Canada markets closed

'We will see a financial crisis' if COVID-19 benefits are left in the budget: Kevin Brady

·3 min read

U.S. Representative Kevin Brady (R-Tex.) warns the trillions of dollars spent to overcome the COVID-19 pandemic will add to the U.S. national debt and threaten the country's economic future.

"You've got to take all this emergency spending and take it out of the regular budget," Brady told Yahoo Finance Live.

President Joe Biden signed the $1.9 trillion American Rescue Plan into law in March. Then in April, he proposed a $2.3 trillion infrastructure bill called the American Jobs Plan along with another bill, the $1.8 trillion American Families Plan

Biden's proposed federal budget would make some of the COVID-19 pandemic era spending permanent. That would increase government expenditures $6 trillion dollars over 10 years. Biden proposes to pay for it by raising the corporate tax rate from 21% to 28%. The budget proposal posted online by the White House says the increased spending and increased taxes would pay off. "The American Families Plan makes permanent the American Rescue Plan’s expansion of premium tax credits and makes a historic investment to improve maternal health and mortality."

"If you leave it in there, we will see a financial crisis at some point in the future," Brady warned, referring to the proposals to make pandemic relief spending permanent. He, and other Republicans in Congress want to slowly constrain, "the growth of government and put it back in whack with the economy" as well as preserve the Trump-era tax cuts.

"Frankly, it's made us the most competitive economy in the world," said Brady, who co-authored the historic Tax Cut and Jobs Act of 2017.

'Stay at the table'

Brady said there is room for agreement. "Infrastructure has always been bipartisan. We just need to stay at the table to get that done," he said.

Biden, however, ended negotiations with Republican lawmakers, failing to reach an agreement on the infrastructure bill's size and proposed tax increases to pay for it.

"If they, the White House, insists on putting these crippling tax increases into that bill, there are a dozen or more House Democrats who hold themselves out as pro business and moderate back home. Who knows, they probably won't be returning if they are forced to cast their votes," Brady said. "It is in everyone's best interest to find a path forward."

On Tuesday, White House Press Secretary Jen Psaki issued a statement regarding negotiations between Biden and Congress: "The president is committed to moving his economic legislation through Congress this summer, and is pursuing multiple paths to get this done."

Senate Majority Leader Charles Schumer (D-NY) said bipartisan negotiations over an infrastructure bill will continue in the Senate. “It may well be that part of the bill that will pass will be bipartisan and part of it will be through reconciliation, but we’re not going to sacrifice the bigness and boldness in this bill. We’ll just pursue two paths, and at some point they will join,” Schumer said.

"We do need the roads, bridges, ports, waterway, broadband, there is a lot I think of consensus on that area," said Brady, but the Democrats are pushing "wasteful spending." There are smarter ways to focus on and fund infrastructure, he added.

Adam Shapiro is co-anchor of Yahoo Finance Live 3pm to 5pm. Follow him on Twitter @Ajshaps

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn,YouTube, and reddit

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting