Transcripts For CSPAN3 Marc 20240703

Here to talk about federal spending. Mark goldman, lets begin with defining deficit versus debt. The deficit is how much we borrow each year. The debt is how much we owe. It is for some of all of our past deficits. If we think about a credit card, the deficit is how much you have added to the credit card bill in 2023. The debt is how much you owe total. Where we are right now and 2023 without deficit . There is different ways to measure it. People like to talk about 33 trillion. I like to look at debt held by the public as a share of the economy. The bigger the income, the more debt that you can afford. We are very close to 100 , meaning that the debt is as large as a full years worth of output. Why . Why are we in this position that we are in right now . There is no one thing. The covid crisis, the recession before that included a lot of onetime borrowing that got us far from historical average. Underlying that, we keep passing tax cuts and spending increases that widen our structural deficits and we have an aging of the population and rising healthcare costs that put pressure on some of our older programs like Social Security and medicare, to continue growing over time. Are we paying our credit card . We are borrowing. We are probably going to borrow about 2 trillion this year of new stuff, plus, we are going to borrow additionally to rollover some of the debt from previous years. You according to this new report put out last week from your organization, the deficit is rising faster than projected. Last year seth deficit was 1 trillion. This years is going to be true to trillion. You got remove some student that stuff that never happened but effectively, the deficit has doubled. Part of the reason of that is it turns out 2022 was actually a high water point. It is going from capital gains, wages because of inflation had gone into income first. When a pretty sharply because of inflation and our interest cost are as high as they have ever been with the average Interest Rate on new debt, 45, five and half percent in some cases. Who is to blame for this . We all are. The voters need to take summer font ability because we have loved to have low taxes. We love Government Services and benefits. The politicians keep making promises that they cant afford. They keep telling us do not worry about the borrowing because its going to pay for itself or this new Spending Program is so important. Frankly, many of the economist are to blame because when Interest Rates were low, they said borrowing is cheap, lets do it. It did not occur to them that Interest Rates were going to rise and we were going to rollover all of the cheap debt into what is now very, very expensive got debt. I want to show this chart from your report. It shows the divergence between spending and revenue over the years. What can you tell us about this . What has been happening . Two things are happening. We keep cutting taxes. Revenue has a built in growth to it as incomes grow up, revenue should be growing. That does not happen if we keep cutting taxes. The other is, we keep increasing spending. That is taking three forms. New Government Programs. The second is onetime relief. Some of it made sense, some of it didnt. For covid. And then the third is that we have allowed some of our largest programs in particular, Social Security, medicare, medicaid, to continue to grow. Basically, completely unfettered. We have known that these programs are an unstable track. Many of them have trust funds headed towards insolvency. If you are in Social Security now, starting in 10 years. We do nothing either bring those costs under control or to raise more revenue. Why not . Why not . Because it is hard. Its very fun to tell people i gave you a tax cut. I protected your Social Security benefits. It is very hard to say, in interest of the greater good, to save this program, we are going to have to raise the retirement age by one month every two years. Youre going to have to pay a little bit more taxes on your income. We can do it. Not to beat each other over the head but it is politically tough because nobody wants to pay more taxes. Nobody wants lower benefits. The latest round of tax cuts came during the trump administration. President trump and republicans were in control. They passed a package of tax cuts. There was a report in the paper last week about how much of those tax cuts will stay in place because President Biden has said that no one making less than 400,000 should see a tax increase. There reporting said that much of President Trumps tax cut package stays in place. I think its very possible. We cut taxes. Republicans cut taxes by about 2 trillion over at 10 years and then they join hands with democrats to increase spending and cut taxes by a combined 3 trillion more. Now, many of those tax cuts are set to expire at the end of 2025 and although there has been some nice talk of paying for extensions, we have not actually seen how they are going to do it. It is a very big risk that the parties join together, not in the interest of her sons ability. Not by making hard choices but by extending or even expanding these tax cuts. What you think happens on the spending side . We are eight working days away from the possible Government Shutdown. Republicans in the house are saying we need to address the spending now. They want to spend hundred 50 million less than what the president and Speaker Mccarthy agreed to inmate. The physical response ability act, i think it was a really good start to get our spending under control. Democrats and publicans came together on a plan to freeze spending levels for a year and then have them grow really slowly next year. That would not solve our debt but it would save one 2 trillion over a decade. I think we ought to go forward with that deal and Work Together on how to build on it. What is happening now is the house wants to spend below the deal. The senate wants to spend about the deal. They are taking other stuff and declaring it as emergency even though it is totally ordinary spending. Nobody wants to abide by the deal. The first step is lets pass the spending based on the physical response ability act and then lets go back for more because we have to cut spending a lot more if we are going to get our debt under control. I want to talk about that in a minute but first, let me ask our viewers to join us in this conversation this morning. Democrats. Independents, 202748. Just include your first name, city, and state as well. Let me ask you this. If we were continue this trend that we have been seeing over the next decade, where would that put us . To an ugly place. Right now, that is about 100 of the economy. The u. S. Record is 106 . We set that right after world war ii and we had a plan to pay it down. If we continue on our current trajectory within 10 years, we are going to be at 115130 . Within 30 years, we will be within 180300 percent of gdp. There is no historical example of that working. The really is not any international cases. The closest is japan on the low end. That is a recipe for slow and stagnant growth. More about the ventilation and possibly, hopefully not but possibly a physically created financial crisis. What would it take to get out of that type of situation . How long would it take . We should start now. That would hold our debt to below the size of the economy and it would be an unbelievable important start. It would mean we would have to cut tax breaks and raise revenue. More to restrict the growth of those appropriations and we would get serious about getting healthcare costs under control and restoring security. We could do it if we acted now. If we wait until the crisis moment, its going to require devastating, abrupt cuts that could put us in recession and it is certainly not going to feel good to the folks that are really relying on various programs and tax provisions. Javy. Is. Thank you. I have a question that may seem a little off topic but this morning, it was reported that we spent and gave 6 billion. What i do not understand about it, it said the money was to oil sales. The accounts were set up under trump administration. I do not think so. That is pretty specific. To his point about spending money on aid to foreign countries, we got that debate happening right now with this continuing resolution. Should include an additional 20 million for ukraine . On top of the billions has given in their fight against russia. I think what asking about is we actually owe iran a little bit of money from periods of time that we were not in conflict and i think the agreement year was to release some of those funds. As to the broader point, foreign aid is about 1 of the budget. We should have a serious debate over the whether it is worth it or not. We should scrutinize every dollar and spend it efficiently. We are not going to fix our debt by cutting foreign aid or getting rid of waste or getting billionaires to pay the taxes that we owe. Really fixing the debt is going to require doing things that some people feel. Changes to the tax code, adjustment to Social Security, reforms to healthcare. We cannot get it from these tiny pots of money alone. Has the Kitty Committee looked what needs to be done on Social Security and if so, what is your group recommend . We have a very poor tool called the Social Security performer. It allows anyone to design their reform plan. High schoolers have used it, members of congress have used it. There is your retirement age, your tax rate, how much income is subject to the tax. The structure of the benefit formula, and the cost of living adjustment. You can basically tinker with any or all of those to reform it. Me, personally, i am and all of the above approach. I think we need more revenue into the program but i also think we need to adjust the benefit formula and adjust the age. We can do all of this in a way that encourages economic growth. We just put out a study late last week that says if you do progrowth Social Security reform, you can boost average income by 10,000 per person 30 years from now. If we do this right, there is a tremendous upside. What about healthcare . You mentioned that as one of the drivers of our nations deficits and debt. What do you propose to do about that . The United States spends about 50 more on healthcare than the next highest spending country. About twice the average. There is an incredible amount of rate waste in our system. Some of it is or payments, some of it is incentives. We can start with a bunch of policies that both president obama and President Trump have supported. For example, right now, the Medicare Program pays more if you see a doctor and hospital versus the exact same doctor in a private doctors clinic. That makes no sense. We can equalize neutral payments. As another example, there is a private alternative called medicare advantage. In many ways, it is more efficient than medicare and it costs the federal government more money because of the way they are recording their cost. Just getting rid of some of that fraud and missed recording good save hundreds of billions of dollars over a decade. Independent. Thank you for taking my call. I personally do not have an issue with the Government Shutdown over this deficit spending and federal spending. In my opinion, the federal government has two jobs that help me that would be securing the border and the sovereignty of our country. Is the first one. It would be to protect without a strong military. I pay in wisconsin locally that go towards all my services i received locally. Okay, done. Mark baldwin was to the three Government Programs are Social Security, medicare, and defend. The fourth largest is medicaid. All of these serve a broad swath of people. It does not mean that there is not and will waste both in those programs and outside of that. We could find spending cuts where we can. Most of what the Social Security program does is send people checks. As for the Government Shutdown, unfortunately, this will not resolve any of that. We are never going to have a permanent shutdown. It might be for a week or for a month. And then we are going to go back and pay the federal employees for not working over that time period. We are going to have all these new. Is in an credible waste with no actual upside unless it leads to serious policy change. You say it will not . It could. You never know how negotiations are going to go. The shutdown, itself, does not do anything. The only good that can come out of the shutdown as if it leads to an unrelated policy change. If the leverage point to lead to an improvement of policy. The shutdown, itself, does not make government more efficient. We talked about this earlier with our audience a little bit. About discretionary sending spending versus mandatory. Those two ledgers. What this debate happening on capitol hill about shutting the government down and the top line figure. Does that even impact mandatory spending . Social security and medicare . People will still get the Social Security checks. They will still get there medicare in the case of a Government Shutdown because it is not what is being shut down. People newly applying to Social Security and to care may have some trouble because we do, through the discretionary budgets, fund the administration of these programs. Eric in duluth, minnesota, democratic color. Hello. I would like you to give a statement as to whether its the overspending or the cutting of taxes, which is to blame for the 31 trillion debt. I want to point out that since the era of the regular administration, which is one the first tax cut occurred, the number of billionaires in the u. S. Has increased. There was 13 at the time in the ministration. They are doing quite well during the same. The National Debt has accrued. I would like your response to that. Asking why is to blame is like asking which side of the scissors does the cutting. The truth of the matter is they both are. The problem is the disconnect between the two. We need to stop cutting taxes over and over again and start focusing on some extremely egregious tax breaks in the code that as you say, benefit billionaires. We also keep spending more and more and we have done absolutely nothing or almost nothing to get under control of our two largest Spending Programs. Social security and medicare. Riot in georgetown, south carolina, independent. Hi. I just wanted to talk about the National Debt and the situation of spending cuts. I think its really messed up to talk about cutting medicare spending and talk about cutting Social Security spending because the United States spends over 700 billion a year just in military spending. Altogether, even with the nuclear stuff and everything like that, it ends up being about 1 trillion a year in federal spending just in military defense and stuff like that. We could be cutting that spending by a lot in order to help fund these programs that help workingclass people. Lets take that point. Has your group looked independent on spending . For sure. Thank you for your question. There is an incredible amount of waste in the Defense Department and there is lots of rooms to cut and bring the spending under control. I also want to point out that when it comes to medicare, there is so much we can do to save people money that is not actually cutting benefits. In fact, it is improving the value of the program. That is exactly what we did in the Inflation Reduction Act when we put in place negotiations for drug prices and caps so they cant raise faster than inflation. These are exactly the kind of ideas that president obama talked about before President Trump. When it comes to medicare, there is so much room to lower cost in ways that actually improve benefits. When it comes to Social Security, this program is 10 years from insolvency, which means if you do not touch it, the law calls for about a 17,000 cut a typical couple retiring in 10 years. We to get Social Security under control for its own sake and we can do that both with benefit reforms that can be progressive but also with new revenue. And yes. We need to look at the defense spending. Most of the top three Spending Programs. Anyone that is not at least looking at all three is not taking the budget seriously. Does the pentagon have an account . Do they have to do any sort of accounting for congress . Congress is appropriated by every year. They do need to go back to congress. Congress does in two parts. They do something called the National Defense authorization, where they authorize the money and they appropriated through the appropriations process. What they have not done successfully is audit the pentagon. That is something that is the law. The pentagon eventually has to pass an audit. That has not happened yet. They should have to pass an audit. We should the cutting weapon systems that are there because they are in someones congressional district, not just because they are the best way to the mission. We should be cutting bureaucracy. We should be looking at benefits that dont make any sense. There is so much we can do to get Pentagon Spending better under control and that has to be on the table. Why havent they had the past not yet . Basically, they cant. Right . The pentagon is just not budgeted for it in a way that they can pass an audit. There is always going to be some things the pentagon does it has to remain secret from National Security secrets. And i think everybody understands that. The other things that they do that have, by tradition, been kept off of the normal way you would do books but should be brought on the books so a proper audit can be done. Ruth is in hemphill, texas. Publican. Ruth . Hello. I am wondering if he is aware of this magic number of 37,000 that medicare has billed to people i know in the last month. One, the fatherinlaw died in a nursing home and the family received a bill for 37,000. The man only owned 5000 with the property. The other is my sister has asbestos. She has a tumor in her long and her first award came in this month and medicare sent took out 900 of the 1100 that she was awarded by the Bankruptcy Court that handles these asbestos cases. They said they will continue taking one third of whatever she gets until she has repaid 37,000. It seems to be a magic number and nobody knows where it comes from and has never heard of it. Mark goldline . Its not something that i have heard of. It might be medicaid, not medicare but that does atomic a lot of money but i am not sure what the magic 37,000 is. When was the last time the u. S. Was not in a deficit . In 2001 we had a balanced budget. On a bipartisan basis, we started the hard work of balancing the budget in the late Ronald Reagan area. We had a Social Security plan. Especially starting in 1990 under george h. W. Bush, and then in 1993 and 1997 under bill clinton. The combination of their efforts was a Strong Economy is to balance in the late 90s through 2001. And then we cut taxes and then we had the wars in iraq and afghanistan. We had the financial crisis and then we increased spending and cut taxes. And then we had the covid recession. Now we are 2 trillion a year added to the deficit and the days of balance seem so far out of reach. Even though it was only 20 years ago. What would it take to get back to having a surplus . You would have to do the equivalent of cutting spending by about a quarter or increasing revenue by about a third. This is not realistic. Its not realistic in the broadest sense. It goes from unrealistic to impossible if you take things like Social Security and defense and veterans off the table or if you say we are only going to raise taxes on people making 400,000, then it goes from unrealistic to mathematically impossible. We are not going to get the balance anytime soon. That is okay. We do not need a balanced budget. But we need the budget where deficits are small enough that the economy can grow faster than the debt. So that the debt to gdp that is at about 100 right now, is going down. Where does it need to get to . There is no magic number. I think the directions what matters. You cannot have a debt that is growing faster than the gdp indefinitely. The more we reduce it, the better it is for longterm, economic growth. In terms of sustainability, i think step one should be lets hold in at about 100 and lets try to get it down. Can it go higher . If so, what could happen . It could but i prefer it not. We do not know where the breaking point is going to be. What we know is the higher the debt is, the higher Interest Rates get. The more our budget goes to interest. The less space we have to borrow for emergency repressions and the slower our wage growth. We put out a study a few weeks ago that the current trajectory, its going to slow Income Growth by about a third. Incomes will keep growing but they will grow only at two thirds apace. A significant reduction. We do not want any of that. At some point, that might be so high that it causes a financial crisis. Basically, it causes a up in Interest Rates, field auction, and a massive selloff of debt. That would be devastating. Think the Global Financial crisis over a decade ago but with no u. S. Government to bailout, the companies and the citizens in need. There is no magic number when that happens. I hope it never does. That is a risk that becomes increasingly likely as your debt claims. Kenneth is in texas. Democratic collar. Hi, kenneth. Hi i just wanted to say that any ceo who is granted money by the board in excess of the president s salary should not have any more than that salary, the president s salary deductible from corporate taxes. That is basically all i had to say. We actually do have a policy like that, believe it or not, in the tax code that limits the deductibility of executive compensation. I believe it is over 5 million for the ceo and 2 million. I would have to check. You could lower the 400,000 but we actually have the structure of that already in the tax code. Jennifer in ohio, independent. Question or comment here about deficits . Well, i would like to say that jill and joe collected 54,000 on their tax return and also, i am sure they cut off below 160. I would also like to say that the refugees they bring in the cuban refugee act awarded all the retirees that came over here Social Security and all they did was call her brother, sisters, mothers, brothers and come over. Another get Social Security. We should not be paying for the worlds retirement. All right, mark goldline. You have any spots there . The effects of immigration on the budget a really interesting. On the federal level, most of them are actually positive for the budget. Not all of them can receive benefits. At the state and local level, it is the opposite. Many of them are effectively being paid for medicaid for uncompensated care. They are in the school districts, et cetera. I think we ought to have more comprehensive Immigration Reform or reading about the best way to do immigration. We also may want to think that the physical aspects and how the. Different levels. There is a way to show that a little bit more evenly. Donald in indiana. Looking color. How are you doing . Good morning. I have three things. Number one, the government does not fund Social Security and medicaid and stuff. We pay for that out of our paychecks. Number two, how much does the government still owe medicaid and security when they went in and borrowed and never give it back. And number three, i know so many people that are passing the medicaid and Social Security out like candy. The people that shouldnt even be on it. Okay, we will take your points. That is a great point. Social security is financed out of the payroll tax. Not from other income tax revenue. It is built up of 3 trillion surpluses that you say the government owes it. The problem is, that payroll tax that pays for Social Security, its only covering about three quarters the cost. When that 3 trillion runs out, the government will pay it back. When that runs out, Social Security is in trouble. The law says it cant get money from the rest of the government. What that means is there is a 23 across the Board Benefit cut. 17,000 for a typical couple that retires in 10 years. That is why we need to get Social Security solvent again. Not to help the rest of the government again but to help the beneficiaries so they are not devastated by a deep across theboard cut that affects the 92yearold widow the same as it affects the young 62year old millionaire. Neil and colorado says what about idea to raise the Social Security age and the era of ai. Part of artificial intelligence, which really raised lots of jobs for population. We have essentially no Labor Force Growth in this country and if you look out of the market right now, you hear a lot of employers saying they are having trouble finding workers as we age. It is an economic problem and there are advantages to bringing more segments of the population of the workforce including working parents, workers with disabilities, workers in the early 60s. There is also a personal advantage to working longer. Weve seen this in all of the literature. They have more money saved up. They are happier, they are healthier, they live longer, they have stronger social networks. They have lower divorce rates because they are not at home all day knowing their spouse. They drink less, watch less tv. People that cant work longer, they should be allowed to retire with dignity, retirement security. We need a system that allows that possibility. People can retire at age that they need to. Hi, great discussions today. I would have to agree with the republican earlier from texas who was talking about i want to make the point to refer to Social Security as an entitlement. It seems condescending. The fact that everything the paycheck i have earned in my entire life has had Social Security reductions taken from it. I think this is where we differ. I believe to expect unlimited potential for growth in our economy is kind of a mistake. It is not going to work. This might touch on what you talked about with wanting to extend the years people worked before they are able to retire. We have an aging population. The baby boomers were monolith as a separation and they took up the bulk of the workforce. Millenials are even smaller. There is not enough human beings in the population who the income first generated. Scott. I think we understand. I am not sure i used the word entitlement here but i do not think it is condescending at all. Entitlement means youre entitled to the benefit which is exactly what the caller is saying. He paid into it. He is entitled to it. The issue is, the amount that we are paying in right now, i am paying it in, you are paying it in, it only covers about three quarters the cost. We have to do something and soon. For Social Securitys own sake, so that people on Social Security today can continue to collect full benefit. I want to be really clear about this. The law says when Social Security is on solvent, benefits get cut 23 across the board. That means that a young retiree today will be 72 years old when their benefits get slashed by almost a quarter. That means todays 57yearold will be just retiring when the couple loses 17,000 of benefits that they are expecting. We need to save Social Security, not for the rest the budget, not to subsidize ukraine or defense tax cuts. We need to save Social Security for its own sake so this contributions are covering those costs. As for unlimited growth, optimistic about the country and our ability to keep growing but we are not going to do it with. Your color is right. We are not going to have 3 , 4 growth going forward. I would like to have 2 growth. We are looking at every thing we can do, whether its on the labor side or with better investment, better research. Can make a big difference. Carolyn west virginia, independent. Good morning. I was just wondering if we could do a spending freeze. I would also like to cut but not really cut freeze the pentagon until he can pass an audit. Any department that cant pass an audit should not be at any increases. I think we need to do a line by line to find out where we can cut and that includes from the top down, reform the tax deal. Everybody wants the rich and to pay their fair share. They never do anything about reforming any of the tax laws that put them there. I think we could do a better job if we would do it mind by line and we would be able to find more where we could cut across the board. All right, carol. I used to work on a bipartisan fiscal commission. The late senator from oklahoma was the first i needed to put forward the idea to freeze Pentagon Spending until he passed it. I think it was a good idea when he suggested it. I still think it is a good idea when he when you suggested. I like spending freezes as a temporary measure. We can go on line by line to find the waste. I think that makes sense of a lot of programs. It is tougher in some areas than others but i think that would be progress. We need to reform the tax code as well. Allen in california, please break out the cost for medicaid for medicare. What is medicaid costing you as a taxpayer and how many beneficiaries are u. S. Citizens . Thats a great question. Medicare is merely for retirees. For some survivors, its mini for retirees. 700 million in cost and rising quickly. Medicaid is mainly for low income and it is a similar cost overall but the states are paying for half of it. It is more likely hundred, 400 billion at the federal level. Most of it is for u. S. Citizens. Many of it is for mothers, recent mothers come a pregnant women. Mark, were you watching for in these days ahead as the slimming shut down hangs over washington . What are you watching for . They are not going to figure out how to fund the government on time. The rule says we need to have 12 appropriations done by now. They are not going to do that. What they are going to do, i hope, is kick the cab. It will do a continued resolution. The alternative shutdown which is extremely wasteful. But i am hoping for is an agreement on a relatively short kick the can with the process for them to get agreement on that i shouldve passed a long time ago. What i worry about is that the house in the senate so far apart, they both want to break the physical response ability act. The house wants to break it by cutting spending more and i totally understand the impulse but we already have a deal that is causing more chaos. The senate wants to break it by making the fiscal years of the ability act and adding more spending on top of it. That makes absolutely no sense. I think we need to agree that a deal is a deal, past the Appropriations Bills based on that and then keep fighting for more spending cuts going forward. Mark oldline, with the committee for responsible, go to their website, crfb. Org to find out more information about spending. Mark goldman, thank you very much. Think you for having me. Testifies on security failures that occurred on january 6th, 2021 during the attack on the u. S. Capital. He testifies before a hostile ministration oversight subcommittee