will find that what the Congressional Budget Office calls ``tax expenditures'' exceed the amount spent each year on Social Security, on Medicare and Medicaid, on defense: $1.4 billion in tax breaks.

Now, some of those are for good policy purposes, but some of them and a lot of them are there because some powerful special interest got some special break that helps him and nobody else, and this Republican budget doesn't touch one of those in order to reduce the deficit, not one. It doesn't close one of those $1.4 trillion in tax expenditures to reduce the deficit.

What it does do is make life harder for people who are working hard every day. It increases the tax burden on middle class Americans and on those who are working to join the middle class. It raises the cost of going to college by increasing the cost of student loans. It increases the daily costs of seniors, who are going to face higher prescription drug costs and higher fees for copayments--seniors, students, working class families.

I started this discussion by pointing out that we have seen worker productivity grow. American workers are working harder than ever, but their paychecks have been flat. Our Democratic alternative budget will address that issue.

This Republican budget makes the situation worse. It doesn't do anything to help hard-working Americans get ahead. It says, Work harder, but get less. You are going to take home less, and you are going to get hit with higher taxes because they take away certain important tax benefits for middle-income and working people.

Why in the world we would want to pass a budget that makes it harder on hard-working people today and that disinvests in the future of America tomorrow, I don't know. There is a much better way to do it. We will present an alternative tomorrow which does that.

It says we should have a Tax Code that is not rigged in favor of making money off of money, but that actually favors people who earn a living through hard work every day. Our current Tax Code actually gives better tax rates to unearned income than to earned income. That doesn't make sense.

We propose to provide important tax incentives and benefits to hard-working Americans; whereas the Republican budget just provides another tax rate cut for folks at the top on the failed theory that it is going to trickle down and lift everybody up. That is not the way to accelerate economic growth.

The way to accelerate economic growth is to make sure all hard-working Americans can bring back bigger paychecks to provide for their families, to make sure their families can achieve the American Dream.

That is an economy in which everyone moves forward together, as opposed to an economy that says to the folks at the top: you have made it; we are going to give you even more tax breaks, and once you climb the ladder of opportunity, it is okay to lift the ladder up after you.

That has not been the way our country has worked from the beginning. Let's reject this budget. There is a better way, and we will have a chance to debate that tomorrow.

I yield back the balance of my time.

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