Remarks as prepared for delivery:
Thank you, Chairman Yarmuth, for holding this hearing. I look forward to participating in this important conversation today.
As we’re all aware, yesterday, the Congressional Budget Office (CBO) released its annual baseline confirming what we already know: our country is on an unsustainable fiscal trajectory. Specifically, in fiscal year 2020, CBO expects the deficit will be $1.015 trillion, an increase of $31 billion from last year.
It should be deeply unsettling to all of us here in this room that fiscal year 2020 will be the first year since fiscal year 2012 that the deficit will eclipse $1 trillion. We are clearly headed in the wrong direction.
Looking even further ahead, if we do not take action to get our fiscal house on a responsible path, the deficit will be $1 trillion by fiscal year 2021, and then rise to $1.74 trillion by fiscal year 2030. Deficits will total $13.1 trillion over the budget window.
Our country’s unsustainable deficits are driven by our out-of-control mandatory spending, which includes daunting interest payments on our debt. Mandatory spending currently accounts for 70 percent of the federal budget, and it is on track to reach an alarming 76 percent by fiscal year 2030. To put this in perspective, in 1965, mandatory spending accounted for only 34 percent of the federal budget.
Because of the continued growth of our country’s mandatory spending, federal spending will consume an ever-expanding share of economic resources. It will rise from 21.0 percent of GDP this year to 23.4 percent in 2030 – vastly exceeding the 20.4 percent annual average of the past 50 years.
Make no mistake: if we continue down this reckless path, CBO confirms that we will face the severe threat of a fiscal crisis, which will negatively impact every American.
While Washington undoubtedly has a spending problem, our revenue growth is strong. CBO estimates federal revenue in fiscal year 2020 will increase by $170 billion from the previous year, reaching $3.6 trillion. Revenue is projected to grow to $5.7 trillion in fiscal year 2030.
To further underscore this remarkable growth, by fiscal year 2026, revenues will exceed the historic average for revenues as a percentage of GDP. This upward trend continues through the end of the budget window. It’s pretty clear that the government has a spending problem, not a revenue problem.
While it’s true that we’re experiencing a period of historic economic prosperity and growth, the stark reality is that the consequences of our high – and rising – debt are severe. According to CBO’s projections, the federal debt will grow faster than the economy in perpetuity, which, of course, is unsustainable.
And this isn’t just CBO’s analysis. A few short months ago, Federal Reserve Chairman Jerome Powell testified before this very Committee confirming this reality. He said, “our debt is growing faster than our economy by a margin… by definition, that is unsustainable.”
There is no way around it: either Congress will put the federal budget on a sustainable course, or a financial crisis will result. According to CBO, the current debt path increases “the risk of a fiscal crisis – that is, a situation in which the interest rate on federal debt rises abruptly because investors have lost confidence in the U.S. government’s fiscal position.”
We’ve heard about the reality of our fiscal trajectory time and time again, and yet it still seems as though my colleagues on the other side of the aisle are not taking these warnings seriously. Policies promoted by congressional Democrats would increase mandatory spending by tens of trillions of dollars, thus drastically adding to the national debt. The most notable unrealistic policy proposals that come to mind include Medicare-for-All and the Green New Deal.
It is critical that Congress come together to address our daunting fiscal outlook, and yet, Democrats continue to promote outrageously expensive policies with no way to pay for them.
Our dire fiscal situation underscores the pressing importance of budget resolutions, which are supposed to come from this Committee as a long-term financial plan for the country. Under Democrat control, our Committee did not put forward a budget resolution last year, and it doesn’t appear that we’ll have one this year either. In every business, in every city, in every state a budget is done every year. Yet, in the greatest country in the history of the world, we’re not doing a budget.
It is my hope that, after hearing from CBO Director Swagel today, eyes will be opened to the stark reality we face. We simply must start making tough budgetary decisions in order to put our country on a responsible fiscal path and deliver on our duty to the American people.
Thank you. I yield back the balance of my time.