WASHINGTON — Experts told the U.S. House Budget Committee on Wednesday the country’s economic outlook is problematic, as a fierce debate over the nation’s budget remains front and center.
House Republicans, led by Speaker Kevin McCarthy of California, have repeatedly rejected raising the debt limit unless President Joe Biden agrees to a series of spending cuts. Biden is adamant that the two issues of raising the debt limit and setting future spending levels should move forward on separate tracks.
He’s also repeatedly called on House Republicans to release their budget resolution, a tax and spending blueprint that would show how the party proposes balancing the budget during the next decade.
The House GOP has yet to do that or set a timeline for when it will.
During Wednesday’s hearing in the House Budget Committee, Pennsylvania Democratic Rep. Brendan Boyle, ranking member on the panel, acknowledged that Congress needs to restructure federal taxes and government funding moving forward.
“We agree — our nation does face long-term fiscal challenges. Our population, like most in the Western world, is aging. So health care, Social Security, and Medicare costs are rising,” Boyle said, before adding that increasing inequality and disruptions caused by climate change are all part of the picture.
“And yes, deficits and debt are projected, especially in the next decade, to reach levels that simply none of us would be comfortable with,” he said. “So we’re seeing a similar picture and we do have very different ideas to where solutions lie.”
The men who testified before the panel had drastically different approaches for how much the federal government should tax its citizens and how much it should spend.
Scott Hodge, president emeritus and senior policy adviser at the Tax Foundation, urged U.S. lawmakers to eliminate “failing businesses enterprises,” such as the Tennessee Valley Authority, Amtrak, the Corporation for Public Broadcasting and the U.S. Postal Service.
“These and many more federal assets should be sold off and the proceeds used to pay down the national debt,” said Hodge, who was one of the Republican Party’s witnesses.
Hodge called on Congress to “make hard choices,” saying that if a “a company or industry cannot survive without taxpayer assistance, it should not be allowed to survive.”
Lawmakers must, Hodge said, make structural changes to entitlement programs, like Social Security and Medicare.
“These programs are bankrupt now and are getting worse,” Hodge said. “No member of this body is in a position to criticize the management of Silicon Valley Bank for failing to foresee the crisis in their balance sheet when the financial crisis in Social Security and Medicare have been known and getting worse for years.”
Mark Zandi, chief economist at Moody’s Analytics, agreed the country faces “significant long-term fiscal challenges” though he called for Congress to address it through “both tax increases and government spending restraint.”
Zandi also urged Congress to address the nation’s debt limit quickly and without fanfare, saying the impact of a default on the federal government and the economy would be problematic. The nation hit the debt limit in January and began a process known as extraordinary measures, in which the U.S. Treasury Department uses accounting measures to avoid defaulting on the debt.
