senate leaders met with president obama on tuesday to talk about the supreme court vacancy. senators mitch mcconnell and harry reid discussed the meeting on the senate floor earlier today. here is a look.

>> mr. president the current senate democratic leader once dated that quote nowhere in the constitution does it say the senate has a duty to give presidential nominees a vote. the incoming senate democratic leader the one we will have next year is not even waiting until the last person's term to declare the senate should not confirm a supreme court nominee except in extraordinary circumstances. we all know what vice president biden said when he chaired the judiciary committee. here is what he said. it would be our pragmatic conclusion he said that once the political season is underway and it is, the supreme court nomination must be put off until after the election campaign is over. that's the essence of mr. president of the rule. yesterday the chairman of the judiciary committee and i personally reiterated to president obama we will observe

the biden rule. the american people deserve to be heard on this matter. that's the fairest and most reasonable approach today. voters have always begun to choose the next president who in turn will nominate the next supreme court justice. it's an important decision. justice scalia himself provided us setting aside one's personal views is one of the primary qualifications for a judge. his aim was to follow the constitution wherever it took him even if he disagreed lyrically with the outcome. we saw that when he sided with the constitutional line of protesters to burn the american flag. you have to be a good and faithful judge he said he have to resign yourself to the fact you are not always going to like the conclusions you reach. i think americans agree that judges should be fair impartial arbiters who apply the law and the constitution equally to all and is actually written not as

they wish it were pretty think most americans agree that a jury should be committed to an even-handed interpretation of the law and the constitution so everyone who walks into a courtroom knows he or she will have a fair shake. but there is another view of the role of the judge. the view promoted by the current president the so-called empathy standard. judges prioritize their political ideology above the law the problem with that approach is empathy is only good in the courtroom if you are lucky enough to be the person the jury have sympathy for. not so good if you are the other guy. this is something the american people should decide. president obama has every right to nominate someone on his way out the door. the senate has every right to withhold its consent. that's what the biden rule reminds us this election year.

we will appropriately revisit the matter after the americans elect their new president. now this is not the only issue we discussed at the white house yesterday. they also had a constructive discussion about other legislative issues like the prescription opioid and heroin epidemic sweeping our country and the important bill will continue to consider today to help address it. the comprehensive addiction and recovery act is bipartisan legislation that targets this crisis at every level. the bill has a host of supporters including 42 bipartisan co-sponsors in more than 130 groups dedicated to combating the epidemic. while this is an important authorization bill i would also note that congress has already appropriated 400 $9 to opal you wait specific programs already. all 400 million of those funds to remain available to be spent today.

that's right mr. president, these funds are still available and we will have more opportunities to address funding for the appropriations process later this spring. michael botticelli the obama administration stretch of national drug control policy came before a hearing a few months ago and thanked congress for including funding in the fiscal 16 spending bills saying we appreciate that congress provided more than 400 million funding in the fiscal 16 appropriations act especially, specifically to address the opioid epidemic. an increase of more than $100 million from the previous year. botticelli went on to say the square evidence of comprehensive response like that of cara is tremendously important it is to the provisions are critically important to make headway in terms of this epidemic. let's now allow -- let's not

allow this issue to get tangled up in politics. it's really too important to each of our states. let's do our part today to help those in recovery take their lives back. let's help keep families together and kids safer, to help prevent more americans from suffering at the hands of addiction. let's put politics aside and continue to work to pass a comprehensive addiction and recovery act which would be an important step forward in the fight against international opioid and heroin crisis. >> the democrat leader. >> people don't watch us on television. they should understand that everything we do is not dour, kind of frowning. there are times when we are away

from the cameras and have a good time. there is no better example of that than this morning. every day, every week at 8:00 in the morning on wednesday we meet downstairs for the senate prayer breakfast. i go there as often as i can. very stimulating meeting. i am glad i go every time i do go but today was especially good because al franken the junior senator from minnesota was there making a presentation. even though there was an opening prayer and the closing prayer and some talk in between that his presentation was terrific and of course we all know al franken. so i want everyone watching this this morning to know that we are

not always, i use the word coward. there are times when we smile and have a good time. the presiding officer everyone knows the presiding officer and i have total disagreement and policy but i so admire the presiding officer. i without resignation can say we are friends, not just political friends but we are friends. a year ago when i was injured because he is not the mullah just he reached out to me and gave me his advice and mostly his concerned for which i'm grateful. i think we stop and look around at each other we would find many such relationships like the presiding officer and i appreciate that. mr. president now we have a new

rule called the biden rule which i guess was invented this morning. what happens when my friend the republican leader as he did yesterday talks about what senator biden said he never completes the presentation senator biden made great senator biden did not say they would not be any nominations. here's what he said in his presentation. at the end of this page in 1992 senator biden said compromise is the course both for the white house and the senate. if the senate cooperates with the senate on moderating selections in this nomination as did justice kennedy and souter. that's what this is all about. senator vice president by never said there would not be any

nominations approved and that was evident in the oval office yesterday. vice president biden told the story of a republican president calling his chairman to the judiciary committee and said okay we are having some problems here. we have 10 names on a piece of paper. i want you to look at it and give me your estimate. what would work? these are people that a republican president with the democratic chair of the judiciary committee said give me your impression of these people. yes, yes, no, 10 names. that's the same thing that happened yesterday in the white house. president obama said give them to me i will be happy to take a look at them so mr. president

there is no biden rule. the biden rule, we continue doing what we as eyes done here in the senate and what is that? we approve in any presidential election year, we have never not , that's a double negative, in a presidential election year we always take care of the nomination. we have never in this country not done that until now. the other thing mr. president is we keep talking about a lot of lyrical things but we have an obligation based on the constitution of the united states to do something about these nominations ever get from the president. we have a constitutional duty to do our jobs and that duty is to give advice and consent to the

president when he sent the nomination of peer which we will have in a matter of a week or so and we do it quickly. we don't spend months and months doing this mr. president. this has never ever been done before and for my friends at that the republican leader talked about statements i made and the senior senator from new york made of course we made statements. it didn't effectively get around here. i'm sure a lot of people listened and slowed down what president bush was wanting to do but the fact is president bush did what he wanted and he in the process was able to present nominations to us and we look them over. now we have a new standard.

we are not going to meet with whoever this person is. we are not going to have hearings and that's wrong. mr. president here is something that appeared in the "washington post" headline. trump is the gop's frankenstein monster. this was the headline at "washington post" opinion piece offered by robert kagan. he is now a senior fellow at the brookings institute. it's true trump is the republican party's frankenstein. building trump piece by piece. today the republican establishment acts like it's surprised by donald trump and his victories around the country. they claim outrage when a party

spent years telling immigrants they are not welcome in america. they act surprised that republican voters are flocking to -- as leaders continue to support a man who refuses to distance himself from the ku klux klan. shock and outrage to hear trump schoolyard taunts and the most common courtesy extended to every president even denying a fair hearing to the supreme court nominee for the first time ever, the first time in history. .. party's own political crimes are being punished in a bit of

justice fit for greek tragedy." close quote. seven years ago, the republican leaders of the party decided that president obama was the illegitimate president. they decided his presidency was unworthy of their basic respect and good-faith efforts. congressional republicans decided that whatever policies this president proposed, they would reflexively oppose them, regardless of the merits. instead, congressional republicans have only one objective -- to keep president obama from being re-elected. in order to do that, the republican leader and its party refused to engage the president or democrats on policy. no matter how dire the crisis for the american people, republican leaders decided it was more important to deny president obama an achievement than help people in need. mr. president, can we have order in the senate, please? the presiding officer: the senate will come to order, please. mr. reid: it's very difficult to

make a presentation when we have a deal going on across the way. mr. president, no matter how dire the crisis for the american people, republican leaders decided, i repeat, it was more important to deny president obama an achievement than to help people in need. think about the monumental legislation the republicans refuse to even engage in, let alone work on. the american recovery investment act, known as the stimulus. when our economy was in a nose dive, in a nose dive, remember, when obama was elected, that month he was elected, the country lost 800,000 jobs in one month. we were in the throes of the great recession, and yet it took a herculean effort to get a mere three republicans to work with us on that legislation. very important. they were strong, they were courageous. specter, collins and snowe.

but the republican leadership made it clear they didn't want their senators working with president obama on the stimulus. well, we got it done. health care. before obamacare, there were nearly 50 million americans with no health insurance. since then, almost 20 million more americans have gained health coverage. today, if you have a preexisting disability, you get -- you are covered with insurance. today the rate of no insurance is below 10%. this has all inspired congressional republicans who would not work with democrats despite our best efforts, refused to do anything to engage in any way. when the debate over health care started, three republicans -- snowe, grassley and enzi, members of the very important finance committee -- acted interested in fixing our

nation's health care system, but republican leadership >> >> >> the there was none. so the bill to the finance committee in the senior senator went back to iowa to talk about death panels. doesn't that sound like something donald trump would do? wall street crash provided remember with the secretary of the treasury he was on his knees that country was

in deep trouble with the republican president. in with a shadow the republicans would not work with us there is only one republican voter for that bill. and then to go to lou the extreme to block the legislation in the republican leader said that of the policies were from the republicans. to give the of respect it deserves.

it is to have more than 500,000 i'm sorry, that is a little high in six years 500 filibuster's in that same six year period lyndon johnson had to overcome to. -- two of them this is far more than anybody imagined could have been. actions speak louder than words. to said a clear and simple message. but instead of working for the american people with the extreme right wing happy is more important. for even background checks. with campaign finance reform.

to have 59 votes to allow some disclosure menacing the republic can -- republican voting with us. equal pay for women. now they're blocking the nominee to the supreme court. and now they have said that -- the trump standard. and now, is doing the same thing. to be rooting against latinos and immigrants. said congressman from iowa called them drug dealers. to describe it a negative

and ugly way. donald judd is the ultimate fulfillment of structure resentment. to be frank it isn't only trump also senator cruz or senator rubio or ben carson is the same thing. after all this is the same party day yesterday sought nine members voting after the civil rights activist maya angelou. hard to believe. republican leadership the senate republican leaders in

then and then for the republican party and then by denouncing donald trump. >> the g.o.p. monster. to tear it apart even more than it is now. >> the first sentence of the of book the first history of american conservatism is deep -- disappointment and

betrayal.

>> the meeting will come to order for co-chairmen will come back we very much appreciate your willingness to speak with us it is important to understand to get your take and where we are going helps us in terms of policy making decisions during for word i want to welcome you here for your purchase a patient all of us welcome you and thank you for your willingness for this long standing tradition the chairman council lift economic committee. this year marks the 70th anniversary of the council of economic advisers in the joint economic committee on

a wide range of matters on the economy we appreciate the opportunity to engage in dialogue and which has been learned over the course of the slow-growth recovery and would only continue for the foreseeable future the current recovery of subdued expectations with that labor force growth on the federal budget constraints. of slower economic growth to create a better tax system to rate in spending of those shackles that can alter the trajectory with the structural barriers and in my opinion a lot of the

problems you would like to solve require us as policymakers to look in the mirror. in to see how that affects our economy. the the final "state of the union" address obama stated he wanted '' to focus on the next five years and the next 10 years and beyond but what of the most important issues america faces is a financial obligations coming due with that time frame and beyond. that was not mentioned once and how to achieve fiscal sustainability to argue that we as a country have to answer. given how the national debt has risen so sharply from 10.6 trillion when obamacare took office now at $19 trillion.

that it is nothing short of reckless it will only get worse the longer we wait. indigested years with of mandatory spending with 99 percent of all federal revenue it pradesh revenues the path is unsustainable. our ability to pay for essentials government functions is severely constrained our economy will suffer in national security will be a risk. to take significant attention into equality as a challenge in the 21st century. however it is important to recognize intergenerational theft is from equality from

the children and grandchildren are ploy used to inherit. it will depend largely on the decisions we make today. into remain attainable? afford to discuss these issues with the chairman and now i will turn to the ranking member. >> in thank you for calling this hearing and the key for appearing again before us today to answer questions about the current state of the u.s. economy i share the overall assessment that under the leadership under president abominations' economy is back contracts after the worst recession

since the great depression we have just completed the best two years of private sector job growth since the 1990's and recorded the fastest two-year drop in the average unemployment rate in three years it has been cut in half. as you can see in the chart in the midst of a long history private-sector job creation in history with a growth and creation of 14 million private sector jobs. there are some who looks like the at the achievements that it pales in comparison as if the economic meltdown in the last years of the bush administration was an average recession. aulos of almost 9 million american jobs average?

is a loss of 9 million americans average? remember when george bush left the economy was in a death spiral. in the final quarter gdp strunc one dash shrank with a staggering eight-point to% in annual rate the worst quarterly economic performance in more than 50 years. housing prices were collapsing u.s. households had 13 trillion and dr. for menu said it was like an economic part attack that the share of wealth lost in the early days of this recession was almost five times as large as a loss of wealth that triggered the great depression thanks to -- and of president obama democrats in congress and

the federal reserve we have steadily climbed back from this recession and. as you can see from this chart, u.s. gdp has grown 24 at of 26 quarters real gdp has grown by over 14 percent since the start of the obama administration. the auto industry has already added nearly 640,000 new jobs since 2009 and now exporting more than 2 million units per year. at those 2007 levels and household wealth is $17 trillion higher than before the recession. the first day oppose stimulating the economy and

in fact, every single one of them demanded budget cuts in economic theory says government should increase spending to boost demand. without long-term structural challenge the baby boomers are retiring and will decrease labor force participation so with that of shoring in the job loss due to automation. the challenges are not a surprise. and what should we do? i agree to day the infrastructure in investing early childhood education and. is equal pay for equal work.

i want to close by looking at economic inequality. and the focus of the first and fourth chapters of the economic report of the president. it has diverged from other countries since the 1987 the share of income going to the top 1 percent to go to the top country every single year we need to recommit ourselves to expand opportunities and inequality they will pay dividends in the future to help create an economy where the benefits of growth are shared across the income spectrum. given all people a fair shot

to strengthen the economy to boost productivity and accelerating growth. thank you for appearing before the committee of the forge your testimony. congratulations on an excellent report simic now we'll introduce our distinguished what it -- witness. chairman of the council of economic advisers previously serving as the principal deputy director and senior vice president of the world bank. and director of that hamilton and turning that ph.d. from government from harvard university in masters of science of economics from the london school of economics we look forward to hearing from your report. >> thank you.

to the members of the committee we are excited to be here today to talk about the 70th annual economic report of the president that we have had a chance to do many times. that 2015 was a year of continued growth for the u.s. economy in the face of cysteine shall headwinds. ranking member baloney talks about the strongest job growth in a decade the largest decline with private sector job growth the unemployment rate has consistently fallen faster than what anyone would expect falling 4.9% compared

to those to be expected above 5% through 2020 provide the same time the labor force participation rate is stable of a past year and improving economic conditions with a drag on the participation from the baby boom generation. over the past six months earnings for private sector earnings since the great recession that more needs to be done to boost wages. it is all the more notable with a substantial headwinds from the global economy. the imf estimates global economic growth 3.1% in 2015 the slowest since 2009 and continuing a trend to fall

below expectations. united states has the highest growth rate and many major advanced economy and to weigh heavily on the global economy weak growth abroad subtracting 0.one percentage points a substantial shift from the point that exports have been added in 2013 and 14. and expect that to continue into the year 2016 and in light of that development is important to strengthen domestic growth and also important to look to ensure that benefits are shared broadly and that economic

report to lay out the agenda for inclusive growth despite progress the unequal distribution of income and wealth and opportunity remains one of the greatest challenges facing our economy. is an easy but it is more severe than in other countries around the world. what we have seen is then natural consequence as technology evolves but may reflect that rising influence of the income captured by those beyond what the productivity justifies. in recent decades the overall increasing to boost productivity providing opportunities to improve both the efficiency and equity the president's agenda includes making

competitive markets work better to increase opportunity within unequally divided the competition must promote economic growth with the widest pool of talent to have opportunity by investing in education supporting those of low income families with a criminal justice system. also to make the markets more competitive to promoting more open and competitive markets and a smarter approach to regulation among other policies. other sections may add additional steps to ensure a strong domestic economy investing in technology and infrastructure and children and i will be more than happy to talk about these

topics you are interested in. >> and want to apologize to have to leisurely the senate has called for four consecutive votes that will take a considerable amount of time i will ask my question to you. been given this order of 2q first and what did your seniority we will try back and forth i have someone here who has studied as an expert to tell you who is next. [laughter] trust me it can get very complicated. they came to office a long time ago. the first critical votes i

had to face was the decision to free we raise the debt ceiling limit to over $1 trillion. people say that must've been 100 years ago but 1981. today we're at 19 trillion. taking the politics out of this we have three years of balanced budgets in the 1900's under both republican control in democratic control we have seen the excel rating plunged we knew the door theater of the future economy is lurking out there waiting to collect the bills from the cbo with projections going forward are dramatic with discretionary spending as it streaks -- shrinks. . .

>> to provide for healthcare, research and you name the functions necessary to be addressed.

i wonder if you would tell us, what is the next president, regardless of who that is, will what does the next president and congress, what what do they need to do to finally stand up to this looming crisis, to put into place a long-term solution that is feasible in terms of how we need to govern and will put us on a path to more fiscal responsibility and avoid this coming wall that we are going to hit if we don't take action. i may not be able to be here to hear your final answer on that but we would like it for the record and i would appreciate it if you would address that. that's my only question and i will turn it over. >> sir, thank you very much for that question. i think i agree with the premise of almost everything that you said. i think it's important to put this in context, our deficit

was nearly 10% of gdp when the president walked in the door, that was a consequence of a very severe recession. the deficit has come down to 2.5% of gdp but we know it is going to spike shortly. that is due to a combination of deficit reduction and also a strengthening economy. doug recently co-authored the paper that said it's a challenge but it's less of a challenge than it looks a couple of years ago, in part because of the steps we have taken and in part because of lower interest rates. moore does need to be done, the deficit will rise as the share of the gdp, our approach is a balanced combination of measures on the spending side including to entitlement and measures on

the tax side which predominantly are not about raising rates but about cutting back on tax benefits for high income households, many of which are economically efficient. the last the last thing i should say is ultimately our goal is to see the debt to gdp ratio on a downward path and stabilize. you you can up, was that by lowering debt and raising gdp and steps to raising our economy is an important part of dealing with our debt and deficit. >> thank you, we finish 12 seconds behind my time so i need to pass this on, again i apologize for having to leave and i hope to be back as quickly as i can't. >> thank you jimmy. i recognize mrs. maloney for five minutes. >> thank you very much, a major focus of the economic report of the president is widening economic inequality. your report argues that extreme inequality can be an economic

problem, dragon productivity and growth. please explain to even those were not concerned about the growing gap between the haves and have not why we should be concerned about inequality and why is it vast inequality everybody's problem? >> thank you for your question i think there's a number of reasons, one of the clearest is that if you have inequality of income you're going to have inequality of opportunity. if you have have inequality of opportunity there is talents that could be contributing more to our economy but will not get the shot that it should get because it is lacking educational and other opportunities so we will miss out on the innovation and creativity that we need to push us forward.

>> as you noted in your testimony the share of income going to the top 1% in the united states is much higher than in other g7 countries. why has the experience from the united states been so different from the other g7 countries? >> all of our economies are facing similar forces in terms of technology and globalization. those have played a a role and rising inequality across the economies. one thing that's happened in the united states is we have made less of a investment in education that would let our workers keep up with the skills that would complement the advance we have seen it to acknowledge were to take advantage of globalization. that's one reason why we see an increase in inequality. also institutional changes matter, the fact that the united states has a minimum wage that is very

low by the standards of the g7, it's been eroded substantially by inflation it has also been a contributing factor to the increase in inequality. >> many people understand that at expanding economic opportunity for women in the workplace pain them fairly is the right thing to do. why is it also good for the broader economy? >> one of the challenges we face in our economy is a demographic challenge that where increasing aging society. one way to increase the growth of our labor forces to incorporate more men and women in the workforce. when you take steps like more flexible workplaces, more subsidies for child care, reducing the tax penalty on secondary earners and other measures along those line, paid leave, all of that helps bring more women into the workforce and helps us overcome some of the demographic challenges we have built into our structure.

>> people understand that programs like heads guard and universal pre-k are are an effective tool for helping children succeed in life, what are the economic benefits for allowing all of our children to have this opportunity a pre-k. >> recently economic research has been taking advantage of studies that follow children over long period of time. after public policies. they found that high-quality preschool, for example raises future earnings substantially. it raises them more than enough to justify the initial cost of the program. high-quality preschool also helps the women labor force participation. it it helps today the family as a whole, and

balance work and family and it helps the children later on. that's true of a wide range of interventions. the earned income tax credit, supplemental nutritional substance program, and medicaid all have been shown to have long-term benefits for children in terms of education, earnings, and health. >> when the united states congress instituted automatic spending cuts in 2013 did it help or hurt the economy? >> that hurt the economy it created a fiscal - max me time has expired, thank you. >> think your ranking member, good afternoon chairman thank you for joining us today, and his letter to congress introducing the erp president obama says and i quote, i've never been more optimistic about america's future than i am today. the chart that i have hopefully on the screen in the second shows that past growth projections of the administration have not lived up to expectations. they have failed, that now by the administration's own

estimates, the long-term growth potential is meager at best. so the red is omb's forecast, the solid black wind is actual and the dotted black line is the new projection going forward and then the blue lines are other nonpartisan organizations. you can see the gdp growth is between two and two and a half% which is below the historic averages. the business essential for economic growth, it has slowed dramatically in the last two years. you describe an optimistic and pessimistic view of the future trend in business investment within your report, so are you optimistic or pessimistic? >> i thank you for that question i'm optimistic and that optimism

depends both on the inherent strength of the u.s. economy and also the policy measure that we can take. if you look at the unemployment rate, it shall not chart in my initial presentation, that is consistently fallen faster than our forecast. interest rates have come in below are forecast and the goal of these forecast is to budget the deficit which is to generally come in at less than what we had expected. i think you're right though on the business investment across all of the advanced economies, that u.k., the eurozone, japan has not been what we like to see in a think a lot of that is the consequence of a very deep recession. within business advancement is research development by price that. >> so year mentioning the imports of gdp growth to mr. chairman regarding our debt

to long-term debt, so larry summers as you know recently talked about secular stagnation. his hypothesis he sees low capital investment, slow labor growth and slow technological progress as lasting conditions long-term. his secular stagnation the same as the pessimistic view or how do you explain it? and do you agree with that? >> i interpret secular stagnation as a specific economic hypothesis about long-term interest rates and the like. i think it has a number of problems in its application to the united states. i think it may help us understand places like japan and the euro zone, i don't think it applies to the united states. that being said i think the impetus that we need to take big

bold steps and invest more in our infrastructure are very much true and we would have a brighter fit you future if we did that. >> i was disappointed the european does not address the economic potential from the administration's action in policies like increased spending debt, failure failure to reform attacks code and the regulatory for example in this chart it shows historic and projected greenhouse gas emissions including the effects of the president clean power plan specifically the paris pledge, these policies policies and regulations are not even mentioned in the erp and the ministration has turned away all of the above strategy that it was once in favor of as it now closes powerplants and sends natural gas and nuclear power. >> we have seen this administration poor on new financial labor regulations, environmental regulations, and those holding down economic

growth in either not massive costs associated with such decline in admissions on this chart? these policies, none of them which i mentioned are included in this economic report, shouldn't they discuss the most important issues impacting our economy and explain that some government policies might constrain economic growth? >> to some degree when you don't see something in a report it's a matter of space and we always supposed 400 pages. for example on taxes i would hope that you would find a lot to agree with on that discussion, the importance of lowering our rates in making our international system more competitive. we didn't repeat that this you're not that it's not important it's a matter of space. on regulation you might ask to see it differently. our analysis finds a trajectory of growth very well explained by

traditional model that doesn't take into account the regulatory changes in the investment we see performance in the u.s. economy has been very similar to other economies. i don't think they are a very important factor in explaining. >> thank you, my time has expired. >> thank you mr. chairman, the report notes that while investments below the rate of payout to shareholders but not financial firms, the corporations are now returning half of the funds that could be used for investment to stockholders, one possible explanation provided by the report was the rise of payouts to shareholders may be related to the decline in the startup rate as young firms are likely to reinvest the cash flow then mature firms. the lower investment growth of

shareholders suggest they had more shares than they could properly reinvest. the rise and share buybacks predates current economic circumstances. senator baldwin has pointed to the 1982 fec rule that provided a safe harbor. prior to 1982 buybacks were very limited use of corporate profits. ibach says we know can make earnings report look better and foster short-term thinking in the corporate governance. can you comment on the impact of this and other regulatory changes that contributed to current investment environment is should we be seeking to limit buybacks as a means of promoting private sector investment? >> thank you for your question. i have seen the hypothesis put forward about that 1982 regulation has played a role in the rise of buybacks.

this really the case that buybacks have risen over time is not just a recent. i haven't seen and reviewed the research in terms of assessing that link, i don't have an opinion on it i'd be happy to look into it more. one of the most important questions for us to ask is what can we do to make sure companies have good things to invest in and make sure that we have a dynamic system in which new businesses are being formed and coming into existence. if you have a large mature company that doesn't have great investment projects i'd rather the money go back to shareholders and they can allocated to some other part of the economy that could be of higher efficiency. i usually step back and look less at where the money is going and more at what is shaping the business decision in terms of

the real prospects. >> thank you. the erp contains an interesting discussion on economic rents as a driver of inequality. i like your simple definition that its income cash by companies and workers, beyond that is their productivity testifies. rankin also created by market consolidation and regulation which favors the business over its competitors. can you recommend policy purchased? >> one is something that senators have held a hearing on a few weeks ago to occupational licensing. the fact that the state level 25% of iq patients you need a license to get. that reduces that reduces your ability to move between jobs unless you command a premium. land-use restrictions that drive up the cost of living in certain areas also create rent both literally and in the economic sense, greater degree of competition is

important in this regard, but the other thing i would say some rents are inevitable and it's a question of how they are divided. a higher minimum wage, labor unions would help make sure the you're dividing the pie and make sure it gets divided more towards the labor and. >> we keep hearing about mandatory spending continued to increase and that at some point in our lifetime it will be 100% of federal revenues. do we have a plan to address the long-term thinking about what we're going to do to maintain a meaningful discretionary part of our budget? >> we currently have much lower projected healthcare, both level

and growth rates going for them the projections six or seven years ago, that is in part due to the affordable care act in part due to a set of changes that were underway in our health system and continuing to implement that which is mostly the job of our administration and that's really important. we can also take additional steps modeled on that that bring down the cost of healthcare helping to reduce premiums and extend the life of medicare and reduce the pressure on discretionary spending that you cited. >> thank you. >> thank you mr. chairman, and thank you for being here, and following up on the report it's interesting to me because some of the numbers you cited and the economy is back on track, we've had the best and we've had records but here's another number i think is really critical, the u.s. bureau of labor statistics announced that for all of 2015, all of last year that we had u.s. productivity rose only .6%. this is the fifth year in a row

where that growth has been below 1%. since the u.s. started collecting this data going back all the way to 1947, up until now there has never in such a poor five year stretch because we have had five years in a row where it's been below 1%. find that the cases been important, the link between increases in productivity, one example now estimates because of the annual increase of labor productivity of 3%, if you had 3% the average standard of living would double in 24 years in the united states but now compared to the last five years with low productivity growth we've actually changed it where the average standard of living will not be doubled until every 139 years. these are numbers behind what many people feel is the disappearing of the american

dream. it's probably why 72% of the public feels like were in a recession right right now even though were not. i'm not a dr. but i think one of the rules of medicine's do no harm. in terms of that question, to what end do you or the administration, what with thoughts of you given, what analysis have you provided or do you acknowledge that the cumulative effect of a lot of regulations on small, medium, large businesses is had on the lack of productivity and the effect it is having now on lower standard of living in the united states? >> thank you for the question, i think you're right to identify productivity as a challenge the economy faces. analysis by the same francisco fed but the date around 2004 when productivity growth started to slow this something we started to see in other

countries. the united states and one of the reasons i'm optimistic is that over the last ten years we have had the fastest productivity growth. we certainly have not had enough that places a big role in terms of what future we can expect for wage growth. i think an important question is what steps can we take. i suggest expanding markets abroad through steps like tpp, reforming our business tax system, lowering the rate and reforming the base. investing more in infrastructure, investing more in research and development. bringing down our deficit to free up more private capital for investment and those are five important steps we could take to increase our productivity. >> i would, tax reform, trade opportunities, sell more opportunities, sell more american goods and services overseas and get the money back home. what about the regulatory environment, do acknowledge her

have you done analysis on the weight of regulations from the cumulative effect. it's a consistent message i hear from my employers that i visit with the minnesota all the time. i think it's very important to get regulations right. one of our jobs is to participate in the process by which executive branch regulations are reviewed and we take that responsibility very seriously and work hard to get the benefits as high relative to the cost as you can. that means during regulations in a way that is flexible, i think if you do that it can be consistent with a stronger economy. >> i want to welcome chairman furman and thank you for your very intelligent report and testimony today. it has significant -- is a great

work product as usual. i was going to ask about economic rents but my friend has already covered that. i want to go back about paris cord and thinking about this debate about economic growth as it relates to how we position the country around climate change, when he think of two postures, one that is more forward leaning as it relates to climate change in other words setting goals like 50% between electricity by 2030 or various goals that are achievable based on current technology but aspirational. versus not taking the steps and not put in the proper incentives in place. how do you think about that as it relates, putting aside of bimetal stewardship stewardship but as appear matter of economics, which posture will drive greater economic growth for the united states?

>> i think acting as soon as possible to create as predictable task for the future and one they said is achievable but a little bit of a stretch to make sure were challenging our self is the thing that makes most economic sense especially in a world where most other countries in the world are doing the same thing. some of the progress we've seen in solar energy, in wins, and conserving energy, all of that is helping to make sure jobs are located here in the united states,. >> when you think about job creation opportunity versus noncarbon industries, what does the data suggest in terms of both our economic growth but also this notion and i may be wrong about this but my senses that the carbon intensive industries have become more automated and therefore are not actually driving labor, in fact

they are net even as they produce the same amount of energy. versus the clean energy, green energy whatever you want to call about to be more labor-intensive >> so that is my understanding as well that a lot of the traditional carbon industries are capital heavy. it's a a continuum. natural gas for example has have as much carbon beginning to end as: have an we've had substantial increases in natural grass production that is help create jobs in our country. i think that's a good thing and something we would welcome and encourage. it's also something it's also something compatible with how we are trying to hit our goals for climate change. but on solar, and wind in as you said some of these are very labor-intensive.

>> when he think of economic wrist to america and as you have seen this country has seen the last seven years particularly relative to our competitors which this may be one of the greatest periods of times where we've out case the rest of the world with how we recovered and how less dependent we are in other parts of the world. things like what's happening in the developed world are affecting us less. mark carney, the chairman of the bank of england give a speech about a year ago when he talked about a risk to financial market is climate change. he said there might be a point in time when people actually it might not be when they catastrophic events occur but when people come to the reality there's a repricing of assets based on that. how do you think about that and risk to our environment?

>> the administration has was called the social cost of carbon, it's an estimate of how much each ton of carbon costs us economically, our estimate is about $40 per ten that we use as an input to the rulemaking process, that estimate does not include the uncertainty of the risk associated with climate change and that's a lot of what mark carney was talking about in the speech you refer to, that that might even be a larger more consequential costs than just this. at the other end, the sooner you deal with it the cheaper and more efficient it is, it would be quite costly if you waited 30 years. >> senator lee is recognized for five minutes. >> thank you to chairman furman for coming to testify today. i think you also once again for coming to testify on

occupational licensing. i like to speak with you about innovation and get your thoughts on a piece of your report that focus on the potential job market effects of robots, it seems we might be nearing a significant technological inflection point, one that that could have profound implications for economy. boston dynamics continue to release robots with mobility while the industrial applications involving machine running, some level it simulates cognition, some observers suggest that we may be on the edge of a new wave of innovation. if this new wave might someways be similar to that that was spurred on by the invention of the internal combustion engine for example. which of course effectively led

to a really sharp and economically significant decline in the use of horses, first of all, as policymakers should be be thinking of -- is a better thought of a piece of a larger challenge involving globalization trade and a number of other similar factors? i'm referring to the challenges facing lower skilled lower income workers and their jobs? >> i think that's that's a great question and is something i grapple with all of the time, i think that's one set of issues but automation brings it to the floor in a very direct way. in theory automation should not present any problem at all. we've had automation for thousands of years and we always find more jobs for people. the practice that can come at a cost in terms of inequality or some people who don't find another job and you might find

it transitional or temporary but that could last for decades. >> and that is why raise the question is this could be different in some ways. i was looking to try to stay away ahead of the curve. your report estimates high likelihood that jobs today paying less than $20 per hour will eventually be automated. >> there doesn't seem to be a hard timetable that accurate? >> that's accurate. we're drying on research that was done at oxford in that regard. >> the current administration supports raising the minimum wage. every policy is trade-offs. that's what i try to hash out in these debates and one of the things we discussed in this commie