Transcripts For CSPAN3 Shai 20240706

Bipartisan policy center. Weve had you on several times over the years to talk about the debt ceiling and potential default and the recurring that limit standoff. How worried are you right now about this one . I would say im concerned. That level of concern will grow in the coming days as there continues to not be a resolution. Among the leaders in congress and the president. We saw white house meeting yesterday that was the start of a discussion. Its important that theyre talking to each other because theyre not gonna reach a deal without that. They agreed to meet again on friday. And i think that is a positive next step. But the two sides are really going to be using their original talking points. Theyre going to win need those to move off those to return agreement. We are months, even weeks away from defaulting on our obligation to the country which the position that the United States should never be. In but looking back at history, our leaders have always managed to come to a resolution before the worst consequences have hit us. So im cautiously optimistic. The story is in the washington post, the wrap up of the meeting, yesterday they laid out a potential path forward. I just thought about that off of you. They have left open the possibility of a deal on Government Spending that also and the spending limit. It will allow both sides to claim victory, with republicans saying that they think white house officials maintaining that they took steps to divert ripple default. Is that a possibility . I think thats definitely the most out likely outcome. The president is saying that he is meeting nothing else attached to it. The house has passed a definite increase, along with five trillion dollars. There is not the most for that either. We need to do something in the middle. The president is not going to open negotiate over the debt limit. Republicans have said theyre gonna insist on specific savings for an exchange for the debt limit. The president said hes willing to negotiate about the budget but not the it comes down to about how the two sides are going to describe it. And if they can get back past the rhetoric they can make sure were also making good on our obligations. The question is, do they have time to get past this . Explain what the x state is. We have bipartisan groups that have been working on the debt limit for over a decade. Now we talk to the third party objective voice in this discussion because the Treasury Department has estimates of where we we will run out of cash to pay our bills. Because of politics and because there are members of the opposite side, those efforts are not always interpreted as an objective and we tried to play the validating voice from the outside to give members of congress that information that they need. Its when the government would run out of cash on hand to meet all the obligations. Right now the Treasury Department is using what is called extraordinary measures, its a accounting maneuvers for additional time for policymakers to work out a deal. Those measures have been in place since january and we expect they will run out sometime between early june and early august. So at most, months, perhaps weeks away. Which is again, quite concerning. This is an analysis that it takes a lot of work because we are analyzing hundreds of billion dollars of cash flow that comes in and out of the government of the month. Its important to acknowledge that not even the tracker treasury secretary knows what day that we will meet all of our obligations. Why dont they know that . Why isnt this is your prediction we dont know and things are gonna get paid . Its a little different from a lot of viewers are probably familiar with and a Government Shutdown. And Government Shutdown is a specific date for which congress has authorized spending. And once that comes, if they dont make new spending decisions, there is no authority to spend more money. We know that its gonna be, its written in law. If they dont meet that day, there is a Government Shutdown, nonessential employees get sent home. Some Government Services get shut down. In this case, what were dealing with is the u. S. Has set out on spending priorities, including entitlement programs, Social Security, medicare, also the annual discretionary programs, the annual programs for this year. There isnt enough Borrowing Capacity in order to me all of them. Were running a deficit of the country. Spending more than were taking in. The difference is made up from borrowing from the public. If we dont have the ability to borrow more money from the public by issuing debt, then we cant meet all of our obligations. Thats why its difficult to estimate this because we need to figure all the cash flows of the government to happen over the course of each day, each week, and each month. And then figure out when theyre gonna actually run out of this cash flows and hit effectively ground zero. Is there any way you can be more specific of june through august, do you have kind of, can you narrow that a little bit so you feel more confident about. A lot of us are wondering why we have, right now, its an interesting question. We see a real danger point early june because that is before the Treasury Department looks at quarterly tax revenues that are due on june 50. And once they get those in, without a help buoy them for a period of time, theres actually an additional extraordinary measure that becomes available at the end of june, itll help get them further. We sort of a twopart window here. Either dangers on the front end, if they managed to get past, that which is risky, but if they managed to get past, spots like little be at least into july before we reach it, were looking at sometime in july, the latest perhaps early august. What do you think this does to our credit standing . Do you see a potential of another credit downgrade . Well, we saw that in 2011, of course, that was the last time we had this all out brawl over the debt limit. It was both because we were threatening not to me all of our obligations on time and because we showed that there really wasnt a way that we can deal with our fiscal tell adjusts. Of course, we have very large debt for the country, almost 100 percent gdp, which has only been once throughout our history. After world war ii. And its skyhigh, its 200 of gdp over the next several decades if we dont do anything about it. And they acknowledged both that fiscal reality in the fact that we were the debt limit. And downgraded us as a result. Various agencies have put out warnings to say that if we see that kind of thing again or if we go past it, in the worstcase scenario, they could downgrade further. I think that would be really dangerous for the country, could lead to increase borrowing costs, equity markets, a lot of other consequences we cant anticipate. Have we given them any more confidence in the past 12 years that we can deal in a bipartisan way with our fiscal challenges in the country . The short answer is no, we have not, thats really troubling because our debt continues to rise. We all know that its a problem. And yet, there doesnt seem to be the political will to do anything about it. Weve had various debt ceiling episodes between 2011 and now. None of them have come quite as close to the brink as we did in 2011. Or is this one could take us. But we have come with, and you know, weeks or months of not making good on our obligations. I think when Credit Rating agencies are looking at the United States or any country, they have to decide how likely is it that the government is mock and make good on those debts. If we come within weeks or months every year two of that risk, there is a natural reaction from them, you are no longer the Gold Standard of, you know, credit limits in the world. Shai akabas as our guest, the director at the bipartisan policy institute. It is where you can go to see all of his and his colleagues work. If you want to join the conversation this morning, democrats republicans to a two, 748, 8001, independents, to a two, the 74, eight 8002. We have them for by the next 25 minutes or so, go ahead and start calling in. He mentioned the Gold Standard, the United States being the Gold Standard, if its that not the United States, who is the next closest, whats the next closest country that be that Gold Standard . There really isnt one. I think thats frankly why weve managed to retain that position. Lack of competition. Yeah, lack of competition. Chinas a Major Economic competitor of, are as their Global Concerns about the way they handled their economy and their political system. There is a danger that we could start migrating more in the chinese direction or perhaps another european competitor. Thats a compilation of a lot of countries, i dont think theyre quite as powerful economically as we are. But the risk here is that if we lose that dominance, it will lead to higher borrowing costs for the rest of the country and it wont help us attain our status as both the Global Economic leader and the diplomatic leader, where were really in charge of marshaling policy for the free world. Calls for you, this is, ryan washington, independent, good morning. Good morning, washington journal. I am checking out your action, you refer a lot to bipartisan. I have to ask you, with all the positive outcomes weve had in the last, you know, three years, the last year of trump, lost couple years of biden, anything that has been beneficial to the american citizen taxpayer average working guy has only been promoted by one side of the aisle and totally objected to buy the other side. Ill use an example, health care, you know . If were gonna be above water and not get, you know, just the carpet pulled out from underneath us with drastic, unexpected medical bills. We want to keep our family economics working still, but we can end up in bankruptcy over humongous medical bills that we already had medical insurance for, but the insurance guys wont pay for it. What is the question here . My question is, if you say its gotta be bipartisan, would you point out one bipartisan action that has been taken currently, recently its an interesting question. I think that when i say it has to be bipartisan, it effectively has to be bipartisan in order to Pass Congress because the republicans are the majority in the house, the senate is controlled by democrats, you need 60 votes to move something. Of course, President Biden is a democrat. So, in order to get a deal here, its gonna need to be bipartisan, basically by definition, with regards to what we want. In terms of your question about things have been bipartisan the past few years, our organization has worked on a lot of deals, on a variety of issue areas that have had bipartisan support, many of which have helped working americans, we have my project on the economic side that ive worked heavily on, retirement security. Its called secure two point 04, short last year on an overwhelming bipartisan basis, and that made improvements to the 401k and saving systems to let more people put aside money more easily for retirement and form urgency. Is that, i think its one big thing we can go to, among many over the past two years. Clearly theres issues where one party or the other appears more aligned with the working class, to some extent, that is the health debt ceiling bill, not a bipartisan vote, let me show you a graphic on that when it was passed at the end of last month, that entire roadblock, the 217 republicans who supported that legislation, that blue block, 215 democrats and four republicans voted against that legislation. Three members of the house did not vote. Whats your read on that legislation . That legislation is interesting, it includes a lot of provisions, there are a number of people that i think have some element of bipartisan possibility, and some that are non starters. The nonstarter category or things that directly undo actions that the president has done. So, those are things Like Clean Energy credit that were passed as part of the inflation reduction act, the student loan forgiveness, has been a major plot of the president s platform. Those are unlikely to see a lot of bipartisan opportunities. There are other places, in terms of Discretionary Spending, what level of Discretionary Spending to be, at its defense spending and then domestic programs, all the agencies, education apartment, energy department, housing, urban development. Those have to be appropriated each, or congress has to reach a level of what they need to be out. Republicans alike to reduce them and have them grow more slowly, democrats would like to see them increase somewhat. And theres clearly room between them. Having negotiation over that portion of the House Republican bill seems logical, basically necessary between their faces i think earls opportunities for bipartisanship, for example, the forms wouldve been put forward by the house and senator manchin, also been a big proponent of the speed up Infrastructure Project to make sure we can build at a pace that makes more sense for our leadership role in the Global Economy and our needs domestically. I think there is an opportunity there, and actually speaking just this morning that a Bipartisan Policy Center but that subject from representatives of the administration. I think theres a chance for that there. Theres also provision in the house bill that would repeal unspent funds from the covid pandemic. Of course, we are sitting here more than three years after the pandemic, started three years after a lot of the funds were passed the block. And some of them have not been put. Out meanwhile, the emergency has been ended and war no longer in the pandemic phase. So, i think theres a rational to look at those and see which of them no longer makes sense to have out there and pay those dollars for taxpayers. The president said he was able to look at that as well. Those are pieces i think could have bipartisanship. This is democrat. You on with shai akabas. Yes, im just wondering why the democrats just dont the red states when they run out of money. The republican states have their hands so i every year, taking more money than they put into the federal government, they are the ones that want to cut back spending, but their hands are out for more money. I know that kentucky takes, like, 20 billion a year that they dont put in. I know West Virginia takes out, like, 17 billion a year that they dont put into the federal government. If the federal government has to balance its budget, why dont the states have to balance their budgets for their own gdp . Thank you. Yeah, so, the states actually do mostly have to balance their own budget. I think what youre referring to is when you are talking about an earlier prettier question, they receive support from the federal government, contributing to our fiscal problem at a national level. Some of those states receive more support than others. That is a challenge, and frankly one that members of Congress Battle with every day, because, of course, they want to see their own states get an equitable portion of the pie. There are various programs that do go disproportionally to various states, perhaps because they have higher rates of poverty and lower rates of growth and gdp than other states. Perhaps they have larger populations. Theres a variety of reasons why some states get more than others. Thats always a challenge to make sure that all states are being treated equitably. And there are situations where some states are getting more money. But then representatives or talk about cutting funding and other places. That creates a dynamic where some would argue theyre being hypocritical. Its a really challenging issue because theres so many programs the federal government doles out. And different needs four different states. Sam from connecticut. Joe, republican. Good morning to the constitution stay. Good morning, how are you today . Doing well. You are on with shai akabas. Go ahead. Yes, i have a comment for him. He mentioned something about the United States being the Gold Standard of the world, right . It used to be. We have turned into a third world country. This president , this administration is destroying this country in every possible way, every possible way. And you talk about a Gold Standard . There is no Gold Standard anymore. Hes destroying this country. Thats the point, any comments . I would disagree with the proposition that were third world country at this point. I think were still considered the Global Economic leader, both in terms of the data and in terms of leadership. But i do agree with the implication that the color has that we have major problems in this, country on a variety of fronts, every almost and those need to be addressed. Some of them are quite urgent. Should the peace garden state, this is lewin, democrat, good morning. Hey there, good morning. I was going to say that i think that you cant fix capitalism with capitalism. It just doesnt work, you cant do, it you can try, but its gonna and i just want to say there is more common sense things we can do. Whats a more common sense thing we can do, lewin . Spend more money. We make the money, you know, we can just spend more, i dont think that would hurt anything. Money, you know, you spend more, i dont think theres a problem with doing all of that. Can we just print more money . Well, thanks for the question or the suggestion, i think thats a challenge for us in this country because over the past several years, weve actually seen high levels of inflation, hurting many of our consumers. Thats a result of not quite printing more money, but the government, in part a result of the Government Spending more money. Theres a limit to how much we can pump into the economy without inflation, hurting the pocketbooks of everyday americans. There is lots of needs in the country, thats why the federal government is spending the amount of money it spends. Theres always arguments about spending more. We really do need to increase the ways we can look to save money, so, were not putting ourselves in a worse fiscal position that were already. And members of congress tend to look favorably upon tax cuts or spending increases for political reasons, those are popular, tax increases and funding cuts are often less popular. So, we need to have the political will to move towards a stage where were paying for all the new priorities that we have, if not going beyond that and actually reducing our deficits overtime. Can the 14th amendment be used to fix this impact that weve come to . The 14th amendment states the death of United States shall not be questioned. That is very vague. Who is ratified in the mid 19th century. It was not applicable to the debt limit, was not an existence then. Several who argue that the existence of the 14th amendment basically means the debt limit should be nullified. It contradicts the 14th amendment by putting in place a limit that doesnt allow us to borrow the amount we need to spend thus, it would call into question the debts the Treasury Department would issue to meet those bills. The issue, i think, its not so much a legal one, although that is, of course, its an important component of the question, im not by any means a legal scholar. But the issue, from my vantage point, as the economic fallout from that. If the president were to say nullify the debt limit, an issue that above and beyond what is permitted by the delmont, i think that could create a chaotic state of the Financial Market because their reaction to that and the reaction of credit regencys, the reaction in the political world, republicans do that unilateral action, it would be quite severe. And it could lead to some of the same consequences that we fear with an actual default. Doesnt necessarily mean well get to that place, but if that Additional Debt that the Treasury Department issues above and beyond the debt limit, he was in the 14th amendment as justification is called into question why a legal case, that could, again, throw everything into disarray because it would mean the debt the government is issuing is being challenged, and investors are not gonna want to be holding those debts. They might be invalidated. Didnt demand much higher Interest Rates. Could inadvertently lead to a debt default in and of itself. Thats a long way of saying, i think theres a lot of complications around unilateral action with the debt limit. Which is why it has been in the past, some of them perhaps be better than actually defaulting on our . Duck probably. But its a risky proposition, and that has been why treasury secretaries in the past have not gone in that direction. We dont miss an opportunity to read the constitution, section four of the 14th amendment, which is passed after the civil war, it reads the validity of the public that the United States authorized by law, including debts incurred for payment of pension and bounties for services, suppressing insurrection or rebellion, shall not be questioned. The mid states nor any state shall assume or pay any debt or obligation incurred in eighth of insurrection or rebelling, rebellion against the United States or any claim for the emancipation of any slave, but all such deaths, obligations, and claims, shall be held as a legal and void, section for the 14th amendment. This is christian and clyde, north carolina. Republican. Good morning. Good morning. Yeah, i just wanted to discuss from the house bill, the debt ceiling bill, im a big fan of. It i think it has a lot of good things in there, i like the fact that it brings the understanding down to the prepandemic levels. I like that it calls back the unspent covid money. A big thing im a fan of and it is the work requirement for some of the social programs that it brings back from the Clinton Gingrich area. That was something in the 90s that a lot of democrats and republicans works together on. Do you think its possible that that could maybe happen again, we could have welfare reform like that . I know the Democratic Party now seems to be more to the left of where it was under the clinton area, do you think theres any possibility of that . I think would be a great thing if it was . Thank you. Thanks for bringing that up, those are actually component of the House Republican bill i admitted in my initial response. And its one that a lot of Republican People feel is critical to their package. These are requirements that individuals who are collecting various benefit programs from the federal government, particularly in the house bill, food stamps, the nutritional sustenance programs and medicaid, or health care, able bodied people collecting those are working, and i think in theory, that makes a lot of sense. The challenge has been in practice, a lot of those work requirements and up open, taking people off of programs, maybe impacting working, but then theyre not able to jump through all the hopes that takes to validate their employment. A lot of these people tend to be those with lower financial capabilities, many more struggles in their lives, in most cases theyre low income. So, we have to balance the desire to make sure the people who are collecting benefits are working, with the fact that if we create who in the system, as moderna be helping the people who actually need it. Thats a balance that is difficult to achieve. The states really arent well equipped right now to set up a massive work requirement system for the medicaid program. So, putting that in place overnight, i think would really be a challenge vote likely result in more people being kicked off and not being able to validate their employment then actually getting people to find employment who are not employed today. And that, is again, an underlying point here, most of the people who are able bodied and collecting welfare are in fact employed. The proportion of beneficiaries who are not employed, that this would either, hopefully help them get employed or would kick off the program, its quite small. Its an important element of the equation and when that is tough to get right. I do think theres opportunity with that program, that already has work requirements for people under the age of 50. The republicans to age 55. Might be room for compromise there. The medicaid program, that doesnt have those requirements that i think would be a much bigger a much tougher task to put those in place right now given all of the administrative complexities involved. Five or ten minutes left with shai akabas of the Bipartisan Policy Center, bipartisan to check out his work. This is reba in maryland for democrats. Good morning. Hello, thank you for taking my call. One of the problems i have with the whole debt ceiling thing is its preceded by budget. The whole budget process from the point of view of a citizen is very difficult to follow because they act at the lastminute like its just happening. But when you look, there was talks about it before, none of this is easily accessible that ive been able to find. Anything you can suggest for actually following the budget from the bills to pay to the budget so that we dont get hit with this debt ceiling from a citizens point of yo every year. My next thing is, is there anything about the bill that did not have, i mean, can i find out which bill you thanks for your point and questions, its a really good one, many members of Congress Follow youre not alone. Thats how about it when they come on this program, exactly, frankly, our budget process is broken. I think people on both sides of the aisle will acknowledge that, its been broken for several decades. Congress is supposed to put out a budget revolution from the house and senate, they need to agree on that, and then that lays out the levels for all the appropriation bills for the various agencies for the year. That almost never happens these days and we get these lastminute situations where theyre passing would or control continuing last years spending levels and priorities for the coming year until they can reach a longterm agreement, or the Government Shutdown, thats the worstcase scenario, weve seen many of those in the past few years. Seeing that the budget process is broken, the debt limit becomes this leverage point where its the only opportunity to really have that conversation about our priorities, our spending, our taxes for the future, thats why it gets used the way that it does, thats not justifying, but the reason were having the debate over the debt limit is because we dont have the opportunity on an annual basis to do so over the budget. We have an action proposal reform to the debt limit, we think these are two problems that are crying out for a change. The first change here is that it would be the debt limit, and make sure were not putting our economy at risk every year and threatening to default on obligation. It also ensure theres a process each year to debate the full federal budget and tax policy. Ffigure how are gonna reduce deficits in the future. Both of those, i think, are incredibly important, the deficit is a long term problem that we need to be tackling now. The debt limit, in the short term problem comes up every year to. We can tie these two together and find a way to make sure were preserving our status as a Global Economic leader and created better form for handling our budget and issues overtime. Pembroke pines florida, good morning. It, morning can you hear me okay . Yes, sir. Okay, as you know, im sure you know that most civilizations that have declined have the basis for their declining, its based on their national debts, it seems to be happening to the United States of america as well. I am not convinced that defaulting would be such a terrible thing, it might actually wake up the American Public who are addicted to all kinds of government benefits. That includes, me im 74 years old, i get the Social Security and stuff. But something needs to be done, otherwise our future generations are gonna be a difficult time. Not to mention, the declining of the United States will continue. Perhaps we should go ahead, lets go ahead and default, and then we can start fixing our national debt, which is going on 32 trillion. We can start applying some common sense to all of the Government Programs that were all benefiting from, which were all using to kill this country. Thank you. So, i hear you. I am also concerned about the trajectory were on and weve been on for the last several decades in terms of our debt. I dont think that defaulting would do anything to improve that situation. In fact, i think would make it significantly worse. The reasons, our first of all, if we default, investors are going to become less likely, theres gonna be less demand among investors to buy or debt. Were gonna have to pay higher Interest Rates, Interest Rates are already the Fastest Growing part of the federal budget, if it accelerates, its gonna make it harder to fix our challenges. In addition, if we default, i think youll likely see pretty severe economic consequences. Will slow down, unemployment will likely go up. All of these are things that ten make the federal budget situation worse. Now, it might, wake up people to the fact that this is a huge problem. I dont think the cost is likely to materialize are worth the benefit here. I think there are other ways we need to help inform the American Public, as weve been trying to do for many years. Frankly, we need more leadership from those and elected office. But i think youd have quite serious economic consequences that we cant wrap our arms around. I think would focus the entire political system on how we mitigate the disaster that the full would create and not actually fixing the underlying problem. Its not worth Congress Burning its hand on the stove to hear this . I think burning its hand on the stove might be worth it, this is more like setting yourself on fire. We dont know, its possible that it would not be catastrophic. But taking that risk with our global with our leadership position in the Global Economy, everything weve built, i mean, it takes so many risks with what we have created. And i think the consequences are still unforeseen, theyre likely to be highly damaging to our future. Time for one or two more phone calls here while were here with shai akabas independent, go ahead. Good morning, i think people should be aware that a 1917, a law was passed called the debt ceiling law, it never existed before that, 79 times we passed this debt ceiling, but having said that, where the only nation in the world that has a program which says you spend and then think about paying the bell. My explanation as world war ii was paid off in ten years when republicans were really rational. How did they do . It they raised the taxes on the rich to 90 and we paid off world war ii in ten years. We have the ability to manage your budget. But the republicans believe in charge and spend. The democrats believe in tax and spend, so, pick your weapon, you either pay your bill or dont. Thats it. You raise a lot of valid points there in terms of the debt limit [inaudible] because until that point, the president and the administration needed to come to Congress Every time they wanted to issue new debt. That became untenable for us as a growing country and as a very large economy. So, they passed a law that limited the total level of debt that the treasury could borrow. It is important to recognize that the need to raise the debt limit, as youre implying, to cover spending that congress is already approved. So, failing to do that would be defaulting on the commitment the policy makers have already made. That said, as we were talking about a moment ago, we dont have a functioning budget process. So, there is no natural opportunity to talk about entitlement programs, tax policy on a regular basis. Thats why were in the situation that were in. Hence why we have budget conversations connected to the debt limit in this moment. It really is quite urgent that policy makers act if they want to avoid the possibly catastrophic consequences that would be associated with so, i think they need to find a way to come to Common Ground and make progress on the budget, not solve all the problems that we have, but to take a step forward in the right direction. We can always come back to this in the coming years. Time for one more call. This is jane in north carolina. Democrat. Good morning. Good morning. My question is, in 2017, the republicans passed a tax cut for 1. 7 trillion dollars, that actually only helped one to 2 of the population. They had no way to pay for it when they did that. And 73 years old by Social Security is half my income, and all i get our threats that theyre going to cut this, theyre going to cut that. So, why is it that when they gave that 1. 7 tax cut, basically to the rich, they had no way to pay for that money coming out of the treasury, no money going back into it. Why cant we tax the rich again . When, god, i cant even remember his name. Thats okay, we can stop there. We only have a minute left. Let me give you a chance to respond. Sure, i cant exactly answer your question, frankly, we were not supportive of the tax cuts in 2017, they were not bipartisan. But your point, i think, its an important one in that both parties have contributed to the debt problem we have today. They both passed the responsible spending and tax cut policies, the 2017 tax cuts were among them. The democrats just a couple years ago passed a very large package, much of which was probably justified, many economists at the times that it is too much spending and impart led to the inflation weve seen. So, those are a couple of examples of decisions that have been made, theyve not been paid for. We do need to get back on track and find ways we can raise revenue and cut spending to get our budget back balanced. This tax cuts in 2017 actually expires some of them at the end of 2025. That will create the next opportunity for congress to discuss what tax policy should look like, what the taxes should be on those with higher incomes than they are today, and if there are additional