Text: S.Hrg. 115-372 — NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO

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[Senate Hearing 115-372]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-372

        NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO

=======================================================================

                                 HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             FIRST SESSION

                               __________

         NOMINATIONS OF BROCK LONG TO BE ADMINISTRATOR, FEDERAL
            EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF
             HOMELAND SECURITY, RUSSELL VOUGHT TO BE DEPUTY
          DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, AND NEOMI
RAO TO BE ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, 
                    OFFICE OF MANAGEMENT AND BUDGET

                               __________

                              JUNE 7, 2017

       Available via the World Wide Web: http://www.Govinfo.gov/

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        Committee on Homeland Security and Governmental Affairs

        
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
               Margaret E. Daum, Minority Staff Director
                  Anna Laitin, Minority Policy Adviser
                     Laura W. Kilbride, Chief Clerk
                   Bonni E. Dinerstein, Hearing Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator McCaskill............................................     4
    Senator Portman..............................................    16
    Senator Heitkamp.............................................    19
    Senator Hassan...............................................    21
    Senator Peters...............................................    23
    Senator Hoeven...............................................    26
    Senator Daines...............................................    28
    Senator Carper...............................................    30
Prepared statements:
    Senator Johnson..............................................    39

                               WITNESSES
                        Wednesday, June 7, 2017

Hon. Orrin Hatch, a U.S. Senator from the State of Utah
    Testimony....................................................     3
    Prepared Statement...........................................    41
Brock Long to be Administrator, Federal Emergency Management 
  Agency, U.S. Department of Homeland Security
    Testimony....................................................     7
    Prepared statement...........................................    43
    Biographical and financial information.......................    45
    Letter from the Office of Government Ethics..................    59
    Responses to pre-hearing questions...........................    64
    Responses to post-hearing questions..........................    88
    Letters of support...........................................   105
Russell Vought to be Deputy Director, Office of Management and 
  Budget
    Testimony....................................................     8
    Prepared statement...........................................   111
    Biographical and financial information.......................   113
    Letter from the Office of Government Ethics..................   135
    Responses to pre-hearing questions...........................   138
    Responses to post-hearing questions..........................   160
    Letter of support............................................   171
Neomi Rao to be Administrator, Office of Information and 
  Regulatory Affairs, Office of Management and Budget
    Testimony....................................................     9
    Prepared statement...........................................   173
    Biographical and financial information.......................   175
    Letter from the Office of Government Ethics..................   195
    Responses to pre-hearing questions...........................   201
    Responses to post-hearing questions..........................   221
    Letter of support............................................   233

                                APPENDIX

We've done 81% of Simpson-Bowles chart submitted by Senator 
  Johnson........................................................   246

 
        NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO

                              ----------                              


                        WEDNESDAY, JUNE 7, 2017

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:02 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Portman, Lankford, Hoeven, 
Daines, McCaskill, Carper, Tester, Heitkamp, Peters, Hassan, 
and Harris.

            OPENING STATEMENT BY CHAIRMAN JOHNSON\1\

    Chairman Johnson. Good morning. We will call this hearing 
to order. We are going to be waiting for Senator Hatch, who 
will make an introduction.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 39.
---------------------------------------------------------------------------
    I want to welcome the nominees. I want to thank you for 
your willingness to serve this country. Coming from the private 
sector myself, and this is absolutely true, I have been very 
impressed with the quality of individuals that work for the 
Federal Government. This nomination process is not easy, as you 
are well aware, but the fact that we have so many patriots that 
are willing to step up to the plate, subject themselves to this 
process, and serve in the Federal Government for probably a 
whole lot less than you can make in the private sector, says an 
awful lot about your dedication to this country. I truly want 
to thank you for that.
    I know, in your opening statements, you will introduce your 
family members. Specifically, I want to welcome all of them, 
and I will leave it to you--do not forget to introduce your 
family members.
    For my opening statement, all I really want to do is to 
quick read a description of the jobs, basically, you are going 
to be filling, what the agencies do, and then I will turn it 
over to my Ranking Member, Senator McCaskill, and then 
hopefully Senator Hatch will be here to make an introduction. 
Otherwise, we will proceed.
    We are considering three nominations, one for the 
Administrator of the Federal Emergency Management Agency 
(FEMA), one as Deputy Director for the Office of Management and 
Budget (OMB), and then the third is the Administrator of the 
Office of Information and Regulatory Affairs (OIRA).
    The FEMA Administration serves as the principal advisor to 
the President and the Secretary of Homeland Security on 
emergency management. The Administrator's duties include the 
operation of the National Response Coordination Center (NRCC), 
the effective support of all emergency support functions, and 
more generally, preparation for and protection against, 
response to, and recovery from all hazard incidents.
    The Administrator is also responsible for management of the 
core Department of Homeland Security (DHS) grant program 
supporting homeland security, and for providing an annual 
estimate of the resources needed for developing the 
capabilities of Federal, State, and local governments necessary 
to respond to a catastrophic incident. FEMA is 22 percent of 
DHS's overall budget. A pretty simple job. I mean, not much to 
it, so I appreciate you are willing to take it on.
    The Deputy Director of Office of Management and Budget, the 
role of that individual varies from Administration to 
Administration, but is viewed as a general deputy to the 
Director, assisting the Director in carrying out the 
President's budget and management agendas across the Executive 
Branch. The Deputy Director is primarily responsible for budget 
development and execution. In addition, the Deputy Director 
oversees eight OMB offices: General Counsel (GC), Legislative 
Affairs, Strategic Planning and Communications, Economic 
Policy, Legislative Reference, Budget Review, and Performance 
and Personnel Management. The remainder of OMB is overseen by 
the Deputy Director of Management.
    From my own standpoint, the reason I came here is we 
literally are mortgaging our children's future. We are $20 
trillion in debt. The projected deficit over the next 30 years 
is $129 trillion. These figures are incomprehensible, so, Mr. 
Vought, you have some real challenges ahead of you as well.
    Finally, the Office of Information and Regulatory Affairs, 
was created as part of the 1980 Paperwork Reduction Act (PRA), 
a law intended to curb the amount of, and duplication in 
paperwork requirements imposed by regulatory agencies on the 
public. The Administrator oversees requests from agencies for 
any new information and collections in paperwork requirements. 
The Administrator also oversees and coordinates proposed 
regulations from agencies.
    OIRA also conducts a regulatory review of so-called 
significant rules, ensuring the analysis and legal basis used 
to justify proposed rules is sound and consistent with criteria 
established in relevant Executive Orders (EO) going back to 
1993. This may include ensuring that cost-benefit analysis uses 
well-established methods, that the agency considered potential 
non-regulatory alternatives like market mechanisms, and that 
the agency clearly identified a problem which justifies 
regulatory action. The Administrator ultimately may decide to 
either approve the rule or return it to the agency, with 
recommended changes.
    From my standpoint, I think the number one component of a 
solution of whatever problem we are talking about within this 
Nation is economic growth. I think the number one impediment to 
growth is overregulation. A $2 trillion per year regulatory 
burden, almost $15,000 per year per household. Ms. Rao, you 
have your challenges ahead of you as well, making sure that we 
only issue regulations to provide certainty to the private 
sector. Hopefully we can start rolling back overregulation that 
harms economic growth.
    With that I see our esteemed colleague, Senator Hatch, has 
arrived. To be respectful of your time, Senator Hatch, I think 
you would like to make an introduction and we will let you do 
so right now.

OPENING STATEMENT OF THE HONORABLE ORRIN HATCH, A UNITED STATES 
                 SENATOR FROM THE STATE OF UTAH

    Senator Hatch. Well, thank you so much, Mr. Chairman. It is 
my distinct pleasure to introduce Professor Neomi Rao at 
today's hearing, and to fully commend her confirmation to the 
Committee.
    I have known Professor Rao for some time now, ever since 
she worked as a counsel to the Senate Judiciary Committee. 
Since then, Professor Rao has distinguished herself in private 
practice, government service, and academia. Her experiences 
have prepared her well for what will be an important and 
challenging task ahead.
    The position of Administrator of OIRA may not receive as 
much fanfare as other nominations but it plays a critical role 
in modern policymaking. This Administration has said that it 
would get serious about regulatory reform. Republicans in 
Congress have said the same. Professor Rao's confirmation will 
be an important step forward in fulfilling that promise.
    Professor Rao's qualifications speak for themselves. After 
graduating from Yale, Professor Rao attended the University of 
Chicago Law School. She then clerked for Judge Harvie Wilkinson 
III on the Fourth Circuit, and Justice Clarence Thomas on the 
Supreme Court. After spending a few years in private practice, 
she served as an Associate Counsel and Special Assistant to the 
President, and then began a career in academia. She currently 
teaches at the Antonin Scalia Law School at George Mason 
University, where she is also the Founder and Director of the 
Center for the Study of the Administrative State.
    Mr. Chairman, there is little doubt at this point that our 
present system for formulating and implementing Federal 
regulatory policy is simply unacceptable. For years, citizens 
and businesses have complained about an administrative process 
that is opaque and unresponsive, and for years this process has 
produced results that too often harm economic growth while 
rarely improving public health and welfare.
    Accordingly, over the span of several past Administrations, 
a consensus has formed that an important step in streamlining 
and improving the administrative process is to empower an OIRA 
administrator. Professor Rao is supremely and uniquely 
qualified to step into this role. Under her watch, we can 
expect OIRA to carefully scrutinize rules to assure that they 
satisfy cost-benefit analysis.
    But, of course, as Professor Rao gets to work, we cannot 
take our eye off the ball here in Congress. We will need more 
than just exceptional candidates like Professor Rao at OIRA. 
The Legislative branch must do its part. That is why I was 
pleased to co-sponsor the Regulatory Accountability Act (RAA), 
along with Senators Portman, Lankford, Manchin, and Heitkamp. 
The Committee reported the legislation to the full Senate last 
month, and I am hopeful that the rest of our colleagues on both 
sides of the aisle will join us in making it law.
    The RAA is a carefully negotiated bipartisan effort to 
codify existing policy that streamlines and improves the 
rulemaking process. Further, I will be introducing legislation 
later this month, the Separation of Powers Restoration Act, 
that will begin a conversation about the growth of Federal 
regulation enabled by the Chevron Doctrine and abetted by broad 
legislative delegation.
    Just like the confirmation of Professor Rao, these efforts 
at regulatory reform are not about politics. Regardless of 
which party controls the presidency, regardless of which 
controls Congress, our administrative process is broken. The 
time to fix it is now.
    In conclusion, Mr. Chairman, I will say one more time that 
I am very pleased to be here today to introduce and recommend 
Professor Rao for this important post. The Federal policymaking 
process and Federal policy, generally, will stand to benefit 
from her leadership. I want to thank you very much for this 
opportunity to testify today and for your kindness in allowing 
me to go forward. And I wish you the best. You will do just 
great.
    Ms. Rao. Thank you, Senator Hatch.
    Senator Hatch. Thanks, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Hatch. We certainly 
appreciate that.
    I do want to recognize the fact that Senator Burr had a 
conflict so he is unable to attend, but he wanted to introduce 
Mr. Long, and I will ask consent to enter his written statement 
and recommendation into the record.\1\ Also that Representative 
Hensarling was going to introduce Mr. Vought but also had a 
conflict and we will enter his written statement and 
recommendation into the record\2\ as well. We also have some 
other letters of recommendation for the nominees, which I would 
also ask consent to enter into the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Burr appears in the Appendix 
on page 105.
    \2\ The prepared statement of Representative Hensarling appears in 
the Appendix on page 171.
---------------------------------------------------------------------------
    With that I will turn to our esteemed Ranking Member, 
Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you very much. Thank you, Mr. 
Chairman, and thank you for the three of you, and it was a 
pleasure to meet all of your families. I am painfully aware 
that public service is a family affair, and so I want to make 
sure that they get the recognition they deserve.
    At today's hearing we will consider three nominees for 
three very different jobs, but they are all three very 
important, to our country and to our government.
    I will start with Mr. Long and the Federal Emergency 
Management Agency. Mr. Long, we are holding this hearing 1 week 
into hurricane season. So far this year we have already had 
several floods in Missouri and surrounding States, as well as 
devastating tornadoes across the country. We have seen an 
uptick in the number of serious disasters in our State, 
especially flooding. I do not think the pace of response to 
natural disasters in this country are going to slow down. I 
think that pace is going to increase because of what is going 
on with our environment.
    You have had a career in emergency management, seeing the 
process from all sides, at FEMA, at a State emergency 
management agency, and consulting for cities, counties, and 
private entities. I think you bring a wealth of experience to 
this responsibility. If you are confirmed I look forward to 
working with you as Missouri continues to recover from flood 
damage, having very recently guided the disaster declaration 
submitted to the Federal Government for the many counties that 
were devastated by the recent floods.
    Mr. Vought, you have been nominated to serve as Deputy 
Director for the Office of Management and Budget. You have been 
at OMB since January as a member of the beachhead team and as a 
senior advisor working on the development of the budget 
proposal.
    Without knowing as much about you as I may in the future, 
that alone raises concerns for me. The budget released by the 
President 2 weeks ago is highly problematic. The core 
assumptions underpinning it are financial fantasy. 
Representative Sanford, a conservative Republican from South 
Carolina, put it kindly at the first hearing following the 
release of the budget, stating that ``it presumes a Goldilocks 
economy and is based on assumptions that the stars perfectly 
align with regard to economic drivers.'' And since the budget 
was released, key members of the Administration have been 
unable to agree on exactly how it accomplishes the growth and 
the revenue that it projects, the very underpinnings of that 
budget.
    On top of that, the budget cuts key programs that 
dramatically impact rural Missouri and rural America. It 
slashes Medicaid, which will hit rural hospitals and limit 
access to nursing care for the elderly poor. It targets cuts to 
programs that have paid for infrastructure development in small 
cities and towns across Missouri. And it cuts the budgets of 
Inspectors General (IG), the front line for identifying and 
eliminating waste, fraud, and abuse in government spending.
    Mr. Vought, the most essential role of a budget officer is 
to get the numbers right. This budget simply does not do that, 
and I speak as a former auditor, and it is not honest with the 
American people about the impacts it will have. I would like to 
hear that you will bring a new level of openness to the budget 
process, but knowing that you were closely involved in the 
drafting of this one, it causes me great concern.
    If anything else, I would hope that there would be a 
reconsideration of some of the fundamental assumptions in the 
budget where numbers seem to have been counted twice, where 
assumptions that are made have no evidentiary backing, and 
where, if you actually believe what is being put on paper, it 
still has devastating impacts to the rural areas in my State.
    If you are confirmed, I will continue to watch OMB closely. 
Particularly, I know my colleague is going to talk about this, 
but we are particularly frustrated that we worked hard on a 
bipartisan basis to get a permitting bill passed that will ease 
permitting regulations for projects across the country. The 
Obama Administration failed to stand that up. So far there has 
been no inclination of the Trump Administration to stand that 
up, and the irony is the President has called a press 
conference for Friday, talking about how they are going to ease 
permitting in public projects. And we are wondering, ``Hello? 
We passed the law. Stand it up. Make it happen.''
    I know, along with my colleague, who was in this Committee, 
who got that bill passed, we will be watching closely to make 
sure that law is implemented quickly and efficiently.
    Ms. Rao, the Office of Information and Regulatory Affairs, 
is an extremely powerful office that tends to stay out of the 
public eye. OIRA has a significant and determinative role in 
the rulemaking process for most Federal agencies. It 
coordinates agency work and ensures that regulations are 
properly developed, is responsible for reviewing regulations to 
ensure they do not put an undue burden on the public, and 
ensures that agencies' rules reflect the priorities and 
policies of the President.
    As we discussed yesterday, I am the first to say I am 
supportive of reforms of regulatory process, to make it work 
better for both consumers and businesses. I am proud of the 
efforts that I have made, along with my colleagues, to clean 
out some of the silly regulations that caused so many problems, 
or to stop other regulations from coming to pass. And I will 
not argue that the process in place today is not anywhere near 
perfect. I know that many Americans, especially small business 
owners and farmers in my State, feel like regulations keep 
getting piled on them and making it harder every year to make a 
living. Community banks fall in that same category.
    That being said, I have deep concerns about this 
Administration's efforts to simply dismantle regulations in 
ways that do not seem to have underlying policy considerations, 
and to disregard the importance of consumer protections and 
public safety. Your academic writings display a healthy 
distrust of regulatory agencies and disregard for the complex 
reasons why regulations can be necessary in a market-based 
economy.
    I hope that if confirmed as the Administrator of OIRA that 
you keep an understanding in mind that public safety and 
consumer protection is very important, as you examine and 
scrutinize regulations that come across your desk.
    Thank you, Mr. Chairman, and I look forward to questioning 
the nominees.
    Chairman Johnson. Thank you, Senator McCaskill. It is the 
tradition of this committee to swear in witnesses, so if you 
will all rise and raise your right hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Long. I do.
    Mr. Vought. I do.
    Ms. Rao. I do.
    Chairman Johnson. Our first nominee is Brock Long. Mr. Long 
has more than 16 years of experience working in emergency 
management at the local, State, and Federal level. Mr. Long is 
currently the Vice President at Hagerty Consulting, an 
emergency management consulting firm in Illinois. From 2008 to 
2011, he was the Director of Alabama's Emergency Management 
Agency. He also gained experience serving as FEMA's Region IV 
Hurricane Planner and Response Team Leader, and Georgia's 
State-wide Hurricane Program Manager and School Safety 
Coordinator. Mr. Long.

    TESTIMONY OF BROCK LONG\1\ TO BE ADMINISTRATOR, FEDERAL 
   EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Long. Chairman Johnson, Ranking Member McCaskill, 
Members of the Committee, it is truly an honor to be nominated 
by the President for this job.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Brock appears in the Appendix on 
page 43.
---------------------------------------------------------------------------
    First I would like to take a minute to recognize my wife, 
Mandi, of 14 years and my boys, Jonah and Isaac, 11 and 7. I do 
not know if sleeping is allowed---- [Laughter.]
    Senator McCaskill. It happens up here sometimes. 
[Laughter.]
    Mr. Long. Thank you. I have almost two decades' worth of 
experience in emergency management, and it is a unique 
experience. It is not just in the public sector. It is also in 
the private sector. I started with Georgia Emergency 
Management. I excelled. I proudly served with FEMA Region IV 
previously. I saw the agency at its best time and at its worst. 
I also served as the Director of Alabama Emergency Management 
Agency, which allowed me to actually visualize and see how 
Federal resources can be maximized at the State level and 
passed down through to our State partners who are dealing with 
disasters.
    I also hold my private sector experience very valuable. For 
the last 6 years I feel like this experience has truly helped 
me to put my fingers on the pulse of emergency management in 
the community, and not just emergency management but the first 
responders which we serve.
    Not only have I been a part of teams to help communities 
design emergency operations plans, test, train, and evaluate 
those plans, I have also helped them to interpret FEMA 
guidance, whether it is on the preparedness side or helping 
them to navigate disaster recovery.
    This agency has one of the most important missions inside 
the Federal Government, and I believe the staff inside that 
agency are the most important assets. I look forward to working 
with them. I think they are very service-oriented individuals, 
regardless of the criticism they may receive. They get up, dust 
themselves off, go to work, and try to truly protect America, 
save lives, and help people in time of their greatest need. If 
confirmed I look forward to working with them very closely, 
leading them, and helping the Nation to achieve resilience to a 
much higher standard than where we currently are.
    With that I will stand by for your questions. Thank you.
    Chairman Johnson. Thank you, Mr. Long.
    Our next nominee is Russell Vought. Mr. Vought is currently 
a senior political appointee at OMB. Prior to joining OMB, he 
was a Vice President at Heritage Action for America, and prior 
to that worked as the Policy Director for the House Republican 
Conference, the Executive Director for the Republican Study 
Committee, was a staffer for several Members of Congress, 
including, most recently, Representative Jeb Hensarling and 
Senator Chuck Hagel. Mr. Vought.

TESTIMONY OF RUSSELL VOUGHT\1\ TO BE DEPUTY DIRECTOR, OFFICE OF 
                     MANAGEMENT AND BUDGET

    Mr. Vought. Thank you, Mr. Chairman. I want to thank you, 
the Ranking Member, the Members of this Committee for the honor 
of appearing before it. I also want to thank and introduce my 
family, who has endured this process with me and the long hours 
that come with serving your country in public roles. My wife, 
Mary, is here, my daughter, Ella, my two sisters, and many 
friends are here in support.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Vought appears in the Appendix on 
page 111.
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    It is a joy to come home to the U.S. Senate. I worked for 
my first 4 years of my career in this distinguished body, 
mostly for Senator Phil Gramm. I spent hours on the Senate 
floor, in committee, and at my desk, learning how the Senate 
works its will, how an institution protects the rights of a 
minority to be heard, and how statesmen ought to debate their 
colleagues to move the vote and shape public opinion. It was 
here that I developed a love for public policy, seeing how it 
could be used to help the people of this country live freer and 
more prosperous lives.
    It is an honor to be nominated to serve as the Deputy 
Director of the Office of Management and Budget. It is a job 
that comes with great responsibility, and I am humbled that 
President Trump and Director Mulvaney asked me to serve. I know 
the quality of the men and women who have previously served in 
this particular role, and I want to contribute to that long 
line of distinguished public service.
    My career has readied me for this moment. I spent over 12 
years working in the House and Senate, with a specific emphasis 
in budget policy. I was the Republican Study Committee's 
(RSC's) Budget Director, writing its budget resolutions and 
advising on budget policy. I went on to be the Executive 
Director of the RSC, and then the Policy Director of the House 
Republican Conference, under then Chairman Mike Pence.
    All of these roles afforded me an opportunity to handle a 
wide range of policy issues and to manage policy development 
processes that ensured a wide variety of viewpoints were heard. 
That is very much the job of the Deputy Director of OMB, to 
build and further a policy process that ensures that the 
President and his advisors receive all of the best analysis so 
that the best decision can be made.
    I also have experienced managing a large organization. I 
spent the last 7 years managing many aspects of Heritage Action 
for America, including staff and 17,000 volunteers across this 
country. Volunteers are, in fact, volunteers. They have their 
own viewpoints and ideas and you do not get very far working 
with them if you do not have an appreciation for them as 
leaders in their own right. That experience has prepared me 
well for managing the men and women at OMB, who are career 
experts in their field and have years of institutional 
knowledge for this new Administration to draw upon.
    As for the job to be done, it is immense. Our country faces 
a $20 trillion national debt. That debt will wreck our country 
if it is not tackled. That burden will fall on my children and 
grandchildren if today's policymakers do not change the current 
path. It will mean a lower standard of living for them and less 
time for the truly important things in life, such as family and 
community. That is not the American way.
    I have spent my entire career caring about taxpayers and 
families. I have fought to save them money and ensure that 
their tax dollars are well spent. I come from a blue-collar 
family. I am the son of an electrician and a public school 
teacher. I know what they went through to balance their budget 
and save for the future. My parents worked really long hours to 
put me through school, but they also worked long hours to pay 
for the high levels of government in their own life.
    My old boss called them the wagon-pullers in our country. 
Others have referred to them as the forgotten men and women. 
They have always been my test for Federal spending. Did a 
particular program, or spending increase, help the nameless 
wagon-pullers across our country, working hard at their job, 
trying to provide for their family and future without the 
luxury of watching C-SPAN at that particular moment to know 
that we might increase their burden at that minute? How would 
they vote--yea or nay? I believe that as a country we have too 
often failed that simple test and it is the reason that we are 
facing a $20 trillion debt.
    If the Senate confirms me, I am ready to take up that work 
again. Thank you for considering my nomination and I look 
forward to answering your questions.
    Chairman Johnson. Thank you, Mr. Vought.
    Our final nominee is Professor Neomi Rao. Professor Rao is 
currently an Associate Professor of Law at George Mason 
University. She founded the school's Center for the Study of 
the Administrative State, and serves as the center's Director. 
From 2005 to 2006, Professor Rao served as Associate Counsel 
and Special Assistant to President Bush, and prior to that was 
an Associate at Clifford Chance LLP in London. Professor Rao 
worked as a Counselor for Nominations and Constitutional Law on 
the Senate Committee on Judiciary, clerking for the Honorable 
Justice Clarence Thomas on the U.S. Supreme Court. Professor 
Rao.

   TESTIMONY OF NEOMI RAO\1\ TO BE ADMINISTRATOR, OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
                             BUDGET

    Ms. Rao. Thank you very much, Chairman Johnson, Ranking 
Member McCaskill, and Members of the Committee. It is an honor 
to appear before you as the President's nominee to be the 
Administrator of the Office of Information and Regulatory 
Affairs. I am grateful to the President and Director Mulvaney 
for their trust and confidence.
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    \1\ The prepared statement of Ms. Rao appears in the Appendix on 
page 173.
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    I would first like to thank Senator Hatch for taking the 
time to be here and for his generous introduction. Working on 
the Judiciary Committee for then Chairman Hatch I learned about 
law-making, and music-making, and living a good life. It means 
a lot for me to have the support of such a distinguished and 
respected member of this body.
    I would also like to thank the Members of the Committee and 
their staff for taking the time to meet with me. I appreciate 
your graciousness and the chance to connect and to discuss 
issues about regulatory policy. For those of you I did not have 
a chance to meet, I hope that we may have an opportunity after 
the hearing. If confirmed, I look forward to working closely 
with Members of the Committee on issues relating to regulatory 
and information policy.
    If you will indulge me, I will take a moment to recognize 
and thank my family. I am here today with my husband, Alan 
Lefkowitz, and my two children, Isabella and Ezra. Alan's 
unwavering support has made it possible for me to even consider 
the demands of public service.
    My father, Dr. Jehangir Rao, is also here, and has believed 
in me at every stage of my life. I remember also my mother, Dr. 
Zerin Rao, who died too young of cancer and I wish she could 
have been here to share this day.
    Leaving India in January 1972, my parents arrived in 
Detroit in the middle of a snowstorm, without winter jackets, 
but with their medical degrees, $16, and the optimism of the 
recently married. They always imparted by example the 
importance of integrity, perseverance, kindness, and a 
commitment to service.
    I would also like to share some information about my 
background. For the past 10 years I have been a law professor 
at the Antonin Scalia Law School at George Mason University, 
where I have taught constitutional law and legislation and 
statutory interpretation. My scholarship has focused on the 
framework of constitutional accountability for administrative 
agencies. About 2 years ago I founded the Center for the Study 
of the Administrative State. The center commissions academic 
research and hosts public policy conferences that bring 
together scholars, practitioners, and government officials to 
analyze and debate difficult questions of administrative law.
    Prior to my academic career, I worked in the Office of the 
White House Counsel, where I oversaw the legal work of a number 
of agencies and helped to coordinate interagency discussions of 
law and policy. I have also served on the Senate Judiciary 
Committee as a Counsel for Nominations and Constitutional Law.
    My other experience includes working for several years at a 
law firm in London and clerking for Justice Clarence Thomas of 
the U.S. Supreme Court, and Judge J. Harvie Wilkinson of the 
U.S. Court of Appeals for the Fourth Circuit.
    My academic background and practical experience in all 
three branches of the Federal Government have helped me to 
understand the regulatory process and the respective roles of 
Congress, the President, and the Courts in Administration.
    Since Congress established OIRA and the Paperwork Reduction 
Act of 1980, OIRA has operated with a consistent mission to 
improve the quality of decisionmaking in administrative 
agencies through regulatory review and the coordination of 
information policy. OIRA plays a vital role within the 
Executive Branch to ensure that administrative agencies follow 
the law, base their decisions on the best possible economic and 
technical analysis, and fulfill Presidential priorities.
    Within the requirements set by Congress, OIRA works with an 
overarching goal of creating the greatest benefits for the 
American people while minimizing regulatory burdens. Reading 
through OIRA's statutory authority, as well as Executive Orders 
and OBM guidance, I have been struck by the consistency of the 
principles guiding the work of the office across 
Administrations. Perhaps this is one reason why so many 
talented professionals work at OIRA and often stay for many 
years, serving Presidents of different parties.
    I am humbled to be nominated for this role. If confirmed as 
Administrator, I would work to ensure the continuity of OIRA's 
principles, updating and refining when necessary, but 
maintaining the integrity of the process that has developed. I 
would also look forward to working with Members of this 
Committee and other Members of Congress on legislation relating 
to regulatory reform and other issues within OIRA's purview.
    Thank you for your consideration. I look forward to 
answering your questions.
    Chairman Johnson. Thank you, Professor Rao. There are three 
questions the Committee asks every nominee, for the record. I 
will read each question and then ask for a verbal response from 
each of you.
    Is there anything you are aware of, in your background, 
that might present a conflict of interest for the duties of the 
offices to which you have been nominated. Mr. Long.
    Mr. Long. No.
    Chairman Johnson. Mr. Vought.
    Mr. Vought. No.
    Chairman Johnson. Professor Rao.
    Ms. Rao. No.
    Chairman Johnson. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated? Mr. Long.
    Mr. Long. No.
    Chairman Johnson. Mr. Vought.
    Mr. Vought. No.
    Chairman Johnson. Professor Rao.
    Ms. Rao. No.
    Chairman Johnson. Do you agree, without reservation, to 
comply with any requests or summons to appear and testify 
before any duly constituted committee of Congress if you are 
confirmed? Mr. Long.
    Mr. Long. I do.
    Chairman Johnson. Mr. Vought.
    Mr. Vought. I do.
    Chairman Johnson. Professor Rao.
    Ms. Rao. Yes.
    Chairman Johnson. Good. I appreciate it. I appreciate your 
anxiousness to answer the question. [Laughter.]
    Let me start with you, Mr. Long. Last Congress the 
Committee passed legislation known as the Integrated Public 
Alert and Warning System (IPAWS), that would authorize and 
enhance the public alert warning system. The key parts of the 
law have not been implemented and deadlines have been missed. 
This includes the requirement to create a mandatory training 
program on how to use the system and to form a subcommittee 
comprised of Federal, State, and local agencies to consider 
improvements to the system.
    This responsibility falls under FEMA. Will you commit to 
the Committee that if confirmed you will ensure that these 
provisions are fully implemented?
    Mr. Long. Thank you, Chairman Johnson. I am very familiar 
with the IPAWS program and I believe that making sure that we 
have clear lines of communication and multiple ways of 
communicating and redundancy is the key to getting through 
response in disasters. I have also, with my previous experience 
as the State Director of Alabama Emergency Management worked 
through a couple of pilot programs with the IPAWS program. It 
is an incredibly important program. Obviously, at this point, 
respecting the nomination process, if confirmed I would be 
happy to evaluate where we are, but I am not familiar at this 
time about the deadlines that we are missing.
    Chairman Johnson. OK. Well, one of the reasons I am 
bringing it up is I was with Chairman Pai in Wisconsin on 
Monday with broadcasters and they brought this up. Obviously 
they are very supportive of IPAWS. They want to make sure it 
gets implemented. Again, I realize you are the nominee but I 
just want that commitment that you will follow the law and 
implement these procedures.
    Professor Rao, in President Trump's Executive Order 
regarding the ``one-in, two-out'' rule--this Committee has held 
two hearings on it, one in conjunction with the Budget 
Committee. Certainly what I have seen coming from the private 
sector, and talking about that regulatory burden, everything in 
Washington that you see is basically additive. You have 
regulators; they regulate. You have legislators; they 
legislate. Everything is additive. The problem we have is layer 
upon layer of rules, regulation, law--we spend billions with 
procurement procedures so we do not waste a buck, and it just 
does not work, and we were unable to update our computer 
systems.
    Can you speak a little bit in terms of how you would view 
the ``one-in, two-out'' rule and how that would be implemented?
    Ms. Rao. Thank you, Senator. I think the ``one-in, two-
out'' is an important step for considering how to reduce the 
overall regulatory burden that you are speaking of, and I think 
it can work. OMB has issued guidance on this matter, and the 
way I think it will work, in practice, is that agencies will 
identify regulations to eliminate, and those regulations might 
be ineffective ones, or excessively burdensome, and those 
regulations will have to meet a cost-benefit analysis for 
deregulation before they are going to impose any new regulatory 
burdens.
    Chairman Johnson. This would actually be a subtractive 
process. I do not know how many regulations I see on the books 
that are just, basically gathering dust but doing real harm to 
our economy. I would think every Senator on the dais here, at 
almost every meeting we take with constituents, the number one 
concern on their minds is, one regulation after the one that is 
putting them out of business.
    We had the Chancellor of the University of Wisconsin-
Madison come in and testify. They issued a study. Forty-two 
percent of researcher time at research universities is spent 
complying with Federal regulations, the paperwork, which is 
just an unbelievable burden. But again, I really encourage you 
to take a look at that seriously and utilize that executive 
authority to remove two regulations for every new one, and 
hopefully the new one overwrites some of the bad ones as well.
    Mr. Vought, I appreciated, in your testimony, how much you 
concentrated on the $20 trillion in debt. As I mentioned in my 
opening comments, the projected deficit over the next 30 years 
is $129 trillion. You spoke of your responsibility primarily 
providing the analysis for good policymaking.
    I have been here 6 years, going into year 7 now. It is 
depressing how very few people are focusing on and talking 
about that $20 trillion debt burden and the projected deficit. 
We budget for now less than 30 percent of what the Federal 
Government spends. Seventy percent is completely out of 
control.
    Can you just speak to, how you intend to convey that to the 
White House, to the Administration, so we start getting serious 
about not mortgaging our children's future?
    Mr. Vought. Thank you, Senator. I think this budget is a 
great example of this Administration's commitment to dealing 
with deficits and debt over the next 10 years and into the 
future. This budget has more reductions in entitlement savings, 
which are the type of savings that you mentioned in your 
question, than any budget that has ever been proposed by a 
President, from a nominal standpoint. It has more reductions in 
the rate of growth to entitlement spending, as a percentage of 
the base, than any President's budget since President Reagan's.
    I think it shows that this Administration is very serious 
about tackling the debt and dealing with the deficits that are 
projected to rise greatly over the next 10 years, if nothing is 
done. As an Administration, the fact that it balances--we have 
begun to get back to having a conversation, as a country, about 
what it takes to balance our books, and I think that is another 
aspect of this as well.
    I have noticed, being a participant in compiling some of 
the options for the director to decide upon presenting to the 
President, that the whole focus on balance leads to a 
commitment to finding savings and reductions wherever you can, 
and then finding a way to justify them and to be able to think 
through what are the tradeoffs with a given policy proposal. I 
think that is healthy and I think that is one of the ways that 
we begin to tackle the debt.
    Chairman Johnson. As my closing thought to all of you, what 
we are trying to do, this Committee, is through a hearing 
process lay out realities, is the first step in this problem-
solving process, which starts with gathering information, 
defining the problem, do a root cause analysis, things like 
strengths, weaknesses, opportunities and threats (SWOT) 
analysis, that type of things. Lay out that reality. Based on 
that reality, set achievable goals, and once you have done all 
that work, then you start working on the regulations, the 
rules, the legislation.
    If confirmed, in your roles, I really want you to utilize 
this Committee to help lay out those realities that you are 
seeing within your agencies. I want to be a real partner with 
you here, and I think all of us do. We have enormous 
challenges, but it starts with that information, and laying out 
those realities.
    With that I will turn it over to Senator McCaskill.
    Senator McCaskill. Thank you, Mr. Chairman. My background 
is as a prosecutor and an auditor, and so when I came to the 
Senate I began doing what has been the meat and potatoes of my 
work here, which is oversight. I was really moved, frankly, Mr. 
Vought, in your opening statement, that you expressed such 
affection for the Senate. It was appreciated that you talked 
about what makes the Senate so important in our constitutional 
framework, which is the way the Senate protects the rights of a 
minority to be heard.
    So you can imagine, if I have done oversight from day one--
and, by the way, talking about saving money, billions and 
billions of dollars in wartime contracting, that we worked on 
and accomplished, in terms of changing the way we do 
procurement within a contingency operation in our military--I 
can give you lists and lists of examples of where we have 
ferreted out billions of dollars being poured down rat holes in 
the Federal Government. You can imagine my concern when I hear 
that the White House is telling executive agencies to not 
respond to ranking members' requests for information.
    We ask that question of all of you, and we ask, do you 
agree, without reservation, to reply to any reasonable request 
for information from a ranking member of a duly constituted 
committee of Congress? Mr. Long, you said yes?
    Mr. Long. Yes.
    Senator McCaskill. Unequivocally. Thank you for that 
answer.
    Mr. Vought, you said ``subject to the discretion of the 
director and advice of legal counsel.'' As a lawyer, do you 
agree with legal counsel's decision that just because I am a 
Democrat I am not entitled to information that allows me to do 
oversight as a member of the U.S. Senate, and as the Ranking 
Member of the Government Oversight Committee?
    Mr. Vought. Thank you, Senator. I have not actually read 
Office of Legal Counsel (OLC's) opinion on that, but as an 
Administration, it is controlling right now, in terms of the 
guidance that has been given out as to how the agency should 
respond to oversight requests and having them go through the 
Chairman, and to have the oversight process flow that 
direction.
    Senator McCaskill. Are you aware, in the history of the 
Senate, that there has been an Administration that has said, 
``We will not provide information to the Ranking Member of the 
Committee on Government Oversight''? Are you aware of that ever 
occurring before? Did you ever work for a Senator that was in 
the minority?
    Mr. Vought. I did work for a Senator in the minority.
    Senator McCaskill. And do you think that Senator would have 
taken that sitting down, if an Administration said, ``I am 
sorry. You cannot request information from the government to 
find waste, fraud, and abuse if you are a Democrat, or if you 
are in the minority? ''
    Mr. Vought. Senator, I look forward to working with you in 
a transparent manner. I am looking forward to working with you 
in ferreting out waste, fraud, and abuse. In terms of formal 
communications that are sent to the Administration, I am merely 
reflecting the Administration's policy in regard to the OLC 
opinion.
    Senator McCaskill. Well, we have had one nominee say yes, 
unequivocally. I have had the Secretary of Homeland Security 
say yes, on the record, unequivocally, in this Committee 
hearing room, and to me personally, and his rank, frankly, is 
higher than yours. So if you cannot give me a straight answer, 
do you think--let me ask you this. Do you think it is right 
that an Administration would say that the Ranking Member of the 
Oversight Committee in the U.S. Senate is not entitled to 
oversight information? Do you think that is a correct decision?
    Mr. Vought. Senator, I think the rule of law is important 
and if OLC has----
    Senator McCaskill. So you think it is the rule of law.
    Mr. Vought. OLC has an opinion, Senator, in which it has 
put forth a position for this Administration as it pertains to 
responding to oversight requests, and that is merely what I am 
responding to.
    Senator McCaskill. OK. Well, we have a huge problem, if you 
cannot even say out loud--even though the Secretary of Homeland 
Security has unequivocally said, ``Absolutely, we will get you 
information,'' and does so on a regular basis. We have a huge 
problem if you cannot even say whether you think it is right or 
wrong. You cannot say whether you think it is right or wrong?
    Mr. Vought. Senator, again, I have said I am looking 
forward to, if the Senate confirms me, working with this 
Committee in an open and transparent way. Again, I am 
reflecting the fact that this Administration is under an OLC 
opinion that has instructed the agencies on how best to engage 
with formal oversight requests from the various committees.
    Senator McCaskill. Well, the people that elected me did not 
send me here to take that answer lying down, and I have to tell 
you, I will punch above my weight on this. If this 
Administration thinks they are going to withhold important 
government information from the Ranking Member of the Oversight 
Committee of government, because they want to make sure we 
never find out anything--by the way, I did oversight in the 
Bush Administration and I think the Chairman will back me up; I 
know Senator Portman will back me up--I did aggressive 
oversight of the Obama Administration. The notion that we are 
going to our partisan corners on oversight is disgusting.
    I am disappointed with your answer, and let me ask you, Ms. 
Rao, how do you feel about providing information to the Ranking 
Member of the Oversight Committee of the U.S. Senate?
    Ms. Rao. Senator McCaskill, if confirmed I would do my best 
to provide information. The Office of Legal Counsel memorandum 
that was spoken about I think speaks to whether there is a 
requirement to do that but it leaves discretion within 
agencies, and I am committed to working with this Committee on 
their requests.
    Senator McCaskill. I would love your analysis, as somebody 
who has spent a great deal of time with the law, as to the 
underlying legal basis for that opinion. I think it is hogwash. 
I have looked at it. It is just trying to shut off information 
to people who want to find problems. Welcome to the big 
leagues, administration. This is what happens. You get 
oversight. It is the function of the Congress to do oversight.
    I am hopeful that--so far I have not--we have had a few 
problems, but not to the extent many of my colleagues have on 
other committees, and it would be really bold for this 
Administration to cutoff information to this Committee, no 
matter whether it is a Republican or a Democrat.
    I know I am out of time. I did not expect that to take as 
long as it did, but I will come back to ask you about FEMA and 
the budget cuts and then some more questions for you, Mr. 
Vought, about the budget.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Portman.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Thank you, Mr. Chairman. I appreciate the 
nominees' willingness to serve and distinguished backgrounds, 
all three of you.
    Just a brief comment. I have not looked at the OLC legal 
opinion and I probably should not speak, but I will. As 
Associate Counsel in the first Bush Administration and then as 
OMB Director in the second one, it was often frustrating 
dealing with Congress, but I felt it was my responsibility to 
provide information. The branch that you are now before has the 
opportunity to confirm you or deny your confirmation, and that 
is because that is the way the founders set it up. They also 
set it up so that we would have the opportunity to do 
oversight, and the elected representatives, each of us 
representing, in my case over 11 million people, expect us to 
do that oversight.
    I do hope that the information will be forthcoming to this 
Committee, and I know the Chairman feels the same way, that, 
this is our responsibility.
    I have so many questions, but let me just start, if I 
could, with you, Mr. Vought. Again, you are stepping up to take 
on a very tough job. I relied heavily on the deputy at OMB when 
I was there. As you know, there is a deputy for management and 
also one more for the budget functions, and you have a lot of 
interaction with OIRA, should you be confirmed, so it is good 
you guys are sitting close together. That may not be true in a 
couple of years, after you have some clashes. No, just kidding. 
I am sure you will get along great.
    But let me focus on one thing that was mentioned earlier, 
and that is infrastructure. Today the President is in my 
hometown of Cincinnati talking about infrastructure. I am 
delighted he is doing that. He is going to talk about locks and 
dams on the Ohio River and he is going to talk, I hope, about 
broader infrastructure questions. On Friday he is supposed to 
be talking about permitting.
    I know you are not there yet, and when you were at Heritage 
Action you guys actually opposed the highway bill that passed 
the Senate. I hope you did not oppose the permitting reform. I 
do not think you did. I think, in fact, you would have been 
supportive of that had you been asked to opine on that 
separately.
    But Title 41 of the FAST Act has the permitting reform that 
was talked about earlier, and it is absolutely needed. We have 
projects, on the Ohio River, as an example, including some of 
our dams that have taken 6, 7, 8, 9, 10 years, and capital is 
not that patient anymore. It goes somewhere else, and it does 
not just go to other State, it goes to another country.
    Our reform effort, and Senator McCaskill and I did this 
together on a bipartisan basis, for 5 years worked on it. We 
had the Chamber of Commerce, the manufacturers, and others with 
us. We also had the AFL-CIO Building Trades Council with us, 
because they all wanted jobs, and they saw what was happening. 
We took the statute of limitations, for instance, from 6 years 
down to 2 years, after a National Environmental Policy Act 
(NEPA) review. Our original bill, actually, was even shorter 
than that, but that is a huge change right there. We have this 
dashboard now where citizens are able to get transparency to be 
able to see what the status is of a project, and it puts one 
agency in charge, which is really important because the right 
hand often does not know what the left hand is doing. We have 
energy projects in Ohio where 35 different permits are 
sometimes required, sometimes sequentially. So the effort is 
just to make it more efficient.
    We set up this thing called the Federal Permitting 
Improvement Steering Council (FPISC). It sits at OMB, and I 
fought hard to get it to OMB, and not to Council on 
Environmental Quality (CEQ), where some other folks wanted it, 
because we believed OMB had some leverage. I think Senator 
McCaskill will tell you--we went back and forth on this quite a 
bit and she took some heat on it, but we wanted to put it 
somewhere where you had part of the government, OMB, that 
actually has some leverage over the other agencies and 
departments, partly because of the budget function that you 
will be very involved with.
    Are you, one, aware of this issue of the permitting reform, 
the need for it, and the legislation that we have already 
passed, and are you aware of the fact that this FPISC 
organization has not been stood up, that we do not have an 
executive director. There is an acting person there now. Do you 
have thoughts on why that is and why we cannot get this going?
    Mr. Vought. Thank you, Senator. I am aware of the 
Permitting Council. I am aware it is a priority for the 
Administration. Funding was included in the President's budget 
for it, specifically in regard to the impact that it has in 
order to leverage the types of reforms and spending that we 
need, as an Administration, to be able to get $1 trillion of 
investment into infrastructure spending.
    I cannot speak to why there has been a delay in setting up 
the council, but from a funding aspect, it has been a priority 
of the Administration.
    Senator Portman. Well, I am glad to hear you say that, and 
I hope you personally will roll up your sleeves and get 
involved in this, because I do think it is incredibly 
important, as we are trying to figure out how to spend tax 
dollars more efficiently. The dollar is going to be much more 
valuable if it is in the context of a permitting reform effort, 
where we do not have to go through these long delays and 
additional costs.
    Are you looking for any additional authorities on this, do 
you know? Any other thing we need to do, in Congress, to be 
helpful?
    Mr. Vought. It is not something that I have inquired on 
yet, because I have not been confirmed, but if confirmed, 
Senator, it would be something that I would want to inquire 
upon and to seek advice within the OMB as to ways that we can 
improve the statute.
    Senator Portman. OK. I appreciate that, and what I am 
asking for today is your personal commitment that should you be 
confirmed that you will be supportive of getting FPISC set up 
and using the authorities we have already given you, on a 
bipartisan basis, which is rare around here, to actually make a 
difference, and not just talk about it but actually implement 
it.
    Mr. Vought. You have that, Senator.
    Senator Portman. I appreciate that.
    Ms. Rao, thank you very much again for your willingness to 
serve. Wow, what a background. You have been involved in 
regulatory affairs for a long time. Senator Heitkamp and I have 
legislation that Senator Hatch talked about--he is one of the 
original co-sponsors--called the Regulatory Accountability Act. 
I assume you are aware of the Regulatory Accountability Act. 
Have you followed that?
    Ms. Rao. Yes, I have.
    Senator Portman. I know that there is a lot of interest in 
trying to find some way to get the independent agencies into a 
more systematic cost-benefit analysis, like the Executive 
Branch agencies. Do you support what we are trying to do there, 
to tell the independent agencies they, too, have to go through 
a cost-benefit analysis?
    Ms. Rao. Thank you, Senator. I think that the question 
about the independent agencies is a very important one, and has 
been considered over the years, pretty much since the inception 
of OIRA, should we be including the independent agencies. I 
think that, in principle, it makes a lot of sense to have the 
independent agencies follow the same cost-benefit analysis as 
other agencies, and that was a position reflected in the Obama 
Administration, and it is a position, that is in the Regulatory 
Accountability Act as well.
    Senator Portman. With regard to lookback, Senator Heitkamp 
improved the legislation by putting a retrospective review in, 
requiring agencies to review the most expensive regulations 
they already have on the books at least once every 10 years. 
How do you feel about that?
    Ms. Rao. Senator, I think retrospective review is a really 
important issue, because at the outset, when a regulation is 
proposed, even with the best analysis there is only a 
prediction about costs and benefits. Being able to look back to 
see how a regulation has actually worked, what its actual 
effects were, its costs and benefits, is very important, 
especially to reducing the regulatory burden of ineffective or 
out-of-date regulations.
    Senator Portman. My time is up. I have already stolen 
Senator Heitkamp's question, so she is already mad at me. But 
my question to you--would you commit to working with us, on a 
bipartisan basis, to try to get this Regulatory Accountability 
Act though this process? This was marked-up by this Committee, 
Chairman, what, 2 weeks ago, with your support and help, and 
thank you. It is common-sense stuff, and we need help from the 
Administration to ensure that we can get this done.
    Do you make that commitment today?
    Ms. Rao. Senator, I would be happy to commit to working 
with the Committee on your regulatory reform proposals.
    Senator Portman. Thank you, Mr. Chairman.
    Chairman Johnson. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman. Mr. Vought, I am 
going to give you a second chance here, and I think we all kind 
of sat stunned because we certainly expected a different answer 
to the question that Senator McCaskill asked you. You heard 
Professor Rao's response to the same question, saying, in her 
opinion, that legal opinion gave her discretion and that she 
was going to use that discretion to be cooperative with this 
Committee. Do you want to restate your position? Is your 
position you are never going to deal with the minority and that 
that legal opinion prevents you from dealing with the minority?
    Mr. Vought. Of course not, Senator. That is not my position 
at all. I look forward to working with this Committee if 
confirmed in an open and transparent way. Senator McCaskill was 
asking me specifically with regard to response to formal 
oversight letters, and as it pertained to the OLC memorandum, 
and that is what I was referring to.
    Senator Heitkamp. Right. Let us get to that. So you are 
saying that as it relates to formal requests from the minority 
party, from this Committee, that you have no intention to 
responding to those requests?
    Mr. Vought. Senator, I am going to look to the direction of 
our legal team and the director in how we respond to various 
oversight levels, and one of the things that we will be looking 
to is the OLC opinion.
    Senator Heitkamp. My question is, do you think that 
yesterday, when Secretary Kelly gave us an unequivocal answer 
that he intends to cooperate with the minority party, respond 
to any requests, that he is violating that legal opinion and 
doing something illegal in making that commitment to us?
    Mr. Vought. Senator, I do not know what Secretary Kelly 
said. He is running his department and agency----
    Senator Heitkamp [continuing]. Under the same legal 
guidelines from the Office of Legal Council. Correct? That 
opinion applies equally to you and Secretary Kelly.
    Mr. Vought. Correct.
    Senator Heitkamp. Is that correct?
    Mr. Vought. Yes, ma'am.
    Senator Heitkamp. Then why is your distinction different 
than Secretary Kelly's?
    Mr. Vought. We have been given direction from OLC, in terms 
of how we should deal with formal oversight requests.
    Senator Heitkamp. The opinion itself, as outlined by 
Professor Rao, gives you discretion. We are asking you to make 
the commitment today that in your discretion you will deal 
equally with the minority and majority party of this Committee.
    Mr. Vought. Senator, I would be willing to commit to 
working equally in dealing with you to cooperate in oversight 
as it pertains to certain formal oversight letters. If 
confirmed, in my responsibilities as the deputy director, I am 
going to seek our legal team's advice and the advice from the 
director.
    Senator Heitkamp. I think anyone, on either side of the 
aisle--because I have been both in a situation where I have 
served where the President was of my political party. Now I am 
serving where the President is--I think what you are saying is 
absolutely outrageous. I just have to tell you that it is very 
troubling, and it should be troubling not just for the minority 
party today, but that party that could be minority party in 2 
years, 4 years, or 6 years. I am very troubled by your response 
to this line of questioning, and find it almost disqualifying 
in supporting your nomination, quite honestly.
    Now I was going to ask you a series of questions on cost-
benefit analysis. I will save those for the Office of 
Management and Budget. But I do not think that you can come 
here and say you respect the Senate and take the position that 
you have just taken as a matter of law, when other people, as 
Senator McCaskill said, who outrank you, have taken a different 
position.
    I am going to turn to Professor Rao. We had a very 
enjoyable meeting and I have to tell you, I cannot see your 
families but I certainly could see your family on this side. 
The pride and love that they have for you is so overwhelming. 
As somebody who lost her father at a very young age, I want you 
to know I am pretty sure your mom knows what a great success 
and what a great pride she has in you also.
    I am going to run through just a series of questions, 
because I do not have a lot of time, on cost-benefit analysis. 
As Senator Portman has said, we want to continue to work on 
this effort. As I have told you in my office, I believe that 
the gimmicks of ``two-in, one-out'' are not going to be 
particularly successful. We need to be more surgical. I also 
have told you that I am very concerned about ongoing regulation 
that has to exist as a result of outdated law, that we really 
expect you to come to us with a list of statutory changes that 
need to be made to eliminate burdensome and unnecessary 
regulation. We have to be in this together.
    In your personal opinion, do you believe that cost-benefit 
analysis is appropriate for deregulation actions?
    Ms. Rao. Yes, Senator Heitkamp, I do.
    Senator Heitkamp. Thank you. Do you believe that cost-
benefit analysis for deregulation actions deserve the same 
level of scrutiny as if you were enacting a major legislation?
    Ms. Rao. Yes, Senator, and that has been the position that 
OMB has taken in its guidance on the new Executive Orders.
    Senator Heitkamp. Correct. Do you believe that indirect 
costs and benefits should be taken into consideration when 
conducting cost-benefit analysis?
    Ms. Rao. I do, and that is, again, part of the long-
standing practice of OIRA and the agencies, to take those 
effects into account.
    Senator Heitkamp. Do you believe that there is a role for 
qualitative and non-monetized benefits in cost-benefit 
analysis?
    Ms. Rao. Yes, I do believe they can play a role.
    Senator Heitkamp. Thank you. Do you believe in the 
principles set forth in Executive Order 12866 should be 
reaffirmed by the Administration?
    Ms. Rao. Yes. I think that those principles are very solid 
and have, in fact, been reaffirmed by this Administration.
    Senator Heitkamp. The same thing with Circular A4, given 
that the circular is only guidance and not technically the law 
of the land, if tasked with drafting a new guidance to instruct 
agencies on how to conduct cost-benefit analysis. Would you 
reaffirm the same principles that are in Circular A4?
    Ms. Rao. Again, I think those principles are very solid 
and, may require some updating, but I think the basic core of 
that is solid.
    Senator Heitkamp. I have just one more question, and this 
goes to the very important work. There is no one on this dais 
who does not rely--we have great bipartisan interaction with 
former heads of OIRA. You are really stepping into a critically 
important position. I have long maintained that you are 
understaffed. Can you tell me what you are going to do to try 
and either manage this important job with the staff that you 
have or advocate for a few more folks who I think could 
actually save you money in the long run? This is the push-pull 
of investments.
    Ms. Rao. Thank you, Senator. I think the President's budget 
does call for an increase in resources in OIRA.
    Senator Heitkamp. Do you think it is adequate?
    Ms. Rao. I am not sure as to the precise resource needs. I 
understand that former administrators believed that the office 
could use some more support, and so I commit to looking into 
that.
    Senator Heitkamp. We commit to helping you. Senator 
Lankford is not here but we certainly commit to helping you in 
the future. And just so you know, we expect that we are going 
to see you a lot in our Subcommittee. We are very excited about 
the expertise that you bring to this job and excited about 
getting to work with you going forward. Thank you so much for 
agreeing to accept this position.
    I have a lot of questions for FEMA. I will reserve those, 
maybe if we get to a second round. Thank you.
    Chairman Johnson. Senator Hassan.

              OPENING STATEMENT OF SENATOR HASSAN

    Senator Hassan. Thank you, Mr. Chairman, and thank you to 
all the nominees for being here, and also a special thank-you 
to the families who are here, because it is a family affair to 
serve and we are very grateful.
    Just at the outset, Mr. Vought, I will add my concern about 
your answer on the OLC's guidance. We were elected to represent 
Republicans and Democrats, and it is my view that the 
Administration serves members of both parties in their 
oversight role, and I am hoping that you will rethink your 
response.
    I wanted to spend some time on issues concerning FEMA, and, 
Mr. Long, it was so nice to meet with you yesterday. I want to 
talk a little bit about pre-disaster mitigation, something we 
touched on yesterday. I think we can all agree that the 
frequency and intensity of natural disasters are on the rise. 
If we are going to blunt the effects of these disasters we are 
going to have to make effective and sustained investments in 
our infrastructure prior to the disasters happening.
    As Governor, I often found myself dealing with the same 
flooded areas in New Hampshire, year after year. We would clean 
it up and then it would flood again. Federal support came only 
in the aftermath of these crises, leaving it up to our State to 
address the front-end investments in infrastructure that would 
have helped to mitigate the crisis in the first place. 
Consequently, we took steps to launch a hazard mitigation 
initiative in New Hampshire that would help us to inventory our 
most at-risk locations during natural disasters and help us to 
develop a way to target our limited resources more effectively.
    From my experience, our Federal programs may not be 
properly incentivizing our States to make the necessary 
investments in our infrastructure that will help to mitigate 
the long-term consequences after these disasters. I should note 
that one of the key FEMA programs that actually does encourage 
this kind of investment, the Pre-Disaster Mitigation Grant 
Program, was cut in half in the President's Fiscal Year (FY) 
2018 budget.
    Mr. Long, can you talk to me about your approach to pre-
disaster mitigation investments and whether you support a 
Federal role for incentivizing these kinds of investments?
    Mr. Long. Thank you, Senator. I believe that mitigation is 
the foundation of emergency management, or let us just say the 
cornerstone of emergency management. If we ultimately want to 
reduce costs in the future for disasters we have to do more 
mitigation. I believe that mitigation is a community effort. It 
cannot just be upon the Federal Government to supply funding to 
our State, local, and tribal partners. We have to all take 
action as the whole community.
    From my own experience as a former Director of Alabama 
Emergency Management Agency, I was director of a State that 
continuously seemed to be hit with disasters, and we had 
several disaster declaration. For us, mitigation funding came 
in the form of post-disaster, 404, 406 funding as we call it in 
the field. We had much more post-disaster mitigation funding, 
which seems regressive to me, than really we wanted on the pre-
disaster side of the house. We focused mostly on the post-
disaster funding to put that to work, according to the 
mitigation plans that we have designed.
    If confirmed, I would like to work with the Committee to 
evaluate all of the mitigation funding, not just pre-disaster 
mitigation funding but how do we possibly budgetize, all of it, 
up front, to do more work to reduce disaster costs, rather than 
basically have to get hit to be accessing the mitigation 
funding that is there.
    Senator Hassan. Great. Thank you. We talked a little bit 
yesterday, as well, about employee morale at FEMA. In 2016, the 
Partnership for Public Service released the results of its 
annual Best Places To Work In the Federal Government survey, 
and FEMA came in 284th out of 305 Federal agencies. We talked a 
little bit about it, but could you just briefly touch on what 
your thoughts are about how to improve the morale there, 
because, obviously, the employees at FEMA do such critical work 
for our country and we want them to have high morale.
    Mr. Long. Thank you, Senator. Yes, they do.
    First of all, with my own experience within FEMA, 
previously working for Region IV and reflecting back on that 
experience, I believe that we have to be able to immediately, 
upon on boarding and hiring with staff, to make sure that they 
fully understand the mission of the agency but where their job 
specifically fits in. They also need to be able to see a career 
ladder, and I also believe that the agency, over the past 8 
years, has done a great job of not only providing a blue sky 
day job when they are not responding but also the response job. 
I believe that the response piece is very important to making 
people feel a part of the overall mission.
    If confirmed, my type of leadership is very diplomatic. I 
like to get out, be out with the staff that is there, to 
understand how we can open up lines of communication from all 
parts of the agency to make sure that, if confirmed, my team 
would be able to understand how to improve the agency from all 
parts of it.
    Senator Hassan. OK. Thank you very much. And Professor Rao, 
again, I enjoyed our conversation yesterday very much and I 
appreciated you taking the time to meet with me, and I 
appreciated very much your answers to Senator Heitkamp's line 
of questioning, and particularly your affirmation of Executive 
Order 12866 as good precedent for OIRA.
    I want to turn, in the little bit of time I have left, to 
something we talked about yesterday, which was, we spoke about 
the importance of allowing agencies to be agile and more 
quickly if the needs arise, and that is one of the great 
challenges as we talk about regulation, and when we look at 
bills that, in some ways, perhaps could increase transparency 
but could also slow things down. An example I think of is in 
terms of the ongoing opioid epidemic. We need to be sure the 
public health and safety rules can keep up, for instance, with 
the entry of new synthetic drugs into the illicit marketplace, 
and ensure that old rules are not holding us back when it comes 
to responding effectively to other public health challenges.
    If confirmed as OIRA Administrator, how will you ensure 
that agencies are able to move quickly to change or implement 
needed rules as the need arises?
    Ms. Rao. Thank you, Senator. Yes, I think one of the ways 
that OIRA can do that is to provide its review process in an 
expeditious manner, so when agencies bring their rules to OIRA 
to make sure that we are moving through them quickly and 
appropriately, based on the need for the regulation.
    Senator Hassan. Thank you very much, and again, thank you 
all for being here today.
    Chairman Johnson. Senator Peters.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Thank you, Mr. Chairman, and Ranking Member 
McCaskill for bringing the meeting together, and to each of 
you, it is good to have an opportunity to ask you some 
questions, and I am happy to say that if you are confirmed by 
the Senate I look forward to working with all three of you on 
some very important issues that you will be confronted with.
    But I serve as the Ranking Member on the Subcommittee on 
Federal Spending Oversight and Emergency Management, so, Mr. 
Long, I am going to start with you for my first question, 
because we will probably be interacting more than with the 
other two. I am sure you are well aware of the ongoing crisis 
that we are experiencing in my State, in Flint, a water crisis 
of really unimaginable proportions, as a result of some very 
bad decisions made by the State of Michigan that led to lead 
contamination throughout the city, and which children are going 
to be suffering from for the rest of their lives.
    While I was pleased that Michigan received an emergency 
declaration, I was very disappointed that they did not receive 
a major disaster declaration from the President, because the 
disaster was ``not a result of a natural catastrophe nor caused 
by fire, flood, or explosion.'' But certainly by any other 
definition, this was major disaster, looking into the eyes of a 
child who is suffering from lead poisoning and will be dealing 
with that their whole life. That child does not care whether or 
not it was man-made or natural. It is a disaster. The parents 
and grandparents of those children do not care what caused it. 
It is still a disaster.
    I know you note in your written statement FEMA is charged 
with helping communities recover in times of their greatest 
need and major disaster declaration could have been critical in 
certainly getting more timely help for the people of Flint.
    I was just curious, what is your view on allowing the 
President to issue a major disaster declaration for man-made 
disasters not caused by fire, flood, or explosion? I bring this 
up because we have actually proposed some legislation that I 
have co-sponsored in the past, dealing with lead in drinking 
water, and that is an extraordinary situation and we may find 
other communities across the country that are going to be faced 
with this type of crisis as well, going forward, which will 
have unimaginable impacts, just as it has had in Flint.
    I know you are concerned about opening up the floodgates to 
all sorts of assistance, which is always an issue that we have 
to be concerned about, but I think if we set some strong 
parameters and perhaps craft it in a way to help folks like 
future Flints, or in cities like Flint, we may be able to make 
sure that the American people stand behind other Americans who 
are suffering their greatest need.
    So what are your thoughts?
    Mr. Long. Senator, thank you for your question. I have a 
lot of thoughts about this. First of all, I believe that the 
Stafford Act is a very general document that was designed to be 
very scalable, zoomable to help communities overcome many 
different types of disasters. Regarding this specific situation 
with Flint, I was not privy, obviously, to why the decisions 
were made for just an EM declaration, or why the Department of 
Health and Human Services (HHS) was put in charge as a public 
health emergency. Regarding that, I would be happy to sit down 
with you, if confirmed, to be able to understand your concerns 
more deeply, but also to work with the staff within FEMA to 
understand the decisions that were made, ultimately, that you 
have received, the EM declaration.
    Personally, I have been through several non-Stafford 
Disaster Acts events, one of those being Deepwater Horizon, one 
of those being an H1N1 public health emergency event, and I 
have grown to realize that at the local and State level, that 
emergency managers and first responders cannot afford to sit 
one out, just because we delineate whether it is Stafford Act 
or non-disaster Stafford Act.
    So, if confirmed, I do have direct experience with similar 
events that were not caused by nature, and I would be happy to 
evaluate the situation and meet with you.
    Senator Peters. Well, I appreciate that. It sounds as if 
you do have concerns with the way the Act may be written now, 
to respond to some extreme emergencies.
    Mr. Long. Senator, yes. I would be willing to sit down with 
you to understand your concerns.
    Senator Peters. Right. I appreciate that, Mr. Long.
    Mr. Long. Yes.
    Senator Peters. Mr. Vought, I will concur with some of my 
colleagues who are very concerned about your comments in terms 
of responding to requests, Senator McCaskill's questioning, 
that if we really are doing our job, as oversight, and my job 
as Ranking Member of the Federal Spending Oversight 
Subcommittee is to make sure the taxpayer money is being spent 
properly, that the appropriations made by Congress are done in 
a way that makes sense, and in order to do that we need 
information. So I am extremely troubled by comments that if you 
are in the minority party that questions related to specific 
documents that I may need in order to do my job, and my 
colleagues need to do our jobs, in Federal spending oversight 
or technical comments, briefings, for some reason would not be 
made available to us.
    I represent the entire State of Michigan. My colleagues 
represent the whole country. The people of this country expect 
us, and rightly so, to work in a non-partisan way when it comes 
to overseeing the Federal Government, asking the tough 
questions, making sure that money is being spent appropriately.
    I am extremely troubled that you believe if a minority 
member asks those kinds of questions you are not under any 
obligation to give that information. Is that accurate?
    Mr. Vought. I do not think it is accurate, Senator. I 
believe strongly in the oversight process. I believe strongly 
in working on a bipartisan basis and transparently to reform 
programs and find waste, fraud, and abuse where we find them, 
and to participate in as many of these processes that the 
Congress sees fit to initiate. What I was merely responding to 
was the question about OLC's memorandum as it pertains to 
certain forms of oversight requests, in which I would seek 
legal counsel within our agency about how to respond to those.
    Senator Peters. I hope, if confirmed, that you fully 
appreciate the need for us to work in a cooperative way. The 
only way we are going to do this job appropriately for the 
American people is if we work in that manner. I am also 
concerned about a statement made by Director Mulvaney, recently 
suggesting that one of the agencies that we have always looked 
at in Congress as being a non-partisan policy analysis shop is 
the Congressional Budget Office (CBO), and I believe that 
Director Mulvaney suggested that ``the day of the CBO has come 
and gone,'' and that he may not be looking to analysis done by 
the CBO.
    In your role as deputy director, would you consider the CBO 
scores as an integral part of the OMB's toolkit in making 
policy decisions? What is your view of CBO?
    Mr. Vought. CBO is a very important institution within the 
legislative process. OMB works very closely with CBO. It relies 
on its information. I think the director's comments go to when 
there are very big legislative packages in which the CBO's non-
partisan analysis ends up causing political ramifications based 
on some of its conclusions that, in this case, we disagree with 
as an Administration. But that is not in any way to suggest 
that CBO does not have a valuable role in the legislative 
process. As a congressional staffer I relied on it heavily to 
assess a bill's cost and the impact of what the bill would do 
if it was enacted.
    Senator Peters. If I hear your comments correctly, the CBO 
is a valuable, non-partisan policy analysis organization, 
unless you disagree with their conclusions and therefore it is 
illegitimate.
    Mr. Vought. No, sir. I do not think that is what I said. I 
think that CBO, like any other organization and institution, 
needs to be able to defend its methodology and its analysis, 
and what this Administration has been engaged in is a 
conversation with the American people about what CBO's 
conclusions are with regard to the American Health Care 
Association (AHCA). This Administration feels that those 
conclusions are wrong, and have put forward its analysis for 
why that is the case with regard to various coverage numbers 
and some of the other impacts that CBO has said the AHCA would 
have on our health care system.
    Senator Peters. If confirmed, I hope that you treat facts 
as facts and not being merely inconvenient and not supporting 
your opinions. Thank you.
    Mr. Vought. Yes, sir.
    Chairman Johnson. Senator Hoeven.

              OPENING STATEMENT OF SENATOR HOEVEN

    Senator Hoeven. Thanks, Mr. Chairman. Mr. Long, I want to 
commend you on your service in Alabama, and your work on behalf 
of the people there. I look forward to working with you at 
FEMA, and it is great that your family is here. They look 
pretty awesome.
    In North Dakota we have a number of flood projects. We 
flood up there pretty regularly, although this year it is 
looking like drought, unfortunately. And in the Fargo-Moorhead 
area, which is North Dakota/Minnesota, Red River to the north, 
we have Roy Wright up there who directs the FEMA insurance 
operations and he is very good. We really coordinated the flood 
mapping and the FEMA insurance with building the flood project.
    Mr. Long. Right.
    Senator Hoeven. In Minot, where we had a flood in 2011, and 
4,000 homes were flooded, so that is a lot more people--we are 
building flood protection in phases. We need you all to work 
with us on the remapping, so that people do not really get 
hammered with increasing FEMA premiums. I am asking for your 
commitment to work with us. I understand you have a job to do 
and you have to do it by law and regulation, but we need a 
problem-solver. We need your help now to do kind of the same 
thing that we have done in the Red River valley, in the Souris 
River valley, to help those people. OK? I am asking for your 
commitment to do that.
    Mr. Long. Yes. I can commit to working with you to 
understand.
    Senator Hoeven. Good. Then you are going to get off easy. 
[Laughter.]
    Ms. Rao, We are now doing P3 projects--public-private 
partnerships. The President wanted to do P3 projects. We have 
been working on this for a while. We have passed into law P3 
projects. Again, for the Red River valley, this is a $2.2 
billion flood protection project that affects both North Dakota 
and Minnesota. It is underway. The Federal share was originally 
$900 million but now it is $450 million. How does that sound? 
Does that sound good? In other words, the cost to the Federal 
Government now has been cut in half. Does that sound like a 
good thing or not?
    Ms. Rao. I think that sounds like a good thing.
    Senator Hoeven. Particularly when the Corps has a huge 
backlog in projects. Right? If we could cut that backlog in 
half like that would be a good thing, would it not?
    Ms. Rao. Yes, it would.
    Senator Hoeven. We need some help to do that. Right now 
that $2.2 billion project is $450 million to the Federal 
Government, and the State and local financing is in place, 
because it is a public-private partnership. But, OMB still 
scores projects. When they come up from the Corps, even 
projects the Corps really wants to do, like this one, they 
still use the benefit-cost ratio without taking into effect, or 
account the P3 benefit.
    When they score our project, they are scoring it as if the 
Federal Government has to come up with $900 million, when they 
only have to come up with $450 million. Do you think that makes 
sense?
    Ms. Rao. Senator, that is an interesting issue. I am not 
familiar with that particular form of scoring but it is 
something that I would be happy to look into if I am confirmed.
    Senator Hoeven. Good, because both the OMB Director and the 
White House have committed to me that they will do it, and the 
Corps, in fact, is working on it, and I want your support for 
it.
    Ms. Rao. Yes. I am happy to work with OMB.
    Senator Hoeven. Again, I commend you on your outstanding 
experience and look forward to working with you, and thank you 
for coming by to visit with me. I appreciate it very much.
    Ms. Rao. Thank you.
    Senator Hoeven. Mr. Vought, thanks for being here. I 
appreciate it. I just want to ask you about the Consumer 
Financial Protection Board (CFPB). I have serious concerns 
about the CFPB. I am on Appropriations, and we do not have 
jurisdiction over their appropriations. That makes no sense to 
me. I cannot fathom why we would not have authority when it 
comes to appropriating over the CFPB.
    Can you give me your thoughts on that?
    Mr. Long. Thank you, Senator. I agree with you. I think 
that the CFPB is something that should be subject to the 
appropriations process. I think one of the reasons why it has 
the perception of being unaccountable is that it is not 
accountable to the annual appropriations process. That is one 
of the reasons why the President's budget calls for that 
specific reform, and I think it is a very important issue that 
you raise.
    Senator Hoeven. I want to thank all three of you for being 
here and I look forward very much to working with you. Thank 
you.
    Chairman Johnson. Senator Daines.

              OPENING STATEMENT OF SENATOR DAINES

    Senator Daines. Thank you, Mr. Chairman, Ranking Member 
McCaskill. Thank you to each nominee for your testimony. 
Overseeing the budget, management, regulation, and information 
policy, OMB is a cornerstone of the Trump Administration's 
``drain the swamp'' initiatives. I hope you are all investing 
in very large pumps. There is a lot of swamp that needs to be 
drained, whether it is the government reorganization, or 
rolling back these Obama-era regulations that are truly 
inhibiting economic growth. It is a boot on the neck of small 
businesses across this country.
    No less important, the FEMA Administrator will be 
responsible for assisting those in times of crisis and serve to 
get our communities back on their feet when a disaster strikes. 
We saw that happen, in fact, in Southeast Montana last summer, 
June 2016, when a tornado came through Fallon County. We are 
not known for our tornados in Montana, like Oklahoma might be, 
but it was devastating to our community and we were grateful 
for the support of FEMA.
    It is my hope that each of you will receive speedy 
confirmation.
    I want to start and talk about the budget process reform. I 
spent 28 years in the private sector before coming to 
Washington. In fact, the last election I won prior to winning 
the congressional election in 2012, was as student body 
president of my high school. I am the only MSU Bobcat in 
Congress. I am also the only chemical engineer. I spent 28 
years managing businesses held accountable for producing a 
budget each year, and then ensuring that we did not spend more 
than we were taking in. In fact, in the private sector, you 
have to take in more than you spend because that is called 
profit, but we are a long ways from that here in Washington, 
D.C.
    There is a growing sentiment in Congress that the 
congressional budget process is broken, from start to finish. I 
think using the word ``broken'' is a kind word. According to 
January 2017 CBO report, by this September 30th, well over half 
of our discretionary spending, $648 billion, will be 
appropriated to unauthorized programs. Congress has not passed 
all 12 appropriation bills since 1996. For those of you playing 
at home, that is 21 years. In addition, the process leads to 
brinkmanship, with do-or-die passage of an annual, if we are 
lucky, omnibus bill, that does not allow for targeted 
congressional oversight.
    Thirteen of my 28 years I spent in the private sector was 
with a company called Procter & Gamble. In fact, I was part of 
the shampoo operations for a number of years. On the back of a 
bottle of shampoo, it oftentimes will say, ``Lather, rinse, 
repeat.'' It sure feels a lot that way here in Washington, D.C. 
I will put a lot of money on the table that we back to a CR 
kind of discussion here, coming soon, as we approach the end of 
our fiscal year, and we go through this repeated cycle of 
insanity in this country, and the people of our great country 
deserve much better.
    Mr. Vought, you have seen the shortcomings of our budget 
processes first-hand in Congress. Do you agree that 
congressional budget process is in need of an overhaul?
    Mr. Vought. Yes, Senator, I do.
    Senator Daines. Where will budget process reform fall in 
your priorities at OMB, and can we count on OMB to actively 
participate in these reform efforts?
    Mr. Vought. You can, Senator. It is a very important issue 
for OMB to think through. Typically, the OMB Analytical 
Perspectives has an entire chapter about budget process reforms 
that it intends to propose. This year our budget process reform 
chapter was smaller because the Administration was so new and 
the priority was Senator Rounds getting the budget done. But 
next year, if the Senate confirms me, I really do want to have 
a much broader conversation, internally and with this 
Committee, about ways that we can reform the budget process, 
ways that we can remove brinksmanship from the budget process, 
ways that we can get at unauthorized spending, which is 
actually banned in the House but they waived the rule almost on 
every appropriations bill. It is a major problem and we need to 
have new and creative ways to address it.
    Senator Daines. I was struck by D.C.'s continuing 
ineptitude, and this institution's failure, just this last 
budgeting cycle--I am on the Appropriations Committee--we were 
7 months into this current fiscal year before an omnibus was 
passed. I just cannot imagine. In my days of working for a 
Fortune 20 company and then I worked in a family construction 
business, then I was part of cloud computing startup. We took 
the company public and grew a lot of jobs. But I cannot 
imagine. Imagine the Chief Financial Officer (CFO) showing up 
at the board meeting and saying, ``Well, first, we do not have 
a budget,'' and we are 7 months into the fiscal year before you 
even basically authorize the funds.
    It is ludicrous. This broken process has produced $20 
trillion of debt and the projections are, frankly, ominous as 
we go forward now, in terms of the fiscal condition of this 
country, because of the inability of this institution to let 
alone balance a budget, but to even pass one in a timely 
fashion.
    I want to shift gears and talk about the debt ceiling 
reforms. Recently, Treasury Secretary Mnuchin indicated that 
Congress may need to lift the debt ceiling by the end of July. 
I am a strong believer we need to continue to consider budget 
reforms with any debt ceiling increase to get to the crux of 
the issue, and that the next Administration will play an 
important role in making that happen.
    Mr. Vought, do you believe we should pursue budget reforms 
in the context of lifting the debt ceiling?
    Mr. Vought. Senator, thank you for that question. I do 
believe that that also tracks with history in terms of many of 
the times that we have raised the debt limit, we have included 
budget process reforms, other spending reductions over time. My 
old boss authored Gramm-Rudman-Hollins. That was attached to a 
debt limit increase.
    We certainly do not want brinksmanship in the legislative 
process, but in terms of using the debt limit increase as an 
opportunity to take account of where we are, fiscally, as a 
country, when we are $20 trillion in debt and we are being 
asked to, once again, raise the debt limit, the debt limit 
needs to be raised but it does not seem smart, at the same 
time, to then not take account and try to fix the problem.
    Senator Daines. Yes, and I am going to squeeze in a quick 
question to Ms. Rao. You are going to spearhead the 
Administration's deregulatory efforts, rolling back some of 
these Obama-era regs. We have got a gross domestic product 
(GDP) growth of under 1.5 percent during the tenure of the last 
Administration.
    Specific question--would you support legislative efforts to 
streamline the retractions of regulations?
    Ms. Rao. Well, Senator, that is an interesting proposal and 
it is one I would be interested to consider working with you 
on.
    Senator Daines. All right. Thank you. I am out of time.
    Chairman Johnson. Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. I just want to take a minute. I was not 
going to mention this. I just want to go back in time, if we 
could. Harry Truman used to say the only thing that is new in 
the world is the history we forgot or never learned.
    Let us just back up a little bit. We actually had balanced 
budgets about 16 or 17 years ago. In fact, we had four of them. 
We had not balanced budgets since 1968. We had four balanced 
budgets in a row, and one of the ways we did it, we matched--I 
am a recovering Governor, OK? I governed in Delaware from 1993 
to 2001. We had 8 years of balanced budgets. We cut taxes 7 out 
of the 8 years. We paid down some of our debt. We got a triple-
A credit rating. I know a little bit about balancing budgets. I 
was State treasurer for 6 years before that.
    The last 4 years of the Clinton Administration, what did we 
do? We balanced the budget. We matched revenues and we matched 
expenditures. We grew the economy. More jobs created in those 8 
years than any 8 years in the history of this country. We did 
exciting things on environmental reforms. And we did a number 
of things in terms of regulatory reforms that some of us may 
not have liked, but we sure grew the heck out of the budget.
    The guy who helped drive the budget deal, during those 
years was Erskine Bowles. President Clinton asked him to do the 
deal, and to negotiate with the Republicans, and he did. One of 
the key Republicans was the Chairman of the House Budget 
Committee, a guy named John Kasich. He was a personal friend of 
mine. I was elected, came to the Congress with him, served with 
him for many years. He is still my friend.
    What happened there, you had Democrats and Republicans 
working together who are determined to balance the budget, and 
they succeeded, because of bipartisan support.
    This Administration, I will tell you, and I know that some 
others have been asking questions about responsiveness, this is 
the worst responsiveness I have ever seen. If we had a 
Democratic Administration and Republicans were trying to get 
information through oversight over this Democratic 
Administration, and got the kinds of responses that we have 
been getting, non-responses, you guys would shut the place 
down. We probably ought to do that as well.
    And so talking about draining the swamp, give me a break. 
They are creating the swamp. These folks are creating the 
swamp, and that is not a dispersion on the people that are 
before us today. But I just cannot sit here and listen to what 
I have just heard and say nothing in response.
    Barack Obama--everybody makes mistakes. What did Richard 
Nixon used to say? The only people that do not make mistakes 
are people who do not do anything, and the last President, 
whether you like him or not, he did a lot. One of the things 
that I am proudest of, that they did, you can look at 8 years, 
almost without a scintilla of scandal. He is a very moral 
person, tried to make sure that the people around him 
understood that and behaved accordingly.
    One of the big mistakes that he made, he did not embrace 
Bowles-Simpson. If he had embraced Bowles-Simpson, I think the 
rest of us would have fallen in line, and finally, when it got 
to the point of actually negotiating on a Bowles-Simpson with 
John Boehner, Speaker of the House, and they negotiated 
basically a Bowles-Simpson deal--restraint on spending, 
entitlement reform, and revenues. Those are the three corners 
of the agreement. The Speaker took the deal back to the House--
you were probably there--and could not sell it. He came back, 
tried to renegotiate it, and could not sell it. I give John 
Boehner credit. I give President Obama credit. But if we had 
somehow been able to do that deal, we would not be having to 
negotiate this situation now with $20 trillion in debt.
    I just want to say again, and I do not know who to direct 
this to--Mr. Vought, maybe to you--if this kind of lack of 
responsiveness continues, I hesitate to think what we are going 
to do in response. It is just unacceptable. I am a big believer 
in the Golden Rule--treat other people the way we want to be 
treated. But if we had a Democratic House, a Democratic Senate, 
and we had a Democratic President, and the Republicans were 
trying to do oversight from the House and the Senate to 
oversight on a Democratic Administration, and you got no 
responses, the Republican Congress got no responses to their 
inquiries, or lack of responses, pitiful responses, you guys 
would go nuts, and you should. Maybe we should as well.
    I guess it is a message that I would share with you. I do 
not mean to take out anything on you, but my friend from 
Montana has got me excited this morning, more excited than I 
usually am.
    Senator Daines. Would the gentleman yield?
    Senator Carper. I am happy to yield.
    Senator Daines. I am grateful for Governors who serve in 
the U.S. Senate, on both sides.
    Senator Carper. And I am grateful for business leaders who 
serve.
    Senator Daines. Well, I will say, I think the----
    Senator McCaskill. How about auditors? [Laughter.]
    Chairman Johnson. Not so much about auditors.
    Senator Daines. I would just say I think our path forward 
here, and the swamp here has been created over years and years 
and years, and you cannot, I think, point to any one 
Administration. We are at where we are at. But Governors that 
come to the Senate I think bring a very pragmatic approach, and 
I think our solution forward is going to be to get our 
Democratic and Republican former Governors in the Senate to 
work on some of these budget reforms, because you have had to 
produce a balanced budget, truly. And I appreciate the comments 
from the gentleman.
    Chairman Johnson. First of all, I want to stop the clock so 
we do not take any from Senator Carper's time, but I need to 
respond, because the truth is we have done about 80 percent of 
Simpson-Bowles, and it barely made a dent.
    Senator Carper. No. With due respect we have not done the 
entire reform. We have not done that----
    Chairman Johnson. But not----
    Senator Carper [continuing]. Through revenue increases.
    Chairman Johnson. We have done about 80 percent.
    Senator Carper. I just do not agree.
    Chairman Johnson. I will give you the figures. About $700 
billion in tax increased the fiscal cliff. I think Simpson-
Bowles wanted $900 billion. Then we got $2.1 billion with the 
Budget Control Act. I think Simpson-Bowles was calling about 
$1.9 trillion for discretionary. We did not do the quarter of a 
trillion dollars on entitlement reforms. That was about the 
only thing we left off the table there, and again, it has not 
even made it down. I just wanted to challenge that. Simpson-
Bowles barely made a dent. We have done 80 percent of it. Now 
we do need to do entitlement reform, but Simpson-Bowles barely 
did anything. That was about a quarter of a trillion dollars.
    Senator Carper. I want to reclaim my time.
    Chairman Johnson. We have kind of done it. We did not call 
it Simpson-Bowles but Budget Control Act, the fiscal cliff, we 
got the revenue, we got the discretionary spending. We actually 
reduced----
    Senator Carper. Let me reclaim my time.
    Chairman Johnson. OK.
    Senator Carper. Those 4 years when we had balanced budgets, 
spending as a percentage of GDP was about 22 percent. Those 4 
years that we had balanced budgets, revenues as a percent of 
GDP was about 22 percent, maybe 20 percent, and today revenue 
as a percent of GDP is 17 or 18 percent, spending is about 22. 
And that is part of the problem.
    In any event, somewhere down the line we will have a 
President and a Congress that want to work together, leaders of 
the Congress and the Administration will want to work together, 
and I hope that is sooner rather than later.
    I will say this. One of the things that we, as our to-do 
list around here, is the GAO High Risk List. I do not know how 
familiar you are with it, Mr. Vought. Are you?
    Mr. Vought. I am familiar with it, Senator. I have read 
previous reports. I have not taken a look at the latest report, 
but, unfortunately, one of the problems with the GAO High Risk 
series----
    Senator Carper. I was just asking if you were familiar with 
it. OK? Hold your fire.
    They give us all these ways, ideas of saving money, and 
some of them are defense spending, some of them are non-defense 
spending. But I will say, I spent 23 years in the Navy, retired 
Navy captain. I loved the military. I loved the Navy. But we 
spend more money on defense than the next six, seven, or eight 
nations combined, and the Administration's President is asking 
for an enormous increase, over $50 billion more for defense 
spending.
    Meanwhile, you have one of the GAO recommendations, on the 
High Risk List you have $400 billion cost overruns in major 
weapons systems. Department of Defense (DOD), after all these 
years, after, what, 70 years being around, they still have not 
gotten a clean bill of health on their audit--70 years. The 
Department of Homeland Security, they did it in like 6 or 7 
years and they are still at it. Three of them now. Is not that 
right, about three of them? And Defense--what you cannot 
measure you cannot manage. We need to do some work there and I 
hope that this Administration will say, rather than just giving 
the Department of Defense another $55 or $60 billion, maybe we 
should go to that GAO High Risk List and see how we can save 
some money while we do this kind of thing.
    But I wanted to mention the High Risk List. I think there 
is a lot of interest here on this side, Democrat and 
Republican, to work that list, and save a ton of money.
    I will ask you this question--one of the recommendations 
they made is--from GAO--and, Mr. Chairman, just cut me off when 
you are ready. But I would like to mention this because we have 
discussed this before. We had John Koskinen in before the 
Finance Committee. We had him there several times. They tried 
to impeach him in the House, and as Commissioner of the 
Internal Revenue Service (IRS) I think he is one of the most 
decent people I have met in government. He is honorable, smart, 
business person. He spent a career just basically taking 
businesses that were wrecked and making something of them, and 
I think he is doing a workman-like job into the IRS, and a 
thankless job.
    But one of the recommendations of GAO, is we could actually 
raise some revenues if we would give IRS the tools that they 
need, the people, the budget, and the technology that they 
need, and for every dollar that we would spend in that we would 
get back $5, $6 or $7, and we would provide a lot better 
customer service for the people that we are serving. People 
call our offices all the time and say, ``I cannot get anybody 
in IRS to help me.'' Your thoughts on that?
    Mr. Vought. I think in the grand scheme of the budget, the 
IRS was basically protected in terms of the amount of 
reductions that it was asked to live under for fiscal year 
2018. About 95 percent of all filers are now doing it online, 
and this budget increases operation support by 6 percent. Now, 
obviously, there are reductions elsewhere, but we felt that 
trying to modernize and continue to make efficiencies to move 
people toward filing their taxes online can help. We certainly 
agree that the IRS is crucial in being able to collect the 
necessary amount of revenue that people owe in paying their 
taxes, and it is one of the reasons we were very careful, as we 
were with the rest of the budget, to allocate reductions where 
they made the most sense.
    Senator Carper. All right. Thanks so much. Let me say, in 
closing, Mr. Long, very nice meeting you this morning, and was 
that your daughter I met?
    Mr. Long. No. My wife.
    Senator Carper. Oh, I am sorry.
    Mr. Long. She would appreciate that comment though, right? 
[Laughter.]
    Senator Carper. And I met your two sons. They are handsome 
guys. He went to Appalachian State University. My father-in-law 
taught there for 40 years. My wife grew up there, on the 
campus, so it is kind of a home game. Good luck. We are anxious 
to get to work with you.
    Ms. Rao, I do not know you well. I appreciate the time that 
we spent together and if you get confirmed I look forward to 
having a chance to work with you down the line.
    Mr. Vought, thank you so much. Thank you for your kind note 
as well. Thank you.
    Mr. Vought. Thank you.
    Ms. Rao. Thank you.
    Chairman Johnson. Thank you, Senator Carper, and I hope you 
do not think I cut you off. I was just responding. I stopped 
the clock and gave you extra time. By the way, what I would 
love to do, and we will do this, I want to hold a hearing, and 
we will go through the budgetary history of what all has 
happened, where spending was as a percentage of GDP, where 
revenue was, why we were able to balance the budget for a brief 
moment in time, what has happened since that time. We will lay 
out the facts, lay out the reality. I am happy to do it. I 
think it is going to be crucial.
    I know Senator McCaskill has some more questions so I will 
turn it over to Senator McCaskill.
    Senator McCaskill. Yes. Before I get to my FEMA question, I 
was struck, Mr. Vought, on your comment a minute ago where you 
said ``we are being asked to raise the debt limit.'' Who is 
asking you to raise the debt limit?
    Mr. Vought. Senator, I know the Administration has asked 
Congress to raise the debt limit.
    Senator McCaskill. So you are asking us to raise the debt 
limit.
    Mr. Vought. Correct. The debt limit----
    Senator McCaskill. When you say ``we are being asked,'' it 
is you. You, Mr. Vought, are asking us to raise the debt limit. 
Correct?
    Mr. Vought. The debt limit does need to be raised, Senator.
    Senator McCaskill. OK.
    Mr. Vought. I think there is----
    Senator McCaskill. I think there seems to be a little bit 
of disconnect around here, in that, for years the debt limit 
was something that nobody wanted to raise, and it was being 
used as a political two-by-four, even though everybody 
understands. Now that you guys are in charge, it is painful, 
but you have to face the reality that this is an inappropriate 
political two-by-four. The debt limit has to be raised. The 
President of the United States is asking us to raise the debt 
limit. The Republican leadership is asking us to raise the debt 
limit. I want to make sure that is on the record clearly, and 
if anybody has somebody else who asking them to raise the debt 
limit, they need to let us know, because the only people I know 
that are asking to raise the debt limit, at this point, is your 
Administration and the Republican leadership in Congress.
    Are you aware of anybody else who is asking to raise the 
debt limit?
    Mr. Vought. No, Senator.
    Senator McCaskill. OK. Mr. Long, on Friday, President Trump 
issued a major disaster declaration for 48 of Missouri's 114 
counties--so that gives you some idea of the massive amount of 
flooding that we had, and the real problem that we are facing 
in Missouri, that is way beyond the capability of State and 
local governments. What we had, we had a number of bridges 
completely wiped out. We had roads washed out. We had homes 
completely washed away.
    By the way, let me give you these statistics. 2016 was a 
major year for flooding. Nationwide flood losses last year were 
six times greater than 2015, and the number of Presidential 
disaster declarations has tripled over the past decade, 
compared to 20 years prior. So your business is going to be 
going up, not down.
    Given that statistic, and given that reality, are you 
concerned about the $600 million in budget cuts that have been 
proposed for FEMA in 2018?
    Mr. Long. Ranking Member McCaskill, thank you for the 
question. First, I fully support the President's budget, but, 
if confirmed, I do realize that as FEMA Administrator I have to 
make sure that the agency can meet the demands, particularly 
when it comes to saving lives and sustaining life after each 
disaster. I have to be able to work with my staff, once 
confirmed, to go in and evaluate where we are, measure out the 
increasing demands placed upon the agency, and if I do perceive 
a problem I look forward to diplomatically working with this 
Committee to address those issues.
    Senator McCaskill. I think you are going to get a lot of 
support on a bipartisan basis for the FEMA budget, because all 
of our States, I will never forget. Whether it was Hurricane 
Katrina or whether it was Hurricane Sandy or whether it was 
flooding, there are actual examples of people who voted against 
funding for those disasters until their State had a disaster, 
and then all of a sudden it was like, ``OK, we need more 
Federal money.'' I am hopeful that we can work on that budget 
because I do not think it is realistic, in light of the uptick 
that we see in the data.
    Mr. Vought, I hope that--and I do not mean to be--I know I 
am coming on very strongly with you this morning but I am 
frustrated, as you can probably tell. I am particularly upset 
about a lawyer in the Justice Department telling the entire 
Executive Branch I have no authority to do oversight. I think 
it is outrageous, and so I am also ginned up about the fact 
that we have two important people in the government saying 
exact opposite things about the budget.
    Director Mulvaney emphatically asserted that ``the budget 
assumes a deficit-neutral tax plan that does not rely on 
economic growth to achieve that deficit neutrality.'' Secretary 
Mnuchin said, in a Finance Committee hearing, ``We are not far 
along in tax reform to have modeled the impact. Again, just to 
be clear, when the budget came out we overlaid the 
Administration's plan for growth, which were incorporated, and 
that is what is shown here. We do not have tax changes so we 
did not model tax changes.''
    We now have, on the same day, at two separate hearings, the 
Secretary of Treasury stating, unequivocally, that the tax cuts 
in the budget were not offset by tax policy changes, but 
instead by economic growth, and on the same day the Director of 
OMB saying we went through a list of exclusions that are 
reduced--loopholes that are closed and deductions that are 
removed, and calculated that those would offset the tax cuts in 
the proposed budget.
    So, under oath, I have the Secretary of the Treasury saying 
that this is just economic growth and I have the head of OMB 
saying that it is the tax policy changes that are, in fact, 
neutralizing the revenue losses. What is going on here? Are 
they not talking to each other, because clearly they are saying 
180-degree, polar opposite in hearings about the same budget.
    Mr. Vought. Thank you, Senator. I do not think that is the 
case. We have been very clear, as an Administration, that this 
budget does not double-count the revenue increase from economic 
growth twice. You can either use it once, for deficit 
reduction, or you can use it to pay for the tax cut. This 
budget uses the revenue from economic growth and contributes it 
toward deficit reduction. 
The tax cut is assumed to be deficit-neutral, and what we did 
in the assumption that we made, with regard to the tax 
proposal, was to take the guidelines that were put forward by 
Secretary Mnuchin and Director Cohn which included, in those 
guidelines, or paying for the tax increase, or the tax 
decreases with getting rid of special deductions and credits 
and loopholes, broadening the base. That is what is meant to 
pay for the tax cut.
    Senator McCaskill. So, the Secretary of the Treasury is 
wrong. This is not revenue growth that will pay for the tax 
cut. It is revenue growth that will, in fact, reduce the 
deficit. So what I need from you, Mr. Vought, is where is the 
money coming from in the reduction of loopholes that is paying 
for the tax cut? What are they?
    Mr. Vought. Again, that is where we get to the fact that 
the tax proposal has not been developed yet.
    Senator McCaskill. Wait. You are saying it is going to pay 
for itself but you have no idea how it is going to pay for 
itself.
    Mr. Vought. The tax proposal has--which is based on a 
number of guidelines that were put forward by Secretary Mnuchin 
and Director Cohn----
    Senator McCaskill. Give me one example. Give me one example 
of how you are going to pay for this tax cut with closing 
loopholes.
    Mr. Vought. Again, I would go back to the guidelines in 
which they said----
    Senator McCaskill. Well, give me an example. You have to 
know it. You drew up the budget. What are they?
    Mr. Vought. Again, the policy development process is not at 
that point where we are ready to say specifically which 
deductions and credits are proposed for elimination. It is part 
of----
    Senator McCaskill. OK. So you do not have any idea how you 
are going to pay for the tax cuts then.
    Mr. Vought. Again----
    Senator McCaskill. You are going to pay for it within the 
tax cut bill by closing loopholes, but you cannot give me one 
example of a loophole that you put in the budget is having 
made--and that is what makes it balance? You are willing to 
stand by that, that you are going to tell the American people 
you are balancing the budget and you cannot give me one example 
of how you are paying for the tax code?
    Mr. Vought. Senator, the budget is a set of assumptions. 
The assumption that we had when we wrote the budget was based 
on the policy development process that was where it was at that 
point, which was a set of guidelines and specifics as it was 
reflected in those guidelines. The rate reductions are 
obviously something that the President wants----
    Senator McCaskill. Well, those are specific.
    Mr. Vought. Correct.
    Senator McCaskill. The only thing that is not specific is 
how you pay for it, and you are telling me now you do not have 
any idea.
    Mr. Vought. I do not have any further specifics on the tax 
plan. No, Senator.
    Senator McCaskill. You do not even have an idea about what 
one might be, what category it might be?
    Mr. Vought. Not at this point, Senator.
    Senator McCaskill. Yes. How can you expect us to take this 
document seriously? It sounds like a novel.
    Mr. Vought. It is a set of policy assumptions based on what 
we know currently. Obviously----
    Senator McCaskill. You cannot say something balances on 
policy proposals when you are not even willing to say out loud 
what the policy is. How can you have the straight face to say 
to the American people, ``We balanced the budget,'' when you 
cannot even step up to the microphone and give me some idea of 
how that happens.
    Mr. Vought. Senator, the policy development process is 
underway and I understand your desire to have clarity on that 
point, and we hope that it materializes soon.
    Senator McCaskill. OK. Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Senator McCaskill. I would 
ask, or give you a sheet here, and ask consent to enter this 
into the record.\1\ I did a little spreadsheet on what I was 
talking to Senator Carper about, and we will give his staff a 
similar chart showing that, in fact, we have done about 81 
percent of Simpson-Bowles. I was pretty close to the $700 
billion in the revenue from the fiscal cliff, $2.1 trillion of 
discretionary savings. Simpson-Bowles had less than that but 
they also had about $795 billion of savings in terms of health 
care savings, mandatory savings, and some Social Security 
reforms. Total difference, $3.4 trillion of savings under 
Simpson-Bowles. We have done about $2.8. The rest is savings on 
interest.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 246.
---------------------------------------------------------------------------
    I will enter that into the record, but again, my point 
being is we have done 81 percent of Simpson-Bowles and we still 
have a massive debt problem and a massive projected deficit.
    The nominees have made financial disclosures\1\ and 
provided responses to biographical and pre-hearing questions\2\ 
submitted by the Committee. Without objection, this information 
will be made part of the hearing record,\3\ with the exception 
of financial data, which are on file and available for public 
inspection in the Committee offices.
---------------------------------------------------------------------------
    \1\ The information for Mr. Long appears in the Appendix on page 
45.
    \2\ The information for Mr. Vought appears in the Appendix on page 
113.
    \3\ The information for Ms. Rao appears in the Appendix on page 
175.
---------------------------------------------------------------------------
    I want to thank the nominees for your willingness to serve. 
As you can see, we have enormous challenges, some divisions. We 
want to work through those things. I want to really thank the 
families. I know, unfortunately, you will see probably less of 
your loved ones here, so this is a sacrifice for the entire 
family as well. Thank you for your willingness to serve.
    With that the hearing record will remain open until noon 
tomorrow, June 8th, for the submission of statements and 
questions for the record.
    This hearing is adjourned.
    [Whereupon, at 11:53 a.m., the committee was adjourned.]

                            A P P E N D I X

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