May 26, 2022

Smith Opening Statement: House Budget Committee Hearing on the Congressional Budget Office's Budget and Economic Outlook

As prepared for delivery.

Thank you, Mr. Chairman.

The budget and economic outlook released by the Congressional Budget Office yesterday shows the impact of one-party Democrat rule in Washington over the past year, and it is not a pretty picture. In short, America’s fiscal health is getting worse. And when we compare it to CBO’s February 2021 baseline you can see just how much the nation’s budgetary and economic outlook has deteriorated since President Biden and the one-party Democrat rule has taken over.

First, let’s look at the data.

  • When President Biden entered office, CBO predicted the government would spend $61 trillion over the next 10 years. Now, they say it will be $72 trillion.
  • When Biden entered office, CBO predicted the government would run up just over $12 trillion in deficits over the next 10 years. Now, they say it will be close to $16 trillion.
  • When Biden entered office, CBO predicted the government would spend $4.6 trillion on interest payments over the next 10 years. Now, they say it will be over $8 trillion.
  • When Biden entered office, CBO predicted the average interest rate to be 2.5 percent over the next 10 years. Now they say it will be 3.5 percent. Their prediction for this year has nearly doubled from 1.3 percent to 2.4 percent.
  • The inflation forecast for 2022 and 2023 combined is 64 percent higher than what CBO predicted when Biden entered office – and that might be overly optimistic. After all, CBO projects inflation to be 4.7 percent this year, but inflation has already increased by almost 4 percent in 2022.
  • Also, perhaps overly optimistic: CBO’s economic growth predictions. Real GDP growth is projected to be 3.1 percent this year – but GDP declined by 1.4 percent in the first quarter of 2022.
Under every metric, President Biden has worsened the balance sheet of the federal government, the economic outlook for our country and the fiscal health of American families.

So, how did we get here?

Democrats passed their $2 trillion American Rescue Plan, even though the economy was well on its way to recovery. Democrats promised it would create 4 million jobs. Instead, job creation was smaller in 2021 than CBO had projected it would be before that $2 trillion plan was enacted.

What it did create was the highest inflation in 40 years while spending federal tax dollars on such things as $17 million on a golf course in Florida; $4 million to build beach parking lots in South Carolina; $2 million to plant trees in New York; and $400 billion to pay people to stay at home and not go to work.

And yet, things could have been even worse.

The Washington Democrats’ Build Back Broke agenda would have added $5 trillion in new spending and $3 trillion in debt, according to CBO.

There is a silver lining in this CBO baseline.

Thanks to the Republican-passed Tax Cuts and Jobs Act, the tax burden on families and job creators fell while federal revenues have grown. This year, revenue from corporations and individual taxpayers is up, far exceeding what CBO projected the federal government would collect. Revenues have surged 39 percent over last year and collections are on pace to be the largest share of GDP in American history. As a matter of fact, if current forecasts hold, revenues could very well end up being more than a trillion and a half above what CBO predicted they would be for 2022 after passage of the Tax Cuts and Jobs Act.

The story this baseline tells is the story of one-party Democrat rule in Washington. After one year we have trillions more in spending; an explosion of new debt; record inflation; a supply chain crisis; the highest gas prices ever recorded; and now, a baby formula shortage. This is the legacy of President Biden’s first year in office.

I yield back Mr. Chairman.