“The U.S. federal budget is on an unsustainable path. The debt is not at an unsustainable level, but the path is unsustainable, and we know that we have to change that,” Powell said during an interview at the New York Times DealBook Summit.
Powell warned the nation is running “very large budget deficits at a time of full employment and strong growth,” pressing for action sooner rather than later.
“We don’t need to pay the debt down. We don’t need to balance the budget. We just need the economy to grow faster than the debt. And that’s not happening,” Powell said.
Powell, a lifelong Republican first appointed to lead the central bank by President-elect Trump and reappointed by President Biden, has repeatedly warned the U.S. is on an unsustainable fiscal path.
His latest comments come as Republicans ready for an intraparty battle over the potential fiscal impact of massive tax cuts in Congress, which is responsible for setting fiscal policy.
Speaker Mike Johnson (R-La.) and GOP leadership want to move quickly to craft a follow-up to the 2017 Tax Cuts and Jobs Act once Trump takes office and the GOP consolidates control in Washington.
The Hill’s Taylor Giorno has more here.
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