e seen the standard of living doubling every 90 years. that's simply unacceptableb j we have to do better over the long term in order for to feel likev ave the opportunity for the american dream. that kind of growth comes from two úzsources. the first source is to actually build up and accumulate your skills, your technologies, the capital. the 1pfactories(!3 the equipment. the means of production and incentives to accumulate those kinds of skills, technologi-?;78 and riddled throughout the jurisdictions of the0ø committ31m whether it's tax or trade or other policies. the second(d is greater prod uktd vy;i ive productivity, especially from workers in the economy. productivity comesl incentives. ityg)- comesñ(uñ from minimal interference from policies that distort sc decisions that firms make. allow them to choose the mean a

of production to the best of their abilityx@)x focus onk-rnñ striping awaydtbñ interferences for productivity growth. what kind of policies are(wç they. trade(ií policies are a great opportunity right now. the tpp and estimates in my testimony suggest this could increase gdp by $200 billion if-/ fully(' h.4himplemented. this has been historically a spur ofífqhy trade growth. we saw a tremendous boom in trade technologies. to get that done, you do have to2onñ give the president trade promotion tax reform is a great opportunity. i don't belabor the pieces that

are this my written =vw5 testimony but it's complicated and raises almost no revenue so we're in the worst of all possible places with our corporate code. the last is, i would argue that it is riddled with anti-growth features. there's a lot of very bad tax put the need for revenue but the structure of the=-4çt device tax and insurance fee are highly efficient and ought to be looked atiéñx!q÷ @xt?carefully. the basic expansion of3where we need to control the spending and control the debt and reduce the threat to long term economic growth. so there's a lot of opportunities in this congress. there's a great need for long term growth. i congratulate the committee for taking a look at these issues and look forward toxñ your questions. >> thank you.(ru

professorle#ly -- you got to turn it on%(2s professor andy+gñ pull it close to you. it's very unit directional, remember thatú!izç n ulv#'word? >> thank you both for the5ij%y invitation and for the advice on using this complex technology.v< i'm pleased to appear again before this distinguished committee. tax reform can be the major driver of,.) faster gdp growth.n#÷r fortunately the american tax code is better in my ways than it was before i first=va+tqp)ed before this committee. thatói )utáhp'd conutscon concontributes to faster growth and better9 jobs. there's also been back sliding in tax rates since the taxbwkñ reform of 1986.

remedying this should be an important goal. there are many that can strength-/yñ in growth of fiscal deficits. i will focus on fe7añs things that receive less attention than they should. let me st that can increase the employment of women and raise their after tax

reforming these rules wouldo increase women's labor force participation and the nation's @i#xy gdp. let me turn to increasing employment among seniors. the labor force participation rate now declines from 64% among 60-year-olds to have that among those 65 to 69. as you know, congress in ca983 raised the age-ce for full social security benefits from 65 to 67. as a result, the labor force participation rateeñ);ç among 65 toa 69-year-olds rose from 21% tofh!df>)e 32%. life expectancya%g at age 67 has increased by three yearsa]ib since raising the age for full benefits in line(bzeñ with that"o increase in life expectancy would expand the laborm.xñ and raise real gdp. let me turn now to policies

designed to raise our nation's rate of saving and therefore our nation's.bhñ capital ñ p stock.é:su household savings, back between 1960 and 1985 averaged "r9% of after tax incomes. now, it's about 1/3rd of that. a variety of public policies contribute to the low rate of saving and the high rate of dissaving. these include the deductibility of mortgage interest and the level of unfunded social security benefits. qb automatic enrollment and a shift of social security to a-ugç mixed system with supplementary investment base personal% hy retirement accountsg# would increase national saving ñqj would therefore increase business investment.)eqpá/çaz would raise real incomes and create better jobs. xñ unfortunately most of household saving is now absorbed by the

federal budget deficit. the resulting national8;éñ debtzs90x haslw

is already being squeezed to historically low levels.bjx% controlling governmenãspending requires slowing programs for seniors. tax revenue can be raised byly. ing@g use the tax expenditure features of the tax codefy( to reduce their tax liabilities. these tax expenditures are a major form spending, indeed i would say domestic spending. capping the use of these tax subsidies could also simplify the process by inducing tax payers to use the standard deduction rather than itemizeing standard e standard deductions. my written testimony provides a recent study on howi÷÷ a recent cap of tax expenditures might be

a key element in this is the corporate tax reform. reducing the corporate tax rate, now the highest in the industrial world and shifting to the type of international tax rule the territorial system that is used by every industrial nation. so thank you again for the opportunity to summarize my views and i look questions. >>) thank youy[ feldstein. >> thank you. i'm the former chief economist of the international monetary fund. i the first point is about the recovery. the second is about theo,oy longer term stagnation of wages and the third is about tpp trade. >> on the p ÷recovery if we look at the u.s. experience compared

with all the other countries affected by the financial crisis and it was a global financial crisis, the most serious crisis the world has faced since the 1930s. most other countries have struggled to recover from this crisis. the right response to such a shock includes the active use of discretionary fiscal policy where 33ksqavailable, the difficult with using such ] policy is can you make it timely? can you make it appropriate? will it be temporary? we've seen problems across other countries on these dimensions but again, looking at the u.s. we've con1[o remarkably well on exactly these points including the fact that the deficit has now come down and the debt level hasbm'r]d fedlstein said is better than in othert@ê countries and yet not trigger a debt crisis. the problem i would suggest seen

comparatively in the u.s. experience has been the lack ofrv1y consensus over fiscal policy including confrontations around the debt ceiling and around the various issues that have triggered government shut down. financialóñs markets creatingv3 uncertainty and trade partners through exactly this mechanism. on the medium term issues that you're c chairman. in the context of attempting to%.8

it is absolutely essential we control our spending and the affordable care act has taken some very concrete steps in that direction. it is the early daysg/÷ but we need time for those programs to work and be evaluated. second, weir8÷ back. since the

or you can have trickle down policies and give advantages to those high up on the income fv(x scale, help those people and assume that'sâx benefitted benefits more broadly. that's been disappointing performance for 90% of the americans since the 1980s. it's a 30wbya year problem. i think mr. levin is right. there's plenty of scope for ã@@eging and.+q÷ ifmproving the tax system keepingwvvvrv mind the long-standing problems we have witho;d? dv-1 of the middle class. finally, on the8sh trade&un agreements, iqñivñ completely agree with8jbé$u$emu that these are very importanted important issues and tpp isyu ñ absolutely center stage for thiscx4' 7;#cjj however, i would urge allk÷ republicans and of course democrats to take the issue oékzqd currency manipulation very seriously. there has in the past been#. cheating by some of the governments with whom7yf, we trade.

cheating wiby degovernments. that's something they don't like on the republican side!u manipulating their currencies.vñ now is a good momentp.id to negotiate that and lock in the current flexible currency &@, arangents with4-; norms but please, do not think that just trade, just opening trade, just more trade on the lines of tpp is necessarily good for of the middle class. if you let other governments continue to cheat it will go badly for our middle class.qrly thank you. >> thank you, professor #et johnson; you. your opening testimonyjj+ was pretty staggering.2$z historically we've doubled our standard of living among americans every 32 6byyears. á ñ at the rate we're at right now is 90 years.

is that písbzright. >> ball park we'reql been growing and we have a growth rate of 2.3%. >> yes. >> in adxs÷ nutshell what's the explanatione:s4 for that. >> tlrhere two pieces. the ageing population' 9 fewer workers andj÷qm÷ the second is lower productivity growth. thatéeu comes from many courses the cdo has marked down its perception #e capacity of the u.s. economy to produce productive workers. >> okay. so in two of those areas this committee has enormous impact on two issues.v]7ñ lñ democrat oe demo graphy, getting people into@.jcwork force and capital

treatment of that. >> yes. >> in sóñ?ñ1996 to 2000, you had a republicano[ua congress and a8c[l democratic president. the result of that combination then produç$ ñ well fair'n9eá[u) a capital gains tax cut a $ reduction in spending. a balanced budget. theñ b telecommunications industry and he will negotiated and got (écr" cf1 o aproven of trade agreements with bipartisan support. weúúú saw very strong economic growth across the board. we saw people poverty into the work force into better lives.t-bsq it was a good time. it seems to me that that kind of need now. give me your generaltws" sense

what could we best do to pull people from the 92 million who are not at work. what can we do to pull them into the+l1rñ work force to help deal with that democratic issue has giving us4m the lower trend growth rates lower standards of living and what can we doz, to help increase our productivity. >> let me start with the latter. i think number one, you have to8xtp deal with the corporate taxdí which the oecd research has identified as thesymsy][yyw8róéñ single most potent anti-growth tax. we have developed world and also hurts our national competitiveness. i think you start with that.8)+fu more generally, i think you have to be especially focused on the growth impacts of the tax treatment of the return to/vp

dividends, cvp& gains economic growth is in the end quite simple, you give up something now in order to save and invest to make the economy bigger in the future at everymargin, social security rules tax rules. on the work front, i think, you know, in the united states the difference between being poor and not poor is work. the difference between being successful when working and less successful when working is education and skills. so at every juncture you want to have the social safety nets to support wo there's a lot of opportunities to do that. you want to take social security and make suref4 discourage workrç we will have morej'!ñ higher skilled r americans in years$wzfä you want to ask what are the work incentives and how can we do better. a lot of people thinktjm growth is

a bill. you pass a recovery act and you get growth and check that box and do other x:q+things. the truth is a fillìáhp &hc% at every juncture when you have to make tough policy c÷uç+q considerations, environmental consider1l3eim versus growth considerations. labor considerations versus growth. you have to consider growth. that's the jobt: committee. >> you were around in the reagan administration during two rounds of tax reform. we had 1981 and 1986 where the top rate was down to 28%,,kz=ñ are there some)"ñ lessons we should derive from that positive negative? question two, that was a different era where the global economy was far less integrated than it is today. çqvpour7z rates are the highest in the

industryialized world onv:q corporations, we're sort of like other countries in theúiwí industrialized world in that we tax most businesses as individualsqvn÷ in what we call pass b(çsoughs which is 6 tk43.6% affectively. we are taxing our corporations higher than theikyr5 taxing theirs. in this global economy in the 21st qeácentury how much of a difference is that making in respect to global competitiveness zh and capital flows and>s÷q what mistakes did you make then that you should@w, we,aaal d minutes? >> well, i think the tax reform experience in the 1980s, diringe during the reagan years was a very positive one. we saw rates come down.vd we saw a significant increase in tax revenue as individuals

shifted from tax shelters, shifted into reporting more income and so the revenue cost of that was less than pure static wí analysis would suggest. yet, it also, of course÷f3t provided strongl,ñz incentives for1] saving and forí y the corporate tax has become a bigger and bigger( we used to have a much higher corporate1áhiñ tax eí çrate. we brought it down. the rest of the world bsó brought it down more rapi x so we now see ourselves with a higher corporate tax rate than world. that, of course, puts our companies at a disadvantage. it raises the cost of áé capital. it makes it more attractive to invest $ the united states and it raises the cost and therefore the prices of american products.

that makes it harder for us to compete with imports and harder toiz[ compete as we export to the rest of the world. so i think.@@xt that's why there's broad agreement that bringing down the corporate tax rate and@@! moving tozv asrj÷ integrated system so called territorial system would make a lot of sense. >> i want to be respectful of other's time so i will yield to mr. levin. >> thank you.á" b first, i would like there to be distributed two charts if you would do that right 5#éá÷now. also to or( it's a little clumsy here because of the way -- who's going to distribute them on this side, too? who's doing that?

just the old fashion way. >> that works too./ã/óç=z jet let me discuss it quickly because it acceptñnk this is a mistake to minimize the progress that we've made in the last years. we need to look to the future but trying to degrade or]ky( i think, misdescribe what's happened in these lastex2] years is

a serious+÷#y mistake. these two charts show what you have said, dr. johnson. the first chart shows the net employment gain in the u.s. compared to uk, germany canada,#;4 japan, korea and all others and you'll see that more thantqu= half of the employment gain from 2010 to 2014 waswj:" in the united states. the second chart to pick up your point, dr. johnson relates to gdps and selective committees. and it's very striking what's happened inh3 compared to the united states.dcéñ so, if we're going to3[zç move ahead, i think it's important not to misdescribe the ky#"past.

i think it's also important for us to look at the policies that were undertaken and i hope if i mightipé9(v so that the republicans will take another look at their opposition to stimulus policies that ;0y have=+[jwyiq really let me also say about the corñkkduz rate1d that mr. r s)m'felled fedlstein and other witnesses 4bx9ñ said. i think we have to lookwf9i at it and the affective tax rate because it varies dramatically according to sectors. in some sectors, they are paying the full mid-30s. but in other sectors the affective tax rate is much lower. and in some cases, the affective tax rate is zero. so i think we need to take a

good look at it. >> going back to the first chartih0 that i put on -- actually it was the% i'd like mr. johnson to -- if we could put that back the second chart that i referred to which4ó:ea talks about essentially the stagnant income for the bottom 90% in contrast to the top 10% andt dr. johnson, you referred to this a bit but describe, if you would, ap pñ bit more, this goes back to the 80s. you mentioned a few of the factors, but as we try to turn our attention as we must, to income stagnation for the middle class, just review what you think are themhahp major factors that

have causedúl!xm this going back now 35 years. maybe you can put on the screen, if we can do that t:5hcally that second chart. if not go-rxññ ahead, proceed. >> i think it's a very important chart. it doesn't matter too much which way you break it down if you do it for the median wage or lower 20%. it's a very similar story. people who used to be in the middle of income distribution people who were middle class with a high schoolis[ one year or two years after hi',ñlz school have done relativelyx/>l badly in terms of income growth and the research on this which has been done by many people, mr. levn, includein, emphasizes the3%zlogical change, havebcñ taken away a lot of what were administrative clerical job. second globalization, the patent

of trade that has developed probably not as important as technological change. >> let me just break in. i think as we talk about the importance of exportskjmp relating to globalization you have to talk about the impact of imports. at just one side of the equation when clearly, you have to look at both. i think that's your é-%wup >> that's an essential point so we have research on the surge of china's exportsg)to the united states in the 2000s. we have mafpped out the destruction of american jobs in manufacturing that came directly from thatgqkl by the way was facilitated by an episode of currency manipulationt- through deliberate government policy.

they destroy jobs and then those a job again they go down in terms of the income t61f÷ they could earn. this is a big part ofr5÷ what lies behind the picture that you showed earlier. >> thank you. my time is up.íke6 >> because we're technical difficulties with the technology here for the record when it comes to any pay increase as the top wage growth 0 grew 138%. >> this was the second slide that we showed. thank you.);zww >> thank you mr. chairman. again, congratulations on being the new chairman.t x÷ i thank you for this hearing as well. i want -- i want to begin by asking you questions regarding rfd#e social security disability. as you may know thez4cñ 9 projected to become insolvent in

2016. i will just say the last thing that should happen is congress raiding the retirement program to bail out the disability program. this is worse than kicking the can down the road and actually makes the social security retirement program worse without doing anything to fix it. do you believe that reforming disability insurance, di, would improve economic growth at all?+o >> yes in a couple ofb 3v ways. first, on the merits of the program itself, we have a clear issue with people going onto disability insureance and i think it's useful for this committee to review the definition of disability. we now basically divide people in these concrete groups can work disabled in fact, there'sv a much more fluid reality out there+jzñ about people with physical and mental disabilities being able to work. the di program provides a pad incentive to have them not work

at all. there's a lot of fraud in the entry process on top of that. the second thing is di is a black hole. people go into di and they never come out. i think the committee ought to think hard about especially young people on the di program who with continuous monitoring would actually find ways to exit anóójx move into the labor force at aaw=kñ relgatively young age and we would benefit from that. i think the program deserves serious review. it's a great opportunity for congress to look abt a mannedt a mandatory program and instead of stealing money, just cutting it or reforming it so it meetscosts less. we need reforms and not cuts. di is a good place to start. >> thank you i agree with you. i'm sure most of my colleagues do, too. as you know, iti

time for a person to receive a decision on an application for disability. for those that don't qualify for benefits, how does this time out of the labor force in your opinion affect their earnings? >> in general long spells of unemployment are bad for people's future earning ability. we've learned it2atñ in the down turn and again and again. to have a policy to induce people to undertake such a bad spell is an incentive. >> sometimes workers take social security before they top working. in other cases, they need to keep working tobaúñ supplement their retirement income. however if they claim benefits before their full retirement age, theiró6qgv benefits are reduced based on how much they earn due tobu retirement earnings test. how can weá[zññ encourage work especially later in a workers

career. >> there are a long list of things one can do as dr. feldstein mentioned. looking at the normal retirement age and moving it to match the current life expectancy. the:,búo taxation.ác of earnings is something that'ú worth looking at. the program itself needs to beu reformed. as the kmtcommittee w4a8 a pension program that has prom ips cut benefits 25%. not a good way to run a pension program. they will then be able to make their labor decisions and know how much they have to work. all of that would be beneficial. >> tell me why we ought to tax the earnings because they have already been taxed pcm% i didn't say i wanted to. i said you ought todéar re-examine that. >> thank you mr. chairman.

yield back. >> thank you mr. louis. >> thank you mr. chairman. i want to take an opportunity to congratulate you on incoming the chairman of this committee and like mr. jqiyulevin i look forward to working with you sir. thank you. >> welcome members of the panel. dr. johnson, would you like to comment on the question raised by mr. >> yes, mr. louis. this is an issue, a problem that we encounter in many severe crises. this is why preventing severeoge crises is important because when so many people are dumped out of the labor market lose their job, more than 7 million people you overwhelm everyone's capacity and more people end up on disability and end up with stress on disability because of what happened. that's why the dodd-frank

reforms are so important. i urge you to not lose track of that in the big picture. this is why the fiscal stimulus so was important also. getting people back to work. making sure they stayed engaged with the labor force and kept those skills. it's when peopletáx thrown out of work and then people can't find a job mr. johnson. those are the circumstances that we found ourselves in at the end of 2008 and 2009. >> thank you very much dr. johnson. the budget passed by the house republicans last year we have unfairly targeted low and moderately low americans with significant cuts in assistance with at least 69% of nondefense cuts coming to programs serving people of limited means. now, i want you to tell us, do you food, and education assistance

to struggling americans might be counter-productive to3 [ñ long term economic growth? >> yes mr. louis. i think the human capital.t- people's ability to ñimlearn. children's ability to go to school and to concentrate. this is absolutely affected by their access to nutrition, health care. headic medicaid for children is a very sensible investment in the longer future growth2q3= of the country and fiscal sustainability because those are the people who pay taxes when they are growth up. if they can't concentrate, if they are sick. if they are absent from school for those reasons or if their family has medical emergencies that mean they can't keep the children in school all of this impacts negatively obviously the individuals in the z$ñ family but also the rest of us as a society and as people responsible for the fiscal accounts. >> are you further concerned that huge cuts)wkp for low income

americans might increase j inequality which is already a growing concern all across our country. >> yes congressman. i think inequality is an important issue. i think that's what+'6váu saw in mr. levin's chart. it's not just about inequality or redistribution. it's about human growth. it's about human capital. it's about people. ioii !out who are you helping when they are young and they are poor and their families can't help them. what kind of opportunities are you providing. i think it's also, mr. louis, about immigration reform. we should be encouraging more people to enter the country legally including families with young children. that's a huge advantage we have relative to other industrial countries, our potential growth in our labor force through legal immigration. no other major developed indufrt ri industrial country has that

opportunity moving forward. >> thank you mr. chairman. doctor, i have been working for several years on a proposal to kind of get us out of the sand box that we've been in for the last 100 years with the progressive tax code and get us to a system that allowsu/kl us to really let investment need to flow where it needs to flow and let capital come off the sidelines sitting in the sidelines not only in banks here in the united states but also offshore and let7-my that money go to where it is best=:qz used in the economy>q4-:rq)e entrepreneeqe and investors want to invest. you're +c familiar, based off the bradford ex-tax what i did is converted it into taking that tax and looking at it on all business activity and5pñ created a cash flow tax.3m i hywk en working under chairman camp and now chairman ryan with joint tax to try to get this to a revenue neutral score because it's a theory now

but i'm trying to vet ith 'd get it out there in the public so that all republicans democrats, the american people have a chance to look at what it would look like under a completely different tax structure. i know you're familiar with it. i would like for you to on the record talk about thenpositives and possibly negatives with transitioning to a tax like this. >> as youp?->ñ know i am a student of the late david bradford who is one of the greatest tax policy minds this country has ever seen.c6u i am a big fan of yr tax system as a result. i think it has ¡r]r ofpfhm virtues from the point ofskf affective tax rates on all sectors across the economy. something that is an important consideration. compared with the territorial systems that will allow us to stop the practice of locking the off shore earnings of our most successful earnings. bring them back and have them

invested in the united states and reaping thôu8 reward of doing/é that. it affectively taxes a people on what they take6vpax out of the economy, ed@ they consume as%1e opposed5qd3ñ to what they contribute to the economy. their efforts and skills in the capital pool. on the basis of taxation i think that's a very fair principle, what they take out. it distinguishes between a high income who takes a lot out and a high income individual who puts a lot back in. the downsize in many people's eyes is the inability to sort of have high affective tax rates on the affluent. i think that can be addressed with a progressive tax structure and how you treat the return to capital for people who are extremely successful. this system, i think is especially desirable because it basically turns the whole world

in a big traditional ira. youq when you make it and you tax everything that comes out,ñdm the original plus the earnings when it's :u"xrealized. that means that if you hit a wind sbn all. if you end up being microsoft or an> q enormously successful start up, all of that(iemm gets taxed. in other systems that try to give investment incentives they look like roths. if you had to pick at this point in time a pro-growth policy. that would be a very pro-growth policy that has better fairness considerations. >> it's fair to the entrepreneur right because nows$boñ we have entrepreneurs that make their start upñ7cb decisions based off of the tax code which isr what we don't want them to do. >> yes. >> we only have a minute left. i don't know if you're familiar

with the ex-tax but i'd like to get your thoughts if you could. >> i'm also a fan. x tax. i think,akn the idea as it is described as kind of a generalized ira in which individuals can save and pay tax only when they take it out is a y&fpv f improving the fairness and also improving to savings incentive and growth. proposal with you. it's just a draft for now but i'd like to get your comments:n when you can. i'd also like for you to get your comments also, mr. johnson, at a later date. i yield back. >> thank you mr. chairman. congratulations again. the panelist that we have are all well regarded. i want to talk a little bit aboutw88by dynamic scoring. recently mr. larson and myself we had atdp9 chance to see an almost

completed project along the rail line from new haven to hartford and onto springfield and saint albens vermont. it will mean 12 to 16 more trains a day between new haven and springfield. there are two union stations that are under reconstruction because of it involving6t ñ substantial federal expenditure in one case up to $82 million. i supported stimulus. got up and supported the package offered by president obamatg believe dr. feldstein supported the stimulus you'll have a moment to that if it's not true. but how according to mr. ryan's dinatic underscoring taking would you measure the affect of stimulus in terms of investment which i happen to believe is a pro-growth economicmoçç undertaking?

i'm comfortable enough asking all three panelists to tell me what you think of it. >>;qr the stinl stimulus bill in 2009. at that time interest rates were down at about zero. i thought we did need a fiscal stimulus stimulus. i thought the design of that particular bill was not good. iós( thought in the end it provided some stimulus but probably added more to the national debt than it did to 8ehíigdp. i think in the end, we've had a very significant recovery because the over introduced so called quantitativeç7b easing, drove down long term interest rates that ultimately led to as ben bernake

redikt re predictedht#s it would lead to increase consuming spending and that in turn led to more hiring accumulation and gave us the serious recovery that started in the second half of 2013. so i think that as a more general prop oi significanceosition when you do tax changes or do spending, it's worth tryingqj9ñ to calculate what that's trying to do to gdp. historically, on the tax side, that's not@ff9ñ been done. so congress gets a incorrect view of what the costs are of

tax reductions and what the benefits are of tax increases. >> thank you, doctor. can we hear from the other two quickly. we only have about two minutes. this is a big issue. i would like to point out a couple of obvious things first. very few bills are substantial enough in their impact to merit the growth of those bills. does the economy as a whole get larger or smaller as a part of the legislation. so a couple of bills in each congress would merit this consideration. i don't think it would change most of the work of the congress very well. second thing i would say is that this is not a new thing for a particularly exotic thing. every president'spó dynamically scored. if you read it,&zh it says these estimates are contingent on the enacting of the president. the third thing i will say, it's no more uncertain or no more difficult too than conventional

scoring. i had to score terrorism risk insurance. the financial consequences of an unknown attack at an unknown time with an unknown weapon. that's hard. so there are going to be judgments and dixtfficulties in conventional and dynamic scoring. i don't think think of that should not the members from knowing those which are better for growth versus those which are not. >> i agree that we should consider the full but some of the models they are using for dynamic scoring has some strange features including full employment. assuming full so i think it needs to be used extremely carefully. i worry that can be used whatever outcome people are seeking. >> mr. chairman, i hope you will examine at the time the opportunity to apply dynamic scoring if that's the embrace of the rule's package used to pass it by the house you will

consider spending. >> i think the gentlemen should review -- >> we looked at it. >> it's cbo. >> tachx+úqxo cuts. >> it's spending as well. >> but the language is different as to spending as to revenue. i suggest there's an article in the new york times about medicaid in children. >> the gentleman's time has expired. we can revisit thiso time. >> mr. tebury is recognized. thank you mr. chairman. doctor, you mentioned in your testimony that trade creates jobs, in fact supports nearly 11 million jobs in the united states. in my home state of ohio, home of the national champion buckeyes by the way -- >> but no beard sir. >> because we are winning.>u,dñ well, never mind. champion of what? >> a lot of misconceptions. a lot of rhetoric thrown around,

particularly during presidential campaigns. in fact we've had6'= candidates talk about trade being bad but exports being good. can you do trade without exports or exports without trade? >> no. >> okay. it's been pretty surreal to watch. in ohio international trade supports 1.4 million jobs.inxa we in ma÷3ohio since 2002, goods v( ex-ported to our trading partners account for about a 48% increase over the last''f 12 years to our trading partners. our trading partners purchase 19 times more goods per capita from ohio than nontrading countries in 2012. canada is /xgm biggest exporter but nafta is bad. many people in oeohio -- again campaign rhetoric.

so my dad2wlus a stealu many jobs that people had in that industry those jobs didn't go overseas technology changed those jobs. often times, doctor we never hear about the advancement of technology and what that has done to our economy. the scapegoat tends to always be these jobs went elsewhere. i have toured manufacturing plants where there used9 d to be 20 people on assembly line and now there's one. 19 jobs gone because of technology. there's a lot of efficiencies by the way but those have cost jobs. so as we move, with respect toh&1 your testimony, i think there's a huge opportunity for america whether you look at trade,húmí

exporting, the tax code, we in the united states are doing well despite the fact that we have one arm tied behind our back whether it's the high corporate tax rate that we've talked about. whether it's the fact that we have fewer trading partners than many of our allies do around the world. can youojtell us why, particularly on trade, opening up additional markets andxñ9h giving the president tpa is important sooner rather than later andoa[tpbqi why that is important to our economy and jobs in ohio and other states? >> so it's important now because we are not fully8sjñ employed. we don't have everybody who wants to work at work and additional opportunities to accessúa>n markets and sell our products bring people into the labor force to make the products are especial:k

moving quickly is beneficial. >> the second thing is we'll be in the ground floor of setting the rules for the 0çé!qarrangements. if you're on the sideline waiting probably not a good idea. be at the table. third thing is ultimately we would expect us to get back to full employment. that means better job, not just more but people's jobs will be better as a result and the third the technologies through trade. the biggest advances in trade have been driven by natural gas and oil exploration. it has changed the global lay of the land for the united states mer manpermanently. you could not imagine the "cz geopolitical rates in the east and oil barrel prices ten

years ago. it just wouldn't happen. so it's hardtd ñ when people get displaced by trade. it happens. its not all exports. there are imports. if the economy takes advantage of the opportunity, we have more people working and they are3kly making more money. >> but the displacement technology enters into it as well. >> it's interregion trade. this is part of an economy adjusting, not unique to a-=÷trade. >> thank you. >> thank you mr. chairman. i suppose in a hearing on this topic of this importance that it is merely an oefversight that i guess the leader of republican thinking on this in the senate at least senator mcconnel began this session byñhcy noting that what he called the uptick in our economy resulted from the mirror expectation of a

republican congress. it's good to know that after so many apopcalyptic sayings over the last six or seven years that this administration has done or not done that we have enough progress that some republican leadership is claiming credit nor all of the for all of the things they said would hurt or hinder the economy that in most cases have helped it significantly. i guess it does give new meaning to the other reference ofrúy an old elephant. one area of progress we need to

we have the widest wealth gap in three decades. the compensation for the chief executive officers at americanjp corporations was that about 20 times that of the typical worker back in the 60s but in more recent years, it has become about 300 times. it has increased by 65% but worker wages have remained essentially flat but ceo pay grew by almost 1,000%. i think that this income inequality has some of the same pernicious:%s affects on economic growth in our country as discrimination against various groups gender generation for example. claiming that we're not going to permit as some societies

continue to do of women to participate fully in our economy. well, in this case,tk] treated one group of americans as really not having the potential to achieve their -- not being able to fully achieve their god given potential. mr. johnson, i just wanted to ask you about that further. if what the impact is of the decisions here in congress either through action or inaction to not) ave all americans participate6i6yñ-4 and lack the american opportunity tax credit to an increases in pel grants to assure more americans can share and can contribute to the economy. does that have a different impact on our future economic productivity and growth in our country. >> it has a huge impact. nobody is asking you to be like the king trying to turn back the

tide. you can't do that but there are many sensible policies absolutely under the jurisdiction of this committee, including the pel grants for example and other encourage people give them an incóç5w4urju resources in order to become fzveducated. we know what kind of skills you need in order to be productive in order for our country can compete globally. we know you need to be able to have quantitative and reasoning skills. we also know it's hard for some people to get those skills and get any kind of post high school education. we should shift away from talking about k through 12 to k through 14 because you need those two years post high school to have any chance of decent high lifetime earnings and being able to pay taxes. >> as far as korntcorporate taxes are concerned, mr. johnson, it's difficult to see how you can lower the rate much more for a company like general electric

unless you began to pay them for operating which we in fact have done in some years where corporation after corporation pays its lobbyists more than this does the treasury. is it important to close hoop loopholes as we change the statutory rate. >> if you close it it should be on a revenue neutral approach. the other point is compare around the world compare with other countries, the world bank does this cans entrepreneurs how do they assess the bzu(áj environment? we're number seven in the world. and we're very close to five other countries that are above us in those rankings. >> thank you. >> thank you mr. chairman. congratulations, again. like my colleagues i support a robust trade agenda. i come from washington state and i think most everyone knows that

washington state with boeing and microsoft and other large corporations, 40% of the jobs created in washington are a direct result of our strong trade agenda not only i think most of the colleagues on this panel agree with the strong trade agenda but, in fact the president of the united states and our ambassador, mr. froman both agree that t about, ppp and tpa are critical to doubling our exports and creating jobs in america. i happen to be a member of the president's export council and have been for the past six years and have been at almost every one of those meetings. of course, the president's wish and the ambassador's wish is the democrats that recognize the importances, much as the president and the ambassador do and help to get both tpp and tpa passed through this congress. as i said, 40% of the jobs in washington state -- mr. tebury

talked a little bit about technology. my focus is more on small business and how technology has helped small businesses, we all think of exports and larger corporations across this country. exporting their goods like airplanes, et cetera. i have a son-in-law who's currently in china, a small software producerá and i have a&%l son who is a machine shop who sends his product. they have 10 or 12 employees. he sends his products all over the world. how important is trade. #