Patrick McHenry on China, Entitlement Reform, and the New GOP Congress

What comes next for House Republicans

I had the pleasure of interviewing House Financial Services Chairman Patrick McHenry on the issues of China, the debt ceiling, entitlement reform and more. You’ll find the video link below, and a portion of the transcript:

Ben: The conversation around the debt ceiling is one where you're put in the position of being a significant figure on this for all manner of reasons. And we've heard the demagoguery on this from the White House and from the president in the State of the Union. We've also heard the pushback from Republicans on entitlements not being a major part of this discussion. At the same time, don't Medicare and Social Security need reform in order to be around when you and I actually need it?

McHenry: Yes, I agree. And the absurdity of the State of the Union speech — not to mention how disjointed and bizarre moments were — but this idea that the President wouldn't negotiate around the debt ceiling. He was vice president and negotiated on behalf of President Obama around two debt ceilings! Two major debt ceiling negotiations. In fact, it was Speaker Pelosi and Leader Schumer that went to negotiate with President Trump in the Oval Office around the debt ceiling. And what they demanded was a spending increase, demanded out of President Trump.

So for the last 40 years, 50 years of the debt ceiling has been the moment in time where Washington take stock of its fiscal house of our spending, our ability to pay for that spending, our debt and our deficits. And that is where we are as well. I think it's only responsible and only reasonable to take stock of our fiscal house when we're debating fiscal matters. And so the debt ceiling and government funding are ones where we have to figure out whether or not we can afford the government that we currently have. That government is 30% larger than it was before COVID. That government is taking in record amounts of income 4.9 trillion this year. That is $1.7 trillion more than what was predicted when we pass the tax cuts and Jobs Act, record revenue, record federal spending and record deficits for as far as the eye can see. And we have important social programs, Medicare, Social Security, that will be going broke in the next decade. And when they go broke, under operation of law, we do nothing. The folks that are paid into the systems will see benefit cuts.

So I think that's not the responsible thing to do for those that are on Social Security or that are at or near retirement age. So I think we have to look at those programs. And to see how we put them on a sustainable path for future generations, and then also see our revenue, which is at record highs as a percentage of the economy and amounts. And how do we pull in that spending within the confines of our ability to pay for it? This is not groundbreaking stuff. This is just responsible budgeting, or closer to responsible budgeting than what we've had in the last generation in Washington.

Ben: You know, you mentioned generations. You're a Gen Xer. Historically, no generation has redistributed more wealth from the rest of America to itself than the Baby Boomers. It's clear it's not even close. It will never be topped, I don't believe. And they are at historic levels of wealth as a generation, particularly compared to Millennials, who've seen an inability to buy homes and inability to form families in part due to the challenges that emerged from the financial crisis and other issues related to that.

Why is it that we are so reluctant, other than simple electoral politics, to deal with the hard fact that Baby Boomers have redistributed far too much money to themselves over the course of years that they have indulged in this? Well after the point when retirement ages were moving way up, when lifespans were increasing dramatically? For programs that were meant to serve people at the very end of life, they are now essentially designed to fund lengthy retirements for the same people… Other than the electoral politics element in this, what's the principle that justifies that?

McHenry: Well, power.

Ben: I appreciate the honesty!

McHenry: That’s gonna get me in trouble. The fact is, you have an 80 year old in the White House. And you have the Senate Majority Leader, and the now the former Speaker of the House. You have folks that simply won't retire in the name of keeping power, and it's keeping power for themselves but also for their generation.

When you ask folks that are in retirement: “Do you want to leave your grandkids worse off in your country than you found it?” That to me, that should be a part of the debate. And I think we need to think about where we leave America when we're gone. And I think about that context for my kids. I want to leave them better off and more prepared. And a country that is better off and more prepared than then I found it.

So this seems to be like outside of politics, a normal conversation that normal people can have any bring it in the political context. And it's just removed from that sense of responsibility. We have each other. So let's try to be like, let's try to be normal people about this and not just political beings.

Ben: That's too profound of a thought for the Congress though, I fear.

Listen to the whole thing here.