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37–566pdf 2007

S. HRG. 110–161

NOMINATION OF HON. JIM NUSSLE, OF 

IOWA, TO BE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

HEARING & EXECUTIVE 

MEETING

OF THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

July 26, 2007—NOMINATION OF HON. JIM NUSSLE, OF IOWA, TO BE 

DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

August 2, 2007—EXECUTIVE MEETING

(

Printed for the use of the Committee on the Budget 

COMMITTEE ON THE BUDGET 

KENT CONRAD, North Dakota, Chairman

PATTY MURRAY, Washington 

RON WYDEN, Oregon 

RUSSELL D. FEINGOLD, Wisconsin 

ROBERT C. BYRD, West Virginia 

BILL NELSON, Florida 

DEBBIE STABENOW, Michigan 

ROBERT MENENDEZ, New Jersey 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JUDD GREGG, New Hampshire 

PETE V. DOMENICI, New Mexico 

CHARLES E. GRASSLEY, Iowa 

WAYNE ALLARD, Colorado 

MICHAEL ENZI, Wyoming 

JEFF SESSIONS, Alabama 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

JOHN ENSIGN, Nevada 

JOHN CORNYN, Texas 

LINDSEY O. GRAHAM, South Carolina 

MARY NAYLOR, Majority Staff Director 

SCOTT GUDES, Minority Staff Director 

(II) 

iii

C O N T E N T S 

HEARING 

Page 

July 26, 2007—Nomination of Hon. Jim Nussle, of Iowa, to be Director 

of the Office of Management and Budget ........................................................... 1

MATERIALS SUBMITTED FOR THE RECORD 

Statement of Biographical and Financial Information Requested of Presidential Nominee Jim Nussle of Iowa .................................................................. 51

Pre-hearing questions and answers ....................................................................... 104

Post-hearing questions and answers ...................................................................... 149

EXECUTIVE MEETING 

Statements for the Record ...................................................................................... 160

Committee Vote ....................................................................................................... 162

(1)

NOMINATION OF THE HONORABLE JIM 

NUSSLE, OF IOWA, TO BE DIRECTOR OF 

THE OFFICE OF MANAGEMENT AND

BUDGET 

THURSDAY, JULY 26, 2007

U.S. SENATE, COMMITTEE ON THE BUDGET, Washington, DC. 

The committee met, pursuant to notice, at 10 a.m., in room SD–

608, Dirksen Senate Office Building, Hon. Kent Conrad, chairman 

of the committee, presiding. 

Present: Senators Conrad, Murray, Wyden, Nelson, Stabenow, 

Cardin, Sanders, Whitehouse, Gregg, Domenici, Grassley, Allard, 

Bunning, and Crapo. 

Staff present: Mary Naylor, Majority Staff Director, Scott Gudes, 

Staff Director for the Minority. 

OPENING STATEMENT OF CHAIRMAN KENT CONRAD 

Chairman CONRAD. The hearing will come to order. 

I want to welcome everyone here for the hearing on the confirmation of Congressman Jim Nussle of Iowa for the position of the Director of the Office of Management and Budget. I want to welcome 

everyone to the hearing this morning. 

This is the way we will proceed this morning. I just want to advise my colleagues we will allow those as a courtesy who are here 

to introduce the Congressman to go first, starting with Congressman Spratt, the Chairman of the House Budget Committee, who 

we are very pleased to have on this side of the aisle. Congressman 

Spratt and then we will, if Senator Grassley is here, have him go 

with his statement so that they can be excused. 

And then Senator Gregg and I will make our opening statements, 

and then we will swear the witness, and then we will give Congressman Nussle a chance to make his statement. And then we will 

go to questioning rounds. 

For the advice of my colleagues, we thought this morning we 

would limit the questions to 6 minutes a Senator because we know 

we are going to have a lot of attendance this morning. So that will 

be the order. 

I see Senator Grassley entering now. Senator Grassley, who is a 

very respected member of this Committee, as well as a very important member of the Senate Finance Committee that we work with 

very closely. So we are delighted that Congressman Nussle has 

2

these two very distinguished speakers here this morning to introduce him. 

OPENING STATEMENT OF CONGRESSMAN SPRATT 

With that, we will turn to the House Budget Committee Chairman, Congressman Spratt, a very dear friend, for his introduction. 

Mr. SPRATT. Thank you, Mr. Chairman, Mr. Gregg, Ranking 

Member, Senator Wyden. Thank you for this opportunity. 

I should say, and I should have explained this to Jim Nussle before I agreed to undertake this assignment, that the last time I testified in support of a candidate here was a special experience. It 

was a classmate of mine from high school who was getting his third 

star and becoming Deputy Chief of Staff of the Army. 

He was one of these generals who had managed to spend most 

of his career in the field, not the Pentagon, and being in a Congressional setting like this was a little unusual for him. 

I spoke to Senator Exon before I came in. My old classmate sat 

down. A few minutes later, with a wrinkled brow, he turned to me 

and handed me a piece of paper. I unfolded it and it was a note 

from Exon to the nominee. It said having Spratt speak on your behalf is not a fatal mistake, but it will help your cause enormously 

if you dissociate yourself from him and denounce him thoroughly 

in any remarks you make. 

[Laughter.] 

Mr. SPRATT. So Jim, I do not know whether you realized what 

you were getting yourself into when you invited me to do this. 

During all the years that Jim Nussle was the Chairman of the 

House Budget Committee, I sat next to him as the ranking member. Our working relationship became one of comity and respect. 

Despite our disagreements on the budget, and they were significant, Jim Nussle was collegial not just toward me but toward other 

Democrats on the Committee. He agreed to ground rules for committee proceedings that allowed Democratic members who were in 

the minority a fair chance to be heard, not to win a vote mind you, 

but to make a point or to raise a question. 

A good example of that is markup. When we marked the budget 

resolution, his side could have required our side to do what we 

must do on the House floor under the House rules, and that is offer 

only amendments which are full substitutes. We instead negotiated 

a plan that allowed our side to offer and argue some 35, 40 amendments which we arranged in three tiers. The top tier got 20 minutes and the bottom tier 10 minutes. This led to marathon markups, over which Jim presided in an evenhanded manner late into 

the night, long after he would have gladly gaveled the meetings to 

a close. 

Off the hearing room stage, Jim dealt with us fairly on administrative issues, allowing us for example the computers and equipment we needed and a staff allotment equal to a third of the professional staff. Our minority staff were located behind the Cannon 

building in an old motel. I think it was an old Howard Johnson’s 

motel. The most you could say for it was that each staffer got his 

own bathroom, tub included. We were delighted to learn that the 

building was scheduled for demolition until we found that that 

3

would mean we were going to be on the street. There was nowhere 

else for us to go. 

Having wandered around the basement of the three buildings on 

the House side for several days, we went to Jim. He intervened on 

our behalf with the Speaker’s office and we found space in the Cannon basement that was tight but adequate. 

I cannot point to any bipartisan budget agreement on which Jim 

and I collaborated, unfortunately. But then the only bipartisan 

budget on which I have worked for the last 10 years was the Balanced Budget Agreement of 1997. At that time John Kasich was 

Chairman of the House Budget Committee. But if Jim Nussle had 

been chairman instead, I feel sure the outcome would have been 

the same. I have no doubt that he would have worked in earnest 

with us to find common ground. 

At the same time, he would have stayed in line with his leadership and his fellow Republicans because, make no mistake, he is 

a team player. 

When he was still a back bencher on the budget, Jim asked John 

Kasich to let him chair a task force to study improvements in the 

budget process. Kasich agreed and at my recommendation named 

Senator Cardin cochair. In the end, I did not agree with many of 

the suggestions the task force put forth, for example making the 

budget resolution a joint resolution. But Jim Nussle came to me 

several times repeatedly and sought my input. I saw that there 

was a separation between us on the uses but there was a potential 

still for working together. 

Having overseen the assembly of several budget resolutions, Jim 

Nussle is conversant with the budget. Having chaired the Committee within the last year, he can easily pick up where he left off. 

At OMB, Jim will assume the task of defending the President’s 

budget and it may arrive at an acrimonious time if vetoes start flying, as the White House has threatened. 

But regardless of who is Director of OMB, I am afraid we are 

likely to continue having disagreements over major budget policy. 

For example, everyone, myself included, admires the current director, Rob Portman, but we have not achieved a lot of conversion unfortunately on budget issues under his tenure. But to his credit, he 

has sought to initiate negotiations over entitlements. 

Given our history on the Budget Committee, I consider Jim 

Nussle a worthy adversary, able, knowledgeable, and fair. I am 

pleased to share with you just a few of my experiences with him 

and to recommend his appointment, confirmation of his appointment, for Director of OMB. 

Thank you very much. 

Chairman CONRAD. Thank you, Chairman Spratt. 

I would say to Congressman Nussle, you have got a real friend 

there. It matters a lot to the deliberations of this Committee, and 

I can say to this Chairman, that Chairman Spratt has endorsed 

your candidacy so warmly. 

We are also joined this morning by Senator Grassley, the senior 

Senator from Iowa, and a very respected member of this Committee. And also a real powerhouse on the Senate Finance Committee. 

4

Welcome, Senator Grassley. It is good to have you in this position 

today, as well. 

OPENING STATEMENT OF SENATOR GRASSLEY 

Senator GRASSLEY. Thank you, Mr. Chairman. 

I am very pleased to be here to introduce the nominee. I think 

I take off where you left off, and that is in regard to Chairman 

Spratt being here. I do not think there is any higher commendation 

that a Republican can have, appointed by a Republican president, 

of why Jim Nussle ought to be confirmed. 

Because in that position of Director of OMB, Congressman 

Nussle, if confirmed, will have to be negotiating for the President 

between Congress and the President and, of course, representing 

the President because the President has been elected and the 

President has the right to choose his OMB Director. 

But knowing of the interactions that have gone on between Congressman Spratt and other Democrats over the years that Congressman Nussle has been in the Congress, then I think that that 

ought to be very meaningful to us in the Senate as we try to work 

for some comity on budget issues. 

I have known Jim Nussle for nearly 27 years. I first met him 

when he was a student at Luther College in Northeast Iowa. He 

drove me around in an old Ford during my campaign in 1980. He 

did not charge anything for doing it. 

Chairman CONRAD. Did he ever get you lost? 

Senator GRASSLEY. He never got me—I do not think he ever got 

me lost. At least it is not memorable. 

When he decided to run for Congress at age 29, he was elected 

when he was 30, it was a sort of a thing where after he got the 

nomination he asked me to help him. I was very glad to help him 

because you know I had five kids, I wanted one of them to be in 

politics. They hated politics because I had been in it and spent so 

much time with it. 

So I saw Jim as a little Grassley, and an opportunity for me to 

have somebody who would work with me and carry on a tradition 

that I think is a great tradition, and that is of public service. Not 

for just Chuck Grassley, for everybody that is in public service. And 

I like young people to do it. 

And so I worked for him in his campaign and I made it very 

clear to the voters that I considered him like part of the family. 

So he was elected and he has demonstrated that leadership well 

within the Congress of the United States and he has not done anything to let me down while he has been in the Congress of the 

United States. So I absolutely have no regret working for him for 

Congress. He has been a great public servant and I think he is 

going to be a great Director of OMB. 

I think he has shown himself to be a wise steward of taxpayer’s 

money. I think that he took seriously this responsibility very early 

in his congressional career. Ferreting out wasteful and unnecessary 

spending is an obligation we all have. 

And I think that he has always been looking toward long-term 

challenges, not just short-term goals as well. I think some of the 

long-term goals would best be evidenced by his work on the Deficit 

Reduction Act when we saved the taxpayers $40 billion over 5 

5

years with that DRA. He has not considered the budget process a 

perfect process because he chaired the Bipartisan Task Force that 

came up with the Comprehensive Budget Process Reform Act of 

1998 and he did that in a bipartisan way, working with Congressman Ben Cardin, now a member of our body. 

So he has demonstrated, as best demonstrated by Congressman 

Spratt being here, working across the aisles. 

Now in addition to that, I have had excellent testimony in support of his nomination when Senator Harkin testified on his behalf 

before the Senate Homeland security and Governmental Affairs 

Committee just this week. He noted that Congressman Nussle is 

superbly qualified. 

Given Congressman Nussle’s experience, knowledge, and commitment to public service, it is fitting that he has been nominated to 

be Director of the Office of Management and Budget. He’s highly 

qualified, knows the budget, knows Congress, and most importantly, he is a decent and honorable man. 

So I commend him to you, Mr. Chairman. 

Chairman CONRAD. Thank you very much, Senator Grassley. 

And again, we appreciate very much your being here to introduce 

your colleague. That also carries special weight with this Committee because of your valued service here. 

It also carries special weight with me because I have come to 

know you as somebody who is absolutely honorable and somebody 

who can rise above partisan positions to try to get something done 

that is important for the country. We very much appreciate your 

providing witness here today. 

I would now indicate to Chairman Spratt and Senator Grassley 

that you are excused. We will now go to the opening statements of 

myself and Senator Gregg, and then we will turn to questioning 

rounds after the Congressman has a chance to make his opening 

statement. So let me just begin with a brief opening statement. 

Again, welcome, Congressman Nussle, to the Senate Budget 

Committee. By the way, you could not have had better introducers 

than Chairman Spratt and Senator Grassley. 

OPENING STATEMENT OF CHAIRMAN CONRAD 

Chairman CONRAD. I think we all know this is an important 

nomination. The Office of Management and Budget is the person 

that represents the president of the United States on these issues, 

on these questions. I think all of us know, in this Committee, that 

our country faces very serious physical challenges, both short-term 

and long-term and that we have got to work together to solve them. 

Certainly the long-term challenges are not going to be resolved unless there is a bipartisan consensus. 

And so I look forward very much to hearing from Mr. Nussle on 

how he intends to work constructively and cooperatively with Congress to address these challenges. And I hope that we will hear 

from you, Congressman Nussle, some concrete steps we can take to 

break the current logjam that exists with respect to the outstanding issues for this year. 

As my colleagues know, I have very serious concerns about the 

budget condition of the country and the fiscal policies of this AdVerDate 0ct 09 2002 12:13 Oct 26, 2007 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\37566H.TXT SBUD1 PsN: TISH
6

ministration. Let me just run through briefly a couple of charts 

that make the point and raise the concerns that I have. 

This is what has happened with spending under this Administration. Spending has gone up almost 50 percent. And all of us know 

that that has been driven in large measure by the war and by 

homeland security. But nonetheless, spending is up sharply. Let us 

go to the next slide.

While spending is up sharply, revenue has stagnated. Real revenue, that is adjusted for inflation, is just now getting back to 

where it was in 2000. So while spending has gone up sharply, revenue has been largely stagnant in real terms over this Administration’s life. And that has led to an explosion of the debt. The debt 

of the United States has gone from $5.8 trillion at the end of the 

President’s first year to an estimated $9 trillion at the end of this 

year.


37566_001.eps
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37566_002.eps
8

Of course, that means we have had to borrow more and more 

money and, increasingly, that money is being borrowed from 

abroad. Let’s go to the next slide. 

Foreign held debt, that is the U.S. debt held by foreign countries, 

has exploded more than 100 percent increase in foreign held debt. 

That means that increasingly we are in hock to China, Japan.


37566_003.eps
9

Let this go to the next that shows Japan we owe over $600 billion; China we all over $400 billion; the United Kingdom over $160 

billion; and on it goes, the oil exporters over $120 billion. This is 

a deep concern.


37566_004.eps
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Let us go to the next slide, if we could. 

At the same time, we have had significant tax reductions and 

they have been heavily weighted to those who are the most fortunate among us. You can see in 2006 those with incomes of over $1 

million a year got an average tax reduction of over $118,000.


37566_005.eps
11

Let us go to the next slide, if we can. 

The Administration has told us that the tax cuts have fueled economic growth. Unfortunately, when we look at this recovery compared to the nine previous recoveries since World War II, looked 

at the nine major recoveries since World War II, we see that this 

recovery is running well short of the average of those other nine 

major recoveries since World War II. In fact, on revenue we are 

still $86 billion short of the typical recovery.


37566_006.eps
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It is not just on revenue, let us go to the next slide. We see the 

same thing with respect to job creation. Job creation, again, if we 

look at the nine recoveries since World War II, take the average 

and compare this recovery, we see we are still 7.3 million private 

sector jobs short of the typical recovery.


37566_007.eps
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The final point is on business investment. This is perhaps the 

most striking. Again, comparing this recovery to the nine major recoveries since World War II and averaging all of them, we see this 

recovery running 69 percent behind, on business investment, those 

other recoveries.


37566_008.eps
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Something is wrong. I am increasingly concerned with the direction of the economy. We all know the subprime market is raising 

questions. Interest rates are rising. Markets are unsettled. So we 

have got a lot of work to do. 

And of course, the biggest hurdle of all are the long-term challenges. This is a place where, Congressman Nussle, I think you and 

I and Senator Gregg are perhaps in very close agreement, at least 

in the diagnosis of the problem. We all know that we are headed 

for a cliff. We have got an unsustainable course here for the country and it is going to take working together to have any chance to 

deal with it. 

We have heard the President say that the budget resolution 

adopted by this Congress spends too much. Let me just put up a 

slide that shows the difference between the spending—the overall 

spending between what the President called for, $2.91 trillion, 

versus what is in the budget, $2.94 trillion. That is less than a 1 

percent difference.


37566_009.eps
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Goodness, if we cannot resolve this matter, how are we ever 

going to resolve the question of the long-term imbalances that 

exist, especially the looming challenge of the health care accounts, 

which is the 800-pound gorilla. It is the thing that can swamp 

about and we have absolutely got to turn our attention and do it 

in a bipartisan way to addressing that challenge. 

I would like to make just a final point on the tax cut. CBO, let 

me just go to that last slide, CBO now tells us that we would not 

have a deficit if we did not have the tax cuts for this year. Now 

I do not think any of us take the position that none of these tax 

cuts should be extended. I certainly do not take that position. I 

think certainly those tax cuts aimed at the middle class need to be 

extended.


37566_010.eps
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I think we also really owe it to the country to review our entire 

tax system. I am increasingly convinced that it is badly outdated, 

does not deal with the challenge currently facing the country. We 

have got the Alternative Minimum Tax hanging out there, it cost 

$800 billion to fix. It is the old millionaire’s tax, rapidly turning 

into a middle class tax trap. We have got all of these other tax provisions that are going to not be extended past 2010. That, I think, 

is an impetus to reform. 

And most of all, our competitive position in the world ought to 

be an impetus for us to thoroughly revamp the current tax system. 

We have got the looming prospect of a demographic tsunami 

called the baby boom generation. And all of us know that we are 

going to have to fundamentally reform our long-term entitlements. 

If we fail in that, we put the country’s long-term fiscal strength at 

risk. 

With that, I want to turn to my very able colleague, the ranking 

member, Senator Gregg. 


37566_011.eps
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OPENING STATEMENT OF SENATOR GREGG 

Senator GREGG. Thank you, Mr. Chairman, and Congressman 

Nussle. I would join with the Chairman in saying that having Congressman Spratt and Senator Grassley introduce you is certainly a 

very strong statement of bipartisan support for your nomination 

and reflective of your years of work here and the fact that it has 

been well received and seen as fair and constructive. 

Being called a little Grassley, however, that could really do some 

damage. 

[Laughter.] 

Senator GREGG. As a practical matter, I had not intended to 

spend a lot of time on the large picture. I was going to focus more 

on your qualifications, which I think are extraordinary. I mean, 

you bring to the table obviously great talent and ability, the fact 

that you were Chairman of the Budget Committee, the fact that 

you were cochairman with Senator Cardin of the Budget Reform 

Task Force, and the fact that you ran the Budget Committee on the 

House side in a fair, open way. 

The budget is inherently a partisan document. Regrettably, but 

it is. And it has always been that way. There has been, I guess, 

one exception to that. It would be nice if there were more. But as 

a practical matter that is the way the structure works. 

So the key to doing this document, however, has always been—

and I congratulate Senator Conrad for his handling of it in this 

way—is to recognize it may be partisan. But that does not mean 

the opposition does not get a fair hearing at the table, get to make 

their points, and have a chance to make their case. Obviously, in 

the final count, the vote is usually going to be whatever the ratio 

is of the majority to the minority. 

And you did that. And I enjoyed working with you when I 

chaired this Committee and found our relationship to be open, 

frank, and constructive, and very professional. 

I think that is what we need at the OMB job. The OMB job really is very much a liaison with the Congress. Obviously, you are the 

traffic cop within the administration for spending, as OMB Director. But equally important, you are the person that, as we go into 

the appropriating process, the Congress works with most often in 

order to resolve issues of how the day to day operation of the Government is going to occur and how appropriations bill are going to 

be structured. 

So your knowledge and your track record of bipartisanship and 

willingness to work across the aisle is critical and I think very 

much a positive here. 

On the larger issue which has been referred to by the Senator 

from North Dakota, and I did not bring my charts today—I thought 

I would give everybody a break. 

Chairman CONRAD. He has got a very good charts, by the way. 

Senator GREGG. Excellent charts. But let’s cite just three basic 

statistics which I think call into question the general theme that 

the economy is a disaster and the policies of this Administration 

have been a disaster on the issue of fiscal policy, which is I think 

the theme of the Senator from North Dakota, along with the theme 

that I do agree with, which is that we have to address entitlement 

spending. 

18

But three statistics. The first, is that the economy is in good 

shape. The unemployment rate in this Nation is, I think, about 4.6 

percent. It is extremely low. And we have, I think it is 25 straight 

quarters of economic growth. And we have had added somewhere 

over 8 million new jobs. That represents a pretty robust economy 

and essentially a fully employed economy. 

The second statistic which I think is important is that revenue 

of the Federal Government now exceeds the historic norm. The historic norm has been, since World War II, about 18.2 percent of 

gross domestic product has come into the Federal Government in 

revenue. We are now up to about 18.6 percent of gross domestic 

product in revenue. 

And that has been a function, I believe, of having a tax law—

which is a product of the work of Senator Grassley—which is fair, 

which says that if you are an entrepreneur, go out and invest, take 

a risk, and as a result create jobs for Americans. And as a result 

of doing that, people have gone out and taken a risk, been entrepreneurs, and created jobs for Americans. 

The practical effect of that is that more revenue has come into 

the Federal Government because more people have been working 

and there has been more capital activity. And capital has been 

more efficiently used instead of inefficiently used. 

And so we now have revenues above their historical norm. No 

matter what chart you want to hold up, that is the basic test. Are 

we generating the revenues that the Federal Government needs in 

order to fund itself at its historic levels? Yes, we are. Are we spending too much money? Yes, we are doing that, too. But that is primarily a function of entitlement spending and the war. 

The third statistic which I would cite is that these tax policies 

which Senator Grassley evolved with the help of the President, 

have created a distribution which is extremely progressive. High 

income individuals today are paying a larger percentage of the tax 

burden than they paid under the Clinton Administration. The top 

20 percent of people with income in this country are paying 85 percent of the income tax burden of this Government, 85 percent. That 

is a pretty big number. Under the Clinton Administration they 

were paying 82 percent. 

On the other end of the scale, the bottom 40 percent of people 

with income in this country are receiving more back because, as a 

practical matter, they do not pay income taxes. They are receiving 

more back from the Government than they have received under the 

Clinton Administration by a factor of about two. 

So the lower income individuals are getting more benefit from 

the Government, higher income individuals are paying more into 

the Government as a percentage of the cost of the burden of taxes, 

and that is progressivity. 

And it is a function of the fact that we have created a tax law 

in this country which basically taxes capital fairly so that people 

are undertaking investments which are taxable. Instead of avoiding 

investments by looking for tax shelters, high income individuals 

are willing to do taxable activity. 

The response of the other side of the aisle in the short time that 

they have been here was basically summed up by the Senator from 

North Dakota’s chart which essentially represented that we are not 

19

paying enough taxes. They want to raise taxes. They basically want 

to repeal the present tax rate on capital gains, the present tax rate 

on dividends, and the rate of the upper bracket. They want to raise 

that. Significant tax increases are essentially the game plan of the 

other side of the aisle. 

In addition to that, not only are they restive about the fact that 

we have got a tax law which has generated all this revenue because we have created a fair tax on capital, they essentially want 

to go out and even expand that effort and through regulatory activity, intend to pursue capital formation in a way that is going to 

drive capital overseas. 

It is really a cutoff your nose to spite your face policy because 

the thing that has been generating this economic recovery has been 

the fact that we have created an atmosphere where capital formation, entrepreneurial activity, and the resulting jobs that occur 

have generated the income to the Government. 

In addition, spending is exploding around here. You can use all 

the charts you want to try to make it look like these lines are coming together, but it is not. Every time we turn around we are seeing on the floor of the Senate proposals to spend a heck of a lot 

more money in nondefense areas. It is not healthy to this economy. 

The supplemental that came through here for the Defense De- partment, which was supposed to fight the war, had put into it $17 

billion of spending which had nothing to do with our national defense but was basically a price to pay which was required by the 

other side of the aisle before they would support funding the troops 

in the field. 

The budget which was passed by the other side of the aisle had $23 billion of spending over the President’s request on the nondefense domestic discretionary side. And we are seeing a variety of 

expansion of program in the entitlement account area which is not 

paid for. 

So spending is growing and growing dramatically. And that is 

one of the things that is maybe driving the other side of the aisle 

to say that we should be raising taxes. 

So there is a philosophical difference. I think our numbers are 

even more defensible than the other numbers. 

But that brings us back to your nomination, which should be the 

topic of this discussion. 

[Laughter.] 

Senator GREGG. I think what you will bring to the table, and 

what I know that this process requires, is that you will be seen as 

a fair arbiter, obviously someone who is going to be carrying the 

message of the administration but somebody who will listen fairly 

to the other side, who will work effectively with the Congress because you understand the Congress, and who can hopefully bridge 

some of these differences so that we, as a Government, do not end 

up in the situation we are under right now which is functioning 

under a continuing resolution but can actually proceed to appropriate the funds necessary to manage the Government as we go 

into the next fiscal year. 

Chairman CONRAD. Thank you, Senator Gregg. You can see, you 

know, we are in almost complete agreement here in the Senate 

Budget Committee, except when we are not. 

20

If you will please stand and raise your right hand, do you swear 

that the testimony that you are about to give will be the truth, the 

whole truth, and nothing but the truth? 

Mr. NUSSLE. I do. 

Chairman CONRAD. Again, we want to welcome you, Congressman Nussle, to the Committee. Please proceed with your statement. 

Then again, for the advice of my colleagues, what we intend to 

do after Congressmen Nussle makes his opening statement, and I 

hope he will take that opportunity to introduce his wife who is with 

him and other guests who have accompanied him, we will then 

have 6 minute rounds. We have agreed to 6 minute rounds because 

of the number of Senators who are interested in getting time in. 

We have also been advised we can expect a vote, a roll call vote, 

at about 11:35, which is about an hour. 

Again, welcome to the Committee. 

STATEMENT OF HON. JIM NUSSLE, OF IOWA, NOMINEE TO BE 

DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET 

Mr. NUSSLE. Mr. Chairman, thank you very much. 

As many of you know, when you go for a job interview oftentimes 

you speak before people, you are interviewed by people who have 

not met you before, never worked with you before, do not know 

anything about you. And that is probably not the case here today. 

I have worked with three members of this Committee as chairman, 

and I am honored that they are here today. I have good memories 

from all three of those encounters and I appreciated your service. 

I have members that I served with in the House, I believe nine 

on the Committee all told, that I served with in the House. In fact, 

two that are here that I came in with as classmates, and I am honored by your service. 

And also members that I have worked with in a partisan way 

and in a bipartisan way over the years, on committees, in the 

House, and I am honored by the reintroduction to all of you. 

Even some staff here that went over the wall from the House 

that are now here in the August Senate and I hope the promotion 

is going well for you and I am honored that you are here, as well. 

Mr. Chairman and Ranking Member Gregg, thank you for your 

comments. I appreciate the opportunity to be here before the Committee and I thank you both for the time you have taken in counseling me and giving me advice, not only previous to this nomination but also subsequent to the nomination. I look forward to continuing those conversations and meetings on a regular basis. 

I want to thank Senator Grassley. As you said, and I understand 

the circumstance in which we find ourselves. I have to tell you a 

little bit about John Spratt. When I first called him about this 

nomination, he volunteered to do this. When I picked up the phone 

he had heard about it and he said if you need me to come over, 

I will be happy to do it. He volunteered to do that. 

You can say a lot about people but when they make that kind 

of a personal effort on your behalf, it is something you are honored 

by and will remember. John Spratt and I have had, as he said we 

both regret the fact that—both because we could not and sometimes because we would not agree on different things over the 

21

years. Possibly our hands were tied. Possibly it was not the right 

timing. The budget, as Senator Gregg said, is such a partisan process. I regret that. 

Senator Cardin and I, I believe, in our reform package, attempted to take a little bit of that sting out. I do not know if it 

would have. That was certainly our intention, to try and bring 

some of these big decisions more forward in the process and look 

for agreement earlier in the process. 

But be that as it may, it is a partisan process and it is something 

I think we all regret because there is so much that we agree on. 

If you would permit me, I really did listen to what both our Senators, my friends, and the Chairman and ranking member just 

said. If I could recap, and I know this is dangerous because I have 

to be careful that I was listening carefully. 

But if I would be permitted, let me suggest that both of you said 

that jobs were growing but maybe they could grow faster. Both of 

you said that economic growth was up but economic growth we 

would all want to be growing faster. The deficit is down but it 

could come down faster. And it is a short-term priority only we 

know, as you both said, that the long-term is the real challenge. 

You both have indicated and are leaders in the effort to look at 

our tax code. 

And last but not least, I guarantee you, having been the Chairman of the Budget Committee, that while there is a disagreement 

between $933 billion and $955 billion, I guarantee you within both 

of those numbers there is a lot of agreement. 

We disagree on the top line possibly, that may be the debate and 

conversation and rhetoric today. But we all know embedded within 

those numbers is a lot of agreement on how to secure our country, 

how to make sure our next generation is prepared, how to make 

sure that our families have the kind of security they need for the 

long term. There is so much that we agree on. 

And I believe, as the Chairman said, and he asked if I could 

maybe point the way. First of all, I wish I could today. I am not 

at liberty yet to negotiate. Nominees find themselves in an awkward position—I do not know if it is limbo or what you call it—

where you may know a lot or you may think you know a lot about 

the process but you are not yet equipped either with any authority 

or the responsibility to do much about it. 

I would be honored with your consideration for confirmation to 

get to work to do just that. 

I am anxious to work on these areas where I know we have common ground. We are going to have a difficult challenge in bridging 

that and finding exactly where the particular common ground is. 

But the mere fact that we agree on the challenges oftentimes, I believe, is a pretty important foundation to move forward. 

I am spirited by the opportunity for this challenge. I am an optimist and I am someone who enjoys that kind of challenge. I would 

say to all of my friends and Senators and colleagues, former colleagues on this Committee, that I want to be able to help with that. 

Also, I kind of got off my statement here. I just want to thank 

a couple of other people if I may, Mr. Chairman. John Spratt’s current staff director was also here, he may still be, Tom Kahn, was 

and is also good friend. My former chief of staff, Rich Meade, they 

22

worked together and they still are friends and work together. I 

think one thing that John and I were able——

Chairman CONRAD. If I could stop you there, Rich enjoys a good 

reputation over here, too. Let met just say I talked to my staff this 

morning and they tell me they have always been able to work well 

with Rich. We welcome you to the Committee, as well, Rich. 

Mr. NUSSLE. I think one of the things that we all know is that 

when we lead by example, the people who work with us also follow 

that lead. They have the same kind of positive rapport. 

I also want to introduce my wife, Mr. Chairman. Karen is here 

with me. We all know that our spouses are our anchor and they 

have to put up with a lot whenever we go into public service. And 

she does it with grace, as our spouses do. It is because of her that 

I am able to be here today and do that. And so I want to thank 

her and introduce her to the Committee, as well. 

Chairman CONRAD. Karen, you are more than welcome here. We 

enjoyed meeting you before the hearing began. Welcome to the Senate Budget Committee. 

And we promise, we will be respectful with your husband. 

Mr. NUSSLE. Mr. Chairman, too, the one thing that you do not 

know about when you take on a responsibility like this is how 

much support you will need. When the President asked me to do 

this, I have never been through this before so you do not really 

know what happens next. In fact, if I would have known a little 

bit more about this maybe it would have been a little bit different 

process. 

But the OMB staff has just been fantastic. I am sure that they 

shudder every time a question gets asked and they wait for my answer. But they have done just an outstanding job. It is such a professional staff. 

I knew that when I was Chairman but I have gotten to see it 

firsthand. And I know many of you have enjoyed working with the 

great professionals at OMB. I am honored that they have tried to 

help prepare me for today. 

Mr. Chairman, as I stated, when the President nominated me, I 

am really humbled and privileged by this opportunity. If confirmed, 

I look forward to helping to develop the policies that we talked 

about on behalf of the President, trying to keep the economy going 

and growing, creating jobs, balancing the budget by 2012. 

And then looking, as we were just talking about, how we can 

deal with the unsustainable growth in entitlement spending in 

Medicare, Medicaid, and Social Security. If I should be confirmed 

by the Senate, I intend to work everyday, wake up everyday and 

work on these challenges that we have talked about in private with 

many of you and that we will discuss here today. 

I also have to tell you, it feels good to be back here in Congress. 

I learned some amazing things in this body. I had the honor of 

working with so many of you and forged a number of lifetime 

friendships and also lifetime experiences that not very many people 

get to have. I am honored by that, as well. 

If confirmed, I also have the opportunity to follow in the footsteps of some great people. In particular friends, Rob Portman, who 

was my Vice Chair on the Committee, and also Josh Bolton are two 

that have blazed the trail before me and our good mentors. These 

23

two people give public service a real good name and I am honored 

to be able to work with them. 

As I was sitting trying to figure out what to say today, I kept 

having this flashback to a classroom 30 years ago in Decorah, Iowa 

where it was when it was I had that Ford that I drove Senator 

Grassley around in. I was sitting in my Intro to Congress Class, 

I was a political science major and had an economics minor. I was 

sitting in class and the professor, Joan Thompson, decided she was 

going to teach us about the Federal budget process. 

I thought to myself, as I know all of us have had this experience, 

you think when you are in school in particular, when in the world 

am I ever going to use this information? Do I really need to know 

this stuff? Is this going to be on the exam? I think is probably what 

you think. 

But something happened during that. I got hooked. I am an admitted budget wonk. I love the budget. I love the process of the 

budget. She taught me, and I have learned through my experience 

here, that so much is interwoven in what we do in the budget, 

what you do in the budget here. 

I have to say I never thought, as a 19-year-old at Luther College, 

that I would ever be chosen by my peers to be the Budget Chairman, let alone be sitting here in front of all of you nominated by 

the President and under your consideration to be the OMB Director. 

It is truly an awesome thought and I hope it is something I hope 

my teenage kids take a lesson from. I hope many students do, and 

that is you never know where life is going to take you. You ought 

to pay attention. Pay attention, listen, learn, because you really do 

not know what is going to be on that the final exam. I have a feeling that I am going to get some of those tough questions on that 

exam here today. 

Listening and learning is something I took very much to heart 

in my role as a representative. I feel that we all govern better 

when we listen to our constituents and learn from them. So should 

I be confirmed by the Senate, I intend to continue those philosophies which I first learned from my parents and which were instilled in me by my constituents about listening and learning and 

teamwork and being open and honest. 

This is not easy work. We know there are huge challenges ahead 

of us. 

But I congratulate you, Senator Conrad, on passing the budget. 

I know how challenging that is. And I congratulate the work that 

this Committee does. And I very much am eager to get to work, if 

confirmed, to work on these challenges. I know they are going to 

be difficult but I believe that I have the tools necessary in my toolbox to help us find some of those answers, even if they are not obviously apparent here today. 

I thank you for the opportunity to come before you and testify. 

[The prepared statement of Mr. Nussle follows:]

24


37566.128
25


37566.129
26

Chairman CONRAD. Thank you, Congressman Nussle, for that 

statement. 

Let me just ask a housekeeping question first, which is when 

asked, will you agree to appear before this Committee, given reasonable notice? 

Mr. NUSSLE. Yes, sir. 

Chairman CONRAD. We thank you for that. 

Second, will you agree to answer questions put to you by this 

Committee when you are not called as a witness, but to answer 

questions that this Committee or members of this Committee 

might have? 

Mr. NUSSLE. Yes, sir. 

Chairman CONRAD. We appreciate that. 

Let me just go to this first question. I listened very closely to my 

colleague, Senator Gregg, and he talked about revenue being at a 

level that is somewhat above the average. The problem with that 

is if we had revenue at the average level the last 20 years, none 

of the budgets would be balanced. The problem is the bottom line. 

The bottom line is when you put spending together with revenue, 

the amount of spending we are doing with the amount of revenue 

we are raising, the two do not match. We are spending far more 

than we are taking in. And we are doing it before the baby boomers 

retire. 

The result is this is what has happened to the debt. Let me ask 

you this question. Is this dramatic increase in the debt during this 

Administration a good thing, a bad thing, or does it not much matter? What would be your assessment of what this increase in the 

debt means to the country? 

Mr. NUSSLE. As the Senator knows as well—if not better—than 

I, there are many reasons why our debt is going up and has gone 

up. I consider it a huge challenge, a fiscal challenge, for our country, an enormous challenge that we have to grapple with. It is not 

a short-term challenge. It will not be addressed this year or in the 

next budget in total. 

But we have to, as you know, I think I have heard you say and 

I have heard others say—I have probably said it myself—when you 

are in a hole the best thing to do is to stop digging. 

So I agree and I believe it is a shared—it is one of those shared 

principles that all of us agree, that we need to do our best to reverse that trend as quickly as possible and get back on the road 

toward responsibility. 

Chairman CONRAD. And why does it matter? Why should anybody be concerned about this trend line? 

Mr. NUSSLE. Again, the Senator can, the Chairman can—and I 

appreciate you asking me that question. The reason I am concerned 

about the trend line is because of the opportunities that are often 

missed either today or in the future by being saddled with debt. 

This is true whether you are a farmer or in small business or an 

individual with high credit card debt, or it is true as a Nation. 

Having said that, there is, I believe, some silver lining, if there 

is. The fact that we are an economy that can grow at amazing rates 

when we are growing, the fact that our debt is debt that is attractive and purchased by others is a positive. There are some counVerDate 0ct 09 2002 12:13 Oct 26, 2007 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6601 C:\DOCS\37566H.TXT SBUD1 PsN: TISH
27

tries where people are running away from the indebtedness instruments. So there is a lot of silver lining, too. 

But I would concur with you and I believe there is bipartisan 

support in the area of concern over growing debt. 

Chairman CONRAD. Let me just go to the second one, on foreign 

holdings of debt. Let me ask you your view on this issue. This is 

what has happened to foreign holdings of our debt during this Administration. It really is quite striking. It took 42 presidents 224 

years to run up $1 trillion of U.S. debt held abroad. This president 

has more than doubled that amount in just these 6 years. 

Does this trend line of foreign holding of U.S. debt concern you 

or not? I would ask the same question I asked previously, is this 

a good thing? Is this a bad thing? Or does it not much matter? 

Mr. NUSSLE. I am concerned about it, Mr. Chairman. Obviously 

when you—and all of us are, I compliment you on your chart. 

There are many ways to construct a chart. If you compare that indebtedness to a denominator which I think is a common denominator that all of us would choose to compare these big numbers to 

something, when you compare it to GDP we, I think, see a much 

more reasonable indication of our debt compared with our ability, 

our strength of our economy to pay it back. 

But I will not quibble with your chart. It is a challenge. You held 

up another chart involving the different countries. I believe 9 percent, as an example, is held by Communist China. Again, it could 

be a lot higher. It is good that our indebtedness is something that 

is attractive to be purchased. But I consider that and others to be 

a concern that we should never shy away from. 

Chairman CONRAD. Why is it a concern? Why does it matter that 

we have this doubling of U.S. debt held abroad? Why should somebody listening and watching this perhaps care? 

Mr. NUSSLE. Obviously at some point in time it may need to be 

paid back. That is the most important indication. 

Probably the second, however, is that we currently do not have 

an agreement on a plan by both sides or between the Congress and 

the President to address that long-term unsustainable growth in 

entitlements. We have seen good proposals but we do not yet have 

a meeting of the minds and active reform legislation to deal with 

those challenges. 

It is true with anybody who has problems with their debt, whether it is their credit cards or their mortgages or whatever it might 

be, if you do not have a plan to deal with it, how much you have 

is less relevant than how much you are going to continue to accumulate if you do not deal with that long-term challenge. 

Chairman CONRAD. Let me just say this to you, Senator Gregg 

and I have a proposal that we will be introducing in the near future that suggests with respect to the long-term challenges that we 

face that we put together a working group, 16 members, eight 

Democrats, eight Republicans, two of whom would be representatives of the administration. We contemplate the Secretary of the 

Treasury being the chairman of this working group. We would really anticipate—obviously the president would decide who his other 

representative would be but it would likely be you. And that these 

people be given an assignment to come up with a plan to deal with 

these long-term entitlements. 

28

If you are confirmed and if this plan goes forward, is that something that you would be willing to devote your time and attention 

to, coming up with a plan that could be presented to a future Congress? 

Mr. NUSSLE. If confirmed, yes sir. 

Chairman CONRAD. Senator Gregg. 

Senator GREGG. Thank you, Mr. Chairman. 

Senator DOMENICI. Mr. Chairman, could I ask before you do that, 

did you mention names name for that commission you were talking 

about or just the job? 

Chairman CONRAD. Just the job. 

Senator DOMENICI. Thank you. 

Senator GREGG. Mr. Chairman, thank you. 

Congressman Nussle, following up on the Chairman’s questions, 

the concept that we have been working on is that this would be 

fast tracked, it would not be amendable, and that any report would 

be bipartisan. Of the 16 people on the commission, at least 12 

would have to be in favor of any recommendation. We would hope 

it would be unanimous. And that the members of the commission 

would be experts, within the Congress primarily, on these issues. 

And that any final passage would require 60 votes. So you would 

have fairness and bipartisanship as the underpinning of the proposals. 

Obviously if this went forward, you would play a role in it as 

OMB Director, I would hope. 

On another issue, however, we are headed for a self-inflicted 

train wreck here on the appropriations process. The Senate has not 

taken up but one appropriations bill and here we are 2 weeks before the break for August. It is very obvious that there is not a plan 

in place to take up the rest of the appropriation bills, or at least 

not many of them, and to conference them. And to get them back 

to the president before the end of the fiscal year on September 30th 

is a physical impossibility due to the fact that they have not been 

brought to the floor. So it is purely self-inflicted. 

I guess I would be interested in your thoughts on how we sort 

through that type of situation. I recognize you are not OMB Director yet, but as a former Chairman of the Budget Committee and 

an active member of the House, any thoughts for how we work 

through this, what appears to be an intended train wreck? 

Mr. NUSSLE. Senator, I have watched this process, as you have, 

for quite some time. And I have noted that in those years—and it 

seems as though there is always a pretty healthy rumor of a train 

wreck. It has happened in divided government times and it is also 

happened, strangely enough, in times where one party controlled 

all of the different branches, we have heard this word train wreck. 

This is why in my budget reform proposals I have always tried 

to accelerate the process by which we discover that there is a challenge—that there are actually two trains heading down the track 

at one another, but also to provide a mechanism to begin the process of talking. 

Again, I am not suggesting any of you need to support a joint 

resolution but that was one way that you would have an early 

warning and an opportunity to bring all parties to the table in 

order to accomplish that. We do not have that mechanism today. 

29

What I would commit to you, if confirmed, and I would commit 

this to all members, that the Administration and the Congress 

need to begin communicating as quickly as possible on these matters where we agree and where we disagree. I understand, I have 

seen in the media a flurry of letters and meetings and I think all 

of that is a positive step forward. I hope, and I am as anxious as 

I can report to you, that I have the opportunity, if confirmed, to 

be part of that process. 

I believe, not only having a little bit of an understanding of 

where the Administration is coming from, but maybe even more 

importantly the advantage Rob Portman had is he understood a little bit about what was happening up here on the Hill on the part 

of members. I think all of that would give me some ability to help 

in this process and I would want to be able to use my efforts in 

that regard. 

Senator GREGG. I think that is certainly an appropriate approach 

and obviously I understand there is going to be a meeting down at 

the White House on this issue with the Democratic leadership next 

week, I think it is, which will be constructive. 

But this is a self-inflicted event. There was obviously a conscious 

decision made that appropriation bills would not be brought to the 

floor of the Senate and would not be conferenced individually because of the issue of a veto having been put forward on bills that 

exceeded the President’s budget. And under the budget passed by 

the Democratic leadership here, they exceeded the President’s 

budget by $23 billion. So the event, the die was cast. 

How you work through this now becomes a very interesting exercise. The problem, of course, was that in the last Congress we had 

a continuing resolution which ended up going for the whole year. 

Our side of the aisle was properly excoriated by the other side of 

the aisle for not passing the bills and having a continuing resolution which went for the whole year. It appears that we are going 

to be in a position where that might happen again, or something 

similar might happen again. 

I guess I would be interested in your thoughts on continuing resolutions which run for the whole year, what effect they have on 

running a government efficiently? 

Mr. NUSSLE. Senator, I am of the view that continuing resolutions do not define success. And I would just suggest that both 

sides are losers when that is the case. 

Now there are some who may suggest that there may be some 

victory in that, and I can understand where that might be the attitude. But my view is that it does not define success. The president 

is not able to move his agenda and priorities forward under a continuing resolution. Congress is not able to work its will and exercise its authority of the power of the purse under Article I in a continuing resolution. 

I do not believe anyone wins. It certainly is a better answer than 

a closure but it is, to me, not a successful conclusion to the process 

because of both sides having an inability to move their agenda forward in any positive way. 

Senator GREGG. Thank you. 

Chairman CONRAD. I would just briefly observe, on this question, 

there is no decision on our side not to bring the appropriations bills 

30

to the floor in a regular order. In fact, I have just attended a meeting in which the overwhelming sentiment was to try to conclude 

work on the appropriations bills in the regular order. 

This discussion at the White House with the leadership of the 

House and the Senate that is going to occur, as we discussed before 

the hearing began, very, very important, very important. I commend you for your statement on a continuing resolution. 

I think all of us—those of us who have been deeply involved in 

the budget process would agree this is just not the right way to do 

business here. We are much better off if we are able to complete 

the appropriations bills in the regular order, to give full consideration so that we can prioritize the use of resources. CR is just taking last year’s and continuing it. So I think you have made an important statement here. 

Senator WYDEN. 

Senator WYDEN. Thank you, Mr. Chairman. 

Good to see you, Mr. Nussle. I have appreciated our working relationship and certainly serving as OMB Director is not a job for 

the fainthearted. I am looking forward to your responses this morning. 

You could get a little bit of a sense of the back and forth here 

in this Committee. I sure hope you can revive tax reform, for example, in the administration. 

I have a proposal, S. 1111, the Fair Flat Tax. I have asked the 

President several times if he would like to work on a bipartisan 

basis. It does not, for example, raise the top rate. It holds the rates 

down for everybody, gives everybody a chance to get ahead. So I 

wish you well in terms of being able to pump some new life back 

into the tax reform talks. 

The questions I want to zero in on first are what I think are the 

overriding issues of our time, and that is changing course in Iraq 

and fixing American health care. Both issues involve hundreds of 

billions of dollars and go right to the heart of what you will be 

tasked to do if confirmed at OMB. 

On the Iraq war, I believe that there has been a systematic effort 

by the Bush Administration to hide the real costs of the war in 

Iraq. I think we very much need some truth in budgeting with respect to the war’s costs. 

So let me ask you first about several actions you have been involved in. First, to your credit, I noted that when you were Chairman you did criticize the Bush Administration for not including 

war funding in the budget and instead relying on just the 

supplementals. But when the bipartisan leadership of the Budget 

Committee sent a letter to the President urging him to include 

foreseeable war costs, you did not sign the letter. 

Why wouldn’t you have signed a bipartisan letter, given the fact 

that you had an interest as stated? 

Mr. NUSSLE. Thank you, Senator, for your comments and for 

your question. 

Frankly, I do not remember the context of that letter and I do 

not know why I would not have because I was probably the earliest—certainly the earliest Republican House leader that came out 

in favor of including and recognizing the out-year challenges of the 

31

war within our budget. So it sounds like a letter I probably could 

have drafted and probably should have drafted. 

But I am not familiar with that letter or why I would not that 

have signed it. But I would be happy to try and take a look at it 

and give you a straight answer on that. 

Senator WYDEN. Thank you. 

For the fiscal year 2008 budget the Bush Administration, for the 

first time, included some of the funding for Iraq and Afghanistan. 

It included a $50 billion placeholder for 2009 at a time when the 

country is spending $10 billion per month on the war and nothing 

was included for 2010 and future fiscal years. Do you think that 

is truth in budgeting? And what would you do again to make sure 

that the American people really see what costs are involved here? 

Mr. NUSSLE. Senator, I would first indicate to you that, of course, 

I did not write that budget. I cannot answer the question of why 

the number was chosen. I would reflect on the fact that it is a number that I, actually, together with then Chairman Gregg, negotiated as part of the first indication of long-term obligation for the 

war was $50 billion. We used it as what we call, as you all know, 

a plugged number because we did not know exactly what that cost 

would be from a Congressional standpoint. 

My assumption, it is dangerous to do so sometimes, is that they 

have continued that practice. The good news is that the Administration is starting to recognize that. I would work with you and 

with the Congress, if confirmed, to do a better job. 

If I may point out one other thing, too——

Senator WYDEN. Let me, if I might, because I think that is a constructive response and I appreciate it. It is going to be especially 

important given the stories we saw 2 days ago with General 

Petraeus talking about a deep commitment for several more years. 

And so we are going to need your involvement in this question of 

additional efforts to be transparent and offer more information on 

the budgeting. And I appreciate your answer. 

I wanted to get into one other area and that is the health care 

issue that you and I talked about in my office. 

Senator Bennett and I have brought to the Senate the first bipartisan health care overall in more than 13 years. I think there is 

a real opportunity, even in this session of Congress, to act. The Administration has focused on tax changes with respect to health 

care. I happen to think the tax code is a mess with respect to 

health. And I am willing to meet them halfway in that effort. 

But just changing the tax code is not going to do it. Because if 

all you do is change the tax code, folks are still going to go out into 

the broken marketplace, insurance companies can cherry pick, people get discriminated against. 

My question to you is are you open to working with us on a bipartisan basis to say yes, we do need to make those changes in the 

tax code but we are also going to have to look at some of these reforms along the lines of what I mentioned and others because the 

two go hand-in-hand and they will be a prerequisite to fixing 

health care? 

Mr. NUSSLE. Yes, Senator. I had an opportunity to visit with 

Senator Bennett and you both on your proposal. I believe it is 

something that we need to continue to work on. And if confirmed, 

32

I would be honored to continue that conversation and work. And 

I applaud you and he, as well as on your work for tax reform, in 

both those areas. Because they are, as we discussed earlier, part 

of the pieces of the puzzle I believe if we are going to have longer 

term fiscal responsibility for our country. 

Thank you. 

Senator WYDEN. My time is up and I will have some additional 

questions on a second round. 

Thank you, Mr. Chairman. 

Chairman CONRAD. Senator Bunning. 

Senator BUNNING. Thank you, Mr. Chairman. And welcome, Congressman Nussle. 

We served together on the Ways and Means Committee and on 

the Budget Committee in the House, so I have some experience and 

knowledge about Congressman Nussle. 

Let me start out with a couple of questions. You have said that 

it is your goal to work constructively with Congress on appropriation bills. As the Senate continues to consider House-passed appropriation bills, we consistently find ourselves in a situation in which 

spending exceeds the limit proposed by the President. How do you 

plan to work with Congress to bring our appropriation bills back 

to the point where they are consistent with the President’s request? 

Mr. NUSSLE. Senator, as a nominee it is awkward—it is impossible, let alone awkward—to begin that negotiation here today. So 

I do not have a proposal that I can make for you on either how to 

do it or what the substance of that might be. 

I think we all share a concern about growing spending, about the 

deficit, about the debt, about our need to rein in our entitlements. 

And I believe, as I said in my opening, if we can work from where 

we do agree I believe we may be able to set a foundation that all 

of us can then work from to build an agreement around. 

Senator BUNNING. Just to followup on Senator Wyden’s questioning, in the past the Department of Defense has been criticized 

for its budgeting practices. Last year they made some progress, and 

you and Senator Gregg made progress, by putting a plug in of $50 

billion in anticipation of what was coming. 

Yet emergency supplementals are still needed to meet the operational cost of the war in Iraq and the Global War on Terror. 

In the past, some of my colleagues have argued that more of the 

costs are needed to be added to the baseline budget. But this could 

inflate the defense budget. 

How do you plan to work with the Department of Defense to ensure that they have a fiscally responsible budget, yet still have the 

flexibility to meet the needs in this time of the war? 

Mr. NUSSLE. You are hitting the nail on the head, Senator. As 

you well know, and this Committee knows, your question is the one 

big challenge. Senator Wyden was bringing it up, as well. 

This is one big challenge about budgeting for the war, and that 

is you plow this into the baseline of the defense budget and then 

they buildupon that as if that kind of spending needs to continue 

forever and we do not recoup any advantage or any reforms or any 

changes in the out years. 

Senator if I am confirmed, I will work with you and others, particularly with this Committee who I think recognizes his challenge 

33

more acutely than maybe anyone else, in trying to ensure that 

while we are finding what we agree upon and what is determined 

to be agreed upon for the war and what is needed, and to do so 

in a responsible way that does not just inflate the baseline for the 

Defense Department at a time when we all know the Defense Department needs more oversight not less when it comes to their financial management and the potential for waste within their budget. 

Senator BUNNING. This one has something to do with that same 

type of budgeting. 

I have been working with OMB on the budget analysis of longterm contracts for jet fuel. Unlike the rest of the aviation industry, 

our military is stuck with short-term market price contracts for 

fuel where they were $1.6 billion over budget for jet fuel in the last 

year, just the last year. The Air Force has strongly supported this 

new authority. 

What is your view on the long-term contracts that provide secure 

fuel for our military? Will you work with me to create long-term 

contracts authority that are fiscally sound? 

Mr. NUSSLE. Senator, first of all, yes, I will work with you. This 

is not an area that I have had particular information or knowledge 

about. But this gives, I think, all of us an indication of the M in 

OMB and why good fiscal management is so crucial to whether or 

not we are going to spend the taxpayer dollars wisely. 

So I would be honored to learn more about this. Since you have 

obviously done some work in this area and taken a lead in this 

area, I would work with you to first learn about it and then see 

if we cannot do a better job with regard to it. 

Senator BUNNING. The last question, because my time is about 

to run out, for the last 30 years the Abandoned Mine Land Program collected taxes from current coal producers to pay for future 

reclamation projects. While the program was required to provide 50 

percent of the money collected to the States, the States’ share has 

been locked up. Locked up, by the Administration. Thanks to legislation passed by Congress, States like Kentucky are finally going 

to receive the money they are owed. 

And I must say Wyoming is owed a lot more than Kentucky. 

Can you assure me that OMB will move quickly to distribute 

these funds as Congress intends, if you are confirmed? 

Mr. NUSSLE. Senator, if confirmed, I will certainly work with you 

on that. This is another one of those areas that I have to admit 

that I have not studied and had any particular briefing on. But let 

me get back to you on that. I think it is clear that this is area of 

concern for you. That is obvious. And you deserve an answer. 

If for some reason it is not going to move in an expeditious way, 

you deserve an answer on that. So let me, if I may, get back and 

work with you, if confirmed, on that important issue. 

Senator BUNNING. Thank you. 

Mr. Chairman, I would like to put my opening statement in the 

record. 

Thank you. 

[The prepared statement of Senator Bunning follows:]

34


37566.013
35

Chairman CONRAD. Thank you, Senator Bunning. 

Senator CARDIN. Senator CARDIN. Thank you very much, Mr. Chairman. 

Mr. Nussle, welcome. It is nice to have you here. 

As has been pointed out already, we have had the opportunity 

to serve together on the Ways and Means Committee for many 

years. I admired your service on that committee and I thank you 

for your public service. 

Some of our colleagues have already mentioned the committee 

that you and I cochaired on budget reform. It is true, we did work 

in a very bipartisan manner on that committee. We brought out a 

very aggressive recommendation, and one that, had it been adopted, would have avoided some of the problems that we confront 

today by having a budget resolution that confronted the executive 

branch earlier, dealing with accrual accounting rather than just so 

much cash accounting, dealing with entitlement spending and 

being fiscally responsible. 

But as you know, we ran into bipartisan opposition to that effort. 

So hopefully we will have a better go of it here. 

I want to followup on Senator Wyden’s point, first, that we can 

view things in the short-term and long-term. And the long-term, 

clearly the Chairman and the Ranking Member’s point about entitlement spending is something that we need to get involved with 

in this next year and a half. We cannot let it go. We have to start 

confronting those issues. But there are certainly longer-term problems. 

Senator Wyden mentioned health care. And I do think that we 

need to initiate a better working relationship between the Executive and legislative branches when it comes to dealing with health 

care. The amount of resources it takes, not just from the Government funding but from our entire economy, drains our ability to 

provide access to affordable quality health care to all of our citizens. 

So we really do need to engage and come up with a strategy that 

will make our system much more cost-effective, because the results 

just are not there today. 

In the meantime, we have short-term issues. This Congress, 

through the budget resolution that was passed and through the 

work of the Senate Finance Committee, is working on a proposal 

now to expand the SCHIP program. It received strong bipartisan 

support in the Senate Finance Committee. It came out of that Committee with a 17 to four vote. 

I had discussions yesterday with some of my Republican colleagues in the House about how that bill will provide preventive 

health care, and lower the costs of our health care system. Because 

if you provide children with health care services, they are going to 

have better health care outcomesduring their lives. 

I mention that because we already are setting up a conflict with 

the President on that particular program. 

You are going to have to use your talents to bring together different views between the White House and Congress. We have very 

strong views about moving forward with the children’s health care 

initiative. We have very strong views on some of the appropriations 

bills that are moving through Congress. I believe that the homeVerDate 0ct 09 2002 12:13 Oct 26, 2007 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 C:\DOCS\37566H.TXT SBUD1 PsN: TISH
36

land security bill passed by a unanimous vote in the Senate Appropriations Committee and it is $2 billion more than the President’s 

number. 

How do you intend to deal with the issues such as CHIP? How 

are you going to use your negotiated skills to convince the White 

House that they are going to have to move, and yes Congress is 

going to have to move, if we are to have a successful year on the 

budget? 

Mr. NUSSLE. First of all, Senator, if I may, the interesting thing 

about your question is that it is a question that came up in a lot 

of our—Senator Whitehouse brought this up, Senator Wyden obviously brought this up. 

The challenge I see is, and this is sometimes typical in my observation of the way things sometimes operate in Congress, is that we 

know there is a huge challenge out there. We look for the train 

that is moving at that moment and we try and solve that big challenge on the small train that is moving. 

I think the challenge that we have here with SCHIP, if I may 

just from observation, is that we all know there is an uninsured 

challenge out there, a number of families, children, adults, young 

people who are uninsured. We see a reauthorization process moving down the track for SCHIP. I think there is an effort to try and 

resolve not just reauthorizing an important program that started 

and intended to reach out to children at 200 percent of poverty who 

were not covered by Medicaid, and expand it to help solve a much 

bigger problem that maybe should move through a process that you 

just described or that Senator Wyden described or that Senator 

Whitehouse described to me in our meeting. 

That is not much of an answer except to say that if we continue 

to have a stalemate on the conversation of these big issues, we will 

look for forced ways to solve them that are awkward and oftentime 

fly in the face of either the other party or the Administration and 

I think that is what we see here. 

What the Chairman described, as far as a task force or a commission, I applaud. You have served on those in the past. I have 

as well. We need to tackle those bigger issues so that we do not 

force those big issues into smaller authorization processes that are 

moving through, in my judgment. 

Senator CARDIN. I agree with you that we have to deal with the 

big picture. And I think Senator Wyden is right on target in having 

us look at the overall health care system. 

But in the next year and a half, we have got to move forward 

on some of these issues. And we are not going to accomplish the 

big picture as aggressively as we would like in the next year and 

a half. We need to make some progress, on the long-term and also 

on getting things accomplished by enacting legislation in this Congress. 

With the children’s health care initiative, we have a chance to 

get something done that can help. I see what is happening my own 

state of Maryland and I saw a young child, a 12-year-old, die because he could not get care for a toothache. He lived six miles from 

here and could not get care for a toothache. He fell through the system. 

37

We know that children who do not have health care are very vulnerable in our society. We have got to make some progress. And 

you are going to have a chance, as OMB Director, to do something 

about it. You have to bridge the gaps between what the White 

House is doing and what we are doing here in Congress. 

You have those talents and you are going to have to be aggressive. Otherwise were going to lose the opportunity over the next 

year and a half. 

Thank you, Mr. Chairman. 

Chairman CONRAD. Let me just say to my colleagues, they have 

got a vote that they are telling us will be roughly 11:35. I have 

called over and asked them to delay that somewhat to 11:45, because I think we might be able to conclude if we are able to do 

that. So I would just ask my colleagues to keep that in mind. 

Senator ALLARD. 

Senator ALLARD. Thank you, Mr. Chairman. 

I also would like to join my colleagues in saying that it was a 

pleasure to serve with you on the Budget Committee on the House 

side when I had an opportunity to serve over there. Senator Nussle 

and I both had an opportunity to work on a number of issues together, and I have always appreciated his openness and willingness 

to listen. 

First of all, I think it is remarkable that you got Senator Grassley to come up and say some words. Every time I want to talk to 

him, I have to get up at five o’clock in the morning and go jogging 

with him. 

So my question to you, if Senator Grassley and I want to talk to 

you about an issue, will you get up at five o’clock in the morning 

and go jogging with us? 

Mr. NUSSLE. I am usually running away from things. I do not 

know if running with you is probably the best way for us to come 

to much agreement. But if that is the best way, I will do it. 

Senator ALLARD. I just wanted to check out your commitment, 

how far you would go to listen to us. So thank you. Thank you, 

Congressman, for your service. 

On a more serious note, I do have a great deal of concern about 

accountability in the bureaucracy. We have passed legislation 

through the Congress, where the bureaucracy is expected to set 

some goals and objectives in a measurable way, such as the PART 

program. 

An important part of your responsibilities, as well as working 

with the numbers, is to work with the agencies and review them 

to make sure that they have a way of measuring how they are proceeding along when they set goals. I do think it is important because your budget is tied to setting those measurable objectives. 

Hopefully we can work closely to tie our budget, as we move along, 

toward that. 

So I would like to hear some comments from you about the PART 

program. I think it is important. Both the Chairman and I have 

talked about holding some hearings on the PART program. And 

again, we may very well call you as a witness on that. So I would 

like to hear some of your thoughts about the PART program and 

the way it has been implemented. 

38

Are there ways that we can improve it? Do you think it is serving us as it should at this point in time? 

Mr. NUSSLE. First, Senator, I would be honored to come back and 

visit with you. I would also hope that you would include—I am 

sure you would—the Deputy Director for Management, Clay Johnson, who has really taken the lead in this area. 

The Program Assessment Rating Tool is just that, a tool. It is 

one of the tools in the toolbox that we should all use to provide the 

oversight that is deserved both on the part of the Administration, 

also on the part of Congress in order to determine whether or not 

a program is doing the kind of job it should be doing, using the 

money appropriately, getting the results necessary, and interacting 

with the rest of the Government programs in an appropriate way 

to make sure that the people or the issue that we are trying to 

serve is served. 

I take the M part of OMB very seriously, and I would be pleased 

to come up and continue that conversation either as a colleague or 

also as a witness in the future. 

Chairman CONRAD. Can I interrupt on that point? 

Senator ALLARD. My time is running but go ahead, Mr. Chairman. 

Chairman CONRAD. I will extend your time. 

I will say this, that this really is very important. If there is one 

thing I think we all know, we do not do enough oversight. The M 

is distinctly lacking many times. Senator Allard and I are committed to try to make this program work better and we would appreciate your help. 

Mr. NUSSLE. You know, Mr. Chairman, this is one of the areas 

that, like you, I felt that there was not enough emphasis on the M. 

But I have to tell you, in the last number of weeks in visiting with 

the OMB staff, this is probably one of those less glamorous parts 

of the job and therefore we do not hear about it a lot. But there 

is a lot of M going on. There is a lot of management going on. 

I was impressed by that and I think it would be good to inform 

the Committee. If confirmed, I would be honored to keep that conversation going. 

Senator ALLARD. One other thing, just following up on this. An 

important part of it too, I think, is keeping the public informed as 

to which agencies are performing. Such as you do through the 

website Expectmore.gov. I would like to get a commitment from 

you that you keep that as user friendly as you possibly can so that 

in the public can look at that and see how their favorite agency or 

maybe least favorite agency is performing or not performing. I 

think that that is a valuable aspect, so I would hope that you 

would keep up that webpage and get a chance to review it from 

time to time. 

Mr. NUSSLE. Yes, sir. If confirmed, I would be happy to do that. 

Senator ALLARD. You know, another issue that comes up is static 

scoring versus dynamic scoring. My time is getting short here, but 

it is, I think, a source of some of our debate as to what the budget 

is going to look like, what our revenue is going to look like out in 

the future. Can you share any thoughts with us about static scoring as opposed to dynamic scoring when we look at these future figures? 

39

Mr. NUSSLE. It is a fair question and probably deserves a much 

more in-depth answer. I will be very brief and suggest to you that 

I always adopted the view that even though static scoring was imperfect, it was the perfect that we knew at the time. And that dynamic scoring needed a lot more work before it was ready for prime 

time. 

I certainly worked with the CBO directors and others on this 

issue. But I never assumed that we could—the challenge with all 

of the scoring is trying to give Congress the best information possible to make decisions. And at this point in time, I believe the 

static scoring, so called, is far better than any other tool that I am 

aware of. 

Chairman CONRAD. If I can interrupt just to alert my colleagues, 

here is the situation we face. The 11:35 vote is locked in. It was 

locked in by unanimous consent and cannot be moved. So that creates a bit of a challenge for us. 

I think the best thing we can do is go to 5-minute rounds and 

try to complete before that vote. 

Senator ALLARD. I am going to yield right now. I expected to 

yield to my colleagues in respect for their time. 

Chairman CONRAD. Senator Allard, I thank you for your courtesy. 

Senator SANDERS. 

Senator SANDERS. Thank you very much. Jim, it is good to see 

you. I have known Jim Nussle, we came in together 16 years ago. 

It is good to see you. 

Jim, let me tell you the concerns that I have with your nomination. It is not that you are not smart. The partisanship does not 

bother me. I think if you stand up and fight for it, you believe. And 

where I come from that is not something to be held against people. 

This is my concern, Jim. I think the American people believe that 

President Bush is increasingly out of touch with reality in many 

areas. It is not just Iraq. It really has to do with the economy. 

Today we have heard from Senator Gregg and others that the 

economy is really robust, is the word they use here in Washington. 

Let me ask you this: since Bush has been president over 5 million people have slipped into poverty, nearly least 7 million Americans have lost their health insurance, median household income 

has gone down by nearly $1,300, 3 million manufacturing jobs have 

been lost, 3 million American workers have lost their pensions, 

home foreclosures are now the highest on record, the personal savings rate is below zero which has not happened since the Great Depression, the real earnings of college graduates have gone down by 

about 5 percent in the last few years, entry-level wages for male 

and female high school graduates have fallen by over 3 percent, 

wages and salaries are now at their lowest share of GDP since 

1929. 

Now I will concede that President Bush has done a wonderful job 

for the wealthiest people in this country and for the CEOs of large 

corporations. If you receive this position, a very important position 

as head of OMB, are you prepared to go into the office and say Mr. 

President, you have got to represent more than the wealthiest 1 

percent, that the middle class is shrieking and poverty is increasVerDate 0ct 09 2002 12:13 Oct 26, 2007 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 C:\DOCS\37566H.TXT SBUD1 PsN: TISH
40

ing, and Mr. President we need policies to address the concerns of 

ordinary Americans? 

Mr. NUSSLE. Senator, as I said to the Chairman, I am not satisfied, even though there are statistics to show that there is growth. 

You pointed out a number that show that we are lacking, and that 

there are people that are still not able to succeed in our country. 

There are many reasons for that. I am not sure it can be pointed 

at either one person or one policy. But I would concur with you 

that our work is not done yet. 

I, as you indicated, some call it partisanship, I call it being passionate, when you believe in something. I have not shrunk from 

that, in talking either with my colleagues. But I would not shrink 

from that in speaking with the president, either. 

Senator SANDERS. Jim, the President has insisted that at the 

time when we have the highest rate of childhood poverty, an issue 

that we do not talk enough about. But as you may know, over 18 

percent of the children in this country live in poverty. The highest 

rate by far of any country on earth. 

The President believes that we should completely repeal the inheritance tax in a way that applies only to the wealthiest 0.2 percent. 

If we repealed the inheritance tax the Walton family, which owns 

Wal-Mart, one of the wealthiest families in America, would receive 

over $32 billion in tax breaks. 

Do you think it is appropriate to give $32 billion in tax breaks 

to the wealthiest, to one of the wealthiest families in this country 

at the same time when we have 9 million children living without 

health insurance in this country and the highest rate of childhood 

poverty? Is that a good sense of priorities, in your judgment? 

Mr. NUSSLE. First of all, Senator, any witness, any nominee on 

the part of an administration will most likely represent that administration. I concede that. That would be true under the Clinton 

Administration, the Bush Administration. No matter who the administration is, the people that they nominate need to work with 

them. We serve at the pleasure——

Senator SANDERS. Do you know my question? 

Mr. NUSSLE. I know your question and I respect it because I 

know you and I——

Senator SANDERS. $32 billion in tax breaks for one family and 

the President cuts back on programs for our children. Does that 

make sense to you? 

Mr. NUSSLE. I also know, Senator, that if you increase the taxes 

on that one family you would not solve the problem either. There 

is a lot of work to be done within our tax code. We just had a conversation about how our tax code is not performing, it is not doing 

the job it needs to. 

Senator SANDERS. Do you think we should repeal the inheritance 

tax so that one family gains $32 billion? 

Mr. NUSSLE. Well, not for that purpose. No, sir, Senator. But I 

did vote on that issue in the House. So I have already voted on 

that, and my vote was yes, I will report to you as I know you know. 

Senator SANDERS. I know I know. You know I know. 

Jim, this country has by far the most unequal distribution of income and wealth. Senator Gregg was talking about how the 

41

wealthy are paying all of the taxes. He forgot to tell us that the 

top 300,000 Americans now earn nearly as much income as the bottom 150 million Americans. 300,000, 150 million, the gap between 

the rich and the poor is growing wider. These hedge fund guys are 

making more money than anyone could possibly imagine. 

Does that growing gap between the rich and the poor in America, 

which is now by far the highest in the industrialized world, concern 

you? 

Mr. NUSSLE. Yes, sir, it does. But I would say to my friend that 

my view is that we should do everything we can to help the people 

who are not succeeding, who are poor, succeed. And I do not think 

that has to be done to the detriment of people who have been successful. 

Senator SANDERS. I would just say that that is the line that we 

have heard. But in reality what has happened in the last 6 years 

is that spread has become much wider. We have given tax breaks 

to billionaires and cut back programs for the middle class and 

working families. 

I think, Mr. Chairman, my time has expired. 

Chairman CONRAD. I thank the Senator. 

Senator GRASSLEY. Senator GRASSLEY. The Senator from Vermont is a friend of mine 

and works with me, and I am not going to take issue with him. I 

do not know the family he is talking about. 

But the other side of the coin is you can do like the Buffets or the Gates do and give $34 billion and $60 billion to foundations 

and not pay taxes on it, either. So we think we are going to get 

that money into the Federal Treasury, it is not as certain as not 

repealing the estate tax is. 

I would ask the Chairman before I start my questioning, I hope 

that there is a good feeling about, that I sense at this hearing, that 

we will able to move this nomination along. I am not going to ask 

you to comment on that. But that is my feeling. And I would think 

that, based upon this hearing, that we would be able to move it 

along. 

I want to get back to some of the issues that has been brought 

up about taxes because I am on that committee that has responsibility over tax policy. 

Some on the other side have been highly critical of the Bipartisan Tax Relief Plans of 2001, 2003, and 2006. One of their criticisms is that the Federal budget picture would be much brighter 

if the Bipartisan Tax Relief Plan had not been enacted. That seems 

to be the way that these critics framed the questions to the Congressional Budget Office in a recent letter that we have heard so 

much about in the press. Estimates such as those cited by the CBO 

letter are produced to guide decisions that we in Congress need to 

make. Estimates often vary quite a bit from actual Federal fiscal 

results. 

Fortunately, over the last several years, the actual performance 

of the receipts side of the budget has been much brighter than estimates when we passed those tax relief measures. 

The charge of the critics is that the bipartisan majority screwed 

up. We should not have done—we should have done something different. That criticism is framed solely from the view of the revenue 

42

loss of the policies. Let me be clear, there is revenue loss over a 

10-year period when you provide tax relief to virtually every American taxpayer. 

I have got a chart here that shows the revenue loss of these poli- cies on an ongoing forward basis. It is a big number, $1.9 trillion 

over a 10-year period of time. 

A fair question to ask of both supporters and critics is to look at 

the tax relief category by category and then ask whether it would 

be a wise decision, whether the policy was a wise decision. And depending upon where the person comes down, should we extend the 

particular tax policy beyond 2011? 

So we have heard today that you were one of the architects of 

this policy. So I would like to go through this category by category. Marginal tax rates, $553 billion over 10 years. Was it a mistake? 

Should we let it expire in 2011? 

Mr. NUSSLE. Senator, as a Member of Congress, as a former 

Member of Congress, and judging my record, my answer would be 

no, I do not believe that was a mistake. 

Senator GRASSLEY. The 10 percent bracket, $299 billion over 10 

years. That was to help low-income people. Should we let that in 

expire in 2011? 

Mr. NUSSLE. Senator, as someone who wants to be the Director 

and as a nominee, I have to be careful. I cannot speak yet on behalf 

of the Administration. But I can tell you my personal opinion and 

what I would be an advocate for and that is I believe that should 

be extended. 

Senator GRASSLEY. The President has advocated that we make 

these permanent so you are not going against what the President 

said. 

Mr. NUSSLE. I know but I am trying to be a little careful. 

Senator GRASSLEY. The child tax credit, $216 billion over 10 

years. That is helping lower middle income and low income people. 

Should we let that expire in 2011? 

Mr. NUSSLE. Again, I do not believe so. 

Senator GRASSLEY. The capital gains and dividends lower tax rates, $216 billion over 10 years. Was it a mistake? Should we let 

that expire in 2011? 

Mr. NUSSLE. Again, I do not believe so. 

Senator GRASSLEY. And the marriage penalty, I mean how can 

you justify a penalty if you are married? And we did away with 

that. It had been on the books for a long time. That is $52 billion 

over 10 years. Was that a mistake? Should we let that expire? 

Mr. NUSSLE. I do not believe it was a mistakes, sir. 

Senator GRASSLEY. Small business expensing, something to encourage investment, to make small business efficient and effective 

to compete, and to create the 80 percent of the jobs that it created 

in America. That cost $19 billion over 10 years. Should we let that 

expire? 

Mr. NUSSLE. Again, I do not believe so. 

Senator GRASSLEY. Education tax relief, $12 billion over 10 

years. Was it a mistake? Should we let it expire? 

Mr.. Nussle. I do not believe so. 

Senator GRASSLEY. I think that when you get down to this piece 

by piece it is pretty difficult to make a case that the tax cuts of 

43

2001, 2003 were mistakes, particularly when Chairman Greenspan 

says it is the reason why we created 8.2 2 million new jobs. 

I yield the floor. 

Chairman CONRAD. Senator Stabenow. 

Senator STABENOW. Thank you, Mr. Chairman. 

And first, welcome Congressman Nussle. it was a pleasure to 

serve you in the House and it is a pleasure to have you today. 

Mr. Chairman, I first want to start, as our distinguished ranking 

member was speaking about appropriations, I actually looked 

around to see if we were on the Daily Show or if there his tongue 

was planted firmly in his cheek when he was talking about appropriations and the concern about where we are in appropriations. 

Because just for the record, it has been our—the Republican leadership that has filibustered every single move we have tried to make 

in order to be able to get to appropriations. 

So just for the record, and I know that the Chairman and I know 

that the distinguished members of appropriations and our leadership is working very hard not to be in any situation that would involve a continuing resolution. And we are certainly committed to 

that and we certainly are committed to doing everything we can 

not to have a train wreck that was talked about earlier. 

I do think it is important, though, and you have a tough job, 

Congressman, coming into this position. Because we are in a situation where in the first 6 years, the last 6 years I should say, the 

President did not veto any appropriations bills. There were not veto 

threats in the last 6 years. We know it was a different Congress, 

it was a Republican Congress and now it is a Democratic Congress. 

But we have on the one hand to no vetoes to the President saying he is going to veto all nine appropriation bills coming out of the 

House. So you have a very tough job ahead of you to try to figure 

out how we go from no vetoes to vetoing everything and averting 

that train wreck. 

Because I would agree with you that continuing resolution is not 

a success for anybody. 

I am also very concerned that we are working on things in a bipartisan basis here, a number of things. Senator Cardin talked 

about the children’s health care program. This is a bipartisan effort. It came out of the Finance Committee, of which I am a member, 17 to four. The leaders, certainly Senator Grassley certainly 

being a key leader in that effort. And yet, the President says he 

is going to veto that. 

We have a homeland security bill in front of us now. The only 

difference is the President says it should have a 6 percent increase. 

We say 8 percent increase, certainly given the reports that we have 

recently received and concerns about safety and homeland security 

and the threats to families and communities in the country. But it 

is only a 2 percent difference. And now we hear the President talking about veto. 

I am also very concerned that we passed last week, with 78 votes 

in the Senate, we passed a very important student aid bill. It is a 

very significant bill for young people and older people wanting to 

go college, to get the skills that they need to be able to compete 

in the global economy. 

44

You know as well as I know, this was a very important effort 

that has been going on in the House and Senate to create more opportunity, and particularly for middle-class families that feel 

squeezed on all sides right now, trying to be able to help them, 

help students not come out of college with this huge debt. And all 

of us who have had college students appreciate and understand 

what that is about. $19 billion for families and students fully paid 

for. The President says he cannot support the bill, 78 votes in the 

U.S. Senate. 

So I guess my question to you is do you think it is wise for the 

President? What is your perspective on the President indicating he 

is going to veto a bill that had 78 votes in the U.S. Senate or veto 

a bill on children’s health care before he even saw the legislative 

language, he said it was going to veto it, something that came out 

overwhelmingly out of committee. 

We want to work together. We do not want a train wreck. We 

want to move forward and have things happen that are really important for the families of this country. 

How do you come into this? You are, unfortunately, walking into 

a situation that is pretty tough. 

Mr. NUSSLE. I realize my timing is—or maybe Rob’s timing was 

not——

Senator STABENOW. Maybe it was on purpose. 

Mr. NUSSLE [continuing]. Was not perfect. No, I do not believe 

that at all. He is a friend. 

Let me go to your question. First of all, I was not privileged to 

be part of those conversations so I am not sure I can report to you 

on the conversation and exactly how that was developed. I can 

make some guesses but I do not think that is probably appropriate 

as an answer. 

If I may observe, and I think you rightfully asked the question 

why weren’t there vetoes in the past and why all of a sudden is 

this coming? 

Let me just step back into my own shoes of having been the 

Chairman of the Budget Committee. I actually thought there were 

some times it would have been good to have a couple of vetoes, I 

would say to start with. 

No. 2, in all of those years, again and I am not going to suggest 

this is perfect but I think it is a fact nonetheless, there was a top 

line agreement between the administration and those Republican 

Congresses on the top line number. That was a lot of disagreement 

within. But as I recall, and I may be mistaken, I am sure there 

was negotiation as I recall, as well. But there was at least a final 

top line agreement on what that top line appropriation number 

would be. 

As part of that, I believe that the administration gave some leeway within the appropriation bills for puts and takes, recognizing 

that Congress has to work its will. I believe that is there, as well, 

even in this regard. 

But I believe that is the biggest reason why all of a sudden there 

was a difference. That is just my belief watching this, having been 

a private citizen for 6 months and reading the papers. And so I 

have not spoken and have not been part of those meetings but that 

is what I observe as possibly the reason that triggered this. 

45

But as I say to start with, there were many of us that thought 

it would have been good to have a couple of vetoes during that 

time, if for no other reason just to wake a few of us up. 

Senator STABENOW. Thank you, Mr. Chairman. 

Chairman CONRAD. Thank you, Senator. 

Senator DOMENICI. 

Senator DOMENICI. Thank you very much, Mr. Chairman. 

I learned a lesson today. If I want to ask questions, I had better 

get here early. I will run over here as fast as I can and get my seat 

but I will be in my tennis shoes when I do that. Then I will leave 

and go do a little work and come back. I will still have my seat; 

right? OK. 

Chairman CONRAD. Early bird rule. 

Senator DOMENICI. I will try to use only a couple of minutes. 

I told him when I was chairman, I used to have some pity for 

older chairmen and I would let them go ahead. He looked at me 

and said well, he did, this chairman looked at me and said well, 

that was not very good because you were the only chairman they 

ever had. 

[Laughter.] 

Senator DOMENICI. I think that might have been true. I said no, 

I was talking about the Democrats. 

Mr. NUSSLE. Pity is a new face for you. I have never noticed that 

with you, Senator. 

Senator DOMENICI. I do not ever want to wear that. 

But I have a question that is a tough one for you and it is going 

to require some solution, I am afraid, some serious declarations on 

your part, on the part of the Administration, before you can get 

confirmed. 

This has to do with an issue called loan guarantees., if you have 

not heard of it yet, as it applies to the Department of Energy and 

the bill that we passed in 2005 the Energy Policy Act, a big energy 

bill. It contained within it a provision, an entire chapter, that had 

nothing to do with anything other than making sure that loans 

were going to be made available to the public from the Department 

of Energy for clean energy development. 

It is very clear that it is a self financing program. It is very clear 

that they have to pay the risk factor up front, that is determined 

and it says that in the statute. And it is clear that if that was set 

in law properly, in regs properly by OMB, that would be all anybody would have to pay because that is what the risk factor is, a 

given amount, maybe 10 percent, as high as 10 percent. 

But OMB has been dragging their feet and I do not know which 

cabinet members have been involved. I surmise as of now the Secretary of Treasury is himself involved. 

But I can tell you, Mr. Nussle, that this is one of the most important provisions of the Energy Act. It should have already been done 

and it should have had $25 billion to $30 billion in the loan guaranteed fund. It is still not ready and the recommended amount by 

OMB is $9 billion. That will not fly. 

This is a pot of money that is there in case a nuclear power plant 

wants to borrow to build a nuclear power plant. They may never 

do that. But if they need, they need $1 billion, not 50 cents. 

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We have got two or three new coal plants that are needed that 

are new hybrids. We expect to get them built with loans from the 

Federal Government. One of them cost $540 million. 

I know that somebody in Government and maybe in OMB does 

not think that this is the way we ought to do things. But you know 

it is too bad. When you write the law, the president signs the bill, 

it becomes the law of the land and you read and reread it and 

reread it and it cannot come out any other way. 

Now you got some very smart people over there, I do not feel like 

calling you Jim. I never did know you that well before I worked 

with you, so I will call you secretary or whatever it is, Mr. OMB 

Director Nussle. 

I can guarantee you that they are not going to read this one the 

way they have been reading it because they have been reading it 

wrong and causing nothing but trouble. 

It seems to me all the work that has been done, you have got 

about 48 hours, to sit down and get this fixed. I can give you a 

piece of paper that outlines all of the problems. I cannot fit them 

on less than two. I can give you those and do not expect anything 

from you since you might not even want to agree with what I have 

said. 

I would rather that you just acknowledge that Domenici, who 

was chairman when this was all passed, gave me those pieces of 

paper and I am looking at them. 

Is that a fair answer on your part? 

Mr. NUSSLE. Senator, I believe that is very fair. I met with you 

on this topic. I know you are very serious about this. And if I am 

confirmed, I will work with you on this. In the meantime, I will 

make sure your message is delivered to current Director Portman. 

Senator DOMENICI. Well, that may be OK, but you understand 

that sometimes we expect the people who are not yet current to 

write something down too, as to how they feel. 

Mr. Chairman, I am thinking that I feel that way about this 

nomination versus this very, very major, major error that has been 

made that makes plenty of people sick. We should have had $10 

billion or $12 billion invested out there. You know it. You would 

be on my side in a minute. You helped us write it. 

Chairman CONRAD. Yes, sir. I am on your side. 

Senator DOMENICI. You helped us write it. You said that is the 

only way to do it, put in the bill how it should be constructed. Do 

not leave OMB constructing it because we know what will happen, 

it will not get done. So that is where we are. 

Other than that, I think you are wonderful. 

Mr. NUSSLE. Thank you very much. 

Senator DOMENICI. And your wife also. I remember you were just 

getting married when you left the chairmanship or went home to 

get married and I did not get a chance to meet her. But that is her 

there, right? 

Mr. NUSSLE. Yes, it is. Thank you. 

Chairman CONRAD. Thank you, Senator Domenici. 

Let me just conclude where I began. We have only got just a couple of minutes left on this vote. 

This is really, I think, the toughest question. Here is, I think, the 

toughest question. This is what is happened to the debt during this 

47

Administration. You were, as House Budget Committee Chairman, 

one of the architects of the policy that has led to this explosion of 

debt. 

Why, as a policy matter, separate from our feelings about you as 

an individual—and let me just say publicly, I always felt I got 

along well with you, Jim Nussle. I like you. And I always thought 

we had a very constructive working relationship. My staff feels 

good about your staff. 

But this is apart from personal feelings. This is a question of policy. 

I think this is a—I think this has been a very serious—well 

frankly, I think it is a disaster for the country, this run up of debt 

before the baby boomers retire. This has been the record of this Administration. You were one of the architects of this policy. 

Why should we confirm you if the intention is to follow this policy? To continue this policy? 

Mr. NUSSLE. Senator, it is a very fair question. I will report to 

you, as I think you know, there was no intent is a direct policy 

matter to run up debt. It was a reaction to challenges that faced 

us in 2001 that you and I worked on in a bipartisan way in many 

of those responses. 

Obviously the dot-com bubble bursting, the corporate scandals, 

the recession, the 9/11 attacks, what that did to the marketplace, 

the response, the emergency response to 9/11 which we worked on 

and did in a bipartisan way and was done cheerfully in a bipartisan way in the best interests of our country. 

Certainly part of that was the tax relief to try and jumpstart the 

economy, which Chairman Greenspan said was the right tax relief 

at the right time in order to deal with that, as well as the new Department of Homeland Security and the war. Each one of those red 

dots on that map are those policies. 

Chairman CONRAD. Let me ask you this, Senator Grassley put up 

a list of things that he would like extended. There is no suggestion 

of paying for any of it, no suggestion of paying for it. 

You earlier said, in response to my question, you do not want to 

dig the hole deeper. But now, in response to the questions from 

Senator Grassley, he wants to spend $2 trillion here and not pay 

for it. And you have endorsed that. 

That gives me great concern that while I hear you saying you do 

not want to dig the hole deeper, when you ask the specific policy 

questions all I hear is the whole is going to get dug deeper. And 

we are going to go more in debt at the worst possible time, before 

the baby boomers retire. 

One of the things we have done, and I am proud of doing in this 

budget resolution, is reinstating PAYGO. So we say if we want 

more tax cut you can have them but you have to pay for them. If 

you want more mandatory spending you can have it but you have 

to pay for it. 

Do you believe that the PAYGO procedure ought to be followed? 

Mr. NUSSLE. First, with regard to digging the whole, Senator, 

there are two entities that have shovels. The Government has a 

shovel that is shoveling it out and the American people have a 

shovel that is shoveling it in. And I am concerned about the ones 

48

that are shoveling it in, as I know you are, too. I am not suggesting 

you do not. 

But I do believe that economic growth is a very—and I have 

heard you give very eloquent speeches on our need for expanded 

economic growth. The tax code is one way to accomplish that. It is 

not the only way but it is one of, I believe, the best ways for us 

to help with making sure that we are not all doing the shoveling 

on just this end. 

With regard to PAYGO, in the bipartisan agreement that I had 

with Senator Cardin, you may be interested to know that we, in 

a bipartisan way, agreed to extend PAYGO. I have had the belief 

that there are ways that we can work together in order to provide 

speed bumps to spending as well as speed bumps to all sorts of 

things in order to prevent that hole from digging deeper. 

The President has indicated his position on that and, if nominated—excuse me, if confirmed, obviously I will be someone who 

works at his pleasure and will help instill those policies. 

But I also know there are ways that we can work together to reform the process to provide more fiscal responsibility, and I would 

look at any reform proposal that comes forward as we consider 

ways to improve that process. 

Chairman CONRAD. Senator Wyden. 

Senator WYDEN. Thank you, Mr. Chairman, and I will just sprint 

on this. 

Mr. Nussle, as you know, the Bush Administration is trying to 

change on a dime 100 years worth of history in the rural west 

where the Federal Government owns most of the land. We have got 

communities in Oregon that literally are talking about going out of 

business, shutting down. 

Will you commit today to taking a fresh look and working with 

us Westerners on a bipartisan basis so we can get a responsible 

multiyear program? So we get enough time so they can transition 

to a different fiscal approach? 

Mr. NUSSLE. Senator, after our meeting when you brought this 

issue to my attention, I went back and asked the questions about 

it. I have learned a little bit more about it. 

Yes, if confirmed, I would be happy to look into this with you and 

take a fresh open-minded approach. 

Senator WYDEN. Thank you. 

Thank you for the extra time, Mr. Chairman. 

Chairman CONRAD. Yes, sir. 

I would just indicate for members of the Committee and other 

members, we will hold the hearing record open until noon tomorrow. That is a hard deadline. I do not intend to extend it. so the 

hearing record will be open until noon tomorrow. 

Thank you, Congressman Nussle, for your appearance here 

today. Thank you for your willingness to continue in public service. 

We will close the hearing. 

[Whereupon, at 11:58 a.m., the Committee was adjourned.]

49

PREPARED STATEMENT


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United States Senate

COMMITTEE ON THE BUDGET

ROOM SD-624

(202) 224-0642

WASHINGTON, DC 20510

STATEMENT OF BIOGRAPHICAL AND FINANCIAL 

INFORMATION REQUESTED OF PRESIDENTIAL NOMINEES

A. BIOGRAPHICAL INFORMATION

1. Name:

Jim Nussle, James Nussle

2. Position to which nominated:

Director of the Office of Management and Budget

3. Date of nomination:

June 25, 2007

4. Address: (redacted).

5. Date and place of birth:

June 27, 1960; Des Moines, Iowa

6. Marital status:

Married; Kim

7. Names and ages of children: (redacted).

8. Education:

Luther College, 1979–1983, BA, May 1983

Drake University, 1983–1985, JD, December 1985

9. Employment Record:

1/2007–6/2007

Navigating Strategies, LLC 

Chairman 

2265 Meadowbrook Drive SE 

Cedar Rapids, IA 52403

1/1991–1/2007

U.S. House of Representatives, 

Member of Congress 

U.S. Capitol 

Washington, DC 20515

6/1986–12/1990

Delaware County, 

IA County Attorney 

301 East Main Street 

Manchester, IA 52057

3/1985–11/1985

Governor Terry Branstad, 

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Intern 

Iowa State Capitol 

Des Moines, IA

5/1982–8/1983

Tom Tauke for Congress 

Campaign aide 

Locust Street 

Dubuque, Iowa 52001

1/1982–5/1982

Office of Congressman Tauke 

Intern 

319 Cannon House Office Building 

Washington, DC 20515, n/a

6/1981–9/1981

Marko Dumlija Contractor 

Painter 

Tinley Park, Illinois 

773-206-2002

6/1980–8/1980, 7/1979–9/1979

Viking Metal Cabinets 

General Labor 

5321 W. 65th Street 

Chicago, IL 60638

708-594-1111

10. Government Experience:

5/1985–8/1985

District Court Judge George Bergeson 

Clerk 

Polk County, IA

11. Business relationships:

Navigating Strategies, L.L.C., Chairman 

Rudy Giuliani Presidential Exploratory Committee, Advisor 

Roche Pharmaceuticals, Consultant 

University of Dubuque Board of Trustees, Member

12. Memberships:

Delaware County Farm Bureau 

Delaware County Volunteer Firefighter 

University of Dubuque, Board of Directors 

International Rett Syndrome Association

13. Political affiliations and activities:

(a) List all office with a political party which you have held or any public office for 

which you have been a candidate.

Delaware County Prosecutor, US Representative from Iowa, candidate for Governor 

of Iowa

(b) List all memberships and office held in and services rendered to all political parties or election committees during the last 10 years.

US Representative from Iowa 

Candidate for Governor of Iowa 

Rudy Giuliani Presidential Exploratory Committee Advisor

(c) Itemize all political contributions to any individual, campaign organization, political party, political action committee, or similar entity of $50 or more for the past 

5 years.

7/1/03, Bush-Cheney ’04, $1000 (personal contribution)

14. Honors and awards:

American for Tax Reform Award, National Taxpayers Union Award, Citizens 

Against Government Waste Award, the Council for Government Reform Award, the 

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National Tax-Limitation Committee Award, the Concord Coalition Award, and the 

Farm Bureau Golden Plow Award

15. Published writings:


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16. Speeches:


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17. Selection:

(a) What do you believe in your background or employment experience affirmatively 

qualifies you for this particular appointment?

The President chose to nominate me because of my background and budget experience, my relationship with my former colleagues on Capitol Hill and because of my 

overall support of the President’s fiscal agenda.

(b) Were any conditions, expressed or implied, attached to your nomination: If so, 

please explain.

No.


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(c) Have you made any commitment(s) with respect to the policies and principles 

you will attempt to implement in the position for which you have been nominated? 

If so, please identify such commitment(s) and all persons to whom such commitments have been made.

No.

B. FUTURE EMPLOYMENT RELATIONSHIPS

1. Will you sever all connections with your present employers, business firms, business associations or business organizations if you are confirmed by the Senate?

Yes.

2. Do you have any plans, commitments or agreements to pursue outside employment, with or without compensation, during your service with the government? If 

so, please explain.

No.

3. Do you have any plans, commitments or agreements after completing government 

service to resume employment, affiliation or practice with your previous employer, 

business firm, association or organization?

No.

4. Has anybody made a commitment to employ your services in any capacity after 

you leave government service? If so, please identify such person(s) and commitment(s) and explain.

No.

5. If confirmed, do you expect to serve out your full term or until the next Presidential election, whichever is applicable? If not, please explain.

Yes.

C. POTENTIAL CONFLICTS OF INTEREST

1. If confirmed, are there any issues from which you may have to recuse or disqualify yourself because of a conflict of interest or the appearance of a conflict of 

interest? If so, please explain.

See ethics agreement letter.

2. Identify and describe all investments, obligations, liabilities, business relationships, dealings, financial transactions, and other financial relationships which you 

currently have or have had during the last 10 years, whether for yourself, on behalf 

of a client, or acting as an agent, that could in any way constitute or result in a 

possible conflict of interest in the position to which you have been nominated.

I was on contract for 3 months this year with Roche Pharmaceutical advising them 

on the issue of appropriations for Tamiflu.

3. Describe any activity during the past 10 years in which you have engaged for the 

purpose of directly or indirectly influencing the passage, defeat or modification of 

any legislation or affecting the administration and execution of law or public policy 

other than while in a federal government capacity.

Advice to Roche on legislative and administration strategy.

4. Do you agree to have written opinions provided to the Committee by the designated agency ethics officer of the Office of Management and Budget and by the 

Office of Government Ethics concerning potential conflicts of interest or any legal 

impediments to your serving in this position?

Yes.

5. Explain how you will resolve potential conflicts of interest, including any disclosed by your response to the above questions.

See ethics agreement letter.

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D. LEGAL MATTERS

1. Have you ever been disciplined or cited for a breach of ethics for unprofessional 

conduct by, or been the subject of a complaint to any court, administrative agency, 

professional association, disciplinary committee, or other professional group? If so, 

provide details.

No.

2. To your knowledge, have you ever been investigated, arrested, charged or convicted (including pleas of guilty or nolo contendre) by any Federal, State, or other 

law enforcement authority for violation of any Federal, State, county or municipal 

law, regulation, or ordinance, other than a minor traffic offense? If so, provide details.

To my knowledge, no ‘‘investigations’’ as such. But one contact with police relating 

to a pizza ordered while in college, for which the vendor made a routine complaint 

to local police because student payment by check did not clear; after notification, 

complaint was dropped when payment was made in full. Amount involved was less 

than $10.

3. Have you or any business of which you are or were an officer, director or owner 

ever been involved as a party of interest in any administrative agency proceeding 

or civil litigation? If so, provide details.

No.

4. Please advise the Committee of any additional information, favorable or unfavorable, which you feel should be considered in connection with our nomination.

None.

E. TESTIFYING BEFORE CONGRESS

1. If confirmed, are you willing to appear and testify before any duly constituted 

committee of the Congress on such occasions as you may be reasonably requested 

to do so?

Yes.

2. If confirmed, are you willing to provide such information as may be requested by 

any committee of the Congress?

Yes.

F. FINANCIAL DATA

All information requested under this heading must be provided for yourself, your 

spouse, and your dependents.

1. Please provide personal financial information not already listed on the SF278 Financial Disclosure form that identifies and states the value of all:

(a) assets of $10,000 or more held directly or indirectly, including but not limited to bank accounts, securities, commodities futures, real estate, trusts (including 

the terms of any beneficial or blind trust of which you, your spouse, or any of your 

dependents may be a beneficiary), investments, and other personal property held in 

a trade or business or for investment other than household furnishings, personal effects, clothing, and automobiles; and 

(redacted).

(b) liabilities of $10,000 or more including but not limited to debts, mortgages, 

loans, and other financial obligations for which you, your spouse, or your dependents 

have a direct or indirect liability or which may be guaranteed by you, your spouse, 

or your dependents; and for each such liability indicate the nature of the liability, 

the amount, the name of the creditor, the terms of payment, the security or collateral, and the current status of the debt repayment. If the aggregate of your consumer debts exceeds $10,000, please include the total as a liability. Please include 

additional information, as necessary, to assist the Committee in determining your 

financial solvency. The Committee reserves the right to request additional information if a solvency determination cannot be made definitively from the information 

provided. 

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(redacted). 

2. List sources, amounts and dates of all anticipated receipts from deferred income 

arrangements, stock options, executory contracts and other future benefits which 

you expect to derive from current or previous business relationships, professional 

services and firm memberships, employers, clients and customers. If dates or 

amounts are estimated, please so state. Please only include those items not listed 

on the SF278 Financial Disclosure form. 

(redacted).

3. Provide the identity of and a description of the nature of any interest in an option, registered copyright, or patent held during the past 12 months and indicate 

which, if any, from which you have divested and the date of divestment unless already indicated on the personal financial statement. 

(redacted).

4. Provide a description of any power of attorney which you hold for or on behalf 

of any other person. 

(redacted).

5. List sources and amounts of all gifts exceeding $500 in value received by you, 

your spouse, and your dependents during each of the last three years. Gifts received 

from members of your immediate family need not be listed. 

(redacted).

6. Have you filed a Federal income tax return for each of the past 10 years? If not, 

please explain. 

(redacted).

7. Have your taxes always been paid on time including taxes on behalf of any employees? If not, please explain. 

(redacted).

8. Were all your taxes, Federal, State, and local, current (filed and paid) as of the 

date of your nomination? If not, please explain. 

(redacted).

9. Has the Internal Revenue Service or any other state or local tax authority ever 

audited your Federal, State, local, or other tax return? If so, what resulted from the 

audit? 

(redacted).

10. Have any tax liens, either Federal, State, or local, been filed against you or 

against any real property or personal property which you own either individually, 

jointly, or in partnership? If so, please give the particulars, including the date(s) and 

the nature and amount of the lien. State the resolution of the matter. 

(redacted).

11. Provide for the Committee copies of your Federal income tax returns for the past 

3 years. These documents will be made available only to Senators and staff persons 

designated by the Chairman and Ranking Minority Member. They will not be available for public inspection. 

(redacted).

12. Have you ever been late in paying court-ordered child support? If so, provide 

details. 

(redacted).

13. Have you ever filed for bankruptcy or been a party to any bankruptcy proceeding? If so, provide details. 

(redacted).

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POST-HEARING QUESTIONS AND ANSWERS


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EXECUTIVE MEETING PREPARED STATEMENTS


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COMMITTEE VOTES

YEA NAY 

Mr. Chairman 

Senator Murray 

Senator Wyden 

Senator Feingold 

Senator Byrd 

Senator Nelson 

Senator Stabenow 

Senator Menendez 

Senator Lautenberg 

Senator Cardin 

Senator Sanders 

Senator Whitehouse 

Ranking Member Gregg 

Senator Domenici 

Senator Grassley 

Senator Allard 

Senator Enzi 

Senator Sessions 

Senator Bunning 

Senator Crapo 

Senator Ensign 

Senator Cornyn 

Senator Graham

Æ