lawmakers and others have they ought to express them. certainly if they are good ideas we may take them up. .. here in the united states. consequently the united states was noted by the syrian government today that it must immediately suspend operations of its embassy in washington d.c. and is honorary consulate

in troy michigan in houston texas. syrian honorary consulates are no longer permit to perform consular functions and those who are not u.s. citizens or lawful permanent residents must depart united states. >> i guess i wonder why didn't this happen nine months ago? >> following the announcement of the syrian embassy in the consular services and in consideration of the atrocities perpetrated by the assad regime this step was taken. i think the suspension of consular services was the near-term precipitating event. >> ambassador mcfaul said today in response to putin's speech that there should be, the president should enact more sanctions today and a new response should take place today. >> i think i said. >> there is a hint that more is coming. >> morris coming and i don't have timing for you but work is being done to make further

designations and obviously. >> will continue to be on the individual? >> i'm not going to itemize what's under consideration are what the decisions will be. the authorities of the executive orders are broad and give us the tools we need to take appropriate action as we see fit given the decisions by the russian government. >> can you give us more on. >> the president spoke with angela merkel not that long ago today about ukraine and about the collaboration that the two leaders have engaged in with our shared allies and others to ensure that the actions in ukraine and crimea the transgressions by the russian government are not viewed as legitimate by the international community and that effort is

clear to see and it was evidenced by the 13-1 vote. i'm not going to speak for chancellor merkel that i would point to her public statements that have been strong on this matter and on the matter of the need for further steps to be taken in response to russia's actions. [inaudible] the op-ed that seem to suggest that the president takes, that he is left with bad options because he takes too long to make decisions in certain situations whether it's serious or russia on foreign policy. i didn't know he had a response to that. >> i don't have a response. >> do you have anything to say? >> all the way in the back. two questions. the malaysian government is

incorporation with the -- [inaudible] >> you will have to repeat. he said malaysia is criticizing? >> linking cooperation with the fbi. >> what i can tell you is the malaysian government has the lead in this investigation. u.s. officials are in kuala lumpur working with the malaysian government on the investigation. this is a difficult and unusual situation and we are working hard and close collaboration with the malaysian government and other partners to investigate a number of possible scenarios for what happened to the flight. our hearts of course go out to the families and passengers. they are in a truly agonizing situation. we remain fully committed to assisting the malaysians and working with our other international partners on this investigation and on this effort and we are providing assistance through the ntsb through the faa and the fbi so i don't --

i haven't seen the report you are mentioning. i can assure you we are in a close collaborative relationship as regards to this investigation. >> some news reports are saying that the missing flight could have landed in the u.s. military base in the center of the indian ocean. >> i will rule that one out. >> you mentioned earlier there will be costs and a lot of people who have looked at these sanctions imposed yesterday have found them to be minimal and in some cases risible. mr. goes and said they were written by a prankster and a lot of the people who are sanctions don't have assets in the u.s.. or they say they don't. >> bill what i can tell you is the actions taken against the

lebanon individuals were part of a process that will continue because of continued unwillingness by russia to resolve this in a way that is consistent with international law. and the costs have in real and they will increase. i am not going to get into a guessing game about what the decision-making process is among president putin and his advisers about steps moving forward or the acceptability of the rising costs that are being imposed on russia for russians actions. what i can tell you is they will increase. >> what are those costs? i mean we don't have any indication from you what the costs are. >> because somebody pops off on a television camera doesn't mean that the costs aren't real.

a blocking of assets and access to assets, at blocking of an individuals ability to travel are not real consequences and as outlined in the two executive orders that the president signed there are authorities in those orders to expand considerably the sanctions imposed in response to russia's refusal to reverse course in this matter. and so the costs will increase and as we just discussed with regard to one of the provisions, one of the descriptions of those who good to be sanctions under yesterday's executive order include individuals who are influential with an close to and provide material support to government officials but are not members of the government. anyone who understands how the russian system of governance works and who has influence in that system understands the kind

of person that we are talking about here and the fact that they have substantial assets not just in russia but i brought. >> exactly to that point people have pointed out that the people who were sanctioned yesterday are not top-level oligarchs in russia. there are people who. >> i don't disagree with that but i'm not sure what the point is. we took steps identifying the people and further steps will be taken as i made clear today in response to russia's continued refusal to avail itself of the means to resolve this diplomatically in a dialogue with ukrainian government with the participation of international interlocutors through the presence of u.n. and ose be monitors in ukraine through a process that is established under ukrainian law and the constitution that would allow for the legal discussion of decisions like changing the

status of a region within the sovereign state of ukraine. these are all options available to russia, available to those in crimea to have taken this step. russia has not availed itself to those steps with and thus there will be further costs imposed not just by the united states but by others. [inaudible] >> i'm not going to psychoanalyze. i'm not going to predict actions. what i can say is that we have been very clear that there are costs to this behavior. those costs have been imposed and are increasing as the behavior continues. >> they just don't look very severe. >> well i get your point. it's yours to have. i can tell you what we are doing and what our policy is. >> on health care you started out by saying 5 million people are enrolled. is that the correct word enrolled since we still don't know how many people have paid their premiums?

is it 5 million have signed up and will we get the information on who is actually enrolled? >> cms is working to provide more detailed data on who has already paid their premiums and what percentage of the population of enrollees that includes. we can point you to major insurers who have placed that figure at 80% give or take depending on the insurer but we don't have specific data in a reliable enough form to provide. i think it's how things tend to work and what is ironic to me i think is you know in some ways it seems like yesterday in some ways it seems like five years ago instead of five months ago but i doubt a they stomach questions i got at the time that anybody would have done anything but laugh if i had said there would be 5 million enrollees by

march 18. >> a couple of weeks ago the enrollment figures they did say they are working on the data and they hope to have the data soon but do you anticipate it would be by the end of march? >> i would refer you to cms. i understand what is happening here which is the battle to discredit the process has been lost on the grounds in the arena of nobody's going to enroll and healthcare.gov is a disaster and the whole thing is going to collapse of its own weight. that didn't happen and i apologize to those who were hoping it would but what we are doing is systematic leak implementing a law that provides enormous benefits to millions of americans who are making clear that they want us to do that at the demand they are showing. every time there's an issue that needs to be resolved we are going about the business of resolving it. every time there is data that we are able to provide in a responsible way we provided and

that's going to be the case here. what i can tell you is a lot of people have signed up and a lot more will sign up. they are signing up because they want the benefits provided by the options available to them and you know i am confident that no matter what the number is on april 1 there will be those who find it insufficient. >> the last one, one reason changes aren't covered is they're looking for an new job so i wonder if you will be looking for health care and going to the exchanges anytime soon? >> i would say a couple of things about reports on numbers at the white house which is the level of accuracy is inversely proportional to the quality of the sources. >> can we get your take on it than so we can get the most accurate version? >> i have a great job that i love. yes, sir creates the vice president biden with president

komorovsky this morning said he was not surprised to russia's moving ukraine because the russian budget defense grew 400% in last eight years and criticize nato members who scaled back their defense spending. does the white house agree that nato members considering the ukrainian crisis should reconsider their military expenditures? >> i didn't see those particular comments. i can certainly understand the concern and suspicion on the half of polish officials with regard to what russia has been doing in ukraine. i think that if you look at overall military spending by this country say 10 days ago you would see dramatic increases even as we now rationalize our military spending after having ended one war and being in the

process of ending another. what i would also say is that if you look at the presidents submitted budget he contains within it both the top line for defense spending and a conditional $25 billion through the security and investment fund that we certainly hope congress will support because we believe that is an appropriate additional amount of spending that we should see in our defense budget. [inaudible] >> i will wait to talk to nato to hear what the institution itself has to say. i don't have it at my fingertips the figures on defense spending by nato members. april. >> two questions, one on health care. you're over 5 million enrolled. what is the anticipation of this white house or march 31 and what

are your numbers for march 31? >> you know i'm not going to do that april, right? all i can tell you is we have a lot of people who signed up and there are going to be more. our goal has always been to get substantial number and for it to be demographically and geographically allocated in a way that allows the marketplaces to function effectively. we believe very strongly that we will achieve those goals. there has been some talk over the months about what target figures there are and cbo has made estimates and revised estimates and i can point you to cbo for the cbo's figures. what i can tell you is since the very very rocky start that this enrollment period endured, we have seen substantial interest

rewarded with an ability consummated to enroll in insurance coverage through the marketplaces. that's a good thing. the purpose of the law was to make sure that americans across the country had options available to them for quality and affordable health insurance and that is being realized. we have a lot of work to do. we are 13 days out. a lot of people can and will still enroll and we are doing a multifaceted campaign to reach as many people as we can so they know what their options are and they know that march 31 is the deadline and they need to enroll by then or they won't be able to until next year. >> is there a possibility that 7 million could be met especially this week in the present told u.s. si that he is anticipating large numbers to come in on the site and through

the other sites that are linked to the federal government to register. >> we have all learned through hard experience not to predict success but to do the hard work necessary to create success when it comes to this effort. there are a lot of people working extremely hard to ensure the web site is functioning, that all the various issues that are resolved as we smooth out the transition are being resolved effectively for the american people and that work is going to continue right up until the deadline and it will continue beyond that in the various efforts as we continue to work so what we feel positive about is since the wretched start to healthcare.gov we have seen a system that has functioned effectively for the millions of americans who want it to work for them and it was on us to fix the problems and

some very talented people worked hard to make that happen. we have got 13 days left and i want everybody and i know the audience is huge but anybody who is out there watching should be aware that march 31 is the deadline and they need to make sure they have the information they want and need so they can enroll by march 31. >> what would it take to see a gh versus a g7 and what would it take for russia to be involved? >> i wouldn't put it in terms of that institution and the meetings and the summits that it holds. i would simply say the suspension of reparations for that g8 summit are the result and that suspension is the result of the actions that russia has taken so that positive that would come out of

russia reversing course might include restoring preparations for the g8 in general but i think the positives are far greater than that. jared. >> you described the costs to russia as real and significant and effective. can you at this point point to any hesitation or a reversal of course that russia has made due to the sanctions and the other costs the united states has put into place? >> jared i want to congratulate you on the penetrating question. i think it's very clear that russia continues to pursue a course that is in direct violation of international law that directly contradicts its obligations under international treaties and understandings of memoranda that has ukraine and other nations and that is why we

are taking the actions we are taking. that is why the cost will increase until russia changes course. >> you can count no success is? >> you have seen what has happened today. i am not sure your point except that as long as russia and i am reinforcing the point he asked if russia refuses to change course it will incur more costs. imposed by us in imposed by our friends and allies around the world and those in the global economy. >> more clarifications. so the united states will read read -- never recognize the sanctions on russia today. does that mean the sanctions that have been put in place will remain in place until russia reverses what it has done? >> sanctions will increase as the nations will be forthcoming so it's hard for me to put a pen

on what the ongoing consequences of that kind of action would need. what i can say without question is that this action, the results of the referenda and the attempt to annex a region of ukraine illegally will never be recognizerecognized by the united states or the international community. >> and should we then assume and i think he strongly implied so i will ask directly the g8 summit in sochi will not happen unless russia. >> all i can say right now john is preparations for that summit have been suspended. does preparations don't look likely to be resumed anytime soon but i don't have an announcement to make about that at this time. we are focused on as we have been throughout this situation

providing support to ukraine, rallying the international community in opposition to these actions and conveying very clearly to the russians what we believe are very sensible options for them to take when it comes to ensuring their interest in ukraine are protected and recognize. >> on the seven russians that were sanctions assets can you tell us to any of them have assets in the united states? >> that is not information i have and i would refer you to the department of treasury for those kinds of questions. what i can tell you is those named of the seven and four others under the designation, the seven you mentioned are very well-known and prominent members of the russian government or the duma and they fall under the category of russian government

officials that is spelled out in the executive order. that executive order contains expansive authorities for the designation of other individuals and entities and what i can tell you is they should expect further action to be taken as russia continues down this path. >> a political question. earlier today the chairman of the republican party predicted a republican tsunami this fall and i was just wondering if political forecasters at the white house. [inaudible] >> it's an interesting choice of words but i think the president is focused on it and democrats are focused on a message that supports the policy priorities that we have which consist of the steps we can take to expand

opportunity and reward hard work and responsibility in this country and that policy approach is supported i is substantial portion of americans across the country. that is the way we approach this election cycle eco-'s elections and the end are about who makes the decisions going forward in congress, in this case when it comes to policy. we are always engaged in debate about what the proper policies are when it comes to how do we grow our economy and how do we reward hard work. what to me doesn't seem like a particularly substantive argument is that we are against everything they are for and we will get back to you about what we are for. it certainly does leave the

opening for those who might make the counterargument that therefore the policies that helped precipitate the worst recession since the great depression, that's not a great place to be. >> to you agree with your predecessor robert gibbs on the likelihood of the republicans taking over the senate? >> i don't think it's likely at all that the senate is going to be obtained by demott -- for the reasons i just described. >> jay you said the g7 meeting next week they would discuss assistance to ukraine. his senate delegatiodelegatio n that went over there last week senator john kaine came back and said the united states and nato should consider sending some kind of defensive military hardware at antiaircraft and tank. is that one of the modes of

assistance that will be considered at that meeting next week with xp what we have said and i will repeat is that we are reviewing requests by the ukrainian government and we are are -- and we will continue to do that. our focus however remains on supporting economic and diplomatic and de-escalating the situation in ukraine. but we are reviewing a friday of requests and running a process that evaluates what forms of assistance we and our partners can provide aimed at a focus that still hopes to see the situation de-escalate rather than escalate. >> was a significant amounts of military wax thanks jay.

>> alexis and then roger. >> because a lot of the relationships with russia are under some scrutiny and evaluation do you happen to know whether the world trade organization is something that russia might lose its membership and that work so hard to get into the wto? >> i haven't heard that specific conversation. i think in general rush's credibility and stature internationally is affected by the sanctions. the system that is in place through organizations with broad international membership that affect. trade and politics through the united nations and other organizations are dependent on fealty to the rule of law. a shared commitment to resolve differences through legal means

and what we have seen of late by the actions taken by the russians in crimea is an undermining of the violation of those principles that undergird that structure that supports all of the international institutions. so it certainly affects their standing within the world community. i don't know at this point how to answer questions about status of membership within any specific organization. last question. >> vice president this morning talked about diversifying the region's energy supply. can you talk a little bit more about what the vice president has in mind and what possibly the u.s. will do? >> i think there has been a lot of focus for this reason on the secure energy needs of europe in

general and which nations depend on which other nations for their energy supplies. what we have said is that we are taking immediate steps to assist ukraine including in the area of energy efficiency and energy sector reform. in addition we understand that there has been no interruption of oil and natural gas exports from russia to ukraine in europe european gas inventories as i pointed out the other day are well above normal levels at this time due to a milder than usual wet winter in europe and will replace russian exports is necessary. it's also important with the question of energy security in ukraine that any disruption to russia's energy shipments to ukraine in europe is a lose lose situation for everyone with russia being the biggest loser. they depend heavily on ukraine is a critical export market for its natural gas and they earn

something like $50 billion a year from those sales. remember a lot of this applies to europe run through ukraine so we are evaluating steps that ukraine can take when it comes to energy security to energy efficiency and energy sector reform and and mindful of all the things that i just mentioned. >> is this on the agenda for hayden next week? >> i don't want to get more specific than i was earlier. ukraine is the subject and will be the principle subject of that conversation. i obviously leave it up to the leaders to decide the particulars. thank you all very much. [inaudible conversations] >> today's young adults the

millennial generation are having a lot of trouble getting started in life because they have come of age in a hostile economy. they are paying money into a system to support a level of benefits for today's retirees that they have no realistic chance of getting when they themselves retire so there needs to be a rebalancing of the social compact. it's a very important challenge and a very difficult challenge for this country politically because not only is social security and medicare half of our budget or about to become half of our budget and by far the biggest thing we do but it is symbolically the purest statement in public policy that is a country we are a community all in this together. these are programs that affect everybody and the old math of these programs doesn't work.

now a discussion on the state of the global economy. we will hear from congressional budget office director doug

elmendorf. the atlantic hosted this event earlier today. >> i have confirmed that it is true that for those of you who have the temerity to hang out with us all day we are in fact serving at her festive reception the lehman dropped and they -- so i hope you can join us and i will keep referring to that. without further ado let me invite nancy cook the economic and buster posey correspondent for "national journal" in a conversation with doug elmendorf director of the congressional budget office. [applause] >> hi everyone. thanks so much for sticking around and thank you doug for joining us. i feel like this public appearances you make are somewhat rare and the cbo has been under fire lately so we will have a discussiodiscussio n about that. >> i'm happy to be here and have all of you here to join us. >> i wanted to start off since

this whole event is about the economy and one that start off with a broad question. five years since the start of the recession. are you surprised they were radar in the economic recovery? >> yes. we have been surprised and disappointed by the pace of economic recovery. i think the people who were more right for those who had looked more carefully at the experience of other countries and earlier points in the u.s. experienced with debt crises that were on the housing and the financial system and those people like carmen reinhart in ken rogoff and vincent reinhart found those sorts of recoveries for those events are very prolonged relative to the post u.s. experience and their own forecast of cbo i think in retrospect would put too much weight on not just the post-war experience but wenders did this was a different sort of event that put too much weight on the

rapid monitor. policy response in the fiscal policy response. but that would be enough to put this economy not in its v. shaped recovery but a fairly quick u-shaped recovery to bring the economy back more strongly than it has and we have in the past several years mark down our projections for economic growth. we think there is at this point still considerable slack left in the economy and considerable slack left in the labor market. we have been carefully watching the structural factors that have slowed the economy. for example participation is down considerably over the past several years in a big chunk of that we think is due to the demographic changes within the aging published in moving the baby boomers enter retirement but also we think a significant decline in labor participation

rate stems from the weak economy. some of the people who left the labor force we think will stay out of it permanently. many others we think will come back as the economy strengthened so our view now is that the economy will over the next four years return essentially to full employment and we think that will come both from a healing of the underlying economic problems that stem from the housing boom and bust in the financial crisis but the growth will pick up this year because of the fiscal drag we have seen in the past few years won't be in place this year. so we do think that there are even stronger reasons today to expect the economy to rebound, but we have been wrong before about that and i think we have learned as many economic forecasters in this country have learned just what a long process it is to work out the excesses of the housing boom to rebuild

the financial system to restore consumer and business confidence. >> have you changed anything internally at the cbo or the way you go about forecasting if you feel like you guys were a little bit wrong in the way you feed the economic recovery? >> i'm not sure we have changed anything structurally in our own processes. we looked very carefully at the successes and failures in our forecasting process. we are certainly aware of this other research. carmen reinhart has been advising us for some time. we were unaware of it but i we misjudged the resilience of the u.s. economy. our economic forecast and to be quite similar to those of consensus of climate forecasters. it's a trickier to know the forecast condition on current law and fiscal policy which has involved a number of points and the expiration of the tax cuts.

private forecasters are trying to guess what congress might do about fiscal policy and we are not allowed to do that but adjusting for differences and fiscal policy is something our forecasters have come close to the consensus but forecasting is very hard and we are always working to get better than that that -- at that. >> one thing that i was struck by in the latest budget outlook you put out in temporary was you and implement rate is going to remain above 6% through late 2016. that is still very high. it's going to be through an election year. what you think that's going to mean for the labor market for unemployment to remain so high? >> well there are in our estimates, there are 6 million more people who will be working if the employment rate were back down to its pre-recession level and the labor force participation rate was back up to the level without the current

current -- so those are 6 million jobs our economy is short today in our estimate and that is big economic costs of course. those people are not producing output and it has very large personal costs for those people and their families. in particular we have as you know had a rate of long-term unemployment that have been out of work for half a year or more has been extraordinarily high and although it is come down now a little from where it was at its peak a year ago its higher today than at any point during the series except for the last few years. people who have been unemployed for long time under personal hardship at the time because if they had savings they work through them perhaps but also they find it more difficult to get back into the labor force. some of that seems to be deterioration of their skills or at least not keeping up with changes in how work is done but

also some of that seems to be just a stigma and an unfair stigma that attaches to people who have been out of work for a long time. the most famous recent study was a person who sent out a number of resumes that were identical in every respect except some people reported they were unemployed for short period of time and other for a long. of time and those under her shirt period of time had a greater chance of being called in for interviews. we think a number of them who left the labor force had taken up disability insurance as part of the social security program and are likely to stay on that program or move into the retirement program. others had been looking for work or stopped looking for work in or out of the labor force. the consequences of having unemployment so high for so long are really profound but will have a long shadow and this

experience is unusual in the u.s. over the last 70 years but it is what has tended to happen in other economies that have experienced housing booms and busts and financial crises of the latest work i'm aware of by ken rogoff with a large collection of experiences across the world of overlong period of time found the average country has taken six to eight years to get back to the pre-crisis level of output per person. the u.s. is now back to the pre-crisis level of output per person. doesn't seem like much of an accomplishment in an economy that is accustomed to growing and should he growing so the costs are very high. >> what was your reaction when congress failed to return an agreement to extend emergency long-term unemployment benefits? >> as you know cbo does not make policy recommendations and that's very important because policy choices depend not just

on the analysis of the consequences at the different courses of action but also how one ways those consequences and what value one applies. there's nothing special about our values. it's up to our elected leaders to make those policy judgments. our job is to help congress understand the consequences of alternative courses of actions. we have said a number of times that extending unemployment insurance benefits will provide a short-term boost to the economy because that money will go to people who would be highly likely to spend it and that will produce demand for goods and services for workers and so on. there are other consequences of extending unemployment insurance as well. there's the budgetary cost and there are some people who would look for work less vigorously than they might otherwise so it's not our place to offer judgments about that. we have laid out the consequences and offered congress a number of times in the past half-dozen years now

menus of possible ways of providing some fiscal stimulus to the economy. >> i want to talk for a second batch is the politics of the cbo because the agency has come under fire recently particularly from the white house. to report to put out one on the effect of the minimum wage which the white house aggressively came after the forecast of in a report about the affordable care act. privately what sort of pushback have you gotten from white house officials and congressional democrats over these reports it didn't necessarily a trace a lot of the political conversation that democrats want to have right now? >> let's just emphasize that we don't get any private pushback from anybody and we get no private pushback from the administration because i have no private contact with anybody in the administration i think that's appropriate. and we don't really get pushback

from members of congress. when they're unhappy they provide public pushback. >> on twitter and all over the place. >> lots of different ways. but the essence of cbo is to do analyses without caring who will be made happy or unhappy by the russell. it just isn't a factor in what we do. congress is paying us to do objective analysis ,-com,-com ma to do analysis that draws on the best thinking in the community and among practitioners whoever we can consult for information to help us do our estimate and other analyses so we reach out to a lot of people for substantive feedback. we give no heed to whether certain results of hours will get a lot of attention or not. we get a lot of favorable attention from some people in unfavorable from others. that just comes with the territory and shortly after i

started my job about five years ago i was taken to lunch by the former directors of cbo and everyone had their stories to tell. i did wonder whether i should go back to the officer just get on the metro and go home again because the stories were really something when you hear the whole collection of them over lunch. but it's the essence of what my predecessors did and what i did. most importantly is the essence of what everybody is cbo does. everybody becomes knowing that this is a place where we will do really high-quality objective work where our own value judgments are policy choices do not enter the conversation. so the strength of cbo is not particularly meeting with the other directors. it's in the entire organization and the culture of the place that is now almost 40 years old.

we really studies and they get attention sometimes and sometimes less lessen people are happy or unhappy and they will call us to testify or send tweets or write letters or whatever they do. that's okay. that's their role. our role is to go on to analyze the next project. >> do you ever worried though about cbo's ability to maintain its nonpartisan environment or its mission in such a partisan environment moving forward? >> i don't worry about our ability to do if work. it's so ingrained in the organization and the people who are there. i spend more time worrying about the perception of our objectivity in an environment that is highly partisan as washington is especially now. things can be viewed through partisan lenses. they can be viewed as suggesting some partisanship even if a

particular estimate is viewed as nonpartisan there can be questions about why the effects of this proposal and not that proposal and why did you write it this way and not that why? that why? waited to release it on this day of the week and not that day of the week? so we worried a lot about making sure that we present the work we are doing anyway that demonstrates its objectivity. i don't worry about the analysis being objective. i worry about the analysis being right because the topics are just very complicated and our energies are devoted to trying to take the best available evidence as i said from public research and conversations with practitioners and people running state governments or administrative federal rules and trying to combine all that knowledge to produce the most accurate estimates is very hard.

we have a terrifically talented and dedicated set of people at cbo and i'm proud to be part of that. but we worry about that in trying to do as good a job in that way as we can. >> i want to talk a little bit about the budget wars the consumed washington and consumed a lot of your life in my life for about two years. what was your reaction to the budget compromise that democratic senator patty murray and congressman paul ryan came up with in december? deerfield that was tackling the issues that everyone had been fighting about for two years or so? >> well when i testified in the budget conference committee november i said near the end of his testimony that given the budget challenges that we faced the big steps are better than small steps and small steps are better than no steps. and then i added no steps are better than backward steps. i had have to be very careful. [laughter]

so the agreement that chairman murray and chairman ryan came to endorse by the congress and the appropriations bill that followed from that were small steps toward better budget policy and not endorsing particular actions that were included but just i think the gathering of people to agree on something that allowed the government to be funded and to move ahead was very constructive. but fundamental physical challenges that we face remain. the fundamental fiscal challenges, from growth in spending for social security and the major health care programs. the government as a whole does not get bigger relative to the size of the economy. under current law are projections under the current law, all federal spending apart from social security and make your health care programs will

be a smaller share of gdp by 2020 than at any point in at least 70 years. but social security and the major health care programs will be much more expensive relative to gdp than they have average in the past. that is coming from the aging of the population. there will be one third more people receiving social security and medicare benefits a decade from now than there are today. it's coming partly from the rising cost of health care per person. not the rapid increase in the past dozen years but rapid enough to push up health care spending and third it's coming from expansion of federal programs to subsidize health insurance for lower income americans. and with those three factors at work that handful, just a handful of programs are becoming much more expensive. we has a -- we have a choice as a society to scale back those programs

relative to what was promised under current law or to raise tax revenue to above its historical average to pay for the expansion of those programs or to cut back on all other spending even more sharply than we already are, even more sharply than the lowest point of gdp. we haven't decided as a society how we are going to -- what we are going to do but some combination of those three choices will be needed and that we continue to do work. we presented to the congress to fix volume of options for using budget deficits last fall. there are a lot of possible ways to perceive that they tend to be unpleasant in one way or another and we have not as a society decided how much that unpleasantness to inflict on him. >> i think part of the problem is everyone on the hill is very

exhausted by the budget wars. the american public is exhausted by the budget wars and also the deficit, the annual deficit this year really dropped so when do you think that -- when do people really need to start worrying about these questions that government spending is part of? >> we have been saying for five years at the cbo that deficits would be particularly high for a while and then decline and they would decline because as the economy recovers slowly that brings in more tax revenue and suspendinsuspendin g certain programs. we thought it would decline because the congress passed substantial legislation particularly in 2009 to provide stimulus to the economy and to fix that legislation. our projections have shown for a while that it has come down from the roughly 10% of gdp in 2009

towards something in the two to 3% range which we still project to happen this year or next year. before deficits start to rise again and deficits rise again because of factors which are happening now but basically masks by the decline by those other others. those unrelated factors will show through. so the current level of the deficit is roughly the average deficit as a share of gdp over the last 40 years. that will be true for the next half a dozen years or so so the challenge is not the level of deficit in the short term. it is the death of such rising after that and in particular the high level of debt federal debt held by the public is now 70 something% of gdp. that is way above where it was

for most of the post-war period and a high level of debt will ultimately crowd out capital investments with slow-k mutation of n. slowing of the growth of wages and at what reduces the flexibility for policymakers to respond to future crises that arise. if a high level of debt and deficits long-term the reason why action today would be beneficial is because if you want to make changes in programs for retirees or changes in the tax code it's better to make those with a warning. one wants to set them in motion early even if the full effect won't he felt for many years. >> i think we are going to take some questions from the audience now. there are people with microphones if you want to raise your hands. we have a question whatever they are. go ahead. >> good morning. my name is tom gage with marconi

pacific. we are technological consulting firm. i have a question about certain technological driven deflation and i wonder whether cbo has done any work in that area looking at the effects of the internet, driverless cars machine to machine technology sort of the next generation and how that's going to impact employment or unemployment and if you connect that to the last panel and the lack of economic growth as a result of lack of family formation. you sort of got a somewhat skeptical or perhaps not as positive future as some people might paint in another direction. thank you. >> we have not looked very carefully at the issues you raise. they are important issues. we have a limited number of things that we can tackle and i will look particularly carefully

at that. we have in our projection of growth is close to the average of the last several decades. we are not looking for a particular pick up or slow down and there are pieces people have made in a pickup or slow slow down and we are sticking roughly with the store go average. we think in terms of wages that there will be some return of wage growth as the labor market tightens in the next several years. as you may know the share of income going to workers has been on a gradual downward trend and has fallen quite markedly since the boom. we think that will pick up to some extent but not back to what it had been in the past. we think inflation is likely to stay low, below the federal reserve target for a while. on the view that the federal reserve will respond to

pressures one way or the other in its policy setting. >> i think we have another question right here. >> good morning. my name is sandy and i am with whiting international. there are two issues that come to mind. we keep hearing entitlemeentitleme nt when it comes to social security and people have paid into that while they were working. how do you address that as an entitlement when americans have done this and also how do you focus on tax policy win as you said americans income is going down and yet we continue to subsidize exxonmobil with their outrageous profits. >> so, one of the options that we offer congress in the fall for deficit is to change the tax treatment of companies that are extracting resources like exxonmobil.

again we don't take a position about that but that is one of the possible ways of moving forward. on social security we generally don't use the word entitlement ourselves because it has different sorts of connotations to different people. a lot of people have paid social security taxes on the expectation that they would get benefits for retirement and in fact from the point of view of the overall federal government the money we paid into taxes tend 20 or 30 years ago was used to fund government activities including social security benefits 10, 20 and 30 years ago but the argument that we come to expect certain things and are counting on certain things to be there for them is exactly the point i mentioned about how if one wants to change those programs they have given people a lot of warning about those changes that are coming would be especially important. >> i have one quick question i want to ask you. your time is up in january 2015

and it's been, you have had -- been a valiant soldier for a while. you have been in this job for a while. are you interested in serving another term or what else would you be interested in doing? >> i love my job. i have had a chance to work on interesting questions with terrific colleagues. >> that's not answering the question. >> i know. [laughter] and i am focused on what we are doing in 2014. i have no plans eons 2015 when my term expires and i'm making no plans and we'll have to see what happens when we get there. >> thank you so much. [applause] >> thank you very much. >> applause for doug elmendorf. the question i would ask and nancy terrific job. the question i would ask doug is does your job? in the sense that you know it

must be a complicated thing when you're basically trying to tell truth to both sides that don't want to hear it. you don't have to answer that. >> i love my job. it's absolutely true. >> thank you very much doug and thank you very much nancy. another round of applause. [applause] ..