| Speaker | Time | Text |
|---|---|---|
|
unidentified
|
President Trump is here for four years, but a mining investment, and we said is, you know, 20 years to build, could be another 40 to 80 years. | |
| Is it so long term that changes? | ||
| You know, even if Putin and Trump are like, you know, we're on the same page about respecting this, that doesn't mean, I mean, think about the development time of a mine. | ||
| It's four more U.S. presidential electoral cycles before you would have a producing asset. | ||
| That's a long time for something to change. | ||
| And this is why, you know, we kind of keep saying, well, an explicit security guarantee could be better, because there's a little bit of a higher standard to holding to it than an implicit guarantee. | ||
| Chris Lambeskaran is the program director on critical minerals security at the Center for Strategic and International Studies. | ||
| Thank you very much for the conversation this morning. | ||
| We appreciate it. | ||
|
unidentified
|
Thank you for having me. | |
| Welcome back to the bipartisan Republican voting in opposition. | ||
| Their House budget resolution includes $4.5 million, trillion, excuse me, trillion in tax cuts. | ||
| That's important. | ||
| $2 trillion in spending cuts, $100 billion in new spending on immigration enforcement and the military would raise the debt limit by $4 trillion and requires the House Energy and Commerce Committee to find $880 billion in cuts to federal programs, possibly from Medicaid. | ||
| What will this do to our fiscal outlook, Maya McGinnis? | ||
|
unidentified
|
Morning. | |
| It's nice to be with you and always happy to be talking about budgeting. | ||
| So taking a step back, this process is going to be a multi-step process because you have the House working on one end and the Senate working on the other end. | ||
| They were coming at this, passing a budget in different approaches. | ||
| And importantly, neither of them is focusing on the overall big picture budget. | ||
| Both of them have focused on budgets that unlock the very powerful tool of reconciliation, which allows Congress to pass something with it will be just with Republicans. | ||
| They won't need Democrats to help with the voting. | ||
| So what we saw out of the House Budget Committee and then the full House, and it was a nail biter of a night. | ||
| It did not look like this budget resolution was going to pass. | ||
| And then at the very last minute, it did. | ||
| Sounds like from with some arm twisting from the president. | ||
| Overall, this is a budget that would cut taxes very significantly, like you said, by $4.5 trillion and would have spending cuts or offsets of one and a half or up to two trillion dollars. | ||
| So what does that leave? | ||
| That leaves a lot of borrowing because there's also a couple hundred billion in spending. | ||
| That leaves about $2.8 trillion in new borrowing, in new debt that we would add. | ||
| So from our perspective, and we are a nonpartisan group that is worried about the deficits and debt in this country, that doesn't make any sense at all. | ||
| This is a moment when our debt is at near record levels. | ||
| It's almost as large as a share of the economy as it was right after World War II. | ||
| Our interest payments are the second largest item in the budget. | ||
| They are larger than national defense, and they are the fastest growing item in the budget. | ||
| And the point that I would make, particularly with the backdrop of inflation and strong economic growth, we should not be passing any bills whatsoever that add to the national debt. | ||
| This is a moment where we should be taking steps to reduce the debt. | ||
| So anything that falls short of that is not fiscally responsible. | ||
| $2.8 trillion, very, very far from fiscally responsible. | ||
| Explain how the debt impacts inflation. | ||
|
unidentified
|
Yeah, and I'll also explain how it affects households, if that's okay, because it is one of those issues where it's like, okay, sounds like it's not a great thing, but why should I care about the national debt? | |
| And that's one of the big challenges of these issues, that it doesn't feel very personal. | ||
| But when we're borrowing too much, and by all metrics and accounts we are right now, that has negative effects on the economy. | ||
| It is squeezing out private investment. | ||
| It slows economic growth. | ||
| It slows wages. | ||
| It slows our standard of living. | ||
| And if you put too much borrowing into the economy, it can lead to inflation because you're creating too much demand for too little supply. | ||
| We had very, very high levels of inflation a few years ago. | ||
| That was the result of three things. | ||
| Excessive borrowing that came right after COVID from the American Rescue Plan, supply chain problems from COVID, where we weren't able to get the inputs that we needed, and energy shocks. | ||
| Those three things combine to have very high levels of inflation. | ||
| Right now, inflation is still above where the target is for it to be. | ||
| It hasn't come down to 2%. | ||
| Looks like it could go back up again. | ||
| And certainly if we put more stimulus in the economy, every dollar that we borrow pushes prices up to some extent. | ||
| Every dollar that we reduce deficits hopefully will help the Fed do the work of bringing inflation back down. | ||
| It also has negative effects or positive effects. | ||
| It also pushes up interest rates. | ||
| So you have inflation. | ||
| When you're fighting inflation, that pushes up interest rates. | ||
| That means things that you are borrowing for, whether it's credit cards, mortgages, car loans, any of those things become more costly as well. | ||
| We've seen that in the mortgage market and lots of other places that affects households. | ||
| So it has lots of effects on the economy, even though it's not something that people see and understand the direct connection on a daily basis. | ||
| What about Republicans' efforts to cut spending, though, to help pay for these tax cuts? | ||
|
unidentified
|
Yeah. | |
| So it's interesting because more so than ever, I think saying Republicans as though there's one point of view is not going to capture the nuance of what's going on. | ||
| So in this budget battle from the House, there have been really two very adamant sides of the debate. | ||
| One, I will call the fiscal conservatives, those who want to borrow less and those who want to spend less. | ||
| And they were pushing for more spending cuts. | ||
| They like tax cuts, but many of them are concerned that the tax cuts should be, will be too large compared to the spending cuts. | ||
| They wanted to push up more spending, both again, to reduce borrowing and to bring the government spending down. | ||
| Then there are, I will say, the moderates who are very concerned about the direction. | ||
| So when you have a reconciliation bill, you're telling different committees they have to find a certain amount of savings. | ||
| They've been very concerned about the levels of savings they are going to have to find, particularly in the areas of probably Medicaid, possibly Medicare. | ||
| There's been deep concerns about that amount of spending cuts. | ||
| I'll put the number in context. | ||
| If we save, let's say, $2 trillion, so they're required in the budget resolution to save $1.5 trillion. | ||
| And then there was another add-on, which says, actually, we're going to bring that up to $2 trillion. | ||
| So it's going to be $1.5 and $2 trillion. | ||
| Over the same time period, we will be spending $86 trillion. | ||
| So, and I should just say sort of my perspective, again, political independent, we're a bipartisan group. | ||
| Where I sit, we shouldn't be doing a single thing before we're putting together a debt deal. | ||
| So I would make the case we need to have a lot of spending cuts. | ||
| They shouldn't just be in one area of the budget. | ||
| We should be looking at every single area of the budget. | ||
| We also need to be increasing taxes, not decreasing them. | ||
| I know these are all the things that people don't like and politicians don't like, but that's how you fix huge budget deficits and debt. | ||
| And so I would argue that the $2 trillion in spending cuts is really a tiny amount out of the $86 trillion that we will be spending over the same time period. | ||
| We need to find much, much more in terms of savings. | ||
| But I would use it to reduce deficits rather than cutting taxes with the goal of fiscal responsibility. | ||
| What you're talking about would take bipartisan support. | ||
| Republicans and Democrats have been reluctant to look at the drivers of our nation's debt and deficits. | ||
| What are they? | ||
|
unidentified
|
Yeah, what I'm talking about would require bipartisan support and hard budget choices. | |
| We don't see much of that on anything. | ||
| We see bipartisan support when we're borrowing. | ||
| There's one exception, which is we did have the Fiscal Responsibility Act recently, which was the last time we had to increase the debt ceiling. | ||
| They also attached something called the Fiscal Responsibility Act, which put in spending caps, and that saved one and a half to two trillion dollars. | ||
| Really not enough to get us where we need to go, but a tremendous first step. | ||
| Again, it was only one part of the budget. | ||
| It was the discretionary portion of the budget, and that's not where the big growth is. | ||
| We'll go to that. | ||
| But that was something worth saying, okay, Congress did something difficult and they put in spending caps. | ||
| Those caps will be coming to an end at the end of the year. | ||
| And there was the suggestion that they increase them for another four years. | ||
| I would suggest that they do that. | ||
| It would make a lot of sense. | ||
| It forces them looking in the discretionary area of the budget for where they might find savings. | ||
| But is that the problem with the overall federal budget? | ||
| It is not. | ||
| If you look at the growth in the budget, you can just see that sort of the estimates and our projections growth is absolutely concentrated in the other portion of our budget, which is called mandatory. | ||
| And those are the areas that grow. | ||
| They don't go through the appropriations process every year. | ||
| They're on automatic pilot, meaning if people qualify for those programs, they will receive the benefits. | ||
| The biggest drivers of our debt by far are Social Security, Medicare, Medicaid, other health care programs, and interest on the debt. | ||
| Again, interest is the single fastest growing of all of them. | ||
| If we are going to get a handle on our out-of-control fiscal situation, and I would argue we need to, not just for the economic reasons we discussed a minute ago, but it is a grave national security threat. | ||
| And I could talk more about that. | ||
| But right now, it is undermining our strength on the global stage, the fact that we are as indebted as we are and dependent on borrowing from elsewhere. | ||
| If we are going to truly watch our leaders govern in a fiscally responsible way, we are going to have to fix Social Security, which is headed towards insolvency in about a decade. | ||
| When that program hits insolvency and the trust funds don't have the money to pay full benefits, there will be automatic across-the-board cuts of 22% for all beneficiaries. | ||
| That's crazy. | ||
| That's crazy that there are people who depend on the program right now, where our politicians of all sides are saying, I promise not to touch Social Security, I promise not to fix it, when exactly what we should be doing is fixing it. | ||
| And there are lots of ways to do that. | ||
| We can certainly do it while protecting current beneficiaries. | ||
| They don't need to be affected at all. | ||
| But we need to make changes going forward, whether it's lifting the payroll tax cap, increasing the retirement age for young workers, changing the way we calculate benefits for the well-off. | ||
| There's a variety of choices. | ||
| There's no right or wrong answer, but we have to do something. | ||
| Likewise, we have to make changes on Medicare. | ||
| And just at cspan.org. |