By Staff Reporter |
Congress’s Joint Economic Committee (JEC) warned that the Biden administration’s economic policies have caused an unsustainable debt crisis and historic inflation.
This assessment was announced formally earlier this week by JEC Vice Chairman and Congressman for Arizona’s first district, David Schweikert, through the 160-page Republican Response to the Council of Economic Advisers’ 2024 Economic Report of the President.
Schweikert stated in a press release that 2024 serves as a “critical juncture” for the nation’s fiscal health, one that transcends political parties.
“The challenge before us is neither Republican nor Democrat — it is our moral obligation to ensure American families aren’t left behind. Congress holds the keys to determine which path we choose,” said Schweikert. “We can either behave like adults and choose the path of fiscal responsibility or continue our partisan gamesmanship that will put the American dream further out of reach for future generations.”
Schweikert said that the problems and proposed solutions put forth by the JEC report were inherently bipartisan, focusing on common-ground economy boosters like a healthier population and secure social safety net programs.
The JEC assessed that the Biden administration’s demand-side policies financed by increased borrowing have placed unsustainable pressure on constrained supply. As a result, JEC predicted that debt-to-GDP would grow from 99 percent to 116 percent by 2034, with interest costs rising. JEC noted that the labor force participation rates haven’t recovered to prepandemic levels; historic mortgage payments for new homebuyers, the highest in 30 years; constraints on budding American industries due to new restrictions on trade; and the cost of clean energy subsidies amounting to $1.2 trillion over 10 years, despite emissions from electricity production declining.
Further exacerbation of the economy comes from an aging population, declining fertility rates, and decreased prime-age labor force participation among men, per the JEC. The aging population is anticipated to drive Social Security spending to 6 percent of GDP by 2035, an increase from the present 5.2 percent and the 1970s at 3.1 percent, though no major expansions have occurred in over 20 years. The JEC reported that one in nine prime-age men remain out of the labor force; if just 25 percent of those entered, the economy would grow by $215 billion.
JEC disputed the Biden administration’s belief that increased taxes of wealthier individuals would amount to their desired revenue, a dwarfed amount of around 1.1 to 2 percent of GDP compared to future deficits. JEC stressed that only reduction in spending would improve fiscal consolidation.
Another demographic with an outsized impact on the economy, according to the JEC, is the rapid increase in obesity. Excess medical expenditures are anticipated to amount to over $9 trillion, as well as federal government spending of over $4 trillion within the next decade. Labor productivity and supply reductions impacted by obesity are projected to cost nearly $3 trillion and $12 trillion, respectively.
As for a positive solution to the nation’s current and looming fiscal woes, JEC indicated that artificial intelligence could grow the economy and improve government efficiency.
JEC also issued a lengthy assessment of the Congressional Budget Office’s revised budget and economic projections for the next decade. This included a $400 billion increase in projected FY2024 deficit, with about 80 percent of the increase coming from President Joe Biden’s student loan forgiveness, the Federal Deposit Insurance Corporation failing to recover payments from 2023 bank failures quickly, new legislation, and higher than expected Medicaid outlays.
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