On 3/22/2023, Senator Kennedy questions Treasury Sec. Yellen on bank bailouts, Biden budget. Kennedy gets her to admit that the national debt is now projected to be $33 trillion ($32.7 trillion). And then he gets her to admit that the budget projects that debt to be $51 trillion ($50.7 trillion) 10 years from now.

With a straight face, Janet Yellen tells Kennedy that the national debt would end up larger than $51 trillion in a decade but for the Biden budget, because the $4.7 trillion in new taxes — some $470 billion per year — proposed in the budget cuts down on that deficit. As Kennedy says, this kind of logic is only possible in Washington, D.C.

Kennedy: You talked about reducing the deficit. Isn’t it a fact that under President Biden’s proposed budget, gross debt will rise from 32.7 trillion dollars at the close of this year to 51 trillion dollars by 2033?

Yellen: Two, I’m sorry, what number did you give me for the president’s proposed budget?

Kennedy: Will increase gross debt from 33 trillion dollars at the close of this year to 51 trillion dollars in 2033. Isn’t that correct?

Yellen: Well, debt held by the public, which is no. Ma’am, that’s gross debt, not a fact.

Kennedy: That’s probably a fact. So, you haven’t reduced the deficit, have you?

Yellen: The deficit and the debt are reduced by the President’s…

Kennedy: But can you go from 33 trillion dollars to 51 trillion dollars and call that a reduction in the deficit? Because that’s a calculation for which you need a baseline, and then you compare the budget and the deficits and debt in the budget with the baseline in which there are no changes, either in revenues or in spending. Here’s my base budget, here’s my baseline. At the end of this year, we project, people a lot smarter than me, probably not than you, but smarter than me, say that gross debt’s 33 trillion. They say if the President’s budget is implemented by 2033, it’ll be 51 trillion dollars. Isn’t that a fact?

Yellen: If the President’s budget is not implemented and none of the changes are made, it will be worse than that. And so, the President’s budget has improved the fiscal outlook relative to what we would have without the President’s proposals, even though it raises gross debt from 33 trillion dollars to 51 trillion dollars.

Kennedy: You say that’s an improvement?

Yellen: It is. It is an improvement because it raises taxes by more, and it leads to… that includes taxes.

Kennedy: In what world is that an improvement, other than Washington and long, long land?

Yellen: It’s an improvement in the revenue increases far exceed proposed investments.

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Kennedy: But can you go from $33T to $51T & call that a reduction in the deficit?