Congressional Budget Office (CBO) Director Phillip Swagel faced hours of questions before the House Budget Committee on the challenges to the nation’s fiscal trajectory — and a bit of heat from Republicans over the accuracy of the agency’s projections.
In the backdrop of a partisan fight over how to fund the government on Capitol Hill, the head of Congress’s nonpartisan scorekeeper testified before lawmakers Wednesday about the agency’s 10-year budget outlook for the nation.
While members on both sides extended praise to the CBO for its budget work, Swagel also felt some heat from Rep. Drew Ferguson (R-Ga.) over the agency’s previous projections.
Ferguson said when he first joined Congress, the CBO “told us that the spending for 10-year window in 2017 was going to be about $52 trillion.”
“Well, guess what? We’re about $82 trillion now, and I’m happy to give you all the numbers; we got them from you,” he said. “The revenue difference in 2017 over the 10-year window was expected to be $43 trillion, and now it’s at $62 trillion.”
“We consistently miss the mark on the accuracy, and this is true for both sides, and it is really hard for both Republicans and Democrats to go argue their points with a sense of confidence when year in and year out, CBO gets it wrong,” he said. “And I think it has a lot to do with rules that you have to operate by current law. You’re not able to predict the changes in the economy that are going to be coming.”
“You were off by several hundred billion dollars on revenue from the Tax Cuts and Jobs Act, and really the only thing that you do is you give the competing sides fuel for their arguments that happen to be wrong in many cases,” Ferguson said, asking Swagel how members are supposed to trust projections going forward.
“I can tell you, I’m very confident that the fiscal trajectory is unsustainable under current law,” Swagel said during the tense exchange, before later noting the agency “has been shrinking” and emphasizing the need for greater resources to expand its work.
The recent CBO report at the center of the hearing forecasts the debt held by the U.S. public reaching a record high in the coming years, and federal budget deficits are also projected to climb over the next decade.
Republicans also seized on numbers showing the nation’s rising debt to needle President Biden and Democrats over government spending and high inflation.
“Bottom line is, on Valentine’s Day, when we think about how much we love our significant others, one could ask how much do we love the country?” House Budget Committee Chair Rep. Jodey Arrington (R-Texas) said at the top of the hearing.
“Well, as Shakespeare said, let me count the ways, maybe the ways we’re not loving our country,” he said, while pointing to estimates of “$20 trillion in additional debt over the next 10 years.”
Democrats, on the other hand, pointed to some of the economic gains made since President Biden assumed office, measures taken by the Biden administration to tackle sticky inflation, as well as tax policies enacted under former President Trump they say contributed to the country’s more than $34 trillion national debt.
“Under President Trump, Republicans added $8 trillion to the national debt, including nearly $2 trillion alone from the Trump tax scam that gave overwhelming benefits to the wealthiest millionaires and billionaires in America, and now you see a desire to extend those rewards to the super-wealthy,” said Rep. Dan Kildee (D-Mich.) while pressing Swagel on the costs of extending some of the tax cuts passed under Trump.
In the report released last week, the CBO projected the federal budget deficit to reach $1.6 trillion in fiscal 2024 and mostly rise through 2034. The report also projected the cumulative deficit to hit $20 trillion between 2025 and 2034.
While the figures are still cause for concern for lawmakers, the CBO noted in its report that its projected deficits are still lower than previous forecasts, thanks to a combination of factors.
That includes a deal struck between Biden and then-Speaker Kevin McCarthy (R-Calif.) last spring to limit annual government spending, other stopgap funding measures and higher immigration.
“A key finding in our report is the role of immigration in the economy,” Swagel said, noting findings in the recent report that “the labor force is more than 5 million people higher at the end of the 10-year window than we had previously expected, and that’s because of the surge in immigration.”
Republicans also focused on threats to solvency for entitlement programs, like Social Security and Medicare, in the coming years, particularly as many in the GOP have pressed for a fiscal commission.
“I think it’s really important that if we are successful in putting together this fiscal commission, that we really go out and explain to the American people that what we really have here is a math problem,” Rep. Lloyd Smucker (R-Pa.) said during the hearing while discussing how access to benefits would be impacted without policy changes if funds run out as projected.
The hearing comes as lawmakers hash out the 12 annual government spending bills, weeks after congressional leadership struck a roughly $1.7 trillion funding deal for fiscal 2024.
Members on both sides are confident they will finish the annual funding work ahead of a pair of early March deadlines to stave off a funding lapse, but they also acknowledge the schedule is tight and sticking points are already beginning to emerge.