pleased by good c.t.e. schools, classic trade work force schools, but we could use more. and we have to have capital to grow and just can't come from the banking sector. crowding -- crowd sourcing for small businesses and try to do something good-bye bringing together people from all over, all walks of life to help somebody build a business. i thank the chair for his leadership and the ranking member. i urge my colleagues to support this. the speaker pro tempore: the gentleman yields back the balance of his time the gentleman from north carolina reserves. the gentlewoman from california is recognized. ms. waters: i have no further speakers and am prepared to close if the gentleman from north carolina has no further speakers.

the speaker pro tempore: the gentlelady from california is recognized. ms. waters: h.r. 298 will focus on the challenges small businesses face. i urge my colleagues to support this bill. again, i would like to reiterate how anxious i am imto work with the opposite side of the aisle to build the concerns of rural america. it is not only in small business. again, it is health care and it is in housing and all know that housing is one of my top priorities. i'm looking forward to a rule of some kind and i'm looking forward to what can be done in arkansas. my mother was born in cotton plant, in his district and it's going to cost money and going to cost time, and i believe in

capital formation and we can work together on capital formation. with that, i urge my colleagues to support this bill and i yield back the balance of my time. the speaker pro tempore: the gentleman from north carolina is recognized. mr. mchenry: i yield myself the remainder of my time. i want to thank the ranking member for her words and comments here. it is true, we have worked together on capital formation in previous congresses and hope to be able to do the same. but i know of her upbringing in missouri and her career in california. she has both rural and usual and experiences that she can bring to this and i likewise have mainly rural to bring to this. but together we can craft a smart agenda and address the needs of the american people with the practice ole capital

formation across the country with the needs of a modern economy to digitize our processes in the world of financial services and the need to give architecture to a new range of assets that are in the financial world. there is a lot that is happening here that is embraced. and working together, we can do that. with that, i urge adoption of this piece of legislation and i yield back. the speaker pro tempore: the gentleman yields back the balance of his time the question is will the house suspend the rules and pass the bill h.r. 298. those in favor, say aye. those opposed, no. in the opinion of the chair, 2/3 being in the affirmative, the rules are suspended, the bill is passed and without objection, the motion to reconsider is laid on the table.

pursuant to clause 12-a of rule 1, the chair declares the house in recess until approximately>>"

continues. host: this is shia kabbas talking about issues of the debt ceiling and federal spending. thanks for giving us your time again. guest: good to be with you. host: back in september of 2021, we were talking about the same thing, needing a debate about debt limit so why have we come to this point where we are still dealing with these issues and we

bump up against these deadlines? guest: here we go again, as they say. the federal debt limit is in law by congress that limits the ability of the treasury department to borrow a certain dollar figure. right now, the dollar figure is $31.4 trillion. it has increased many times over the course of the last hundred or so years. especially over the last decade, you have these recurring debt limit apples where there are negotiations and demands about what should be attached to the debt limit and an extendedperiod about uncertainty how that will take place in the debt limit gets extended. the last time we had one of these was in 2021 and we are here again at the beginning of 2023. it comes in the cycle of having these debates. there is no clear path off that road. we need to get out of the

paradigm we are in otherwise we will keep having this over and over and. we have very large fiscal challenge. that is expected to grow substantially larger over the coming year. the reason we keep running up against the debt limit is because we have this federal credit problem. it's not an effective tool to manage that. unfortunately, we will keep running back to this unless congress says they want to change the process. host: we heard house speaker mccarthy expect to sit in with president biden to discuss those matters. what are your feelings about this conversation? do you have a sense of optimism? guest: it's a necessary first step. you have to get the two sides talking together before there is any negotiation. unfortunately, it seems this

meeting is largely going to be an opportunity for both sides to restate the talking points they've been sharing with the media. that's not necessarily a cook -- because her optimism. i'm sure we will pay off her bills on time. we've had a debt problem for many years and congress has been externally reluctant to take that on a do anything about it. the only deficit reduction we've had in the past decade is the inflation reduction act which the democrats passed last year which only had a moderate impact. that will raise some amount of money. the solution need to be much bigger than that. we need the two sides to talk to each other to make that happen.

well the meeting is a necessary first step, i'm not encouraged we will get a resolution out of it. host: you can ask air guest questions. -- our guest questions. you can call in and pick the line the best represents you and you can also text us. you can also post on our social media sites. let's play a little bit of the house speaker yesterday talking about his responses. let's hear from him directly. [video clip] >> are you willing to consider any reductions to medicare and social security? >> let's take those off the table. we talk about strengthening social security. the president says he doesn't want to look at it but we have to make sure we strengthen those. >> you mean lift the retirement age? >> what i want to look at is

they have increased spending by 30%. when you look at what they have done, adding $10 trillion of debt for the next 10 years in a short time, they went through and they never passed a bill through appropriations in the senate. mr. schumer has been the leader and he is never passed a budget and is never passed in appropriation bill and he simply waits until the end of the year to allow two senators were no longer here to write a $1.8 trillion on the biz bill. >> you want to come to an agreement on a budget? >> yeah, i think our first responsibility is we should both pass a budget. this way the country can see the direction we are going you cannot continue the spending that is brought this inflation and economic problems. we got to get our spending under control. host: that was the house

speaker's take on upcoming conversation. do you want to respond to anything else? guest: the speaker makes interesting points. some of them i strongly agree with. we should have a budget resolution passed in the congress. they are supposed to do that every year but far too often, they pass that responsibility that makes it difficult to go from where we don't have an outline to an agreement on how we will fix our fiscal problems. what is ironic is that both parties basically don't want to touch medicare and social parity. -- and social security but those are the two biggest programs in the federal budget but those are off limits so it becomes externally difficult to extend revenue. ultimately, we will need to have conversations about those programs sooner rather than later. unfortunately, the debt limit is not an effective pointed wish to have this conversation.

it's the only point when we have this conversation was his why -- which is why we are where we are today. there is no other opportunity where republicans and democrats get together and have serious conversations about our fiscal problems. we need a change in the paradigm reset up another rosses that will work at her than the one we have today. i don't think that will fix all of our challenges but if we replace the debt limit debate over 31 trillion dollars in threats about not paying the bills and replace that with an actual serious process where there is a debate over her spending program and tax programs, that would be a much more constructive conversation. host: here are the phone lines -- you can also text us.

let's hear from john in cleveland, ohio. hello. caller: the money is already appropriated. it's an oxymoron. [indiscernible] medicare and payroll tax, they've had it for 70 years. the answers are there. they should take a lie detector test. host: that's john cleveland, ohio. guest: the caller makes some

good points where the solutions have been known for some time especially in the social security challenge. it's more about math problems and medicare problems. we know what the options are in social security and they are opportunities to tweak those. republicans and democrats nearly -- need to come to the table and examine those options. we will probably need them to get the system into balance. host: the white house yesterday congressional republicans have advocated for cutting earned benefits. their policies would privatize medicare and socl curity rates and the retirement agor cut benefits. he says house republicans refused to raise revenue from the wealthy but strengthen

earned benefits programs. is that a fair characterization? guest: we will need some of both. we will need the wealthy to contribute more than they are today area we will need changes on the benefit side as well and for both sides to say any tax increase will kill the economy or the other side saying any benefit adjustment will throw millions of seniors into poverty, that's just not the case. the more both sides continue to use talking points and view the issue as a cudgel, the less likely we are to get any kind of progress. to be more optimistic, there are serious conversations owing on in the senate right now around social security that are much-needed because that graham, the trust fund is projected to be insolvent in a decade area in 10 years, if congress doesn't take action, there would be an

across-the-board cut of about 25% and everybody's benefits. that's unfathomable and we cannot let that happen. the sooner congress acts, the more gradually they can phase in those changes. i am encouraged by the fact that they were these earnest conversations in the senate across party lines and i'm hopeful there'll be some type of package that comes out of the trap this year to advance those conversations and hopefully see some reforms in the next couple of years. host: when it comes to social security and medicare, is there a least painful approach of changing these programs to preserve their solvency? guest: absolutely, there are reforms we can put into place they go into effect many years in the future and gradually and are targeted at the people can afford the most. all of those are things we should welcome. less time social security was informed in the early 1980's, they put in in just retirement age increases that just finished

going into effect recently. those were 30 or 40 years. we have time to do phase in's to make sure people on the program have limited or no impact on the benefits and people early in their careers were coming into the workforce will see modest changes to how their benefits are calculated years down the road area that's what we need to do on the benefits to make sure there are enough revenues coming to the program to funded and that will mean modest tax increases especially groups of people who can afford it most. host: if that's the case and you've west is for a long time, if solutions are easy, why can't congress come together and enact these? guest: it's politically unpopular. it's much easier, is logical that the average person in the country hears about benefit cuts and taxing pieces and says i don't want those that impact me but i would rather see other changes.

in reality, we will need changes to the program that will impact a large group of beneficiaries but not the county and. -- but not in a draconian way. if both sides are trying to get a political win out of the situation which is what we've seen for chart -- for far too long, we will not get progress. we will need a change in that dynamic in the possibility of legislation passing. caller: doug in new york, independent line. the debt went down and in 1980 with the tax cuts, that has been increasing ever since. there is a slight remission of

change when george bush the first change taxes. why can't we learn from that experience? what we use that to get out of this debt problem? we did it once before. we should go back and analyze the mechanics of that time and reapply it. thank you. host: thank you, caller. guest: a good question i think we should be looking for lessons we can take a way to solve the current problem. a couple of dynamics make the situation different from what we had historically even though we had similar elevated levels of dance. we drew down our forces and were spending on our military dramatically as well as other programs supporting that effort overseas.

it made for a natural opportunity where our debt came down. that was not the entirety of the situation but it made up a lot of the reason way from well over one her percent of gbp -- of gdp to sustainable levels. today, we have a situation we don't have that same situation. our military budget is not the same as world war ii. we don't have that easy ability to draw down the defense forces. the other is that the democrats it -- the demographics we face are different. we have a situation where older americans are increasing rapidly and people are going out to social security and medicare and that is outpacing the people paying into those programs. they are contributed to social security and medicare and we expect that trend to go on for several decades as well as people living longer and longer

so they are spending more in retirement collecting those benefits. to change that, we will need reforms that fundamentally form the basis system because we cannot keep paying out benefits for more and more years otherwise we had to keep raising taxes more and more and that ultimately becomes unsustainable. we need more revenue in the program but we will have to make some adjustments to the benefit trajectory. host: you talk about history. take us back to 2011 when president obama faced a similar situation with debt control and the budget control act of 2011. what did that do and how was it as a solution? guest: with the bipartisan policy center, we been working on debt limits for about 12 years. the first time in modern era where came up in the political fashion it did in 2011 is when republicans were insisting

particular budget reforms and extending the debt limit under obama. that summer, there was a very protracted debate over how we would get this done. they ultimately passed a government extension but it closed to what we call the date where the government could not meet its obligations on time that led to a credit rating downgrade by the s&p 500 which has ramifications in the short and longer term it. what that did was to put in place caps on discretionary spending on nondefense and defense appropriate accounts. it also put in place a sequester which would be automatic across-the-board cuts. that failed. the bipartisan supercommittee did ultimately fail and that sequester kicked in. since then, they rolled back a

lot of those because they weren't tenable. both sides of the aisle felt they couldn't live with those cuts to domestic in defense spending and there were subsequent increases going into effect. most of those cuts were not heeded. that's what happens when we negotiate against the law and the deadline and not having awful deliberations about how we tackle our fiscal challenges. i'm hopeful we can get to a place where we have these conversations well in advance of the deadline. the deadline is not an effective tool to have these conversations and change that paradigm where there is a process and agreed upon time in congress where we have these conversations. host: thank you for joining us from the bipartisan policy center. but hear from joan in colorado, independent line. caller: good morning, no business could be run away this country has been run lately.

when the budget is due, it should be -- and shouldn't be a 4000 page document and i believe that they will now go back and do appropriations for each department separately thus may be preventing some of the politicians from doing wrong. apparently we have too little money for too many people and i say why aren't we doing something. the answers are simple but no one wants to go there. close the border. i heard one day that they would make cuts to social security and that same day, i heard that resident by said we will give illegal emigrants free health care.

none of it is making sense and if you are paying attention, we all know what needs to be done. some and congress are fearful to make that decision. thank you. host: thank you. guest: the immigration issue is important for the fiscal challenge. it impacts things in many different directions. when immigrants come, they receive benefits in the country so that has a cost. the other side is that they often participate in the workforce and contribute taxes to the other side of the asian. they help grow the economy in that fashion. there is a balance and i'm not an immigration policy expert. it's well worth noting that immigration policy contributes to our fiscal challenge both through helping to grow the

economy by welcoming more legal immigrants and the benefits we are paying out. in some cases, illegal immigrants may be accessing those benefits but there are restrictions in many of those programs. host: this is from justice kagan: good morning -- caller: good morning. how are you guys? i was curious about this narrative i heard with the national debt, that the ratio is about 1.2 times what our annual income as a country is. that seems to be national debt to the public, which governments expense. we have a law of costs and i agree that we should debate what we are spending this money on. but this perception that this debt is out of control and the

republicans keep saying it is 1.2 times the national debt is a bad thing, yet when it comes to personal debt to private interest, it's ok to have a 200 some $5,000 mortgage and still make $54,000 per year. this is crazy talk, to talk about a debt limit when we need to talk about specific issues. when you talk about the popularity of programs that could really go far toward saving a lot of money for the taxpayers, we have 50 million votes from the republicans to repeal and replace, but nobody wants to talk about medicare for all. we spend over $1.5 trillion in private insurance that could go directly toward medical costs and cutting down medicare and medicaid costs directly. host: ok, thank you caller. guest: there are a lot of subs to tend to -- a lot of

substantive issues when it comes to fiscal spending, and the debt limit is not a format for those discussions. i do think it is important to recognize that we have a serious fiscal problem ahead. right now or -- right now, our debt to gdp is higher than it has ever been in modern history. it is unfortunately headed on a very upward trajectory from there. we need to put in place reforms that in that curve, otherwise things like interest on debt will end up eating a larger and larger portion that we are all paying into the federal program. eventually, that becomes so -- that becomes unsustainable. the longer we let this go on, the more that type of spending is going to crowd out the important programs you were just talking about. we do need to have those conversations both about the spending side and the tax side of the equation.

the two sides need to be coming together on that. in any advanced democracy, we should have the ability to negotiate over our differences and compromise on a challenge that already exists. unfortunately, we have not seen that from our policymakers over the last decade. the polarization we have in our country, frankly, we need to change that dynamic or we will be in a lot of trouble. host: this is mark in fort lauderdale, asking us to ask you if it is true that the debt ceiling has actually reached that, if the first thing that doesn't get paid is the u.s. treasury bill on note. guest: we have reached the debt limit now. the treasury department isn't lamenting what they call extraordinary measures. these are legal accounting maneuvers they are permitted to undertake in the treasury department to give us a bit of a grace period for congress to

address the debt ceiling. congress often takes things to the last minute, as we have seen in many occasions in the past. they may very well do so again this time. once they reach that point where the government can no longer reach its quotas on time, we don't know what will happen. the u.s. is considered the foundation of the global economic system. if all of a sudden we are not making good on all of our promises, that could really shake that foundation. what would get paid and what would not get paid is a really open-ended question. we have never been there, as i said. it will be up to the treasury department to chart a path forward. but any course they take would be inviting legal challenges, operational challenges, because that is not an environment they are used to living in. they are used to paying the bills as they come due on time. there will be a situation where

they have to choose among millions of bills coming in and out of the government each month and figuring out which ones they will pay and which ones they will not. that will be incredibly difficult and will likely have severe ramifications for financial markets, the economy, american households and businesses, and likely around the globe. host: others of you ask a similar question. in the larger sense, just how much is the government managing to pay off the nation's debt? how any billions actually go toward paying off that debt? guest: right now, none is actually going to pay off the debt because it is continuing to grow. we are spending about $6 trillion a year and only taking in roughly $5 trillion per year. there is about $1 trillion that gets added to the debt each year. what we are paying is principal and interest payments that are on debt that is outstanding. as our debt grows, that portion of the federal budget, as i mentioned, is continuing to

increase. but we have not even pay down our debt since the late 1990's, when president clinton was in office and republicans controlled congress, and they made deals that, along with economic growth, balanced the budget and helped us pay down our debt. since the year 2000, we have been running deficits, in many cases very large, projected to grow now into the future. we are not expected to pay down any of our debt anytime soon. host: john in wisconsin, independent line, thanks for calling. go ahead. caller: my question is, i would like to know what percentage of household income -- household debt there is to income, in comparison to our federal government. and secondly, with japan having 2.5 times their gdp currently with that -- with debt, why we are overly alarmed with our 1.2 times gdp.

and what will happen if republican measures to cut the irs are implemented to the interest portion of our debt. thank you for taking my call. guest: sure. good questions there. i don't offhand no -- know that household debt to income ratio. it is interesting to look at. the government and several a lot of differences from individuals, so it is not necessarily a comparison we should draw strong conclusions from. but it will be worth looking at and exploring that comparison. in terms of japan, that's a good point. they own the vast majority of their debt domestically. that's a bit of a different situation then we have here. it's a fair point. as i said earlier, i don't think we are going to hit a crisis when we get to a slightly higher level of debt than we have today. unfortunately, that trajectory continues to be sharply upward. we need to put in place reforms

to address the fiscal policy we have. it is highly unlikely they are going to address themselves. the sooner we can start tackling them, the better, because we know we are going to have to do it at some point. the last question you raised was around the irs and the reforms that were put into place as part of the inflation reduction act last year. those, i think, were quite necessary from two perspectives. one is that the irs has had significant operational challenges with their customer service and processing. those are things we needed to address upfront in order to see things on the backend. i'm curious to see some of the dollars going into the irs put toward customer service and operations as a whole. on the other side is closing the tax debt. if we put in place these dollars and have more audits, basically a modern era low, if we get them back to a more reasonable level,

we will catch more people who are evading taxes and collect more revenue. that will more than pay for the investment we are making in the irs. i think the details matter, but that is generally a good thing. it will ensure people are paying the taxes they owe and help us pay our deficit. if that money is repealed, in the opposite direction, that will increase our deficits. i don't think that will be a good policy, nor would it be helpful for getting our fiscal policy in order. host: a story out today, taking a look at the ideas that go along the debt limit and what we are seeing currently play out in congress. they have suggestions, such as minting a trillion dollar coin. the other would be to declare the debt ceiling non-comparable with our fiscal spending. guest: there's a lot of ideas

floating around when we look at the debt limit. we could be headed there again this time and that's why those ideas are resurfacing. frankly, policies are worse than they ever have been. fuller's asian continues to worsen. some ideas are back on the table. my concerns about all of them, and i put them all in a similar category, are that we have never been in a situation where we are testing out these unprecedented taxes. more so than the substance of whatever the treasury does, whether it is minting a $1 trillion coin or declaring the debt limit incompatible with spending laws, all of these are likely to provoke significant reaction from investors and financial markets, and perhaps credit rating issues -- agencies. once these reactions occur, they could be quite severe. we don't know, but that could have a ripple effects and broader ramifications for the domestic and global economy. once the toothpaste is out of the tube, we can't put it back

in. we don't know what the consequences would be in that situation, but i think will be very difficult for the treasury department and congress to get a hold of any of that fallout. i am very concerned about any of those measures that go into place, which is why i think to mitigate risk, we need to address this before that exit date. instead of defaulting on our debt, which could have extremely severe repercussions in the long term, in terms of our global placing an economic system, but all of these ideas are untested and i think, with a very significant dose of risk. host: for the buy policy partisan center, shai akabas. democrat line. caller: good morning. i am not an expert at all in this, but it seems if you look at it simply, if you had more

workers paying taxes, the social security would continue on. and i don't understand how come we don't bring in more immigrants that are paying taxes and we wouldn't have to worry. is it that simple or what? guest: that's a very good question. i would not say it's that simple, but i do very much agree with you that that is a portion to the solution. if we have greater numbers of legal immigration, participating and paying taxes, that would much help the social security system finances. caveat is that that alone is unlikely to solve the entirety of the problem, because there has been such a large mismatch in terms of what's happening in the coming decades with the baby boomers moving into retirement. between the amount we are paying

out and if it's an electing in taxes, it cannot all be fixed with immigration solutions. we need to look at other changes on the tax and benefits side. the by policy partisan -- the bipartisan policy center has put this out in 2016. friendly, the situation has not changed dramatically. we haven't made any significant reforms to the program since then. that packages out there. there are lots of other ideas floating around out there. we need the political will to do something. i am hopeful there may be some of that in the senate this year, as bipartisan members are looking at serious solutions. host: what did you think of senator mcconnell saying that when it came to debt ceiling discussions, it is up between the house speaker the president himself? guest: i wasn't surprised by senator mcconnell's comments. the political world we have today, a democratically controlled senate, a republican house, and a immigrant in the executive office, it means we definitely -- we ultimately need

agreement from the house and the executive branch in order to find resolution. the republicans being minority in the senate are in a difficult place, or even if they were trying to negotiate some type of solution with their counterparts, the majority, the democrats in the senate, that could be rejected by the house of representatives and we could be back at square one. i think senator mcconnell doesn't want to have the rug pulled out from under him in that way. he is letting the house taking the lead -- take the lead, ultimately recognizing speaker mccarthy and the republicans -- democrats need to lead the way. host: we are hearing from pat. caller: you are speaking earlier about the structural changes made to social security, raising the retirement. what impact does that have when more and more of us people who are older and are being displaced are able to collect

benefits at age 62? guest: raising the retirement age, there are two ages. or the terminology we use for these ages are just incorrect and misleading. we should be calling these claiming ages. many people claim benefits before they retire. many people retire before they claim benefits. should not be thinking about these is one and the same. some need that if it's earlier and some don't. that is how we should be approaching that decision for themselves. when it comes to social security, we have two ages. there is the normal retirement age, which is 67 years old, and the early retirement age, which is the earliest eligibility age. or maybe the reduced benefit age, to help people understand that this is an age where you get significantly reduced benefits for the rest of your retirement. we don't expect that will change in any reform, because many people do need to retire at earlier ages based on the

careers they have, based on their life expectancies. but what i do you think is that with the majority of the population seeing increases in retirement, age will likely increase in the coming years. that will probably not impact people already on the program, but it will impact people who are maybe 10 years, 20 years, 30 years away from retiring and need to take that into consideration for their long-term financial planning. host: stephen in illinois, independent line, good morning. caller: pedro, good morning. thank you, always nice to hear from you. i am 77 years old and i receive benefits from social security and medicare. i would not be of any objection to the tweaking of those programs. however, what always rubs me the wrong way is the government subsidies to farmers, businesses, and whomever else. the free money going to people