Grassley Demands Cooperation On Social Security And Medicare: It’s Time For An ‘Adult Conversation’

2 months ago

Before the Congressional recess, Sen. Chuck Grassley (R-IA) delivered remarks on the federal budget during a Senate Budget Committee hearing.

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Transcript

00:00Before I read my statement, I want to comment on what you said about Social Security and Medicare.

00:07And I'm not criticizing what you said. I'm going back to this comes up every day.

00:14Why come you guys can't do something about saving Social Security and Medicare?

00:20And I use history as an example.

00:25I always start out by saying, you know why nothing gets done in Washington, D.C. about Medicare and Social Security now?

00:33There's no Reagans and Tip O'Neill's in this town anymore.

00:37Because they found where we're going to be in 10 years on these two programs.

00:45They were right there in 1983 or 84 or whenever it was.

00:51And they raised taxes. They cut benefits. They changed formulas.

00:57And probably did a whole lot of other things that I don't remember.

01:02And they probably thought they were doing something for 20 years, I tell my constituents.

01:10But they did something for 50 years now if we still go to 2033.

01:17And they did it because they got together and said, you know, these programs are, I guess then they were only talking about Social Security.

01:29Social Security was so important, we can't let it go broke.

01:33And they built up a surplus that we're still using of trillions and trillions of dollars.

01:41And that's going to be spent down by 2033.

01:45And if we don't do something, Social Security is going to be cut.

01:51It's going to be cut by, I guess, 23% or something.

01:59So I guess I'm trying to, if there's any comment that I'm trying to make to you, it is that they didn't just raise taxes.

02:10They got together in a program that was bipartisan and passed the Senate 90 to 10.

02:16And I voted for it.

02:18Well, Mr. Chairman, I thank you for agreeing to my request for today's hearing with Director Swigle.

02:25It's been nearly four years since the CBO director last testified before the Senate Budget Committee on the nation's budget outlook.

02:34That's far too long for what's traditionally been a routine occurrence in the Budget Committee,

02:40particularly given the budget hole we've dug ourselves into.

02:45Federal Reserve Chairman Powell stated earlier this year that it's, quote,

02:51past time to get back to an adult conversation about elected officials, about getting the federal government back on a sustainable path, end of quotation.

03:04Today in the Budget Committee, that conversation has finally taken place.

03:09Director Swigle, thank you for coming.

03:11And I think you're going to tell each of us things that we'd rather not hear.

03:17But that's part and parcel of having what Powell called an adult conversation.

03:23So in moving beyond the partisan blame game of who's most at fault for our fiscal mess,

03:31President Biden tried to play this game at the recent presidential debate in an attempt to claim the mantle of fiscal responsibility.

03:41The reality is that President Biden has been dragged kicking and screaming to agree to even modest spending restraints as part of last year's Fiscal Responsibility Act.

03:55The fact is our nation's debt will soon top $35 trillion.

04:01Next year's interest payments will exceed $1 trillion.

04:05And in 10 years, Social Security will go broke if we don't take bipartisan action to save it.

04:12I shouldn't say go broke because you're still going to have the revenue coming in that will pay 77% of what benefits are today.

04:22CBO has warned Congress for decades that we'd face a fiscal reckoning due to ballooning mandatory spending.

04:31That reckoning is now at our doorstep.

04:34Absent action, rising debt will leave future generations facing higher interest rates, lower incomes, greater inflation, and the risk of full-blown fiscal crisis.

04:48Avoiding this requires a robust discussion of revenue and spending.

04:54As I've said in previous hearings, I have a record of going after genuine tax loopholes and wasteful carve-outs, and I'm open to reviewing tax subsidies.

05:07Now, a very good place to start is with those in the so-called Inflation Reduction Act, which CBO has said actually increases inflation.

05:17Ending the law's subsidies for luxury EVs and other regressive giveaways that have exploded in cost could net hundreds of billions of savings.

05:33Contrary to claims from the left, taxing the so-called rich is no silver bullet to our fiscal outlook.

05:43Even confiscating – I want to emphasize confiscating, not taxing – all income over $1 million wouldn't close our $2 trillion deficit.

05:57History proves that high tax rates fail to raise significant revenue, so I'm repeating something I said here a couple meetings ago.

06:07Taxpayers and workers and investors are smarter than we are in the United States Senate because we've had 93 marginal tax rates,

06:17then 70 percent marginal tax rates, 50 percent, 30 percent, back up to 40 percent, and you can go on and on.

06:26But regardless of the rate, we've brought in about the same amount of revenue as you can see from this chart.

06:36So we ought to stop to think that we senators are not smarter than the taxpayers.

06:44Rather than punish success, tax reform should focus on incentivizing work, savings, and investment.

06:52And that's exactly what Federal Reserve Chairman Volcker advised Congress in the 1980s at a similar time of large deficits and inflation.

07:03It was a recipe for success then and can be a recipe for success at this point.

07:10Most importantly, we must have a frank discussion about Washington's spending addiction.

07:16Whereas revenues are in line with historical levels, federal spending, relative to the size of our economy,

07:24is at heights previously reserved for wars and recessions and still growing.

07:31Record spending is driving up unprecedented debt and deficits, which fuel more spending in the form of ballooning interest payments.

07:41Interest costs are rapidly becoming one of the largest line items in the federal budget.

07:48Next year, we'll see a new record as a share of gross share of our economy.

07:56No single chart can capture the size and scope of our fiscal mess.

08:02But the closest to it is a depiction of federal relative to the size, the debt relative to the size of our economy.

08:11We're on track to set a new record high by 2027, exceeding the World War II era record.

08:21While debt to GDP rate, while debt to GDP declined quickly after World War II,

08:32today our debt is infinitely projected to grow faster than the economy.

08:38And that's the definition of unsustainable.

08:43Yet President Biden continues to use his pen and phone to spend trillions, particularly on student loan bailouts.

08:51In these unprecedented fiscal times, that's the height of recklessness.

08:57We must stop digging ourselves into an ever deeper budget hole.

09:04And I think the budget agreement reached between McCarthy and Biden a year ago starts us down that track.

09:13Maybe not as aggressively as we should, but it's still a start.

09:18We must find common fiscal goals that can serve as a catalyst for continuing that bipartisan action.

09:26Can we agree to debt to GDP can increase forever without consequences?

09:33Can we agree in a debt to GDP level that we mustn't cross?

09:39One last note, this week marks the 50th anniversary of the Congressional Budget Act, which created CBO and the Budget Committee.

09:49A lot has changed since 1974 from the way Congress operates to the size and scope of the federal budget.

09:58Updating the Budget Act for the fiscal 21st century is a shared goal worth continuing to work towards.

10:11So once again, thank you, Mr. Chairman, for this meeting, and welcome to you, Director Swagle.

Grassley Demands Cooperation On Social Security And Medicare: It’s Time For An ‘Adult Conversation’

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