EXCLUSIVE — Eric Hovde, the Wisconsin Republican aiming to take on incumbent Sen. Tammy Baldwin (D-WI), said he wants to help prevent a looming fiscal crisis.
During a Friday interview with the Washington Examiner, Hovde, a 59-year-old businessman, said he hopes to get the economy out of the “debt hole” it is in should voters send him to Washington, D.C. His economic vision entails righting the country’s fiscal ship through cuts to spending and other changes.
Hovde said he supports the formation of a bipartisan fiscal commission and that he would “100%” be willing to take on a leadership role in the matter to address the rising debt and soaring interest costs.
“We’ve got to stop digging ourself into such a debt hole. We are probably in a debt trap already,” he said. “Interest costs on our debt now is the second-largest line-item expenditure of the federal government.”
A focus on fiscal stability and lower spending would place Hovde within the more traditional mold of fiscal conservatism. The party, in recent years, has seen the rise of members, such as Sen. Josh Hawley (R-MO), who take a more populist approach and steer clear of proposals to reduce spending on popular programs.
This year, the U.S. will be shackled with $870 billion in payments on net interest. That is nearly 5.7% more than the $822 billion the government will spend on national defense, according to budget projections from the Congressional Budget Office.
Borrowing costs have risen very quickly over the past few years as inflation took off, and the Federal Reserve raised its interest rate target in response. Higher rates mean the government needs to pay more in interest to borrow, a reality that has heightened the urgency for lawmakers to act.
“They increased the expenditures of the federal government by 40% during [the pandemic], and they have not brought that down — did our population increase by 40%? Hell no, it didn’t,” Hovde said. “So we have to get serious about our spending and trying to deal with our debt problems.”
The concept of a bipartisan fiscal commission is one that has gotten new life in recent months thanks to the support of House Speaker Mike Johnson (R-LA).
In January, the House Budget Committee voted to advance bipartisan legislation that would form a panel consisting of both Republican and Democratic lawmakers from both chambers of Congress, in addition to outside experts. The committee would work to produce a report and propose legislation that would stabilize the ratio of public debt to GDP to at or below 100% within 10 years.
But the politics of a fiscal commission are daunting. Any proposals that would cut programs or raise taxes could be used against members on the campaign trails.
Democrats have attacked commissions by arguing that they could lead to cuts to Social Security and Medicare, the old-age programs that enjoy strong popular support.
For instance, Rep. Dan Kildee (D-MI) said during a hearing in January that fiscal commissions in the past have prioritized cutting spending and have not focused on changes to the tax code that would close the gap.
Hovde said he doesn’t think most lawmakers understand the severity of the country’s fiscal situation. “I don’t think they understand what the debt crisis ultimately means,” he said.
“I think we’re in a very precarious position economically today, and Biden is running around and touting his economic growth and GDP, well, yeah — when you’re spending that much deficit spending of course you can create GDP, but they’re spending basically $1.50 to create $1 GDP,” Hovde said. “All you’re doing is robbing the future to create some economic growth today.”
Another priority for Hovde is cutting regulations and paring back the administrative state. The matter has become a salient one over the past few years for Republicans, who have accused Biden of using rulemaking to side-step legislating.
“We have this massive bureaucracy that has to justify itself and what they do is sit around and create administrative rules and regulations,” he said. “And we’re choking on rules and regulations.”
Earlier this year, House Majority Whip Tom Emmer (R-MN) introduced a bill dubbed the Sunset Act. The legislation would require all major rules to expire 10 years after they are enacted unless approved by both chambers of Congress under a joint resolution.
And last year, Rep. Kat Cammack (R-FL) introduced the Regulations from the Executive In Need of Scrutiny, or REINS, Act. That legislation targets rulemaking from the executive branch and would mandate that every new major rule proposed by federal agencies be approved by the House and Senate before going into effect.
This week during a Wisconsin rally, former President Donald Trump gave Hovde his “complete and total endorsement.” Wisconsin is a critical battleground state for Trump and Republicans hope it could be an opportunity to win back the Senate in November.
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When Hovde was asked on Friday about whether he supports Trump’s proposal to apply 10% across-the-board tariffs, something that critics say would make inflation worse, Hovde said he falls more into the free-trade bucket but does think there are times when the U.S. should take action to force the hand of other countries to open their markets more.
“I believe in free trade. I think it’s very important to have free trade. However, I do understand and appreciate President Trump’s frustration with countries like China that put up barriers for our goods and then try to flood our system and destabilize our companies,” he said.
