“Extremist” Republicans are trying to force Americans to accept massive cuts in federal spending that will harm the middle class in a deliberate attempt “to wreck the Biden economy,” Sen. Elizabeth Warren (D-Mass.) said on March 7.
The remarks came as the opening salvo in a committee hearing to assess the possible economic impact of breaching the U.S. debt ceiling. Ultimately, the hearing showcased the two parties’ opposing visions for how to regulate the economy and preserve American jobs.
Warren and invited witnesses appearing before the Senate Committee on Banking, Housing, and Urban Affairs decried any delay in raising the nation’s $31.4 trillion debt ceiling as irresponsible and almost certain to cause financial harm.
The debt ceiling would have been breached on Jan. 19 if not for “extraordinary measures” taken by the U.S. Treasury to avoid it. Republicans have demanded spending cuts in exchange for raising the debt ceiling.
President Joe Biden has said he will not negotiate over the matter because failure to do so would put the full faith and credit of the United States at risk.
Ranking Member John Kennedy (R-La.) voiced the Republican view that there will be no default on the federal debt but nearing the debt limit is an opportunity to examine the nation’s spending habits and the effect of the growing debt on the nation.
Rock and a Hard Place
In her opening statement, Warren said House Republicans have wedged American workers between a rock and a hard place.
“Now here’s the rock. They will raise the debt ceiling, and if they don’t, House Republicans will plunge the U.S. economy into a recession and cost at least 1 million Americans their jobs,” Warren said.
“And here’s the hard place. If they raise the debt ceiling but only in return for sharp spending cuts, that will also trigger a recession and push 2.6 million Americans out of work.”
Mark Zandi, chief economist of Moody’s Analytics, testified that by attempting to balance the federal budget in 10 years without raising taxes or cutting Social Security, Medicare, or defense spending, deep cuts in all other federal programs would be required.
“It’s $16 trillion in cumulative cuts over the 10-year period. So just divide by 10. That’s $1.6 trillion per annum,” Zandi said.
Achieving that goal would require “effectively eliminating all non-defense discretionary spending,” including housing inspection, food inspection, transportation spending, overseas aid, and Medicaid, Zandi said.
Monetary Versus Fiscal Policy
Kennedy sought to portray the Republican insistence on spending cuts as a desire to save jobs by exercising congressional authority to regulate fiscal policy.
“It is unthinkable to me that the United States Congress will not extend the debt ceiling,” Kennedy said.
“There’s a moral principle involved and a practical principle. If you’re going to have a party, you’ve got to pay the band. And it’s time for us to pay the band and we’re going to do it.”
The spending discussion is not a refusal to pay the nation’s bills Kennedy said, but an attempt to deal with inflation in a responsible way.
The Federal Reserve Board has been attempting to do that by raising interest rates, and the effect of that policy can be measured in only one way, Kennedy said: increased unemployment.
“[Fed] Chairman Powell, acting on his own, just using monetary policy, will have to raise rates to 10.6 percent, and that’s going to put a lot of people out of work,” Kennedy said.
A better approach, Kennedy believes, is to slow the rate of inflation using fiscal policy, meaning controlling the rate of federal spending.
“If we can slow the rate of growth in spending and debt accumulation to stimulate the economy less, that’s gonna save a lot of people’s jobs,” he said.
Congress will have until Aug. 19 to determine a spending plan and raise the debt ceiling, according to Zandi.
He calculated that as the X-date when the country will again reach the debt limit, this time with no further workarounds to pay the country’s bills without further borrowing.
I D I O T !
i’d love nothing more than to ‘blast her’ into deep space… And hope the rocket she’s on, leaves our solar system!
U.S. $31 trillion gross federal debt. That is $31 trillion in the hole.
The treasonous destructive Democrats deliberately want to destroy our economy and make everybody dependant on the “Socialist Democrat Party Dictatorship” for everything.
Socialism is, broadly speaking, a political and economic system in which property and the means of production are owned in common,
typically controlled by the state or government.
Do you trust this treasonous, destructive, dishonest, corrupt, socialist
Democrat Party to have complete control over your life and possessions?
Yo, Lix—we’re courting economic disaster because of Congress’ repeated refusal to respect a debt ceiling.
When she speaks it is like listening to a Looney Tunes Cartoon. And she seems to be crazy with her perceptions.
Disaster for Democrats, natch. Good for everybody else.
The Disaster is already HERE in case she doesn’t know it, then iy doesn’t affect her as it would ordinary people!
The DemonRats and RINOs are the main reason we’re on the brink of financial ruin. They’ve been using our tax money for generations to keep themselves in office. They all ought to go to prision for misappropriation of funds.
AT THE LEAST. If i had my way, EVERY ASSET, bank account, and sellable commodity they owned, WOULD BE SOLD OFF, to repay the USA..
Congress will almost certainly raise the debt ceiling and get NO spending cuts in return, as always. That’s because the Dems are ruthless and the Reps are spineless. We are headed for a national bankruptcy and Congress doesn’t really care because “they’ve got theirs.” One very quick way to save billions of dollars, encourage business growth, reward personal responsibility, and delight taxpayers across the board is to do away with the IRS and switch to the so-called “fair tax,” a national sales tax IN PLACE of (NOT in addition to) our utterly-insane tax code. But it is unlikely that Congress will ever pass it because the Income Tax System was never about raising money. It is about rewarding friends (with favorable tax laws,) punishing enemies (with punitive tax laws,) and gathering information (that is none of their business) about everyone. Yes, the Reps will vote for the Fair Tax as long as it has zero chance of passing but, just like Obamacare, when they have a chance to really implement it, they will bail. Maybe I’m wrong, but I doubt it. PS: I doubt there is any spending cut that would be as harmful to the economy as Biden’s idiotic policies.
I laffed when they said the federal cuts would have to come in housing and food inspection and medicaid. first of all, due to their incompetence and corruption and sheer audacity these inspections never get done. nor do innovations or solutions apart from those idiotic windmills destined to kill wildlife and our economy. to fix medicaid take illegal aliens off the social services payroll and close the borders. is that rocket science or what. oh and stop paying yourselves so much monies and benefits with a pre determined prison sentence for insider trading and funding of companies in which they then invest or short, depending on how they manipulate it. everybody knows. that’s how it goes.
Step #1 — Stop all Foreign Aid, use those funds for the USA.
I 1000% agree with that.
“Extremist” Republicans are trying to force Americans to accept massive cuts in federal spending that will harm the middle class in a deliberate attempt “to wreck the Biden economy,” — Sen. Elizabeth Warren (D-Mass.), March 7.
Wreck ‘Biden’s economy’? Do you mean the economy that has drained nearly a hundred grand from my IRA account since 13 November 2021? Is that the one you mean, Faux-cahontas? Are you sure you don’t mean ‘Trump’s economy’, during which my IRA was steadily growing? Well, if you mean the destruction of Biden’s economy, then I say, “Wreck away and be quick about it!” Get us back to a Trump economy or similar.
And, by the way . . . F— Joe Biden.
Note, THEY have not seemed to suffer the same sorts of losses to THEIR accounts!!!