February 16, 2022

Smith Opening Statement at Democrat Hearing on Abolishing the Debt Limit

As prepared for delivery

Thank you, Mr. Chairman.

I would like to welcome the newest member of our committee, Mr. Carey from Ohio.

I’d also like to welcome our witnesses today – which includes one of our former colleagues and a former member of this Committee, Director Mulvaney – who coincidentally was sworn in as head of the White House Office of Management and Budget almost exactly 5 years ago today. At the time, that was the latest ever that an OMB director assumed the job in a new administration – a little less than one month after a new President was sworn in.

Under the Biden Administration, we are now a year longer than that without an OMB Director. There’s a lot to unpack today, but I will start by saying that it seems Budget Democrats are working at cross-purposes.

Last year, we had a hearing about Congress’s “power of the purse” and how to reassert our Constitutional role in budgeting and spending, so that it wasn’t being usurped by Executive Branch decision making.. What we learned was that if Congress did its job – budgeting, appropriating and authorizing programs on a timely basis – it would go a long way to removing the ability of unelected bureaucrats to make decisions about government spending while also restoring some fiscal sanity to Washington. And yet, today, we’re talking about passing off Congress’s responsibility for the debt to unelected career government employees. This would severely undermine if not destroy the power of the purse my colleagues claimed they believed in less than a year ago. It would allow Congress to take credit for spending without being accountable for the debt it creates.

Which brings us back to today’s hearing. The real reason we’re here is because Democrats want to get rid of any obstacles standing in the way of their radical agenda – an agenda that has unleashed a multitude of crises: the highest spike in prices in 40 years, a national debt above $30 trillion, businesses facing chronic worker shortages and a supply chain crisis.

For the last 12 months, Democrats have been focused on their partisan agenda, while the ‘Check Engine’ light of the Biden economy has been on and flashing.

Inflation rose faster in Joe Biden’s first year in office than President Trump’s entire first term. Democrats first denied inflation existed, and then dismissed it as transitory. Even members of this committee said panicking over inflation was “uniformed and misguided.

Economists warned for months of the impact that reckless government spending would have on inflation. What did Democrats do? They spent $2 trillion in the President’s Bailout Bill – a bill they claimed was meant for COVID, but less than 9% went to combating the virus.

This crisis has been especially painful for Americans living in rural communities. Recently, the CBO found inflation in rural areas was 130 percent that of urban areas and they experienced 25 percent slower real wage growth than urban areas.

Now, Democrats are claiming a $5 trillion spending bill will fix inflation, even though it was written while Democrats were either denying inflation or calling it transitory. And even though the CBO has confirmed it would add $3 trillion to the debt.

If we combined the $68 trillion in spending Democrats called for in their FY22 budget with what they have passed since Nancy Pelosi became Speaker in 2019, it would be more than all taxes paid by every American in U.S. history.

For the last forty years, the debt limit has typically been one of the only times that Congress has had a serious conversation about the national debt. Debt limit negotiations have given us real checks on government spending – including statutory limits on discretionary spending like those in the Budget Control Act of 2011. If the debt limit didn’t exist or was raised to a “gazillion” dollars, as the Chairman has suggested, Washington Democrats would spend without end.

Democrats claim that government can print as much new money as it wants to spend, and budgets and debt don’t matter. But look around the country. What’s the result of flooding the economy with new money? Inflation.

We’ve seen what happens when Congress tries to exempt itself from the basic laws of economics. We should not allow Congress to exempt itself from our budget laws and hand over more responsibility to unelected bureaucrats.