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James S. Brady Press Briefing Room

1:35 P.M. EDT

MR. CZWARTACKI:  Good afternoon, everyone.  We are here to announce — proudly announce — the fiscal year 2018 presidential budget.  I just want to remind you that this is an on-the-record briefing, but it is embargoed until 9:00 p.m. tonight.  That includes all audio.  And folks on the phone, it includes you guys, too.

So without any further ado, let me introduce Director Mulvaney.

DIRECTOR MULVANEY:  Hello, hello.  Thank you all for coming out today to talk about the budget.  Before I start, I want to thank — I don’t usually come with such a large crowd, but this is like 1/100 of the budget team.  There’s about 500 people across the street who worked on this, so I wanted to have them come and see this live, see what it’s like, and maybe even help me answer some questions later on.

But here’s where we are.  The budget comes out tomorrow.  We’re delivering it to the Hill tomorrow.  This is it.  We’ll be taking this to both the budget folks on the House and the Senate side tomorrow during the day.  I’ll be testifying on Wednesday in front of the House Budget Committee and Thursday in front of the Senate Budget Committee.

The title on the front is:  A New Foundation for American Greatness.  That’s the title that we came up with.  And as I was reading through it this weekend, I was trying to figure out, okay, what’s new and what’s a foundation?  And what’s American greatness?

So I want to break it down and talk about it like that for a few minutes before I take your question.

What’s new?  I said if I had sort of a subtitle for this budget, it would be the Taxpayer First Budget.  This is I think the first time in a long time that an administration has written a budget through the eyes of the people who are actually paying the taxes.  So often in Washington I think we look only on the recipient side:  How does the budget affect those who either receive or don’t receive benefits?

And it’s been a long time.  I can’t remember the last time we actually looked through — looked at a budget through the perspective of the people who are paying it.  The question we asked ourselves, as we were going line by line — and believe me this team here when line by line with me through this budget:  Can I ask somebody, a family in Grand Rapids, Michigan, to pay tax money to the government so that I can do X?

And if the answer to X is to help a vet who has lost both limbs in an explosion in the Middle East, the answer is, yeah, I can do that without any reservation.  And my guess is they’d be happy to pay it.

If the answer to X is some program that only helps one out of every 15 people it’s designed to help, and it hasn’t had any type of really good research on it in 10 years, and oh, by the way, it’s not authorized by Congress, that’s a different result.

And that’s what I mean when I say it’s a taxpayer-first budget, going line by line through the budget, trying to put yourself in the shoes of the people who are paying for those lines.
What else is new about it?  It balances in 10 years.  It balances in the 10th year.  In fact, it begins to reduce the deficit as a percentage of the overall economy in year one.  We can talk a little bit about the details on that, if you’d like, during the Q&A.

The foundation — what’s the foundation?  What is this all about?  What’s the heart of this?  I’m trying to figure out a way to articulate this the best.  There was an article a couple weeks back about “What is Trumponomics?”  And I think what Trumponomics is and what this budget is a part of is an effort to get to sustained 3 percent economic growth in this country again.
I think it’s sad that the previous administration was willing to admit that we couldn’t get better than 1.9 percent growth over the next 10 years.  I think it’s sad that the CBO does the same thing.  The Congressional Budget Office assumes that we’ll never grow at more than 1.9 percent again, out into infinity.

That assumes a pessimism about America, about the economy, about its people, about its culture that we’re simply refusing to accept.  We believe that we can get to 3 percent growth.
And by the way, we do not believe that that is something fanciful.  In fact, there was a very well-written piece, by the way — I don’t know if The Washington Post is here or not today — a very well-written piece I thought in the Post this morning.  But one of its lines was that:  “The budget relies on an unprecedented level of economic growth.”  An unprecedented level of economic growth?  No, it’s not.  It’s 3 percent, which is below the average since the founding of the country.  It’s below the average since World War Two.  The average is slightly above 3 percent.  That is what an ordinary, healthy American economy is supposed to look like — not 1.9 percent growth forever.

If you are a 30-year-old adult, you have never had a job in a healthy American economy.  You’ve either been in a recession or sluggish recovery.  And you think this is normal.  And we are here to tell you it is not.

I grew up.  I was a young man during the ‘90s when we had healthy economic growth in this country, and if I got fired, I could find another job — because that’s what you can do with 3 percent economic growth.  When I didn’t like my job — and I didn’t — I quit, so I could go start my own company.  That’s what you can do with 3 percent economic growth.  That’s a dynamism that used to be normal in the American economy.  And that’s what we’re trying to get back to, and that’s what this budget is part and parcel of.  It drives our tax reform policy, our regulatory policy, trade, energy, welfare, infrastructure, and our government’s spending priorities.  Everything is keyed to getting us back to 3 percent.

The ugly truth is this:  You can never balance the budget at 1.9 percent growth.  Just not going to happen.  So those out there who say you’re never going to grow beyond 1.9 percent are condemning us to a future filled with nothing but debts and deficits.

How do we get there?  Amongst other things, we’ll talk about that.  We talk about this in terms of tax policy.  We talk about capital investment.  Right now, one of the things that touches on the budget and how we get 3 percent growth, we need folks to work.  We do.  We need people to go to work.  If you’re on food stamps, and you’re able-bodied, we need you to go to work.  If you’re on disability insurance and you’re not supposed to be — if you’re not truly disabled, we need you to go back to work.  We need everybody pulling in the same direction.

I think the difference right now between the U3 and the U6 unemployment rate — I’ll look at this, don’t want to get this wrong — remember U3 is the unemployment rate as we look at it; and then U6 is the unemployed, plus the marginally attached, plus part-time for economic reasons, right?  So it’s folks who want to work more but can’t.  That’s the difference between U3 and U6 — U3 unemployed, U6 unemployed plus folks who aren’t working enough but want to.  That’s 6.8 million people.  Okay?  We want those folks to work.  We need them to work.  They want to work as evidenced by the fact they’re part-time against their will.

This is one of the things the budget focuses on.  We go through the various reforms that we talk about.  There’s a dignity to work, and there’s a necessity to work to help the country succeed.  And we need everybody to pull in the same direction.

At the same time, the budget — while it does balance in 10 years, it also funds the President’s priorities.  I was here with most of you in March.  We talked about some of the increases in spending to suit the President’s — to meet the President’s campaign promises.  It will be familiar to you by now:  more money for national security, more money for border security — and that means bricks and mortar for a wall, technology people, infrastructure at the border.  It also means more money for law enforcement at the federal and the state levels.  It means more money for veterans, more money for school choice.  What we didn’t talk about in March but it’s part of this budget is a — for the first time ever, by any administration of any party, we are proposing a nationwide paid parental leave — $25 billion for that over the course of the 10-year budgets — a truly groundbreaking thing for this President to do, and to prove to folks that we can do things like that, okay, and we can still balance the budget if we prioritize our spending right.

By the way, people ask, you say, Mulvaney, you’re used to be a Freedom Caucus guy, how can you support paid parental leave?  It goes right to the heart of the matter on 3 percent growth.  We need men and women who are sitting home thinking you know what, I don’t know if I can go back to work because we’re getting ready to have a kid.  And what happens if I have to stay home?  We try and create the environment where people are more comfortable going back to work and staying at work knowing that if they do have a child, they’ll be able to spend time with that child under the paid parental leave program.

We can do all of that and balance — because there’s a certain philosophy wrapped up in the budget, and that is that we are no longer going to measure compassion by the number of programs or the number of people on those programs.  We’re going to measure compassion and success by the number of people we help get off of those programs and get back in charge of their own lives.  We’re not going to measure our success by how much money we spend, but by how many people we actually help.

Along those lines, by the way, we take a really, really hard look at unauthorized programs.  We’ve not finished counting yet, but I think the last time anybody counted, it was close to $300 billion — $300 billion of money that we spend every single year on unauthorized programs.  What does that mean?  It means that Congress has not seen fit to extend programs that by their natural terms are supposed to expire.

So if they’re not important enough for Congress to take up, are they really important for me to spend your money on?  And I think that’s a valid conversation and drives a large part of what we’re trying to do in the budget.

I want to give two examples of these things.  We talk about waste, fraud, and abuse.  We talk about authorized programs.  We talk about how to prioritize spending and how to look at programs that work and don’t work.  The childcare tax credit and the earned income tax credit.  One of our proposals is that we are going to require you to have a Social Security number now to collect those.  Why is that?  Because I can ask you for your money, I think, in good faith and good conscience and say, look, I need to take some of your tax money and give it to this family who deserves the childcare tax credit.  But I can’t do it to give the earned income tax credit, which is designed to help folks who work, to give it to somebody who is in the country and working illegally.  That’s just not fair.  It’s not right when you look at it through the perspective of the people who pay the taxes.  And it’s one of our proposals.
The other one that I talk about — I’ll pull out some notes on this — is that the TRIO Program.  It’s an education program – – and I can never remember what TRIO stands for — T-R-I-O.  It’s actually got five parts to it, as only a federal program can.  It’s a TRIO Program with five parts.  There’s three parts that actually work, and they are the Upward Bound, the Talent Search, and the Students Support Services Programs part of TRIO.  What do we say when it works?  It means that when Department of Ed, either internally or paid somebody externally to come and look at those programs, they accomplish their goal.  They helped people who would not have gone to college or not have stayed in college to graduate, okay?  That’s what those programs are designed for, and that’s what I’m comfortable going and asking you for help with by giving us some of your taxpayer money.

The other two programs — the McNair grad school program and the Educational Opportunity Centers — don’t.  In fact, the McNair program is the McNair post-baccalaureate something, something.  It’s designed to take folks from — after they graduate from college to get a post-bachelor’s degree.  The last time the Department of Education looked at this, it was 6 percent effective — 6 percent.  I can’t do that anymore.  We can’t do that anymore.  We cannot defend programs like that — 6 percent just doesn’t cut it.  The 21st Century Community Learning Center Program says that less than 20 percent of the kids enrolled improved because of the program — 20 percent doesn’t cut it anymore.  Okay?  We’re $20 trillion in debt.  Every single one of you in here owes the federal government roughly $60,000.  Each of my 17-year-old triplets owes the federal government $60,000.  Every man, woman, and child in the country is $60,000 in debt because of the $20 trillion debt we’ve run up.  We cannot continue to simply measure our compassion or our success by the amount of money we spend.  We’re going to measure our passion and our success by actually helping people and by respecting the taxpayers who paid for it in the first place.

And that is the last piece of the puzzle.  That is the American greatness part of it.
So with that, I apologize for talking so long.  You know I don’t usually do that.  Mostly I was practicing for tomorrow.  But I guess you’re going first with questions?  Is that what — raise your hand.

Q    So Congress says that — or at least there are people on the Hill who say the Medicaid cuts that are proposed in this budget are not sustainable.  I’d like to get your reaction to that.
And number two, what about the critics who say that this budget is incredibly hard-hearted for those — the least of our

brothers, those who have the least amount of income?

DIRECTOR MULVANEY:  Yes, let’s deal with Medicaid first.  We assume the Affordable Health Care Act that passed out of the House passes.  That has some Medicaid changes into it.  We wrap that into our budget proposals.  We go another half a step further and ratchet down some of the growth rates that are assumed in the AHCA.  So if you assume growth rates — I can’t remember what the exact measure is — it’s a CPI-plus measure.  We take a measure that we think is closer to what the actual growth rates look like.

But to your larger part about hard-hearted, for the school teacher in Kenosha, Wisconsin, who is trying to raise two kids by herself, save for their college and save for their retirement, isn’t it hard-hearted to go to her and say give me money for a program that’s only 6 percent effective?

Q    You’re still asking her for the same amount of money, you’re just diverting it somewhere else.

DIRECTOR MULVANEY:  We are.  Absolutely.  But I think it is hard-hearted to look at her and say, I want to take your money so that this 6-percent-effective program can continue to fund at the same time instead of what we’re doing now and saying, can we have your 6 percent to help defend the nation?  Can we have your 6 percent to help the veterans?  Can we have your 6 percent to help law enforcement?  And I think the answer to that question is yes.
People don’t mind paying their taxes — people don’t mind paying their taxes as long as they know their money is not being wasted.  And for too long I think the federal government has been unwilling to prove to them that that’s the case.

Yes, sir, in the back.

Q    This budget doesn’t address entitlement programs.

DIRECTOR MULVANEY:  Thanks for that.  I appreciate that.

Q    And so how does 3 percent growth deal with the more than 3 percent growth in those two main programs?

DIRECTOR MULVANEY:  And I forgot to mention — do not touch mainline Social Security, and we do not touch Medicare in this program.

And I could tell you exactly how it went down.  In fact, I think I’ve talked about in a limited fashion.  I went into the President with a list of proposed entitlement reforms — some reductions, some eliminations — and gave him a list.  I don’t know — the list was probably a page long.  And we went down the list.  Yes, yes, no, no, yes, no, yes, no, no.  Okay?

Q    What were the yeses?

DIRECTOR MULVANEY:  And the no’s — well, we’ll do the — and we’ll talk about that in a second.

The no’s were all Social Security and Medicare.  That’s it.  He said, I promised people on the campaign trail I would not touch their retirement, and I would not touch Medicaid.
And we don’t do it.  I honestly was surprised that we could balance the budget without changing those programs, but we manage to do that.  We’ll talk about how we did that in a second.

At the same time, before I get the question — people are going to say, oh, but Social Security disability insurance is part of Social Security.  If you ask 999 people out of 1,000 would tell you that Social Security disability is not part of Social Security.  It’s old-age retirement that they think of when they think of Social Security.  In fact, the paid parental leave program that we are running, we are running it through the unemployment insurance program.  And I think a couple of states right now actually that do it at the state level run it through their disability program.  That does not mean that paid parental leave is unemployment or disability any more than the Social Security disability insurance program is part of Social Security.  It just happens to be where they are structured.

Q    But how do you stand behind a budget that doesn’t deal with those two issues?  I understand the President doesn’t want to.  But you voted for programs that — in that past that —

DIRECTOR MULVANEY:  I absolutely did.  And I made the case for why those programs needed to be reformed.  The President said, no, I’m going to keep my promises.
And I said, well, I’d still like to balance the budget.

He goes, I still want you to balance the budget, just don’t do it changing these programs.
And we were able to do it.  You asked the question about, how does 3 percent economic growth contribute to that?  It actually does help the program, as you can probably imagine, as more people go into work — and the President talked about this a little bit I think on the campaign trail — as people come — that U3-U6 split, which again is like 6 million people, if those folks go back to work full-time, they’re now paying into the system.  If the folks who are on Social Security disability insurance who are not supposed to be, if they go back to work, they’re paying into the system, and they’re not taking out of the system.  So it does make the programs healthier.  It does not solve their long-term deficiencies.

Q    The spending is a higher rate than 3 percent, combined?

DIRECTOR MULVANEY:  I think that’s fair, but again, the programs get healthier with 3 percent than they do at 1.9 percent.  And, yes, we do not change them in this budget.

Yes, sir.

Q    What about the President’s promise not to touch Medicaid?

DIRECTOR MULVANEY:  I think we assumed that in the Affordable Health Care Act, and the President has made it very clear that he supports what the House is doing because it’s better than the alternative.  And the alternative right now is Obamacare.  We can have a long conversation about the drawbacks with Obamacare, the shortcomings, the fact that — didn’t Iowa just lose a bunch of its coverage in a bunch of its counties?  So we can go over that again.

I think once the President said I support the American Health Care Act, part of that was Medicaid reform.


Q    Briefly about the border wall funding.  It went from $4.1 billion to $1.6 billion.  What conversations did you have with the President?  Where are things going to have to sort of come to the table?  And where were cuts made?

DIRECTOR MULVANEY:  I’m not sure where the $4.1 billion number is.  The spending on the border security is $2.6 billion, of which I think $1.6 billion is actual bricks and mortar construction.  The other $1 billion is infrastructure and technology.  I’m not sure where the $4.1 billion number comes from.

Q    From the blueprint to what you’re looking at now, tomorrow what you’re going to present to Congress, what changes do you have to make?

DIRECTOR MULVANEY:  Oh, oh, oh.  Yes, the number in the blueprint was DHS writ large, okay?  So that DHS includes border security and other stuff, okay?  So when I say $2.6 billion for the border, I think the equivalent in the 2017 request was $1.6 billion.  I’m looking at Russ.  I think that’s the right answer.  So apples to apples, it’s a larger request in 2018, which you would expect because the 2017 request as part of that omnibus discussion was only for five months out of the year.

The woman behind you had a question.  Yes, ma’am.

Q    Hi.  About half of all U.S. births are covered by Medicaid now.  Is there any provision in here for pregnant women or preventative care?

DIRECTOR MULVANEY:  There are a bunch.  If you could ask us that again after the meeting, that would be great — because I don’t have the list with me of all the Medicaid programs.  But we do expand a bunch of women’s health programs.  And the Medicaid proposals that we make — mostly changing the growth rates and so forth — don’t touch on precisely what you’ve mentioned.  So I don’t want to give you an answer that’s not accurate.  But the short answer is I don’t know the answer.

Yes, ma’am.

Q    Can you walk us though the list of cuts that are proposed for mandatory programs, for entitlements like SNAP and other?

DIRECTOR MULVANEY:  I can.  There’s a notebook full of them, and I think you’re going to get

Q    Well, can you just give some highlights?

DIRECTOR MULVANEY:  I can.  At the end you all are going to get the tables?  Is that what it is?  Here you want to — actually, I’ll just run through it.  I tell you what, why don’t you pick an agency.  Let’s do —

Q    Let’s do SNAP.

DIRECTOR MULVANEY:  SNAP, oh, sure, okay.  Let’s talk about SNAP.  The programs at SNAP.  One of the things we’ve seen with SNAP, formerly food stamps.  I still refer to them as food stamps.  I know that’s not technically correct — is that as you might expect, they spiked during the recession.  But they’ve not come down like we would expect them to do.  In fact, they’ve stayed up at very, very elevated levels.  I think at the height of the recession there were 47 million people on SNAP, and now there’s 44 million — even though we’re at supposedly near full employment, notwithstanding that differential between U3 and U6.  So I think that raises a very valid question, which is that:  Are there folks on SNAP who shouldn’t be?

And so our primary — we do two primary things.  We do have an able-bodied work requirement.  If you don’t have any dependent children, and you’re an able-bodied adult, we start to phase in that requirement.

We also look to — and we’re doing this in a couple of programs — we look to the states to help us.  And what we do is to ask them to start to participate in a cost-sharing program.
With SNAP, I believe that the states already participate 50 percent in the administrative costs.  But 100 percent of the costs of the actual providing the programs — providing the benefits fall to the federal government.

And what we’ve done is slowly try to phase in a state match for this reason, which is that they’re the folks who are administering the program, and they probably do a better job than we do on recognizing where the programs can be improved.

As a former state legislator, I can assure you that’s the case.  When I was in South Carolina, we knew where the difficulties were in some of our federal programs, but we didn’t have the flexibility to fix it.  Plus on food stamps, we didn’t have the motivation to fix it.  We didn’t have the incentive to fix it because the Feds were picking up all the whole tab.  So what we do is go to the states and say, look, we want you to have a little bit of skin the game and help us — because you know how to make the programs better — to improve the programs and save money.

And those are the two major drivers in SNAP.  Again, the goal is this, and this is the goal with all of our safety net — we believe in the social safety net.  We absolutely do.  I know folks want to say that — the narrative is that Republicans don’t.  I believe in the social safety net.  I also think that it helps us get to that 3 percent growth because having that social safety net does provide people with the confidence of knowing they can take a gamble and fail, and they won’t be completely wiped out, okay?  So I believe in the social safety net.  And what we’ve done is not to try and remove the safety net for folks who need it, but to try and figure out if there’s folks who don’t need that need to be back in the workforce.

Q    So would that come through the farm bill?  Would you have to wait till the farm bill to make a change like that?  Or do you foresee some other strategy?

DIRECTOR MULVANEY:  Yes, I think it’s part of — because SNAP is part of the farm bill.

Q    Do you also see crop subsidies?

DIRECTOR MULVANEY:  I see that as separately.

Go ahead.

Q    Thank you, two questions.  One for the foreign aid budget, there have been reports that with regards to foreign aid, military aid, much of that is going to be replaced by offers of loans — countries like Vietnam, Indonesia, Colombia, Pakistan, Philippines, and Ukraine.  Can you confirm that?  That’s the first question.

DIRECTOR MULVANEY:  Yes, this is embargoed.  Yes, I can confirm that.  Yes, we do change a couple of the foreign military programs from direct grants to loans.  Our argument was instead of loaning somebody — giving somebody $100 million, we can give them a smaller number worth of loan guarantees and they can actually buy more stuff.  We did not change it for Israel.  We did not change it for Egypt.

AIDE:  I think a lot of the specifics the State Department is still working on.

DIRECTOR MULVANEY:  Got you.  But we do change — we do propose to change some of those programs.

Q    And the second question.  With regard to the earned income tax credit, you mentioned requiring a Social Security number for receiving that.  Do you mean a Social Security number for parents, or for children — particular children who are born American citizens?

DIRECTOR MULVANEY:  I think it’s the parents.

Q    So the earned income tax credit is meant to help parents raise families — the idea is you have a child — and if you look at the tax credit, if you don’t happen to have children —

DIRECTOR MULVANEY:  You’re not supposed to get the tax credit if you don’t have children.

Q    Right.  And so how does that help people, whether they’re here legally or not, raise families if those families have American citizen children?

DIRECTOR MULVANEY:  Thank you.  That’s the exact difference we’re talking about in the perspective on this budget.  You’re sitting there focusing only on one side of the equation, okay?  And we’re trying to focus on both — both recipients of the aid and the folks who pay for the aid.  How do I go to somebody who pays their taxes and say, look, I want you to give this earned income tax credit to somebody who is working here illegally?  That’s not defensible.  And it’s a reasonable accommodation to simply ask them for Social Security numbers.

Q    But it’s supposed to help the kids, is what I’m saying.

DIRECTOR MULVANEY:  It’s supposed to help the families.  Okay?  There are other programs all up and down our federal government, all up and down the budget that help the children.  We help them at school and we help them after school, we help them in preschool.  I mean, Title I —

Q    But that’s —

DIRECTOR MULVANEY:  Give me a second.  Now, hold on a second.  Title I is $15 billion, I think, in terms of programs to help kids like that.  So I hear what you’re saying.  The point of the matter is it’s not unreasonable to ask for a Social Security number before they get those benefits.

Q    Can you explain, where does the tax for locations come in in this budget with respect to the API — American Pacific Islanders?

DIRECTOR MULVANEY:  I’m sorry, I do not know the answer to that question.  But if you can reach out to my office afterwards — I tried really hard to get every line item in the budget memorized.  It’s just not going to happen.

Yes, ma’am.

Q    So what are the three major areas of savings?

DIRECTOR MULVANEY:  The repeal of Obamacare I think is the number one item.  I want to say that’s $800 by itself?

AIDE:  Yeah, it’s $800 billion.

DIRECTOR MULVANEY:  — $800 billion by itself for repeal of Obamacare.

AIDE:  With the additional Medicaid reforms —

DIRECTOR MULVANEY:  On top of that.  So I think that’s the big one.  After that, we’ve got some —

AIDE:  Food stamps —

DIRECTOR MULVANEY:  SNAP programs, student loans — and what was the other?

AIDE:  Federal retirees.

DIRECTOR MULVANEY:  Federal retirees.  And all of this will be in the tables that you folks get at the end of the day.

Yes, sir.

Q    Thank you, Director.  Real quick question — I have two questions for you.  The real quick one is, is there aid in your budget for Pakistan?

DIRECTOR MULVANEY:  Yes, but we changed the program in Pakistan from a — we don’t?  Yes, we do maintain aid to Pakistan in the budget.  I believe — I don’t believe it’s at the same levels as previous.

Sorry, do you have a follow-up?

Q    That’s a loan, or you changed the process for them?

DIRECTOR MULVANEY:  Rob is our national defense specialist, and he was telling me that State still has some flexibility to come up with a final plan on that.  But I do know that, writ large, we have moved several — we have proposed to move several countries from a direct grant program to a loan guarantee program.


“Director Mulvaney stated that FMF funding for Pakistan would be provided in the form of a loan guarantee. This is one of the options that the Administration had explored in its internal deliberations, but the request itself does not make that determination. Whether the funding is provided through grants, or as a subsidy for a guaranteed loan, is an option the State Department can exercise to ensure our foreign assistance best supports our national interests.”

Q    And I have another one on this.  You’ve been a congressman before, you’ve seen these budget proposals, budget blueprints being sent over from the White House to Congress.  You know as a congressman, when key proposals, budget blueprints are sent over, they look at them — congressmen who lead committees

— congresswomen who lead committees — and they go, thank you, we’re going to start anew.  What makes you think that this Congress isn’t going to do the same thing with the budget proposal that you’re sending them?

DIRECTOR MULVANEY:  It’s a fair point, and I think legislatures everywhere sort of look at the executive budget like that.  But they look at it — this is how we offer, this is what the law intends, okay?  We’re required by the Budget Act of 1974 to do this.  Why?  Why do we do it?  And why do we spend so much time on it?  Why do we actually get down in the details like this?  Keep in mind, the 2019 budget — this is the ’18 — the 2019 budget, work on that will begin in September, right, of ’17. That’s how far off we work.

So we take this very seriously.  Why?  There’s a certain message here, okay, and it’s the message from the President of the United States to the Congress that says, look, here are my priorities in terms of where I want to spend more; here’s where I think we shouldn’t be spending nearly as much; and here’s some of the big-ticket items.  And one of the big-ticket items is I want more money for defense; I want more money for border security; I want more money for the vets and school choice; and I don’t want to add to the deficit this year; and I want to be responsible for the taxpayers in a way that we haven’t been before.

If Congress has a different way to get to that endpoint, God bless them.  That’s great.  And that will be part of my testimony to both the House and the Senate this week.  Do I expect them to adopt this 100 percent, wholeheartedly, without any change?  Absolutely not.  Do I expect them to work with the administration on trying to figure out places where we’re on the same page?  Absolutely.  But I don’t think it invalidates the importance, the credibility of the President’s budget just because they’re not going to pass it wholeheartedly.

Yes, ma’am.

Q    You may have covered this already, but does it defund Planned Parenthood?  And number two, does it defund the Corporation for Public Broadcasting?

DIRECTOR MULVANEY:  Yes, and yes.  It does the first one because it assumes the American Health Care Act passes and the AHCA in its current form, which is the one we assumed — and that’s making a bunch of assumptions, here — that it assumes that passes and that defunds Planned Parenthood.

The elimination of — actually, it’s not eliminated, the Corporation for Public Broadcasting.  There’s a little money left in the budget to allow us to wind down the federal position.  I think we account for 15 percent of their funding right now.  So we don’t take it to zero right away, but we do anticipate to.

I have time for one or two more.  Yes, sir.

Q    I guess I’m wondering if, in the table that you’re going to give us, if it includes both the economic assumptions beyond —

DIRECTOR MULVANEY:  I think I give you the economic assumptions, we’re going to give you the inflation assumptions, give you the unemployment rates — all the basic macroeconomic —
Q    And then is the President’s tax plan incorporated into this budget?

DIRECTOR MULVANEY:  That’s a good question.  Yes and no.  The tax plan, as you know, is in its very early stages.  We released our one-page summary that’s sort of to drive — start to drive the debate, I don’t know, probably three or four weeks ago now.  We do assume in this budget that that plan is deficit-neutral, just because it was, in all honesty, the most efficient way to look at it, because if we said it’s going to add to the deficit, then we have to go into more detail than what’s in the summary right now.  If we say it’s going to reduce the deficit, we have to go into more detail than what’s in it right now.  And we simply are not in a position to do that.

We released our principles.  We’ve sent them to the Hill.  Discussions are ongoing.  In fact, I think Mike Pence is going to be talking with members of the —

Q    — not going to see like what those income tax plans actually correspond to or —

DIRECTOR MULVANEY:  No, you won’t see any more detail on this than you already have.
Last one.  Yes, ma’am.

Q    Can you talk about the cap in discretionary spending? We know the $54 billion next year.  What’s that number at the end of the 10 years, and do you have a total for the 10 years?

DIRECTOR MULVANEY:  It’s in the tables.  I don’t remember off the top of my head, but I do know the concept that we put in place.  And the concept we put in place is a general, what we call the two-penny plan, which is that every single year we see those reduced by two cents on the dollar, every single year.  So you do see this sort of reduction in the nondefense discretionary in order to hit the Budget Control Act caps and to accommodate the President’s other priorities.

All right, look, let’s do this.  I’ll leave you the summary tables.  I know you have a lot more questions.  I’m coming back tomorrow to do this on TV, and I’m doing the committee hearings on Wednesday and Thursday, so there will be plenty of chance to talk about this during the week.

Thank you all very much for your accommodation.  And we’ll pass this stuff out now.

2:06 P.M. EDT