Hearing of the House Budget Committee - Why Congress Must Balance the Budget

Hearing

"Thank you, Chairman Price, and I want to join the Chairman in welcoming all our witnesses today. I think it's indisputable that the country has made real economic progress over the last several years. We've seen 63 straight months of private sector job growth -- over 12 million new jobs created over that period. At the same time, we all know much work remains to be done to grow our economy, and grow it in a way with more shared prosperity

"One of the things we've seen over that last 20, 30 years is rising worker productivity but flat real wages and compensation -- frozen paychecks. People are working harder than ever, but they feel a little bit like they are on a treadmill or moving farther behind. So we've got to focus on economic growth with that shared prosperity. Which is why it was especially disturbing to read the Congressional Budget Office analysis of the Republican budget this year, which indicated that the cuts they made to investments will actually slow down economic growth over the next three years, at the very time we need to make sure the economy gets on its legs and moves forward. And, just to translate what that means, that means fewer jobs and lower wages as a result of those deep cuts over the next couple of years. And again, it's not my opinion, that's the professionals at the Congressional Budget Office.

"We also know from the professionals at the Congressional Budget Office and most economists that an extreme fixation with balancing the budget under any economic circumstances can cause real economic harm. We know that from the 2008 economic collapse, where it was very clear that, without the recovery bill, the economy would have gone from a deep recession into a full blown depression. Let me just read again from the Congressional Budget Office Director Elmendorf: "The vast majority of economists agree that the Recovery Act boosted output and employment relative to what otherwise would have happened.'

"And Martin Feldstein, who was the Chairman of the Council of Economic Advisers under President Reagan, said the Recovery Act "just wasn't big enough. And I think we all recognize that now.'

"In other words, that there are moments when it is really important that at the federal government level -- not necessarily the state government level, but at the federal government level -- we have the flexibility to make sure that economic downturns do not turn into full blown depressions. And that's exactly what happened with the Recovery Act preventing a full blown depression.

"Now, in order to boost economic growth we should be investing in scientific research and innovation, we should be investing in modernizing our national infrastructure, we should be investing in educating our kids to compete in the 21st century workforce. And we should be reforming a tax code that right now rewards those who make money off of money more than it rewards people who earn paychecks through hard work. Those are the things we should be doing.

"Unfortunately, the Republican budget plan takes us in the wrong direction on both counts. They deeply cut those investments. They disinvest in America relative to any historical standard. And their tax proposals actually take us in the wrong direction. They added $270 billion to the deficit over a couple days on the floor of the House by eliminating the estate tax for couples with estates over 10 million dollars -- that's about 5,500 people in this country each year. That was their economic priority.

"Now, we need to reduce the long-term deficit and we need to do it in a smart and balanced way through a combination of smart cuts, but also cuts to tax breaks. And eliminating tax breaks to reduce the deficit is something our Republican colleagues have refused to do. Not one tax loophole will be closed by our Republican colleagues to help reduce the deficit, even though the deficit is apparently the overriding priority.

"So yes, Mr. Chairman, let's find a smart way to dramatically reduce our deficits. Our priority needs to be focusing on our economy. And I'll close with this -- the great irony is that the Republican budget didn't balance in 10 years. It didn't balance. It balances with the assumption of revenues from the Affordable Care Act and savings from the Affordable Care Act that our Republican colleagues say they want to repeal. So despite this focus on having the budget balance, they don't even do it.

"So let's focus on reality here, Mr. Chairman, and I'm looking forward to the discussion today."

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