Press Briefing on the FY2018 Budget
James S. Brady Press Briefing Room
11:12 A.M. EDT
DIRECTOR MULVANEY: Good morning. I wanted to make a brief statement before we start about things that are probably more important than the numbers. And folks like me sometimes get caught up in the numbers. I want to talk very briefly about what happened in Manchester, England.
The President this morning summed it up emotionally for a lot of us who just called these people who perpetrated this -- the one person, there may be more -- “evil losers.” The President has -- I think Barron is 11 or 12. I took my son to his first concert when he was 11 or 12. And I think all of us who have children that age and take them to concerts, this is something that hits especially close to home.
And we stand shoulder-to-shoulder with our ally and our friends in the UK, and also have the victims and their families in our hearts as we talk about these other things that somehow pale in comparison.
With that said, let’s talk about the budget. And I know that some of you were here yesterday, and some of what I’ll say at the opening will be a repeat. But a lot of folks were not here. So let’s talk about what this is.
This is the President’s FY2018 Budget. The name on the cover is “The New Foundation for American Greatness.” As I read through it over the weekend, as I did -- in fact, we've been working on this since before I actually got here -- it struck me that the title should have been different; that the title should have been, "A Taxpayer First Budget." Because that's what this is.
And as I was trying to reconcile those two things -- well, it’s called the "New Foundation for American Greatness," but I wanted to call it the "Taxpayer First Budget," that it struck me that that was what was really new, or one of the things that was new about this budget; that we looked at this budget through the eyes of the people who are actually paying the bills.
I think for years and years we’ve simply looked at a budget in terms of the folks who are on the back end of the programs, the recipients of the taxpayer money, and we haven’t spent nearly enough time focusing our attention on the people who pay the taxes.
I got a couple questions yesterday -- I know I will today -- about compassion. Compassion needs to be on both sides of that equation. Yes, you have to have compassion for folks who are receiving the federal funds, but also you have to have compassion for the folks who are paying it. And that is one of the things that is new about this President’s budget.
What else is new? It’s new in that it balances for the first time in at least 10 years. The last time we looked, we couldn’t find a President Obama budget that balanced ever. I think he tried a couple times to convince us that primary balance, which was balance without regard for interest payments on the debt, was balanced. We reject that. We get to an actual balance on this budget within the 10-year window.
It begins to reduce the size of the debt relative to the size of the economy in year one, okay? That's how important it was and is to this President to try and bring some fiscal discipline.
Again, if you're looking through the perspective of the people who pay, you’d like to be able to tell them at some point in the foreseeable future, you're going to be able to balance. The previous administration completely gave up on that. As I’ve said before, to the previous administration, if you borrow money -- if I take money from you and I have no intention of ever giving it back, that is not debt. That is theft.
And if we're going to borrow money from people, we have to have a plan for how we are going to pay it back. And that's what this budget does, and that's one of the things that is new about this budget.
The next word in the title is foundation. What is the foundation that we're trying to build here? And I sum it up this way -- again, I saw an article a couple weeks ago about “What is Trumponomics?" and that Trumponomics is part of the foundation here. What is it? It’s sustained, 3 percent economic growth.
Everything that we do in this administration, every single time I am called into the Oval Office -- whether it’s on immigration policy, healthcare policy, tax reform policy, trade policy, budgets and spending -- the focus is sustained, 3 percent economic growth.
We have been attacked, stunningly, by some folks on the left and even in the mainstream who say that that's an unreasonable assumption. We should stop and think how absurd that is to think that 3 percent growth in an American economy is to some people an absurd assumption. It used to be normal. Ten years ago it was normal. In fact, it’s been normal for the history of the country. I think the average over the 240-odd years that we've been a country has been over 3 percent. It’s certainly been over 3 percent since World War II.
The 1.9 percent growth rates that the previous administration assumed towards the end of their administration, and the 1.9 percent growth rates for the entire 10-year window that the CBO growth rates assume -- that the CBO assumes, the Congressional Budget Office assumes, are something we simply reject. That is a pessimistic look at what the potential for this country and for what this country’s people is. We reject that pessimism.
And so you know what? We probably should have gone in and assumed 3.5 percent or 4 percent growth because that would be aggressive. Three percent growth is just getting back to normal.
I’ve said it before, I say it again: If you are 30 years old and you are watching this, or you're sitting here, you have never had a job as an adult in a healthy American economy. It’s either been a recession or a slow, sluggish economy stumbling along at less than 2 percent growth.
The differences between 2 percent growth and 3 percent growth doesn't sound like much. In fact, I cringe when I hear people say it’s only a 1 percent difference. It’s not; it's a 50 percent difference. But that's just math. The difference in that is tangible.
At 3 percent economic growth in a healthy American economy, if you don't like your job, you can quit because you know you can go get another job. If you get laid off, you know you can go off and start your own business. These are the opportunities that people have forgotten about. And these are the things, the optimism in the country, the dynamism in the country that the President is so eager to push back and to bring back to the country.
It’s what drives every one of our policies, especially when it comes to anything dealing with jobs and the economy. We will bring back 3 percent economic growth to this country, and those numbers are assumed in this budget.
By the way, if you don't, the budget will never balance. If you assume 1.9 percent growth, my guess is you’ll never see a balanced budget again. So we refuse to accept that that's the new normal in this country. Three percent is the old normal. Three percent will be the new normal again under the Trump administration. And that is, part and parcel, one of the foundations of this budget.
Along those same lines, the budget also speaks to and funds a lot of the President’s priorities. We've talked about this since March when we unveiled the budget blueprint. National security, obviously a priority for this President. Border security another priority for him. We can talk at length, if you want today, about the details of the additional money that we spend in those areas.
The total plus-up, again, for the 2018 budget is $54 billion over the Congressional Budget Office baseline. The law enforcement gets a significant increase here, and that's both at the federal and the state and local level as we follow through on our efforts to enforce the law.
Veterans see more money here. That's a classic example of looking at the budget through the eyes of the taxpayer. I put myself in the role of the person who is actually taking the money from you as taxpayer and giving the money to someone else in terms of a benefit. And if I can look you in the eye and say, look, I need to take this money from you so that I can help this injured vet, I can do that in good conscience -- I can look you in the eye, and my guess is you're okay with that -- I am a lot less comfortable to the point of not wanting to look you in the eye and say, look, I need to take this money from you to give to this person over here who really isn’t disabled but is getting a disabled benefit, or this person over here who is supposed to use the money to go to school, but isn’t actually going, or a program that is supposed to encourage you to graduate from high school -- or from college, but is only 6 percent effective.
That's the type of compassion we talk about, and that's the type of different perspective that we bring to the budget. And it’s one of the things that I like to talk about when we talk about the veterans. People don't mind paying their taxes as long as they know that that money is not being wasted and frittered away.
We also increase spending for school choice and paid parental leave, making this President the first President of either party to propose a nationwide paid parental leave program for parents and adopted parents. There’s $20 billion in that over the course of the 10-year window. I think I gave an incorrect number yesterday of $25 billion.
What are those, by the way? National security, border security, law enforcement, veterans, school choice, paid parental leave. They are all -- all -- campaign promises that the President made while he was running for office.
And that's why I say these numbers are simply the President’s policies put onto paper. We took the President’s speeches, we took his priorities. We turned them into numbers, and that's what it’s in the document.
It does not -- along the same lines, not a single thing in here touches Social Security retirement or Medicare. Why? Because that's what the President said when he was campaigning, that he would not change those things.
In fact, I’ve told the story several times of sitting in the President’s office with a list of possible reforms to mandatory -- what some people call entitlement spending -- and have the President at the end of the list go: Yes, yes, no, no, no, no. And the "no, no, no's" were always Social Security retirement and Medicare. Didn't change those at all because he promised people that he wouldn’t.
We can do all that and balance at the same time because we look at spending differently. We're no longer going to measure compassion by the number of programs or the number of people on those programs, but by the number of people we help get off of those programs. We're not going to measure compassion by the amount of money that we spend, but by the number of people that we help.
And that is how you can get 3 percent economic growth. That is how you can balance the budget in 10 years. That is how you can borrow money from people while still promising and intending to pay it back from them. That is how you can help people take charge of their own lives again, and that is the part of the budget that deals with the American greatness.
So with that, I’ll take questions for a little bit. I know there is a couple. Yes, ma’am.
Q So President Trump is sticking to his campaign promise not to touch Medicare or Social Security retirement benefits, but not Medicaid. So how does he intend to square that with his supporters?
DIRECTOR MULVANEY: A couple things about Medicaid, and this is one of my favorite stories to tell about Washington spending. Keeping in mind -- and I know that you all probably get this, but if you're watching this at home -- in Washington, D.C., if you spent $100 last year on something, and we spend $100 on it this year -- on that same thing -- in Washington, people call that a cut. $100 last year, $100 this year -- you all call it a cut.
In fact, I’ve seen several occasions where we’ve spent $100 last year, and $102 this year, and many people will still call that a cut -- because the budget is hard-wired by the Congressional Budget Office to go up every single year. And if the Congressional Budget Office says we spent $100 last year, and we're supposed to spend $106 this year, for a lot of people anything less than $107 is a cut. In fact, I’ve actually heard $106 referred to as a "freeze" because it simply says in line with the Congressional Budget Office. A classic example of how Washington speaks differently than the world back home.
So a couple things about Medicaid, okay? There are no Medicaid cuts in the terms of what ordinary human beings would refer to as a cut. We are not spending less money one year than we spent before. What we are doing is growing Medicaid more slowly over the 10-year budget window than the Congressional Budget Office says that we should or says that we will under current law.
Why do we change it? We change it -- we change those growth rates in Medicaid spending because of the American Health Care Act, which this President does support. We've said from the very beginning we support the House efforts. We're looking forward to and are working right now with the Senate, working on what their healthcare bill would look like. But we support the American Health Care Act, and that does change Medicaid.
How does it change it? And this is something that I don't think enough people are talking about. It makes it a lot better and a lot more able to deliver the necessary services to the people who need it. Here's how: Medicaid is funded in large part by the states. In fact, I was in the state legislature, and our second-largest line item I think after K-12 education was Medicaid. And we would see this program come down from Washington will all of these instructions on how to use it, and say, goodness gracious, this won't work in South Carolina.
We happen to think, for example, that Medicaid is designed for more of an urban poor population than a rural poor, as predominates in South Carolina. And we would ask them every single year -- would ask them, the federal government -- give us more control over how this money gets spent. We think we can do it better. We think we can either provide the same services to the same number of people cheaper, or we can provide better service to more people at the same amount of money if you let us do it better. And the federal government always said no. In the American Health Care Act, we say yes, and we give the governors and the state legislatures a lot more control over Medicaid.
Everyone is interested in seeing the truly needy in their state and in our nation get the care that we promised them in Medicaid. But there's a better way to do it than under current law, which is Obamacare. We can also talk about what a failure that is. But there's a better way to do it, and that's what the American Health Care Act does.
In the back. Yes, sir.
Q Director Mulvaney, you mentioned the previous administration, the stagnant growth, and that the deficit has actually doubled since 2008 from about $10 trillion to $20 trillion. But a member of that administration, Larry Summers, today actually went on the attack. I'm curious, how do you respond to his assessment of the budget? He called it "simply ludicrous," and that the administration is double-counting the tax cut and the benefit from the growth.
DIRECTOR MULVANEY: I did get a chance to just see the piece that Mr. Summers wrote, on the way out the door, and the ideas were rushing into my head what I might say to Larry if he were here. So if he's hiding in the back, now would be a good time for him to come out and identify himself.
I went back and looked at some of the economic assumptions that the Obama administration made in its first couple of years, and I want to say, on a couple of different occasions, their assumed growth rate was more than 4.5 percent. Keep in mind this is the first administration in history -- it was the first decade and the first eight-year period of history not to have a 3 percent growth rate, and yet they were promising us 4.5 percent growth. So if Larry wants to talk about unreasonable assumptions, we talk about my 3 percent growth rate and his 4.5, and we'll talk about who actually is closer to reality.
Regarding the double-counting, here's one of the things I think that a lot of folks have overlooked. And we did it on purpose because it's sort of hard to count this, and you don’t want to make too many assumptions. You have to make assumptions about a budget. You're talking about a document that will look 10 years into the future. So it's natural for administrations from either party to make some assumptions.
But one of the assumptions we didn’t make was that we didn’t close any of the tax gap. For those of you who aren’t familiar with that, the tax gap is the amount of money that we should collect in taxes every single year, but don’t. 2016 -- that number is $486 billion. Almost enough to close the deficit that year. And we don’t assume an additional penny of that being closed as part of our tax reform. Why is that important? There's probably two reasons that people -- well, three reasons people don’t want to pay tax. Number one, they just don’t pay tax, and there's always a certain number of people who don’t want to do that. Number two, it's just too hard for them to do it. It's too complicated for them to do it. Two reasons. Now I feel like I'm a Monty Python skits. But two reasons.
And we think that --
Q Airspeed velocity of an unladen swallow.
DIRECTOR MULVANEY: Exactly. That if it's a simpler tax code, that people are more likely to pay. That simply makes sense. If you can really fill out your tax reform -- tax returns on a single piece of paper, you're much more likely to actually do it. It's also easier for us to see if you're paying the right amount. A simpler code is easy for you to pay and easy for the government to see if you're paying the right amount, which would allow us very reasonably to assume a reduction in the tax gap. And we don’t do a single penny of that.
So I'm aware of the criticisms, and I would simply come back and say, look, there's other places where we were probably overly conservative in our accounting. We stand by the numbers. We thought that the assumption that the tax reform would be deficit-neutral was the most reasonable of the three options that we had. We could either assume that our tax reform was deficit-neutral. We could assume it would reduce the deficit. We would assume it would add to the deficit. And given the fact that we're this early in the process about dealing with tax reform, we thought that assuming that middle road was the best way to do it.
Q Thank you, Director. Can you characterize the treatment of climate science programs and cuts to those? And do you describe those as a taxpayer waste, if you do not cut them?
DIRECTOR MULVANEY: You tell me. I think the National Science Foundation last year used your taxpayer money to fund a climate change musical. Do you think that's a waste of your money?
Q What about climate science?
DIRECTOR MULVANEY: I'll take that as a yes, by the way. (Laughter.)
So you see my point. What I think you saw happened during the previous administration is the pendulum went too far to one side, where we were spending too much of your money on climate change and not very efficiently. We don’t get rid of it here. Do we target it? Sure. Do a lot of the EPA reductions aimed at reducing the focus on climate science? Yes. Does it meant that we are anti-science? Absolutely not. We're simply trying to get things back in order to where we can look at the folks who pay the taxes, and say, look, yeah, we want to do some climate science, but we're not going to do some of the crazy stuff the previous administration did.
And I will note for the record that you didn’t say anything about the musical.
Q Thank you, Director. I'm just wondering -- you were talking about making assumptions. What are your assumptions and expectations for the budget in reference to the wall? I mean, Congress really seems to have come on the record and say they're not in support of funding it. So what are you expectations?
DIRECTOR MULVANEY: Well, some folks aren’t in support of it, some folks are very much in support of it.
By the way, I did read something -- and I was really disappointed yesterday. I don’t know if there's anybody here from the folks who broke the embargo. But I thought -- there was only place -- I don’t think it was anybody here. Somebody did. But I read the article about how we supposedly dramatically reduced our request for the wall funding. It's not accurate. The 2017 request was $1.5 billion for border security and $3 billion in additional DHS funding. And the request in the -- the proposal in the 2018 is $2.6 billion for border security -- almost twice as much -- and $4.5 billion for total DHS. Again, a much larger number than 2017. So I'm not really sure how the person got to that number.
But let me address your question.
Q (Inaudible) the wall --
DIRECTOR MULVANEY: It was. We are absolutely dead serious about the wall. In fact, after taking care of national security and the vets, my guess is, it's in the President's top three. In fact, I know for a fact that it is. And we've made that very clear to the folks on the Hill that while we did not get as much money as we wanted for border security in the 2017 omnibus -- we didn’t get a lot; many of you were here for the presentation I gave on that -- that we will see increased border security between today and the end of the calendar year. By the same token, we're going to continue to press on.
We do think there's a role for technology, a role for additional people, all of which we asked for in this 2018 budget request. But it is absolutely a priority for the President.
Q You said you reject the premise of the economy not growing at 3 percent.
DIRECTOR MULVANEY: Yep.
Q Did you set the 3 percent target and then reverse-engineer the figures in order to achieve that? Give us the math?
DIRECTOR MULVANEY: No. Yeah, keep in mind, we had -- because there was a lot of numbers that were floated during the campaign -- 3 percent, 3.5 percent, 4 percent, 4.5 percent -- and we didn’t start with any of those numbers and work back. What we sat down and did is this -- in fact, it was the group of -- it was myself, Secretary Mnuchin, Director Cohn from the NEC, who at the time I think was -- still is playing the filling the role often filled by the Council of Economic Advisers. And what we did is we sat down and said -- we looked at the CBO baseline numbers and said, okay, what will our tax policy increase GDP by? What are the ranges for that? What will our regulatory policy impact GDP by? And what could the ranges be for that? What does repealing Obamacare do for increasing GDP?
By the way, the Congressional Budget Office actually has hard numbers on that. The Congressional Budget Office assumes that if your repeal Obamacare, it will increase GDP because Obamacare creates a disincentive to work.
So we went through the methodology, item by item, and arrived at the 3 percent. And I also think that you'll see that, as well, in the ramp-up to that 3 percent. We don’t assume 3 percent in year one, for example. I think the assumption for this year is 2.3 percent, then 2.5 percent, then 2.7 percent or 2.8 percent, and then 3 percent out. So we think it's a very reasonable and very defensible macroeconomic assumption.
Digging a little bit deeper into the numbers, we also think that our numbers regarding the related interest rates and unemployment rates are likewise defensible. We get a lot of questions, sometimes, about productivity. We hear these stories now -- there was an interesting story in one of the leading newspapers -- I can't remember if was the Times or the Post, yesterday -- about a business in Utah that can't find enough people to work. And people say, oh, how are you going to grow the economy at 3 percent if we're already facing a tight employment market?
I'm going to pull the numbers up here to I don’t butcher these. Of course, as soon as I say that, I can't pull the numbers up. The difference between the U6 rate and the U3 rate is -- I think the number was in excess of 6 million people. What does that mean? The U3 rate is what we call the unemployment rate. It's what everybody calls the unemployment rate. The U6 rate is those folks who are unemployed -- they're in the labor force looking for work but they can't find it -- plus the people who are marginally attached or are working part-time for economic reasons, working part-time because they can't find full-time work. That difference, that delta, is over 6 million people. So we believe that we should be able to drive U3 and U6 together and get those folks into full-time employment. And that's one of the ways you get productivity gains.
Q You're saying that U6, a measure that goes back to 1994, you can have it equal to U3 measure?
DIRECTOR MULVANEY: In a properly functioning economy, that would be the case. Because keep in mind, what's the difference? Marginally attached and part-time against your will. You want to work full-time, but you're not. So you're technically not unemployed, because that's not the technical definition of the U3 unemployment rate, but you want to be doing more, you want to be more productive, to go back to the economic terms. And we do believe that if we bring those people back to the job place, they will end up adding to productivity.
Q Director Mulvaney, thanks for doing this. On the day that he came down the escalator, famously, and became candidate Trump, he said, "We're going to save Medicare, Medicaid and Social Security without cuts. Have to do it." I recognize that he's going to be saving Social Security retirement, but he's not saving Social Security disability insurance, which benefits more than 10 million Americans. So is the President keeping his promise on that program?
DIRECTOR MULVANEY: Thank you for that. Yes, he absolutely is. And here’s why. The fact that it's called Social Security disability insurance I think is -- well, I'll put it to you this way. We propose to do parental paid leave in this budget. Again, the first President of either party to do that. We propose to do that using the tools that already exist through the state unemployment insurance. By the way, I think that's similar to the way that Canada does it now.
There are a couple of states -- New York, New Jersey, I think California -- who already provide statewide paid parental leave. They do it through their disability insurance programs, their employment disability. That does not mean that parental leave is unemployment, and it does not mean that parental leave is a disability. It simply means that that program is managed through the infrastructure that already existed at the time it was set up.
And the same is true with Social Security disability. It is a welfare program for the long-term disabled. It is not what most people would consider to be Social Security.
Q So why do those individuals who presently receive SSDI receive less as a result of this budget?
DIRECTOR MULVANEY: I hope so -- if there are people who are getting SSDI who should not be getting it --
Q Those people who should be getting, will they receive less?
DIRECTOR MULVANEY: No, no, if people are really disabled and there are folks who need this program --
Q So how are you going to determine who is getting it that shouldn’t be getting it? So many antifraud programs that exist already.
DIRECTOR MULVANEY: Yes, that's a great question, and I could get down in the weeds. But one of the -- we have -- one of the proposals we have is actually how we pick the administrative law judges to make -- because I think it's a lifetime appointment on day one, and we try to phase them in to make sure that they’re not -- there have been several judges accused of sort of abusing the program.
But to your point -- your point is an excellent one -- we are not kicking anybody off of any program who really needs it. That's not -- we have plenty of money in this country to take care of the people who need help. Okay? And we will do that. We don't have enough money to take care of people, everybody who doesn’t need help. So what we try and do is look at these programs -- again, through the perspective of the people paying for it -- and say, SNAP, for example -- I know I haven't been asked a question about it --
Q But wouldn’t 42 million Americans benefit from SNAP?
DIRECTOR MULVANEY: 42 million Americans? I thought it was 44; I'll take your word for it on 42.
Q It's in the neighborhood.
DIRECTOR MULVANEY: It is. I think the high was 47, and that was during the recession. Pre-recession, the numbers were as 28. It spiked during the recession, which you would expect on a countercyclical program like food stamps. During bad economic times, more people will go onto food stamps. So it's completely within reason to look at that number -- it went from 28 million on food stamps before the recession to 47 million at the height. It's 44 or 42 today. Yet here we are, eight years removed from the end of the recession. We've had economic growth, albeit slow. We're at what we consider to be full employment, with the limitations of U3 and U6. Why is the number still that high?
Is it possible -- if you're paying for it, isn't it reasonable for you to at least ask the question, are there people on that program who shouldn’t be on there? And shouldn’t it be up to the government to make sure we can look folks who are paying the taxes in the eye and say, you know what, we did everything we could to make sure that everybody on SSDI is really disabled. We don't think that's unreasonable. In fact, we think that is the definition of compassionate -- a compassion that is balanced between the people who get the benefits and the people who pay them.
Q Can you talk about provisions affecting federal employees and how to strengthen -- your plans to strengthen the federal government?
DIRECTOR MULVANEY: I'll deal with federal -- let’s talk about federal retirement, because that's gotten a little bit of a -- and that's one of our largest changes. Simply put, we try and make federal retirement closer -- closer to the private sector. So we've increased the contributions that they make to their 401(k) programs. I think on one program we got rid of a cost-of-living adjustment that was there. But keep in mind, those are folks who will also be participating in Social Security at the same time, which is cost-of-living adjusted. So we thought they were common-sense reforms to try and bring the federal government benefit programs closer to the private sector.
I'm a federal worker. I have a pension and a 401(k). Raise your hand if you're in the private sector and you have a pension and a 401(k). My guess is -- oh, one did. Did you really? In the back? Okay, all right. So she wanted to ask the next question. So we're simply trying to get some common sense back into that program. And we don't think that's an unreasonable thing to do. Again, it's the right thing to do on behalf of the taxpayers.
In the back. Yes, sir.
Q Can you talk about the $1.6 billion for brick and mortar for border security? What are the American people going to see with that money? Are we talking about more replacement wall, new wall? And if so, how much new wall?
DIRECTOR MULVANEY: Just to be clear, the $1.5 billion was the request for 2017; $2.6 billion is the request for 2018, reflecting the fact that there are 12 months in 2018; there was only five months in 2017 when we were dealing with that.
So the answer to your question -- what they're going to see is, all of the above. That would be replacement wall. That would be new wall. That would be land acquisition. That would be infrastructure. Keep in mind you can't just -- you don't automatically, magically build a wall in the middle of nowhere. You have to build a road to get there. You often have to run utility services out if you're going to do lighting, for example.
So it's all of the above, and part of the President’s commitment. We haven't decided yet on the best kind of wall. I think we're going through a competition right now, and I think there are either four or eight -- and I lose track; it depends on how you want to count it -- different prototypes that are in the process of being designed and built right now as we try and figure out what the most appropriate type of wall is. And it may well be -- by the way, we fully expect that different barriers will serve best in different areas.
Q A quick follow-up. Are you projecting out -- a lot of this budget has to do with projections as many as 10 years out. Are you projecting out how much money you're going to need in the following years to complete the President’s promise during the campaign?
DIRECTOR MULVANEY: We don't -- the way this works -- and it's a great question -- keep in mind, the federal budget is a budget in name only. It's really its own thing. I guess they called it a budget because they didn’t know what else to call it. But it's got two big pieces to it. It has a spending proposal for the first year, and that's where you get a good bit of detail. And then you have these policies and broader-brush sort of approaches for the next years, two through ten. So the answer to your question is, yes, we get very specific in where we would spend DHS money in 2018, but as you go further and further away, we get less specific. We do plug in numbers, for example, for DHS, but we don't say what number that would be for.
I'll take the last question.
Q I have an energy question for you. I wanted to ask about the SPR, the Strategic Petroleum Reserve, and the proposal to sell off half of the stocks. How concerned are you that doing that would hurt domestic producers by pressuring prices lower? And does the administration plan to break with its agreement with other OECD nations to keep 90 days’ worth of oil supplies in reserves?
DIRECTOR MULVANEY: I can't speak to the OECD because I'm not familiar with that. What I will tell you is we do not believe that the proposals that we've got would harm the domestic production ability. In fact, one of the reasons we believe that we can reduce --
Q -- prices.
DIRECTOR MULVANEY: Prices. And of course, if you do it slowly, if you telegraph it over the course of time, there’s a way to do it without having a dramatic impact on prices.
By the way, what she’s talking about is we proposed to reduce the size of the Strategic Petroleum Reserve, which was put in place back in the 1970s. It may have been the early 1980s by the time that actually got funded. And at that time, I think we were importing over 6 million barrels of oil a day from the Middle East and we had limited domestic production. That's why you do it, right? It was a national security argument -- if we're going to rely so heavily on imported oil, then there might be a national security, and certainly an economic argument, to not exposing ourselves to the risks like the oil shocks that we had in the 1970s.
That risk goes down dramatically when we have increased domestic production like we do today. Like we just saw Congress last year approve for the first time since the 1970s crude oil exports out of this country. So we have the opportunity now to do that. We also produce more oil because of hydraulic fracking. We also produce more natural gas and other hydrocarbons.
So we think it's a responsible thing to do. It's no longer necessary. Again, go back to that perception of the taxpayers. I don't need to take this much of your money to bury in the ground out in West Texas someplace for domestic security and national security reasons when we have domestic surpluses -- supplies like we do.
Q Can I ask a question on SNAP?
DIRECTOR MULVANEY: Thank you all very much. Again, we'll be available for questions. You can reach out to -- SNAP -- I will. Thank you for that. We'll take SNAP. Then I will go. Thank you. I've talked about it a little bit, but go ahead. What’s your -- I thought I answered the SNAP question.
Q You touched on it, but I have a follow-up from yesterday. You said that you would be phasing in the work requirements. And I was wondering if you could tell us a little bit more about that process and how quickly you expect that to happen? And also, if you could, tell us what you would say to the able-bodied Americans you referenced who are saying, I want to work, but I can't find work?
DIRECTOR MULVANEY: The answer to your question is, I'm not familiar with the details of how we phase it in over time. So I apologize, we'll have to get back to you on that one. But in terms of what we’d say to people is, great, thank you, thank you for wanting to work, because we need you as a nation to do that. So we are starting on the exact same page. So we are going to do everything we can to help you find a job that you are suited to and a job that you can use to help take care of you, yourself, and your family.
Now, that's not the problem. Okay? Folks who are out there who are on food stamps and want to work, we'll be able to work with them to solve the problem. They are not what’s causing the difficulties in SNAP. It's the folks who are on there who don't want to work. And that's what we're trying to point out to people, is, look, if there’s 44 million people on there, eight years from the end of the recession, maybe, maybe it's reasonable to ask if there are folks who are on there who shouldn’t be. That is a reasonable question to ask. I would even suggest to you it's a compassionate question to ask.
But I can assure you, if you're in this country and you want to work, there’s good news, because Donald Trump is President and we're going to get 3 percent growth, and we're going to give you the opportunity to go back to work.
So thank you all very much. I appreciate it.
11:47 A.M. EDT