Republicans on the Senate Budget Committee blistered the Biden administration for claiming that its $5.8 trillion budget proposal would ensure “fiscal responsibility,” while it would actually worsen the budget deficit and the national debt.
The senators made their remarks in a committee hearing to discuss the White House’s fiscal year 2023 budget proposal with Office of Management and Budget Director Shalanda Young.
“The president has touted his budget as fiscally responsible. It is not responsible,” Iowa Republican Senator Chuck Grassley said. “He attempts to take credit for cutting this year’s deficit by $1.3 trillion; that is mainly the product of pandemic-era spending coming to an end. In fact, most of this so-called ‘deficit reduction’ results from the president and the majority in Congress going on a $2 trillion liberal wish list spending spree, stoking the flames of inflation,” he continued, referring to Biden’s $1.9 trillion American Rescue Plan. “So in the end, then, taking credit for deficit reduction resulting from discontinuation of irresponsible spending is comparable to an arsonist taking credit for containing a fire by refraining from dousing it with more gasoline.”
Pennsylvania Republican Senator Pat Toomey said the Biden administration’s claims were “flat-out false,” and agreed with Grassley that the deficit reductions were due to COVID spending. “The president’s budget message to Congress states: ‘Critically, my budget would also keep our nation on a sound fiscal course.’ Well, that’s just flat-out false. Our nation is not on a sound fiscal course. It hasn’t been for quite some time,” Toomey said. “It’s clear to me that the president’s budget would worsen our nation’s fiscal health.”
Toomey pointed out that Biden’s budget would increase the budget deficit by more than $14 trillion over 10 years, and public debt would balloon by trillions of dollars as well. He also pointed out, like Grassley, that Biden’s supposed deficit reduction was due entirely to trillions of dollars in “unprecedented [emergency] spending” for COVID relief no longer being included. He then lambasted the American Rescue Plan for making the 2021 deficit worse than it should have been, and for “[proving] to be a significant contributor” in driving inflation to a 40-year record high.
Utah Republican Senator Mitt Romney sparred with Young regarding the sustainability of the budget over the long-term. He pointed out that at current spending levels, the federal debt would grow to more than double the country’s GDP. He then pointed out the examples of economic collapse in both Greece and Italy once their debt was larger than their economies. Young said that the White House only looks at debt in terms of how much spending is needed to pay the interest. But Romney noted that when debt becomes too high, investors demand higher interest rates, which leads to “back-breaking” increases to service the debt.
“So what would you have said to every other country that’s gotten to this level that’s had an economic collapse? That they were just wrong?” Romney said. “Every major civilization that’s gone down this path has ended up having their currency no longer become the reserve currency of the world and [having] economic collapse. We simply cannot continue on a road of adding a trillion dollars of debt every year … [And] every single year in your ten-year forecast, you’re showing deficits of over a trillion dollars a year. I don’t know how … we can keep adding a trillion dollars a year to the debt without at some point reaching calamity.”
Biden claimed in a statement announcing his $5.8 trillion budget proposal Monday that it emphasized “fiscal responsibility,” and would cut the federal deficit by $1.3 trillion from 2022. “Budgets are statements of values, and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” Biden said.