no. it's way more than that. >> comcast is partnering with a thousand community centers to create wi tpeufplt enabled places so students from low-income families can get the tools they need to be ready for anything. >> comcast supports c-span as a public service, along with these other television providers. giving you a front row seat to democracy. org/january 6 to watch the latest videos of the hearings, briefings and all of our coverage on the attack and subsequent investigation since january 6 2021. go to c-span.org/january 6 for a fast and easy way to watch. washington journal continues. host: joining us is douglas holtz-eakin, former director of the congressional budget office.

thanks for giving us your time. guest: my pleasure. host: remind people about the forum and the positioning it takes when it comes to economic issues. >> it's a center-right think tank and we are interested in market oriented solutions where possible. we do domestic and foreign policy issues. host: when you hear statements about the possibility of a recession later this year, a mild recession as it's described. what goes through your mind when you hear those terms? >> i think recession talk has become a bit overblown. i don't think it's as imminent or threatening as the rhetoric would suggest. the reality is the number one problem is inflation. when inflation has become ingrained you have no real good choices. the federal reserve will have to let people live with inflation.

that's quite unpleasant. or they will take steps to combat it. you don't put refrigerators or furnaces in houses and you slow down large swaths of the economy. every month we are going to hear reports that aren't as good as they used to be. that feels bad but it's the necessary step to slow the inflation. host: jerome powell took a step last week as you referenced. as far as other steps the federal reserve can throw, what can you expect? >> more increases in the so-called federal funds rate. when that interest rate goes up, tenure loans go up. they are going to push up rates

across the board. it's a blunt instrument. that's the game plan. they have signaled they want to move aggressively to what they call neutrals. and take a gauge on whether inflation is slowing. host: as far as the timeline for inflation, what's the best way to think about these things? >> it's a several year thing for sure. when chairman powell rolled out the strategy in its speech, he said they could expect to get to their 2% target in three years. that's a fairly clear commitment by the fed chair. the key to keeping it to three years is that inflation expectation is not getting ingrained. people expected inflation to be

in double digits. people price double digit increases in their products. if people start doing that, it's hard to slow down the inflation. in that era the fed pushed interest rates above 19% to slow the economy. host: you have probably heard if you look at inflation it's only the result of the policies of this president. how accurate is that? >> it's the result of the policies of this president and the federal reserve. if you look back to the on-site of the pandemic. the federal reserve started buying up 120 billion dollars worth of bonds every month. that's pumping $120 billion into financial markets. that was a very effective response and financial markets actually performed pretty well.

we had a big problem. people forget quickly that the economy fell by 10 percentage points in one quarter. it's a terrible time. big response on a bipartisan basis. those were all appropriate responses in 2020. the missteps came in 2021 or the fed kept its foot on the gas all through the year. even though inflation was rising and by late in the year clearly problem. the american rescue plan was just too much too big at the wrong time. host: expand on that. >> we have only had three instances in the u.s. where the consumer price index has jumped. one was in 1951 when the economy was growing at 10.5% and the

federal government expanding right -- expanding by 50 percent to fight the korean war. 1974 we get opec oil embargo. quadruples the price of global oil prices. overnight businesses have to pass on enormous cost increases. we've got a little of both going on in the u.s. economy right now. host: (202) 748-8001 republicans. (202) 748-8000 democrats. independents (202) 748-8002. janet yellen said one strong point of the economy was consumer spending. i want to play you a little bit of what she had to say about that and then get your comments. >> there is month-to-month

volatility put overall spending is strong. patterns are changing and higher food and energy prices are certainly affecting consumers and making them change their patterns of spending. balance -- bank balances are high. lower income households continue to have buffer stocks of savings that will enable them to maintain spending. i don't see a drop off in consumer spending is a likely cause of a recession in the months ahead in the labor market is very strong. >> that's exactly why i think the recession talk is overblown at the moment. there are lows we have not seen

since the 1980's. despite what they are saying, they are spending the money they have in the bank and consumer spending has remained strong. since that's about two thirds of the economy, it's hard to get a recession. host: how much of that money came from pandemic support? >> a lot. suppose people had saved normally during the pandemic. compared to what they actually saved the difference is about two and a half to $3 trillion. host: the biden administration goes forward, one other possible takes can they do to slow down inflation or at least meet its impact? >> there's very little they can do. you don't want to start the inflation because you only have bad choices and administrations

essentially have none. what can the budget people do, they can raise taxes or cut a lot of spending. i don't think you are going to see them do that in an election year. i could get rid of some of the tariffs. i think they would be wise to take a close look at the regulatory burden they are putting on the private sector right now. we keep track of all the regulations issued by the federal government and this administration set the record for the most costly regulation in the first year of an administration. over $200 billion of additional cost. that's a lot. that's part of the supply problem. stop doing that and make things a little easier. host: our first call from florida. joe on the republican line. you are on with our guest this morning. caller: good morning sir. how are you today. today i'm calling because of

what the actual question is. the economic forecast and biden administration policies. they say that if you do not learn from history you are condemned to repeat it. the thing that amazed me more than anything else is that throughout history our country has always had an economic problem. so what i'm saying is that there have been things that have taken place even before i was born. my parents dealt with the depression and world war ii. i was born in 1948 in new york city and there was a lot of economic problems there. the thing about it is i do not know what the economic forecast is going to be. it's kind of like prophetic. you have to wait and see. stir biden's president right now but we don't know how things will be with the next administration matter who it's going to be. this is when most americans say

we are in debt. most americans are living and dead. the governments got to straighten up but i want to live the way i want. >> i think one of the things that i would take away from that question is that it's really important that there be bipartisan legislation. if one party is doing everything over the opposition of the other party, the minute the party changes, you lose everything. if you think about it, we've got a bipartisan infrastructure plan. that's something i think is a model for better ways to go forward. host: president biden still fighting for aspects of his

reconciliation bill. >> are not a big fan of build back better efforts. i have never really added up from a cbo perspective. i'm always looking at what's going on with the deficits and the dead. they have never really made sense. they have simultaneously been too broad so it doesn't do any one thing right. collectively all they have really done is add new social welfare programs to an economy that can't pay for the ones it has. i would rather see them spend their time fixing social security for the long-term and taking care of medicaid and medicare. host: henry is in michigan on the line for democrats. caller: hello. i have two quick comments and that i will ask a question. there's a simple solution to resolving all of the problems that we have about guns, abortion and the economy. and that's for democrats to come out en masse, overwhelm the

polls and vote straight democratic ticket's. get rid of the mansion and cinema president -- presidency and give joe biden the margin he needs. a caller asked if it would be double jeopardy for trump to be tried by the -- host: i'm going to stop you because our guest wasn't here for that. if you have an economic question go ahead. caller: let me ask my question, pd. -- petey. could you please explain to the people that the fed does not raise interest rates in a down or bad economy and that at near zero unemployment, the corporations are profiteering because they want to have layoffs. they want to be able to lay people off and that way their

stock prices can get back up to where they need them to go. host: ok. >> the fed doesn't raise interest rates when the economy is weak and it's raising now because it perceives it to be very strong. the problem is not looking for layoffs. we have about one .7 job openings for everybody looking for work and they are competing like mad to get their hands on those workers. what we have seen in the past few months is smaller businesses have been tremendous difficulty hiring and the growth in the small business employment slowed the most. host: is it because businesses are offering pay and perks or people are looking for better options? >> all of the above. as an economist, you know that a company is going to pull all the strings they need to to get someone on board if they have to hire. as someone who is running a small think tank and has 20 odd employees, hiring right now is hard.

host: james in atlanta georgia. caller: he said the quickest way to fix this is bipartisan support in the caller says vote straight democratic down the ticket. people aren't listening to what experts are saying. my question is, is what we are experiencing the result of its natural cycle or are there specific things that we did as a policy with the biden administration that has caused this to occur. >> that's a really good question. business cycles in the 20th century, people would get laid off and stop spending. eventually the shelves are bare

and you have to start hiring people again and it goes the other way. incomes rose and fell. a lot of our recession fighting tools were replacing income. the business cycle changed in the 21st century and we got the.com bubble. the financial crisis, great recession. this is neither of those. during 20/20 wealth rose. investment took place. the housing market was red-hot. income rose in 2020. money was out there to spend. people couldn't spend it. so this downturn was driven by the virus and the unwillingness of people to go out and actually spend money. i didn't go to concerts. they didn't get on planes and take vacations. when you say this is the natural up and down, this is very unnatural given the historical record and i think the responses

were too much running the old playbook on an old problem. host: the economy picked up. are you seeing another slow down because of inflation and if that's the case, what happens then? >> we are going to see it come down for two reasons. there was no need to be doing more. it was going to slow down as a matter of its natural course. now we've got to flight the end -- fight the inflation. so the economy will grow slower this year and next year is when people can reasonably talk about a heightened risk of recession. host: you brought up regulations. what regulations would you eliminate?

>> it's really not just a matter of eliminating regulations. the obama administration averaged about 100 million dollars a year in regulatory costs. trump administration said to the agencies, here is a budget. we are going to give you a number. how you get there is your business. the reality was you simply readjust the burden to keep it down getting ready things you don't need. and no one is smart enough to know all the regulations. the increase in regulatory costs in the trump administration was essentially 20 billion dollars over four years. its dramatic difference. it can be done. it's not a matter of not regulating. it's doing what you need to and getting rid of things you no longer need. host: let's hear from sarah in ashburn, virginia. on the line for democrats.

caller: i'm wondering if the people who decide to live off of their pensions during the pandemic and they decided to stay home, will we ever see them back in the jobs market being that their investments have gone down? the other question i have is as a senior, of course we have the highest disposable income and we were not spending. now we are spending. i'm spending for home improvements, jobs that need to be done when we couldn't get them done during the pandemic. and the third question is regard to in the carter administration, what was the highest rate of interest on the debt that we had to pay during the carter administration. >> good questions. it's like taking an oral exam. i'm not sure i will get through them all. on the retirees during the pandemic, one of the really

interesting things is it turns out it's very common for people to retire and then we think and say i'm going to go back to work. this is the walmart greeter problem. in the pandemic no one becomes a greeter at walmart. in the pandemic people retired and didn't come back. that has resumed. that phenomenon seems to have corrected itself. there is still a mystery about where some of the workers are. we thought it was too much unemployment insurance but that went away last labor day. we thought it was staying home with kids. we got the schools open again. retirement doesn't seem to be the answer. we are sort of going through the list and we can't figure out what's going on exactly in the u.s. labor markets. it remains somewhat of a puzzle. as far as the retirement savings, yes.

this is exactly the phenomenon we described earlier. you had savings that you are spending, it's supporting the economy. secretary yellen mentioned normalization of the spending patterns. during the pandemic, people didn't spend any money on services. you didn't go to a bar or restaurant. you didn't do lodging services, hotels. we spent a lot of money on goods. and we got a lot of goods priced inflation. if we see anything, probably 2022 will be the year of services inflation and not on the good side. host: of you are asked who paid the feds -- who pays the fed borrowing rate. >> the fed doesn't control interest rates between banks and

those wanting a mortgage or an auto loan or anything like that. the fed controls the interest rate between banks so banks need to have some money on hand both as a matter of regulation and how to satisfy customers. the cost of business gets passed along to customers so you will push up all of the interest rates. they don't all go up by the same amount because some things are riskier than others. some borrowers are riskier. some loans are. all the rates change in response to the fed. host: for douglas holtz-eakin of the american action forum, texas. republican line. caller: good morning c-span. i have a couple of questions to ask the speaker here.

why do we have so many incompetent people in our government in high positions like secretary-treasurer, secretary, doj along with joe biden? why are we having so many incompetent people just running our government? i've been here a long time. i'm older than you are and i am on retired payment and i have just about depleted my savings to keep afloat. answer that question for me please. >> i'm sorry to hear that and i hope you are well. i won't pass judgment on the president. i will say the economic officials, certainly secretary yellen is eminently qualified. she's a former chair of the federal reserve. she is an outstanding economist in her own right and i think she brings a level of expertise to

that job that actually exceeds most of her predecessors. it's been out quite two years and i don't think anyone is particularly happy with the state of the economy right now. i have some complaints. but i wouldn't trace it back to secretary yellen. host: when she was -- admitted she was wrong about how inflation would track? >> i think admitting it so bluntly is a surprise. quite frankly economists are wrong a lot. one of the pitfalls of what i do is you are going to be wrong. i think it's appropriate to say i was wrong. i would feel better if there was a better explanation as to why they were wrong. that's still a bit murky. host: from new york in queens village. democrat line.

caller: good morning. how are tariffs affecting inflation? >> tariffs make the cost of goods higher and that's a one time thing. you put in a $10 tariff, price will go up by 10 bucks. tariffs don't produce inflation, they produce higher prices and then it stops. when prices are going up, taking tariffs off is not a panacea but it would help. host: we are supposed to see the president talk to oil companies. what do you think of those discussions and what is the president trying to get out here?

>> i may not be as old as that color but i'm old and demonizing oil companies when things are bad is not a new strategy and it will yield nothing. this is a global market for oil and refined products. even large american companies by no means dominate it. to characterize them as having lived off this pandemic is completely wrong. they lost money for years until this year and they've been unable to invest as a result. a lot of this is outside their control. as a matter of venting frustration, you call in the oil company execs and give them what for. host: the windfall profit tax. >> bad idea. it's weird to be me in 2022 because these are all the things i grew up with and now they are back. we are worried about ohio oil

prices, inflation at 40 year highs. we've got discontent with now russia then the soviet union. one of the responses in the 80's was we need to put a tax on the windfall profits of these oil companies because we've had a big spike in oil -- spike in oil prices. it didn't lower the price of oil. it didn't raise much money. it was very poorly designed and it really did hurt investment in new production and expansion of supplies. anything that doesn't improve supply is a mistake. host: for our guest in tennessee. caller: i have several comments. i'm kind of like your previous

color. i experience the jimmy carter days. i owned several businesses. i'm retired at the moment. and my real concern is that our administration with its attack on energy efficiency, and they are trying to go with their green energy climate has really disturbed me. there has not been an oil refinery that has been open since 1976 and for them to increase production they would have to spend billions of dollars which has been cut off and demonized by our administration. what i really think is that the administration has caused the problems with supply chain. diesel has not even available as it should be and it's causing

everything to go up. i think our inflation is higher. my question to douglas is do you think that our administration has only shut down, created chaos without any kind of plan in place to see how to accomplish their goals without just shutting things down? host: got the idea. >> the threshold moment is when the president makes the announcement that the top priority of his administration will be climate change. and then adopts a climate strategy which focuses on sectors of the economy. and not using fossil fuels. that puts a heavy reliance on renewables, wind and solar.

solar is largely available from china. now there's a conflict with foreign policy goals and strategic economic policy. in the energy sector, it's unrealistic. we can't get the wind and solar to the capacity needed with the reliability needed on the timescales the administration has laid out. it is at best and extremely risky climate strategy that might not work. it is at worst just distant to fail. -- destined to fail. a better approach would have been to focus on what goes out of the economy, not what comes in. you want to reduce carbon emissions and greenhouse gases in general. there are cap and trade programs. they are stuck with a strategy that for stems -- forces them to shut down things. people be -- pay attention to

those symbols. host: what do you think of lowering gas taxes as a strategy? >> i was the chief policy advisor senator john mccain. he advocated for gas tax holiday. it was a terrible idea then, impossible for me to defend. it's a tiny one time thing temporarily in the face of chronic inflation. host: this is a viewer from twitter saying the problem of inflation -- economic lockdown causes supply disruptions.

>> the supply chain issue is real and it's just the manifestation of the supply chain around the globe. but the u.s. also has the demand problem that i mentioned. if you look at 2021, europe which had all the supply chain problems so it's inflation rise by about one percentage point a quarter. the u.s. got the 1% in the second quarter, we got an extra couple of percentage points. you can't just point to the supply chain and say that's the problem. to do so as to miss the larger policy mistakes. host: brenda is in philadelphia on the democrat line. caller: -- inflation -- i hope

he gets nominated again for the president thing. because under trump administration, this country was going off the edge of the earth. [indiscernible] all the important documents that he took onto mar-a-lago. and i love president biden and tell him i said congratulations. >> the next time i'm with the president i will pass it along. host: george in upper lake, new york. republican line. caller: good morning. my question is does the cost of servicing the debt play a role in the calculus the fed uses for

the rate? >> it's a good question. with higher interest rates will come higher cost of servicing federal debt and higher deficits. the congressional budget office just put out its revised economic projections and interest costs are $1.8 trillion higher in total over the next 10 years than they were before. that's attributed to the higher interest rate environment that we are in. it's bigger than the tax cuts and jobs act was. that's a real budgetary impact. the fed doesn't pay attention to that and should not when setting it is interest rates. it can set rates to control inflation and maximize lung unemployment. that will generate the most revenues for the federal government as a byproduct and the people who have to control the borrowing costs are the house, the senate and the president.

getting the federal budget under control will continue to be a challenge going forward. host: christina in michigan. independent line. caller: good morning c-span and thank you for taking michael. please give me a couple minutes because i'm a little nervous and i'm old so it takes me a while to say things. i have been watching this for years and years. when we had the financial crisis in 2008, that was under a republican administration. i kept hearing republicans saying obama wasn't fixing it fast enough. you're talking about right in doing old stuff, but everything you are suggesting is the old stuff republicans always suggested. since you worked with senator mccain, i remember the woman that ran for vice president with him did a windfall profits tax in alaska on their oil and she

was greeted as a wonderful person. there is just so much i don't understand. i think some of it is the best way to get everybody upset his oil prices because everything we buy it has to be transported. even though president biden isn't in control of this, this is all a result of the pandemic. and we think we can snap their fingers and put everything back to the way it used to be and we can't. therefore a lot of people i know, i talk with them, are not aware of a lot of things. in the pandemic we were told that was a hoax. my brother died because of this hoax. a million people died because of a hoax. some of complications are a lot more than biden doesn't know what he's doing. host: thank you color.

>> i'm sorry for your loss. so many americans have faced. the issue is not putting everything back to what it was prior to the pandemic. i don't think that's the right way to frame it. the issue is at what points can you speed the economy toward lower unemployment, more wages and salaries for people and is there a point where you should just turn that over to the private sector and let it do its job. that was the pivotal mistake the administration made. it's not that they made a mistake every day. they made one policy with the american rescue plan. host: debra in bethesda, maryland. caller: thanks for taking my call and please give me some time here. why you republicans answer to why we have inflation is always the poor have too darn much money.

they shouldn't have gotten the stimulus checks, there were too many of them lifted out of poverty therefore they spent us into this inflationary spiral, their wages are going up therefore we've got to get them back down and the answer is always to raise interest rates which also hurt the poor. it's not the rich who have to borrow for student loans and auto loans and mortgages and other types of credit card debt. they don't have any of that. it's the poor. and they are going to get hit with his interest rate hikes. so you're always trying to balance whatever problem there is on the backs of the poor. i don't see you going after the airlines for example, where they threw billions at these airlines on the theory they would keep their employees on and then they

fired them anyway and now they don't have anybody to run the planes and there are thousands of flight delays. host:.eu, color. -- got you, caller. >> if you look at the data that we had on spending patterns in high income zip codes versus middle and low income zip codes during the pandemic, spending in low income zip codes and middle income zip codes got back to the february pre-pandemic level pretty quickly in part because of the support that came out of the cares act. so that mechanically the piece of the economy that was missing was spending by affluent households because they are the ones that go to vegas to see the shows on an airplane and stay in a hotel and that's a big chunk of the service demand.

there was nothing about the american rescue plan that was targeted on the problem. it was just money going out. we did a calculation. if you had targeted the same amount of money to those people who have been unemployed for 20 weeks or longer in the year before. provide support to people but really targeting those in the worst need, you would have had a bill that was $10 billion, not hundreds of billion dollars. there's a lot of money going out to the nonpoor and that was the problem. host: people working from home and the the speaker pro tempore: the january 6 free-throw committee holds the next public hearing today to examine alleged efforts by donald trump to pressure state election officials and use alternative electors to block the certification of the 2020 presidential leaks results. georgia secretary of state and his deputy are expected to

testify. as well as arizona's house speaker. we'll have live coverage at 1 p.m. eastern on c-span3. you can also stream the hearing on our free video app, c-span now, or online at c-span.org. >> there are a lot of places to get political information. but only at c-span do you get it straight from the source. no matter where you are from, or where you stand on the issues, c-span is america's network. unfiltered, unbiased, word for word. if it happens here or here or here or anywhere that matters, america is watching on c-span. powered by cable. >> c-span's the weekly podcast brings you over 40 years of audio recordings from our video

library. comparing the events of the past to today. on this episode watergate, g gordon liddy. >> it happened 50 years ago own june 16er, 17, 1962. police arrested burglars at the watergate complex in washington, d.c. first we remember g gordon liddy in this episode of c-span's the weekly. he helped plan the watergate break-in, wept to jail because of it, and served five years of a 20-year sentence. then liddy reinvented himself as a radio talk show host. he used his radio show to offer provocative history in memories of watergate. >> it occurred to me that they might have me cincinnatied, and i didn't want some amateur doing it with a shotgun on a sunday morning through the kitchen window. they take out not only but me but my wife and a few kids. if they wanted to go that route i would stand on some remote street corner where we wouldn't

harm the taxpayers. dean's comment was, don't think we have gotten there, gotten to that point yet. a find the weekly on c-span now, our free mobile app, or wherever you get your podcast. >> senator tim scott of south carolina was the featured speaker at an iowa republican party fundraiser held in cedar rapids, following opening remarks he talks with senator joni ernst and jeff kauffman, the iowa g.o.p. chair on inflation and other issues. andi ernst. this is 50 minutes. >> we got a lot of great media here today. i will be very quiet and measured. the c-span camera is looking right at me. i will behave myself tonight. sort of. [laughter]