financialservices.house.gov

Cmte Financial Services (R)
Contact:


Hensarling Opening Statement at International Financial System Hearing
‘Our national debt is spinning out of control’

Washington, Mar 22 -

WASHINGTON- Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee hearing with Treasury Secretary Jacob Lew: Before we begin today’s hearing, we need to keep in our thoughts and prayers the victims of this morning’s attacks in Belgium, as well as their loved ones and the first responders who are working to care for the injured and bring justice to those responsible for this terror. I ask that we pause for a moment of silence. We welcome Secretary Lew for his testimony on the IMF and the international financial system. It is a system that faces serious challenges brought on by spending-driven debt and reckless monetary policies around the globe. Fortunately for hardworking American taxpayers, needed IMF reforms were passed by Congress in December, even if they weren’t the reforms the Administration wanted. Notwithstanding IMF quota reform, Congress reduced the U.S. contribution to the IMF for the first time in its history, sunsetting over $40 billion in credit lines. Congress also restored – over the Administration’s objections – a rule that limits large IMF loans to countries with unsustainable debt. This rule was first put into place in 2002 but was, unfortunately, altered by Treasury in 2010 when the IMF improperly bailed out Greece, a bailout that has led to nothing but additional bailouts. What remains certain for the international finance system, though, is that the IMF will never be able to bailout the United States if we remain on the Administration’s current spending trajectory. As the monitors show, our national debt is spinning out of control and is undeniably unsustainable. During his time in office, President Obama has presided over the five largest nominal deficits in history. He has piled up more debt than every president from George Washington to Bill Clinton combined; a debt that now leaves every American family owing, on average, $153,000. Although our witness, Secretary Lew, and other Administration officials constantly attempt to change the subject to declining deficits, three facts remain: One, the deficits have only declined relative to the historic highs set by this Administration. Two, every deficit – declining or not – actually increases the national debt; and three, under the President’s policies deficits will soon begin rising again – despite a $3.4 trillion tax increase - and will approach the $1 trillion threshold before the end of a decade. That means the President’s legacy will be a debt so large that at the end of his budget we will spend more on debt service annually than what we will spend on national defense, Medicaid, education and transportation infrastructure – only spending on Medicare and Social Security will be larger than interest on the national debt. According to the Congressional Budget Office, the President’s legacy of debt may very well compromise our national security and increase the likelihood of a fiscal crisis. And as we all know, it is the poor who will suffer the most when this occurs. This is why the national debt and debt ceiling remain deadly serious matters. Regrettably and inexcusably, the Treasury Department for over two years has stonewalled, obfuscated and misled Congress as our committee has investigated Treasury’s contingency planning for the debt ceiling. That is why we recently issued a staff report entitled, “The Obama Administration’s Debt Ceiling Subterfuge.” I believe the report clearly reveals that Treasury has sought to withhold from Congress and the American people information about their contingency plans, this for the purpose of pressuring Congress to acquiesce to the Administration’s position that there only be a naked debt ceiling increase without any reforms or fiscal discipline. Or, in other words, to hasten our national bankruptcy. We know the President’s legacy will include doubt, decline and debt. As documents continue to be withheld, let us hope that deception will not be added to the list.