Crapo Statement at Hearing on The President’s FY 2024 Budget | The United States Senate Committee on Finance

March 16,2023

Washington,
D.C.–U.S.
Senator Mike Crapo (R-Idaho), Ranking Member of the U.S. Senate Finance
Committee, delivered the
following remarks at a hearing on the President’s fiscal year 2024 budget with
the U.S. Department of Treasury Secretary Janet Yellen.   

The
text of Ranking Member Crapo’s remarks, as prepared, is below.  

“Thank
you, Mr. Chairman, and welcome to today’s hearing, Secretary Yellen. 

“I
appreciate you appearing before the Committee in a timely manner following the
release of the President’s budget. 

“While
the budget is the focus of today’s hearing, I expect that the emergency
measures taken this weekend by the Treasury Department, Federal Reserve and
FDIC will also be appropriately discussed today.  

“It
is important to learn more about what initiated the run on Silicon Valley Bank,
the impact of the Federal Reserve holding interest rates low for too long, and
what steps were–or were not–taken by Silicon Valley Bank and the banking
regulators. 

“In
the meantime, I am concerned about the precedent of guaranteeing all deposits
and the market expectation moving forward.  

“Once
started, moral hazard–like inflation–is not easily contained and does
long-lasting damage.   

“Inflation
played a key role in the recent bank failures, as rising interest rates and
mismanaged interest rate risk led to a liquidity crisis.  

“Indeed,
there is no issue more critical than the unacceptably high inflation American
families continue to face every day. 

“Americans
have now experienced 16 months of inflation at or above 6 percent.  Costs
of rent, groceries and services continue to rise.  Wages cannot keep up. 

“Last
year, the Administration committed to working in a bipartisan fashion to address
this serious problem, noting the budget must complement monetary policy. 

“Instead,
a reckless tax-and-spend agenda was forced through Congress, rolling out
trillions of dollars in debt-financed spending and hundreds of billions of
dollars in new taxes on U.S. job creators.   

“The
Congressional Budget Office says the Inflation Reduction Act will not only
increase inflation in the near term, but Treasury will collect LESS corporate
tax revenue with the partisan IRA in effect–despite being sold as a bill to
make corporations pay their ‘fair share.’ 

“The
Federal Reserve is having to compensate for this Administration’s lack of
budget discipline with growing interest rate hikes.   

“Rising
interest rates are impacting household budgets, the federal government’s
coffers, and, as we saw this week, our banking system.  

“The
President’s budget demonstrates the Administration has not learned from its
mistakes.  After two years of policies that contributed to record-high
inflation and excessive deficit spending, this Administration is doubling down
with more of the same.  

“The
spending binge must stop.   

“We
must address our growing deficits in order to put the United States’ finances
on a sustainable path, and pro-growth tax policy should be part of the solution. 

“The
Tax Cuts & Jobs Act led to one of the strongest economies in generations. 

“TCJA
introduced competitive tax rates while broadening the base, including by
enacting the first global minimum tax of its kind, and putting an end to
corporate inversions.   

“It
also contributed to record-high corporate tax receipts, both nominally and as a
share of gross domestic product.   

“But
instead of considering bipartisan, pro-growth policies, the President’s budget
includes a whopping $4.7 trillion of new and increased taxes on American job
creators, which ultimately means fewer jobs and lower wages. 

“It
also includes higher taxes on American energy producers.   

“Earlier
today, Senator Barrasso and a number of his Republican colleagues, including
myself, sent a letter to you, Secretary Yellen, raising concerns with the
over-$100 billion in increased energy taxes proposed in the President’s fiscal
year 2024 budget.  Mr. Chairman, I ask that the letter be included in the
hearing record.  

“The
Administration’s shortsighted, partisan agenda extends to its unilateral
approach to the OECD international tax agreement. 

“For
the last two years, Treasury has used the OECD negotiations to attempt to
compel changes in U.S. law without regard for the effect on U.S. revenue, U.S.
companies and U.S. workers.   

“Not
only has the Administration failed to put a stop to digital services taxes, but
now foreign countries threaten to impose extraterritorial taxes on U.S.
companies under the global minimum tax–at Treasury’s invitation. 

“The
latest OECD guidance confirms the Administration has agreed to allow foreign
countries to collect U.S. GILTI revenue, and worse, tax U.S. companies on their
U.S. profits in violation of our tax treaties.  

“The
budget fails to consider these revenue impacts, which, if implemented, will
result in billions of dollars of lost U.S. revenue. 

“Meanwhile,
the Administration continues to hide its true intentions for ‘transforming’ the
IRS. 

“The
budget doubles-down on the $80 billion already given to the IRS, including two
additional years of plus-up funding totaling $29.1 billion solely for
‘enforcement and compliance initiatives,’ in addition to $14.1 billion more of
yearly funding.  That’s another $43 billion! 

“Secretary
Yellen, I agree with you that having a funding plan for an agency budget that
dwarves many others is ‘critical.’  “In
the meantime, the IRS has embarked on a ‘spend first, plan later’ approach that
is not transparent or responsible, and is a surefire recipe for error, waste
and mismanagement. 

“While
we may not have all the details, we do know that only six percent of the
existing plus-up funding is for modernization, while over 62 percent is solely
for hiring–more than 93 percent of which is enforcement hiring.  

“These
new funds are not going to replace retiring IRS agents, as annual
appropriations already provide that funding, and the Administration has not
requested any reductions in IRS annual funding to account for replacing
retirees with plus-up funding. 

“Secretary
Yellen, there are opportunities for the Administration to work across the aisle
on commonsense economic policies, but nothing suggests the President is
abandoning the partisan tax-and-spend policies of the last two years.  

“This
Administration must recommit to working with Republicans to develop real
solutions that will stabilize the economy and create higher wages and
opportunities for American workers.”