In today’s Financial Services Committee hearing on “Why Debt Matters,” Ranking Member Maxine Waters
(D-CA), underscored the importance of promoting growth and reducing income inequality through short-term increases in discretionary fiscal stimulus in order to reduce the nation’s debt and deficit.
In her remarks, Waters criticized austerity measures such as the Sequester for impeding economic growth – particularly during a recession. She also pointed to the obvious political motivation behind the hearing, as in recent years the progress toward shrinking the deficit has been significant.
The Congresswoman also highlighted a number of important issues on which the Committee should be focusing. These include full funding for the Securities and Exchange Commission, the Consumer Financial Protection Bureau and affordable housing programs at HUD, in addition to the reauthorization of the Terrorism Risk Insurance Act and the Export-Import Bank.
Finally, Waters warned Republicans to avoid another self-inflicted wound, such as the shutdown, sequester and debt limit brinksmanship, all of which hurt economic growth, slowed job creation, and widened the gap between rich and poor.
Her full remarks are below.
As prepared for delivery:
“Thank you, Mr. Chairman for scheduling today’s hearing to discuss the important role that fiscal policy plays in contributing to full employment and economic growth. As we continue to climb out of the worst recession since the Great Depression, it is essential that we get our fiscal policies right, and that we hold firm in our commitment to promoting growth and reducing economic inequality. And while my colleagues on the other side of the aisle endlessly use the national debt as an excuse to slash funding for important government programs, the fact remains that putting America back to work in an economy that works for everyone is undoubtedly the most effective and efficient way to reduce our debt and deficit.
With that in mind, I am pleased to see that many of the witnesses here agree that Congress can best tackle the long-term deficit and national debt by pursuing short-term increases in discretionary fiscal stimulus. I similarly urge such an approach, and would suggest the Chairman consider similar proposals in the President’s fiscal year 2015 budget request.
As we have learned in recent years – both at home as well as in Europe – government austerity during a recession, such as the Sequester, impedes growth. Unfortunately, we've learned this lesson the hard way. In contrast to previous recessions when the government provided much-needed fiscal stimulus, the recent drastic cuts to discretionary programs have been a headwind to our full recovery.
Regardless, our progress toward shrinking the deficit in recent years leads me to believe that the timing of this series of hearings seems to be more inspired by politics than enacting good policy. Especially given the fact that since President Obama took office the budget deficit has fallen from 10 percent of GDP in 2009 to 3 percent, which is the average size of the deficit over the past 40 years.
President Obama’s new budget proposal will help grow the economy even faster – reducing the deficit to 1.6 percent of GDP by the year 2024.
As further cuts are made to the deficit they must be balanced with spending priorities that boost growth and fulfill our moral obligation to those in need. The social safety net has proven to be a crucial tool in lowering poverty rates by half. Pretending that cutting these programs would somehow magically lift people out of poverty is neither sensible nor fair.
This Committee should also advocate for a strong and stable financial system that protects consumers and safeguards the savings of working Americans. Doing so requires full funding for our nation’s regulators, the Securities and Exchange Commission and the Consumer Financial Protection Bureau, to ensure that the financial services industry adheres to the rules of the road. And we should provide stability to our nation’s business community by quickly reauthorizing the Terrorism Risk Insurance Act, known as TRIA, and the Export-Import Bank, both of which increase employment and investment.
We should support initiatives to reduce poverty by fully funding HUD’s programs that provide public housing, work to end homelessness and preserve access to affordable rental housing.
And this Committee should focus on sensible housing finance reform, not the radical remake of our housing finance system called for by the PATH Act.
And finally Mr. Chairman, this Congress must avoid self-inflicted wounds that have become all too commonplace – like the recent Republican shutdown of the government, threats of defaulting on our debts and the sequester, all of which hurt economic growth, slowed job creation, and widened the gap between rich and poor.
We can and must do better.
Thank you Mr. Chairman, and I yield back.”