Hearing of House Committee on the Budget: The President's Budget for Fiscal Year 2006

HEARING OF HOUSE COMMITTEE ON THE BUDGET: THE PRESIDENT'S BUDGET FOR FISCAL YEAR 2006

February 8, 2005

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Mr. Baird. Thank you, Mr. Chairman. I thank the gentleman. Yesterday at 3 a.m., I was at McChord Air Force Base, welcoming our soldiers home from Iraq and Afghanistan. It strikes me when we look at the budget and recall the testimony we heard last year, last year the budget was estimated to be $1 billion shy of the needs of current services for veterans. As I look at this budget on page 271, I see admittedly in some categories some increases, but in other categories real dollar cuts. What I don't see are adequate increases to provide for the increased enrollment of veterans into the system, inflation as adjusted for health care and the demands of our soldiers and their families as they come back from Iraq.

Frankly, I have got to say that I think parts of this budget are dishonest, and I think some of it represents a betrayal of promises made to our soldiers.

I, along with Congresswoman Darlene Hooley and many other Members of Congress, believe that as part of the supplemental appropriation of $80 billion, we should add at least 1.3 billion immediately, not wait until 2006, but add it immediately to meet the needs of the returning soldiers and their families.

I would sure like to be able to discuss that with the administration. If we can send $80 billion over there, we ought to be able to spend 1.5 or so here, so that when those soldiers come home with prostheses and with mental health challenges and the family readjustment issues, we could take care of them. Is that something we could work with you on as we look at the $80 billion supplemental coming up?

Mr. Bolten. I don't anticipate that that will be part of the $80 billion supplemental, but I am sure that Secretary Nicholson will be interested to engage with you on what the needs are in the veterans' community. We feel we are appropriately meeting those needs. I think you were out of the room when I put a chart up on the screen that showed that over the----

Mr. Baird. I was present, but what I didn't see in the chart is a comparison of enrollment growth and inflation growth, medical inflation growth, vis-a-vis the portion you put up. I think there was something absent from the chart.

Mr. Bolten. Well, we will try to provide you additional information. But I should say that Secretary Principi and now Secretary Nicholson are very proud of the quantity and quality, very importantly, of the care.

Mr. Baird. My question isn't whether you are proud of it or not. I think if you run for office on the platform and the President runs for office on the platform that the veterans' benefits would see cuts in terms of benefits, I think there would have been a different outcome.

Let me move to a couple of other issues.

Mr. Bolten. Congressman, let me say we are not proposing cuts in veterans' services.

Mr. Baird. In cuts in services? You are absolutely committed to providing current level of services to our veterans, including new enrollees and including adjustment for inflation.

Mr. Bolten. Congressman, we--if you look at the budget, what you see there is increasing expenditures on veterans' health care.

Mr. Baird. I didn't ask about veterans' expenditures, sir. I asked about benefits, which was a word you used. Are you making a commitment to this body and to the people of the United States that will there be no benefit or service cuts to our veterans?

Mr. Bolten. We don't intend any in this budget. I will let Secretary Nicholson engage with you on what you think is needed. But what I think I will say is that we are confident that we are amply meeting the needs of today's----

Mr. Baird. Let me not go to confidence. It is not a subjective process.

Will you say to us here that if you adjust for inflation, additional enrollment and additional demands of the returning population from Iraq, Afghanistan and other theaters, this budget will not result in long waiting lists, will not result in increased costs of service to those people?

Mr. Bolten. I can't predict how every piece of the budget will play out, but what I can tell you is we have amply met the needs of our veterans.

Mr. Baird. Wait, we are rehashing turf.

Let me bring up another matter, if I may. Could I bring up chart 3, Bush Budget Omits 10-year Cost. I would ask the gentleman to help us with this a little bit.

As I look at this, I think there is a real cost that is absent. That, I think, we find on page 362 of your budget.

Here is the question. If--and you can help us add to this possibly of the omitted costs. If we were to list how much borrowing we are doing from Social Security over the next 10 years, under your budget, the President's budget, what would that amount be, borrowing from the trust fund?

Mr. Bolten. I think you can probably do the arithmetic as quickly as I can. But the bottom of page 362 does show the off-budget surplus that is being used for government expenditures, as it has been for many years.

Mr. Baird. So correct me if I am wrong. I don't think it says it has been for many years. I see an increase in borrowing from $155 billion in 2004 to $252 billion in 2010. So I think we are adding $100 billion and borrowing from the Social Security Trust Fund even as we are claiming to cut the budget deficit in half, and that is the first 5 years.

My guess is maybe that trend goes up. I may be wrong with that. It seems to me you are close to borrowing $1 trillion in the next 5 years alone, while saying you are cutting the budget deficit in half. Does that strike you as inconsistent?

Mr. Bolten. No. The way the Federal accounts have always been kept is to keep account of what the government is taking in and spending out, which is what is reflected in those deficit numbers. Now, Social Security has been running a surplus. For many years the government has been spending that surplus, while putting aside, as an accounting mechanism, the obligations owed to retirees.

One of the reasons why we needed to get Social Security costs under control is that sometime toward the end of the next decade that cash surplus will shift to deficit. As big as you saw those numbers going up, they are going down. That is why we need----

Mr. Baird. Let me make two closing points if I may. First of all, we stopped borrowing from Social Security in the final years of the Clinton administration and actually began to pay back on that.

Second of all, I think it would have been a different outcome--it might be a different reception in the public today. I said at the outset I think parts of this budget are dishonest.

I would invite President Bush and yourself to travel around the country and say we will cut the deficit in half, and part of the way we are going to do that is to increase borrowing from Social Security from $150 billion to $250 billion every single year, over $2 trillion for the next decade. I think that would be an honest statement to the American people.

I yield back my time.

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