At today's House Appropriations Committee hearing, Rep. Steny Hoyer (D-MD) questioned Treasury Secretary Scott Bessent.
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00:00Member Hoyer, for any questions he may have.
00:04Mr. Chairman, let me ask you a broader question, Mr. Secretary, at the outset.
00:10The President has been talking about recession and the acceptance of a recession in the short term.
00:19Do you believe we're in a recession now?
00:24Congressman, I believe in data, and there is nothing in the data that shows that we are in a recession.
00:30As a matter of fact, the jobs report has surprised to the upside.
00:35The job report, of course, less than the average for the Biden administration last in 2024.
00:46But the GDP went down this first quarter of the Trump administration.
00:55If we have a negative growth in the second quarter, which is, I suppose, the traditional definition of a recession, would you agree that we are in that recession of which the President speaks?
01:08Congressman, these economic numbers are noisy and subject to substantial revision.
01:18So I, having looked at a detailed analysis, would believe that the first quarter GDP would be revised upward.
01:26And, you know, I would also, with regards to your remark about where we were last year, last year, we were spending 6.7 percent, we had a 6.7 percent fiscal deficit, the largest we've ever had, during peacetime or non-recessionary times.
01:45So the easy thing to do would be to keep spending, to keep the economy running on an unsustainable path of government spending.
01:54Let me remark, because you mentioned this, I think, in our meeting, we had a spending problem, not a revenue problem.
02:09I want to talk about the revenue problem.
02:11Let me suggest to you, my view is it's neither a revenue nor a spending problem, it's a pay-for problem.
02:17If we would pay for what we buy, whether it's defense or non-defense, we wouldn't increase the deficit.
02:23So I think, looking at, I'm a big proponent of paying as you go.
02:28Unfortunately, we haven't pursued that on either side of the aisle, maybe for different objectives.
02:34Let me go to IRS.
02:37I want to, you probably know these figures, and these are somewhat old at this point in time.
02:44But what they reflect, as you will see, is a substantial decrease in the resources of the IRS, particularly in enforcement.
02:54As the blue representing an increase in filings, the orange representing the nominal, and the dotted line, the net actual value of the funding for IRS, particularly in enforcement.
03:16The budget proposes substantial cuts.
03:23Have you or anybody done an analysis of the ramifications of those cuts, both in the short term and in the long term, in terms of your ability to collect revenue?
03:35Let me paraphrase, not paraphrase, but give a, in your discussions, you said you were not going to sabotage, that we had in my office, sabotage collections.
03:48Are you confident, in light of the fact that any IT, and I agree with you, we've wasted a lot of money on IT, that any IT will be accomplished within the next 36 to 48 months, and therefore justify a reduction in personnel?
04:12Congressman, let me work backwards there.
04:14So, I am confident that we will make substantial progress in the IT, and right-size the payments, the payment system, the collection system.
04:30As I've repeatedly said, my priorities are collections, privacy, and customer service.
04:36And, again, the substantial increase in the enforcement group, there is nothing that shows, historically, that by bringing in unseasoned collections agents, that that results in more collections or high-end collections.
04:57It would be like sending in a junior high school student to try to do a college-level class, that the, becoming a high-end IRS collections agent is something that one grows into.
05:13So, I believe, through smarter IT, through this AI boom, that we can use that to enhance collections.
05:26And, you know, I would expect that collections would continue to be very robust as they were this year.
05:34Chair now recognizes the gentleman from Arkansas, Mr. Womack, for any questions he has.
05:38Thank you, Mr. Chairman.