Transcript: Q&A w/ Rep. Tom Cole on the CBO’s 2014 budget & economic outlook

Partial transcript of Q&A with Rep. Tom Cole (R-Oklahoma) on the Congressional Budget Office’s (CBO) 2014 federal budget and economic outlook. The House Budget Committee hearing was held on Feb. 5, 2014:

Rep. Tom Cole (R-Oklahoma):
…I’m exceptionally – and I think most of us are – disappointed. We’ve actually worked and made a little progress here in the last few years on the deficit. And I voted with my friends on the other side on the fiscal cliff deal. That generated revenue. I know, Mr. Chairman, you did as well.

The budget agreement that you negotiated with Sen. Murray also restrained discretionary spending. That made a little bit more progress in the right direction. And some mandatory spending as well. You know, we’re actually spending $164 billion less in the discretionary budget than we were spending in the last year of the Bush administration – fiscal year 2008.

So, that’s actually real progress by Congress. And yet when you look at this report, it really doesn’t translate into long-term deficit reduction for the simple fact that we just simply haven’t done enough on the entitlement front. Is that a fair statement?

Douglas Elmendorf, Director of the Congressional Budget Office:
I think the Congress hasn’t done enough on entitlements and revenues and some combination. And again, it’s not our place to say which side of the budget you should give more or less emphasis to.

Rep. Tom Cole (R-Oklahoma):
Fair enough. Between the two, which have we done more on – revenue or entitlements?

Douglas Elmendorf, Director of the Congressional Budget Office:
Well, that depends on how you view the extension of the expiring tax provisions a few years ago. So, under the current law assumptions we’d worked on relative to that, the extension of most of the expiring income tax cuts in the early 2000s produced a big cut in revenues and a big increase in the deficit. I recognize that that’s not the way that many of you have thought about as a starting point in your own minds, but it makes it hard for me to answer that question, Congressman.

Rep. Tom Cole (R-Oklahoma):
I know, and that’s why I want you to answer it. You know, are we going to have a lot more revenue than we would have had had we retained all of the Bush tax cuts?

Douglas Elmendorf, Director of the Congressional Budget Office:
You’ll have more revenue than you would have had, exactly, because some of those tax cuts were allowed to expire.

Rep. Tom Cole (R-Oklahoma):
Roughly how much more over a decade?

Douglas Elmendorf, Director of the Congressional Budget Office:
I would guess a trillion dollars or so?

[Audio off-camera]

I think my ballpark has been agreed to, Congressman.

Rep. Tom Cole (R-Oklahoma):
Okay. Well, let me ask you this. If we’ve had a trillion worth of reforms in entitlement programs?

Douglas Elmendorf, Director of the Congressional Budget Office:
Well, the Affordable Care Act made substantial reductions in spending for Medicare, as you know. I’ve not – really have not tried to assess what that would look like over the same 10-year time period as these allowing some of those tax cuts to expire. So I think I should not speculate more about numbers I haven’t looked up.

Rep. Tom Cole (R-Oklahoma):
…Politically, obviously I think the revenue picture is easier to deal with than the entitlement picture. I don’t care which side of the aisle you’re on. That’s just the case of it. And we saw the struggles with entitlement spending, frankly, in the budget agreement between Chairman Ryan and Chairman Murray. That’s just politically a very charged area.

Let me ask you this: Of the entitlement programs, which are the largest contributors of the deficit going forward over the next decade?

Douglas Elmendorf, Director of the Congressional Budget Office:
Well, the largest program – the single largest program is Social Security. And the programs that are growing – whose increases are sharpest in dollar terms – are Social Security, Medicare, and Medicaid.

Rep. Tom Cole (R-Oklahoma):
And let me ask you this and this is going to be a pox on both Houses sort of thing. Has either party put forward a plan to deal with Social Security?

Douglas Elmendorf, Director of the Congressional Budget Office:
We’ve not analyzed any plans of that sort in the last few years.

Rep. Tom Cole (R-Oklahoma):
I’d suggest that’s because one hasn’t been presented. We have not presented one in our side of the aisle, you know, because it’s politically pretty charged. Our friends in the administration hasn’t presented one. It’s probably statistically the easiest one to deal with because we actually know how many people will turn the age – that’s much more predictable, much easier. And yet, neither party has had anything to say about it. Is that correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
We have provided Congress with a large menu of possible changes to Social Security and to other parts of the federal budget. We have not been asked to do a lot of estimates on specific pieces of legislation.

Rep. Tom Cole (R-Oklahoma):
…Actually, the last person who tried to lead in this area was President Bush, who actually did put forward proposals and actually did do something.

…I’d say this for the record for my friends, because we’re going to have a lot – this is an area where I think we really ought to sit down. This is where we really ought to go down. Our friend, Mr. Delaney, on your side of the aisle has an interesting bill to deal with this by commission and make Congress vote up or down…I would suspect there will be full of unpalatable choices for both sides of the aisle. But that’s something I would like to see us begin to look at and do. It’s the most important single program that we have, the most popular. It’s the one most Americans want us to ensure, and yet neither side of the aisle has put a plan on the table.

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