Hearing: Hearing On President's Fiscal Year 2007 Budget With OMB Director Joshua Bolten

Statement

Hearing: Hearing on President's Fiscal Year 2007 Budget with OMB Director Joshua Bolten

Good afternoon. Welcome to the Committee's second hearing in a series to examine the President's Fiscal Year 2007 budget proposal. We heard from Health and Human Services Secretary Michael Leavitt this morning, and we are honored to have Office of Management and Budget Director Josh Bolten testifying before our Committee this afternoon. We look forward to your testimony.

The President has presented a budget proposal that continues to fund the nation's priorities, while reining in discretionary spending. It keeps us on the path toward cutting the deficit in half by 2009.

Good fiscal policy is never easy, but spending taxpayers' dollars wisely is always necessary. To that end, Mr. Bolten and I just came back from the bill signing for the Deficit Reduction Act, which the Congressional Budget Office estimates will reduce the deficit by almost $40 billion over the next five years. That was important legislation, and of equal importance is that Congress continues this path of deficit reduction.

The budget outlook is improving. Thanks to the tax policies which helped to spur the economy, tax receipts in 2005 were stronger than expected. Since May 2003, when the capital gains and dividends tax relief was enacted, the economy has created 4.7 million jobs and unemployment is down to 4.7 percent - a level not seen since July 2001. The House and Senate are currently in the midst of assembling a tax reconciliation package which will maintain some of these tax policies that have kept the U.S. economy strong.

With the impending retirement of millions of baby boomers, the financial future of America's entitlement programs is a major focal point. That is why last week's news about the lower costs for Medicare's prescription drug benefit was so significant. CMS announced that the costs of the new drug plan to both beneficiaries and taxpayers have dramatically reduced due to competition.

The President's budget for Fiscal Year 2007 includes a number of proposals to reduce the growth of Medicare spending by $36 billion over the next five years. The proposals you are recommending are identical to recommendations made by the Medicare Payment Advisory Commission. Together, we share a common goal to ensure accurate payments to health care providers.

The President's budget emphasizes the challenges of escalating entitlement spending as baby boomers begin to retire next year. Without action, Social Security and Medicare will continue growing faster than our economy, which will have serious effects on our nation's budget, taxpayers, and our children and grandchildren's prosperity. In his State of the Union address, the President called on the Congress to join him in creating a bipartisan commission to examine the long-term financial challenges facing our entitlement programs for retirees. I served on the National Bipartisan Commission on the Future of Medicare in the late 1990's and found the exercise extremely beneficial in bringing sound ideas to the table.

We look forward to your testimony and hearing more about the ideas put forth in the President's budget proposal.

I now recognize the gentleman from New York, Mr. Rangel, for any opening statement he may have.

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