ICYMI: Chairman Arrington on Squawk Box to Discuss Fitch Downgrade
Today, House Budget Committee Chairman Jodey Arrington (R-TX) joined "Squawk Box" on CNBC to discuss Fitch Ratings' decision to downgrade the U.S. government's credit rating from AAA to AA+. Republicans have been sounding the alarm on the urgent need to control Washington's unchecked spending that is hurting the economy and could drive our country into a recession.
Chairman Arrington on Debt and Deficits:
"I do think the last two years: the $11 trillion in record spending, the spending-induced inflation, and the interest rate hikes, and an economy that's projected--not only by CBO, but by Fitch, and even the White House's own economist--for recession. We're in trouble. But these are things that I think investors were watching for years now, and I don't think it's a surprise to anybody, sadly enough, because there are some structural problems in our balance sheet, namely mandatory spending. We have an aging population, the world's largest generational retirement, and we have to rein that mandatory spending in and we've got to grow the economy faster than we're spending. That's not happening. The policies in place today, Andrew, are not going to get us there. Which is why we have all these negative projections of under 1 percent GDP this year--Fitch says it's going to be not even a half a percent in 2024. We've got to return to pro-growth, pro-energy, and pro-growth policies that will get us back on track."
Chairman Arrington on Entitlements:
“We're going to reveal our 10-year fiscal framework, called a ‘budget resolution.’ Probably most of your viewers haven't heard of that because for the last four years, my Democrat colleagues, never put forward a budget framework. But we're going to include entitlement spending so that we put our country on a path to balance in 10 years. Part of that is growth. Part of that equation will be right sizing the bureaucracy--that's the discretionary spending, and all the activity around the appropriations process, and the debt ceiling agreement. But we will take on welfare and health care and other entitlement programs to make them more cost effective, to root out the waste, and to give states more autonomy and responsibility. You have got to do that or you don’t get out of this mess: you get more downgrades and potentially a sovereign debt crisis."
Chairman Arrington on Fitch Ratings' Downgrade:
“I'm surprised it's taken this long to arrive at the conclusion that Standard & Poor's did 10 years ago. I do think that they saw how difficult it was to get my colleagues to the table and actually include some modest fiscal reforms in this recent debt ceiling negotiations. But when you look at their metrics--debt-to-GDP--and you look at them relative to our peers and the median debt-to-GDP of our peers, we are two and a half times worse off than our median peers who are AAA. If you look at interest to revenue, we are 10 times the median ratio of our peers. I think they have all the justification."
