[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                     REIGNITING AMERICAN GROWTH AND
                    PROSPERITY SERIES: REMOVING THE
                    BURDENS OF GOVERNMENT OVERREACH

=======================================================================


                                HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

              HEARING HELD IN WASHINGTON, DC, MAY 24, 2023

                               __________

                            Serial No. 118-4

                               __________

           Printed for the use of the Committee on the Budget
           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]           


                       Available on the Internet:
                            www.govinfo.gov
                            
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
53-464                     WASHINGTON : 2024                    
          
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                        COMMITTEE ON THE BUDGET

                  JODEY C. ARRINGTON, Texas, Chairman
RALPH NORMAN, South Carolina         BRENDAN F. BOYLE, Pennsylvania,
TOM McCLINTOCK, California             Ranking Member
GLENN GROTHMAN, Wisconsin            BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania          JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            EARL BLUMENAUER, Oregon
EARL L. ``BUDDY'' CARTER, Georgia    DANIEL T. KILDEE, Michigan
BEN CLINE, Virginia                  SCOTT H. PETERS, California
BOB GOOD, Virginia                   BARBARA LEE, California
JACK BERGMAN, Michigan               LLOYD DOGGETT, Texas
A. DREW FERGUSON IV, Georgia         JIMMY PANETTA, California
CHIP ROY, Texas                      JENNIFER WEXTON, Virginia
BLAKE D. MOORE, Utah                 SHEILA JACKSON LEE, Texas
DAVID G. VALADAO, California         ILHAN OMAR, Minnesota,
RON ESTES, Kansas                      Vice Ranking Member
STEPHANIE I. BICE, Oklahoma          DAVID J. TRONE, Maryland
LISA C. McCLAIN, Michigan            BECCA BALINT, Vermont
MICHELLE FISCHBACH, Minnesota        ROBERT C. ``BOBBY'' SCOTT, 
RUDY YAKYM III, Indiana                  Virginia
JOSH BRECHEEN, Oklahoma              ADRIANO ESPAILLAT, New York
CHUCK EDWARDS, North Carolina

                           Professional Staff

                      Gary Andres, Staff Director
                  Greg Waring, Minority Staff Director
                           
                           
                           C O N T E N T S

                                                                   Page
Hearing held in Washington, D.C., May 24, 2023...................     1

    Hon. Jodey C. Arrington, Chairman, Committee on the Budget...     1
        Prepared Statement of....................................     4
    Hon. Brendan F. Boyle, Ranking Member, Committee on the 
      Budget.....................................................     7
        Prepared Statement of....................................     9
    Dr. Doug Holtz-Eakin, President, American Action Forum.......    12
        Prepared Statement of....................................    14
    Ms. Karen Harned, President, Harned Strategies LLC...........    23
        Prepared Statement of....................................    25
    Mr. Wayne Crews, Fred L. Smith Fellow in Regulatory Studies, 
      Competitive Enterprise Institute...........................    31
        Prepared Statement of....................................    33
    Hon. Benjamin Harris, Former Assistant Secretary for Economic 
      Policy, United States Treasury Department..................    54
        Prepared Statement of....................................    56
    Hon. Lloyd Doggett, Member, Committee on the Budget, 
      submission for the record..................................    81
    Hon. Sheila Jackson Lee, Member, Committee on the Budget, 
      submission for the record..................................    93
    Hon. Sheila Jackson Lee, Member, Committee on the Budget, 
      submission for the record..................................    98

 
                     REIGNITING AMERICAN GROWTH AND
                    PROSPERITY SERIES: REMOVING THE
                    BURDENS OF GOVERNMENT OVERREACH

                              ----------                              


                        WEDNESDAY, MAY 24, 2023

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
210, Cannon Building, Hon. Jodey Arrington [Chairman of the 
Committee] presiding.
    Present: Representatives Arrington, Norman, McClintock, 
Grothman, Smucker, Cline, Good, Bergman, Ferguson, Roy, 
Valadao, Estes, Bice, McClain, Fischbach, Yakym, Brecheen, 
Edwards, Boyle, Higgins, Blumenauer, Kildee, Doggett, Panetta, 
Jackson Lee, Balint, Scott, and Espaillat.
    Chairman Arrington. Well, good morning, everyone. The 
hearing will now come to order.
    Welcome to the Budget Committee's first in a series of 
hearings that will focus on economic growth and its impact on 
our Nation's fiscal health and future prosperity.
    I will yield myself such time as I may consume for an 
opening statement. I have promised my colleague, Brendan Boyle, 
and my Democrat friends that I will not go 12 minutes this 
time. Is that okay with you, Jimmy?
    Mr. Kildee. Is it more or less?
    Chairman Arrington. We are going to shoot for 14 and set a 
record.
    Today, we are starting this series on how we, as a 
Committee, and as a Congress, can contribute to reigniting 
American growth and prosperity.
    If we are going to bring down inflation and interest rates 
along with it, lift our economy out of recession, strengthen 
our Nation's balance sheet and stave off a debt crisis, I 
believe we have to do two primary things, we have got to reduce 
spending and grow the economy. That is the strategy that has 
worked in the past, that is the formula for success, I believe, 
to get us out of our current economic and financial mess, and 
that is the framework for our current debt ceiling proposal. 
Reign in spending, right size the bloated bureaucracy where we 
are spending hundreds of billions of dollars more than even 
what the nonpartisan CBO said we would be spending at this 
juncture, and return to pro-growth, pro work, pro energy 
policies that will unleash American prosperity once again.
    Today's hearing will focus on the economic growth part of 
this equation and with $32 trillion of debt, 123 percent gross 
debt-to-GDP, the prospect of another $20 trillion or more added 
to the debt in ten years, an annual deficit set to double, and 
interest payments, which we got a report on recently from CBO, 
that will increase at least 40 percent year over year. For this 
year at $663 billion just to service the debt, almost--well 
over three quarters of what we spend on all of national 
defense.
    If we grow the economy while controlling spending, we can 
create a glide path to a healthier balance sheet, a stronger 
economy, and a brighter future. Policies have consequences. I 
think we can all agree with that. I would submit to you that 
the reckless spending and the failed economic policies of the 
last two years have been disastrous. Higher taxes, an onslaught 
of regulations, which will be our focus today, an expansion of 
welfare without work, a whole of government assault on the 
lifeblood of our economy, American energy, and a whopping $10 
trillion in spending, an unprecedented $6 trillion of which, 
has been added to the national debt in just two years.
    Today we are going to focus on the burden of excessive and 
overreaching regulations, how they kill jobs, suppress growth, 
reduce wages, and increase cost to consumers.
    Look, I used to work at the FDIC as chief of staff. I 
understand we need reasonable and limited rules for fair 
competition and consumer protection, basic safeguards for 
health and safety, but by congressional abdication and/or 
executive activism we have created a Frankenstein of a fourth 
branch of government in a massive regulatory state that is 
compromising our freedoms, quenching our entrepreneurial spirit 
as a Nation, and choking the life out of our economy, and I 
don't think that is hyperbolic. I think that may even be an 
understatement, and we will dig into that today.
    The Code of the Federal Regulations now contains more than 
1.3 million separate regulatory restrictions and costs on our 
economy of trillions of dollars. The cumulative effect of this 
seemingly infinite set of rules and regulations is devastating, 
to say the least, to our economy, our global competitiveness, 
and ultimately our quality of life as Americans. The Mercatus 
Center found that if regulations had remained at 1980 levels, 
GDP in 2012 would have been $4 trillion higher and real incomes 
would be higher by $13,000 per person.
    I respect that President Trump took this on, I think like 
no other president, this herculean task of deregulating our 
economy, and I believe he had great success and there was great 
reward for all Americans as a result. Instead of piling on more 
rules, his goal was to eliminate eight regulations for every 
new regulation enacted, which ultimately saved consumers and 
job creators more than $220 billion per year. President Biden, 
on the other hand, has unleashed an unprecedented barrage of 
regulations and executive actions at a record clip. All told, 
his administration has added $360 billion in new regulatory 
cost on our economy, and he is on pace to double in four years 
the cost of the Obama White House in their regulations over 
eight years.
    It is not just the economic cost of hurting our country, it 
is the circumvention--and I hope we can all agree with this, 
because I am sure, I am certain both parties have contributed 
to this--by abusing their executive authority, they have 
circumvented our democratic process to make policy whole cloth 
outside of the constitutional legislative process and against 
the will of the American people as a result. Advancing policies 
by regulatory fiat that could never pass the United States 
Congress undermines popular sovereignty and is an affront to 
our self-determination. Recent examples include expanding 
government dependency by executive fiat, pushing people by the 
hundreds of thousands onto Obamacare who already have work 
sponsored health insurance, removing work requirements for 
able-bodied adults, allowing millions of people who are 
ineligible to stay on Medicaid rolls, forcing low-income 
families to pay for student loans of upper- and middle-income 
individuals.
    The President has unilaterally used rules and regulations 
to target an entire industry, something in my lifetime I have 
never seen. Shutting down power plants, shaking down Federal 
contractors for information about emissions, dictating what 
cars and trucks that Americans can buy, and even what kind of 
stoves we can use.
    Getting rid of these needless and burdensome red tape and 
regulations will take a sustained effort, and I welcome the 
input and collaboration from my Democrat friends, but if we 
don't reverse course, the greatest economy in the world will 
die a death of a thousand regulatory cuts and our children will 
not inherit the land of opportunity, but a desolate economy, a 
barren land, a bankrupt country, and a very bleak future.
    And with that rosy and optimistic scenario, I yield to my 
friend Mr. Boyle from Pennsylvania for his opening statement, 
such time as he may consume.
    [The prepared statement of Chairman Arrington follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Boyle. Well, thank you.
    And Jodey, as folks know, is a friend of mine, but I have 
to tell him, after listening to that depressing assessment, I 
wouldn't even want to wake up in the morning. Oh, doom and 
gloom, doom and gloom. Thank God it isn't true.
    Here is the reality: the greatest economic recovery from 
COVID of any major economy on Earth is that of the United 
States of America. An unemployment rate today, the lowest it 
has been since 1969. We are the envy of the world right now, 
and even inflation, which we all admit, has been a challenge--
no, it was not transitory, as Jay Powell kept telling us--but 
even that, remarkable progress in the United States, nine 
consecutive months inflation has dropped. We have a better 
inflation picture here in the United States than all of our 
peer countries in Europe, as well as the average of OECD 
nations. In fact, if anything, it is getting a little bit worse 
in some of those major economies in Europe, while the United 
States, it continues to improve. Just two hearings ago, not 
you, but sitting in that chair was Mark Zandi, the chief 
economist of Moody's, who told us in this hearing room that by 
late 2024 we should be back to normal in that two percent range 
on inflation, which of course was caused not by any domestic 
legislation in the United States. It wasn't anything that 
passed here that caused inflation worldwide. It was, of course, 
turning the spigot back on essentially after COVID.
    So this has been a remarkable period for our economy, a 
resilience that even the experts at the Congressional Budget 
Office--and I respect them all and the important work that they 
do on a nonpartisan basis--but this has far exceeded their best 
expectations. They didn't think we would return to an 
unemployment rate this low for the rest of the decade.
    So let's make sure we do not do anything in Congress to 
jeopardize this remarkable record of the last two and a half 
years.
    So the good news is that there is no reason for this sort 
of pessimism and doom and gloom. We should be talking about 
ways that we can sustain this growth while at the same time 
acknowledging that particularly as we look at the projections 
for the next decade, the national debt is a challenge.
    Now, let's just talk about spending for a second. It is 
interesting to hear the other side talk a good game about 
spending and national debt. They had full power just five years 
ago. Five, six years ago, 2017, 2018, Republican President, 
Republican House, Republican Senate, and what did they do? 
Increase spending. And what happened to the deficit? The 
biggest single jump in the deficit in a growing economy in 
American history, all as a result of the TCJA, the Trump tax 
cuts. The tax cuts, 83 percent of which went to the richest one 
percent. So forgive me if I am little skeptical that those on 
the other side are now so concerned about deficit and debt. 
Although I will exempt actually our Chairman from this. To his 
credit, in a bipartisan fashion, he has pointed out that 
frankly spending has increased under both sides when in charge. 
The difference is on the revenue side. The difference is when 
Democrats have been in charge, we have attempted to tackle 
deficit and debt by ensuring that we receive more, frankly, a 
fair share, from the richest one percent, but when the other 
side is in charge, they do not have that same approach. In 
fact, even now, when the conversation is taking place about 
reducing deficit and reducing debt, there are those on the 
other side that are pushing to make the Trump tax cuts 
permanent, which would add $3.5 trillion dollars more to the 
national debt. So give me a break. There is no concern about 
deficit and debt on the vast majority of those on the other 
side. They just want to continue the massive tax giveaways to 
the top one percent and the richest corporations, and they are 
willing to use the excuse of deficit and debt to cut important 
investments that so many of the American people benefit from.
    Finally, I will say, because trying to stay within the time 
limit, some of the things that are being talked about right 
now, and that actually passed the House a few weeks ago in the 
Republican bill, would have a devastating impact on our 
economy. You don't have to believe any Democratic talking 
points, just look at the nonpartisan analysis from Moody's. 
800,000 fewer jobs by the end of next year if their bill were 
to become law, a substantially increased risk of a recession, 
if their bill would become law, and all sorts of individual 
cuts that I recited last session, and will be happy to repeat 
later again, if we get the opportunity in this hearing.
    So that, in a nutshell, is where we stand right now in our 
economy. We need to stand up and continue those policies that 
have worked, and the last thing we need to do is to pursue any 
policies that would jeopardize this remarkable job record.
    With that, I yield back.
    [The prepared statement of Ranking Member Boyle follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Arrington. I thank the gentleman from Pennsylvania 
and regret yielding him as much time as he may consume.
    In all seriousness, welcome. Thank you for your insight. 
Thank you for your time, every one of you. Look forward to your 
contributions to this important discussion, and want to 
introduce our witnesses.
    We start with Doug Holtz-Eakin, a friend and no stranger to 
the Ways and Means Committee in testifying over the years. He 
is the President of American Action Forum. Also have Ms. Karen 
Harned, the President of Harned Strategies, Mr. Wayne Crews, 
Fred Smith Fellow in Regulatory Studies at the Competitive 
Enterprise Institute, and the Honorable Benjamin Harris, former 
Assistant Secretary for Economic Policy at the U.S. Department 
of Treasury.
    Thanks again for your time.
    The Committee has received your written statements, and 
they will be made part of the formal hearing record.
    You will each have five minutes to deliver your oral 
remarks, and I now yield five minutes to Dr. Holtz-Eakin.

STATEMENT OF DOUG HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM

    Dr. Holtz-Eakin. Thank you, Mr. Chairman, Ranking Member 
Boyle, and Members of the Committee. It is a privilege to be 
here today.
    Let me make four very brief points, and then I look forward 
to answering your questions.
    Point number one is that I think we would all agree that 
the U.S. could benefit from more rapid economic growth. If you 
look at GDP per capita, accrued measure of the standard of 
living, we saw GDP per capita grow at an average rate of 2.3 
percent per year in the final 50 years of the 20th century, and 
at that pace of economic growth, the standard of living doubles 
every 30 years. So in one working career, the standard of 
living could double, and that was many people's route to the 
American Dream, the additional resources that yielded. So far 
in this century we have averaged GDP growth per capita of 1.2 
percent per year, and at that pace, the standard of living 
doubles every 58 years, nearly twice as long, and there is the 
palpable sense that access to the American Dream is 
disappearing over the horizon. It is a concern for Americans 
interested in sending their kids to college, buying a house, 
and having all the benefits of a growing economy.
    Going forward there is reason for concern. If the CBO 
projections are accurate, we will grow at under one percent in 
GDP per capita over the next ten years, and the pace of 
doubling of the standard of living will decline even further. 
So there are really two important points about that.
    Number one, it would be great to grow more rapidly. Number 
two, the trend rate of growth in the economy is not some 
constant delivered by nature. It is responsive to policies, to 
tax policies, regulatory policies, labor market policies, and 
focusing on the growth impact of policies makes a lot of sense 
at this point in time.
    Second point is that among the policies that varied over 
time is the regulatory costs in the United States, and using 
the data from American Action Forums RegRodeo, which is curated 
by Dan Goldbeck, who is sitting right there, we track the cost 
of regulations issued by all the agencies in the Federal 
Government, and we have data going back to 2005 to do this. If 
you look at that data, we saw regulatory costs imposed on the 
private sector of an average of $120 billion roughly per year 
under the Obama Administration, fell to about $15 billion per 
year under the Trump Administration, and at current pace, it is 
roughly $150 billion a year under the Biden Administration. 
Indeed, the first year of the Biden Administration exceeded 
$200 billion, the largest single first year of any president in 
our data.
    So clearly, these regulatory costs are something that can 
be moved up and down, and we ought to think about how do we 
want them to progress going forward. As I cite in my testimony, 
there is lots of research literature that suggests that 
excessive regulatory costs can be a headwind to economic 
growth. From recent experience, I think we should have some 
reason for concern about excessive costs, because one of the 
reasons we had such a slow recovery from the Great Recession 
was, in fact, the $890 billion of cumulative regulatory costs 
imposed on the economy under the eight years of the Obama 
Administration, and with the arrival of the Trump 
Administration, we saw just a real change in both the 
regulatory costs and the outlook in the economy. The National 
Federation of Independent Businesses, small business confidence 
that jumped overnight with the arrival of that regime.
    So the final point is that Congress, I think, should think 
hard about imposing some structure on the regulatory state and 
controlling excessive costs through one strategy or another, 
and there are really three strategies outlined in my testimony. 
One is essentially to enhance the current Congressional Review 
Act, which looks after the fact at regulations and attempts to 
repeal them, and instead, for major regulations, the Congress 
could approve in advance and screen things before they get too 
large.
    The second approach is to have a commission to look at the 
entire existing body of regulations and weed out those which no 
longer serve any great purpose and/or are excessively 
expensive. That is something that is in something called the 
Scrub Act, which has been considered by Congress in the past.
    And the third option is to adopt a statutory version of the 
Trump Administration's regulatory budgets, which essentially 
said to an agency, you can impose this much in costs on the 
private sector this year, and if you have proposed a regulation 
that exceeds that budget, you have to find a saving elsewhere. 
This is a Budget Committee. That is a strategy that ought to 
appeal to everyone sitting in this room as a way to set the 
targets and coordinate the activities across all the agencies 
and eliminate the potential for excessive regulation because 
people are not cognizant of the cumulative costs across the 
entire range of government activities.
    So I think this is a very important topic. I am pleased to 
be here today, and I look forward to your questions.
    [The information follows:] 
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    Chairman Arrington. Thank you, Dr. Holtz-Eakin, and now I 
would like to yield five minutes to Ms. Harned for her 
testimony.

  STATEMENT OF KAREN HARNED, PRESIDENT, HARNED STRATEGIES LLC

    Ms. Harned. Great. Thank you, Mr. Chairman and Ranking 
Member Boyle and Members of the Committee.
    For over 25 years, I have worked as an attorney in 
administrative law, and over the last 20, I have worked on 
behalf of small business, first at NFIB and now on behalf of 
Job Creators Network. Over my career, I have watched as Federal 
agencies have grown their power to not just administer the law, 
but to make it. Agency officials appear to treat many of the 
laws governing rulemaking as box checking exercises rather than 
meaningful processes to ensure transparency in how rules are 
made and protect against new regulations having unintended 
consequences on businesses and ultimately, the American people. 
Federal regulations cost the U.S. economy real money, and the 
cost for small businesses is disproportionately higher than it 
is for the large ones.
    While at NFIB, as Doug mentioned, I witnessed one of the 
clearest pictures of the correlation between regulations and 
the economy during the presidential transition from 2016 to 
2017. In 2012, experts predicted the coming of a regulatory 
tsunami. That prediction came to pass in 2016 with a record 
setting 97,110 pages of new regulations in the Federal 
Register. Small business optimism at that time was at 
historically low levels according to NFIB. However, then-
candidate Trump promised that if elected, he would work to 
reduce the regulation and eliminate unnecessary regulations on 
the books. Following his election, NFIB's monthly survey of 
small businesses showed a sharp rise in business optimism 
starting in January 2017, a trend that continued until COVID.
    During the regulatory ramp up of the Obama Administration, 
the small businesses I spoke with expressed concern about what 
was coming out of Washington. Many could point to specific 
regulations, but others seemed just paralyzed by the volume. 
They did not know how these regulations were going to impact 
their business. They just knew a large number were coming, were 
in the works. The uncertainty caused by such government 
regulatory expansion was a significant factor in their 
decisions not to grow their business.
    My conversations with small business owners and what they 
were experiencing mirrored what NFIB's research showed. First, 
the cost of complying with regulation is the biggest problem 
for small business. According to Job Creators Network's monthly 
SBIQ poll, 79 percent of small businesses have fewer than ten 
employees. In the regulatory context, this is particularly 
important to appreciate. Firms with fewer than ten employees do 
not employ attorneys, accountants, or human resource 
professionals. In fact, they are lucky if they even have a 
sales manager. As a practical matter, that means it is a small 
business owner who is tasked with those duties, including many 
of which are regulatory compliance.
    So in 2016, it is not surprising to hear that over 41 
percent of those small business owners surveyed reported 
reaching out to talk with someone at a government agency to get 
help in complying with the regulation over the last three 
years. Time is money. Time spent filling out paperwork, keeping 
up with new regulations, and in many cases, hiring a lawyer or 
other outside professional to help--like an accountant, to help 
navigate the regulatory jungle, is time and money not spent 
investing in and growing the business.
    Second, the volume of regulations, rather than a few 
specific regulations is the biggest problem for 55 percent of 
businesses. Unless a business owner is in a highly technical or 
regulated industry, the regulatory burden they experience is 
more generalized. It is the famous death by 1,000 cuts or for 
the small business owner, death by 1,000 regulations.
    Unfortunately, it appears that the Biden Administration is 
ushering in a new regulatory tsunami. As a result, small 
business owners are growing increasingly concerned about the 
economy and their ability to succeed. According to a recent Job 
Creators Network poll, 74 percent of small businesses rate the 
economy as fair or poor. As the poll notes at its takeaways, 
the small business community thinks we are close to a 
recession.
    The good news is there are several House bills I highlight 
in my testimony that I think would go a long way in ensuring 
agencies are held accountable when they overstep their 
authority, not engaging in one size fits all rulemaking that is 
particularly harmful to small business and reviewing the 
thousands of regulations on the books to ensure that what I 
call the regulatory underbrush is eliminated.
    Federal regulation has a direct impact on the economy. 
Businesses large and small consider regulation when deciding 
where to locate and whether to expand. Congress should pursue 
legislation that would help rein in the regulatory state.
    Thank you for having me testify today, and I look forward 
to your questions.
    [The information follows:]
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    Chairman Arrington. Thank you.
    Mr. Crews, now we yield five minutes to you for your 
testimony.

 STATEMENT OF WAYNE CREWS, FRED L. SMITH FELLOW IN REGULATORY 
           STUDIES, COMPETITIVE ENTERPRISE INSTITUTE

    Mr. Crews. Chairman Arrington, Ranking Member Boyle and 
Members of the Budget Committee, thank you for the opportunity 
to testify today.
    My name is Wayne Crews and I am the Fred L. Smith Fellow in 
Regulatory Studies at the Competitive Enterprise Institute, a 
nonprofit, nonpartisan policy organization focused on 
regulatory issues from a free market perspective.
    Federal spending gets all the attention, but the hidden tax 
of regulation is equally important. The Code of Federal 
Regulations is 188,000 pages and counting. Regulations affect 
nearly every aspect of life, from our houses we live in, to the 
food we eat, to what we do at work. Recent proposed White House 
changes in an already opaque rule making process will make 
regulation even less transparent. For example, members of the 
Committee may be unaware that there has been no formal OMB 
report to Congress on regulatory costs and benefits since 2020, 
covering Fiscal Year 2019. Only a relative handful of 
regulations receive rigorous analysis.
    Independent agencies, ascendant in Biden's whole of 
government progressive pursuits like climate crisis, equity, 
and competition policy get little OMB scrutiny, nor do the 
thousands of guidance documents, memoranda, circulars, notices 
and other decrees that we refer to as regulatory dark matter. 
Bottom line, nothing exists to justify claims of net benefits 
for the entire regulatory enterprise, especially since 
unmeasured categories of intervention, such as antitrust, 
propel cost as well.
    Notwithstanding all this, at Biden's direction OMB is 
reformatting central regulatory review procedures through a 
rewrite of so-called Circular A-4 Guidance on Regulatory 
Analysis. This is problematic given the progressive 
transformation and Federal consolidations underway in the 
United States. When government steers cross-sectionally, as it 
does today, while the market merely rose, especially in the 
wake of Inflation Reduction Act and other recent control 
oriented spending bills, it creates compounding costs of 
intervention, even if no specific notice and comments rules get 
issued.
    Comprehensive regulatory reform is important. Congress, as, 
for example, recently the RSC GEAR, Government Efficiency, 
Accountability and Reform, Task Force noted, has vastly over 
delegated power to these administrative agencies. While 
Congress tends to pass a few dozen laws each year, up to a 
couple of hundred, maybe 300, agencies issue over 3,000 rules. 
So it is a good thing that the REINS Act to require 
congressional approval of certain hefty rules appears in the 
debt limit package.
    Today's hearing, though, proves that there is an appetite 
in the 118th Congress for reforms, and we do periodically see 
bipartisan appeals for transparency and better disclosure of 
regulatory burdens. Some might not realize that the 118th 
Congress' Regulatory Accountability Act, the Guidance Out of 
Darkness Act, a regulatory improvement commission, and even 
regulatory budgeting boast bipartisan pedigree. I discuss these 
and more in my written testimony.
    Speaking of regulatory budgeting, Representative Bob Good's 
Article I Regulatory Budget Act would make Washington's 
presence in the economy more explicit by capping what agencies 
individually and collectively compel the private sector to 
spend on compliance. More thorough cost analysis and more 
transparency are bipartisan winners. A generation ago, the 
Unfunded Mandates Act, the Small Business Regulatory 
Enforcement Fairness Act, and shockingly enough, the 
Congressional Review Act, the very CRA that generates so much 
consternation now, passed with overwhelming bipartisan support, 
with Harry Reid among those leading the charge. Unfunded 
mandates reform was so popular it was dubbed S.1 in the Senate. 
If, as I suspect is likely, a rise in mandates on lower level 
governments and small business materializes, reform may again 
garner bipartisan appeal. It certainly enjoys constituent 
appeal.
    That said, mere regulatory reform won't suffice if Congress 
continues enacting hyper legislation like that of recent years, 
a series of transformations that are fusing the spending and 
regulatory state into a colossus, much of it propelled by the 
Federal Government's extraordinary and monopolistic procurement 
and contracting power. Overdoing regulation and legislation 
will derail our post-pandemic march into an era of renewed 
prosperity. When it comes to healthy and prolonged economic 
expansion, you don't need to tell the grass to grow, but you do 
have to take the rocks off of it.
    Thank you again for inviting me to testify.
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    Chairman Arrington. Thank you, Mr. Crews.
    Now we want to yield five minutes to Dr. Harris for his 
testimony.

STATEMENT OF BENJAMIN H. HARRIS, FORMER ASSISTANT SECRETARY FOR 
           ECONOMIC POLICY, U.S. TREASURY DEPARTMENT

    Dr. Harris. Thank you, Chairman Arrington, Ranking Member 
Boyle, and Members of the Committee for inviting me to testify 
at this important hearing today. I am honored to appear before 
this Committee to discuss strategies to grow the American 
economy.
    Given the broad and far-reaching focus of this hearing, my 
written testimony outlines four key lessons for policymakers 
who seek to implement policies and reforms aimed at promoting 
economic prosperity in a sustainable and inclusive way.
    First, I believe we need a new framework for generating 
economic growth. In January 2022, Treasury Secretary Janet 
Yellen introduced a new theory for economic growth termed 
modern supply side economics. Secretary Yellen presented a pro-
growth strategy as an alternative to supply side economics that 
could better boost potential GDP and lead to faster annual 
gains in growth. A key part of the modern supply side approach 
is policy reforms designed to lower barriers to work and 
increase the labor force participation rate, while a second 
pillar aims to address the negative implications of economic 
shocks, including the increasing disruptions from climate 
related events like hurricanes, flooding and persistent 
drought.
    A second lesson is that robust competition is necessary to 
harness the power of capitalism, and targeted regulation can 
help. Competition is an essential element of capitalism, and 
lack of competition often impedes the ability of markets to 
deliver their full economic potential. Perhaps contrary to the 
central takeaways of traditional supply side economics, more 
robust regulation in certain circumstances, including in 
particular the labor market, can improve competition and lead 
to more efficient economic outcomes. Especially, policy 
interventions are important to combating monopsony-like 
conditions that can arise due to a host of factors, including 
employer concentration, anti-competition policies like non-
compete agreements, and asymmetric information regarding 
compensation, among others.
    A third, especially timely lesson, is that failure to raise 
the debt limit is a pressing and serious threat to economic 
growth. The current debt limit impasse represents a serious 
threat to economic growth and will likely result in a severe 
economic disruption if not resolved in a timely fashion. 
Reputable analysis from organizations such as Moody's and the 
Brookings Institution have confirmed that breaching the debt 
ceiling would have severe and perhaps catastrophic economic 
consequences.
    To elaborate on these threats in the context of the current 
impasse, there are four major avenues through which the debt 
limit can cause economic harm.
    The first is through brinksmanship prior to the X date, 
which we have already begun to observe in financial markets. A 
second major threat is through a financial crisis owing to a 
post-X date impasse in which the Treasury Department defaults, 
failing to make a scheduled payment, or even missing a 
principal or interest payment on Treasury securities. The third 
major threat is related to potential political remedies to 
resolve the current impasse, including a sharp reduction in 
discretionary spending.
    A final concern is related to the repeal of tax incentives 
for clean energy production implemented through the Inflation 
Reduction Act, which would not only undermine planned projects 
in the energy sector but would cast uncertainty around the 
permanence of all tax incentives previously enacted by 
Congress.
    The fourth and final lesson is that the revolution in 
energy production will be a major boost to growth in economies 
that choose to compete in this market. The world is in the 
midst of a massive transition in the way energy is consumed 
and, especially, produced. The transition promises a series of 
economic, social, and health benefits that rival some of the 
greatest achievements in human history, principally related to 
the gains achieved by mitigating the harmful impacts of carbon 
emissions. Yet even laying aside the gains from reducing 
emissions, the transition promises to offer a major 
macroeconomic advantage to those countries that invest in low 
carbon technologies.
    Thank you. I look forward to answering your questions.
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    Chairman Arrington. Thank you, Dr. Harris.
    I yield five minutes for the beginning of our Q and A 
session to myself.
    And let me play off something, Dr. Harris, that you said 
about competition. I agree healthy competition is good for the 
economy, for our free enterprise system, but when I hear Ms. 
Harned's comments about small businesses and the 
disproportionate impact of regulations and representing West 
Texas, and a big rural swath of the Lone Star State, most of 
the job creators are family farmers and independent oil and gas 
producers and small businesses of all kinds, and they tell me 
about this tremendous weight of all the red tape and all the 
compliance costs on their businesses. They talk about, though, 
the sort of combination of so many things. Unemployment numbers 
look good, but job participation numbers look bad. We still 
have millions of people that are not in the workforce that were 
there pre-COVID. NFIB also had a study where half of their 
small business members said they can't fully staff up. So there 
is a labor shortage. I would say it is at least the tail of 
paying people not to work and welfare without work 
requirements. I think we need to tighten them up because that 
is a big gap and a big drag on the economy, and I think small 
businesses, that is one of the layers in addition to the 
regulatory cost. Obviously capital cost with interest rates and 
a number of things.
    But let's talk about the competitive disadvantage of the 
job creation engine of America's small businesses. Any comments 
on that, Ms. Harned?
    Ms. Harned. Yes. I mean, the struggle is real, and a lot of 
it is because small businesses really don't have a good seat at 
the table at all these regulatory inner workings. Groups like 
NFIB and Job Creators can only do so much. They do not have 
their individual Washington rep offices roaming the halls of 
EPA. So what I still find is, despite all of our best efforts 
on their behalf, many don't know about a regulation until they 
are forced to comply with it, and they are like, where did this 
come from? How do I comply with this? Again, 40 percent are 
calling the government to try to figure out how to comply. So 
they are already at a disadvantage when it comes to that.
    And I also just have to remark that I would agree with your 
comment on getting folks in the workplace. JCN, Job Creators, 
is showing the same issue and in fact, surveyed on the Limit, 
Save, Grow, and the work requirement and, I think it was 80 or 
more percent wanted to see that happen.
    Chairman Arrington. Well, on top of the input cost and the 
regulatory burden and the labor shortage, just so that people 
don't think I am trying to be pessimistic in a vacuum, or for 
political purposes, I would suggest a 1.1 GDP quarter, last 
quarter, which is down every quarter for the last three 
quarters, heading into recession, ain't good news.
    So look, there are a number of things that will benefit 
this country with respect to growth, and I have got a minute 
and a half left. I just want to list a few, and then, Doug, I 
would like you to elaborate on this because we have got to 
strengthen the balance sheet. We have a debt problem that 
really could turn quickly into a debt crisis and that would be 
hard to bail. You can't print money and borrow enough to bail 
out of a debt crisis. Seems to me though, that a stronger 
economy would strengthen the balance sheet by generating 
revenue to the Treasury, improve our ability to pay our bills 
and our Nation's priorities, reduce the financial risk, which 
would lower interest payments, which would bring down our debt-
to-GDP, et cetera, et cetera.
    How important is this growth factor in our ability as a 
Nation, collectively, Democrat and Republican, to get our 
country on good financial footing in the long run? And I will 
let you finish the remainder of my time.
    Dr. Holtz-Eakin. Well, certainly it is important to every 
family to have greater opportunity and see the real wages 
rising and have their standard of living rise, but from the 
perspective of the fiscal challenge we face, in the end, the 
revenue bases of the Federal Government are going to grow 
roughly as fast as nominal GNP, and so if we get back to two 
percent inflation and we manage to have two percent growth, it 
is going to grow at four percent, and we have programs--Social 
Security is growing over seven, Medicare is growing in the 
sixes. That gap is enormous, and that is the balance sheet 
problem, that is the future deficit problem.
    Chairman Arrington. Doug, with five seconds, can we get to 
one percent?
    Dr. Holtz-Eakin. Grow faster, add another percentage point 
of growth, and you have narrowed that gap. You have made 
everything easier that this Committee is worried about.
    Chairman Arrington. Do you think we could get one percent 
growth over that 10-year projection of CBO if we changed the 
mix of policies in place today?
    Dr. Holtz-Eakin. Congress has never been disciplined enough 
to do the things necessary for one percent----
    Chairman Arrington. But if we were----
    Dr. Holtz-Eakin [continuing]. But it could be done.
    Chairman Arrington. Now, there is some optimism, ladies and 
gentlemen.
    Thank you, and now I yield five minutes for Q and A to my 
colleague.
    Mr. Boyle. Well, thank you, and I was remiss earlier. I 
should point out, most importantly, we have an alumnus from the 
House Budget Committee staff in Dr. Harris. So welcome back. 
Showing that alumni from this Committee go on to do excellent 
things. So you are very welcome and thank you for being here.
    Just a general observation before I do switch to what 
really is the 800 pound or perhaps more elephant in the room, 
and that is the greatest threat to our economy that we are 
facing right now, and that is a failure to raise the debt 
ceiling, but first, a general observation. One of the reasons 
why spending always goes up, regardless of the party in the 
White House or Congress, is that I observe the American people 
are against spending in the abstract, but then when you poll 
and ask each individual item that government spends on, there 
is solid majority support, and that reality is not going to 
change anytime soon.
    I think similarly when it comes to regulation, if you ask 
the American people, if you ask me, what do you think about too 
much regulation or onerous regulation, we all say, of course we 
don't want that. We don't like regulation, but then the moment 
something goes wrong because there wasn't sufficient 
regulation, people are immediately outraged.
    And so I think that we as lawmakers, as people who impact 
public policy, we should probably acknowledge that sort of 
external constraint that we all operate under in terms of 
sentiment.
    Now, switching to the debt ceiling, Dr. Holtz-Eakin, you 
gave comments in January, which I appreciated, and I am going 
to paraphrase, but I think I have it right. It is your view 
that we should absolutely not play around with the debt ceiling 
and take it hostage, that it should be increased, but the 
fights that were happening right now in terms of spending next 
year and beyond, should more appropriately be handled as part 
of the appropriations process. Is that a fair characterization?
    Dr. Holtz-Eakin. My view is that it is imperative to, in a 
timely fashion, raise the debt ceiling or suspend it. That 
requires 218 votes in the House, 60 in the Senate, and that you 
are better at than me. So I don't know what piece of 
legislation gets it done, but please get it done quickly.
    Mr. Boyle. Thank you, and, Dr. Harris, could you talk about 
what happened in 2011, the impact of coming so perilously 
close? I had been saying since January, it was very much my 
fear, and candidly, my belief, that this would be the most 
dangerous situation that we would face in terms of the debt 
ceiling since 2011. Unfortunately, that is proving accurate.
    Dr. Harris. So I would agree with you that is proving 
accurate. Unfortunately, 2011 was a perfect text case as far as 
how bad things could get if you fly too close to the sun. 
Equities declined by 17 percent, so the stock market went down 
by 17 percent, credit markets----
    Mr. Boyle. Including--sorry--including five percent in one 
day I think.
    Dr. Harris. In one day. I mean, this is not a typical well-
functioning financial system when you are seeing these really 
big swings day to day. It is bad for business. Credit markets 
seized up. If you wanted to get a mortgage, it was much more 
expensive, if you were a big corporation and you were relying 
on short term debt markets, as many big corporations do, those 
markets seized up. The VIX, which is a measure of financial 
volatility, went through the roof. So this was a completely 
unforced manufactured crisis, and we didn't actually hit the 
debt ceiling. I mean, that was just representative of what 
could happen. So I am just as worried as you are.
    Mr. Boyle. Yeah, and, of course, we ended up, one of the 
three credit agencies downgraded the United States for the 
first time ever. There is every indication that we may be about 
to experience the same thing.
    Could you opine or offer any insight into the fact that now 
that the debt ceiling, which has existed for more than a 
century, but it is really only the last 25 years, this has been 
weaponized, if this dysfunction continues and continues, what 
impact might that have on the United States continuing to be 
the reserve currency of the world?
    Dr. Harris. So the United States has benefited from decades 
and decades of proving to be the best place in the world to do 
business. We respect the rule of law, we are generally measured 
when it comes to policy making, and there aren't wild swings 
and things like the debt ceiling, but we sacrificed that. We 
sacrificed that, as you said, from a reserve currency 
standpoint. We also sacrificed that from a policy making 
standpoint, and the part about the bill that passed the House 
that worries me so much is the repeal of the tax credits we are 
offering the IRA. I spent a lot of time at Treasury talking to 
business leaders who relied on those tax credits, they made 
investments based on that tax credit, they took Congress at its 
word when it passed the IRA, and to have those pulled out from 
underneath its feet would be catastrophic to their business 
decisions.
    Mr. Boyle. And with one second left, I yield back.
    Chairman Arrington. I thank the gentleman and now yield 
five minutes to my friend from South Carolina, Ralph Norman.
    Mr. Norman. Thank you, Mr. Chairman.
    I think we live in two different universes. To hear my 
friend on the opposite side say it is rosy picture, the economy 
is well, Dr. Harris, to hear you say Janet Yellen has got a 
plan, you talk about the debt ceiling, how we got to raise it. 
Jodey just mentioned we got $660 billion in interest alone. 
That is going to surpass our military budget. You have got to 
face it at some point. Now my friends on the other side of the 
aisle saying we use it as leverage, we are using it to bring 
some sanity back in this government. Janet Yellen has never 
created a job in her life. That is the problem up here. You got 
bureaucrats, unelected bureaucrats, making policy and spending. 
It is easy to spend other people's money.
    I am in the construction field. We have built many houses 
and projects. Go ask them on Main Street the challenges they 
face. Go ask them why they can't get workers. If a job is hot, 
you can't find somebody. Go ask them why they can't get meters 
and the supply chain shortages. I mean, the list goes on and 
on.
    I have never seen a battery operated dump truck. Maybe I 
didn't, haven't looked long enough, but I have just never seen 
one. I have never seen an 18-wheeler operate on batteries nor 
do I get on an airplane and fly out on batteries. Yet this 
administration thinks that all of a sudden we can have a magic 
change and go to electric vehicles. The public doesn't want it 
and it is really bizarre, and the fact that we spent--I think 
it is $400 million on climate change, or maybe billions, can we 
really control a storm and an earthquake yet we can't control 
the price of gas?
    It is pretty simple folks. This is stupidity at its height, 
and the economy is not doing well. I am part of it. So goes 
housing, so goes the economy, and the only way we are going to 
have to get some sanity back is just what we are doing on the 
debt ceiling. We put parameters on what we presented, we got 
the 218 votes, Dr. Holtz-Eakin, and hopefully we are going to 
stick with that and not vary from that.
    Is it unfair to ask people before they get a government 
check to go to work, go 20 hours a week? Really? So it is 
really insanity, and I know the Trump Administration, aside 
from so many great things they did, for every regulation that 
was presented you had to cut two, and I would go down the line, 
what effect did that do with the economy? And I got two 
minutes. Just briefly, what dollar amount did that bring to the 
economy in your opinion?
    Dr. Holtz-Eakin. If you go from averaging $120 billion a 
year in regulatory costs imposed on the private sector to $15 
billion, you just freed up $105 billion to pay workers better, 
expand your business, otherwise grow.
    Mr. Norman. So substantial?
    Ms. Harned. Right. I mean, again, I watched this real time. 
The small business owners I represented were just--you know, 
they felt like they could grow again. They felt like Washington 
wasn't coming with something new, that they wouldn't know what 
it was and what they would have to--you know, new regulatory 
requirements. It really did help.
    Mr. Cross. It was easier at first to cut more regulations 
for every regulation that had to be added. It gets a little 
more difficult, but this notion of cutting rules in order to 
add a rule is a bipartisan one. I think it is something we can 
stress later on when we talk about this and I think it belongs 
in the discussion that this Committee has because it has a big 
impact, because when you freeze regulation, which is 
essentially what that was, a Trump one in, two out was a zero-
based regulatory budget, freezing cost. When small business has 
some certainty it makes it easier for them to react and to grow 
and not expect they are going to be hit with something.
    Mr. Norman. No, and like Ms. Harned said, most--what, 
seventy-something percent of small businesses are made up of 
ten people or less. They don't have the funds to hire 
accountants, to hire--the legal fees, and that is what we are 
hitting all over this country.
    Dr. Harris.
    Dr. Harris. About the question about general regulation, 
sir?
    Mr. Norman. Whatever.
    Dr. Harris. Yeah. So I mean I think it is very difficult. I 
mean I agree with the Ranking Member. It is very difficult to 
talk about regulation in the abstract. I have seen firsthand, I 
have done three stints in the administrative branch. I have 
seen firsthand dedicated public servants----
    Mr. Norman. Let me ask you--I am running out of time. Is it 
abstract or is the interest--how much was it, Jodey? $660 
billion on interest of the debt, is that in the abstract or is 
that real?
    Dr. Harris. That is real.
    Mr. Norman. Okay.
    Dr. Harris. And I worry about continued higher spending, 
but I have suggestions for how to improve the fiscal outlook.
    Mr. Norman. Okay, well, it starts with the bill, which is 
hopefully what we have got.
    Thank you each for being here.
    I yield back.
    Chairman Arrington. I thank the gentleman from South 
Carolina.
    I yield five minutes to Mr. Higgins from New York.
    Mr. Higgins. Thank you, Mr. Chairman.
    Dr. Harris, there is a lot of talk, particularly this week, 
about the debt and the possibility of a default, which, 
according to a report by NPR, people impacted by default would 
be U.S. military veterans. $12 billion as of June 1, if we 
default, $12 billion in veterans benefits would not be sent 
out. $12 billion in civilian and retiree benefits would not be 
sent out. As of June 1, $25 billion in Social Security benefits 
would not be sent out. Mortgage interest rates would increase 
by 8.4 percent. $47 billion in Medicare provided payments that 
are due June 1 would not go out. $1 billion in tax refunds as 
of June 7 would not go out. $4 billion in Federal salaries 
would not be paid. Obviously, and the economy would be 
projected to contract by about 5 percent, and a loss of several 
hundred thousand jobs.
    The U.S. debt is often misperceived as being owned by 
foreigners, where actually 70 percent of U.S. debt is to the 
American people, owed to the American people. It seems to me 
that historically, in times of world and domestic financial 
crisis, the demand for U.S. Treasury bonds and bills increases 
dramatically because U.S. debt is considered a flight to 
safety. So in times of economic uncertainty, both for the 
American people, and for the world economy, U.S. debt is kind 
of a good thing. Why is it so vilified when in fact, it is 
deemed to be the safest asset in the world, backed by the full 
faith and credit of the United States? What can you reconcile 
about this?
    Dr. Harris. So I agree wholeheartedly that we have 
benefited from U.S. debt being seen as a risk free asset, and 
in fact, our financial system, not just the United States, but 
the world, is based on this, and what I worry about so much 
about the current debt ceiling impasse is we are on the cusp of 
possibly seeing the world view, U.S. debt as going from risk 
free to being a risky asset, and we don't know the implications 
for that, and you could have a repricing of really every asset 
in the country, not just Treasury debt, but also every home, 
every piece of stock that you own, every investment that you 
make. I mean, we could just be throwing a match on gasoline 
right now, as we see Treasuries go from risk free assets to 
being risky assets. We just don't know what would happen. It is 
incredibly dangerous.
    Mr. Higgins. Yeah, our friends on the other side are very 
quick to point to the fact that they don't want to adversely 
impact Social Security, for example. So right now there is a 
Social Security Trust fund of $2.8 trillion. As I understand 
it, that is the money that is paid into the system through 
Federal Insurance Contributions Act that are not paid out to 
beneficiaries. So we are still in a surplus situation. 
Understand further is that by law, those surpluses have to be 
invested in U.S. Treasury and bonds. If you are really 
interested in preserving and expanding and improving Social 
Security, aren't you putting that very program at risk by not 
raising the debt ceiling and potentially putting the United 
States in default for the first time in its history?
    Dr. Harris. Absolutely. So Social Security makes regular 
payments to beneficiaries. We have planned payments the first 
few days in June for some of the lowest income beneficiaries, 
and then regular payments on June 14, June 21, June 28. If 
these people don't get their payments, and each Wednesday, the 
second, third, and fourth Wednesday in each month, about 20 
million older Americans get these payments and they rely on 
them, and they depend on them to come on the exact day that 
they are promised. Out of those 20 million older Americans who 
rely on Social Security, about half, about 10 million, are 
pretty much living paycheck to paycheck, and if this debt 
ceiling impasse means that they don't get their money, you are 
going to see real hardship for people. I mean, these are older 
Americans going hungry that have no other option. It is an 
absolute catastrophe for people who have worked their whole 
lives and who are depending on Social Security.
    Mr. Higgins. My time is near expired and I yield back.
    Chairman Arrington. I thank my friend from New York.
    I now yield five minutes to Mr. Tom McClintock from 
California.
    Mr. McClintock. Thank you, Mr. Chairman.
    First, I would like to remind my Democratic colleagues that 
the House acted last month to increase the debt ceiling by $1.5 
trillion. They all voted against it. It is now up to the Senate 
whether to send that bill to the President or amend it and send 
it to conference.
    Mr. Chairman, perhaps we should enter that episode of 
Schoolhouse Rock into the Committee record since they obviously 
missed it.
    Dr. Holtz-Eakin, just some basic economics of over-
regulation. It seems to me that the prosperity in a free 
society is created by those voluntary exchanges that occur 
between countless consumers every minute. I pay you a dollar 
for a cup of coffee. What is going on? I am telling you that 
your cup of coffee is worth more to me than my dollar, and at 
the same time, you are telling me that my dollar is worth more 
to you than your cup of coffee. We make that exchange and we 
end up with something of greater value than we took it, we both 
go away richer. Do I have that basically correct?
    Dr. Holtz-Eakin. Yes. Except the price of coffee.
    Mr. McClintock. True. So suppose some busy body now sticks 
his nose into the transaction, the Ranking Member, perhaps, oh, 
no, the coffee has to be served between 98 and 103 degrees and 
it must be covered if consumed more than 25 feet from the point 
of sale and a swizzle stick has to be included if the 
condiments are to be sold at the same location. Doesn't every 
one of those regulations reduce the value of that exchange for 
one or the both of us?
    Dr. Holtz-Eakin. Yes, and it will most likely show up 
immediately in just higher costs for the coffee.
    Mr. McClintock. Right, and they tell us that this is to 
protect consumers, but isn't the word no the ultimate consumer 
protection? No, your price is too high, no, I don't like the 
color, no, I can get a better deal down the street. I mean, we 
all make bad decisions in our lives, but isn't that the price 
we pay for the freedom to make all the good decisions in our 
lives?
    Dr. Holtz-Eakin. Yes. Plus, the option to go somewhere 
else.
    Mr. McClintock. Yeah, exactly right. I can get it down the 
street.
    Dr. Holtz-Eakin. I think one of the biggest impacts of 
regulation is to make it harder for new entrants to come in and 
compete, and that is where you lose competition in markets, 
that is where you lose the ability to harness markets to make 
people better off.
    Mr. McClintock. Right, and it is not to say that some 
regulation isn't necessary. I mean, representations in a market 
have to be accurate, contracts have to be enforced, currency 
has to be reliable, products have to function as advertised. 
Those things that apply to the entire market and that make it 
trustworthy and reliable, make a market function more 
efficiently, but isn't that fundamentally different from 
government simply replacing a consumer's preferences with its 
own?
    Dr. Holtz-Eakin. I think what you listed are a lot of 
safety and soundness regulations. People respect and want 
those. The excessive regulations are those which interfere and 
make decisions on behalf of people.
    Mr. McClintock. Exactly.
    Mr. Crews, let's turn to the fundamental constitutional 
issue involved in the regulatory state. Madison pointed out 
that when all of the powers of government are concentrated in 
the same hands, you have tyranny. That is why they meticulously 
divided the powers of government. Congress makes law but can't 
enforce it, the President enforces law but cannot make it--at 
least he is not supposed to, and then you have an independent 
judiciary to resolve disputes. Doesn't the modern regulatory 
state put all of those powers back in the same hands? An 
unelected agency writes the laws, then enforces the law that it 
has written. If it accuses you of violating its law, you have 
to answer to the agency in a court that is run by the agency 
without a jury, and the agency then keeps the fines that it 
assesses you. Is there a more profound threat to democracy than 
that?
    Mr. Crews. Well, I think the administrative state has long 
been a threat. It is something that has grown. It is seen as a 
fourth branch. It consolidates all those powers that you 
mentioned, and there can be better ways of doing things----
    Mr. McClintock. And completely separates the government 
from the control of the people, which is the very definition of 
a democracy.
    Mr. Crews. That is actually worsening because we talked 
about the relative handful of laws that Congress issues, and 
regulatory agencies are issuing thousands of rules every year 
on top of their----
    Mr. McClintock. Here is how Alexis de Tocqueville framed 
the subject of this hearing back in 1825, almost 200 years ago. 
He said it covers the surface of society with a network of 
small, complicated rules, minute and uniform, to which the most 
original minds and the most energetic characters cannot 
penetrate. The will of man is not shattered, but softened, 
bent, and guided. Men are seldom forced to act, but they are 
constantly restrained from acting. Such a power does not 
destroy, but it prevents existence. It does not tyrannize, but 
it compresses, innervates, extinguishes, and stupefies the 
people till each nation is reduced to nothing better than a 
flock of timid and industrious animals of which the government 
is a shepherd.
    Is that what we are facing as a society today?
    Mr. Crews. It is too easily headed that way, and I think 
too many new sectors are subject to regulatory burdens. Even 
the example with coffee that you gave just shows you, if you 
have burdens put on that aren't necessary and you cut 
competition, you lessen commerce, you cause consumers to look 
for other options, then they have trouble finding them, it 
dampens the economy. It dampens the entire competitive 
structure. It dampens the GDP, and it ends up circling back 
into this budget debate you are having, because if you have an 
over regulated economy and if you have spending that is also 
regulatory in nature, you are ending up with a government that 
is spending too much, going into too much debt.
    Mr. McClintock. Which helps----
    Mr. Crews. If you lessen regulation, you can energize 
things so that you can deal with something.
    Mr. McClintock. Which helps explain why Mark Zandi is 
always wrong.
    I yield back.
    Chairman Arrington. And with that thank you, Mr. 
McClintock.
    Now I yield five minutes to the gentleman from Oregon, Mr. 
Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman.
    Dr. Holtz-Eakin, it is great to see you. We joked that we 
might exchange our statements from 12 years ago that are 
equally applicable in this slow-moving train wreck that we are 
involved with.
    But I would like to ask you an economic question, if I 
could. Our friends have referenced that people should work 
before they get subsidies, welfare. I am wondering if you, from 
the economic perspective, could comment on whether we should 
examine 20,000 farmers who received $18 billion in subsidies 
for 37 consecutive years, averaging a million dollars per 
person. Is that an area that may have some economic 
inefficiency and should be reviewed in the context of what we 
are doing?
    Dr. Holtz-Eakin. Well, certainly you had the opportunity 
this year. The farm bill is up for reauthorization, and I would 
encourage you to do that.
    Mr. Blumenauer. No, I am asking should it? Should it?
    Dr. Holtz-Eakin. Yeah, look at it.
    Mr. Blumenauer. Thank you.
    My Republican colleagues have repealed, and would like to 
repeal, and voted to repeal some of the subsidies that we have 
given for energy production. We have seen people rush into this 
space, not just committing, but investing billions of dollars. 
If we look at repealing these subsidies that have been enacted 
into law, does that have a de-stabilizing effect? Is that a 
problem for the private sector? Yes, sir?
    Dr. Holtz-Eakin. I would, on this point, disagree with you. 
I am not a big fan of the strategy in the Inflation Reduction 
Act on clean energy, but it is yielding enormous inefficiency.
    Mr. Blumenauer. I want to ask my question. Repealing 
billions of dollars of subsidies that people have relied on to 
make investments, you don't think that is de-stabilizing?
    Dr. Holtz-Eakin. I think de-stabilizing is too strong a 
term. It is a small piece of the energy sector, an even smaller 
piece of the economy. It is setting out in the wrong direction, 
in my view and going back would not be a mistake.
    Mr. Blumenauer. Well, with all due respect, I think most 
people would suggest that Federal legislation that people have 
relied upon to make billions of dollars of investment, to 
suddenly repeal them, would have a de-stabilizing effect, and I 
will give testimony on the floor of the House in a few minutes 
from people in the industry and the unions that are involved.
    Dr. Harris, am I missing something? Isn't that de-
stabilizing?
    Dr. Harris. So I think the only thing that is incorrect 
about your point was the billions. It should be trillions. So 
that roughly $370 billion for tax credits in the IRA will 
catalyze up to $5 trillion investment in the private sector. I 
have had conversations with executives in the sector. They have 
said that this bill just kicked off a wave of new interest. I 
mean, that is really the idea. This isn't just government 
subsidies for new spending, this is to partner with the private 
sector, to transition to a new way to produce energy, and it is 
$5 trillion. It is one of the biggest economic----
    Mr. Blumenauer. Thank you. I appreciate your observation. 
That was my experience in a recent meeting in Houston with 
dozens of people in the renewable energy sector talking about 
the impact that this has in their investment decisions and 
making a difference, at least for the economy in Texas.
    I do take the notion that Mr. Norman said, it is like we 
are looking at two different universes, and I take that point. 
I also agree with the Chairman, that handing out subsidies 
without some responsibility is something we should look at, and 
I don't think it is healthy.
    But to our Ranking Member's observation that people look at 
these issues like tax credits or tax in the abstract, when we 
get real about the impact that they are having on real life 
people, it is why that theoretical 22 percent reduction that 
people are imagining, when it comes time to put their vote 
behind it in appropriations or very specific budget decisions, 
people shy away. It is why we haven't been given a specific 
litany that would give context and focus to the theoretical Act 
that my Republican friends passed last year. When it comes time 
to make those cuts real, you are not going to find much 
enthusiasm or many votes.
    I appreciate your indulgence, and I yield back. Oops, I am 
four seconds over. I am sorry.
    Chairman Arrington. I appreciate my colleague's sentiments, 
and now we are going to pass the mic for five minutes to my 
friend, Mr. Smucker from Pennsylvania.
    Mr. Smucker. Thank you, Mr. Chairman. Great conversation, 
and I would like to respond to some of the things that I heard 
from the other side as well.
    Mr. McClintock mentioned this already. I would like to 
remind everyone in regards to the debt limit, there was one 
vote to increase the debt limit, and that was the House. There 
are three parties. It takes three parties to increase the debt 
limit, that is the House, the Senate, and the President. If you 
don't like our plan, why isn't the Senate passing a bill? Why 
isn't the President proposing something?
    The folks on the other side keep going back to the clean 
debt limit, but that just doesn't hold water because there has 
been negotiations around debt limit discussions a majority of 
the time, majority of the time. So ignoring the desire of House 
Republicans to begin to put ourselves on a better fiscal path 
just does not recognize the political reality. We have had an 
election, the House is in the majority, we don't agree with the 
massive spending that has taken place under this 
administration, and there needs to be some compromise, and we 
don't expect to get everything that we want, but certainly no 
one is going to get a clean debt ceiling here, and so for 
months we have been asking for this negotiation to take place, 
and it will take place, and I think we are going to get this 
done. Everybody understands. We agree on one thing, that we do 
not want to default, and that won't happen if we get to the 
table and conclude these negotiations in the next few days.
    And then another point, and I think that we are on a 
pathway that could end in disaster over the next 10, 20, 30 
years, and so it is frustrating to hear this partisan blame 
going back and forth, some of the opening comments of the 
Ranking Member. When are we going to get serious about that 
trajectory? And that is what we are attempting to do, and you 
talk about we are doing this in the abstract, and then when you 
talk about specific line items, it is hard to make the cuts, 
but that is what we are elected to do, to put ourselves on a 
better path, and I would like to remind the Ranking Member, in 
Pennsylvania, he and I were both there, in 2008 when we were 
forced, because we didn't have revenue coming in, to look at 
every single line item in the budget, and yes, every line item 
has a constituency. So it is very tough to make these 
decisions, but I believe, and I think all of us believe, that 
there has been a massive expansion of the Federal Government 
intruding in every area of our lives, and we have to pull it 
back because we know it doesn't end well if we don't move us on 
the right path.
    And so on this debt relief bill that we did, the public 
thinks it is perfectly reasonable to go back to the spending 
levels of COVID when we were at all time high because of COVID. 
So going back to what we were spending six months ago and then 
trying to limit spending increase by one percent per year, that 
is reasonable, and then pulling back COVID dollars that aren't 
spent, that is reasonable, and then expecting people who are 
relying on government for help, expecting them to put forth the 
effort to go to work, that is reasonable. That has support from 
the public. So what is it about our plan that the other side 
doesn't like? I would like to hear. I would like to see a plan 
come from the Senate. I would like to see the President come to 
the table. I think it is time we do that.
    Dr. Holtz-Eakin, you talked about the excessive regulation. 
I know you do a lot of work on this, and I appreciate your 
work. I was a business owner, saw that myself, saw the impact 
on a growing business, but why should an everyday American who 
is not a business owner care? We do talk about regulation in 
the abstract, and I know that there are some regulations 
needed, we all expect that. You mentioned excessive regulation. 
I wish you had more time. I would like some framework of what 
we could use to consider excessive, but we know that the 
Federal Government has ballooned and it is really affecting 
people's freedom to make their own decisions, but why should an 
everyday American, who goes to work everyday, care about this 
growing Federal Government that thinks they can make decisions 
for you that you can't make better yourself? Why should they 
care?
    Dr. Holtz-Eakin. The barriers to entry will produce fewer 
choices. You will have fewer places you can go to get the 
things you want, you will have less variety of products on the 
market, they will cost more, and in the end, your wages won't 
go as far and your standard of living will not be what it 
should be, and those are things everybody would experience 
every day.
    Mr. Smucker. Thank you.
    Thank you, Mr. Chairman.
    Chairman Arrington. I thank Mr. Smucker.
    I now yield five minutes to my friend from Michigan, Mr. 
Kildee.
    Mr. Kildee. Thank you, Mr. Chairman. I appreciate you 
holding this hearing.
    You and the Ranking Member have made, I think, important 
opening comments that help explain some of the differences that 
we have, but we all share a common goal, and that is to do what 
is right for the American people.
    I will take a moment; just to briefly respond. I do think 
there are areas for common ground in response to Mr. Smucker. 
Some of the framework that is being discussed right now around 
the debt ceiling negotiation, one side is negotiating in 
public, but it is true that some of what we are talking about 
around limitations on spending is the subject of conversation 
that certainly the White House is engaged on, and let's not get 
too far ahead of ourselves in predicting that we can't find 
common ground when in fact progress is being made toward that 
common ground. So let's not make this all political. A debate 
and a discussion and negotiation is tough. We have competing 
priorities.
    I will say this. I disagree with one point. I am not sure 
you meant to make this point precisely, but I just want to 
clarify. It is not my position that we are elected ``to make 
the cuts''. We are elected to make decisions and part of that 
means making the tough decisions to realize that part of the 
solution here may be to eliminate the fact that in our system 
and our fiscal structure, we are talking about reducing support 
for essential programs that some may say we can't afford, but 
all the while ignoring the fact that some of the wealthiest 
Americans and certainly some of the richest corporations in 
this country do not even come close to paying their fair share, 
and that is policy that is embedded in the tax code, but in 
this particular conversation, one side of the conversation, one 
side of the debate has decided that we cannot even look in that 
place to try to come to a solution to this problem. So we do 
have some differences, and I hope as the conversation evolves, 
some of that--sorry, Yo-Yo Ma just decided to interrupt my 
commentary.
    So I appreciate the comment and I appreciate the debate.
    I do want to turn to Dr. Harris and ask a question in my 
remaining time. One of the issues that I have been working on 
is an increased occurrence, sadly, in the 21st century, of the 
exploitation of children in our labor markets. It is almost 
unbelievable at this point in our history that we are seeing an 
increased use of children in child labor, in factories, which 
is, I think, something we would all agree ought to be stopped. 
The difficulty that I would like you to address is that in the 
process of addressing the sort of regulatory environment, one 
of the initiatives is to dramatically cut the dollars available 
to the United States Department of Labor to pursue enforcement 
of our child labor laws, which means we are essentially sending 
the message that that is okay, and I don't know that you might 
have specific information about child labor enforcement, but I 
wonder if you might, Dr. Harris, comment on the cost, the 
social cost, the other economic costs, the externalities 
associated with the failure to enforce regulations that we all 
agree are based on principles that are common, but that will be 
nothing but a greeting card to those kids who are out there 
working in slave conditions, or perhaps it could relate to 
other aspects of the regulatory environment.
    Can you talk about the cost of that loss of enforcement?
    Dr. Harris. Sure, and I am happy to talk specifically about 
child labor. Child labor last year, child labor violations went 
up by 37 percent. It is almost unfathomable this is a problem 
in a country as great as the United States, that we have kids 
working in ways that violate the laws. I agree that we have a 
labor supply problem. We shouldn't look to children to fix it. 
When kids are at work, they are not doing other productive 
things, namely, they are not in school, they are not preparing 
to be adults. It is really a catastrophe, and cutting the 
funding for the DOL to go ahead and enforce child labor is just 
a tragedy in light of the trends that we are seeing with 
increased child labor exploitation.
    Mr. Kildee. I very much appreciate that, and I will 
generously yield back the remaining 22 seconds, Mr. Chairman.
    Chairman Arrington. I would like to remind the gentleman 
from Michigan that playing inspiring music while you are giving 
your commentary, it is got to be out of order, but it was 
impactful, I must say. I am going to take that into 
consideration.
    Thank you, my friend, and I now yield five minutes to the 
good gentleman from Virginia, Mr. Good.
    Mr. Good. Thank you, Mr. Chairman, and thank you to all of 
our witnesses.
    Mr. Crews, the average number of Federal agency rules 
issued for every law that was passed from 2007 through 2017 was 
27, meaning there is a 27 to 1 ratio during that ten year 
period of rules, regulations, mandates forced on the American 
people by unelected, unaccountable bureaucrats for every law 
that was passed by Congress, you know, the people's 
representatives, those entrusted and empowered by the 
Constitution with lawmaking, responsibility, and authority, and 
as I think you would agree as a side comment, that is why, by 
the way, the REINS Act is such a critically important component 
of the Limit, Save, Grow bill. The REINS Act, which would 
require that congressional vote on every major rule that is 
passed of impact of $100 million or more. Isn't that crazy? We 
only consider it major unless it is $100 million.
    And I will also just point out we are spending--this is 
important for the larger issue that we deal with in this 
Committee--our budget, Federal budget, $6 to $7 trillion. The 
President wanted it to be $7 trillion, a record budget this 
year. It has been a little over $6 trillion in the last couple 
of years. That is $20,000 per citizen on an annual basis. 
Everybody in this room, your share, if you pay it before, you 
have got to pay $20,000 for your Federal Government this year. 
That is not per taxpayer--it is what, $50,000 per taxpayer, 
$60,000 per household? For what? What in the heck are we 
getting from our Federal Government at an individual cost to 
that effect?
    And let me just go ahead and pause and make that a question 
and let you comment on that, Mr. Crews. What are we getting for 
our share of $20,000?
    Mr. Crews. Well, make the point--by the way, you can still 
get a $1 cup of coffee at Scotchman if you still need to do 
that.
    But that index, that ratio of the numbers of rules to the 
numbers of laws that Congress passes, we kind of jokingly call 
that the ``unconstitutionality index''. Regulations do a lot of 
different things, and you all have talked about the ones that 
are good and the ones that are bad. All that is a great 
discussion to have, but you have got regulations that are 
economic in nature, you have got some stuff that is just 
paperwork, you have got environmental, you have got health and 
safety, you have got a new surge now in social regulation, in 
social programs, especially after COVID in the wake of the 
things like the rental extensions and things of that sort, but 
people are getting different things for it, but I think the 
notion of getting together and looking at things we can do to 
grow the economy and reduce regulation, remember, your choice 
is never no regulation. That is one thing I think we really 
need to get across. Your choice is always between political 
disciplines, regulatory disciplines, and then competitive 
disciplines also. You can have an agency write a rule, but that 
is not necessarily a good regulation. Capitalism doesn't mean 
companies just run around doing whatever they want to do. In 
free markets, in free enterprise, you have got a company with 
upstream business suppliers, downstream business customers, 
consumers, Wall Street, advertisers, the media. There are all 
sort of forces that regulate.
    So when you say, what are we getting for all that 
regulation, I think in a lot of cases, not what we should be 
getting because we might be doing things incorrectly, and 
especially in emerging technologies and emerging businesses and 
emerging companies, this notion of spending hundreds of 
billions of dollars on EV charging stations--I was asking 
someone at the Consumer Electronics Show, I said, okay, so you 
are doing these stations, well by yourself? What are you doing 
to also add in cell tower cells and things like this? How are 
you working with other infrastructure owners to do it? So right 
here on the cutting edge, when you all are talking about saving 
money and not expanding government, now you have got an 
opportunity to really wall off the future from the way we are 
regulating in the past and consumers not getting much from it, 
in artificial intelligence, in new electric vehicle charging 
stations, and all of these new technologies. We are going down 
the regulatory path right now, and consumers are not going to 
get good deals out of it, I think.
    So I think the notion of the Article I Regulatory Budget 
Act too in addressing some of this and deciding what should the 
economy spend on regulation. I mean, that is a serious question 
that you all have to think about. You know what Federal 
spending is now, you know what the debt and deficit are now. 
How much do you think you are willing to put into regulations? 
And I think it is what the economy can stand and it is what 
consumers will get out of it.
    Mr. Good. Thank you, Mr. Crews, for being here.
    Mr. Chairman, I yield back.
    Chairman Arrington. Thank you, Mr. Good.
    Now I would like to yield five minutes to the gentleman 
from Texas, Mr. Doggett.
    Mr. Doggett. Thank you very much, Mr. Chairman, and to each 
of our witnesses.
    Dr. Holtz-Eakin, you are frequently called expert by 
Republican colleagues and I gather it is pretty clear from your 
testimony this morning you do not think this is a time when we 
should be increasing deficits, we should try to reduce them.
    Dr. Holtz-Eakin. Correct.
    Mr. Doggett. And your testimony before the Ways and Means 
Commission, Committee over the years has been very consistent 
that tax cuts do not pay for themselves, and that remains true 
today, does it not?
    Dr. Holtz-Eakin. Yes, it does.
    Mr. Doggett. And so adding another $2 or $3 trillion to the 
deficit by cutting taxes is largely likely to have the same 
impact as if we increase spending by that amount. In fact, 
the----
    Dr. Holtz-Eakin. I don't think I would agree with that.
    Mr. Doggett. You would agree that it certainly increases 
the deficit if you cut taxes since they don't pay for 
themselves?
    Dr. Holtz-Eakin. Yes. Yeah.
    Mr. Doggett. And the estimate from the Congressional Budget 
Office, which you once headed, said that the Trump tax cut got 
up pretty close to $2 trillion in adding to our deficit, and I 
guess I would have a lot more confidence in the view that our 
Chairman has advocated that we need to get the deficit under 
control if he were not already sponsoring another massive tax 
cut that is estimated to cost trillions of dollars.
    Indeed, yesterday there was a report out that the Chairman 
of the Ways and Means Committee, Mr. Smith, wanted to have a 
tax cut as his birthday gift on--I believe it is June the 16th. 
The data that I have seen suggests--from the Institute for 
Taxation and Economic Policy--that the richest five percent of 
Americans would receive nearly two-thirds of the benefit of the 
type of tax cut that he says he wants and the richest one 
percent of Texans would get a tax cut of over $80,000 in the 
first year of that birthday present. That is a pretty good-
sized birthday present, a little bigger than most Texans get.
    It seems pretty clear that the reason that we are going to 
receive another Republican tax cut proposal instead of the much 
promised Republican budget, is that while they are very 
specific in the benefits they would accord the most elite 
members of American society, they are unwilling to be specific 
at all as to where these cuts would fall, because if the 
American people fully understand the impact of the cuts that 
they are making whether it is to barter law enforcement, to 
veterans' health care, environmental law enforcement, or the 
approximate $1,000 in cuts to Pell Grants, that those would be 
unacceptable to the American people.
    The current concern for budget deficits, which I share and 
which I think we should find a way to try to bring under 
control, is not brought under control by adding trillions of 
additional dollars in tax cuts.
    Dr. Harris, what would be the effect of another Republican 
tax law cut for those at the top at a tune of $2 to $3 
trillion?
    Dr. Harris. Well, I think that you captured the 
distributional consequences well.
    I will say with respect to the TCJA and the macroeconomy, 
in 2017 we had this supply side experiment that was on a scale 
that we have never seen before. It was a $1.5 trillion tax cut, 
perhaps even more expensive, and the data, the economic studies 
that have been performed afterwards showed it wasn't effective 
at all at increasing investment. Investment did increase 
incrementally, but that could be attributed to growth in 
aggregate demand, oil prices, and other factors, and in fact, 
we didn't see growth in business formation, we didn't see 
growth in employment, and we didn't see growth in median wages 
after TCJA.
    So I would characterize it as a very costly, failed 
experiment.
    Mr. Doggett. Thank you.
    A standard line in here from last week and probably this 
week's hearing is, oh, this is a spending problem, it is not a 
revenue problem. Well, I would ask unanimous consent to add to 
the record a report from the Committee for a Responsible 
Federal Budget, which has been critical of both Democrats and 
Republicans, pointing out that the way we are right now, we 
have seen a decline recently in revenues, and they suggest that 
neither the arguments for the pandemic policy nor the delayed 
effect of the so-called pro-growth tax cuts have produced a 
meaningful--that the effect of them is both to impact 
negatively our budget situation, that there is both a revenue 
problem and a spending problem, and I would ask unanimous 
consent to include that report in the record.
    Mr. Bergman [presiding]. Without objection, so ordered.
    [The information follows:]
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    Mr. Doggett. Thank you. Thank you.
    Mr. Bergman. Mr. Grothman, you are recognized for five 
minutes.
    Mr. Grothman. Great. Thank you.
    Ms. Harned, I have a big manufacturing district. I don't 
think people realize the role manufacturing plays in our 
economy. By the way, just for people listening at home, you 
know Wisconsin right now is the biggest manufacturing state in 
the country as percent of workforce. Did you know that?
    Mr. Crews. No.
    Mr. Grothman. Good. Now you learned something. Wisconsin is 
number one in manufacturing, so you got to know.
    Okay, but, Ms. Harned, do you have any sense of how over 
regulation has affected manufacturing?
    Mr. Crews. I am Mr. Crews.
    Mr. Grothman. Oh, Karen.
    Ms. Harned. Yes. I mean, that is an example of a very 
heavily regulated industry, and it does--I know of one 
manufacturer just in Dallas that has just seven employees, and 
he is spending an exorbitant amount of his money on regulatory 
compliance because of all the rules that----
    Mr. Grothman. Could you compare--this is something compared 
to other countries.
    Ms. Harned. Right.
    Mr. Grothman. Could you compare the regulatory burden in 
U.S. compared to our competitors?
    Ms. Harned. I cannot, but maybe one of my colleagues can.
    Mr. Grothman. Okay. What steps can Congress take to ease 
these burdens?
    Ms. Harned. Right. I think, again, that there is a lot--
look, when somebody, especially a small business owner, is 
inspected, for example, the administration or the agency 
official is going to look for something to show for their work, 
right? And there are so many regulations on the books that 
really are just sitting there waiting to be used. So if there 
is not a real issue, they have got all these regulations they 
can pick from that maybe haven't been enforced in years, and 
actually, some studies have been done on that. Getting rid of 
the regulatory underbrush would be a very big part of that.
    Also, in doing regulation, making sure it is not one size 
fits all. Small businesses are their own regulatory compliance 
officer and their voice is not heard at the regulatory process 
as much as it should be or when alternatives are suggested, the 
agencies so easily dismiss those. So strengthening that 
analysis would be great.
    Mr. Grothman. Thank you. Next question, and I guess it is 
more for Mr. Crews.
    The administration is pushing retirement account 
fiduciaries to consider ESG factors in evaluating their 
investments, and the Biden Administration is, by executive 
order, directing Federal agencies to take a whole of government 
approach to enact its social justice goals. How does this whole 
of government approach affect the private sector in the degree 
to which the Federal Government is going to be weighing in for 
social justice goals?
    Mr. Crews. Yeah, I think this is a big, important issue and 
I think you ought to pay a lot of attention to it. You remember 
President Obama had the pen and phone that he used to go around 
Congress, he would say, and now with President Biden, he says 
the same thing, that he can go around Congress, and his 
agencies have a series of what he calls whole of government 
initiatives. There is competition policy, there is equity, 
there is climate crisis, there is digital currency, there is 
long COVID. So these are----
    Mr. Grothman. I will ask you a question. I was recently out 
to eat dinner in one of these places, you know, you are a 
congressman, people come up and talk to you. I had a gal come 
up and talk to me. She was in human resources for a bank, which 
of course is very highly regulated, and she said they had a job 
opening for months but they weren't able to fill it because the 
only applicants were white guys. Well, is this something you 
hear about?
    Mr. Crews. I didn't hear that, but the interesting thing 
here though is agency--you have got laws that agencies use, 
they have their rules that they issue, but now with guidance 
documents and so forth, which is the way a lot of these new 
whole of government programs will be driven, I think you have 
got even less transparency in the regulatory state and it is 
going to affect the private sector quite a bit, and there needs 
to be more transparency for it all.
    Mr. Grothman. Well, not just transparency. Does it bother 
you, these types of regulations? When I talk to my human 
resources professionals it is becoming an increasing problem.
    Mr. Crews. Well, I think they do, and initially you 
mentioned the investment funds being required to invest----
    Mr. Grothman. Not the investment funds. Let's talk about 
the effect of the----
    Mr. Crews. But that is increasing regulation indirectly.
    Mr. Grothman. Let's talk a little bit about the hiring part 
of a business, the degree to which the Federal Government is 
weighing in. Is this an increasing problem and do you expect it 
to become a greater problem?
    Mr. Crews. It could. I am not an HR expert. Maybe----
    Mr. Grothman. Well, is one of the other one is an HR expert 
when we are talking about Federal regulation. Not really? You 
don't feel like answering that question? Okay, well, we are 
going to go fight for you guys anyway.
    Thank you.
    Mr. Bergman. Mr. Panetta, you are recognized for five 
minutes.
    Mr. Panetta. Thank you, General, Ranking Member. To all the 
witnesses, thank you for being here.
    Dr. Holtz-Eakin, obviously, I have had the pleasure of 
being in committees where you have testified before, and so I 
think it is important that we continue to listen to you and 
hear from you today. So I am going to focus my questions on 
you. The other Members you can either zone out, but don't worry 
about it. I am just going to hit the doctor over here.
    I am going to talk about three issues, Doctor, permitting, 
immigration, and the deficit, and the lack of progress on 
reducing our deficit.
    When it comes to permitting, I know that you did not 
mention that in your testimony, but do you believe that 
permitting can fit in, at least when it comes to Federal 
infrastructure, to the broader issue of regulatory burden?
    Dr. Holtz-Eakin. Yes.
    Mr. Panetta. How?
    Dr. Holtz-Eakin. So the permitting process is a set of 
regulations on how reviews will in fact, be conducted, who 
signs off, what approvals are necessary to do big 
infrastructure projects, they involve multiple levers of 
government, each of which has their own regulations. So it is, 
in general, a regulatory thicket to get through the permitting 
process.
    Mr. Panetta. Exactly. Now, look, I obviously support strong 
environmental regulations, but it just seems they are being 
weaponized these days, unfortunately, and there must be proper 
community input, and there must be a timely court process, but 
they just can't be used for an automatic veto over a project. 
So I am proud that we at least are setting out some permitting 
principles to speed up the pace of projects, especially when it 
deals with clean energy projects, and move this conversation 
ahead, and so I would appreciate you continuing to talk about 
that as well.
    When it comes to immigration reform, how does immigration 
over-regulation, how can that hurt economic growth? And could 
there be streamlining when it comes to immigration that help 
address that issue?
    Dr. Holtz-Eakin. Well, certainly. Again, the visa granting 
system is a large set of regulations, and we have a very 
elaborate set of regulations, for example, that govern the 
issuance of visas for work purposes, and we have H1Bs and H2As 
and all sorts of categories. In general, you like a labor 
market where people can flow from one opportunity to another 
with a minimum of costs and where businesses can compete for 
high quality employees, and all of those regulations lock 
people down and interfere with that mobility. They limit the 
number of workers, and I think this is an opportune moment to 
re-think the strategies we have toward immigration for work 
purposes.
    Mr. Panetta. Exactly. Thank you.
    Now I want to go to an article that you were a part of in 
The Economist, I think it was just a couple of weeks back. 
Basically, interviewed three former CBO bosses, yourself, Doug 
Elmendorf, as well as Keith Hall. The summary of that article 
was basically all three of you were unanimous in your view that 
a failure to lift the debt ceiling now, therefore opening the 
door to default, is a horrific idea, is the last paragraph of 
this article. However, prior to that, your statement, and what 
you say is, the average American has gone through the 21st 
century with Presidents who said we didn't have a problem. So 
why should anyone bother now with hard reforms? There is going 
to be a generation of voters that can't get anything they want 
because all the money has been spoken for. Can you elaborate on 
that statement?
    Dr. Holtz-Eakin. Certainly. So I wonder about the 
unwillingness to take on the reform of Social Security and 
Medicare in particular, when these programs are such central 
planks of the social safety net and both are in financial 
danger. A person who is 55 now does not know what the deal will 
be when they retire with Social Security. That seems to me just 
wrong. It is a terrible way to run a program. Medicare in five 
years, Part A bankrupts, but there is no groundswell to fix 
this, we don't hear that.
    And so I look back at the 21st century where the debt has 
only gone up and the Federal--and we had shown no political 
will to control it, and my old boss, George W. Bush, 
essentially had budgets that said, we are going to win the war 
against global terror at all costs. Period. President Obama put 
out eight years of budgets that said there is nothing wrong 
with the Federal budget except the rich have to pay their fair 
share. President Trump said nothing. He didn't use the words 
deficit or debt for four years, and this administration came in 
saying, hey, we can have whatever you want. Build back better, 
tons of new entitlement programs, it is all good.
    So the average American who relies on the President to 
identify big problems and needed reforms has not been told we 
have a big problem, and we do, and there will have to be 
substantial reforms of important programs, and there will be. 
No one knows that.
    Mr. Panetta. My time is up.
    Thank you. I yield back.
    Mr. Bergman. Thank you.
    Mr. Ferguson, you are recognized for five minutes.
    Mr. Ferguson. Thank you, Mr. Chairman and Ranking Member 
and witnesses. Thank you for being here.
    We have just heard a significant amount of stuff that is 
thrown at us. We have heard from--I have heard things from 
Moody's being quoted, different organizations, CBO, blah, blah, 
blah, yada, yada, yada. Nobody is talking about the consumer.
    So let's do a couple of things here. Let me ask a couple 
of, couple of questions here.
    Mr. Crews, over the last ten years, are Americans paying 
more for healthcare than they were a decade ago?
    Mr. Crews. Yes, I think so, but I don't follow the 
healthcare issue. I know I am.
    Mr. Ferguson. All right. Doug.
    Dr. Holtz-Eakin. Healthcare spending per person has risen 
in the United States.
    Mr. Ferguson. Okay. Also, to you, are Americans more 
healthy now than they were a decade ago or less healthy?
    Dr. Holtz-Eakin. Less healthy by many measures.
    Mr. Ferguson. Okay, thank you.
    Dr. Holtz-Eakin. Life expectancy, obesity, we can go down--
--
    Mr. Ferguson. Are there more regulations in health care 
over the last decade?
    Dr. Holtz-Eakin. Yes.
    Mr. Ferguson. Okay. All right, that is number one.
    Number two, are Americans paying more for energy costs now 
than they were a decade ago? How about just three years ago?
    Dr. Holtz-Eakin. Yes.
    Mr. Ferguson. Okay. Paying more for gas at the pump and for 
the cost of electricity in their home?
    Dr. Holtz-Eakin. Yes.
    Mr. Ferguson. American businesses are paying more for 
electricity.
    Are there more regulations, Ms. Harned, in the energy 
industry now than there were just a few years ago?
    Ms. Harned. Yes.
    Mr. Ferguson. Okay, so, all right, let's go to another one. 
The cost of capital, okay, the banking industry. Are Americans 
paying more to borrow money now than they were just a few short 
years ago?
    Ms. Harned. Yes.
    Mr. Ferguson. Okay. Are there more regulations in the 
banking industry and in the financial industry today than there 
were just a few years ago?
    Ms. Harned. Yes.
    Mr. Ferguson. Okay. All right.
    So now we have got the transportation sector. We've got 
just a few years ago, pre-pandemic, the price of transportation 
had kind of leveled off. Are Americans paying more for 
transportation, cost of vehicles, cost to fly on an airplane, 
you name it across the board. Are they paying more now than 
they were just a few short years ago?
    Ms. Harned. Yes.
    Mr. Ferguson. Are there more regulations in place today 
than there were just a few short years ago?
    Ms. Harned. Yes.
    Mr. Ferguson. Well, there seems to be a very common thread 
here that the more that this place regulates, the higher costs 
go.
    Now, look, I am going to put my small business hat on here. 
I ran a dental practice for 25 years. Every single time the 
Federal Government stepped in the middle of it, it drove 
healthcare cost up in my practice. All right. We have talked a 
lot about the bureaucracy here in D.C, but there is a sub-
bureaucracy that has been created in the private sector to deal 
with the bureaucracy in D.C. So now you have got the White 
House, you have got the Senate, you have got the House, you 
have got the bureaucracy, you have got the private sector 
bureaucracy. All of this stands in the way of American 
progress. Fair statement?
    Ms. Harned. Absolutely.
    Mr. Ferguson. All right. So let me ask you, let's go back 
in time just a little bit, okay? Let's go back to the mid to 
late 1980s. All right, Mr. Crews, this one will be for you. We 
had the most regulated telecommunications industry in the 
world, right? Ma Bell----
    Mr. Crews. That is right.
    Mr. Ferguson [continuing]. Controlled all of the long 
distance, right? We deregulated them. Are Americans paying less 
money today for their long distance and communication services 
than they were in the 1980s.
    Mr. Crews. Sure. There is a lot of innovation that emerges 
from getting rid of government supported monopolies and 
expanding, and it is a good thing to do.
    Mr. Ferguson. So right now, what my colleagues on the other 
side of the aisle have been advocating for and what we have 
seen consistently from this administration, is that they are 
going to regulate more and more and more to control the 
business environment, and it is going to drive the cost up, and 
then they are going to want to give everybody a subsidy so they 
can afford the cost of the regulation that they put in place. 
That is a ``mell of a hess''. I mean, it really is. I mean, 
that just creates a significant problem.
    So why aren't we thinking about things in a different vein? 
We deregulated telecommunications industry and we got the 
greatest period of innovation and technology that we have ever 
had. Why don't we do that on transportation? Why don't we 
deregulate healthcare? Vertical integration in healthcare is 
strangling, is strangling people's ability to access care and 
utilize the system. By the way, doctors are getting paid less 
and everybody else in between the patients getting paid more. 
Is that a function of regulation?
    Mr. Crews. Yes.
    Mr. Ferguson. So I think the basic notion here is that the 
more that this place regulates, the more it costs consumers, 
and for consumers to afford it, the government then has to 
provide a subsidy. Why don't we just get the middleman out of 
the way and let the consumer go direct to the provider? Doesn't 
that make sense? All right.
    With that, Mr. Chairman, I yield back.
    Thank you.
    Mr. Bergman. Thank you.
    Ms. Balint, you are recognized for five minutes.
    Ms. Balint. Thank you, Mr. Chair.
    I think I will start with where we just ended up in the 
previous line of questioning. My colleagues on the other side 
of the aisle would have us believe that regulations are 
absolutely killing our economy, and just to highlight what 
Ranking Member Boyle said earlier, we have emerged from the 
pandemic and the inflationary period in a better place than all 
of our economic peers worldwide. Recovery has been faster, it 
has been stronger, and so we have regulation essentially to 
ensure the health and safety of Americans. That is why we have 
it. It is not to strangle the growth or productivity of the 
U.S. economy.
    And so, I think about the summer and where we are right 
now. We are about to head into a period of extensive travel, 
whether it is by car or by air, and we know that this fight 
that we are having right now over debt ceiling and this ransom 
note that we are being asked to pay would cut money from the 
FAA, it would lead to a third of airports losing air traffic 
control, it would lead to cuts in TSA personnel, longer wait 
times, in excess of two hours for regular Americans, and would 
also bring about cuts to the National Highway Traffic Safety 
Administration, would lead to workforce reductions, which would 
increase danger for American travelers.
    So, regulations are not designed to stifle anyone, they are 
designed to protect American consumers.
    Now, Dr. Harris, from your experience at the Treasury 
Department, can you tell us what default would actually look 
like for regular American families like the Vermonters that I 
represent?
    Dr. Harris. So it is tough to say precisely, but it would, 
without a doubt, mean higher interest rates. So anyone who has 
a credit card, anyone who wants to take out a mortgage, any 
small business owner who wants to borrow and access the capital 
as a big part of the small business industry, they would pay 
more for every single one of those loans. If you have a 401K, 
almost certainly you would see a decline in the stock market. I 
don't know by how much, but you would experience pain that way, 
and you would see job losses--according to Moody's--I know that 
we cite them a lot, but they are willing to do the projections, 
and they are reputable--up to eight million jobs in a worst 
case scenario. So across the economy, everyone would be 
affected.
    Ms. Balint. And when we look at the economy as a whole, 
does this crisis, this manufactured crisis around the debt 
ceiling, improve our fiscal situation, the brinksmanship alone, 
does that improve our fiscal situation?
    Dr. Harris. That is a great question. Because interest 
rates go up, that means we are paying more for this $31 
trillion in debt. There have been projections that I have seen 
everywhere from Brookings to Moody's that put it right around 
$800 billion in extra interest spending over ten years, and 
that is kind of the irony of this, which is if you are doing 
this to improve the fiscal situation, but yet you are leading 
to almost a trillion dollars in higher interest payments, in 
some ways, it is counterproductive.
    Ms. Balint. Do you think it is fair to say that we already 
experienced financial costs that we will have to bear because 
of the brinksmanship alone, regardless of what happens as we 
approach the so-called X date? Are we already experiencing 
concerns in the markets because we are at this moment?
    Dr. Harris. So we are seeing some stress in the short term 
part of the curve. So Treasury issues different durations for 
debt. About two or three weeks ago, Treasury had an auction on 
a 4-week bill that was the highest ever on a 4-week bill 
maturing in early June.
    Another problem that arises from this is that after this is 
all over, Treasury has to raise a lot of cash, because in the 
world's greatest economy you don't want to be stuck at close to 
zero. So raising all that cash and reversing some of these 
extraordinary measures means it should be equivalent to around 
this, according to Bank of America, about a 25 basis point hike 
in interest rates. So, yeah, we have already incurred some 
costs.
    Ms. Balint. Thank you.
    Less than a minute left, I want to shift testimony just a 
little bit.
    Dr. Harris, in your written testimony, you wrote about how 
policy reforms designed to lower barriers to work and increase 
the labor force participation rates are actually better for 
economic growth than the failed policies in the 2017 Tax Cuts 
and Jobs Act. You wrote, ``Examples of such policies include an 
expansion in the Earned Income Tax Credit, better access to 
paid leave for caregivers, universal access to pre-K, and 
subsidies to raise the demand and supply of childcare''. So if 
you could just take one example, childcare, how does that have 
a positive impact for working mothers, for families, and for 
the economy as a whole?
    Dr. Harris. It leads more working mothers to the labor 
market, which is better for the aggregate economy and it is 
better for those families.
    Ms. Balint. Thank you.
    Thank you. Mr. Chair. I yield back.
    Mr. Bergman. Thank you. And I now recognize myself for five 
minutes.
    When we think about everybody in this room and those who 
might be viewing this on TV, what would the eighth grader think 
of our discussion? Why I pick on the eighth grade is that it 
was in eighth grade that I had started my first business, where 
I grew up in the north country, where you cut lawns in the 
summer and shoveled snow in the winter. I began to understand 
the value of a dollar and the value of taking debt to include 
buying a new lawnmower, buying a new snow shovel, and you know 
what, eighth graders today, I think, are savvier than I was 
back then because they have got more tools at their disposal, 
but the question is how do they use those tools? And the 
Ranking Member in his comments, opening comments, used the 
elephant in the room. I would suggest to you we need to look at 
the Hut in the room. Anybody know who the Hut is? As in Jabba 
the Hut. And the point is, if you look at Jabba the Hut, was a 
fictional character in the movie Star Wars, who better than to 
educate today's eighth grader than their parents who were 
roughly that age when Jabba the Hut came on the scene? But 
Jabba basically was a gimme more, gimme more, gimme more 
bureaucracy that never ever yielded the results, that 
necessary, but it was just give me more, and when you think 
about the generational nature of what we are talking about 
here, what we make decision-wise on debt is being passed along 
to our, in my case, my grandkids. We have got, we have got ten 
and they are all pretty sharp cookies because their parents 
chose to teach them a lot of things, not only morals and ethics 
and faith and family, but to teach them basic finance.
    So I think we can fairly ask the question to anyone, how do 
we, whether you are an individual, whether you are a family, 
whether you are a business, whether you are a government, view 
debt. Think if Alexander Hamilton was here, what views he might 
have.
    So I guess as we look at are we dealing with symptoms, are 
we dealing with root causes? The symptoms are what the symptoms 
are, lest we deal with the root causes, and this is not 
Democrat or Republican. This is about dealing with the root 
causes of what we are trying to deal with, then get back on it.
    So, having said that, as I ask my two minutes of questions 
here, I would ask you to consider, will the eighth grader 
understand a little bit of what you are saying? And if they 
don't, more importantly, if they turn and ask their parents, 
what did they just say, mom, what did they just say, dad, that 
their parents can give them an answer, because I believe we are 
way past time to teach financial education. Not how to spend 
your inheritance, that is not financial education, but basic 
finance for individuals or businesses, as we have referred to 
here.
    So, Ms. Harned, according to a recent piece in the Wall 
Street Journal, average inflation adjusted payments to low-
income households has grown from about $10,000 to roughly 
$45,000. Over the same period, the percentage of prime working 
age adults in the bottom 20 percent of income earners who 
actually worked, plummeted from 68 percent to 36 percent. How 
do Federal regulations and policies encourage low-income 
individuals to stay at home instead of finding work? You know, 
how do they work and what can Congress do to address the issue 
of unnecessary regulations that actually deflate incentive?
    Ms. Harned. Right. Well, so there have been many great 
proposals that you all have introduced that would get rid of 
regulations on the books that haven't been enforced for years. 
Once you get a regulation on, it is like the Hotel California, 
you never get it off. There are a lot that have not been 
enforced, and they need to get off the books.
    Also, when it comes to hiring, that is a whole big mess 
now, as far as each employee costs you $10,000 or $11,000 per 
employee for a small business owner. So they are thinking a lot 
about regulation when they are thinking about that and so 
getting rid of the burdens of that.
    And finally, I would just say 80 percent of small business 
owners support what you all passed with getting work 
requirements tied to government subsidies.
    Mr. Bergman. Thank you very much, and I see my time has 
expired. I yield back.
    Mr. Yakym, you are recognized. Oh, I am sorry. I didn't see 
you slide in there. Madam, you are recognized.
    Ms. Jackson Lee. I thank the Chairman and the Ranking 
Member for, I am sure, bringing us together for a positive 
reaction to what is the best way to move forward, and I think 
semblance of this title is about prosperity. Let me acknowledge 
that all of us would care to have prosperity, all of us would 
want to take that back to our communities.
    Cities have been called the cradle of civilization, cities 
are the closest to the people, cities are required in some 
instances to balance their budgets, but in doing so, if there 
is a catastrophic Hurricane Harvey, like Houston, Texas, 
catastrophic Hurricane Ike or Katrina, well renowned of 2005, 
as my recollection occurs, they are looking to the Federal 
Government to be able to provide that off ramp, and so as we 
sit here and debate amongst ourselves about potential 
prosperity, we also have to consider that prosperity does not 
come if the only answer we have in the pending days is a 
default.
    So I would like to pose this question to Dr. Benjamin 
Harris on the trickle-down effect of a default. We are talking 
about prosperity, but what would be the trickle-down effect on 
that on a city, the top ten cities, which includes Houston, 
Texas, Chicago, New York, but yet the rural hamlets, who from 
my perspective are enormously dependent on Federal aid and 
support.
    Dr. Harris. So there are many different effects. The first 
would be on financing. So, as I am sure you know, 
municipalities rely on well-functioning credit markets in order 
to finance the services they provide. You would see a potential 
blow up in those markets. It would be much more costly for 
cities to borrow to meet those needs. Then of course, the 
people who live in those cities would also suffer from higher 
costs, everything from higher costs from a mortgage to paying 
more for their credit card.
    But then there are also the potential costs related to the 
remedy, so to speak, and so if we do see those costs, those 
cuts in discretionary spending--just to give you one example 
and then I will stop. I have spoken a lot to some business 
leaders who are really worried about this cut in transportation 
spending related to the airports around the country, and it is 
not just the increased two hours wait time at TSA, we could 
actually see up to 300 different air traffic controller towers 
shut down, which means that these smaller cities and towns are 
left out of our Nation's air travel network.
    Ms. Jackson Lee. Well, let's continue to pursue that, and 
as I do so, let me ask unanimous consent to put into the record 
``White House Pushes to Save Key COVID Programs in Debt Ceiling 
Talks''. Ask unanimous consent, and, as well, ``McCarthy 
Bracing for Defections Eyes a Fraught Path to a Debt Limit 
Deal''. Ask unanimous consent to place these in the record, 
Chairman.
    Chairman Arrington [presiding]. Without objection, so 
ordered.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Jackson Lee. Let me just quickly, as my time goes, to--
and, Dr. Harris, the potential of losing seven million jobs, a 
spike in unemployment--we have been going along at about a 
three percent unemployment rate, which has really been a gift 
to all of us, even though there are unemployed persons in, 
unfortunately, groups that suffer the most, African Americans, 
young people, et cetera, that we have to continue to work at--
but seven million and wiping out ten trillion in household 
wealth and result in people near retirement, losing tens of 
thousands in savings, and I do want to put on the record on the 
brink of this Memorial Day, which is to honor the fallen, but 
30 million veterans losing, of course, their ability for their 
medical appointments. Can you pierce into that this is not a 
game of, I appreciate having the ability to cut costs, which 
shows that Americans say that is exciting to do, but let's 
pierce in to how it wobbles the economy, how it may collapse 
the economy, and how cities, counties, rural areas are going to 
be hit?
    Dr. Harris. So I think you touched on a lot of the costs. 
It is difficult to specify the costs because they have been 
unspecified at this point. We have these aggregate costs, 
aggregate caps leading out ten years to an economy, we don't 
know what the economy will look like in 2033. We haven't seen a 
specific cost. So it is virtually impossible to comment on what 
those cuts will mean because I don't know what they are yet.
    Now, we have seen a lot of speculation and we know that if 
we are going to firewall defense cuts and protect defense 
spending from any sort of reductions, and we are talking only 
about non-defense discretionary spending, then we have to make 
assumptions, and those assumptions are just catastrophic in 
many of the ways that you just characterized.
    Look, I am an economist, we don't make value judgments all 
that often. I happen to think that cutting support for veterans 
is immoral. I think that cutting support for housing stability 
is incredibly disruptive. We are talking about maybe hundreds 
of thousands of people being evicted or being without their 
housing support just like that, just because of a debt ceiling 
impasse.
    So it is really difficult to specify because I don't know 
exactly what cuts will come, but based on the assumptions we 
have made it would be really harmful for probably millions of 
Americans.
    Ms. Jackson Lee. As my last sentence, Mr. Chairman, in your 
mind it would not promote prosperity?
    Dr. Harris. The cuts? No, not at all.
    Ms. Jackson Lee. I yield back.
    Chairman Arrington. I thank the gentlelady from Texas and 
yield five minutes to my friend from Indiana, Mr. Yakym.
    Mr. Yakym. Thank you, Mr. Chairman, and thank you to our 
witnesses for being here today to share your expertise on this 
important issue.
    Deregulation is an essential component to economic growth. 
It allows for greater efficiency and competition in the 
marketplace and thus greater prosperity for all Americans. The 
Trump Administration took significant steps to reduce 
regulation in a meaningful way that benefited all Americans. 
According to the Council of Economic Advisors, the previous 
administration's deregulation efforts were estimated to raise 
real incomes by $3,100 per household per year. Unfortunately, 
President Biden and congressional Democrats undid several 
commonsense deregulation efforts and developed new policies 
that increase red tape and reduce accountability for regulatory 
bureaucrats.
    The nonpartisan Congressional Research Service estimates 
that between 3,000 and 4,500 final rules are published 
annually. In 2016, there were 315 significant regulatory rules 
enacted while only 214 public laws were passed. In fact, 
between 1996 and 2016, there were only three years in which 
there were more public laws enacted than significant regulatory 
rules. This illustrates, to me at least, an alarming problem. 
There is absolutely no reason that the United States Government 
should allow for unelected bureaucrats to make more rules 
impacting the lives of Americans than the U.S. Congress.
    Every student learns in Government 101 that there are three 
branches of government, the Legislative, the Executive Branch, 
and the Judicial Branch, but the unelected and unaccountable 
bureaucrats that constantly interfere in the lives of 
businesses and everyday Americans essentially amounts to a 
shadow fourth branch of government. Since 1960, the total 
number of regulators has grown from 57,000 people to over 
288,000 regulators, which means that over 3,600 regulators were 
added to government every year since 1960.
    We need to seriously reevaluate the regulatory environment 
in this country, and Congress has ceded too much of its own 
authority to unelected, unaccountable bureaucrats, and we need 
to explore ways through Congress to reclaim our Article I 
Constitutional authority.
    So my first question for Dr. Holtz-Eakin, can you estimate 
the overall size of the regulatory state in the United States 
economy?
    Dr. Holtz-Eakin. Not off the top of my head. There are a 
number of estimates out there, but you can count the 
regulations, you can count the pages or the lines or the number 
of rule makings, but it is the economic impact that matters, 
and all we know is that that is an enormous burden right now, 
and that, I think, what you heard today is not a cry for no 
regulation, but to have high quality regulation done when 
necessary at the least possible cost, and Congress providing 
incentives to do that is the important step we need to make 
now.
    Mr. Yakym. So from your perspective, how has over-
regulation fueled inflation and stifled economic growth?
    Dr. Holtz-Eakin. Well, it certainly is an enormous headwind 
to economic growth. At this moment it is heading in the wrong 
direction from the point of view of inflation. Additional 
regulations are costs that have to be passed on to consumers in 
one form or another and thus place upward pressure on prices at 
a time when we would like to go the other direction.
    Mr. Yakym. Can you talk about the impact that 
overregulation has had on our small business environment in the 
United States?
    Dr. Holtz-Eakin. It is a real concern. There are some 
specifics. For example, in the aftermath of Dodd-Frank, we have 
averaged fewer than five new banks per year. We used to average 
dozens and dozens of banks started every year. So competition 
goes down in providing those services. We have seen a real 
decline in startups leading into the pandemic. We were deeply 
concerned about the average age of American firms because we 
weren't getting new startups. They provide new products, better 
competition. Improving that climate, I think, is a first order 
challenge for better economic performance in the U.S.
    Mr. Yakym. Thank you, and, Mr. Crews, given that it has 
been proven time and time again that deregulatory policies are 
good for economic growth, can you share some examples of where 
you see opportunities for deregulation?
    Mr. Crews. Yeah, well, I think there are opportunities, but 
there are opportunities for this body, I think, in addressing 
the question, because we talked about the successes in the 
Trump era in regulatory budgeting, airline deregulation, and 
things of that sort, but as I'd indicated early on in my 
initial remarks, the notions of one in, two out, the notions of 
unfunded mandates reform, the notions of small business relief, 
those kinds of notions are bipartisan. They are rooted. They go 
way back. You find regulatory budgeting back in the Jimmy 
Carter era, and that is when you got the airline, trucking 
deregulation and banking deregulations, and you had this 
dramatic decrease in the amount of economic regulation in the 
economy. Environmental regulations, of course, increased and 
they are still increasing now, but I think the big concern that 
you all have to reckon with now is you mentioned the numbers of 
rules coming out from agencies as opposed to lawmakers, but now 
it is increasingly the independent agencies that don't get the 
regulatory review at the OMB that the Executive Branch agencies 
get, and I think a lot of the new surges in regulation--you 
know, we were asked about some of the equity rules and some of 
the ESG type programs. It is a lot of the financial bodies that 
are doing that, and yet they are not reviewed at OMB, and OMB 
has just put out new guidance--that comment date is coming up 
June 7--new guidance that is even weakening the potential 
overview because the threshold for review is going from 100 
million up to 200 million for the expected cost of regulation, 
and you don't really know. As Dr. Holtz-Eakin said, we don't 
really know, but there are enormous amounts of money, and I 
think if we can wrestle with some of those--some of the 
comments that Dr. Harris had made, I think, of removing entry 
barriers and things like that----
    Chairman Arrington. The gentleman's time has expired. I 
apologize for cutting you off.
    Mr. Yakym. Thank you to the witnesses and----
    Chairman Arrington. Trying to let everybody indulge 
everybody to have the fullness of discussion, but a few more 
folks and want to respect their time.
    Thank you, Mr. Yakym, and now would yield five minutes to 
Mr. Espaillat, the gentlemen from New York.
    Mr. Espaillat. Thank you, Mr. Chairman.
    Just let me read some headlines real quickly. Our Speaker 
says a debt limit deal with Biden is possible, our Speaker 
faces balancing act on debt ceiling deal, our Speaker tells 
House Republicans are nowhere near, our Speaker, meeting ends 
with no deal on debt ceiling, the Speaker holds a productive 
talk.
    This theater is about to end. The curtain will come down on 
this theater that has occurred 78 times, including 49 times 
under Republican administration. So this effort to talk about 
spending and gut programs that are so essential to workers and 
families in the United States, this effort to create a theater 
leading us to a potential precipice, is about to end today or 
tomorrow.
    So, Dr. Harris, having said that, the Default on America 
Act will force the administration to make cuts that will remove 
the government's ability to enforce existing regulations. One 
rule that may be affected will be the Department of Labor's 
ability to ensure that workers earn and are paid fair wages. 
Given the workforce challenges that America already faces, like 
reports of 100,000 nurses leaving the workforce due to unfair 
wages and burnout, particularly during the pandemic, how do you 
think the lack of enforcement would affect the U.S. economy?
    Dr. Harris. So I am glad you asked about the labor market. 
As I mentioned in my written testimony, I think competition 
labor market is an incredibly important issue. I think the 
labor market right now is characterized by lack of competition 
in many areas, and that means we need government intervention 
in some ways to get workers their market wage. I think in many 
circumstances, including with nurses, there is good evidence 
that they are not being paid their market wage. So this is 
really an example of government intervention being necessary in 
order to get workers what they deserve.
    Mr. Espaillat. Okay.
    The Default on America Act also imposes work requirements 
for Medicaid recipients and increased work requirements for 
SNAP recipients. These requirements would threaten food 
assistance for several thousand women, children, families in my 
district. There is no evidence to suggest that these increased 
work requirements would decrease reliance on safety net 
programs. What are some of the policies that Congress can put 
forward that would actually improve employment rates while also 
ensuring that Americans are able to meet their basic needs? 
What tools are we already implementing or have proven to reduce 
poverty?
    Dr. Harris. So on work requirements, let me say that I 
understand the theoretical appeal, the problem with work 
requirements is they really don't work in practice. So Iowa 
tried this. They strengthened the work requirements. What 
happened is you saw very little, if any, employment boost, but 
what you did see was the state of Iowa having to pay two and a 
half times to implement those work requirements. It was a lose-
lose situation.
    As far as pro prosperity policies that could increase 
employment and help low-income families, I mean, I think that 
SNAP is a really important thing. It is difficult to be a 
productive member of society if you are hungry. Pro employment 
policies include a stronger EITC, better childcare to get more 
women in particular, into the labor market, and, of course, 
better spending on workforce training.
    Mr. Espaillat. And, finally--I think I have a minute left--
Moody's analytics indicated that the Republican cuts to 
spending, the Default on America Act, will result in a lower 
GDP for 2024 and nearly 800,000 fewer jobs. This is an 
artificial crisis that was tried to be created that has real 
consequences in the job market and, of course, on Wall Street. 
What is your view on that?
    Dr. Harris. So my view is there is a time and a place for 
discussions around spending and it is not holding the U.S. and 
world economy hostage in doing so. I think that there is an 
appropriations process, we have Appropriations Committees, and 
that is the appropriate place to have discussions about 
discretionary spending. The problem with doing it over the debt 
limit is that you create so much financial and economic chaos 
that you really decrease the prosperity of Americans.
    Mr. Espaillat. Thank you, Mr. Leader, I yield back.
    Chairman Arrington. I thank my friend from New York and now 
yield five minutes to the gentleman from Oklahoma, Josh 
Brecheen.
    Mr. Brecheen. Thank you, Mr. Chairman. Thank you all for 
being here today. Great discussion on the regulatory 
environment.
    I would use the word hobbling, if you have ever seen a 
horse hobbled and the inability to move. We have a hobbled 
economy because of a regulatory front that runs counter to the 
rule of law, and I heard Dr. Harris talk about the rule of law. 
Article I, Section I of the U.S. Constitution says all 
legislative powers be vested in the Congress, and so, for many 
years, we were the world reserve currency status and perceived 
as such in part to the truth of what you said, because we 
adhered to the rule of law, but in an environment where we have 
cubicle decisions, people that in their desk in front of their 
computer screen are making decisions, not elected 
representatives that are sent to Washington to represent the 
people, now we have a hobbled economy, and so, some would say, 
well, things from the Democrat viewpoint, things that they are 
seeing upticks in certain statistics that they can pick. Can 
you imagine what would happen if we would unleash the wisdom of 
our Founding Fathers and return power and decision making back 
to the States? And I am so grateful for a panel that for the 
most part has been talking about that.
    So I am going to give three numbers: $13,000, $14,000, and 
$18,000. $13,000 is how much real incomes would be higher per 
person had regulations remained at the 1980 levels, according 
to a study by Mercatus Center. That is about $4 trillion that 
would have been added to our GDP that hovers between $22 
trillion and $25 trillion. It is almost one-fifth the increase 
in our GDP. So $13,000, how much real incomes would be higher 
per person had regulations remained at 1980 levels.
    By the way, that is about the time we tripped $1 trillion 
in gross national indebtedness--$1 trillion. Now we are at 
$31.5.
    Give you another number, $14,000. That is how much each 
American household pays right now annually for government 
regulation, or $1.9 trillion annually according to the Center 
by the Competitive Enterprise Institute. $18,800, that is how 
much it would cost someone to print the entire Code of Federal 
Regulations at FedEx, because it is mentioned, in 2021, the 
Code of Federal Regulations is 188,321 pages. In 1960, it was 
22,877 pages, in 1950, it was just under 10,000 pages, or just 
five percent of the figure from recent, from 2021. The total 
estimated cost of 2023 economic significant regulations ranged 
from $55 billion to $78 billion, according to self-reported 
information by agencies.
    And what are some of these regulations? The American people 
have a right to ask that. From this month, early this month, 
here is a Federal regulation, toy gun markings--toy gun 
markings from the Department of Commerce to the Consumer 
Product Safety Commission, updated safety standards for bedside 
sleepers, surface coating operation for cars and light duty 
trucks, national standards for real estate inspection, the 
Agricultural Department is adjusting its civil penalties for 
inflation, non-aeronautical airport closure procedures, and in 
California, air quality management from the EPA. It was 
mentioned that there is $150 billion worth of regulations right 
now under the Biden Administration. That is the cost of 
regulatory adherence. It was $15 billion under Trump, it was 
$120 billion under the Obama Administration. So many of these 
regulations come in because of the climate ideology.
    So, Dr. Harris, I am going to ask you a question. In your 
opening statement, you mentioned the word hurricane, and I know 
it would be tough to maybe flip to that, but I think what you 
said, and I want you to correct me if I am wrong, that the 
disruption you all are looking at--and you just left the Biden 
Administration--that you are looking at, economic disruption, I 
think you mentioned hurricanes is caused by climate change. Is 
that correct? Did I remember your statement correctly?
    Dr. Harris. Yes.
    Mr. Brecheen. Okay. So I want to read something to you 
because I think it is so important how many of our Federal 
regulations are adherence to the climate ideology. So I am 
going to read to you from the United Nations Intergovernmental 
Panel on Climate Change--the United Nations Intergovernmental 
Panel on Climate Change. They state, there is ``No consensus on 
the role of human activity on changes to Atlantic hurricane 
activity''. That same body, the United Nations body, also 
determined that since 1900 there has been no trend in the 
amount of landfall events in the United States.
    I could go through from the United Nations Panel on floods, 
same thing, no increase on trends in frequency, when it comes 
to extreme temperature--I mean the science is being tossed on 
its head whereas a few years ago, we are talking about four and 
five degrees, now we are talking about two.
    Here is what I wanted to land the plane by saying, the 
narrative is out there and we are sacrificing our prosperity on 
the altar of the church of nature, and we have got to push 
back. We have got a 200- to 300-year supply of oil and gas 
under this country, and we have got to start fighting with both 
fists. If we don't, China and Russia will continue to laugh at 
us while they don't appease the Paris Climate Accord.
    With that, I yield, Mr. Chairman.
    Chairman Arrington. I thank the gentleman from Oklahoma and 
yield five minutes to my friend from Michigan, Lisa McClain.
    Ms. McClain. Thank you, and thank you all for being here. I 
appreciate it.
    I want to start by asking just a simple question, is to 
make sure that we are all in agreement in theory. The reason--
and would you agree with this statement--the reason we have 
regulation and regulators is to keep us safe, healthy, and 
really the economy strong. Anyone disagree? Okay, good. No one 
disagrees. I would agree with you.
    What I am concerned about is what happens when the 
regulators fail, right? So we have all this regulation. We have 
regulation on top of regulation on top of regulation, and then 
we have people at these regulatory agencies that are supposed 
to execute and perform their job right, and spend billions of 
dollars on it. Okay?
    On the Oversight Committee--I chair the Subcommittee on 
Health and Financial Services--for example, I have had numerous 
hearings on the baby formula crisis, as an example, and the SVB 
hearings, as an example, and we will continue to have more. 
What I am seeing is concerning me, and it seems like there is a 
general theme. If business makes a mistake, and they do, right, 
we can all point to businesses that fail, what happens? They 
lose their job, right, people actually get fired, they lose 
market share, they lose that ugly word called profit. There is 
a consequence to their action because there is a person that we 
held accountable. In fact, I think Congress actually put in 
this law called Sarbanes-Oxley--are you familiar with that--
which, I mean you want to talk about burdensome regulation--
however, what it did was have some accountability. Remember, 
because my COO or my CFO had to sign their name, that if X 
screwed up, one person was held accountable.
    What I am failing to see, and hopefully you can enlighten 
me and see more clearly, is I don't see that same concept of 
accountability on all these regulatory agencies and regulators 
who run these agencies. I mean, I am yet to find a person at a 
regulatory agency that will (a) take ownership on SVB crisis, 
on the baby formula crisis. That is a concern to me. Yet my 
colleagues across the other end of the aisle want to give these 
agencies more money and more power, with no accountability. I 
see that as gravely concerning.
    So with that, the question is to you all, who owns these 
regulatory agencies, whether it be the FDA, the FAA? If there 
is an error, whose head do I roll? Anybody?
    Dr. Holtz-Eakin. Congress owns them, Congress created them, 
Congress funds them, Congress provides oversight of them, and 
the ultimate accountability is the U.S. Congress.
    Ms. McClain. So if I understand you correctly, I could haul 
in the head of the FDA, which in my opinion, if he is at the 
top, and Congress could fire that person?
    Dr. Holtz-Eakin. No, you have given the President the 
authority to run those agencies.
    Ms. McClain. Okay, so the President could fire them?
    Dr. Holtz-Eakin. Yeah.
    Ms. McClain. How many times has that happened?
    Dr. Holtz-Eakin. I don't know, but we can certainly get 
back to you.
    Ms. McClain. Often? Is that a common--give me a gut feel? 
Like usually--I mean the baby formula crisis, that was a 
crisis, right? The SVB Bank, major, major crisis.
    Dr. Holtz-Eakin. Yeah.
    Ms. McClain. Who do you think is going to get fired? I will 
take a bet right now. I will bet the don't pass line. I bet (a) 
we can't even admit there is a problem, and (b) we will 
probably promote that person. Therein lies the problem.
    So I am going to advocate that Congress use the very rules 
that it enacted for private business that they use for 
themselves, and there must be more accountability because right 
now, I think for the American people, Mr. Chairman, there is 
zero accountability and zero heads roll when there is a crisis.
    And with that I thank you and yield back.
    Chairman Arrington. I thank the gentlelady from Michigan, 
and my colleague and Ranking Member I think will be back 
shortly.
    I am going to yield myself some time to give closing 
remarks, to also give a colleague an opportunity to come and 
share his thoughts and ask you questions, but first, let me say 
thank you for your insight and your input and facilitating a 
good discussion. I said in my remarks that I worked in the Bush 
Administration at the FDIC, an independent regulator, and I 
must say there were good people over there and they were well 
intentioned. Some good Americans, love their country, but I was 
just astonished by the almost unfettered power to basically 
write the force and effect of law in policies, rules, and even 
guidance, which sounds so benign, and yet it has the same force 
and effect of law if you ask those who are being regulated.
    And so from that perspective, my eyes were opened. I 
thought to myself many days while serving at the FDIC, and 
again proudly along some of my colleagues there, but as an 
institution, I thought, my goodness, my civics teacher, Miss 
Becky Taylor, never told me there was a fourth branch of 
government, and I think it is like the nature of man, there is 
a nature of these agencies, and whether it is to be relevant or 
it is to manage risk at a zero basis, which is not real life 
unless you can shut a government down and still keep your job. 
I am not picking on Mr. Fauci, but to make these calls and that 
put people literally out of business and they can't provide for 
their families, some struggle to come back and still struggle, 
when the decision makers here will get paid regardless of 
whether the economy is open or not. It is a pretty perverse 
dynamic to me when people are making those kinds of decisions.
    So we have to have a better process for oversight and we 
have to have a better process to determine what things are 
necessary, what things are appropriate, and how to best strike 
the balance of providing basic guardrails and then letting the 
free fellow Americans make the decision about their own lives 
and the choices for their families, and as my colleague said, 
no thank you for your coffee, I am going down here where they 
make a bigger cup, a better cup, a cheaper cup, and that 
competitive force, I think, is a pretty efficient, self-
regulating effect on this country. I think we put too little 
value in the self-regulatory effect of free markets and we put 
too much of a premium on this sort of top down even--well I'll 
just say this top down system of micro regulating every sector 
of our economy.
    I took some time to provide some closing remarks and I have 
got a colleague, but I want to yield to you, Mr. Boyle, for 
some closing thoughts and comments, and then we will have our 
last Member give his questions and comments.
    Mr. Boyle. If Chip Roy is really the last speaker at this, 
I am aghast, but I will----
    Chairman Arrington. You might want to filibuster.
    Mr. Boyle. Yeah, I will speak for the next hour and a half, 
wait him out.
    But thank you, Mr. Chairman.
    So I will switch up the order here, make these closing 
comments and then hand it back to you to the remaining speaker 
we have.
    I will just, kind of in the same vein you just did, offer 
several observations or beliefs, or both.
    The first is we are a representative democracy. I believe 
that the decisions ultimately should be made by the people as 
expressed to their elected representatives. So the idea that 
any bureaucrat would in any way overrule the people's wishes, 
as expressed who they elected, I find offensive, and I oppose 
that, and frankly, there is no red or blue, Republican or 
Democratic exception to that in my view.
    The second thing I think is, and even I just used the term 
bureaucrat, I do object to the--not that the Chairman 
necessarily did this, but certainly others do--to the common 
characterization of a government employee, a public servant, as 
a no name bureaucrat who is just sitting there attempting to 
subvert things. I generally find that that is not the case. 
There have been instances, and I have personally observed a few 
of them, whether here in Congress or elsewhere, where you will 
have people behind the scenes who are attempting to subvert the 
will of those who have been elected, and that is wrong, but we 
should not use that to paint a broad brush because the reality 
is the overwhelming majority of those who work in government 
are good, hardworking people. Many times they could actually 
make more in the private sector, but they are doing what they 
are doing for the good of the public. So I hope that we 
understand and recognize the complexity when we are talking 
about this issue.
    Now, I would also observe, and I think that this has been a 
real problem of the last 25 years, as Congress has increasingly 
become hyper partisan and dysfunctional, we have voluntarily 
ceded power to the other branches of government. I think that 
is certainly the case when it comes to the Judicial Branch, and 
you can cite decisions that either liberals or conservatives 
object to where the Judicial Branch has overridden laws that 
were passed, and we all know it is quite difficult to get 
legislation passed. So the fact that too often, in my view, 
nine unelected folks are overriding legislation, that should 
concern all of us who are ``democrats''.
    This is also the case that in both Democratic and 
Republican administrations in recent years, they have been able 
to step in and take advantage because the Congress has 
essentially ceded certain powers to the Executive. Although I 
have to say, I observe that happening more in foreign affairs, 
really than any other realm.
    So if we are able to take a step back from the typical day 
to day partisanship and really examine the need for regulation, 
the need for proper regulation, and the need to balance that 
with what actually is the legislative intent, we can see that 
this is a complex issue that requires a balanced and nuanced 
approach, and certainly if there are concrete ideas coming out 
of this where we can make the system better, I certainly would 
be welcome to those.
    So with that, I will be happy to yield back and thank the 
Chair.
    Chairman Arrington. I thank my Ranking Member and will 
yield to our final speaker and friend and gentleman from Texas, 
Chip Roy.
    Mr. Roy. I thank the Chairman; I thank the Ranking Member. 
I thank you for your indulgence. I was trying to make it back 
from the House Judiciary Committee where we were actually just 
having a thorough debate on the REINS Act and the extent to 
which we might wish to rein in the regulatory state, and it was 
a good debate, and it is meritorious here, and that is why I 
bring it up.
    One question that I would just like to ask. At the 
beginning of this hearing--and I had to leave to go to 
Judiciary--there was some discussion among a number of the 
Members about taxes and tax burden and these allegations about 
the rich not paying their fair share. I assume this has been 
covered to some degree, but I just want to make sure for 
purpose of the record--and I think, you know, Dr. Holtz-Eakin, 
we have worked together in the past in my former staff days, 
but would you agree that in the time I have been around the 
Hill, and I came to the Hill as a staffer in 2003, the top one 
percent of taxpayers paid 33 percent of the overall tax burden, 
52 percent was paid by the top five percent. In 2010, that was 
37 and 59, respectively. In 2020, after the implementation of 
the Trump tax plan, 42 percent of taxes were paid by the top 
one percent to 62 percent by the top five percent. Across the 
entire strata, it has moved up in terms of who is paying the 
burden. Now, we can debate about what that means in terms of 
overall income impact, sure, but that is a different question.
    And this is my actual question, in terms of the revenue, is 
it not true that we are at a historic high in terms of revenues 
to the Treasury, Dr. Holtz-Eakin?
    Dr. Holtz-Eakin. Yes.
    Mr. Roy. And is it true that that has only been matched 
twice in history, once during World War II when we had a 
particular need for revenue, and then again in 2000 at the sort 
of back end of the dot-com boom, around 19.6 percent to 20 
percent----
    Dr. Holtz-Eakin. 20 percent.
    Mr. Roy [continuing]. Of GDP?
    Dr. Holtz-Eakin. It was about 20 percent at the end of the 
dot-com bubble.
    Mr. Roy. And so, my question for you is, would you agree 
then--I mean we use this line: we have a spending problem not a 
revenue problem. That is an easy punch, right, that is a 
political line, but is it not at least true? I mean we are here 
in the Budget Committee. I mean I wish my colleagues were here 
and I wish I could have engaged, but we have to at least 
operate off of a common set of facts in order to determine how 
we are going to proceed. Is it not at least true, like as a 
matter of just simple fact that in terms of revenue, if we look 
at the overall economic production of this country, that we are 
bringing in approximately 20 percent of it into the Treasury, 
which is an all-time high? So by definition, it is not just a 
political line, that if we are out of balance, if we have 
deficit spending, that it is in fact a spending problem not a 
revenue problem?
    Dr. Holtz-Eakin. For me I think the most important issue is 
going forward, and what I see when you look at every CBO 
projection is the fact that the spending programs, particularly 
the large mandatory spending programs, will grow much more 
rapidly than any revenue source plausibly can, and so if you 
have a spending growth rate that exceeds the revenue growth 
rate, the lines just diverge. Now you can have a onetime tax 
increase, but you don't change the growth rate of revenue. So 
you just defer the problem. At some level you have got to deal 
with the growth rate of those large spending programs and the 
welfare of their beneficiaries because they are the most 
important in the social safety net.
    Mr. Roy. Thank you for that.
    In my limited time I was going to ask Dr. Harris, as a 
former Biden Administration official, I mean I would just ask 
you a quick question about the--I think earlier you were 
talking about the importance of the IRA tax credits and how 
they will leverage private investment. Can we at least just 
acknowledge for the record that it is going to be significantly 
high-income earners and corporations who will be the biggest 
beneficiaries of these tax credits, because 90 percent of the 
subsidies going are going to billion dollar corporations and 80 
percent of the EV subsidies, which are a big portion of what we 
are talking about, are going to people who make over $100,000 a 
year as an individual or $300,000 a year as a couple? And I 
just ask, Dr. Harris, for a pretty quick answer. I mean is that 
not true? Is it not true that that is who that is going to?
    Dr. Harris. So I would consider the full economic benefit, 
including the impact of climate change which is really----
    Mr. Roy. Well, hold on, but that is not a tax issue. True 
or false, are those tax credits going to those corporations, 
big billion dollar corporations, 90 percent?
    Dr. Harris. They go to a combination of consumers and 
corporations.
    Mr. Roy. And the consumers getting EVs, are they not making 
over $100,000 a year or $300,000 as a couple to go buy a Tesla?
    Dr. Harris. So some of the consumer credits for EVs have 
income limits, so high income taxpayers cannot claim those.
    Mr. Roy. Right, but the vast majority, 80 percent according 
to every study I have looked at, are going to those people.
    Look, my point is--if we want to go around on this, and I 
will use my five minutes. I am not going to go over because out 
of respect for the time--that those tax subsidies--I hear my 
Democratic colleagues saying, well, we need tax increases, we 
need revenues when we are talking about this debt ceiling 
debate, yet the primary driver of what they are trying to do 
are tax credits and tax subsidies to the wealthiest among us 
and to the corporations, in this case, tax subsidies to 
corporations to promote an agenda. As you just said, it is an 
agenda driven tax subsidy. If my colleagues on the other side 
of the aisle want tax revenue, I give you tax revenue.
    I yield back.
    Chairman Arrington. I thank the gentleman from Texas, and I 
also thank Dr. Holtz-Eakin and Ms. Harned and Mr. Crews and Dr. 
Harris for your time and all the time you took to prepare, and 
appreciate the conversation and the debate and the input, and 
we wish you a great rest of the week.
    [Whereupon, at 12:38 p.m., the Committee was adjourned.]

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