Hearings to examine making Washington work for seniors, focusing on fighting to end inflation and achieve fiscal sanity.

1[Senate Hearing 119-39]2[From the U.S. Government Publishing Office]34                                                         S. Hrg. 119-3956                       MAKING WASHINGTON WORK FOR7                        SENIORS: FIGHTING TO END8                  INFLATION AND ACHIEVE FISCAL SANITY910=======================================================================1112                                HEARING1314                               BEFORE THE1516                       SPECIAL COMMITTEE ON AGING1718                          UNITED STATES SENATE1920                    ONE HUNDRED NINETEENTH CONGRESS2122                             FIRST SESSION2324                               __________2526                             WASHINGTON, DC2728                               __________2930                            JANUARY 29, 20253132                               __________3334                           Serial No. 119-023536         Printed for the use of the Special Committee on Aging3738         GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT3940        Available via the World Wide Web: http://www.govinfo.gov4142                          ______4344             U.S. GOVERNMENT PUBLISHING OFFICE45 59-988 PDF         WASHINGTON : 20254647                       SPECIAL COMMITTEE ON AGING4849                     RICK SCOTT, Florida, Chairman5051DAVE McCORMICK, Pennsylvania         KIRSTEN E. GILLIBRAND, New York52JIM JUSTICE, West Virginia           ELIZABETH WARREN, Massachusetts53TOMMY TUBERVILLE, Alabama            MARK KELLY, Arizona54RON JOHNSON, Wisconsin               RAPHAEL WARNOCK, Georgia55ASHLEY MOODY, Florida                ANDY KIM, New Jersey56JON HUSTED, Ohio                     ANGELA ALSOBROOKS, Maryland57                              ----------58                McKinley Lewis, Majority Staff Director59                Claire Descamps, Minority Staff Director60                         C  O  N  T  E  N  T  S6162                              ----------6364                                                                   Page6566Opening Statement of Senator Rick Scott, Chairman................     167Opening Statement of Senator Kirsten E. Gillibrand, Ranking68  Member.........................................................     36970                           PANEL OF WITNESSES7172Jeff Ferry, Chief Economist Emeritus, Coalition for a Prosperous73  America, Alexandria, Virginia..................................     474Alex Lawson, Executive Director Social Security Works,75  Washington, DC.................................................     676Tarren Bragdon, Chief Executive Officer, Foundation for77  Government Accountability, Naples, Florida.....................7879                                                                      880E.J. Antoni, Research Fellow, Grover M. Hermann Center for the81  Federal Budget, Washington, DC.................................     98283                                APPENDIX84                      Prepared Witness Statements8586Jeff Ferry, Chief Economist Emeritus, Coalition for a Prosperous87  America, Alexandria, Virginia..................................    3688Alex Lawson, Executive Director Social Security Works,89  Washington, DC.................................................    3890Tarren Bragdon, Chief Executive Officer, Foundation for91  Government Accountability, Naples, Florida.....................9293                                                                     4194E.J. Antoni, Research Fellow, Grover M. Hermann Center for the95  Federal Budget, Washington, DC.................................    469697                       Statements for the Record9899Chairman Rick Scott Statements for the Record....................    60100101                       MAKING WASHINGTON WORK FOR102103                        SENIORS: FIGHTING TO END104105                  INFLATION AND ACHIEVE FISCAL SANITY106107                              ----------108109                      Wednesday, January 29, 2025110111                                        U.S. Senate112                                 Special Committee on Aging113                                                    Washington, DC.114    The Committee met, pursuant to notice, at 3:30 p.m., Room115106, Dirksen Senate Office Building, Hon. Rick Scott, Chairman116of the Committee, presiding.117    Present: Senator Scott, McCormick, Tuberville, Johnson,118Moody, Husted, Gillibrand, Kelly, Warnock, Kim, and Alsobrooks.119    Also present: Senator Crapo120121                 OPENING STATEMENT OF SENATOR122                      RICK SCOTT, CHAIRMAN123124    The Chairman. The Senate Special Committee on Aging will125come to order. I want to thank everybody for being here today.126I'd like to recognize our new committee members who are127participating in their first hearing today. I'm thrilled to128have my fellow Floridian, Ashley Moody, and Jon Husted here129from the great State of Ohio join the Committee.130    Inflation, which is caused by massive government spending,131has been a serious issue plaguing American families and their132seniors over the past four years. In today's hearing, you will133hear me talk about the causes and impacts of inflation also,134why I'm very optimistic about the future and the opportunity to135bring fiscal sanity back to Washington and solve the problems136facing seniors.137    Let's be clear how we got here, over the past four years,138while the U.S. population has grown just two percent, federal139spending has increased by 53 percent, and all that spending has140added more than eight trillion to America's national debt,141which today is more than eight or thirty-six trillion. This142kind of spending just isn't sustainable. If nothing changes,143our Federal Government is on track to add a trillion dollars to144the federal debt about every 100 days or so.145    The cost of this debt is another massive problem. Right146now, more than one trillion of the money that hardworking147Americans paying taxes each year goes to paying the interest on148the federal debt. Having a trillion dollars in annual interest149expense is not sustainable either. Every dollar we are spending150on interest is a dollar that isn't funding an important program151seniors rely on or going toward the Federal Government keeping152its promises to provide a return on investment of American153taxpayers. Just think about if that money was going into154propping up Medicare and Social Security.155    Those numbers are massive and difficult to even wrap your156mind around, but here's what every American, and especially157every senior understands very well: the inflation caused by all158this government spending is out of control and it has to be159stopped. Any of us that went through a campaign this last cycle160knows the impact it's had on our seniors.161    Since January 2021, overall inflation is up over 20162percent, but when you look at the specific things that nearly163every American spends their money on, prices are way up more164than 20 percent. Here's just a few examples: Eggs up 160165percent, coffee's up 41 percent, oranges up 33 percent, energy166cost up 32 percent, new car prices up 29 percent, and household167debt is up more than 21 percent, because our families just168can't keep up.169    According to research done by the Joint Economic Committee,170the average American household needs over $13,000 more per171year, than they did four years ago just to maintain their same172standard of living. For seniors, many of whom are on fixed173income, skyrocketing prices are not simply an inconvenience,174but a threat to their ability to retire, make ends meet, and175for too many, keep food on the table. That is unacceptable. It176should never happen in our country.177    Like a lot of us, I grew up in a family that didn't have a178lot of money. I watched my parents struggle to find work and179provide for our family. That's why this issue is very important180to me, and here's why I'm optimistic about the future: I know181that with President Donald Trump, we will all work together,182Republicans, Democrats, and Independents, which is what it183takes to turn this country around and get our fiscal house in184order.185    This isn't a partisan issue. I know that every one of us186here in the Senate has heard countless stories from folks in187our states about the pain caused by inflation. I'm optimistic188about getting this done because I know it can happen. I know it189because I was able to turn around Florida when I became190Governor back in January 2011. We had lost 800,000 jobs, we191hadn't balanced the budget, we had growing debt, and we had a192shrinking population.193    When I left office in 2018, we cut taxes a hundred times,194slashed more than 5,000 burdensome regulations to make195government more efficient, paid down over ten billion of our196state debt and private businesses, not government, and added1971.7 million new private sector jobs, and our revenue sky198skyrocketed.199    When government is efficient, the economy grows, and tax200revenues increase so we can keep our promises to seniors and201all Americans who work hard, pay their taxes, and deserve a202government that is accountable to them. We did in Florida; we203can make this turnaround happen in Washington too.204    My hope in highlighting these issues is to begin a205productive dialog with everyone in this room, and it takes206Republicans, Democrats, and Independents to work on this, so207that we can fix problems to promote good ideas that stop208inflation and make Washington work for our seniors. It's also209why I'm excited to be part of the DOGE Caucus here in the210Senate and work with President Trump and Elon Musk to make sure211we get back on track.212    I look forward to working with Ranking Member Gillibrand213and all our colleagues in this Committee to discuss ways to214make Washington work for America's seniors, which starts with215getting our fiscal house in order so the Federal Government216keeps their promises to elderly Americans, ensure they can217enjoy their golden years with a peace of mind of having fiscal218sanity and also gives us every opportunity to make sure we can219preserve all the benefits of Medicare and also all the benefits220of social security, which is important to everybody up here.221    I'd now like to recognize Ranking Member Gillibrand for her222opening remarks.223224                 OPENING STATEMENT OF SENATOR225             KIRSTEN E. GILLIBRAND, RANKING MEMBER226227    Senator Gillibrand. Thank you, Chairman Scott, for calling228today's hearing. These are extremely timely topics. As the229Aging Committee, it's our role to amplify the voices of older230adults and seek to understand and address the problems that231they're facing every day. As such, I think it is relevant that232one of our first conversations on this Committee is about233financial stability.234    Many Americans have faced increased costs over the past few235years, from the cost of our groceries, such as eggs and meat236and bread and milk to our cost of medicine--key lifesaving237medicines. Older adults are not exempt from these price238increases, and by some accounts, they're getting hit even239harder.240    Older adults living on fixed incomes from the retirement241accounts and social security benefits can't afford the higher242costs they have to pay for food and for housing. The truth is,243much of the inflation we are facing today can be traced back to244either supply chain shocks triggered by the COVID-19 and global245instability, or to corporate profit gouging, just wanting to246make more money, or like we've seen with the price of eggs247avian flu.248    The Federal Reserve accounted for all the inflation in the249first year of the pandemic recovery where these shocks are from250supply chain and COVID.251    However, I think this Committee should be focused on one252thing. How do we help older adults who are struggling to afford253those essentials today? I first must address the recent254attempts by the Trump Administration to block federal funding.255These freezes are very serious. The Trump Administration has256violated the law and released an order that has put all257Americans and especially older adults at risk.258    The order, which in a chaotic move, has now been reversed259on paper, but not in actuality, is jeopardizing our funding260that supports medical research, our law enforcement officers,261our firefighters, our community health centers, our nutrition262programs, the SNAP benefits that a lot of seniors rely on,263including Meals on Wheels, which as you know, might be the only264hot meal a senior might get in a day and might be the only265visitor that week and potentially Medicaid.266    We can't have a meaningful conversation about supporting267older adults when the Administration is doing something so268disruptive and so harmful to our seniors.269    Social Security, as we know, is a lifeline for older adults270across this country. Estimates show that social security keeps27116.3 million older adults out of poverty. We need to be working272on how to strengthen social security benefits and make sure273that the monthly benefits are received adequately cover the274cost of living, Medicaid, Medicare, the SNAP program, are275critical to the survival of our seniors.276    As a committee, I'm looking forward to making sure our277older adults have access to the food, the medicine, the medical278care, and other financial support that they need. I'm very279excited about our witnesses today and for this hearing to begin280to have this discussion. Thank you, Mr. Chairman.281    The Chairman. Thank you, Ranking Member Gillibrand. Now,282let me introduce our first witness. Mr. Ferry is the Chief283Economist Emeritus at the Coalition for Prosperous America. He284holds economic degrees from Harvard and the London School of285Economics. On the course of his career, Mr. Ferry has advocated286for strengthening the American economy and protecting American287workers and industry. With decades of expertise in trade288manufacturing economic policy, he's been a strong voice in how289we can rebuild and sustain a strong competitive economy. Thank290you for being here, Mr. Ferry.291292            STATEMENT OF JEFF FERRY, CHIEF ECONOMIST293294              EMERITUS, COALITION FOR A PROSPEROUS295296                 AMERICA, ALEXANDRIA, VIRGINIA297298    Mr. Ferry. Thank you, Senator, and thank you for the299opportunity, Senator, and Ranking Member. The founder of Soviet300communism, Vladimir Lenin, is said to have declared that the301best way to destroy the capitalist system was to debauch the302currency. By a continuing process of inflation, governments can303confiscate, secretly and unobserved, an important part of the304wealth of their citizens.305    By this method, they not only confiscate, but they306confiscate arbitrarily, and while the process impoverishes307many, it actually enriches some. Lenin was certainly right.308There is no subtler, no surer means of overturning the existing309basis of society than to debauch the currency. The process310engages all the hidden forces of economic law on the side of311destruction.312    That's a quote from the great British economist, John313Maynard Keynes. Many people think that Keynes was pro314inflation, but that's not true. Keynes lived through the 1920's315and saw what hyperinflation did to Poland, Russia, Austria, and316especially Germany, where the hyperinflation of 1923 shook the317faith of the German people and democracy with disastrous318results. Kane's advocated balanced government budgets except in319times of serious recession or depression.320    The fundamental cause of inflation in an economy is an321excessive demand over supply. Excessive demand can be caused by322a number of things, including an excessive government budget323deficit, too much money printing or wage push inflation, which324is accommodated by the government.325    In the U.S., in 2021 and 2022, inflation took off reaching326a high of nine percent in 2022, the highest rate since the327early 1980's. The cause of this inflation was excessive demand,328colliding with restrained supply. As we all recall, the supply329of goods from Asia was severely restrained in 2020 by the330worldwide COVID pandemic and then the backlog at all the major331ports.332    On the demand side, the Federal Government enacted three333separate measures to support people during the Covid pandemic.334The third of those, the $1.9 trillion American rescue plan, was335too much money at precisely the wrong time, when the country336was going back to work and people were rushing out to use their337savings to purchase goods. That led to a surge in the price of338goods, everything from the food at the grocery store, to home339appliances to new cars.340    These forces led inflation to reach nine percent in 2022.341Could this have been prevented? Yes. On the demand side, the342American Rescue Plan should have been much smaller. On the343supply side, the situation is more complicated. Clearly, the344U.S. needs more domestic sources of manufactured goods, and345that's something I've been working hard on for several years.346Nor was the nine percent headline rate the whole story. The347prices of some categories of consumer goods shot up by much348more.349    For example, in December 2022, the price of eggs was up 59350percent year on year, the price of margarine up 44 percent,351airfares up 28 percent, and even the humble lettuce was up 25352percent. These high inflation rates hurt many groups,353especially seniors.354    Many seniors live on a fixed income. The average social355security payment in the U.S. is now $1,976 a month. According356to a study by University of Massachusetts economists, that357covers just 68 percent of basic living expenses for an elderly358single person who rents their home.359    According to the National Council on Aging, 14 percent of360people over 65 live in poverty today. They say aging with361dignity should be a right for all of us, and I think that's362right. Other expenses paid by the elderly continue to rise.363Seniors still pay significant copays for prescription drugs,364and studies have shown that a significant percentage of seniors365are doing without these drugs because they can't make ends366meet.367    Home healthcare services unrelated services, were up 9.5368percent in December 2024. That's on top of the inflation of3692021 and the and 2022, so what can be done about inflation?370Most important, we need to get the federal budget deficit down.371The best way to think about inflation is are we as a nation372consuming more than we produce or are we keeping within our373budgets?374    For over 40 years, this Nation has run trade deficits,375meaning we borrow billions of dollars from abroad to consume376more than we produce. For 24 consecutive years the Federal377Government has run a large budget deficit, meaning the Federal378Government spends billions and now trillions of dollars more379than it takes in revenue.380    A budget deficit of seven percent of GDP is far too high.381We need to cut government spending aggressively. I applaud382incoming Treasury Secretary Scott Bessent's three percent383target for the federal deficit, that will ease inflationary384pressures and reduce interest rates.385    Supply side reforms can also make a significant difference386and make prices less rigid and less likely to rise. We need to387make it more economic for people to go to work so we can388increase the supply of labor and restrain the cost of labor,389and we can do this by fixing the tax and welfare system to390provide more incentives.391    Finally, we import far too much. Restraining imports will392stimulate domestic production, helping to improve the supply393demand balance. Thank you, Mr. Chairman.394    The Chairman. Thank you, Mr. Ferry. Now I'd like to395recognize Ranking Member Gillibrand to introduce the next396witness.397    Senator Gillibrand. Thank you, Chairman Scott. I want to398introduce our second witness, Mr. Alex Lawson. Mr. Lawson is399the Executive Director of Social Security Works, where he works400to advocate on behalf of Americans for Social Security,401Medicare, and Medicaid. Thank you for being here.402    Mr. Lawson.403404          STATEMENT OF ALEX LAWSON, EXECUTIVE DIRECTOR405             SOCIAL SECURITY WORKS, WASHINGTON, DC406407    Mr. Lawson. Thank you so much. Good afternoon, chairman408Scott, Ranking Member Gillibrand, and distinguished members of409the Committee.410    As Executive Director of Social Security Works, I travel411across this country and speak with legions of primarily412seniors. Almost to a person, they are concerned with rising413costs. These rising prices hurt older Americans endangering414their ability to afford food, housing, prescription drugs, and415they want Congress to take action.416    Across the country, there is bipartisan agreement on what417people want: cracking down on corporate price gouging,418improving social security's annual cost of living adjustments,419and reducing the price of prescription drugs by expanding420Medicare's power to negotiate. These are actionable policies421that will help older Americans adjust to inflation caused by422global supply chain shocks and greedflation--which has423contributed to rising costs over the past few years.424    In fact, the Federal Reserve found that corporate profits425accounted for all of the inflation in the first year of the426pandemic recovery and 41 percent of inflation overall in the427first two years of the post pandemic recovery.428    There is also bipartisan agreement across this country429about what people don't want in response to rising prices.430Republicans, Independents, Democrats, all agree that not one431single penny should be cut from Social Security, Medicare,432Medicaid, and other benefits. There is absolute bipartisan433agreement among people everywhere in this country except here434in Washington DC.435    Here you have a Republican majority who announced proposals436to slash trillions of dollars from Medicaid, our country's437largest provider of long-term care. Over nine million Americans438over 65 rely on Medicaid. Cuts to Medicaid would force these439seniors and their families to pay enormous out-of-pocket costs440for long-term care, money they don't have.441    It would force millions of caregivers, most often women out442of the workforce. This would make it far harder for American443families to pay their monthly bills. In addition, these444proposals also include cuts to SNAP benefits, which 4.8 million445older Americans rely on to put food on the table.446    Just last week, the new Trump Administration repealed an447executive order from President Biden that directed the Federal448Government to find ways to lower drug prices. The Trump449Administration is already favoring big pharma at the expense of450seniors and working families. There have also been calls by451Republicans to repeal the Inflation Reduction Act, which gives452Medicare the power to negotiate lower prices on key453prescription drugs. This could force many seniors to cut their454life sustaining medication in half due to higher costs. Many455others would face a terrible choice between buying food,456filling their prescription, or paying their heating bills.457    Even social security, the most popular and effective458program in America is not safe. Last month, a Republican459representative who's a member of the DOGE Caucus like Chairman460Scott, told me personally that there will be some cuts to461Social Security and Medicare. Let me be clear, these proposed462cuts will do nothing to lower costs for average Americans or463older adults; these cuts are being proposed to offset the cost464of tax handouts for billionaires and corporations, who've been465shown to be responsible for rising costs themselves.466    This Congress should value the interest of older adults467above the wealthiest Americans, and I hope that the Aging468Committee will lead that charge.469    Consider this: If an older adult cannot afford their drugs470and groceries at the average social security benefit of about471$1,900 a month, its absolute fiscal insanity to think the472solution is to cut their income, to take away their healthcare,473to destroy Medicaid and force them to pay the average long-term474care costs of around $100,000 a year. If they can't afford the475price of eggs, it's absolute fiscal insanity to believe they476can afford them better without SNAP benefits.477    I'm here to deliver a message to the members of this478Committee from older Americans. Across this country they say,479you don't lower prices by stealing people's healthcare. You480don't lower prices by giving giant tax cuts to billionaires and481price gouging corporations, and you absolutely don't lower482prices by reducing the social security and other benefits that483adults have worked their entire lives to earn. Thank you very484much.485    The Chairman. Thank you, Mr. Lawson. Just so you know, I486don't actually know anybody that wants, that thinks we ought to487be cutting the benefits of Medicare Social Security. It's a big488deal in my state.489    Next I get to hear from my home State of Florida. I'd like490to introduce Tarren Bragdon. Mr. Bragdon is the Chief Executive491Officer of the Foundation for Government Accountability. He492holds a Bachelor of Science degree in Computer Science from the493University of Maine and a Master of Science of Business from494Husson university.495    Prior to joining FGA, Tarren served as the Chief Executive496Officer at the Maine Heritage Policy Center, he decided it was497way too chilly. He also served in the Maine House of498Representatives and remains the youngest person elected to the499Maine legislature serving from 1996 to 2000. Through his500organization, Mr. Bragdon has been a steadfast advocate for501common sense policies that empower individuals and families to502achieve greater economic independence.503    Mr. Bragdon.504505          STATEMENT OF TARREN BRAGDON, CHIEF EXECUTIVE506507               OFFICER, FOUNDATION FOR GOVERNMENT508509                ACCOUNTABILITY, NAPLES, FLORIDA510511    Mr. Bragdon. Chairman Scott, Ranking Member Gillibrand and512members of the Committee, thank you so much for this513opportunity.514    The inflationary legacy of the Biden Administration has515harmed all Americans, but especially seniors, and sadly, this516inflation in part is a direct consequence of three major policy517failures. One, massive red tape, two, increased welfare, and518three, few work requirements in welfare. This trifecta of bad519policy has reaped big inflation.520    Let me quickly talk about each of them. Number one, massive521red tape. Former President Biden issued more costly regulations522than any President in modern U.S. history, finalizing more than523300 economically significant regulations during his first term,52440 percent more than President Obama's first term. In contrast,525President Trump delayed more than 1500 regulatory actions,526finalized more than 500 deregulatory actions and lowered costs527by more than 200 billion during his first term, so why does all528this matter?529    Well, for every 15 percent increase in federal regulations,530the cost of consumer goods and services increases by one531percentage point. That's why President Trump's ten for one532deregulation target would directly lower red tape driven533inflation, and it's not just about the federal spending from534increased regulations. More regulations mean more compliance535costs by businesses which are ultimately passed along to536consumers through price hikes. Overall, the Biden537Administration expansion of the regulatory state added 1.7538trillion worth of new costs to taxpayers over a decade.539    Number two, increased welfare. In 2021, the Biden540Administration pushed through a 27 percent increase in food541stamp benefits. After failing to receive congressional approval542for increase in the Thrifty Food Plan, the Biden Administration543unilaterally used guidance to increase this or to create this544$250 billion welfare expansion, the largest in the program's545history, so why would an increase in government welfare546increase inflation for all Americans?547    Well as government spending on food stamp increases,548purchases made by food stamp recipients drive up grocery prices549through the natural laws of supply and demand. In fact,550researchers at the World Bank reviewed more than a decade of551retail data to measure this impact, and here's what they found.552That food prices increase by one percent for every 12.5 percent553increase in food stamp spending, so you have that 13 to one554ratio in the increase in welfare spending, very similar to that55515 to one ratio I talked about with more red tape driving556higher inflation.557    Number three, few work requirements in welfare. The Biden558Administration's food stamp expansion not only spiked grocery559prices, but it also led to millions of Americans choosing560welfare over work. In fact, an estimated 2.4 million Americans561declined employment due to this increase. In addition, the562Biden Administration pushed several pro welfare policies.563Everything from rescinding Medicaid work requirements to564gutting program integrity and anti-fraud provisions to565expanding exemptions and waivers of food stamp work566requirements.567    The number of able-bodied people on Medicaid and food568stamps is higher today than it was when the unemployment rate569was near 15 percent during the COVID lockdowns, and in fact,570these two programs alone are expected to cost taxpayers close571to $9 trillion over the next decade.572    More spending in Medicaid and food stamps on able-bodied573adults who are working age means less resources available in574the safety net for seniors and those with disabilities. In575fact, over 60 percent of able-bodied adults on Medicaid or food576stamps do not work at all, and as a result, our labor force577participation rate is lower than it was before COVID.578    My written testimony outlines nine key policy solutions to579reverse this trend. Everything from congressional oversight of580costly regulations to increase program integrity and expanded581work requirements. Thank you for the opportunity to testify,582and I'm happy to answer any questions.583    The Chairman. Thank you. Finally, I'd like to introduce584E.J. Antoni. Mr. Antoni is an economist and research fellow at585the Heritage Foundation's Grover Hermann Center for the Federal586Budget. His work has been featured with a variety of news587outlets including Daily Caller, Fox News and Fox Business, Wall588Street Journal and National Review.589    Mr. Antoni earned his master's and doctorate in economics590from Northern Illinois and his contributions to help shape591public discourse on economic policy and provide valuable592insights for policymakers and the public alike. Thanks for593being here.594595           STATEMENT OF E.J. ANTONI, RESEARCH FELLOW,596597                GROVER M. HERMANN CENTER FOR THE598599                 FEDERAL BUDGET, WASHINGTON, DC600601    Mr. Antoni. Chairman Scott, Ranking Member Gillibrand,602members of the Committee: Thank you for the invitation to603discuss with you today the difficulties faced by seniors604stemming from the last four years of excessive government605spending and its subsequent inflation. I'm a public finance606economist, the Richard F. Aster fellow at the Heritage607Foundation, and a senior fellow at Unleashed Prosperity.608    Under the Biden Administration, seniors in America suffered609terribly because of failed left-wing ideology masquerading as610public policy. Four years of Washington's prodigal spending611drove up the national debt by $8.5 trillion while the612treasury's cash balance was reduced another $1 trillion. That's613a net overspending of $9.5 trillion or one quarter of the614entire national debt in just four years.615    This runaway spending was primarily financed by the Federal616Reserve, literally creating money for the treasury to spend. By617flooding the economy with freshly printed dollars the Fed618diluted the value of the currency, like pouring water into619wine, the total volume of liquid increase, but not the amount620of alcohol. Likewise, the total quantity of dollars increases,621but not the value for which those dollars could be exchanged.622We call this monetary phenomenon inflation, and it functions as623a hidden tax, transferring wealth from savers and wage earners624to the government.625    In just four years, the Biden Administration and its626congressional allies managed to effectively confiscate one627fifth of the value of all dollars in existence, a devastating628tax on Americans, especially seniors.629    Prices on average rose more than 20 percent according to630official government statistics, but the cost of many631necessities rose much more. Many food staples saw prices632increase 40 percent. The cost of home ownership doubled and it633will cost you 30 percent more to heat your home this winter.634    The four-decade high inflation also prompted the fastest635rise in interest rates in 40 years. This has been a deadly636combination for seniors in two distinct ways. First, the637stratospheric cost of living forced many Americans to fall638behind on their bills and rely on debt to make ends meet.639Outstanding credit card balances have exploded to $1.2640trillion, even as the average interest rate on those credit641cards is near a record high today.642    Now, for the first time ever, Americans are paying over643$300 billion annually just in finance charges on credit card644debt, which doesn't include a dime toward paying down those645balances. Seniors have been particularly susceptible to this646downward debt spiral because they are disproportionately on647fixed incomes with little room in their budget for higher648costs, but the rapid rise in both inflation and interest rates649has also decimated seniors? retirement savings, which tend to650be in fixed income assets.651    Under the Biden Administration's--legacy, the bond market652had its worst three and a half year run in at least a century.653At the same time, this asset class has significantly654underperformed. Retirees also need 20 percent more savings than655just four years ago to account for the current cost of living656crisis.657    For the average American senior, who was planning on658retiring today, he or she will have to work an additional six659years to recoup these inflation adjusted losses. Unfortunately,660the big spenders in Congress have plenty of apologists who will661blame inflation on anything, but its cause, which is excess662government spending.663    One of the politicians' favorite scapegoats was and still664is, business. We can dispense with the parochial notion that665inflation is caused by the boogeymen of corporate greed or666price gouging. Did business magically become greedy precisely667when Biden took office and went on a spending spree? Prices668aren't higher because margins are flat, rather, prices are669higher because the dollar has gone lower. In fact, the Biden670Administration's own data proved this point, cost paid by671businesses rose even faster than cost paid by consumers over672the last four years, businesses have merely passed their cost673increases on to consumers.674    Inflation comes from Washington DC, and whenever the675federal budget increases, the family budget decreases, and the676inflationary deficit isn't from a lack of revenue, tax receipts677today are at or near a record high by any measure, whether678percentage of GDP or inflation adjusted dollars, et cetera. We679don't have a revenue problem; we have a spending problem. The680current Fiscal Year is off to its worst start ever, even worse681than the blowout spending year of the pandemic.682    Despite the hole that Biden has dug for seniors, President683Trump is offering them a way out. By reigning in government684spending, we can finally bring inflation to heal. Likewise,685expanding energy production will reduce the cost of living686while also raising additional tax revenue. Common sense687deregulation will also produce these positive effects.688Additionally, pro-growth policies that incentivize work will689actually increase social security and Medicare tax receipts,690providing much needed breathing room for these programs which691are approaching insolvency.692    If this Congress genuinely wants to help seniors, it should693join President Trump in shrinking the burden that the694government places on its citizens, whether that's explicit695taxation, the hidden tax of inflation, burdensome regulation,696or another form of government overreach. If Congress wants697seniors to continue suffering, then by all means keep in place698the Biden policies that got us here. Thank you again for your699time. I look forward to answering your questions.700    Senator Johnson. Thank you, Mr. Antoni. If Senator Kim's701ready, you ready to go for questions? I'll defer mine. Okay.702Senator Kim?703    Senator Kim. Yes, sure. Happy to jump on in. Mr. Lawson, I704wanted to just kind of pick up something you had talked about,705you know, just the challenges that seniors face when it comes706to long-term care. You know, this is something that my family's707been struggling with as my father's having real challenges of708decline.709    I'll be honest with you, I've heard about this problem and710the sheer cost of that from a lot of people in New Jersey, but711when you go through it personally, it just was a whole other712level just to see, you know, how much--in New Jersey, if people713going for assisted living or other types of facilities, we're714talking to upwards $10,000 a month or more out of pocket and,715it's either that or, people having to basically bankrupt716themselves until they're eligible for Medicaid.717    I guess this is something that I hope we can as a718committee, be able to engage in and try to address, but I guess719I just wanted to just hear from you, you know, what are the720things that you would recommend this Committee diving in on?721How can we use this opportunity to really not just hear those722problems, but understand that, just the sheer trajectory of723crisis that we're in as a country as a whole, but then just how724devastating this is for families right now?725    Mr. Lawson. It's such an important question. Thank you for726asking, Senator. I think the most important thing to talk about727when it comes to long-term care is to understand that we do not728have a long-term care system in this country. Because of that,729people are forced to rely on Medicaid, which is not in and of730itself a long-term care system.731    What you talked about, you know, people having to bankrupt732themselves, they call it a spend down. That's so that they can733qualify to have their long-term supports and services or long-734term care covered, because otherwise the families would be735bankrupted. They would not be able to afford the average cost--736in the whole country is a hundred thousand dollars, so the737finding in New Jersey of $10,000 a month is not at all out of738line with what people would face.739    I say that emphatically because there are proposals that740are written down by members of the Republicans in Congress to741cut $2.3 trillion from Medicaid, and let me be clear of what742that would do. It would destroy Medicaid. It wouldn't do743anything to fight inflation. It wouldn't bring anybody's prices744down. It would just steal people's healthcare and it would745decimate the ability of millions of people to afford long-term746care.747    I really urge this Committee to make that really clear,748that when you're talking about Medicaid, you're talking about749the largest provider of long-term care in this country.750    Senator Kim. Yes, and really you see so few other options751that are out there besides, again, out of pocket, and so, I752absolutely agree with you. We see this being critical when it753comes to the role that Medicaid plays and again, I've seen that754up close and personal.755    What other steps can we be taking if we're certainly going756to--I'm certainly going to try to fight to make sure we're757preserving Medicaid and I hope my colleagues are as well, but758even that doesn't solve the problem, right? That's trying to759prevent even further backsliding, right?760    What else should we be looking at to address? I know there761have been proposals to try to bring long-term care into762Medicare. There are other types of ideas that are out there,763can you gimme a sense of just some of the other things that764experts are talking about that we can try to consider here?765    Mr. Lawson. Absolutely. The idea of bringing long-term care766as a benefit under Medicare as an extremely good idea. Medicare767does an incredible job providing services and restraining768excess cost growth. It does a much better job than the private769alternatives in insurance and especially in long-term care.770    What we've seen is a growing rollup of the long-term care771nursing home system by private equity, so this is by money, who772look at a nursing home and they don't see it as a place to773provide care in the critical end of life period for people.774They see the end of a person's life as a time to squeeze as775much money out of them and their family as possible, so really776investigating the role that private equity has in profitizing777long-term care and reversing that trend is something that I778think is also critical.779    Senator Kim. Well, thanks so much. I yield back. Senator780    Senator Johnson: Senator McCormick781    Senator McCormick: Thank you, Senator. Seniors in782Pennsylvania are hurting thanks to the reckless spending,783including five trillion of new spending under President Biden.784They've had to deal with runaway inflation. They've seen785purchasing power of fixed income evaporate because of bad786policy decisions here in Washington, and they've seen the value787of their retirement accounts after inflation decreased by788almost 10 percent in the last four years, and the cost of elder789care, of course, just keeps going up.790    Prices are up, savings are down, and this can't continue,791so thankfully, we're turning the corner and building an economy792that works for all Americans, including 2.5 million seniors in793Pennsylvania. This starts with reigning in federal spending.794The federal deficit is now equal to seven percent of GDP, debt795is over 120 percent of GDP. We now spend more on interest on796the debt than we do in national defense.797    At the same time, I think everybody on this Committee798agrees that we must protect the critical benefits seniors have799earned, such as social security and Medicare, so we have a800difficult question to wrestle with, how do we bring down801spending while protecting these critical programs that802Americans have paid for and rely on?803    With that context in mind, Mr. Ferry, I'd like to start804with you as your testimony focused on this very question, what805are our best options or low hanging fruit for reducing the806federal deficit while protecting critical programs our seniors807rely on?808    Mr. Ferry. Thank you, sir. I think there are a number of809federal programs that don't fall in the category of essential810spending, as you say, Medicare, Social Security, and defense,811and I think these programs are in areas like the Department of812Education where the federal contribution is debatable at best813and I think we can literally cut an annual trillion dollars out814of federal spending over the next five years.815    I'll give you another example. Senator Scott didn't mention816it, but earlier in my career, I worked in the broadband817technology industry, building optical networks that carry818internet traffic. I was thrilled when the government passed the819broadband program to bring internet to thousands of rural820households. The four-years of the Biden Administration went by,821and not one single household has been connected.822    Where I come from in the private sector, if you had that823record over four years, we would just fire everybody. We'd give824them compensation, but we would just say, you need to do825better. I think we need to instill that spirit of performance826and targets and metrics into the public sector, and if we do827that, we will get five times the reward, which means, as I say,828we can cut spending by a trillion dollars a year without829touching Medicare, without touching social security and without830touching defense.831    Although defense is, to be honest, an area where, for the832$800 billion we spend, we are not getting good value for money,833so I don't know that we need to cut it radically, what we need834to do is to bring in smaller more aggressive, more835entrepreneurial companies to defense to compete with some of836the defense primes, and I think we actually could see our way837to reducing defense, but getting better defense worldwide that838way.839    Senator McCormick: Thank you, and I couldn't agree more on840the accountability and focused on outcomes within our841government, that's what President Trump, I think is leading the842charge on, and he's got a lot of support here on this843Committee.844    Mr. Antoni, let's discuss how the last four years have845impacted seniors, retirement portfolios. You've been very846critical of the Federal Reserve's response to inflation, as847have I. Can you walk us through the impacts of federal policy848on 401k accounts? I hear this all the time from seniors in849Pennsylvania and pension plans in general, and how and what can850seniors do to protect their retirement accounts from rapidly851losing value as they have over the last four years?852    Mr. Antoni. Well, thank you, Senator. It's a pleasure to853see a fellow Pennsylvanian, by the way. Unfortunately, what the854Federal Reserve did to accommodate the spend thrift policies855out of DC was again, literally just create trillions of dollars856out of nothing, and to ease the cost of financing all of the857borrowing from the treasury, they pushed interest rates down to858zero.859    At the same time all of these this debt was being issued,860it was being issued at near zero interest rates, and therefore,861all of the securities that were being issued that were862essentially the financial derivatives that had these low863interest-bearing assets as their underlying asset, that meant864that the securities also were going to have very low yields. As865soon as interest rates began to rise, since interest rates and866prices move inversely with bonds, the value of these securities867have absolutely plummeted. We are literally coming off of the868worst three and a half year run for the bond market in over a869century.870    Well, where do seniors disproportionately put their871savings? Into fixed income assets, and so they have taken just872an absolute wash on their retirement accounts. The average 401k873alone, as you pointed out, lost almost 10 percent of its874inflation adjusted value under the Biden Administration, and875for seniors, it has been even worse than the average because of876that portfolio allocation.877    To answer your question in terms of how can they protect878themselves, unfortunately, when it comes to high inflation,879it's a hidden tax. Like any tax, there's not really a good way880to protect yourself, aside from simply spend all your money. If881you don't have any money, then the government can't take any of882it away through inflation. Unfortunately, that's obviously not883a very desirable outcome either, though.884    Really the best way to protect themselves, I would say,885with all due respect, is to vote in politicians who will886prevent that kind of overspending and therefore prevent the887inflation in the first place.888    Senator McCormick: Thank you.889    The Chairman: Ranking Member Gillibrand.890    Senator Gillibrand. Thank you so much, Mr. Chairman. Mr.891Bragdon, you argue that expansion of welfare and safety net892programs are the main contributors of inflation and propose893that these programs need to be cut significantly. These894programs actually prevent millions of Americans from falling895deeper into poverty, illness, and food insecurity.896    For example, SNAP is one of the most effective tools for897improving health and preventing hunger, enabling nourishing898kids to go to school and adults to go to work. When we cut899programs like SNAP and Medicaid, we will surely head toward the900Nation with poor health outcomes, increasing hospitalizations901and ballooning our healthcare costs.902    What you propose we do when millions of Americans go hungry903or fall into poverty or become ill without healthcare coverage904because of these cuts?905    Mr. Bragdon. Senator, thank you for the question. In my906testimony, I outlined really two key strategies in right sizing907welfare programs, but also providing incentives for people to908move from welfare to work and out of poverty. The only path for909an able-bodied adult out of poverty is through work, and there910is a broad bipartisan consensus, whether it's in mental health911or substance abuse for individuals with disabilities, that were912work is key to a meaningful life.913    What we talk about in the testimony is an example after914example. An effective work requirement for able-bodied adults915of working age is proven to get individuals out of poverty and916into the workforce. We have more than eight million open jobs.917Most of those don't require more training than on the job918training, and that's the path out of poverty. The second piece919is----920    Senator Gillibrand. Could you pause for one second, Tarren?921    Mr. Bragdon. Sure.922    Senator Gillibrand. Wasn't most of the waiver for work923requirements because of COVID?924    Mr. Bragdon. There are still waivers even in low925unemployment areas. The Biden Administration has allowed states926broad authority to waive work requirements.927    Senator Gillibrand. Wasn't that due to COVID? I think the928waivers are no longer in place. They were removed once we got929out of COVID, but I thought most of the waivers were because of930COVID because It was so much disruption in the economy, and931some people weren't able to go back to work because the932employers didn't want them to go back to work, or their933employers weren't open, or there were so many differences and934so many changes.935    Mr. Bragdon. They were waived for a period of time, but936then states can also submit waivers, which they did to USDA in937food stamps saying, we want to broadly waive work requirements938in certain counties, gerrymandering counties together to create939waivers where there's even low employment.940    Senator Gillibrand. Was that because of low unemployment?941There's no jobs available.942    Mr. Bragdon. You mean high unemployment in those counties?943    Senator Gillibrand. No, low unemployment. I think the944unemployment rate's been hovering around three percent, and945when unemployment's that low, meaning there's just not that946many jobs out there, all the jobs are full. There's a challenge947of finding good jobs.948    We make the tradeoff. We'd rather people not starve, then949require the work requirement. I think a lot of the people who950also are considered able-bodied often have as you said, mental951health issues or impediments to work like an elderly person at952home who needs care, or a child at home who needs care. What953data do you have on that?954    Mr. Bragdon. Sure. I appreciate the question, so with work955requirements in food stamps, an individual, if a doctor says956they're not able to work for whatever, whether it's a physical957or mental health, a condition that they have, then they would958be exempt from the work requirement. States don't have the959authority to waive work requirements in low unemployment areas.960There is the ability in high unemployment areas for states to961waive those work requirements for certain adults with no kids962and no disabilities, but not with low unemployment.963    In fact, there's more than eight million open jobs across964the country, and the path out of poverty is for individuals to965go into those open jobs. I know, for example, we have four966teenagers, my daughter went into one of these open jobs in967Florida. She's earning $18 an hour at Jimmy John's, and that's968her first job moving her on the path to prosperity, and it's969really helping every American begin their American dream.970    Senator Gillibrand. Okay. Mr. Lawson, some Republicans have971proposed raising the full retirement age to 69 or 70 to protect972social security solvency and avoid benefit cuts. This is973misleading. Can you share the actual impact of raising the974retirement age would have on social security benefits and on975the adults who rely on them?976    Mr. Lawson. Yes, absolutely. Every year the retirement age977is raised, it's a seven percent benefit cut across the board to978everybody's social security benefits. It's not like a benefit979cut, it is a benefit cut, because the retirement age really has980nothing to do with when you retire. It is just the mathematical981point at which you receive your full benefits, so if you raise982it then you're cutting everyone's benefits by seven percent per983year.984    Senator Gillibrand. Thank you. Thank you, Mr. Chairman. All985right,986    The Chairman. Senator Tuberville987    Senator Tuberville. Thank you, Mr. Chairman. Thanks for988being here this afternoon. Mr. Ferry, a lot of misconceptions989are floating around by the media about tariffs and how they'll990hurt the American economy. Can you speak to how tariffs, if991they're done right, will boost the economy?992    Mr. Ferry. Thank you for the question, Senator. That's an993absolutely true statement. Tariffs done right will stimulate994our economy. I just want to say following on from what Mr.995Lawson said, that there is no money tree. The percentage of old996people in our economy continues to grow. I'm sitting here as a997living, breathing example of that, and we have fewer people in998work earning, in a sense, less real wages than 50 years ago999when we had four working people for every retired person, now1000we're getting close to two, I think.1001    We need to make this economy grow and we need to raise the1002real incomes and the value of the production of every single1003worker. Tariffs are a key way we can do that because what1004tariffs do, is they handicap imports and they allow domestic1005production to grow. We want to tariff the high value, highly1006productive high growth manufacturing sectors, which is roughly1007three quarters of the entire manufacturing sector in the United1008States.1009    By doing so, we will produce more cars, more computers,1010more machinery, more machine tools, more medical equipment, and1011more steel and more aluminum and all those industries pay1012higher wages. As an example, the average large steel company is1013today paying its average steel worker over $100,000 a year. The1014average steel worker no longer works with hot molten metal. He1015works in a computer control room, and tariffs are a key way to1016stop the handicap this economy has due to an overvalued dollar1017and due to trade cheating from countries like China and1018Germany, so they're an absolutely essential tool.1019    Senator Tuberville. Do you see an increase in job1020opportunities with increased tariffs?1021    Mr. Ferry. Yes. I mean, mathematically, yes. We will see a1022higher labor force participation rate with increased tariffs1023because domestic production will rise, and those jobs will1024attract people to get off the sofa and go out and get those1025jobs, but most crucially, I see a transition from people1026working for places like Jimmy John's at minimum wage, into high1027value jobs, which not only pay more today, but offer them1028career opportunities to get on a rising escalator.1029    Senator Tuberville. Thank you. Mr. Antoni, Americans are1030upside down in credit card debt, $1.17 trillion. Eighty-five1031percent of Americans have credit cards, 85 percent of Americans1032over 65 have a credit card. What can be done at the1033congressional level to encourage savings and keep more money in1034the pockets of Americans when it comes to credit?1035    Mr. Antoni. Senator, thank you for the question. A big1036disincentive to save has historically been inflation because as1037your money is sitting there in the bank, or even if it's in1038equities, whatever the case may be, much of the growth that1039it's experiencing is simply just the dollar losing value, so1040there's not really much of an incentive there.1041    If you want to get rid of inflation and you want to not1042only incentivize people to save, but disincentivize them from1043borrowing, you got to get inflation down, and I think the way1044you have to do that is by cutting government spending.1045    The only other thing I would add is to help the people who1046are already in so much credit card debt who are suffering with1047the combination of high credit card debt and high interest1048rates, is you need to get the interest rates down, and the1049interest rate is simply a price, it's the price to borrow1050money.1051    If you want to reduce the price of something, reduce the1052demand, so reduce the demand for borrowed money. All marginal1053spending by this Congress is by definition borrowed, so if you1054reduce that spending, you will also reduce the demand for1055borrowed money and help bring interest rates down.1056    Senator Tuberville. Thank you. Mr. Bragdon, you talk a lot1057about unsustainable expansion of the federal welfare programs1058that have caused massive increase in spending, particularly1059SNAP. SNAP spending has grown by more than 73 percent since the1060last farm builds predicted we'll spend more on SNAP in the next106110 years than we have in the last two decades. This is over the1062top, so what's your thoughts here on this massive increase in1063the TFP and what recommendation do you have to address this1064Farm Bill with, with SNAP.1065    Mr. Bragdon. Senator, thank you for the question. I think1066it's really twofold. One, the authority for setting the food1067stamp program, the SNAP program, really relies on, on Congress,1068and when you look at what the Biden Administration did with the1069Thrifty Food Plan, by just through guidance, literally1070bureaucrat with a pen and a power trip, dramatically increasing1071that benefit, and then that going, as my colleague said, into1072borrowed money and increasing interest rates, you also took1073away the incentive that people have to go into the workforce1074because it pays more not to work, and as I talked about, it1075drives even higher food inflation because SNAP benefits can1076only be used for food, and as we saw with the research that I1077cited that drives increased demand and raises food prices; I1078think there's really twofold things that need to be done within1079the SNAP program.1080    One is greater anti-fraud measures. If you look at the1081improper payment, that's fraud and waste within the SNAP1082program. That's primarily driven by individuals who are1083receiving benefits, who are no longer eligible, either because1084an income change, they moved or some other benefit change or1085life change.1086    The second piece is really looking at how do we effectively1087use work requirements for working age able-bodied adults? We've1088seen this work well with adults with no kids and disabilities.1089We recommend that pro-work anti-poverty policy be expanded to1090more working age adults who have school aged children.1091    Senator Tuberville. Thank you.1092    The Chairman. Senator Warnock1093    Senator Warnock. Thank you, Chairman Scott. Today's1094hearing, discussing the consequences of high prices on seniors1095could not be more timely. On Monday evening, the Trump1096Administration ordered a total illegal freeze of federal1097taxpayer funds going out to communities in Georgians. This1098illegal funding freeze includes programs that are essential to1099seniors with lower and fixed incomes.1100    I'm thankful that a federal judge temporarily halted this1101illegal freeze yesterday afternoon, but these programs are1102still at risk. The Trump Administration, to be very clear, has1103rescinded the OMB memo, they have not rescinded the executive1104order. Mr. Lawson, will pause to payments for nutrition1105programs or the Older Americans Act, make food more affordable1106and accessible for seniors?1107    Mr. Lawson. No, Senator, it will do the opposite.1108    Senator Warnock. What they did on Monday night won't help?1109    Mr. Lawson. It will hurt.1110    Senator Warnock. How about a pause on payments for federal1111housing vouchers? Will that help?1112    Mr. Lawson. That will not help. That will also hurt.1113    Senator Warnock. What about a pause on energy assistance1114funds?1115    Mr. Lawson. Same answer. This won't help at all, it will1116only hurt seniors.1117    Senator Warnock. I would agree with that. Seniors,1118particularly those of modest means, rely on these funds to help1119pay for food, medicine, in-home care, rent, energy, and heating1120bills in the dead of winter and many other federal programs1121that ensure dignity throughout a person's life. This trump1122freeze will hurt Georgia Seniors, make life more expensive for1123them, including our veteran seniors who need care. Mr. Lawson,1124how can the Federal Government help bring down costs for1125seniors?1126    Mr. Lawson. One of the best ways is to focus in on one of1127the key drivers. That is really the rock, in the rock and the1128hard place that seniors are in the price of prescription drugs.1129For decades, pharmaceutical corporations have been able to1130raise the prices year after year enormously above the rate of1131general inflation. They do it because they can, they do it for1132greed alone, and seniors pay the consequence of this, and1133that's too often having to cut their pills in half or forego1134their prescriptions or face the choice of, am I going to pay my1135rent or my heating bill or be able to afford my drugs this1136month. That is the reality that millions of Americans face.1137    Now, President Biden and Democrats in Congress passed a1138bill that allows Medicare to negotiate prescription drug prices1139for the first time ever, and there's been a reduction or there1140will be a reduction in the prices of some specific drugs, but1141what we could do is expand that to all drugs. Why get ripped1142off on any drugs?1143    Senator Warnock. Absolutely, and I'm proud that in that1144provision, which caps the cost of prescription drugs, my1145insulin bill, which caps the cost of insulin to no more than1146$35 of out-of-pocket cost per month for seniors, insulin1147shouldn't be expensive, and the fact that it is, or prior to1148our engagement in this area, speaks to the outsized influence1149of big pharma in our politics.1150    On his first day in office, President Trump signed a wave1151of executive orders, and one of these executive orders rolled1152back an initiative that would empower Medicare prescription1153drugs to offer generic drugs that treat common chronic1154conditions or a flat two-dollar copay. Mr. Lawson, would1155capping the cost of medication at two dollars help with1156senior's ability to afford other essentials like groceries?1157    Mr. Lawson. Absolutely. There's no doubt at all on that.1158    Senator Warnock. How do high prescription drug costs affect1159seniors also dealing with inflation?1160    Mr. Lawson. When a seniors forced to try to go get1161groceries and they can't afford those groceries and the $1,9001162average social security cost per month, if their drug prices1163are going up month after month 13 percent, you know, they're1164going to be even less able to afford those groceries, and we1165know that this price cap works because there is now a $2,0001166price cap on prescription drugs in the same bill that put in1167negotiation, and that has--the freedom that gives seniors from1168the anxiety of, will I be able to afford my next bag of1169groceries, is enormous.1170    Senator Warnock. Absolutely. In my remaining time. One last1171question. The Affordable Care Act established a premium tax1172credit to help everyday Americans afford their healthcare1173costs. Several years ago, Democrats and Congress passed1174legislation increasing the value of the premium tax credits to1175help families better afford healthcare while dealing with1176inflation, but if Congress fails to extend these tax credits1177before the end of the year, a 60-year-old couple in Georgia1178with a household income of say, $80,000, we'll see their annual1179premium go up by $16,798. Mr. Lawson, how would extending the1180enhanced PTC support the fiscal sanity of seniors?1181    Mr. Lawson. I mean, if it'd be fiscal insanity not to1182extend it and think that it'll do anything other than drive1183millions of older Americans into poverty. Because you can't1184just increase a bill $16,000 and expect that money to just come1185from nowhere.1186    Senator Warnock. Thanks, thank you so much. I'm proud to1187serve on this Committee. Also, glad I'm on the Finance1188Committee, and while many of my colleagues will be focused on1189tax breaks for the wealthy, I'll be fighting for everyday1190Georgians to help them to be able to afford their healthcare.1191Thank you so much.1192    The Chairman. Senator Johnson.1193    Senator Johnson. Thank you, Mr. Chairman. First of all, an1194excellent hearing, and you've assembled a panel here bipartisan1195that actually agree on one thing, that inflation is really bad1196for seniors and they pay a really heavy price.1197    Let me quickly put up a chart. This describes how bad it is1198because we've devalued our currency. A dollar Americans held in11991998 is now only worth 51 cents. A dollar you held only 101200years ago in 2014 or 12 years ago, is now worth 74 cents. A1201dollar we held before the pandemic started was, is about 801202cents. Now where there are disagreements is what causes this. I1203think I agree with three of our witnesses that it's because of1204massive government spending, deficits of spending, printing the1205dollar too many dollars, chasing too few goods, but Mr. Lawson1206believes it's because of price gouging. Mr. Antoni, I think he1207pretty well nuked your testimony, can you explain to Mr. Lawson1208why he is so wrong?1209    Mr. Antoni. I'd be happy to, Senator. If we look at the1210data published by the Biden Administration, so these aren't my1211figures, this is from the Biden Administration. We see that1212prices paid by businesses for all the things they buy actually1213rose faster than the prices paid by consumers.1214    When you go to the grocery store and you grab the gallon of1215milk off the shelf, the grocer had to buy that gallon of milk1216first in order to put it on that shelf for you, and the rate of1217increase that that grocer has been paying has actually been1218higher than what consumers have been paying, and that's why1219when we look at corporate profits, they're really not up after1220adjusting for inflation.1221    Senator Johnson. Businesses literally--in order to maintain1222their market share and be able to sell products shielded1223consumers from, you know, some of the inflation caused by1224massive government spending, correct?1225    Mr. Antoni. Exactly, and that's why wholesale inflation1226peaked much higher than retail inflation or consumer inflation.1227    Senator Johnson. Mr. Lawson, you say you travel all over,1228you're talking to seniors. Let me ask you a hypothetical1229question. If a family let's say they have a major medical1230problem, and so one year they had to borrow $50,000 to take1231care of those medical bills, but then their family member gets1232well, do families keep borrowing $50,000 and keep spending it1233at that level even when they no longer have the illness?1234    Mr. Lawson. Well, what I would hope is that Congress could1235come together and----1236    Senator Johnson. Mr. Lawson, what would a typical family1237do? They would lower their spending and stop borrowing, so let1238me put it in my next chart here, so American families wouldn't1239do what the Federal Government did here. In 2019 before the1240pandemic, we spent $4.4 trillion, then we went on a massive1241bipartisan spending spree, $6.6 trillion in 2020. The pandemic1242eventually wound down, okay, we were actually coming, well out1243of it by the end of 2020. We certainly didn't need the1244inflation reduction act, which sparked 40-year high inflation.1245    The last five years, we've averaged $6.5 trillion. Last1246year we spent $6.9 trillion. This year, we'll probably spend1247about $7 trillion. Mr. Antoni, is there any justification for1248maintaining this level of spending now that the pandemic is1249over?1250    Mr. Antoni. I suppose that depends on how much waste, fraud1251and abuse you're willing to tolerate.1252    Senator Johnson. I'm willing to tolerate none.1253    Mr. Antoni. Well, in that case, there is absolutely no1254justification for the figures on your chart there.1255    Senator Johnson. I've given my colleagues a number of1256options to return to a pre pandemic level spending. One of them1257was, if you go back to Bill Clinton's 1998 budget, where we1258actually had a surplus, and by the way, 40 Senate Republicans1259voted for that, and they voted for the appropriation bills, but1260if you go back to there and you increase that spending level1261for population growth and inflation, and you use this year's1262Biden's, social Security, Medicare, so you hold those programs1263harmless, that they are as they are, and interest, according to1264President Biden's budget, we would have a spending level of1265$5.5 trillion, but President Biden's projecting $5.5 trillion1266of revenue, that's how close we are to a balanced budget isn't1267that reasonable? Mr. Ferry?1268    Mr. Ferry. I don't think I followed all your numbers,1269Senator. You're saying that the Clinton budget of 1998 would1270lead to tax revenue of five----1271    Senator Johnson. No, what I'm saying is that back then it1272was $1.7 trillion because the dollar was worth more, but if you1273inflate that $1.7 trillion by population growth and inflation,1274but for Social Security, Medicare, and interest, who used this1275year's number, we'd be spending it $5.5 trillion. We'd1276basically have a balanced budget. If you do Clinton for 2014,1277do the same thing, you'd have about $6.2 trillion. Again, that1278would be a reasonable pre pandemic level of spending to return1279to, and again, those were President Clinton's spending1280priorities.1281    Again, as I lay out these numbers, I'm one of the few1282people here that I'm an accountant, I actually use numbers, I1283look at history. My colleagues are actually shocked at how1284reasonable that spending level is, so again, I'm guess, I'm1285just trying to get some comments. I mean, anybody want to1286challenge that that's not a reasonable spending level to return1287to?1288    Now again, we can spend on different things, but we1289shouldn't be spending at seven trillion level over 50 percent1290higher than the start of the pandemic when population is only1291growing two percent. That was, you know, Senator Scott made1292that comparison, spending was up something like 60 percent in1293one analysis, population has only grown two percent there.1294There's no justification for that. Correct?1295    Mr. Ferry. Yes, I absolutely agree with that. The, the1296Federal Government has broadened and widened its interest in1297various areas producing very little in all these areas, when1298what it should be doing is focusing on those entitlements,1299including senior citizens, and this needs to be paired back1300dramatically and radically.1301    Senator Johnson. Mr. Chairman, just one quick question. In1302Mr. Antoni's testimony, you say that interest payments in1303December 2024 were $140 billion. Now, the interest expense I've1304been using in my analysis here was Biden's budget number at13059.65. You're saying that interest is going to be 1.2 trillion,1306but even the 140 is, comes out till about $1.6-$1.7 trillion,1307so I'm sure there's a timing difference in terms of interest1308payments, but what is Biden that far off in terms of his 20251309interest expense of 9.65? Is it going to really be 1.2 trillion1310or more?1311    Mr. Antoni. Senator, I think what the Biden Administration1312was probably referencing, there was net interest, which is1313frankly kind of a made-up category. They take gross interest,1314the actual cost of servicing the debt, and then they subtract1315out a bunch of interest sources of income to the U.S. Treasury,1316and that's where we get this net interest figure, but again,1317it's not the actual cost of servicing the debt for this1318calendar year, you're looking at about one point $0.2 trillion1319just for that one expense alone.1320    Senator Johnson. Again, it flows through the budget. It is1321net interest, so the 9.65 is a reasonably accurate number then?1322    Mr. Antoni. For net interest.1323    Senator Johnson. That's what I want to know. Thank you, Mr.1324Chairman.1325    The Chairman. Senator Kelly.1326    Senator Kelly. Thank you, Mr. Chairman and congratulations1327on being the chairman. Mr. Lawson, on Monday night, the Trump1328Administration announced that federal funding and grants were1329paused. This has created a chaotic situation in the State of1330Arizona.1331    Yesterday, my office was fielding calls all day from folks1332trying to understand what this means and what was happening on1333all kinds of programs, asking how they could be sure that1334they'd have the money to continue to operate. Meals on Wheels1335National didn't have clarity on what the funding freeze meant1336for them. They were receiving conflicting information out of1337the Administration.1338    That means that our local programs in Arizona were also1339getting mixed information, and folks who provide meals to1340seniors didn't know what the impact would be on their ability1341to continue to deliver these meals, and obviously, this means1342that seniors didn't have a guarantee of where their next meal1343would come from.1344    Now, I've delivered meals to seniors in their homes, and it1345was obvious to me that if I didn't show up, they weren't going1346to have anything to eat, and then on top of that, the1347Administration then, I mean, they defended the order all day1348yesterday, and said, this was a great idea. This afternoon it1349seemed like they wanted to walk it back, but unfortunately, for1350seniors in Arizona and across the country, they just muddied1351the waters even more.1352    Now, while I believe that the initial action that the1353Administration took was illegal, the past 48 hours have also1354been irresponsible, reckless, and absolutely unacceptable, so,1355Mr. Lawson, can you talk about how disruptive this kind of1356government action is and the stress that this causes to seniors1357and those community organizations that support them?1358    Mr. Lawson. It's basically incalculable. The messages that1359we receive of people just in full distress because they do not1360know if they're going to have a meal to eat. They're hearing1361all sorts of information. When the press secretary for the1362White House is asked whether Medicaid is going to exist, she1363says, I'm going to have to check on that and get back to you.1364What that means for a senior in Arizona across the country is1365they don't know if they're going to have healthcare. They might1366have an upcoming appointment. Do they need to reschedule that?1367    All of this uncertainty, it's chaos and it inflicts real1368harm on seniors, but the only thing worse than that sort of1369incompetent chaos are the plans to legislatively make those1370cuts permanently. Right? Which is what we've seen targeting1371Meals on Wheels, targeting Medicaid, targeting the exact1372programs that the President unconstitutionally tried to1373unilaterally stop funding.1374    Your question is incredibly important, and I can't express1375strongly enough the distress that this brings to Americans1376who've worked hard all their lives, they've followed the rules,1377and then when they expect the system to be there for them, like1378an 89-year-old relying on Meals on Wheels, they're going to get1379an answer from somebody that's like, oh, well, they could go1380get a job at Jimmy John's. Right?1381    We've heard that multiple times now in this Committee, that1382the problem is that not enough people are going to work. This1383is a hearing about seniors. Do you think that an 89-year-old1384can go get a job at Jimmy John's because their healthcare was1385taken away? No, they can't. Congress cannot steal people's1386benefits that they've earned because the people will stand up1387against that.1388    Senator Kelly. Well, the people that I met that were1389receiving these meals, not only were they elderly, they were1390often disabled. They're not working at Jimmy John's or anywhere1391else for that matter, and they rely on this to just have some,1392I mean, it's their food. They don't have any place else to go,1393and often, in some cases, you know, what I felt and is, the1394person that shows up that day to bring them that food that1395might be the only interaction that they get with anybody, so1396it's even more, I mean the damage is even beyond, just the1397meal. It's a lack of the social interaction that they will get1398from somebody showing up at their doorstep to deliver this, and1399I don't have a lot of faith in this getting resolved quickly,1400but it needs to get resolved and in a way that brings certainty1401to the folks that I represent and seniors across the country.1402Thank you, Mr. Lawson.1403    Senator Gillibrand. Senator Husted.1404    Senator Husted. Thank you for the opportunity to join my1405committee members, Ranking Member and Chairman Scott. I know1406that I'm excited to work with him and the rest of the Committee1407members.1408    I do have a question for Mr. Antoni that I think perhaps1409you can help from your background and research and provide some1410insight into because we're talking about the needs of senior1411citizens, and from my experience of traveling my State of Ohio1412over a lifetime, the past few years with dramatic inflation,1413has really hit seniors hard. These are folks who after a1414lifetime of work, are dependent on social security, retirement1415savings that they might have, which certainly is not seeing1416returns at the rate of inflation.1417    You see, the cost of food, cost of housing, the cost of1418energy, which is built into every single consumer product that1419they buy. The punishing nature of inflation in their lives, and1420I am interested in, from your background and your research,1421what has been the impact, the real impact of inflation in the1422lives of seniors? And then what recommendations do you have on1423how we can continue to attack the insidious nature of these1424inflationary costs?1425    Mr. Antoni. Well, thank you, Senator. I would say the1426impact is best described as a quality of life decrease or a1427cost-of-living increase. We have dramatically increased that1428cost of living on American seniors who are probably the least1429able to accommodate--their budgets are least able to1430accommodate those higher costs, because of exactly what you1431were just describing.1432    The fixed nature of their incomes and even the portions of1433their incomes, which do have those COLAs, those cost-of-living1434increases, they tend to happen very infrequently, so you're1435stuck with an entire year of cost increases, let's say before1436that COLA actually does kick in. On top of that, you have a1437very serious worry now with things like pension funds, which1438have lost about two and a half trillion dollars in inflation1439adjusted value under the Biden Administration.1440    That's a combination of both asset classes underperforming1441and also just inflation reducing the real value of those1442nominal holdings, and so, at the same time, so many of these1443seniors are having to pay more to live, they also are seeing1444the value of the moneys on which they rely go down, so it's1445really a double whammy for those folks, and they're just having1446to cut back, unfortunately, again, speaks to that lower quality1447of life, higher cost of living.1448    In terms of the second part of your question, you know,1449what can we do to fix this problem? The one good piece of news1450here is the fact that all of these wounds are just self-1451inflicted. In other words, if we reverse the bad policies that1452got us here, we'll reverse the bad effects, and the number one1453way to do that is to cut the excess government spending that1454has been talked about so much today.1455    Now, there are some other things that are going to help.1456For example, Senator, you mentioned energy. You're absolutely1457right. The price of energy affects everything we do and1458everything we buy, so if you return to the energy policies of,1459let's say, the first Trump Administration, that would have a1460tremendous impact on boosting production.1461    One of the things I mentioned in the written portion of my1462testimony is that we are drastically below trend in terms of1463the growth in energy production, so again, you increase1464production, you increase supply, that means you'll decrease1465price. That's not just the price of energy that puts downward1466pressure on prices everywhere.1467    Last deregulation would have a tremendous impact. One of1468the studies cited in my testimony explains that the average1469American family faces an additional $50,000 in regulatory1470compliance costs because of the policies of the Biden1471Administration, so rolling back those burdensome regulations1472would save everyone, including seniors, a tremendous amount of1473money.1474    Senator Husted. Yes, thank you. If you really look at how1475much energy prices are built into food, whether it's the cost1476of planting, the cost of the raw material, natural gas that is1477part of the fertilizing process, the harvesting, the1478transportation, there's just a huge, huge input into a lot of1479the foods we eat, and any way that we can tackle the cost of1480energy, I know affects that's just food prices.1481    Not to mention the fact that you've seen housing inflation,1482the cost of things going to housing inflation. It's great when1483people see their property values rise if they're going to sell1484them, but most seniors are not selling these properties.1485They're trying to live in them, and it's why it has a1486disproportionate effect on them, so thank you very much for1487your thoughts.1488    Senator Gillibrand. Thank you, Senator. Mr. Lawson, in your1489testimony you mentioned the social security cost of living1490adjustment, otherwise known as the COLA. The COLA is key1491component to keep up with rising costs. Yet we know that COLA1492often doesn't adequately capture the cost incurred by older1493adults. This is why I've supported the boosting benefits and1494COLAs Act. Can you tell me why the Kohl calculation is1495currently insufficient? And what can we do to ensure that1496Social Security benefits remain adequate during times of1497inflation?1498    Mr. Lawson. The current cost of living adjustment, which1499just to be clear, is part of a benefit, we pay for our social1500security benefits, including the COLA. It's not some sort of1501gift. The idea of social security is that it will freeze your1502standard of living and increase with inflation. The benefits1503will increase with inflation so that your standard of living1504doesn't go down.1505    The problem is that the COLA is calculated using the CPIW,1506which looks at the cost faced by your average worker, which are1507very different than the cost faced by your average senior or1508person with disability. Primarily this is going to be in a1509medical category, so as you know, the bill that you support and1510the efforts to switch to a better CPI for the COLA, the CPIE,1511which would more accurately reflect seniors costs.1512    Senator Gillibrand. Thank you. We heard in Mr. Antoni's1513testimony today that if Congress wants to alleviate the pain1514inflicted on Americans, especially older Americans, then1515lawmakers should make drastic cuts to government spending. I1516think we can read between the lines and understand that Mr.1517Antoni really wants Congress to make drastic cuts to senior1518Social Security, Medicare, and SNAP, but maintain and expand1519tax breaks for the wealthiest in America.1520    Mr. Lawson, what would happen to tens of millions of older1521adults who receive Social Security, if Republicans were to make1522these drastic cuts, to their benefits, particularly those older1523adults who don't qualify for other federal programs?1524    Mr. Lawson. It's really straightforward, people would be1525harmed. People would die, people would be pushed into poverty,1526millions of people. The current poverty rate among seniors is1527around 14 percent. It's right around--it's too high, obviously,1528but it's right around where the average rate is for the general1529population. Without Social Security, that number would be 401530percent, 40 percent.1531    You have millions of seniors who are just eking it out1532under, with the current average $1,900 a month to literally1533reach into people's pockets and steal that money so that a1534billionaire can buy another golden yacht with their trillions1535of dollars in tax handouts, it's deeply un-American. It's1536immoral and I just can never get it through my head how people1537can't see how wrong that path is.1538    Senator Gillibrand. Mr. Antoni, do you want to respond to1539his thoughts on your statement?1540    Mr. Antoni. Which part, Senator?1541    Senator Gillibrand. Well, the poverty created by cutting1542social security benefits.1543    Mr. Antoni. Senator, I'm not aware of any proposals to1544actually cut Social Security, so I'm not sure how to address1545that. In terms of your own characterization of my testimony, if1546you actually read my testimony and I'm happy to provide you a1547copy. Nowhere in there do I advocate for cutting social1548security benefits, so I'm not sure where that's coming from.1549    Senator Gillibrand. It comes from the rhetoric across the1550country right now. It also----1551    Mr. Antoni. With all due respect, Senator, I don't1552represent the country. I simply represent my own views, that's1553what I've been asked to testify on here today, and in my own1554views there are no cuts to social Security, so again, I'm not1555sure where that's coming from.1556    Senator Gillibrand. Let's talk about your cuts to SNAP. How1557would you address seniors who are hungry?1558    Mr. Antoni. Again, Senator, I'm not advocating for any cuts1559to SNAP, so I'm not sure where this is coming from, that that1560is found nowhere in my testimony.1561    Senator Gillibrand. Where are you planning on cutting then?1562Where are your drastic cuts from?1563    Mr. Antoni. I would start with the low hanging fruit of1564waste, fraud, and abuse throughout the government.1565    Senator Gillibrand. Which waste and which fraud and which1566abuse in which program?1567    Mr. Antoni. Senator, everywhere. Absolutely everywhere, and1568there are no sacred counts here by the way----1569    Senator Gillibrand. Just give me one. Just give me a few1570hundred billion that are waste, fraud, and abuse. Just gimme a1571few hundred billion since we have to make up over a trillion1572dollars to pay the debt and deficit.1573    Mr. Antoni. Oh, certainly. Well, Senator, a very easy way1574to do that would simply be to revert back to pre-COVID spending1575levels.1576    Senator Gillibrand. Absolutely not. That's not correct and1577I'll explain why. COVID was such a dramatic crush to the U.S.1578economy. Such an unconscionable disaster to the U.S. economy.1579Businesses closed all across America. Schools were closed. Five1580million women lost their jobs because they had to stay home so1581their kids could get school by Zoom, so that's what happened1582during Covid.1583    In fact, we realized pretty quickly that our social service1584safety nets weren't effective during COVID, because so many of1585them required you to turn up in person to fill out a form or to1586get a benefit, SNAP was one of them, so one of the changes we1587did very quickly in SNAP was to let people apply online, so the1588increase in the number of people who had access to SNAP is not1589because people were lazy and stopped working, or because people1590weren't doing their fair share.1591    It's because the people who actually were qualified were1592finally getting the benefit that it was made for. It's not that1593somehow there was abuse of the program, or somehow people1594decided that they wanted to get free food. That many people1595needed access to the SNAP program before COVID, but because we1596recognized it wasn't working, to have to show up in person, and1597letting people apply, it fixed the program, so no, that's not1598true.1599    A lot of the things we did in COVID was to fix things that1600weren't working, and we didn't understand until we saw the1601impacts of COVID. I'm past my time. I'm now going to refer back1602to the chairman.1603    The Chairman. Thank you, Senator Moody.1604    Senator Moody. Thank you so much.1605    The Chairman. This is your first time to ask questions in a1606committee.1607    Senator Moody. Yes, it is. Not my first committee1608appearance, but yes, my first asking of questions, so you1609should all be very afraid. Thank you, chairman Scott, Ranking1610Member Gillibrand. It's an honor to be here. It's an honor to1611be among you on this Committee, and let me just say, I know1612this has gone on for a little bit and we're just really1613grateful that all of you were willing to show up today and1614testify. Thank you so much.1615    This is an important hearing, especially for states like1616Florida. We have nearly six million residents that are over the1617age of 60, so we feel many of them living on a fixed income, so1618our residents certainly feel the effects of inflation, and this1619is a problem all across the Nation, but certainly we are1620feeling it in Florida as well.1621    We know that this has been caused, certainly in part by the1622enormous spending that has taken place under the last1623Administration. As Attorney General, I fought against agencies1624constantly, not just for overreaching policies, but sometimes1625spending decisions that I don't think were lawful either, and I1626think it all contributed to the excessive spending. I look1627forward to serving on this Committee and I've enjoyed hearing1628not only your original testimony, but your responses to the1629questions. It's been incredibly helpful, as one of the newest1630senators here in the U.S. Senate number 99 to be exact.1631    One of the things Mr. Antoni that I heard you talk about,1632of course, your testimony included an analysis of how the1633spending has contributed to the rapid increase in inflation,1634but one of the things you talked about, it may have been in1635response to one of my colleagues' questions, was how the Fed1636might have also played a role in this, and certain monetary1637policy decisions may have played a role in this, and so I1638wanted to just ask you a few questions about that. Number one,1639do you believe that's the case?1640    Mr. Antoni. Oh, absolutely Senator. As one colleague of1641mine describes it, if Congress is the bank robber, the Fed is1642the getaway driver, so Congress is the one who initiates this1643excess spending, but then it is the Federal Reserve that1644finances it, and the way they do that is by simply creating1645money out of nothing, just simply--, and the result of that is1646a dilution of the value of the dollar.1647    Senator Moody. Do you believe currently there is enough1648transparency and accountability of the Fed?1649    Mr. Antoni. Oh, not at all. Absolutely not Senator, and one1650of the best ways to observe that, I think, is if you just1651simply follow their rhetoric around the time of the election,1652so, significantly before the election, they were talking about1653how we're going to need much higher interest rates for a very1654long period of time, and then all of a sudden, right before the1655election, despite the fact that the underlying data had not1656changed, they all of a sudden completely changed their view1657that somehow, we were going to get a lot of interest rate cuts1658in very quickly.1659    They actually did start cutting interest rates, and they1660started telling us that inflation was essentially solved, and1661then right after the election, they have once again, changed1662their tune and gone back to saying inflation looks like it's1663going to be around a little bit longer, and we're going to have1664to have these higher interest rates for longer as well.1665    Senator Moody. Certainly, when those announcements were1666made about the interest rates coming down right before the1667election, there was no change in spending.1668    Mr. Antoni. Correct. That's absolutely right, Senator, and1669so, again, to your point, the underlying problem here has not1670been solved, and yet the Federal Reserve treated as if it was.1671    Senator Moody. What would be your suggestions or1672recommendations on how we might bring more transparency or1673oversight to the Fed?1674    Mr. Antoni. I think probably the best way to make it1675transparent would be to simply get rid of it, but if you're1676going to have a central bank, I think you need to have much1677less government control over it. It needs to be the bank for1678bankers and not the bank for Congress.1679    Senator Moody. Thank you so much.1680    The Chairman. Thank you, Senator Moody. Senator Alsobrooks.1681    Senator Alsobrooks. Thank you and good afternoon to1682Chairman Scott and Ranking Member Gillibrand, and to our1683speakers today, thank you so much for being here. I know it's1684been a long day.1685    I'm going to direct my questions today at Alex Lawson. I1686have to tell you this issue is one that is quite personal to1687me. I am a part of the sandwich generation, which means that I1688am not only raising a wonderful 19-year-old daughter, but I am1689also the daughter to two aging parents. A mother who has1690significant needs, and my father, who is her caregiver.1691    Two issues I just want to ask you about that have been1692mentioned quite frequently throughout the State of Maryland are1693housing concerns for our seniors as well as the cost of1694prescription drug medications. These are two issues that I1695believe across all across the state--and without respect for1696party, this is an issue that has been of grave concern.1697    My question to you is regarding the Inflation Reduction Act1698which did cap the cost of prescription drug medications, and I1699have to tell you again how significant this is. My father is a1700person who went last year, was diagnosed with a heart1701arrhythmia, and learned that Eliquis was $800, cost prohibitive1702caused him tremendous distress, and so my question to you is,1703whether you believe that this has been--discuss how it's1704impacted seniors and to talk about what would happen were this1705not available to seniors, so just if you could just briefly1706discuss the benefits of the Inflation Reduction Act for1707seniors.1708    Mr. Lawson. The American people pay the highest drug prices1709in the world, somewhere between three and eight times higher1710than any other country. This, despite the fact that our tax1711dollars go to the research and development, which develops1712almost all of these drugs, then the pharmaceutical corporations1713turn around and charge us the highest prices in the world,1714because they can, because there's never been a check on their1715greed until the Inflation Reduction Act was passed.1716    It had many pieces to it, but the two important ones are,1717it allowed Medicare to negotiate a lower prescription drug1718price with the pharmaceutical corporations. That's the part1719that they hate the most, because they want to be able to charge1720whatever they want. I'll also say what they want is a price1721that's so high that some people die. You look at insulin and1722you see this very clearly; they want some people to die, so1723everyone else is terrified enough to spend every dollar they1724have and every dollar they can borrow to afford the drugs that1725they or a loved one needs.1726    Finally, the Congress acts and says, no, you can't charge1727whatever you want. You have to charge a fair price. That just1728started, and seniors will be seeing those reduced prices next1729year.1730    Now, there's a lot to do there. We could just do all drugs1731right away instead of just some drugs, but on the other hand,1732they also, what you brought up is the Inflation Reduction Act1733capped what seniors pay out of their pocket at $2,000 a year.1734Right? That's enormous, enormous insulin capped at $35 out of1735pocket for people on Medicare, vaccinations, free. The impact1736that the Inflation Reduction Act had on seniors cannot be1737overstated.1738    Senator Alsobrooks. Thank you. Likewise, I know I'm running1739out of time here. Just one other quick question regarding1740housing, which is a big issue. Maryland has a senior assisted1741living subsidy program which helps adults 62 and older pay for1742assisted living programs that they would otherwise not be able1743to afford. How can housing subsidy programs be a part of the1744solution to help seniors who are struggling with high cost of1745living?1746    Mr. Lawson. Housing subsidies are a solution to seniors1747struggling with the cost of housing, which is happening across1748the country, is a major issue. The idea that has been brought1749up you know, by my colleagues at the table, you know, they talk1750about drastic cuts. They talk about all these big cuts, but1751then when they're pointed, what are you going to cut? They1752suddenly get amnesia of their own plans that they've written1753down.1754    Chairman Scott wrote an op-ed in the Wall Street Journal1755giving himself kudos for being brave enough to say, we're going1756to cut Social Security and Medicare. Right? Now they go down1757the line, they say, we're definitely not going to cut those1758programs, but when pressed, they won't say what they're going1759to cut. It's written down, housing assistance, food assistance,1760Medicaid, Medicare, and yes, social security is on the chopping1761block, so that giant tax handouts can be given to billionaires1762and these multinational corporations.1763    Senator Alsobrooks. Thank you so much, Mr. Lawson.1764    The Chairman. Mr. Lawson, first off, you just told and said1765a complete lie. I have a bill that would protect Medicare and1766Social Security, and there's not one Democrat that got on the1767bill. I have fought to protect Medicare and Social Security1768since I've been up here, and that was a complete lie, but let1769me ask you a question. You just said drug companies want people1770to die. Can you explain that better?1771    Mr. Lawson. The easiest one to see is the insulin cartel.1772There are three companies that produce insulin, a drug that1773costs about six per vial to make. Now these three companies1774have increased the price year after year in lockstep, illegally1775acting as a cartel and charge upwards of $300 a vial. Now you1776can google just insulin death and you will find story after1777story, and the many of them are of 27-year-old people. Why 26-1778year-old, they just got kicked off of their parents' insurance.1779They're just footing the bill for the first time, so they're1780trying to stretch their insulin, and what happens is they go1781into ketoacidosis and die. Now, if the pharmaceutical1782corporations wanted that not to happen, there's a million1783things they could do. They could have an emergency program so1784that no one would ever not be able to afford their insulin, but1785they don't want that.1786    The Chairman. Has anybody ever sued a drug company for1787wanting people to die?1788    Mr. Lawson. A ton of attorney generals have actually taken1789on the insulin cartel for----1790    The Chairman. Wait, wait, a minute. You said they want1791people to die. That's what you said?1792    Mr. Lawson. Yes.1793    The Chairman. Do you know of any lawsuits against the1794pharmaceutical industry because they, and I guess you must have1795evidence, so like, do they have emails to say they want people1796to die? Is that, I mean, how do you have this information?1797    Mr. Lawson. I infer it through their actions of keeping1798prices so high that people die.1799    The Chairman. That's not what you said. You said that you1800know that they want people to die. I mean, like, if you're1801going to say that I think you would have like some testimony or1802an email or you've talked to somebody at a drug company. Like1803do you know people at drug companies and people there that are1804out there working every day to get people to die?1805    Mr. Lawson. Senator, let me be super clear. What I said is1806the prices that they charge are high end----1807    The Chairman. Hold on. You said they want people to die.1808That's what you said. Those were your words.1809    Mr. Lawson. Prices high enough so that some people die so1810that everyone else is terrified.1811    The Chairman. That's not what you said. You said they want1812people to die. In 2023, the Social Security Administration1813reported there was an estimate of 2.7 workers for each social1814security beneficiary. Mr. Lawson, what's the estimate for 2030?1815    Mr. Lawson. What the actuaries continually say is that the1816worker dependent ratio is not at all a factor in the trust fund1817insolvency and that's entirely because of the ultra-wealthy and1818billionaires not paying into the fund.1819    The Chairman. That doesn't make any sense. Let's think1820about this for a sec. Somebody's got to pay in, right? You have1821to have workers to pay in, so in 2030, it's going to be 2.41822workers for everybody on retirement. That is a problem, so1823American workers fuel the Social Security Trust fund, that's1824how it's set up, right? The more people that are in the1825workforce, the more people that's going to be contributing to1826the security trust fund.1827    I think there's an excess of 50 million Americans now1828between, I think 15 and 64 that are not in the workforce. Now,1829some of them have, are probably retired. Some of them probably1830can't work, all sorts of things, so what is your proposal? All1831right. Does your group have a proposal to get more people into1832the workforce?1833    Mr. Lawson. What we would propose is a solution that would1834address the problem, which is that billionaires don't pay the1835same rate into social security as the rest of us. That is what1836the actuaries say drives the entire problem, not the worker1837dependency ratio.1838    The Chairman. Do you have the proposal?1839    Mr. Lawson. I have a proposal that would solve the problem.1840Not one that would aim at something that does not factor in.1841    The Chairman. Can you send me the proposal?1842    Mr. Lawson. Absolutely. Okay.1843    Senator Gillibrand. It's Senator Sanders bill. I'm a co-1844sponsor. It's the blow the cap bill. Create a donut hole, so,1845someone who's earns less than $400,000 but more than what the1846current top number is. Which is what? 166,1847    Mr. Lawson. Yes, 176.1848    Senator Gillibrand. Right now, that they don't pay any1849additional, but that you get that six percent for all income1850above $400,000. That's the bill.1851    The Chairman. Mr. Antoni, the Social Security Trust fund is1852funded by American workers who must preserve and protect the1853benefits of Social Security, but again, if fewer workers are1854working, that's going to become a major challenge. How has the1855weak labor participation rate impacted our ability to fund1856Social Security? Wouldn't increasing the labor force help drive1857the Social Security Trust fund back toward the solvency?1858    Mr. Antoni. Absolutely, Senator. One of the devastating1859impacts of the last four years of anti-work, if you want to1860call it that anti-work policies, has been has to reduce payroll1861tax receipts. If we look at, for example social Security and1862Medicare, what you might call the missing tax receipts, just to1863those two programs, amounts to about half a trillion dollars,1864so, to your point, yes, that is speeding us to insolvency of1865those programs.1866    The Chairman. Mr. Ferry, over the last four years, the1867federal debt has increased by eight trillion. Federal spending1868is up 55 percent, so we've had about a two percent increase in1869population, and we've had this unbelievable increase. We've got1870$36 trillion for the debt. How is this--I think you've talked1871about this is an existential threat to our economy. Can you1872talk about that?1873    Mr. Ferry. Yes, absolutely Senator. Thank you for the1874question. A debt of 120 or 130 percent of GDP sounds like an1875existential crisis for the United States of America. As you1876know, and probably most people on the panel know, some of the1877most respected economists in the world have published a study,1878which put 80 percent as a key threshold. When countries get1879above 80 percent of GDP in debt, then they tend to hit a1880downward slide where investors start to get very skeptical of1881whether this country is ever going to pay back that money.1882    We could go look at the history of countries like Greece1883and Italy and Brazil and Argentina, where that problem arises.1884The United States is in a much more central position in the1885world economy. We've got very attractive investments in the1886tech industry and in government bonds, but we are not immune to1887this problem and a growing number of investors around the1888world.1889    I do talk to investors at Sovereign Wealth Funds in1890countries that have large amounts of money invested in the1891United States. I recently met with one from Singapore, and this1892$36 trillion of debt does arouse worries and make them start1893looking for alternative investments in what you could call a1894post Imperial America age, and that fills me with fear, I have1895to say.1896    The Chairman. Thank you. Mr. Bragdon, Can you talk about1897how much money we could save for seniors if we reduce the1898regulatory environment?1899    Mr. Bragdon. Sure. Thank you for the question. We've been1900talking about how big spending drives big inflation and big1901interest payments. A lot of that spending over the last four1902years wasn't driven by appropriations from Congress. It was1903driven by executive fear, by expanding spending through1904regulations and guidance of the Biden Administration. Then, as1905my colleague noted, having to borrow money or create money to1906pay for that spending.1907    Outlined in the testimony, some of those key red tape1908regulations that have driven that testimony, that have created1909expansions of the welfare state, have encouraged folks to1910remain on benefit programs beyond their eligibility, have also1911driven up costs across the board in particular industries, and1912so, rolling back that red tape, just as you did as Governor of1913Florida boosts the economy, gets more people working, providing1914more tax receipts that then undergird the safety net for1915seniors.1916    The Chairman. Thank you. Ranking Member Gillibrand, do you1917have any other questions?1918    Senator Gillibrand. No, I just want to thank this panel for1919your dedication and your passion and your willingness to help1920guide us in these very important decisions we have to make.1921    The Chairman. I'd like to thank everyone for being here1922today and participating. I look forward to continue to work1923with my colleagues. If any Senators have additional questions1924for the witnesses or statements to be added, the hearing record1925will be open until next Wednesday at 5:00 p.m. Thanks. That was1926good. Good job.1927    [Whereupon, at 5:14 p.m., the hearing was adjourned.]19281929?19301931=======================================================================19321933                                APPENDIX19341935=======================================================================19361937?19381939=======================================================================19401941                      Prepared Witness Statements19421943=======================================================================19441945?19461947                 U.S. Senate Special Committee on Aging19481949  "Making Washington Work for Seniors: Fighting to end Inflation and1950                         Achieve Fiscal Sanity"19511952                            January 29, 202519531954                       Prepared Witness Statement19551956                               Jeff Ferry19571958    "The founder of Soviet Communism, Vladimir Lenin, is said1959to have declared that the best way to destroy the capitalist1960system was to debauch the currency. By a continuing process of1961inflation, governments can confiscate, secretly and unobserved,1962an important part of the wealth of their citizens. By this1963method they not only confiscate, but they confiscate1964arbitrarily; and, while the process impoverishes many, it1965actually enriches some. Lenin was certainly right. There is no1966subtler, no surer means of overturning the existing basis of1967society than to debauch the currency. The process engages all1968the hidden forces of economic law on the side of destruction."19691970    That's a quote from the great British economist John1971Maynard Keynes. Many people think that Keynes was pro-1972inflation, but that's not true. Keynes lived through the 1920s1973and saw what hyperinflation did to Poland, Russia, Austria, and1974especially Germany, where the hyperinflation of 1923 shook the1975faith of the German people in democracy, with disastrous1976results. Keynes advocated balanced government budgets except in1977times of serious recession or depression.1978    The fundamental cause of inflation in an economy is an1979excess of demand over supply. Excessive demand can be caused by1980a number of things, including an excessive government budget1981deficit, too much money printing, or wage-push inflation which1982is accommodated by the government.1983    In the U.S., in 2021 and 2022 inflation took off, reaching1984a high of 9% in 2022, the highest rate of inflation since the1985early 1980s. The cause of this inflation was excessive demand1986colliding with restrained supply. As we all recall, the supply1987of goods from Asia was severely restrained in 2020 by the1988worldwide Covid pandemic. Even in late 2020, when countries1989began to lift factory closure orders, the ships and the ports1990between Asia and the US west coast were overloaded and backed1991up, with dozens of container ships waiting to unload outside1992Los Angeles and Long Beach ports. In addition, U.S. factories1993took time to catch up to the backlog in orders. There was a1994notorious fire at a Japanese chipmaking facility dedicated to1995chips for automobiles exacerbated the constraints on automobile1996production in the US.1997    On the demand side, the federal government enacted three1998separate measures to support people during the Covid pandemic.1999The third of those, the $1.9 trillion American Rescue Plan, was2000too much spending at precisely the wrong time, when the country2001was going back to work and people were rushing out to use their2002savings to purchase goods. That led to a surge in the prices of2003goods, everything from the food at the grocery store to home2004appliances to new cars.2005    These forces led inflation to reach 9% in 2022. Could this2006have been prevented? Yes, obviously. On the demand side, the2007American Rescue Plan should have been much smaller, Larry2008Summers said 75% smaller way back in February 2021. On the2009supply side, the situation is more complicated. Clearly the2010U.S. needs more domestic sources of manufactured goods and2011that's something I've been working hard on for several years.2012    Nor was the 9% headline rate of inflation the whole story.2013The prices of some categories of consumer goods shot up by much2014more. For example, in December 2022, the price of eggs was up2015by 59% year-on-year; the price of margarine was up 44%;2016airfares were up 28% and even the humble lettuce was up 25%.2017    These high inflation rates hurt several groups severely. I2018want to mention two groups: senior citizens and politicians.2019    Many seniors live on a fixed income. The average social2020security payment in the U.S. is now $1,976 a month. According2021to a study by University of Massachusetts economists, that2022covers just 68% of basic living expenses for an elderly single2023person who rents their home. For seniors, food makes up a large2024share of their expenses and the 2021-22 inflation hit food2025severely, and there is little sign that prices will come down.2026Rents and the cost of drugs continue to rise. According to the2027National Council on Aging, 14% of people over 65 live in2028poverty today. They say "Aging with dignity should be a right2029for all," and I think that's right.2030    Other expenses paid by the elderly also continue to rise.2031Despite Medicare, Medicaid, and Part D prescription drug plans,2032seniors still pay significant copays for prescription drugs.2033Study after study has shown that a significant percentage of2034seniors either don't fill prescriptions or don't adhere to the2035recommended dosage, in other words they take fewer pills than2036they are supposed to, perhaps taking a pill every other day to2037make the prescription last longer. These expenses continue to2038rise, even while broad inflation is subsiding.2039    Another critical expense is home health care and related2040services. This is vital for a large and growing number of2041seniors. The latest federal data shows that the cost of care2042for the elderly at home rose by 9.5%, year on year in December20432024. That's on top of all the inflation of 2021 and 2022.2044That's one of the highest rates of inflation for any sector in2045the 14-page BLS report that came out two weeks ago.2046    I also want to point out that politicians suffer from2047inflation too. We can cite four elections where the party in2048power was voted out of office due in part to inflation. That2049happened in 1968 to LBJ, in 1976 to Gerald Ford, again in 19802050to Jimmy Carter, and finally as we all know, just two months2051ago in 2024. Each time there were other factors at work too,2052but each time, it's very clear that part of the thought process2053of the American voter was: "many things happen in the world2054that are out of politicians' control, but inflation is one2055thing they can control and if they screw that up, it's time to2056turf them out of office."2057    I wish more politicians would learn that lesson.2058    What can be done about inflation? Most important, we need2059to get the federal budget deficit down. The best way to think2060about inflation is: are we as a nation consuming more than we2061produce, or are we keeping within our budgets? For over 402062years, this nation has run trade deficits, meaning we borrow2063billions of dollars from abroad to consume more than we2064produce. For 24 consecutive years, the federal government has2065run a large budget deficit, meaning the Federal Government2066spends billions, actually now trillions of dollars more than it2067takes in in revenue. Under the Biden Administration, the2068federal budget deficit reached levels that were unprecedented2069for peacetime.2070    A budget deficit of 7% of GDP is far too high. We need to2071cut government spending aggressively. I applaud incoming2072Treasury Secretary Scott Bessent's 3% target for the federal2073deficit. That will ease inflationary pressures, and reduce2074interest rates. There are so many things the federal government2075does badly, and often talks about doing but does not actually2076do, that we need to take an axe to many of these programs.2077    Further, I would say that I am a strong advocate of an2078independent Federal Reserve. The Federal Reserve needs a2079laserlike focus on the macroeconomic balance in the economy.2080Past Fed chairmen like Paul Volcker and Alan Greenspan have2081shown us this is achievable. As we all know, in 2021, the2082Federal Reserve took its eye off the ball.2083    I would also say that supply-side reforms can make prices2084less rigid and less likely to rise. Areas of the economy where2085more competition and/or deregulation can reduce costs include2086defense equipment providers, prescription drugs, the oil and2087gas industry, and mineral production and processing.2088    We need to make it more economic for people to go to work,2089so we can increase the supply of labor and restrain the cost of2090labor. We can do this by fixing the tax and welfare system to2091provide more incentives to work.2092    Note that I don't say we should open up our borders to more2093imports. We currently import far too much. Restraining imports2094will stimulate domestic production, helping to improve the2095supply-demand balance. We need more domestic production of2096goods and services and more competition.2097    I would say to the Republicans: don't be afraid to cut2098spending and shake up the civil service, but don't cut taxes2099until you know you can reduce the budget deficit. And by the2100way, new tariffs and spending cuts will play a large role in2101enabling you to reduce taxes AND cut the budget deficit.To the2102Democrats, I would say two things: first, it's fine to initiate2103new programs when you are confident that voters support them,2104but you must pay for them directly, with revenue. Expanding the2105deficit is simply another way to debauch the currency, to use2106Keynes's phrase. And that inevitably leads to inflation,2107distrust of politicians, and endangers people's faith in their2108government.2109    Finally, I want to say that I am very disappointed in the2110Democratic economists who advised Biden, some of whom I know2111personally. Not one of them has yet to come out publicly and2112say plainly: we goofed. We caused that inflation and we have2113learned our lesson. The economics of inflation is really not2114that hard. Keynes believed that in times of a strong economy2115the government should run a surplus, not a deficit. There was2116really a lot less distance between Maynard Keynes and Milton2117Friedman than many people claim. Economists need to be less2118partisan and more honest about what we see out in the real2119world.2120    Thank you Mr. Chairman.21212122                 U.S. Senate Special Committee on Aging21232124  "Making Washington Work for Seniors: Fighting to end Inflation and2125                         Achieve Fiscal Sanity"21262127                            January 29, 202521282129                       Prepared Witness Statement21302131                              Alex Lawson21322133    Good afternoon, Chairman Scott, Ranking Member Gillibrand,2134and distinguished members of the Committee.2135    As Executive Director of Social Security Works, I travel2136across the country speaking with legions of primarily older2137Americans. Almost to a person, they are concerned about rising2138prices. These rising prices hurt older adults, endangering2139their ability to afford food, housing, and prescription drugs.2140They want Congress to take action.2141    Across the country, there is widespread bipartisan2142agreement on what people want: cracking down on corporate price2143gouging, improving Social Security's annual cost-of-living2144adjustments, which keep up with rising prices and currently2145under-measure seniors' cost of living, and reducing the price2146of prescription drugs by expanding Medicare's power to2147negotiate. These are actionable policies that will help older2148adults adjust to inflation caused by global supply chain shocks2149and greedflation-which has contributed to rising costs over the2150past few years. In fact, Federal Reserve research found that2151corporate profits accounted for all the inflation in the first2152year of the pandemic recovery and 41 percent of inflation2153overall in the first two years of the post-pandemic recovery.2154    There is bipartisan agreement across this country about2155what people don't want in response to rising prices:2156Republicans, Independents and Democrats all agree that not one2157single penny of cuts to Social Security, Medicare or Medicaid2158benefits should be made. There is absolute bipartisan agreement2159among people everywhere across the country.2160    Despite this, the House Republican majority announced2161proposals to slash trillions from Medicaid, our country's2162largest provider of long-term care. Over nine million Americans2163over 65 rely on Medicaid.2164    Cuts to Medicaid would force these seniors, and their2165families, to pay enormous out of pocket costs for long-term2166care - money they don't have. It would also force millions of2167caregivers, most often women, out of the workforce. This would2168make it far harder for American families to pay their monthly2169bills. In addition, these proposals also include cuts to SNAP2170benefits, which 4.8 million older Americans rely on to put food2171on the table.2172    Just last week, the new Trump Administration repealed an2173Executive Order from President Biden that directed the federal2174government to find ways to lower drug prices. The Trump2175Administration is already favoring Big Pharma at the expense of2176seniors and working families.2177    There have also been calls by Republicans to repeal the2178Inflation Reduction Act, which gives Medicare the power to2179negotiate lower prices on key prescription drugs. This could2180force many seniors to cut their life-sustaining medications in2181half due to higher costs. Many others would face a terrible2182choice between buying food, filling their prescriptions, and2183paying their heating bills.2184    Even Social Security, the most popular and effective2185program in America, is not safe. Last month, a Republican2186representative, who is a member of the DOGE Caucus, told me2187personally that "there will be some cuts" to Social Security2188and Medicare.2189    Let me be clear: these proposed cuts will do nothing to2190lower costs for average Americans or older adults; these cuts2191are being proposed to offset the cost of tax handouts for2192billionaires and corporations, who have already been shown to2193be responsible for rising costs. This Congress should value the2194interests of older adults above the wealthiest, and I hope that2195the Aging Committee will lead that charge.2196    Consider this: If an older adult can't afford their drugs2197and groceries at the average Social Security benefit of $1900 a2198month, it is absolute fiscal insanity to think the solution is2199to cut their income! To take away their health care! To destroy2200Medicaid and force them to pay the average long-term care cost2201of around $100,000 per year! If they can't afford the price of2202eggs, it is absolute fiscal insanity to believe they can afford2203them better without SNAP benefits.2204    I'm here to deliver a message to the members of this2205Committee from older Americans across the country: You don't2206lower prices by stealing health care. You don't lower prices by2207giving giant tax cuts to billionaires and price gouging2208corporations. And you absolutely don't lower prices by reducing2209the Social Security and other benefits that adults have worked2210their entire lives for.22112212    Appendices:22132214    Appendix A.22152216    Work requirements for safety net programs like SNAP and2217Medicaid: A punitive solution that solves no real problem,"2218Hilary Wething, January 24, 2025 https://www.epi.org/2219publication/snap-medicaid-work-requirements/2220    Proponents claim that adding more work requirements for2221programs like food stamps (SNAP) and Medicaid will lead to2222higher levels of employment among low-income adults, but EPI's2223research shows that this will not address the underlying2224challenges these adults face in seeking employment. Such2225requirements will only curb access to food and health care for2226many benefit recipients.2227    Congressional Republicans have recently proposed increases2228in work requirements for the receipt of some federal government2229benefits. These proposals seem to be based on an inaccurate2230belief-that public benefits are so generous, there is no2231incentive for recipients to seek out paid employment to2232supplement the money from those benefits. Stricter work2233requirements-and the burdensome paperwork that will need to be2234completed to apply for the benefits-will shut out deserving2235families needing food assistance and health care."22362237    Appendix B.2238    Americans' Views on Social Security," Social Security2239Works, last updated May 2024 https://socialsecurityworks.org/22402022/08/03/social-security-polling/22412242    Most Americans want to expand Social Security's modest2243benefits, and pay for it by asking the wealthiest Americans to2244pay their fair share. Almost all voters, including almost all2245Republican voters, reject the idea of cutting Social Security2246to reduce the national debt.22472248    Appendix C.22492250    A majority of Americans oppose cuts to Social Security and2251Medicare," Camille Keene, January 23, 2025 https://2252navigatorresearch.org/a-majority-of-americans-oppose-cuts-to-2253social-security-and-medicare/2254    This Navigator Research report contains data from a survey2255on the latest perceptions of public health and health care2256programs, including Social Security and Medicare, as well as2257perceptions of a tax plan that would cut these programs, and2258who Americans see as most likely to benefit from Republicans in2259Congress' tax plan.2260    Among a list of policies related to public health and2261health care, more than two in three oppose cutting Medicare (852262percent) and cutting Medicaid (81 percent)."22632264    Appendix D.22652266    Social Security Lifts More People Above the Poverty Line2267than Any Other Program," Kathleen Romig, updated January 21,22682025 https://www.cbpp.org/research/social-security/social-2269security-lifts-more-people-above-the-poverty-line-than-any-2270other2271    Social Security benefits play a vital role in reducing2272poverty in every state, and they lift more people above the2273poverty line than any other program in the United States.2274Without Social Security, 22.0 million more adults and children2275would be below the poverty line, according to our analysis2276using the March 2024 Current Population Survey. Although most2277of those whom Social Security keeps out of poverty are aged 652278or older, 5.7 million are under age 65, including 959,0002279children. Social Security is particularly important for older2280women and people of color, who have fewer retirement resources2281outside of Social Security. Depending on their design,2282reductions in Social Security benefits could significantly2283increase poverty, particularly among older adults.2284    Without Social Security, the poverty rate for those aged 652285and over would meet or exceed 40 percent in nearly a third of2286states; with Social Security, it is less than 10 percent in2287nearly two-thirds of states. Social Security lifts more than2288one million older adults above the poverty line in Florida,2289California, and Texas, and over half a million in New York,2290Ohio, Pennsylvania, North Carolina, Georgia, and Michigan."22912292    Appendix E.22932294    Seven Facts About Older Adults and SNAP," National Council2295on Aging, April 11, 2024 https://www.ncoa.org/article/7-facts-2296about-older-adults-and-snap/2297    The Supplemental Nutrition Assistance Program (SNAP) is the2298largest domestic hunger safety net program. SNAP is especially2299important in helping low-income older adults to achieve food2300security, but many myths abound."2301    Appendix F.23022303    10 Things to Know About Medicaid," Robin Rudowitz, Alice2304Burns, Elizabeth Hinton, and Maiss Mohamed, June 30, 20232305https://www.kff.org/medicaid/issue-brief/10-things-to-know-2306about-medicaid/2307    Medicaid is the primary program providing comprehensive2308coverage of health care and long-term services and supports to2309more than 90 million low-income people in the United States.2310    Public opinion polling suggests that Medicaid has broad2311support. Two-thirds of adults in the U.S. say they have ever2312had a connection with Medicaid; majorities across political2313parties hold positive views of Medicaid, and seven in ten say2314that the program is working well for low-income people."23152316    Appendix G.23172318    The Importance of Medicaid for Older Americans," Alicia H.2319Munnell, October 22, 2024 https://crr.bc.edu/the-importance-of-2320medicaid-for-older-americans/2321    Most people think of Medicare - not Medicaid - when2322considering government health care for older Americans.2323However, Medicaid, the program that covers the medical expenses2324of the poor, spends over $132 billion a year - 20 percent of2325its budget - on individuals ages 65 and over.2326    Surprisingly, Medicaid is very important for older2327Americans. Although most people over 65 have Medicare, it does2328not provide long-term care services and supports, only limited2329home health care and post-acute care in a skilled nursing2330facility after a hospital stay."23312332    Appendix H.23332334    SNAP Polling," Data for Progress, March - April 20232335https://www.filesforprogress.org/decks/2023/dfp--snap--deck.pdf2336    Voters have a highly favorable view of SNAP and even2337support increasing federal funding for SNAP. Voters are more2338supportive of increasing SNAP" funding than increasing Food2339Stamps" funding. Voters are more likely to believe SNAP2340benefits are too low when presented with a dollar-per-meal2341framing (instead of benefits-per-month)."23422343    Appendix I.23442345    Project 2025's Economic and Health Care Policies Concern2346Voters," William Diep, October 15, 2024 https://2347www.dataforprogress.org/blog/2024/10/11/project-2025s-economic-2348and-health-care-policies-concern-voters2349    Project 2025 is a set of conservative policy2350recommendations developed by the Heritage Foundation that2351serves as a blueprint for the next Republican president to2352transform the federal government. The policies range from2353privatizing Medicare and defunding Medicaid to firing thousands2354of civil service employees, eliminating the Department of2355Education, and placing the Department of Justice under direct2356presidential control.2357    With less than four weeks until the election, new polling2358from Data for Progress finds that likely voters have heard2359mostly negative things about Project 2025 and are worried about2360its policy proposals, including those that would reduce health2361care and economic benefits for low- and middle-income2362Americans.2363    These findings show that voters, including Independents,2364are concerned about the economic and health care changes that2365Project 2025 proposes. Despite Trump's claim that he is not2366involved with Project 2025, a plurality of voters, including2367Independents, believe he supports the platform and its many2368unpopular provisions."23692370    Appendix J.23712372    Republicans' Proposed Budget Policies Are Unpopular," Abby2373Springs, April 1, 2024 https://www.dataforprogress.org/blog/23742024/4/1/republicans-proposed-budget-policies-are-unpopular2375    The Republican Study Committee - which represents nearly2376four in 5 members of the House Republican caucus - recently2377released a budget that targets Social Security, Medicare, the2378Affordable Care Act, and other popular government programs.2379However, new polling from Data for Progress finds that these2380elements of the RSC's budget proposal are widely unpopular with2381voters.2382    The RSC budget advocates cutting funding for Medicare,2383Medicaid, Social Security, the Affordable Care Act (ACA),2384housing assistance, and the Children's Health Insurance Program2385(CHIP). When voters are asked whether they support increasing2386funding, cutting funding, or keeping funding the same for these2387programs, voters overwhelmingly reject funding cuts.2388    Overall, the results indicate that policies included in the2389Republican Study Committee budget are extremely unpopular among2390the electorate. Voters would prefer to see funding for Social2391Security, Medicare, and other popular government programs2392increased, not slashed."23932394                 U.S. Senate Special Committee on Aging23952396  "Making Washington Work for Seniors: Fighting to end Inflation and2397                         Achieve Fiscal Sanity"23982399                            January 29, 202524002401                       Prepared Witness Statement24022403                             Tarren Bragdon24042405    Chairman Scott, Ranking Member Gillibrand, and members of2406the Committee, thank you for hosting this important hearing. I2407am Tarren Bragdon, the Chief Executive Officer at the2408Foundation for Government Accountability (FGA). FGA has worked2409for many years on a wide variety of policy areas, including2410welfare, workforce, health care, and more. These have included2411reforms to help reduce the cost of living for Americans through2412changes at both the federal and state level. In fact, in 2022,2413a member of our staff previously testified before this2414Committee at a field hearing in the Villages, Florida on the2415inflationary challenges American seniors are facing.12416    Unfortunately, since that time, seniors-and all2417Americans-have been facing an even more severe cost-of-living2418crisis. In fact, the inflationary legacy of the Biden2419Administration has done irreparable harm to all Americans. This2420damaging outcome is the direct result of conscious policy2421decisions to increase the size and scope of the regulatory2422state, expand the food stamp program in an unprecedented2423manner, and make other reckless changes to major federal2424welfare programs. Only by undoing these policy changes can2425lawmakers improve prosperity for all Americans.24262427Overview24282429    Americans across the country are facing a cost-of-living2430crisis brought on by rampant inflation that has occurred during2431the entire course of the Biden Administration's reckless four-2432year term. Annual inflation was just 1.3 percent when Joe Biden2433took office, spiking to 9.1 percent by June 2022.22434By the end of 2024, prices had grown more than 21 percent under2435President Biden.3 The year-over-year price increase2436of some goods and services-from food to energy to vehicles-2437reached double digits at its peak in 2022.4 But the2438harsh reality for many Americans is that it is unlikely they2439will ever regain the purchasing power they lost under the Biden2440Administration.2441    The untenable increases in prices have not been2442"transitory". They have not been brought about by sudden2443"corporate greed." They are the direct consequence of three2444major policy failures:2445    A massive spike in federal regulations, which has both2446increased government spending and imposed new costs on2447businesses and consumers;2448    An illegal and unprecedented increase in food stamp2449benefits that have contributed to rising grocery prices; and2450    Unsustainable expansions of federal welfare programs that2451have caused spending to explode while keeping able-bodied2452adults out of the workforce.24532454    Together, this trio of failures has brought about reckless2455inflation. Fortunately, President Trump has already taken steps2456to begin to address out-of-control spending. And there are2457additional policy options for both Congress and the executive2458branch to consider as they seek ways to undo four years' worth2459of devastating public policy.24602461Unchecked federal regulations under the Biden Administration2462have driven up costs24632464    Former President Biden issued more costly regulations than2465any president in modern U.S. history. During his four years in2466office, Joe Biden finalized more than 300 economically2467significant regulations-over 40 percent more than even2468President Obama's record-shattering first term.52469    This regulatory spree began on Joe Biden's first day.2470In his first term, President Trump withdrew and delayed more2471than 1,500 regulatory actions from Obama Administration2472bureaucrats, finalized more than 500 deregulatory actions2473lowering costs by nearly $200 billion, and implemented new2474provisions to stem the future growth in regulations.62475    On his very first day in office, however, then-2476President Biden issued an executive order undoing the Trump2477Administration's work to establish regulatory budgets for2478federal agencies and undoing several other regulatory reform2479initiatives.7 Over the next four years, the Biden2480Administration published nearly 357,000 pages worth of2481regulations, executive orders, and agency notices-a record2482high.8 Nearly 111,000 of those pages were added in2483his last year alone-one page of new regulatory material every2484five minutes.92485    Considering that, for every 15 percent increase in2486federal regulations, the cost of consumer goods and services is2487hiked by a full percentage point, it is easy to see how the2488Biden Administration's regulatory overreach drove up the cost2489of living.10 And it's not just more federal2490spending: A larger regulatory burden means more compliance2491costs faced by businesses, which are ultimately passed on to2492consumers through price hikes.2493    Overall, the Biden Administration's expansion of the2494regulatory state added $1.7 trillion worth of new costs.112495From unprecedented student loan forgiveness to gutting program2496integrity provisions in major federal welfare programs, these2497regulations have precipitated major increases in costs for2498everyday Americans.24992500    Biden's illegal food stamp expansion accelerated inflation25012502    In 2021, the Biden Administration pushed through a 272503percent increase in food stamp benefits by reevaluating the2504"Thrifty Food Plan."12 After failing to receive2505congressional approval for an increase to the Thrifty Food2506Plan, the Biden Administration unilaterally took it upon itself2507to ram through this $250 billion expansion-the largest in the2508program's history.132509    To justify this unprecedented increase in welfare2510benefits, the Biden Administration ignored the U.S. Department2511of Agriculture's (USDA) 45-year cost neutrality requirement,2512blatantly violated internal control standards, canceled peer2513review processes, sidelined the Department's chief economist,2514and ignored best practices.14 And just as concerning2515is that, even though federal law requires federal agencies to2516submit reports on the cost of proposed rules to Congress and2517the Government Accountability Office (GAO) before they become2518effective, the Biden USDA implemented the change to the Thrifty2519Food Plan before informing Congress.152520    Why would a government welfare program increase2521inflation for all Americans? As government spending on food2522stamps increases, purchases made by food stamp recipients drive2523up grocery prices through the natural laws of supply and2524demand.16 As food stamp benefits become more2525generous, welfare also becomes more attractive than work-2526contributing to the nation's labor shortage and further driving2527up labor costs for employers that are ultimately passed on to2528consumers.172529    Researchers at the World Bank reviewed more than a2530decade of retail scanner data to measure the impact food stamp2531spending has on food prices.18 Their review included25322.6 million barcodes with data from more than 20,000 stores,2533comprising roughly half of all sales at U.S. grocery2534stores.19 That research found that food prices2535increase by one percent for every 12.5 percent increase in food2536stamp spending.20 When coupling the expansion of the2537Thrifty Food Plan with pandemic-era increases to the food stamp2538program, total food stamp spending nearly tripled. As a result-2539and largely driven by the Thrifty Food Plan reevaluation-2540increases in the food stamp program caused grocery prices to2541skyrocket by more than 15 percent.212542    The unlawful Biden-era expansion not only spiked2543grocery prices directly, but also led to millions of able-2544bodied adults choosing welfare over work.22 An2545estimated 2.4 million Americans declined employment due to the2546Thrifty Food Plan reevaluation.23 Had these2547Americans reentered the workforce, they could have filled2548roughly a quarter of open jobs, further driving costs down by2549increasing the labor supply and reducing business costs.2425502551Massive expansions of federal welfare programs have2552exploded government spending25532554    In addition to the changes to the Thrifty Food Plan, the2555Biden Administration promoted and presided over some of the2556most monumental increases in major federal welfare programs in2557U.S. history. These include:25582559    Rescinding Medicaid work requirements;252560    Gutting Medicaid program integrity provisions and2561preventing states from verifying eligibility;262562    Continuing pandemic-era policies-such as Medicaid2563continuous coverage provisions and food stamp emergency2564allotments-well beyond the time they should have2565expired;27-282566    Expanding refundable tax credits to record levels,2567such as the Child Tax Credit, the Earned Income Tax Credit, and2568ObamaCare subsidies;29-30-312569    Maximizing exemptions and waivers from food stamp2570work requirements;32-332571    And many more.25722573      Much like the reevaluation of the Thrifty Food Plan, each2574of these policy decisions has kept Americans from reentering2575the workforce as welfare remains more lucrative than work. As a2576result, welfare program enrollment has swelled as labor force2577participation has declined.2578    The number of able-bodied people on Medicaid and food2579stamps is higher today than it was when the unemployment rate2580was nearly 15 percent during the government-imposed lockdowns2581at the height of the COVID pandemic.34 Over the next2582decade, these two programs alone are expected to cost taxpayers2583$8.6 trillion.35-362584    Meanwhile, 62 percent of able-bodied adults on2585Medicaid and 66 percent of able-bodied adults on food stamps do2586not work at all.37 The Biden Administration's2587promotion of welfare over work has contributed to this crisis2588of dependency among those dependent on government programs.2589    As a result, the labor force participation rate remains2590lower than it was before the pandemic-and continuing to2591struggle.382592    For every American that chooses welfare over work,2593not only will Americans be directly subsidizing their decision2594to stay on the sidelines, but the indirect costs of lower2595workforce participation will drive up costs as well, as2596businesses' labor costs rise and those costs are passed on to2597consumers.2598    With 8.1 million open jobs nationwide, the Biden2599Administration's failed policies have directly caused a2600nationwide workforce crisis that will continue to keep costs2601elevated until and unless it is addressed.3926022603Massive expansions of federal welfare programs have2604exploded government spending and kept Americans out of the2605workforce26062607    Thankfully, there are solutions at the disposal of Congress2608and the executive branch to undo the harm brought about by the2609Biden Administration. Whether as part of the current budget2610reconciliation process or through executive action,2611policymakers have a wide array of options at their disposal to2612help reduce federal spending, shrink the size of the regulatory2613size, and drive up workforce participation among able-bodied2614welfare enrollees. These policy options include:26152616    Requiring congressional approval for costly federal rules2617that increase taxpayer costs;2618    Repealing Biden-era rules that gutted Medicaid program2619integrity, drastically expanded student loan forgiveness, and2620more;2621    Rolling back the reevaluation of the Thrifty Food Plan by2622resetting it to FY2020 levels adjusted forward only for2623inflation;2624    Implementing universal work requirements for able-bodied2625adults without young children across Medicaid and food stamps;2626    Phasing out the enhanced ObamaCare match for able-bodied2627adults on Medicaid;2628    Closing exemptions and loopholes to work requirements in2629the food stamp program;2630    Requiring food stamp enrollees to meet federal eligibility2631standards;2632    Verifying eligibility more frequently across welfare2633programs, including Medicaid;2634    Addressing illegal aliens on welfare programs by requiring2635citizenship verification before enrollment in Medicaid,2636prohibiting administrative spending on Medicaid for illegal2637aliens, and adding citizenship verification requirements to the2638Child Tax Credit;2639    And more.26402641    If left unchecked, the Biden Administration's legacy of2642bigger government and more spending will persist indefinitely.2643Only through bold reforms can policymakers get federal2644expenditures and inflation under control.26452646References264726481 U.S. Senate Committee on Aging, "Issues Facing Seniors:2649Retirement Security, Healthcare, & Fiscal Health," U.S.2650Congress (2022), https://www.aging.senate.gov/hearings/issues-2651facing-seniors-retirement-security-healthcare-and-fiscal-2652health.265326542 Bureau of Labor Statistics, "Consumer price index for all2655urban consumers: All items in U.S. city average, all urban2656consumers, seasonally adjusted," U.S. Department of Labor2657(2025), https://data.bls.gov/timeseries/CUSR0000SA0.265826593 Ibid.266026614 Ibid.266226635 Regulatory Studies Center, "Cumulative economic significant2664rules by presidential month," George Washington University2665(2025), https://regulatorystudies.columbian.gwu.edu/media/9006.266626676 Jonathan Ingram et al., "Congress must rein in President2668Biden's regulatory spending spree to tame inflation,"2669Foundation for Government Accountability (2022), https://2670thefga.org/research/congress-must-rein-spending-to-tame-2671inflation.267226737 Ibid.267426758 Authors' calculations based upon data provided by National2676Archives and Records Administration on the count of numbered2677pages published in the Federal Register between January 21,26782021 and January 17, 2025.267926809 Authors' calculations based upon data provided by National2681Archives and Records Administration on the count of numbered2682pages published in the Federal Register between January 17,26832024 and January 17, 2025.2684268510 Jonathan Ingram et al., "Congress must rein in President2686Biden's regulatory spending spree to tame inflation,"2687Foundation for Government Accountability (2022), https://2688thefga.org/research/congress-must-rein-spending-to-tame-2689inflation.2690269111 Liesel Crocker, "Congress can put a stop to the current2692administration's reckless regulatory spending," Foundation for2693Government Accountability (2024), https://thefga.org/research/2694congress-stop-administrations-reckless-regulatory-spending.2695269612 Jonathan Ingram and Hayden Dublois, "President Biden2697unilaterally and unlawfully increased food stamp benefits,"2698Foundation for Government Accountability (2023), https://2699thefga.org/research/president-biden-increased-food-stamp-2700benefits.2701270213 Ibid.2703270414 Ibid.2705270615 Ibid.2707270816 Jonathan Ingram, "Feeding inflation: How President Biden's2709unlawful food stamp expansion is costing taxpayers and2710consumers billions," Foundation for Government Accountability2711(2023), https://thefga.org/research/feeding-inflation-bidens-2712unlawful-food-stamp-expansion.2713271417 Hayden Dublois and Michael Greibrok, "The Biden2715administration's unlawful food stamp increase incentivized2716people to choose welfare over work," Foundation for Government2717Accountability (2023), https://thefga.org/research/food-stamp-2718increase-incentivized-people-choose-welfare-over-work.2719272018 Jonathan Ingram, "Feeding inflation: How President Biden's2721unlawful food stamp expansion is costing taxpayers and2722consumers billions," Foundation for Government Accountability2723(2023), https://thefga.org/research/feeding-inflation-bidens-2724unlawful-food-stamp-expansion.2725272619 Ibid.2727272820 Ibid.2729273021 Ibid.2731273222 Hayden Dublois and Michael Greibrok, "The Biden2733administration's unlawful food stamp increase incentivized2734people to choose welfare over work," Foundation for Government2735Accountability (2023), https://thefga.org/research/food-stamp-2736increase-incentivized-people-choose-welfare-over-work.2737273823 Ibid.2739274024 Ibid.2741274225 Michael Greibrok, "Congress could boost economy by allowing2743Medicaid work requirements without bureaucratic intervention,"2744Foundation for Government Accountability (2023), https://2745thefga.org/research/congress-boost-economy-allowing-medicaid-2746work-requirements.2747274826 Sam Adolphsen et al., "Comment on proposed streamlining2749Medicaid eligibility rule," Opportunity Solutions Project2750(2022), https://solutionsproject.org/wp-content/uploads/2022/275110/OSP-Comment-On-Proposed-Streamlining-Medicaid-Eligibility-2752Rule-10-28-2022.pdf.2753275427 Sam Adolphsen and Jonathan Ingram, "Stopping the Medicaid2755madness: How Congress and states can start salvaging some2756program integrity," Foundation for Government Accountability2757(2022), https://thefga.org/research/stopping-the-medicaid-2758madness-how-congress-and-states-can-start-salvaging-some-2759program-integrity.2760276128 Hayden Dublois, "Food stamp boosts are bankrupting2762taxpayers," Foundation for Government Accountability (2023),2763https://thefga.org/research/food-stamp-boosts-are-bankrupting-2764taxpayers.2765276629 Jonathan Ingram, "Allowing President Biden's Child Tax2767Credit changes to expire helped flip the House in the 20222768midterms," Opportunity Solutions Project (2023), https://2769solutionsproject.org/wp-content/uploads/2024/01/OSP-Comment-on-2770CTC-Impact-on-2022-Elections-2-24-2023.pdf.2771277230 Hayden Dublois and Jonathan Ingram, "How the new era of2773expanded welfare programs is keeping Americans from working,"2774Foundation for Government Accountability (2021), https://2775thefga.org/research/expanded-welfare-keeping-americans-from-2776working.2777277831 Hayden Dublois, "Broken promises: Why expanded ObamaCare2779subsidies must expire on time," Foundation for Government2780Accountability (2022), https://thefga.org/research/broken-2781promises-why-expanded-obamacare-subsidies-must-expire-on-time.2782278332 Jonathan Bain, "The Biden administration's new food stamp2784work requirement exemption is keeping able-bodied adults2785trapped in dependency," Foundation for Government2786Accountability (2023), https://thefga.org/research/biden-2787administration-food-stamp-exemption-trapped-dependency.2788278933 Jonathan Bain and Jonathan Ingram, "Waivers gone wild: The2790next wave in waiver abuse," Foundation for Government2791Accountability (2024), https://thefga.org/research/waivers-2792gone-wild-next-wave-in-waiver-abuse.2793279434 Author's calculations based upon data provided by the U.S.2795Department of Health and Human Services, U.S. Department of2796Agriculture, and state welfare agencies.2797279835 Congressional Budget Office, "June 2024 Medicaid Baseline,"2799Congressional Budget Office (2024), https://www.cbo.gov/system/2800files/2024-06/51301-2024-06-medicaid.pdf.2801280236 Congressional Budget Office, "June 2024 SNAP Baseline,"2803Congressional Budget Office (2024), https://www.cbo.gov/system/2804files/2024-06/51312-2024-06-snap.pdf.2805280637 Author's calculations based upon data provided by state2807Medicaid agencies and the U.S. Department of Agriculture on the2808share of non-disabled adult enrollees between the ages of 182809and 64 who report no earned income.2810281138 Bureau of Labor Statistics, "Labor force statistics from the2812Current Population Survey: Labor force participation rate,2813seasonally adjusted," U.S. Department of Labor (2025), https://2814data.bls.gov/timeseries/LNS11300000.2815281639 Bureau of Labor Statistics, "Job openings and labor turnover2817survey: Total nonfarm job openings, seasonally adjusted," U.S.2818Department of Labor (2025), https://data.bls.gov/timeseries/2819JTS000000000000000JOL.28202821                 U.S. Senate Special Committee on Aging28222823  "Making Washington Work for Seniors: Fighting to end Inflation and2824                         Achieve Fiscal Sanity"28252826                            January 29, 202528272828                       Prepared Witness Statement28292830                              E.J. Antoni28312832    Chairmen Scott, Ranking Member Gillibrand, members of the2833Committee: thank you for the invitation to discuss with you2834today the difficulties faced by seniors stemming from the last2835four years of excessive government spending and its subsequent2836inflation. I am a public finance economist and the Richard F.2837Aster fellow at the Heritage Foundation, where I research2838fiscal and monetary policy. I am also a senior fellow at2839Unleash Prosperity.28402841Four Years of Cost Increases28422843    Since January 2021, American families and businesses have2844faced sharp increases in prices, due primarily to the declining2845value of the US dollar.\1\ This has been especially true for2846seniors who have not only tended to face slightly higher price2847increases than the general population, but who2848disproportionately tend to be on fixed incomes, which adjust2849relatively slowly to inflation, if at all.2850---------------------------------------------------------------------------2851    \1\ The Federal Reserve Note is referred to in this testimony as2852the US dollar for ease of understanding by the general public.2853---------------------------------------------------------------------------2854    The consumer price index (CPI)\2\ published by the Bureau2855of Labor Statistics (BLS) has risen a cumulative 21.0 percent2856in the 47 months from January 2021 through December 2024 on a2857seasonally adjusted basis. That is an annualized rate of 5.02858percent, at which pace prices will double in less than 152859years. This is in stark contrast to the rate of increase in the2860CPI before January 2021. From the start of the previous2861economic expansion through January 2021, the CPI rose at an2862annualized rate of 1.8 percent, below the Federal Reserve's 2.02863percent target (figure 1). After January 2021, however, the CPI2864began increasing significantly faster and from that time2865through June 2022 rose at an annualized rate of 8.5 percent,2866more than 4.7 times the previous rate of increase. Since June28672022 and through December 2024, the index has risen an2868annualized 3.0 percent, significantly above the Federal2869Reserve's target and even further above the annualized rate2870before January 2021.2871---------------------------------------------------------------------------2872    \2\ The CPI-U, consumer price index for all urban consumers, is2873commonly referred to as simply the CPI.28742875GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT28762877    The increase in prices over the last four years has far2878outpaced the increase in the typical American's take-home pay.2879Average hourly earnings rose $5.76 from January 2021 through2880December 2024, but inflation-adjusted average hourly earnings2881fell $0.44 (figure 2). This difference of $6.20 between nominal2882and real hourly earnings can be thought of as the average2883American's hourly inflation tax under the Biden administration,2884which exceeds what that same worker loses to the personal2885federal income tax, on average.2886GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT28872888Price Increases for Seniors28892890    The BLS has also produced a data series that aims to2891replicate the cost of the basket of goods and services2892purchased by the average retiree in the United States, called2893the R-CPI-E. This index differs from the CPI in how its2894components are weighted, in order to better approximate the2895cost of living for older Americans, compared to younger2896consumers. During most of the last four years, cumulative price2897increases in the R-CPI-E were outpacing those in the CPI. With2898the December 2024 data from the BLS, however, the two indexes2899now show essentially identical cost increases of about 212900percent from January 2021 through December 2024 (figure 3).2901That is not to say that seniors have suffered equally to the2902rest of the population over the last four years. On the2903contrary, prices for the things disproportionately purchased by2904seniors were rising slightly faster than the increase in the2905general price level for most of the last four years.2906Furthermore, seniors tend to have incomes which adjust slower2907to inflation than average because seniors tend to be on fixed2908incomes. Even programs like Social Security which have a cost-2909of-living adjustment (COLA) only increase benefits once2910annually so that seniors must suffer through an entire year of2911cost increases before this portion of their incomes adjust2912upward. Even still, the lost purchasing power which they2913experienced over the 12 months in question is never returned to2914them. This phenomenon can be illustrated with the following2915analogy. The situation faced by seniors is like being robbed2916daily for an entire year, and the thief takes slightly more2917from the victim with each passing day. On the first day of the2918year, the thief takes a dollar, then two dollars on the second,2919three dollars on the third, and so on. By the last day of the2920year, the victim is losing $365 daily. Then, on New Year's Day,2921the theft stops, but the victim never receives any restitution2922for the money stolen throughout the prior year. This is like2923what seniors on fixed incomes and infrequent COLAs experience2924from inflation.2925GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT29262927Source of Cost Increases29282929    The primary source of cost increases over the last four2930years for seniors and the general population alike has been2931inflation. Beginning in 2020, the federal government began2932running unprecedentedly large budget deficits in response to2933the Covid pandemic. Unfortunately, the one-time emergency2934spending measures that caused these initial deficits were then2935replaced with other spending. This resulted in sustained2936elevated Treasury net debt issuances and an increase in the2937federal debt of approximately $8.5 trillion during the Biden2938administration, but also a reduction in the Treasury's cash2939balance of approximately $1 trillion. That is a net2940overspending of roughly $9.5 trillion in just four years. These2941debt issuances were largely financed by the Federal Reserve's2942purchase of almost $5 trillion of Treasury securities since the2943start of 2020, along with manipulations of interest rates and2944capital markets to steer liquidity away from the private sector2945and towards the public sector (figure 4). Since purchases by2946the Federal Reserve are made from the right to issue fiat2947currency, they inherently increase the supply of money. Because2948the real economy has grown much slower than the money supply2949over the last several years, the value of the US dollar2950relative to goods and services has declined. This phenomenon is2951often referred to as "too much money chasing too few goods" and2952it is observed as an increase in the general level of prices.2953The Federal Reserve's balance sheet peaked at nearly $92954trillion, an increase of approximately 115 percent from pre-2955pandemic levels. Securities held outright by the Federal2956Reserve grew approximately 127 percent over that same period.2957These purchases are sometimes referred to as quantitative2958easing, or QE. Conversely, since the Summer of 2022, the2959Federal Reserve has engaged in quantitative tightening (QT), or2960the net sale of securities, to reduce the very inflation which2961the Federal Reserve itself helped cause. Simultaneously, the2962central bank raised interest rates significantly. This balance2963sheet runoff slowed markedly in the Summer of 2024 and2964securities held outright are now approximately 74 percent above2965their pre-pandemic level while the total balance sheet of the2966Federal Reserve is approximately 64 percent above its pre-2967pandemic level. In addition to the slower pace of balance sheet2968reductions, the Federal Reserve has reduced its benchmark2969interest rate target by 100 basis points, or one percentage2970point.29712972GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT29732974    The quantity of money referred to as M2 grew over $62975trillion from early 2020 to the middle of 2022 (figure 5).2976After about a year of declines, M2 then remained relatively2977steady and has now begun growing again, with the latest data2978available at the time of this writing indicating that the2979growth rate of M2 is exceeding the average growth rate of the2980previous economic expansion. The level of M2 remains about $32981trillion above its pre-pandemic trend, is only down2982approximately one percent from its peak in April 2022, and 392983percent above its pre-pandemic level.29842985GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT29862987    Similarly, bank reserves reached a trough at the beginning2988of 2023 and then trended up for that entire year, before2989declining throughout much of 2024 (figure 6). As this portion2990of the monetary base increases, loans to individuals,2991businesses, and the Treasury can increase, and each loan2992expands the total money supply. Thus, despite the Federal2993Reserve's reduction in its balance sheet, the increase in bank2994reserves throughout 2023 continued to expand the money supply2995and maintained an inflationary impulse in the economy. Bank2996reserves appear to be trending upward again, as inflation2997reaccelerates in the American economy, with the annualized2998increase in the CPI for December 2024 reaching 4.8 percent, the2999highest in nine months.30003001GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT30023003    The Federal Reserve did not simply create money for the3004Treasury to spend but also engaged in active manipulation of3005the loanable funds market in order to channel liquidity away3006from private lending and towards the Treasury, while seeking to3007minimize the inflationary impact of its money creation. In3008March 2020, the Federal Reserve ended its interest on excess3009reserves policy and replaced it with the policy of paying3010interest on all reserves. This incentivized banks to keep money3011parked at the Federal Reserve and not lend it out to the3012private market. This revised policy stance can be seen as an3013extension of the interest on excess reserves policy, which was3014previously utilized to reduce the inflationary impact of3015government overspending financed with fiat money creation.3016Simultaneously, the Federal Reserve used its reverse repurchase3017agreement (RRP) facility to absorb massive amounts of excess3018liquidity and maintain an interest rate floor. Instead of3019lending that liquidity to either private borrowers or the3020Treasury, financial institutions were effectively lending to3021the Federal Reserve. The New York district's RRP facility saw a3022peak utilization of over $2.5 trillion as the central bank3023sterilized unprecedented amounts of money, in conjunction with3024similar efforts from the interest on reserve policy (figure30257).\3\ However, as the Treasury's demand for loanable funds has3026remained stubbornly high, the RRP facility is seeing almost no3027use today. That has caused the previously sterilized $2.53028trillion to come back into circulation and multiply in the3029banking system, creating renewed inflationary pressure and3030countering the Federal Reserve's continued QT. The economy is3031still suffering from the monetary malfeasance that began3032several years ago. In other words, some of the inflation which3033would have been caused months or years ago by the budget3034deficits of 2021 and 2022 is only now manifesting itself. This3035is contributing to the notion of "sticky" or persistent3036inflation.3037---------------------------------------------------------------------------3038    \3\ Federal Reserve Bank of New York, desk operations.30393040 GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT30413042    However, today's inflation is not only the result of past3043mistakes. Elevated levels of government spending have not3044abated. Consequently, the current fiscal year is off to its3045worst start ever, with a cumulative deficit of $711 billion in3046just three months.\4\ The deterioration of federal finance has3047entered a positive feedback loop because of these elevated3048levels of spending and their accompanying higher interest3049rates. Interest on the federal debt now exceeds $1.2 trillion3050per year. In December 2024, the most recent data available at3051the time of this writing, gross interest payments were $1403052billion, just for the month-the largest single line item in the3053entire monthly statement from the Treasury. For context,3054Treasury outlays in December for the next three largest line3055items were $130 billion for the Social Security Administration,3056$99 billion for the Department of Health and Human Services,3057and $79 billion for all military spending. For additional3058context, gross interest in December was equal to more than 663059percent of all personal income taxes collected that month.3060Since all marginal federal spending is borrowed, this increase3061in interest expense has increased the deficit. That additional3062borrowing in turn increases the demand for loanable funds,3063which puts upward pressure on interest rates. Higher interest3064rates then increase the cost of servicing the federal debt,3065which exacerbates borrowing, interest expense, interest rates,3066etc. If left unchecked, this positive feedback loop will result3067in exponential growth of federal interest payments (figure 8).3068As a percentage of gross domestic product, interest payments3069will set a new record high by 2027, exceeding 5 percent, and3070then continue climbing.3071---------------------------------------------------------------------------3072    \4\ Monthly Treasury Statement, Bureau of the Fiscal Service,3073December 2024.30743075GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT30763077Impact of Inflation and Interest Rate Changes on Retirement3078---------------------------------------------------------------------------3079Accounts30803081    While equities have performed historically well in nominal3082terms since the end of 2020, much of that gain has merely been3083a reflection of the decreasing value of the dollar, which3084declined by about one-fifth in just four years. That poses3085particular difficulties for many savers because capital gains3086are not indexed for inflation. Nominal price appreciation and3087real growth are taxed exactly the same, which means that3088inflation not only imposes a higher cost of living but also3089increases savers' tax liability. From the first quarter of 20213090through the third quarter of 2024, major stock indices saw3091nominal gains of two to four times their inflation-adjusted3092increases.\5\ Furthermore, the bond market experienced its3093worst three and a half year run in at least a century because3094of the rapid rise in interest rates that followed the3095unprecedented issuance of near-zero-interest-rate fixed income3096assets, with 2022 seeing the worst bond market returns in 1003097years. The rapid rise in interest rates and inflation rates3098during the Biden Administration caused devastating losses to3099retirement accounts. The average 401(k) plan fell about 9.23100percent from the first quarter of 2021 through the third3101quarter of 2024, after adjusting for inflation. Likewise,3102pension plans in aggregate have lost $2.5 trillion in real3103value over that same time. Because seniors tend to have their3104savings disproportionately allocated in cash and fixed-income3105assets, their individual retirement accounts have been hit even3106harder than the average 401(k) plan. The typical senior who was3107planning on retiring today will have to work an additional six3108years or more to recoup the real losses sustained to his or her3109retirement account since the beginning of 2021.3110---------------------------------------------------------------------------3111    \5\ "Making Senior Citizens Poorer: The Negative Impact of the3112Biden Administration's Economic Policies on Senior Citizens' Retirement3113Incomes" E.J. Antoni, Ph.D., October 2024.31143115---------------------------------------------------------------------------3116An Inflation Misnomer31173118    Inflation is caused by the federal government overexpanding3119the money supply to pay for unfunded spending. The idea that3120inflation is caused by "corporate greed" or "price gouging" is3121incorrect according to both economic theory and empirical data.3122Businesses did not suddenly become greedy at the beginning of31232021 at the same time as the government vastly expanded its3124budget. Instead, the government's own data show that prices3125paid by businesses have risen faster than those paid by3126consumers during the Biden Administration's tenure (figure 9).3127According to the BLS, in the 47 months from January 20213128through the end of 2024, the wholesale price level rose 21.23129percent while the consumer price level rose 21.0 percent.3130Furthermore, during nearly this entire period, the cumulative3131price increases faced by businesses exceeded those faced by3132consumers. In other words, businesses were shielding consumers3133from cost increases, likely in an effort to maintain or even3134grow market share. The exact same facts are observed when3135excluding the volatile categories of food and energy from both3136consumer and wholesale price indices.31373138GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT31393140Public Policy Considerations31413142    The elevated levels of government spending, which have made314340-year-high inflation possible today, stem directly from3144Congressional action. Additionally, the Federal Reserve's3145monetary manipulations were prompted by this same Congressional3146action. In conjunction with Congress, the Executive Branch3147during the Biden Administration played a necessary role in both3148the highest inflation and fastest interest rate increases in3149four decades. Just two pieces of legislation alone increased3150federal spending by over $3 trillion, required then-Vice3151President Kamala Harris to cast the tie-breaking vote in the3152Senate, and accounted for at least half of the excess inflation3153since 2020.\6\ Both of these pieces of legislation, as well as3154numerous other unfunded spending bills, had the explicit3155endorsement of then-President Joseph Biden who eventually3156signed each of them into law. Seniors have suffered3157considerably because of this government overspending, with3158their cost of living rising as their real incomes fall and3159their retirement accounts plunge at the worst rates in years.3160---------------------------------------------------------------------------3161    \6\ "The Big Government Formula for Double-Digit Inflation" Casey3162B. Mulligan, Ph.D., August 2024.3163---------------------------------------------------------------------------3164    Additionally, it is not just today's seniors who have been3165so negatively affected by the public policy decisions of the3166Biden Administration and a spendthrift Congress. America's3167seniors in the future will be suffering because of the Biden3168Administration's policies that have disincentivized work and3169retarded economic growth. Those policies have reduced Medicare3170and Social Security tax receipts over the last four years by3171about $500 billion, and that decline in revenues directly3172impacts the long-run solvency of these entitlement programs.\7\3173This has the effect of accelerating their insolvency and3174putting seniors' benefits at risk at a much earlier date than3175previously forecasted.3176---------------------------------------------------------------------------3177    \7\ "Payroll Tax Revenues Down $400 to $900 Billion Due to Lower3178Wages and Less Growth: Casey B. Mulligan, Ph.D., March 2023.3179---------------------------------------------------------------------------3180    While the monetary phenomenon of inflation has been the3181primary driver of cost increases for seniors over the last four3182years, restrictive energy policy has also played a role in3183driving up costs. These anti-energy policies have reduced3184domestic oil output by at least a cumulative 2.4 billion3185barrels from 2021 through the end of 2023. The relatively lower3186production of oil and natural gas has increased prices higher3187than they otherwise would be, imposing additional costs on the3188economy of at least $250 billion over that same period.\8\3189Because energy is such a ubiquitous input in the economy, these3190higher energy prices have raised prices for all goods and3191services, exacerbating seniors' deteriorating financial3192situations.3193---------------------------------------------------------------------------3194    \8\ "The War on Oil and Gas has Cost America $250 Billion in Lost3195Output" Moore and Mulligan, May 2024.3196---------------------------------------------------------------------------3197    If Congress wants to alleviate the pain inflicted on3198Americans, especially older Americans, then lawmakers should3199make drastic cuts to government spending and return the federal3200budget to pre-pandemic levels. This would achieve several3201objectives. First, it would begin reducing the primary3202inflationary pressure in the economy. As the Treasury borrows3203less, the demand for loanable funds will decline, putting3204downward pressure on interest rates. Reduced levels of spending3205and borrowing also remove the Federal Reserve's incentive to3206overinflate the money supply. Thus, both inflation rates and3207interest rates will decline if Congress reduces its spending.3208Efforts to increase domestic energy production would also have3209a positive impact by reducing prices while increasing both3210American jobs and payroll tax receipts. While regulatory reform3211would help roll back the $50,000 in regulatory costs that the3212Biden Administration imposed on the average American family,3213this is largely the purview of the executive branch.\9\3214---------------------------------------------------------------------------3215    \9\ "Biden-Harris Regulations Cost the Average Family Almost3216$50,000" Casey B. Mulligan, Ph.D., July 2024.3217---------------------------------------------------------------------------3218    Lastly, when considering the impact of proposed tariffs on3219seniors, the Senate Aging Committee should keep in mind that3220tariffs, by definition, cannot be inflationary. If a tariff is3221imposed on a particular import and raises the cost to consumers3222of that import, then the consumer has less money to spend on3223other products and services. The consumer will buy less in3224aggregate as the quantity demanded falls. Furthermore, because3225there is no change to the money supply, the value of the3226currency is unaffected. The Aging Committee should also3227consider factors like the price elasticity of the item(s) being3228tariffed and the effects on exchange rates. Failing to account3229for these economic realities will result in overestimating the3230negative impact of tariffs on consumers broadly and seniors3231specifically. Lastly, if tariffs protect American jobs, there3232can be a positive and significant impact on seniors,3233particularly the sustainability of those seniors' retirement3234savings. Increasing the number of American jobs and the real3235wages earned by Americans will also increase payroll tax3236revenue and provide additional tax receipts to Social Security3237and Medicare. This can help ensure benefits will be available3238to seniors in the future. Tariffs can also increase the value3239of American corporations, companies in which seniors hold3240shares of stock or from which seniors have purchased fixed-3241income assets like corporate bonds. Congress should consider3242these, and other, positive impacts of tariffs when proposing or3243evaluating any legislation in this area.32443245*******************32463247The Heritage Foundation is a public policy, research, and3248educational organization recognized as exempt under section3249501(c)(3) of the Internal Revenue Code. It is privately3250supported and receives no funds from any government at any3251level, nor does it perform any government or other contract3252work.32533254The Heritage Foundation is the most broadly supported think3255tank in the United States. During 2023, it had hundreds of3256thousands of individual, foundation, and corporate supporters3257representing every state in the U.S. Its 2023 operating income3258came from the following sources:32593260Individuals 82%32613262Foundations 14%32633264Corporations 1%32653266Program revenue and other income 3%32673268The top five corporate givers provided The Heritage Foundation3269with 1% of its 2023 income. The Heritage Foundation's books are3270audited annually by the national accounting firm of RSM US,3271LLP.32723273Members of The Heritage Foundation staff testify as individuals3274discussing their own independent research. The views expressed3275are their own and do not reflect an institutional position of3276The Heritage Foundation or its board of trustees.3277?32783279=======================================================================32803281                       Statements for the Record32823283=======================================================================32843285                 U.S. Senate Special Committee on Aging32863287  "Making Washington Work for Seniors: Fighting to end Inflation and3288                         Achieve Fiscal Sanity"32893290                            January 29, 202532913292                       Prepared Witness Statement32933294                     Senator Rick Scott Statements32953296GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT