WASHINGTON – On Tuesday, U.S. Sen. Ron Johnson (R-Wis.), member of the Senate Budget Committee, participated in a hearing titled,The President’s Fiscal Year 2025 Budget Proposal, where he exposed the President’s unsustainable and inflationary budget proposal during a heated exchange with Office of Management and Budget (OMB) Director Shalanda Delores Young.

 

 

Watch his full remarks here. Excerpts can be found below: 

On out-of-control spending sparking 40-year high inflation

Sen. Johnson: “… What do you think sparked the forty-year high inflation?”

Director Young: “Senator, we can also talk about inflation that has come down by two-thirds.”

Sen. Johnson: “No, again, that damage is done. And again, what caused, what sparked 40-year high inflation?”

Director Young: “Most economists agree that coming out of a global pandemic which is why we saw inflation across every major economy in this country. It was the supply chain issues, economies turning back on, coming out of a once-in-a-generation pandemic, which is why you saw inflation across the globe increase.”

Sen. Johnson: “You don't think that too many dollars chasing too few goods is the primary cause of inflation? And when you spend $2 trillion one year over the next, and then you don't readjust the baseline? I mean, how can you justify spending $4.4 trillion. As Senator Scott was saying, the population grew less than 2% over this time frame. So we go from $4.4 trillion to $6.5 [trillion]. In 2021, when President Biden comes into office, we spend $6.8 [trillion] and then $6.3 [trillion]. We haven't reset to the 2019 baseline. How are we ever going to recover from this?”

Director Young: “Senator, we put forth a proposal, a way to continue to invest in the American people. If we think we have adequate childcare and paid leave in this country, I welcome us to talk to hard-working Americans. We can do that by asking the top 1% and 2% to add more into the system. That way, we can not only pay for our investments, but we can bring down the deficit by about $3 trillion. We can't just talk about spending as if it only hits those programs that hit working families in this country.” 

Sen. Johnson: “… By the way, the top 1% garner about 20% of the income pay, about 40% of the income tax. I mean, at some point in time, you have to say that's probably a pretty fair share.”

On the President’s budget plan that locks in “$1.5 trillion deficits as far as the eye can see” 

Sen. Johnson: “But, you know, I remember when a couple hundred billion dollars was like real money. You know, the political process would be all upset if you were running a couple hundred billion dollar a year deficit. Your plan to get us out of this, you're running deficits of $1.8, $1.5, $1.5, $1.5, $1.5, $1.6 [trillion]. It never comes down. You’re basically locking in at least $1.5 trillion deficits for the next ten years. That's what you're budgeting. Clearly, this is unsustainable. You don't worry about, once again, sparking massive inflation that further devalues the dollar from a dollar to $0.85? What is it going to go down to $0.70, to $0.60?” 

Director Young: “Senator, absolutely. That is why we put forth a plan that would actually bring deficits down by $3 trillion. We care about our fiscal path. This President has shown how you can still invest in the American people and achieve deficit reduction. By the way, he worked with Republicans to sign a Fiscal Responsibility Act that would save $1 trillion on our deficit.”

Sen. Johnson: “So you're proud of a ten-year budget that never reduces the deficit, never brings it down below basically $1.5 trillion? You're proud of that work?” 

Director Young: “Of course I'm proud of a budget that reduces deficits by over $3 trillion. That continues its investments in the American people. And by the way, most economists will tell you the way to look at our affordability of debt is to look at debt and deficit as a percentage of GDP. As a percentage of GDP, deficits are below 4.5%.”

Sen. Johnson: “I don't think average Americans take a look at at least $1.5 trillion deficits as far as the eye can see and think this Administration is bringing down the deficit. I mean, that's just fantasy talk.” 

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