tv OMB Dir. Shalanda Young Testifies on 2023 Budget Request - PART 2 CSPAN April 2, 2022 3:29pm-4:49pm EDT
for being here so we can ask you these questions. i'm sure in your 26 years of work in this field, you have developed enough experience to be called director of the budget office. thank you. chair yarmuth: per our agreement with director young, the committee will recess briefly. the committee will stand in recess subject to the call of the chair, requested members return at 12:30 p.m. so the hearing may proceed. [captions copyright national cable satellite corp. 2022] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
gentleman -- gentlemen from iowa. >> and you for calling a hearing and a thank you for coming to us today. i look forward to answering questions. i would like to point out that the tax cut and jobs act will expire as part of this budget raising taxes on working families in iowa, raises taxes on small businesses, firefighters, teachers and health care heroes who have dedicated their lives to making others healthy especially through pandemic. we will reward them with a tax increase. i finished my fifth 20 county tour around the district and held a town hall was made. there is a theme for my constituents, when here on the ground and that is the concern about rising prices. whether it is farm repairs, farm inputs, the price at the pump for gas, increase in everyday goods like groceries, bacon and milk, working families are struggling to put food on the table largely because of the initiation policies.
we know increased federal spending is driving of these costs, yet the president's budget request proposes more spending with a $14 trillion impact on the deficit, that is up to the next generation to play. inflation today is at seven point 9%, the highest it has been in four decades and yet the budget plan assumes inflation will only be 2.3% through the next foreseeable future all the way to 2032. this is just out of touch and we have heard why that is so but i asked about that same issue last year. your we are with worse inflation than a year ago. my question is why his administration continuing to make these claims that are out of touch about low-inflation inflation here, hydration -- high inflation at the grocery store and what consumers are facing because that is affecting islands every day.
dir. young: we hear you and we agree with your servants, we might disagree about how to get them under control of the president is concerned about these cost pressures on americans. we have worked with the ministration for example to ensure that those who work farms can fix their own equipment. we have found that there is competition always with rec -- >> right to a different issue. asking why being accurate in your accounting of inflation here. because if you're making an assumption based on a budget that is wrong, but is irresponsible. >> that is how budgets work. we have to close the books 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 affected
different inflation rate, but you're right, it is higher than our estimates were in november when we walked to the database. >> i hope going forward that we can be cognizant of the back of those numbers are inaccurate, though as we has the committee are continue and work with you and your office, being cognizant that these numbers are not right is going to be crucial as we are making the right decisions. i'm glad you mentioned farmers in this position because americans are struggling with the cost of fuel, which includes billions of dollars in funding for ev and charging for structure, this does nothing to write on the cost of fuel for iowans but the subsidies will make inflation worse. in the president came to iowa on the campaign trail and looked them in the eye and said they could count on him for a new era of biofuels, quoting the president, lipservice will not make up for nearly four years of retroactive damage that has damaged our economy and forced plans to shutter. we have heard it's on this budget but i'm wondering why, why does the ministration break
there promised to iowans and americans do not support these age of renewable biofuel, domestic energy production like ethanol. dir. young: i'm sorry it and i could this. this budget starts october 1. many inflationary increases we are seeing in gaza have to do with the russia and ukraine situation. we have to deal with that situation before the budget takes effect. so we are happy with that $13 billion congress provided to help with assistance to ukraine, but the gas situation in addition to selling 60 million barrels from the strategic petroleum reserve will also be looking to other things in which to bring down costs for americans. that will be before the budget takes effect. >> we are looking at projections for many years out, so i think iowans want to know why it's not included. why is biofuel noticeably missing?
we have had two million encounters at the southern border, some increased funding in the omnibus and supplemental there, but we are back at square one with these cuts to proposed --two cbp. why is that happening? dir. young: you see a five percent increase to dhs included for agents. many in our party will disagree, but we believe there is a necessity for additional personnel to ensure that we have an orderly immigration system and in addition we have an increase for immigration judges to make sure we move people through the legal sick -- legal system. so we have put forward what we believe is a bounce approach to deal with the border. >> the gentlewoman's time is expired. i recognize the gentleman from massachusetts for five minutes. >> thank you, chairman and director young, 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 opportunities that it presents. can you talk to me for a second about how we are modernizing our military our national security? here we are watching russian tanks get destroyed by drones on tv. one of the biggest threats americans face from this ongoing war in ukraine is the threat of cyber attacks. home and our biggest adversary of the world is china. china has not only invested in future capabilities like advanced missile systems, space systems and artificial intelligence, but they have made important cuts to make those investments possible. we used to be thrilled china had a one million man army because it was not that good. they have cut it to invest in future capabilities. how is the administration meeting that challenge? dir. young: thank you. we are increasing the department of defense budget by 4%.
it is in line with the strategy. last year when the adventure she was new, we saw the military the future but we are invested in ai and hypersonic. in addition to legacy equipment, submarines that many of you are interested in. we have to do both. we have to invest in our traditional capabilities as well as look to the future including our cyber threats. >> that is often been said that congress gets in the way of the cuts we need to make to invest in the future. would you agree? dir. young: out of deference to my former place of employment, i'm going to say this is the beginning of a process and i look forward to working with you. >> if you want to break, i will. i think we have work here to make sure that we are not just protecting parochial interests at the expense of nationals garrity. china is also trying to
outcompete us in foreign aid why attacking one of our strengths, the allies and partnerships we have around the globe. look how much they are investing in places like africa. this budget puts six hundred $82 million hundred $82 million toward ukraine support. is that correct? dir. young: that is correct but that is longer-term objective. we are really using for military a taoist $13 billion congress painfully provided earlier this month. >> it is amazing to compare six hundred $82 million we are 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 is also important that we take this opportunity having passed this historic infrastructure bill to invest in the future of transportation. is that the administration's
position that we should invest in modes and investments that have a high return on investment for the american taxpayer? dir. young: that's what we believe. we also believe project should have high benefit cost ratios and we put out guidance at the conservation of some tries to focus our transportation in innovative and modernizing ways. >> i would point out that high-speed rail has some of the highest roi entrance rotation which is why the rest of the world has invested in it, china has built in the last five years the largest high-speed bro system of the world. are you familiar with the size of the united kingdom's budget compared to our own? dir. young: i am not. >> the united kingdom, a country one 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? dir. young: clearly you have to work with congress as you have pointed out that represents many parts of the country. >> i would say if america is 40 times bigger than the united states, we should not be moving around much more slowly than the rest of the world. the brits can go three times as fast on their interstate system on the new high-speed rail line. investing in more highways creates more traffic jams. investing in a lot of electric vehicles makes the traffic jams silent, but we still have a lot of traffic jams. so we have passed this historic info structure bill. i think the administration has an opportunity to make this investment for the future. we can build more 19 50's era trains and railways or we can build for the future and i hope you take that opportunity. dir. young: thank you. >> the gentleman yields back and i recognize the showman from
florida for five minutes. >> thank you, mr. chair. director, things are being here, i do appreciate it. obviously a budget in five minutes, we are not going to be able to deconstruct this entire thing. soap let us try to focus. number one, the corporate tax rate under the president's budget goes up to 28%. is that the administration's belief that an increase in the corporate tax rate will have no impact on an inflationary environment with higher prices? dir. young: we don't believe it will change how corporations make decisions. >> the question is does the magician believe that higher corporate income taxes will force an increase in prices in an already inflationary environment that a lot of people believe now is unleashed by the american rescue plan from last february. dir. young: we do not believe that is the case. >> so the imagination does not
think higher taxes is boring to lead to higher prices on top of already inflationary environment. dir. young: you are assuming corporations are passing it on -- >> they already do, they do it with the ability to get products right now. the call -- when the crawl --cost of freight is up, cost of oil, that is all passed through. yes or no. dir. young: we don't believe asking corporations to pay 30 to 20 percent, these pay 35, will increase this. >> does the initiation acknowledge that when the corporate tax rate was cut that the united states raised more revenue in corporate income taxes than any point in american history? dir. young: what we saw was the continued use of loopholes that
prevented 50 corporations are paying any taxes. >> about talking about what is in the tax code. i would argue if we are going to have a fair code we should have a flat tax or fair code. fair tax. it is 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 make that argument is a they're using these things. i'm talking did the government raise more revenue from corporate income tax? yes or no? dir. young: and they continue to make more. next let's move on. were not going to get anywhere. i'm reading the green book right now. right now we have a situation in the united states associated with gas prices and rising oil prices, which is going to impact every american whether they are rich or poor, black or white. one thing that will be consistent is it will affect everybody. there will be no inequality
associated with rising energy prices. in your budget proposal, the administration is saying they are going to unwind every tax benefit associated with fossil fuels in the united states. does the initiation believe that completely eviscerating all oil in natural gas tax treatments we have had in our country for 30 or 40 years, do they believe that will actually lead to lower prices on oil and natural gas? dir. young: we don't believe the tax structure offered will lead to increased gas prices, but you're right, 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. >> we have to acknowledge that oil prices were up far before vladimir putin invaded ukraine. the price of a barrel oil -- barrel of oil was of significant, the price of gas was up roughly 65% -- 60 five
cents per gallon in the united states. that's already sick of getting higher. do you acknowledge that? dir. young: i acknowledge their are further increases the further increased since russian aggression. >> we are going to acknowledge the record that prices have been higher under the president's of ministration currently. the president has talked about how he wants to get away from fossil fuels. is the administration's position that donating all text treatment that makes oil and gas production in the united states far easier for mother that is going to be to the betterment of the united states from an energy perspective going forward in the country? dir. young: we think we need a comprehensive approach as we will remind everyone here. our country is one of the three before russia took this route that produce over 10 million barrels a month. this country does not have an oil production problem. >> quick follow-up. that is 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 ministration 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 for oil and natural gas? dir. young: these are developing systems. we need to ensure those systems -- >> fairly? >> his time has expired. >> come on chairman, we were good. >> i will let her answer. dir. young: by the way, many of the subsidy is for people who want to biochip vehicles is help consumers. many consumers want solar panels promote electric vehicles -- want solar panels and electric
vehicles. we believe to help them achieve that and a cleaner world is to provide subsidies through our tax system. >> his time is expired. >> thank you director. >> you have the opportunity to survey questions in writing which she can answer for the record. i now yield five minutes for the gentleman from washington. >> thank you mr. chairman, director young it is great to see you and to see you and call you director, graduations again on your appointment. i wanted to say first of all that there are many things in this budget that we appreciate, including the taxes on the wealthiest. i'm a lead sponsor of the ultra millionaire tax act. i also appreciate the restrictions on the stock buybacks. as well as some immigration provisions you mentioned earlier, investment in judges, legal counsel and community-based alternatives to detention, we appreciate those things so thank you for those.
america has a monopoly crisis that is strangling small businesses and hurting people's pocketbooks while corporations have made amends profits through profiteering and price gouging. i was pleased to see that there are historic increases to the antitrust and the ftca to enforce our laws. but that's one piece. have efforts in congress to give federal agencies more tools to ensure competition. do you agree that those efforts should be prioritized? dir. young: we do. that is why we talked earlier, increasing competition is one way we have to deal with inflation in this country and why you see at two hundred $73 million request for the antitrust division and the department of justice, 80 $8 million increase, 40 eight percent over 20 21 and a four hundred $98 million request for a 40 percent increase over 2021 for the ftc. >> thank you, and i appreciate
the department of justice as recent letter stating that the rise of dominant platforms presents a threat to open markets and competition and we are looking forward to moving our packet along. you will be surprised to know that i need to express my deep concern with the 4% increase in defense spending. is on top of the unprecedented increase over the president's festival 20 two request but just became law. can you tell me how much the pentagon has given just five contractors? dir. young: are we speaking contractors --i will 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 park traps after 9/11 went to just five contractors and from fiscal year 2001 to 2020, these companies received two point $1 trillion in $2021. and in -- 20 21 dollars and
they gave. and a half times the entire budget of the state apartment and usaid. is the pentagon the only federal agency that has never passed an audit? dir. young: i believe that's correct. >> and it has failed its last four audits, yet we are continuing to pile money on top. i would just say that to the previous representative's questions, i would argue there more efficient ways to spend the money we have. it does not mean that we can have solid and secure national security if we actually cut out waste fraud and abuse and focus on technologies that will provide us with the biggest bang for the buck. it seems that our only strategy our military spending is bigger is better. do you think that bigger is better forever and ever? dir. young: i think a defense
budget has to be strategy based. you have been a longtime advocate here on getting rid of waste and abuse in the department of defense, that is accurate. but we have heard from the other side of the aisle who believe our number is not large enough. that is why we believe the right thing to do here is use the long-term dissent strategy to build our budget. parks director young, i assume that the other side also would agree that we don't want waste fraud and abuse in our pentagon budget. i rumor last year or last term under a republican president we actually had a republican budget director 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 to some of the patriotic banner and say that somehow because we are increasing military spending, even though we can't pay for veterans at home, we can invest in education in ways that we
want, even though we are having debates around whether or not we have enough money for childcare, something the president has advocated for the way, more childcare, but as we have those debates, how are we going to make sure that the taxpayer dollars that we are spending are actually going to an audited agency that has cut out abuse? dir. young: there is no reasonable person who would disagree that a pentagon should be able to pass a basic audit. but i want to reiterate that we think the need is to put forward a budget that is tied to a national strategy, whether or not you agree with the strategy is another thing, but as you heard, there are a lot of opinions about what the defense number should be. >> you know how i have been advocating on this for a long time, and i just understand, there is nothing that is contradictory to a national defense strategy will talk about making sore --sure that pentagon passes an audit and cut out
waste fraud and a bruise dutch abuse. thank you for your role that you occupy in every thing you do before this and i hope we can work together to make taxpayer dollars mean something instead of just -- >> her time has expired. i recognize that government from ohio, for five minutes. >> -- the gentleman from ohio for five minutes. >> thank you. i want to make a few points and i will ask my question. number one, it is what is said and what is not said. in going through the document i realize there is zero mentioned, i think arbors ben cline of the sub, zero mention of congressman kline brought this up, -- congressman kline brought this up, there is zero mention of the debt crisis.
another mention, it mentions tax fee or penalty 100 27 times. -- 100 27 times. it is not mentioned the keystone pipeline, nor any plans for new domestic oil and natural gas production. while it mentions 27 times green , green house and one hundred 87 mentions of climate. --187 mentions of climate. you had a lot of discussions about the price of gas but i want to go back to another thing. in this document there are zero mentions of order 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, the things that have been mentioned and the things that have not.
my question is simple. how does this budget spend for other countries to combat climate change? dir. young: we are making a historic investment, about 11 million dollars, dutch 11 billion dollars, to ensure that low income countries who do admit can join all of us in the developing world and bringing down their pollution, so our kids in future generations have an earth to call home. >> a follow-up to that, mr. chairman. what is the total level of funding provided, including tax, for climate related policies in this budget? dir. young: we devote about 40 five billion dollars in climate activities. i will 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. for them to rate question down to make sure i have it correctly. it was also a provision, would any of the $30 billion in mandatory spending to prevent combat and crime be used to enforce gun control on any u.s. citizens? dir. young: the 30 billion dollars part is supposed to be a comprehensive look and provide state and locals with tools including psychiatry and mental health. but we do have increases in atf to make sure that ghost guns and other guns that find themselves in the hands of criminals, but we do something about that. >> another question. how will spending one point $4 million on a new office of environment of justice at doj help one enforcement's agencies do their job and tackle the crime crisis in america?
dir. young: we have to tackle the crime crisis while we tackle an environment of justice system. i read in the new york times, there is one county, i will mention the state, where people's sewage goes into their backyards. people of color, low income, we think something is wrong with that. >> and that should be part of the law enforcement agencies. dir. young: where there are illegal activities, the doj needs the tools to make sure all americans are treated equally under the law, even when they are environmental issues. 1 >> ok. all right. thank you, director. i appreciate your time. >> the gentleman yields back. i yield five minutes to the gentleman from michigan. >> 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, strengthening the middle-class, supporting law enforcement in particular, which is important in the communities i represent. and for doing what we can to lower cost for families. i was as i've expressed 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. for those who are not familiar, the flint registry is run to the centers for disease control and prevention and was created by congress to respond to the water crisis in my hometown and to connect families to health care and nutrition, led removal services, and do things they need to do to minimize the effect of lead exposure on their health. it is a powerful tool in it has this terrible moment, and it
also helps other communities. newark, new jersey. the michigan delegation democrats and republicans support this, and i just ask if the administration will support fully funding -- funding the flint registry so we do not have to reduce that commitment. dir. young: absolutely. we talk about the earliest in which we have to do things to get a budget, the flint registry was a result of that. we did not have time to incorporate the omnibus final decisions, we talk about environmental justice, how can we support things without
supporting flint, so you have my full support. >> thank you for that, and it's a good example that perhaps we avoid the very high cost, both in human and financial costs that the people of flint have experience. one other issue i do want to raise, has to do again with delphi salaried retirees. when gm filed for bankruptcy, the pbgc cut as much as 70% for 20,000 salary retirees.
these salaried workers suffered significant losses. i believe they were unfairly targeted. bipartisan legislation, can we ensure congress delivers these hard earned benefits? dir. young: thank you for your work on this. 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.
>> middle and high school students participate in the c-span documentary partition. we are featuring the winning entries. the second prize are from palo alto, california. the entry is titled a student's perspective on affirmative action. >> throughout high school, many students like us walk -- worked tirelessly. affirmative action is favoring individuals belonging to minorities.
they develop themselves to become open-minded and understanding in their futures. doctors, nurses. >> the only way we are going to get there is through an affirmative effort. >> let's take harvard for example. in 2021, harvard was ranked in the top 250 schools nationwide for diversity. when compared, the diversity stands out. not everyone believes affirmative action is fair to all students. since affirmative action started changing the lives of students in the 1970's, it became a controversial topic.
>> if you are disadvantaged you cannot run against people welcome practicing all their lives. >> the causes colleges to admit less qualified candidates. >> it's wrong to assume because someone is a specific color that that brings diversity to a school. >> in 2003, affirmative action became a federal issue. they accuse the college of not admitting them because of race. >> i think racial discrimination is wrong and the university of michigan is using a preference based on skin color and that is wrong. >> our view was, historically,
based on legal protection clause , race could be used for narrowly described circumstances. >> we should acknowledge we are trying to create -- if someone could demonstrate they were truly harmed by being discriminated against, i would say let's get rid of that. >> the supreme court ruled it is constitutional. however, all of these cases have been the same. keeping affirmative action a relative factor in college admissions across the country.
how does this affect our lives? many high school students around the nation seeking having a well-rounded college experience, and part of what makes this so meaningful is learning different backgrounds of people around the world. today, affirmative action allows schools this opportunity to create a more diverse student body. >> i have see what happens when young people are introduced. >> it challenges today are. >> today, it's a necessary step because when we surround ourselves from different backgrounds and cultures, we
allow our generation to develop activists to be a more diverse nation. >> to watch this at all winning entries visit our website. >> c-span is your unfiltered view of government, we are funded by these television companies and more. >> wow is there for our customers. now more than ever. it all starts with great internet. >> while support c-span as a public service. along with these other television providers, giving you a front row seat to democracy. >> next, three democrats vying
for the party nomination in the november 2 race debated in ohio, the winner of the primary competes in the general election for the seat currently held by rob portman. the debate is just under an hour. >> welcome to voters first, the 2022 ohio u.s. senate demo primary debate, sponsored by the ohio debate commission. coming to live from central state university in wilberforce, ohio. funding for this debate is provided by aarp ohio. the murray and agnes good government