>> they are often referred to as the congress enact your been there for two years i can't think of a better name.

it is really the heartbeat of the people. >> it is designed to ensure that members of congress are african-american or decide to come together on issues plaguing the community at large from issues that may be taking issues to discuss legislative solutions, legislative proposals to ban the causes of people that don't have a voice. >> next, head of the cbo, doug elmendorf testifies about the long-term budget outlook. cbo has released its latest fiscal report to congress. mr. elmendorf took questions from the house budget committee at this two-hour hearing.

>> the hearing will come to order. the committee will come to order. welcome to the budget committee. the purpose of the year he missed a review of the long-term budget outlook, which cbo just recently released an impact of fiscal and economic damage and challenges facing our nation. we are joined today by no stranger to this committee, doug elmendorf current director of the congressional budget office. already thank you for testifying today for the worker team has done in putting together this report. the report is sobering and the warnings are dire. you write in the report, growing to bowling crease the sudden fiscal crisis during which investors of those if budget and thereby boost its ability. what is causing this growing

data? government spending is on a break in that case. by 2025, according to this report, health and include medicare and medicaid images on the debt will include 100% of revenue. a problem of course is unsustainable increases in spending. our entitlement programs in particular government spending on health care at the core drivers of the data. as a report makes clear, and health care law fails to address the cost problem and instead has the liabilities to an already bankrupt future. those unwilling to structurally reform a structurally broken government repeat the same cars for ever higher taxes to chase ever higher spending. on the question of taking more come in cbo's report clear. writing that quote the extent that higher revenues higher revenues are generated by boosting marginal tax rates, those higher rates to discourage people from working and saving, further reducing output and

income, close quote. cbo economic on nonpartisan efforts has again warned that delay himself in a fiscal problems. unfortunately, the administration is no solution to the problem we face but merely distraction for those who put forth good faith solutions. the senate of course, hasn't passed a budget and more than three years. house republicans refuse to accept the european style debt crisis, which promises harsh austerity. we reject the empty promises and continued inaction in the face of a crisis. cranking up tax rates that siphon growth and harsh assertions to beneficiaries is what europe is doing right now. this does not have to be our fate. this is why we continue to advance gradual, commonsense reforms to lift the debt and strengthen core priorities and spur job growth. we still have a window of opportunity that will require us to come together to solve this problem. cbo has presented us with their

analysis, but it's incumbent upon policymakers to respond to finance the principal solutions. for more responsibility to work together and chart a sustainable fiscal path to revitalize economic growth and expand opportunity now and generations to come. i want to thank you for coming today, doug. look forward to your testimony and without a yield to the ranking member, mr. van hollen. >> i thank you, mr. chairman. two weeks ago, you and your colleagues at the congressional budget office released an analysis of the economic impact of the so-called fiscal close, painting a very somber picture of what might happen if congress fails to address expiring tax cut and automatic spending cuts that encourage your son. you predict that a possible recession early next year and millions more out of work if we were to actually go over the fiscal cliff. janet, your long-term outlook

coming cbo's long-term outlook, which were discussing today also confirms that continuing to do business as usual, extending all current tax and spending policies will produce unsustainable deficits and debt, which will also hurt the economy in the long run. taken togetherare committed to cbo reports reinforce the fact congress must adopt a two track strategy of one, enough to boost our fragile economy and help more americans back to work and number two, acting now to put in place a balanced approach to long-term deficit reduction that doesn't take resources out of the economy in the near term. this is the opposite approach of those who advocate for immediate steep austerity measures come in the type that have been pushed by some of our european partners like the u.k. and put them back into a recession.

on the first step, putting americans back to work, we need to enact the president's jobs plan that the white right has sent to congress nine months ago. that proposal includes significant new investment in building roads, bridges and other at a time of 14% unemployment in the construction industry and super low interest rates, and they should be a no-brainer. we call upon speaker boehner to put the price is just a postal two is vote on the florida house. the second step is for lawmakers, the congress can a president to adopt a plan to reduce the deficit in a balanced way. by applying the kind of framework is spending cuts and revenues generated by eliminating certain tax breaks that has been recommended by a bipartisan groups simpson/bowles. that should extend for working

families and sequester to deficit reduction so our economy does not go over the fiscal close. unfortunately, the speakers thread to let the nation default on its debt if republicans cannot impose their european-style austerity plan to cementing the viewing capital market that lawmakers will fail to reach an agreement before the end of the year. that manufactured crisis creates uncertainty that will undermine confidence and weaken the economy. the standard & poor's credit rating my issue is due to forecast a continued clinical gridlock and yet for many in the house of representatives, compromised remains a dirty word. mr. chairman, we look forward to having a willing partner, points make the necessary compromise to both make sure our economy kicks into full gear and also develops a balanced plan to reduce the deficit over the long-term. >> thank you, mr. van hollen.

i asked the legislature members have five days to insert to the record if they choose to do so. dr. elmendorf come the floor is yours. >> thank you,.orion and then holland. i'm pleased we've asked you to talk about the long-term budget outlook. in a report cbo released yesterday the assassin are two very different sets of assumptions about future tax and spending policies. the extended a fine scenario perplex the assumption that state laws generally remain unchanged. that assumption implies that lawmakers will allow tax and spending policy changes that are scheduled to occur to actually do so. in contrast, the extended alternative fiscal scenario incorporates the assumptions that certain policies in place for a number of years will be continued in some provisions of love might be difficult to sustain for long. will be modified. thus the scenario maintains that

some analysts might consider current policies as compared with current laws. the budgetary and economic outcomes under these two scenarios would be starkly different. under the extended baseline scenario, that is current law, federal debt would decline gradually relative to gdp over the next 25 years from an estimated 73% this year to 53% by 2037. so the outcome would not be dramatically different from our current situation there would be a sharp change from the nation's historical patterns of taxes and spending. revenue said rice rise sedulously relative to gdp, on several fact areas. the scheduled expiration of cuts income taxes enacted since 2001, growing rates of alternative minimum tax, tax provisions of the affordable care, the way in which the tax system interacts with economic growth. demographic trends another five

years. altogether revenues increase 24% of gdp by 2037, much higher than has been seen in recent decades. at the same time, federal spending on everything other than the major health care programs social security and interest would decline to the lowest percentage of gdp since before the second world war. that's significant increase in revenues and decrease in relative magnitude of further spending would more than i said the dramatic rise in spending on health care programs of social security. that is way down with the a declining ability to gdp under current law. in contrast, the outlook for debt is much bleaker under the extended alternative fiscal scenario. as i said in that scenario, the assumption is government maintains the kind of tax and spending policies we've been accustomed to. in that scenario, all expiring tax provisions with the sole exception of the current reduction in payroll tax rate

are assumed to be extended through 2022 and after 2022 revenues are assumed to remain at their 2022 mark of 18.5% of gdp, just a little about the average of the past 40 years. on the outlay side, this scenario since the automatic reduction in spending required by last year's budget control act will not occur. that certain reduction health care spending will not occur in federal spending and everything other than a major health care programs, social security and interest would return the average share of gdp during the last two decades. altogether in a alternative fiscal scenario would be much lower a noninterest outlay someone higher than the extended baseline scenario. as a result federal debt will grow rapidly from its already high level exceeding 90% of gdp in 2022 and approaching 200% in

2037. because of the extended alternative fiscal scenario, it's roughly representative of the fiscal policies now or have recently been in effect. the explosive path of federal debt under that scenario underscores the need for largely timely policy is to put on a sustainable course. i want to take a few more minutes to highlight the implication of these projections. first, it is not possible both to keep taxes at historical average share of gdp and to keep the last unchanged for social security, medicare and medicaid. the reason we can't repeat the historical conversation of policies is the aging of the population have made this large entitlement programs? stanford than they used to be.

it is possible to keep taxes at historical average shared gdp. only then make substantial cuts to live and and a large entitlement program that benefit a broad group of americans at some point in their lives. alternatively, it is possible to keep the last for the large programs unchanged. only by raising taxes substantially on a broad group of americans. changes to other federal programs besides large entitlement programs can affect the magnitude of changes they did in texas or large programs, but cannot eliminate the basic trade-off i've just described. even spending on all the other programs including national defense in a wide variety of mystic programs fell to a smaller share of gdp than we have seen since before the second world war. that would still be on an unsustainable upward trajectory with substantial changes in taxes and a large entitlement programs are both.

the second implication i would like to emphasize if keeping federal deficits and debt no larger than the project under current law would involve difficult policy trade-offs. under current law as captured by the extended a fine scenario, we expect that will decline slowly relative to gdp in 2015 and beyond. such a pattern that would gradually reduce the crowding out of private investment caused by high debt. it would restore his lawmakers ability to use tax and spending policies to respond to unexpected domestic or international challenges. and it would reduce the risk of a sudden fiscal crisis during which investors would lose confidence in a government's ability to manage its budget and it would lose its ability to burn affordable rate. even on that path, 25 years from now would still be larger ability to gdp than any year

between 1986 and 2008. so that path for federal debt might not be optimal. in fact, analysts don't know what level of debt is optimal. but it is one path that might be considered a possible goal for federal policy. attaining that goal though the create significant trade-offs. trade-offs are exemplified by the decisions confronting you as various provisions of law expire or take effect at the end of this year. to keep the nation on that current law path of declining debt, any action by the congress that was significantly worse than the budget outlook relative to current law would need to be offset more paid for by other actions that would improve the budget outlook by a comparable amount. for example, removing the automatic spending reductions under the budget control act would raise deficits by about a trillion dollars of the next

decade. and extent of the 2001 and 2003 tax cuts and indexing the amt for inflation would raise deficits by about $4.5 trillion over the next decade. both figures excluding debt service i should say. making such changes to current law while maintaining the same path of declining debt as under current law would require other changes in policy that would reduce deficits by roughly one or $4.5 trillion. to be sure, the congress may not enact the changes in the work might choose to allow more debt than would occur under current law or alternatively to reduce debt more quickly relative to gdp than would occur under current law. they are many possible combinations of policies he may pursue and cbo will make neither recommendations or predictions about them. my point is simply the path of debt under current law would still leave debt at an historically level relative to

gdp. and yet, achieving even that path would require a very large change in current policies. you and your colleagues and all of us as american citizens make hard choices. thank you. i'm happy to take your questions. >> thank you. okay, so first i think it's very construct is that we have what we call the alternative fiscal scenario because it sort of mark? turned policies. but just to get it clear, we talk about current law baseline, the extended baseline, that assumes 30% cut to.or starts january to the discretionary caps in place capstan placings sequester enacted on top of that and a $4.4 trillion tax increase occurs in january as well. >> concludes all under current law and the imposition of all the new things happening. >> right, so that's not very realistic. it's very helpful to have this afs, alternative fiscal

scenario. as we look at the alternative fiscal scenario on your table 2.1 and figure 2.1, we are doing real gnp per person and long-term budgetary on gdp, you have a range of estimates. i'm very intrigued with these range of estimates. first of all, one of them over in your gnp per person as howard basically measure standard olympic. how much of the group or person the future and what is great about our nation as we've always had an increasing standard of living. but always, always given the next generation a better standard of living, better growth. i am looking etcher lower estimate, which shows in the 2030s that goes away. and down in your footnote come you say would reach 250% of gdp by 2035 under these assumptions. cbs model cannot cannot reliably

estimate output after debt reaches the amount of the agencies government, which the model can't measure the economy going on beyond that point. what's in it at 200% of gdp in your assumptions a year ago? where's the difference? if i recall when they had these with your predecessor and with yourself, i know it's a technical thing, but i am just curious. where do you lose confidence in measuring the economy go forward once the debt reaches these levels? should not do that to 250 rather than 200? >> wouldn't change that, mr. chairman. it took them last terms budget outlook, we show the effects of the alternative scenario i'm gnp out at that point to 2035 and a 2035 we thought that including the dynamic effects of rising debt on the economy that the debt would be two and 50% of gdp. we show that on page 32 of last

year's report. and there's no magic point at which the model stops working. our view -- >> edges loses credibility? >> based on historical experience. at some point our debt under the scenarios would move so far out of historical experience that we don't trust the model to be reliable. it's also true in various parts of the report that we just cut off the vertical axis. because the picture 200, two and 50% of poverty because we don't do it conveys useful information. even if we can and a sense from the calculator. >> so what that means in the 2030s, we don't think the economy -- we can measure the economy going forward because of debt burdens. with any degree of confidence. >> at the end of the 2030, yes, that's right, mr. chairman.

>> let me ask you about interest rates. first of all, our tenure is sort of the port and a strong, safe haven. we went down as much as 1.5. you predict interest rate increases, but those long-term rates are still under the past trends. what happens if rates don't stay as low as you are project team? what is the rule of thumb you use on a ten-year basis if rates don't stay as low as you predict in? that is one of my biggest fears as interest rates rise whenever a medium long term above trend like they did in the 1980s or even of the 1990s levels. what does that do to lessen how to set up that those those states with?

>> at the end of the first chapter of the report we talk about a collection of risk that surround these projections and usually take those risks in the insurgency very seriously. when sort of risky way to to as the chairman is mentioning is the risk of much higher interest rates. also possible race to be lower than the project. we note here that if interest rates under the extended alternative fiscal scenario, net interest would be 27% of all federal outlays by 2037 in our projections here. if interest rates were even half of a percentage point higher on a sustained basis than the debt service costs would be even higher. so for example, we think it's federal debt would be 215% of gdp in 2037, not 199% we show the passage to assume. >> now, i was intrigued also with your comments on marginal tax rates. you save it from higher marginal

tax rates go, the less output and economic roles who cared. so is a good combination of fiscal policies, in your judgment based upon what we are seeing here lower debt levels, which increases output and keeping marginal tax rates low? if they are not a trade-off, meaning if we get savings which reduces the detriment of the reforms and other reforms in better economic role is not the virtuous cycle we want to get on quite for not asking you to give me a policy judgment, but i am asking your judgment, do they get better economic lower tax rates and lower debt levels? >> yeah, all else equal, lower tax rates mean more economic output. whether all else is equal depends on what the economist that. the alternative fiscal scenario has lower tax rates in the baseline but much more debt.

the irs estimates that much more debt as a stronger negative force in the tax rates. >> that's basically the essence of our approach which is keep tax rates low to maximize short-term maximize growth. as we can see here, even under the ss, revenues go up. spending goes up at such an incredible clip because as you mentioned demographics, health inflation and the rest. if we can get them under control we can grow. sewickley key part that levels at or below where we are over the long term and keep our tax rates at or below where we are, will avoid this kind of projection you are showing us in these various scenarios in the 2030s for decades so high you can't track growth going forward, meaning we can dodge this austerity bullet if we get this to combination policies in place. is that i'm an accurate take

away? >> guest: aker to do until attaching yesterday bullet. but yes, you are right that it got its act or fall slower the sheer gdp in tax rates are lower, that combination would be the best combination of those two features of the budget for growth in the long run. >> when the question on the fiscal cliff. is your judgment -- how much do you disaggregate between the recession your project and from which i believe you project a two quarter drop in output if the fiscal cliff occurs, how much in your judgment results from the tax side of the fiscal cliff versus the other parts of the spending issues? >> well, a larger share of the typing of fiscal policy between this year and next comes on the revenue side. now, the effects of specific changes in spending will be

exactly the same in the short run but altogether we think the revenue increases for the larger fact there in restraining economic growth and employment at the beginning of next year. >> thank you. >> thank you, mr. chairman. tonnages pick up first for the chairman left off for some those hypotheticals because he asked you if you're able to keep tax rates low given everything else being equal it would be the result, assuming also that debt remain low. but that her elmendorf, all this was very difficult trade-offs. so to the extent that we keep that low and we reduce revenue, that means that we have to cut much more deeply into other areas. is that right? be my guest. >> given the fact that health care costs are increasing rapidly, especially medicare, it would mean we have to come up with another way of dealing with

medicare costs. is that right? >> yes, that's right. >> just go back to the cbo analysis of the house republican plan with respect to creating a medicare voucher premium support, whatever you want to call it, my recollection is that the cbo analysis shows that a village is shifted a lot of the right thing health care costs off the medical programming onto seniors. >> and the analysis we did a year ago at the plant to chairman reported at the time, we did analyze to offer some rough estimates of the ship to cost to beneficiaries. disturbing able to do that analysis. the plan was different and more complicated and we're not able do that comparable analysis this year. >> that's right. and in the chairman said he changed some of the things, which may have somewhat soften the impact. my understand or be due to the cbo analysis last time was the same dynamics are in play and

while it may somewhat reduce the amount of risk and cautious to seniors, it does not eliminate the problem. he had a chance to look at that quick >> we have not been able to analyze that. >> if i can put up a chart because i think it's important as we look at the deficit challenge that we look at what components are driving it. and what you see here is this is the deficit -- the debt is 8% of gdp. what you see beginning in 2001 if the black bottom line coming down very steep he peered down was cbo's projection of surplus at the time. in fact, about 5.6% trillion dollars -- excuse me, 5.6 joined others in projected surplus. we know by the end of 2011, we'd one of the worst reversals in fiscal fortunes we've ever seen. and you see the debt rising as a

percent of gdp. >> when's the last time we had a balanced budget?

>> we in the democratic alternative budget created a balanceed approach that creates needed cut, and as part of the budget control act, we cut a trillion dlafers over the next ten years, but our proposal also deals with the revenue side of the equation because if we don't get the fiscal house in order as dr. elmendorf said in the out years there's a slowing down effect that slows down the economy. as you pointed out, the alternative fiscal scenario has lower revenue; correct? >> much lower than under the extended baseline. >> and yet your -- you're projecting higher deficits and slower economic growth; is that right? >> yes, that's right. >> if we would just go to this chart, which is something cbo handed out.

it should be in everybody's packet. it's your one pager. because it points out the different components that make up the difference between your extended baseline scenario and the extended alternative fiscal scenario. when i found interesting in this was that in this comparison that you did, there's actually very little difference in the major drivers of spending, and in other words, if you look at social security and health care spending, under scenario one and scenario two, it's only .7% of gdp difference. in the year 2037, even when you go way out there; is that right? >> yes, that's right. >> if you look at all over federal spending, and as i understand it, one of the big components of that is you assume that we will not allow the

sequester to go into effect, nor will we replace the sequester with deficit reduction. correct about the assumption there? >> yes, that's right. >> okay. so if you actually look at these drivers, that component assumes that we will not replace the sequester and the gap in total revenues, plus the interest payments which result from increased debt as a result from less revenue, are the major reasons for the difference between the extended baseline scenario, is that correct? >>ic that's right, congressman. once debt agrees relative to gdp, it continues on that path, and interest payments start in the same way, and it snowballs in a very damaging way for the

economy. >> right. and in this chart, the major difference, i mean, the number one driver, the top driver here is the difference in revenues; correct? >> yes, absolutely. >> and so i want to make it clear, i'm not proposing that we adopt the revenue policies underlying the extended baseline scenario, but this chart takes the balanced approach recommended by groups like simpson-bowles, bipartisan groups. let me ask you about the debt ceiling which by most forecasts we hit possibly at the end of this year. what would be the economic consequences if the united states did not raise the debt ceiling? >> we think it defaults on american debt and it would be a devastating blow to the economy and the financial system. it's hard to know. we have not done it.

the -- we can't look to historical parallels in this country really in the modern era, but if a default were to occur in a sustained way, i mean, if -- if the obligation we took on really were not honored, that would be a shock to the financial system that is already -- in this country and particularly overseas, in a fragile state, and i don't know anybody who thinks we ought to let that happen. i realize there's disagreements among members of congress about what else, if anything, should go along with an increase in the debt ceiling, and i don't know anybody who thinks it's useful to go ahead and default on the debt. >> no, i think that's right, but i think it's grossly irresponsible for anybody to threaten that the united states will not meet its obligations unless we enact somebody else's

version of how to best reduce the budget. for example, the speaker has said that he would object to raising the debt ceiling unless we reduce the deficit the way the speakerments to do it. if i could just ask you, dr. elmendorf, have you had a chance to look at the house republican budget? >> we don't analyze budget resolutions at cbo, congressman. we looked at the chairman's own long term budget proposal. >> right. >> we released that in march, but not the budget resolution itself. >> do you know that the house republican budget requires, even if you adopted all of the provisions, which still require approximately a $5.2 trillion increase in the debt ceiling between now and 2022? >> i'm not aware of that either way, congressman. we have not studied that. >> if you could get back to us to confirm the fact. >> i'll do it for you. debt goes up in this country

under any budget scenario by the factors we talked about here. >> i just thought it was important to point out. >> oh, yeah, any scenario. >> the fact the speakers made a big thing about using the debt ceiling to achieve its political purposes that the republican budget that he supports would require a $5.2 trillion increase in the debt. >> and i introduced the speaker's comments last week to make sure they were accurately reflected. >> sure. >> with that -- [inaudible conversations] >> okay, doug, turn the microphone on or pull it closer. i guess the sound people are not capturing. >> it is on. >> a little closer. right up front. mr. campbell. >> thank you, mr. chairman, dr. elmendorf. referring something to what the ranking member mentioned about tax revenues as a percent of gdp, in 2007, i believe, under the current tax rates, revenues were 18.5% of gdp, and they are

down now into the same tax rates so my question or point of this is that the amount 6 revenue as a percent of gdp is affected not just by rates, but by economic conditions. >> absolutely, congressman. >> okay. so if we had a better economy today, you would have a a larger share of revenue even under the existing tax rates? >> yes. >> 18.5% is fairly close to historic avenue since world war ii, is it not? >> when the cbs talks averages, we use the last 40 yiers. last 40 years, revenues averaged 49% of gd. >> right, under the existing tax rates and a good economy in 2007, we had a larger revenue as a share of the economy, actually larger than the average over the previous 40 years. >> yes, that's right. >> thank you. next question relative to what we charitably call obamacare and on the other side they call the

affordable care act, do all 6 your scenarios, i believe, the alternative scenario and the baseline scenario, include obama care and that law being in effect; is that correct? >> so we use the term affordable care act arkses, congressman. >> i'll sure you do. >> as a lot of independent analysts do. under both the scenarios, most of the affordable care act is included. there's one point a little different in the extended alternative fiscal scenario. we turn off a couple of the the provisions that would redice the growth of health care spending in what was the second decade when the affordable care act was enacted. in particular, we don't allow the continued reductions in the growth of payments to medicare providers to go on, and we turn off indexing of the thresholds

for subsidies through the insurance exchanges. we take away a few features that would create greater slow down in federal costs than in the second decade. >> why did you turn them off in the alternative scenario? >> as we define in the scenario, it's viewed as extending policies in place for a long time, but also has modifying some policies that we think would be difficult to sustain for a long period of time, and the cut backs in payments to medicare providers are incremental. every year there's a lower growth rate. >> okay, so -- >> as years go on, it's hard earn and harder. >> you think they would not work, so you take them back? >> we think is would be more difficult, and we're trying to offer an alternative perspective. >> under either scenario then, total jut lays of the health programs with medicare and medicaid and f-chip program rises 78% under the baseline se

scenario and 93% over the next 25 years as a share of gdp. the medical costs rise by 78% as a percent of gdp under the baseline and 93% under the alternative scenario. that sunday correct? >> sounds right. >> biggest driver of expense increases in the budget by far, are they not? >> yes, absolutely. >> in a letter to chairman ryan, you were asked, cbo was asked, what tax increases would be necessary if you faye for all of this with entirely with tax increases, and you concluded that you would need a 33% across the board rate hike by 2023, 48% by 2030 and an 86% increase in all tax rates by 2050 in order to just keep a balanced budget under the alternative fiscal scenario going out.

>> you quoted numbers correctly, congressman. the experiment we were asked to look at is a case when the increased revenue came through increases in tax rates. it was another approach. >> i understand. >> it's broughtenning the tax -- broadening the tax base. >> i understand. i have a lot to say and 25 seconds to say it. i wanted to point out in all of 24 you have huge medical entitlement cost drivers, and you can't do an 86% tax increase. we have to deal with these things quickly. we don't want to make rapid changes europe did. europe's problems are because they let their european socialism they were not paying for go on too long so they had to try to fix it too quickly. we need to get on this right away so there's a slowly glide path to correcting the problems. thank you. >> thank you, mr. chairman, and thank you, dr. elmendorf. as i read page 4 of your

summary, and just paraphrasing it, to keep deficits and debt from climbing to unsustainable levels, policymakers need to increase revenues substantially, decrease spending significantly, or a combination of the two approaches. that's basically what your testimony has been this morning. >> yes, exactly, conkman. >> thus far, the congress over the last year has pursued reducing spending significantly only. i believe that under the agreement that was reached last year, if fully implemented, spending would be reduced by about $2 trillion; is that right? >> yes, congressman. >> no revenue increase at all? an entirely one-sided approach to addressing this problem? >> budget control act focused on spending cuts, exactly. >> and your testimony this morning is that if we continue to pursue that course of only cutting spending with no additional revenues, we will have to substantially reduce

medicare and social security, will we not? >> yes, that's right, congressman. >> and each time that the congress passes another tax cut without paying for any of it, $46 billion in a recent week for a business tax cut, $29 billion this week for a medical device tax, directed mostly at trying to weaken the affordable health care act, but still $29 billion a year adds up. each time they pass a tax cult without paying for it, that adds to the debt, and it would increase the amount of spending that would have to be cut directly impacting medicare and social security, doesn't it? >> yes. any increase in spending or reduction in taxes that is not justify set, not paid for through another policy change, it's going to push our debt above this trajectory under current law. under current law, very gradually declined, and have

quarter century from now is large by u.s. historical standards. >> your testimony this morning is if we extend bush tax cuts and make adjustments with the amt associated with those, and don't pay for them, that's $4.5 trillion in additional debt. >> yes, plus the debt service. >> plus the debt service that adds a significant amount. >> yes. >> so though congress has taken an approach of cutting spending by $2 trillion, one of the alternatives advanced for approval in the house this summer is that we have unpaid for $4.5 trillion of less revenue, and the impact will be significantly increase the debt if that were to become law and to make it merely certain we have to make substantial cuts in social security and medicare unless we wanted to have

uncomfortable debt. >> if those tax cuts were extended and no other changes were made to fiscal policy, that would make the federal budget jut look significantly worse, and the medium run and in the long run, and it would worsen the economic outlook in the medium and long run. >> yes, my concern is that those who continue to preach what may be a good rhetoric at a political convention that washington doesn't have a tax problem and only has a spending problem ignores the fact that we really have a little of both, and unless we have a balanced approach to trying to get our budget in balance, we ensure that medicare and social security as generations of americans have known them, will not be there for them, and that is is, i think, a terrible and unjustified cost to pay. as far as the spending side, because we do have to focus on both, you've talked about the fact that we don't just have a

medicare health problem or a veteran's health problem or a children's health insurance health cost problem, but a health cost problem generally, and one of those areas that some folks significant the might help us resolve that is to copy the federal employees health benefit program. from looking at that program, has it produced substantial savings that world help us avoid these problems? >> cbo has written about this before, conkman, and i'm not totally familiar with it, but the conclusion was premium increases in the federal employees program have been roughly comparable to increases elsewhere in the health care system. >> exactly. >> we show rates comparative of coast growth and the rest of the health care system. for different periods of time when pieces outpace other

pieces, but we see in general, as you commented, across the board increases in health care cost that jut paced the growth in gdp creating this increasing biped for the federal budget and state and local budgets and budgets of firms and household. >> thank you. finally, the experience then with the federal health program shows it's no panacea to solve the health care problem. >> thank you, time expired. dr. price. >> thank you, mr. chairman, and welcome, dr. elmendorf, to the committee, and i appreciate the long term projections you've made. i want to talk a couple items. first, the debt ceilings, friends on the other side often times use the language that people are threatening to and have the united states not meet its obligations. you're not aware of anybody threatening not have the united states meet its obligations are you? >> congressman, i try not to clarify the members of congress, and i said, and i repeat, i

don't know anybody who thinks we actually should default. i recognize there's a disagreement about what other policies should be confined with the debt ceiling. >> i think that's fair. >> we're talking about the debt ceiling, and if -- if a debt ceiling increase is required, and the options are to have no spending reduction and a debt ceilings increase, or a debt ceiling increase accompanied with a spending reduction, which has a more positive effect on output? >> in the long term, most economists that have cut back will weaken the economy, lower jut put unemployment. over the longer team, if the reduction in government spending is not accompanieded by other changes and thus leads to reduction in the debt, then that would be good for the economy. >> so a decrease in the debt, as

you mentioned before, lower debt results in more economic jut put. >> that's right. >> reduction in taxes, as you said earlier, lowers taxes and results in more economic activity? >> lower tax rates, in particular, and the many features ever of the tax code affect the economy. >> yes. >> but the lower tax rates, on the margin, help encourage additional work, savings, and that's good for the economy. >> exactly. that's what we attempted to include in the budgets. i want to talk about the economic variables used in this long term forecast, and it's my understanding that the growth rate utilized is 3.1%? >> it may be, i don't know that number. >> you also forecast the unemployment rate goes from the current rate to 4.5% by 2018. >> yes, that's correct. >> last week, it warned that if

the current law stays in place, and the tax increases goes in effect in 201 as scheduled, that the united states likely goes into resection for a period of time next year. >> yes, that's right. >> and so is it safe to say that a recession would contract, decrease federal tax receipts similar to levels seen in 2007 and 2009? >> it would karat them. that was a severe recession that brought ratings as low as they were a few years ago. we don't think they'd fall as low again. predicting a mild recession, but certainly the direction 1 the same congressman. >> so if the congress doesn't act in the current law is realized, would you expand on your perspective how this impacts the macroeconomy in terms of employment and economic growth? >> yes. we think that if the congress allows current law to unfold

through the end of the year, and into next year, that the economy will contract in the first half of next year, and it grows slightly over next year as a whole, and that employment will be a good deal lower and employment higher would be the case if a federal budget were not contacting in that way. later in the decade and beyond, then the path of smaller deficits would be good for the economy, and it would strengthen output in incomes. that's the baseline scenario showing here over time relative to the fiscal scenario. >> so the proposals that we have attempted to put forward, which are either keeping rates as they are, not increasing rates on individuals, and decreasing spending at the federal level, decreasing debt, the slope of the debt, would be a positive factor from an economic jut put, economic stand appointment? >> lower tax rates and lower

debt good for the economy in the long run. >> short time remaining, care to address the difference between the tax rates, marginal rates, and revenue to the federal government because our friends oftentimes confuse the two or use those synonymously. >> so in simple terms, revenue government collects equals a tax rate times the tax base to which the rates are applied, and our current tax base, well, we talk about the income tax, tax on all income or corporate levels, and, in fact, tax bases are narrower than overall corporate income, thus given the set of tax rates in place, we collect less revenue than we would if the bases were broader. raising tax revenue by raising tax rates hurt the economy. raising tax revenue by broad ping the base could help or hurt the economy depending on the nature of the changes. some of the futures, credits and

so on, are bad for the economy because they distort individual's behaviors and encourage certain things at the expense of other things in a way that's not consistent with the market price signals or consistent with social aims. >> ordinary , reasonable , an- on the other hand, there's features helpful in offsetting distortions that exist in the private market that achieve social gains. hard to make broad statements whether broadening the tax base is good or bad for the economy. for particular changes, we have the model and capacity, and our colleagues on the staff have the model and capacity to provide estimates to you and the colleagues about the economic effects, but it's hard to make general statements about the effects of broadening the tax base. >> thank you. >> thank you. doctor, we appreciate your patients in coming back -- patience in coming back again

and resist our efforts to use portions of them to justify our heart felt needs and sound bites. >> understanding my predictment, congressman. >> i continue to marvel how well you do it. i love how you used earlier the term "all things being equal." this is the thrust of your analysis is to let us know what's going to happen, all things being equal. i love what you said a moment ago in terms of how you structure the tax provisions because there can be some that can reenforce productive activities. some can distort economic activity. that could be the case, for example, for lavish agricultural subsidies, couldn't it? if they are borrowed dollars that distort the marketplace that encourage overproduction of something that may even have

environmental damaging impacts and shortchange things like nutrition support which like food stamps actually help sustain the economy. this is one of the things cbo ruled as a power -- as a powerful stimulant so, for example, all things being equal, if we got our agricultural subsidies refined, that might be something that could save money and improve productivity, couldn't it? >> it might be, congressman. we have not studied the -- >> and i'm not asking you to walk that plank now. i just want you to help me with the hypothetical. done right, we can reduce the deficit, improve productivity, and move forward. >> potentially so, yes, congressman. >> likewise, were we to deal meaningfully with reforming our military spending, some things like hundreds of billions of dollars maintaining a nuclear

arsenal that we're not going to use, hopefully ever, has less economic impact than lowering the deficit, reducing potentially taxes, or up vesting in things like education and infrastructure. suspect it poll that getting that right could boost our economy while reducing the deficit? suspect it possible? >> a whole variety of possible changes, congressman, and in federal programs -- >>but maintaining doesn't have a ripple effect or strengthen parts of the economy. this is more of drag on the economy than investing in education bridges or sewer systems, is it not? >> there's a positive multiply effect with other things, and as they pay my salary, they --

>> i understand the principles, and i'm not trying to trap you. i just want to put on the table there are some things that sl less of a multiplier than up vesting in our future. all things being equal. >> so, yes, in addition to the short term economic effects, talking multipliers in particular, short spending remits investments in the future and others for current consumption. >> that's one of the things that all things being equal, seems to me that if we were, in fact, investing as we usedded to in this country on things like roads and bridges and transit, improving sewer, water, and protection, these investments put people to work, family wage jobs, have economic benefit, and avoid costs in the future. isn't that possible, all things being equal? >> yes, congressman, and we have written about the economics of

additional investments in transportation and water infrastructure. we noted, for example, that according to the federal highway administration, there's a large number of highway projects that have benefits exceeding their costs. they are not currently funded. to fund all of that infrastructure investment would require a good deal more money from the federal government or other sources. >> yeah, well, thank you. i appreciate your patience with us. i guess that's the note i would conclude on because there are a lot of things that people on this committee, in their heart of hearts, could agree on whether it's refining agricultural investment at a time when we have virtually zero interest rates that we could finance long term investments for infrastructure to make a huge difference in all our communities, and i hope we reach the point where the cliff helps us reach it in a thoughtful fashion that makes a long term

difference to the economy and our future. thank you. >> thank you, mr. chairman. i want to have mr. van hollen's chart back on the screens if we can. okay. this chart i found to be interesting. there were two factors, i think, in play here that were not discussed. number one is in 2001 where the chart starts, we had a factor come into play, and that's when the war on terror started beginning with the attacks on 9/11 so i think that that fact was left out, and 2007, a political change occurred #, and that was when the other party assumed control of congress in both houses, and you see the huge increases in spending that occurred and the impact on the economy with the changes and regulatory environment. dr. elmendorf, when the stimulus bill was passed, it was widely believed that unemployment would

go down because of that stimulus program, but here we are three and a half years later, and we peaked to 10% unemployment and about 40 months of employment higher than 8%. the other side of the aisle is proposing to continue -- to have another round of stimulus. they change the name to investment and it's the panacea to solve the deficits and solve our debt problem we have in the country that you've done a great job of explaning. my question is this. can you explain in about 30 seconds or less why the stimulus didn't achieve its desired outcomes and what impact it's had on the debt and deficits? >> the economy has performed a good deal worse than expected and many forecasters expected a few years ago. in our assessment, and the assessment of most economists, i think, the recovery act created more jut put and more employment than would have happened without it. the underlying weakness of the economy, not unusual in

comparison to other countries that have had financial crisis induced recessions, but unusual for us, the under lying weakness of the economy has more than offset efforts of fiscal policymakers and monetary policymakers. >> that takes us to the next question, and i asked this question before. what is more efficient in terms of causing increasing activity? is it public sector spending or private sector spending? in other words, it's a choice between a solyndra expenditure or keystone expenditure. which is better for the economy? >> we have not studied those two particular. >> those are the poster chirp, 10 let's talk about it because they are the poster children. >> the -- in an economy where the con straint on output employment is a weak demand for services, an economy we've been living through for the past four

and a half years, additional demand from the private sector or government raises jut -- output and employment. >> what causes increased demand? what is it? i mean, can -- under that thinking that public sector spending can raise demand, i mean, you would have had a $4 trillion stimulus, but, of course, the impact on the economy would have been tragic because of impact on federal deficits and debts so isn't it better to rely on private sector spending for economic activity? wouldn't you want to do things that encourage private sector investment and jobs in our economy and paychecks than public sector spending? >> well, congressman, we've been clear that the extra debt accumulated through the recovery act, if not offset by changes later, leads to higher debt that in the medium term and long term is a drag on the economy.

>> correct. >> i think policymakers tried to both stimulate private spending and increase public spending. >> inappropriate to double down in terms of a failed program to continue -- if the stimulus version 1.0 didn't work, why does 2.0 work bet ensure >> i understand you don't agree with us, but it was not a failed program. the position is it created higher output in employment than would have occurred without it. we did testimony last fall of a collection of alternative proposals, some tax increases, cuts, spending increases that we think would spur output and employment. >> what would have had a higher impact? if you had $700 billion of additional gdp from the private sector versus $700 billion of gdp, spending from the public sector, which would have had greater impact on the economy? >> well, in -- over the past few years, congressman, that extra

spending, wherever it came from, would have led to more jobs. no need to think that this would lead to more additional jobs than extra spending in the public sector. over a longer period of time, the question 1 what sorts of goods and services have been purchased, and if the public sector was investing, then that's good, but it a private sector is investing, that's good in the long run. >> thank you. that was fast. >> i draw our own conclusion. >> we had the hearing on multiply effects where there's a difference of opinion on multipliers and maybe going back to the hearing, we had mr. zandy representing the cbo's position and mr. taylor from stanford with an alternative position. that hearing probably gives a little ill illustration to the point. >> thank you, mr. chairman, thank you, dr. elmendorf for your testimony. the cost of health care is frequently mentioned as a significant factor in increased spending in your testimony

certainly reenforces that. traditional approaches to addressing rising costs with care, rates, and in my state of oregon, we've come together in order to take a new approach, particularly regarding the unensured and our medicaid dollars, enand it was quite refreshing to see business, labor, republicans, democrats, educators all come together and work on this health care transformation that is with the goal of improving care while cutting costs and integrating and coordinating services including physical, mental, and oral health care. the modeling that's taken place, better preventing chronic diseases, using patient centered primary care homes, and improving and aligning care for individuals who a dual eligible.

the establishment of these coordinated care organizations is projected to actually improve care while reducing costs and increasing access. in fact, by coordinating services, oregon projects a 4.9 to 9.7% savings in the second year of implementation compared without the transformation to a 10% increase. this savings is expected to build over time, and i wonder if you can talk a little bit about how this type of change would impact the federal budget of a similar approach was implemented in other states as well. >> i think, congresswoman, there's a tremendous amount of experimentation going on in different states and different private providers of care and private insurers to get more value for the health care dollars. i think the ferment of experimentation is a very positive factor. it's also true that a number of

experiments have been tried over the years have not worked as well as advocates hope, and though some worked, it's proven more difficult to expand across different providers, settings, different states' health care systems. we've done a long and careful review of a collection of medicare demonstration projects in both value based payment methods and disease management and care accords nation, and these were medicare demonstrations. we wrote about this last year, and the set of demonstrations that medicare tried found that when there's a direct interaction between a care manager and physicians and in person interaction with parties where there's a lot of effort and energy focused on care coordination, that's modeling more likely to reduce spending, gross spending, but it also had its own costs in terms of paying for interactions so in medicare,

there's not yet been a model that's been used in any widespread way that's had the effects people are looking for of higher quality care and lower cost at the same time. it doesn't mean it cant happen. probably can happen, but people are still trying to figure out just how to do it, and just how to do it, as i said, in different sorts of settings. >> right. >> the affordable care act introduces a lot of different programs, particularly the center for medicare innovation as you know that's designed to do more experiments faster, to reach conclusions more rapidly, and then to be able to extend the successful programs across the system more rapidly, and we think that will have some positive effects, but how large effects will be and just what arrangements turn out to be most effective we don't know yet. >> well, thank you for your testimony, and i know that we'll all be watching what's happening

in my home state as well as those other states because until we increase access and address the high costs of chronic care, we're increasing costs, and we need to be keeping people out of emergency rooms. i appreciate your testimony and yield back my time. >> thank you. >> thank you, thank you as well for being here. let me talk about page 35 of your report. you have an interesting section of something i talked a lot about as well, and that is the effect of government borrowing, and what effect that really has on the any as a whole, and the top paragraph there generally draws money away from or crowds out private investment in productive capital leading to a smaller stock of capital and longer output, and the porks of people's savings used to buy government securities is not available to finance private investment. the description you made this, talking about what you spoke about often as well, this effect

that the more that we borrow, the more we require of capital that's otherwise invested into productive things rather than just sovereign debt. that is is occurring worldwide currently. this trend, as you say, and i'll ask you this in the center of your -- some of you want to talk about it or not, but that issue is happening in europe, other parts of the world, and as well as here. what's the effect currently of the crowding out of investment worldwide based on sovereign debt? >> well, the countries in europe have a collection of overlapping problems as you know. >> right. >> they have a banking crisis. they have a fiscal crisis. they have a growth crisis, and as we wrote in an issue brief a few years ago about the risk of a fiscal crisis in the united states, once one ends up in that situation, then there are no good options. countries that are unable to borrow at affordable rates feel the need to cult back on -- cut back on borrowing, and at

the same time increase in spending or revenues slows the economy and therefore worsens the budget situation. it's a vicious circle. we think that the european economic situation is weighing on the u.s. economy now and has the potential to be a much more significant negative force if they don't find a way to keep their system going. >> but it also is a benefit to us in that it keeps our interest rates low because people don't invest in their sorch debt, but they invest in ours. it's a double-edged sword that, yes, it's slowing down the country, but keeping interests rate on our debt. >> yes, it's pushing down treasury interest rates because they are engaged flight to relative safety, but it's weighing on other parts of the financial system, and that's where the biggest risk lies if they have a larger collapse in their financial system. their potential of very large negative spillovers to ours. >> right.

you mentioned tax rates and marginal rights and such and that increases productivity or at least activity in the economy. can you factor in certainty and uncertainty? there's a constant that we don't know the rate next year mentality. rates are tweaked out every single year. can you factor in the difference between certainty and uncertainty in marginal rates? >> it's very difficult to quantify. we think the uncertainty about federal policies on a whole variety of areas including the tax code is weighing on the economy. it's a negative factor. it's hard to know. >> as we walk through this year, at the end of the year, there's common discussion about the expiration of tax rates from 2001 and 2003. better to resolve those earlier or better to resolve those later? we have six months to do either of those. it's not early even at this point. >> earlier is better, no doubt. >> okay.

do you think it's possible to address our national debt burden or deficits at all without dealing with major entitlement programs? >> well, congressman, as i said in the beginning, it is possible to maintain social security and medicare and medicaid as they are under current law, but only by substantially raising taxes on a broad group of americans. similarly, it's possible to maintain taxes at their historical average share of gdp, but only by making substantial cuts relative to current law in large entitlement programs that benefit a broad section of americans at some point in their lives. that's what makes this choice you and colleagues face and that we as americans face so difficult. one can can pick to hold one part of the budget as it otherwise would be, but given the gap between revenues and spending under current policies, then one has to make even

larger, even ma dramatic changes in the other part of the budget. you can see that in our extended baseline sewer their -- scenario here, and what is an alternative vision in chairman ryan's long term proposal analyzed in march that holds revenues down and makes large cuts 234 a number of federal programs. >> either way, earlier is better to resolve this? >> certainly for longer term issues as well, earlier is better because it gives people time to plan and adjust and gives you a chance to phase in changes gradually, and yet have them take effect in a way that's important in dollar terms before the debt gets larger than it has today. >> thank you. i yield back. >> thank you, mr. chairman. dr. elmendorf, this is interesting we talking about cuts in the entitlement programs a lot, but i'd like to talk about another program, and in

your assumptions on that in your two scenarios, and what were your assumptions for the defense spending as a percentage of gdp? >> defense spending? >> defense spending. >> so what we do for our long term scenarios is we just take the set of all programs apart from -- >> i understand. i just have a few minutes. just tell me what it is. >> we don't have a explicit projection of spending. >> you don't? >> beyond the 10-year window. we have a specific projection -- >> and that is? >> i'm not sure i have -- >> well, then you'd have to look for that. so maybe you can get back to us, if you can, answer this question. mr. romney, who is the republican no , -- nominee vowed to never let it go to below gdp, what's the impact of a sustained level of spending

over the remainder of the decade? that is, never go below, didn't say anything, no qualifiers for global security environment. what would that have on the effect of domestic discretionary spending under your two scenarios? >> well, in the baseline, congresswoman, this all other category is only 7.3% of gdp in 2022. defense spending were 4% of gdp, leaving just over 3% of gdp for all of the domestic programs apart from this handful of large entitlement programs, and that would be a dramatic reduction reel titch to historical average. >> so there's a plan on the table for mr. romney, and i mentioned his decision never to allow spending to go below 4% of gdp. he also talkings about cutting revenues of $6 trillion over the decade by making bush tax cuts

permanent, cutting the rate from 35% to 25%, eliminating the state tax, capital gains tax, taxes on diff depped earnings as well as other tax breaks. when you add the increase to the defense spending, what would be the impact on the deficit with all the other cuts to revenue that he's talking about having? what effect would it have on the safety net of entitlements? >> congresswoman, i'm sorry, we've not analyzed mr. romney's plan nor analyze plans of candidates for office. >> you have two scenarios -- >> [inaudible] >> there's two scenarios. one in which you have the tax cuts, not, you know, not having the sequester happening. mr. romney is talking about undoing that, and then increasing defense spending. i mean, what -- what would be

the effect on the safety net in the entitlement program? you have a scenario in which the bush tax cuts expire, the corporate rate doesn't change. he's talking about undoing that. >> right, if you extend all of the tax policies that are expiring as we do in the alternative scenario, but then that, by itself, puts that on this steep upward trajectory. if onements to then maintain the slight downward tray trajectoryy need to cut it by trillions of dollars. >> so it would be -- that scenario plus more spending for defense which would even mean -- >> increase defense spending relative with current law and still wanted to keep debt on a downward from geek story, we have to make larger cut backs in other domestic programs. >> thank you. thank you, mr. chairman. >> thank you, mr. chairman.

thank you, mr. elmendorf. enjoy your testimony. i want to talk about interest rates and segue that into taxes. on page 32, one of your points under interest rates say an increase in government debt increases interest rates to people to allocate savings like treasury bonds and thereby crowding out capital goods. can you talk a little bit about our -- does your report here touch on why are interest rates at record low levels right now? >> we don't talk about that here, congress mapp. we will in the regular forecast update. the principle factors seem to be a weak economy, and thus weak private credit demands, and a flight to relative safety,

particularly in europe, that are in an especially fragile state right now. >> qe1, qe2, that's obviously playing a part of that. if that expires, are we going to see interest rates increasing in the near future? >> well, they will -- more focused on the longer run rates, and brought down longer term rates, but when one looks at financial -- one looks at financial markets out beyond the next few years, say out later in the decade, they are expecting noticeable increase in interest rates, short term and long term interest rates, and the economic forecast included in it noticeable increases, and later in the decade, looking for a short term rate colossian to 4% and 10 year rate of 5%, and that's consistent for the readings in financial markets. >> on page 43, under the bullet

point for the need for higher taxes and less spending on government programs, am i correct from what you stated earlier, you talked about rates versus base, and there's rhetoric here in washington that republicans are against revenue increases when, in fact, in our own budget, we address the tax policy, and suggest that we go to two tax rates at 10% and 25% tax rate, am i clear -- clear that you're discussing one scenario versus the other where there's a tax rate increase which you are discouraging what the expiration of the tax rates, or in your alternative scenario, a broadening of the base. do you discuss those in the report? >> no, we don't. i mean, we're not trying here, particularly, to explore the details of alternative tax

policies. current law would have a certain set of things occur, trying to capture that in the baseline scenario and alternative scenario tries to capture expiring provisions. turns out that under alternative scenario, one extends provisions that tax rates are kept low and base that has not changed reallt turns out under current law there's some effective broadening of the base because more and more income is taxed which has a broader base. >> so broadening the base would be -- would not hurt the economy the way that raising the current rates would affect the economy; is that correct? >> regimely -- generally true. it depends on the nature of the broadening, and particular provisions might be broadened in se a tax reform plan that

congress provisions and we are prepared to talk about the economic effects of those. >> okay. thank you. mr. chairman, i'll give it back. >> if we had more people working across america, would the debt and deficit situation be improved? >> yes, absolutely. >> can you tell us if we had the -- if the unemployment rate was 1% lower how much better our debt and deficit situation would be? or 2%? >> i did not bring that magic table. this is the second time i wish i had. we wrote a letter to congressman matt hollen talking about the effects on the economy if the price on the budget if the economy were stronger. we said a third of the current

deficit goes away if the economy were somehow immediately put back close to full employment. >> see, that's one of the frustrations because there is absolutely no dialogue from my friends on the other side of the aisle as job creation is part of debt reduction and deficit reduction. we could really give a boost to this improving economy if we could do some things on jobs. i mean, here are positive signs. we had 27 straight months of private sector job growth, manufacturing employment continues to trend upwards, consumer confidence is up, the median home price, sales figures are up, corporate profits are up. things are trending in the right direction, and here, the congress could be really helpful in job creation and in deficit reduction if we could come together to do some things on jobs, but unfortunately, my

friends on the other side of the aisle lost the jobs plan put forth last year that said, you know, let's rebuild schools across america. that would put a lot of people in construction back to work leaving us with better facilities for students. they have stalled the transportation bill. i mean, look at the transportation bill, when do you have 75 votes out of the united states senate on a bipartisan bill, and yet that's been stalled for months and months and months, and i heard your earlier comment with infrastructure. you said oftentimes benefits exceed the cost; is that correct? >> that's correct. there's a lot of projects not being done on highways, for example, where the benefits to the economy would be a lot greater than the costs. >> and then when you factor in the republican budget that was passed, that's a prescription for disaster when it comes to the future plans for this

country because they so slash the important investments that government and the private sector work on together whether it's in scientific research or it's in infrastructure, in education, and i think think their one-sided unbalanced approaches is really going to cause great damage. i think it's causing damage now because we could come together now to take a good whack at the debt and deficit if we could do some things on jobs, so i'm hopeful we -- there's still time to do it, but i hear your message loud and clear, sooner rather than later. thank you, and i yield back. >> thank you, ms. black. >> thank you, mr. chairman and mr. elmendorf, i always appreciate your reports. i do read those and highlight them and learn so much by those. thank you for your work. i wasn't going to go in this direction, by i just have to address what the gentle lady from florida was talking about,

ways to raise revenues, one is to tax people more, and the other is to have those employee pay taxes which then raises revenue. i can't let this go by to say as i visit with my job creators in my community that what they tell me is there's so much uncertainty out there this is why they are not growing. the urn certainty creates paralysis. giving them certainty and looking at what you're saying on the budget outlook and helping us to understand where the debt drivers are help us to make those decisions on policies, but we have 30 pro-creator -- comiews me, 30 pro-job creator bills laying there that have not been handled by the senate. i want to go to the area, though, when we look as those areas driving our debt and the long term debt of the country, what do you say the significant drivers are? >> well, the feature of the budget that's becoming more different than it was in the past is spending on the health

care programs and some extent spending on social security because of the rising costs of health care and the ages of the population. >> so those two drivers most significant we continue to hear about in the budget forecast you give to us in other ways are social security, medicare, and medicaid? would you say those are the biggest drivers? >> big changes. >> okay. >> what you decide to do in response to those is, of course, up to you. >> if we could bring up the first chart taken from the cbo report, but put into a chart that i think, is easy to take a look at, we see historical average versus what the if no changes in any of the programs, what happens under the current law so we see what has been the historic level of spending on these two areas, mr. elmendorf? do you agree -- >> i can't check exact numbers, but it captures the gist of the point, congresswoman, which is that social security and health care spending are on track to be much larger shares of the

economy than they are today, and there are a larger share today than there were over the past several decades. >> so if we just take a look at the two categories, they represent about a quarter -- about 25% gdp, and looking historically, we go up to 60. we see here total revenues, not a lot of room left for anything else in the budget. would you agree with that? >> yes, and i should say that picture, i think, congresswoman, the 237 under current law, rev news are 18% of gdp. that's the extended alternative scenario. under current law, revenues rise a good deal more. ..

we see here that at 2037, our total spending far, far outpacing our total revenues that may see howard that continues to grow. and i think that these charts, as if it is out there for people to see rather than this report that are so instructive. every time to read these, that's great. but when we take a flash of teeth in niche artform, and it's got to break except to say there's got to be some changes

as they move forward into the future. >> that's absolutely right, congresswoman. we cannot go back to policies of the past. again, people are clear under current law is the alternative scenario. overall spending is that a large part because of the bush and interest payment reflecting the gap between the amount interest spending and revenues for all the years between now and 2037. non-interest spending would be a good deal higher in 2037 than it has an historically, the not so much higher than historical averages. >> you can take a lot of scenarios and do different things these charts, but the most important thing is when you look at a chart form such as this, it is got to be striking to us that we've got to act on this than we do have some alternatives out there and hopefully will get serious and get out of the politics and address these and get it done for the american people. thank you very much. >> thank you. last but not least,

ms. schwartz. >> thank you berry patch. i appreciate your testimony and patience. i wanted to follow up. actually was good to follow a and the charts could be -- i was interested in your and their on a chair because you just spent two hours telling us it is not just spending, is also revenue. and that last chart really ignores the fact they could do something about revenue. i'm surprised you didn't say that yes, it is not just spending because you just said it many times at the problem we're facing in terms of deficit and the dramatic increase in deficits and the national debt relates to both spending and reduction in revenue. that's true. >> beyond sustainability of fiscal policy is the gap which means spending and revenue and whether you and your collects used under current policy you

choose to resolve that the recent tax revenue or cutting spending is a choice you can make. >> that last charge is shown as based on the fact that there will continue to be the lower revenues built on the fact that there are, as an assistant on the republican side that instead of looking at both spending and revenues and recognizing that we cannot, given the dramatic concerns about data set, we cannot nor the revenue side. and you pointed out how we do that is for us to decide. whether we maintain those tax deductions for our largest corporations, whether we can afford to do that is completely at work then i chart. i just want to have you make absolutely clear that it is a choice the republicans are making to take home a look at the spending five and refuse to look at the revenue side. and in fact, revenues -- reduce

revenues that they want to continue -- make your choice to continue to reduce revenues. they have said: discussion about tax policy as if it is mutual. no new revenues, even if those tax reductions are not country remained to economic growth. even if they don't do everything. >> with a general idea of quick >> no. would you speak to that? >> you are certainly right, congresswoman that the explosion of debt and interest payments that we show under the extended alternative scenario could be addressed either by reductions in spending relative to that scenario or increases in revenues. >> or a combination. one of the things we have put forward a tennis all the time that such a sorry that choice. we put together, democrats have put together a budget that is

clear about our insistence that we will deal with the deficit and create that certainty in a way that does not hurt our fragile economic recovery and boosting economic growth, but would like to see more. i'm the only way we'll do it in a free bipartisan commission has said it is got to be both looking at the revenue side, getting rid of tax deductions that do not grow the economy despite the other side saying job creators have not created jobs. the provisions they don't create jobs, they don't create economic growth we can get rid of those so we can see something on the side of revenues but of course we will cut spending. we have already. we have made that commitment. the trillion dollars this series, and so could you just -- this is really about choices that we are making and it is about choices we take all of it out of the spending side, that

we walk away from our commitment to seniors on medicare, which is of course republicans have voted for time and again. that would look away from investments in education and innovation and growth industries. and yet has pointed out on our side, walk away from potential investments now such as in transportation infrastructure that not only grows jobs right now, but actually help economic growth in the dirt by creating demand and create an environment to chris johnson encourages companies to stay here and invest here and grow jobs in the air. it is certainly possible in your testimony at the last 21st have suggested that we have to take a bounce to approach and we have to do is sit at them later. >> as you know, i can tell you what approach you should take. you are absolutely right that you and your colleagues in the citizen the fundamental choices about the rule of the government and our society, what we want to

do collectively versus what we want to do privately. the truth are forced upon us because we have a set of programs that are becoming much more expensive than it used to be. >> and reduce revenues. >> thank you. >> thank you, mr. chairman. i appreciate you being here. i had a couple follow questions earlier from one of my colleagues in reference to the stimulus package on why it didn't work. i want to refresh your memory. the administration and i present the cbo had to the same outcome was more outcome did that roughly the unemployment rate today would be 5.7% if that had work as the economists, most economists i guess in town have promoted that today of course 8.2% as the unemployment rate. the difference is 13 million americans are not working today that were project it. he said the economic recession

was first a mistake here. well, can you tell me what numbers were last? the reason i ask this is not a cut you question. i'm trying to find out who was astounded accurate job of predicting because the folks that said we need to spend our money were very, very wrong. can you tell me where you and others were gone as far as the economic figures who were using for that type of projection? tonight yes, congressman. economic forecasting is very hard. we released a regular update and a good way to phrase that, to summarize that is we are no worse than other economic forecasters. to put it that way it's very hard to do. for our case and from many forecasters, the u.s. has not experienced a recession of the magnitude of the one we just lived through since the depression. we have become used to have been infrequent and fairly mild recession and we another forecasters expected this to be like that. people who had studied more

carefully and other countries in the financial crises were saying from the beginning and the sort of situation we should be looking for a much longer and more pronounced downturn this country may turn out to have been right. i want to be clear about the facts of the recovery act. there is disagreement among economists about the size of the multipliers and reflecting that agreement we show ranges of estimates. there is only a small fraction of the profession that thinks the recovery act was not good for the economy. >> and i appreciate that. but what particular figures, just in general you say most economists were generally wrong or were the specific indicators that were missed. and this gets pretty political because we have folks suggesting and maybe yourself that it wasn't big enough that we should spend our money and according to your report on page 34 companies suggested we could spend more money somehow that would grow

the economy and after spending $880 billion at the $1.1 trillion cost to pay it back, i cannot figure out what economic indicators were mixed to suggest that we should have another stimulus to just spend our money of any type that somehow it will grow the economy. what did you another economists know specifically that led to this huge jobs to between what was projected by the folks that produce the stimulus? we talk 13 million americans would like an answer to say worded washington mess up? you say most economists think it should have worked. it didn't. >> and the gentleman yield for a second? >> yes, sir. >> if i'm not mistaken whether it is above one or below one. is that not the case? for mr. bernstein multiplayer click >> the question of whether the recovery act is above or below zero.

can i just put into the transcript on this regard, there's a question at the university of chicago that they do regular survey to distinguish economists at leading universities and issues a public dollars the to show where the agreement lie. >> whether a dollar spending produces more than a dollars worth of economic outlook are yes. >> because of the american recovery and reinvestment act in 2009, the u.s. unemployment rate was lower at the end of 2010 than it would have been without stimulus bill. >> that was the question. the question with a question mark at the end. it was phrased as a statement. because of the recovery act, the employment rate for sovereignty and 2010 and would've been without the stimulus bill. 80% of the respondents agreed or strongly agreed with that statement. 4% disagreed or strongly

disagreed. >> i'm not sure if sean taylor's in this group. that is a distinct minority. >> here is what i think getting that. what was the multiplayer? i think it was the bernstein rohmer. i cannot recall who came up with a multiplier to generate those stimulus projections. what was the multipliers they use? was a two-point something click >> add-on to what they did. >> i know people that he is getting at is how did they get it so wrong of projections? my question is, what was the multiplayer to houston was the multiplayer not outside of the realm of the most economists thought it would have been? >> i just don't know what they use. we went through the literature. for the data set of multipliers from the evidence the economists are generated. >> yours is one point something, right click >> for every permission, the multiplayer is different.

i think for the recovery act of the whole, with the spending increases in the end we thought the multiplayer on average was about one. very abrupt turn a nasa we've been reporting. >> can do is point out the top of my head, if i'm not mistaken, i think this bernstein, goes to something, was it not? choice, and you know the answer to that? >> and may have been. they're not trying to rebut what they do. we did our own analysis and can speak to that. >> mr. chairman, since we are now over the time -- the question is whether or not the recovery bill, the stimulus bill helped the economy relative to not do any stimulus. the interim cbo and 80% is that it helped the economy. >> what mr. hill's camp is getting out that the claim is to solve the stimulus was based on the multiplayer that clearly did not materialize, which is much

higher than what cbo claimed it would be. i think it was 2.1. >> we started doing our analysis. >> the administration was selling something and they oversold it. >> i just about everybody to put the congressional budget analysis on this exact issue raised a couple times, which made clear as a result of the recovery, we saved or created over 3 million jobs. they talk about it on a year by year basis. for those people that have those jobs, it's pretty meaningful. >> the administration claimed unemployment would never get about eight and millions more jobs have been created and they plugged in the multiplayer that very few economists support or justify. mr. mcclintock. >> can i say one more thing click >> not on my time. >> we are doing a report right

now i'm a slow recovery. we are trying to understand better where we went wrong to improve our forecast moving forward and provided that the way that will be available to you and your colleagues in a few months as part of our preparation. >> i actually started the mantra after your time. >> no, you did not. >> okay, you're right. i appreciate that. i wasn't around here and i'm going with the numbers provided by the administration. he says 5.7% am writing this so far off. as we go forward and i look forward to that report, one thing i asked to put and report if you can make an estimate as mrs. black indicated, what is the economic risk and uncertainty clicks that is nowhere in your report and that's a difficult thing to measure. >> thank you for the indulgence.

mr. mcclintock. >> it reminds me of the economists who says that might be true in this, but how does it work in theory? i think we've run mcclintock's rule of physics, which is the more we invest in their mistakes, the less willing we are to admit them or the corollary of that is the conceit of a somehow a consensus determined science or economics. the sad fact of the matter is if 80% of economist turned out to be wrong, and the fact is 80% doesn't make it right. it is still wrong and that has been the experience we've had and why your testimonies he greeted with a certain degree of skepticism now. but they respect to the question of default, does the secretary of the treasury have the authority to prioritize payments to ensure the timely payment of the government sovereign debt obligations? >> i think that is right, congressman. >> i think it is, too. in fact i think it is undoubtedly a establishes the department of the treasury.

so sovereign debt default would not be an act of the congress. it would be in all seasons of the executive in craters in payments to assure timely payment of her sovereign debt obligations. >> i cannot speak to the legalities of this. i can speak it into a sense of economic consequences. >> ms. castor called the budget passed by the house last year a disaster. i recall standard & poor's warning that a deficit reduction of $7 trillion from the baseline over the next 10 years so what was necessary to preserve the aaa credit reporting of the united states government. i specifically asked the head of their sovereign debt division if the budget adopted by the house last year, the so-called brian budget would've preserved the aaa credit rating of the united states government. his answer was that would have. you have any reason to contradict that?

>> i have no view on that one way of the other, congressman. >> i have some friends on the list you seem to think that is a disaster. >> dummy talk about the relationship between tax and deficit if i could. tax has often been put forward as an antidote to deficits. you've essentially said that in your testimony. but our taxes and deficits the same thing click start deficit the future attacks? our taxes and deficits the only two possible ways of paying for spending? >> i think that's right, congressman. in the long run we need to bring our spending and taxing into rough correspondence with each other. borrowing today -- >> whether you are taxing today or you are taxing tomorrow, which is what we call it that say, you are still taxing the

two ways to pay for spending. it seems to me with apologies to the clinton campaign, it is the spending. >> when we run up the debt today, that does not commit us to do an even more taxation or less than in the future. which it is depends on the congress. >> can you offer any samples that has ever spent and baru the way to test dirty? >> i'm not sure what you mean by that, congressman. prosperity cancer in the ability of an economy to produce prison services from about the quality of the labor force and nature of the capital activity and so on. >> going from theory to actual practice, i looked back over the 20th century in the beginning of the 21st century and i see hardy in reducing spending as a percentage of gdp and early 20s. truman reducing in the mid-1940s. greg and reduce them in the 80s and clinton in the

mid-1990s and each. follows orders followed by a rather traumatic expansion of the nation's economy. and yet i see when spending is dramatically increased, hoover in the late 20s and early 30s, roosevelt throughout the 30s, bush and the 2000 the economy has languished. what are we to draw from the practical experience that is quite consistent over the past century click >> the practical experience that is hard to interpret the near sane. different countries and how they perform on the table in front of me. germany, which is one of the stronger european economies being relied on by others in europe today have a much larger share of gdp click in tax revenue. >> that's not what i'm talking about. spending as a percentage of gdp.

>> there are countries in europe that have different spending and tax policies. >> i just saw a per capita dollars, per capita spending in the united states is higher than it is in european countries. >> we are richer than they are, so share of gdp goes further. >> if we continue policies we can fix that in a hurry. >> no, i'm using my time, mr. chairman. he referred time to let people invest in errors and are willing to admit them. i'm not sure if you refer to our analysis or policy making, pathetic to say we continue to read the literature and we have in fact suggested a range of estimates of the effects of the recovery at response to put we have learned of the process, but we have not adjusted to include effects for loser because we don't think it's consistent with the evidence that only 4% of economist seem to think it is an 80% think it isn't.

so although we do respond to the evidence and are not afraid to admit that, were very clear we change our views on why we think again that the great majority of the economists was not good for the economy of the past for years. >> thank you, mr. chairman. was a stimulus bill at the recovery at the only way we could have helped the economy click >> no, congressman. there's a whole collection of alternative policies that could have been enacted. and we been asked a number of occasions by the senate budget committee to look at alternative ways of providing a boost to the economy, we have offered a menu of options we that's what the likely effects of being pros and cons of the way we've been proceeding. >> is also fair to say the recovery acted out to the deficit? >> acted out to the debt click >> yes, that's right. >> what is the effect of borrowing money going into debt and deficit have an or q.'s

>> well, over the medium-term and long-term, extra double crowd out information on the sentence in february 2009 is the recovery act was then being discussed would be good for the economy, perhaps another changes would be a drag later on. >> selector look at the president's budget proposal for the next decade, i seem to recall seeing, i think, every year for the next time, our deficit exceeds $1 trillion then our long-term debt continues to grow. i do not know what% of gdp that is off of the top of my head. so to your point that at some point in the long term, which is what this report talks about, we have to change, as you said, the ratio of debt to gdp and we have got to change our tax revenue to our expenditures. now, it is suggested by some

that the way to do that is to increase taxes. if we increase taxes -- let's say we increase every single tax rate, does that does suggest with more long-term revenue to the treasury? >> in general, congressman, higher tax rates will lead to higher revenue. who will be some effect on people's behavior, but in general, higher tax rates starting from today or has been talking about over the next decade, i think increases at that point would lead to more general revenue. we could find specific taxes. we have to check in that way. >> so the reason is an alternative to raising tax rates to trying to fix and solve this problem. but as i revenue today? 2.62 trillion? >> he think i would know that, congressman, but i don't. we think this year that revenues will be about $2.5 trillion. >> $2.5 trillion, but we will

spend about 3.5 click >> about 3.5. >> but we still look at a trillion dollars deficit. >> we are. we don't think you will persist at that level under current law. but the president's budget does have larger deficit than under current law. >> one of the things i want to get on the record that you met talked about before, so i apologize if you have. in terms of health care entitlements, the cbo report is 5.4% of gdp are they spending in 2012, which goes up to 12% of gdp by 2050. so that is clearly key driver of our long-term fiscal problems, is it not? >> that is something different from the past. that is the part that means we cannot repeat the policies of the past. again, whether that is addressed by you and your colleagues as changes in your program or other changes in taxes is that to you.

the fiscal problem and imbalance comes from the gap, not either side or the other. >> if we eliminate discretionary spending, we would still have a current deficit and was still have long-term debt problems. >> i haven't tried the complete elimination, but when i start it, change one makes in programs outside the health care program in social security can affect the magnitude of changes needed in taxes or large entitlement program but it doesn't eliminate the basic trade up for you to either change taxes relative to current law or do some combination of both. >> are you to comment on the unfunded liability numbers and mandatory side click >> i don't know, congressman. we don't calculate in dollar terms like that. we generally show projections, as shares of gdp. and we show some imbalances in the social security trust fund

and wish you a fiscal gap for the economy as a whole. but that is just the gap between spending and revenues. it's not meant to capture all future revenue. thank you, congressman. >> thank you very much. i think that concludes our questions. dr. elmendorf, thank you for your hard work in putting this insightful hearing report together in this hearing is adjourned. [inaudible conversations]

>> up next >> a witness from bloomberg news said it may go to court to stop the labor department plan to change the way employment statistics are released to the public. one of the reasons for proposed changes is to prevent stock traders are getting jobs numbers before everyone else.

this portion of the committee hearing is two hours. >> good morning. the oversight committee will come to order. we have the oversight committee exists to secure two fundamental print the bulls. first, americans have a right to know the money washington takes from them as well stand in second, americans deserve an efficient effective government that works for them. our duty on the oversight and government reform committee is to protect these rights. our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. we will work tirelessly in partnership with citizen watchdogs to deliver facts to the american people and bring american reform to federal

bureaucracy. when president obama took office, he promised the american people to have a more transparent administration, the most transparent frustration in history. from that point on, this was a standard that the obama administration would be held to. almost four years later, more and more it seems that there are not shown the actions of this administration they just the opposite is true. the department -- the u.s. department of labor yet by secretary hilda solis has unilaterally changed the method in which the media accesses the bureau of labor statistics jobs data. this unprecedented action has serious freedom of the press implications. let to be no doubt, we appreciate the need for simultaneous release of this sensitive information. but that has been accomplished

for more than a generation three procedure that was much more effect to -- as affect the remarks at will to the media health. the abrupt nature of this change coupled with the absence of a clear explanation and the lack of public input raises key questions about what this decision to implement this change and why. to that individual have the authority of law? at the committee has examined, this isn't the first time the issue is, concerning the labor department's reach into the bureau of labor statistics. you will ricardo padilla will receive 500 million of stimulus funds to train workers for so-called green skills. but an audit by the inspector general found the program to be an utter failure and represented a tremendous loss to the taxpayer. this included training for

occupations that are hardly green, such as welder, sheet-metal worker and machine operator. certainly those are jobs that may be needed. skills are valuable, but there's not all of a sudden green after hundreds of years has been around as a profession. aside from the excuse ways that perpetrated the department of labor, they've been using the guise of green jobs to justify ongoing funding of the presidents green agenda. however, the standard they have invented includes counting as a green job in addition to the wealthier college professors are now green. environmental reporters are now green. policy experts and a think tank can be green. in fact, lobbyists can be green. now i've been in washington for

nearly 12 years. there's a lot of green with lobbyists. none of it should be counted as an environmentally green job. there are 33 times as many so-called green jobs in the septic tank -- you can't make these things a coming guys. at the taken portable toilet servicing industry as there aren't solar energy and utility areas. within 160,000 of the screen jobs are related to school bus drivers. using these type takes to manipulate the number to mislead the american people is nothing short of embarrassing and that the trail of the standards the president to bomb established for his administration. transparent bbq with honesty. you cannot send out false propaganda and say you're trying parent. the truth is essential. the barest of the truth is

essential, unfiltered if you are to be transparent. we'll appreciate the administration has an opinion of the chairman is sometimes different. we're entitled to opinions. we are not entitled to or fax. is it any wonder that such can you, why there is such can turn now the secretary solis department wants to unilaterally change in control of the press receives job number from the bureau of labor statistics? of course, when invited to appear today to explain why this change and freedom of the press would occur, secretary solis turned on all invitations and offered us alternatives. we appreciate those who are here as alternatives. however, ultimately if you're the secretary of labor, the bucs to shop with you. if it doesn't stop there, where can the americans believe it

stops? it doesn't stop at the white house if the secretary allow something to happen and then doesn't have an answer. we will hear more about that today and i hope it will send a clear message to the administration. with that, i recognize the distinguished member for his opening statement. >> thank you, mr. chairman. i thank you for holding today's hearing which focuses on two very different topics involving the department of labor and bureau of labor statistics. first off is the integrity of the department of labor's job reporting. department of labor strikes a balance between preventing the unauthorized release of key economic data and providing journalists with that estimate data ahead of time so they can prepare their stories in context about the broader deployment situation. this balance is very important.

we are in the public sizing errors, so it is critical that they have the access necessary to ensure that they have a thorough and accurate understanding so that they can place in context. a leak of this data could have negative consequences reared for example, enhances certain traders, early access to this data, even if just by a few seconds or other powerful trading on korea times to manipulate the market and reap millions of dollars, that is by the departments and other data reporting agencies employed procedures to prevent unauthorized releases recently the department of labor hired sandia national laboratories, which oversees security of our nuclear arsenal to evaluate whether changes were able to a new security requirements of

today's changing technological environment. sandia found significant vulnerabilities in the department's procedures and recommended steps to mitigate those risks. sandia also warned that those seeking to break current security controls are profit driven, technically sophisticated individuals or organizations who may have a durable resource is at their disposal. acting on cindy is recommendations that the department announced new controls on hardware and software in the lockup environment. in addition, the department has now excluded specific firms access to solid data to wall street traders a fraction of a second before other traders see a. initially, some in the media complain that the department's proposed changes pursue

restrictive in these complaints appear to be in the impetus for today's hearing. for the past month, the department has worked with the fresh outlet to accommodate their concerns while enhancing security. we anticipate there'll be an additional amount that -- that there will be additional announcements regarding the ongoing discussions soon. the second topic of today's hearing appears to be how the department of labor calculates the number of green jobs in the united states, me. this is the third hearing, ms. top deck of the third time department of labor officials have testified before us. last july at the brookings institution issued an important report on green jobs at the following findings. first the green jobs and play almost 2.7 million americans, more than the fossil fool industry twice his size of a

bioscience sector. second they said, the green economy has expanded a greater rate in the economy as a whole. they went on to say the green economy offers considerable and more highly paid opportunities for low and middle scope workers. and finally they said before the green economy's manufacturing and exploiting the intensive, both of which are critical for america's future. since this report was issued company view of labor statistics estimated the number of screenshots is even higher, reporting over 3 million adult to rebuild our economy. this new should be welcomed by policymakers in congress. unfortunately committee seems more challenging by the bureau of labor statistics rather than helping people that were. i think the witnesses for being here yet again today. i look forward to your

testimony. that, mr. chairman, i yield to. >> i would take note that although the ranking member mention the plo report, the sandia report has not been made available to us under any circumstances. so notwithstanding the gentleman's assertions until the department of labor makes that report available to us, we will consider to be a cya document told closed against congress. i hope the gentleman will join with me in issuing a subpoena will not deliver that document they allege is the impetus for closing. >> i would be happy to vote on a subpoena. i'd be happy to talk about it. if there's more, and certainly join. >> i thank the gentleman. >> members have seven days to submit for the record here we now recognize our first panel,

mr. daniel moss, executive editor for economics and international government at bloomberg nurse. welcome. mr. rob doherty is general writer for reuters news. also, welcome. ms. lucy dalglish. could you pronounce it? [inaudible] >> dalglish is the executive chair for freedom of the press. also, welcome. dr. keith hall is the labor statistics and currently a senior fellow at the mckay defender. and last but not least, i will work hard on this one. ms. diane furchtgott-roth. furchtgott-roth is the former chief economist department of labor and current fellow of the manhattan institute. local mall pursuant to committee's rules, which you

please rise and take the oath? and raise your right hands. do you solemnly swear or affirm that the testimony you're about to give will be the truth, all truth and nothing but the truth? what the record reflect all answered in the affirmative to the best of their ability. please be seated. now, many of you are returning to testify. a couple of you and me your first. we have members who will be coming in and out. we estimated about half an hour for your opening statements, so try to stay as close to five minutes as you can. we will have your entire opening statements plus additional material you may wish to submit to support anything you say here today included in the record without objection. so you only need to summarize because for the record all that you have submitted will be on

the record. mr. moss. >> chairman issa, i want to express my particular appreciation to committee for its engagement in this issue. bloomberg news provides data, news and analytics to decision makers and industry beyond finance. bloomberg news is delivered to the bloomberg professional service, through television, radio, mobile, the internet and to magazines, bloomberg business week. we are syndicated in hundreds of newspapers globally. we cover the world with more than 2000 reporters and editors than 146 euros and more than 70 countries. we are experts at publishing economic statistics and disseminating market information. the media stakeholders are making progress with the department in a way of arriving

at a place that will not undermine the first amendment, will not reduce transparency and accuracy of critical data or create unacceptable cybersecurity risks. while no conclusive agreement has been reached that we have we have seen would not have been possible without the impeachment of members of this committee and committees and members in both chambers of both parties. we are particularly thankful to senator bond for his engagement. on april 10, without the notice and comment. the taken under the administrative procedures act, the dll announced a dramatic policy shift. henceforth come reporters and editors would be required to use only government software, government hard work, government lines, government notebooks and government pans. bake uses greater accuracy and context to provide repeat prohibited. all transmission would be via

the internet, not through secure lines. the department of labor would own and operate the lines, control internet access and control internet connection, creating a single point of focus because on the organizations which are the infrastructure. although the policy change was unprecedented, it was presented as a nonnegotiable. news organizations were required to remove software, hardware and dedicated lines from the department by june 15. this proposal threatens the first amendment. the government would literally honor to reporter's notebook unlike any other federal agency, the department of labor is requiring reporters write news articles on government owned and operated computers on a weekly basis, which would give the government unfettered access to reporter's notes and drafts. no administration anywhere

should have access to reporters thoughts come and drafts or notes as a condition for covering the news from a little news of such importance. the proposal also -- the order also threaten the national security. the house, senate administration have rightly spent a great deal of time attempting to address potential cybersecurity threat, protecting our financial markets from disruption by cyberattack has been a key part of that discussion. and the world in which we now live, the department of labor to deliberately force transmission of data away from secure, dedicated lines and instead mandated strength mission via the internet is inexplicable. the vulnerability of the internet of even accidental disruption is a large part of the reason why news organizations have invested in their own secure lines. the prospect of a deliberate disruption, potential spoofing, potential market manipulation

are real. in august last year, the department of labor's website went down following the release of the monthly employment situation report. the unemployment rate was unavailable for one hour. if the april 10 order goes into effect, the vote would be potentially catastrophic. this proposal will increase market vulnerability and volatility. in the modern era computer is treating people compete in nanoseconds. studies of the 2010/crash illustrates that small incidents can result in major disruptions. in the department of labor hosted a conference: april 16, ostensibly to answer media questions on the new policy, i asked, what is the problem do you think you imagine this will

prevent? the department of labor response was i think we're going to move on operator will take the next question. the alleged rationale for the new policy has grudgingly slipped out in drips and drops, ultimately relying on the report by sandia national laboratories which the chairman has not been publicly released. the dll has alleged its new policy is necessary because unauthorized people planted unauthorized equipment in the department's communications closet. but this is an argument for enforcing the existing policy, not imposing to crony and new laws. the sandia report speaks of those who close the department's recommendations as adversaries, according to a summary which has circulated on the hill. and notice that although they are willing to potentially violate the law, violence is unlikely as an operational method.

does the department believe what was a miserly likely to break on what evidence or experience such as event-based. sandia continues stating the root cause of issues driving this assessment is the possible presence of algorithmic traders and/or their agents in the press lockup facility. has a lock of the dimpled treated by hedge funds? the public press and congress would be entitled to that information. is it that difficult to distinguish between an authentic news organization and a hedge fund. most significantly at the root cause of the issues driving this assessment is possible presence of algorithmic traders, why not just expel them from the lockup? why not threaten to erode the first amendment? in summary, this proposal does undermine the first amendment,

reduces transparency, potentially reduces accuracy of the data can increase his market volatility and imposes cybersecurity threat. even the dll's refusal to extend the current june 15 date for removing equipment, the calendar june 15 date for removing equipment, the calendar take how shortly seeking an injunction against a comprehensive overall agreement take how shortly seeking an injunction against a comprehensive overall agreement is reached. an understanding has been reached amongst officials of the new organizations and is still to get back to us in a number of issues including rules to the lockup until an overall agreement is reached in the format of the protest letter, the order stands. thank you, mr. chairman. >> thank you. mr. doherty doherty >> thank you from by may testify new policies and procedures labor department aspiring for lack of spirit am rob doherty and united states for what is coming is division.

reuters is the largest international agency in the world with more than 2900 full-time journalists and 200 beers around the world reporting in 20 languages. globally our audience includes more than 1700 text media is 600 tv clients over 35 million visitors convertors websites each month in more than 400,000 financial professionals described by thompson readers to subprojects. the labor department notified. she's another organizations about major changes in plan for the operation of lockups. dan has covered changes in details. i won't repeat those, but needless to say we were taken aback by the plan changes. they were to mandate an announcer that any explanation of the rationale. importantly to us without the affected news organization. i want to be clear on two points. first report of lockups are

extremely useful in promoting accurate and authoritative dissemination of sensitive data because they provide time to better understand information before sending it to the public. second, we fully understand responsibility of the department of labor will to implement lockup rules and information using everyone's interest that the department to do so. indeed we believe the lockout procedures now in place have been effective in preventing release of the data but despite this success, the department plan announced in april would require us to use government equipment to do her work as a matter of routine, something we as an independent news organization fundamentally opposed. additionally, changes announced in april would represent a major step backwards technologically for news organizations and for dissemination of critical data to recognize news channels. that would imperil ability of news organizations to revise information to the public in a reliable, accurate and timely way and lead to confusion in the

public and financial markets they rely on the department's data. to gauge importance of the data to the public in general and markets in particular, one looks no further than the unemployment report. he was a developer working on into automating software to ensure works with their system and private communication lines to speed delivery of crucial importance for mission to millions of readers and subscribers across the globe. our software allows journalists to officially been accurately incorporate news releasers to push the new material in context. this will be lost if lockup participants learned the department provided configuration of computer and apartment of internet service provider. to be lost without insurance and of procedures at maturely decrease probability of premature leaks and as dan that you can make an argument that would increase the difficulties that dissemination of the data.

because of these concerns can we join the three other news organizations, bloomberg, associated press and dow jones and requesting a meeting at the white house to voice opposition to the peten announcement. for also hoping to better understand labors department concerned and see if we can find a way the department can be its responsibility to prevent early release of data without the draconian changes planning. we now have a series of what i would describe as struck dead meetings on this concept is optimistic to agree on procedures and policies that while not perfect and not the status quo we would prefer would interview represent a workable compromise and allow news organizations to disseminate from if lockup quickly, reliably and accurately. but we are not there yet. we're still hoping we can complete an agreement in time for the july 6th at mindset by labor. if not, we left the department for a short delay to allow any great changes to be implemented in the least disruptive way

possible. as we discuss other issues and reach agreement, the timing is important issue for us. it is now june 6. a stance that the equipment starts coming on june 14 and 15. the new procedure goes in place july 6, which by the way is the next unemployment usually launch. talking to our technical staff it's nearly possible to do this the right way. if we are able to reach an agreement on the larger technical issues, and go forward, the department will be flexible on the implementation dates. can date spirited new mexican for invitation to address the committee and for your continued interest on this issue may be happy to answer your questions. >> thank you. ms. dalglish. >> thank you. chairman isaiah, ranking member coming and members of the committee, thank you for the

opportunity to testify today. i am lucy dalglish, executive director for freedom of the press. for more to them for years the committee is provided free legal and advocacy services to protect the rights of journalists working with united states law applies. i'm happy to testify today on behalf of the sunshine in government initiative of which the reporters committee is a member. sgi is the coalition of media associations promoting greater the government. thank you, mr. chairman for holding this hearing. we strongly object the changes the united states department of labor announced less than two months ago. the department's approach as proposed in april makes the release of market moving information must reliable, less secure, more prone to errors and inaccuracies unless equitable as it reaches the public. last month the sunshine in government initiative urged the labor department to suspend

these changes, clarify concerns with the current process and work with us to address those concerns. since then, only your attention to this issue has helped bring about productive discussions between the media and the labor department. quite honestly, we are bewildered at labor department's announcement on april 10 without consulting with any media involved about these to mandate changes that will have a devastating impact of journalists ability to inform the public in a timely and useful manner. it took the interest of this committee to spur what we understand to be a protected discussion between the journalists in the lockup in the department. as you know, mr. chairman, since its formation after 9/11, sgi has worked with you and others on capitol hill and across the executive branch to work through problems that we remain committed to working with the department on this issue. but let me be clear. we do not wish for the labor

department to maintain procedures that would advance one media entity over another or make it easier to break embargoes. we are hopeful the labor department can address former abilities than the current lockout procedures with ongoing dialogue. while these conversations continue, let me describe how the announced changes would undermine the integrity of the high-profile economic indicators released to the public. first, the labor department announced approach raises cybersecurity concerns. releasing this data to an online connection may allow an internet hacker to target the release and change key members as they leave the department. or a denial of service attack could delay release to some or all. second, the labor department's new approach would likely be less reliable than the current product is. currently at least two media organizations have built redundant system hardware.

at this circuit fails come a second circularity installed in the network reroutes data traffic. if a secure line hills, duplicate dedicated cabling in place carries the traffic. even attempting to duplicate the secure system of government owned computers to be costly to taxpayers. last, the departments new approach remake errors more likely. without their own equipment, preloaded spreadsheets and custom software to digest the data, journalists will have to type the information relying on memory or handwritten notes. this dramatically increases the chance of errors. marcus to measure time in microseconds surely will react to raw data before and a correction be issued. don't begrudge us the federal government for moving quickly if need be to address security concerns. the labor department should first explain its concerns and consider perspective of journalists in the public before

making such a dramatic and procedural change. the media takes government interference with disparate products very seriously. so does the constitution. in fact, the first amendment obligates the government to allow journalists to operate independently from government control. ..

>> we are also tasked with creating a level playing field with the release of data, meaning that no one has an advantage of getting the data ahead of other people. in addition, they aren't be responsible party for the security of the data, that is including inside the lockup room. in fact, the bureau of labor

statistics has the responsibility to decide whether or not to even have a data lockout. traditionally, news media is the most effective distributor of economic statistics to the public. wire services were the most practical distributor to media outlets, and for this reason, press lockups were designed decades ago to provide the most important economic data to wire service reporter. wire service reporter would get a look at the data under lockup conditions, they would get to ask clarifying questions and getting to write their stories on a typewriter, when the release time came, they would raise to telephones and report their stories. that is essentially have a lot of runs, despite tremendous changes in technology. today, most new economic data is

actually disseminated through websites or e-mail. a lot of continuing for economic data, but continuous change has made it difficult to maintain adequate security inside the lockup. in particular, automatic computer trading now has made employment release data extremely valuable in fractions of a second coming makes a big difference in financial markets. also, blogger participants may now have specialized computer equipment and software that links to automated trading models. when i was commissioner, back in 2009, i read one link of the article, and i want to focus on if it does cost me a great deal of concern. key economic indicators are released to financial markets to a small exclusive group of accredited news agencies.

this data can be read and entered into immediately, before the larger market had time to read this on newswires and i digest the means. this raises concerns other whether or not we had a level playing field. i have a number of recommendations on this, but let me mention a second thing as well. mutation constantly changes, and news agencies that are constantly disseminating data need to be able to take advantage of new methods that new methods of disseminating data. social media is a new method of disseminating economic data, but it and others at the moment have the excess use social media. the els should be allowed to freely use social media and any

other method of dissemination. free from suffering by the office of the secretary, free of bias in the presentation and free from actual perceived parts and intervention. that is my first recommendation. second, with respect a press lockups, i have a number of things that i mentioned that is common sense and long overdue of having a lockup agreement and adequate control. the number of those things have not been emplacement need to be put in place right away. one of the things that i have a particular problem went is to be journalists. they are now allowed to break the lockup and go outside for the data is released to set up for cameras. i think that is a security concern. i think that ought to end right away. most important, i think that the bureau of labor statistics should be given full oversight authority for conducting all of its press lockups, developing and maintaining policy and

procedures, and have the authority to establish and implement credentialing and confidentiality protocols for participating news organizations and employees. policy numbers three and four made it clear that the responsibility to determine whether or not there is a lockup and their responsibility to disseminate the data, they are the ones for confidentiality. >> thank you. >> thank you very much for inviting me to testify here today. i was asked to talk about green jobs. it is a very tough time to be

discussing green jobs because we just got the employment news on friday. which show that the number of jobs in the economy rose by only 69,000. following an increase of 77,000 in april. the unemployment rate rose to 8.2%, and has been above 8% for well over three years. america might not be good at creating jobs, but it excels at relabeling jobs as green jobs. it is much easier to redefine an existing job as a new job, he green jobs. how many jobs as our government be labeled as green? the bureau of labor statistics decides which drugs are green and which are not commonly identified 3.1 million in 2010. latest year available released in march 2012. americans may have been unaware that a federal agency might designate their job green. i would like to ask you that we

should focus on job creation, rather than green jobs, because we have over 12 million unemployed. our broadest rate of unemployment is 14.8%. if people want to buy green products, such as prius, they will do so. much emphasis on green has driven jobs overseas. just two examples, incandescent light bulbs. the ban on incandescent light bulbs was resolved in the closure of the factories and the new florescent lightbulbs, which are all made in china. their green jobs for china. many solar panels, wind turbines, required by law, are made overseas in places such as china. coal is produced here, but we are increasingly not allowed to use it. china is using our cool and

producing less than 1% electricity that makes these products and send them to us, which we use as our jobs. the government decides which jobs are green. transportation policies, based on green jobs, with 20% of the highway trust fund reserved for mass transit. tax subsidies are given to electric vehicles. for companies to produce them and americans to buy them. the els have to find green jobs as jobs and businesses that produce goods or provide services that benefit the environment or conserve natural resources. order, jobs in which workers duties involve making their establishments production processes more environmentally friendly or use natural

resources. in order for us to be considered green, we have to meet one of five goals. namely energy from renewable sources, energy efficiency, pollution reduction, or removal, natural resources conservation, and environmental compliance and education training and public awareness. i was particularly interested today when i saw this caveat. this just is a cup, but on it it says, we have the power to save energy. this fits it in with number five, the environmental education and training and awareness. people that produce these cuts, they would be considered to have green jobs. but that hasn't meant is a creation of green jobs, this is just a matter of relabeling. in agriculture, one of the main categories of workers are 3600

organic farmers and growers. the workers are credited with accomplishing both natural resource conservation and creating energy from renewable sources. with farming, it is possible to calculate the percentage of employment that is dedicated to ethanol or organic produce. in other areas, it is not so clear. one example is woodchips used for biomass. how many widgets are tendered in the wood industry to create woodchips? woodchips are naturally a byproduct of middle-income and milling is not considered a green jobs. yet according to the labor department definition, the 33,000 word product manufacturing jobs created are called green because companies can sell the woodchips.

there are many other examples in my testimony, but i see that my time has run out. thank you very much. >> thank you. thank you all for your testimony. doctor keith hall, i'm going to begin with you. you do see need for reform in the lockup. what he said earlier, it has a set of guidelines, and makes every effort to ensure the bureau of labor statistics is independent. [inaudible name] committee know who he is? >> yes, i do. >> does he work for the bureau of labor statistics? >> he is in fact a political employee, working for the secretary of labor, and he's the person who came up with this policy, isn't he? >> yes, he is. >> so, he violated omb guidelines. it is being directed from the department of labor. this is the intention the work

so long and hard for, you have been candid with us in the past. it is your job to count the green jobs you are told to count you accurately account for the numbers. it is someone else's decision about whether they are green or not, under the definition. we have enjoyed your honesty, but your honesty here says it is supposed to be one-way. it clearly wasn't. is that correct? >> that is correct. i do think the bureau of labor statistics should be responsible for running the lockup. >> by the way, would you ever have thought that the department of labor -- or bureau of labor statistics would be able to come up with more green jobs, even then one of the great liberal think tanks? you need not answer that one. mr. daniel moss, you are one of the companies that invested heavily in proprietary wines in the a timely basis, is that right? >> yes. >> he did so for two reasons. one was clearly to ensure that

your story didn't fail to allow, and i guess, the second one is to make to make sure the you got it out at least as fast as anyone else, if not a few seconds faster, is that right? >> mr. chairman, we are not interested in getting it out faster than anyone else. >> mr. rob doherty next few is shaking his head yes, so i am assuming he wants to. >> we get information out instantaneously as the lockup rules will allow. >> sir, you have an interest in absolutely, positively not being beat to the newsstand? >> welcome our interest is to get information out as quickly as we can to all of our clients, within the rules. >> you are sort of representing the umbrella for a moment. doctor hall was very kind in saying that most of the systems

that actually go out on a newswire. they are not important enough, so they go out, everybody gets them at the same time and they look at them. the most important are subject to this lockup. historically, until today. let me ask you one question. if, in fact, the bureau of labor statistics we started pumping this up through the internet, wouldn't in fact, it would be worse for it the most critical information, because then the hedge fund with the best computer diagnosing what is very predictably exactly the same raw statistics, would then make a decision on market interruption and trade during those first few seconds. doesn't the plethora of different organizations of news, with different opinions, reporting in different fashions, reaching different conclusions, on raw data, doesn't actually negate the vantage of the hedge fund? ultimately, looking at anyone of the services doesn't guarantee

him anything, it doesn't give him the raw information come as much as a gift and somebody's opinion and isn't a dozen or 100 opinions, isn't it a better safeguard against a radical market move in a single piece of back? >> mr. chairman, i really have to confess that i don't know a lot about how hedge funds operate. but i can tell you that by having multiple news organizations in the lockup, disseminating that information, i believe there are safeguards for the public. and i also believe that the independence of those news organizations is a benefit to the public, rather than having the government just being the only source of the information as it gets out, wetherbee to the public or to the hedge fund. there is value in having multiple news organizations digesting and disseminating this information. >> the tune organizations -- which you news organizations --

aren't you in fact an arm of propaganda? the difference between propaganda and independent news, isn't it the value added that your reporters can bring, either through years of experience, or, if, in fact on the information they bring in that it helps them take raw data and turn it into opinionated factual news? >> mr. chairman, the proper lockup and agencies disseminate statistics around the world, it is that it allows us to publish information with as much context and supporting data with as many reporters as we can. what we publish at 8:30 p.m. sharp goes beyond one headline in number. we can tell the story, both

above and underneath it. >> one important part that we didn't talk about on april 10, on the order that the labor department put out, we were talking about changing this -- there was no internet access at all. even in the half-hour that leads up to the lockup starting. that is important. it allows are journalists to rally. one of those is to do what is happening around the world. even if it is breaking at the last minute, 7:45 a.m. come on the internet. with everything happening on the eurozone, we really provide some context. >> thank you. we think the ranking member for the question. >> thank you, mr. chairman. it is good to see you again. i just want to make sure we are clear. i don't want wrong or inadequate information to be in the headlines tomorrow. the bureau of labor statistics is a nonpartisan statistical

agency, is that right? >> that is right. >> the department, to your knowledge, when did you leave the department of labor? >> in january of this year's. >> did the department of labor or any other entity within government, that is focused on the development and advancement of policy interfere with els's development with green jobs? >> no, they didn't. they were very good about letting us do our work. >> as i have listened to the testimony, clearly, i understand and sympathize with the news organizations. i understand exactly what you're saying. it seems like we have a question of balance. any time things get out of balance, it seems like we run into problems. it appears that our security measures are not equal to what technology can be used with the data. it seems like there is a, you know, i think mr. hall described

what happened. how this came about. what, 40 years ago? now, technology has changed dramatically since then. would you agree with that, mr. hall? >> congressman, the department of labor has a master switch that controls communications into and out of the room. no news headline or story can be published until the labor officials literally flick the master switch at 8:30 o'clock. >> mr. daniel moss, you have a comment? >> that is actually true. one of my concerns, though, they came from an extraordinary number of incidents in the locker room, that involved this struggling with the technology coming out. i do think that there is a need,

at a minimum, to review the security not lockup room. >> i would add, that is why these discussions we have been having with the labor department, the focus is on that. they have needs, and as i said in my testimony, we understand they have the responsibility and right to set up the lockup rules. the argument would be the april 10, the announcement then, whatever you want to call it -- they didn't strike a balance. we were hoping to negotiations. >> i'm hoping that happens to come and i will urge the secretary to try to move that along so that you all can come up with an agreement. sometimes i think it is a matter of people sitting down and working out things. not everything has to be legislated. as a matter of fact, it was a lot slower when that happens. according to a joint statement by the then commissioner bureau of labor statistics and then

public affairs commissioner, the news report in november 2008, that was scheduled for release, friday, december 5, 8:30 a.m. i'm a was inadvertently transmitted from the lockup facility, approximately 25 seconds early. the news release states that a similar, early transmittal occurred on december 3, 2008, involving the data on productivity and cost. the news release verifies that a wired service -- a wire service bureau chief come had inadvertently released information from the lockup facility to subscribers in both occasions, and that the department of labor confirms this claim. finally, it states the transmissions were accidental. following recent technological changes and hardware configurations. at that time, isn't that right? >> that's right two what can you

tell us specifically about how that occurred, and particularly how were the league's accidental? and what circumstances allow that to take place? >> if i recall, the news agency was allowed access without any technicians. they replaced the cable from the computer to that box. it turns out that cable inadvertently bypass the security on the box. since then we have tried very hard to not let people into the room without a els technician there. so that kind of thing doesn't happen. >> those kind of leaks, i mean, where they detected at the time they occurred? >> they were not.

>> mr. rob doherty, you write in your testimony that we take this very seriously. we have always been able to comply with the procedures. after a hardware reconfiguration did inadvertently uncover the defect in the equipment, the resulting two unintentional instances of information on labor lockup in late 2008,. what can you add to what mr. hall said about how the leak occurred? also, your statement said the defect resulted into two unintentional releases. was the fault in this matter, with the department, or was it would you? >> my understanding is that we did reconfigure our hardware. my understanding is that the way that we interface with a lockbox and how that was tabled in the department, that triggered the inadvertent releases.

mr. hall said the first release wasn't detected by anyone. second, we realized and immediately became been made that known to the department. we work to figure out what the problem was. a fix was implemented. as i say in my testimony, we were aware of no other issues in the 3.5 years cents. the department has eight to 10 lockup someone, that would be roughly 350 lockups since that problem? one last question. do you believe that steps to the department of labor announced to improve this economic data during the pre-release embargo. app are necessary? >> i think most are necessary. the ones -- the one aspect would be replacing equipment. that is a pretty germanic that. i do think it was worth considering. and i do think it is a possible solution to release the data on

the website. and then open up a lockup room so it runs a little bit behind the website -- then there will be such a rush to move trading within the locker room. i don't think it is something that should be neglected, i do think it is something that should be discussed. >> thank you, and for the record, when these lapses occurred, where was the president of the united states? >> well, i believe it was during the obama administrations. but we did have -- but to be fair -- >> november, 2008, who was president? >> well, -- >> i just want to make sure that we understand that president bush, he was responsible for the leak, and yet 3.5 years later, we have a fix proposed. i guess that is quick and dramatic action.

>> i really appreciate you holding a hearing on this topic right now. as anyone is well aware, this is an election year. i don't think that anyone who follows statistics doesn't realize that the number one issue facing our country our jobs and the economy. that's what people are looking for in leadership to make a decision this fall. i think these numbers are extremely important, and i think this hearing is very timely. the one thing the american people do agree on is that congress is not doing a very good job, and i think they have a trust factor that is very low. the one thing that they should get artifacts on these numbers. i often wonder why we focus so much on unemployment numbers, rather than employment numbers. i wonder if anybody on the panel has a comment why we don't look at employment numbers, the number of people actually employed? >> commerce, that is an argument for allowing the news organizations to publish as much

context as much full information at 8:30 a.m. sharp as possible. congressman, and mr. chairman, representative cummings, if i may returned to a point, he was talking about unauthorized access. >> so anyway, i just think that there is such a disparity in unemployment numbers, there is 8.2%, who is under employed and unemployed -- getting to the truth, making it a decision on who they want to lead the country, we should provide the facts to them. ..