[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                     BIDENOMICS: A PERFECT STORM OF
                     SPENDING, DEBT, AND INFLATION

=======================================================================

                                HEARING

                               BEFORE THE

 SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY POLICY, AND REGULATORY AFFAIRS

                                 OF THE

               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                           SEPTEMBER 19, 2023
                               __________

                           Serial No. 118-67
                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
  
                   [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 


                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov

                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-521 PDF                WASHINGTON : 2023                           
                             
                             
               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama                 Gerald E. Connolly, Virginia
Clay Higgins, Louisiana              Raja Krishnamoorthi, Illinois
Pete Sessions, Texas                 Ro Khanna, California
Andy Biggs, Arizona                  Kweisi Mfume, Maryland
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Byron Donalds, Florida               Shontel Brown, Ohio
Kelly Armstrong, North Dakota        Jimmy Gomez, California
Scott Perry, Pennsylvania            Melanie Stansbury, New Mexico
William Timmons, South Carolina      Robert Garcia, California
Tim Burchett, Tennessee              Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia      Summer Lee, Pennsylvania
Lisa McClain, Michigan               Greg Casar, Texas
Lauren Boebert, Colorado             Jasmine Crockett, Texas
Russell Fry, South Carolina          Dan Goldman, New York
Anna Paulina Luna, Florida           Jared Moskowitz, Florida
Chuck Edwards, North Carolina        Vacancy
Nick Langworthy, New York
Eric Burlison, Missouri

                       Mark Marin, Staff Director
       Jessica Donlon, Deputy Staff Director and General Counsel
                     Daniel Flores, Senior Counsel
                Kim Waskowsky, Professional Staff Member
      Mallory Cogar, Deputy Director of Operations and Chief Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director
                      Contact Number: 202-225-5051
                                 ------                                

 Subcommittee On Economic Growth, Energy Policy, And Regulatory Affairs

                      Pat Fallon, Texas, Chairman

Byron Donalds, Florida               Cori Bush, Missouri, Ranking 
Scott Perry, Pennsylvania                Minority Member
Lisa McClain, Michigan               Shontel Brown, Ohio
Lauren Boebert, Colorado             Melanie Stansbury, New Mexico
Russell Fry, South Carolina          Eleanor Holmes Norton, District of 
Anna Paulina Luna, Florida               Columbia
Chuck Edwards, North Carolina        Raja Krishnamoorthi, Illinois
Nick Langworthy, New York            Ro Khanna, California
                                     Vacancy

                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

Hearing held on September 19, 2023...............................     1

                               Witnesses

                              ----------                              

Ms. Carrie Sheffield, Senior Policy Analyst, Independent Women's 
  Forum
Oral Statement...................................................     4

Mr. E.J. Antoni, Research Fellow, Grover M. Hermann Center for 
  the 
  Federal Budget, The Heritage Foundation
Oral Statement...................................................     6

Prof. Casey Mulligan, Professor in Economics, University of 
  Chicago
Oral Statement...................................................     8

Mr. Bobby Kogan (Minority Witness), Senior Director, Federal 
  Budget 
  Policy, Center for American Progress
Oral Statement...................................................     9

 Opening statements and the prepared statements for the witnesses 
  are available in the U.S. House of Representatives Repository 
  at: docs.house.gov.

                           Index of Documents

                              ----------                              


  * Report, Moore, Antoni, ``Impact of Biden Economic Policies on 
  Americans' 401k and Other Retirement Plans''; submitted by Rep. 
  Fallon.

  * Report, Mulligan, ``Paying Americans Not To Work''; submitted 
  by Rep. Fallon.

  * Report, Mulligan, ``Payroll Tax Revenues Down $400 to $900 
  Billion Due to Lower Wages and Less Growth''; submitted by Rep. 
  Fallon.

  * Report, Moore and Mulligan, ``The Cost of Biden's War on Oil 
  and Gas: Nearly $100 Billion a Year in Lost Output''; submitted 
  by Rep. Fallon.

  * Questions for the Record: to Mr. Kogan; submitted by Rep. 
  Bush.

  * Questions for the Record: to Ms. Sheffield; submitted by Rep. 
  Fallon.

  * Questions for the Record: to Mr. Antoni; submitted by Rep. 
  Fallon.


The documents listed above are available at: docs.house.gov.

 
                     BIDENOMICS: A PERFECT STORM OF
                     SPENDING, DEBT, AND INFLATION

                              ----------                              


                  Tuesday, September 19, 2023

                        House of Representatives

               Committee on Oversight and Accountability

                Subcommittee on Economic Growth, Energy 
                     Policy, and Regulatory Affairs

                                           Washington, D.C.

    The Subcommittee met, pursuant to notice, at 2:06 p.m., in 
room 2247, Rayburn House Office Building, Hon. Pat Fallon, 
Chairman of the Subcommittee, presiding.
    Present: Representatives Fallon, Boebert, Edwards, 
Langworthy, Bush, Brown, Stansbury, and Norton.
    Mr. Fallon. The hearing of the Subcommittee on Economic 
Growth, Energy Policy, and Regulatory Affairs will come to 
order. I want to welcome everybody here.
    Without objection, the Chair may declare a recess at any 
time.
    I recognize myself for the purpose of making an opening 
statement.
    Today's hearing is an opportunity to discuss an issue every 
household in America is familiar with, with a clear failure of 
Bidenomics and the crisis caused by this current 
Administration's reckless spending. Joe Biden likes to say that 
Bidenomics is just another way of saying restoring the American 
Dream. I beg to differ. But just last week, the Consumer Price 
Index showed prices have risen 17.4 percent since Mr. Biden 
took office. That means that 26 months of consumers watching 
their paychecks disappear before their very eyes due to the 
rising costs of living. Worse yet, mortgage rates have nearly 
doubled since Joe Biden took office, making it much harder for 
Americans to buy a new home, and that is clearly not the 
American Dream.
    Joe Biden likes to say Bidenomics is about building from 
the middle out and the bottom up. That is a clever slogan, but 
it does not reflect reality. In fact, let me say this, those 
hurt most by these rising prices are low-income households and 
seniors that are relying on Social Security for their monthly 
retirement.
    Wage growth has fallen behind the pace of inflation in 20 
of the past 22 months, and most Americans are now unable to pay 
for the surprising expense of, you know, if there is something 
that cost $400, suddenly they are struggling to pay that bill, 
something that was unforeseen, and that is not building from 
the middle out or from the bottom up. Joe Biden likes to remind 
us he promised not to raise taxes on anyone earning less than 
$400,000 a year, but as of June 2023, the average worker was 
paying an inflation tax, kind of an invisible tax because what 
inflation is, is a tax on everything that we need and have to 
buy. That 13.5 percent is effectively like a second Federal 
income tax, particularly for low-income earners. The truth is 
Bidenomics has been an abject disaster, and I think most of the 
American people know that.
    A recent poll found that 80 percent--let me say that 
again--80 percent of Americans credit Joe Biden's policies for 
the current state of the economy, and 70 percent agreed that 
their incomes were not keeping pace with inflation. And if you 
see any poll in the last year-and-a-half, 2 years, you have 
seen that the Biden Administration scores, of all the major 
topics that we discuss, they score the worst on the economy.
    Our current economic track is nothing short of 
unsustainable, yet the Biden Administration really does not 
seem to be concerned. In fact, Joe Biden considers the current 
environment a huge success, and he said that often on the 
campaign trail, proudly taking credit for every failed business 
that could not stay afloat under his crushing regulatory 
regime, or parents that are forced to pay bills with a credit 
card and then going into debt because their wages were not 
keeping up with inflation.
    According to Joe Biden, we are supposed to believe that we 
are actually better off today than we were when he took office, 
but the facts tell a very different story. The pain households 
are experiencing can be tied directly back to the disastrous 
policies posed by this Administration, which was so much 
reckless spending into the trillions of dollars. Now we are 
about to cap over $33 trillion in debt that our grandchildren 
and their grandchildren will have to pay.
    In the early days of COVID, emergency spending did make 
some sense. It clearly did. I was not in Congress at that time. 
I believe my colleague, my Ranking Member, was not either, but 
the country was thrown into a tailspin, and we had to ensure 
that our economy did not capsize. However, this Administration 
plowed forward, maintaining these ``wartime'' spending levels 
long after the spending was necessary and really long after the 
pandemic was a national emergency any longer. It has been said 
``never let a good crisis go to waste,'' and they did not. From 
the American Rescue Plan to the Inflation Reduction Act, the 
Administration has wasted no time throwing mindboggling numbers 
at varying crises at their choosing with seemingly no regard 
for the consequences. The Biden Administration apparently does 
not care if a gallon of milk cost six bucks--I know I do--or 
how much gasoline costs or an airline ticket, so long as it 
forces everyone to purchase an electric vehicle that costs more 
than the yearly median household income.
    Decades ago, Republicans banded together with the Contract 
with America to bring about some of the most impactful economic 
reforms seen in generations. By combining a series of targeted, 
fiscally conservative policies into one unified agenda, House 
Republicans paved the way for Americans everywhere to prosper. 
We have already seen the blueprint for what works, so we do not 
need to reinvent the wheel. We should go ahead and achieve that 
kind of success again, or at least that should be our goal. We 
have also seen the blueprint for what does not work, and thanks 
to Bidenomics, we have an ugly reminder of what anti-growth 
policies bring.
    I want to thank our witnesses, all four of you all, for 
being here today, and I look forward to a thoughtful 
discussion. The Chair now recognizes Ranking Member Bush for 
the purpose of making an opening statement.
    Ms. Bush. Thank you, Mr. Chairman. St. Louis and I are here 
today to discuss the real economic situation of the people of 
this country. From gas prices to food, the cost of living is 
rising. New Census data indicates that real incomes fell 
significantly in 2022 as inflation reduced the size of our 
constituents' paychecks. We know there are investments that the 
Federal Government can make to reduce poverty.
    The Republican Party's inability to govern has us rapidly 
moving toward a total government shutdown. This will disrupt 
important benefits and services for all of our constituents, 
such as food and cash assistance. Too many people across this 
country are struggling to make ends meet. A government shutdown 
would affect more than 42 million people who receive SNAP 
benefits, nearly 3 million people who receive TANF benefits, 
and over 6 million participants who receive WIC benefits. 
Congress pulled together in a crisis to provide COVID relief, 
this emergency relief that people needed.
    My vision of a progressive economy led by the Biden 
Administration must include Medicare For All. It must include 
raising the Federal minimum wage, ensuring housing 
affordability, reinstating the child tax credit, and canceling 
student debt. That is my vision. During the pandemic, we made 
direct payments to families through the child tax credit and 
provided student debt relief by freezing interest and payments. 
We still need to do more now. These two concrete examples show 
Congress can ease the effects of economic hardship and boost 
the economy overall. When it was in place, the child tax credit 
lifted nearly 4 million children from poverty, causing child 
poverty to hit a historic low of 5.2 percent. The expanded 
child tax credit slashed child poverty, infused local economies 
with billions of dollars, and reduced food insecurity by nearly 
one-third. In Missouri alone, the child tax credit lifted 
73,000 children out of poverty. Without the child tax credit, 
child poverty in the United States has more than doubled in 
just 1 year. Since its expiration, nearly 3.7 million children 
have fallen back into poverty, including the impacted children 
of Missouri.
    Millions of people in this country are buried in burdensome 
debt to make ends meet--medical, credit card, and student debt. 
Student debt payments will resume soon after numerous payment 
policies extended by the Biden Administration. Though that 
temporary relief has helped many, we need much more, and we 
must cancel student debt. The Federal student loan portfolio 
currently totals more than $2 trillion owed by over 40 million 
borrowers. Black people carry the heaviest debt burden, meaning 
student debt. Say it again. Student debt relief is a racial and 
economic justice issue. As lawmakers, we must ensure education 
leads to prosperity, education leads to opportunity rather than 
inescapable debt.
    While my Republican colleagues are slashing programs to 
help keep kids out of poverty and fighting against student debt 
relief every step of the way, we have an over $880 billion 
defense package moving forward. The money is there. The 
question is how we as elected officials choose to invest in our 
communities. The money is there. We can deliver for our 
constituents to help them out to not only survive, but to 
prosper.
    Republicans are trying to distract us from the internal 
dysfunction which is steering our Nation toward a government 
shutdown. The question is, do we choose to invest in defense 
contractors or reduce poverty for millions of people? Thank 
you, and I yield back.
    Mr. Fallon. We have with us today an expert panel of 
witnesses who each bring valuable experiences and policy 
insights that will be beneficial to our discussion. First, we 
have Carrie Sheffield, who is a senior policy analyst for the 
Independent Women's Forum. She previously managed Municipal 
Credit Risk at Goldman Sachs and rated healthcare bonds at 
Moody's Investor Service. We also have E.J.--it is Antoni, 
right? OK. I get nervous when I see vowels. My mother's maiden 
name is Genovese. I want to get it right. OK.
    Mr. Antoni serves as a research fellow for the Heritage 
Foundation's Grover H. Hermann Center for the Federal Budget 
and a senior fellow at the Committee to Unleash Prosperity. He 
focuses his work primarily on fiscal and monetary policy. Casey 
Mulligan serves as a professor of economics at the University 
of Chicago and previously served as the chief economist for the 
Council of Economic Advisers under the Trump Administration. 
And finally, we have Bobby, is it Kogan? OK. Bobby Kogan, who 
serves as a senior policy director of Federal Budget Policy at 
the Center for American Progress. I am a Member of Congress 
from Texas, but I grew up in Massachusetts. So, I will quote a 
Boston term, ``you are all wicked smart.'' Thank you again for 
being here.
    Pursuant to Committee Rule 9(g), the witnesses will please 
stand and raise their right hands.
    Do you solemnly swear or affirm that your testimony you are 
about to give is the whole truth and nothing but the truth, so 
help you God?
    [A chorus of ayes.]
    Mr. Fallon. Let the record show that the witnesses answered 
in the affirmative. Please sit.
    We appreciate you being here and look forward to your 
testimony. Let me remind the witnesses that we have read your 
written statements and they will appear in the full hearing 
record. Please limit your statements to 5 minutes.
    As a reminder, please press the button on the microphone in 
front of you--I believe it says ``talk''--so that the Members 
will be able to hear you. When you do speak, the light in front 
of you will be turning green for 4 minutes, 1 minute will be 
yellow and then will be red, and that is when your 5 minutes 
are up, and if you are at that red, if you can just wrap it up, 
that would be great.
    I now recognize Ms. Sheffield for her opening statement.

                     STATEMENT OF CARRIE SHEFFIELD

                         SENIOR POLICY ANALYST

                       INDEPENDENT WOMEN'S FORUM

    Ms. Sheffield. Thank you, Chairman Fallon, Ranking Member 
Bush, and Members of the Committee. Thank you for inviting me 
here today. As has been said, my name is Carrie Sheffield, and 
I am a senior policy analyst at the Center for Economic 
Opportunity at Independent Women's Forum. We are a nonprofit 
organization committed to increasing the number of women who 
value free markets and personal liberty. We advance policies 
that enhance people's freedom, opportunities, and well-being. 
My work focuses on expanding economic opportunities for women.
    We are here to discuss ``Bidenomics: A Perfect Storm of 
Spending, Debt, and Inflation,'' and indeed this storm is 
already hammering suffering communities and homes nationwide. 
Evidence shows that President Biden's signature legislative 
packages, such as the American Rescue Plan and the Inflation 
Reduction Act, contributed to persistent inflation and are 
failing to bring it back down more sustainably. This increased 
government spending triggered more inflation, eroding wages and 
increased government spending and buying power. The White House 
has talked about an uptick in nominal wages, but as research 
from the Federal Reserve Bank of St. Louis shows, real wages 
have not recovered to pre-pandemic levels even as they are 
starting to rise nominally.
    Families are stretching their dollars further each day 
since their paychecks and retirement funds are worth far less 
than they were when President Biden took office. CNBC reported 
this year that an alarming 54 percent of the American public 
reported using savings to pay for everyday expenses, such as 
groceries and rent. Savings are down as is economic confidence.
    The recent, multi-trillion dollar increases in government 
spending erode the value of the dollar through inflation 
because the money is expanding demand and driving prices up. 
CBO projects the Federal budget deficit in 2023 is $34 billion, 
more than the deficit recorded last year. That increase would 
be larger if not for a shift in the timing of certain payments 
and the spending cuts that were forced by House Republican 
leadership this past April in a sustainable manner.
    Fraudulent actors may have stolen some $1 out of every $7 
in pandemic unemployment, totaling as much as $135 billion, 
according to a new GAO report. That means that scammers made 
off with between 11 and 15 percent of the increased jobless 
benefits that Congress approved on a bipartisan basis early in 
the coronavirus crisis. This tragic waste of taxpayer money is 
stealing from American families, who are now more than $1 
trillion in credit card debt, a historic high hit last month. 
That is Bidenomics in action.
    Regarding America's ticking debt bomb, The Wall Street 
Journal notes that the Congressional Budget Office regularly 
updates its long-term budget forecasts and says that U.S. debt 
held by the public will surpass gross domestic product this 
fiscal year, and that interest on the debt will equal about 
three-quarters of discretionary non-defense spending. By 2031, 
it will be as large. Medicare, Social Security and, of course, 
interest are legally non-negotiable. Military spending is not 
really optional either. It is no wonder that the Federal 
Government is described as an insurance company with an army.
    These unsustainable public debt interest payments will 
crowd out important public expenditures for other discretionary 
needs. Congress must act now to cut spending in order to rein 
in these unsustainable debt and interest levels. Increased 
upward pressure on U.S. interest rates we are experiencing now 
will add additional pressure to businesses and the real estate 
market, which has experienced a significant constriction under 
Bidenomics.
    The civilian labor force participation rate remains below 
pre-pandemic levels under Bidenomics. It is currently at 62.8 
percent in August 2023, compared to 63.3 percent in February 
2020. The Consumer Price Index stood at 3.67 percent on August 
1, which is a steep drop below the inflation of 9.1 percent 
last summer, but it is still above the Federal Reserve's 2 
percent target. And more importantly, a sharper measure of 
inflation is the Median Consumer Price Index, or median CPI. 
That measure was 5.72 percent at August 1, 2023, significantly 
higher than the standard CPI. That is why the headlines are, 
even though they sound rosier, the median CPI shows that 
families are actually still suffering significantly because of 
Bidenomics and inflation.
    While Bidenomics may define inflation as a high-class 
problem, as Ron Klain, the former chief of staff for Joe Biden 
said in the White House, most Americans disagree. The median 
CPI helps explain why in his recent CNN poll, 66 percent of 
Americans disapprove of how Biden has handled the economy with 
76 percent describing the economy as in poor shape. Congress 
can act to help slow the ill effects of Bidenmomics through a 
return to the economic principles that built America's 
extraordinary economic engine: fiscal prudence, competition, 
and regulation that enhances rather than undermines fair 
competition and growth. Thank you very much.
    Mr. Fallon. Thank you. The Chair now recognizes Mr. Antoni 
for his opening remarks.

                        STATEMENT OF E.J. ANTONI

                            RESEARCH FELLOW

            GROVER M. HERMANN CENTER FOR THE FEDERAL BUDGET

                          HERITAGE FOUNDATION

                             SENIOR FELLOW

                    COMMITTEE TO UNLEASH PROSPERITY

    Mr. Antoni. Chairman Fallon, Ranking Member Bush, Members 
of the Subcommittee, thank you for the invitation to discuss 
with you today the impact of Federal spending, debt, and 
inflation on the American people and various aspects of our 
economy as well. I am a public finance economist at the 
Heritage Foundation, where I research fiscal and monetary 
policy, with a particular focus on the Federal Reserve, and I 
am also a fellow at the Committee to Unleash Prosperity.
    The last 3 years of public policy have been characterized, 
most notably, by excessive government spending, inflation, and 
anemic economic growth. Despite periods of near-record high 
Federal revenues by multiple measurements, we have seen 
deficits of $2.7 trillion, $1.4 trillion, and $1.6 trillion in 
fiscal years 2021, 2022, and 2023, respectively, with the last 
month of 2023 being estimated, and with the deficit for Fiscal 
Year 2024 projected to be $1.9 trillion, yet another increase.
    Massive borrowing by the Treasury and monetary financing of 
deficits by the Federal Reserve created 40-year high inflation 
and imposed a hidden but heavy tax on the American people. 
Inflation transfers wealth from the people to the government, 
and, frankly, there is no better definition of a tax than that. 
It is worth pausing for a moment, as well, to emphasize that it 
is the government and only the government which can create 
inflation because it is only the government that has control 
over the money supply.
    A lot of scapegoats are thrown around for inflation, such 
as greedy businesses or spendthrift consumers or grasping 
unions trying to get higher wages, whatever the case may be. 
These are all tropes that were dragged out in the 1970's, and 
they are just as untrue today as they were then. As just one 
example, prices paid by businesses have actually increased 
faster under President Joe Biden than prices paid by consumers. 
If businesses are being greedy, they are certainly doing it 
wrong.
    Prices, on average, for consumers have increased 16.6 
percent since President Joe Biden took office, and wages have 
not kept up. Meaning inflation adjusted weekly earnings are 
down 4.7 percent for the typical American family with two 
parents working and earning that average weekly pay. This has 
been a loss in annual purchasing power of over $5,100. 
Shockingly, the average American worker now loses more through 
the hidden tax of inflation on his hourly wages than he pays in 
Federal income tax. Similarly, household net worth has 
increased about $23 trillion during Mr. Biden's tenure, but 
nearly all of that is just inflation. Almost all the household 
net worth generated over the last 2 1/2 years has effectively 
been transferred to the government through inflation. And while 
headline inflation has come down since June 2022, things are 
not improving for many Americans. Inflation has actually 
reaccelerated in the last 2 months, and the monthly change in 
real earnings was negative in both July and August. In terms of 
annual change, things have been even worse under Mr. Biden.
    Annual weekly earnings growth has lagged inflation for all 
but the first 2 months and the last 3 months of Mr. Biden's 
presidency to date. The 26 months in between are record for 
consecutive annual declines in real earnings growth. As 
interest rates rise in the wake of 40-year high inflation, 
borrowing costs have risen for businesses, consumers, and the 
Treasury, creating an unsustainable problem for the United 
States Treasury and the current trajectory of both the deficit 
and the debt.
    In terms of the American family, I estimate that for the 
typical American family, they are paying an additional $1,800 a 
year now in higher financing costs compared to January 2021. 
Coupled with the decline in real earnings, this leaves a family 
roughly $7,000 poor than when Biden took office. However, it 
should be emphasized that many Americans are even worse off 
than that. For those trying to buy a home today, the monthly 
mortgage payment on a median priced home has risen over $1,000 
during that time, and so, it costs a family about $13,000 more 
per year every year over the life of a 30-year mortgage.
    These are just a few examples of how Bidenomics, excessive 
government spending, borrowing, and creation of money has 
inflicted a tremendous amount of financial pain on the American 
people.
    Mr. Fallon. Thank you. The Chair now recognizes Professor 
Mulligan for his opening statement.

                      STATEMENT OF CASEY MULLIGAN

                         PROFESSOR OF ECONOMICS

                         UNIVERSITY OF CHICAGO

    Mr. Mulligan. Chairman Fallon, Ranking Member Bush, and 
Members of the Subcommittee, thank you for the opportunity to 
discuss with you today how Federal policy is affecting the 
economy, workers, and consumers.
    Under the Biden Administration's policy agenda, high 
inflation has emerged as a hidden and bothersome tax. 
Regulatory costs add another layer of hidden taxation, 
especially burdening small businesses and low-income 
households. The labor market has been affected by this agenda 
with real wages falling below pre-pandemic trends. According to 
the CBO, the Federal debt held by the public is already 98 
percent of a year's GDP and would almost double to 181 percent 
by 2053 under current law. This is driven by Federal spending.
    Government spending has to be paid for either with taxes 
narrowly defined, such as income taxes, or taxes in the future, 
or the inflation tax. For example, the recent inflation surge 
translated to a $2.2 trillion unanticipated tax on debt holders 
administered in less than 3 years as the purchasing power of 
their assets was eroded. A recent econometric study concludes 
that the recent and previously unanticipated fiscal expansion 
in the U.S. and other OECD countries is likely a key driver of 
inflation in 2020 through 2022. Even without new tax 
legislation, inflation increases marginal tax rates on 
businesses and personal incomes, deterring business investment 
and reducing real wages.
    Beyond taxes, many regulations make workers less productive 
and, thereby, reduce the wages that they can earn. Others make 
consumer products, such as prescription drugs, automobiles, and 
internet service, more expensive. The rules finalized by the 
Biden Administration through the end of 2020 impose costs of 
nearly $10,000 per household. That is new. Of course, we had 
regulations before that, which is a $1,300 more than the new 
regulations that the Obama Administration had created during 
the comparable timeframe. If the 2021-2022 regulatory pace 
accelerates as it did in the Obama years, costs would near 
$60,000 per household after 8 years of rulemaking.
    President Trump's pace was in the opposite direction, 
saving the average household $80,000 compared to what the Biden 
Administration is doing. The $80,000 in regulatory costs far 
exceeds, for example, the revenue provisions of the Build Back 
Better Act, which would have cost only--only in Washington 
could I use that phrase--$14,000 per household if it had 
passed.
    For the purposes of understanding economic consequences, 
the Biden agenda fits into two categories. One category would 
be redistributive policies that reduce employment, and the 
second category would be policies that reduce productivity and 
real wages. Redistributive policies distort the economy twice. 
First, as the revenue is raised, households and businesses 
change their behavior to alleviate the burden. Often this 
involves less investment in business capital, less investment 
in human capital, and less work. Other times investment in work 
are redirected to less productive uses.
    Second, economic distortions are created as the revenue is 
dispersed, particularly regarding safety net programs. 
Households and businesses change their behavior to become 
eligible for the program or increase the benefit received. A 
good projection of the combined effect of the Biden spending 
regulatory and tax agenda is to reduce labor income, the income 
that workers get, by 5 to 6.5 percent. Unsurprisingly, the 
labor market is, in fact, falling short. Real employee 
compensation per adult was already 3.3 percent below the pre-
pandemic trend as of the end of 2022.
    Small businesses are especially burdened by taxes and 
regulations. New Federal regulations are regressive, meaning 
they proportionately hit lower-income households more than 
high-income households, especially because many rules, from 
health insurance to telecommunications to environment, are, in 
effect, forcing middle-and lower-class families to have 
champagne taste on a beer budget. Several policy options can 
reduce tax debt and/or regulatory burdens.
    Regarding safety net programs, eligibility and benefit 
rules could return to, say, what they were in 2008 when we had 
a safety net, but not as large as it is now. Even though the 
latest poverty rate is 15 percent below what it was in 2008, 
the fraction of the population participating in Medicaid has 
increased more than 70 percent. Poverty goes down, but 
government program participation up. SNAP participation far 
exceeds the number of households in poverty. Safety net program 
integrity has also dramatically eroded. I am not sure there is 
much left with hundreds of billions of dollars spent that 
should not have been spent under the law. Federal healthcare 
programs can be reformed to require less revenue while 
providing greater value to patients.
    More specifics are provided in my written testimony on the 
Trump Administration's Choice and Competition Report. Thank 
you.
    Mr. Fallon. Thank you. The Chair now recognizes Mr. Kogan 
for his opening remark.

                        STATEMENT OF BOBBY KOGAN

                SENIOR DIRECTOR OF FEDERAL BUDGET POLICY

                      CENTER FOR AMERICAN PROGRESS

    Mr. Kogan. Chairman Fallon, Ranking Member Bush, Members of 
the Subcommittee, thank you for inviting me to testify.
    Today, I intend to make two points. First, the investments 
in the last 3 1/2 years were appropriately sized and led to the 
strongest economic recovery in my lifetime. And second, the 
cuts proposed by the House Appropriations Committee Republicans 
would harm America by underfunding critical programs. In 
response to a once-in-a-century pandemic, American demand 
plummeted, leaving the economy at its most vulnerable states 
since the Great Depression.
    [Chart]
    Mr. Kogan. The prime-age employment-to-population ratio, or 
EPOP, dropped 10 percentage points in 2 months. And even when 
the economy largely reopened, prime-age EPOP still stood 
roughly as low as the trough of the Great Recession, but rather 
than taking 10 years to recover, our economy did so in under 2 
years. Our rapid recovery was possible only because of 
significant investment into the economy and the American 
people.
    The Biden Administration built upon the previous COVID 
bills to provide relief and ensure the American economy was 
able to invest in the future. The American Rescue Plan expanded 
on many of the earlier critical programs. It was intended both 
to ensure households could weather a difficult economy and to 
ensure that the economy that we rebuilt would be better and 
more resilient. Through the Bipartisan Infrastructure Law, the 
bipartisan CHIPS and Science Act, and the Inflation Reduction 
Act, the Biden Administration made significant investments in 
the future. The result has been large progress.
    Among G7 nations, the United States has had the strongest 
pandemic recovery, and, incredibly, U.S. real GDP has roughly 
returned to where CBO projected it would be before the pandemic 
even happened, as if COVID and the ensuing recession had never 
happened. Our historic recovery has also led to the strongest 
job market in U.S. history. Adjusting for demographics, the 
employment-to-population ratio is at its highest level in 
history, and black prime-age EPOP is hovering around its 
historic high with a historically small gap between black and 
white prime-age employment.
    This strong job market has benefited the American people. 
Real average hourly earnings of production and nonsupervisory 
employees have matched their pre-pandemic trend also as if the 
pandemic had never happened, and gains have been particularly 
strong among lower-wage workers. Importantly, that has happened 
because inflation has come down. The United States also has the 
lowest core harmonized inflation among G7 countries. Further, 
the path in recent months is encouraging. Core CPI has been 
trending down since the spring of 2021, with a 3-month 
annualized average down to 2.4 percent. And even better, the 
contribution of housing rents to CPI inflation, which rose due 
to longstanding supply shortages in the U.S. meeting pandemic 
shifts in demand, is cooling and approaching pre-pandemic 
levels.
    While inflation rose to uncomfortable levels as the economy 
largely reopened, this was not caused by excessive stimulus. 
CBO estimates potential GDP, which measures how much the 
economy can produce without creating excessive inflation, and 
it believes that GDP ran barely above potential for only one 
quarter, and that the economy otherwise has run slightly below 
potential. In other words, our COVID response was appropriately 
sized. Instead, a global pandemic broke supply chains and 
caused monumental shifts in demand. It is impossible for 
inflation to not rise in the presence of supply chain issues 
and massive shifts in demand, but as supply chain issues 
subsided and companies shifted their supply and production to 
match new habits and demand, inflation has come down.
    This progress is being threatened now by the work of the 
House Appropriations Committee Majority. Despite rhetoric to 
the contrary, non-defense discretionary funding, excluding VA 
medical care, or NDD Star, shrank as a percent of GDP in the 
first 2 years of the Biden Administration. Despite this, House 
Republican appropriators wrote levels $58 billion below the 
debt limit deal, which would leave NDD Star at its lowest level 
on record going back more than 60 years. Even worse, the cuts 
proposed to achieve this low level of funding are extreme. To 
highlight just three: Title I education grants would be cut by 
nearly 80 percent, money that ensures our drinking water is 
safe would be cut by 59 percent, and nutrition assistance for 
newborns and pregnant moms would also be cut. These cuts would 
harm the American people. Even worse, they seem to be the 
asking price for not forcing a government shutdown. Immediately 
during a government shutdown, some children with cancer would 
be denied treatment at NIH facilities, and some of our food 
would go without its health and safety inspections.
    The government is supposed to work for the American people, 
and neither cutting programs that people rely on nor shutting 
down the government serves that purpose. Thank you.
    Mr. Fallon. Thank you. We are going to recess for votes, 
and the Committee will return 10 minutes after the close of the 
final vote. Thank you very much and we will be right back.
    [Recess.]
    Mr. Fallon. The Subcommittee will come to order. I now 
recognize myself for 5 minutes of questions.
    Ms. Sheffield, in my district in North Texas, I have heard 
countless constituents, you know, they complain, I mean I feel 
it myself, about the cost of things. And like, for instance, I 
believe, roughly speaking, the average gasoline across the 
country was $2.39 when this Administration took office, and it 
is now, depending on where you are, national average is about 
$5. Well, actually, that was in June of last year. It is a 
little lower than that now. What examples like this would it 
say about the ``success or lack thereof'' of the Biden 
Administration's economic policies?
    Ms. Sheffield. I would say just looking at the numbers, but 
going beyond the numbers as well, just talking to people that 
the headline inflation is certainly not actually how families 
feel and how they are actually experiencing when you are 
talking about food inflation, fuel inflation. You know, my 
esteemed colleague, with all due respect, his graph that he has 
here when he is comparing the inflation to other countries, it 
excludes energy, food, and housing, which are pretty much what 
you need to survive. So, I do not----
    Mr. Fallon. Would it be fair to say those three things 
are----
    Ms. Sheffield. Yes.
    Mr. Fallon [continuing]. Main economic drivers?
    Ms. Sheffield. Absolutely, and especially for the people 
that are in your district, it is personal, it is their everyday 
life. And so, that is why Bidenomics is failing them.
    Mr. Fallon. Mr. Antoni, what has been the impact of the 
expiration of the expanded child tax credit on poverty, and 
what has been the impact of inflation on poverty?
    Mr. Antoni. Thank you. In terms of inflation, I think it 
will probably be best to discuss that one first because 
inflation is actually the only thing that can increase the 
poverty threshold. And so, as inflation has outpaced earnings 
during the Biden Administration, it has caused more people to 
fall below that poverty threshold. That is literally just what 
the numbers tell us. There is nothing else that can increase 
that poverty threshold.
    In terms of the expansion of the child tax credit, you 
would expect that once that went away that you would simply 
return poverty rates for children to the level that they were 
at previously, but that is not what we have seen. We have 
instead seen the rate go much higher. And again, the reason for 
that is because inflation has pushed that threshold so high 
that many people's nominal earnings have not kept pace with 
inflation and have therefore fallen below the threshold.
    Mr. Fallon. And while we are visiting, what is the impact 
of supply chain distributions on inflation
    -disruptions, rather?
    Mr. Antoni. Mr. Chairman, in terms of supply chains, the 
disruptions there, well, let me put it this way. It is very 
similar to what we just said on poverty in that if supply 
chains really were the only driver behind inflation, if it had 
nothing to do with fiscal and monetary stimulus, then once 
those supply chain issues were resolved, not just inflation 
would come down, but prices would come down. Prices would 
simply return to where they were previously, and that is not 
what we have seen at all.
    Actually, the last several reports from S&P Global, their 
Purchasing Manager Index that analyzes global supply chains, 
showed that there is no more pandemic-era impact in terms of 
supply chains. In other words, things are back to normal, and 
yet prices are not, and the reason for that is because the 
fiscal and monetary conditions today are not back to where they 
were----
    Mr. Fallon. So, you are saying that there is an increased 
money supply, and the goods are out there. They remain steady, 
so when you have more money relative to the goods, the goods 
cost more, in very simplistic terms.
    Mr. Antoni. Exactly. Uh-huh.
    Mr. Fallon. Yes. I mean, it is easy to wrap your mind 
around it. Now, is it true that real weekly earnings have 
exceeded inflation, the annual rate of inflation for 26 of the 
31 months of the Biden Administration?
    Mr. Antoni. Yes, it is. You can see on page six of the 
testimony that I submitted. Only the first 2 months of the 
Biden Administration and now the most recent 3 months have seen 
positive annual real earnings compared to inflation, but in the 
26 months in between, it was negative, which is a record.
    Mr. Fallon. Thank you. Mr. Mulligan, you are an expert in 
economic growth. That is one of the purviews, of course, of 
this Committee, as well as regulatory reform, yet another 
purview of this Committee. Before the pandemic hit, the Trump 
Administration demonstrated some of the most pro-growth 
policies that we have seen in generations. How has the Biden 
Administration policies reversed the possibility of growth, and 
what do we need to do right now to get on the right track and 
get our economy moving again?
    Mr. Mulligan. Really, all the policy levers have been 
pushed in the opposite direction of President Trump to the 
extent they could. President Trump had a tax cut that needs 
some renewing, I guess, and that might not happen. A lot of the 
regulations have been totally reversed, not all of them, and 
both of these things go toward reducing productivity rather 
than productivity growing like you see in energy where we were 
pumping more and more and more. We are less productive. We are 
less able to do what we used to do.
    Mr. Fallon. My time has expired. I yield to the Ranking 
Member for her 5 minutes of questions.
    Ms. Bush. Thank you, Mr. Chairman. St. Louis and I are here 
today because our economy needs to fully recover from the 
devastating effects of the pandemic. Housing is the bedrock of 
our Nation's economy. One of the biggest challenges facing St. 
Louis and communities across the country is a dire shortage of 
affordable housing. When landlords raise rents, my constituents 
face increased housing insecurity and the threat of eviction.
    Renters in St. Louis and around the country are forced to 
contend with Wall Street investors who buy up homes in the 
area, jack up rents, and neglect building maintenance, all to 
extract greater profits. Private equity firms took advantage of 
unprecedented foreclosures during the 2008 recession, which 
forced millions of people from their homes. These corporations 
seized on historically low interest rates to purchase 
foreclosed homes. Local landlords and small business developers 
have been muscled out of the local housing market.
    In 2022, the St. Louis Post-Dispatch estimated that out-of-
state investors owned nearly 34,000 single-family homes in the 
region. Investors have doubled the percentage of homes they own 
in my district over the last 10 years. In one housing complex 
in my district called Ridgeview Apartments, the property has 
changed hands at least 4 times in the last 3 years. This wreaks 
havoc on residents and creates a dire lack of accountability. 
Ridgeview residents report there are so little communication 
that some people realize too late that they were sending their 
rent checks to the wrong place, and it is difficult to keep 
track of who their landlords are.
    The St. Louis area is experiencing a housing crisis, and 
evictions are at the highest level in years and still on the 
rise. Wall Street speculators have turned places like Ridgeview 
from homes for families into assets on their balance sheets. 
Working families can no longer afford to buy or even rent many 
places that were previously affordable. Mr. Kogan, what are the 
advantages of homeownership for building household and 
generational wealth?
    Mr. Kogan. Thank you, Congresswoman. Homeownership is one 
of the best ways for families to build wealth and to pass on 
intergenerational wealth. And to the extent that we have seen 
policies in U.S. history, such as redlining, that have 
discriminated against people in the United States, this thing 
that is supposed to work for everyone has been limited to a 
certain cohort. And to the extent that the economy does not 
work for a whole host of Americans, then that is not working 
for Americans.
    Homeownership is beneficial because it is forced savings 
that allows you to build equity and also pushes costs away from 
when you are stuck in a fixed-income later, and pushes it to 
when you are more able to afford it. And so, as home equity, as 
private--I am sorry--as private equities come and buy up a lot 
of the housing stock, this limits the ability of individuals to 
capitalize on this ability to take advantage of these 
mechanisms. So as the forced savings goes away, folks are not 
able to kind of to use that. Sorry. Thank you.
    Ms. Bush. No, you are fine, and I think you started to hit 
on this point, but Mr. Kogan, how would you say that private 
equity snapping up these housing makes it more difficult for 
the average American family to purchase a home? Like, you 
started there, but if you could go a little further with that.
    Mr. Kogan. Sure. So typically, a lot of people will be able 
to buy from an individual with a whole lot of buyers or a whole 
lot of sellers. There is kind of a broad ability. You can shop 
around. You can find someone who fits whatever you are looking 
for. And to the extent that more and more of the housing stock 
is being bought up by a few select companies, we are moving 
toward or moving closer and closer to a monopsony where a few 
sellers are able to set all the prices. And so through this, it 
is limiting kind of the ability for folks to shop for what they 
need and able to find what they can do.
    Ms. Bush. OK. Thank you.
    Mr. Kogan. Thank you.
    Ms. Bush. The Biden-Harris Administration is working to 
address this problem. The Administration's Housing Supply 
Action Plan will reduce barriers for families to access housing 
by expanding financing for low-income and climate-ready housing 
and promoting the conversion of unused commercial space to 
residential space. Moreover, the American Rescue Plan, that not 
a single one of my Republican colleagues voted for, included 
the home program, which will add at least 20,000 units of 
affordable housing across the United States while supporting 
23,000 households with rental assistance. congressional 
Democrats and the President have taken fundamental steps that 
support American families. Far too many people struggle to 
secure basic housing, and yet our colleagues across the aisle 
and their type of economics seek to cut taxes for the wealthy 
and cut services for those in need. It is absolutely shameful, 
but I yield back.
    Mr. Fallon. Thank you. The Chair now recognizes Mr. Edwards 
of North Carolina.
    Mr. Edwards. Thank you, Mr. Chair. Ms. Sheffield, in 
opening comments, I heard that inflation, since Joe Biden had 
been our President, had increased. I heard somebody testify 
16.6 percent, I heard somebody testify 17.1 percent, and I also 
heard a testimony that the additional cost for many of the 
things that people have to buy now is being financed on their 
credit cards. What is the long-term effect of $1 trillion in 
credit card debt? Where are we headed?
    Ms. Sheffield. It is extremely corrosive to building 
intergenerational wealth to have, you know, especially rollover 
balances from month to month and having to pay these very high 
interest rates. So, it becomes this hole that you cannot dig 
out of, and that is really the whole that is the fruit of 
Bidenomics to pile on consumer debt onto families. In terms of 
housing, I think it is important because housing is, you know, 
quite often the largest budget chunk of the family budget. 
First of all, the redlining was created by FDR, a racist 
administration. The FDR New Deal program was the one that 
created redlining, so that is very, very important to just 
historically put on the record.
    But when it comes to housing supply, if you talk about St. 
Louis and other cities, the vast majority where these urban 
pockets of construction of housing supplies are constricted, 
they are run by Democrat regulation. They are run by 
progressive policies that constrict the supply of housing. So, 
if you want to have more housing supply, you need to have 
zoning regulation that is more competitive. And unfortunately, 
these areas where the worst housing supply constrictions occur 
are in progressive areas. And so, I would say that that is my 
recommendation in terms of improving housing supply.
    The other massive increase in inflation is energy. And so, 
we see just recently, within the last couple of weeks, the 
Biden Administration again saying we are going to constrict 
drilling in Alaska and other areas of the United States. Who 
wins in this scenario? It is OPEC that wins. It is Russia that 
wins. And so, it is so counterproductive for U.S. taxpayer 
dollars to go and fund to fight the Ukrainian war against 
Russia, meanwhile Joe Biden is here domestically constraining 
our own domestic oil prices and hitting families over and over.
    Mr. Edwards. Thank you for that. So, with inflation hitting 
the American household, we heard a couple of different numbers 
there. I am going to round it off to $5,000 a year. What are 
folks doing without? How are their purchasing habits changing, 
because surely, most of us could agree that when we are looking 
at 17-percent inflation, most of the harm falls on working-
class families and the poor because much of their disposable 
income is being eradicated by inflation, and I think that would 
be a concern to all of us in this room. So how are they coping? 
What are they doing without?
    Ms. Sheffield. Sure. I would say it is the poor as well as 
retirees as well where, you know, typically when you retire, it 
is when your highest peak net assets or net worth. But 
unfortunately, because of Bidenomics and what has happened with 
inflation, the net worth of many seniors living on fixed income 
is incredibly tight. And so, you are seeing grandparents having 
to forego vacations or forego helping with their 
grandchildren's education. You are seeing people actually just 
dropping out of the education situation altogether, especially 
young men just not even going to college because it is so 
expensive. And unfortunately, the Biden Administration's plan 
on student loans, it is so counterproductive, it does nothing 
to actually address the root cause of inflation in education. 
It simply takes the U.S. tax money and subsidizes the wasteful 
policies that are being held at the university instead of 
actually holding the university accountable for the rise of 
inflation for student tuition.
    So, you are seeing people forgo education. You are seeing 
them having to intergenerational, you know, housing, more 
people within the same, you know, family, grandparents living 
together, which, you know, could be good or bad depending on 
the family dynamic, but yes, people are making do. But 
unfortunately, as I said earlier in my opening statement, I 
believe it is 52 or 54 percent of families, according to CNBC, 
reporting that they are dipping into their savings to pay for 
groceries and to pay for everyday expenses like rent. That is 
deeply unsustainable, and it is the fruit of Bidenomics.
    Mr. Edwards. All right. Thank you. Mr. Chair, I yield.
    Mr. Fallon. Thank you. The Chair now recognizes Ms. Brown 
from Ohio. Oh, she is not here? All right. Well, you know why, 
because Notre Dame is playing Ohio State, she is probably 
trying to get ready, and Notre Dame will thrash them, but that 
is an editor's comment.
    Ms. Bush. Oh, OK.
    Mr. Fallon. OK. The Chair now recognizes Ms. Norton from 
D.C.
    Ms. Norton. I thank the Chair. Mr. Kogan, during the height 
of the COVID-19 pandemic, the world faced a bleak economic 
future. High unemployment, tangled supply chains, and 
inflation, all threatened the future of American families, but 
let us look at where we are now. Unemployment has stayed below 
4 percent for 19 straight months. Grocery store shelves are 
full. Inflation is less than half its peak. So, Mr. Kogan, 
would you describe the Biden-Harris economy as fairly healthy?
    Mr. Kogan. Thank you, Congresswoman. Yes, I would say that 
we have had enormous progress in the past 2 1/2 years.
    Ms. Norton. Yes. Low unemployment, inflation improving, it 
is hard to top that. The Treasury Department has shown that the 
American Rescue Plan led to 4 million additional jobs and 
almost doubled GDP growth. These benefits have also served to 
address historical inequities and increase opportunities for 
all Americans. Mr. Kogan, can you expand more about how the 
American Rescue Plan has benefited the economy and American 
families, particularly those families that may traditionally be 
left out of economic upswings?
    Mr. Kogan. Absolutely. So, there are two kind of main parts 
of the American Rescue Plan. The first was to provide 
assistance right then, and the second thing was to try to make 
sure that we would have a strong job market coming out of the 
COVID recession. So, in the first part, it built on a lot of 
the bipartisan things in the Trump Administration. It sent out 
more money to families. It continued the expanded unemployment 
insurance at a lower rate as was necessary at that time. It 
expanded the Child Tax Credit and kind of made it a monthly 
benefit to make sure that working parents were able to--and 
also the most vulnerable parents--were able to better afford 
the cost of having children. So, that sort of stuff all helped 
families at the time.
    And then by also pumping money into the economy, helping 
invest in the future, it created the strongest job market in 
U.S. history. Right now, the employment-to-population ratio 
adjusted for demographics is the strongest it has ever been, 
and that has redounded to the benefit of the American people. 
And we see that low wage earners are actually doing the best 
out of any cohort of folks.
    Ms. Norton. Well, let us turn to another one of the Biden-
Harris Administration signature achievements, the Inflation 
Reduction Act. Mr. Kogan, this bill, which passed without a 
single Republican vote, has already resulted in 170,000 new 
jobs in clean energy and climate resilience with projections 
estimating that the IRA will catalyze more than 1.5 million 
additional new jobs over the next 10 years. So, Mr. Kogan, how 
will these new jobs created by the IRA improve the U.S. 
economy?
    Mr. Kogan. Thank you, Congresswoman. So, the point here is 
to make sure that not only could we have clean energy, we would 
also be able to be energy independent. And these jobs were 
intended to, for instance, rebuild if you had a broken-down 
coal mine that was no longer operable. It was intended to turn 
that into something that would be able to work in the future, 
right, so whether it is now a battery plant or something like 
that. So, these jobs are intended to exist going forward in 
terms of our energy security and to exist for the years to 
come.
    Ms. Norton. Mr. Kogan, my colleagues seem very concerned 
about the deficit. What effect will the IRA have on it?
    Mr. Kogan. Thank you, Congresswoman. So, CBO scored at a 
savings of about $300 billion. We believe that is an 
underestimate because it does not take into account the 
indirect effects of the tax enforcement. Of course, to the 
extent that some of that gets repealed, then some of the 
savings go away. Since then, we have found that some of the tax 
credits are going to work better than previously thought and 
therefore be a little bit more costly. The most recent estimate 
is that it might still save maybe $100 billion or some. I do 
not have the exact number off the top of my head, but that it 
still saves money.
    Ms. Norton. Democrats' American Rescue Plan and Inflation 
Reduction Act are the kind of investment that the United States 
has needed for decades. I continue to support the President and 
Bidenomics for investing in American communities that have 
faced decades of neglect, and I yield back.
    Mr. Fallon. Thank you. The Chair now recognizes Mrs. 
Boebert from Colorado.
    Mrs. Boebert. Thank you, Mr. Chairman, and thank you to our 
witnesses who are here. It has been very enlightening just 
hearing the wealth of information that you all are sharing and 
answering the questions.
    My first question is directed to Mr. Kogan. In your 
testimony, you falsely claim that because of the trillions of 
dollars spent in the Biden Administration that America has the 
``strongest economy recovery in more than a generation.'' And I 
just want to know, are you aware that just yesterday, America 
exceeded $33 trillion in debt? This is the first time in 
history, $33 trillion in history. And are you also aware that 
inflation's impact is on groceries and that is at an all-time 
high?
    Mr. Kogan. Thank you for the question, Congresswoman. What 
I was saying was that real GDP, we are leading the pack in 
terms of real economic growth among the G7 nations. We are back 
to where CBO thought we would be, roughly, and then we have had 
the first V-shaped recovery of my entire life.
    Mrs. Boebert. So, Mr. Kogan, at $33 trillion in debt, all 
of this is due to wasteful Washington spending by Biden, by 
Pelosi. They financed and borrowed and printed money that we do 
not have. We are spending more than we are bringing in, and yet 
your testimony places blame on House Republicans who are 
working diligently to be fiscally responsible.
    We are in meetings daily right now trying to get our fiscal 
house in order so we do not go off of this fiscal cliff that we 
are all hanging on the edge of, but currently, we have 20 
million Americans who cannot afford their electric bill. 
Americans have lost more than $2 trillion in retirement 
savings, and gas is nearly $4 a gallon, and, I mean, that is 
back up again under this Administration, and Americans are 
paying more for absolutely everything else.
    People are struggling all throughout Colorado's 3d 
District. This is what I am hearing--people cannot afford to 
live, and this does not sound like the strongest economic 
recovery in more than a generation to me. So now, Mr. Kogan, 
you also state in your testimony that under this Administration 
``inflation has gone down,'' and this is a boldfaced lie. 
Americans are paying more for everything. Do you know how much 
American families will pay due to inflation, the inflation tax, 
in just over the next year?
    Mr. Kogan. Thank you, Congresswoman. Inflation in this case 
refers to the rate of inflation. That is how most folks talk 
about----
    Mrs. Boebert. Yes, but that is not how they feel it. That 
is not how they are actually paying for the goods and the needs 
that they are trying to provide for their family--their food, 
their gas, their electric bills--all of these things that I 
have mentioned. The correct answer for how much American 
families will pay for this inflation tax over the next year is 
$8,581. That is per family. That is absolutely absurd, and in 
most cases, this is more than a monthly income for most 
families. And Joe Biden has claimed that for the past 4 
decades, there has never been an economic failure, and the 
United States has never faced an inflation crisis as severe as 
we are facing under the Biden Administration. So now, do you 
know how much a gallon of gas is right now compared to 2020?
    Mr. Kogan. Right near me, my gas station right next to me 
is about $1.50 more. The reason it was so much lower during 
2020----
    Mrs. Boebert. Because President Trump had us energy 
independent, and we were producing American energy right here, 
good clean American energy. We were not relying on OPEC as 
much. We were relying on the American Roughneck, so that is why 
it was lower. I will just answer that for you. But in 2020, 
retail gas prices averaged $2.17 per gallon, and now we are at 
$3.60, up to $4.32 per gallon. I mean, that is a 50-percent 
increase. That is absolutely dramatic and unaffordable to 
average Americans who are just struggling to get by. And what 
about a gallon of milk? I mean, that was $3.32 and now $4.09 
for a gallon of milk. Eggs. Eggs were $1.46 a dozen, and now 
they are $3.44. That is a 42-percent increase. Families cannot 
afford this.
    Now, my last question. You also state that gains have been 
particularly strong among lower-wage workers. Now, for the 
average American family, weekly paychecks have grown about 
$200, but those larger paychecks now buy about $100 less for 
those income earners. Do you know the annual impact inflation 
has on these American workers?
    Mr. Kogan. Congresswoman, real wages are up relative to 
pre-pandemic levels among nonsupervisory, and----
    Mrs. Boebert. But that number is a fairy tale, is it not?
    Mr. Kogan. No.
    Mrs. Boebert. If you are actually spending more for the 
same product that you were getting, but your paycheck looks 
bigger, but you are paying more for the goods that you were 
buying just a couple of years ago, the result is the equivalent 
of a $5,600 annual pay cut. So, it may look good on paper. I 
know engineers love that. I know bureaucrats love that. I know 
the folks in Washington, DC. in the bubble love the way things 
look on paper, but in the real world, that does not work. 
Bidenomics is failing American families, and so are these 
policies. And I hope that you would actually take a look into 
the real world rather than just on paper. Thank you, Mr. 
Chairman. I yield.
    Mr. Fallon. Thank you. The Chair recognizes Ms. Stansbury 
from New Mexico.
    Ms. Stansbury. All right. Well, thank you, Mr. Chairman, 
and I am glad that the last comments wrapped up around the 
concept of what is happening with the economy in the real 
world, because the single largest threat to the economy in the 
real world right now is a government shutdown. And what is 
especially strange and ironic to me is that we are sitting here 
this afternoon after the Majority failed to even get a 
continuing resolution to the floor to keep the U.S. Government 
open, more or less passed a single appropriations bill to keep 
this government functioning.
    So, if we want to talk about real-world impacts, if we want 
to talk about people being able to pay their bills, put a roof 
over their head, buy groceries, and all of the things that we 
are talking about here today, let us talk about funding the 
government and making sure that the American Government and our 
economy can stay afloat, because that is the real world, and 
that is our constitutional duty and responsibility. But it is 
also, you know, a strange hearing that we are having here this 
afternoon as we are on the eve of this shutdown and hearing a 
bunch of distorted and strange representations of the economy.
    Now, I am going to admit I am not an economist. I am a 
sociologist by training, but I am a former OMBer, and I want to 
welcome my colleague who also served in the Budget Office in 
the White House. And I know when folks actually understand the 
economy and do not understand the economy, and I just want to 
talk about the facts for a minute.
    You know, Mr. Kogan, I appreciated some of the charts that 
you included in your written testimony to the Committee. And I 
want to make sure that we share some of those today publicly 
because what we are talking about is the overall macroeconomy. 
When we say that the macroeconomy is actually doing well in the 
United States, in spite of this post-pandemic hangover, and we 
will talk about that and its impacts here in a moment, what we 
are talking about is the gross domestic product.
    And what we see in, Mr. Kogan, in your testimony, you have 
provided this chart here, which is the real GDP of the United 
States. Is this correct? And----
    Mr. Kogan. Yes.
    Ms. Stansbury. What do we see right here? What is happening 
in the year 2023?
    Mr. Kogan. Thank you, Congresswoman. You can see that it is 
back at the trend. That is back where CBO thought it would be 
before the pandemic.
    Ms. Stansbury. And what you can also see on this chart is 
that by billions of dollars by annual rate that we are above 
where we have previously been, so the GDP for the United States 
is on the rise. Now, part of the reason why we are seeing the 
economy come roaring back is exactly because of the policies 
that this body passed last Congress and which President Biden 
helped to champion.
    So first of all, I want to talk about the American Recovery 
Plan. Now, at the height of the pandemic, we had millions of 
Americans who were unemployed, people who did not know if they 
were going to lose their homes. They did not know if they are 
going to be able to buy groceries. They did not know if they 
were going to be able to go to the doctor, and we passed the 
American Recovery Plan to get through the pandemic. It was not 
intended to be a stimulus in and of itself at the onset. It was 
meant to keep millions of Americans from falling through the 
crack and the most significant economic disruption that this 
country has seen since the Great Depression, and that is what 
it did. It kept millions of American people housed. It kept 
food on their table. It helped children get through the huge 
catastrophic impacts, parents. That is what the American 
Recovery Plan was about.
    Now, subsequently, we have passed three significant bills 
that have been causing the GDP to do this. That is the CHIPS 
Act, which has helped to re-shore American manufacturing. It is 
the Inflation Reduction Act, which we have just been talking 
about. And it is the Bipartisan Infrastructure Law, which is 
going to rebuild our roads, our water systems, and all of the 
infrastructure that we know our communities need to have a 
thriving economy. And guess what? The data does not lie. The 
data show us that American manufacturing and investment in 
American manufacturing is coming back with astounding 
consequences, because here we are up here at the highest rate 
ever in American history.
    Finally, if my colleagues want to talk about inflation, let 
us compare American inflation to post-pandemic inflation in 
other countries. And what you can see in this chart in the 
testimony that has been provided to everyone on this Committee 
is that American inflation, with respect to other developed 
countries across the world, is at the lowest rates, lower than 
Canada, lower than the U.K., and lower than most of the 
European community.
    So, if our folks want to talk about facts, let us talk 
about facts in the real world. The American economy is strong. 
It is coming back, but families are struggling. They are 
struggling because of the pandemic. They are struggling because 
we still have the effects of supply chain disruptions, of 
soaring housing costs and soaring food costs, and we have got 
to address them. And I can tell you factually one thing that is 
not going to make it better, and that is shutting down this 
government. So, if my friends on the Majority want to actually 
help American families, then pass the budget, and I yield back.
    Mr. Fallon. The Chair now recognizes Mr. Langworthy from 
New York.
    Mr. Langworthy. Thank you, Mr. Chairman, and I would like 
to thank all of our witnesses today for being here, and the 
media has been busy championing the Administration's message of 
Bidenomics' success. However, I spent just a ton of time 
traveling my district, New York's 23rd congressional District, 
the counties along the Pennsylvania line and the suburbs of 
Buffalo, speaking with my constituents and getting a real sense 
of their top concerns. And let me tell you, I did not meet one 
person that thought that Bidenomics was any step in the right 
direction for this country. But things that stood out loud and 
clear is that Americans are having a really difficult time 
affording groceries and gasoline and keeping the lights on in 
their home, and there is a lot of angst about the costs of gas 
and groceries. This is the reality of Bidenomics for many 
Americans.
    Mr. Antoni, your extensive research on inflation has shed 
light onto the role of as a hidden tax on American households. 
I am aware of your findings indicating that this inflation tax 
frequently surpasses Federal income taxes. Can you elaborate on 
how this is possible?
    Mr. Antoni. Certainly. Thank you for the question. We have 
to understand that inflation, because it is a devaluation of 
the dollar for the sake of creating new dollars, when those new 
dollars come into existence, where did their value come from? A 
portion of the wealth of every other dollar that existed 
previously is siphoned away and goes into those new dollars. So 
as the government creates inflation, it is taking that wealth 
away from dollar holders. So that is how the government 
actually takes wealth away from you through the hidden tax of 
inflation, and all they need to do is do this at a fast enough 
rate that the amount of wealth being transferred is going to 
exceed the amount of wealth being transferred via the Federal 
income tax.
    To be clear, this is not the first time that this has 
happened in our Nation's history. You know, this exact same 
phenomenon happened 40 years ago when we had very high 
inflation rates then as well.
    Mr. Langworthy. Thank you. and I am sure we have all heard 
the Biden Administration's promise that taxes would not 
increase for those earning less than $400,000 a year. Would you 
say that he has kept his promise?
    Mr. Antoni. No, not at all, especially when you consider 
the fact that inflation falls most heavily on those who make 
lower incomes. There are a lot of different reasons for that, 
one of which is that lower earners tend to have incomes which 
adjust slower to inflation, but also looking at the things that 
those people buy. You know, just one example here would be, let 
us say, someone in the middle class would buy fillet 
occasionally, but now they cannot afford to, so they just buy 
ground beef instead.
    You are moving to a foodstuff which is already 
disproportionately purchased by people with lower income. So, 
what you have done now is not only is, if you want to call it 
an income effect from everyone having less money or less real 
money due to inflation so they can afford less. But now, there 
is also a substitution effect, if you want to call it that, 
where there is an increase in demand for things 
disproportionately bought by people with lower incomes. In 
other words, the prices of the things they buy go up even 
faster than the average.
    Mr. Langworthy. Makes a lot of sense. When we think about 
basic economics, we know that in times of high inflation, one's 
money does not go as far. One cannot buy the same amount of 
goods that one was able to purchase before, and often those 
most impacted are those with less flexibility in their budget, 
less of a backstop for their own personal economy.
    As I mentioned earlier, during my discussions with my 
constituents in the district, it became abundantly clear their 
concerns are revolving every day about covering the essential 
costs of feeding their families and managing their energy bills 
and their transportation costs. These are everyday families 
who, not too long ago, they could afford a weekend getaway. 
They could, you know, take the kids on vacation in the summer, 
sign their kids up for sports teams. Today, these simple 
pleasures, these little luxuries, they have become unattainable 
as they grapple with the increasing burden of paying for the 
necessities in life.
    Ms. Sheffield, what should Congress be thinking about when 
considering the downstream impacts that the recent massive 
spending packages have had on American households in their 
expenses?
    Ms. Sheffield. Well, given that we know that the Bidenomics 
bills, massive bills that were already passed, exacerbated 
inflation, my recommendation would be to contain your spending. 
Do not pass these massive multi trillion-dollar additional 
bills that would further exacerbate inflation, and, in fact, 
consider supporting--your colleague recently put forward a 
balanced budget amendment, Jodey Arrington. I highly recommend 
this because it certainly would contain not only the inflation, 
but it would also help the long-term trajectory of the 
congressional budget which is on, you know, the interest 
payments alone will be drowning out significant investments in 
the public good.
    Mr. Langworthy. Well, thank you very much for the 
testimony. I certainly have more questions, but we are out of 
time, and I yield back.
    Mr. Fallon. Thank you. Members, with that, I would like to 
ask unanimous consent to submit these documents and statements 
into the record: ``The Impact of Biden Economic Policies On 
Americans' 401(k) and Other Retirement Plans,'' by Stephen 
Moore and E.J. Antoni; ``Payroll Tax Revenue Down $400 Billion 
to $900 Billion Due to Lower Wages, Less Growth,'' by Casey 
Mulligan; ``The Cost of Biden's War on Oil and Gas: Nearly $100 
Billion a Year in Lost Output,'' by Stephen Moore and Casey 
Mulligan; ``Paying Americans Not to Work,'' by Casey Mulligan 
and E.J. Antoni, and without objection, so ordered.
    Mr. Fallon. The Chair now recognizes Ranking Member Bush 
for her closing statement.
    Ms. Bush. Thank you, Mr. Chairman. Despite my colleagues' 
claims, the U.S. economy is actually growing, and this growth 
directly contrasts with failed Republican economy policies, 
policies that include the massive tax giveaway that former 
President Trump signed into law 2018, which prompted the most 
severe economic contraction in the United States since 1946 and 
cost the United States $1.9 billion.
    Republicans' economic proposals do not work and are 
currently driving us toward a government shutdown that will 
hurt families and devastate our economy. Rather than having yet 
another hearing to bolster Republican talking points, we should 
be focused on funding the government. In less than 2 weeks, 
millions of families in need will lose access to vital programs 
such as SNAP, TANF, WIC, and the administration of Social 
Security, Medicare, and Medicaid will grind to a halt because 
our Federal workforce will be unable to serve our communities.
    Just a couple of hours ago, House Republican leaders 
postponed the vote, voting on a rule to bring a stopgap bill to 
the floor. We also know that a shutdown would have a 
devastating impact on the economy. The partial shutdown from 
2018-2019 reduced economic output in the United States by $11 
billion over 2 quarters, $3 billion of which the economy never 
regained. The difference is clear and of massive consequences 
to our communities. Economic recovery should be the highest 
priority of the Biden Administration, and we are thankful. With 
that, I yield back.
    Mr. Fallon. Thank you. You know, we have staffs that help 
us with our comments because we are spread out a little thin, 
but I took some notes during this hearing and I wanted to share 
them with you. So, you hear Members from each party make claims 
and then they cite statistics and studies, and if you had lived 
on another planet or another galaxy and you came to this 
hearing, you would be scratching your head going I do not know 
who to believe.
    So, let us just talk about some indisputable facts. No. 1, 
inflation is now at a 40-year high. Nobody can dispute that. 
No. 2, interest rates are now at a 22-year high. That is also 
indisputable. Real weekly earnings have exceeded annual 
inflation for 5 of the 31 months, 84 percent of the time during 
this Administration. And if you want to talk about generational 
wealth, generational wealth is built on a foundation of three 
things to start: No. 1, graduate high school; No. 2, have a 
full-time job; and No. 3, do not have children until you are 
married. If you do those three tenets, regardless of race, 
religion, creed, region that you live in, it is very difficult 
to live below the poverty line. I am sure CNN or MSNBC will 
find somebody that did all those three things and is below the 
poverty line, but is absolutely the exception and not the rule.
    Then, we talk about the only Federal spending program that 
progressive Members ever want to talk about cutting is defense. 
That is the only one. Now, they ignore the fact that we live in 
a very small world, a very dangerous world, and a very 
interconnected world. And while they are all too comfortable, 
in fact, perfectly comfortable with cutting defense, they are 
also willing to give Ukraine a blank check for Ukrainian 
defense, which I find a little bit hypocritical or at least 
inconsistent. And then when you look at say 2022's deficit, 
which is the debt for that particular year, it was $1.38 
trillion. So, if we did not spend $1 on defense, we would still 
have over a half a trillion dollars in deficit spending. 
Defense is not the issue. In fact, defense has been the slowest 
growing major Federal spending category since 2000, and even 
that 2000 year base, that base year, was following 10 years of 
post-cold war cuts. So, the U.S. military as a share of GDP 
remains the lowest level since World War II.
    So, more spending is not the solution to inflation because 
if all of those spending programs worked as well as my 
Democratic colleagues have claimed, well, why did we stop at $3 
trillion or $4 trillion of spending? Why didn't we spend $40 
trillion if it is so good? And then let us talk about, because 
the American people or my friend from the other galaxy that 
attended this hearing, need to see contrasts. So, my colleague 
and Ranking Member mentioned about student loans and said that 
student loan forgiveness she fully supports. Well, I completely 
disagree because it is not student loan forgiveness. It is 
student loan transfer.
    First, that program would cost, general consensus, cost 
about $400 billion. And it would benefit, ironically, the 
highest earners will reap about two-thirds of that benefit of 
the giveaway. And then you have to think about, what about the 
folks that had never went to college? What about the folks that 
went to college and did not take out a loan? What about the 
folks that went to college, took out the loan, and then paid it 
back? Is that fair to them, and the answer to that question is, 
of course, no. It is patently unfair. It is patently un-
American, in fact.
    The outstanding Federal loan debt is about $1.7 trillion. 
There are 255 million adult Americans. Forty-five million have 
student loan debt, so that would make it to 210 million adult 
Americans would have to bear the burden for, not this 
forgiveness, but this transfer. And the median borrower, they 
did a study in 1992 and they just recently did another study 
and they found the same thing, that about four percent of their 
monthly income is spent on student loans. They got plenty of 
money to pay off their loans, and it also sets a horrible 
precedent to folks that willingly went into an agreement to say 
I will borrow money and I promise to pay it back. And then what 
about future borrowers that say, hey, they give loan 
forgiveness? I will sign this thing, but I am probably going to 
get forgiveness in the future, or, again, more accurately 
transfer. It is simply unfair.
    And so, we have to recognize the fact that we do have a $33 
trillion debt. And I believe from CBO, that if we continue to 
spend at the rate we are going now, that in 10 years, half of 
the Federal budget will go to loan repayment, will go to paying 
service on the debt. That means that there is going to be less 
money for defense, there will be less money for infrastructure, 
and there will be less money, ironically, for entitlements.
    So, I remember this very hyperbolic commercial that some 
organization put out where you had an actor playing Paul Ryan, 
and he was pushing grandma off the cliff. Well, it seems to me 
that folks that did not want to address this runaway spending, 
which would be my Democratic colleagues or at least most of 
them, are proverbially, hyperbolically are they pushing grandma 
off the cliff because it is going to be a heck of a lot less 
money for entitlements if we do not get our fiscal house in 
order.
    I want to thank the witnesses for coming today. Thank you 
for your testimony and your knowledge and sharing your points 
of view.
    And with that and without objection, all Members will have 
5 legislative days within which to submit materials and to 
submit additional written questions for the witnesses, which 
will be forwarded to the witnesses for their response.
    Mr. Fallon. If there was no further business and without 
objection, the Subcommittee stands adjourned. Thank you.
    [Whereupon, at 4:36 p.m. the Subcommittee was adjourned.]

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