▶ 0:17:02>> good morning, everyone. Thank you for coming. We do this in the house. I'm sure this was a lot of fun. I appreciate you sharing with us the president's budget. Very quickly, I won't take long here. If you are a guy like me, this is the budget you have been dreaming of.
▶ 0:17:34$1 trillion given the changing nature of war and how complex it is, drones, aii, all of that good stuff. We need to change our military footprint. The best military budget I have seen since I have been in congress. There are some cuts to programs I think keep us safe. It is important to me.
▶ 0:18:00We will take under advisement the budget like we do with every president and we will work together to find a way forward among ourselves. The one thing I do want to mention is immigration situation that we find ourselves in. During the four years of biden it was a complete and total disaster on every front that matters.
▶ 0:18:29More people coming in on the tariffs -- terrorist watch list by a bunch. I have been talking about sanctuary cities. Those cities and states that ignore federal law. They are magnets for future illegal immigration.
▶ 0:18:53I have dedicated like everybody on our side to do something about that. You can see the states and cities that have these policies. They have a lot of illegal immigrants. If you could get here, it is a magnet to keep coming. We will be moving to reconciliation soon to fund ice and the border patrol, why?
▶ 0:19:24I would much rather appropriate. I like the normal process. I want to thank senator collins and the good job they have done. It has been quite frankly satisfying to see the appropriations committee work but we had a problem when he came to the department of homeland security funding, we could not reach an agreement about funding ice or the border
▶ 0:19:55Patrol. I don't know about you but it seems like there's a lot of bad things going on in the world and now is not a time to shut the border patrol down. Now is not the time to defund ice. We are going to move the reconciliation bill to be limited.
▶ 0:20:21Make sure we have money for the border patrol and ice to keep doing their job. While we are doing that, I just don't see any breakthrough with our democratic colleagues about these accounts. There are a lot of pressure, defense hawks want the fed money and the reconciliation bill.
▶ 0:20:54I'm trying to keep it as small and focused as possible. I'm hoping it will get past whenever you send one over that we could work in a bipartisan pa p fashion. If that fails, I'll urge the president to do another reconciliation bill for defense.
▶ 0:21:25We can't accept failure when it comes to funding the border patrol, ice, or additional money for the military. I'm hoping the iran war down fairly soon in a way that won't start new wars. Ukraine, russia is one of the bloodiest wars in history, of this century. Last night there was a massive attack by russia.
▶ 0:21:55Who it is the problem, not the solution. There is a bipartisan breakthrough coming when it comes to russian sanctions to put in place a sanctioned tariff regime that will make those who buy cheap russian oil pay a price. It is time to end this war and put pressure on putin. I want the senate to lead the charge of putting in place infrastructure to put pressure on those who prop putin's war machine up.
▶ 0:22:27I think we are very close to reaching an agreement with the white house democrats and republicans to do that. As for the budget, this committee is going to hear what you have to say. I'm enthusiastic about the defense part. Concerned about other parts.
▶ 0:22:52I appreciate very much your commitment to find a way forward against russia. We don't have that consensus. Why are we doing reconciliation? You did the obama care inflation reduction act. We did the working families tax credit bill.
▶ 0:23:22The next reconciliation bill, the one coming up is designed to fix a problem when the appropriations committee fails, this tool has to be used and as budget chairman I will use this reconciliation tool when the appropriation process fails to the extent that I can, thank you. >> thank you very much and welcome, director.
▶ 0:23:52My colleague to my left and I have worked on a number of projects together. There are many in place. We may have a different perspective and certainly I know you mentioned reforming ice, I think that's incredibly important and was the key to being able to go forward because
▶ 0:24:22Ice is operating like secret police. A great irony, they have adopted the tactics of the secret police of iran showing up in unmarked vans and uniformed and failing to get judicial warrants. Detaining people without access to attorneys and families.
▶ 0:24:45Those are all the types of factors that made them so hated in iran that attributed to the 1979 revolution. Now we have those same practices exercised right here. That is a terrible mark on our democratic republic. You are a very important event -- man.
▶ 0:25:13You were a central architect of project 2025. Now you are the chief engineer of the trump administration's training. Virtually nothing happens that doesn't go through. This is the first chance we have had to have you before the committee since the president came into office. I think that's important for you to be here.
▶ 0:25:36You note in your opening message on your budget a historic paradigm shift in the budget process is occurring. I certainly agree with that. This is an extraordinary families lose, billionaires win budget. We saw that in the legislation last year. A cut health care and savage nutrition. Funded tax breaks for the richest americans.
▶ 0:26:07It added $30 trillion to our debt over the next 30 years. If interest rates were 1% higher they have their model. Do savage programs for families in order to run up debt and make billionaires even richer? That is a paradigm shift and not a good one.
▶ 0:26:38There is another paradigm shift underway that is equally disturbing. The constitution assigns three powers to congress. The power of taxation, the power of the purse, the power of war.
▶ 0:26:55President trump has violated all three of those allocations in the constitution trying to take and say those belong to the executive branch, I'm going to take those. That is simply a huge assault on our constitution. The very first bill the senate considered was an issue of tariffs.
▶ 0:27:22The senator sat around and said how much should be on males and so forth. Every president has understood the power of taxation until this president said I'm just going to assign 50% here, 100% here. Tomorrow I will raise it without congressional authorization to do so.
▶ 0:27:44We see under the power of the purse the cessation of programs that have been duly authorized and appropriated by this executive branch. That is a direct violation of the law and our constitution as well.
▶ 0:28:04The agency for international development is one of those agencies that was shut down despite being authorized and appropriated and public health experts estimate that to date 780 thousand individuals died because of that sudden shutdown including 500,000 children. The weight of that rests on this administration.
▶ 0:28:32And then there is the consumer financial protection bureau of which you are the administrative head of. That bureau has saved in refunds to american families, 21 billion dollars since 2011. That's not counting the probably four or five times that amount that was saved by stopping predatory schemes in their tracks.
▶ 0:28:58Everywhere I go I say look at all these new scandals, these strategies to rip off our seniors and families across the country. Why are they doing anything about it. You shut them down essentially is the answer. There is the congressional power to declare war.
▶ 0:29:18A reckless war that has strengthened the hardliners, weakened the reformers, enriched russia after president trump lifted the sanctions on russia. It has left nuclear materials buried deep underground and has shut down the strait of hormuz.
▶ 0:29:45Raising prices for american families let's be blunt also resulting in the death of our service members, the injuries to our service members, and about $2 billion a day in national treasure. These are profoundly concerning changes and not a paradigm shift in sync with the constitution.
▶ 0:30:12I was struck with what is missing on this budget. No plan to bring down gas prices, grocery prices, nothing on social security even though we are just six years out from exhausting the social security trust fund. That is a great concern to seniors across this country who will be looking at a 28% cut in payments. I encourage the administration to take on this issue.
▶ 0:30:46I hope we could get to an actual bill now. I would like to see the administration participating in that effort to save social security. No funding for aid to farmers. No additional funding for disasters despite the enormous increase in wild fires, hurricanes. No credible plan to reduce the debt after adding $30 trillion last year. We are now at over 100% of gdp.
▶ 0:31:20We have an entrenched 6% of gdp deficit between the roughly 17% of gdp that we are raising and revenue and the 23% that we are spending. In this budget I didn't see any deficit projections. The law requires them to have those projections. Section 31 says they have to include at least five years of deficit and debt protections.
▶ 0:31:53You chose not to put them in. That is breaking the spirit and letter of the law. What the budget does include our projections that present tariffs will raise 1.6 trillion in revenue more than they estimate. The estimates were made before the supreme court rule trumps tariffs on constitutional. You would think those projections would be smaller than the projection, not larger.
▶ 0:32:25Those projections really are fictional. And then we have this massive increase in defense spending. A difference of opinion I have with the chair. What we are looking at right now based on last year's hr one bill and what is in this budget is a massive 42% increase in defense spending and that means we would
▶ 0:32:58Be spending more in constant dollars now then we spend in any single year in world war ii when our entire national economy was driven by a world war. This budget doesn't include the billions a day we are spending in iran. It does include a reduction in domestic programs for american families.
▶ 0:33:31Those cuts continue to compound. The budget proposes a 45% cut in non-defense spending as compared to cbo's current law projection. It has less for education, health care, housing. It's families lose and billionaires win. That is not a good path for our nation to be on.
▶ 0:34:00Billionaires have enough money running this government. Huge assault on the vision of government for the people. Remember the vision of this country was not a country by and for the powerful. Or the oligarchs or the richest. That is what this budget is designed to do. President trump when he campaigned said we will make this into an incredible country that could afford to take care of its people.
▶ 0:34:30We will take care of our country first. Why do we see american families last? America's richest classed america's richest classe, the epstein class first. That is just wrong. This budget is a betrayal of every working family. It is an extraordinarily dangerous change to the vision for our nation.
▶ 0:34:57The death of -- of the debt that you are all running up will haunt this nation for a generation to come. I think it's important for congress to recognize and ensure this budget is dead on arrival. I look forward to today's discussion.
▶ 0:35:21Chair Graham: Thank you. We have the director, the floor is yours.
▶ 0:35:31Dir. Vought: Thank you for having me here. I look forward to a productive conversation on how to continue the progress we have made so far. When president trump took the office the nation was facing a catastrophe under the biden administration and decades of status quo spending strangling our nation. They produce nothing in the area of fiscal restraint. Other futility about doing anything about it.
▶ 0:36:03Dir. Vought: That fiscal futility ended with the return of president trump. In just one year the trump administration made historic progress on writing the fiscal ship. The speed and scope of which have not been seen in washington for many years. They drove the tax cut act, once in a generation legislation to end the utility and invest in physical priorities and cut and extend taxes for working americans.
▶ 0:36:29Dir. Vought: This achieved nearly $2 trillion in mandatory savings while securing historic investments in the nation's defense and department of homeland security without corresponding increases and objectionable non-defense spending. The resident shepherd the end of $9 billion in wasteful spending, the first package enacted by congress since 1992.
▶ 0:36:56Dir. Vought: He canceled $3 billion in expense -- spending and executed a historic pocket rescission to eliminate $5 billion in wasteful foreign aid. Upon signing the appropriations bill president trump continued to bring discretionary spending under control. The full year 2020 six appropriations bill enacted the first cut to spending in over a decade. It rooted out wasteful spending the administration identified across agencies.
▶ 0:37:27Dir. Vought: The enacted bills reaffirmed administration policy to eliminate federal agencies that do not serve a useful purpose. The bills eliminated all programming for usaid as they worked to fully shutdown the agency after decades of mismanagement and abuse. This also includes the complete elimination which funneled billions of dollars into biased" programming.
▶ 0:37:57Dir. Vought: We look forward to achieving more progress in the appropriations cycle. The 2027 budget built on the president's vision by constraining non-defense spending and reforming the federal government. It proposes a 10% cut.
▶ 0:38:14Dir. Vought: Within this total the budget maintains investment in border security, immigration enforcement, delivers on the commitment to support law enforcement and combat violent crime with a 13% increase to the department of justice and honors the sacred obligation to military barriers.
▶ 0:38:33Dir. Vought: The 2027 budget eliminates wasteful projects that are dependent on foreign supply chains, returns control of education back to american families and roots out waste, fraud, abuse ensuring every taxpayer dollar makes america safer, stronger, more prosperous. It simultaneously builds on the $1 trillion fiscal year 26 timeline.
▶ 0:38:59Dir. Vought: A request 1.5 trillion four 2027. A 42% increase as promised by president trump last year. It will ensure the united states maintains the most powerful and capable military as we grapple with an increasingly dangerous world. It is a sizable increase I want to explain. It is meant for significant paradigm shifting.
▶ 0:39:25Dir. Vought: The president and his power of war are using the leadership to build more ships, planes, drones, munitions faster without the status quo. For the industrial base to double and triple capabilities, actually build more facilities, not just add ships it requires multiyear agreements. That cost has to be booked in the first year.
▶ 0:39:49Dir. Vought: Under president trump's bold leadership every tool has been used to achieve real savings and our administration will continue to do so. A historic paradigm shift is occurring, it is producing real results for the american public. Fiscal futility is over. Now that it has finally turned to face in the right direction I look forward to working with you and moving forward we will achieve significant budgetary savings while implementing the president's bold vision. Thank you.
▶ 0:40:19Chair Graham: Thank you very much. We will have five-minute questions. Senator jostens has to take over for me. I appreciate that. What percentage of gdp to defense spending would it be if we pass the president's budget?
▶ 0:40:41Dir. Vought: Probably about 4.5%.
▶ 0:40:45Chair Graham: What has been the average since world war ii?
▶ 0:40:49Dir. Vought: Probably 3%.
▶ 0:40:52Chair Graham: Right now we are about what, three?
▶ 0:40:55Dir. Vought: Probably.
▶ 0:40:59Chair Graham: About average, right?
▶ 0:41:03Dir. Vought: The increases are right around where we have been.
▶ 0:41:08Chair Graham: Do you consider the world we live in in terms of threats average?
▶ 0:41:13Dir. Vought: We have adversaries across the globe and the president is taking action against them.
▶ 0:41:19Chair Graham: There's nothing average about what we are facing. We have a world that is very dangerous. Bad actors on the move. Thank god president trump is trying to stop one of them, the iranians. You think I ran had a nickel -- nuclear weapon, they would use it?
▶ 0:41:39Dir. Vought: We don't want to tempt them.
▶ 0:41:42Chair Graham: We don't want to play that game. We are having to deal with a nuclear armed iran. We have a more aggressive china. Would you say china is fairly aggressive in the economic space?
▶ 0:42:00Dir. Vought: Yes.
▶ 0:42:01Chair Graham: China is on the move. We all want to say we want to protect taiwan. They are building a deepwater navy. We need to up our game. You know how many ships we have?
▶ 0:42:16Dir. Vought: Around 290.
▶ 0:42:19Chair Graham: They say we need how many?
▶ 0:42:23Dir. Vought: We need to go to 400 ships.
▶ 0:42:28Chair Graham: If you don't build more ships you have a gap. There's nothing average about the environment we live in. We have a lot to do in a quick period of time. That is why I support the budget. We go from 3% to four point 5%. The history of america since world war ii, 4.5% is not like loading up the place. It is kind of a cold war number to be honest with you.
▶ 0:42:57Chair Graham: My belief is you are very much on track with defense spending, the necessity is there. When it comes to supplemental for defense, you know what when it is coming?
▶ 0:43:13Dir. Vought: Not yet. We are working on it and we want to assess when it will be needed by and how long the operations will last. We are well aware and make sure we set it up.
▶ 0:43:25Chair Graham: In terms of illegal immigration, does it cost america or is it a benefit to america?
▶ 0:43:33Dir. Vought: It cost america in crime, communities, the extent to which these individuals are on our benefit roles.
▶ 0:43:42Chair Graham: Is it fair to say that every part of the government through the appropriations process has been funded for this fiscal year except ice and border patrol?
▶ 0:43:54Dir. Vought: Correct.
▶ 0:43:56Chair Graham: As we sit here in the appropriations process, there is no money for these accounts? How do you feel about that?
▶ 0:44:07Dir. Vought: It's worse than that. There's no money for the department of homeland security. We need reconciliation to fill those holes. The department of homeland security is disintegrating because the secretary and I are having to figure out ways to temporarily fund paycheck so we don't have people quit and embark on new careers.
▶ 0:44:31Chair Graham: Do you think if we keep this up much longer people will quit?
▶ 0:44:36Dir. Vought: The weekend secretary mullin took office was incredibly concerning. We have to have a funding mechanism including those two important law enforcement agencies.
▶ 0:44:49Chair Graham: Would you say if we fail to do that we put america at risk?
▶ 0:44:54Dir. Vought: I would.
▶ 0:44:56Chair Graham: What kind of wrist?
▶ 0:44:58Dir. Vought: The department of homeland security was created because this party wanted the entire department.
▶ 0:45:05Chair Graham: The department of homeland security was a reaction of the federal government to make sure 9/11 never happened. Is that right?
▶ 0:45:15Chair Graham: That is correct. I want the american people to know there is no money for the department of homeland security because we can't reach an agreement among ourselves. If you thought the department of homeland security was necessary to avoid 9/11, the whole thing is shut down. If there is another 9/11, don't blame me.
▶ 0:45:42Chair Graham: I am trying everything I can, bipartisan or otherwise to put money in an agency that is on the front lines of defending us all. What we are doing is incredibly irresponsible, incredibly dangerous. I want to disassociate myself completely from what senator merkley said. I have been here a while.
▶ 0:46:09Chair Graham: I have never been more worried about the dysfunction of this place leading to a bunch of americans getting killed. >> thank you very much. Have you included estimates or a fund for the war in iran in the budget presented to congress?
▶ 0:46:34Dir. Vought: No sir. We are working on supplemental for additional needs. We are working through that review process. Part of it is the length of the war. Part of it is the extent to which some items might be fiscal year 26 or 27.
▶ 0:46:55Sen. Merkley: Would I be in the ballpark to say we have spent $50 million?
▶ 0:47:00Dir. Vought: I wouldn't want to make a characterization of that at this point.
▶ 0:47:06Sen. Merkley: I would say as the most knowledgeable person of the budget I would expect you to have good numbers on that so I'm a little disappointed in that answer. My understanding is the most recent plans have been to present a supplemental in the ballpark of $80 million to $100 million.
▶ 0:47:30Dir. Vought: If you are on the inside of the department of war these costs would fluctuate. It is hard to give you an average cost. That is one of the reason we will come after much work and review to give you a full request.
▶ 0:47:44Sen. Merkley: Thank you. I think it's important for a budget to include all the things we know are going on in order to have a good foundation when it is presented. I do look forward to whenever you present in the near future. I noted you did not include deficit numbers. Those are required by law, why not?
▶ 0:48:06Dir. Vought: It is a discretionary budget. One of the things I think is important is to not confuse the country when we are in the middle of several reconciliation efforts. This is making sure you could start the appropriations process. We will comply with the law at the midsession point about how we are doing.
▶ 0:48:30Sen. Merkley: I will take that answer. I disagree with the notion that it is discretionary to follow the law. The law did require members. They could be extracted if one sits down and does the numbers from your revenue spending projections. That includes the deficit of $2.2 trillion in 2027.
▶ 0:48:59Sen. Merkley: Perhaps the reason you didn't want to include deficit numbers was you didn't want to draw attention to the situation where you are not in major recession. You are not including in this the cost of the war. That is not a factor. We are continuing to drive this nation deeper and deeper into debt.
▶ 0:49:25Sen. Merkley: The projections show that in 20 years with a 6% structural deficit we will be in the position of basically being able to fund along with medicaid, medicare defense along with interest payments. Those investments are diminishing in your budget. My accurate in saying extracting from the numbers that you do have that it will be about $2.2 trillion?
▶ 0:49:50Dir. Vought: Again, this budget is not intended to tell you where we would be from the deficit. I appreciate the concern. I appreciate the concern. When we came into office we were staring in the face, 30 $2 trillion in deficits. We have got that down to $18 trillion.
▶ 0:50:12Sen. Merkley: Thank you. The situation is you added 30 trillion last year to the debt over the next 30 years rather than reducing deficits and debt you are increasing them.
▶ 0:50:34Sen. Merkley: This is on top of $8 trillion in hugely, strategically misshaped wars in afghanistan and iraq. It was not invested in american families. This budget continues the process of saying we don't care about american families. The foundations of health care, housing, education, a good paying job.
▶ 0:51:04Sen. Merkley: The president ran on providing a foundation for families. This budget does the opposite. Why not include a plan to address social security when we are just six years out from the trust fund being exhausted?
▶ 0:51:18Dir. Vought: The president is clear he will protect social security into the future.
▶ 0:51:23Sen. Merkley: Why not have a plan, come to congress and say this has to be a priority. Why not have the president give a speech and say we are really pleased that chairman graham held a hearing on social security and we want to get this fixed and fixed now, not wait until it runs out of money and families are facing a 25% reduction in benefits?
▶ 0:51:47Dir. Vought: No senior will face reduction. This president will fully protect them at all points of the deadline. We have to get the government funded. We need congress to work again.
▶ 0:52:00Sen. Merkley: My time is up, thank you. >> I have just one process and one question. Congress has appropriated money. We don't have the authority to impound it. I'm interested in the release of community service block grant money.
▶ 0:52:25Sen. Merkley: The reason I'm interested in it, we are not getting any answers about why these quarterly allotments are not given out. I follow this program in iowa. The reason is personal to me. One of your predecessors suggested we do away with the program. I and senator hatfield, who is no longer alive cap that program alive.
▶ 0:52:57Sen. Merkley: I want those quarterly allotments released. My question is this, my democratic colleagues believe the only solution to our unsustainable debt and deficit is higher taxes on job creators and families.
▶ 0:53:16Sen. Merkley: History proves that high tax rates failed to raise significant revenues, taxpayers, workers, investors are smarter than we in congress or bureaucrats are. We've had 93% marginal tax rate. A 70% tax rate, 50% marginal rate. 30% and 40% and so on.
▶ 0:53:44Sen. Merkley: Regardless of the rate, we brought him about the same amount of revenue. I have a chart that shows that. On the other side of the ledger, federal spending is at levels we have never seen outside of war and recession and still growing. Isn't it true that our fiscal imbalance is primarily a spending problem, not a revenue problem?
▶ 0:54:13Sen. Merkley: Let me give you the second part of it. How is this administration working to rein in federal spending?
▶ 0:54:20Dir. Vought: It is a spending problem. If you look at our postwar average. Revenues have been about 17% of gdp. We will be at 18.3% on average. If you look at the postwar average it is about 19%. We have been over 20%, 22% at times as a percentage of gdp. Spending is the problem.
▶ 0:54:49Dir. Vought: It is one of the reasons we believed strongly that we need to extend the tax cuts. That you are not allowing for current law taxation to be assumed. That was not an honest way to reflect deficits. We are thankful the action congress took and believe it is part of the economic growth that is needed to deal with the deficit.
▶ 0:55:12Sen. Grassley: Thank you.
▶ 0:55:17Sen. Merkley: A budget is really -- Sen. murray: looking at trump's latest budget, we are cutting tens of billions of dollars from housing and health care and education so we could spend half $1 trillion more to fund trump foreign wars.
▶ 0:55:39Sen. Merkley: We should be sending more funding to schools here in america, not buying more missiles trump could fire on schools in iran. We should be bringing down our energy costs. Not blowing money on wars that spend -- send gas prices through the roof. It will not shock you to hear that I believe this budget is morally bankrupt.
▶ 0:56:08Sen. Merkley: Also by any objective measure deeply irresponsible because it will rob our families and burden our grandkids with mountains of new debt, for what? So trump has more bombs he could threaten to end civilizations with. This budget rob states like mine, zeros out funding for howard hanson dam. I rejected those cuts in our last funding bill. I will do it again as many times as it takes.
▶ 0:56:38Sen. Merkley: There is only one place for this budget and that is in the trash bin. I do have some questions for you . You and president trump are asking for 400 $50 billion in new defense spending, to be clear that is the largest increase since world war ii. That does not include money you still plan to request for the war in iran.
▶ 0:57:03Sen. Merkley: What is the total dollar amount requested for defense spending including annual appropriations in reconciliation?
▶ 0:57:11Dir. Vought: $1.5 trillion. The combination of appropriations and the mandatory. We are trying to increase the amount we would fund through appropriation. We don't want the full increase to be born in the process.
▶ 0:57:27Sen. Murray: What is the total amount for non-defense spending?
▶ 0:57:31Dir. Vought: $660 billion. 10%, 70 billion. We look at that is about $81 billion frankly. You count yourself as a spending hawk. Here you are arguing for a $1.5 trillion defense budget.
▶ 0:58:00Dir. Vought: Warning the president that it would explode the deficit, did you warn the president or administration that this would explode the deficit?
▶ 0:58:09Dir. Vought: I fully support this budget. It is needed for the department of war. It is designed to have paradigm shifting investments like I mentioned to be able to fund now a multiyear agreement. It is necessary to keep us safe. I have never been more confident the administration is doing what it can at the department of war.
▶ 0:58:37Dir. Vought: There are bills that need to be paid with regard to drones and planes.
▶ 0:58:42Sen. Murray: I will say for the record people at home need to understand this. The president is suggesting we cut $73 billion in our domestic funding for things like education and health care critical to our economy, to the future of our country to help pay for a truly jaw-dropping half $1 trillion increase in defense spending.
▶ 0:59:09Sen. Murray: I just think we have to all recognize what is going on here and be smart about how we put together a budget as we go forward. Let me just ask you. We are here to talk about next year's budget. This administration is spending billions on the war as we speak. I heard senator merkley ask you a question. You have no idea, none how much has been spent on the war so far?
▶ 0:59:37Dir. Vought: We don't have that figure right now because it is fluctuating on a day in day out basis. It is one of the reasons we are studiously reviewing.
▶ 0:59:47Sen. Murray: You can't give us a rain? You will not tell us because you don't want us to know how much is being spent. We have a responsibility, senator merkley mentioned that. We have to know how much is spent so we could make our annual appropriations. I find it outrageous that you are not willing to tell us this. It is your job to know. Let me also asked you.
▶ 1:00:16Sen. Murray: You said the appropriations process has to be less bipartisan. Do you stand by that statement?
▶ 1:00:20Dir. Vought: That was coming at a time when the use of a statutory process was derided by one side as a shot against the bipartisan appropriations process. It is not. You pass appropriations bills right now. They have to get 60 votes. You are famously making that point to the country.
▶ 1:00:47Dir. Vought: You have congressionally enacted statute that allows us to use rescissions.
▶ 1:00:51Sen. Murray: Let me tell you this, as a member of the appropriations, we worked out very different differences between each other. We can't trust that a deal is a deal when we reach those bipartisan agreements, that will make it truly impossible for congress to do its job.
▶ 1:01:10Dir. Vought: Could I respond to that? >> on the chairman's time please.
▶ 1:01:18Dir. Vought: We had a dhs bill that would have funded dhs.
▶ 1:01:24Sen. Murray: I was at the table working on negotiating that. We work hard to come to an agreement. The senate has now passed twice a bill to make progress on that. I will take a backseat to no one on working hard to get the funding done that we need to get done. Several johnson an awful lot --
▶ 1:01:54Sen. Johnson: An allies appropriations, we have ship sailing, airplanes training, the cost of the war is obviously there is an uptake in terms of how much is spent. You have the munitions, correct? It will take some time for you to figure out what is in place, correct?
▶ 1:02:24Sen. Johnson: You have 1.5 trillion, you will be authorizing 1.5 trillion but it is you telling me in the opening this is for a long-term contract. Am I getting that correct?
▶ 1:02:38Dir. Vought: We are always asking for budget authority over a period of time. Do you know it will be a defect -- exclusive of the war cost?
▶ 1:02:54Dir. Vought: Dod spending is typically going out. A vast majority is on transportation funding which takes forever to go through the system. These are important investments. We have run a thorough process. One of the reasons why we are up here this month is the extent that we are working with the department of defense to make sure this money is well spent. We are proud of the budget we are here to articulate.
▶ 1:03:25Dir. Vought: >> what components are currently underfunded?
▶ 1:03:31Dir. Vought: All of them are underfunded including the disaster relief fund. We are not prepared for a natural disaster from a funding standpoint. We are temporarily using a fund from the one big beautiful bill to pay salaries so the secretary of homeland security doesn't have a complete walkout on his hands.
▶ 1:04:04Sen. Cornyn: Does that include the coast guard and cisa? No money for any of those functions?
▶ 1:04:13Dir. Vought: No money for the department of homeland security in its entirety.
▶ 1:04:19Sen. Cornyn: I understand our colleagues are angry with ice, they don't believe in enforcing immigration laws. The tool they have used to defund the department of homeland security reaches far more broadly than just ice, correct?
▶ 1:04:40Sen. Cornyn: I want to talk to about defense spending, you believe national security is the first responsibility of the federal government?
▶ 1:04:49Dir. Vought: Absolutely.
▶ 1:04:52Sen. Cornyn: All of the rights flow from the ability to defend ourselves?
▶ 1:04:56Dir. Vought: Absolutely.
▶ 1:05:01Sen. Cornyn: President trump has been courageous in demanding our nato allies step up defense spending to a level of 5%. Is what the president has proposed, doesn't exceed 5%?
▶ 1:05:19Dir. Vought: It should be in the area of 4.5%.
▶ 1:05:25Sen. Cornyn: What the president is recommending the united states do is what our allies do so the american taxpayer doesn't have to pay the burden. With the national security apparatus for the entire world. I was intrigued to see in the wall street journal a story about steve fienberg and the deputy secretary of defense.
▶ 1:06:00Sen. Cornyn: It is being undertaken to make sure, ukraine has changed the nature of warfare. Now instead of multimillion dollar weapons, to drones and other weapons are being used on that battlefield. Ironically enough ukraine is teaching the rest of the world how to use these new technologies.
▶ 1:06:28Sen. Cornyn: Talk to us in the long term, is it important to get the pentagon and a better position when it comes to purchasing the weapons, aircraft that we need and talk to us about the necessity of dealing with the ossified processes at the pentagon in terms of procurement acquisition, making sure tax dollars are being spent on things that help our war
▶ 1:06:59Sen. Cornyn: Fighters.
▶ 1:07:02Dir. Vought: Sometimes you could assume the defense contractors are just putting out what is needed for the various things we have to deal with the annual this is what we do, the president has done and his team at the department of war have worked hand-in-hand.
▶ 1:07:25Dir. Vought: It is to say you have to scale to a level that you had not been planning on. It is based on your bottom line. You need to know that you have a partner in us that will procure over many years. It is not enough to have an added shift. You need more facilities across the country. That is what this budget is designed to do. It is coming at a time where the president is putting pressure on these same contractors.
▶ 1:07:57Dir. Vought: Not to do stock buybacks, dividend payments, so when you get to quarterly earnings and they have a backlog of ships that you are not rewarding bad behavior. This is part of a combined effort of putting pressure on that community but also making sure we have the resources so we could say we will build a facility that will add x number of drones, planes, ships so that we could be ready to take that deal, that is what the budget is
▶ 1:08:28Dir. Vought: About.
▶ 1:08:29Sen. Wyden: Thank you. I want it understood that I think what we have seen in this administration is a wildly skewed set of priorities. Essentially all the money now has descended to the war in iraq. Reality is 100% of U.S. senators voted for the dhs appropriation.
▶ 1:08:58Sen. Wyden: You can get on typical day is 100% of the senators to order a 7-up together. 100% where they on this budget it is so crucial. What I want to do for my time is move this to the consequences of your budget for real people and what it means every day. I will start with the effort to talk about wildfire preparedness.
▶ 1:09:23Sen. Wyden: What we are dealing with in our area is you are bringing a wrecking ball to this crucial area when we are looking at one of the toughest wildfire season's in decades. The reality is you all illegally withheld funds in the past for firefighting which resulted in the departure of 1400 qualified for them -- firefighters.
▶ 1:09:52Sen. Wyden: You empowered immigration enforcement at -- agents to arrest and detain firefighters in the middle of fighting a fire in order to protect all of us. Just a few weeks ago the trump administration announced a complete dismantling of the forest service agency largely tasked with helping western states fight fires.
▶ 1:10:14Sen. Wyden: I have a very specific question, between your budget and the staffing cuts, I could tell you people all over the west, there is the same kind of concern. I would like to hear you commit to me that my state will have the same number of firefighters and forest service staff on hand this summer in order to prepare for what looks like a devastating wildfire season.
▶ 1:10:44Dir. Vought: I need to unpack the claims you are making. There's a story to tell with regards to this. We fully fund all fire prevention accounts. He's very interested in making sure there's one point of contact.
▶ 1:11:02Sen. Wyden: We lost 1400 qualified firefighting personnel at the outset, that is a fact. I want to know on my time. You can talk to other senators on their time, are we going to have the same number of people on a firefighting season.
▶ 1:11:21Dir. Vought: You will have the full weight of the presidency.
▶ 1:11:26Sen. Wyden: You are ducking the question. I'm asking a specific question. Will we have the same number of firefighters? I would like a yes or no answer, will we have the same number?
▶ 1:11:38Dir. Vought: I'm not in charge of the forest service, how they allocate resources is how you will -- is something you will have to ask them.
▶ 1:11:48Sen. Wyden: You are cutting projects all over the west. With respect to mental health the trump administration is planning to slash $2 billion from substance abuse and mental health. I and others made a gigantic stink about it saying we will not let that happen on our watch. Less than 24 hours later you seemingly backtracked on the cuts.
▶ 1:12:15Sen. Wyden: The newest budget would eliminate the substance abuse and mental health program entirely and merge it into a new agency that you combined with a $5 billion cut from that new agency. We are seeing a failure when it comes to mental health. We are in the middle of an opioid crisis, what is your budget going to do to help with that?
▶ 1:12:38Dir. Vought: We have a block grant for mental health and drug abuse, opioid addiction. We do make organizations within the department. Our officials there have put forth proposals we think will lead to better care. We want less funding to go through nonprofits.
▶ 1:13:04Sen. Wyden: Nonprofits on the front lines are completely against your program, your idea of eliminating substance abuse and mental health programs. Talk to them and you will see that.
▶ 1:13:15Dir. Vought: They often share a viewpoint that we reject, which is why we are going through programmatic reviews. We put the funding forward.
▶ 1:13:27Sen. Wyden: My time is about to expire. I just think your views with respect to mental health are another moment in hypocrisy, you get these big speeches in terms of fighting crime. You say it will be fine -- find a block grant, we will settle for that.
▶ 1:13:55Sen. Kennedy: Mr. director, welcome, I want to ask you your thoughts on a few subjects. I consider to be an expert on the federal budget. On public policy in general. I want to talk about the situation that you inherited.
▶ 1:14:23Sen. Kennedy: Would it be fair to say that mas president biden would have sent it money?
▶ 1:14:33Dir. Vought: I think that is fair.
▶ 1:14:38Sen. Kennedy: And would it be fair to say that the amount of money that president biden and my democratic friends spent was so outrageous that it resulted in 9% inflation?
▶ 1:14:54Dir. Vought: Precisely. I was one of the people that was noting that at the time. They pass the bills that lead directly to naprosyn inflation. Historically so.
▶ 1:15:05Sen. Kennedy: And that guided middle-class americans like a fish, did it not?
▶ 1:15:10Dir. Vought: One of the most regressive taxes you can in that region -- you can imagine.
▶ 1:15:19Sen. Kennedy: You inherited a mess. You took steps to try to put things in order. For example, at your suggestion, we clawed back, as I recall, about $1.1 billion that the american taxpayers were giving to npr and pbs. Is that correct?
▶ 1:15:45Dir. Vought: Correct.
▶ 1:15:50Sen. Kennedy: We were told, did we not come if we did that western civilization would end as we know it?
▶ 1:15:56Dir. Vought: We were told us types of things would occur if we did not fund the program.
▶ 1:16:02Sen. Kennedy: But here we are and npr still exists, doesn't it?
▶ 1:16:07Dir. Vought: Asked does pbs.
▶ 1:16:11Sen. Kennedy: All right. Ok. I want to ask another question that does not -- well, it has to do with the budget a little bit. When he was alive, would you have given charles manson a nuclear weapon?
▶ 1:16:27Dir. Vought: Absolutely not.
▶ 1:16:30Sen. Kennedy: Isn't that what iran is all about?
▶ 1:16:33Dir. Vought: The country we are engaged with operations does not and should never have or should never have a nuclear weapon. It cannot be trusted with a nuclear weapon.
▶ 1:16:44Sen. Kennedy: In my last two minutes, and I'm going to stay within my time because our chairman here is tough as a hoot and he is going to cut me off, do you happen to know what our poverty rate is on america?
▶ 1:17:02Dir. Vought: About 32,000 as a family of four and it is a formula --
▶ 1:17:11Sen. Kennedy: What percentage of americans?
▶ 1:17:12Dir. Vought: I don't know.
▶ 1:17:16Sen. Kennedy: If yes the census bureau, it is 11%. It has been 11% or 12% since god was a child. I started looking at why that is. Are you aware the census bureau under its definition of poverty only counts cash payments to the american people, not non-cash benefits?
▶ 1:17:37Dir. Vought: I am aware of that.
▶ 1:17:41Sen. Kennedy: Are you aware that if we count both cash benefits and non-cash benefits, for example, food stamps, which the census bureau's us does not count. If we count non-cash benefits, all this money coming from the american people that the poverty rate would be 1%.
▶ 1:18:06Sen. Kennedy: Don't you think we ought to give the american people credit for reducing poverty in our country? I am proud of that. Are you aware -- I have 32 seconds. These are the programs that the census bureau refuses to consider as part of the american people's gift to neighbors who are less fortunate than them. I'm going to read them quickly. S.n.a.p.
▶ 1:18:32Sen. Kennedy: Benefits don't count, wic, emergency food assistance, food distribution on indian reservations come to school breakfast program, the national school lunch program, the special milk program, the senior farmers market nutrition program from a does not count. Chip doesn't count. Medicare doesn't cover to give me 10 seconds extra, Mr. chairman. The affordable care act subsidies don't count.
▶ 1:19:01Sen. Kennedy: Low income housing assistance doesn't count. Weatherization doesn't count. Section eight housing does not count. If we -- all these benefits that according to the census bureau says they don't count. If we counted them come the poverty rate would be 1%. And that is a rule set by the census bureau. Don't you think we ought to change that?
▶ 1:19:28Dir. Vought: We definitely need -- I don't think the market people are getting an accurate view of how well we are fighting poverty in this country. I'm happy to work with you on that.
▶ 1:19:42Sen. Kennedy: A lot of people don't want the american people to know that, do they?
▶ 1:19:44Dir. Vought: No, sir.
▶ 1:19:48Sen. Kennedy: You are generous.
▶ 1:19:49Chair Graham: That is a long 10 seconds. We love listening to you.
▶ 1:19:55Sen. Kennedy: Thank you. >> I'm a little taken aback because I would have thought my from the senator from louisiana where he was going, I thought you would have said if it had been joe biden, he would've actually put an npr station on mars.
▶ 1:20:18Sen. Kennedy: He hadn't thought about it. If he had -- I'm sorry. >> when you became director, took an oath like I did to support and defend the constitution of the united states faithfully discharge the duties of the office. Do you agree that article two section 3 of the constitution of the united states as the president shall take care the laws be faithfully executed? Yes.
▶ 1:20:49Sen. Warner: Appreciate your acknowledgment. I believe by taking that oath you have a duty faithfully discharge your office as a designee of the president. You have a constitutional duty to execute the laws faithfully even if you don't agree with them.
▶ 1:21:06Sen. Warner: So I don't understand, sir, how I see the omb director as having a role that is ministerial not legislative yet, sir, I will start with the nonpartisan gao that says, you have illegally impounded funds at least seven times. You know, if you wanted to legislate, you should jump in the fray and try to get elected.
▶ 1:21:39Sen. Warner: We passed that empowerment law in 1970's when a president at that point, president nixon, illegally impounded funds and we said going forward we want to make clear that if congress appropriates, you've got to deliver these funds. You and I have gone back a number of times on cdf I's. I can't think of anything more bipartisan.
▶ 1:22:07Sen. Warner: The number of my republican friends and those investments actually help lower that poverty rate. It is a capitalism-based system. Cdfi funds in 2025, we sent a letter signed by 13 of my republican colleagues requesting that you release those funds and we heard cricket since last week
▶ 1:22:37Sen. Warner: -- until last week. I hope and pray you will follow the law and make sure those 25 funds are released with these cdfis. One in virginia and 300 units of affordable housing that was taken care of houses that have been destroyed in the southwest part of our state. So I am usually disappointed that -- you are a religious -- you are not a legislator.
▶ 1:23:07Sen. Warner: You are ministerial he supposed to allocate the funds that are appropriated. I remember some and said, he could not act because you would not let him. Do you have authority over the secretary of the treasury?
▶ 1:23:24Dir. Vought: The president has proposed to eliminate the --
▶ 1:23:30Sen. Warner: Do you have authority over the secretary-treasurer?
▶ 1:23:32Dir. Vought: I do not.
▶ 1:23:35Sen. Warner: Is your job it or legislative?
▶ 1:23:37Dir. Vought: The congress has given a statutory authority making sure funding is well spent so when we --
▶ 1:23:42Sen. Warner: Something like cdfi 's which president trump was a leading champion of in his first term, overwhelmingly supported. Your judgment is more important than the huge bipartisan majority that supported cdfis?
▶ 1:24:00Dir. Vought: No, we release the money last week but we are trying to make sure cdfis are consistent with our agenda.
▶ 1:24:10Sen. Warner: You released the funds over a year after they were supposed to be released. I believe that is a violation of your duty.
▶ 1:24:17Dir. Vought: A pride fashion show promoted transgender housing buried $3.7 million for the opportunity finance network which sought to address a white monopoly on capital through racial justice. Also all of these cdfi programs are exempt from ability to repay.
▶ 1:24:34Sen. Warner: If congress had appropriated money for housing on mars, my belief is your job is to administer it not make that judgment. It is our job to make the judgment. It is our job to fight back and forth and then legislate.
▶ 1:24:52Dir. Vought: Administrate well. That is also our job.
▶ 1:24:58Sen. Warner: I think you have violated your office seven times illegally impounding --
▶ 1:25:01Dir. Vought: We have not --
▶ 1:25:05Sen. Warner: It is disgraceful and I would hope and pray my republican colleagues would join me and say -- may be democratic omb at some point. I don't want some future director of omb determining what is good and what is not good. That is our job. Thank you.
▶ 1:25:20Chair Graham: Senator moreno.
▶ 1:25:24Sen. Moreno: Director vought bang, you are aware that 100% of the senators did vote to fund all of dhs except for border patrol and ice because the democrats would not find border patrol and ice without basically eliminating immigration enforcement in the interior of the country. Is that accurate?
▶ 1:25:43Dir. Vought: It is and you left out for about interment we were in shutdown of the entire department.
▶ 1:25:49Sen. Moreno: Given the choice the republicans face between ending immigration enforcement the entire interior of them in his -- making the country entire century country or funding everything at dhs but border patrol and ice and fixing that reconciliation was the only path forward?
▶ 1:26:07Dir. Vought: The only path forward.
▶ 1:26:14Sen. Moreno: We don't want to be doing budgets going forward through half appropriations and half reconciliation, correct?
▶ 1:26:25Dir. Vought: Correct.
▶ 1:26:29Sen. Moreno: How many people work for border patrol and ice?
▶ 1:26:31Dir. Vought: I don't have it in front of me but thousands.
▶ 1:26:35Sen. Moreno: Do you think there are bad people?
▶ 1:26:37Dir. Vought: These are some of the best of our nation. These are people in an environment that is very tense right now in our country, they put themselves forward and says I want to do my part to keep our community safe read I think that is incredibly --
▶ 1:26:52Sen. Moreno: These are brothers and sisters, these are people who are american citizens working every day to defend us. What does it do to the morale when you hear even today, just today in this exact hearing, those people compared to the iranian secret police? What does that mean to that mom or dad who has their kid referred to that way?
▶ 1:27:16Dir. Vought: I think it puts a target on them. I think it is incredibly unhealthy for those individuals. They are not going to want to sign up for that kind of work anymore.
▶ 1:27:28Sen. Moreno: I remember when democrats used to be the party of working americans. When they disparage working americans that way, it is a total and complete disgrace. Let's move onto another quick issue. One of the members of this committee earlier said that a budget is a reflection of "their morals and values." when the democrats had unified control of government, they passed a $7,500 subsidy for electric vehicles. Are you familiar?
▶ 1:27:57Dir. Vought: Yes.
▶ 1:28:01Sen. Moreno: That went to about 250,000 people per year, primarily lease foreign-made extraordinarily expensive vehicles. And the people who benefited from that was the wealthiest of americans. People who would lease an electric rolls-royce, electric lamborghini, electric porsche, electric mercedes.
▶ 1:28:25Sen. Moreno: What does that say about the morals and values of the democrats who every single one of them voted to give $7,500 to the people buying those type of vehicles?
▶ 1:28:38Dir. Vought: It is out of whack and also out of whack to allow the biden administration to allow the childcare program we so poorly run that you have explosion -- program after program we see this with democratic parties.
▶ 1:28:50Sen. Moreno: Let's talk about fraud. What is an acceptable level of fraud?
▶ 1:28:55Dir. Vought: Zero.
▶ 1:28:58Sen. Moreno: What is the current level in the government?
▶ 1:29:00Dir. Vought: I don't think we know but we have hundreds of billions of dollars out there in fraud that this administration is going to go out with abandon.
▶ 1:29:10Sen. Moreno: When we pass the working families tax credits, we took s.n.a.p. And said, hey, you can have more than 6% fraud -- which honestly is a little crazy . That number should have been zero. But the democrats say that is cutting s.n.a.p. Is that cutting s.n.a.p.?
▶ 1:29:40Dir. Vought: No.
▶ 1:29:44Sen. Moreno: It is interesting to me would have working class being abandoned and their content with fraud -- the democrats are content with fraud. Not only abandoning, disparaging working americans, calls them gestapo and secret police. Everyone.
▶ 1:30:02Sen. Moreno: As you look at the depraved individuals that serve in this body, people like eric swalwell, I don't know I would want to be categorized same way and I don't think it is fair to do that to border patrol agents. One less thing, ford and general motors, do you think of a lot of employees? About 350,000 combined worldwide.
▶ 1:30:21Sen. Moreno: We have been able to eliminate that level of government employees -- is a government functioning at least as well or better than it was before we eliminated 350,000 federal employees? Dir. Vought: it is functioning better.
▶ 1:30:38Sen. Moreno: How is that possible?
▶ 1:30:39Dir. Vought: We are doing it more efficiently and finding people previously that most of them are already gone that were not performing enough to warrant a taxpayer-funded job. We have been able to do it better, cheaper, more efficiently.
▶ 1:30:54Sen. Moreno: Thank you.
▶ 1:30:54Chair Graham: Senator kaine.
▶ 1:30:58Sen. Kaine: Mr. chair, there's been some discussion about the bill -- the dhs funding bill. The votes are there to pass it from the leadership might take it up. You were before the house yesterday. Did you encourage the house to finally pass the bill?
▶ 1:31:14Dir. Vought: My interactions yesterday were to remind --
▶ 1:31:18Sen. Kaine: Ok, but you do what the bill passed.
▶ 1:31:21Dir. Vought: We do.
▶ 1:31:24Sen. Kaine: Did you say it yesterday?
▶ 1:31:25Dir. Vought: I was on asked.
▶ 1:31:29Sen. Kaine: Hold on, hold on. Hold on. You had the opportunity to tell the house yesterday to pass a bill that you say you support. That 100% of this and it supports and you did not bring it up.
▶ 1:31:43Dir. Vought: You had the ability to fund dhs --
▶ 1:31:48Sen. Kaine: I was interested in the revenues in the budget you sent over. One revenue in particular interest to me was tariffs. What you are assuming for tariffs. You can see the #tariffs were sort of bumping around less than $100 billion a year. 100 billion dollars in 20 22.
▶ 1:32:06Sen. Kaine: $195 billion in 2025 when the tariffs started to kick in I eva read tariffs have been determined to be illegal by the supreme court. Next week you're starting to refund 166 million dollars of tariffs. I was interested what your tear protection -- projection was going to be. I see far from going down as you are refining a legal tariffs, or predicting dramatic increases in tariffs.
▶ 1:32:38Sen. Kaine: What is president trump going to tax next?
▶ 1:32:40Dir. Vought: We had a tenure assumption for the tariffs and those should be shaded a different way. Rob us of the supreme court changed our strategy on that and we are going through a process to replace those but we do not believe that the tariffs will be less.
▶ 1:32:59Sen. Kaine: If you're going through the process, tariffs are a tax. I would like to introduce two documents. 90% of the tariffs last year fell on american consumers and businesses and another from the tax foundation, average in 2025 was $1000 per american tax if I could introduce. You're going through a process to decide what are you going to tax next? Who are you going to tax next? To reach these astronomical tariff numbers.
▶ 1:33:26Dir. Vought: We don't think they are attacks on american people.
▶ 1:33:30Sen. Kaine: 90% --
▶ 1:33:32Dir. Vought: Does not support tariffs.
▶ 1:33:36Sen. Kaine: Who you are you going to oppose tariffs on next?
▶ 1:33:38Dir. Vought: They are imposed on the foreign importers.
▶ 1:33:43Sen. Kaine: So what industry sectors are you going to hobble?
▶ 1:33:46Dir. Vought: It is ensuring we have american made --
▶ 1:33:49Sen. Kaine: So you don't yet know who the tariffs are going to hit, or just projecting all this money --
▶ 1:33:55Dir. Vought: Have been out there ever since liberation day.
▶ 1:33:59Sen. Kaine: Liberation day. That is when you did right before tax day that took $1000 out of american families pockets. The next one, I've heard you go back and forth between talking about the investment in the department of defense or the department of war. Everybody here, legally, the name of this department is the department of defense, correct?
▶ 1:34:20Dir. Vought: It is the department of war.
▶ 1:34:23Sen. Kaine: Why do you say that?
▶ 1:34:24Dir. Vought: Status with the president and his team has renamed it.
▶ 1:34:30Sen. Kaine: There is a statute that calls at the department of defense. The president did an executive order saying the department of war was a secondary title in september 2025. Have you been instructed to use the department of war?
▶ 1:34:43Dir. Vought: No --
▶ 1:34:46Sen. Kaine: Your just voluntarily --
▶ 1:34:49Dir. Vought: Sen. kaine: are you aware of legislation that has been passed by congress to change the name?
▶ 1:34:56Dir. Vought: I'm curious to extent -- I didn't realize this would be a debate. It is a hostile world out there --
▶ 1:35:08Sen. Kaine: Are you aware of any bill to change the legal name of the department?
▶ 1:35:12Dir. Vought: Not to my knowledge but something we would probably consider.
▶ 1:35:17Sen. Kaine: There is a process right now, I would look forward to that debate because I think you will get laughed out of the room and become a punchline on tv. Nations all around the world have secretaries and ministers of defense. Do you know of any that has a secretary or minister of war?
▶ 1:35:31Dir. Vought: Our founders thought it was a pretty good name --
▶ 1:35:40Sen. Kaine: And they changed it back. Are you aware of any nation in the world that calls this function war rather than defense?
▶ 1:35:43Dir. Vought: I did not realize this was a source --
▶ 1:35:45Sen. Kaine: There is no other nation. You know the oath our military offers to come in no where is "war" mention. You section 350 thousand people. Do you know what percentage are veterans?
▶ 1:35:59Dir. Vought: We have ensured all the veteran preferences are stuck to.
▶ 1:36:04Sen. Kaine: 30%. When you fire 350,000 people, think you have five more veterans than any administration in history of the united states. I yelled back.
▶ 1:36:15Chair Graham: 350,000 fewer -- how many of that was just -- how many are people that took early retirement? They refused to come back from working from home? Do you have any consensus?
▶ 1:36:30Sen. Kaine: The vast majority were people who took early retirement. >> that is not being sacked, that is voluntary retirement. Senator lee.
▶ 1:36:42Sen. Lee: Thank you for being here. One of the things I want to talk about first is the U.S. african development foundation, during the dose process and to other inquiries, it is been revealed there's been a lot of waste, fraud, and abuse within usaid so much so that a couple of months ago the same week we were called upon to pass a five bill appropriations package that included staggering 12 man dollars, the acting director of
▶ 1:37:13Sen. Lee: U.S. adf declared it hopelessly mired in corruption and suggested should be defunded. I offered an amendment to try to strip the funding and that regrettably was tabled. I want to talk about this. Do you agree we ought to resend funding from U.S. adf?
▶ 1:37:34Dir. Vought: I think we should defund that particular agency.
▶ 1:37:39Sen. Lee: With regard to the state and local fiscal recovery funds that the slrf -- when democrats passed the american rescue plan act, which could have been called the covid exploitation bill, there is a lot of money going around. $350 billion program that allowed states and localities to recklessly spend federal dollars.
▶ 1:38:10Sen. Lee: That is where we see a lot of abuse. If you have one government providing a large sum of funding either through a block grant retirement program, state government in charge of administering it, sometimes the deficits in the accountability chain make it very difficult to detect and stop waste, fraud, and abuse.
▶ 1:38:30Sen. Lee: Tell me a little bit about what you and omb are doing within the administration to help ensure compliance with the expenditure deadline at the end of this year for the funds that have been obligated from the state, local, fiscal recovery fund.
▶ 1:38:47Dir. Vought: I'm not aware of that particular -- that fund, it might be called a different name. I would be happy to check up on it.
▶ 1:38:57Sen. Lee: Ok. Now, president trump last month established something called the task force to eliminate fraud. Very worthy objective and certainly plenty of fraud to go around.
▶ 1:39:11Sen. Lee: I tend to think when we see these instances of fraud that have gotten a lot of public attention in minnesota, california, I tend to think of the ones that we are aware of is the tip of the tip of a very large iceberg because again, this sort of thing that happens when you've got one government providing the funding and other governments doing the spending.
▶ 1:39:35Sen. Lee: There isn't the same type of accountability that is going on if their own states and localities were providing that same funding. Given omb's position on this task force and unique insights that you at omb have a federal program accounts, how do you and your team at omb plan to help carry out the responsibilities of the task force in conjunction with the rest of the administration?
▶ 1:39:58Dir. Vought: Our role is to be part of the governmentwide efforts. We want to make sure that agencies that need resources to be able to get investigators -- if they are bureaucratic barriers to fighting fraud, we want to be there to help remove those.
▶ 1:40:16Dir. Vought: You raise a great point with regard to states and the extent to which often we are asking for roles we can then run them through various systems to make sure someone who is who they say they are and they fight us on that, don't give us those roles --
▶ 1:40:31Sen. Lee: You mean the states.
▶ 1:40:32Dir. Vought: The states. We may have to come to you and ask for additional tools to be able to say, look, we are going to withhold funding until you give us the roles that we need to have assurance that someone is not getting child care funding if they are in fact serving or having a child in child care. These are a host of things we plan to tackle. We want to prosecute, have the department of justice prosecute everything they possibly can.
▶ 1:41:01Dir. Vought: We want to remove barriers to fighting for odd -- fraud. So we get down to is close to zero as a sinner from ohio pointed us to.
▶ 1:41:10Sen. Lee: Sure, sure. Great aspiration. One has to wonder, particularly if in some programs you lack the tools, if you legally lack the ability under existing law with any abuse programs to say, if you don't respond to our reasonable request for information we are going to withhold funds. If you don't have that, we need to do that.
▶ 1:41:35Sen. Lee: More broadly, is it tenable or are you just going to see more waste, fraud and abuse as long as we continue funding as many things as we do to the tune of however many hundreds of billions trains of dollars it is in a particular year? Is it tenable to root out waste, fraud and abuse where the government spending the money is not the same government providing the money?
▶ 1:41:56Dir. Vought: It is not tenable to have the size and scope of the federal government and not going have a continued conversation about fraud. When you see us eliminate programs that we don't think should exist, it is in part and parcel because we think it is incredibly fraudulent program that should go away.
▶ 1:42:16Dir. Vought: And part of what informs that is the extent to which the federal government is always going to have a hard time going that granular to see where the funds flow, particularly hard when we can't trust many states to give us the information we need to come alongside them to help fight fraud.
▶ 1:42:32Sen. Lee: Thank you.
▶ 1:42:33Chair Graham: Two things that were mentioned, one was the standard poverty rate would be a lot lower if you include the fact that there are various nutrition and housing programs. The government does do that calculation, call the supplemental poverty rate. But it also includes removing money that is spent on taxes so that is adjusted.
▶ 1:43:00Chair Graham: And it includes the cost of housing and health care which are not in the basic poverty rate and actually the supplemental poverty rate is higher than the standard rate because it accounts for the impacts of highly much more expensive health care and housing. It was mentioned that ice and cbp were unfunded. That is not correct.
▶ 1:43:27Chair Graham: They received extra funding letter to the tune of $75 billion for ice and $6.5 billion for cbp and the entire senate agreed to fund the other four agencies unanimously. Let it be understood the house of representatives struck down the funding for those four additional -- those are very important agencies. We love the coast guard. It was with great regret the house failed to do that.
▶ 1:43:58Chair Graham: Senator padilla.
▶ 1:44:00Sen. Padilla: Thank you, ranking member. Mr. vought, several of us have recognized the $1.5 trillion increase in proposed spending for the department of defense. That number first came out, proposed budget first came out to recognize 42% increase. It did not just raise eyebrows come it raised alarm bells for a lot of people.
▶ 1:44:32Sen. Padilla: At this moment not going to get into a debate of defense spending which is not defense spending in the historical balance but just 42% increase. $1.5 trillion. It seems like a whole lot of money for someone who has a track record of talking about fiscal responsibility and concern about the deficit. Not just her testimony in the house yesterday but public reporting.
▶ 1:44:56Sen. Padilla: I understand you've tried to justify it by "it's meant for significant paradigm shifting investment" and I think you use that link which earlier today and that "for the industrial base to double and triple capabilities, and build more facilities, cost has to be booked the first year." is that accurate?
▶ 1:45:17Sen. Padilla: Logic would tell me if we are booking these costs the first year, we should anticipate significant reductions in your proposed budgets and needs in the next fiscal year and the fiscal year after that. Is that what we should anticipate for future budgets?
▶ 1:45:29Dir. Vought: This is viewed as a one-time increase of this level. I don't expect all of the defense levels into the future to get this level.
▶ 1:45:40Sen. Padilla: We could count on significant reductions in your proposed budget next year in the year after?
▶ 1:45:44Dir. Vought: I'm saying we have not built that into the budget. It was meant to be a one time seize the moment pay for what we can ensure that we have people that are driving the best deals possible at the department of war. What kind of just can they secure they have the money. I'm not going to speak to next year's budget process other than to say --
▶ 1:46:05Sen. Padilla: Is sounds like very vague and inconclusive. Speaking of your testimony yesterday, did you take the opportunity to urge house members are particularly house republicans, to pass the bill that has been passed twice unanimously by the senate to fund tsa, to fund fema, fund the coast guard and cisa?
▶ 1:46:31Dir. Vought: Center, you will shut the government down -- the whole government down and then you shut dhs down for a month.
▶ 1:46:39Sen. Padilla: The senate has passed this bill twice.
▶ 1:46:40Dir. Vought: After it shut down. Of all those lines, yes, I would encourage the house to pass it. [indiscernible] the people need to know that
▶ 1:46:53Pretty Sen. Padilla: We have a pathway forward and you had a golden opportunity yesterday and you did not take it. Moving forward, as my colleagues have recognized them every time we talk about the annual proposed budget we talked about it being a statement of our values and priorities. The public has seen this for what it is. It is not a significant investment in health care.
▶ 1:47:14Pretty Sen. Padilla: It is not a significant investment in housing, in energy assistance, not a significant investment in disaster preparedness, not a significant investment in job -- it is a huge spike in defense spending. Now, some people that are trying to get the benefit of the bout will say whether we like it or not because we know it is not authorized but there is this war in iran, maybe that would justify the big increase in spending.
▶ 1:47:44Pretty Sen. Padilla: Yet you refuse to give specific numbers. You refused yesterday in front of the house and refuse here today to provide costs as to what this war is costing us on a daily, weekly, or monthly basis and going. So much more from the head of omb.
▶ 1:48:05Pretty Sen. Padilla: It sounds like -- it seems like you are taking this job seriously to stay on top of the dollars, let alone this being a complete abandonment of a promise to administration supposedly made to the american people to bring down costs. The cost of housing is still high. The cost of groceries is growing. The price at the pump people are paying is still continuing to spike because of this unauthorized war. It is not a question, that is just my confusion. I do have one more question.
▶ 1:48:38Pretty Sen. Padilla: When you are coming through for confirmation, several of us here raised questions and concerns about your prior statements, objectives you had to put federal employees into trauma. You remember those statements? You got off to a great start.
▶ 1:49:00Pretty Sen. Padilla: The funding freezes, layoffs, pushing people to retirement, relocation of agencies, making it harder for people who want to stay working in departments and agencies they love. The elimination of certain departments. 350,000 fewer federal employees today and those that remain, a good chunk of them are worried they may be next. What grade do you give yourself in successfully putting federal employees into trauma?
▶ 1:49:29Dir. Vought: I reject the premise of your question.
▶ 1:49:35Sen. Padilla: If the president asked you what grade --
▶ 1:49:37Dir. Vought: I will let the president of the united states grade my performance, center, thank you.
▶ 1:49:44Sen. Padilla: We are going to grade this performance in november real quick.
▶ 1:49:48Chair Graham: Senator scott.
▶ 1:49:52Sen. Scott: Thank you for your hard work. Before the end of this year, our country's national debt $40 trillion. We are rapidly approaching $40 trillion of debt in this growing threat driven by wasteful spending is directly undercutting the government's ability to serve the american people. Currently over $1 trillion of taxpayer dollars is being spent just to pay the interest expense of our debt.
▶ 1:50:19Sen. Scott: When it could be used to help everyday americans. Median household income in america it's a little over $83,000. We have to take the household of 12 main american households just to make our interest payments. That is insane. It is not sustainable. It is a drag on our economy and national defense and the american dream. We owe it every american family to stop spending so much of their money and settling their kids with unbelievable debt.
▶ 1:50:49Sen. Scott: The last seven years, the debt on the country has gone from I think $18 trillion to 39 trillion dollars. We need to make sure every dollar we spent is making them safer, stronger, better off. I want to thank president trump and you and the entire administration because I know you're working hard to fix our government by cutting waste, fraud, and abuse. Detecting every taxpayer dollar from waste and fraud is the most important steps the government can take to tackle this fiscal situation.
▶ 1:51:19Sen. Scott: I've introduced a federal taxpayer funds protection and clawback act which would allow the federal government took clawback many from fraudulent programs like what we have seen in minnesota and california. Removing it allows us to spend american taxpayer money properly and reduce the deficit spending. Unfortunately congress continues to fail and doing his job of being a proper steward for authorizing trillions in deficit spending.
▶ 1:51:45Sen. Scott: I walked in as governor of florida, governor had only balanced the budget once in several years. I believe our situation is a true national emergency. One of the most important issues facing us today. We have to start acting like it. I have introduced the act which provides the authority and discretion of the president to curb wasteful spending and balance the federal budget.
▶ 1:52:12Sen. Scott: I applaud the president's effort to clean up the federal budget by removing waste from getting government out of the way, prioritizing the strength of our nation. These are important steps but just the beginning. We have to do more to combat the growing debt problem. I am very thankful for what you are doing. Under the bed and income tax dollars were recklessly misallocated. Unbelievable. Going to wasteful programs and woke policies. No accountability, no results, nothing. Cause massive inflation.
▶ 1:52:43Sen. Scott: This created horrible inflation that is affected lower income americans the most. How do you feel -- how are americans feeling the effect of the inflation created under the biden administration?
▶ 1:52:53Dir. Vought: They put this administration in office to deal with it and we have freedom we have gone from 9% down to 3% and we are going to continue to see improvement as we get through the operations and overseas and iran to be able to keep working every day for more affordable policies to drive down prices and costs for the american people. Spending is a part of that and you have been a leader on this, senator. We have to make sure we drive spending down.
▶ 1:53:23Dir. Vought: Spinney created the problem and adding rid of spending will be a part of removing that problem for the american people.
▶ 1:53:31Sen. Scott: Can you highlight combating waste and fraud in the government programs?
▶ 1:53:36Dir. Vought: $70 billion in non-defense cuts as part of that process of identifying education programs that we don't think actually educate kids of programs that we think put forward harmful ideology to the country. Those are the types of things we think are wasteful. We are also a participant on the task force for finding fraud.
▶ 1:53:57Dir. Vought: We are going to make sure the investments and resources are needed to be able to find it wherever possible read the biden administration scaled down the number of investigators dramatically. When you have that dynamic in play, we have to make sure we address that issue.
▶ 1:54:17Sen. Scott: You watch these bipartisan deals and these bipartisan deals more air marks, wasteful spending, no kind ability, nothing. So, senator johnson talked about this a little, do you think there's any ability through the regular budgeting process to ever get the debt under control?
▶ 1:54:36Sen. Scott: Or is the only way we are going to be able to do this through either eliminating the filibuster so we can do it on her own -- republicans can fix it on her own or go to the reconciliation process and maybe have the whole budget process go to reconciliation?
▶ 1:54:50Dir. Vought: Right now where the senate is and the inability to get spending cuts, honestly, without spending cuts to fund the federal government through the normal appropriations process, it is making there be incentives, more more things to mandatory. That is where we are. I think that is the direction things are headed.
▶ 1:55:12Sen. Scott: Thank you.
▶ 1:55:13Chair Graham: Senator van hollen.
▶ 1:55:16Sen. Van Hollen: Thank you, Mr. chairman. Bouncing around between hearings. Director vought bank, I read your testimony and I saw some of your testimony in the house yesterday grade talking about the trump tax bill that was part of the reconciliation process. And you presented it as a bill that was really aimed at helping working people.
▶ 1:55:42Sen. Van Hollen: I just want to review that claim with you today because as you know, if you look at the distribution of tax benefits under the republican trump tax bill, they overwhelmingly go to the richest people in the country. Do you agree with that? Dir.
▶ 1:56:02Vought: No taxes on tips, no taxes on auto loans. No taxes on seniors.
▶ 1:56:10Sen. Van Hollen: I'm going to get to that. I am talking about the share of the overall tax benefits.
▶ 1:56:14Dir. Vought: Which is an extension --
▶ 1:56:18Sen. Van Hollen: Yes, it was an extension of their previous trump tax bill that provided the overwhelming share to the top folks. I am looking at the chart. 72% of the benefits went to the wealthiest 20%. A whopping 22% of the benefits went to the top 1%. And the tax cuts you provided to the wealthiest or permanent, right?
▶ 1:56:47Dir. Vought: Yes.
▶ 1:56:52Sen. Van Hollen: But the tax cuts aimed at working people like no tax on tips, those will expire at the end of 2028?
▶ 1:56:57Dir. Vought: We will be working to extend those.
▶ 1:57:02Sen. Van Hollen: But you did not make them permanent.
▶ 1:57:04Dir. Vought: We were not able to because of the reconciliation and cost allocations.
▶ 1:57:10Sen. Van Hollen: Because you did not want to have to pay for them. Here is what I'm going to propose to you, what I want to ask you. I have a proposal. I want to make the other point at this distribution where it shows the overwhelming share going to the very wealthy will get even worse in 2028? When the no tax on tips expires in this distribution --
▶ 1:57:31Dir. Vought: I have not seen your chart. As someone who worked in this body and has been a part of seeing many of the charts that come through, I would want to study it.
▶ 1:57:44Sen. Van Hollen: I am happy to share it. Here's my question. I've got a proposal that is really working american tax cut bill. I propose to get 100% of the tax benefits to taxpayers below the top 20%. Does that sound like a good proposal to you? Dir. Vought: we're not considering a tax bill right now. If you have ideas for what the next tax bill should look like, this administration is always looking for ideas read Sen. van
▶ 1:58:13Hollen: I hope you'll agree. It cost about $1.5 trillion to give real tax relief to working people. We pay for it with a surtax on people who make more than $1 million a year. So on your first color over $1 million a year, we have a surtax. That revenue more than pays for the proposal to provide real middle-class tax relief.
▶ 1:58:38Hollen: Unlike the trump republican plan that overall even after cutting medicaid added $4 trillion to our national debt. This one would be deficit have a neutral and help folks -- let me ask you this, Mr. director. Would you agree if I am somebody who has a certain income because I have tips and I am another worker who has the same amount of total income but I don't have tips, should we both get a tax break?
▶ 1:59:07Dir. Vought: We are always looking for opportunities to lower taxes on the american people. If there are ideas --
▶ 1:59:15Sen. Van Hollen: But you chose not to do that. You chose not to provide a tax break based on someone's income. You chose to do the doordash thing.
▶ 1:59:25Dir. Vought: Every one of our tax relief's on the republican side for the last several decades have always included substantial amounts for individuals who are at the lowest amount of money from an income tax --
▶ 1:59:42Sen. Van Hollen: The numbers put a lie to that claim. I am more than happy to share this with you. These are from tax experts and I more than happy to share. Do you suggest -- for you to suggest that republican tax cuts come the trump tax cuts really were focused on working americans when you can see 72% of the benefits go to the richest 20% and the benefits to those folks who are working expire at the end of 2028 --
▶ 2:00:13Sen. Van Hollen: Unlike the other ones -- I know you want to market it that way and I saw the doordash thing, but I hope you will all actually support the bill where 100% of the tax benefits go to people who are working paycheck-to-paycheck. I heard your testimony in the house saying the trump tax cuts were somehow going to make life much more affordable for a lot of people. Hard to believe when gas prices are going through the roof because of the war and other things.
▶ 2:00:44Sen. Van Hollen: The way to make it really affordable for a lot of people in addition to bringing down costs, which we need to focus on, is to actually give everybody, not just folks who make money off of tips primarily read and I'm all for that. But everybody. I don't know why you would leave out everybody who is working hard paycheck-to-paycheck. Thank you.
▶ 2:01:03Chair Graham: Before I turn to senator whitehouse, I just want to pick up on a point similar to what you talked about but also senator kaine was talking about, senator graham has done an awful lot of research into and writing about the amount of benefits we provide to people in the lower quintile based on 2017 figures, the average household in the lower quintile received about
▶ 2:01:35Chair Graham: $42,000 in tax-free federal benefits. $42,000. $64,700. The points senator kennedy made, we are quite generous as a nation providing benefits. People who are working hard and making tips, working overtime, that is for the tax cuts were directed, right?
▶ 2:02:04Chair Graham: They are the ones footing the bill. They are the ones providing the tax revenue to provide that level of tax-free benefit to the households in the lowest quintile. Are those roughly accurate?
▶ 2:02:17Dir. Vought: They are providing the ability to fund the federal government, tax dollars are coming in and our side continues to believe that it is ok to cut their taxes and we want to do things that are creative. This president ran on creative solutions to be able to ensure there are no tax on tips for overtime. Those are relatively new ideas for our side of the aisle.
▶ 2:02:42Dir. Vought: And that is something that we are very proud of as an administration. We are going to continue to be putting forth policies on that front.
▶ 2:02:52Chair Johnson: I think with the president has done has confirmed republicans are the party of the working men and women in this country read based on the way the other side wants to defund ice and cbp and open up the border that they are the party -- senator whitehouse.
▶ 2:03:08Sen. Whitehouse: . Not until I get my clock reset. Several minutes of my time. There we go. Just reset it. Thank you. I want to talk a little bit about deficits and debt because when I chaired this committee and I had hearings into what climate driven extreme weather portends for insurance, mortgage, mortgage, and real estate markets, my republican friends came here constantly to say, oh, but the debt. Oh, but the debt. Oh, but the debt.
▶ 2:03:37Sen. Whitehouse: But if you take a look at where things are going in trump's first term, they added $8 trillion to the debt. The recent billionaires bill, this one right here, is north of $4 trillion, $5.5 trillion if made permanent. In the role of this committee in making things worse not better on the debt is part of the problem.
▶ 2:04:07Sen. Whitehouse: The tax scandal as we refer to it on our side that republicans put through for the rich friends in the first trump administration was to trillion of that and that had to come through this committee to get to reconciliation to be able to push those rich people's tax cuts on a party line basis. This $4 trillion had to come to this committee to get to reconciliation and if made permanent, it will be another $1 trillion.
▶ 2:04:35Sen. Whitehouse: We cannot pretend the budget committee is a great place for solving the debt problem right now. I will urge my colleagues to think about going back to the budget reform plan, and I'm going to start asking colleagues on both sides of the aisle to see if we can reboot that because, clearly, this image he has a better role that it can achieve at reducing deficits and debt. The other point I want to talk about is energy costs.
▶ 2:05:04Sen. Whitehouse: The iran war is dramatically increasing energy costs. Gasoline costs in rhode island for regular have crested four, primus five, diesel is nearly six dollars. That is a pure product of the decision to start this war with iran. Electricity costs, really important part of family budgets.
▶ 2:05:36Sen. Whitehouse: Electricity costs are going up. I would say they're going up thanks to the trump administration policies on purpose. I will explain to you why I say that. Because the trump administration , like the republican party, like the french groups you have worked for in the past, is more or less entirely funded by the fossil fuel industry. Now it is payback time.
▶ 2:06:04Sen. Whitehouse: The way payback is being done is to suppress clean energy on the grid. And what happens when he suppress an clean energy on the grid? I will give you little example. If you want to know clean energy is inexpensive, just go to your grid operator and asked them what the generation stack looks like. What they will tell you is they deploy clean energy first because it is less expensive.
▶ 2:06:32Sen. Whitehouse: Grids run less expensive power first irrespective of how it is fueled. When they run clean energy first because it is less expensive. Then on top of that, they have fossil fuel energy. What happens at any given level of demand, let's say this, if you have taken the clean energy out of the grid, now for that same level of demand, you are running way more fossil fuel
▶ 2:07:03Sen. Whitehouse: Energy. What you have done is taken units at the top that would not be running, units above my finger let's say that is where the demand is, units above my finger that would not be running now they run. They run because the clean energy is not there. When they run, they set the price for the grid. And when they set the price for the grid, they raise costs for consumers.
▶ 2:07:30Sen. Whitehouse: Because almost always the most expensive unit running is one that sets the grid price. And that price goes to americans electric utility bills. So the whole grid costs goes up to the most expensive also full unit running -- fossil fuel unit running. Those units are more expensive than inexpensive clean power is not on the grid. What happens then is it is like a big money pump.
▶ 2:08:00Sen. Whitehouse: It extracts dollars from family budgets by the billions created by the billions in higher electric utility costs. It pumps those dollars to the fossil fuel industry. To your administration, trump's big political donors. They make up all that added money that goes to the units that would not otherwise be running because they are too expensive to run because this administration has suppressed clean energy.
▶ 2:08:32Sen. Whitehouse: If you want a specific rhode island example, let me give you this one. We operate in an 18 set per kilowatt hour grid. The trump administration tried to stop offshore wind projects that offered nine sit per kilowatt hour power in an $.18 grid where you add a lot of nights in kilowatt hour power, you do not have to be much of a mathematician to know that will bring down average costs.
▶ 2:09:02Sen. Whitehouse: And yet the trump administration stopped work on those projects, put union people out of work, illegally -- they have all been thrown out in court -- all to drive costs up for consumers so that added consumer expenditure went into the pockets of the natural gas industry that is the default when clean and inexpensive power is not available. Thank you.
▶ 2:09:26Dir. Vought: I don't recall this level of outrage when gasoline prices nationwide average five dollars a gallon in june 2022 because of the democrat war on fossil fuels. I don't understand -- the outrage of the incredibly high energy price in california that probably closest to the top of policies they want to promote in terms of energy --
▶ 2:09:52Sen. Whitehouse: Let me remind you --
▶ 2:09:53Chair Johnson: The good news is --
▶ 2:09:57Sen. Whitehouse: You might as well let me answer.
▶ 2:09:58Chair Johnson: We are the largest reducer now of fossil fuels for energy. If you want a good economy, need power. The cheaper the power, the better. Green energy has --
▶ 2:10:14Sen. Whitehouse: As long as you're going to interrupt and challenge what I've said, I at least deserve the courtesy to reply. I will tell you there was considerable outrage when the fossil fuel prices soared in the past. In fact, I wrote an excess profits clawback bill -- fossil fuel industry took the biggest profits in world history , taking advantage of the ukraine war to raise profit -- prices on american consumers even for one dollar of gas that never went anywhere near
▶ 2:10:44Sen. Whitehouse: Ukraine.
▶ 2:10:44Chair Johnson: Your democrat policies failed. Senator lula principal lula -- senator lula principal lula talk to the farmers. It is awful for any time of year. When it was high before, shame on all of us. This is ridiculous and it is hurting people and breaking people. I am hopeful that we all will do something about this.
▶ 2:11:11Chair Johnson: I don't see anything in this budget that will help reduce prices for the american people. The questions are prepared for today, director, I don't know if you are aware, the last hearing that chairman graham had in this committee room was around social security. That is for my questions are pretty social security, medicare, foundation of financial and health security for older americans, people disabilities. Survivors.
▶ 2:11:42Chair Johnson: I think we can all agree. We have heard the president say things like that. Director comes as president trump leaves social security and medicare are worth protecting?
▶ 2:11:51Dir. Vought: Of course.
▶ 2:11:53Sen. Lujan: I'm sure you are aware they face shortfalls in the next decade.
▶ 2:11:58Dir. Vought: I'm aware of the accounting shortfalls but I'm here to tell you the president is committed to making sure social security and medicare beneficiaries are fully protected.
▶ 2:12:07Sen. Lujan: Does the budget that you are here to talk about that was submitted for this fiscal year request does it include any proposals to address the looming insolvency of social security or medicare?
▶ 2:12:19Dir. Vought: No mandatory proposals in this budget. Discretionary only budget rate unless those mandatory proposals are part and parcel of the discretionary needs in the first year.
▶ 2:12:31Sen. Lujan: To protect seniors?
▶ 2:12:33Dir. Vought: Not a mandatory long-term budget. It is a discretionary only. We do not have mandatory policies. This president fully protects social security and medicare beneficiaries now and forever more.
▶ 2:12:47Sen. Lujan: Mr. director, your where republicans in the senate and house of representatives are contemplating a budget reconciliation as soon as next week?
▶ 2:12:57Dir. Vought: Yes.
▶ 2:13:00Sen. Lujan: Does president trump -- is he demanding provisions to shore up social security medicare and the budget reconciliation bill?
▶ 2:13:06Dir. Vought: We are in a crisis right now because of the fact democrats did not fund the department of homeland security for a month. As a result, we had a department of homeland security that was disintegrating in senate and then had to take steps to pass everything but ice and cbp. Now we are in a situation where we have to on the mandatory side pass a reconciliation bill to fund those two law enforcement agencies because the democrats would not do it through the normal appropriations process.
▶ 2:13:38Dir. Vought: This process has to be tight and timely and we fully expect to get that done between now and june.
▶ 2:13:42Senator Lujan: You are in the U.S. senate side of the capital today. Are you aware of that?
▶ 2:13:47Dir. Vought: Yes.
▶ 2:13:50Sen. Lujan: You know who is in the majority?
▶ 2:13:52Dir. Vought: Republican party who relies on democrat votes --
▶ 2:13:59Sen. Lujan: Are you aware of the united states and it passed not just once but twice funding the most dhs bill? Are you aware of who is in the majority of the U.S. house of representatives?
▶ 2:14:08Dir. Vought: After a month -- several on who is in the majority? It is a secret. Republicans are in the majority in the U.S. house. Mike johnson is the one sitting on hisas and not doing a damn thing to move legislation. He lied to the american people on a monday and then on tuesday -- I guess he prayed to the jesus that donald trump purports to be an he changed his mind and now nothing is happening, sir. Let's talk about the facts. Let me get back to this.
▶ 2:14:38Dir. Vought: I appreciate today the clarity that you just told us that there is nothing in the budget bill to address social security, address medicare. When chairman graham was up here, I said, look, there's a budget reconciliation bill coming up. If you care about social security because we are having this hearing today, then do something about it. You don't need democratic votes if you're going to go this way. Fill it and get it done. Director, I am beside myself and some of these areas. Let me ask a question with my remaining time.
▶ 2:15:07Dir. Vought: Is inflation up or is it lower than a year ago today?
▶ 2:15:10Dir. Vought: Much lower than 9% that was under the biden administration.
▶ 2:15:16Sen. Lujan: I appreciate that. Now answer my question, is a higher or lower than a year ago?
▶ 2:15:19Dir. Vought: Right now we are in the middle of a situation in iran and as a result we are going to be on the other side of that, hopefully soon.
▶ 2:15:28Sen. Lujan: What are you suggesting, higher or lower than a year ago?
▶ 2:15:30Dir. Vought: I'm suggesting the policies --
▶ 2:15:34Sen. Lujan: If you don't -- if you disagree with me --
▶ 2:15:36Dir. Vought: Inflation was --
▶ 2:15:40Telling Sen. Lujan: You can correct me. Inflation is higher right now than it was a year ago. Fact.
▶ 2:15:44Dir. Vought: The policies the democrat party democrat --
▶ 2:15:53Sen. Lujan: I heard your response rate a year ago you came into this office. It is higher now. That is facts.
▶ 2:15:59Dir. Vought: In the presence of administration is driven down the costs because we have tackled spending.
▶ 2:16:06Sen. Lujan: It is higher than a year ago. You can keep spinning this all you want. I will remind you what I told my colleagues a while back, statistics professor mindset figures don't lie but liars can figure. You can dance on these numbers all you want but they need to tell the truth. Let's be honest. When rfk was performing the finance committee has had come until the america people the truth. His response was something along the lines they don't want to hear that. Let's just be honest with each other as we get to this place. It is what it is. The effects of the facts.
▶ 2:16:37Sen. Lujan: I hope we can get there as well. Mr. chairman, I know you're going to explain to everyone what I try to say today so I appreciate your clarity as a professor and explaining what the farmer was trying to say to the director today but I will just close by saying trickle-down economic theories is not a new idea.
▶ 2:16:58Sen. Lujan: The question asked on who got the tax breaks with the question that came from my colleague from rhode island and justifying wealthy people getting tax breaks will make its way down to people, that is an old broken theory. I trickle down cancer is not worked. It is hurting people. I hope we can get a next donation of what that means as well.
▶ 2:17:16Chair Johnson: I appreciate you asking to clarify. Director vought income isn't it true we cannot touch social security through reconciliation?
▶ 2:17:27Dir. Vought: Yes.
▶ 2:17:28Chair Johnson: We can do that. So I've got a quick question. I will c1 we hit on a couple of the subjects. First of all, fraud. We had the ceo from lexis come in front of his subcommittee. I didn't realize it in research on this, but according to their research, they claim it is about $1 trillion per year in fraud.
▶ 2:17:57Chair Johnson: One of the things he was talking about is these foreign governments, like somalia, they have literally learned how to fraud the federal government. They send their illegal immigrants here, or even legal immigrants, and they figure out how to defraud the system. The department of justice in the 2025 national health care fraud takedown website shows all of the different prosecutions for fraud. It totals about $4.8 billion.
▶ 2:18:24Chair Johnson: Whether you take the trillion dollar estimate of fraud or $500 billion, it is a massive amount of fraud. We are not going to recover it through prosecutions. It's hard to prosecute this stuff. Once the money is spent, it's gone. I realize this is a top priority of yours. I realize vice president vance is running a task force.
▶ 2:18:50Chair Johnson: We need to be addressing this aggressively and the best way to prevent fraud is to stop spending the money. Can you give me some comfort that we are going to get this handled over the next 2.5 years?
▶ 2:19:03Dr. Vought: I think so. I think the first up was this bill that you all passed last year, the one big beautiful bill. In our federal government. We are going to look at our task force to figure out what tools we need that we don't have that we will come to you and ask for those tools. Ways to force states to give us the information we need to collect, to be able to make sure they are who they say they are.
▶ 2:19:34Dr. Vought: We will always be looking at ways to not do what we can't oversee. If we are in a position where we can't oversee it, that will be the time where we have a conversation about that.
▶ 2:19:47Chair Johnson: There is a great article written by eric prince. We have talked about this. The ukraine russian conflict has shown us it is different. We need to use what we have in our arsenal now, one million dollar plus missile knocking down drones that cost thousands. That is asymmetry we simply cannot afford.
▶ 2:20:13Chair Johnson: How aggressive is this administration going to push defense contractors, and hopefully open up the process to not traditionally defensive contractors who will do things a lot cheaper and quicker? We have to respond very rapidly to this growing threat.
▶ 2:20:30Chair Johnson: We can produce literally hundreds of thousands of drones for the cost of some of these programs for the highly sophisticated -- but what is the dedication in terms of the administration in terms of changing the paradigms and the military-industrial complex? By the way, we have not heeded general -- general hide's warning on that paired we are getting ripped off by the military-industrial complex.
▶ 2:20:54Dr. Vought: I don't think it could be higher. I have been in these meetings with the president and secretary of war, and how much pressure they are putting on the contractors. But also, we are attempting to do both. We want to maintain our qualitative edge technologically. You are seeing that this year across the world. We also want to ensure we have low-cost items that can be used. Low-cost munitions. I have personally visited factories doing this.
▶ 2:21:24Dr. Vought: Many of these are startups. Many of them put their own money on the table to do their r&d investment. They come in cell is a product, which is not the normal relationship. We are all in on trying to do things differently. And that is one of the reasons why we feel the moment is now to come and ask you for an admittedly large increase for defense.
▶ 2:21:45Chair Johnson: We had another come before our senate conference. One of the big tech geniuses. We need to open up this process to people like him. He is involved in it. I think we can dramatically reduce the cost of our defense effort and have it be far more effective and more efficient. By the way, talking here at the dais, that is something that could gain a lot of bipartisan support.
▶ 2:22:17Chair Johnson: One thing I had to point out, that senator whitehouse is no longer here, but he talks about the tax cut for billionaires. That was an act that was beneficial to every american. Every taxpaying american. They had huge tax cuts. Democrats, when they had the white house senate and house, they could have reversed that, couldn't they? They could have used reconciliation. They could have repealed the tax cut and jobs act. Did they do that?
▶ 2:22:46Dr. Vought: They did not.
▶ 2:22:47Chair Johnson: Did they touch -- did they cut any texas?
▶ 2:22:50Dr. Vought: Not to my knowledge.
▶ 2:22:52Chair Johnson: What we did and making sure we prevented a massive automatic tax increase, that was a literally bipartisan agreement. When democrats were in power, they didn't increase taxes and neither did we. That was the big part of that score. Not increasing taxes. The cdo score is based on the current law versus current policy which we switched.
▶ 2:23:18Dr. Vought: That is what was going on. There were baselines that did not assume the tax rates of which the american people would have been surprised to know had changed from one year to the next.
▶ 2:23:24Chair Johnson: I will close on this talk. You have heard me say this before. Prior to the pandemic, spending $4.4 trillion. This year, we will spend $7.5 trillion probably. Your budget shows for a trillion dollars. That is an 80% increase. We have to figure out some way to return to a reasonable, pre-pandemic level spending.
▶ 2:23:50Chair Johnson: Listen, I believe defense spending is a top priority of government, it has to be. If we spend that amount of money, we have to spend it more efficiently. I don't we have to spend that much more money if we spend it efficiently. Give me some comfort that -- I do appreciate, tell me about the lmb efforts. We have the $100 million for ai for going through the budget line by line, program by program. We are working with the folks that are doing dashboards on the cost effectiveness per outcome.
▶ 2:24:21Chair Johnson: Tell me about what omb is doing, and your commitment to that.
▶ 2:24:25Dr. Vought: We are not going to stop with what we have been doing this year to end fiscal futility. We are very proud of the types of things we -- that we achieved this year. We have a pretty small stuff. People don't realize the extent to which -- if we look at as compared to gao, we are very small. People ask us to do a lot of things.
▶ 2:24:48Dr. Vought: We wish we could do more and because you all, we are in the midst of scaling up to ensure we have fraud fighters in a way that we previously did not. We compiled a budget, monitor as best as we can, but I think you and technology have ensured we will have people with a dedicated workforce and the teams were already working on this and developing ideas on how this will go.
▶ 2:25:16Dr. Vought: I think it will serve the task force that is up and running under the vice president. I think it will inform next year's budget, any of the reconciliation bills we do this year. We will be more than one reconciliation bill.
▶ 2:25:28Chair Johnson: Spending on antifraud will be money well spent. You know how tough it was during the last reconciliation achieving $1.5 trillion, which we didn't achieve because we spent in other areas. The lower end of the estimate, that is $2.5 trillion over 10 years. That is $10 trillion. Those are the kind of figures we have to be looking at. That is the savings we need to start achieving. Do you have any closing thoughts?
▶ 2:25:57Sen. Merkley: I do. Thank. . You, Mr. chairman. . I do think this hearing highlights a lot of the differences in philosophy and interpretation of the current circumstances. But our challenge on this budget committee is to try to reach across that chasm between democrats and republicans. I do think this topic you just addressed, the massive fraud that is in the defense department, is something that is bipartisan.
▶ 2:26:24Sen. Merkley: A department that has never been able to pass an audit of any kind. Having worked for cap weinberger and done a cycle in the defense department on the budget committee, it was just astounding. The waste was so deep, you swum in it every day. I did find it remarkable that doge did not go to the place where the biggest waste is.
▶ 2:26:56Sen. Merkley: That is where doge should have gone, to the defense department. Because that's where the massive waste is. A few closing comments. It was commented on, and I heard you say this, Mr. director, that democrats did not find I.c.e. And cvp. Actually, I.c.e. And cvp were funded last year, to the tune of $65 million for cvp and $75 billion for I.c.e. Those were funds equal to seven years. They were already funded.
▶ 2:27:28Sen. Merkley: That is simply an inaccurate summation. As pointed out by several members, democrats and republicans universally, in this chamber, funded the other parts of the homeland security, all four of them, cybersecurity, tsa, fema, and the coast guard. , and it was the house that decided to torpedo all of those is gen z's. Let's turn to -- all of those agencies. Republicans are for working families?
▶ 2:27:57Sen. Merkley: I must say, that is astounding to everyone in america. We saw who was lined up behind the president at the inaugural address. It wasn't champions for health care or housing or education. It wasn't folks working to improve working conditions for families. No, it was the oligarchs, elon musk, jeff bezos, mark zuckerberg. Then when we look at what that bill did, let's see.
▶ 2:28:24Sen. Merkley: Ways and means committee and the house says you may have saved up to $600 for families earning $50,000, but other experts say it is closer to have fat, $300. That is less than one dollar a day for a working family. But that same bill increased the cost of nutrition by three dollars a day and the cost of health care for many families by $30 a day. What we have? -- what do we have?
▶ 2:28:51Sen. Merkley: We have that comparison where the net effect actually worsened the condition of working families across america. That's why it was a massive betrayal. What a did was help billionaires. If you got $1 million a year, it gave you 70 to $90,000. Versus decreasing the standard of living for working families. It's crumbs for working america.
▶ 2:29:19Sen. Merkley: It's the red carpet and the rolls-royce for the richest americans. That bill gave amazon a tax cut of $18 billion. Tesla a tax cut of $1.2 billion. I think their taxes r0 zero now. Alphabet, google, 18 -- $18.4 billion tax cut. There we have it. It is families lose, billionaires win. And it is government for the powerful peer that is.
▶ 2:29:49Sen. Merkley: What this budget is if we don't change it, working people, ordinary families in america are totally screwed.
▶ 2:29:55Chair Johnson: I appreciate that. I will just point out, not increasing taxes is not a tax cut. When you were in control and have the power, you could have increased taxes, you could have repealed the tax cut and jobs act, you didn't do that.
▶ 2:30:13Sen. Merkley: Those were going to expire. So the democrats did not extend them. It was republicans who extended those tax breaks for billionaires.
▶ 2:30:21Chair Johnson: We refused to allow a massive automatic tax increase. It would have harmed this country economically. Anyway, director vote, appreciate you appearing before the hearing. The committee -- the hearing is adjourned.