BUDGET HEARING: Murray Calls for Investments in Broad-Based Growth, Fair and Responsible Deficit Reduction
Today, Chairman Patty Murray (D-WA) and the Senate Budget Committee held a hearing with Congressional Budget Office Director Dr. Douglas Elmendorf, who testified and answered questions about CBO’s Budget and Economic Outlook: 2014 to 2024.
At the hearing, Murray highlighted that while many in Congress have singularly focused on reducing the budget deficit, it has left a deeper deficit in areas including infrastructure, education, job training and innovation, and that these job creating priorities must be addressed in addition to tackling long term budget challenges. Murray discussed CBO’s findings on the Affordable Care Act, and explained how expanded access to health care will be a boost for families and businesses - countering Republicans efforts that misrepresented the CBO report in order to attack the Affordable Care Act.
Murray also addressed news that House Republicans are dropping their debt limit demands and will move forward with a clean debt ceiling bill: “Unfortunately, the drama and uncertainty around the debt limit that caused so much harm to families and the economy last year has come back over the past few weeks. But there was encouraging news this morning. House Republicans seem to have finally realized that Democrats aren’t going to pay a ransom to allow the federal government to pay its bills. I look forward to them sending over a debt limit bill with no ransom demands attached. And I am hopeful that we can truly step away from the constant crises and debt limit brinkmanship to build on the bipartisan progress we made in our budget deal.”
Key Excerpts from Chairman Murray’s Statement:
“Recognizing the findings and the challenges that the CBO budget outlook identified, I think we should move forward in two ways. First, we need to work to ensure every family has the opportunity to succeed in America. At the same time, we need to address our long-term fiscal challenges fairly and responsibly. Those two goals go hand-in-hand, because the best way to tackle our long-term fiscal challenges is to invest in broad-based and long-term economic growth.”
“For too long in this country, leaving a job also meant leaving behind your health coverage. In 2008, Harvard University conducted a study that found 11 million workers wanted to change jobs, but felt locked in to their current job, simply to keep their insurance. One of those workers is named Christine Lange from my home state of Washington. A year ago, Christine dreamed of quitting her job to start a small business. But her family relied on the health insurance she received through her employer. The Affordable Care Act changed that. In January, she retired from her old job and now plans to launch her own business later this year.”
“By expanding access to health care, more people will have the opportunity to retire early. More entrepreneurs will have the chance to start a new business, without giving up access to health care. And CBO’s report makes it clear that the Affordable Care Act is good for parents. That’s because it will give more parents the choice to stay home and raise a family and the choice to reduce hours to take care of an aging parent or family member. This doesn’t mean unemployment will go up. In fact, CBO found that on balance, the Affordable Care Act will actually boost demand for goods and services over the next few years. That’s because when people have access to affordable health care, they are able to spend more of their earnings on other family needs.”
“In recent years, many in Congress have had almost a singular focus on reducing the budget deficit. While important, that has left us with deeper deficits in other areas. Our roads and bridges are crumbling. We aren’t making the investments we need in education and job training. While other nations are investing in innovation, research, and development, we’ve scaled them back. We have a serious jobs deficit and a serious opportunity deficit. And we would be doing families today, and the next generation, a great disservice if we let these deficits continue to grow. Addressing these deficits isn’t just the right thing to do. It’s also good economics, and it’s good for the budget.”
“…we need to put in place a credible plan that reduces spending responsibly, that raises revenue by closing wasteful and egregious tax loopholes, and that invests in, and grows our economy today and pays dividends for generations to come. But to do that, we have to build on the bipartisan foundation we built with our two-year budget deal.”
“Let’s continue that work. Let’s tackle our long-term fiscal challenges fairly and responsibly. Let’s expand opportunities for more workers and families. Together we can move forward and build a future of shared prosperity for generations to come.
Full Text Of Chairman Murray’s Opening Statement:
“This hearing will now come to order.
“Welcome, everyone. I’d like to thank Ranking Member Sessions and my colleagues for joining me here today.
“And I want to thank Dr. Doug Elmendorf and the entire staff at the Congressional Budget Office.
“We appreciate the hard work and the high standard of professionalism and objectivity that CBO provides to the Committee and to the Congress.
“Those qualities were especially helpful last year in assisting Chairman Ryan and I with the completion of the two-year Bipartisan Budget Act.
“That deal that we reached in December was a strong step away from the constant crises we’ve seen over the past few years.
“Democrats and Republicans finally came together to pass a budget.
“We came together to roll back the irresponsible cuts from sequestration with a balanced approach that included smarter savings and new revenue.
“And we came together and compromised to show people everywhere that bipartisan work in Washington is possible.
“Unfortunately, the drama and uncertainty around the debt limit that caused so much harm to families and the economy last year has come back over the past few weeks.
“But there was encouraging news this morning.
“House Republicans seem to have finally realized that Democrats aren’t going to pay a ransom to allow the federal government to pay its bills.
“I look forward to them sending over a debt limit bill with no ransom demands attached.
“And I am hopeful that we can truly step away from the constant crises and debt limit brinkmanship to build on the bipartisan progress we made in our budget deal.
“Recognizing the findings and the challenges that the CBO budget outlook identified, I think we should move forward in two ways.
“First, we need to work to ensure every family has the opportunity to succeed in America.
“At the same time, we need to address our long-term fiscal challenges fairly and responsibly.
“Those two goals go hand-in-hand, because the best way to tackle our long-term fiscal challenges is to invest in broad-based and long-term economic growth.
“Before we get into the details of CBO’s outlook for the next decade, it’s helpful to take a step back and see where we’ve been.
“When President Obama took office, we were facing the worst economic downturn since the Great Depression. The country was losing more than 700,000 jobs a month. Families were losing their homes. Parents were losing confidence in what the future would be like for their children.
“We’ve made significant progress since then. We’ve had 47 consecutive months of private-sector job gains. Economists believe economic growth is poised to accelerate this year.
“The housing market has improved, though we can’t forget that many families are still struggling.
“Of course, even though these are good signs, the recovery hasn’t been nearly as fast, or as strong, as any of us would like.
“Last Friday’s disappointing jobs report is just the latest reminder of that.
“So while we are moving in the right direction, Congress can, and must, do more to boost this economic recovery.
“In the past few years, we’ve also made significant strides in tackling our fiscal challenges.
“Since 2009, we’ve cut our deficit in half. CBO projects it is on a path to decline further this year and the next, with the debt stabilized as a share of the economy through the end of this decade.
“But, as with the economic recovery, we have more work to do.
“And I look forward to hearing from Dr. Elmendorf about the long-term deficit challenges – challenges we can’t ignore.
To be clear, discretionary spending – by which I mean investments in priorities like national security, infrastructure, research, education, and programs that fight poverty and provide economic security – is not driving our fiscal challenges.
“In fact, CBO projects that discretionary spending will continue to decline as a share of GDP through 2024. In the 1970s and ‘80s, discretionary spending averaged about 10 percent of GDP. Last year, it was at 7.2 percent of GDP. And, by 2024, those investments will represent just 5.2 percent of GDP.
“This decline is alarming because limiting discretionary spending means limiting investments in innovation and cutting-edge technology that spark job growth.
“It also means threatening our efforts to care for service members, veterans, and their families.
“Those lifetime investments will be critical over the next few years, as more military families transition from the battlefront to the home front.
“And limiting discretionary spending will roll back efforts to give kids and families the education and job-training opportunities they need to succeed in a global economy.
“I want to be clear on another point in the CBO report that caused lots of confusion last week.
“For too long in this country, leaving a job also meant leaving behind your health coverage.
“In 2008, Harvard University conducted a study that found 11 million workers wanted to change jobs, but felt locked in to their current job, simply to keep their insurance.
“One of those workers is named Christine Lange from my home state of Washington.
“A year ago, Christine dreamed of quitting her job to start a small business. But her family relied on the health insurance she received through her employer.
“The Affordable Care Act changed that.
“In January, she retired from her old job and now plans to launch her own business later this year.
“By expanding access to health care, more people will have the opportunity to retire early. More entrepreneurs will have the chance to start a new business, without giving up access to health care.
“And CBO’s report makes it clear that the Affordable Care Act is good for parents. That’s because it will give more parents the choice to stay home and raise a family and the choice to reduce hours to take care of an aging parent or family member.
“This doesn’t mean unemployment will go up.
“In fact, CBO found that on balance, the Affordable Care Act will actually boost demand for goods and services over the next few years.
“That’s because when people have access to affordable health care, they are able to spend more of their earnings on other family needs.
“But the latest outlook makes clear we have some areas to work on.
“The CBO projects mandatory spending for programs like Medicare and Medicaid will continue to rise over the next decade.
“But the solution isn’t to shift those growing costs onto seniors and families, as Republicans have proposed. We need to work on ways to bring those costs down responsibly.
“The good news is health costs have slowed significantly in recent years. From 2010 to 2012, the cost of health care grew at its slowest pace since the government started tracking it in the 1960s, according to the Council of Economic Advisors.
“The CBO reports the cost of Medicare ‘will be slower than usual for some years to come.’
“So, we need to follow through on the reforms in the Affordable Care Act that reduce costs and increase access to quality care. And we need to work together to build on them.
“Bringing down health care costs is just one part of the solution.
“We also need a balanced approach to tackle our deficit – one that reduces spending and raises new revenue fairly and responsibly.
“As CBO reports, in 2014, federal spending through the tax code is the single largest item in the budget, costing American taxpayers more than Social Security, Medicare, or defense.
“While some of those tax breaks go to important investments in the middle class and low-income working families, the Treasury loses hundreds of billions of dollars to tax loopholes and carve-outs that benefit the wealthiest Americans and biggest corporations.
:Big businesses shouldn’t get to write off expenses associated with shutting down a plant in the U.S. and moving it overseas.
“It’s wrong that corporations can claim massive tax breaks by deducting the interest on loans used to finance foreign operations, before they pay tax on their foreign income.
“These unfair tax giveaways only incentivize corporations to move jobs abroad. And they make it harder for U.S. businesses without foreign operations to compete.
“The list of egregious loopholes and special-interest giveaways goes on. And it would be unfair and unacceptable to protect every last one of them, yet ask seniors and families to bear the burden of deficit reduction alone.
“In recent years, many in Congress have had almost a singular focus on reducing the budget deficit. While important, that has left us with deeper deficits in other areas.
“Our roads and bridges are crumbling. We aren’t making the investments we need in education and job training. While other nations are investing in innovation, research, and development, we’ve scaled them back. We have a serious jobs deficit and a serious opportunity deficit.
“And we would be doing families today, and the next generation, a great disservice if we let these deficits continue to grow.
“Addressing these deficits isn’t just the right thing to do. It’s also good economics, and it’s good for the budget.
“When we invest in job creation and innovation, small-business owners create new products and technology the rest of the world wants to buy.
“And with more growth, more people can find jobs, and incomes increase.
“As broad-based prosperity increases, our long-term budget challenges become easier to tackle.
“That point – that these two challenges go hand in hand – is riveted by the latest CBO report.
“As I read it, Dr. Elmendorf, the biggest change in the deficit and debt projections relative to last May result from changes in CBO’s economic projections.
“Those changes lower revenues and, on net, increase deficits and debt by $1.2 trillion.
“To put that in perspective, $1.2 trillion is twice the amount of revenue that Congress elected to raise by allowing a portion of the 2001 and 2003 tax relief to expire for upper-income taxpayers at the end of the last Congress.
“So, we need to put in place a credible plan that reduces spending responsibly, that raises revenue by closing wasteful and egregious tax loopholes, and that invests in, and grows our economy today and pays dividends for generations to come.
“But to do that, we have to build on the bipartisan foundation we built with our two-year budget deal.
“That deal was a good start. It showed that Republicans and Democrats can come together to put families and the economy first.
“Let’s continue that work. Let’s tackle our long-term fiscal challenges fairly and responsibly. Let’s expand opportunities for more workers and families.
“Together we can move forward and build a future of shared prosperity for generations to come.
“I’m looking forward to hearing Dr. Elmendorf’s remarks, but I’ll first turn to Ranking Member Sessions for his opening statement.”
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