Raphael Warnock: ‘The Big Ugly Bill Will Put The United States On A Disastrous Fiscal Path’

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During Wednesday’s Senate Banking Committee hearing, Sen. Raphael Warnock (D-GA) questioned Fed Chair Jerome Powell about the Big Beautiful Bill.

Transcript

00:00is next. Thank you, Chair Scott. Thank you, Chair Scott, and thank you, Chair Powell. Good to see

00:07you. The United States national debt currently exceeds $36 trillion. Last year, we paid nearly

00:15$1 trillion in interest on the debt alone, more than the federal government spent on educating

00:22and feeding our children. Chair Powell, how does the Fed consider rising national debt levels during

00:30discussions about adjusting interest rates? We really don't. We take fiscal policy as

00:37completely exogenous, and we look at the data that's coming in, but we're never going to take

00:42into account budget deficits and things like that. Well, here is my concern. Maybe Congress

00:48should be thinking about it. The world is losing faith in America's ability to repay our debt.

00:54We have seen a sell-off in the bond market. The United States dollar has lost more than 10%

00:59of its value against the euro and pound and is down against nearly every single major currency

01:06in the world. Back in May, Moody's downgraded the U.S. government's credit rating because of

01:13growing debt and sinking confidence in lawmakers' willingness to address this issue. Historically,

01:20high debt pushes up interest rates, slowing economic growth and setting up a dangerous

01:26debt cycle where both interest rates and debt continue to rise. Chair Powell, how does the size

01:34and the trajectory of the national debt affect the Federal Reserve's ability to manage inflation

01:40in good economic times and spur investment and hiring in slower economic times? I'm happy to say

01:49that today, those things do not affect our ability to do our job. The concern really is that if we don't

01:56do something, then there will come a time at which it will be a problem, not for us, but for the

02:01country. But at this time, it does not interfere in any way with our ability to do that. That is a

02:06realistic concern in the future, given the rate of increasing debt. And it's something I'm concerned

02:13about. And maybe because it's in the future, maybe that's why, you know, folks who have power, who sit in

02:19these jobs, aren't as concerned about it as perhaps the Congress should be. I'm concerned about it as a

02:26grandfather of a six-year-old and an eight-year-old. I'm concerned that my Republican colleagues are

02:33planning to ram forward a bill that, according to the Congressional Budget Office, will increase the

02:38deficit by $4.2 trillion. So I want us to think about that. We're taking food out of the mouths of

02:48hungry children. This bill could cut as many as 16 million Americans off of health care.

02:58When we think about Medicaid, 71 percent of the Medicaid recipients in Georgia are children.

03:03So we're taking their health care, and then we're saying to these children that you'll have to deal

03:09with these trillions of dollars in debt one day. $4.2 trillion increase. Senate Republicans are trying

03:16to use a budget gimmick to claim the bill only costs a fraction of that by simply not counting

03:23things they don't want to count. If they don't like the math, they just change the formula.

03:28But the markets and those investing in our country don't care about these budget tricks.

03:32And I don't think it will help my six-year-old and my eight-year-old when the bill comes due on

03:36this. They know the truth, and they will react based on the truth. The big, ugly bill will put the

03:42United States on a disastrous fiscal path, and it will be catastrophic for our economy. Even worse,

03:49the big, ugly bill is cutting people off of their health care, and for what purpose to give tax cuts

03:55to the wealthiest. So this is an interesting moment for me, for someone who didn't know I'd end up in

04:01politics, who just paid attention to politics over the years. They're getting ready to create a whole lot

04:08pain for a lot of people. And the question is, for what purpose? To give billionaires a tax cut? I think

04:18we ought to work together to prioritize extending tax cuts for the working class. We shouldn't be

04:25cutting their health care. We ought to save the country trillions of dollars by not giving more

04:32tax breaks to the richest Americans. And if we try to work together, we can save our economy from this

04:39disaster and still protect working families from a tax hike. I believe in tax cuts. I think working class

04:48Americans ought to give them, ought to receive them, and that we ought not be burdening our children with

04:54all of this debt. With that, I yield, and the chairman should take note, that the Baptist preacher is

05:00done with three seconds left. And the people today-

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