During an interview with Bloomberg on Wednesday, White House Council of Economic Advisers Chair Jared Bernstein stated that the downgrade to America’s credit rating by Fitch isn’t giving credit where credit is due for legislation like the debt ceiling legislation and its deficit reduction, but that the debate over the debt ceiling that spawned that legislation was “terrible policy” and shouldn’t have happened.
Co-host Romaine Bostick asked, [relevant exchange begins around 2:05:15] “I think you can certainly make a compelling argument about the timing and how the timing itself may certainly be a little questionable, if not flawed. The underlying thesis to this about — particularly about the politics of our country, the nature of that politics being disruptive to implementing fiscal policy…government governance…does that not ring true to you?”
Bernstein responded, “It doesn’t in the following sense: … I think respective to the question you just asked, some of these commentaries in that spirit are glazing over critical differences between this administration and the last one. This sort of pox…on both your houses, ignores the fact that, under President Biden, not only have we had bipartisan legislation and the bipartisan infrastructure act, the PACT Act, the CHIPS and Science Act, but the Fiscal Responsibility Act, an overwhelmingly bipartisan solution to the recent debt ceiling debate that carried with it $1 trillion in deficit reduction. So, that goes exactly in the opposite direction, and if you don’t give credit where credit is due, and you paint with such a broad brush, you’re not going to provide the kinds of observations that give this a much more honest assessment.”
Later, Bernstein stated, “I think that President Biden and our team, working with members of Congress on both sides of the aisle, continue to pull legislative rabbits out of hats. So, look, nobody liked the debt ceiling debate. But the Fiscal Responsibility Act that came out of it had some positive attributes and reduced the deficit by around a trillion dollars, it definitely shouldn’t have had that kind of threat to default in there, taking the economy hostage and all. That’s obviously terrible policy.”
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