tv Unveiling of Fiscal Year 2017 Budget Proposal CSPAN February 13, 2016 10:00am-11:16am EST
joined by wendy stefan berg. democratick about primary voters, health care, and other issues. we will also be joined by grover norquist, president of americans for tax reform. we will talk about the president's 2016 -- 2017 budget release. and we will be talking to matthew were jansky -- matthew rojansky. that is all happening tomorrow beginning at 7:00 a.m. eastern, 4:00 a.m. pacific. until then, have a great saturday. ♪
announcer: next, shaun donovan outlining president obama's 2017 budget request. then defense department the pentagon'sss portion of the 2017 budget. then examining u.s. efforts to combat terrorism. on tuesday, shaun donovan and other administration officials outlined the president's 2017 budget request. it includes plans for a new transportation system funded by ap paid by oil companies. clean energy and investments to cure cancer. this is one hour and 15 minutes.
mr. earnest: good afternoon, everybody. [inaudible] obviously, today's the day that many of you have been waiting for a long, long time. the president has released his fiscal year 2017 budget. and we're going to have some presentations here to start before we get to your questions. there's one point that i wanted to make before i turn it over to sean here. and it's simply this. budgets are important because they enumerate priorities. when you is something that's that this detailed, there's no fudging. it becomes quite clear when you look at the numbers what you believe rates. and that's the importance of this exercise. i readily acknowledge, as i have on many occasions, that there's some priorities that we have that are deeply held that republicans in congress do not share. and there will be differences of opinion about the priorities that are laid out in here. however, there are a number of areas where there should be bipartisan agreement. there are a number of priorities
that are reflected in this budget that are priorities that are held by republicans according to what they say. one good example of that is cybersecurity. there is a robust proposal in here that many of you have already reported on that includes a stepped-up investment in protecting the country, in protecting government systems from cyberattacks and cyberintrusions. that's an important piece of business. it's critical to our national security. it's certainly critical to our economy. that's all the more reason it's unfortunate that republicans on the budget committee won't even have a conversation with us about it. and here's the thing i guarantee you. i guarantee you that at some point over the next year, we're all going to file into the briefing room and i will walk in and find many of you on the edge of your seats eager to ask the white house about the latest cyberintrusion. it may be the government agency,
it may be at a private sectorer company, that is well known, it may even be a media organization. and when you do, i will discuss the efforts that we have made over the first seven years of this presidency to strengthen our cyberdefenses. i will certainly make detailed notes of the significant investments that we are proposing to enhance our nation's cybersecurity. and you can be certain that i will point out that when we put forth this proposal, republicans on the budget committee refused to even discuss it. and i think you, rightfully, and the american people, rightfully, will have lots of questions about the republican'' commitment to confronting this issue that is critical to both our nation's economy and our national security. so with that, let me turn it over to sean for a more detailed overview of what is included in the budget and then we'll start taking some questions from all of you.
>> thanks. also thank you to jason, cecilia and jeff for joining today. i think as we begin this discussion of the budget, it's useful to just take a moment and take stock of our economic and fiscal progress. under the president's leadership we've turned our economy around and created 14 million jobs. our unemployment rate is below 5% for the first time in almost eight years. nearly 18 million people have gained health coverage as the affordable care act hases taken effect. and we've dramatically cut our deficits by almost 3/4 and set our nation on a more sustainable fiscal path. it's important to take stock of our progress, but this budget is not about looking back. it is about looking forward. it's about choosing investments, as josh has said, that not only make us stronger today, but enable us to make progress toward the kind of country that we aspire to be. the president is absolutely committed to using every minute of
his last year to make such progress, to deliver for the american people, and in particular, to address many of the challenges he highlighted in the state of the union. the budget is a path toward meeting those challenges. it accelerates the pace of innovation, to tackle climate change, find new treatments and cures for cancer and other diseases, transform our infrastructure and grow our economy. it makes investments to give everyone a fair shot at opportunity and economic security. including investments in education, job training, support for working families and modernization of our benefit structure to reflect our evolving economy. cecilia and jeff are going to say more about those areas in just a moment. and it advances our national security and global leadership with increased funding for our effort to destroy isil, as you just heard, more than 1/3 increase in cybersecurity across the federal government, and a range of other investments to protect the american people and advance development and democracy around the world.
the budget shows that these investments in growth, opportunity and security are compatible with putting the nation's finances on a strong and sustainable path. it makes critical investments in our domestic and national security priorities while adhering to the bipartisan budget agreement that was signed into law last fall. as you may recall, that fully paid for agreement allowed us to avoid harmful sequestration cuts. the second time that congress came together on a bipartisan basis to avoid sequestration. and provided dollar for dollar funding increases for both defense and nondefense priorities for 2016 and 2017. the budget also puts forward paid for mandatory investments that are critical to building durable economic growth and maintaining america's edge as the leader in innovation and cutting-edge science, support jobs and economic growth, and expand opportunity. the budget finishes the jobs started by the past two bipartisan agreements and prevents the return of harmful sequestration
funding levels in 2018 and beyond. it replaces those savings by closing tax loopholes and with smart spending reforms. and it also drives down deficits, keeping them below 3% of g.d.p. through the entire 10-year period and it maintains our fiscal progress through $2.9 trillion in smart savings from health care, immigration, tax reforms and other proposals. $375 billion in health savings grow our over time and build on the affordable care act, with further incentives to improve quality and control health care cost growth. and critically important, those proposals in the budget would extend the life of medicare for more than 15 years. it also contains $955 billion of revenue from curbing inefficient tax breaks for the wealthy and closing loopholes for high-income householded.
it also includes immigration reform along the lines of the 2013 bipartisan bill, which the administration supported, which would reduce the deficit by about $170 billion over the first 10 years and by almost $1 trillion over two decades. as a result of all these changes, the budget stabilizes federal debt as a share of the economy and then puts it on a declining path through 2025. a key measure of fiscal progress. lastly, let me just build on something that josh said before i turned it over to jason. i want to take a moment at that talk about the importance of this budget as we move forward with the debate this year. it's attempting to adopt the conventional wisdom that a president's final budget isn't relevant. but i think the conventional wisdom is wrong. with many final-year budgets you either see an administration dramatically chim its sales and dial back on ambition, or you see a budget that is solely a vision document with little that's relevant to the debate.
this budget falls in neither of those camps. the budget office -- offers a range of proposals where there's bipartisan support for taking action. josh talked about cybersecurity. but to name a few others, there's a significant bipartisan interest in investing in cancer research, ensuring that everyone struggling with opioid addiction can get treatment, and expanding tax credits that support work and reduce poverty to workers without kids. in other cases, we may not get bipartisan support. but the president isn't going to shy away from proposing solutions that are both good for our economy and address major challenges that we face. those proposals may not be enacted this year, but they lay the groundwork for reaching solutions in the long run. the bottom line is that in the final year, in a season full of political distractions, the president and the administration remain focused on meeting our greatest challenges and delivering for the american people. we will spend every day of this
last year doing just that, with this budget as our road map. with that i'll turn it over to jason who's going to discuss the economic outlook and budget assumptions. >> thank you. as sean mentioned, the u.s. economy continued to strengthen in the last year. as the unemployment rate fell below 5% in the face of significant global headwinds that have weighed on the economy. looking ahead, the administration expects that the economy will grow at an average rate of 2.5% over the next three years. this forecast finalized this past november to give agencies time to prepare their budget forecasts is line line with forecasts from the congressional budget office, the blue chip consensus of private sector economists and the international monetary fund.
starting in 2019, the budget assumes a g.d.p. growth rate of 2.3% annually. the g.d.p. forecast reflects continued growth in consumer spending, which grew at a solid pace over the last year, reflecting the savings from the recent drop of energy prices, the ongoing improvement in household finances, and increased consumer sentiment. moreover, both residential investment and r&d grew strongly in 2015, with r&d reaching its highest level as a share of the economy on record. and both have continued room for growth in 2016. thanks to the budget agreement at the end of last year, fiscal policy has shifted to a moderately accommodative stance, as compared to the fiscal drag that had been faced in previous years.
the same time our economy will continue to face significant headwinds on a number of dimensions, as foreign demand continues to slow, the oil industry continues to adjust to lower prices, and the societied -- associated transmission of these events through recent financial market developments. the other notable change in the forecast is a reduction in projected interest rates with a 10-year treasury note expected to eventually settle at 4.2%. this projection is slightly more conservative than the c.b.o. and blue chip interest rate projection. these lower expected interest rates also have important implications for broader macroeconomic and fiscal questions. overall, some of our assumptions are more conservative than the assumptions made by the c.b.o. some are more optimistic. but they average out to a very similar outlook for the 10-year baseline deficit. with that, let me turn it over to jeff. >> i just want to do a minute or two on innovation which is a corner stone of the president's budget. in fact, innovation has been at the center of the job recovery. you see this in manufacturing, for example, where there's been a revitalization in advanced manufacturing and investments in innovation and manufacturing have helped create 900,000 manufacturing jobs just over the last six years.
you also see it in clean energy. we kick-started a transformation in how the u.s. produces energy, with solar energy production up 30-fold since 2008, and this has supported good job growth of good jobs in the solar industry, in fact association lar jobs are growing at 12 times faster than the economy. all of this is consistent with the u.s. is number one in the world in innovation, but it's a hypercompetitive marketplace. the global competition is intense. china and other countries are investing heavily in research development -- and development and they're doing everything they can to eat into our lead. so we need to accelerate the tastes of innovation, to build the economy of the future and continue to create high-quality jobs. that's exactly what the president's budget does. it proposes investments that will ensure the u.s. continues to set pace and technology, in innovation. let me just highlight three areas very quickly.
the first is a 21st century clean transportation system. it's a bold plan that's proposed to increase investments in surface transportation overall by 50%. including transformative investments in rail and transit. it also supports, importantly supports the development of breakthrough technologies like autonomous vehicles. upgrading our infrastructure helps builds move goods faster to market and this proposal is fully paid for by a $10 a barrel fee on oil, paid for by oil companies. it would support hundreds of thousands of good american jobs and help the environment by reducing carbon pollution. more broadly, the president's budget doubles clean energy research and development, it costs $7.7 billion investment in early stage r yabds d, on clean -- r&d, on clean energy, that's a 20% increase.
this will keep us at the van guard of the clean energy revolution. final innovation initiative i'll mention is cancer. the president's budget invests more than $750 million in the vice president's cancer moon shot. this builds on progress that we made in last year's budget or the current year's budget to invest about $200 million new money in cancer research. at n.i.h. and to bring together the private sector and the federal government to push the frontier of data and technologies with the goal of doubling the rate of progress in cancer treatment and research. so the president's budget sets out a clear plan to enhance america's position as the number one country in the world in innovation, by investing in what we do best. building the next must-have made in america product, making the next clean energy breakthrough, and finding the next life saving cure. with that, let me hand it over to cecilia.
>> thank you. as you heard the president express in the state of the union address last month, one of the key challenges as a nation is to make sure we're finding a way to give everyone a fair shot at opportunity and economic security. this budget makes particular investments in accomplishing those goal, in particular by supporting education and training opportunities, supporting workers and their families, providing access to health care and other investments to ensure that we're all able to contribute to our maximum capacity in our country's economic growth. so this includes continuing investments in the educational system from the earliest years all the way through higher education. expansions in high quality early childhood education, cutting taxes for families that are paying for child care, building out the most effective head start programs, including very importantly making sure that students in head start can attend for a full day and for a full year.
and investing in pre-k for all 4-year-olds in the country. the president's budget also includes funding for his new computer science for all initiative which is a $4 billion investment to states and another $100 million that would go directly to districts to create access to computer science, education at all levels from pre-k all the way through high school. in addition to that, the budget includes significant new investments in the pell grant program and these are aimed in particular at helping students in the pell program complete their educations, so there are incentives to help students who are taking a full credit load of 15 credits and then for students who are doing that also incentives to allow them to use pell grants for an additional semester, so it would allow them to use the pell program year-round. what this does is essentially helps folks in the pell program complete on time, which is important to reducing the overall cost of a college education.
the president's budget also calls for $2.5 billion in new tax incentives to encourage employers to play a more active role in the educational and training process, so these are -- this is a proposed community college partnership tax credit which builds on our work to increase access to skills and to make sure that the skills education that's happening ot our community colleges and technical schools is aimed at the kinds of jobs which are becoming available in this growing economy. there are also, as you heard jeff and josh say, very important investments in health. you heard jeff talk about cancer. there are investments in mental health and opioids and combating the zika virus. important investments in child nutrition, in particular electronic benefits to kids in the school meal program, so that we can continue their access to food and meals over the summer. as well as using medicaid data to help with the enrollment process for kids in the school breakfast and lunch program.
they help facilitate their enrollment and making sure we're feeding kids adequately. what this all adds up to is a focus on opportunity, on economic security and really making sure we're investing in the full potential of all americans. with that, let me turn it back to josh. mr. earnest: great. ok. let's open it up for questions. who wants to go first? right in the front. reporter: you mentioned a couple areas -- mr. earnest: wait for the mike there. introduce yourself. reporter: sure. matt with "politico." you mentioned a couple areas where you see opportunity for bipartisan agreement, the eitc, cybersecurity. i'm wondering if based on the reactions you heard this morning from the republicans, and based on the fact that we're in an election year, what gives the president hope that there's going to be any movement on these priorities and not simply a c.r. pushing it to who ever is inaugurated next january? >> i'll take a first stab at this.
mr. earnest: i think there are two things that come to mind. the first is, there's a lot of pessimism at the beginning of last year about whether or not this administration would be able to make progress on a range of priorities that we identified. considering that republicans had just enjoyed a significant victory in the midterm elections, that increased their majority in the house of representatives and gave them the majority in the senate for the first time in a while, that pessimism was well founded. but through some perseverance and a willingness on the part of some republicans to try to find common ground, we made progress on a whole range of things that nobody would have previously considered possible. we got a five-year transportation bill done, we reformed the no child left behind bill to make sure that we're not overtesting our students, we got a budget agreement thanks to the good work of a lot of people signature on this stage right now, not me, that allowed us to ensure that we would not abide by sequester caps, that would undermine our ability to invest in economic and national security priorities.
we got the debt limit extended without significant drama or delay. we got i.m.f. reform, something we had long sought. we got a re-authorization of the export-import bank. most of those were things republicans were strongly opposed to. at least they said they were strongly opposed to them. but yet we were able to work aggressively and find common ground with republicans. none of the bills i just described were perfect but they did all reflect compromises and republicans who were part of those compromises deserve credit for trying to find that kind of common ground that's in the best interest of the country. our experience last year gives us some optimism about what is possible this year, particularly when you consider that there are so many opportunities that are ripe for bipartisan agreement. the kinds of things that shaun laid out, that do represent bipartisan potential, are not things that we -- there's -- these aren't positions we're
ascribing to republicans. if you called republicans' offices, which i hope you'll do after the briefing, they'll tell you they themselves are interested in things like expanding the eitc program to promote work and give an incentive to workers who don't have children. the -- obviously cancer research, there's a lot of audiocassette talk on the campaign trail both among republicans and democrats in new hampshire right now about doing more to fight opioid addiction and heroin abuse. and we often talk about cybersecurity. that's actually a bit of compromise that was achieved at the end of last year that i failed to mention. there was legislation this administration put forward at the beginning of last year and urged congress to pass. took them the whole year to do it but they did it. they did it not because we talked them into it but because we put forward a good proposal that would strengthen the country's cyberdefenses.
so i think the experience of last year certainly informs our relatively optimistic view about this year. and the fact that we have some legitimately bipartisan proposals that both democrats and republicans acknowledge to be good for the country that we can put forward and hopefully work on together. >> let me pile on a little bit. it would be interesting to go back and look at the press releases they put out last year that the president's budget came out. i think the words dead on arrival were heard quite a bit. relevance was questioned and to josh's point, not only did we get a lot of wins but the budget agreement struck in october and the omnibus in december followed the structure that the president laid out. we got 90% of the increased investment that the president called for. it was dollar for dollar on the defense and nondefense side. those were the two bright lines the president laid out at the beginning on funding.
he said, we have to end sequester. we have to do it dollar for dollar, defense-nondefense. the third thing he laid out, we have to do it without poison pill riders. and in fact that's what happened. we defeated the poison pill riders in the deal. below the surface, there were many, many things, whether it's the types of things that josh talked about, we made a down payment on the opioid epidemic last year. cecilia talked about our investments in head start. we made a big start toward over $400 million of increase in head start toward full day, full year, a plan which the president laid out. state grants to expand universal pre-k, apprenticeships, i could go on and on. there's a broad range of things we got done last year that were bipartisan.
we also got a bunch of things done like the green climate fund. we got funding to implement the president's clean power plan. we got important new investments at the i.r.s. which the republicans said there was no way were going to happen. both on bipartisan things and things that were priorities of the president but not shared, we got a lot done last year. the only other thing i would just say on this, and there are many of those same priorities that are in this bill that i think have real bipartisan support and others that i think we have a lot of leverage to get. the question here is not for the administration. we took a very clear position, we were going to hi by our word, we were going to write our budget to the deal last year, even if that meant we were going to make some tough choices and we made those tough choices. as josh said a budget is very specific, you have to show your priority. the question here isn't a fight between the administration and republicans, it's a fight within the republican party. we're already seeing despite some people saying on the republican side, we're seeing others that say we ought to cut below the deal.
we're seeing others that say we ought to raise spending above defense. i think the question for the republican party is where do they stand on this? are they going to be able to function in congress? that's really the the question. it's going to be up to them whether this is something we have done our part with this budget. it's going to be up to them to see whether they can deliver on their promises to get back to regular order this year. >> angela. just wait for the mike so the dozens of people watching on camera here an hear. >> we at bloomberg have dozens watching us. angela with bloomberg. question on the revenue projections for the international tax reform proposals. they've more than doubled since last year's budget and we're trying to figure out where that doubling comes from.
it goes to $480 billion from $238.3 billion last year, which is a pretty sizable difference. and then one other question along those same line the per barrel oil tax last week was billed at $10, today it's $10.25, so what accounts for that difference as well? >> why don't i take both of those. i have to check the numbers. the proposals for business tax are very similar to last year. i thought the scores were largely similar to last year. there's a difference in the budgetary treatment of the whole package. a package that passed at the end of last year. last year, we treated business tax reform as revenue neutral, but it in a pox in the budget and didn't have any of those policies adding into the budget totals. this year we continue to be committed to business tax reform and we're committed to it on the same basis we were last year, which is to say, we think it should pay for tax extenders. we had proposed to pay for tax extenders last year in a compromise with congress in order to get things done, we agreed to do last year without paying for them.
but if we come back and reform the business tax system, we'd want to make up for that revenue this year system of the current budget treatment flows through all the different tax loophole closers and structural changes to the business tax system toward the overall budget number with the goal of being revenue neutral relative to the baseline we established last year, in other words, paying for tax extenders. i'll take a look and you can also talk to treasury about how any plarl item changed in terms of its scoring, often there's technical changes in the score bus there were no major policy changes. in answer to your second question we can described the oil tax as about $10 per barrel, it phases in over five years, it's indexed to inflation. it's literally a different number in each of those years and we were giving you the rounded number.
>> on the international tax side, i think we have also seen that there are an increasing number of companies that have -- are proposing or have actually been carrying out inversions and so one of the things that is contributing, there are other are proposing or have actually been carrying out inversions and so one of the things that is contributing, there are other technical issues but one of the things contributing to that change in score is treasury observing a larger number of companies that are taking advantage of what we think are loopholes that need to be closed. we've taken significant actions with our existing authority, but we're also calling on congress to move changes to stop inversions as well and that's something that is highlighted by the change in numbers that you point to.
mary: thank you. mary bruce with abc news. wondering on the $10 a barrel oil tax, how much of that do you anticipate will be passed on to consumers and is there concern that that could hinder the broader economic growth you've been discussing? also on the time, can you explain why the decision was made to release today what is the biggest political items, if the super bowl was a factor, why not hold it for later in the week? >> we all see it on our way to work, roads, transit, businesses are losing money, paying lots of money and are undermining their position in the global economy because our infrastructure is no longer a source of competitive advantage, in fact, it's a vulnerability. it's a hidden tax on consumers or commuters, some estimate says that's over $900 per year in lost hours and fuel costs.
it hits our businesses. so there's urgency to build on what congress did at the end of last year and invest significantly in our infrastructure. in terms of the fee itself, it is a -- it is paid by oil companies. we anticipate that oil companies will pass some of that on to the consumers of various oil products and that's important here in that this is not just about automobiles, it's about airplanes and rail and other forms of transit that consume oil and oil, as i said earlier, is responsible for about 30% of carbon pollution. this is a strong plan that addresses the fact that we have this hidden tax on consumers and businesses because of the inadequacy of our infrastructure across all nodes and we think it's an important proposal that preempt ours competitiveness and as i said, will save consumers and commuters time and energy costs.
>> just on the question about timing, obviously february in general is crowded this year. and so i'm not sure, given both the february statutory release date and frankly the fact that congress was so late in getting the budget done, that we were going to be able to find a day that was sort of free from other distractions. i think the important point here is, you know, based on the president's absolutely determined focus on using every day of his last year to deliver for the american people, we had a state of the union that was one of the earliest on record. mr. donovan: we've already before today rolled out more than 20 specific proposals that are in the budget and actually we think given the distrabses
-- distractions that we have more broadly, from candidates that are, you know, talking down the country and frankly presenting a dark picture of where the u.s. is headed, we've been able to capture, i think, a remarkable amount of attention to a broad set of budget proposals that really are about the future and about the hopefulness that the president has about the country. so i think despite the timing of the day today, this has been a budget release that's been ongoing for a number of weeks now and i think certainly my sense, and i give a lot of credit to our press team and others that have worked on it, that this is something where we really have captured the imagination of the american people in a lot of ways. >> the last thing i'd say about that is, i think republicans canceling the budget hearing is actually the clearest evidence
that it's republicans who don't want a public discussion about the budget. we welcome the opportunity and maybe we'll get them to change their mind. >> kevin? kevin: kevin corker, fox news. about that, does the lack of an invitation resonate with you in a way that makes you understand that there's not going to be a lot of bipartisanship, maybe not a lot of cooperation coming up in this year, or am i overreeding that? i think the second question, you can also weigh in on that if you would, josh, the second question i have is, is there a tax increase in this budget? and if so, what's that level? and last, i notice that there's specific read on immigration reform as a means for saving money within the budget. i'm just curious how that plays out when you consider the lack of the likelihood that immigration reform will actually take place even in fiscal 2017.
>> i talked about the broad fiscal progress we've made under the president's leadership and that this budget would continue that progress. one of the key areas where we've made enormous progress is on health care costs. the president came in and identified health care costs as the -- as one of the single most important drivers of our long run fiscal challenges and through the a.c.a. and a range of other steps we've taken, we've made enormous progress. just to give one specific example the budget makes clear, just in the year 2020, we believe that we will save about $185 billion just in that one year because of the slow growth of health care costs and better projections since the affordable care act was passed.
so enormous progress on what is among the biggest drivers of it. the second thing we have to realize is that a big fiscal challenge we have is keeping our promises to the baby boom generation. the budget goes through and i won't get into all the detail bus we're moving from where just a few years ago, we had 3.2 workers per retiree, to a place we can see in the next decade where we'll have 2.4 workers per retiree. one of the most important things about immigration reform is that it brings in more workers, those workers contribute to society they pay taxes, they boost our economy, and these are not just our numbers. the congressional budget office says the same thing. their projections are that we would save $170 billion in this decade.
we've adopted those numbers in the budget and that savings grows. it becomes almost a $1 trillion when you add in the second decade. so immigration reform is not just the right thing to do for families and our economy, it's the right thing to do for our fiscal future. on the point about bipartisanship, josh is very clear up front that we're going to keep putting out what we think is right. independent of whether we think it's something that will be adopted by republicans. but we should remind you that there was bipartisan support for exactly the bill that we are adopting in our budget. it passed in the senate with bipartisan support and our hope would be that after we get through the distractions and the bombast of this political season, that we could return to doing the right thing for the country and we think immigration reform is part of that.
>> in answer to your question on taxes, the budget proposes $277 billion of tax cuts for middle class families. that helps everything from child care, with tripling the child tax credit for people with younger children, pro work by having a tax credit for secondary earners. it simplifies and expands tax crets for college. -- credits for college. it expands a tax break to encourage both small businesses to offer savings plans and people to take them up. and also expands the eitc for people without qualifying children, either because they don't have children or they're noncustodial parents. take all of this together and the main experience most persons -- most americans would get in terms of their taxes as a result of this budget would be a tax cut for things like child care, college, retirement savings, work, and low income households. as part of the deficit plan, the budget does as a whole curb a set of tax breaks for high income households.
one of those, for example, limits the tax deduction and tax exclusions for high income households to 28% that would only affect households making above $250,000 a year. and it's something that my predecessor, -- my predecessors have all described as more akin to a spending cut because it's spending that takes place through the tax code for high income households. another example of that is a loophole for high income households on their net investment income which we would propose to close here.
so the revenue is coming from high income households, it's coming from cutting back on tax expenditures, closing tax loopholes, not raising rates. >> can i just add one thing to that? you talked about the tax side but this is a balanced proposal in our budget. as i said, we decided to live by the agreement that was reached last year. and we've made some hard choices. we have 117 different cuts, consolidations or savings proposals in the budget. we talked a little bit about health care savings, about $275 -- about $375 billion there but we got 15 different proposals that save over $115 billion on program integrity, for example. we have smart savings proposals on everything from crop insurance to a range of other things. and i think it's important to step back, since the president came into office, we've had deficit reduction of about $4.5 trillion. this budget adds $2.9 trillion additional dollars of deficit reduction. if you put those all together,
we're still getting more than 50%, even if we adopted every one of the proposals in the president's budget that jason just talked about, we're still getting more than 50% of that $7.4 trillion in deficit reduction from spending not revenue increases. we believe this is a balanced proposal, both on the spending side and the tax revenue side. and we stand by that. deficits to g.d.p. are under 3% every year of the budget window and debt to g.d.p. we take from under current law if we did nothing, would be increasing substantially over the window and we stabilize debt to g.d.p. and start bringing it down through 2025. >> i want to go back quickly to the bipartisan thing, we've observed many times that with republicans in control of congress and democrats in charge of the white house, anything that gets done is going to have to be by definition, bipartisan. so the question really for republicans at this point is, are they going to do anything? are they going to use their majority in congress to strengthen our cybersecurity, to fight opioid addiction tombings
o cure cancer? or are they not? i think the question is for them. we put proposals in our budget for how precisely we can do that. this gentleman right here. charlie: charlie clark with government executive media group. the republicans seem to want to have a reduction in number of workers in the federal work force and maybe even abolish some agencies. i'm just wondering, is the upside of this budget a net increase in the size of the federal work force or the size of the government? >> we do have particular places within the federal government where we think there needs to be increased investment in the number of people as well as the skills of those people.
cybersecurity is a very good example where that's a place that's a critical national need where we do propose both increasing number of personnel as well as raising their skills. we have $62 million investment as part of the cyberplan that the president announced today that really goes to this work force piece of the issue. but we have other places, for example, the veterans administration, where we continue to enhance the number of people we have there to respond to what is really a wave of veterans that we are bringing back from overseas and that's a sacred promise that the president has made. i would also point to another example of a place like i.r.s. where the cuts from the republican congress have been so deep that we got to a place last year where we were only answering 40% of taxpayers' phone calls. 40%. now we had a win in the budget
last year where we got almost $300 million of increase. we're now up to answering 60% of taxpayers' phone calls but obviously that's not acceptable. and by the way, we're losing billions of dollars of revenue from taxes that should be paid, that are due to the federal government, because we don't have the personnel. so there are clearly places where we do need more workers. but there are other places where we're making smart changes and finding efficiencies and overall what we see is just a small proposed increase in the federal work force overall when you balance those together. mr. earnest: right here in the front. julie: julie davidson from l.r.p. publications. to build on that, can you talk about how the budget supports the people, culture, pillar of the president's management agenda and how you decided on a 1.6% increase for federal
employees? mr. donovan: to take the second question first, obviously, particularly with the second year of the budget deal being less than the president had called for in his budget, we had difficult choices to make in a number of areas and one of those is the tough choice about how much we should be increasing pay for federal workers. we worked closely with the military, with d.o.d., see their results of their review of compensation and ultimately we settled on a 1.6% increase both for military and for civilian workers. that is something that obviously builds on the progress that we've made, the progress on our deficit and our progress more broadly economically and allows us, as opposed to in past years, where we had a freeze and then
1% increase and then for 2016 a 1.3% increase, we're obviously making progress here. i think it also is important to recognize that inflation overall has remained very, very low. and in fact, to the point where we are starting to see significant wage growth, probably the best six months of wage growth we've seen of the recovery over the last few months. i think this represents progress in terms of paying government workers what they deserve but also one where we did have some tough choices to make. the only other thing i would
just say in terms of other critical investments that we're making, our people are one of the single most important assets we have in the federal government and we do have major investments in training, many employee engagement, we have been encouraged that the employee viewpoint survey across the federal government showed real progress, in fact, for the first time in history, every single question in that survey showed positive movement. there wasn't a single question where results went down. and we think that that is a measure of the progress that we're making, in addition to the work that we're doing to upgrade and improve our recruiting, moving our systems into the 1st century and i think that they're doing a terrific job moving us forward at o.p.m. ron: ron allen from nbc. josh, you said in your opening that this is about priorities
and you can tell what's most important to the administration. is there anywhere in the budget that takes a covet the plan to -- account of the plan to close guantanamo bay and why not and how is that going to happen now? or is it something the that you've given up on or the president has given up on? mr. earnest: we have always envisioned putting forth a plan for congress' consideration that would factor in some of the financial impact of moving forward with closing the prison at guantanamo bay. one of the chief reasons we have advocated for closing the prison is that the individuals who are detained there and need to remain detained can be more cost effectively detained in the united states. and that's what our proposal will underscore. there are a number of them that would be transferred, a number of others that are going through
a criminal justice process, either through military commission or article 3 court. but cost effect i haveness is one of the reasons that we are looking to close the prison. the other reason, obviously, is we know that extremist organizations use the continued operation of the prison at guantanamo bay as a recruiting tool. that's why you have seen democratic and republican national security experts come forward and advocate for the closure of the prison. we'll put forward a plan to congress at some point. i don't know when in terms of timing but when we do it will include some information, at least, about the budgetary impact and that's information we won't just present to congress, we'll present it to all of you. >> but why not put it in your budget which as you say is your statement of your most cherished priorities and that, as i understand it, is one of the 's -- ent cost
mr. earnest: it is a priority, the plan is not done yet, when it is we'll have more about it. >> there was a specific provision in the defense defense authorization bill that set up a process to do it separately with a timeline that didn't match up with the budget. it is a very high priority but for reasons that there was already a separate process in place, it didn't make sense to marry it up with the budget. given what josh said about our ongoing work on that. >> is the plan done and you are waiting for the opportunity to move it forward, is it not done or is it? mr. earnest: the latest update i have received is the president has not signed off on a final plan at this point. >> i can confirm that. >> aisha roscoe with reuters. is there concern that those medicare savings measures could be perceived as cuts and that could be used against democrats on the campaign trail, and then
also on a separate issue, there seem to be proposals to cut spending on refugee bus yet the but yet the administration has called to ramp up asylum and -- or ramp up the asylum program so how do you reconcile that or is that a misinterpretation? 's the administration approached from the beginning has been if you can lower national health expenditures, you can reduce premium growth. the budget and extend the life of medicare so it is a win-win. that is what we did in the affordable care act and you see the benefits now with health cost growth being the lowest in 50 years. the affordable care act added 13 years to the life of medicare. it put us in a better position for our budget the type of
savings we are proposing now are very much in that spirit as well. if you reduce overpayments to drug companies for dual overbles, you can save $100 billion and that is not something that is coming at the expense of people. it is actually part of a plan to help. if you can have competitive bidding in medicare advantage come you can squeeze out the extra margin that some of the insurance companies are getting within that system. would continue to slow the growth of health care costs and also, together with the tax loophole being closed moreed to medicare and than 15 years to the life of medicare trust fund, this plan is going to help strengthen and sustain medicare to help slow
the cost growth of health care. 2012 felt thisin would be an effective argument. >> on your question about refugees come i'm not sure where this reports come from. ouract, the budget meets commitment to increase the number of refugees that we would u.s. e to welcome to the we are happy to show you the details on that, but it meets our commitment. traditionally, the itc proposal from the administration for single adults has been raisers through revenue
. given that speaker ryan has expressed interest in a similar plan i was wondering what the parameters are and what would be an acceptable -- >> we would be happy to work together with congress. we have an awful lot of pay fors to choose from in our budget. what you would not see flexibility on is the principal in the proposal is to reduce poverty. if you're cutting one thing helping to reduce poverty and , you haveething else not made the type of improvements that we envision. there's a lot of ability to work together with congress as long as you are not doing this at the expense of the poor.
deficits areseline worsened by $1.8 trillion over 10 years. can you go into the factors about why that is? out at the laid beginning, we have a few that are the most important changes between the baseline from last year's budget and this one. extenders deal was completed at the end of last year. deficits by a few tenths of a percent alone. just that one package. while we agreed with a number of the extenders that were made permanent and they had been part of our business tax reform plan, as jason said earlier, we were
not in favor of doing that unpaid for. we felt there should have been a comprehensive plan on business tax reform. in our budgeting this year and one of the reasons we are able to stabilize and actually bring it down is because we continue to propose comprehensive business tax reform that would upset the cost of the tax reform, tax extenders done at the end of last year. the single most important change from last year. there are also changes in the economic assumptions that point to the critical importance of many of the investments that we have talked about in terms of growing opportunity. one thing we have not talked about was we have to modernize our system of support.
we are proposing and unemployment insurance passage of changes that includes a weight insurance proposal that is proven to help get workers back in the workforce more quickly and be better off. that is another example of something that ought to be bipartisan. the baseline deficit projection is worse, as is the cbi of. .- cbo we propose more deficit reduction this year. under thet you get to president's policy is similar to what it was last year. below 3% gdpistent and the debt on a declining path through 2025. theou also spoke about dwindling number of workers per retiree.
which would seem to be an argument to deal with social security. but there's been no mention during this session about dealing with the social security trust fund and its solvency. can you go into why we are not addressing that and why that has become less of a priority for the president? , i would point your attention to the budget includes the long run outlook of the deficit and debt over the next 25 years. the same window the cbo uses. that shows the deficit remains below 3% of gdp even in the out .ears debt is stable as a share of gdp over the longer run window.
we have in the last seven years made a lot of progress in terms of our long-run deficit. when you take all those improvements in long run outlook which doug cited in a paper he put out last week, the improvements in the long run outlook together with additional policies here really do put you on a stable basis for the long run. , thethe very beginning president has always had he is open to working together with congress on a bipartisan basis to deal with social security. in out a set of principles terms of not slashing benefits and not privatizing social security and not taking away a system that works for americans with disabilities and some other principles.
thing isimportant lifting the budget as a whole and that is where we have made substantial progress. an issue and social security that was critical to address last year. and that we did address. helping theple of president move forward in his budget of 2016. that republicans said we will never fix the social security disability program without major cuts in entitlements. we were able to get an extension of the disability trust fund which would have run out of benefits in two years or the end of next year. -- end of this year. and would have put us in a place just we would have cut to have to cut benefits by 25%. that was the most urgent issue
and social security. it was done in a fiscally responsible way. say, if you look at the long run challenge we have on the fiscal side, social security is not a major contributor to that challenge. the other thing that is important to recognize is how manyon reform -- workers do we have paying into social security relative to the number of retirees? one of the most important things we can do is increase the number of workers we have in this country and also raise their wages. all of that can help us stabilize. immigration reform is an important contributor to strengthening social security. i don't think it is right that we don't have policies in this budget on this issue. it is one of the key things that
immigration reform would do, to strengthen social security. >> jordan? thanks. i was wondering, democratic leaders will be here meeting with the president and vice president for the second time in three weeks. i know there's been a lot of back and forth between you guys and republicans. i wondered if there was any thought to having a similar meeting with the republican leaders to advance on the proposal to say there is bipartisan support on i know they were here last week. i wonder if there was any talk to giving them a separate meeting. scheduled that was was already canceled by the republicans who chaired the house subcommittee's. we are eager to do so.
i'm confident these are the kinds of things that are being discussed amongst democrats. both in the current meeting and all across capitol hill. there is a decision republicans have to make about whether or not they want to make some progress this year. , ay were given by the voters new majority in the senate and struggle majority in the house. stronger majority in the house. there are ample opportunities for them -- it will require them working in good faith to actually do that. sara: one quick clarification. -- thed there was director was scheduled to be on the hill to talk about the budget and it was canceled? been held around the same time every year for 40
years. the fact that it is not being you could also-- say it was not scheduled. a choice made by m republicans. >> these are things that paul ryan has backed in the past. now the speaker appeared is that why there is additional optimism that this can get through? are there new proposals on that and from the white house that you think will make it even more enticing? there are new proposals in this budget and it is an issue we hope to take up in a bipartisan way. here is another proposal in the budget that focuses on provided flexibility.
particularly with folks of highest need, there's a lot of data showing there's a significant number of families living on less than two dollars a day in cash. this is a conversation we are interested in having. we need to have it in a way that is really about creating opportunity for families in poverty. we think there is a lot of room for agreement and it is a conversation that is overdue. obama ran very hard against the ryan budget. he said it was social darwinism. now that you are looking to work with speaker ryan on issues like poverty, has there been any kind of rethinking of the speaker's
motivation? at blows,ways been coming to blows around their respective budget. >> i don't think anything we've said today has tried to paper our point is simply that given those significant differences, it is all the more important that we capitalize on those areas where common ground does obviously exist. the itc is a good example of one. ofe itc is a good example one. new research that would lead to a cure to cancer is another one. investments in helping fight the opioid epidemic. it is all the more important that we seize on the common ground with it materializes. atthere is a proposal aimed
what we are turned to do with the criminal justice system. the president has invited members from both sides of the aisle working together on legislation. a very good example. thank you. in recent years, the oninistration has relied projections of stronger economic growth to boost revenues to deal with the spending challenges we will face on the entitlement front. forecasts areh being revised down consistently. if growth continues to -- new investments
without raising taxes. if the u.s. economy were to fall in recession, is fiscal policy cap doubt -- tapped out? if you look at how the economy has evolved relative to our forecasts, some things have come in more favorable and some things have come in less favorable. gdp growth has come as you said, been below the forecast. the an employment rate has also been below what we forecasted. this unemployment rate. more often than not, the deficit has actually come down relative to what is expected. it is true if you look forward as well. the mostok at
important thing we are trying to accomplish your, to create a baseline for what the deficit is when to be over the next decade, those forecasts have been on the conservative side over the course of this entire administration. that would be the first point i would make. cbo has a point, the deficit of 5% of gdp as the baseline. we have 4.9% of gdp for our baseline. small differences in terms of comparing us, but they are generally quite similar. we then propose a substantial amount of deficit reduction. below 3% to gdp. the long run fiscal outlook is better now than what it looked like seven years ago. because of the steps we have taken and because of the .lowdown on health costs
our country does have the fiscal needed.and when it is if anything, the last seven years have taught us around the world that there is more fiscal room and a lot of countries to begin with that people might have imagined seven years ago. >> we should be very clear that there is a fiscal choice in front of the republicans in congress right now. do they live up to the deals we reached last year or do they put us back into a place of
manufactured crisis and mindless fiscal austerity? because of the budget deal we reached last october, the projections are that fiscal policy will, for the first time in many years them actually be contributed to growth this year. deal would at 340,000 jobs this year. another 100 and 2000 and 2017 -- 2017 -- in 2017. jason has really dealt with the longer-term issues. fact talk about whether in republicans are going to propose
to blow up the deal from last year, cut spending below the we agreed to. that alone is critical to fiscal policy in the short and medium-term. >> thank you for spending time with us today. have a good day, everybody. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2016] >> tonight, a discussion about efforts to improve the federal government's online services. he and his team described their operations at the computer
history museum in mountain view, california. he describes the disarray he found he was first brought in. >> if you just walk in as an engineer and look at other engineers and see what they are doing and how they are doing it, it was total insanity when you first looked. there were 55 different companies contracted to work on different parts of healthcare.gov. which is a fairly complicated operation. haddy knows how many people a technical roles on the project. they were in dozens of different buildings. -- they did they have
the explicitly for bid and forbidden from communicating with each other because of the way contracts are managed. government reserved for itself the job of coordinating how this was going to go. they did not have that skill set. the government was not equipped to do that job. what was going on made zero cents. >> that discussion tonight at 8:00 p.m. eastern on c-span. president obama's 2017 budget request allows $580 billion for defense spending. , the vice chair of the joints chief of staff and other pentagon officials outlined the details. this is one hour 15 minutes.