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| C-SPAN, Democracy Unfiltered. | ||
| We welcome now Douglas Holtz Aiken back to our desk. | ||
| He's, of course, the former head of the Congressional Budget Office, currently president of the American Action Forum. | ||
| And for folks who might not know, what is the American Action Forum? | ||
| What's your mission? | ||
| It's a center-right think tank in Washington, D.C. | ||
| We evaluate and try to understand the range of domestic and economic policies. | ||
| We don't do any social issues, international affairs. | ||
| Economic policy is very much a part of this budget bill that was passed out of the House Budget Committee last night. | ||
| The expectation, at least from the Speaker's office, is that it'll get a vote in the House this week. | ||
| Your 30,000-foot view of this bill, do you like it? | ||
| What are your concerns? | ||
| It's going to do one thing, and that is it's going to avoid a large tax increase in 2026 that would almost certainly lead to a downturn. | ||
| And that's its great virtue. | ||
| Past that, it's not outstanding tax policy. | ||
| It's not a real step forward on the fiscal problems, which we obviously know are really pressing given the downgrade on Friday. | ||
| So, you know, in terms of what's at stake here, it's an extension of the 2017 law, so that's more of the same. | ||
| It's not going to do much for the economy. | ||
| There are some provisions to improve business investment and research and development. | ||
| They are, I think, positives, modest. | ||
| And then there's a whole collection of promises the president made on the campaign trail, which in my view will have very little to do with economic growth and actually go the wrong direction from a tax policy point of view. | ||
| You know, the rule in tax policy is broaden the base, treat everything the same. | ||
| This part pulls out special favors for overtime or tips or seniors. | ||
| So it's not another step in tax reform. | ||
| It's actually very different than the 2017 effort. | ||
| There was a caller in our first segment very concerned about the debt in this country. | ||
| We're at about $37 trillion approaching that. | ||
| What does this bill do for the trajectory of debt in this country? | ||
| It makes it modestly worse. | ||
| And that's a real disappointment. | ||
| I thought the gold standard would be do something which is budget neutral, pro-growth tax reform. | ||
| And if you do that, you would make some progress on the fiscal situation. | ||
| That was the gold standard. | ||
| At the other end of the spectrum, make it no worse. | ||
| This doesn't even do that. | ||
| So you can't be too excited about this from a budgetary point of view. | ||
| You talked about the Moody's downgrade. | ||
| Can you just explain what that is? | ||
| Moody's is one of three very important rating agencies where they look at a borrower and say, you are credit worthy, you're going to pay back for sure. | ||
| There's some risk associated with you. | ||
| The first to downgrade the United States was Sander ⁇ Poor's in 2011. | ||
| They said, you're no longer AAA guaranteed to repay. | ||
| We have some concerns. | ||
| Those concerns were about the politics. | ||
| 2023, Fitch Ratings, the second group, did essentially the same thing. | ||
| Said, the U.S. is showing some inability to manage its finances. | ||
| Those are largely political disputes over debt ceiling increases or shutting the government. | ||
| We've been through these episodes. | ||
| This is very different and more, I think, troubling because what Moody said is you have a lot of debt and you have a lot of interest and you might not be able to pay it. | ||
| And for that reason, we're downgrading you from a surefire repay to a little bit of risk. | ||
| That's not a good development. | ||
| The Treasury Secretary, Scott Besent, was on Meet the Press yesterday, and he was asked about the Moody's downgrade. | ||
| I want to play his response and then get your response to that. | ||
| I think that Moody's is a lagging indicator. | ||
| I think that's what everyone thinks of credit agencies. | ||
| Larry Summers and I don't agree on everything, but he said that when they downgraded the U.S. in 2011. | ||
| So it's a lagging indicator. | ||
| And just like Sean Duffy said with our air traffic control system, we didn't get here in the past 100 days. | ||
| It's the Biden administration and the spending that we have seen over the past four years. | ||
| We inherited 6.7% deficit to GDP, the highest when we weren't in a recession, not in the war. | ||
| And we are determined to bring the spending down and grow the economy. | ||
| Fair enough, but under President Trump's first administration, he added $8 trillion to the nation's debt in his first term. | ||
| So there's plenty of blame to go around. | ||
| No, no, no, no, no. | ||
| But let's review. | ||
| We were in the rescue portion of COVID. | ||
| The Biden administration was in the recovery portion. | ||
| And Kristen, it would have been, if not for Senators Manchin and Sinema, who were no longer in the Democratic caucus, it would have been $4 or $5 trillion more. | ||
| Scott Besent, the Treasury Secretary yesterday on Meet the Press, your thoughts on his view on the Moody's downgrade. | ||
| It's a little disappointing. | ||
| It has two answers. | ||
| Number one, don't pay attention to it. | ||
| It doesn't mean that much. | ||
| Number two, it's not our fault. | ||
| I'd like someone who is a little more serious to say, yeah, this is a problem, and we intend to do something about it. | ||
| That's what the country really needs. | ||
| The notion that it's a lagging indicator is just confusing to me. | ||
| A lagging indicator is something where the problem arrives and later you find out because the lagging indicator showed up. | ||
| Well, that means he's acknowledging we have a problem. | ||
| Why don't we use him about it? | ||
| Debt being a big part of that problem. | ||
| How much debt is too much debt? | ||
| Is there a moment when we will accumulate a certain amount of debt that will be a breaking point, and we will all know it's too much debt? | ||
| The answer is yes. | ||
| At some point in our trajectory, which is just ever-increasing amounts of debt, even relative to the size of a growing economy, at some point, international creditors take a look at that and lose the confidence that you will repay either the interest or the principal in a timely fashion. | ||
| And as a result, they no longer extend you the credit. | ||
| Now, the trouble is, I don't know what that day that is. | ||
| You don't know what day that is. | ||
| No one knows what day that is. | ||
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We're going to leave this to take you live to the U.S. House for votes. | |
| H.R. 1263 and H.R. 1286. |