things, but embracing it as a truly revolutionary development that would put the united states in a role to lead. .. >> >> that we have in the

united states. we will be robbing peter to pay paul of multimedia gulf coast with i unemployment in the midwest and other areas what achaean this committee do to do with the rigidity of the labor market? >> you really have a limited number of polls in terms of geographic mobility that has diminished in the united states. there are certain a a lot of other policies that i would urge the governors to look at. there is a lot of licensing and the certification for mobility it is excessive in the west but then you have the social safety net. so everything work-related in that regard would help.

>> my time has expired. >> i welcome your words with which they were offered and these were interesting and thought-provoking panel. the issues we have referenced with tax and traded health care are controversial but absolutely they need to be on the agenda. i would argue something the panel did not address but then to bring people together i think it may have the president of the afl-cio the president of the chamber of commerce in the president of the american trucking associations, and president of seven-up -- civil engineers, environmentalist and truckers will unite to say after 23 years it might be time for us to raise the

gas tax to fund our infrastructure. president ronald reagan 22 years ago in his address for thanksgiving made an appeal when congress came back to more than double the gas tax. for those who want to be put to work because israel user fee. there are costs that were being incurred at that time. at wed cost less severe shock absorbers.

42% of the major urban highways are congested and it is not controversial across the political spectrum. that one-third of our roads are in for or mediocre condition and it is costing the average motorist's over $300 a year in damage to their vehicles. the s&p economic report regardless of how he will use dynamic scoring or not with a $1 billion of infrastructure would put 30,000 people to working and you don't have to worry if it is regions of high unemployment or not.

these jobs are available, a family wage jobs for people across the country. i would respectfully suggest we have the deep responsibility. this title for dissertation this is ways and means. not tea and i. it is our jurisdiction in. over to congress's it was offered on the floor if you remember but circumstances did not permit. there was broad consensus to get local governments and state governments in the private sector and the professions, environmentalist and the truckers and aaa

to, together to say congress, get off the dime. when i came to the airport yesterday, the quarter gas station was selling gasoline $1.60 less than this spring. the average motorist if we raise $0.15 over three years from what they are already benefiting for gasoline prices and remember they pay over $300 a year damage to their cars. with experts across the political spectrum analyst of a better approach so

let's hear from them. >>. [laughter] dr. price is recognize. >> and go into the chairmanship of the committee to assisting your efforts. i want to talk about the economic analysis with dynamic scoring that i called realistic and accurate scoring and all of my friends on the other side to ask questions of the panel were an effort to get an assessment what a policy change would have on the country.

that is called macro economic analysis and what they do every single day. '01 to welcome my colleagues to embracing the importance of macroeconomic analysis. the one to state and its -- say we are pleased to put this is the slowest recovery of any economic downturn of this country ever. ever. there is a reason for that and as policymakers we should ask why is that? the obvious policy makers ask the question whether the work incentives?

and last week we learned to the december jobs numbers was a decrease of 5.6%. and though labor participation rate ended 62 .7% below list in 37 years. go back to the carter administration for rates this low in early 56.6 percent of women were participating in the job market the lowest of 26 years. so could you explain why the labor force purchase a patient rates are so slow and provide us with two or three items we could consider with that labor market? >> if you look at the decline, some of that is

just demographics some of that comes for that. that is half the decline roughly. there was a two percentage decline ballpark son was traditional or cyclical stuff than there is another of -- another phenomenon open to dispute it will they come back as the importunate question would will wage inflation and what about going forward? i am in the campus they're not coming back.

if you look at the unemployed person in the probability there would get a job but now it is just barely winning the race. they're just not coming back. i think we have discouraged a chunk of workers in a big and substantial way and we ought to reexamine from start to finish with those incentives and the social safety net programs. >>. >> guest: to highlight two or three? >> a big chunk will come promising goldman and that the itc is not beneficial that should be looked at.

one of the reasons i am deeply skeptical that we would raise it through the great recession and that is the starting of jobs people rely on. so what is going on with the teens and the single men? don't let them leave. >> your time has expired. >>. >> also want to congratulate my colleague from wisconsin. just to find some common ground. we're having a hearing today on the state of the country with the policies that make sense but it seems if the parties aren't too different planets.

one of the concerns that i have with a friend's on the other side with that testimony or hearings or suggestion suffered fact that regardless of us economic conditions it is always about tax cuts cuts, spending cuts including the investments we should be making. including deregulating though wall street banks and it doesn't matter the economic circumstances it is the same three over and over and over. >> i knew of the play is a working you have to change it to call the honorable. to give that economic circumstances is that we face it is seems for the

ideological and philosophical a driven. to cut taxes is it increase spending. in the ability to distinguish between the two that turns into a partner. it is the inability that has this tied up but i want to ask you use that our economic recovery was made more difficult by the policies and budget issues with the lack of consensus without a means to support the economy. repeated confrontations over the debt ceiling began threatening to default on the national debt creates a great deal of uncertainty in the country such uncertainty

discourages investment and consumption. would you care to expand with recommendations how we can overcome that in the future with the growth that we need right now? >> recommendation is don't do it. under chairman camp idc stall the members not to engage in the destabilizing confrontation politics. default on the debt is crazy for a technical term. to a threatened government shutdowns that is not helpful. the way that it spikes in rigo that discourages investment.

all parts of the economy then we can sort out opportunities and growth but if you generate that uncertainty you will slow down the economy for sure is. >> there is focus on tax reform and its impact. talk to business owners and the impact is overstated and overplayed with feed decisions they have to make every day. there are many multiple factors. can you speak about that in regards to the whole dynamic scoring issue that we talk about and how hard it is to predict the macro economic impacts of any policy coming out of this place? >> it is multi dimensional.

we are numbers seven but they looked at two cities and the problems that they identify not about the federal government. and you'll see a range of things including skilled labor. >> with the largest corporate tax increases at this time under the reagan administration. >> mr. chairman i it agree this committee has an opportunity to work together to get things done right now. a discussion about corporate raids in the highest in the world with minimal deductions a couple few

years ago 26 messages more than fair but they said we have to be competitive in the world. we agree to do something with corporate rates but my concern is with the past -- pastor entities. but if you add state income-tax the average age is 49.6 with the corporate rate whenever they think about doing fair either now how you can be competitive in terms of the passer. a lot of them are passer-by 60 percent of job creation comes through these

businesses with a startup. i would also say in terms of reducing the rate if you have 70 employees and to give half of your money back to the various governments it is hard to grow jobs when you give half of it away. my point to the professors here today so with that pass through what difference with the growing economy? would you expand on that? >> i mentioned earlier it is a bad tax policy theft freeze fifth since his differently whether it is a c corporation or pass through so then you build your business based on tax considerations not business decision so that is the

hallmark of interfering with the economy. with sole proprietors -- sole proprietorships they're disproportionately sensitive to tax considerations and they are heavily relying on the cash flow. sleazy a strong linkage between the entity of the capacity to grow and invest i can get that to you but in terms of just rates. >> you just see a lot of people moving from the pass through and partnerships back to the c corporations. >> it is an option that

companies have taken always go back with that lower effective tax rates so if they prefer to be the escort -- s-corp with the distribution of profits there is no simple solution how you integrate the two. but i field the basic principle ought to be take the tax is out of the choice whether you are a the s-corp or the c corporation. in the '80s sterol see that we went to s now we have come full circle to go back to the sea -- c corporation if we do not address them is all that pass through as well. i yield back.

>> mr. chairman, i could block. -- good luck. [laughter] i have noticed we have or the decibels but there is still the ironclad position to get us out of the logjam. for one example i hear from your side about discussing and debating the business i hear nothing about personal tax extenders. if we come to any agreements that needs to be in

consideration and i asked you do that. i sincerely wish you the best of luck. you will need it. the question is that the and though the task mr. johnson on trade, you wrote an article what we needed to avoid those cell looks lovely from the outside but talk about unfairly at times without oil level playing field that protects the workers for that benefit from free trade isn't the workers in the factories or the shareholders and executives at the top. >> as you know, we have been discussing all awarding most of the gains in terms of income is at the top of

the distribution in. the highly skilled labor has also done well. also with the dpp is to engage with said details to have a closed market for cars autoparts for a long time will they open that up to do exports? to what extent are they held responsible? but if you grant tpa you're not engaged in that discussion. that would engage with tpp first that is the way to have that conversation.

>> you wrote a column for the financial times that inflation is living on america's horizon. in almost six years since she wrote the piece inflation is consistently below wall the employee rate continues to be elevated causing real world paid and hardship. now with the economy improving with the specific policy but the employer rate is dropping but we are a long way away. we all agree that we are a healthy economy but with the areas of inflation you call

for the federal reserve to act aggressively, your word even though it is nowhere near complete or even to exceed the target. why is there a prediction in 2009 did not materialize? >> ct for the question. policy changed after that with this so-called unconventional monetary policy where the fed fed, because they were authorized to pay interest on excess reserves induced the commercial buying sphere to deposit the extra funds that they got from the quantitative easing policy to put it back with the federal reserve so it never looked like it would happen

back in 2009. i think the fed handled it very well. and ultimately the fed's policy davis the recovery verses the policies of 2009 and 2010. >> titled moving america forward with the new congress in particular the improvements are welcome news but to know that this has been stated as the worst economic recovery the slowest recovery ever we cannot even in get to an average. when wages are flat people take notice and those that

have doubled every 32 years to add 60 years under the standard of living. people think this is the new normal. officials are accepting it and we can do better. though we have been out of recession five 1/2 years and then to serve its will say will your children be better off they and you are? two-thirds of americans say no. that can make a difference of tax policy or trade policy going 750,000 jobs are tied to trade with the

partnership the european trade agreement it is key to that no doubt but also regulation mr. holtz-eakin, is a possible to mention how much expansion cost our workers or costs the economy and slower growth? and if so how much? >> we have an ongoing attempt to measure the regulatory burden in the united states that tracks all regulation the measures of the burden that are in complete so with that

compliance cost there is a paper work burden you can look at that i would be happy to get you the total spent looking at 2014 with final regulation of $20 billion, a $200 billion tax increase we would have the strong discussion how do you want to think about that? there is extraordinary period to display that but with the recent memory was post september 11, a 2011 --

2001 these were big impact on the economy and they're happy to hear the numbers. >> one other question. in the 1990's we were successful as a country to boost take-home pay and reduce poverty all which has gone and the opposite direction through welfare reform. could it uses same? could we do more on welfare reform? >> as i said we need to look with the lessons for the u.s.. there is no substitute for rapid economic growth has a number one priority. both to inactive for the for

dissidents to be successful we should try to do that again. you don't lead to replicate the.com bubble but the old-fashioned way. and the spending restraint was the era where the peace dividend of the balanced budget. now it is the mandatory programs it is said different world. >> mr. davis. >> we could certainly thank eyewitnesses' for participating. i also want to add my a congratulations to my friend of the midwest to be on this committee. is having dinner with two of my grandson's the other day and i asked them to pass me

a glass of water. once said the one that is half-empty? the other one said the one that is half full? of course, there was only one glass. they both saw the same glass but dayside different they. that our economy has made tremendous progress. unemployment numbers are down, the economy is moving forward so there is a reason for joy but not jubilation.

too many people being underplayed. with the frigid climate throughout the country they do not have heat in their homes. in those that do not have homes to he toward jobs to which of -- to apply. could you share what you would recommend in terms of policies to keep our economy moving forward? to reach back and include the millions of people that are left behind? >> it is the right way to think about the issue. in the second session of the testimony i lay out a range of ideas. there are specific measures this committee could take up

with the earned income tax credit. raising minimum wage that is highly relevant. with early childhood education and imposed a high-school education like the pell grants. if you look at the tax code and consider tax reform it is important to do that in a way that is revenue neutral with an aging population and continuing pressures from globalization. the affordable care act has done their remarkable job in terms to slow down but we need to have the revenue there and all proposals i have heard so far is cutting taxes to give away revenue. nobody likes taxes but who has the responsibility?

>> and then to reply to the comment united states has the highest share of income going to the top 1 percent of earners compared to the other g-7 countries. does this seem to help expand our e economy with the impact? is it intended to or what is your response? >> reflection of the global trend is not unique to our economy. it has been going on since the '80s we saw the bottom fall in the top prize but all the evidence from the harvard study on mobility

says it hasn't changed over-the-top 50 years. the rich can be rich but we're not going fast enough so we focus on anti-poverty and the ability to have low-level some of them come so that is the top and. >> you are recognized. >> i would like to ask the panels some questions about the recent phenomenon taking place in texas and north dakota. at least five years said discovery transmission has

been a major factor in the economy in the most robust parts of the economy. now we have seen a significant price decrease that we see. i drive to the ranch in engaged what prices they are by asserting gas station. $1.60 forces this weekend. but they gave us to the consumers with the fuel cost offset the loss of the economy created by the oil patch in and if we reach a

stabilized level of oil prices does this have a long-term effect on the economy? i with like each of your opinions spinnaker with the decline in oil prices recently is a plus for the u.s. economy. it is shared by the reserve and others that we will see stronger growth because consumers have gone up. we benefit the cost of other countries that we import oil and they think that they take a hit at the same time where consumers are better off. but that combination leaves

or more consumer spending. in the near term. >> i think it had a radical impact in the have never seen anyone do the full accounting from the stimulus , the ability of chemical manufacturers with the cost of natural gas in the income generated so it is bad from their estates until prices are damages could with a more nuanced position. so if you look for word as

they grow more rapidly they appeared to stabilize that will allow for exploration and extraction so i don't see a long-term problem that would not be surprised but on balance it is said good thing for the biggest states. and it is said different world with energy policy. >> congress may and it is good the first of all, you need the country with the flexibility with that technical innovation we have seen and with one who got the affordable care acted reduce job loss to stick with that certain job or employer they did not give up on the health care. please do not return us to a situation with greater job

loss. we need to move capital to the new opportunities and we are better at it than we were. >> most of the production is over the first year b.c. gas prices go down you will see a bigger drop off next year as well but then touche. >> i yield back. >> your time has expired. >> mr. chairman, in the absence of our chairman of with like to congratulate him as well since all members have of to this point. i want to go to the issue of capital it was a very interesting talk said chairman and gave to the u.s. chamber a couple of years ago and i was struck by what he said.

may be items simple-minded and it made it so much and he said is about capital. if you don't have an influence in the calf total you would not create a business sorry job billion by that taxes are paid on other thomases are services produced as well as the income of those workers. looking at capital and that influxes not occurring i just what you to start us off for someone who would be capital putting that in the market what keeps us from seeing that's right now?

dixit -- taxes are a traitor everything combined? >> it is in tax from all of those things. looked at what the government can do at the very highest level the federal budget is anti-grows. with consumption and the return to capital with subsidize consumption we give people health care and subsidies. as a nation it is the anti-saving for that capital within the budgetary framework it crowds out any genuine investments so is very anti-a cumulation when

the tax cuts can be the same way for:i am a fan of the tax code for -- your fishing but that is a rapid incentive and it treats all capital the same if you hire a worker into educating you can expense that machinery machinery, expense that, you treat all the capital the same it is a good thing to do. then household savings tax rules for higher education and finance why would you save when they said we will not give any scholarships if you do? what about retirement? so security? medicare? it is all-important but are we going to save and invest? we have to look at those.

>> you keep talking about what we talk about is is incentivizing what we want and as you have already indicated there are many policies and the incentivizing what we want. talk about policies to help the kids had that together. would you like to weigh in on this issue? >> if we don't save little have capital. so closer to a third from 1985. so now the saving rate is very low.

partly because the other policies that sesotho for savings. that which brings savings down four american households. >> would you like to weigh it from your perspective? >> when we discuss capital don't forget to bring capital. after 200 years of experience the prosperity of the the country depends on the education and skills and health of its the sisyphean inhabitants. showing what it does and does not do the social insurance was introduced to encourage people to build the country and it was a great success. >> weekly b white time i am at a time but it is the private sector that helps to grow the economy that helps

to make these possible. i yield back the hispanic inky mr. johnson. we have covered a lot of territory. the u.s. in the fact shirring in particular but with the chairman said in his introductory remarks the debt crisis is a dark cloud that hangs over us.

to date is 18 trillion to keep the interest rate at zero? i cannot imagine if the if you agree that is possible. so we have the industry in its -- issue. does anyone think we obtained inflation it is

never an issue in the future? if you raise interest rates to anybody give me numbers? interest rates if we don't have the increase will rise and given the size of the debt that will be a substantial increase of the deficit and the growth of the debt. so if there are changes of the entitlement programs with the debt to gdp ratio of 70% now headed at 100 is serious trouble.

it is held by people in the united states. they say it is not such a good idea that the interest rates are rising. so for the congress a of this committee to slow the growth of spending with tax reform to raise revenue. but over the next 10 years the cbo baseline autopilot says the ratio start to rise and take years from now we're running a $1 trillion deficit 800 billion his previous intra so we're perilously close and that is a death spiral. that is not a good thing. >> i wholeheartedly agree so

that puts the whole thing a rest. i no question that they care for americans i do. but don't you jeopardize it all is should we have the responsibility as legislators to do the right things to deal with it now rather than later? >> don't give up on dodd/frank. it came from the deep recession. that is job number one. to not give up on the revenue. and third control health care costs. it is health care not just medicare the affordable care act has tilted the curve.

>> it is just the growth rate. >> i reclaiming my time. we'll have to do something and i yield back. >> your time has expired. >> congratulations to the chairman as well. but yes or no or should tax expenditures be revenue neutral? >> i think stacks' expenditure reform changes the limits. but know they should raise revenue. >> i think revenue neutral. >> with the entire package

of tax reforms should be revenue neutral but the with that trajectory of health care cost the wing for word you need to support what never forms of health care fifth. >> for many manchin and that the recovery has taken too long. and drew the last administration was not run into the ditch but over the cliff. we had a long way to go to climb now but i want to reiterate that there was a pediment to get out. and with that crisis did not help. but where we are today it is

a remarkable recovery i don't think anybody thinks this is where we need to stay but we have done quite a bit but it is fairly impressive. mr. johnson, to what to richard gere to with the progress we have made? >>. >> to have the enormous potential in the face to get themselves back up with the central bank should get kudos for what they did. this is standard textbook in to have the other circumstances about stimulus with the economy goes down.

but the disappointment to me is we all did not work together. and choose low-fat of recovery over fiscal policy. >> to pick up where mr. glickman fall left off. but it is the most immediate way to help our economy. there is now one of us here whose congress districts would not benefit greatly with the adequate level of investment in infrastructure. and use started to say something and never by to hear your thoughts. >> and to make the point of

the death tax so about how people move to and from work and around the country. it is roads their bridges and transportation it is broad bands so when in some situations in those parts of the country to use revenue sources to invest in interest for station and infrastructure. >> so what else to cut its core energy have our job creation or our economy? >> if you look at the

comparative the with the private sector we need a supportive environment for the united states. what i hear the most is the weakness of the infrastructure with the lack of investment. and for the business people traveling back and forth. >> your time has expired. >> my congratulations to your chairman right in. for the free-wheeling conversation i want to talk about tax reform does specifically focusing on tax reform for smaller businesses and younger firms.

the last congress may push of a draft with the leadership in analysis although not perfect we would increase the rate of gdp of 3.$4 trillion but i do have concerns back to the small and the number of firms of some intimation that we may only consider core for reform with those passer entities with simplification on one-handed marginal rate reduction to pay only half of the point didn't profits in the bears'

reminding to many constituents over the last decade six at of 10 jobs are through the smaller firms. . .

a. >> there were some particularly vexing issues in the investment income, not the least of which is we have three different task forces. and that different definition exists everywhere. so as a top priority, the simplification is one side that will help especially the smaller guys trying to deal with this in a big way. and we have done a lot of tax-writing from the 1980s and we when we had the marginal rates go down a little bit lower. the biggest obstacle was comprehensive reform and it was done and was very successful and has been a part of this ever since. >> if you could offer me 30 or 45 seconds please.

>> 28%, that was the raid that we had after the 1986 tax reform and it's now up in the 40s and that is a very big difference for anybody who is contemplating a small business or expanding a small business. >> don't forget a 1986 there was other taxable income and that is a principle that we should go back to. if you consider the distortions in the comprehensive tax reform you should think about it on a revenue building basis the differential taxation's introduce a lot of distortion and i think that we should go back to it on that point. >> should record and may perform as a we reform the tax system, should we also consider coordinating those reforms with

the welfare system in the country? >> the welfare system as previous comments have brought out, have become a disincentive for working for lower income people and we need to be looking at food stamps and what food stamps have done to the incentive, particularly for second vernors. >> are there other provisions that we need to take a look at with respect to this matter? >> yes. >> what might they be? >> i wouldn't draw the distinction between the tax code and the safety net provisions. but almost 50 million individuals are now receiving food stamps and that creates serious incentives for second vernors and effective marginal tax rate.

>> thank you i yield back. >> the gentleman's time has expired. >> thank you, mr. chairman, thank you all for being here. i'm from the private sector and i'm never understood how you can say we are going to be okay when you look at the future. the numbers in may not be exact but it's somewhere around 3.2 to $3.4 trillion a year. and we take this in in tax revenues and that's like telling someone who makes 25 or $26,000 per year it's okay to spend $34,000 per year and don't worry about it because you always be able to borrow what you need and if that doesn't work, you can print it in the basement. we have talked about and bragged about how we have reduced deficit spending. but we don't talk about the effect of long-term debt that is

going to affect our ability to recover. the numbers i understand are that lasser tax-preparation to about $77 billion and i would think that most americans would feel that that money could have been used more effectively. mr. johnson as well. my concern is that we are not addressing the real problem here. anybody that has a charge account, the worst thing you can do is asked the bank or the lender to give you greater spending limits. and so while we look at right now attacks are warm, we have an excellent opportunity to get this country back on track. and doctor if you could please talk about the annual growth at 2.3 to 2.4 that's a country that are so blessed with so many

assets, what is the new normal that is what we should shoot for. that doesn't make sense to me. if there is a global market that we can not only compete in but dominate in we have an excellent opportunity and i think most of it comes from energy. the effects of lower cost of energy in our ability to compete and how that would strengthen our position in the world, i think the geopolitical consequences of this create the greatest danger for us and it's a little bit to talk about. so mike i think that's almost laughable. if we are going to allow political agenda to outpace policy then we are going to have trouble. but energy in our ability to capitalize energy is part of it. >> i don't think that anyone has done a comprehensive accounting of the benefits to the u.s.

economy and a rapid expansion in the oil and natural gas expansion in the united states. but we know from the postwar history of the u.s. economic growth that a standard problem has been a spike in global oil prices and the federal reserve's concern over inflation and the tightening of monetary policies leading to a recession, worsening budgetary outcomes and the anti-recession measures, we have seen that again and again. and i think that the biggest difference now given the production in north america and the rest of the world is that that is very different and we won't see that to the extent that we have in the past. that is the biggest benefit greatly should continue to let the private sector continue this based on market incentives and we should also look at the ban on oil, allowing food prices to

fall even further. so we have gotten a lot of benefits, we need to get more, but i don't think we need to single out the energy sector. if the markets continue, it will be successful. >> the effect on businesses the private sector especially, one of your main worries is not competition but the way you are regulated and taxed by the country they live and work in. by the way, the same country that you fund every penny of what they spend or borrow i think that we need to be looking at as to how we make those people stronger. people get confused about this. and the prime rate was at 21% i understood it because at that time i was 1% over prime. when you start seeing this come you quit ordering cars which

means the guys that build them don't make them and it's overwhelming. we have an excellent opportunity to really lift this country to a level that we haven't seen in quite some time if we look at this tax opportunity and the pro-growth. >> you have about one second left. i will say yes is you know what he said earlier about savings. i'm 66 years old and i'm hoping that i have more than one second lap heard. >> you're going to sell them off quick. [laughter] >> is a great market out there right now. my question is about getting to where we need to be. >> thank you. sir, you're recognized. >> thank you, mr. chairman thank you to the witnesses for being here today. following up on what my colleague was talking about and what mr. kelly was talking about. we're talking about the national debt and the growth of national debt area i always get

concerned. i was a businessman because i am a big lever that you have to look at the big picture before you can move forward, the date policy decisions moving forward and i'm always somewhat concerned that we zero in on the national debt without also zeroing in on the unfunded liabilities that this country actually has. when you start to add those unfunded liabilities to the national debt i believe that you make different policy decisions than zeroing in on the national debt and i would like to hear what your thoughts are an all-star revue as well. why don't we look at the total picture, and do you think that we should? >> i think that a number of economists and studies and the cbo, they all look at the unfunded liabilities and the danger when you do it is that the numbers turn out to be so big that people throw up their hands and say it is hopeless. it is not hopeless. when is that we slow the growth

of some of these entitlement programs not by a lot a little bit, we can avoid this explosion of unfunded liability. so i do believe that that is the challenge and i spoke about greasing the retirement age in line with the increasing life expectancy and that would make a big difference to these unfunded liabilities. >> if you know what all your liabilities are abc this has changed, you made a good decision and we don't do enough of that. >> two things that we have left out of this discussion and numbers are big and terrifying i personally dislike the term unfunded liability in this context because they are not liabilities the policy decisions and promises made, not like contractual obligations, they should be modified. and we can't afford a kind of a

tax increase and i don't like the term. the second is this is often showing that these numbers are huge. this is an important part of the social segment and it's falling apart. 25% benefits across the board am a terrible way to run detention system. spending goes up the gap is $300 billion every year and that is a program that will fall apart with seniors, please fix it. medicaid is a program where people go to the hospital for ordinary care, please fix it. it's not just the unfunded liability. they are not doing their job. >> i think we had it and we looked at them we would make good decisions. >> we should understand what drives those costs in its health care costs paid by the government and the private

sector that should been that curve and slow down the rate of increase. and that is the data and i mentioned it in my testimony. and we should look at policies that have all health care costs. >> thank you. also a big issue for me is predictability. we make decisions here in the lemonade that uncertainty and predictability. government is good at doing that for the business owner. i would like to hear your thoughts as we have these expiring tax provisions. how does a business operate when they never know what their tax policy is a matter i want to know. and i know that i have 50 some seconds. should these be permanent? they have been around for 20 some years, what are your

thoughts? >> many of them get renewed every time. but there is an uncertainty about it. >> there is no virtue to do is come in the practice should end. >> uncertainty discourages investment and hiring. do not have this or threaten more government shutdowns. this will be a lot more than other tax expenditures. >> thank you, sir. mr. rangel please go ahead. >> thank you, mr. chairman. and let me thank the panel. you have been around so long that i consider you an institution of the congress. having said that as what we can accomplish in the next two

years the president has two years left and we have a new chairman of this committee. and we have a lot of things that we have a priority on infrastructure, education, disparity of incomes but one opportunity that i would just confine my in worries with today in regards to trade we have a new chairman and i look forward to working with the chairman and certainly the ranking member as well has dedicated so much to improving trade and creating jobs and a lot of things that you talked about, i would hope that even after this hearing, that we can get together to see what part in your professional opinion we all agree upon so that we can just keep out the

rhetoric and start concentrating on those things that we can cooperate because the trans-atlantic opportunity should not just fail because we are not talking to each other. there's a lot of thought that the president should have in regards to trade authority because there are many people that cannot negotiate a trade agreement and that includes how we want to make certain that the congress is not going to [inaudible] and congress is caught in the position where we just don't want to be caught in the position where there's so much time and an opportunity for us to discuss what is it and how are we prepared to deal with it. there are some people when they see trade they see loss of jobs

and other people say that we are talking about millions of jobs that are going to be created. so would seem to me why is it so difficult to determine where these jobs are going to be loss and where they will be paying. the fact remains that if you have a progressive trade agreement or productivity, there are a lot of americans who have talked about this as well. so now comes an opportunity for new jobs to be created and if we had any idea it was included on this for the protection of the american people and the standards that are going to be there in communist countries are

at .2 respect this. so how do you expect that we can give them the authority and we have not the transparency to educate republicans and democrats base. and you can get this directly to the core and it's easy politically keep this down but you have to admit including how we have any reason and you talk about great opportunities and we won't know what it is until what

do you do? >> i don't run for office, but you have already made your mistake. i think on the negotiating issue is my choice and i think every president should have authority and i believe that deeply for the reasons that you have talked about. and at the same time congress has the oversight capabilities trade ambassador should be at this table and you should be weighing in on what is the state of negotiations and would provisions that i care about and there's no reason why they get to negotiate with no oversight from congress in this way. >> we do not have oversight. it's either yes or no. >> during the negotiation, that is when it is important.

>> that is what i would say is the right combination. >> a gentleman's time has expired. mr. smith, you are recognized. >> thank you to our panel for your participation here today. honestly america is a big place in the world is even bigger. i think a discussion about trade and the economy in general are very important. it has been interesting as i have represented, one of the numbers of plains states and others, mountain states and others that are notable have fallen below average unemployment and lower cost of living throughout a lot of the economic downturn. what has been interesting is that the states are going to experience substantial economic high and lows that other states

have varied i'm wondering if you can reflect on the observations that you may have made throughout the last few years and the differences between regions of the country that are more specific and even state because obviously we had our share of challenges in nebraska amidst the economic downturn and certainly we did not see the high unemployment rate than other states have seen. so could any of you be so kind to reflect on that starting with the doctor? >> i think that the number one thing that differs going into this crisis is the state of housing markets which are an integral part of the great recession. we have two different kinds of housing markets, which is the california and nevada housing bubble collapse in the midwest

have a very different housing problem. they were bad economies, they were not growing rapidly. people turned their housing into second mortgages and third mortgages because they are really struggling. and the state starts with those differences. they differ greatly depending upon the oil and natural gas opportunities and the other states did their part as well. and i think the third thing is state government matters in terms of the quality of policymaking, some states went in and were unable to help and it was just the private sector and others are in great shape. i do not know the details of every state but i know this as well as. >> thank you. >> housing was very important

and as i understand the new rules of fannie and freddie taking mortgages with 3% down payment and 97% loan to value ratio and that doesn't sound like a good idea. the notion was that mortgage originators should have an incentive to be careful by keeping this in the game and that has been scrubbed. it's not part of the numerals. i think that we are creating a possibility that we are going to see different parts of the country have serious problems if we do not continue to see this rise at the same rate. >> are there any opportunities of states that had low unemployment? >> i think what the gentleman said is right. there were big differences in

what preceded in the housing area and therefore the downturn was much more serious in some areas where house prices have gotten out of line. but if i could buy a house with 3% down, there's a temptation to run up house prices again in those markets. >> many states do not have fiscal capacity to deal with crisis, they don't have the resources and cannot borrow or they run in a way that is a little too close to the edge where they have the balanced budget legislation and that is why what the federal government does in terms of fiscal policy i think that we should before we get a lot of rhetoric and complications, we need to think about what is the right way for fiscal policy to be involved in any future difficulties that occur in as i recall at the end

of 2007 and early 2008 when you had a republican president, there was in favor of the fiscal stimulus at that point and we testified in some of those hearings and had a big hearing. >> one additional question, professor do you believe that the trade promotion authority actually helped american agriculture? >> yes we have the most productive and efficient sector on the planet. opening up the japanese markets are a big opportunity that can be done. >> i agree. thank you. i yield back my time. >> thank you. the gentleman's time has expired. >> i now recognize mr. shaw. >> thank you, mr. chairman. i wish to congratulate you on the chairmanship of the committee. i have been fascinating over the economic growth accurate

scoring as was called. and the debate often times on this committee and even in the broader context of the political realm between left and right on economic growth and the disparity between have and have-nots, the wealthy and the poor, it is really a question about whether you believe the economy is dynamic, the best way to create wealth is whether to take from those that have and redistribute or whether to incentivize those that do not have. to work and innovate, to create, for those that have to invest. and so specifically there has been want written about this over the last couple of years.

i know that one book that has been getting a great deal of play on the last particularly is a book written by a french economist. capital in the 21st century. one of the most interesting is assumptions that he makes is that he looks at the bottom 5% the bottom 10% of the top 1%. but those remain the same and that we have the afford mobility that many of us have not believed anything less than that is what america is all about. specifically sir i know that you have taken these assumptions and i wish that you would maybe speak a little bit upon what you think this committee should be

focused on in terms of the income disparity that occurred and is present in our economy and the best way to raise those that have without and those that are struggling in the middle class and those to go even higher. >> professor, he was really not concerned with that problem he was concerned with high income so i think that that is the wrong place to focus and i think the right place to focus his being concerned about income distribution. to focus on this question of poverty and what we are dealing with there. part of that is a question of education, part of it is labor force participation, part of it is a measuring problem and it's not as bad as it looks. so i do think that all of those things that this committee might spend some time focusing on drilling down and trying to understand what the actual nature is the bottom 10% of the

measured income distribution. >> sir please go ahead with your comment. >> there are responses to this whole discussion. i think it's worth looking at the nerdy statistical fight about measuring something real or not. a lot of people have to report income that did not previously but this looks very different and i get nervous about that. but that is one thing that is going on. the second is that sometimes the wealth of the upper class has gone up and that is what the housing bubble dead and don't do it again. that is the lesson of that. it is about not just housing policies. and the third is i was just asked about the mobility evidence that says that on the whole, mobility is the same as

it was 50 years ago people have a chance to get ahead, but we don't like how good getting ahead is in being on the bottom is. that is focusing on key antipoverty programs. >> mr. johnson, i have 30 more seconds. do you believe in mobility? >> of course we all believe in mobility. i came here mobility. but i think that in the way you frame this discussion in the beginning is appropriate. and i think that if we go to the chart that was put up at the beginning showing what has happened since the 1980s. the biggest thing has been not 100%, but the big thing has been toward this will benefit other people and it hasn't happened. and i think that we should been the basis of thinking about comprehensive tax reform you know we got out of the 1980s and the 1990s and it was not

more for the middle but more for the top-end of global competition of talent and you have to think about how you handle that going forward. >> at times for the doman has expired. >> you're now recognize. >> thank you, mr. chairman. i want to congratulate you. but i think i will wait until after next sunday before i congratulate you totally. okay. >> you guys have been through this about everything under the sun. one of the interesting things that i have been having sat through all of this is that very little is talking about the middle class and the people struggling to get on those letters. one of them as students and there has almost no discussion of a $1.2 trillion student debt which is hanging over the

students. i look at that. i am a doctor and i know what goes on in medicine when you are in debt. but even if you're going to be a schoolteacher, your $60,000 in debt, what's that does to your view of the economy and society and how much you're going to invest, when you are basically trying to exceed this survival and pay your debt service, there is nothing left to save. of course there is not. every middle class family in this country has put all of their savings into their students loans. they have signed their house notes and all kinds of stuff to do this. so one of the fascinating things about looking at and listening to this which has also been sometimes very centric with what has happened in the united states, but i would like to hear

your comments about the european attitude toward student debt and what that is making in terms of the future. because i have had a university in my district for a long time ever since i came into politics. and i watched the national institutes of health dropping their investment on higher-level students to use to 19% and now they are doing 16% of the grant, there are people deciding if they want to go into that kind of a thing. was the long-term effect of keeping the dead on the students? that's really what i want to hear you talk about. and how did the europeans do otherwise? >> congressman the attitude is exactly what you said we want a strong and expanding higher education with more people than

have vocational skills you don't want to overburden them with debt. i think there is a particular problem around the for-profit sector and our competitors have to some degree avoided that. higher education in this country has been a strength and i think it will be a strength going forward and i think we need to expand the post high school locational education, don't just subsidize people to take on more debt to take these degrees. expand the supply increase the skills that are out there and have them come out with manageable lower debt levels to your point. >> why should a student pay more than 1% above prime and if we

bought it for so everybody could have student loans for 1% or so above prime, how would that change the future. >> you're absolutely right that the level of interest rates is too high. and these people are a good credit risk considering the contracts we are signing. you get paid. the default rate is relatively low and it's hard to discharge these debts. >> especially if it is a federally guaranteed loan, especially. we should look at the market and understand the competitive practices and some of the people and some of the companies that are inappropriately couching students. and most of all expanding the opportunity of post high school

training. >> banks in the southwest are talking about the housing loan. should we bail them out when max. >> no, i will leave it at that. [laughter] >> please go ahead. you are recognized. >> i appreciate all of you being here for so long and lending us i want to reference a comment we talked about republicans and others running the same

playbook, not spending dollars ,-com,-com ma cutting spending how that isn't working, we need to change this. so i come from south dakota and i represent the entire state of south dakota. so we have made some tough decisions in that state is served in the legislature i was there when we had such difficult times we have become the number one state in the nation to do business in. and we have done it by keeping taxes low. we have a regulatory burden that is minimal and allows businesses to come into the state to thrive and survive and to get people to work, we even have a constitutional i am and have a balanced budget every year which i believe mr. johnson had said could be a problem for some states. but for us it works. we make tough decisions and with an ear to be can the conceit economy turn around and do well. the number one industry is agriculture. and we work hard to increase not

only businesses and opportunities, but also at altar in south dakota and across overseas. i am excited about the trade agreements that we have coming and the opportunities that recreates. but i am also kind of concerned about how this goes down. last year the united states reached a record high of $152 billion worth of exports when it came to that. and also into that we have opportunities. sometimes the ham to getting agreement on has been part of this. i would like to ask you when it comes to getting that, when we look at previous trade agreements, has it been bipartisan.

and we have to give that to the type of authority. >> in many cases that has been cut. >> it has been a bipartisan power arrangement. >> in that role when we are being sought after from congress, what is the role of the president. they become a proponent of getting that type of negotiation power so they can complete the trade agreement? >> yes, white house involvement is essential. white house leadership is essential on any a partisan initiative.

>> we have this agreement that we are completing for these countries and perhaps down the road 10 years from now. what are the benefits of we would have in this country? >> at a time when we are operating below the potential we have this and putting it to use and it happens quickly. there are finite benefits to that. eventually that goes away and the larger impact is the ability to set standards and to make sure that the standard of manufacturing and the codes used to identifying myths are international. you move the mix of the workforce into this and you get the bonuses in sectors in terms of pay.

and these are all durable advantages to be engaged in trade. >> one of the comments are facts around trade agreements and what they mean for our economy that traditionally some of these jobs that are trade related pay more than nontrade related jobs. >> we are hoping to do this and my sense is that we are not looking at this as a robust that of agreements and agriculture but the japanese as you and i might like to do. >> thank you. >> gentlelady from california is recognized. >> thank you, mr. chairman.

>> i appreciate your willingness to join us and i'm a little bit confused about this information that has come out and on the one hand i'm here this is sending our country down the drain with economic policies, on the other hand we are hearing that her country has seen 58 consecutive months of job growth thanks to the leadership of obama. so i guess it depends on whether you like the president or not. the ways and means committee has a long history of holding substantive hearings in an effort to find solutions and is our economy a perfect economy? no, it is not. should the pay for trade workers

be higher? absolutely. but i don't see the republican-led congress stepping up the fight for workers anytime soon, because a whopping zero members of that could bring themselves to cosponsor bills to raise the federal minimum wage to $10.10 in the last congress. and so under most of our recent economic recoveries, we have strong republican opposition and this is the party that threatens default on the financial obligations and that actually shut our government down at great cost to taxpayers. while they continue to advocate for more tax cuts for the very rich, they can live in the bubble where they think that history will stop repeating itself and that the strategies have trickled down economically and that will magically benefit everybody including minimum-wage workers. so talking about another piece which is health care probably

one of the most important issues for american families and but for the aca was enacted come a woman was considered a pre-existing condition. most women's health issues including pregnancy were routinely treated as pre-existing conditions. but now thanks to the aca some are charged more simply because of our gender and we can now receive preventive services with out-of-pocket costs, all to which and this includes making

sure that people understand her appeal of the health care law, but this alternative, if we repeal it, what are they propose to replace it with? there have been many economic benefits from the health care law. >> there are more women in the workforce things to family planning counseling that they receive because of the aca. i am particularly sensitive to women's issues as they relate to the labor force and the workforce. and i'd like to talk a little bit more about this. [inaudible] >> and the claims that social security discriminates against women by taxing the income but not paying them the social

security benefits they have earned. coming to that conclusion includes completely incorrect assumptions and i will talk about them because i think it's important. and the second assumption is that married women depend on husbands to support them and would get the same benefit from social security if they didn't work as if they did it again that is not necessarily the case and that only women or never men only woman would ever make the choice to muscle while raising children by being supported. and we know the reality is that there are many things that work part-time or choose not to work and raise kids.

and so based on their earnings alone, whether or not they are married, a smaller number of people benefit from this. i will beg your indulgence. and then an additional benefit because a higher earning spouse can likely earn more. and some men and women do not work at all but still qualify for social security benefits va spouses work. so i felt the need to point that out because i don't know what reality you live in but the reality that i live in is that people must work to support a family and economically it is no longer the case that women turn upon men for their support. i think the chairman for his input. >> i would like to talk to the gentlelady from california, i

don't believe that anybody else is requesting time. you've been here since 10:00 a.m. this morning. this is our first hearing in the new 114 congress and i thank you for taking time out of your busy schedule to indulge this today and i thank you for inviting us. the committee stands adjourned. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> coming up on c-span2 threats on north korea.

and then today's senate debate on the keystone xl pipeline. >> tomorrow on c-span2 chamber of commerce president gives his annual address on the state of american business and the economy. live coverage begins at 10:15 a.m. eastern. and later president obama visit sioux falls iowa to talk about broadband internet access. it's part of a series of speeches that will be in his state of the union address next week. live coverage from iowa begins at 3:30 p.m. eastern on c-span2. >> c-span2 providing coverage of the floor proceedings and public aussie offense. every weekend but tv for 15 years the only television network devoted to non-fiction books and authors.

created by the cable tv industry and brought to you as a public service by your local or cable satellite provider. watch us and follow some twitter. >> a hearing on north korea look at the threat posed by the country's nuclear weapons program and state-sponsored cyberattacks. officials from the state and treasury security departments testified. ed royce chairs this 2.5 hour hearing. >> [inaudible] >> i very much appreciate the ranking member and his cooperation in beginning this process of holding a briefing so that we can get started on many pressing issues that we face. i look forward to meeting next week to organize the committee

and to discuss how all of us can work together in a bipartisan way in order to advance u.s. interests around the world and one of the things that i have enjoyed working with this committee is the way they the member and myself on the committee have been able to advance the idea that we work on a consensus among move that forward with one voice overseas, and i think that that amplifies the message from the united states. but the issue that we are discussing today with north korea is one that for years the united states and the allies have been rightly concerned about the threat from north korea's nuclear missile programs and mr. sherman and myself remember very vividly the situation of proliferation by north korea with respect to the transfer of that capability.

the transfer of that capability into syria on the banks of the euphrates, a weapons program being developed as a consequence of north korea. for years we have watched the program grow and now this regime has added a new weapon to the arsenal which is state sanctioned cyberattacks that underscores freon changing facts about north korea. for as first we have this rogue regime that has no interest in being a responsible state. second while kim jong-un continues to carry out human rights abuses throughout the world, by carrying out attacks for those of you that remember some of the exercises that north koreans have taken offshore, as well of what they have done to their own people. the way in which a country

treats its people will sometimes tell us how it treats others. the current individual, her mother was assassinated by north korean agents and we look at that u.n. report it that was recently filed after the evidence and interviews with many of the survivors. this was the conclusion. the united nations has found no parallel in the contemporary world to the treatment of the people in north korea and that is quite a statement. and so in the meantime, of course instead of assisting a population, the resources that are brea gets its hands on continues to go on in this nuclear missile system and that includes cyberwit weapon capability as well. and also north korea weapons are

not for show. we are basing his brutal regime, one that is not only trying to miniaturized nuclear weapons to put them out there, but also one as i said earlier, that has been involved in the past in central asia and the middle east and proliferating these different types of weapons and other kinds of offensive capabilities and weapons capabilities. the growing cybercapability emerged most starkly in 2013 and our ally thomas south korea, suffered a series of cyberattacks that brought down some of the commercial and media networks and disrupted the banking systems that hackers called it a dark soul and in particular what they were able to do was to shut down the banking system and shut down the atm systems and so forth.

despite limited internet capability of north korea the fact is that there is an elite cyberwarfare unit which was traced back as the source of these attacks on south korea and some of the expertise was obtained overseas by sending them to other countries for training, but certainly that capability was deployed in south korea and laster cyberattack is estimated to have cost sony hundreds of millions of dollars in damage. it was a state sanctioned attack that has many americans asking if that is what north korea can do how vulnerable is this and that obviously could be a dark

chapter. the administration announced sanctions targeting officials and foreign companies of the north korean government and i'm glad the administration has described as a just the first aspect of its response because many of those blacklisted have marty been targeted by u.s. sanctions. but the significance of this executive order comes from the broad power that he gives the president to target anyone who is a part of the north korean government or assisting them in any way if the administration chooses to you at two use it to it's full of damage. we need to step up and target those financial institutions in asia and beyond that are supporting the brutal and dangerous north korean regime sanctions have purple them in the past and we remember the consequences of others being sanctioned leaving the regime

unable who could not be paid. this committee has been focused on this threat for years, bringing attention to the human rights abusers criminal activities, nuclear and missile programs and helpful scrutiny of nuclear negotiations. the last congress passed legislation that the ranking member and i offered to ramp up the financial pressure pressing for them to designate a primary money-laundering money laundering concern, as has been done with iran curtailing the sale of weapons and stepping up the north korean sale of ships unfortunately the senate failed to act on this critical legislation but are it adjourned, but we will soon try again and give them a chance to join us and i will now turn to the ranking member for his opening comments.

..

we have really enjoyed pieces. we have done joint letters to officials, and i believe that we have gotten the biggest bang for the buck because we have shown unity. bipartisan delegation along our differences. we are all americans and love this country. so i want to thank you, mr. chairman, for all you do to ensure that that continues. i continues. i also want to thank our witnesses for their services and testimony. the recalcitrance and unpredictability of the kim regime makes it one of the worst we face on the global stage. we have attempted to address the problem of the north korean nuclear program. unfortunately very little progress has been made.