>> on the next "washington journal," we discuss criminal penalties for marijuana. and his proposal to profitize federal airport screeners. then democratic congresswoman donna edwards of maryland on her party's agenda for 2014 and its chances in november's midterm elections. and former u.s. surgen -- surgeon general talks about training first reresponders to mass shootings incidents. "washington journal" at 7:00 a.m. eastern. >> c-span, we bring you public affairs events from washington, directly to you. putting you in the room at congressional hearings, white house announces, briefings and covering complete gavel to gavel coverage of the u.s. house. all as a public service of private industry. we're c-span. created by the cable tv industry 35 years ago and funded by your local cable or sat lied provider -- satellite

provider. watch us on h.d., like us on facebook and follow us on twitter. >> the house intelligence committee today held a hearing with top officials from intelligence and law enforcement agencies. here's what the chairman of the committee, mike rogers, had to say about the obama administration's approach to counterterrorism operations. >> decision on key covert action activities have had serious consequences to the national security of the united states. when it comes to america's current approach to national security, there is only one thing that is certain and that is our allies have no clue what our policy is from one day to the next. we just return from the munich security conference, we had roughly 10 bilateral meetings in a bipartisan delegation. to the individual who expressed frustration over the lack of clarity in u.s. policy when it comes to engagements in rough parts of the world.

as a matter of fact, one particular very senior official highlighted the confusion when he stated that on serious policy matters, very recently received direction from the pentagon that was different from the same direction he got from the state department, that was different from the direction he got from the white house. you can imagine the frustration of our allies in a very troubled time. talking about the problem, reviewing the problem, assigning a task force to think about the problem is causing serious problems. our adversaries completely see it as weakness. and we look to see how the world has evolved in response to these last five years. america's strength and stature in the world has diminished. that's just not one member's opinion. that is the opinion of our international partners who we meet with frequently. terrorists are emboldinned and grabbing land around the world. rowing nations are only more bellicose. our adversaries like russia an china capitalize on our

indecision and be a sebs from the world stage -- absence from the world stage. when policymakers embrace national security policies based on what sounds good in a speech, those left to untangle the mess are those gentlemen you see sitting before us today and the very courageous men and women who work for those agencies. so i thank you, all of you, for the work that you do. not only with the good work you're doing now, but for the years you have spent defending the country. for making the arguments for standing up what is right and needed in one of the most challenging times i argue in our national security's history, our country's history. but i also fear that this lack of leadership has created growing risk aversion within our intelligence agencies, as al qaeda has morphed and spread throughout yemen, syria, and africa. we have piled on here in washington, d.c., even more bureaucracy on our intelligence agencies. today individuals who would have been previously removed from the battlefield but u.s. counterterrorism operations for

attacking or plotting to attack against u.s. interests remain free because of self-imposed red tape. while we're busy pondering more transparency, our intelligence professionals are left paralyzed because of the -- are left paralyzed because of the totally incoherent policy guidance. let me be the first to say publicly, the president's may, 2013, policy changes for the u.s. targeted strikes are an utter and complete failure. and they leave americans' lives at risk. those changes, while sounding nice in a speech, are today right now endangering the lives of americans at home and our military overseas in a way that is frustrating to our allies and frustrating to those of us who engage in the oversight of our classified activities. as to afghanistan, last year at this same hearing, i asked whether we had the conviction to cement our gains and achieve a lasting victory. or would we just walk away. a year later we seem even more

focused on leaving the war before victory has been won. yet we have already learned what happens after a hasty exit in iraq, instability in these countries gives al qaeda and other terrorist groups their most valued asset, ungoverned space, to plan, train and conduct terrorist activities against the west and indeed our homeland. such operational freedom results in the loss of hard-fought gains. our policy should be dictated by what best protects america and not what is politically expedient. america's adversaries are not slowing down. now is not the time to disengage from the world. the drip of classified information designed to undermine u.s. interests will continue, but we must move past false accusations and feigned outrage. we need leadership and clear thinking in a very difficult time. we must get back to business of protecting america and we must give our intelligence services

the clarity and certainty and the tools to be successful in that effort. that's why we look to you, heads of our intelligence agencies, to find innovative ways to make sure that you have the ability to impact potential terrorist operations targeted at the united states and our allies and collect the information for policymakers to make the right decision in difficult places of the world. it certainly is no small task. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> the head of the defense intelligence agency testified at today's house intelligence committee. here's what he had to say about the leaks of edward snowden. >> i have a lot more questions, then we have a lot of members. i want to get general flynn to the defense intelligence agency report that was issued recently and made available to the committee, which i think is the first agency to complete its review of the stolen information by the n.s.a. contractor. in your professional opinion, do you believe these leaks will cost american lives on the

battlefield, either now or in the future? >> i do. >> did the compromise make it harder to counter the threat from i.e.d.'s used against our forces in afghanistan? >> i believe that we will face problems with the i.e.d. threat because of these leaks, whether it's in afghanistan or on some future battlefield. yes. >> so that has a fairly immediate threat level to our soldiers, marines and other military forces in the field? >> in my judgment it does. >> has the safety of u.s. government personnel throughout the world been put at risk by these leaks? in other words, have you had to alter any assignments as a result of this compromised material? >> let me just say for the purposes of our task force snowden, ssume that

everything that he touched we assume that he took. stole. and so we assume the worst case in how we are reviewing all of the defense department's actions, you know, events, exercises around the world. so, to sort of cut to the chase of your question, i believe that we will have to make adjustments in the future based on those assumptions. >> what particular military services have been impacted by this stolen material? >> all of our services. >> army? >> army, navy, air force and marine corps. >> and so, there will be changes necessary to mitigate the theft of this material in order to maintain security of operations and the safety of the united states military personnel, is that correct? >> i believe there will have to be, yes. >> do these leaks give our adversaries insights into how we -- about how we crack them and what their military vulnerabilities are and how they might look at what might

be some vulnerabilities from the united states military? >> i mean, yes they do. what i don't want to do, chairman, is i don't want to get two far, you know, in front of where the investigation's going on, on this issue, and also -- there i'm just talking about the material that was stolen. -- >> i'm just talking about the material that was stolen. i don't know how you read that report and don't come with the conclusion that if our adversaries are looking at them, like many believe they are, that has -- gives the enemy or adversary, is probably a better word today, it gives them operational and strategic advantage when it comes to military service operations around the world. >> yes, it could. >> ok. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> i came to washington to conduct investigations. the department of f.c.c. conducted investigations for a year and a half, five or six days a week, eight, 10 hours a day.

in the field of finance and reorganization of receiverships and i had a great galaxy of people like john foster on the stand. we never, never, never would even call a man if we knew that he wouldic advocate the fifth amendment. >> friday, c-span radio continues our series of oral history interviews with former supreme court justices. this week from 1967, society justice william o. -- associate justice william o. douglas. >> the new c-span.org website makes it easy for you to find and watch all of c-span's extensive coverage of official washington. look for it on our home pages in a space called "federal focus." each day you'll find comprehensive coverage of house

and senate debates, congressional committee hearings, events with the president and members of his cabinet, press briefings from the white house, capitol hill, the state department and the pentagon. plus, selected supreme court oral arguments and appearances by the justices. watch live or on your own skeds, federal focus on c-span.org. making it easy for to keep tabs on what's happening in congress, the white house and he courts. >> a congressional budget office report released today shows the federal budget will decrease in the short-term but increase over the next decade. tomorrow morning c.b.o. director douglas elmendorf testifies before the house budget committee about that report. you can see that live at 10:00 a.m. eastern on our companion etwork, c-span2. jason furman, the chairman of the white house council of economic advisors, spoke to reporters today about that

c.b.o. report. he answered questions in the white house briefing room for about 45 minutes. >> good afternoon, ladies and gentlemen. i hope you all are well. thanks for your patience. as you can see, i have with me today jason furman, the chairman of the president's council of economic advisors. because i know there's interest in today's c.b.o. report, i asked jason to join me. he will say a few words at the top, then take questions from you on that subject and others elated to his expertise. i enjoy having other people making sentences for me so it's good to have jason here to do this work and i will stand by for questions on other subjects. so if you take all your questions related to matters that jason handles at the top,

i'll be here for when he goes. thanks. >> thank you very much, jay. wanted to start with the main thing with the c.b.o. report, which is about the federal budget. and it confirms the very substantial near-term improvements that the united states has made in its deficit. in particular, it finds that the deficit last year was $4.1 -- 4.1% of g.d.p. that's cutting the deficit the president inherited in half and the fastest pace of deficit reduction since the demobilization from world war ii. the c.b.o. report also finds that the deficit will continue to decline in the near term, falling by another $200 billion in the next two years, falling to $2.6 -- 2.6% of g.d.p.

that number's important because from the very beginning, the president's economic team and the president thought that the most important goal in fiscal policy was to ensure that your debt was falling as a share of the economy. and having deficits below 3% of g.d.p. are consistent with that goal. c.b.o. does also find and confirm that there is over the medium and long term still a substantial deficit challenge and that's why you're going to see the president's budget once again as it has in previous years continue to propose deficit reductions over the medium and long run, as it makes investments in jobs and priorities as well. turning now to appendix c of the report. since that seems to have attracted some interest from some people. i can give you a little bit of

context for the impact the affordable care act has had on labor markets and will have on labor markets and the economy going forward. first, since the affordable care act has passed, the private sector has added 8.1 million jobs. that's the fastest pace of private sector job growth since the late 1990's and i think that fully puts to rest a lot of the more overwrought predictions about how the sky would fall and the economy would be deeply damaged by the affordable care act. turning now to this report, c.b.o. itself says that in a very important way, the affordable care act today right now is helping labor markets, is helping businesses, and is helping jobs. and in particular, what c.b.o. finds is that the tax credits

for health coverage, medicaid, will help put more money in people's pockets, help them able to spend more and that will provide a boost to the economy, to give you the full quote, quote, the expanded federal subsidies for health insurance will stimulate demand for goods and services and that affect will mostly occur over the next few years -- effect will mostly occur in the next few years. help employers hire more workers or increase employees' hours during that period. we've seen claims that the affordable care act is impacting the job market today. for example, numerous allegations that it's increased part-time employment. c.b.o. refutes that, saying, quote, in c.b.o.'s judgment, there's no compelling evidence that part-time employment has increased as a result of the a.c.a. that is what the a.c.a. is

doing to labor markets in the near term, right now, the economy today. finally, the report talks about what happens to labor markets over time. which the report defines as 2017 through 2024. that too refutes one of the main attacks and criticisms against the affordable care act, which is that it would lead employers to shed jobs, that it would lead employers to dramatically cut back on hours, and increase the unemployment rate. in fact, what c.b.o. found, and this is their summary quote, near the top of appendix c, again, quote, the estimated reduction, this is the reduction in the total quantity of labor that all of you have seen and talked about, quote, the estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply,

rather than from a net drop in businesses' demand for labor. what's relevant about that is the word itself is choose. this is a choice on the part of workers. and i have no doubt that if, for example, we got rid of social security and medicare there are many 95-year-olds that would choose to work more to avoid, you know, potentially starving or to give themselves an opportunity to get health care. i don't think anyone would say that was a compelling argument to eliminate social security and medicare. similarly here, c.b.o.'s analysis itself is about the choices that workers are making in the face of new options afforded to them by the affordable care act, not something about firms destroying jobs. the final thing i'd like to say is that c.b.o. themselves stress that their analysis is not complete. it doesn't reflect the full set

of factors. and that there's substantial uncertainty around their analysis. in particular, i think there's three very important ways that the affordable care act is and will continue to improve labor markets that weren't reflected here. the first is an increase in the productivity of workers, because of fewer sick days, less disability, and generally improved productivity as a result. the second is something that council of economic advisors has done a report on, which is contributing to the slowest pace of per capita health spending growth in the last 50 years. that slowest pace since the last 50 years is a fact. we documented the ways in which the affordable care act is one of the important factors that has contributed to that slowdown. what that does is it helps employers in the short and medium run. it lowers some of their compensation costs, helps them higher more workers -- hire

more workers. and then finally, by giving people more security in terms of their health care, it reduces what commifflets call job lock or gives more opportunities for entrepreneurism and moving from job to job. in addition to that, as i said, there's a lot of uncertainty. i think economists would debate some of the assumptions here and i'd expect there to be a robust debate around things like how much workers respond to a set of phaseouts that in other parts of social programs you generally haven't seen people respond to and some of the degrees assumed here. but regardsless of that, as i said, this report confirms the .c.a. is -- has -- is making positive impacts today in very important ways, it refutes some of the arguments about how it has hurt the labor market today, or will hurt it in the future. and it confirms what we've all known, which is when you do something like that gives people more choices and more

options and people will sometimes make different choices in the face of new choices and new options. >> i guess that you think this report refutes the idea that it's going to be businesses that are cutting back on jobs. but even if some of these nearly 2 1/2 million people were going to leave full-time jobs are doing it because they're choosing to, doesn't just the sheer idea of losing 2 1/2 million jobs over 10 years have a negative economic impact? >> first of all, two things. one is, i every month go out on tv to talk about the jobs numbers. every month pretty much every one of you that does television in here asks me the question, you know, is something bad -- if something bad happened last month, wasn't that because of the affordable care act? or there's been an increase in part-time employment lately, which was true in the spring, it hasn't been true in the last couple of months, isn't that because of the affordable care act? so over and over again there has been the claim that the affordable care act is impacting the labor market today. this refutes that.

in the long run, frale first of all, as i said, getting rid of social security and medicare would cause more 95-year-olds to work. we don't think that would be an effective economic strategy. for boosting the economy or particularly wise policy. so you can ask that question in the context here. second of all, the numbers themselves don't incorporate some of the important ways in which this does help labor markets by improving productivity, reducing the growth of health care, reducing job loss and thus encrease -- increasing entrepreneurialism. when you look at the affordable care act as a whole, it's good for the economy and gives more choices. >> but the report is saying that the affordable care act will have the impact on the labor market of reducing full-time ploist employment by 2.5 million jobs over the next 10 years? >> the report finds that there will be less -- workers will choose to supply less labor, correct. it's described as a choice.

it's not that the businesses are cutting those jobs. >> if you're losing that many jobs, i'm really trying to understand this here. if you're losing that many jobs, regardless of why you're losing them, doesn't that have some kind of negative impact on the economy? >> just a small picky thing. it doesn't say losing jobs. it says f.t.e.'s. so to some degree this might be somebody who used to work 60 hours because they needed health insurance and that was the only job that offered it and now they can get a different job at 35 hours that doesn't offer health insurance but they're getting it through this and they're switching from one to the other and that's a better choice for that person. and this has given them that option that they didn't used to have. as i said, you wouldn't judge whether social security and medicare are good or bad based on what they do to labor upply. i'm not contesting that fewer 95-year-olds work because of

that program. that's not the way anyone would look at anything that we choose to legislate and judge it. but, finally, i'm not necessarily saying that the 2.35 million number gives a complete -- 2 1/2 million number gives a complete picture of all of the myriad effects of the affordable care act. c.b.o. says, for example, the a.c.a. could also alter labor productivity, the amount of output generated per hour, which would influence employment and then it says, you know, that their report isn't taking into account factors like that because they're hardered to quantify and be sure about -- harder to quantify and be sure about. it's not the same as saying it doesn't matter. >> do you refute any of the data that the report is using? >> i -- c.b.o. does excellent work. we cite c.b.o. all the time. i wouldn't say anything other than that about them. i would say no matter how excellent any organization's work is, number one, it's

subject to the misinterpreted and a lot of what i've been talking about here is the way that this has been interpreted. but number two, analysis can only take into account so many things. this analysis by design looks at a set of labor market effects, it didn't look at another set of labor market effects and i talked about what those three effects were. i think in particular that slowdown in health costs is something that put in the language of c.b.o. would increase labor demand and be quite an important factor. so that's the second point. the third point i'd make is c.b.o. themselves says there's a tremendous amount of uncertainty. a lot of the report stems from, as tax credits phase out, what does that do to people's incentives? there's a literature on the earned income tax credit that has generally found that the phase-out of the earned income tax credit doesn't affect labor supply. c.b.o. is assuming that in this

context, people will have a much better understanding of these phase-outs and alter their behavior in response to it in a much greater degree than we've seen with the earned income tax credit. i expect c.b.o. would say there's uncertainty around that and expect that's one of the many assumptions that one could debate in this report. >> you don't dispute or do you dispute the conclusion, one of the main conclusions that we've talked about already, that some people would choose to go part time so as not to lose the subsidies that are a part of the design of the a.c.a.? >> i think there is no dispute that the affordable care act provides people with new options and that people who today are doing a set of things because they don't have options and choices will be able to do new things that they would not have otherwise chosen to do. in many cases not have been able to do. there are puts and takes and

this is describing the net effect of that put and take. in terms of whether this number is the most accurate net effect. again, there are other things you'd want to factor in, there's a lot of uncertainty you'd want to think about in that regard and ultimately you're not going to look at something, you know, and judge it entirely by the impact on labor supply, first of all, and second of all, if you want to judge it entirely by the impact on labor supply, you're going to want to take into account a fuller analysis than just what was seen here and reflect also the uncertainty around that analysis. >> c.b.o. is a nonpartisan agency. do you see this report as partisan in any way? >> i think c.b.o. does consistently outstanding work nd i think this report is, you know, mainstream economics, but i think like mainstream economics, it doesn't take into account -- it's subject to

missberms, doesn't take into account every factor -- misinterpretation, doesn't take into account every factor and there's uncertainty and debate around it and one of the key debates is the responsiveness of that labor supply would have in context to this phase-out. >> you talked about the choice, you're using that word and when you're talking about a choice, it makes me think of a calculation that some families make where the mom or the dad diseases -- decides they're not going to go back to work because they look at child care costs, it becomes so expensive, it doesn't make sense financially for them to go to work. is it a choice or is it a calculation that some people are making where some people may actually want to work but the benefit they're receiving may discourage them from doing that? >> first of all, the word choice is -- i have been using that word a lot. a lot of my use that have word has also been in the quotes. so when you read appendix c,

you'll see throughout it talks workers ut the labor hoose to supply. [inaudible] from medicaid, for example. there's some evidence that if you have just a single person, medicaid is not going toimpact their choice about working. and that's because if you are the only bread winner in your family, because the you're the only person in your family, you'ring if to need to have a job, you're going to need to work there. have been studies that have found if two people are married and they get medicaid, that that might lead a spouse, who otherwise would have gotten a job, and worked really hard, to buy health care for the whole family, might not need to get a full-time job, might get a part-time job and have more time to spend with their children as a result of the new option they have for health care. that is one of the types of choices that people would have now that they wouldn't necessarily have had before and

that's one of the choices in the types of studies that c.b.o.'s relying on in making this fining. >> -- finding. >> when you talk about something, working 60 or 65 hours a week and they might now be able to work 35 hours a week and they'd have health insurance, just an example. so it's a good thing that they now have health care, maybe they didn't before. but isn't that man or woman going from 60 hours to 35 hours and making less money? >> i'm saying if they -- yeah. if the main thing going on here was a change in labor demand, and labor demand, just to be clear, that is the decision that employers are making. so employers are cutting jobs because of the affordable care act, that would be a bad thing. because that means somebody who really wanted a job wouldn't be able to get one. you might see the unemployment rate go up as a result of that. for example. c.b.o. explicitly says that you're not going to see an increase in the unemployment rate, that when you see changes it will be that person who

maybe didn't want to work those hours, they still have the option to. they still can. but in that case, maybe they'll decide they don't need to anymore and that in their case might be a better choice and a better option than what they had before. >> and they make that choice and they go from 60 to 35 hours, presumably that's thank family's going to have a lot less take-home pay and they're going to have less money to put back in the economy go. but we just described -- >> but we just described -- first of all, it's a hypothetical example. >> it was your hypothetical. > that is completely fair. again, it's a choice they're making. this doesn't -- they had something before which was a 65-hour job. and maybe no health care and no great health care options. you now give them a new option they didn't have. a brand new thing, option to buy in the marketplace, it is subsidies through that, maybe it's medicaid if their income is low enough. they still have everything they

had before, labor demand hasn't changed, they still have that job, they can still go to that job, they can still do that, but you give them this extra new thing, you can't have made that person worse off. if they make a new choice, it's optimizing re subject to a new constraint. >> but work hours-wise, it might be better for the family to have health insurance but a lot less take-home pay. >> in my example -- >> are you making more money when you go from 60 to 30? >> some people may choose to -- i'm not going to sit here and go -- give a list of 140 million americans and tell you how many hours each of them should work. that's not what the affordable care act does, that may be your call. that's not what the affordable care act does. the affordable care act says, you can do juft what you did before -- just what you did before in this regard, with some puts and takes, but sort of you can basically do the

same thing did you before, but now you have this new thing you didn't used to have. it's because of this new ching you make a different choice than you used to, you are by definition not worse off. there's no way you have a set of stuff, you can make exactly the same choice you made before, and now i give you something else that you could be -- that you're worse off as a result of that. >> doesn't that incentivize some people to do less? all of a sudden there's an incentive to do less. you'll have subsidies from that benefit. >> for many people there's an incentive to do more. there's an incentive for more entrepreneurship because they're not locked into a job. it's an incentive for employers to be able to hire more people because the cost of health care is lower. there's an incentive to hire workers who are going to be absentee less. i think there's a whole bunch of puts and takes here that we need to take -- >> job lock, isn't there? as a result of the job lock, you're stuck in a job, you're afraid to pursue other things

because you need the job. >> that was the situation before the affordable care act. now that situation has been -- the affordable care act effectively solves that. and creates a situation where you can be more dynamic and can be more mobile. >> or be less dynamic, right? because if you do less and you potentially have a lower salary and you get more government subsidies, then -- >> the basic premise here is that people have more choices. in the same way that social security and medicare give retirees more choices than they'd have today. and on net, as i said, there's a whole lot of puts and takes but this is an extra choice people have and that's not making somebody worse off, to give them an option they didn't have before. >> just want to be clear with your social security and medicare example. so, you're saying it may be a good thing if there are two million fewer workers. i'm not saying i -- i'm not

saying that i accepted that number. i think there's a whole range of factors that go into estimating that number. some of which were captured here. some of which weren't. some of which are subject to uncertainty, first of all. second of all, i think it is -- just step back here. how many articles have we read, how many people have gone out and said, the affordable care act is causing businesses to ut back on jobs? [inaudible] the number of times republicans have said, you know, they are strangling the economy and regulation from the affordable care act, an employer can't create jobs and it's killing jobs and employers can't add jobs. this directly goes against all of that. it raises a different set of issues around when you give people options, what choices they make. those options. -- they make with those options.

>> you don't dispute there will be fewer people working full-time jobs? can you find anything to dispute in the numbers that are presented here? >> i've gone through that several times. c.b.o. itself says that they take into account some set of factors and analyze those, there's another set of factors they don't take into account, all of which go the other direction. and there's uncertainty around, in particular, the key question of the degree to which people will understand and respond to, you know, a set of phase-outs in a way that we haven't seen elsewhere. 'm not accepting the numerical premise here. >> you don't dispute the idea that there will be fewer full-time workers, though? this was the whole point of your medicare and social security example, right? that some people will choose not to work because they are no longer locked into a job, to get health coverage.

i thought that was part of your argument here. >> part of it is, even if the net result of this is a reduction in labor supply, to the degree that reduction in labor supply is voluntary and reflects the choices people are making, you're going to think about that very differently than if it was businesses cutting back on jobs. this isn't businesses cutting back on jobs, this is people having new choices they didn't used to have. those are two completely different things in terms of the impact it has on people. first of all. second, if you ask the net effect on this, on, you know, overall labor in the economy, you would want to take into account that other set of factors, quantify them, put them into that analysis, c.b.o. hasn't done that. but economists, david cutler, he's one of the leading health economists in the country, when he did that, for example, he said that lower health costs would add 250,000 to 400,000

jobs per year towards the middle to end of this decade. and that's based on just the slowdown in health costs and what it would do to jobs. this is by way of saying there are a number of different things that you want to factor in here, that we haven't seen factored in in appendix c. >> just one more. you're saying that one of those choices is the choice not to be employed or the choice to be unemployed? >> somebody who used to be in a job they didn't want to be in, just because that was the only way of getting health insurance for their family, may be able to be in a better job for them, maybe a spouse who wanted to be part-time so they could spend more time with their family, now is abled to that. somebody else who wanted to start a business and become an entrepreneur and was terrified of doing it because they'd lose their health insurance is now able to do that too. and switch and take a chance on creating jobs and growing the

overall economy. so there's a lot of new choices that this will facilitate. >> [inaudible] -- entrepreneurship and the other benefits that you were referencing. >> i don't have a particular lan on that at this point. >> i wanted to ask about the subsidies here. the subsidies were one of the main things that are causing workers to make these decisions. for example, the 60-hour workweek down to 40. you've mentioned other factors too. what would be some of those other factors causing people to make these decisions? >> the c.b.o. does a set of -- incorporates a set of classical labor market factors in terms of looking at phase-out rates of credit skets -- schedules and pass-throughs and the like

and those are classic, standard things to analyze. i've been a little bit repetitive about the things they didn't include. i think the three that are the most important are the slowdown in health costs, which in the long run it's pass on to workers in the form of higher wages -- it's passed on to workers in the form of higher wages. it shows in the short and medium run a slowdown in health costs will also reduce compensation for employers that will increase the demand for labor by employers, or that will create jobs. and that's the 250,000 to 400,000 that cutler found. number one. number two, reduced absenteism and increased -- and reduced disability. and you've seen some cross national studies that have looked at these type of factors. and the oregon health experiment, for example, has found reductions in depression associated with people getting medicaid. if that's going to be the case, people are going to show up at

work and be more productive on the job and that will help the economy and then the final factor is this job lock or entrepreneurialism that you don't need to get stuck in a job just to have health insurance. and that's really important. because what matters for the economy is people who are going to the job that's best for them, that they're most productive in and that may be also choosing to be an entrepreneur and the affordable care act facilitates that. >> at the top you said that the president's budget coming out march 4 would continue to propose deficit cuts. are you talking about net deficit cuts or are you talking about cutting some here and raising it here? >> i don't want to lift the curtain on the budget the president is going to put out. but every budget he's put out to date has on net over the medium and long-term early reduced the deficits from -- long-term reduced the deficits. >> and we should expect that will continue? >> i don't want to lift the

curtain on any specifics. but -- and in the state of the union, in fact, he said something to the effect of we need to do more deficit reduction and do it in a balanced manner while making investments. >> you said we are now at 4.1% of g.d.p. with the deficit and heading toward 2.6%. what's the ideal considered in congress? >> the most important thing is that you're getting your debt down as a share of the economy. and that it's on a downward path, that says you're fiscally sustainable. and deficits under about 3% of g.d.p. are generally consistent with getting that down. i want to be clear. c.b.o. finds that the debt as a share of the economy, after about 2017 or 2018, i can't remember the exact year, does start to rise as a share of the economy. so they are not saying we have solved our fiscal problems.

they continue to confirm that we do have a medium and long run fiscal challenge. but they do find that deficit reduction in the last four years and that again in the near term or for the next couple of years, we're going to continue on a strong path. >> if you're already at 4.1% and you're heading to 2.6% and you've got 15 million americans out of work, why the fixation on more deficit cutting, why not an emphasis on more stimulus or more spending to boost the economy? >> if you looked at the state of the union, the president was talking about things like more investment in infrastructure, about other fiscal policies that would help growth and help job creation. and in the past we've always shown how you can do that while also over the medium and long run dealing with the deficit. >> i have three quick

questions. just a follow-up. o.m.b. doesn't have any plans to produce your own economic analysis of the a.c.a. related to the work that c.b.o. has concluded? >> there are no plans. we have done a very extensive analysis of the impact the affordable care act has had on the growth of health costs and that itself is an important economic input. but we don't -- there's no plan to do this. >> the second question is, am i understanding what you're the correctly, that incentive for people is not a net drag on economic growth? >> i'm saying -- >> if 2.5348 people change their choice about working, that is not a net drag on the economy? >> i haven't accepted that. in there's a lot of facts that are go into that number. -- factors that go into that

number. not all of them in uncertainty. second of all, i'm saying that that whole analysis refutes the claim that this is about employers cutting back on jobs and increasing unemployment and that has been an argument against the affordable care act. instead this analysis itself, which isn't a complete analysis, but this analysis itself is about the choices that people make. and -- >> but you didn't answer my question. >> could you repeat that again? >> you're talking about something different. you're talking about the choices that employers make. c.b.o. is talking about the choices that workers make. so i was asking you, if workers choose to take federal incentives and not work -- >> i guess partly i don't -- i think that -- i think once you think about -- i think the question, again, to use my social security and medicare

example, i don't think that the right question is, would we increase people's choices about working by repealing social security and medicare. i don't think that's the right way to think about that. i think you want to think about that as to what does that do for workers, what does that do for retirees, what does that do for people with disabilities and what options does it give them? >> medicare and social security are aimed at primarily people of a certain age, seniors. so, when you talk about older people, that's a whole separate equation that the a.c.a. this is a group of human beings who are in a program of all ages. >> first of all this number itself is a small percentage of the overall economy. second of all, this number itself purports dish mean, is about effectively choices of people. and, third, it doesn't reflect the full set of factors that go

into it. so, again, i mean, our economic -- if you look at what some of the challenges we have in our economy, one of the challenges has been the growth rate of health costs. part of how you deal with the growth rate of health costs is dealing with some of the things that were causing that and some of that wases the way in which our -- was the way in which however policies were constructed -- in which our policies were constructed, vis-a-vis the employers and visa i have the -- vis-a-vis the public provisions of health insurance. the a.c.a. is contributing to slower health cost growth. i think that's the number one thing i would look at in the affordable care act to ask about the overall economic impact. because if it is slowing the growth of health costs, then it gives you a set of betser options than you had before all around. the federal government can save

money, employers can save money, workers can save money, there can be more incentive to work, sort of net-net good. so in think being is the affordable care act helping the economy, i think that's the important question and in that regard, you know, i would answer the question yes. >> for those of who you are new to that in option trading, what the heck do you mean? >> i'm saying there's a lot of provisions in the affordable care act. a lot of them will create different incentives here and there. i'm not saying that no one anywhere will have any -- no employer will have any new incentives to do anything. there will be some that will have incentives to increase something here, to decrease something there, to raise something, to do something different there. will be different, you know, incentives on net, though, that aggregates out to something that is, quote, slightly effect, unquote, is c.b.o.'s

word, labor demand or what employers are doing. >> just to follow up on. this if you can't answer the question by saying no, how do you answer republicans who now have this big piece of evidence that they can wave so to say, aha, a.c.a. -- [inaudible] >> you can't say this isn't 2 1/2 million fewer workers isn't a net drag, how do you counter what is the really convenient shorthand that they now can trumpet and say i told you so? >> i just thought yule be would be interested in appendix c in ase you hadn't noticed it. the affordable care act had three primary goals. one was related to coverage. one was related to quality. and one was related to cost. in so far as you are asking

about the economic impact of the affordable care act, what it does to job creation, what it does to income, what it does to the overall economy, i think overwhelmingly the most important factor there is what does it do to the cost of health care? and i think the evidence is very clear that it is slowing the growth of the cost of health care and in that way is helping the overall economy and raising income. that is the -- there's a lot of things one could analyze but in terms of the biggest and most important one, i think it's that. so i don't think there's any problem at all making -- i just made a very clear argument that the affordable care act is good for the economy. >> so you think -- [inaudible] >> [inaudible] >> you're saying it's a settled matter that the decrease we've seen in health care costs is due to the a.c.a.?

>> there's obviously a debate around that proposition. i think, to me, i think the evidence is very clear. that that is the case. and i'll do the two-second version and we have the whole report on it. we're happy to follow up about that report. health costs are growing at the slowest pace they have in 350 years. that's measured in real per capita terms. i don't think the recession, many said that was the reason, don't think that is the main reason. and that's because we're now five years past the recession. we are seeing a slowdown in medicare which is not very affected by the overall economy. and we're seeing a big slowdown in health prices as measured by a couple of different price indexes and those also are affected by the recession as much as quantities are. that's ruling out that explanation or that as a total explanation in terms of the

affordable care act -- explanation. in terms of the affordable care act, we have c.b.o. said in this year it would reduce 2/10.ing by 2 that's a decent amount in the health world. that's a direct effect of medicare. if you take into account spillovers from the private ctor then it is 6/10 off the growth rate of health care prices. and none that have takes into account things like -- that are coming online like the innovation sentser, like the benefits of reduced readmissions, 130,000 readmissions averted. and the whole range of things in the accountable care organizations that are design pod better integrate care -- designed to sbetter begvate -- to better integrate care. i think it's slowing the growth of health costs, slowing the growth of health costs, you know, most important economic variable here.

>> slowing the growth of health care cost is going to balance out whatever the number is, c.b.o.'s or yours or someone else's, of the lost number people who will be earning money, contributing to the economy, helping their families, and paying taxes by virtue of less work, even if it's by choice? >> first of all, if you look at the fiscal impact of the affordable care act, that's also positive and we know that's going to reduce the deficit by more than $1 trillion. so, you went into some fiscal things in that set of argument. reduce the growth of health costs. i think that matters, i think job loss masters. i think productivity matters. i think all those factors matter and i think regardsless -- so, first of all, i think all those factors matter. and second of all, this at its core refutes the notion that businesses are not going to add jobs because of the affordable care act.

>> you seem to be dismissing the effect, even if it's by choice, people not producttively paying into the economy. paying, for example, social security tax toward a system that's increasingly based on fewer and fewer workers. >> there's a labor supply that's important. you look at something like immigration reform. it's a real motivation for immigration reform, to have more talented people contributing to our economy, creating jobs, adding to the overall strength of our economy. i think that certainly matters. ut i think, again, you have to factor in the way in which people make different choices, they have different options, and when health costs are lower, you know, we as a country have a better set of options than we would have otherwise had. >> jason, you said you disputed the totals.

so just from the individual perspective, when an individual works fewer hours every week, in order to access a subsidy, a subsidy that the government is paying them, a government that's now getting less taxes going to what mark was just saying, less taxes to social security, spending, all those other things. why is that good economic policy when they are intentionally working fewer hours to access a government subsidy? >> first of all, you know, you're asking the same question so i'll give mostly the same answer. which is i think what's good economic policy is slowing the growth of health costs, what's good economic policy is encouraging entrepreneurship. what is good economic policy is aving a work force that is suffering less from depression, that is suffering less from physical ailments and is able

to more productively contribute to the economy. i think in all of those respects, the affordable care act is good for the overall economy. i think right now there are a lot of people who are making choices that may not be -- not right now, last year, the year before, before the affordable care act, there were people that were making choices that may not have been the best choices for them and for their families. this will give them new options and will make them better off as a result and when you take all of these different economic effects into account, is part of an overall economic strategy, including that deficit reduction that we briefly mentioned. >> talking about lowered unemployment rates, will we see a duplication effect where people who are leaving the work force because of these disincentives through the a.c.a. are being replaced by

people who are still looking for a job and trying to fill the worker hours that -- obviously there's no -- you're saying this doesn't affect net demand, labor demand. will we see an artificial dampening of the unemployment rate because of this? >> i think you're missing what was one of the main things in the report that i started to call attention to at the top which is if you're asking about, you know, the economy right now, in 2014, the economy in 2015, the economy in 2016, a really important impact to the affordable care act that c.b.o. analyzed in their report was that the increase in demand will induce some employers to hire more workers or to increase their employees' hours during that period. that is because you put more money in the pockets of families, you help them with medicaid, and that's going to help people be able to spend more, that's going to help the overall economy and so not only do we have the eight million jobs since the affordable care act was signed into law,

private sector jobs signed into law, you also have that when you're thinking about the economy right now, when we talk about, you know, the jobs number for any given month, rye now the -- right now c.b.o. is saying a very important effect of the affordable care act or one of the essential effects it will have right now is increasing demand for goods and services, leading more employers to hire more workers or increase their employees' hours. every time there's a jobs number that is below what people expected, the number of people that go out sand say that was because of the affordable care act -- and say that was because of the affordable care act, precisely this is saying that aspect of the affordable care act goes in the opposite direction. it's helping jobs right now in the economy today. that's really important and i think people have largely missed out on that. in their reporting on appendix c. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> it is really an instrument of the president and that has

always been the case. the president is always the master. i mentioned in the book that presidents, and i served under seven, they each come to view it as a personal pop stand. they can direct it to do things in secret, they don't have to worry about the normal congressional appropriations process. and it's a convenient and attractive and sometimes overly eductive tool in the president's foreign policy arsenals. >> from the shadows to the frequent center of political controversy, a look at the c.i.a., saturday night at 20k eastern and sunday at 9:00. and online at book tv's book club, comment on last month's n depth guest. read a "women's history for beginners." click on book club to enter the

chat room. >> an official from the retail store target apologized at a senate panel for the credit card data breach that affected as many as 70 million american shoppers. that's next on c-span. . >> reaction to a congressional budget office report that says the health care law will reduce the work force by 2.4 million jobs, which you just saw. then a house panel damage u.s. marijuana policy. later a pentagon briefing alleged naval test cheating on a nuclear reactor training. next washington journal, we will talk to florida congressman about u.s. marijuana policy. then marilyn representative donna edwards will discuss the latest cbo report that the deficit will drop to 514 billion. this week's deadline on the debt limit.