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