S. HRG. 114–247 CONCURRENT RESOLUTION ON THE BUDGET FISCAL YEAR 2016 HEARINGS BEFORE THE COMMITTEE ON THE BUDGET UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION January 28, 2015-CBO’S BUDGET AND ECONOMIC OUTLOOK: FISCAL YEARS 2015-2025 February 3, 2015-THE PRESIDENT’S FISCAL YEAR 2016 BUDGET PROPOSAL February 11, 2015-THE COMING CRISIS: SOCIAL SECURITY DISABILITY TRUST FUND INSOLVENCY February 25, 2015-THE COMING CRISIS: AMERICA’S DANGEROUS DEBT March 4, 2015-WASTEFUL DUPLICATION IN THE FEDERAL GOVERNMENT March 11, 2015-BENEFITS OF A BALANCED BUDGET CONCURRENT RESOLUTION ON THE BUDGET FY2016 S. Hrg. 114–247 CONCURRENT RESOLUTION ON THE BUDGET FY2016 HEARINGS BEFORE THE COMMITTEE ON THE BUDGET UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION January 28, 2015-CBO’S BUDGET AND ECONOMIC OUTLOOK: FISCAL YEARS 2015-2025 February 3, 2015-THE PRESIDENT’S FISCAL YEAR 2016 BUDGET PROPOSAL February 11, 2015-THE COMING CRISIS: SOCIAL SECURITY DISABILITY TRUST FUND INSOLVENCY February 25, 2015-THE COMING CRISIS: AMERICA’S DANGEROUS DEBT March 4, 2015-WASTEFUL DUPLICATION IN THE FEDERAL GOVERNMENT March 11, 2015-BENEFITS OF A BALANCED BUDGET ( U.S. GOVERNMENT PUBLISHING OFFICE 95–387 WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON THE BUDGET MICHAEL B. ENZI, WYOMING, Chairman CHARLES E. GRASSLEY, Iowa BERNARD SANDERS, Vermont JEFF SESSIONS, Alabama PATTY MURRAY, Washington MIKE CRAPO, Idaho RON WYDEN, Oregon LINDSEY O. GRAHAM, South Carolina DEBBIE STABENOW, Michigan ROB PORTMAN, Ohio SHELDON WHITEHOUSE, Rhode Island PATRICK TOOMEY, Pennsylvania MARK R. WARNER, Virginia RON JOHNSON, Wisconsin JEFF MERKLEY, Oregon KELLY AYOTTE, New Hampshire TAMMY BALDWIN, Wisconsin ROGER F. WICKER, Mississippi TIM KAINE, Virginia BOB CORKER, Tennessee ANGUS S. KING, JR., Maine DAVID A. PERDUE, Georgia ERIC UELAND, Republican Staff Director WARREN GUNNELS, Minority Staff Director (II) C O N T E N T S HEARINGS Page January 28, 2015-CBO’S BUDGET AND ECONOMIC OUTLOOK: FIS- CAL YEARS 2015-2025 ..................................................................................... 1 February 3, 2015-THE PRESIDENT’S FISCAL YEAR 2016 BUDGET PROPOSAL ......................................................................................................... 71 February 11, 2015-THE COMING CRISIS: SOCIAL SECURITY DIS- ABILITY TRUST FUND INSOLVENCY ....................................................... 157 February 25, 2015-THE COMING CRISIS: AMERICA’S DANGEROUS DEBT .................................................................................................................... 351 March 4, 2015-WASTEFUL DUPLICATION IN THE FEDERAL GOV- ERNMENT .......................................................................................................... 423 March 11, 2015-BENEFITS OF A BALANCED BUDGET ............................. 493 STATEMENTS BY COMMITTEE MEMBERS Chairman Enzi .......................................................................... 1, 71, 157, 351, 423, 493 Ranking Member Sanders ........................................................ 2, 74, 160, 353, 425, 499 WITNESSES Bruce Bartlett, Former Deputy Assistant Secretary for Economic Policy, U.S. Department of the Treasury ............................................................................ 377, 379 Mark Blyth, Eastman Professor of Political Economy, Watson Institute for International Studies, Brown University ....................................................... 533, 536 Carolyn W. Colvin, Acting Commissioner, Social Security Administra- tion..................................................................................................................... 173, 175 Philip R. DeJong, Professor of Economics, Amsterdam School of Economics, Univerity of Amsterdam .................................................................................. 285, 288 Honorable Gene L. Dodaro, Comptroller General of the United States, U.S. Government Accountability Office .................................................................. 428, 430 Honorable Shaun Donovan, Director, U.S. Office of Management and Budg- et ............................................................................................................................ 76, 78 Mark G. Duggan, The Wayne and Jodi Cooperman Professor of Economics, Standford University......................................................................................... 270-272 Douglas W. Elmendorf, Director, Congressional Budget Office ............................... 6, 9 John Engler, President, Business Roundtable, and Former Governor, State of Michigan........................................................................................................ 502, 504 Lawrence J. Kotlikoff, Professor of Economics, Boston University.................. 346, 360 Kate Lang, Senior Staff Attorney, National Senior Citizens Law Cen- ter....................................................................................................................... 291, 293 Maya MacGuineas, President, Committee for a Responsible Federal Budg- et ........................................................................................................................ 517, 520 Heather Pfitzenmaier, Director, Young Leaders Programs, The Heritage Foundation ........................................................................................................ 372, 374 iii Page QUESTIONS AND ANSWERS Questions and Answers ......................................................................................... 61, 220 iv CBO’S BUDGET AND ECONOMIC OUTLOOK: FISCAL YEARS 2015–2025 WEDNESDAY, JANUARY 28, 2015 UNITED STATES SENATE, COMMITTEE ON THE BUDGET, Washington, D.C. The committee met, pursuant to notice, at 10:00 a.m., in Room SD–608, Dirksen Senate Office Building, Hon. Mike Enzi, chair- man of the committee, presiding. Present: Senators Enzi, Crapo, Portman, Toomey, Johnson, Ayotte, Wicker, Corker, Perdue, Sanders, Murray, Stabenow, Whitehouse, Merkley, Baldwin, King, and Kaine. Staff Present: Eric M. Ueland, Republican Staff Director; and Warren Gunnels, Minority Staff Director. OPENING STATEMENT OF CHAIRMAN ENZI Chairman ENZI. Good morning. I will call to order the first Sen- ate Budget Committee hearing of the 114th Congress. This morning, we will hear testimony from the Congressional Budget Office Director, Doug Elmendorf, as he explains CBO’s out- look on critical fiscal issues confronting our country. Congress is under new management, and so is this committee. I am Mike Enzi. I am a Senator from Wyoming. I was first elected in 1996. Budgets matter to me. I am an accountant. I ran a small business in Wyoming for many years and kept my books balanced. I ran for mayor when I was 29 on a balanced budget platform and got elected, and then later got elected as a State legislator on the same platform. In both roles, one of my key jobs was making sure that the city budget, and then the State budget, balanced every year. I did not forget that when I came to the Senate. My first floor speech was to support a Constitutional amendment to balance the budget. After several years in the Senate, I finally had a chance to join this committee and got to be Chairman earlier this month. There is some activity across the nation that we should be inter- ested in. There are 24 States that have already passed a Balanced Budget Constitutional Convention amendment, and there are ten more that are working on it. If 34 states pass it, that makes it hap- pen. What could that mean? Currently, we spend 3.9 trillion dollars— that does not sound like nearly as much as 3,900 billion dollars, which is what we spend. I think that is easier to understand. Twenty-eight-hundred billion of those are checks that are auto- matically written. We do not make any special decisions on them. So, that leaves us with 1,100 billion to make the decision. Last (1) 2 year, we spent one-and-one-tenths trillion, 1,100 billion. The deficit last year was 468 billion. So, we spent almost 50 percent more than we took in. So, to balance the budget, we would have to make some really detrimental decisions. Just trying to balance the budget over ten years, which is what we are trying to do in this budget, will be a difficult task. Of course, that is all related to the debt and interest. It would help if we could stay at a mere one-and-seven-tenths per- cent interest rate. This year, I intend to run a Budget Committee dedicated to the proposition that we have to confront spending, bringing the deficit to an end and ultimately balancing the budget. We are currently receiving more revenues than we have received in the history of the United States, but we are still spending a lot more than our revenues. As the first accountant to handle the gavel, the focus for me will always be the numbers. What do we spend? Where does that spending go? Where does the money we spend come from? Can we afford the spending we have? Where can we find the best value for the money that comes to Washington and leaves our Treasury? One thing I learned at an early age, while you can lie about the numbers, numbers never lie, and so I will always be looking for the numbers—looking at the numbers and, hopefully, understanding the numbers to be able to explain to colleagues and constituents the facts about our budget