Huffman Reminds Budget Committee Why We Have A Deficit—Hint: It's Not Obamacare...

On September 26,2013, Congressman Jared Huffman (D-San Rafael) reminded his congressional colleagues that the mountain of debt facing the United States was created by two wars, tax cuts for the rich, and the economic downturn caused by the Wall Street collapse—not by Obamacare, which is a net positive for the federal budget. Huffman questioned Congressional Budget Office (CBO) Director Doug Elmendorf about the budget outlook, and noted that repealing or dismantling the Affordable Care Act, continuing the sequester cuts, and defaulting on the debt limit each would cause further harm to our economy. A transcript may be found below: Rep. Jared Huffman: Thank you, Mr. Chair and thank you very much, Doctor Elmendorf. It's been an interesting discussion. It's even been interesting that we've had a few practitioners of political ideology interrupting and disagreeing with and attempting to re-educate our independent Ph.D. nonpartisan economists who Congress turns to in these situations. I think those who are watching will have an interesting window into the forces that have taken us to the brink of a government shutdown in that discussion. I am, of course, sobered by this mountain of debt that you are projecting, that we're grappling with. I think everyone in this institution should be, and I know that Democrats are very sobered by it. In fact, we may even be more dismayed because, we have gone in a pretty short period of time—from 2001 when following eight years of the Clinton administration, your office was projecting we would be enjoying a multi-trillion dollar surplus at this very point in time, to this mountain of debt that you're now projecting. We could certainly probably have more discussion about how we got here, but it seems to me that putting a couple of wars on the national credit card, cutting taxes for the rich, and looking the other way while Wall Street crashes the economy had a lot to do with it. In any event, it also seems to me that we have four issues that are immediately facing this House that could have either a positive or a negative effect on this situation, depending on how we resolve them. The first of which is the sequester, and I want to just understand your testimony. I believe you said that continuing the sequester, which is what our Republican colleagues are suggesting in their CR and other proposals in 2014, would eliminate 600,000 jobs and reduce GDP by as much as a half a percent. Is that correct? Douglas W. Elmendorf, Director of the Congressional Budget Office: Those are our estimates for the end of 2014. Yes, Congressman. Huffman: Thank you. And with respect to the debt limit, I think you were completely unequivocal in stating that a default of any kind could have catastrophic effects on our economy and our recovery. Elmendorf: I said that a default on any obligations the federal government could have effects that are large, lasting and very damaging to our economy, our financial system, and to the federal budget. Huffman: That's a second big issue facing us right now in Congress. The third is the Affordable Care Act, what will inevitably be the 43rd proposal in the days ahead to try to repeal it. Just to be clear, the Affordable Care Act is a net budget saver, correct? Elmendorf: That's our estimate, Congressman, yes. Huffman: So, repealing it would actually make things worse. Elmendorf: Yes, Congressman. Huffman: And finally, we should be talking about -- we're not -- but we should be talking about Comprehensive Immigration Reform along the lines of the bipartisan proposal that the Senate has advanced. What would the net effect on these fiscal challenges be if we could pass a bipartisan, comprehensive immigration reform bill like the one that came out of the Senate? Elmendorf: Congressman, we estimated that the proposal that was approved in the Senate would improve the budget balance, would improve -- would increase output in the economy over this coming decade and beyond. Huffman: Thank you very much for your testimony. Again, there is no dispute that we face a serious challenge here, but rather than exchanging rhetoric about it, we have four things that I've just highlighted that are pending before this House that we can do to make it better or to make it worse. I think your testimony has been very illuminating in that regard. Thank you, Doctor Elmendorf. I yield back. Elmendorf: Thank you, Congressman.