Federal Reserve chairman Jerome Powell said Wednesday that Congress and President Trump should look to fix the federal government’s finances now, rather than wait for later when the federal debt is higher.
“There’s no time like now, when the economy is healthy, growing, people are working, to go after that problem,” Powell said of the federal debt at a press conference in Washington. “Ultimately, we will have to.”
Powell was responding to a question about congressional projections released this week showing that the federal deficit is rising and set to drive the accumulated debt up to postwar record highs in the years ahead. The deficit is growing, even though the economy is healthy and unemployment is low.
Powell called the government’s fiscal situation “unsustainable” and blamed the expected run-up in debt on healthcare costs and the aging of the population into retirement programs.
The problem, though, is one for Congress and the president rather than the Fed, he said. It affects the future of the country and is determined by taxing and spending, whereas the Fed is responsible for the business cycle and monetary policy.
“In the longer run, we’ll be spending all of our money on paying interest and not on the things that we really need to be doing for future generations, for our own generation,” he said.
[Read more: Fed holds off on rate hike, suggests it might not pursue further increases]
