1 00:00:00,040 --> 00:00:03,720 Speaker 1: There could be more disruption ahead on the fiscal front. 2 00:00:03,760 --> 00:00:05,680 Speaker 1: That's what we're going to discuss now with miam again 3 00:00:05,720 --> 00:00:09,119 Speaker 1: as President of the Committee for Responsible Federal Budget. Maya, 4 00:00:09,160 --> 00:00:11,920 Speaker 1: thank you so much for joining us this morning. There 5 00:00:11,920 --> 00:00:15,440 Speaker 1: were lots of tense moments in fiscal policy in the 6 00:00:15,520 --> 00:00:20,360 Speaker 1: United States, closed on shutdown drama in Congress. In terms 7 00:00:20,400 --> 00:00:22,040 Speaker 1: of who leads it, you would say that we had 8 00:00:22,040 --> 00:00:26,520 Speaker 1: a strong year fiscally in terms of enacting deficit reduction. 9 00:00:26,920 --> 00:00:29,240 Speaker 1: Maybe that's what the bomb market got the message more 10 00:00:29,240 --> 00:00:31,360 Speaker 1: off than the rest of us did. So when you 11 00:00:31,400 --> 00:00:34,440 Speaker 1: look at a fiscal debate in the next month, what 12 00:00:34,600 --> 00:00:37,800 Speaker 1: is the biggest risk as you see it laying on 13 00:00:37,840 --> 00:00:42,159 Speaker 1: the table now in this debate fiscally, yes. 14 00:00:42,040 --> 00:00:44,960 Speaker 2: Congress will be coming back to a lot of unfinished 15 00:00:44,960 --> 00:00:46,199 Speaker 2: and unfinished business. 16 00:00:46,280 --> 00:00:47,800 Speaker 3: So twenty twenty three. 17 00:00:47,640 --> 00:00:51,120 Speaker 2: Actually was quite a good year, despite countdown clocks all 18 00:00:51,159 --> 00:00:53,199 Speaker 2: the time. Are we going to default? Are we going 19 00:00:53,240 --> 00:00:55,520 Speaker 2: to shut down? Which is a terrible way to run 20 00:00:55,560 --> 00:00:59,680 Speaker 2: the government. But overall, there was significant savings of well 21 00:00:59,680 --> 00:01:03,880 Speaker 2: over trillion dollars from all the legislation that was passed. However, 22 00:01:04,280 --> 00:01:06,399 Speaker 2: much of that is because so much of Congress's real 23 00:01:06,480 --> 00:01:10,200 Speaker 2: work remained unfinished business. So when they return in January, 24 00:01:10,400 --> 00:01:13,679 Speaker 2: they have huge issues to deal with, starting with are 25 00:01:13,720 --> 00:01:17,080 Speaker 2: they going to fund emergency funding for Israel and Ukraine, 26 00:01:17,400 --> 00:01:19,760 Speaker 2: which I think the majority of members actually want, but 27 00:01:19,760 --> 00:01:23,000 Speaker 2: there's still big hurdles on whether that will get done. Second, 28 00:01:23,360 --> 00:01:26,000 Speaker 2: along with that, they've wanted to do big policy changes 29 00:01:26,000 --> 00:01:29,120 Speaker 2: with the border that will be both costly and policy changes. 30 00:01:29,360 --> 00:01:31,560 Speaker 3: There's major disagreements. 31 00:01:31,040 --> 00:01:33,080 Speaker 2: Over how to structure that deal, and that could stand 32 00:01:33,080 --> 00:01:33,920 Speaker 2: in the way of everything. 33 00:01:34,160 --> 00:01:35,360 Speaker 3: And then the biggest. 34 00:01:34,959 --> 00:01:39,000 Speaker 2: Issue is they still haven't funded the government. We are 35 00:01:39,440 --> 00:01:42,399 Speaker 2: one quarter of the way through fiscal year twenty twenty four, 36 00:01:42,880 --> 00:01:45,120 Speaker 2: still none of the spending levels have been determined. 37 00:01:45,600 --> 00:01:48,000 Speaker 4: That is going to be a big deal in January 38 00:01:48,000 --> 00:01:50,560 Speaker 4: and the beginning of February and could In fact, I 39 00:01:50,600 --> 00:01:52,960 Speaker 4: don't want to start more countdown clocks, but there's a 40 00:01:53,040 --> 00:01:55,360 Speaker 4: potential for our government shutdown if they can't come to 41 00:01:55,440 --> 00:01:57,360 Speaker 4: agreement on those basic numbers. 42 00:01:57,800 --> 00:02:00,160 Speaker 5: And before we get to the shutdown, all the hand 43 00:02:00,240 --> 00:02:02,960 Speaker 5: dragging that will come to us in Janue. Let's talk 44 00:02:02,960 --> 00:02:05,840 Speaker 5: a little bit more about twenty twenty three, because reading 45 00:02:05,880 --> 00:02:07,840 Speaker 5: over your notes, I mean you make the point that 46 00:02:08,360 --> 00:02:11,680 Speaker 5: the legislative and executive actions that were put in place 47 00:02:12,080 --> 00:02:15,280 Speaker 5: this year so far would reduce the projected deficit by 48 00:02:15,280 --> 00:02:18,160 Speaker 5: one point three trillion dollars over the coming decade. I mean, 49 00:02:18,200 --> 00:02:20,320 Speaker 5: you make the point that the policies that are being 50 00:02:20,320 --> 00:02:22,960 Speaker 5: considered would undo that, But I think a lot of 51 00:02:23,000 --> 00:02:26,480 Speaker 5: people would find that one point three trillion dollar projection 52 00:02:26,639 --> 00:02:27,560 Speaker 5: really surprising. 53 00:02:28,520 --> 00:02:30,800 Speaker 2: I think I would That was never the political narrative 54 00:02:30,880 --> 00:02:33,760 Speaker 2: of what was going on. Because that savings got put 55 00:02:33,800 --> 00:02:38,880 Speaker 2: in place amidst absolute chaos basically around the need to 56 00:02:38,919 --> 00:02:40,600 Speaker 2: lift the debt ceiling and we should never be talking 57 00:02:40,639 --> 00:02:44,520 Speaker 2: about defaulting. Congress ended up putting in the Fiscal Responsibility Act, 58 00:02:44,680 --> 00:02:49,080 Speaker 2: which put in place savings on domestic discretionary discretionary spending 59 00:02:49,120 --> 00:02:52,079 Speaker 2: that would affect both this year, next year, and then 60 00:02:52,400 --> 00:02:54,160 Speaker 2: have savings for the following decade. 61 00:02:54,440 --> 00:02:56,560 Speaker 3: If they stick to those levels, that will. 62 00:02:56,440 --> 00:02:58,640 Speaker 2: Be the largest amount of savings we've seen in well 63 00:02:58,680 --> 00:02:59,760 Speaker 2: over a decade. 64 00:03:00,080 --> 00:03:01,760 Speaker 3: But because one. 65 00:03:01,800 --> 00:03:04,640 Speaker 2: The agreements were really not clear, you're now of both 66 00:03:04,680 --> 00:03:08,160 Speaker 2: sides kind of renegotiating them. And two, even though that 67 00:03:08,200 --> 00:03:11,519 Speaker 2: was a great start, it only focused on domestic discretion area, 68 00:03:11,520 --> 00:03:13,840 Speaker 2: which is the least problematic area. 69 00:03:13,840 --> 00:03:15,280 Speaker 3: Of the budget in terms of growth. 70 00:03:15,560 --> 00:03:18,800 Speaker 2: They didn't talk about social security, they didn't talk about medicare, 71 00:03:19,000 --> 00:03:21,600 Speaker 2: they didn't talk about defense savings, they didn't talk about 72 00:03:21,639 --> 00:03:22,720 Speaker 2: the need for new revenues. 73 00:03:22,919 --> 00:03:24,919 Speaker 3: So everything where the real structural. 74 00:03:24,520 --> 00:03:28,280 Speaker 2: Problems are was still ignored because the fiscal savings that 75 00:03:28,280 --> 00:03:31,400 Speaker 2: we really need to look at is politically difficult. And 76 00:03:31,440 --> 00:03:33,240 Speaker 2: all you have to do is watch our budget process 77 00:03:33,240 --> 00:03:34,880 Speaker 2: and see our politics is broken. 78 00:03:34,960 --> 00:03:37,040 Speaker 3: We are unable to budget responsible ways. 79 00:03:37,080 --> 00:03:40,600 Speaker 2: So great year on paper, if we keep to that agreement, 80 00:03:40,720 --> 00:03:43,360 Speaker 2: it could have a big, big difference in terms of 81 00:03:43,400 --> 00:03:46,960 Speaker 2: getting us started on some needed savings. But we still 82 00:03:46,960 --> 00:03:48,880 Speaker 2: have to do the hard work of budgeting to figure 83 00:03:48,880 --> 00:03:52,000 Speaker 2: out where exactly those savings on these spending gaps will 84 00:03:52,000 --> 00:03:54,119 Speaker 2: be put in place in the actual budget. That's where 85 00:03:54,160 --> 00:03:56,480 Speaker 2: things get tricky and Congress may break down on that. 86 00:03:56,680 --> 00:03:58,480 Speaker 6: My you know what's so funny. I'm thinking, I'm listening 87 00:03:58,480 --> 00:04:00,400 Speaker 6: to you. I'm thinking I could go back years and 88 00:04:00,400 --> 00:04:02,400 Speaker 6: we can have a very similar conversation, or go back 89 00:04:02,400 --> 00:04:05,040 Speaker 6: ten years. You have been following, you know, the ins 90 00:04:05,040 --> 00:04:07,720 Speaker 6: and outs of congressional spending and budgets here in the 91 00:04:07,800 --> 00:04:09,920 Speaker 6: United States for a long time. You have this incredible 92 00:04:09,960 --> 00:04:13,920 Speaker 6: perspective as you look at this Congress, this government, where 93 00:04:13,960 --> 00:04:16,360 Speaker 6: we are, the US fiscal situation, what kind of grade 94 00:04:16,360 --> 00:04:17,040 Speaker 6: would you give it? 95 00:04:17,279 --> 00:04:17,760 Speaker 3: And why? 96 00:04:19,080 --> 00:04:21,640 Speaker 2: Yeah, that's a depressing question as somebody who has been 97 00:04:21,880 --> 00:04:24,720 Speaker 2: really focused on this issue for quite some time. It 98 00:04:24,720 --> 00:04:28,040 Speaker 2: hasn't been a steady decline. And the study decline is 99 00:04:28,160 --> 00:04:32,800 Speaker 2: interplay between politics, governing and our fiscal policy choices. And 100 00:04:32,839 --> 00:04:35,080 Speaker 2: I think the point where we are so polarized as 101 00:04:35,120 --> 00:04:35,800 Speaker 2: a country in a. 102 00:04:35,720 --> 00:04:38,000 Speaker 3: Way that I think concerned so many of us. 103 00:04:38,279 --> 00:04:40,840 Speaker 2: We are unable at this point to make decisions that 104 00:04:40,960 --> 00:04:44,320 Speaker 2: are focused on the long term, focused on compromise, and 105 00:04:44,360 --> 00:04:46,839 Speaker 2: actually do hard things. All of those are what you 106 00:04:46,960 --> 00:04:50,160 Speaker 2: need to have fiscal deals that will keep the government 107 00:04:50,200 --> 00:04:52,720 Speaker 2: debt under control. As a result, our debt has been 108 00:04:52,720 --> 00:04:55,479 Speaker 2: growing not just during emergencies like COVID when it should have, 109 00:04:56,040 --> 00:04:59,400 Speaker 2: but during periods of strong economic growth like leading up 110 00:04:59,440 --> 00:05:02,480 Speaker 2: to COVID, and since the pandemic has been over, so 111 00:05:02,520 --> 00:05:06,080 Speaker 2: we now borrow for political expediency. That's the worst I've 112 00:05:06,120 --> 00:05:09,200 Speaker 2: seen it. I mean, sorry, it's an f We're failing 113 00:05:09,240 --> 00:05:12,240 Speaker 2: on account. We don't even pass budgets. There's a glimmer 114 00:05:12,279 --> 00:05:14,800 Speaker 2: of hope though, which is there are bipison members who 115 00:05:14,839 --> 00:05:18,040 Speaker 2: are trying to start to work together. They're talking about 116 00:05:18,040 --> 00:05:20,760 Speaker 2: a fiscal commission, they're talking about looking at all areas 117 00:05:20,760 --> 00:05:22,880 Speaker 2: of the budget. We will see if we can get 118 00:05:23,000 --> 00:05:25,800 Speaker 2: enough people kind of engaged in those realistic discussions. 119 00:05:25,839 --> 00:05:29,240 Speaker 3: But I think a big switch was now fiscal policy. 120 00:05:29,480 --> 00:05:32,560 Speaker 2: Given what's going on in geo politics, it's as much 121 00:05:32,720 --> 00:05:36,200 Speaker 2: national security as it is economic policy, and that's starting 122 00:05:36,240 --> 00:05:37,280 Speaker 2: to bring more people. 123 00:05:37,000 --> 00:05:39,440 Speaker 3: To the table, and I just hope that will enhance 124 00:05:39,480 --> 00:05:40,000 Speaker 3: the discussion. 125 00:05:40,040 --> 00:05:41,839 Speaker 6: You see China doing it. We had some headlines this 126 00:05:41,880 --> 00:05:44,160 Speaker 6: morning in terms of soy being buying in terms of 127 00:05:44,200 --> 00:05:46,920 Speaker 6: domestic security, and you're right, the pandemic taught us a 128 00:05:46,920 --> 00:05:48,159 Speaker 6: lot long term planning. 129 00:05:48,200 --> 00:05:49,400 Speaker 1: I think this has always. 130 00:05:49,120 --> 00:05:51,800 Speaker 6: Been something that people say the US government needs to 131 00:05:51,800 --> 00:05:54,680 Speaker 6: do more of. Having said that, how is the US 132 00:05:54,720 --> 00:05:58,479 Speaker 6: handicapped by its role on a global level that it 133 00:05:58,520 --> 00:06:00,000 Speaker 6: prevents it from doing some of the things that need 134 00:06:00,120 --> 00:06:03,360 Speaker 6: to do domestically when it comes to spending and or cuts. 135 00:06:04,360 --> 00:06:04,880 Speaker 3: Well, that's right. 136 00:06:04,920 --> 00:06:07,760 Speaker 2: So the US has commitments that we've made around the world. 137 00:06:07,800 --> 00:06:10,800 Speaker 2: Part of our national security policy is diplomacy and foreign aid. 138 00:06:11,120 --> 00:06:13,359 Speaker 2: Those things are going to become more expensive. If we 139 00:06:13,400 --> 00:06:15,919 Speaker 2: stick to the same policies we have in the past, 140 00:06:16,440 --> 00:06:19,120 Speaker 2: very likely our defense budget is going to be growing 141 00:06:19,440 --> 00:06:21,960 Speaker 2: even by a couple percentage points of GDP in the 142 00:06:22,000 --> 00:06:24,320 Speaker 2: coming decade if things continue to be as risky as 143 00:06:24,320 --> 00:06:25,000 Speaker 2: they appear to be. 144 00:06:25,480 --> 00:06:27,799 Speaker 3: That squeezes out other areas of the budget. 145 00:06:28,120 --> 00:06:30,440 Speaker 2: But quite frankly, the biggest part of our budget that 146 00:06:30,520 --> 00:06:32,840 Speaker 2: is really putting pressure on the rest of it is 147 00:06:33,000 --> 00:06:35,440 Speaker 2: the part that has to do with aging health care 148 00:06:35,480 --> 00:06:38,599 Speaker 2: costs and these days, interest payments on the national debt. 149 00:06:39,040 --> 00:06:41,279 Speaker 2: In just a few years, interest payments will actually be 150 00:06:41,360 --> 00:06:44,080 Speaker 2: more than we spend on all of defense spending. So 151 00:06:44,120 --> 00:06:45,960 Speaker 2: you have to look at the returns on these things. 152 00:06:45,960 --> 00:06:48,920 Speaker 2: Some of these are long term investments. It's not an 153 00:06:48,960 --> 00:06:51,360 Speaker 2: issue that we can't do things. The issue is if 154 00:06:51,400 --> 00:06:53,600 Speaker 2: we're going to do them, we have to pay for them. 155 00:06:53,800 --> 00:06:57,240 Speaker 2: And the ongoing policy of borrowing for just about everything, 156 00:06:57,520 --> 00:07:01,680 Speaker 2: that's what weakens the US's fiscal foundation so dangerously. 157 00:07:01,360 --> 00:07:03,760 Speaker 1: And maybe puts a little bit more pressure on the 158 00:07:03,839 --> 00:07:05,680 Speaker 1: idea that we need to see rape cuts in this 159 00:07:05,760 --> 00:07:08,159 Speaker 1: country faster and more quickly. As you say, the interest 160 00:07:08,160 --> 00:07:13,720 Speaker 1: spill on on the on the borrowing is pretty aggressive mine. 161 00:07:13,760 --> 00:07:17,360 Speaker 1: Thank you so much, Mia Beginnis, the Committee of Responsible 162 00:07:17,520 --> 00:07:19,880 Speaker 1: Federal Budget, Thank you very much.