Ben Bernanke, Sean Duffy, and the Watermelon Queen

Feb. 27 (Bloomberg) -- Representative Sean Duffy, a Republican from Wisconsin, confronts Federal Reserve Chairman Ben Bernanke about cutting the `fat' in the budget. (Source: Bloomberg)

Does the federal government really spend $700 billion (with a “b”) to see how long shrimp can run in a treadmill? Don’t think so. But Sean Duffy, the Tea Party Republican congressman from Wisconsin, said it did Wednesday during Federal Reserve Chairman Ben Bernanke’s semiannual testimony on monetary policy. Bloomberg News has the heated exchange between Duffy and Bernanke on video (above).

(Update, Feb. 28: Duffy’s chief of staff says the congressman meant to say $700,000 for shrimp treadmills–one-millionth as much. He’s standing by his other figures.)

Actually “heated exchange” isn’t quite right. Duffy was righteously indignant, but Bernanke was his usual bland self, responding like the academic economist he is to Duffy’s accusations that the Fed was discouraging Congress from being fiscally responsible. Bernanke argues that while Congress needs to deal with the long-term problems of an aging society and rising health-care costs, the economy is too weak now to withstand the automatic $85 billion in spending cuts of sequestration starting March 1.

Aside from shrimp treadmills, Duffy also said that the U.S. spends $27 million on Moroccan pottery classes and $2.2 billion in free cell phones and pays the travel expenses of the watermelon queen of Alabama. A Duffy staff member said questions about those claims were being handled by the congressman’s chief of staff, Pete Meachum, who was in a meeting.

Duffy, a second-term congressman and former prosecutor who first reached the public’s eye in the Boston season of the MTV television show Real World in 1997, seemed to take up the populist cause of Ron Paul, the Tea Party Republican from Texas who retired from Congress in January. “I mean, there is fat in the budget,” Duffy said. “And I think every American looks at how we spend our money, and they go, ‘I can cut 2 percent out of my family budget.’ Small businesses can say, ‘I can cut 2 percent out of my budget.’ But you come in and tell us, ‘Listen, I agree with the president. It is catastrophic, it’s catastrophic if you cut 2 percent. I mean mass mayhem in our economy.’” Said Duffy: “I find that to be unbelievable.”

Bernanke’s answer: “Well, the sequester is not designed to cut wasteful stuff. It’s across the board.”

Duffy then asked if Bernanke would go along with cutting spending by 2 percent if the cuts were more “reflective.” Bernanke said, “I’m still concerned about the short-term impact on jobs. And you don’t get as much benefit as you think, because if you slow the economy, that hurts your revenues, and that means your deficit reduction is not as big as you think it is.”

Duffy tried to get Bernanke to concede that there’s fat in the budget. Bernanke referred back to his prepared remarks, which said that not all spending is equal.

“So you agree there’s fat and you would encourage us to cut the fat,” Duffy said. Responded Bernanke: “It’s obviously a good idea to improve our fiscal budgeting and make better decisions.”

Clearly making little headway with the Fed chairman, Duffy used his remaining time to ask Bernanke to submit a long-term plan for fixing the nation’s budgetary problems in writing.

Stay tuned for the next episode of Real World: Sequestration.

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