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House Appropriations Subcommittee on Financial Services Budget Request 2024

House Committee on Appropriations Subcommittee on Financial Services and General Government

President Biden’s Fiscal Year 2024 Budget Request and Economic Outlook

Thursday, March 23, 2023

Topline

  • Democrats asked Yellen if she supported cutting federally funded programs to reduce the budget.
  • Republicans voiced concerns that the budget will increase taxes for ordinary Americans because of increased spending, particularly for the IRS.

Witnesses

  • The Honorable Janet L. Yellen, Secretary, United States Department of the Treasury
  • The Honorable Shalanda Young, Director, Office of Management and Budget

Opening Statements

Subcommittee Chairman Steve Womack (R-Ark.)

In his opening statement, Womack discussed reckless spending by the Biden Administration and Democrats. He noted that without a sustainable economic trajectory, American prosperity and security are in danger. Womack blamed the Biden Administration for failing Americans with higher spending and inflation. He closed by stating that he had hoped that the FY24 budget request would begin to limit federal spending but instead it increases the public debt to 110% of GDP by 2033.

Subcommittee Ranking Member Steny Hoyer (D-Md.)

In his opening statement, Hoyer noted that inflation is occurring across the globe due to the pandemic and that President Biden’s budget would prioritize the American people. He also showed support for increased IRS funding and claimed that all Americans must pay their fair share for freedom. He was concerned about the House GOP’s budget proposal that considers cutting at least 22% of funding for essential programs. He closed by noting that if the House GOP budget makes these cuts, millions of Americans would lose access to health care services.

Committee Chairwoman Kay Granger (R-Texas)

In her opening statement, Granger questioned President Biden’s claim that the economy is strong by stating that the data is telling a different story. She noted that the Congressional Budget Office recently said if current policies continue, more than $20 trillion will be added to our national debt over the next ten years. She said that Biden’s budget proposal asks for money to be spent on unnecessary programs. She closed by saying she has concerns regarding the budget, but that this hearing will be good to find common ground.

Committee Ranking Member Rosa DeLauro (D-Conn.)

In her opening statement, DeLauro noted that this budget proposal would directly fund the government programs that communities rely on and that also create jobs, lower costs for families, improve public safety, support small businesses, and strengthen economic opportunity. She also showed concern for the House GOP’s reported proposal to cut FY24 discretionary spending back to FY22 levels. She thanked Secretary Yellen and the Department of the Treasury for their help with the Child Tax Credit.

Testimony

Janet Yellen, Secretary, Department of the Treasury

In her testimony, Yellen discussed Treasury’s role as the forefront of the U.S.’s response to some of America’s most urgent challenges. She noted that Treasury’s top priority is to protect the health of the U.S. economy. Yellen briefly discussed the recent banking issues, but reassured the committee that shareholders and debt holders of the failed banks are not being protected by the government. She applauded the record low unemployment rate and noted that the Biden Administration is now building onto the progress they have made in the economy.

Yellen noted that the budget requests $14 billion in discretionary resources for the IRS for customer service and workforce funds, $244 million for the Office of Terrorism and Financial Intelligence to continue to administer and enforce sanctions, and $332 million for the Treasury and its departmental offices to promote financial stability and growth. She closed by asking for an increase in community development financial institutions funding.

Shalanda Young, Director, Office of Management and Budget

In her testimony, Young discussed the progress made by the Biden Administration. She noted that the deficit has fallen by more than $1.7 trillion and that the Administration is investing in the American people. She noted that the Biden Administration is prioritizing lowering costs for families, protecting and strengthening Social Security and Medicare, and reducing the deficit. Young said that this budget proposed a $3 trillion reduction in the deficit by simply having the top 1% paying their fair share in taxes and by cutting wasteful spending to special interests. She reassured the committee that the budget proposal keeps the promise of Medicare and Social Security by not cutting any benefits.

Question & Answer

Inflation

Womack alleged that government spending contributes to inflation. Young noted that inflation is occurring in most, if not all, economies in the world due to the impacts of the pandemic. Yellen agreed and said that inflation is declining.

Womack continued to ask how much inflation the U.S. should endure and at what point federal spending should be rolled back. Young stated that certain investments are being made to lower inflation, such as helping with lowering health care costs for Americans.

Hoyer asked if Congress failing to increase the national debt ceiling if it would have an impact on inflation. Yellen answered that it is imperative that Congress raises the debt ceiling or else the economy would face catastrophe. Hoyer then asked Yellen if all of her predecessors would agree with raising the debt ceiling, to which she agreed.

Budget Cuts to Programs

DeLauro asked Young to describe the consequences of budget cuts, as proposed by House GOP leadership. Young noted specifics, including losing 11,000 FBI personnel, 400 local law enforcement offices, 11,000 rail safety inspectors, 30,000 miles of railroad track that would not be inspected, Pell grants, and noted that there would be many other losses as well.

Rep. Mark Pocan (D-Wis.) asked Young if a proposal that raises the age of retirement to 70 would impact Americans who have paid into Social Security. Young confirmed that it would be considered a loss of benefits for Social Security beneficiaries.

Rep. Sanford Bishop (D-Ga.) questioned what it would mean to the American people if essential programs were cut from the budget. Yellen noted that many, if not most, Treasury-related programs would not be able to work as efficiently as possible without the proposed funding.

Rep. Matt Cartwright (D-Pa.) asked Young what Congress can do to stop efforts to cut Medicare and Social Security benefits. Young confirmed that President Biden has promised that he will never cut any benefits, and that Americans and Congress do not need to be concerned.

Rep. Michael Cloud (R-Texas) claimed that there are thousands of vacant federal buildings across the country that will receive funding through this budget. He asked Yellen if funding for these buildings could be cut and not have negative impacts. Yellen stated that any cuts to this budget would have a negative impact on the U.S.

Foreign Relations & National Security

Rep. David Joyce (R-Ohio) asked what the Biden Administration is doing to protect U.S. businesses from burdensome foreign regulation to prevent efforts that undermine American sovereignty. Yellen stated that countries have different ways to address climate change and that the U.S. agrees with the European Union that the disclosure of climate-related risks (CSRD) is important for investors to fully understand the choices they make.

Rep. John Moolenaar (R-Mich.) questioned the risk of China-based companies if there are Chinese Communist Party (CCP) members on their boards. Rep. Ashley Hinson (R-Iowa) also asked if the Committee on Foreign Investment in the United States (CFIUS) reports any unresolved national security concerns that TikTok transactions from America will not be cleared. Yellen could not provide answers to either of the questions.

Hinson also asked Yellen if the Department of the Treasury is preventing cyber-attacks from occurring. Yellen noted that Treasury is investing heavily in cybersecurity. Hinson asked if there are tools for the Treasury to use if there is a cyber-attack. Yellen did not specify the tools but did confirm she has access to them.

For more information on this meeting, please click here.

For an archive of past SIFMA hearing coverage, please click here.