LEADER JEFFRIES ON CNBC: "PRESIDENT BIDEN'S BUDGET IS GOING TO INVEST IN THE FUTURE SUSTAINABILITY OF MEDICARE AND SOCIAL SECURITY"
Interview
QUICK: President Biden is set to unveil his 2024 budget proposal tomorrow. Topping the list, tax increases on high-income Americans, cutting the deficit and extending the life of Medicare again by raising taxes. Joining us right now for more on this is House Democratic Leader New York Congressman Hakeem Jeffries. Mr. Leader, it's very good to have you here. We appreciate it. How are you doing today?
JEFFRIES: Good morning. Great to be with you.
QUICK: All right. Let's talk a little bit about the budget because this is the lead story in The New York Times and a lot of other newspapers this morning. People are looking at this, wondering what to expect. And already we're getting some pretty big details. We've been talking this morning about Medicare in particular, shoring that system up, but doing it by raising taxes. I want to wonder if you'll weigh in on that, first of all.
JEFFRIES: Well, it's my expectation that President Biden's budget is going to invest in the future sustainability of Medicare and Social Security, invest in education and job training, invest in research and development, invest in transportation and infrastructure, invest in technology and innovation, invest in the creation and preservation of affordable housing and overall, just invest in the health, the safety and the economic well-being of the American people as part of his wonderful effort to build an economy from the middle out and the ground up.
QUICK: One of our reporters dug into what some of those increases will mean and what it will mean for New Yorkers and your district and was just pointing out that with these proposed tax increases, if they were to go through, including that Medicare taxes going to 5% from 3.8% and the cap being lifted, it will mean that New Yorkers who are making $400,000 or more could be facing a tax rate of 59.6% when you add up the state and local taxes. Do you worry about that? Just your own constituents?
JEFFRIES: Here's what I worry about, the overwhelming majority of the people that I represent in the Eighth Congressional District, just like the overwhelming majority of the American people, will not experience a very, very modest tax increase in order to extend out the future of Medicare. Right now, according to the Congressional Budget Office, the Medicare trust fund is slated to be insolvent by the year 2033. And so President Biden is taking a very responsible step to try to extend it out to 2050 in order to make sure that tens of millions of Americans can retire with grace and dignity, folks who have paid into Medicare throughout their entire lives and have an expectation that it will be there for them in their golden years.
QUICK: No question that Medicare is a very important program and that it needs to be shored up. I guess the bigger issue is what happens, because this is already being declared dead on arrival, it's not going to pass in the House. So what do you do? What kind of compromises do you look for? How-- do you think there is something? Do you find any common ground? What are you thinking so far?
JEFFRIES: Well, we always want to find common ground whenever and wherever possible. But in order for that to happen, the Republicans actually need to show us their plan. Unfortunately, what we have right now is a situation where President Biden has been very clear. He's going to release his budget tomorrow. It will be in the public domain. The American people will have an opportunity to fully review it. The Congress can debate it. But right now, we haven't seen a plan from House Republicans. In the past, their plan has been to dramatically cut taxes for the wealthy, the well-off and the well-connected, often unpaid for. Unfortunately, that was the reality in 2017, and it has not delivered the benefits for the overwhelming majority of Americans that had been promised. We've seen budget plans in the past that have sought to repeal the Affordable Care Act, that have sought to undermine Social Security and Medicare, and what we're saying is for us to have a reasonable debate, a transparent debate, then House Republicans need to show the American people their plan.
KERNEN: It's great to have you on Leader Jeffries. I begged the Speaker to talk to you and he was funny, he goes, when Hakeem is on just tell him, remind him, that he had 100% of his caucus voted for him too. So just, you know, just don't rest on your laurels -- when he was Minority Leader, you go tell him that and then look what happened a couple of years later. Anyway, we just had Judd Gregg, former Senator, former Governor of New Hampshire. He worries about if this is essentially drug pricing and that will hurt innovation coming out of the pandemic, where we saw how the innovation of the US pharmaceutical industry really did -- maybe it's overstating it to say they saved us collectively -- but certainly we developed that vaccine very effectively and very quickly. Do you think that -- are you for drug pricing? Don't you think that that hurts innovation and that these companies need capital to deal with Alzheimer's and all these diseases that are going to get worse and worse as the population ages?
JEFFRIES: I think Big Pharma has done incredibly well in terms of profitability, and there were partnerships that were facilitated by the US government during moments of crisis, including the pandemic. But there were investments that were made in research and development over decades, paid for by the taxpayers that have put us into a position where some advancements can be made by entities within the pharmaceutical industry. Now, here's what I'm for, here's what Democrats are for, we are for the American people paying $35 per month for things like insulin, as opposed to approximately $4,000 per year for a drug that has been in existence since about 1922, where there's no additional research or investment or innovation that needs to be made, and no reason that the American people were paying thousands and thousands of dollars. So we have to strike the right balance and build upon what has been put into law, including giving Medicare the ability to negotiate lower drug prices on behalf of the American people. That is a basic principle in capitalism, which means you get to use your bulk price purchasing power to negotiate lower prices. Wal-Mart does it. Target does it. Best Buy does it. The American people should have the ability to do it as well.
KERNEN: The other thing that Senator Gregg was pointing out was for decades, Social Security, Medicare had been the third rail. And you say Republicans don't have a plan and whenever they talk about, even broach the idea of trying to make these both of these programs, Social Security, Medicare, more solvent, you immediately -- or many Democrats, President Biden -- go to the, you know, you want to cut people's Social Security, Republicans want to cut people's Medicare. There needs probably to be a more, not only bipartisan but a more fundamental change in some of the provisions that we have to really make it solvent, to really make it work. And we never get that. We never get a bipartisan effort. You say you want to be bipartisan and actually Leader McCarthy -- or I'm sorry, Speaker McCarthy -- was saying that he's worked with you and trying to work with you on other things. He was it was kind of checking off all the bipartisan things. Why not both sides approach this as adults and try to work something out that really preserves these programs instead of what sometimes looks like demagoguery?
JEFFRIES: Well, Speaker McCarthy and I have worked well together for the good of the institution, and I look forward to continuing to have forward looking conversations to try to do what is in the best interests of the American people in partnership, whenever and wherever possible. There will be times, as Speaker McCarthy has indicated, that we will strongly disagree, perhaps around the future of Social Security and Medicare. My overall point is that for us to have a reasonable conversation to try to find common ground, then the Republicans need to show us their plan. President Biden is going to do that tomorrow. It will be in the public domain. But we believe in a well regulated, market based economy that has been a tremendous engine of growth and prosperity. Help to build the greatest American middle class, greatest middle class, I should say, in the history of the world. And now we have to make sure that we preserve that. Part of it is a strong social safety net, anchored in things like Social Security and Medicare. And so that is going to be a big part of President Biden's budget. We can have a discussion about how to make that sustainable, but we need to see a Republican plan. And many people are reasonably concerned that the reason why we don't see a plan is because it's too extreme for the American people to absorb.
QUICK: Congressman Jeffries, as you mentioned, we'll get this budget tomorrow. We're going to hear a lot more about this. Maybe we should talk a little bit more about the economy, though, because that's what we focus on and what we've been hearing. Yesterday, we did hear from from the Fed head, Jay Powell speaking before the Senate, where he was talking about how the Fed's very likely going to have to raise rates higher and faster than people had been anticipating, you know, the pain that that does put on people everywhere. Inflation is a horrible problem, needs to be figured out. But if we are talking about raising rates, increasing borrowing costs for Americans, for businesses trying to do that while inflation is higher, and the concern that that could cause an economic downturn, what do you think, just in terms of what you're watching with the Fed, what your concerns are about the economy?
JEFFRIES: Well, let's think about where we've been and where we are now. When the American Rescue Plan was passed under the leadership of President Biden, Speaker Pelosi, Leader Schumer, Democrats in the House and the Senate, we were able to rescue the economy and save it from a deep recession. Set us on a path, shots in arms, money and pockets, kids back in school to emerge with an economy that's stronger post-pandemic than any other economy in the Western world. Yes, there are challenges that need to be met around inflation. However, when you take a step back and look at the economy, more than 12 million good-paying jobs created during President Biden's first two years in office, that's a record. Unemployment at around 3.5%, a record 50-year low. More small businesses have been created over the last two years than in any other time in American history. That's extraordinary. And on top of all that, the deficit has been reduced during President Biden's first two years by $1.7 trillion. More needs to be done. We recognize that. President Biden is going to lead with building an economy from the middle out and the ground up as opposed to the top down to make sure we continue to build upon the great American middle class. That's good for everyone. That's good for democracy. It's good for the wealthiest amongst us and it's good for America.
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QUICK: Leader Jeffries, let me just ask you about some breaking news that just came out. ADP jobs report came out. That number was stronger than expected for the month of February. It was a gain of 242,000. Wall Street was only looking for 205,000. And this is one of those good news, maybe bad news scenarios. It's great to hear the strong economy. It's great to hear jobs are being created, but it does raise the prospect that the Fed is going to raise rates even higher in an attempt to try and break inflation and bring down the economy. Do you worry that the Fed is going to do too much, bring rates too high and cause the economy to come in and fall into a recession?
JEFFRIES: It's a very reasonable concern because what we don't want is the Fed to trigger a recession and then set us back. So there is a balance that needs to be struck here in trying to tame inflationary pressures that have impacted the economy. I know year over year over the last six months, inflation is down, but there are still concerns that it is ticking upward in the wrong direction. Those are reasonable concerns to be addressed in terms of monetary policy, but we don't want to go too far in triggering a recession. We'll see what the Fed does and I'll be have, I'll be in a position to be able to comment more intelligently thereafter.
KERNEN: The inflation that we do see, Leader we, I think and I don't want to relitigate, you know, Trump and what you call the tax cuts or Republicans. But so, 8 trillion added to the deficit during, during the Trump years, four of them, another 8 trillion added in the first two years of President Biden's administration. That's 16 trillion, puts us at 32 trillion. And many people say that that's why inflation is so high, 40, at 40-year highs you know, since the '80s. And it does hurt low-income people more than than the rest. There's a reason the Fed is willing basically to raise unemployment just to get inflation under control. Do you at least concede that some of the inflation is because we overspent, both administrations, the prior administration and the current administration to get the $32 trillion in terms of debt?
JEFFRIES: Well, let's understand one thing in terms of the debt situation that we find ourselves in. And by the way, we're going to have to raise the debt ceiling, do it responsibly. It was done three times without fanfare under the prior administration and it should be done in this particular instance to avoid a catastrophic default that will hurt the economy, undermine the US dollar's presence as the world's reserve currency, and really hurt small businesses and everyday Americans. But yes, it's reasonable for us to have a conversation moving forward about how do we continue to reduce the deficit and bring our debt into a better situation. That's what President Biden has been able to do. That's what I believe he will continue to do. And we look forward to having that discussion with our Republican colleagues, but they have to present us their plan in order for us to have a legitimate debate.
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