minimize the effect of these cuts on indian country. but we need your help to talk to congress. it's congress who has to take action on a realistic budget. getting rid of sequestration and preventing the next round of arbitrary cuts having a potentially devastating impact. last year, at this conference, i was able to announce the signing, and you've heard from general shin -- of the reimbursement agreement. something you worked on for a long time. so far, have received nearly a million dollars in reimbursement because of the agreement. that means more resources to serve more people in indian country. we've been working on a number of fronts to make sure your voices are heard in both state level and federal decision making.

and as i said at hhs, we've created a department wide secretary's triable advisory committee. in fact, we're meeting tomorrow. and i continue to urge other colleagues throughout the cabinet to look at that model because the stack meets three times a year. not justice with me, but all of our senior leaders. we meet on policy and budget issue. they inform our priority and help to direct our initiatives. one of the areas i've asked them to work on is reducing barriers to eligibility, access to hhs grant. we're a big department. we have a lot of grants that go in to communities for a whole variety of health service. what we learn very quickly is that the entities, communities, triable communities that need the grant money the most don't have the grant writers. don't have the sophisticated staff to track the money. can't really follow the puzzling amaze of when the grants are

due, how they can best benefit, and what they are for. what we've heard is it would be helpful to get some additional assistance top have a road map where the money is. how to access it. what kind of services it would provide, and even technical assistance in grant writing. so we listened and we have done just that. we completed a two-year effort to better understand the obstacles to remove them. and the grants can be especially significant for behavioral abuse and -- behavioral and substance abuse. issues that are important to deal with in triable communities. it used to be that triable nation were on their own. and the department has a dedicated office working with tribes as they develop detailed

alabama plan and coordinate resources from across the federal government. our grant application are now in a simple, easy to use booklet thanks to the stack's work. we are doing training sessions with triable communities across the country. our efforts are also getting a very big boost from the recently announced party rule. which was released last week. what the parity rule says is behavioral and substance abuse services are on equal footing for insurance companies with physical health. so you can't have a limited number of days. you can't have a limited number of inpatient or outpatient days. whether you are seeking help for behavioral help or substance abuse or a cancer diagnoses. you must be treated the same. that's a huge step forward, and new insurance policies will now include behavioral health and

substance abuse services. about 62 million more americans will have access to service and treatment. i know, a lot of you in indian country are working on efforts around health and wellness. and particularly health and wellnd with children. the effort on childhood obesity lead by a great leader and champion, first lady mawfm, is a initiative called "let's move." it tries to insure that all kids have a a opportunity to grow up healthy and pursue their dreams. let move in indian country focuses specifically on first mesh -- american children. i have some news to share with you on the efforts. our administration is entering a new partnership. are you in the room? would you stand up, please. and let us recognize you.

thank you very much. [applause] i hope he'll help me with my golf game. we'll see about that. i want to recognize that he's done amazing work with his foundation. identifying the best practices and areas for collaboration and triable communities and focusing on reducing childhood obesity in indian country. i want to recognize that this effort could not be more important. we're talking about the next generation. we're talking about living longer, healthier, more prosperous lives. so reducing childhood obesity and type-2 diabetes in triable communities is one of the most important initiatives we can work on together. again, i want to thank him for his efforts in focus and leadership in this area. now, ultimately one of the most important things we can do and are doing to decrease disparity

and increase access to affordable health coverage. the affordable care act targets and reduces disparities by lowering health costs an making quality care more assessable to people as cro the country. for those who already have hurricane, the new law has made the policies stronger. and with the new health insurance marketplace, terrorist an opportunity for those without health insurance to purchase insurance on their own and get coveraged. if you're a member of a federally recognized tribe, and you bay a private insurance plan through the marketplace, you may not have to pay any out of pocket costs like copay or deductibles. if you're eligible for services through the indian health service and urban indian health program or triable program, you cannot only enroll through coverage through the marketplace, you may be eligible for special exemptions that make it easier for to qualify for medicaid or chip coverage. we know there are a variety of

ways to enroll, and inspite of the issues that have plagued the website for the last sick weeks, it's getting significantly better. so you can go online at health care.gov. you can go to the call center, you can go in person, or meet with someone to get a paper application and fill out a paper application. we have trained staff to help american indian and alaska native patients to enroll and get covered. as we observe native american history month, we remain committed to building on this work. to ensuring that all american indians and alaska natives have access to quality, affordable health insurance. and live quality, affordable lives. whether they're living on a reservation, on a triable land, or in urban area. many of the people who wrote the constitution were inspired by the great law of peace. and it's three principles: rich

useness, justice, and health. in many ways, those principles have a new meaning today. there is no righteous without justice. there's no social justice as long as there are unacceptable disparity in health. therefore, we continue to be committed to working with you to move this effort forward and to move toward those great principles of righteousness, justice, and better health for all. thank you very much. [applause] >> ladies and gentlemen, anthony fox. secretary of the united department of transportation. [applause] >> good morning. it is a pleasure to be here with

you. and i want to extend my thanks to secretary sally joule for the invitation to be here. and all of our triable nations, our triable leaders who are here, thank you. thank you for being here today. and i know many of you have traveled a great distance. i'm proud to be a part of the president's initiative to build a more respectful, collaborative relationship that moves our nation's closer to our shared goals. the department of transportation's position is very clear. residents of our triable nations need and deserve safe roads and bridges and access to reliable public transportation. you know as well as i do that transportation is a life blood. to communities, to families, to

people. and when we deliver on the promise of connecting every person on these shores to 21st century opportunities, that includes triable communities all across america. that's a key part of our mission at the department of transportation. and we're committed to ensuring, again, that everyone regardless of where you live has access to safe transportation. today i'm happy to announce the latest evidence of that commitment. as we award 8.6 million to 183 tribes, to help improve transportation safety on their lands. these new funds will improve and protect the roads for everyone who depend upon them, helping to improve the quality of life for triable communities at the same

time. the projects cover a wide range of safety, planning, engineering improvements, enforcement, and emergency services and safety education. just as an example, the char key nation in oklahoma will receive $525,000 to modify a key intersection and improve acceleration and deceleration los length. the native village in alaska will receive $100,000 to create "safe havens" with emergency supplies and heat for people stranded by vehicle break down or impassable rivers. importantly, most significantly, these new triable transportation safety grants will go directly to the tribes for the projects and planning in indian country. in other words, --

[applause] on the dia in the important projects without having to go through governors or county officials. it's going directly to the tribes. [applause] what is more, many of these grants will provide trinal governments with funds to develop brand new safety plans. so this program will see improvement that extend to the future. the national highway traffic safety administration is also working hard to boost safety among travel communities. today seat belt use nationwide is about 86 percent. yet among native americans the number drops to 68.5%. this is significant because it has an impact on our ability to

save lives. in 2011, 55% of passengers killed in a car crash were unrestrained. but among triable nations, a full two thirds of those killed were unrestrained at the time of the crash. they are working with other federal partners to offer more coordinated programs and resources to support travel, traffic, safety, and injury prevention efforts. and we're working with you to extend law enforcement's presence in rule communities so you can more effectively keep

intoxicated drivers off the road. in our partnership on transportation and in indian country doesn't just improve safety. it connects people to opportunity. we know, and you know, that a rebuilt road or a new transit system can be the difference between a child getting to school on time or the difference between an elder going to the doctor or not. no one knows it's a key to accessing good jobs. it's why last year the federal transit administration awarded more than $15 million from our triable transit program to help 72 triable governments provide the critical transportation services that thousands depend on every day. it's also why a total of $30 million has been authorized for triable transit programs for

both fy2013 and fy2014. that's a doubling doubling that of available funds. and across five rounds of our innovative tiger program, triable projects have received nearly oid million in funding for innovative projects to improve infrastructure in our indian lands. those are a just of the few steps we're taking to improve transportation and travel community. clearly there's more work to be done. i look toward to working with you to connect our communities with the 21st century economy and on behalf of the depression -- department of transportation i thank you for your attendance today. [applause]

>> great to be here. thank you for being here. thanks, as my colleagues have said, to sally jewel, department of interior for hosting this conference. and, of course, i was pleased to be able to hear some of my cab innocent colleagues in their discussions. i would like to reemphasize something that secretary jewel said this morning that we are looking forward to really establishing and advancing a subgroup of the white house counsel on native american affairs to really focus on energy development, energy

employment in indian country. i think working together but also with agriculture, epa, and other cabinet colleagues. we want to help harness the energy potential in indian country. conventional energy, renewable energy, to expedite clean energy deployment. that's something we are going get together on. i want to thank the leaders who are gathered here today. i add as a personal ante-dote. this is my second time around the track at d. o. e. i was there in the second half of the clinton administration. this gave me a great opportunity to work with two ante-dote for

this. one is the department has a major challenge in term of cleaning up -- there's no nice way to say it the cold war mess. much of this has impact on traditional triable lands, and when it came to establishing our programs -- i have to say that the appropriate areas around the reservation in washington state, the tribes just fantastic partners in making us focus on the long-term cleanup to a level where traditional activities, for example, could be removed. it was a tremendous help as we structured those programs. on the second very different example, i'll give and later on today one of my colleagues will be discussing this more in the conference, but really under the

leadership of the then secretary bill richardson, really a historic tran for of almost 100,000 acres of land -- back to the tribe in utah. it was returning naval oil shale reserve number 2, which had been taken by the federal government in 1916 to provide fuel for the navy in world war i. it was a tremendous event. melanie will say more about the implications today in term of the asset. so it's great to have a chance to come back and maybe accomplish some things like that as -- well in this obama administration. i've only been here five months. i'm just getting my feet on the ground now in term of this work.

the amount of energy produced by wind, solar, geotheythermal. and the president challenged us do it again. in fact, just in the last five year years, wind power capacity has tripled. solar power deployment has increased by a fake -- factor of 10. we believe we really are at the

place where the significant tran -- transformation to low carbon energy is present. and the cost of growing development of renewable energy in the united states will be important to tribes. as a way to meet the do youing threat of climate change. something we'll be pitching in to do. just less than two weeks ago was the first anniversary of sandy, and, you know, none of us ascribes an individual event, an individual storm to climate change, but we recognize and have the sentence community has recognized for decades how global warming amplify the effect of the storms but also droughts, floods, wild fires,

all trends that we're seeing. and have enormous implications in tsh for example in alaska rising sea level for melting ice, changing weather pattern, flooding rivers are seriously impacting alaska native villages. the army corps. of engineers have identified over 30 alaska native villages as being an imminent risk from rising sea level and flooding. in fact, we -- also know by observation and predicts it's nice when they agree. that in fact global warming becomes especially severe in the higher latitudes like the arctic. on one example, the town of new talk is currently being relocated. the town georgia lee that suffered as hassive flood. the renewable energy laboratory

are supporting fema and the town of georgia lee that in the recovery effort from the disaster. so droughting and rising temperatures pose a threat to coal-fired plants in 1/2 hole nation. oil and gas reservations. we have an -- to meet the threat and certainly to meet it in indian country. let me say a word about the climate action plan that president obama --

put forward in late upto address the urgent threat broadly. it has three pillars. a first, of course, is the cut, carbon, pollution domestically. second to be prepare for these impacts of climate change to adapt to them. and third, to lead international efforts to combat climate change and prepare for the impacts, an niche tiff that is critical and, of course, can only be built on the foundation of our strong domestic program, particularly our strong mitigation effort. cutting carbon emissions starts with the energy e efficiency. encouraging the continued development deployment of -- like solar and wind and low

carbon such as nuclear and power. this is the all of the above strategy there won't be one solution for low carbon. there are different solutions internationally and different solutions in different part of our country. so the department of energy -- we want to work closely with triable leaders to develop renewable resources on triable lands. in particular, and that will be an ongoing effort. today we're pleased to announce that nine tribes have been selected to receive over $7 million to further deployment of clean energy and energy efficient projects. a couple of examples in the awards are wind power for triable government buildings at nation in new york. an energy efficiency upgrades to reduce energy use by 40% in

alaska. and there will be nine tribes that will have these energy efficiency and renewable projects. now that addresses this question of mitigation -- reducing carbon pollution. as i said the second pillar is recognizing that unfortunately we are seeing the impacts of climate change, as i said in amplifying storms, droughts, floods, and the like. that's the second pillar of the president's action plan, and here i want to start out by thanking karen diver of the lake superior for representing triable officials on the state and local and triable leaders task force on climate preparedness and resilience. prepare for the impact of climate change means adapting our infrastructure to increase resiliency. for example, making sure the electric grid can recover

rapidly from stronger and more frequent storms. that's what we saw, for example, in sandy. maintaining and upgrading infrastructure on triable lands would be an important part of making america infrastructure resilient to these new challenges that are emerging. the task force on climate preparedness and resilience will provide recommendation to the president on removing barriers to resilient investment. federal grant loan program to better support local effort and developing the information and too lates they need to prepare. the department of energy will also continue to work with triable nations one on one regarding the project that effect your area. the office of indian energy programs at the d. o. e. working together with the triable energy program provides financial and technical assistance to tribes from evaluation and development with their renewable energy

resources. implementation of energy efficiency, and education and training to help build the knowledge and skills essential for sustainable energy projects. from community scale solar projects at the pueblo in new mexico and southern tribe in colorado, to commercial scale wind projects in maine and small biomass projects in wisconsin d.o.e. is working with 20 tribes in alaska native villages to empower triable leaders with the tools and resources needed to lead energy development that foster self-sufficiency, sustainability, and economic growth. this is our program. and i want to say that at the department of energy, i certainly have made it a personal priority to raise our game with states, local government, and tribes. we believe that in the end a

national policy needs to build from these triable, state, local, and regional policies and activities. we need to focus on collaborating and solving the problems as they are in different parts of our country. i look forward to working together, as i said earlier, i look forward to working very closely with secretary jewel as we stand up our efforts and work with all of you. so thank you very much. and have fun at the conference. [applause] attorney general erick holder also spoke at the white house triable nation conference. he talked about the justice department's efforts to reduce crime and violation in native

american communities. [cheering and applause] >> good morning. thank you for such a warm welcome. it was amazing to hear those words from doctor and also amazing to think he was actually there for that truly historic speech that attorney general kennedy gave. i would like to thank secretary sally jewel and her colleagues at the department of interior for hosting this very important conference today. it's a pleasure to join with all of those people with the president who will be here. my fellow cabinet leaders and leaders without the administration in welcoming a distinguished group to washington, d.c. and it's a privilege to stand with so many good friend, so many passionate advocates, so many dedicated triable leader and essential country partners in reinforcing the ties that

bind us to one another. in renewing our commitment to working with -- and reaffirming our dedication to fulfilling the great promise of our government's relationship with the sovereign tribe. now, i want to personally commend every participant in this year's triable nation con friday for taking the time to be here and moving our nation closer to its most treasured ideal of equality, opportunity, and of justice under law. especially in recent years, countless triable leaders, both in and beyond this room have stepped to the forefront of our efforts to preserve cultural values, to enforce treaty obligation, and secure the right and benefits to which all american intd begans and alaska natives must be entitled. together through many generations you and your predecessors have faced down tremendous adversity. standing up to those who once sought to terminate the federal

government's relationship with tribes. you have gallized support for the right of american indians to maintain triable government and have a seat at the table before major reform are enacted. you have mobilized triable nations to in passage of long overdue law. not simply to regulate triable affairs, but to allow all native peoples to fulfill their own promise and to chart their own paths as the ranch of your partners have grown. you have raised awareness without obstacle to triable sovereignty and with the assistance of public support of servants like mine. robert f. kennedy you ushered in a new era of triable self-determination over a half century old and growing stronger every day. as we gather for this year's triable nations conference here in our nation's capitol during american, india, and alaska heritage month. i think it's appropriate we

celebrate these and other achievements. but it's also necessary that we acknowledge that our relationships have not always been so constructive. far too much of our history has been defined by violence and deep depravation. far too many promises have been broken. far too many tribes have been told their lands, religions, culture, and languages were somehow not theirs to keep. their rights could be abridged or denied without the guarantee of due process. they could not vote. that the only course of action advantage to them would be to move on, to give up, quite simply to forget. today -- today we declare that we must never forget. we must never deny injustice that for decades upon decades was inflicted on native peoples.

when the nation confronted a new frontier. 50 years ago, in bismarck, north dakota, attorney general kennedy addressed the national congress of american indians. at the time, just as it is today n cia was the largest intertriable organization in the country. it was a leading voice for trinal sovereignty and a key partner to the justice department. he spoke with a vision that he and his brother harbored for more free and more just, and more equal nation. and what would become a historic speech he told the assemble crowd he stood before them in what he called a turning in the tide. let me quote him, america, he said, is moving forward more rapidly and in more ways than ever before. moving toward the

fulfillmentment of the delawaresty of the land of the free. it has yet to be fully realized. it's equally apparent over the last few decades and the last five years have been marked by significant steps forward to keep a nation's promise to reclaim by the future that all of our citizens deserve. to confront urgent challenges fop move forward shareds a per ration and bring about the remarkable once unimaginable progress that is so many have been fighting for so long. that, which began in the new frontier, must continue with increased vigor in this new era for which we are all responsible. for president obama and for me, this has been more than a

professional obligation. it's a personal priority. as you heard during the video presentation when i returned to the justice department, as attorney general in 2009, my colleagues and i made it a priority to listen to, to learn from, and to partner with triable leaders. and this renewed commitment to cooperation has yielded results. i think we can be proud of them. since january of 2009, the department of civil rights division working with u.s. attorney officers prosecuted numerous defendants for victimizing native americans through sex trafficking, hate crimes, and police brutality. the division has been active in enforcing the voting rights of american indians across the country. including the right to access voter information in native languages. alongside our counter part and other federal agencies we have prioritized the protection of triable resources of the resolution of long standing, legal dispute. four years ago, the department of justice and the interior reached a historic settlement

totaling more than $3 billion in approved by congress as well as the federal court which was resolved litigation. a class action lawsuit that was pending for a decade and a half. more broadly we have worked to protect water right and and a half really a resources on triable lands and vastly expanded our outreach too and our cooperation with indian tribes across the continent. constitutionalizing ways to speak input on new policies, holding extensive training and listening session and targeting precious resources to the areas where they are needed most. now through our coordinated triable assistance slice at a time we have allowing tribes to secure federal assistance.

it takes more than financial so torte combat crime. our ability to ensure just outcome will depend upon the sustained effort of prosecutors, investigators, invictim service professional on the ground who work closely with and genuinely understand the communities that they serve. leaders like u.s. attorney tim, his predecessor is chair of the native american issues subcommittee brendan johnson. and other u.s. attorneys who include indian country -- our commitment to this work. and this commitment is being strengthened every day by the triable liaison who -- each of the attorney officers and expand in the country.

advice me but also to advise future attorneys general on issues of concern. in july of 2010, president obama bolstered the effort -- treatment effort and enhanced our ability to prosecute crimes that are committed on triable lands. it also ensured that the office of triable justice will be a permanent part of the united states department of justice. that trained thousand of federal and triable criminal justice professionals have resulted in our significant advances and prioritization of close cooperation between u.s. attorneys and officers and triable leaders as brought about a notable increase over our law enforcement in indian country.

increased by more than 54 percent. this is an extremely promising indication. yet, there is no denying that a great deal of work remains to be done. if we are to seize this opportunity to build on the progress we have seen, every person in this room must resolve, here and now, as robert kennedy and his contemporary once did to mark this event not nearly an as occasion of reflection but a moment of renewal. a time for action and time for positive change.

don't expeed the national average. we will not accept -- we will not accept with a shameful fact that american indians are disproportionately to become victim of crime and violence. unacceptable status quo any longer. [applause] we will not stand for it and act

for the change. last year i was proud, extremely proud, to join president obama at the ceremony where we signed the newly reauthorized violation against women act in to law. native women whether the perpetrators are indian or nonindian. that distinction is gone. those provisions were drafted in publicly propose bid the justice department. they never could have become law without your staunch and strenuous support. for that, i applaud you. [applause] as the president noted it

represented a historic step forward for trinal sovereignty and jurisdiction. and automatic of will keep move forwarding together. working with federal officials made real progress in improving educational and programmatic services and youth detention fates in indian country. today i'm pleased to announce i selected the advise i are committee member that will lead the task force. they are here with us today.

preparations are underway for the first hearing held in bismarck, north dakota on december 9th. as the task force moves ahead they will work with a range and strengthen the work you are leading through triable lands. as resulted of these pain and the effort of everyone here. our nation is poised to open a new era in government to government relationships with sovereign tribes. 50 years after robert kennedy stood before a similar group of leaders, i have a great honor to join you in taking the work to a new level. this propoised statement will codify our determination to serve not as a patron but a partner in fighting crime and enforcing the law in indian

country. it will constitutionalize our commitment to indian tribes serving as a blueprint for reinforcing relationships, reforming the criminal justice system and enforcing federal laws and civil rights protections. of course, this statement of principles will be meaningful only to the extent that is crafted in consultation with leaders like you. that's why we'll make our draft available today. when the justice department's website, justice.gov, we'll share directly with the leaders of all 566 federally recognized tribes so question gain the benefit of your insight, your expertise, and goals and yours a per rations. then, only then, will we be in a position to publish it next year. and establishing a set of core principle which is we can chart our future course. ultimately; however, i realize our future will be shaped in our

progress determined not merely ily by the values that guide us but the individual men and women who work to translate the values in to action. men and women who choose to accept the world as it is but fight to make real their vision of the world as it should be. in order to support the work, and to inspire enconsult -- public servants to care it forward.

will have a chance to spend three years working with indian country cases preparely with the u.s. attorney offices but opportunity to be detailed to the office of triable prosecutor. it will help to build the capacity to combat violent crime in to bolster public safety in each of the jurisdictions represented here today. this, after all, is our obligation. not to deny our past, but to rise pouf above it. not to minimize our adult use history but write a new chapter. not to accept a reality short of the ideal we envision in the justice that our citizens deserve is, but to stand together and speak with one voice in order to bring about the changes that we seek.

a i look around this room today and so many passionate leaders and dedicated advocate across the country. i can't help but feel confident in our ability to do that. to fulfill the commitments that we have made. to ensure that good words are backed up by good deeds. and above all, to keep moving forward in common cause with mutual respect and with shared purpose. i am grateful and i'm humbled to count you not nearly as colleagues by essential partner on the considerable work that lies ahead. i will always be proud to stand be you and fight alongside you in the strug m for triable sovereignty, self-government, self-determination. civil rights, and equal justice.

thank you very much. the senate committee hold the conformation hearing tomorrow starting at 10:00 a.m. eastern live on c-span 3. she loved to write. she would create poems as gifts for her parents among christmas and birthdays. she would write a poem and illustrate it. we have two early examples here from when she was 10. in the fall of 1950, jacqueline and very well known writing contest question three of the essay who are three people in history you wish you could know. she mentioned charles, the french poet, and oscar wilde the

author. as we know in her later life, the last part of her life, she was a very from lific editor of book in new york city working with several authors on books of several different topics. the war in europe turning hot.

when the blitz degree took place. the u.s. was unprepared. the chief of the staff of the arpey came to rose investment and said we can't do things we have done in the past. we have to act now. we have to act and do it today. he went to congress and said we must build 50,000 airplanes to protect itself. and all the auto companies were given projects to build engines and airplane parts. ford motor company was given the b24 bomber was a problematic airplane. it was the newest we had. it was in development stages and they wanted to mass produce the airplane. so ford said i'm not just going to build parting. i'll build complete airplanes. they took what had been done as individual paces and took the engineering drawings and designed it to hole the tolerance of 2/10,000 of an

inch. and they would knock out thousand of pieces that gone the assembly line and unskill the assembly workers with a little bit of training could assemble the airplane. between january and june of 1944, 35% of the bombers built in the united states were delivered here. that was one of 11 factories building the b24 bomber. saving a little piece of this plant was so important to that story. it's just beyond words. i can't describe the feeling we will all have with a big smiles once we pull it off. we did something here in detroit that was not done anywhere else in the world. it literally saved the world from the access powers.

to oversight by the food and drug administration. compounding pharmacies mix drug ingredients to create medication for individuals patients. and the bill would create a nationwide system for tracking the drugs. on the compounding pharmacies bill. what is the purpose of this bill? >> well, it's a response to what is considered a gray area in the regulations of the compounding pharmacies. these are the pharmacies that sound like pharmacies and do a lot of things that kind of pharmacies that the mom and pop

pharmacy down the road do. in fact, they are mixing huge batches of drugs and acting like manufacturers. and the country learned they weren't being regulated acquitly after a large area in boston. one of those compounding pharmacies had contaminatedded drugs is shipped around the country to more than 20 states creating a fun gal meningitis outbreak that killed more than 60 people and made more than 700 ills. there are all kinds of having odd symptoms. it was a terrible thing. it happened because of one individual company in massachusetts that was not being inspected or regulated, and they had a bad batch of drugs. >> you mentioned that montana company in the article and tweet yesterday on the procedural vote

in the senate tweets that senate passes key vote to regulate pharmacy response to deadly meningitis. the outbreak started in massachusetts last year. why wasn't the fda responding to these sort of pharmacies? >> well, there was somewhat of a gray area in the law. the fda was responsible for these pharmacies, but there was a court ruling that had put some of their responsibility in to question. since outbreak the fda has been involved more heavily in inspections. but this law is to clarify that and creates a new voluntary category, which is somewhat controversial allowing some of these large pharmacy manufacturing facilities to register themselves and submit themselves to more fda scrutiny similar to the kind a traditional drug manufacturer undergo. >> who are the bill's main sponsors in the senate? >> in the senate it's tom harkin, the head of the health

committee, and it is lamar alexander, the republican ranking member of that committee. it's got wide spread support. you don't really have a division between the parties here. in fact, senator alexander, like many other republican senators comes from a state that was badly affected by the outbreak. he has a very personal and strong connection to trying to make sure something happens. >> republican senator david vitter of louisiana has an amendment that deals with health care. how does that tie in to the bill? what is he hoping to do? >> well, in large part, the big picture he's trying to draw more attention what he sees as flaw in the affordable care act. this is something he's doing to a number of bills. try to put an amendment on the delay to the bill it to bring attention. the specific piece of the amendment he has here has to do with members of congress and their staffs and which ones are

covered through health care exchanges, which the law requires. and most members their staffs to be covered by. and those who might be exempted from the requirement. he's making the point that people should not exempt themselves from this requirement of the health care law because it would show the hypocrisy of those in -- >> and likely his amendment won't be part of the final senate bill? >> i guess it is possible it could pass. the key question here is how much of this amendment he uses as a procedural delay. at this point, it wouldn't be that much of a delay. it's a matter of whether this bill gets passed. earlier in the week it drags all the way to the weekend. which mostly upset the colleagues in the senate. it would not have a greater impact on the bill. >> it passed the house. and the article said "senate clearing the way -- how about in the senate if it

passes is the white house expected to sign it? >> yeah. this is a bill has more support than almost any bill you'll see in congress these days. it passed without even a vote in the house. because there were no objections from house members. it was ironically just before the shut down showing, you know, when nothing could get passed and nothing could happen in washington it was one of the few things that had overwhelming support and 97-1 in the senate. the president is sure to sign it. and a-- sure to become law. >> you can read his articles on boston.com. thank you for being with us. >> thank you. house and senate met today to work on creating a budget blueprint for 2014.

she loved to write. she would create poems as gifts her her parents acomong christmas and birthday. she would write a poem and illustrate it. we have two early camps here from when she was about 10 years old. in the fall of 1950 jacqueline and very well known writing contest and winning essays. one was a self-portrait and question three of the essay: who are three people in list i are you -- history you wished you would have known. ..

>> ahead of the congressional jade office dog elmendorf testified before the budget conference committee. the committee was created as part of the deal that ended the shutdown in the federal debt default. the panel as of december 13 deadline to reach an agreement on a the budget blueprint for 2014.

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[inaudible conversations] com zad. >> the conference committee will come to order. if everybody could take their seats. good morning everyone and welcome. i want to thank senator murray and the entire committee for the all their work so far. since their last meeting we have been talking. we are discussing the parameters of a potential agreement. we are trying to find common ground that we are not there yet. there is a big gap between our two budgets if anyone noticed, and that is why we are talking.

we hope today's meeting will keep the ball rolling. as i said the last time the reason we are here is to get an agreement. we have spent a lot of time talking about our differences. we have got that part down cold. the hard part is figuring out where we agree. so i'm not going to start with an opening statement. we are here to hear from her cbo director dr. elmendorf area dr. elmendorf will give us a brief on the budget the economic outlook in the long-term economic budget outlook and then we'll open it up for discussion. i will recognize any member for up to two minutes for discussion or to ask a question of the cbo director. the director's answers will not come out of this two minute allotment. people can be recognized more than once if they choose to do so and we intend to adjourn at noon. with that i would like to recognize senator murray or any comments that she may have before he recognized dr. elmendorf. >> thank you very much chairman ryan and thank you dr. elmendorf for being here today and all of

our committee members are here to participate today. o. recognize the patient -- nation is facing economic challenges. our highest priority has to be making sure that we need our short immediate term needs to create jobs and boost the economy and as dr. elmendorf talk to us about today we are facing serious long-term challenges as well and that we have got to work together on. i think chairman ryan and i both know this is not easy. our budgets are dramatically different that it is extremely important that we agree and we need to step out of our partisan corners and make compromises and lay down our foundations for long-term bipartisan agreements. we have down as he has said, had a number of discussions since our last meeting regarding the parameters of a potential deal and i am encouraged by those conversations and i am hopeful that we will get to a bipartisan

compromise very soon. so i too look forward to this productive discussion today to help us reach that goal and i think everybody for being here. >> dr. elmendorf the floor is yours. >> thank you very much. my colleagues and i are happy to be here. i will briefly review the economic and budget outlook and try to answer any questions that you have. i will be referring to the charts in front of you for people in the room and those charts that been posted on the cbo web site for people watching from afar. in february, we projected in economic growth would be slow this year and a more rapid expansion will begin next year. that is still our review. in particular gdp is on track to rise 2% this year little above the 1.5% we envisioned but still only a modest increase. the unemployment rate shown in your first chart at the bottom of the front page has come down more than we had expected but

employment has not grown more than we expected. instead there has been a further decline in the number of people in the labor force. as a result the share of the population with jobs shown in the charts on top of the next page is very close to what it was four years ago. this ratio is trending downward gradually because of the retirement of the baby boomers and other demographic factors but has fallen well below its trend. we estimate employment is now about 5 million jobs short of what it would need if the unemployment rate were back down at a sustainable level and participation in the labor force was back up to this trend. the primary cause of the distress of the labor market is the shortfall in the demand for goods and services relative to the productive capacity of the economy and therefore the demand for workers. the primary reason why demand is weak is the lingering effects of

the housing bubble in the financial crisis. but fiscal policy has mattered too. the positive short-term economic impact of the spending increases and tax cuts in the 2009 recovery act has been fading for three years. other stimulative ventures have expired and the congress has enacted additional legislation to reduce budget deficits in the near term. the combined effect of the deliberate policy choices you've made and automatic stay laces in the budget has been to reduce the deficit from about 10% of gdp in 2009 to about 4% in 2013. that is the most abrupt fiscal finding since the end of the second world war and while that tightening has been a beneficial effect of slowing the accumulation of government debt our analysis indicates it has also slowed economic growth during the past few years. moreover uncertainty about fiscal policy has been unusually high owing to the surge surge in

debt and start disagreements about tax and spending policies. disagreements that have led repeatedly to delayed enactment of appropriation bills worries about defaults on federal debt and showdowns over other budget issues. that uncertainty is also dampening growth although we cannot know by how much. the further tightening of fiscal policy built into current law for the next few years as well as ongoing uncertainty about fiscal policy represent continued headwinds to the economic recovery. at this point we think 2014 will see an upswing in housing construction, rising real estate and stock prices and increasing availability to credit as well as a reduction and fiscal drag relative to 2013. in our judgment all of that will help faster growth in employment, income consumer spending and business investment.

however everyone should be cautious about that outlook. researchers have studied the historical record of housing bubbles and financial crises and have been running since 2007 that working off an excessive housing stock proving balance sheets restoring credit and regaining confidence generally takes time. we think the economy will turn the corner next year but no one can be sure. in addition to the near-term economic challenges the country faces significant long-term economic and budgetary challenges. for one thing the prolonged weakness in the economy has lowered its productive capacity for years to come. persistent long-term unemployment shown in your next chart will lead some workers to leave the workforce earlier than they would have otherwise and e. wrote the skills of other workers. in addition lower capital investment and productivity growth will reduce future output and income. moreover as you know the aging

of the population, the expansion of subsidies for health insurance and the rising health care costs will put increasing pressure on the federal budget. flip to the next page at the top in the next chart shows our production of budget deficits under current law. although deficits will fall to about 2% of gdp by 2015 they will then begin to increase reaching 3.5% of gdp or newer a trillion dollars by 2023. moreover under the extended baseline in our long-term budget outlook deficits continue to increase beyond the coming decade. as a result federal debt held by the public shown in the chart at the bottom of that page would reach 100% of gdp in 25 years from now. even without accounting for the harmful economic effects of that increasing debt. there are at least three reasons why we and other analysts are concerned about the long-term budget outlook.

first, that is already larger relative to the size of the economy than at any point in her history except for reese period around world war ii. even if that remains near its current 73% of gdp future wages and incomes will be lowered then they would be with less debt. while the government interest costs will rise dramatically interest rates returned to mourn normal levels your ability to use fiscal policy to respond to future financial crises recessions and international threats will be much more constrained and the risk of a financial crisis or a fiscal crisis excuse me will be higher than it would be with less debt. all of those problems in keeping debt at its current share of gdp will be worse if it rises significantly and persistently relative to the size of the economy. secondly project the current logged debt will rise significantly and persistently relative to the size of the economy.

projections and especially long-term projections are very uncertain but our long-term outlook shows the federal budget is on an unsustainable path under wide range of possible -- about key factors that influence federal spending and revenues. you know the main reasons. retirement of the baby boomers and the rising cost of health care are pushing up the cost of the largest federal programs. your next chart at the top of the next page shows federal spending under cbo's baseline compared with past averages. for example in the top left corner of the chart you can see social security outlays represented 4.2% of gdp on average into 1973 and 2012, the last 40 years were 4.9% of gdp last year and will be 5.3% of gdp we project in 2023. if you take spending for social

security and medicare together that was about 6% of gdp on average over the last four years. but it will be more than 8.5% of gdp by 2023 and the long-term outlook shows in 2038 it will be more than 11% of gdp. meanwhile defense spending shown in the bank of numbers is on track to be a shrinking share of gdp. all other noninterest spending taken together, everything but social security and medicare and defense will be roughly the same share of gdp in 2023 that was on average during the past 40 years and that it is today. i want to make it clear that the steadiness of this gdp share of the all other category masks a very different pattern among sub components. you can see it in the chart at the bottom of the page in this other category means tested health care programs are taking

a growing share of gdp owing to the expansion of the insurance coverage the affordable care act and rising health care costs per person. in contrast non-defense discretionary spending is on track to be a sharply shrinking share of gdp owing in part to the caps for the budget control act. we show figures like these not to suggest that you should try to repeat the budget configurations of the past but instead to help you and others understand which parts of the federal budget are expanding relative to the size of the economy and which are shrinking. there's no particular reason outlays for social security or medicare need to be cut back to the historical average share of gdp when a larger fraction of the population is old enough to receive benefits from most programs. however if those programs are not cut back then we will need to collect a larger share of gdp in tax revenue relative to our history or cut back on other federal benefits and services

relative to what we have been accustomed to. the third reason for concern about the long-term budget outlook is the current laws underlying our baseline projections include provisions that would restrain deficits in significant ways that might raise widespread objections as they took full in effect. i will offer two examples both of which can be seen in the chart to just discuss. first given the structure the tax code revenues would rise above their historical average share of gdp in just a few years and would keep rising. reaching more than two percentage points above the historic leverage by 2038. at the same time, outlays for defense and non-defense discretionary programs would be smaller relative to the size of the economy in 2017 and beyond than at any point at least in 50 years. indeed discretionary funding for the next decade under the current caps would be about $1.5 trillion last that would be

needed to provide the benefits and services that were provided in 2013. to be sure depending on one's goals and priorities there will not be anything wrong with either of those developments. my point is simply that if either of those current law policies is not taken out of the increase in tax receipts for the sharp drop in discretionary spending and other changes to spending and revenues are not made the deficits will be greater, maybe a lot greater than we are projecting current law. to sum up we face both short-term and long-term economic challenges and those challenges are related to fiscal policy in different ways. the long-term challenge can be addressed in part by reducing future deficits whereas the short-term challenge has been exacerbated by the sharp reduction in deficits. policy changes that lead to less fiscal tightening in the near term but greater tightening in later years would improve the economic outlook for both

relative to our current projections. to help you and other members of congress make informed decisions about possible policy changes we have just completed our biannual al-youm of specific options for reducing the deficit. we will be posting a report on our web site at noon today. i want to close on a note of optimism. when i make presentations like this i worry that my toting up the economic and budget challenges are country faces can make the problem seems so large that it actually discourages people from tackling them. that would be unfortunate. of course a clear resolution of the long-term budgetary concerns would be beneficial. but even if that is not feasible right now reallocating elements of the budget to better with the countries produces you feed them while reducing uncertainty that fiscal policy next year in improving or at least not worsening the long-term budget

outlook would be a good thing for the economy and our fellow citizens. even if it lets significant challenges to be addressed in next year's budget process. thank you. >> thank you doctor. instead of making us more of a formal hearing procedure think we will make it more for an informal discussion. i will ask members to put your placards right side up if you want to speak and will alternate between republicans and democrats. his image and so he can keep the flow going and respect everyone's time members comments or questions will be limited to two minutes not including his time in members can speak more than once of course so i see mr. portman. i will go to mr. portman and then mr. whitehouse in the queue after him. >> thank you mr. chairman and dr. elmendorf thank you for your insights this morning and as you said at the end you have kind of depressing information for us

which is things don't look at and they could be even worse if we don't continue to see these relatively high rates of revenue as you said over the coming decades and continue to see these relatively low rates of domestic discretionary spending. i have two questions for you quickly. one is with regard to tax revenue someone is regard to interest rates. it seems to me if we go back to an and historical level on interest rates we have a huge problem in terms of meeting these protections that you lay out and specifically $120 billion in increased deficits so if you could give us an answer on that and what you consider to be the historical rate if we went back to that historical rate of interest and seeing a creeping up of the rate today what would be the impact on the deficit and second with regard to taxes, you mentioned that reading from what you said that tax revenues are going to be above the historic level by 2038, two points above the

historic level. what will be over the next decade the average tax as a% of gdp? i think that figure is 18.9% as they look at the material you gave us and how does that compare to other decades? my sense is other than 1993 and 2002 we have never had a tenured period with revenue at that level. if that's accurate i would like to hear it and if not i would like to hear it and then second what will it be like in the next decade understanding there is more uncertainty for their out of two questions one on interest rates and the impact on the deficit and where are we in texas as a% of the economy and how does that compare to it past decades? >> we expect to just rates will remain fairly low for another few years because the economy although recovering will have low resources and motivation and keep the federal reserve fairly

easy posture for monetary policy and private credit demands low. we think they will stay low for a few years but then we think they will return to more normal levels. we project that short-term interest rates, rates on three-month treasury bills will raise to 4% by 2018 or so and we think 10 year treasury note rates will be a little over 5%, five .25% and normalization of interest rates has a profound effect on the interest so nominal interest payments by the federal government last year interest was a couple hundred billion dollars and we project in 2023 that it will be about 800 billion dollars. in 2023 alone. the share of gdp will rise from less than one point 5% to 3% of gdp in those 10 years. >> are there projections whether

that is a conservative estimate or not talking about almost a trillion dollars? >> the question of tax revenue, as you know the bureau of economic analysis revises historic gdp data and we have incorporated that into our projections as the share of gdp so the number i have in front of me is tax revenue will average 18.3% of gdp over the coming decade and that's taking the larger level of gdp built into history and projecting it, taking the same projection dollar revenues so we get 18.3% now and that compares with an average historic with 17 .4% and if we look further out by 2038 under current law we think that fraction will be up to 19.7%. >> have we ever had, given the apples-to-apples comparison of the new gdp estimate have we ever had 18.3% at any decade in

our history? >> no, i don't think so senator. >> we are higher for the next decade and it will continue to increase after that. >> taxes will be well above what they have an historically under current law. >> i think we had similar rates perhaps close but in part due to a bubble as we know now and also did not continue at that rate in this projection is to continue to the highest sustained rates in our country. thank you. >> mr. whitehouse. >> thank you chairman. mr. elmendorf, welcome. i think we come into this discussion with spending cuts that we have already accomplished of $1.5 trillion adding to $1.75 trillion including interest savings. with tax rate increases increasing revenues by 600 billion dollars, that's

$700 billion associated savings roughly and with tax deductions loophole closing etc. of $0, nothing yet and i would like to put up the a slide if i could that shows the ratio between -- it shows the ratio between what we collect fair tax system and what goes out the backdoor through deductions and loopholes and you will see in the louvre for every dollar that we actually collected the tax code, 90 cents goes out the back door for individual taxes and for every dollar we cut in the corporate tax code 60 some sense goes out the backdoor through deductions and loopholes. mr. elmendorf you said and cbo said in a report last year on choices for deficit reduction that expanding tax bases, which i think his is cbo language for

reducing that money going out the backdoor, the tax code and you are nodding yes, quote would reduce the deficit and generally have a smaller negative effect or even a positive effect on how efficiently the economy operates. how small negative effect was in reference to reducing the deficit by raising tax rates. but you did mention not only a small negative effect but also the chance of a positive effect on the economy from reducing the tax spending in the loopholes. could you explain that? >> yes, senator. the different treatment of different sorts of consumption in different sorts of investment in the tax code because of the whole slew of provisions over time distorts the decisions that households and businesses make and in some cases those

distortions behave as an effort to correct other distortions that exist and the reason people don't do enough of something to achieve some social gain but some of them distort behavior that would otherwise be efficient and it becomes inefficient because of the greater tax subsidy or lower tax rate on certain sorts of activities so to the extent tax reform effort were to reduce some of the differences in the tax treatment of different householder business decisions it could lead them to make more efficient decisions and that would improve potentially gdp in people's well-being. it depends up course on the nature of the changes that are made. certainly tax reform could have those effects. >> just to be clear the gains from the tax loophole closing would go disproportionately now go disproportionately to the highest income sectors of the economy. >> i just want to make sure the

two minutes are two minutes. >> i was following senator portman's -- >> we have done an analysis of the description of tax expenditures. certain ones are seen disproportionately by higher income people and others are received as proportionately lower like the honor and income tax credit by encourager to look at that report and we are happy to send a copy for you all to look at. >> let's go to senator sessions and then mr. clyburn. >> mr. chairman, with regard to the tax loopholes we do need to close those. we have a far too complex system that is causing abuses to occur. the finance committee and the senate are working on that very hard. they're trying to reform our system and senator baucus and senator hatch have solicited ideas and i hope we can make robbers on that and i would support it for sure.

looking at here chart mr. elmendorf on table 6.2 i think it helps explain why it is important that we sustain at least the growth in spending. we are not talking about long-term spending reductions. we are talking about containing and constraining the growth of spending and you indicate on that chart that if we were to maintain or actually reduce spending over the next 10 years by $4 trillion that we would achieve greater growth than would otherwise be the case. indeed your chart shows that i 2038 we would have 7% more growth but if we would maintain our present course and not achieve $4 trillion in spending in reductions we would end up

with minus 7%. that's a very dramatic difference. i will share this with you. the federal reserve has missed the growth projections in the future. it might be close this year but in the past you missed it quite significantly. i just saw terrence magazine had a cover story on slow growth in a project for the next 20 years growth will be 1.8% based on the number of research and mark zandi has testified several times for checks 1.8% for the next five years. mr. elmendorf this description prescription suggests we could have better growth if we get serious about constraining our spending. is that accurate? >> senator as you know you are referring to our long-term budget outlook which looks like

the longer-term effects of different path to federal debt and not distinguishing between the effects of reducing spending or raising revenue. this is simply the effects of nero deficits and you are absolutely right that nero or deficits would be good for the economy in the longer-term. as i said earlier today on many occasions for deficit reduction has occurred over the past years has been a headwind of economic growth because the near-term problem is primarily a shortfall in demand for services and that is why it's different from the economic challenge which is to loose the supply of production in labor and capital. >> mr. clyburn. >> thank you very much mr. chairman. mr. chairman yesterday "the wall street journal" ran a front-page story dealing with the widening job gap in our economy and you

may recall mr. elmendorf but during the so-called supercommittee you and i had a little exchange about the impact of unemployment rates on our deficit. there was a stark correlation between the two. now, this report that we just saw, if we look at 30 years, the 30-year study that you reported to us that was released while we had those discussions in the so-called supercommittee it means that things have gotten even worse since then when it comes to unemployment rates and the impact that is having on our

deficit. i really would be interested in how you view this study as well as a study by uc berkeley indicating that all of this increase in wages at the center of those increases went to the upper 1% and most of that to be 1%. i am really interested in, but i'm also interested in whether or not you will define spending as many others are beginning to define spending. a lot of people said and i would not to sit read that we ought to look at just cutting spending but the question is whether or not entitlement programs, if you call that spending, what you call tax expenditures tax --

because i have noticed a lot of economists are now looking at what we call tax expenditures at tax entitlement because this occurs time and time again and gets back to what senator whitehouse said trade i would be interested in your views on tax entitlements versus tax expenditures. >> congressman to start i'm not familiar with the studies you mention that it is certainly true that there is a great diversity and economic experience in this country but all of the charts that i tend to show about the average unemployment rate for overall income growth are missing and the diversity lies underneath that. for example if one looks at the unemployment rates although the overall unemployment rate in a tovar was 7.3% the unemployment rate for people between 20 and 24 years of age was 12.5%, much

much higher. the unemployment rate for people with less than a high school diploma was almost 11%. the unemployment rate for african-americans was a little over 13% so it's a tremendous and of course there are groups of people for whom the unemployment was less than the national average so there's a tremendous -- and how this recession has hurt people and whether people's fortunes have improved or not during this recovery and they're a long-term trends in which a larger over time growing share of the total national income is going to people at the higher end of the income distribution and more particularly many points have experienced a rather small income in orbit. of many years. we have done an ongoing analysis of that i'm working now to update our analysis.

there will be one shortly from us to look at the discretion of the federal tax burden distribution of income in the country. on your point about tax expenditures the term tax expenditures is an old term. it's in the budget act that established by cbo 40 years ago but a large number of analysts on both sides of the political spectrum and a wide range of views about appropriate policy who think from an analytic respective tax expenditures are the best form of government spending because they are direct actions by the federal government to get benefits to particular activities or particular groups of people much like federal spending programs. >> thank you. let's go with senator crapo and senator baldwin. >> thank you mr. chairman. dr. elmendorf i want to ask a two-part question like senator portman did. first of all in 2009 when we had

the $300 billion stimulus package before the congress, i believe you were the cbo director. you are just starting them and cbo issued a report that is a common type of report that we see from economists who testified before us which said the stimulus package which was entirely or a money would in the short-term have a stimulative effect but in the longer-term which if i recall correctly was two or three years, starting in two or three years would start to have a depressing effect on the economy because of the impact of the borrowing. is that your recollection of that report? >> we actually still update this pursuant to federal law on a regular basis. the recovery act, the biggest boost to the level of output employment fairly soon after it's enacted has provided a

waning boost since then. we think the extra debt will start to be an actual drag on the level of output later in this decade so i think your qualitative point is right that i would say a few years. my question is this an the second aspect of it is as we look at the fact that we are getting closer and closer to the drag of that stimulus spending and the debt that is growing and i think you have indicated we are in unsustainable path and as we look at the question of tax expenditures that senator whitehouse pointed out that we need to look at many of us have been trying not to raise revenue because of utilization of the tax increases but to reform the tax code by flattening the base and reducing the rates. i believe that you testified in the past but that would have a positive stimulative effect on the economy if we approach the tax code in that fashion. would that be true? >> i think it would have a stimulative effect. the size of a stimulative effect

depends on the nature of the tax reform itself. i think it would certainly be a positive factor senator. i want to be careful attaching particular adjectives to the general notion of tax reform. as you understand lots of things can be labeled that and it depends on if you or your colleagues are willing to the base broadening measures or remove the tax expenditures in order to bring down tax rates. >> thank you. >> senator baldwin. >> thank you mr. chairman. i wanted to talk a little bit more about the chart you have on the second page, short-term versus long-term unemployment rates. the federal reserve recently released a paper that stated that long-term unemployment and long-term unemployed people to

come less and less attached to the workforce and obviously lose skills that they once had and as their productive capacity diminishes, it also diminishes the capacity for overall economy. the paper concluded that what should be a cyclical downturn in employment has the potential to become structural. i guess i just want to hear you dig down a little bit deeper on this topic because when i look at this chart this is an alarming figure. if that were the top priority of this conference committee to dig into that problem, what are our key fiscal policy options to prevent this from moving from a cyclical problem into a structural problem? >> senator when you think of the

weakness in the economy over the past five years has reduced their productive capacity for the rest of the coming decade. what we have said so far is that we have reduced the projected level of potential output for the end of the decade at 1.5% because of the downturn and that is partly through workers leaving the labor force are loosing skills and partly through reduced capital investment, partly through lower productivity but we are carefully reevaluating those estimates. now we are beginning the process of doing next year's economic budget projections and we may conclude that these effects are larger than we had expected and i think you're absolutely right. a persistently high level of long-term unemployment is a very worrisome factor for the economy. we wrote a report a year or two ago now about policies used to bring down unemployment. i think some of those other

undead macroeconomic side and stimulating demand for firms products that firms need to higher workers in order to meet that demand and that can be done partly through monetary policy which i'm not here to talk about but also fiscal polity in the primary way to stimulate economic activity in the short-run is to lower taxes or raise spending. now, however to be clear as a consequence in doing that without taking other steps to pay off that debt and the point that senators crapo was talking about. there are also microeconomic policies that try to help improve the workings of labor markets or improve the skills of workers by strengthening their training or by improving their ability to find jobs for which they have the right training and the number of things that can be done. i don't think any of them should be viewed as silver bullets but mostly ideas that have been

tried and worked for not work so so well on the small-scale but wouldn't be happy to sit down and talk more about that set of options. >> justice of closing comments on this, i was talking about unemployment short term versus long but if you look at the jobs reports, we have greatly diminished manufacturing and construction sector and what added employment we have seen has been increasingly in lower wage sectors like leisure and hospitality and retail, which also relates to the productive capacity of our nation. >> that's right. it is importantly a matter of people finding jobs but also a matter of their finding jobs that use their talents in the ways that contribute to the economy and allow them to receive higher pay. >> lets go with dr. price and senator sanders. >> thank you mr. chairman. i want to commend you and senator murray for continuing to

provide opportunities for exchange of ideas in gaining information. dr. elmendorf welcome back once again. i was struck layer three conclusions. debt larger than in any time in our history since world war ii and that will continue to rise and we are in your words on an unsustainable path and number three that current law if followed will result in a decrease of congress's ability and the people's representative abilities to provide participation in defense and non-defense areas to a smaller level than anytime in the last 50 years to 2017 and beyond so the fundamental change in the work that congress does. i'm hopeful that we can reach agreement and i think we can reach agreement. i'm hopeful it is large but i think we need to walk before we can run likely. my question is a specific question about sequester. the discretionary side of spending will decrease january 15 down to 967 or so and

there are many that believe that is not appropriate on the defense or non-defense side. i've been intrigued by some that come come to me and said that a way to mitigate the possibility for the plan is to accelerate the contributions that states make to the expansion of the medicaid program contained in the aca because you know for the first three years is 100% federal subsidies. is that one option that might be able to allow us to mitigate the challenge of sequester and also potentially decrease spending? >> congressman, that is one way to reduce federal spending to have states larger portion of the medicaid costs and if you were to do that simultaneously, raise the caps on discretionary spending than you think i could could -- i think you could accomplish this the spending.

there are an awful lot of ways to cut spending in ways you would use to reduce the debt or to offset some other element of the projections that you don't think are good for the country. >> thank you. thank you mr. chairman. >> thank you mr. chairman and thank you dr. elmendorf for being here. dr., and dorf i thought your presentation was very strong and interesting except you know i think you kind of left out some very important facts of contemporary america and i'm going to tell you what i think and you tell me if you agree or if i'm wrong. one of the difficult jobs that this committee has is not only trying to come up with a budget which is hard but also within the budget deal with ironies. when you spend money and you cut money it impacts real human beings. my impression is that in america today we have the most unequal distribution of wealth and

income since the 1920s, late 1920s and in fact in terms of financial wealth the top 1% owns 38% of the wealth in america while the autumn 60% owns all of 2.3% and my understanding also list the top 1% because of income earned more income than the bottom 50% and between 2009 and 2012, 95% of all new income went to the top 1%. does that sound roughly right quick. >> senator it sounds roughly right. we have not done analysis ourselves through 2012. we are back to the 1920s and i'm not an expert on the other work that you are certainly right the distribution of income wealth is much more uneven now than it has been in decades. >> i say that because as we go forward in terms of our priorities and some people want to cut social security and

medicaid and medicare programs for low income people we have to recognize we have more people living in poverty dave than anytime in american history 40 says -- 46.5 million people people. as i write? >> the cognition of poverty rates is a complicated business and the common series includes many of the benefits the government provides to line come people. >> let me ask you this also and this is an important point. again it's important to understand the past as we go forward. the chart you gave us tells us that up until 2001, 99, 2000, 2001 we had a surplus. is it fair to say the reason we began to go into a deficit was because we went to war in iraq which by the time we take care of the last veteran it will cost us $3 trillion. how did we pay for that were? >> senator as you know congress cut taxes.

>> in the middle of a war? you are not suggesting in the middle of a war which cost three chewing dollars congress cut taxes for the rich? you are not considering that are you? >> congress cut taxes for a lot of people and congress and a lot of money fighting overseas. >> the reason we are in a deficit today is to unpaid wars medicare part d unpaid for large tax breaks a trillion dollars of which went to the wealthy and i only say that because as we move forward is to figure out where want to be as farce parties you have to remember that fact as well and thank you mr. chairman. >> mr. chairman? my response to your senator would be to note we released a study earlier this week and the distribution of federal spending and taxes for the latest full faith of data we could collect but it goes through in great detail the ways in which different federal programs cash

transfers another source of transfers and also federal revenues how they affect households in different categories and different income levels and those of you who are particularly concerned about the distributional impact we hope this information will be helpful to you. it predates the percentage -- the overall picture. >> lets go with senator johnson. >> thank you mr. chairman and director elmendorf you show the dramatic impact of means tested health care so i want to ask a multipart question on the affordable care act. certainly when i learned the details of the act in no way shape or form did i think america would be old to hold onto the health care plan. i knew millions of americans would lose their health care plan which is why in the budget process in the senate they pass an amendment on a bipartisan basis asking the cbo to actually score what would happen when 30, 50 and 100% of employees lose

their sponsored care and how much cost in terms of -- so if three-part question. did you believe the president when he said if you like your health care plan you can keep it in two has the cbo done any work to actually give congress the estimate of how much obamacare is really going to cost and three your current cbo estimates is over next 10 years obamacare is will cost $2.4 trillion i think the estimate is it will be a trillion dollars of tax revenue associated with the plan where does the other $1.4 trillion come from? >> so senator your first question, as you know our initial and announces of the affordable care act showed in our judgment some people would lose -- would not have employer-sponsored insurance we would have had in the absence of the act and we discuss discussed at some length with congress at the time our view that people who are buying insurance in the

nongroup market not from an employer but on their own would face on average an increase in the premiums they pay for health insurance primarily because the policies they would be having to buy under the affordable care act would cover a larger share of services so there co-payments would be down but their premiums would be up and we made that information available to congress in 2009. and your second question as you know we have done a very lengthy analysis of how the cost of the coverage expansion under the affordable care act would vary depending on different sorts of responses by employers and employees to the incentives created by the act. we gave a great deal of thought to our analysis and her basic estimates of the affordable care act and we did a long analysis of what happened in terms of sources of insurance coverage in the cost of the federal government as employees and employers behavior -- we have not done the not done the analysis you requested what

would happen if all employers were to drop employer-sponsored insurance. we don't think that is a plausible outcome in the analysis we did and a wide range of plausible possibilities. >> our amendment is for 30, 50 and 100 i would ask the cbo to conduct that. speeding also be did refute is a wide range of possible possible outcomes. on the third issue affordable care act, has a cost over the current 10 year period from the coverage provisions that we estimate to be about 1.3 or $1.4 trillion that money is offset in our estimate by a combination of cuts in other sorts of spending primarily medicare spending and increases in tax revenue relative to prior

love. >> what am i looking at when i get $3.2 trillion over the next 10 years? >> i'm afraid i don't know senator. i have the table in front of me that is our estimate of the budgetary effects of the provisions contained in the eca in the bottom line is $1.4 trillion. we should talk about the numbers you are looking at senator. >> congressman lowly. >> mr. chairman i asked the record of their record of their preceding includes a letter submitted by the appropriation committee chair senator mikulski and representative rogers along with a statement by each calling for sequestration to be replaced. >> without objection. >> as we are all keenly aware january 15 is the deadline for passing legislation to keep the government running. the shutdown caused the our economy 120,000 jobs, the billions in economic activity tree this conference committee

must be successful in reaching an agreement on a funding level for fiscal year 2014 with enough time for delta pass before before january 15 and a funding level for fiscal year 15 so we avoid another dysfunctional, unrealistic budget and appropriaappropria tions process in just a few months as noted in the letter from appropriations chairs. there is also bipartisan demand for us to end the sequester as mr. rogers has said. sequestration and i quote is unrealistic, ill-conceived discretionary cuts must be brought to an end. the cbo has repeatedly noticed noted the sequester will cost our economy an estimated 800,000 more jobs than 2014 alone. so i think it bears repeating, could you please share cbo's

analysis on the overall impact sequestration on jobs and economic growth for 2013 and what you think the impact will be for 2014 if sequestration remains in place? >> congresswoman i think quoting from a letter from congressman van hollen a couple of months ago we said that if the automatic spending reductions specified in the budget control act including both the effects on discretionary spending and the sequestration mandatory spending those reductions were eliminated that would increase real gdp by 610 of a% in the fourth quarter of 2014 and would raise full-time equivalent employment by 800,000 people by the fourth quarter of 2014. >> i thank you very much

mr. elmendorf and i really thank you for a testimony today. this just amplifies the states of our conference committees work and i hope our committee will really begin working in earnest toward an agreement in the coming days to prevent the economic damage that partisan politics and the sequester could cause in the coming months. thank you mr. chairman. >> thank you. let's go to congressman cole and then congressman sub two. >> i want to assure you that my good friend and i did not coordinate our remarks and i too was going to ask that letter be placed in the record so the fact that my friend has done that. just a couple of points and then a question that want to quote from that letter because it does make it couple of important points. we asked the budget committee and your your leadership endeavored to agree on

discretionary number no later than december 2 preferably by november 22. november 22 is nine days away and we don't have any scheduled meetings between the 22nd and december 2 so this is a matter of some urgency so our colleagues on the appropriations committee which of course includes my friend and myself have the opportunity to get about the business of arriving at real spending bills. this is a bigger and a liberal -- little or problem them what we faced with. mr. elmendorf has given us a wonderful presentation of long-term debt. he is absolutely right we need to address it however the more immediate problem the two bodies are only $90 million apart into barro point made by senator mccain in our last session it's not that big of a deal in a $3.5 trillion budget and we have to be get able to get the preppy

number for fiscal year 2014 i would hope 2015 as well so it's good to literally have an uninterrupted stretch of time to do with their budget. let me ask this question to you mr. elmendorf. you are probably more familiar than anybody here with the house budget the senate budget and the president's budget. i would ask you if you could and you may not be able to do this off of the top of the heading of pop we can't but can you tell us are there enough savings in those three budgets to bridge the gap between the house and the senate budget which again is only $90 billion over a two-year making the to chairman said they could deal with 125 lien dollars for spending not a lot out of almost $7 trillion. .. list of those sorts of cuts so we have the options really that all

sides have agreed on to one agree or another in that area. >> we can try. budget resolutions is not pieces of legislation that we attach costs to. there are plans of the budget committees that they build using information from us. but i can see if we can, if we can be helpful to you in that. >> i would appreciate that. thank you very much. >> we have all looked at each other's budgets and look where the overlaps occur. that is the discussion we're having. >> just if we had that at the disposal for all the members. i think question put the appropriators to work. >> thank you. >> senator coons. >> i'm deeply concerned about what's reflected in your chart that while short term unemployment has come back down, long term