Hi, everybody—and welcome. Today we’re going to discuss CBO’s long-term budget outlook. So first I want to thank Director Elmendorf and his team at CBO for all their hard work.
I have to say: Your report is sobering. Just take the first line: “Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar.” And later: “With deficits as big as the ones that CBO projects, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable.”
That’s it right there: It’s unsustainable. Our national debt is already bigger than our economy—and yet it’s going to get bigger. Our economy is already too weak to create the jobs we need—and yet it’s going to get weaker. People already can’t find work—and yet there will be even less opportunity. The average number of hours worked is shrinking.
We know what the problem is. Spending keeps growing, and our economy can’t keep up. The debt is weighing down working families. Over the next 20 years, real spending will grow by 27 percent. And I’d like to point something out: We will be taking in plenty of taxes, frankly a lot more in taxes—an even greater share of the economy than the historical average. But that still won’t be enough. We still will be spending more than we take in.
And the reason that spending is growing so fast is that our safety net is broken. Medicare and Social Security are going broke. CBO says Social Security’s unfunded liability is now 25 percent higher than before. If we do nothing, we could have a debt crisis. And if we did, the most vulnerable would be hurt first and worst.
Now, I understand some of my colleagues might not be all that concerned about the government spending more money and a soaring debt. But here’s what should concern them. If we spend all our money on entitlements, we’ll have no money left for anything else. If we do nothing, spending on Social Security, our major health-care programs, and net interest payments will take up most of the budget. And total spending on everything else will fall to 7 percent of the economy by 2039—that would be the smallest share of our economy since the late 1930s.
And here’s another serious concern: CBO warns that our growing national debt could compromise our national security. If we don’t take action now, we will have less to spend on our national defense, and we’ll be less prepared for future challenges.
So the answer is simple: Repair our safety net. Cut wasteful spending. Prepare for the future. And don’t raise taxes. The way I see it, we shouldn’t force families to pay for Washington’s mistakes. Hardworking taxpayers deserve better.
We need to expand opportunity for everyone in this country, and we can start by getting the budget under control. That’s how we can make the federal government more accountable and more effective.
With that, I would like to yield to the Ranking Member for his opening remarks.Read More
WASHINGTON—Today, the Congressional Budget Office (CBO) released its annual Long-Term Budget Outlook, which had some sober news for the American people.
In response, House Budget Committee Chairman Paul Ryan of Wisconsin released the following statement:
“If this report tells us anything, it’s that the status quo isn’t working, and families are paying the price. We need to expand opportunity for everyone in this country, and we can start by getting federal spending and debt under control. That’s how we can make the federal government more accountable and more effective.”
Key points from CBO’s Long-Term Budget Outlook:
Federal Debt Is Soaring: The debt has doubled since the onset of the financial crisis, and CBO concludes the growth in the debt is “unsustainable.”
Now Is the Time to Act: CBO says that prompt decisions to rein in future deficits would expand employment and economic growth.
The Economy Is Slowing Down: CBO has again lowered its projection of GDP growth, and the average number of hours worked by Americans is shrinking.
Spending Is Still the Problem: Major entitlements and interest on a growing stock of debt will cause real spending to soar by 27 percent over the next two decades.
Raising Taxes Will Cost Jobs: Taxes will exceed their historic average level this year, and they are on pace to rise even further. Yet these tax increases still never match the pace of spending, even while they discourage work, saving, and investment.
Entitlement Reform Is Key: We run the risk of breaking our promise to seniors and future generations if we don’t reform our entitlement programs soon. CBO has increased their measure of Social Security’s unfunded liability by 25 percent.
The Debt Threatens Our National Security: CBO warns that our growing national debt could compromise national security by constraining defense spending and limiting the country’s ability to prepare for future challenges.
The full report is available here.Read More
Indeed, the topic is always timely. That’s because the Declaration of Independence will always be the defining statement of the American Idea, and the greatest political statement of human liberty ever written.
Everyone knows the stories of how the American Revolution was a difficult and often desperate struggle. We forget in hindsight just how unlikely it was that they would succeed. Many times defeat seemed all but inevitable. Some despaired. Yet that small band of patriot statesmen achieved victory against a long established ruler of seemingly unlimited power and authority. They did so by remaining dedicated to America’s cause and to each other . . . fighting hard at every turn . . . knowing that their success or failure would determine whether they or any people would ever fight again for the great purpose of governing themselves.
In the past, our nation has survived its trials, prospered, and endured. And so has our liberty. I believe we are in a great period of trial again. Yet I am confident that our country can survive, prosper, and endure for many more generations. But all of this depends—as it did in the spring of 1776, or the fall of 1860, or the end of 1941—on what we do and how we act to shape the course of events.
On the surface, the problem seems obvious: We have a President who treats the rule of law more like a rule of thumb. But look more closely, and you’ll see the problem isn’t this president—or at least it’s not only this president. When he leaves office, there will be plenty of candidates like him ready to take his spot. All he’s done is to empower and embolden a certain governing philosophy—one at odds with our founding principles. And this philosophy is gaining ground by the day. The point is, our opponents see politics as a long-term project; we need to do the same.
I want to argue today that in everything we do—in every policy we propose—we need to renew the American Idea. Conservatism is not about the past. It’s not a misty-eyed nostalgia for a world that’s come and gone. And it’s not a skittish disposition to merely “go it slow”—to tinker around the edges. Nor is conservatism about blind opposition to government. For sure, government today is too big, bureaucratic, inefficient, and unaccountable. But we must not jettison the very rule of law that shields our liberty. No, conservatism is about conserving something—principles that are timeless because they are true—to be renewed and applied in our time.
Now, what is the American Idea? In short, it’s self-government under the rule of law. The American Idea is rooted in our respect for the rights with which we are each endowed, a respect that shapes a society where every person can work hard, achieve success, and advance in life.
Why is this idea so special? Well, for most of human history, a very different idea reigned supreme: the idea that people are fundamentally different. Some are born to rule and others to obey. Almost all were subjects or serfs—shorn of all distinction and firmly stuck in place.
But the Founders rebelled against this idea. They said everyone is created equal. They have unalienable rights that come from God. And government is legitimate only if it secures these rights. The Founders were the first to take these self-evident truths and put them into practice. They were the first to tell the world—and prove by their example—that the best government rests on the consent of the governed.
It wasn’t easy. Their first attempt—the Articles of Confederation—failed. So instead, they wrote a new Constitution that both strengthened and limited the federal government. It gave Congress enough power to pass laws for the common good. But it also gave the President and the courts power to push back when Congress tried to do too much—and vice versa. The very structure of the federal government was a vindication of self-government—the three branches would control each other so none of them could control the people. Limiting government and freeing up the associations of civil society would make safety and security, self-government and liberty, comfort and prosperity accessible to everyone.
So in addition to our birth certificate, the Founders gave us the blueprint for a free society: a set of unchanging principles, as well as a framework of government for a growing nation.
But it wasn’t just a set of abstract ideas and a procedural code of law. Our Declaration and our Constitution define nothing less than a way of life for a people. A free people of good character, who would labor for themselves, their families and communities, grateful to the Divine Source of their rights, and committed to providing the blessings of liberty to their posterity.
The framers themselves disagreed about many particulars in the Constitution. No sooner had it gone into effect than they added a Bill of Rights. Each generation struggled with different issues. Could Congress create a bank? Could the president buy Louisiana? Could the federal government build roads and bridges? But there was one thing on which they all agreed: the Constitution was our guide and the Declaration our North Star. And the Constitution endured because it allowed prudent statesmen to make wise decisions that preserved self-government under the rule of law.
There was one great failure: slavery. But it wasn’t a failure of the Constitution. It was a failure of statesmanship. Many of the Founders knew that slavery was wrong. But since they couldn’t end it there and then, they wrote a Constitution that would allow a future generation to do so. Unfortunately, for decades thereafter, frightened politicians north and south kicked the can down the road.
Abraham Lincoln, on the other hand, saw the solution: not to depart from, but return to the principles of the Declaration and the Constitution. In the struggle of Civil War, the Declaration defined the high ground, and the Constitution proved powerful enough to reunite a shattered nation. Cleansed with three postwar amendments, the Constitution emancipated and offered citizenship to millions.
Having endured for over one hundred years, the Constitution was a victim of its own success. As our cities grew more crowded—and our economy more prosperous and unpredictable—some came to believe the Constitution was obsolete. And so, for the first time, they said we needed a wholesale change. The founding project was over, they argued, and the age of “administration” had begun. This new age called for a “living” Constitution, one whose meaning did not rest on fixed principles but which changed according to the winds—and whims—of time. In this Progressive vision, self-government had to give way to technical expertise, to professional bureaucrats governing according to their centralized plans.
The Founders believed in the ability of men and women to govern themselves, and they distrusted unchecked power, which is why they limited government and promoted robust civil society. Progressives think it better to govern men, and they seek a much larger and more active central government that reaches further and further into our lives.
Unfortunately, through fits and starts over the course of the 20th century, the Progressive approach has become a mindset at the heart of the modern Democratic Party, just as it has clouded Republican thinking as well. This is a core problem we face today.
The American Idea has not been rejected, far from it; and the Progressive countervision has never commanded a settled majority. Americans embrace some programs first championed by Progressives, but reject others. They accept many aspects of modern government, while still insisting on their rights and constitutional forms. They have never consented to be ruled by experts, and object to government micromanaging their lives.
So this raises a question: How should we proceed?
We must begin by recognizing practical reality, but always move, sometimes coaxing, sometimes pushing, toward the enduring principles to which we are dedicated. Maneuvering in the sea of politics, we are forced to tack, but always guided by and steering toward our fixed North Star.
Self-government under the rule of law is the conservative touchstone. It rests upon human equality and our equal endowment with fundamental rights. It helps us identify measures that conform to the American Idea, and those that weaken or conflict with the American Idea. There’s our sure guide for reform.
Here’s a practical distinction.
There is a difference in principle—a clear bright line—between two kinds of government programs. On the one hand, there are those that can be repaired and restructured within the bounds of limited government. Let’s review those, and as we choose let’s reform them, and even upgrade them, making them more efficient through market mechanisms, more decentralized and transparent, more fiscally sound and, more true to self government.
But there are also many programs of government that are defined by massive bureaucracies intended to direct large segments of our society and economy. These programs are centrally directed, consist of arbitrary regulations and directives that increase uncertainty and insecurity, and replace popular government by bureaucratic rule. It’s a hodgepodge of boards and commissions with uncertain responsibilities and unaccountable decision-making. This way of governing creates relationships between government and money that encourage cronyism and breed political corruption. More and more Americans are right to see these programs as threats to their freedom, their well-being, and their right to self-government. This whole approach is irreconcilable with the American Idea, and it must be rejected.
The American Idea imposes a duty to oppose those programs which subvert popular government and impose administrative rule. These programs and their administrative forms—leading examples being Obamacare and the Dodd–Frank financial apparatus—cannot be reformed and restructured, but must be ended or, if we choose, replaced by something completely different and consistent with popular consent and self-government.
No reform is possible without recognizing this problem. No reform is worth pursuing that does not turn against this rule and take us on the path of principled renewal.
Now, the progressives were right about something: The country was crying out for a national safety net, especially in light of the Great Depression. The people agreed that we should pool our resources to protect hardworking families. And yes, they wanted smart, talented people to run the federal government. But they didn’t want those smart, talented people to run their lives. They wanted to enlist the federal government in the service of self-government. They didn’t want to turn over the keys.
But progressives didn’t pick up on those niceties. Once they got their foot in the door, they stayed. And they grew. First, there was the New Deal, then the Fair Deal, then the Great Society. And in 2008, they saw what they thought was another opening. This was their chance to cement their philosophy into place. They say everything they’ve done in the past five years is a logical extension of the safety net. If you liked Medicare, you’ll love Obamacare. But it hasn’t quite worked out that way. Instead, the people have resisted. And the Left is baffled. Why support the safety net but not progressivism?
Here’s the difference: Everybody understands the safety net. And everybody benefits from it. Take Social Security. We all know how it works—or at least how it’s supposed to work. When you’re working, you pay in. And when you’re retired, it pays out. It’s the same thing with Medicare—simple, straightforward. Everybody gets old. Everybody gets sick. And so everybody contributes in exchange for a secure retirement. Most people think that’s a fair trade. And I agree.
That’s the opposite of the Affordable Care Act. Nobody understands it. Everybody is anxious. If you listened to the sales pitch, it seemed simple enough: Every business with over 50 full-time employees must offer health insurance—period. Or maybe not. Maybe, you can get a delay . . . or a waiver . . . or an exemption. How do you get one? Nobody knows. The administration makes decisions on the fly, so the law changes every day. Under the ACA, an autonomous board called IPAB decides what kind of care people on Medicare will have in the future. Bureaucrats are calling the shots and running the show.
Or take Dodd–Frank. Some say it’s like deposit insurance. But deposit insurance protects the little guy. Dodd–Frank, on the other hand, protects the big guys—that is, the biggest, most powerful financial institutions in the country. The result is predictable: Big banks get bigger and small banks get fewer. More insidious is that this law vastly expands these bureaucrats’ power to simply take over the daily operations of any large financial institution they deem to be in trouble. So you can understand the skepticism. In short, the difference between the safety net and progressivism is the difference between fair play and playing favorites.
You see, the safety net jibes with self-government; Progressive bureaucracy does not. The one gives people more control over their lives, while the other takes it away. And there’s a key principle at work here. The reason you have more control is you earned it. You paid in. You made the difference. That’s the very heart of self-government: We the people are the masters of our fate. We can improve our lot by dint of our own efforts—by working together of our own free will. Nobody has to force us or oversee us. Earned success and earned security go hand in hand.
Now, don’t get me wrong. Everything wasn’t all hunky-dory until this President came to town. Social Security and Medicare are going broke—they’ve been going broke for years. The politicians made promises they couldn’t keep, and the bill is about to come due. We conservatives must be committed to strengthening these programs—because that’s what hardworking taxpayers have earned and made clear in election after election. Limited government with popular consent is the principle we’re trying to uphold.
Every idea I’ve proposed would give people more control over their future. They paid in all these years so they would have health insurance. Why not let them choose their health insurance? More choice means more control, which means more freedom. The argument for conservatism isn’t just that it’s more efficient—it’s the heart of self-government. And the problem with progressivism isn’t just that it’s more expensive. The problem is it undermines self-government.
That’s the difference. And it’s a key distinction—one we need to keep in mind—because there’s another fallacy popular among our ranks. Just as some think anything government does is wrong, others think anything business does is right. But in fact they’re two sides of the same coin. Both big government and big business like to stack the deck in their favor. And though they are sometimes adversaries, they are far too often allies.
Bureaucrats prefer to work with the big boys, instead of upstarts they don’t know. They’re more predictable—and easier to control. So government tips the scales in their favor, instead of letting competition sort things out. And big business is a willing accomplice—because regulation keeps the competition out. Many times they don’t oppose new regulations; instead, they help write them. The point is, crony capitalism isn’t a side effect; it’s a direct result of big government.
And you can see the results at work throughout our economy. It used to be that only the success stories were household names. Now the failures are: Solyndra, Fisker, Tesla. And businessmen don’t spend all their time hustling in the marketplace. They spend more and more time hustling in Washington. Both businessmen and bureaucrats take part in this culture of double standards. Just take the IRS. It tells every family to keep seven years’ worth of tax records, but it can’t keep six months’ worth of emails. It’s a disgrace.
Neither the founders of America nor of free-market economics would recognize in this stratified system a truly open market of commerce. It isn’t open. It isn’t equal in opportunity. It isn’t producing equitable profit growth or hope for those at the bottom of the ladder. It isn’t driven by satisfying the needs of people; but by experts, calculus, wealth, and preference.
My friend Congressman Jeb Hensarling has recently launched a great challenge against the crony capitalist economy, and in particular, against one of its manifestations, the Export-Import Bank. But the bank is just one example of how bureaucratic government is corrupting free enterprise through and through. Conservatives must stop defending this. Cronyism is the Progressives’ project for economic control. Let them defend it.
Finally, there is the temptation to ask courts to intervene and solve our problems for us. Some conservatives think of judges the way Progressives think of bureaucrats: technical experts with the solutions to constitutional conflicts. But judges, like bureaucrats, are often the problem. We must be mindful of this temptation. It is true the Supreme Court can be an ally in conflicts surrounding the constitution. But, it can also be an adversary. We can’t rely on the Court alone to defend our rights. Under our Constitution of self-government, the court that really counts is the court of public opinion, where the American people hand down their verdict on Election Day.
In popular government, the people are the final judge and jury. And, to come full circle, we must never forget that a people who claim the right of self-government are always on trial. This country began as a people on trial. Out of our first trial in the Revolutionary Era, we adopted the greatest, most enduring Constitution ever written. We were tried in civil war and world wars, in depressions and inflations, and we survived and prospered. Every effort to take self-government away from our people has been defeated—so far. Will we prevail again?
Nothing in history is inevitable. There are no short cuts or silver bullets. If we are to get through our current problems, as we have done in the past, we must do it by our own wits and our own efforts. In this sense, the Constitution is not a living document so much as a life-giving document. It gives purpose and direction to our way of life as a free people. Let us remain committed to the American Idea. With the inherent good sense of the American people, we can—we must—and I believe we will, get through these trials together, freer and stronger than ever before. Thank you.Read More
Hi, everybody—and welcome.
This is our fifth hearing about the War on Poverty. Over the past year, we’ve heard from a number of voices: policy experts, community groups, federal officials. And today, we’re going to hear from the people in the middle—people in the private sector who work with the public sector—people who coordinate state programs with private charity. We’re also going to hear from an especially important voice: Mrs. Tianna Gaines-Turner.
First, Mrs. Gaines-Turner. I was very happy to meet Tianna earlier this year, and I’m excited to hear her testimony. In fact, I want to quote from her previous written testimony, because I think she hits the nail on the head. She says:
Poverty is not just one issue that can be solved at one time. It’s not just an issue of jobs, or food, or housing, or energy assistance, and safety. It’s a people issue. And you can’t slice people up into issues. We are whole human beings. Poverty has to do with a whole person who is in a family, in a neighborhood, in a community.
I think this is exactly right. For too long, the federal government has treated people as numbers—instead of whole people with wholly connected needs.
That’s why I’m also excited to hear from Heather Reynolds, the president of Catholic Charities of Fort Worth. Ms. Reynolds is doing great work in Fort Worth. She’s putting together a pilot project to test how case management can expand opportunity for working families. As Mrs. Gaines-Turner urges, Ms. Reynolds’s program sees people as “whole human beings” who deserve time and care—not just another client to usher out the door. The results speak for themselves. In 2013, 90 percent of the people in their refugee program became self-sufficient within six months.
I’d also like to welcome Jennifer Tiller from America Works. America Works has pioneered two key concepts that are crucial to real reform: work-first and accountability. America Works gets paid only if they succeed. And I can’t find a better definition of success than their own. They say success “is an individual moving to employment, maintaining a self-sufficient lifestyle, and progressing in their desired career trajectory.” I think we should insist on the same accountability from our federal programs as we do from these community groups.
And one last thing. At a previous hearing, some of my colleagues kept asking our witnesses if they had received federal aid—as if that would have undercut their testimony. Look, the point of these hearings isn’t to question whether the federal government should help; it’s to figure out the best way it can help.
With that, I hope we can listen and learn from our witnesses today. And now I’d like to recognize the ranking member for his opening remarks.Read More
Thanks, everybody—thanks, Michèle. After looking at the program, I’d say you have quite the lineup: a four-star general, a PBS news anchor, a national security adviser . . . and a budget guy. Now, some of you might think that’s kind of a letdown, but I’d like to think I’m the entertainment.
And in all seriousness, I’d like to thank you for this opportunity. I don’t get to talk about national security as much as I’d like. So let me begin by saying this: I’m very concerned about where we stand in the world and what it means for us. You might think that working on the budget would narrow your perspective—that national security would become just another number on a spreadsheet. But that hasn’t been my experience. Wrestling with the tough decisions, seeing the hard choices, running on a national ticket and contemplating all that comes with it—it’s made me all too aware of what it takes to keep us safe and how our current policies are falling short.
So I was very interested to watch the president’s speech at West Point last month. I will say I agreed with some of what I heard. But over the past five years, I can’t say I agree with a lot of what I’ve seen. And what I’ve seen is—in far too many cases—the president doesn’t back up his words with actions. It’s not that he says one thing and does another. It’s that he doesn’t do enough. The instinct is to go for the bare minimum—just enough to show concern, but not enough to get results. And after five years, I think it’s worn down our credibility.
And I don’t think this is a tactical mistake. You can’t chalk it up to just a few bad calls. I think it’s a strategic mistake. It’s a deeper misunderstanding of what leadership is. The way he tells it, you can’t lead if nobody will follow you. And nobody will follow you if you’re arrogant and hypocritical. And you know what? He’s got a point. But here’s what he’s missing: Nobody will follow you if you’re weak and indecisive, either.
That’s the problem. It’s not that America might go it alone. It’s that our allies might go their own way—because they’re losing faith in us. Saudi Arabia speaks openly of building nuclear weapons. South Korea and Japan harbor similar thoughts. And all the while Russia, China, and a gang of rogue states continue to disrupt international order. Our allies are anxious, and we’re not reassuring them. They’re calling for help, and nobody’s picking up the phone.
And what it all comes down to—all the hand-wringing and indecision—is how you answer this question: Why should America lead? The president says we’re exceptional because we “affirm” international norms. Well, that’s true. But that’s only part of it. I think America is something more than a team player. We don’t just affirm international norms; we shape them. We make human rights an issue. We make free enterprise the norm. And so America should lead not just because of whom we stand with—but what we stand for: freedom, justice, and the rule of law.
That’s why our allies are so disappointed. We seem to have forgotten that part of our leadership: our vision. When Russia invaded Ukraine, the president spoke with all the moral outrage of an instruction manual. The best he could summon up was “deeply destabilizing.” Well, foreign policy isn’t just a matter of norms. It is also a matter of right and wrong. A leader has to propose and explain and defend a course of action—not just ask for a show of hands. And then—once you make a decision—you have to follow through.
Now, the world isn’t perfect, and we shouldn’t try to make it so. To say we’re the leader isn’t to say we’re always the enforcer. Instead, we’re the chief advocate—for our interests and our principles—because a lot of people in the world share our principles. And when they see a country that stands for the things they believe in and does the things they admire, they want to work with that country. They want to be our partners. That’s why our vision is essential to our security—because nobody will follow you if you don’t know where you’re going.
That’s the issue. Our friends think we’re adrift, and our rivals think we’re sinking. Our credibility is at risk, and with it our security.
So our job, as I see it, is to rebuild our credibility—both our resources and our reputation. We have to develop the full range of our power. And yes, that means we have to develop our military. But we shouldn’t be quick to use it. Teddy Roosevelt didn’t say, “Throw a few punches every now and then just to keep them guessing.” He said, “Speak softly and carry a big stick”—because, in a dangerous world, we have to be smart, steady, and at all times clear.
We have to convince our friends—and our rivals—that we are strong. And the most compelling arguments are acts, deeds, concrete achievements. So today I want to propose a strategy for the 21st century—what I’d like to call a strategy for renewal. To rebuild our credibility, we have to renew three sources of our strength: our allies, our military, and our economy.
First, we need to strengthen our allies. We can’t just tell them to do more—we have to help them do more, especially given the dangers we face. Today, the terrorist threat is both direct and diffuse. Over the last three years, RAND estimates the number of hostile militants has doubled. Al Qaeda and its fellow travelers are in nooks and crannies all around the world. And all too often they hide in the shadows of their state sponsors. We should be ready to use every weapon in our arsenal to root them out: drone strikes, direct strikes, economic sanctions. And we should deny weapons of mass destruction to their state sponsors.
But the fight against terrorism is global in scope. We can’t fight it alone. We need partners—starting with Afghanistan. On 9/11, it was a terrorist hotbed. Today, it’s a fragile democracy. But our commanders on the ground have said our gains aren’t guaranteed. And yet the president has said he will pull every single one of our troops out by 2016—end of story. In other words, we’ve told our enemies: “Wait us out.”
The commander-in-chief’s focus should be the conditions on the ground. We should bring our troops home as soon as possible—but not before we finish the job. We’ve lost over 6,800 servicemen and women in the War on Terror. And the best way to honor their sacrifice is to complete the work they started.
No country can lean on us forever. But the Afghan people are trying to stand on their own. And we should help them to their feet. The Afghan security forces are now over 300,000 strong. With our help, they’re learning how to provide air cover and gather intelligence. If they stick it out, they will deny a sanctuary to al Qaeda. And if we stick it out, we will secure a valuable ally.
Now, Afghanistan is just the most obvious example. We have to work better with all our allies—all around the world.
In Western Europe, we have to strike a balance. Our friends can’t depend on us for all their defense needs. And we can’t dictate to them all their defense policies. Every member of NATO has pledged to spend at least 2 percent of its economy on defense. But only three countries do—Britain, Greece, and us.
That said, we can’t just tell the others to pony up. It’s not just how much they’re spending—but how they’re spending it. We have to convince them to build a coordinated set of capabilities—a set of tools that together will help secure our shared interests. For instance, we need their help in protecting all of us from the threat of ballistic missiles and cyber warfare.
Now in Eastern Europe, we can’t leave our friends in the lurch. Russia is flexing its muscles these days, and our allies are understandably concerned. We need to make clear that the NATO pledge to common defense isn’t some paper promise. It’s an iron-clad commitment. I’d say the European Reassurance Initiative was a step in the right direction. But we also need to start talks with our allies, so we can strengthen NATO’s permanent military presence on its eastern frontier. Our friends stood with us in Iraq and Afghanistan. We need to stand with them in their hour of need.
Now, there’s another area that demands our attention—and that’s Asia. I recently went on a trip to Japan, South Korea, and China. And it was clear in our conversations they’re a little skeptical of our commitment to the region. We supposedly made a “pivot” to Asia, but we didn’t leave much of a footprint. The numbers speak for themselves: Just under 3,000 Marines are on rotation in Australia. Just four littoral combat ships are to be based in Singapore. With numbers like these, our allies wonder, if they’re in a pinch, will America be there?
They need a reason to believe. And there’s no better reason than the U.S. Navy. If we refuel the U.S.S. George Washington, we can keep eleven aircraft carriers in the fleet. And that way, we will have about three carriers—including the carrier stationed in Japan—forward-deployed at all times.
Whether in Europe or Asia—in Africa or Latin America—we have to strengthen the ties that bind. And I mean all those ties—economic ties, political ties, cultural ties—anything that aligns our interests and promotes a common worldview.
Both our interests and our principles are important—because if we pursue one at the expense of the other, we may end up with neither. For instance, the president has recognized a new Palestinian Authority government that includes Hamas, an unapologetic terrorist organization. We’ve undermined our ally Israel on a key issue, and that makes them only less likely to trust us. If we want to strengthen our allies, the first thing we need to do is strengthen their trust.
And if we want to lead our allies into the 21st century, then we need a military that’s ready for the 21st century. So the second thing we need to do is rebuild our military.
Today, we lead the pack. But our rivals are gaining ground: Last year, Russia increased military spending by 4.8 percent. And China? By 7.4 percent. And us? Well, if we passed the President’s proposed budget, the Army would shrink to its smallest size since World War II . . . the Navy to its smallest size since World War I . . . and the Air Force to its smallest size ever.
Every year he cuts so deeply—and so unevenly—that he’s hurting both our current and our future capabilities. Today, if a major threat arose, only a handful of Army brigades would be ready to deploy. That’s not much of a deterrent. We may have both too little today and far less tomorrow.
Now, I voted for the Budget Control Act—because I thought it would force us to fix our entitlements. But the other side refused. And so the little progress we’ve made against the deficit has come, at least in part, at the expense of our national security. That’s why I negotiated last year’s budget deal—so we could stop the arbitrary cuts to our defense—because the fact is, we need a big upgrade. Today, we’re living off the defense build-up of the Reagan years. In the ’90s, we cashed in the peace dividend. And over the last decade, we’ve acquired some new capabilities, but they won’t be all that useful against the challenges of the future.
Now, government isn’t the most efficient thing in the world. And the Defense Department is no exception. Our equipment is the best out there. But we’re spending too much money and waiting too long to get it. Over the past few years, we’ve canceled nearly every major Army procurement program. We’ve scrapped big parts of the Navy’s modernization plans. And we’ve scaled back procurement of air superiority fighters. We’re just starting to revamp the procurement process, and we can’t let up.
More of the same old equipment won’t do. The times call for a new set of capabilities—like directed-energy weapons and advanced missile defense. These tools will help us maintain the qualitative advantage that has set us apart. But the times also call for a new way of thinking. We have to remember the lessons of counterinsurgency. And we have to prepare for the next generation of threats. Many countries want to restrict our access to the global commons, whether in the Pacific littoral or cyberspace. The threats have changed, and we will have to change with them.
And if we want to meet those threats, we also will have to spend more on defense. But if we just borrow more or raise taxes, we will strengthen one asset by damaging another. So the third thing we need to do is fortify the pillars of the global economy, starting with the main pillar, our economy.
We can’t afford a strong military without a strong economy. We encourage free enterprise abroad, and we could use a little more of it at home. The House Republican budget is full of ideas to rev up economic growth: tax reform, regulatory reform, energy production. But the most important is paying down our national debt.
We can’t be a good neighbor if we’re not the master of our own house. To us, the debt is a liability. To our rivals, it’s leverage. And to our friends, it’s demoralizing. It’s hard to trust a country that’s maxed out its credit cards and taken out a third mortgage. And remember: We issue the world’s reserve currency. That’s a great privilege—one the world thinks we’re abusing. So it’s pretty simple: The greatest threat to American leadership is our national debt.
Today, the world is wondering, do we know how to balance our budget? Do we know how to grow our economy? And the answer has to be a firm, unmistakable yes. That means we have to take on the drivers of our debt. We have to reform our entitlements. If we passed the House Republican budget, we’d strengthen Medicare by giving seniors more choices. We’d pay down our debt. And we’d give job creators the certainty they need. By 2024, economic output would be unmistakably higher—by about $1,100 per person.
And here foreign policy can work hand in hand with domestic policy. If we took full advantage of our shale energy, we’d not only boost our economy—we’d help protect our allies from energy blackmail. We know what to do: Step up our natural-gas exports. Increase production on federal lands. And resist the temptation to over regulate.
But there’s another pillar that needs tending. And that’s China. I could think of no better testament to the potential of free enterprise. And after years of isolation, we welcomed the Chinese people into the world economy. But with its new power, China isn’t trying to bend the rules—it’s trying to rewrite them altogether. It’s stealing our intellectual property. It’s attacking our companies. It’s promoting crony capitalism. In a narrow-minded pursuit of its narrow self-interest, China isn’t trying to uphold market principles but to upend them.
So this is the message we want to get across: The market economy works for us; it can work for them too. And it doesn’t pay to break the rules. Many of China’s neighbors, like Vietnam and Malaysia, can’t stand up to China on their own. But if we pull them together, we can hold China accountable. And the hope, ultimately, is to pull China in too.
A good way to start is trade. The Trans-Atlantic Trade and Investment Partnership would reassure our friends in Eastern Europe. And the Trans-Pacific Partnership would reassure our friends in Asia. And as we draw our friends closer in a time of danger, we’d put our rivals on notice: There are costs to confrontation—and benefits to collaboration.
We can’t withdraw from the world. We have to stay engaged. And if we have to stay engaged abroad, then we have to take care of some business at home. That’s why we have to renew the sources of our strength—to pursue a strategy for renewal.
After a decade of war, our country is a little skeptical about the world and its needs. And that’s more than understandable. That said, I think we need to clear something up: American leadership doesn’t demand a more militarized foreign policy, but a more creative one.
Remember: In 1948, the Soviet Union cut off our access to West Berlin. And how did Harry Truman respond? He didn’t tell our troops to shoot their way through. He didn’t blink either. Instead, he ordered the largest humanitarian effort in our military’s history—a massive airlift to give the people of Berlin food, fuel, and other supplies. He didn’t go to war—he didn’t have to. We showed strength, and our rivals showed respect. That’s the kind of mindset we need today.
You know, Jack Kemp used to say he wasn’t a hawk—he was a heavily armed dove. That’s what I’d like to think I am—and what we all are. We prepare for war so we can keep the peace. We constantly renew our strength so we don’t have to use it. And through it all, our goal is a safe and free America in a safe and free world.
Thank you.Read More
Morning, everybody—and welcome. This is the fourth in our series of hearings on the War on Poverty. We’ve been talking about how to promote upward mobility in America in the 21st century. And today, we’re going to pick up where we left off.
Last time, we heard from people fighting poverty on the front lines. Today, we’re going to hear from people who have worked on the supply lines. We’re going to look at how the states and federal government can better support the fight against poverty.
Because, if we’ve learned anything, it’s that there’s room for improvement. Each year, we spend nearly $800 billion on 92 different programs to fight poverty. And yet the official poverty rate hasn’t budged in years. People can get help if they fall into poverty. But far too many people still can’t earn enough to get out of poverty. And over the past three years, deep poverty has been the highest on record. Clearly, something’s not working. We need to try something new.
And given our history, I’d say we’re due for an adjustment. The last time we made a big change was welfare reform in 1996. That was almost 20 years ago. We all know what happened. Poverty among children of single mothers fell by double digits. We also learned—and our witnesses are unanimous on this point—that work is crucial to fighting poverty.
And there’s another takeaway. Before Congress began drafting legislation, it allowed the states to try out new ideas. The National Evaluation of Welfare-to-Work Strategies program tested a number of different approaches: work-first programs, education programs, and different mixes between the two. I think that approach—with an emphasis on results, on concrete evidence—is just the mindset we need today.
But times have changed. Today, the biggest means-tested programs are Medicaid, SNAP, and the Earned Income Tax Credit. We spend more on Section 8 housing than we do on TANF. And we haven’t made any serious reforms in almost two decades.
Poverty is a complex problem, and deep poverty is especially difficult. Many people in deep poverty face serious challenges, like addiction, homelessness, and disability. And all these challenges are interrelated. But our current system is too fragmented to give them the care they need. If we can provide better coordinated care, we can help more people get out of poverty.
Today, we will hear from two panels. On the first is our colleague, the assistant Democratic leader, Congressman James Clyburn. He will brief us on the 10-20-30 plan. And to make sure we have enough time to hear from all our witnesses, we will not take questions for Mr. Clyburn.
On the second panel, we will hear from three people who have extensive experience working with aid programs at the federal, state, and local level. First, we have Jason Turner, who worked with Wisconsin governor Tommy Thompson to reform our state’s welfare program. Then we have Robert Doar, who served as commissioner of New York City’s Human Resources Administration under Mayor Michael Bloomberg. Finally, we have Olivia Golden, who led the D.C. Children and Family Services Agency from 2001 to 2004. Thank you all for being here today and sharing your expertise.
The question I want to answer today is how can we improve? How can we make these programs better? How can we get more bang for the buck? And how can we get more people involved? I’ve said we need to hear from people with different points of view—and from different walks of life. Today, we’ll hear from people who have firsthand knowledge of the challenges we face. And with that, I’d like to recognize the ranking member for his opening remarks.Read More
Higher Education in Brief
Pell Grants: Maintains the current maximum award ($5,730).
Income-Based Repayment: Caps loan payments to 15 percent of discretionary income and forgives loan balance after 25 years.
Stafford Loans: Eliminates the subsidy for interest costs that accrue while students are in school.
The House-passed budget maintains the current maximum award ($5,730) for the Pell Grant program.
The Pell Grant program is on an unsustainable course. Costs have skyrocketed in recent years, from $16.1 billion in fiscal year 2008 to an estimated $26.5 billion in fiscal year 2015. And on the current path, the program will face a shortfall in fiscal year 2017.
But the President continues to make promises he can’t keep: His budget doesn’t fully fund Pell past 2018, so the program could face large cuts in grant amounts, eligibility standards, or both in the near future.
By contrast, the House-passed budget maintains the current maximum award, $5,730, for the next ten years and puts Pell on a sustainable path, so students and their families have the security they need to plan for college.
The House-passed budget caps a borrower’s loan payments to 15 percent of his or her discretionary income and forgives the loan balance after 25 years.
The administration’s current, accelerated income-based-repayment plan caps a borrower’s loan repayments at 10 percent of his or her discretionary income and forgives the loan balance after 20 years.
Just four years ago, Congress made this program more generous, before the program was even three years old—and before it had even shown results. Moreover, the administration’s accelerated expansions could disproportionately benefit high-income borrowers who were graduate and professional students.
Both parties understand the current system is in need of reform: The President’s budget request includes proposals to ensure “high-income, high-balance borrowers pay an equitable share of their earnings as their income rises,” and suggests colleges may be taking advantage of federal loan-repayment programs to increase student debt.
Congress should make sure a program is working before expanding it. This budget provision restores the program to its original intent.
The budget adopts a modest reform proposed by the President’s Fiscal Commission to eliminate the government subsidy for the interest costs that accrue while students are still in school.
Interest doesn’t accrue on subsidized Stafford loans while a student is in school or deferment. Interest does, however, accrue on unsubsidized Stafford loans.
The President’s Fiscal Commission found there is “no evidence that eliminating in-school interest is critical to [the amount a student owes at the completion of their studies] or to individual matriculation.” And because the subsidy manifests as a lower repayment amount over the duration of the loan, it is in effect yet another (fairly opaque) repayment plan. The College Board’s Rethinking Student Aid study group also has argued for “eliminating the distinction between subsidized and unsubsidized Stafford loans.”
The House-passed budget does not require students to pay interest when they are in school. Rather, federal loans taken out beginning July 1, 2015, would begin accruing interest once they are disbursed, just like unsubsidized Stafford loans today. And like unsubsidized Stafford loans, borrowers would be able to pay the interest that accrued on their loans before they entered repayment if they so chose. Otherwise, the interest would be added to the loan principal, which students would begin to pay back when they entered the repayment period.
The President has tried to limit the in-school interest subsidy in the past.
In 2012, the administration proposed to limit the subsidy to 150 percent of program length, and that proposal became law as part of the Moving Ahead for Progress in the 21st Century Act, a transportation bill.,
In addition, the Consolidated Appropriations Act of 2012 eliminated interest subsidies during the six-month “grace period” after graduation.
In short, eliminating the in-school interest subsidy is a commonsense reform with bipartisan roots that could put the Stafford Loan program on a more sustainable path.
 Congressional Budget Office, “Discretionary Baseline, Cumulative Surplus/Shortfall, and Funding Gap of the Federal Pell Grant Program―CBO’s April 2014 Baseline,” April 2014.
 Jason Delisle and Alex Holt, “Safety Net or Windfall? Examining Changes to Income-Based Repayment for Federal Student Loans,” New America Foundation, October 2012.
 Department of Education, “Student Aid Overview Fiscal Year 2015 Budget Request,” Accessed 8 May 2014.
 Jason Delisle, “Is It Time to End the In-School Interest Subsidy on Student Loans?”, New America Foundation, 11 Nov 2010.
 The College Board, “Fulfilling the Commitment: Recommendations for Reforming Federal Student Aid,” The Report from the Rethinking Student Aid Study Group, September 2008.
 Congressional Budget Office, “CBO’s Reestimate of the President’s 2013 Mandatory Proposals for Postsecondary Education,” March 2012.
 “150% Direct Subsidized Loan Limit: Electronic Announcement #1 — Interim Final Regulations Published,” Federal Student Aid, Information for Federal Aid Professionals, 16 May 2013.
 U.S. Department of Education, “Fiscal Year 2012 Budget Summary ― February 14, 2011,” 14 Feb. 2011.
 “Changes Made to the Title IV Student Aid Programs by the Recently Enacted Consolidated Appropriations Act, 2012,” Federal Student Aid, Information for Federal Aid Professionals, 18 Jan. 2012.
WASHINGTON—Today, Chairman Paul Ryan of Wisconsin met with the Congressional Black Caucus to discuss the fight against poverty and the need to promote upward mobility. Upon the meeting’s conclusion, Chairman Ryan released the following statement:
“I want to thank my colleagues in the Congressional Black Caucus for inviting me to their weekly meeting. We had an engaging and productive discussion.
“There’s no question that poverty is a serious problem, one with many causes and no easy answers. But that’s why we need to confront it. And we need to extend the conversation beyond Washington—to communities all across the country.
“Poverty isn’t just a form of deprivation; it’s a form of isolation. And though government must be part of the solution, everybody needs to get involved.
“The first step to real reform is a frank conversation. We need to figure out what works; we need to learn from people who are fighting poverty on the front lines.
“And that conversation must go both ways. Simply defending the status quo or demanding more of the same is not an answer.
“I was happy to begin that conversation with my colleagues today, and I look forward to working with them in our renewed fight against poverty.”Read More
WASHINGTON—Today, the Congressional Budget Office released its analysis of the President’s fiscal year 2015 budget. Based on CBO’s analysis, the President’s plan would increase spending by $1.1 trillion and raise taxes by almost $1.4 trillion over the next ten years. And unlike the House Republican plan, his budget would never balance—ever. Instead, it would run a $746 billion deficit in fiscal year 2024. Under CBO’s revised estimate, the President’s budget deficits would be $1.6 trillion higher than what he presented to Congress last month.
Upon release of the CBO report, House Budget Committee Chairman Paul Ryan of Wisconsin issued the following statement:
“This new report is just more confirmation: The President’s budget would take us in the wrong direction. It would take more from families to spend more in Washington. It would hollow out our national defense. It would weaken key priorities like Medicare. And it would never balance the budget—ever.
“That’s why I’m proud that the House passed the Republican budget. Our plan would balance the budget in just ten years and help grow the economy. By getting our debt under control and advancing other pro-growth policies, it would strengthen our economy and help create jobs. The people deserve a government that works for them, not one that buries them in more debt.”Contrast in visions
After removing gimmicks, the President’s budget increases spending by $1.1 trillion.
The House-passed budget cuts spending by $5.1 trillion.
President’s budget increases taxes by $1.4 trillion.
The House-passed budget calls for revenue-neutral tax reform.
The President’s budget never balances—ever.
The House-passed budget reaches balance in 2024.
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