Federal debt ceiling the federal debt limit. Our Republican House friends care about that sporadically with republican paired president s passing huge for the corporations adding trillions to the debt. More than 7 trillion of debt was added under President Trump and almost 3 trillion added under president george w. Bush. The last two republican president s. They seek to cause chaos. They seek to cause chaos. Not coincidentally, the eccentric and secretive billionaires and polluting industries who are the Republican Partys funders whose stated goal is to destroy the socalled administrative state, the agencies that protect regular people against powerful polluters and special interests. The parties funders, chief among them, the fossil fuel industry, demand rewards. 275 out of 315 pages of the dirty default on america bill are devoted to giveaways to the fossil fuel industry. 275 out of 315 pages. What is the history here . Since bill clinton took office 30 years ago, congress has raised or suspended the debt limit on 24 separate occasions, 14 times under democratic president , 10 times under republican president. We have raised it under congresses and under unified ones. We have even raise the debt limit twice under unified republican control with no Strings Attached with President Trump in office. And two of the three times we raise the debt limit under President Trump were paired with spending increases. On monday, leader schumer and others introduced a bill to stave off defaults through the end of 2024. The section that would actually suspend the debt limit is 31 words. The senate ship has this bill immediately, particularly as we learned tuesday the treasury could run out of funds as soon as june 1. Attempting to extract partisan policy concessions with threats to intentionally drive the American Economy off a cliff is the very definition of extremism. Democrats have not written default unless Congress Also passes gun control legislation or climate legislation, even though those are desperately needed policies with broad popular support. Why not . Because crashing the Global Economy if we dont get what we want is not policymaking, it is hostagetaking and it is extremism. So lets examine the two terrible options the dirty abilities up. Option one is the republican default option. What will that cost . Dr. Zandi estimates a default of even just a few days would lead to a recession, cost close to a million jobs, and raise unemployment for 3. 4 to 5 . A longer default would cost over 7 million jobs and push the Unemployment Rate over 8 . Interest rates on car loans, mortgages, and credit cards would rise for decades. There are other option is there default on america act with it massive cuts to things like border security, Law Enforcement, education, affordable energy, opioid treatment, meals on wheels, elderly housing, and administering Social Security benefits, supports a vital to our Economic Growth and wellbeing. Dr. Zandi analyze the effects of this option and estimates the d. O. A. Act would cost 790,000 jobs and shrink the economy by 141 billion next year. We are supposed to choose between a 700 90000 and nearly one million jobs lost, between recession and 141 billion dollars hit to the economy. Pick your poison. It is a false choice and we should not go either way. In addition to the cuts, the bill imposes what it calls 1 cap. Those caps on Discretionary Spending will affect a huge swath of what the government does, including the Defense Department and Veterans Health care. Republicans maintain defense and veterans would not be cut but no exemption for veterans appears in the 315 pages. When congress imposes spending caps, defense and veterans programs get the squeeze along with everyone else. Even if defense and Veterans Health programs were allowed to grow with inflation, that just shifts cuts to the remaining discretionary programs. Under this future, Law Enforcement, child nutrition, and Scientific Research would all be cut 33 low baseline next year. And by 2033, they would be cut 60 . Even the republican chairman of the house subcommittee that oversees transportation and housing spending implies the proposed cuts are essentially unworkable. Here are some gems. Republicans act would rescind the extra funding we provide to the irs to go after the check tax cheats. This would add 120 billion to the deficit and help the super wealthy individuals and corporations who evade their taxes possibilities. After all our work on health care the d. O. A. Act would put 20 Million People at risk of losing health insurance. The d. O. A. Act is a field day for polluters, repealing Clean Energy Tax credits already generating over 142,000 jobs for more than 190 projects including projects republicans have touted back home. Before coming to washington to pull down those very credits. Freezeframe that and read it at your leisure. Those are comments by Republican House members lauding projects funded by those tax credits they are trying to undo. It would even let fossil fuel interest leak polluting methane emissions with no fee for that pollution. By contrast, President Bidens budget proposes 3 trillion of deficit reduction by raising taxes on the wealthy and large corporations. It was winwin. People at corporations dodging taxes possibilities would pay a fair share and the economy would grow. This d. O. A. Proposes raising cost on working families. It is a loselose. Pick your poison, default or disaster. Simply put, we must raise the debt limit, we must do it now, and we must do it without wrecking livelihoods to appease eccentric billionaires. Senator grassley. Sen. Grassley if you really want to care about working americans, why wouldnt you want to do something about the Terrible Energy policies of this administration and the terrible spending policies of this administration that have raised inflation to a 40year high, and gas prices to historic high last year, shooting up again. It seems to me that the republicans have taken the right approach in this effort, because we do care about working americans. When it comes to inflation, i want to remind everybody of a statement that paul voelker made, way back in 1981, but the same historical time that we are in no, a time of high Interest Rates and high inflation. His words and advice to congress, and it was advised to congress, cutting spending may appear to be the most painful part of the job, but i am convinced that the pain for all of us will ultimately be much greater if it is not accomplished. In my opening comments, i will try to make it clear that, out of 11 times over how many years, i dont know how many times the debt level has been increased, it has been coupled six or seven times at least with debt reduction, spending reduction, i should say. It also is something that i will show you that Many Democrats have proposed in the past. Mr. Chairman, i thank you for holding todays hearing on the house. I think the grow act is the most important part of the title because we are not going to improve the economy by taxing and spending more. I dont know who out there believes the government of our witnesses leaves the government can answer every problem in the world. But remember washington consumes that. Consumes wealth. It is the people out there in middle america, both on the west coast and east coast, that do the work, that feed the money to this city that we spend and we consume. So, House Republicans have acted responsibly by passing a debt limit increase while also beginning to tackle our countrys unsustainable debt and deficits. In contrast, President Biden and Bidens Senate Democrats have sat idly by, watching the clock ticked down to default by not thoughtfully engaging. They hope to avoid a substitute debate substantive debate on a very serious issue, and we know that issue is facing 330 million americans. I know they will start meeting next tuesday, but they wasted i suppose 97 days since biden and mccarthy met in the white house, way back in early february. So, in a last bid effort to avoid an honest debate on our nations finances this week, you know what senator schumer did . He introduced legislation to suspend the debt limit until 2025. Schumer is too little and too late, as a growing number of Congressional Democrats yes, Congressional Democrats are starting to call on President Biden to negotiate. It is time for President Biden and Bidens Senate Democrats to come to the realization that there are and irresponsible strategy of delaying has failed, and begin negotiations in earnest. No longer can biden democrats ignore that over the next 10 years, deficits will average 2 trillion, or ignore that the public debt is a share of our economy is set to rocket past the previous world war ii era records of 106 of gnp by 2028, or that interest costs are set to triple for 475 billion last year to 1. 4 trillion by 2023. Our outofcontrol debt is a bipartisan problem, but once President Biden and biden Democratic Congress exacerbated through budget busting artisan legislation and costly executive and they were warned in december of 2020 by their own economist, harvard economist, former treasury secretary summers, saying, listen, the economy is turned around by december 2020. We are on a path of growth. Dont spend any more money. Within less than 60 days, another 1. 9 trillion. On january 21, january 20, 2021, inflation was 1. 4 . Dont forget it in neatly shot up to 9. 1 immediately shot up to 9. 1 . So, our outofcontrol debt is a bipartisan problem, and that is where it will have to be fixed. Dont forget that the deficit cbo is projecting through 2031, are 6 trillion higher than what the agency expected when biden took office. Given our dismal fiscal outlook, it would be irresponsible not to follow this historical practice of pairing and increase in the debt limit with physical controls, to reign in washingtons chronic overspending, simply kicking the can down the road can no longer be an option. The house bill starts to improve on our unsustainable fiscal trajectory by repealing the president s unconstitutional student loan giveaway, another thing that will exacerbate inflation. Also pairing back their reckless spending of biden democrats in inflation, increasing reconciliation act and capping Discretionary Spending for next year at fiscal year 2022 levels. Levels agreed to by a Democratic Congress, and as recently as december. That last point, it would be up to congress, particularly appropriators, to determine how to meet the discretionary topline. Nothing in this legislation mandates cuts to defense, Veterans Health care, border security, or other activities that republicans have already prioritized. Biden democrats contend that doing anything but rubberstamping an unconditional increase in the debt limit is irresponsible. Well, just a few years ago, the very same democrats, biden democrats were singing a different tune. In 2017 senator schumer boasted about using the debt limit as leverage in negotiations with the white house. In 2019, then Speaker Pelosi demanded that any debt ceiling suspension be paired with an increase in discretionary budget caps. She said, when we lift the caps, then we can Start Talking about lifting the debt ceiling. Last but not least, then senator biden, had this to say in 1984, shortly before he voted against raising the debt limit. I cannot agreed to vote for a full increase in the debt limit without any assistance or assurance that steps will be taken earlier next year to reduce the alarming increase in deficits and the debt. The fact is that that limit legislation has always been the product of negotiations between white house and congress. It is long past time for President Biden to sit down with the speaker and negotiate a deal like the one he brokered as Vice President in 2011. If it worked and then, it can work now. Republicans are not the only ones saying so. Even Many Democrats are now telling the president he needs to sit down with congressional leaders. We know that will happen next tuesday. One Senate Democrats said that the president s refusal to meet with the speaker signals a deficiency of leadership. By now, maybe 95 days have been lost. Another democrat in the house says the president and the speaker ought to get to work, get it done for the sake of the country. The House Republicans bill is meant to start a conversation, to start a conversation, not end it. Speaker mccarthy has said many times he wants negotiate with President Biden. So all the barbs and attacks on the house bill today are meaningless. Everyone knows it. This is an opening bid. It is time for President Biden to stop playing politics and demonstrate real president ial leadership by negotiating in good faith. We will find out whether it is in good faith next tuesday. Im glad the president finally agreed to meet with congressional leaders, but a meeting is not the same as negotiation. I hope when the president sits down with the speaker, he will bring an open mind and a serious counter offer, because the longer the president spends dragging his feet and putting off negotiations, the closer President Biden brings us to the first ever federal default in u. S. History. Thank you. Chairman whitehouse thank you, senator grassley. Our first witness is dr. Mark zandi, chief economist of moodys analytics, where he directs the economic research. Dr. Zandis Research Interests encompass accurate economics, Financial Markets, and Economic Impact of governments that the policies and monetary policies. He will evaluate the default default on america options. Thank you for being here. After that, a pair remotely, we have fred krupp. Since 1984, hes an advocate for harnessing the power of the marketplace to protect our environment and steward the acid rain Production Program into the 1990 clean air act. Recently, focused on the problem of methane emissions from the oil and gas system. Thank you for appearing come mr. Krupp. Our third witness is abigail hopper, president and ceo of the Solar Energy Industries association. She oversees all of their activities including government affairs, research, communication, and industry leadership, and his focus on treating them ownership where solar will cost due to a significant percentage of Americas Energy generation. Unfortunately right now, there are efforts in this bill to try and destroy the American Solar industry. Ms. Hopper, thanks for joining us. Next we have brian riedl, a senior fellow at the Manhattan Institute where his research focuses on budget, tax, economic policies, previously worked as a chief economist to rob portman of ohio. Mr. Riedl, welcome. Finally, we will hear from dr. Jason fichtner, chief economist at the bipartisan policy center. Is reachers focus is on Social Security, federal tax policy, federal budget policy, retirement security. Dr. Fichtner, we appreciate you being here. Dr. Zandi, please proceed. Mark thank you, senator whitehouse, senator grassley, the rest of the committee. I am the chief economist of moodys analytics but my remarks today are my own views. I should also say for the sake of disclosure, im on the board of directors for a publicly traded mortgage insurer. I will make repointed my remarks. First, by my calculation, the x date, the day which the treasury will run out of cash to pay the governments bills on time, will be june 8. Very uncertain because it depends on the very uncertain tax receipts. It is very clear that the april tax revenues came in very weakly, about one third of what we took in last year. I dont quite know what the revenue numbers will look like in the coming days, but by my best calculations, june 8 will be the day when treasury cannot pay its bills. There is a possibility, worst Case Scenario, that it will be june 1. It will be very close. Best Case Scenario will be august 8. That gives you a sense of the timing here. Point number two. This is an especially opportune time to have a political debate over the debt limit. Recession risks are uncomfortably high. I would say in majority of economists, many ceos and investors firmly believe that a recession is likely over the next 12 to 18 months. The economy is struggling with the increase in Interest Rates. The Federal Reserve raised rates again yesterday, raised over five Percentage Points in a little over a year. That has created tremendous pressure on the economy and of course on the Banking System. The Banking System is struggling as well as this point. While it feels like the worst of the crisis is over, it is still simmering. The fallout is yet to be felt in terms of credit availability, what it means for Small Business, commercial real estate , other parts of the economy. This leads me to one of my concerns about the limit save and grow act. It entails significant cuts to Government Spending beginning in fiscal year 2024 which begins at the end of the year, right at the point in time when the economy will be most affordable to going into recession. By my calculation, the act will shave spending equal to half a percent of gdp in 2024. That is half a percent that the economy does not have. We will see, under any scenario, significant meaningful job loss in 2024. Unemployment will rise. I go into much more detail with regard to my assessment of the Macro Economic effects on the limit save and grow act in my written testimony, but just to summarize, it will reduce employment by the end of 2024 by about 800,000 jobs, and add meaningfully to unemployment by almost half a percentage point, putting the rate, currently at 3. 5 , closer to 5 . The timing here is particularly difficult. Finally, i think there is a path forward, a viable political path forward here. The first thing that needs to be done is the debt limit needs to be suspended. There is no time to get this done before the x date. I would recommend suspending the limit to the end of the current fiscal year, 2023, the end of september. Pass legislation increasing the debt limit. Highly recommend that you increase it sufficiently to get it on the others of the election next year. If you dont, the uncertainty that will be prevalent between now and when we debate this again next year, is going to be very significant, and again, contribute to a potential economic recession. Move the suspension to the other side of election. Increasing the debt limit, then pass legislation at the same time funding the government in fiscal year 2024. Debate, discuss appropriate spending levels, composition of that spending, any other fiscal policy that is necessary to pass that budget legislation for fiscal year 2024. Do them at the same time, get this done, and lets move forward. I will say, of course, all of this will not address the nations longterm fiscal problems. We are on an unsustainable fiscal path. We need both additional tax revenue and spending restraints. Both of those things need to happen. But we cannot do that in the current environment. This is not the time to do it. We need to end this drama as quickly as possible. If we dont, we will go into recession and our fiscal challenges will be made even worse. Thank you, senators. Chairman whitehouse thank you very much. Mr. Krupp, do we have you standing by . Fred you do, indeed. Chairman whitehouse you may proceed with your statement. Thank you for joining us electronically. Fred thank you, chairman whitehouse, Ranking Members of the committee. I am fred krupp, president of the Environmental Defense fund, with more than 3 million members. Edf is working across the u. S. And 28 countries to create solutions to environment the problems. Thank you for the opportunity to testify today. The House Republicans plan to tie the debt ceiling increase to the repeal of critical Inflation Reduction Act items threatens our future. I will focus my verbal testimony on the proposed repeal of the methane Emissions Reductions program. It is an example of the smart policies and tremendous opportunities that would be taken away by the house passed bill. Methane is the main component of natural gas. U. S. Companies currently waste enough methane to meet the annual energy needs of more than 12 million households. Put another way, it is one third of the gas that europe was importing from russia before the invasion of ukraine. And this gas could be brought to our allies without the need of any additional new export capacity. At a time of uncertainty and instability in global energy, allowing companies to continue to waste this Energy Resource is just unconscionable. Reducing methane pollution is also the fastest, most costeffective way to immediately slow our current rate of global warming. Oil and Gas Companies are the largest industrial source of methane. U. S. Companies admit at least 13 Million Metric Tons of methane annually. That is an amount that has a greater nearterm Climate Impact than over 200 million cars driven for an entire year. And cutting methane and other dangerous air pollutants emitted alongside it are important to protect the health of the roughly 10 million americans who live near an active oil or gas site. So, merp provides a strong incentive to cut pollution with its charge on excessive methane emissions from the u. S. Oil and gas facilities. Many operators will choose to invest in preventing pollution rather than pay for the excess admissions. That is what we want. The charge applies to emissions from large operators that emit above levels consistent with the industrys own pollution targets. Operators can avoid a charge by just cutting their emissions. Let me stress that point. By meeting the industrys own image and reduction targets, operators would not pay the charge. Merp also directs 1. 55 billion to state and tribal agencies, communities, producers to help reduce emissions. Funding that would be eliminated if this program is repealed. Merp also support job creation by keeping more product in pipelines and out of the atmosphere. Their growing methane mitigation industry provides the goods and services needed to help the companys measure and reduce their emissions. This industry has nearly doubled in size since 2017, with more than 200 companies today providing families sustaining jobs that cannot be offshored. Epas current method of quantifying methane emissions does not accurately reflect todays oil and Gas Production practices and equipment. Studies have found that methane emissions are as much as 60 higher than current epa estimates. To fix the problem, we must accurately understand the problem of the magnitude and source of the pollution. Merp addresses this by directing epa to update Greenhouse Gas reporting program to incorporate real data that will ensure emissions estimates and merps charge accurately reflects the total admissions from oil and gas facilities. We need strong and comprehensive pollution standards from epa to ensure robust pollution reductions from every company for every community. A charge would discourage wasteful levels of methane emissions and hold Companies Accountable while exempting those in compliance. Congress was right to enact merp. Our health and the environment will benefit because of it. And it should be left in place to do its job. Chairman whitehouse thank you very much come mr. Krupp. Wonderful precision on five minutes. To the second. [laughter] ms. Hopper, please proceed with your testimony. Abigail chairman whitehouse, Ranking Member grassley, members of the Senate Budget committee, thank you for inviting me here today to share what we are already seeing because of the Inflation Reduction Act and the impact that the proposed repeal of this legislation would have on our economy. My name is Abigail Ross Hopper and im the president and ceo of the Solar Energy Industries association. I am privileged to represent the 255,000 working americans who are employed in the solar and storage industry. The policies enacted by the Inflation Reduction Act are having a huge impact across the country in the form of new american jobs, new American Manufacturing capacity, and improved u. S. Energy security. That is why it is essential the ira remain intact in its current form. The certainty the law provides, investments being made, jobs being created are all contingent on the continuation of this statute. Nearly every week i travel across the country visiting company headquarters, manufacturing facilities, and solar and storage installations. Dont ask my children how they feel about that. [laughter] among the biggest take away is that the ira is an engine for american job creation for all nubile energy sectors. Storage, solar, offshore, wind just to name a few. These investment are being made across the country and states led by republicans and democrats alike. Climate power recently announced that within six months of the ira being signed into law, Clean Energy Companies have announced more than 142,000 new jobs across 41 states. Climate power has also tracked 191 Clean Energy Projects and billions in investment. Our team at seias tracking announcements of new manufacturing facilities for the solar supply chain that would grow our domestic manufacturing capacity from seven gigawatts per year to nearly 50 gigawatts a year, thanks again to the ira. This is Proof Positive we are in the midst of next evolution of our economy, one that focuses on Economic Growth, wellpaying jobs, and rebuilding our countrys manufacturing sector. Upwards of 40 new electric vehicle battery sites will become to michigan, arizona, south carolina, with an additional 22 companies sharing their plans or expanding manufacturing in places such as oklahoma, alabama, and michigan. Wind manufacturing facilities have been announced across states including south dakota, iowa, georgia, arizona, south carolina, texas, and tennessee. Q cells is investing 2. 5 billion dollars in cell and module manufacturing in fulton, georgia. Q cells also recently announced an investment of 160 million in formally shuttered silicon plans in washington state. Collectively these factories and dozens more like them represent tens of billions of dollars in new investment and 100,000 homegrown jobs across the country. Again, all the direct result of the Inflation Reduction Act. Any threat to the ira is a threat to these factories and jobs. The investment also continue to help build Workforce Demand and rebuild opportunity in low and income communities, committees of color and traditional communities. Weve been talking a lot about numbers. I anticipate we will continue to do that through the hearing but i want to personalize this a little bit. Last week, i was in the great state of arizona on a manufacturing tour. I met a woman named michelle. Michelle worked in that facility for the last few years. They manufacture Tracker Systems for utility scale projects, they use american steel, an american company. Michelle has been promoted a couple of times over the last few years, and since the passage of the ira, there has been even more demand. The company is growing and production continues there. In addition to the jobs and Economic Growth the ira has produced, it has also made our country more secure, producing energy at home with Renewable Energy and making the materials to deploy that energy here in this country will insulate us from global conflict and allow us to make needed upgrades to the grid with confidence. The ira is a landmark law that through the deployment of clean energy is not only building our economies manufacturing and jobs but is the foundation of our countrys next and greatest evolution. And that, my friends, Israel Energy dominance. Chairman whitehouse thank you, ms. Hopper. With consent, i would like to put an additional exhibit into the record supplementing your testimony which represents the investment and jobs in states represented by members of this committee since the passage of the ira. Spoiler alert, it is over 56,000 jobs just in the states that this committee represents, and nearly 60 billion in investment. With that, we turn to mr. Riedl. Brian good morning, chairman whitehouse, Ranking Member grassley, and members of the committee. Thank you for inviting me to participate in todays hearings and a committee where i have many fond memories of staffing so many hearings back when i was chief economist to senator portman. Today, i will make three main points. First, the current debt path is unsustainable and requires immediate attention. Second, that there is a long and bipartisan history of attaching deficit reforms to debt limit bills. Third, that ultimately the debt limit must be raised manner want to. That first point, the debt is totally unsustainable. The deficit will likely settle in around 1. 5 trillion this year, and approach 3 trillion within a decade, even assuming peace, prosperity, and low Interest Rates. This comes to 20 trillion in new spending borrowing over the decade, even if the 2017 tax cuts expire as scheduled. Longterm reductions are even worse. Cbo forecasts a staggering 114 trillion in deficits over the next 30 years, pushing the debt to nearly 200 of gdp. Virtually the entire projected shortfall comes from Social Security and medicare systems that cbo forecasts will run a deficit of 116 trillion dollars over the next 30 years. Those two programs themselves will run a 13 of gdp deficit by 2052. Even under those baseline assumptions of low Interest Rates, interest costs will set a record share of gdp within a decade and consume half of all tax revenues within three decades. If Interest Rates rise, as we are seeing, each percentage point will add 3 trillion over the decade, and 30 trillion over 30 years. That is each percentage point. By that point, interest costs would consume easily 70 or 100 of tax revenues. With respecter Interest Rates and soaring debts, we are sitting on a ticking time bomb. Congress should be working diligently to ever and otherwise inevitable debt crisis, and raising the debt limit has historically been one opportunity to address the underlying debt problem. For decades, the debt limit served as a legitimate tool for both republicans and democrats to address deficits. Debt showdowns were relatively rare because both sides recognize the need to include fiscal reforms. Indeed, of the eight largest deficit reduction loss since 1985, all eight were attached to debt limit bills. This includes both laws in the 1980s, the 1990 bush tax hikes, a 1993 clinton tax hikes, the 1997 balanced budget act, 1996 line item veto law, 2009 paygo law, 2011 budget control act. Every one of those deficit reforms was attached to a debt limit hike. Many of these laws occurred in the 1980s and 1990s when 6 of gdp deficit, similar to today, was eliminated and turned into a Budget Surplus by 1998. Clearly, both parties have gotten away from using the debt limit to address red ink, just as both parties bear response ability for the past deficits. But the unsustainable debt means that all legislative avenues should again be open. This is perhaps why a new survey shows that 70 of voters, including 58 of democrats, agree with the statement that President Biden should agree to negotiations and try to find Common Ground around the debt ceiling including some reductions in Government Spending. Just 26 believe the president should resist negotiating and demanded clean debt ceiling hike. All that said, i agree the debt limit must be raised on time, no matter what. Hitting the debt limit would force an immediate when he percent cut in federal spending and possibly default on the National Debt. The effect on families, businesses, Financial Markets, and the broader economy would be devastating. Hitting the debt limit is not a solution to soaring debt. It must be raised. In fact, replacing the debt limit should be an option, but only if republicans and democrats can come up with an alternative process that would allow members to vote on the entire budget with the true ability to tradeoff computing tax and spending priorities. Right now, the debt limit is the only real true lawmaker vote available that truly covers and trades off the whole federal budget. If we dont want lawmakers to use this risky and flawed process to address soaring deficits, then lets come up with a better budget process tool to have these debates and tradeoffs. Thank you. Chairman whitehouse here here on the better budget process. Next, dr. Fichtner. Please proceed. Jason good morning, members of the committee. Thank you for inviting me to testify today. My name is jason fichtner, Vice President and chief economist at the bipartisan policy center. Apparently all the economist came today with three main takeaways. For my testimony, i will leave you with the following three. First, Congress Must raise the debt ceiling. Second, the nations debt is on an unsustainable trajectory and action must be taken now. For the delay will only make the problem worse and the necessary corrections or harmful to the country and to the most vulnerable in our society. Third, raising the debt ceiling and having the fiscal challenges facing the nation will require both a bipartisan effort and president ial engagement. Turning to these three takeaways in more detail. First, Congress Must raise the debt ceiling. Period, full stop. Taking the nation to the brink of the faulting, going over the cliff or failing to make any obligated payments will cause a necessary fiscal expense, potentially damage the full faith and credit of the United States and cause harm to millions. Even when you can prioritize certain payments, the problem of paying the rest of the nations bills remains. Second, the nations debt is on an unsustainable trajectory. According to the Congressional Budget Office, deficits will be 1. 4 trillion with annual deficits averaging 2 trillion. This is slightly higher than what we spent on Social Security benefits last year. Further, National Debt now stands at over 31 trillion. It is hard to comprehend a number this large. As an illustration, imagine if you had 100 bills. I am sure everyone has one in their pocket. A stack of 10,000 bills would measure half an inch thick. A pile of bills totaling 1 million would fit inside a Standard School backpack. 100 million would fit on a Standard Construction pallet. 1,000,000,100 bills would be 10 Standard Construction pallets. One trillion 100 bills, 1000 billion, would require 1000 of these 1 billion pallets, which double stacked would take up an entire football field. That is 1 trillion. There are 32 football fields in the National Football league, just enough home stadium to hold the nations 31. 46 trillion dollars National Debt if we printed in 100 bills. Our fiscal problem is real. The National Debt is on track to exceed 46 trillion in 2033, 118 of gdp. The Interest Payments alone will near 1. 5 trillion in 2033, more than our nation is planned to spend on National Defense at that time. Third, bipartisan cooperation is imperative. If you are not sitting at the table, you are not negotiating. While the debt limit is not a good mechanism to facilitate thoughtful conversation on addressing the nations fiscal challenges, it is the opportunity currently present and available. I encourage members of the house and senate, democrats and republicans, President Biden to sit down and negotiate before the Treasury Department runs out of options. Finally, i would add a discreetly important for the u. S. To avoid future debt ceiling bring winship. My colleagues and i propose a solution which i addressed in my written testimony which i asked mr. Chairman, with your permission, my written testimony be submitted into the record. Chairman whitehouse without objection. Jason since i have one minute remaining, i want to take a few moments to personally thank you. The last time i testify before both of you was in february 2020 right before covid hit, and before the Senate Finance committee. I was a nominee for the Social Security advisory board. While my nomination never received a vote on the floor, i did pass out of committee with both of you recommending me for confirmation. I appreciate then and now your support and also your willingness to reach across the aisle. I look forward to your questions. Chairman whitehouse we appreciate you being here and your long work on this cause. And to the issue of getting rid of this debt limit bear trap in the bedroom, again, here here. Mr. Zandi, we are being presented by House Republicans with curtain number one and curtain number two. Behind curtain number one is default. You have assessed that as financial calamity as i understand it. Mark that is the word, yes. Chairman whitehouse it would pitch us into recession. Mark severe recession. Chairman whitehouse and it would cost perhaps a million jobs. Mark in the short period of default. Chairman whitehouse longer period, much more job loss. Mark correct. Chairman whitehouse behind curtain number two is speaker mccarthys, what we call default on america act. You assess the economic harm to america of that bill, if it were to pass, as also very severe, correct . Mark yes, it would put the economy on the brink of recession if not in recession. Chairman whitehouse andknock 140 1 billion off of our gdp. Mark correct. Close to 800,000 jobs. Chairman whitehouse 800,000 americans would lose their jobs if this bill was to pass. Mark correct. Chairman whitehouse for the record, the maga extremists in the house, who were essential to mccarthys speakership, have said that nothing less than the default on america option will pass. Just so that it is clear. Those are the two options the extremists in the house are now presenting us. Ms. Hopper, in simple terms, laymans terms, what becomes of the American Solar industry if the default on america bill were to pass . Abigail the default on america bill to pass, all of the investment that we anticipate, both in solar deployment and in Solar Manufacturing would not take place. The 50 gigawatts of investments, over 100,000 jobs in Solar Manufacturing alone, would not happen. Chairman whitehouse would it be fair to describe that as crashing the American Solar industry . Abigail certainly would be fair to describe it that way. It would also be there to describe it as a vision of rebuilding the domestic Manufacturing Base in the u. S. Chairman whitehouse for my purposes, it comes as no surprise that a bill from House Republicans, of whose 315 pages, 275 are dedicated to hand out to the fossil fuel industry, would, if implemented, would also crash their competition, the solar industry. I do not think that is coincidental. Mr. Krupp, what does it tell you when 275 out of 315 pages in this bill are dedicated to handouts and favors for the fossil fuel industry . Fred to me, mr. Chairman, it would have the effect of causing tremendous more pollution. It is just unconscionable. It is not just the pollution, as i said in my testimony. We are wasting gas that europe needs. I do not understand how anyone, in any party, could be in favor of repealing this. Chairman whitehouse where is the methane leakage support caucus to be found . Fred usually they are hiding, senator. Chairman whitehouse i have never heard from them. I have never heard a colleague say, you know, methane leakage is a good thing. We are for that. Yet, here we are with a bill that does exactly that. It repeals them rather we just passed to contain methane leakage in the economy. To me, that is yet another measure of extremism. And extremism in the service of default, or put the other way, default in the service of extremism, is a place that we should not be going. I am delighted that all three of the economists firmly agree that default is not an option, no matter what. With that, i will yield to my Ranking Member, senator grassley, for his five minutes. Then to senator murray. Sen. Grassley just one statement before i get to mr. Ficker, dr. Fichtner. That is for everyone to think about what we heard about the dire consequences of the solar industry. I never heard those dire consequences stated when we all agreed and worked with the industry to phase out the tax credit that was going to happen 2022 until it was extended in recent legislation. That was a multiyear phase out. For you, dr. Fichtner, it is interesting how we only hear about brinkmanship when it is republicans who want to negotiate a debt ceiling. I would note, senator schumers debt bill lifts the ceiling through the end of 2024 may be to maintain their leverage if we have a republican president in 2025. To you, is it fair to say that both parties have the debt ceiling used as leverage in negotiations . Jason it is fair to say that. That is why whatever negotiations that we do, as dr. Zandi said, should be pushed until after the election. It no longer does what it is intended to do, control spending. So lets get rid of the debt ceiling altogether. Sen. Grassley the chairman mentioned what used to be called now whitehouse something, that i want to help you with. Chairman whitehouse looking forward to it being whitehousegrassley. Sen. Grassley i dont think youll have a problem from me. To mr. Riedl, as i mentioned, democrats have no problem using the debt ceiling as leverage in negotiations with republican president s. What did democrats demand and get in exchange for raising the debt ceiling under President Trump . Brian the debt ceiling was raised three times under President Trump, twice attached to large spending bills raising the spending cap by 620 billion over four years. Once it was part of a deal that included disaster aid spending. Even with that spending, the majority of House Democrats still voted against the 2018 debt limit hike. If we want to go back further, there were three clean debt limit hikes under president bush with able republican congress. House and Senate Democrats voted against those limit hikes at a 98. 8 rate including then senator obama and biden. I think it is fair to conclude that neither partys hands are clean on debt limit hikes. Sen. Grassley to you also, President Biden likes to claim that he has lowered the deficit, a falsehood repeated so often, that the Washington Post awarded him what is called the bottomless pinocchio rating. You have been critical of fiscal legacies of president s of both parties. What do you make a President Bidens track record on the budget . Brian i have been reporting on president s of republicans and democrats. Something like one time pandemic spending expiring on schedule is not new deficit reduction. When President Biden was elected, cbo forecast deficits of 2. 3 trillion dollars and then 1. 1 trillion. Instead we got 2. 8 and 1. 4 which is 800 billion higher than the baseline. Overall, as you mentioned, when President Biden was inaugurated, cbo forecast 14 trillion in deficits over 10 years. Now they are forecasting 20 showing dollars over the same period. 5 trillion of that interest has come from legislation in executive orders, pushing deficits toward 3 trillion. In that context, i dont think keeping the deficit though a passed one time pandemic spike is really the right measure. Sen. Grassley also to you, cbo and joint committee on taxation released their scores of the house bill. They reveal that many of the new tax credits and last years reconciliation bill are actually going to cost much more than initially advertised. Knowing what we know now, was last years reconciliation bill, the socalled Inflation Reduction Act, the fiscally responsible legislation that legislator purported to be . Brian at the time, cbo escorted as saving. Now the omb says the same bill will add to hunt at 16 trillion over a 10 year deficit. Much of that change is due to the electric vehicle incentives that were originally scored at 14 trillion and are now estimated as costing 390 billion over 10 years. The law at this point does not appear to be a deficit reducer. Chairman whitehouse senator murray. Sen. Murray enke for holding this important hearing because the stakes are really high and the clock is thinking. As we all know, we have until june 1 to raise the debt ceiling. That is weeks away. The American Economy right now is heading for a cliff. Last week, the House Republicans voted to drive it off will speed ahead. This should not be hard. When you are heading for a cliff, you turn the wheel. You dont say, i will turn the wheel if you let me cut the brakes or disabled airbags or trash the engine. But that is essentially what the House Republicans are offering us. Mr. Chairman, you called it door one, door two, because House Republicans are saying that if you dont let us wreck the economy and whittle down essential Government Services to the point where we are laying off people like air traffic controllers, then we will just wreck the economy by refusing to pay the bills instead. Make moma steak, it doesnt matter who you vote for, what state you live in, or what you make, if House Republicans get their way, it will make our lives worst. The cuts they are proposing in the default sunamerica act not just kick families off of food benefits or riverway Housing Support for veterans, it will got funding that keeps our planes in the sky, trains on the rails, our food and medicine safe, our cops on the street, and helps get deadly fentanyl off of them. Despite republicans protesting, the reality is this bill will not protect veterans from cuts. Just read it. What House Republicans passed does nothing to protect the benefits and supports that veterans have earned and are counting on to get housing or Higher Education or start a business. The default on america act does not even protect Veterans Health care, one of our fundamental obligation to the men and women put their lives on the line for our country. It just cuts across the board. Medical research, childcare, workforce training, disaster relief, border security, Small Business grants, cut. That is their big idea. That is the default on america act at House Republicans are taking our economy hostage for. Except that is only half of it. House republicans are also demanding spending caps that malaak in even more cuts over the next decade. That is 10 years of our competitors who will be investing in their economies, growing stronger and gaining ground, while House Republicans tie our hands and force us to fall further and further behind. A lost decade for america. That is what maga republicans are proposing. What House Republicans have voted for is one massive gift to the Chinese Government because, guess what, our competitors are not debating whether to pay their debt or wreck their economy. They are not debating whether to invest in their future or futurp investments that keep them competitive. They are doing everything they can to get ahead. I am asking my republican colleagues here at the brink of economic calamity do not let speaker mccarthys partisan hostagetaking win the day and lose the 21st century. Do not force an unprecedented economic crisis on our country in an attempt to slash funding for communities across america. Work with us to simply pay our countries bills like we have so many times before including three times under the last president. Then let us Work Together on our bipartisan spending bill that invests in america and keep us moving forward which is i will tell my Committee Members exactly what we are focused on doing in the Senate Appropriations committee. With that, dr. Zandi let me ask you can you speak to the potential macroeconomic damage of House Republicans default on america act, for our economy and nations Competitive Edge of the world stage over the next decade . Dr. Zandi i think there are two broad macroeconomic issues. I mentioned in my remarks, the cuts are going to occur later this year under the legislation been passed by the house later this year in 2024 when the economy is going to be very fragile, at risk of going into recession, grappling with the higher Interest Rates of the banking crisis and now the drama related to the debt limit is starting to do damage in the Financial Markets and i expect we will it will do significant more damage. The risks era quite significant in the near term. The second macroEconomic Impact think is worth considering is if you do the arithmetic, the cuts to nondiscretionary nondefense spending will take the spending from 3. 5 of gdp currently and 3. 5 is less then its average over the past 56 years, this is a place where spending has remained very restrained and not grown more quickly than the economy. But under the limits save grow act it would fall under 2 by the end of the decade and this goes to very significant cuts, all the things you describe. From health care and education training, nasa, national parks. Things i think americans count on is essential services and critical income support that would be incredibly difficult for the economy to digest. And at the end of the day would not address the long unsustainable fiscal situation. Sen. Murray and take away our Competitive Edge. Dr. Zandi severely limit our Competitive Edge, yes. Chr. Whitehouse senator kennedy is next. Senator kennedy any fairminded person that wants us i dont think any fairminded person wants us to default on americas debt. You dont have to be mensa material to understand the consequences would be terrible. I want to thank President Biden for agreeing to meet with the speaker, i thought he should have done it sooner. You can only be young once but you can always be immature and i thought he was being a trifle immature. I hope he will negotiate in good faith. Please mr. President negotiate in good faith. I dont think you want to be responsible for defaulting on americas debt. I believe you are better than that. Let me ask a couple of questions. Do you know that since the 1950s we have had 10 periods of disinflation in america. Not that exact number but that makes sense. Sen. Kennedy disinflation is when we have to reduce the rate of growth of inflation. It is not deflation where prices go down just reduce the rate of growth. Is that correct . Yes. Did you know that if we look at history and all of these times when we had to reduce inflation that in order to get inflation down 2 , we had to raise on average the Federal Reserve had to raise Interest Rates such that it raised unemployment about 3. 6 . Did you know that. Mr. Riedi that sounds similar to what mr. Summers has said. Sen. Kennedy the current Unemployment Rate is 3. 5 , is it not . Correct. If history tells us in order to get inflation down 2 the Federal Reserve has to raise Interest Rates such that it increases unemployment 3. 6 , then if you do the math given that the current Unemployment Rate is 3. 5 in the current inflation rate is 5 . That would indicate the Federal Reserve, if history is any indication will probably have to eventually raise Interest Rates to between 7 and 8 , is that correct . Mr. Riedi it could have to go that high depending on how the economy responds. Sen. Kennedy can we agree the best way to get inflation down is to attack on the fiscal side and monetary side . Mr. Riedi absolutely. Sen. Kennedy we can agree on that . And when you attack it on the monetary side, of the Federal Reserve rate is Interest Rates, trying to slow the economy. It does not want to but the way you measure the slowing is the Unemployment Rate. When you attack it on the fiscal side to reduce the rate of growth, spending and debt accumulation. Is it not the case that if you vote against slowing the rate of growth of spending and debt accumulation you are voting to raise Interest Rates even higher are you not . Generally i would agree with that. Sen. Kennedy thats basic economics 101 right . Let me ask a couple more questions. Putting aside all the politics here we are talking about peoples lives. If we dont reduce the rate of growth of spending and debt accumulation jay powell will do what hes got to do to get control of inflation and he will keep raising rates. Thats good to put people out of work. He doesnt want that. If he has to raise rates between 7 and 8 , that could put six or 7, 8 Million People out of work. Dr. Zandi, i have to ask you this, you made some bold predictions today and some i agree with and some i do not. Were you at moodys in the mid to thousands when moodys graded a lot of these mortgagebacked securities aaa and good as gold that promptly tanked and almost dragged down the World Economy . Were you there then . Dr. Zandi it was before my time. I sold my company to moodys in late 2005. If youre interested i can send you a couple of studies i did at the time. Sen. Kennedy ms. Hopper, i love solar energy. And i love electric cars. I have to ask this question. Ive been waiting to ask this. If electric cars are so swell, how, government has to pay people to drive them . Ms. Hopper like most Government Policies are put in place to incentive certain behaviors. As part of the policy is if we want more sen. Kennedy but if they are so swell in a competitive market, why wouldnt they be choosing electric cars over internal Combustion Engine cars . Why do we have to pay people to drive them . Ms. Hooper i wouldnt characterize it sen. Kennedy sure we are. Ms. Hooper the government to having a policy to incentivize purchase of electric vehicles. Thank you mr. Chairman. Chr. Whitehouse thank you senator kennedy. I would love to talk about evs at another time. Lets talk about an extremely serious issue this morning and im glad my friend raised the issue of the Federal Reserve chairman Jerome Powell and what might happen. Let me quote what he said yesterday no one should assume the fed can protect the economy and Financial System or our reputation globally from the damage a u. S. Default might inflict. We shouldnt even being talking about a world in which the u. S. Doesnt pay its bills. Pretty simple, pretty straightforward. I came from an agriculture meeting and i can tell you it was on credit and Crop Insurance and nobody there thought it was a good idea for farmers and ranchers to see their Interest Rates go up which will happen. This is a very serious thing. We know last week House Republicans pushed our country closer to this catastrophic default and chaos that would arise from it. I think over and over again we need to stress that while republican colleagues are concerned about the debt, we know about 25 of all the debt of the country ever came from four years of Donald Trumps presidency. Of which folks voted for it but at that time it was about billionaires in large corporations getting big tax cuts. If we want to have a real discussion about revenues and spending, thats great. Lets do that. Dont default but lets have that debate about whats fair for the majority of American People, including the fact the largest corporations and billionaires should just pay their fair share like everyone in michigan. But instead we are seeing this bill, the default on america act targeting millions of working families. So many things, i will just mention three. One million seniors no longer getting meals on wheels. Thats a pretty big deal for an awful lot of seniors that are homebound in our country. 30,000 Law Enforcement jobs gone , what does that do to Public Safety . 80,000 v. A. Jobs, how do we do Veterans Health care if thats cut . And when we talk about all of this, a seven million jobs lost, unemployment over 8 , more than double. Higher mortgage, car payments, this is not a good idea and we are coming out of a pandemic, we are seeing the fastest growth ever in a generation which is extraordinary after all of this. We are bringing jobs home. In my state we are cheering about manufacturing jobs and then we want to put the country in a default . Only people that want chaos and want to play politics would even be considering this. Let me just ask one area of debt that so great we are seeing is the number of increases in Small Businesses. We are seeing a renaissance in Small Businesses. More than 12,000 new smallbusiness applications were submitted in april. I wonder if you might speak to how the environment for Small Business owners would change in the event of a default . Dr. Zandi it is amazing the Small Business progress weve made. Once an if it can bright side in the economy and its across all industries and regions. I do fear that Small Businesses are now under significant threat. The banking crisis is a very serious problem because many small banks are under pressure and provide credit to Small Business. When i started my company i got my loan from a bank with three branches still operating in pennsylvania. They are under a lot of pressure and with the debt default, the problems here will be magnified many times over. The banking crisis will continue on. The availability of credit and the cost of credit will be prohibitive. It will be difficult for Small Businesses to not only operate and thrive but to actually survive. Instead of seeing the significant increase of formation see a significant increase in bankruptcy and default. I think we should buckle in for some of that anyway even without the debt limit drama. But with that it would be over the top. Sen. Stabenow mr. Chairman i would just say the message we should send today is dont default, come and work with us in the budget process with the appropriations process, some of what they did, we will have that debate. But dont create chaos in the American Economy thats just beginning to thrive here. Thank you. Chr. Whitehouse which has the additional benefit of public daylight. Senator romney. Sen. Romney thank you mr. Chairman and thank you to the panelists. These comments refer to us. I think we ought to be embarrassed, this committee ought to be embarrassed which is the American People expect us to work in a bipartisan basis to address the challenges america faces rather than Holding Hearings that are about being in posturing and politicizing and trying to blame the other party. It is really embarrassing. This is a committee responsible for setting a budget every year. We are supposed to have done that. We havent even met to discuss that. We could be talking about what things to do to restrain the amount of spending we have, thats a real concern. I think people on both sides of the aisle agree on. We are coming here saying the obvious which is we can default on our debt and it would be terrible if he did. We also know that every time the debt ceiling has been raised in the past theres been questions about whether we should restrain spending and half the time we raise the debt ceiling in the past there have been efforts in provisions and agreements to curb spending. We have to find a way to reduce our spending and deal with our fiscal problems. Instead we are just preening and posturing. I agree with all the people who said it would be terrible to default on our debt. We are not going to default, i certainly hope not. But dont forget that could have been solved a long time ago by her Democrat Friends in the reconciliation bill doing what leader mcconnell asked to do which was raise the debt ceiling yourselves. Didnt need a single vote. That they chose not to because politicking is the way of this city and it just makes the American People sick. Frankly it makes a number of us who serve in these positions ill as well that we are in a setting with such Critical Issues being faced and instead of solving them and working together i dont think this committee has come together to sit down, these back rooms we talk about, we have never had a back room meeting to talk about these things, to negotiate and talk about how we will rein in spending. We are going to have to deal with our entitlements, both on the revenue side and spending side. We will have to deal with discretionary and nonDiscretionary Spending. We dont talk about it we basically just blame the other side. Every year we had another trillion dollars to the debt. Let me just ask, dr. Zandi, is it your view and moodys view that the amount of debt we are adding is ultimately going to become a real problem for the American Economy and for the American People and for our ability as a nation to protect ourselves and have a robust and growing economy . Is this a problem we need to deal with. Dr. Zandi these are my views, not moodys. I hear your words pray they resonate with me. It is clear that we are on an unsustainable path fiscally. It is in our face, it is not 10 years from now. And i agree. We need to address this both in regards defendant spending restraints. You mentioned entitlement programs. And tax revenue. We cannot do one without the other. Both have to be done. It is critical lawmakers come together and talk about this and figure out how to do it. I dont think it should or can be done in the context of the debt limit debate. I dont think it is possible, i think our politics is in a place where we are increasingly coming to the edge of defaulting and we will default if we continue down this political path we are on. We just have to get off that road and come together. I totally agree with you. We need to stop posturing and start acting now. Sen. Romney thank you. Let me ask you the same question. Is this an issue we ought to be addressing and dealing with witches the excessive spending, the borrowing we are doing, of the fiscal challenge. I realize there are two parts of the fiscal challenge, but is this something, i saw one group, and im Nonpartisan Group in the house saying lets get a commission together to talk about how we can restrain spending. Isnt this something we ought to be talking about as opposed to just pointing at each other and say you are to blame, the debt went higher under trump, no it didnt, its like you guys, solve the problem dont just hit each other with brake pads. Mr. Riedl years ago they said this would be the most protectable economic crisis in history. We are on pace by the cbo with 114 trillion dollars over the next 30 years under the rosy scenario of peace, prosperity, a low Interest Rates, no new spending, no new tax cuts. 114 trillion. China and japan have reduced their holdings to 2 trillion print Federal Reserve holds 5 trillion. Are we really going to bottle 100 trillion dollars through domestic investors over the next 100 years and if we do so what will happen to Interest Rates and the economy. If congress doesnt deal with it the bond market will cut us off at some point and it will be more painful. Sen. Romney thank you. Mr. Chairman, back to you. Chr. Whitehouse youve been fine senator romney. Senator van hollen. Senator van hollen i wish i shared senator romneys optimism about the chances of not defaulting having been involved in the 2011 debate, i am much more worried that this time we will go over that cliff. Ms. Hopper, a great to see you, thank you for your work in maryland. I will start by questioning mr. Zandi who i think many of us are grateful for sharing over many years your expertise on fiscal issues. If i could just ask you regarding inflation today. We know we have work to do in the economy, but inflation has now fallen 40 compared to the peak of last year to a twoyear low. The chairman of the Federal Reserve was recently asked about what he thought the pressures on inflation were at the current time and he indicated in his view it is not fiscal policy thats driving inflation down. Do you agree . Dr. Zandi agreed. The inflation we are suffering through now is the continued fallout from the impact of the pandemic on supply chains, labor markets and the russian war in ukraine and its impact on energy, food and commodity markets. Those two shocks conflated and affected Inflation Expectations in wage and other dynamics in the labor market. So lots of reasons for the high inflation. At the very top is the fact that we are still working through the fallout from those two massive shocks on the supply side. At this point i dont think fiscal policy has played any role. One quick other point. If you had asked me back in 2021 i wouldve said fiscal policy is playing a role but at that point, that was deemed to be good inflation. We were heading through a decade of sub optimal inflation. We wanted see higher inflation. Sen. Van hollen my time is running short. I did see your assessment you passed the House Republican plan , we would lose 790,000 jobs in the economy. Have you had a chance to look at the biden Budget Proposal and determine whether it would cause anything in that range of job loss . Dr. Zandi no, they both have deficit reduction long run. The house legislation on the spending side, the president mostly on the tax side. When the economy in the next year and a half when the economy is incredibly vulnerable, the president s budget does not have the same kind of negative consequence. In the longer run the negative consequence of the higher taxes in the president s budget all things being equal way on Economic Growth but very modest compared to the budget cuts in the house legislation. Sen. Van hollen mr. Riddell, you mentioned in your testimony that we actually eliminated our deficits and size surplus back around the turnofthecentury. Do you recall what share revenues were as a percent of gdp when we did that . Mr. Riedl back then revenues had jumped 20 , spending fell to about 17 . Essentially the budget was balanced by a huge defense saving and a revenue bubble and then the bubble burst and 9 11 happened. Sen. Van hollen as you said at that time, revenues were around 20 and i think you are aware of the fact if you look at the current budget rejected out a couple years ago we are talking 18 . 2 may not sound like a big gap but putting that on top of a huge economy thats a lot of revenue we had in 2000 as a percent of gdp we do not have today. Here is my question. President biden has put a budget plan on the table. Much more detailed than the plan that passed the house of representatives. It has 3 trillion in deficit reduction. Do you think President Biden should take the position that he would veto a debt ceiling increase unless he gets his way on how we reduce the deficit by 3 trillion . Mr. Riedl i think both sen. Van hollen im asking a question because the house has said if you do not adopt this, this is our bill, if you do not adopt this we will default. Im asking should President Biden take that decision and say if you dont produce it my way by raising taxes on very rich people, increasing taxes on corporations and requiring Prescription Drug companies contribute more so to an medicare pays less, should he say if you dont adopt my plan i am not going to sign the debt ceiling . Mr. Riedl i think the president should say we need to adopt a deficit reduction plan, ive made an opening offer but im flexible. Sen. Van hollen and if we dont do that we should default . Mr. Riedl i dont think anyone should say that. Sen. Van hollen the number three point in your testimony, avoided defaulted all costs that is not with the House Republicans are saying. They are saying you do not adopt our plan we will default. That is reckless. You know it, others know it and the president knows it which is why he hasnt taken the position that is either his way or the highway. Chr. Whitehouse senator marshall. Sen. Marshall theres not a Single Person on our side of the aisle who wants the country to default on its debt. I want the American Public to know that. Not one of us wants us to default on our debt. But we also want to see responsible spending. We know we cannot give the white house another credit card. We can walk and chew gum, solve both problems. Why does it have to be either or. Why does this capitol hill working in silos. I will never understand this. We can do this is push my this problem onto to my grandchildren and cripple their generation with burdensome debt and Interest Rate payments. I and i dont understand why my colleagues crossly i want to destroy future generations. Jupiter is the roman god of climate and weather ,indra was the hindu god, zeus, the greek mythology god. I ask you who is americas climate god . Is it john kerry, al gore . Why do we have this religious six periods with climate rather than using common sense talking about affordability, reliability and all the while americans Carbon Footprint is going down. Todays white house and the Democratic Party have become the European Green socialist party. Thats who they are today. They worship climate and even banks meltdowns have been impacted by their worship of climate. Even our own Federal Reserve is ignoring the same Interest Rate risk problems that Silicon Valley bank ignored. All impacted by their climate worship. I cant tell you enough how much im disappointed by the name of this hearing. The default on america act. Blackmail, brinksmanship and billionaire backroom deals. I dont know if i can come up with a more misleading and unjust title for a hearing. Theres not a Single Person on this side of the aisle that wants us to default on our debts. There has been no backroom deal, no brinksmanship, no blackmail involved in this bill from the house. I believe the house gop bill is a good solution and let me be absolute here, theres no cuts to the v. A. Or Veterans Benefits in the House Republicans proposal despite the lies from the left to the contrary. Democrats fear mongering and scare tactics using our veterans as political pawns are beneath the office we are elected to serve. Of course republicans will keep fighting to protect and save medicare and Social Security from white house policies that cut funding to those programs and dilute the resources. The irony is its your side now that truly knows a thing or two about backroom deals. You got a marvelous warm up with the American Rescue plan refining the art with the Inflation Reduction Act. What a joke. But drafting it behind closed doors there were no hearings, bills, debates. One minute there was no bill in the next we are voting on a sprawling wish list of the use socialist green party items. Like saddling oil and gas with fees that wont have impact on the environment. I would love to have a real debate about methane in this room in this hearing. Im here to tell you what wont work. I care too much about my children and grandchildren and my parents and hardworking americans already suffering by 15 overall inflation since democrats took control of government policy. The American People and the National Media know that the ball is in joe bidens court. Speaker mccarthy in the house gop have put a deal on the table claws back reckless Government Spending and hopefully will slow inflation while taking care of the debt ceiling for a year. Thats a winwin opportunity. A deal is on the table. These are good things that the American People want and deserve , our country cannot keep racking up debt on the backs of hardworking americans. We must face this head on. All we are asking is the democrats stop all the political theatrics long enough to participate in a goodfaith negotiation so we can pay americas bills. We can do both. If anybody is listening today i want to remind them and it comes to addressing and americas debt crisis republicans have done something and put forth a solution. Democrats have not. Mr. Riedl what would your advice be to the president right now . Mr. Riedl my advice is to sit down and negotiate. The American People want to at least have a discussion and he should sit down and negotiate with an open mind towards raising the debt limit and reducing the deficit. Sen. Marshall the deal on the table does both of those. The deal on their public and house either put forth put forth responsible spending and solve the debt limit crisis. Mr. Riedl it raises the debt limit and addresses the deficit. Chr. Whitehouse for the record, since i sit on the finance Committee Also and the environment and Public Works Committee let me just note the tax credit provisions in the ira came through the finance committee were publicly debated in the finance committee, voted on in the finance committee and the Methane Program came out of the environment and Public Works Committee which was also a matter of conversation in the environment and Public Works Committee. Sen. Marshall so we want to have that debate chr. Whitehouse as well today . Chr. Whitehouse just correcting the record that there was Committee Public action on the measures that ended up. Sen. Marshall when did we get the bill . How much time passed . Chr. Whitehouse the provisions were clear well before and were subject to hearings and debate. Hearing and debate months before. My colleague from utah mitt romney said why cant we figure out a path forward and here we are, it is very clear that many people on my side of the aisle think we need to reduce the deficit by raising revenue from those who pay the least, that is the rich and the corporations. And my colleagues on the other side of the aisle say we want to do it on spending cuts. Im taken back in time to 1974. This committee exists because of the bill passed in 1974. That bill, which was titled the congressional budget and tiedeman control act passed with 100 of the senators. Every senator, both sides of the aisle. The deal was for reducing the deficit, only for reducing the deficit we will create a filibuster free pathway. You might recall there was intense supporters of the filibuster and yet everyone of them said for one purpose, decreasing the deficit we will have a filibuster free pathway. That held for 20 years. You all as experts im sure are well familiar with what happened and what happened was 1996. In 1996 you have the gingrich revolution and we had essentially a series of bills, one of them was a line item veto bill struck down by the supreme court. We had a debate over a balanced Budget Amendment and that fell one short here in the senate from passing. And then at that point, the senate pivoted, Senate Leadership pivoted at that point and said lets do a massive revenue reduction, a tax cut. Democrats said no and so the republicans in this body said you know what, lets use that filibuster free pathway from 1974. They proceeded proceeded to ask the parliamentarian for ruling that instead of using that filibuster free pathway for deficit reduction they could use it for a tax cut that would increase the deficit. And they got the ruling they wanted. Robert dobb was previously an employee of robert dole and he conceded we will change this purpose. It was challenged and there was a vote on the floor and the vote was sustained by the majority of the ruling was stained by the sustained by the majority and now after 22 years we blew up this bipartisan strategy of only using this for deficit reduction , that opened the door to what we did last year with the Inflation Reduction Act in which democrats said if its going to be used for the republican priorities to increase the deficit, we will use it for our priorities to increase deficits. Doing things we would like to see accomplished that are important to america. I just want to give this history because we quickly lose track that this has been a struggle we have been engaged in 50 years. There was a pretty significant legislation in 1974 saying deficit reduction, we dont agree on how to do it but it is so important we will create this protected filibuster free highway and it got blown up in 1996. And here we are having the same question on how do we reclaim that. The former chair of this committee from north dakota, he proceeded to change the rule back to say it could only be used for deficit reduction. Kent conrad. The conrad rule. Immediately as soon as democrats were out of power here republicans changed it back. So there is a lot of posturing over who is right and who is wrong, of the fact is we failed as a senate to wrestle with this and we blew up the one tool wed , together universally to support. Are you all familiar with this history dr. Zandi . Dr. Zandi i forgot a lot of it but that was helpful. Sen. Merkley and dr. Fit in dr. Fitchner, your member this. Thank you for making the offer if they want to introduce that i would like Nothing Better than to spend hours testifying on the budget resolution stronger going back and having deficit restrict reduction and how to do that. Sen. Merkley my commentary to using and not using if you will the debt ceiling in this fashion, the Common Collective tool weve worked out in that that is worked for 22 years. This is a very dangerous path. We they marry well i know im a bluecollar kid, who still lives in a bluecollar Community Thing about the folks with car loans on adjustable, working on Interest Rates on their student loan and they are all good to be hurt. Not a lot of people have stock but some of them have some who are fortunate enough to have an ira or Something Like that. So they have that little bit of savings there. They will be heard on that if the stock market crashes. I dont know how to put this back together because even if we were to recreate the 74 bill, that 74 consensus, what we now know is under political pressure, it could be the blue side or the red side, theyre going to get a ruling from a parliamentarian and blow it up and use it exactly the opposite way it was intended as a moment of political i think the right way to deal with this is that we wrestle with spending bills and those require a partisan cooperation because they are subject to 60 votes unless we are doing it through reconciliation. We wrestle with the revenue side , if those things, the difference between revenue and spending. So when the bill comes due i am always reminded of president reagan saying you do not mess with the american debt. Basically the american credit. I wanted to ask a bunch of questions but i wanted to bring up that piece of history because its relevant to what this committee does and wrestles with in the impasse we are at today. Chr. Whitehouse it is important history and as i turn to senator scott i would say we got pretty close within the white house, it made it into the bicameral Bipartisan Debt Commission and ed pastor there in bipartisan passion fashion. And then neither body took it up on the floor. Dont think that there isnt an avenue to complete the work so many have talked about. It is there. Senator scott. Thank you for your patience. Sen. Scott thank you for the history. I knew most of it but it is good to have a reminder. I became governor of florida and everybody thinks the states balance their budgets, they dont. My state hadnt balanced its budget in the 20 years before i became governor. And i walked in to a budget deficit, not as big as the federal one but we said this is what our revenue basis will be and we will figure out how to keep the dollars. We were able to grow our economy as a result. We paid off one third of the state debt in eight years. Ive been here for years and i think the most frustrating thing is we dont do budgets. We dont even have a fight over spending bills, we just get these spending bills and its not like one side is bad and the other is good, both sides have been doing this. I think its not just that bill but all these things. It happened when republicans were in control. We had these omnibus bills, it never went through a committee or anything. For each of you, we have 31, almost 32 trillion in debt. What is the limit . Our gdp is around 26. So whether its a dollar amount or percentage of gdp, what is the limit . In my experience at least is when we raise taxes we never get the revenues. I want everybody to pay their fair share and figure out how to balance this but we never at the revenues. Other people saying we will save money, we never get the savings either. What do you think the limit is . Many of us have in calling for this to be a problem for years. Ill tell you what i think will happen is 20 33 because thats when Social Security trust fund becomes the pleated and thats becomes depleted and thats if theres no action by congress. We will have to borrow billions a year to make up the difference in revenue shortfalls. Thats when you will see the bond markets interact and say this could go on for how much longer and thats when they will hit. Sen. Scott the Congressional Budget Office i think has this if we continue the path with 48 on top of that. Mr. Riedl once the debt gets up to 150 to 200 of gdp you are in rare territory with the Global Economy. Just to put a number on it. Imagine 200 of gdp and we have a 5 Interest Rate. You are paying 10 of gdp in interest. Revenues are 17 of gdp, you are in rough shape if the majority of your revenue is paying interest. The bond market may cut you off before you get there but even if they do not you dont want to be paying 10 of gdp just in interest. Ms. Hopper im the lawyer not the economist. Ill refer to my colleagues here. Dr. Zandi its not a cliff event, its corrosive on the economy and a good rule of thumb empirically based with a lot of debate, the cbo can be close is a percentage point increase in the debt to gdp ratio adds about two basis points to 10year treasury yields. So just make that concrete on average. Its not linear over time. But that feels roughly right. You have 20 basis points, but if you do the arithmetic here the corrosive undermines the economy in the long run. We clearly have to change this. Sen. Scott we are a little over six times debt to what we anticipate we are collecting and revenues. How much of your net worth will you invest in a company like that . How many of you are buying 30 year treasuries right now . Anybody buying . What would you buy . I have great faith that you will resolve this and that the u. S. Will remain i am hopeful. And i would invest. By the way so does the rest of the world. We still are aaa credit on the planet. Money comes here when times are tough. When times are tough we ultimately do the right thing. Sen. Scott it does Say Something when nobody is sitting here saying they would buy 30 year treasuries. We are supposed to be the safest investment in the world. Dr. Fichtner a lot of money is in cash right now which is paying good interest. If you look at yields on shortterm treasury securities, a onemonth, threemonth. You can see the yields are now rising and falling based on when investors think its possible that we do default on the debt. So the idea we wont default is slowly breaking down here at some point. You look at one month versus three month treasury, its a beautiful chart to look at. It is unprecedented. You can look at treasury securities, yields by day and people are now looking at when receipts are coming in and expenditures are going out and can say on this day the most likely day treasury will run out of cash. Sen. Scott its positive people are getting engaged. Dr. Zandi it is critical they get engaged. Chr. Whitehouse thank you senator scott. Senator lujan. Sen. Lujan thank you chairman and everyone who is here. This is a discussion of appreciated and learn from. I want to take us back to what the republican legislation that was passed this last week, which i think similar to 2017 when the American People dubbed the trump tax policy as a tax scam, that was promised to be targeting middleclass and those aspiring to be in the middle class, to them the proof is in the pudding. Everyone knows where that money went to the dissatisfaction of many constituents i represent. They were trying to figure out how to submit their taxes the next year because the withholding tables changed a little bit and less was taken from their checks, but when april 15 came, they were thinking what happened last year would happen again and it didnt. And it hurt their budgets. I hope when we talk about budgets, we also include the budgets of people we represent when we are talking about this. With me saying that, i dont know if the chair knows, do you know how many u. S. Senators went through headstart . Theres only two u. S. Senators that went to headstart. Im one of them. I think of those programs wouldve been stronger in other parts of the country, colleagues wouldve benefited from them as well. Nonetheless i bring that up because this default on america act that came through the house recently would dramatically reduce and eliminate investments in headstart. Ive heard economist after economist tell me that one of the greatest returns on a dollar is an investment in education and children. Dr. Zandi, does what i say hold true . Dr. Zandi there is a Strong Academic Research that Shows Investments in Young Children payoff and norma sleep not only for their Financial Wellbeing but for the commune is they live and in and the broader economy. Sen. Lujan i know i benefited from this education. I didnt realize until later in life what opportunity that i had that presented itself to my family. Not just that i was able to get a jumpstart on those classes and socializing with other students. The power, i think america could learn something about that. During those headstart days. We sometimes had a little lunch that would be available to us to keep us nourished and strong. Which would help us learn more. But my parents didnt need to find childcare for me when i was growing up to let them stay in the workplace and work more. That sounds like good Economic Policy to me. What i wanted to raise was my concern associated with the devastating cuts that relisted in these programs in the area of Early Childhood education. What other areas that has not been raised just yet is as a reminder to all of us, the United States as a treaty obligation to tribal nations in america. The United States has a horrible track record the plan that came out of the house would devastate and investments into tribal communities. A 1 billion cut to Indian Health service. 60 million cut to the bureau of indian affairs. A cut to the euro indian education. I certainly hope we are having this discussion. My was elected to the when i was elected in 2008 i support his simple policy that was move forward. But thats pretty much a simple policy everyone can understand if you buy something you have to pay for it. Im not as smart as all the folks, i surround myself with smart people. I understand simple concepts. If you can keep it simple and we can all come together and do some things better. I apologize for my approach to some of this. Sometimes we need to step into the shoes of the people we represent and try to communicate in a way the policy takes them into consideration when we have to make these tough decisions. Chr. Whitehouse no apologies needed. You have a very important voice. This is the Budget Committee. Today we are talking about budget. Ive been on it as the committee since i got your four and half years ago. We have not even gotten to first base on a budget resolution that was accepted broadly. Let alone a budget. I would like to ask the chairman of the Budget Committee this senator here had to take as it privilege motion to the floor about a year ago. Thats when it doesnt get done in the regular order of business. Would you commit to you and i at least working when the new fiscal year starts on october 1 that we will bring a budget to the senate floor but we craft here and spend the time on the Budget Committee through regular order like you do everywhere else to get a budget we at least get out of this committee. Chr. Whitehouse i will have to wait to see other present circumstance plays out because if the House Republicans set off the default hand grenade they are negotiating with right now were in a very different world and i cant predict that. Ive already said is to get back to work on the white house budget perform reform proposal that can lead in that direction and set up terms and set up the conversation you want. Senator kaine has been here, i think we got some real bipartisan interest here. I think we are pretty comfortable with the president s budget. I dont think we need to do more. Sen. Braun i think if we still have a Budget Committee we ought to use it through regular order to at least put something out there. The other house needs to do that as well. Lets get to what ive observed. Other places everywhere else. You do not have a credit card that is automatically renewable. I think thats the context that we work within here. Obviously that would be pandemonium anywhere else. Sooner or later things like your sovereign currency are at risk, we saw what happened in europe when greece, spain, portugal and italy fell off the wagon not too many years ago. My observation has been the ability for our unique economy to raise revenue we ought to look to see what that maximum amount would be without threatening Economic Growth. Heres a statistic i have not heard anyone mention. Regardless of the tax rate, we generate about 17. 5 percent to 18 of our gdp in revenue. That means through high rates you get lower Economic Growth. The trump tax cuts, those were chump change if you give the full 150 billion to them. That would only be 7 or so of our current structural deficit. My question will be to everyone of you and give me a fairly brief answer because i have another one. Is that a reasonable place to be . Is there more capacity, is there not. Tell me why. Only three times during the clinton years did we had 20 of our gdp and tax revenue. I will start with dr. Zandi. Dr. Zandi i think there is more room. The average revenue gdp is about 18 . Theres more room than it needs to be because of the aging of the population. Theres more folks that need Social Security and medicare and that is a significant keeping spending per person constant. Sen. Braun do you have a level you would be comfortable with that wooden strain Economic Growth and be reasonable. Dr. Zandi i think somewhere between 20 and 22 . That would address our longterm fiscal issues. Sen. Braun by the way that would be about 3 to 5 lower than where we are currently at with 7 trillion divided by what is our gdp, 26 million . We are way above 25 currently and thats not sustainable. Dr. Zandi i was talking long run. Sen. Braun long run yes. Dr. Fichtner i will divert ms. Hopper i will defer to my colleagues. Mr. Riedl you could probably get to about 20 of gdp tops especially in terms of taxing the rich. You can throw every proposal out there that weve seen on taxing the rich. Youll get about 2 of gdp from that. With spending going to 30 of gdp you have a ways to go. In my lifetime basically the longterm average for revenues average 17. 4 . When you get above 18 there are calls to protect cuts and revenue increases. Even if we have rates going up to 20, lets give that some flexibility. We are going to have 25 gdp at 2033. You can pick it up all on revenue. Sen. Braun right here historically we have 18 rounded up. We have one witness that says 20 to 22 . We are currently approaching 30 . I would think one simple way to get bipartisanship would be to at least establish what the capability is of this federal government and then live within it. Because otherwise you are ending up basing this on an increasingly indebted economy now puts this only number two to japan in terms of percentage of debt as a percentage of our gdp. To me that is a shameful bad Business Plan that is not sustainable. Since i was asked a question i will take a minute of his time for i turned to the senator the way the program worked was very in line with what you said. Everyone agrees the debt to gdp is the right metric to look at. I see all three economist heads nodding. The question is what debt level, per coming the gdp her the gdp is the appropriate one. We can have that with experts. Then you can figure out how quickly you can get there without destroying the economy along the way. The sudden brutal cut shocks to the economy like the house has proposed, as the doctor has said will cause 700,000 jobs and put us into recession. That is not a smart way to get there. You have to have a glide slope. Then you take you enforce the glide slope with warnings youre off the glide slope. And you have the revenue and spending discussions. Mr. Chairman, not too long ago. I have to yield to the senator. Will you do another round . Sure, this is the senators time. Excuse my intervention in your time. Thank you mr. Chair, i will make it up on the back end. Everyone else has, why not you. [laughter] let me also trying to level set, the conversation we are having, but why we are having it here. Despite the slimmest of majorities in the house of representatives, republicans are effectively saying to President Biden and two Senate Democrats and the American People that we must accept the ransom demands or they are forcing the country to default on its debt for the first time in history. Lets be clear. The hostage they are taking or threatening to take is not the federal government. It is the American People. Including their own constituents. A default would plunge our economy into recession. All the economist have established that. Costing millions of american jobs. Increasing loan payments for working families and evident from their homes to cars, to student loans. Threatens to cut Social Security and Health Care Payments as a result. Much of what we are discussing here today, as big and significant as it may sound, is only scratching the surface. Of what the country will face should republicans refuse to allow the federal government to meet its obligations. Let me ask questions about some of the specifics. As we saw in the decent hearing, republicans take great offense at the idea that they would cut Social Security and medicare. Yet, because of this man factored crisis crisis that would result in not receiving benefits, benefits they have paid into the entire life they have earned. A default would keep the federal government from actually paying them out. Can you describe the implications for Social Security and medicare if the federal government defaults on its debts . It would be devastating. The first thing would happen is people not receive their checks on time. They will eventually get the money. It will take longer and longer for that to occur. The longer that the impasse continues. Obviously, the hit to the Financial Markets would be serious, immediately, in fact that will start to even before we breached the debt limit. Investors will anticipate the breach. Stock prices will decline, Interest Rates will rise, and that undermines the Financial Wellbeing of all americans, but mostly family those retirees who will count on that. And then, jobs, the economy, income, that will affect obviously all americans. The entire mobile economy, Social Security recipients, medicare recipients would be casualties like anybody else as a result of that. Raising the issue of veterans, and i am glad that senator marshall made reference to it in his remarks. My understanding is that nowhere in the House Republicans default on america act doesnt say Veterans Benefits are exempt from the 22 cut in domestic spending. Right . We have covered Social Security, covered medicare, nellis talk about Veterans Benefits. It wouldve been now lets talk about Veterans Benefits. It wouldve been perfectly straightforward to write an exemption in the bill. In fact House Democrats offered to amendments in a house in the House Rules Committee to protect veterans from spending cuts. We saw House Republicans vote down those offered room and minutes. Those offered amendments. They did reread the bill to protect ethanol subsidies. It seems clear to me that House Republicans made a conscious choice to subject Veterans Benefits to spending cuts despite protests to the contrary. Can you identify a provision in the default on america act that would exempt Veterans Benefits from spending cuts proposed by house replicants . Not that im aware of, because are two total Discretionary Spending. I would be determined in the appropriations process. In the legislation i am not aware of any language related to the d. A. Program. Va program. In the interest of time, other examples, republicans have put us in the place of a looming crisis. We can and should do what we have done numerous times before under democratic and republican administrations. Pass a clean lifting of the debt ceiling. To hold it hostage for a budget conversation, is wrong, and the exact budget plans, not being offered or suggested, or considered, but passed by House Republicans would only make a horrible horrible situation that much worse. We can outline further examples, but the example most talked about, Social Security, medicare, Veterans Benefits. Despite the bellyaching on the other side clearly on the chopping block. Thank you mr. Chairman. Thank you, that more or less concludes the hearing except for senator braun ask for additional time and i will gladly as chair yielded to him and then offer concluding remarks. And then that will be the end of this, thank you very much for the witnesses testimony and participation. Thank you mr. Chairman. In 2019 we spent about 4. 5 trillion, 2020 we did the cares act, that was bipartisan, everyone and greet agreed out of uncertainty everyone spent too much of we had not shut the economy down to the extent we did come another we know the Health Care Information that came around sooner or later, 6. 5 trillion. Then you have 21, 22, 23. Is it legitimate to get off of the baseline of where we were before with trillion dollar structural deficits . When we were spending 4. 5 trillion taking in 3. 5 . Do we need to keep at a level that was based upon something extra normal . Is it healthy and can we see the territory that we need to be where we are, to have a healthy federal government, should it be occupying that much of our gp . Gdp . In other words just because youre able to spend and borrow the money to do it, is that the new baseline we should operate on deck takes us up to 25 plus of our gp . Should we gdp . Or should we go back to where we were before the extra normal spending took over in the first place . Those are a lot of numbers. That is where we are, those are actual. I would need a spreadsheet to disentangle all that. Let me say this, senator. The physical problems we have today are echo medical. Ecumenical. Both republican and regret. Trump tax cuts are 2 trillion, there is not paid for, that this corresponds to the pandemic which was bipartisan up into the American Rescue plan, in 2020 that was additional 3 trillion. Both sides agreed to that. The 2 trillion arp was democrats. Yep. The situation we are in now is both on on both parties. I am talking my going head back to the original baseline or should we be at the elevated level . I do not know precisely where it should go, i would have to look at the numbers more carefully. But, the spending, as a share of gdp has to get down to something close to where i think revenue should be is where spending should get. It should not get there next year. Does not need to get there the next five years. Does not need to get there the next 10. There has to be a clear path to that over the next 10, 20 years. If we can accomplish that, we are golden. 2022 what about the other panelists . I think spending has grown rapidly in the last couple of years. I will add that discretionary appropriations themselves have grown 23. 4 in the past two years. The idea that any cuts to discretionary appropriations will be a devastating starving of the government, his grown 23. 4 in two years. I do not know how that level has to be the sacred floor that will cause chaos if we go below it. At some point we have to align spending with the economy and the fundamentals in the deficit. Senator i will make my answer quick. I work with a bipartisan policy center. The only organization in the district of columbia has bipartisan in the title. Ill come back and say what the chairman has offered to putback into the white house bill, and you are try to get a process in place, is very very important. That should be getting a budget, making it a priority mr. Chairman. Is your point, should we go back to precovid baseline . We all agree some tax revenues may be 20 , and spending should be close to that. Spending averages 21 of gdp on average. You have that little range. Most of the heavy lifting has to address spending and as the it is a question of timing of how to get it back to a sustainable level. In the instance of tax, how you have a different tax policy, a carbon tax or different type of tax instead of relying on labor for your tax revenue. Thank you. Here here for your last comment, i say. Let me think the senator or his extremely sincere and thoughtful interest in all of this. I particularly appreciate his efforts in this regard, i hope that we can Work Together. I was delighted to hear a Ranking Member saying he was interested in pursuing this. To have bipartisan witnesses both saying that reviving the white house idea of a proper procedure that gives to debt to gdp over time, as a doctor just set could be we are golden. That would be a better outcome than what were looking at renowned. Limiter to what we are looking at right now. Let me turn to the bad side of the closing remarks. If we end up going into this republican threatened default, and all the pain and calamity that all of the witnesses have forecast comes to pass. People in america are going to want to know who is responsible . And this is a personal comment. Do not blame any of the other democrats an idea gently could be logical to blame my republican friends. My her and earned experience tells me that when the Republican Party acts on pollution related and corruption related issues, the party acts as the glove for fossil fuels, dark hand. Every movement of the glove can be explained by the movement of the underlying also fuel industry also fuel industry hand. They have armed a default hand grenade and pulled the pin. They have in their hands threatening to blow it up with all of the consequences that each of you have forecast. The question is, for whom . Edgar allan poe wrote about the purloined letter, where was it found . In plain view. Look in plain view. What is in plain view in this bill . What is in plain view in the house default on america act is 275 out of 315 pages that are giveaways to the fossil fuel industry. The fossil fuel hand in the publican glove republican glove. If we go there. If this default is provoked by, what looks like a aspirate last attack on desperate last attack on clean energy competition. By a massive polluting and heavily political industry. That will come back to them. There will be a story to tell. People all be looking at this and i promise i will do everything in my power to connect the dots so that the American People clearly see the dark fossil fuel industry hand behind the republican glove in the default on america act. 275 out of 315 pages is one hell of a tell. With that i will conclude the hearing. If any members have questions for the record for the witnesses we ask that they be in by noon tomorrow. The witnesses, if you received questions for the record, are requested to provide your responses within a week. May i hope, that we reconvene, in brighter days with the pin back and the hand grenade. And go forward on a bipartisan path to do the work i think has been quite well outlined in the subtext if not the main text of this hearing. Thank you all very much. [captions Copyright National cable satellite corp. 2023] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] they should pay the partisan grandstanding no mind at all