The Daily Signal - INTERVIEW | House Republicans 'Did What They Had to Do' on Debt Ceiling, CEO Says

Episode Date: May 3, 2023

The U.S. may "potentially" default on its debt "as early as June 1, if Congress does not raise or suspend the debt limit before that time," Treasury Secretary Janet Yellen said in a letter Monday to House Speaker Kevin McCarthy, R-Calif. Alfredo Ortiz, president and chief executive officer of the nonpartisan Job Creators Network, says he's "honestly not surprised" by Yellen's letter, sent just days after the U.S. House of Representatives passed the Republican-led Limit, Save, Grow Act of 2023. The legislation, which McCarthy introduced on April 19, would “limit federal spending, save taxpayer dollars,” and “grow the economy.” The legislation passed 217-215 in the House, but did not get a single vote from Democrats. Given Democrats’ control of the Senate, it is unlikely the bill will pass in its current form.  "Putting this now on June 1st, I think, basically, is to kind of try to force the hand of the Republicans," Ortiz says. "But quite frankly, I mean, the Republicans, from my perspective, did what they had to do." "They passed the bill. That I think showed a lot of fiscal responsibility and hard choices that we have to make, and still allowed for $1.5 trillion of the debt to be raised," he says.  Ortiz joins today's episode of "The Daily Signal Podcast" to discuss the debt ceiling, President Joe Biden's upcoming meeting on the issue with top Republican and Democratic congressional leaders, and why he thinks the Environmental Protection Agency "is out of control."  Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, May 3rd. I'm Samantha Sherris, and joining us today is Alfredo Ortiz, President and CEO of the Job Creators Network. Alfredo and I discuss the ongoing debt-sealing debate, Treasury Secretary Janet Yellen's letter to House Speaker Kevin McCarthy, and President Biden's upcoming meeting with top congressional leaders, both Democrat and Republican. We'll get to my conversation with Alfredo right after this. As conservatives, sometimes it feels like we're constantly on defense against bad ideas. Bad philosophy, revisionist history, junk science, and divisive politics. But here's something I've come to understand.

When faced with bad ideas, it's not enough to just defend. If we want to save this country, then it's time to go on offense. Conservative principles are ideas that work. Individual responsibility, strong local communities, and belief in the American dream. As a former college professor and current president of the Heritage Foundation, my life's mission is to learn, educate, and take action. My podcast, The Kevin Roberts Show, is my opportunity to share that journey with you. I'll be diving into the critical issues that plague our nation,

having deep conversations with high-profile guests, some of whom may surprise you. And I want to ensure freedom for the next generation. Find the Kevin Roberts Show wherever you get your podcast. Alfredo Ortiz is joining today's episode of the Daily Signal podcast, Alfredo is the president and CEO of the Job Creators Network. Thanks so much for joining us, Alfredo. Well, thank you very much for having me. Always appreciate the time.

Of course. Now, right here in Washington, D.C., one of the biggest topics is the debt ceiling. And Treasury Secretary Janet Yellen sent a letter to House Speaker Kevin McCarthy on Monday about the debt ceiling and wrote that after reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June and potentially as early as June 1st if Congress does not raise or suspend the debt limit before that time. First and foremost, what is your reaction to the Secretary's letter? Well, I'm honestly not surprised.

I mean, I know that they have been engaged in basically different mechanics to extend the the dead sailing deadline. You know, putting this now on June 1st, I think basically is to kind of try to force the hand of the Republicans, but quite frankly, I mean, the Republicans, from my perspective, did what they had to do. They passed the bill that I think showed a lot of fiscal responsibility and hard choices that we have to make and still allow for, you know, one and a half trillion dollars of the debt to be raised.

I mean, it's not like they sat there and said, no. we're not going to raise it. You know, so from my perspective, I think the Republicans have done what they needed to do. And now this is sitting with the White House and the Senate. And but, you know, the way that they always guess, like the American public, is they're saying that the Republicans are the ones that are basically holding the country hostage and that if it defaults, the Republicans fault. Well, I completely disagree with that.

And just speaking of defaults, do you think it is possible for the U.S. to actually default on its debt? I don't think it will ever default on its debt, honestly. I think people are aware of that. I know the last time we had the big close call with this, we got our AAA creditorating a downgrade to double A. But in this particular case, I don't see that being an issue. And so, again, I think it's almost typical.

D.C. politics of, you know, blaming each other back and forth for what's happening instead really dealing with the real problems that the American public is facing. Now, President Biden has invited the top congressional leaders, both Democrat and Republican, to meet next week about the debt ceiling. What are your thoughts on this meeting? Are you optimistic that something positive will come from it? I don't think this first meeting is really going to have any results. I think, as with everything in D.C., it's going to come right down to the wire probably the day before. Some package will be cobbled together, and there will be some agreement. Both sides will claim victory, as it always is. But quite frankly, I mean, when you

think about even that victory, we're still talking, you know, an increase in the debt ceiling of $1.5 trillion. You know, somebody's got to pay that tab eventually. And I think Republicans understand that, why they're offering, you know, spending cuts. I think it's up to $5 trillion. But, you know, we have to do something to reduce the debt because eventually we're going to get to that point where the interest payments alone are going to balloon to about 20% of federal receipts. And that's going to be a major, major issue.

And with the way the interest rates are going, that is probably going to be the biggest concern of all. And so we have to reduce the debt. unfortunately I think the Democrats don't think that there is anything as a debt because they believe in modern monetary theory, which basically says you can just print money to your heart's desire and it doesn't matter. And so basically they are putting on the American credit card all these wacky social programs that is on their Christmas list and not worrying about how to pay for it. Now, last Wednesday, the U.S. House of Representatives passed the Limit Save Grow Act of 2023. It was led by Republicans. The legislation passed 217 to 215.

Four Republicans voted against the bill, which did not get a single vote from a Democrat. What are your thoughts on this legislation? Well, we supported that legislation. I mean, we thought, you know, that truly is something that showed fiscal responsibility and the type of fiscal responsibility that we should have been shown for, you know, the past several years, but haven't. I mean, the reason why I think we're in the state of affairs that we are right now and we're seeing, you know, the collapse of three of the four largest bank collapses under the Biden administration is because of the incredible inflation rates that we've been seen that have hit the American public. the Fed has had to respond with probably one of the fastest rate increases, I think, in 40 years to combat that. And unfortunately, you know, the banks are the ones that are really getting hit hard.

In particular, I think, you know, you had the most recent one, First Republic Bank was impacted because it had a very significant mortgage portfolio. And quite frankly, then that portfolio, because of the rising interest rate, basically became, had no value because it was better just by T-bonds, basically T-bills, than it was, you know, the portfolio. So before they became worthless. And so once that happened, you know, the bank effectively was collapsed. So, but again, all that is thanks mostly due to the inflation caused by Biden. And just before we shift topics, one last question on the debt ceiling.

As we've been talking about, you know, these conversations have been going on for months. especially here in Washington. What is one thing you want our listeners to know about these ongoing conversations regarding the debt ceiling and why it's so important that so much attention is given to these conversations? Well, you know, the debt ceiling represents, you know, our credit limit for the American credit card, right? And I think everybody probably, all of your listeners and probably most Americans have a credit card with the limit, and they know you can't go over that limit or you get in trouble. And, you know, we are at that point, we're going to be over a limit.

We're going to raise it if the Republican proposal is accepted by $1.5 trillion. But there has to be spending cuts. Like I said, I mean, we're going to get to the point where the interest payments alone are really going to exceed, you know, more than 20% of our federal receipts. And so this is a major major concern. and quite frankly, I don't think our interest rate increases are going to stop. I think we're going to see at least a quarter point increase tomorrow and probably down the road, another quarter point at least. So we're well over almost 5.5% on the Fed funds rate.

So, again, this is a major concern. I think that will probably trigger a couple more banks, smaller banks, to buckle. And, you know, unfortunately, it feels as though we're just getting to that point, which I think, you know, it's almost the intense consequence, frankly, of this particular administration and a Democrat is to basically nationalize our banking system, very much like Canada, very much like Japan, where you only have a handful of banks. I think that's what we want to get to because when you do that, you can exert full control from the federal government over that banking system.

Now, just to move to another topic, I wanted to discuss a recent op-ed that you wrote for Fox News. The piece is titled, EPA is out of control. Here's our plan to stop its illegal actions. So first and foremost, as your title says, the EPA is out of control. Why is that? Well, I mean, when you look at all the different proposals that it's thrown on the table, that really is going to be impacting the everyday consumer, I mean, The list just goes on and on from washing machines to dishwashers to your air conditioners.

You know, they're basically in every single aspect of your life. They're basically, you know, adding regulations that are going to really, I think, negatively impact the American way of life. The biggest one that we decided, you know, we do have to step in and take some kind of action is on the EV vehicles, basically going from effectively 6% going up to, to about two-thirds of the cars out there in less than 10 years being an electric vehicle. I'm not against climate, you know, the issue of climate change. I think there is something that we need to do about the climate, and any time we can do anything to make this Earth healthier, we should do it. But this idea that everything has to be electric vehicles, I think is an absurdity.

When you look at all the different options that exist, we believe kind of in all of the above. There's going to be some combination of fossil fuels, natural gas, right? There might be hydrogen. There might be nuclear. You know, we have to look at all these options, and I think it's going to be a combination of options. Again, when you look at just the electric vehicle market and the impact it's going to have, I mean, have they really thought through all the different elements that's going to be impact?

I mean, you have, first of all, an electric vehicle is about $67,000. This is the average cost of electric vehicle. In talking to several dealers across the country, in particular California, the out-the-door cost for replacing those batteries is somewhere in the range of $25,000 to $30,000. I mean, this is not an easy issue for an average American consumer. They cannot afford it. But guess what they're doing, like in California, very quietly, they've actually approved a 10-year auto loan. Why are they doing that to, quote-unquote, make it affordable for the California. consumer. This is just gaslighting. Why don't they say the truth is that we're creating regulations

that make it actually unaffordable. I mean, to think about a 10-year loan on a car where it's, you know, its average life is probably expectancy somewhere between six to seven years before you have to replace that battery. That's a ridiculous thing to be able to expect the consumer to swallow. And then just the second half of the title, your plan to stop the EPA? Yeah, absolutely. I mean, well, As you know, we took action against the Department of Education on the latest overreach, the biggest overreach, was about $425 billion estimated. I think it was the Penn Warden Study that did that number.

So we sued the Biden administration on the college loan bailout because, again, we thought it was complete overreach by the Department of Education and this administration. And so again, similarly, we think that this is an overreach by the EPA. And so this idea that unelected bureaucrats are really effectively, you know, legislating through regulation has to stop. And so we said this before and we said at this time that when there's actions like this, we will step in, especially when you have so many consumers and small businesses, really, that are going to be hurt by this kind of regulation. Alfredo, thank you so much for joining us today. I really enjoyed our conversation and hope you'll join us again in the future, as I'm sure this debt ceiling conversation is not going anywhere and we'll be keeping an eye on any further updates with the EPA and the Job Creators Network.

Thank you so much. Thank you so much, I'm appreciate it. And that'll do it for today's episode of The Daily Signal podcast. Thank you for listening to my interview with Alfredo Ortiz, the president and C. of the Job Creators Network. Make sure you subscribe to the Daily Signal wherever you get your podcast and help us reach even more listeners

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