During a House Appropriations Committee hearing prior to the congressional recess, Rep. Adriano Espaillat (D-NY) questioned Dr. Phillip L. Swagel, the Director at the Congressional Budget Office, about the effect of President Trump’s tariffs.
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00:00Mr. Espioff for his five minutes.
00:03Thank you, Mr. Chairman.
00:04Mr. Swaggo, we are living in a cost-to-living crisis with great economic uncertainty,
00:13and the families that I represent are afraid of what will come next.
00:19The president's reckless tariffs against our neighbors and allies have presented this uncertainty,
00:28and the markets really continue to tumble as early as this morning.
00:35You wrote in December that higher tariffs will increase federal receipts,
00:39but in your letter, you also explained the negative effects on the economy of higher tariffs.
00:46Those economic effects are what really matter to the people that I represent.
00:51Though there is a very high degree of uncertainty surrounding the administration's recent announcements,
00:57I would like you to give us a nonpartisan expert opinion on what you should expect.
01:06The question is, under President Trump's tariff policy,
01:10should we expect the price of consumer and capital goods to be more expensive or less expensive?
01:17Okay. Thank you, sir.
01:19Yes, we're analyzing the tariff announcements.
01:21And to directly answer the question, the price of consumer goods,
01:26the things bought by families, by households, and the prices paid by businesses will go up.
01:31The tariffs will reduce the efficiency of the economy, lead to lower incomes.
01:40And so what does that mean in real terms for someone that wants to purchase television,
01:46go to the supermarket and buy food, what does that mean to the American public that often it's living on fixed income
01:56or having a hard time making ends meet?
02:00Right.
02:00The prices of the things that families buy will rise, and family incomes will go less far.
02:07And then businesses will see the prices of their inputs go up,
02:10and that will tend to reduce business investment.
02:15That will reduce hiring and reduce the strength.
02:17So this is really reckless, and it is manifested every day as the markets continue to tumble.
02:23And the kind of increase that you're asking for will lead us to get additional staffing
02:28so that we can make these kinds of impartial, nonpartisan analysis on the economy, correct?
02:35That's correct.
02:36The additional staff would help us do this kind of analysis.
02:38And you're asking for 15 additional staffers, right?
02:42That's correct.
02:43And another question that I had regarding that,
02:45because I know that one of the areas where you have expressed a keen interest in is the health arena, right?
02:53And health, in many ways, is also part of the economy,
02:56because the cost of health care is so high that it impacts on real pocketbook issues.
03:04And so I want to know, like, as we move forward and these tariff war continues to wreck our economy,
03:13and we continue to see an effort to potentially cut Medicaid and Medicare from the American people,
03:23two vital programs, really life and death issues,
03:26because if I have Medicaid and all of a sudden my benefits are cut, it's a life and death decision.
03:33Do you foresee these 15 new folks doing an analysis on the impact on the cuts of Medicaid and Medicare
03:40as it pertains to the potential tax cuts for the very rich?
03:46Yes, the people I would look to add, first and foremost, would be in health.
03:53We do analysis of all the programs you mentioned, Medicaid, Medicare, pharma, veterans' health,
03:59and I would add experts in that because there's intense congressional interest.
04:04And these programs are very costly, right?
04:08So it's almost impossible to save money so that you can give a tax break to the very rich
04:13without touching these vital programs like Medicaid, Medica, and I dare to say even Social Security.
04:20I mean, you've pointed to the elements of the fiscal challenge,
04:24the health care programs, Social Security, Medicare, and then revenues on the tax side,
04:29and those are the decisions Congress would have to make in choosing how to address the fiscal challenge.
04:35And we would provide that analysis, including of the tradeoffs that you are pointing to.
04:39So I would look forward to making sure that you have the additional tools and additional staffing
04:45to ensure that we make these kinds of nonpartisan analysis, I think,
04:50that will guide us in the right direction as the stewards of our budget
04:56and having the constitutional responsibility or the power of the purse
05:01to make the right decisions and protect table and pocketbook issues for the American people.
05:07Thank you, Mr. Swagel, and I yield back.
05:09Thank you, sir.
05:10Thank you, Mr. Espiot.
05:11Thank you, Mr. Espiot.