River Bend Times

Senator Chuck Grassley of Iowa, the Ranking Member of the Senate Budget Committee, called for a fiscal focus as the Democrat-led committee kicked off the year with a climate hearing. In his opening remarks, Grassley highlighted the pressing fiscal challenges facing the nation and emphasized the need for bipartisan solutions.

Grassley expressed his hope that the committee would address the unsustainable fiscal outlook of the country, stating, "Our unsustainable fiscal outlook is a bipartisan problem and it's going to require a bipartisan solution to resolve." He pointed out that reducing the federal deficit and shrinking the national debt should be a priority for the committee.

Referencing a letter sent by himself and Senator Rick Scott, Grassley noted that while there may be disagreements on policies and proposals, finding common ground is essential to address the growing national debt. He highlighted the alarming figures, stating, "The CBO warned that the federal budget deficit totaled $509 billion in just the first three months of fiscal year 2024. That's $87 billion more than this time last year, despite revenues coming in eight percent higher."

Grassley also drew attention to the recent downgrading of the country's credit rating by Fitch Ratings and the negative outlook placed on the U.S. sovereign credit rating by Moody's Investors Service. These developments underscore the urgency of addressing the fiscal challenges facing the nation.

While acknowledging the importance of discussing climate change, Grassley expressed concern that the focus on climate hearings has prevented the committee from discussing ways to improve the immediate economic position of the country. He emphasized the need for reasoned adaptation to cope with climate change and questioned the urgency of a doomsday scenario.

The hearing itself focused on the role of climate change in the municipal bond market. Grassley highlighted the resilience of the $4 trillion municipal bond market, noting that over 99 percent of municipal bonds are categorized as "investment grade" according to Moody's. He also pointed out that general government defaults in the municipal bond market are rare, as states and local governments have the power to raise revenue through taxation.

Grassley referenced the city of Detroit as an example of a place that has faced mismanagement but is making progress in recovering from its financial challenges. He noted that even in the face of natural disasters, such as the California wildfire that devastated Paradise in 2018, municipal bond issuers have not defaulted on their payments.

While recognizing the challenges faced by municipal bond issuers, Grassley highlighted the issue of reliance on the federal government for transfers, stating, "A big one is the extent to which municipalities rely on the federal government for transfers – let's face it, we're broke."

In conclusion, Grassley welcomed the witnesses and expressed his anticipation of hearing their testimonies. He emphasized the need for the committee to address the fiscal challenges facing the nation and find bipartisan solutions to ensure a sustainable future.

Click this link to access more information: https://www.budget.senate.gov/ranking-member/newsroom/press/grassley-urges-fiscal-focus-as-democrat-led-budget-committee-begins-year-with-climate-hearing