Pelosi Remarks at Joint Select Committee on Budget and Appropriations Process Reform

Washington, D.C. – House Democratic Leader Nancy Pelosi testified at the House Joint Select Committee on Budget and Appropriations Process Reform hearing entitled ‘How to Significantly Reform the Budget and Appropriations Process.' Below are the Leader's remarks:

Leader Pelosi. Thank you very much, Mr. Chairman [Steve Womack], Madam Chair [Nita Lowey]. Thank you very much to the Members of the Committee from the both sides of the House, I'm very encouraged by the fact that this discussion is taking place. I think it's very important and long overdue.

I do believe that a budget should be a statement of our national values. What's important to us as a nation should be how we allocate our resources, and that budget process that we're engaged in should be respected as something that we go forward into the Appropriations process.

I have a different view on these subjects than the Speaker because I come here as a long-time Appropriator. I heard the perspective of a Ways and Means Committee person, but I do believe when you're – two years for the Budget, one year for the Appropriations legislation is the appropriate route to go.

It was music to my ears to hear the Speaker say that he didn't think he should have legislation on Appropriations bills. Of course, that is what upsets the apple cart in all of the smooth workings of the Appropriations Committee. I have always said, left to their own devices, the appropriators in a bipartisan way know how to allocate resources, respect each other's points of view, and can come to a balance that is important for the Congress.

It is when the legislating on appropriations bills that enters into it, which started in the late nineties. I don't say that you should never have legislation on appropriations bills – you shouldn't have it – unless there's bipartisan agreement that for whatever reason this engine is leaving the station. In the national interest we need to move something immediately on a must pass, must sign bill. But that is something that is not happening in this case. And that, in my tenure on Appropriations, which has gone way back, was what made the difference between a smooth running of Appropriations instituting the budget agreement or not.

The Speaker said very eloquently that the people on these Committees know their brief. We have oversight responsibilities on the Appropriations Committee, and left again to its own devices, I think again it could do a very good job.

So a few principles I want to put forth. First, I do believe that – when we have sent Members to any of the discussions on Budget, we just say, ‘Be agnostic. Just go into that room, put growth into the middle of that table, and say what will promote growth, create good-paying jobs and reduce the deficit.' Those are standards, we don't give you any assignments to say, ‘do this, do that.' Growth, good-paying jobs, reduce the deficit.

I do think that we should return to pay-as-you-go budgeting, which Republicans abandoned in favor of creating huge deficits, and then using those deficits for another purpose – cutting Medicare, Social Security and Medicaid, I'll get to that in a moment.

Second, we should amend the reconciliation process so that it's never used to increase the deficit, so that it's never used to increase the deficit, in the budget window.

Third, Republicans should do no harm – none of us – to the budget process. We must not pass constitutional amendments or implement capped limits on mandatory spending, and they must stop using the budget resolution as a messaging document to call for unspecified and unrealistic spending cuts not included in the reconciliation instruction.

I don't want to waste your time. I'm being very direct in what I'm recommending.

We hear people blaming Medicare, Medicaid, Social Security for the record deficits and debt levels, but the driver is simple demographics, not extravagant spending. For example, I think it's important that we go forward, that we note the demographics. We've reduced the replacement rate in Social Security, and the average worker retiree benefit is only $1,400 per month.

Medicare does not cover vision, dental or hearing benefits, does not have an out-of-pocket limit. Most of the elderly has a form of supplemental coverage costing around $150 per month. So, it's not about extravagance on that end. Medicaid is by far the least generous initiative in terms of reimbursing providers.

The elderly population – now this is the demographic issue – will double between 2010 and 2035, increasing from 40 million to 80 million, from 13 percent of the population to 20 percent population. In fact, demographics account for 80 percent of the increase in outlays for these initiatives from fiscal year 2018 to fiscal year 2028.

I'm speaking to my notes on some of this in the interest of time, because I could go on.

In light of these demographic shifts, we need to work on a bipartisan basis to reduce health spending. We were proud of what we did in the Affordable Care Act, slowing annual Medicare spending program per capita from 2.3 percent in the five years prior to the enactment of the ACA to a negative 0.3 percent in the years since enactment.

We must build on that progress, through far stronger reforms than those proposed by the Trump Administration. We need to allow Medicare Part D – we've been trying to do this for years – we need to allow Medicare Part D to negotiate lower drug prices, push payments and delivery reform through the Medicare and Medicaid Innovation Center, and work toward paying for value rather than the volume of health services.

This should not be a partisan debate. Hard-working families across the country cannot afford the skyrocketing cost of health care today.

When we passed the Affordable Care Act – in terms of budgeting – if everyone loved their health care and their health insurance, we still had to do it in terms of cost. Cost to the individual, cost to the small business, cost to corporate America, cost to the public sector. We simply could not afford the escalating rate of inquiries. As I said, we could reduce that, but the cost of prescription drug is still leveling all that.

So, to return to responsible budgeting, I encourage Congress to move toward two-year budget agreements – I agree with the Speaker on that – maintain annual appropriations – I agree with the Congresswoman [Nita] Lowey on that – and do not adopt automatic continuing resolutions. Imagine that, we had 5 CRs, between last year and when we passed our omnibus.

We must make it easier to pass debt limit increases, that shouldn't be taking up time, debate and leverage. Members have attempted to the hold the country's credit hostage to individual demands, risking grave consequences to our country and economy and our credit rating, even when we didn't do it, just talking about it lowered our credit rating. We should urge the Senate to adopt the Gephardt Rule – the Gephardt Rule enabled just to go through. As the Constitution says, so full faith and credit is not threatened, just have it go through. So we take that off the table.

While some pay lip service to fiscal responsibility, we have fought to put our fiscal house in order. I am very proud that in the 1990s, President Clinton put us on a trajectory of job growth – we come back to that, job growth and smaller deficits despite inheriting a massive deficit.

The last four Clinton budgets had a surplus or were in balance. President Clinton handed President Bush a projected $5.6 trillion ten-year budget surplus, but when you do away with the pay-as-you-go, that surplus was squandered, again, with massive tax cuts to the wealthy that did not – two unpaid-for wars, not negotiating for Medicare prescription drugs, all of that according to the CBO is what added to the deficit.

Tax cuts and spending sprees exploded the deficit plus a new $5 trillion dollars – that is an $11 trillion turnaround – we went from 5 trillion-plus on a path to reducing to the debt to five trillion additional debt, 11 trillion dollar turnaround.

This fiscal recklessness cannot continue. Passing a tax scam for the rich, I'll express my disagreement with that, has increased the deficit – increased the deficit – and it will be at the expense of Medicare, Medicaid etcetera. When the President took office, he said the current services projection for the deficit for the fiscal year 2018 to 2027 was 9.4 trillion. Now due to the Republican tax bill, the CBO's latest current services project for the same year is over $2.3 trillion larger. It just can't continue with that to a staggering – the reckless giveaways have exploded the projections of the annual average deficit to 8.4 percent of GDP – the deficit, not the debt: 8.4 percent of GDP.

So, where we find common ground, two year budgeting. What I would advocate for as an appropriator, very important to have annual appropriations bills. What I think is problematic is the massive legislation, sometimes in the form of poison bills that being placed in these bills. It almost makes us want to make everybody a Member of the Appropriations Committee. It's no use for other committees to exist because we can pile it all on the Appropriations Committee, and in a way that is not bipartisan. I don't think either party should do it.

So, Members of Congress must honor our responsibility to make smart investments, promote growth, create good-paying jobs, reduce the deficit – and do so in way that keeps the deficit under 3 percent of GDP when the economy is healthy, while driving strong and sustainable growth.

Thank you for your attention to this vital issue. I think this is an opportunity for you to do something that will make more efficient, more predictable, more timely, the process. But again it's all about our values, what's important to us as a nation. We have sufficient time in our Committees of jurisdiction, authorization to debate the policy. That shouldn't be something that is placed – you know, appropriating is policy making in itself, there's enough going on there, but to use the appropriations process as a vehicle for poison pills, and partisan policy making it just discredits the responsibility that we all have.

When I was a little girl, my father was a Member of the Appropriations Committee, he would talk in his political speeches in Baltimore about the almighty, powerful Appropriations Committee. As a very little girl, not even in grade school yet, it was to me, almighty powerful. Only identified in one way, in a heavenly way and now it was now attributed to Appropriations Committee.

Let's have the Appropriations Committee retain its power, assume no more, and be responsible to bipartisan budget resolution. Thank you for the opportunity to share some thoughts with you.

Again, it's no use wasting your time, I thought I'd get right to some clarity of thinking on my part, to propose.

Thank you for your leadership and your good work and good luck in your deliberations. Hopefully a nice bipartisan advance will spring from your good work.

Thank you so much.

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