are far older than that. traditions that go back farther than that. that not reasonable to me everything changed for thousand years ago, by everything i mean the species, the surface of the earth and the stars in the sky, and the relationship of all the other living things on earth to humans. it is just not reasonable to me that everything changed like that. >> evolution versus creationism. debate tonight at 8:00 eastern on c-span. >> congressional budget office director greg elmendorf this morning defended his agency's minimum wage report, calling it balanced and consistent with many other economists thinking. he was part of a discussion this morning posted by christian science monitor and moderated by their washington bureau chief, david cook. it is an hour.

theks the hush falls over -- >> the hush falls over the room. we will start. our guest today is douglas congressional budget office director. this is his fifth visit to our room. of the cbo inctor january, two thousand nine and brings an impressive background assignments. his master -- masters and doctorate in economics are from harvard. our guest taught at harvard, and was on the staff of the council of economic advisers and the federal reserve board and served as the assistant deputy treasury secretary for policy. he was senior fellow in the economic studies program it -- at bookings. ritual recitation of mechanical details, as always, we are on the record. please, no live blogging or tweeting or other means of

filing while the breakfast is underway. there is no embargo with the session and, except that our friends at c-span have agreed not to air video of this session until one hour after the breakfast is over to give reporters in the room a chance to file. finally, if you would like to ask a question, please do the traditional thing and send me a subtle, nonthreatening signal, and i will happily call on one and all. we will make some opening comments and then moved to questions around the table. >> thank you very much. it is great to be here and i appreciate the invitation to come back. i want to start with just a few minutes, some pictures taken from our recent report on the slow recovery of the labor market. we released this together with our outlook for the budget and economy a few weeks ago. the labor market during the past several years have been among the most puzzling aspects of the economic recovery, and for millions of americans, among the most distressing aspects of the economy.

particularly careful look at labor market elements as part of this years of dating of our economic and budget projections. in our view of the slow recovery of the labor market, it stems primarily from the slow growth and demand for goods and service is. and to a small extent, various structural factors. our analysis shows a considerable slack in the labor market. we estimate the economy is about 6 million jobs short of where it would be if the and implement rate was back down to its prerecession level and the labor force participation rate was backed up to where it would be without the current cyclical weakness. looking ahead under current federal laws regarding taxes and spending, we expect the unemployment rate will decline to 5.8% by the end of 2017, and to 5.5% by the end of 2024. strengtheningh a

economy and strengthening demand for workers, but also leaning on some of the structural factors that are pushing the unemployment today. we think the work force participation rate, shown in the middle panel, will move down, despite some upward pressure from the strengthening labor market, and from drawing some workers back into the labor force. there will be continued downward pressure on the participation rate from demographic changes, particularly the retirement of the baby boom generation. the participation rate will decline for the coming decade. the share of the population that will be employed, shown in the bottom panel, is subject to be seen crosscurrents. there will be some cyclical pressure upward on that rate, as the economy strengthens and firms feel the need to hire more workers. there will be ongoing downward pressure from demographic that andst and some -- factors some aspects of fiscal policy. bitratio will rise a little

over the next few years, but then declined further after that. i hope that after some of the and my recent work, you'll decide to go back and look at this recent report. they cover some very important issues for the u.s. economy. i will stop there and try to answer your questions. >> thanks. in a profile of you in washingtonian, one of your predecessors, robert reischauer, was voted as saying, "if the folks that invited you to the dance want to drive you home at the end of it, you have not done your job." based on labor market studies on the effects of the formal care act and based on the minimum wage increase, you seem to be doing your job. call withon a phone reporters, betsey stevenson of the council of economic advisers said that cbo was "not fully appreciating how much the literature was moved" on spillover effects of raising the

minimum wage. what made you and your team take the approach that you did, estimating the loss of about 500,000 jobs and benefiting about 16.5 million workers when according to the cea, the bulk of economic studies have concluded that the effects on employment and minimum wage increases and the wage now under consideration are likely to be "small to nonexistent"? >> i don't want to respond directly to what the cea has said. we try to talk about our analysis and let other people talk about theirs. i want to be clear that our analysis of the effect of an increase in minimum wage is completely consistent with the latest thinking in the economic profession. we did an exhaustive review of the literature in this area up through reports that were , a very large number of studies, as you know, and they reach a range of conclusions. although studies have strength

and weaknesses. and a long methodological appendix to our report, we talk about the recent studies that make them more or less compelling our view. balanced reading of the set of research studies in this area led us to conclude that an increase in minimum wage would probably have a small negative effect on employment, but there was substantial uncertainty around the estimate, as we reported. naturally, some economists focused more on studies that show smaller employment effects. other economists showed -- focus on studies that showed larger employment effects. our response ability for the congress is to report the middle of the distribution of possible outcomes, and if possible, the range of likely outcomes. that is what we have done in this report. if you try to compare what our analysis is to what other economists have said, it is

hard, because those economist on have to put numbers behind the words of their evaluations. but we have looked at some of these other statements by economists. ae place one might look is survey conducted by economist at the university of chicago. they asked a panel of leading economists from across the country questions of economic policy on a regular basis. they asked that panel about the effects of raising minimum wage to nine dollars an hour a year ago, about half of the economists would have some answer to that question and said that the increase to nine dollars would make it "noticeably harder" for low skilled workers to find employment. and about the other half of the economists responding said it would not make it noticeably harder for low-wage workers to find employment. in our analysis of the effect of raising the minimum wage to nine dollars, we give a range from the reduction of employment of 2.5% to a slight increase in

employment. exactnot know what the response of that survey meant by "noticeably harvard -- noticeably harder. but if it meant that range, then it needs quite nicely with what we saw with half thinking it would be harder and half thinking it would not. of course, that is not a random sample of economists. it is a sample of economist that support raising the minimum wage. but nonetheless, i'm not sure that we disagree with their statement of the evidence. -- let's said is that see if i can find my copy of it. what they said is that there -- increases in the

minimum wage would have little to no effect on the minimum wage workers. again, they don't say what they mean by "little" in that statement. the increase, the nine dollar increase. we estimate a range of a 2.5% reduction to a slight increase. the range we have looks to me like a little reduction to essentially no change. the last thing i will say on this is that we also look, as you know, at the effect of raising the minimum wage to $10.10. the raising the wage to nine dollars. and we estimate that raising it to $10.10 would have a much larger effect on unemployment. that difference is for good reason. to raise the minimum wage to $10.10 would affect a lot more

people. we effect -- we estimate that the number of people whose wages that will go up would be much larger. 16.5 million people as opposed to seven million. many more people are affected. we also think there'll be a larger percentage reduction in employment with that larger pool. we offer a number of reasons in the report. we are expecting that to be somewhat larger. let me just highlight two of them. one is the increase to $10.10 that we talked about, modeled after some legislation being considered by the congress, the index for inflation at that point is rather different than the past experience with the federal minimum wage and the various minimum wages at the state level where we have raised it in nominal terms. it and then he wrote it in real terms as we -- but then were eroded in real terms as we adjusted for

inflation. secondly, this increased to $10.10 cuts more deeply into the distribution of wages than the increased to nine dollars. and you can see this on the cover of the report. putscrease to nine dollars the minimum wage back up near the 10 percentile of workers wages. an increase to $10.10 puts the minimum wage much higher than that, higher relative to distribute in of wages. and by cutting it further into the wage distribution, both have had large increases a cousin of .he starting of mental wage it means employers will face a larger shop in their costs and have more incentive to incur reduction cost that would be needed to make larger changes in their workforces. we think there are very good in the reportns

for why the $10 10 sent index increased would have -- the $10.10 index increased would have a bigger effect than nine dollars. we think our estimates are completely consistent with the balance of the evidence. one last onek might -- >> let me ask one last one myself. got about a year left in your term, a little less. do you feel that you are the cbo director who is -- has worked in the most extreme political conditions? changed theas it reaction to this, or the reaction to the affordable care act study and many others, has it changed the way you and your colleagues to your work cap oh -- do your work? >> when i became director, i was taken out to lunch by my predecessors and they all told

stories of their experiences. i kind of wondered if i had done the right thing by signing up for the gig. my predecessors have all had stories to tell. i cannot compare my store ash my experience to them. -- i cannot compare my experience to them. we worked quite hard and very carefully on all sorts of issues that do not see a lot of public attention. and we work very hard on things that do receive public attention. and our method of networking is really not any different. we are focused on trying to find the best possible estimate so the congress has the best information to work with. we have estimates that matter a lot to one committee or a small number of people and estimates that matter to a large crowd. we do not take them any differently, based on the attention they get, and we do not do anything differently if we think there will be more or less adverse reaction from different people.

that is just not what we do. >> obviously, you were at brookings and you worked in the clinton treasury department. i think a lot of democrats would figure that you would give them the benefit of the doubt on issues like minimum wage. how do you keep politics out of your analysis? and what are you working on next that we should be ready for? question, myst personal views about economic policy are completely irrelevant to the work that we do. my the personal views of colleagues on economic policy are completely irrelevant to the work that we do. congress does not care what we would do personally about policy, and they should not care about that. they have hired us to do a objective analysis, and that is what we do. what hundreds, maybe thousands of people, have done it cbo for 39 years. and that is what a string of directors have done at cbo for 39 years. on the second question, we are

working on lots of things. i do not have any particular scoops to give you. feel free to blurt something out if it comes to you. paul? >> on your budget and economic outlook, you estimated that as a result of the affordable care act, there would be reduced about 2.5 jobs for million by the end of 10 years. and then in this minimum wage report you are talking about a reduced demand by employers if the minimum wage is raised. is there any kind of interaction or overlap between, on the one hand people demanding less work and on the other hand employers having less demand for workers if the minimum-wage goes up? >> our analysis of the

affordable care act in the labor market under current law and our analysis of the perspective affects of a wage increase in the labor market are more or less independent. they are affected by lots of forces all the time. federal policy is only one -- usually, fairly small -- peace that is happening. act, weaffordable care estimated that there would be a reduction in the supply of labor because the affordable care act reduces the incentive to work by a little bit through a variety of channels. i think you should think of that is a more or less separate question from the effect of wage increase. as you know, wage increase is , but theremployers are different sorts of effects. our future projections of the that aswould take on

well as taking on the affordable care act as well as features of the tax code, as well as what is going on with the economy. there is no particular interaction between them. >> on the same two issues, the the effect onnd minimum wage, are those the first order? for the affordable care act piece, does that take into account what happened after the 220 5 million leave and more people want those jobs? and separately with minimum wage, you forecast a range of employment effects, but you also say that a lot of people will have higher wages. is there a multiplier that you and does that affect the job market together or separately echo >> -- or separately? we expect the >>

labor market to have a traditional balance between the supply of workers and the demand for workers. quantification that we offered was for the second half of the decade. we think most people who are looking for work will be able to find work. the people who would drop the labor force at that point, or worked fewer hours while still working, would not be replaced by those people stepping up. our analysis of the effect of raising the minimum wage, we have focused on the time frame of 22016. that is when the minimum-wage increases would be fully phased in. -- our estimated estimated effects do incorporate the distribution of income down the income scale toward people who are more likely to spend that money, and thus the boost

in demand for goods and services and the boost in employment that would come from that. >> they are both basically equilibrium effects. they both incorporate something. >> yes. >> stephen. >> it seems like over the last 10 years, neither -- these are my words. it seems that members of congress have figured out how to gain the -- how to gain the 10 year budget window. we presume it is a structural thing that will have to come back again and again and again. you have any constructive criticism or recommendations for members of congress, either about process or how to approach cbo with this. know --don't

for example, if you borrow over spend now and you end up paying it over 10 years, especially with our current deficit, there is a debt cost that builds up. i don't know if you include that tenured debt cost in the early years for the debt service cost in your cost estimates. do you do that? can you do that? should you do that? >> we do not include debt service in our cost estimates. we just offer year by year for 10 years, an estimate of the cost, and we provide a straight summation of those numbers over the 10 years. i think members of congress understand that policies that widen deficits have a certain effect and those that narrow debt services have a different effect. we can make projections of what

will happen overall, but to understand how an incremented debt will be financed is a subtle question. i don't think that our not including that extra whatever it 20% charge0%, 15%, would affect policy decisions. it is understood that there are debt service implications. >> you have shown an imbalance when in a 10 year look back it would not necessarily be imbalanced if you had included the debt service costs. in a situation like i said, were you had an immediate deficit increased were you paid for it in the last three years or over 10 years, correct? flex one of my predecessors -- >> one of my predecessors said a number of years ago that the process is not a problem, but the problem is the problem. i would like to use that mine here. where we think there are in policydifferences be on the 10 year window, we try

to look out the 10 year window. and in our analysis of the health care reform legislation, our analysis of the immigration reform legislation, and the analysis of the climate legislation that was discussed a number of years ago, and a few other cases we look out the 10 year window because we think the policies being contemplated would have markedly different effects. and in those cases, the congress is particularly interested in our trying to look beyond the 10 year window. but i do not think in general that cutting off the 10 years off at much over cutting 15 or 20 or whatever. >> you guys did an dynamic scoring on immigration, figuring out how the labor would be affected. do you think that cbo will be doing that kind of scoring more broadly for taxes, for spending? crexendo, i do not. we did 500 formal cost estimates

-- >> no, i do not. we did 500 formal cost estimates last year. for 99% of the proposals that we examined, there would be no economic effects. at the time that we would be required to do those estimates, it would be immense and it would paralyze us. there are distinctions between that set of estimates and the most of our work, and the work that we do on a few pieces of legislation that would have significant macroeconomic effects. in the immigration case where the goal of legislation in the minds of many people, and the reason we are opposed to it as are many other people, is the significant change in the labor force. cbo felt a number of years ago when this came out that when -- that given that it was so integral to the legislation that thinking there will be no change

in the labor force would be so the in variance with approach. we did a separate analysis beyond the normal cost estimate that looked at some of those macroeconomic effects. i have set on a number of occasions that if congress would contemplate overhauling the tax code, that would have significant macroeconomic effects, but we would be happy to do an analysis of those effects as well. those situations are correctly viewed as rare exceptions, and exceptions in the cases where it really matters. where the congress's objectives, arehe issues at stake around the labor force or the size of the economy. that is not true for so much of what we do.

>> [indiscernible] >> if the congress were interested in the economic effects. and we have done in the past some of the analysis of the economic effects. for example, we do an analysis almost every year of the impact of the president's budget. we normally release an estimate of the president's budget on ourl with conditions estimate. and we follow that up maybe a month later with an economic analysis of the president's proposal. that incorporates the changes of budget deficits and also the changes in tax rolls and other things. but those are separate pieces of work. an economic analysis would basically take a month after the budget analysis is finished. jointng with the

committee on deficit reduction, of which some members were considering tax reform, if they put forward a tax reform proposal, we would be happy to do an analysis of its economic effects. that would be separate from the basic estimates. it would come mostly from the staff of the joint committee on taxation, probably. these are separate pieces of work. that we did for immigration, and that we have offered to do in the case of tax reform. >> at the scoring of a tax reform bill would not have dynamic scoring? >> it would not have those effects. lex can you to -- >> can you talk a little bit about what the experience is of states that had expanded coverage, how that informs your analysis of labor force participation in the most recent report, and secondly very quickly, i think it has been a few years since you have done an analysis of changing the tax

treatment of health insurance and giving the apparently renewed interest of some on the hill. any plans to redo that? looke first question, we at what has happened in some states of expanded health coverage, but there are not very many of them. but that is not something that is particularly analogous to the affordable care act. our estimates were based mostly on evidence from other circumstances. of -- mention two sorts pieces of evidence. phasing out of subsidies in him insurance exchanges as your income rises under the affordable care act. it creates an implicit tax. to estimate the effect of that, we use the very large literature on how changes in explicit tax rates have affected labor supply. we did a review of that literature a year or two ago and we wrote a set of free papers explaining how we read the

literature and the estimates we drew from it. we use that literature primarily of thess the effects overall exchange subsidy. for the over -- for the effects of the medicaid exchange emma we looked at states that had expanded or contracted medicaid in the past. some of the states had it done -- had done it in an affordable care act type of way. some states had much more robust and larger literature and we drew on that. question, ind would refer you to our reports on tax reform law. >> there are a number of states that have more limited medicaid expansion. how did that jive or not jive with past analysis of subsidies

in terms of measuring workforce participation? effect of the the formal care act on labor markets, we had to keep track of a lot of different channels. the principle that providing health insurance subsidies would reduce the incentive to work was not something that was a novel idea on our part. we wrote about it in the summer of 2009 before there were any specific proposals. but to do the quantitative estimates, we had to follow a lot of different channels. we drew on estimates you have to follow different channels. i think the effects of the medicaid expansion, we estimated separately from the changes in the change subsidies. distinct literature and we drew on lessons from each of them to apply to aspects of the affordable care act. kathy? someuld you update for me statements he made in the 20 11

hearing about the role of uncertainty in the marketplace and its effect on the economy? be uncertainty on business spending. what are the policies today? have they changed? is it waxing or waning from 2011? >> we and a lot of other analyst federalcertainty about policies as wade on the recovery, but neither we nor have beenysts successful in quantifying them. aboute expressed concern uncertainty over fiscal policy, regulatory policy, health care, the financial system, and energy regulation. uncertainty about federal fiscal

policy is a little smaller today than it was in 2011. 2003xpiring tax cuts from have been mostly extended and partly allowed to expired. so, there is no cliff or deadline right around the corner. the uncertainty about appropriations seems to have been settled, at least at the overall level for this fiscal year to the next fiscal year. not to say that the congress could come back to that issue, but there is at least some specific plan that has been agreed to. we think that those developments have reduce uncertainty about fiscal policy. in ourts can read studies and elsewhere the fact that the federal budget is on an unsustainable fact. clearly future adjustments of bee sort will need -- needed, whether taxes or spending or both.

we can't really quantify it now. >> [indiscernible] is less uncertainty than there was? >> yes. and we think that is a positive factor for the economy. >> david? was a lot of relief the budget deal went for two years, we get two years of spending year.s as opposed to one there are proposals out there to go to a two-year budget. president have on those? >> i think as the manager of a very small part of the federal government, it certainly would be helpful for us to know what our funding will be sometime in the future. moremably that is much important for people running large and complicated parts of government. i think for the managers of government operation to have a better sense of where their funding is going would be very useful.

on the other hand, congress takes advantage of the process toons recalibrate where it thinks federal funds, taxpayer funds are best spent. if you try to put that on autopilot at the individual agency function level, congress loses that flexibility. for us to say how congress should balance those appropriations. >> we have gone for four years without going through the process, hopefully trying to get back to it -- goodat brings up another point though, which is the question is not so much what the official processes. the question is, how does the process work? look well inside in the fiscal year what the amounts would be, the budget would not make that much difference. i think it is the official process that matters and the way the process unfolds. >> daniel? -- danielle?

>> [indiscernible] curious, is it possible in the proposals out there, there is a happy medium? hike wouldnimum wage have less of an impact on unemployment, but still increase paychecks? i do not want to speculate too much. i would say there is no particular trick in the analysis we are doing here and what economists have found for passing minimum wage increases. we estimate that if the minimum wage were raised to the vast affected bypeople an increase would keep their jobs and receive higher wages. the middle of the two estimates 99%omewhere like 97% or

would receive higher wages and the family incomes would be higher as a result. at the same time, one percent, three percent of people would not be able to find employment. lose largerou increases in minimum wage, you are likely to find progressively larger numbers of people who benefit from raising wages and larger numbers who face reduction in employment. >> [indiscernible] pelosi's said your report conclusions contradict the consensus among hundreds of america's top economist. you disagree with that assertion. do you think that letter sent by the economist said that increases in minimum wage have little to no effect on the income of minimum wage workers -- you seem to think that your

report lined up with that assessment by "the economist." do you think that that loss would have little to no impact on unemployment? >> i will not speak directly to what leader pelosi has said. i can only speak about our analysis. as i said before, our analysis is quite consistent with the latest thinking by economists. i know about this letter and the survey i referred to is those numbers todo not put their words. it is hard to know what they meant by "little to no effect." it is hard to know what people meant in the survey by "noticeably harder to find a job." the nine dollar increase is most consistent with what economists studied in the past in terms of

the relative increase. our analysis of the proposal suggests the decline in 2.5%yment would be between and a slight increase, and i think a 2.5% decline would be a small decline or little decline and a slight increase would be consistent with no effect, roughly. so, i don't think one can sell from the statement in this -- i don't think one can tell from the statement in this letter. we are not sure how that economist would take this report. i do not think you can tell anything from that particular wording. nor can you tell, nor does that wording prove that those economists would agree with the finding. what we have done ourselves is to do a reading of literature and we have put weights on a results.e of

some economists will undoubtedly find our estimates of the effects to be larger than they would put themselves and others would find our estimates to be smaller than they would pick themselves. our job is to provide economists with a balanced reading, and we have done that. >> i'm sorry. >> [indiscernible] could put ag if you percentage to what are the that the impact could be far lower? say 100,000? >> the range that we provided for in minimum wage increase to $10.10 is a very slight increase. we constructed this range to capture, as best we can judge, two thirds of the distribution. that means in our judgment, there is a 16 chance that the effects of the minimum ways -- minimum wage raised to $10.10

would reduce implement and a two thirds chance that there would be a slight decrease in an increase of about one million workers. >> does this reaction from democrats apprise you at all, or is this something you expected? take great pains in doing analysis, to consult with people doing a wide range of views. if you take a look at the people we list in our documents, you will see from knowing their own work that they are taking this restaurant with very different sets of views on what would happen. we understand there will differences between

policymakers and compensators outside of cbo and the cbo. that does not surprise us, nor does it have any affect on the work that we do. >> [indiscernible] aca, youscored the score the legislation language, implementation, etc. is there anything we should be talking about as the executive branch changes the deadlines for the individual market or the employer that would make us reconsider or reevaluate the fiscal impact of the affordable ore act in the short-term long-term, especially since the administration has been so interested in saying it is already bending the cost curve in health care? updatesof our regular to our budget projections, we update the effects of the coverage provisions of the affordable care act. we do not update the effects of medicare changes or the revenue those parts ofe

the affordable care act may change it to a large body of existing law, and it is not possible at this point she really entangle the effects of -- to really entangle the effects of the affordable care act with the pre-existing law and medicare. the affordable care act is not really separable from those parts of medicare law. is separable because they are essentially building a new superstructure on the rest of the federal law. just the nature of arguing the baseline projection -- we get estimates regularly on the process of the insurance coverage provisions. the effects of those provisions on the budget have not changed substantially since 2010. we have incorporated a slew of new analysis, a slew of changes from what we expected and the way the laws being implemented. but on balance the effect of the budgetary changes of the

provision year-over-year is not much different than what we said for years ago. the 10-year totals, which you will hear about, has changed because the 10-year budget window is a number of years further in the future and it was four years ago. but on a year to year basis, the various changes made by the administration in implementation result of thethe supreme court decision, development and the health-care system, an analysis by us and others, all those things on balance of not changed the budgetary estimates very much. it will be part of the spring estimates, once again updating those projections. i do not know when that will come out. you all will get to know about that at the same time together in a few months. as for the affordable care act impact on cost, we have said before, we do not know what effect those provisions are having. ofre is a growing literature

economists analyzing the slowdown in health care costs over the last dozen years or so. ondid a report last summer medicare spending growth. we look that affects actually before the affordable care act. we look at the effects of the business cycle which will not be detectable. over time, economists will study the question, and then we will know. we do not know now. there are a few specific channels where the affordable care act brought down payments to medicare providers. that reduces federal health care spending, national health care spending. but the effects on the way medical care is being practiced in the private sector, that is not something we have any analysis of in the moment. >>

[indiscernible] economists are still thrashing around a bit over issues related to the great depression in the 1930's. economist's look at things over time. i think the challenge would be affordable care act is some of the channels that may affect health care spending a rather indirect. one can tote up the effect on medicare payments to providers, but the extent to which the accountable care organizations or medicare readmissions to hospitals, the extent to which those changes hold over to how medicare -- health care is delivered outside of medicare are subtle connections and i think they will be hard to detect. i suspect in a few years certainly you will see clever research that will be trying to get at that.

>> mark? >> thanks. [indiscernible] the forecast but you have, which interests me -- do you see that result ofmainly as a demographic aging, or a long-term diminishing of all age groups or younger workers? and what are the implications of that? it seems to me, that talks about thinking well, 6.5% unemployment say itreshold where they is likely we will keep interest rates low for a lot longer than that, maybe because of participation-- coming back. is your message to the feds, maybe we should start thinking about raising rates sooner? i will step back just a bit.

[laughter] the lastink about isade, part of the decline the aging of the population and part of the decline is the diminishing participation within me age groups. we think that there will be some decline within age groups, but not very much. those effects are mostly waning. if you look ahead at what is going on over the next decade, it is the aging of the population. are moving from an age where most people work to an age when most people do not work. rise inresulting in a medicare participation. labor participation rate has been pushed down by the economy. if the demand for workers was

stronger, if the demand for products were so strong that they would hire workers, we think that the participation rate would be a percentage point higher than it is today. we think that there are nearly 3 million people who are out of the labor force who would come back in if the demand for workers was stronger. that's about 3 million people who are in the labor force, but unemployed, they would go back to work if the economy is stronger. as about 6 million jobs short of where it would be. the participation rate, we will be back to where we we were without the weakness. looking at that, there is a great deal of slack left in the economy. how that influences the fed's policymaking is an issue for someone else. >> so your forecast is predicting that that slack might not be absorbed?

>> no, i think the slack will diminish, mostly between now and 2017. we think the economy is strengthening. not every week or every month, but we think on balance the economy is strengthening and that will push up the demand for workers and bring down the unemployment rate and that factor will tend to push up the participation rate. see, because that is being upset by the downward pressure by the demographic. >> kevin? >> aca is going to take 2000 jobs -- but we are going to -- [indiscernible] a question about the aca, following up my colleague's question, the participation rate you did not waive the

massachusetts experience, and i wonder how that would fit in? how do you manage that? in a perfect world if you could do it all over again, would you feel the aca part of the outlook -- we won't know for a while. is that helpful or has it muddy the waters a bit? >> our responsibility is to give congress are projections of what will happen to the economy under current law. one aspect of current law that impinges the labor market is the affordable care act. we have no choice but to produce analysis of how the affordable care act and other features of the tax system and transfer system will affect the labor market and other parts of the economy. it is the responsibility to them

and the responsibility to explain our analysis as clearly as we can. when we thought there was misunderstanding in what we had done, we decide -- we wanted to think further in this process. we thought there it been a misunderstanding. as for the massachusetts experience, that is an example of something that is something somewhat like the affordable care act, but it's not exactly like the affordable care act in a whole collection of ways. and it is just one state and not a randomly selected state out of the 50 states. we have looked at the experience there. but we don't think that is more compelling than the evidence from many, many analyses of the effect of high tax rates on labor supply and the number of analyses on the expansion on many aspects of labor supply.

so, we put our emphasis on that broader literature, based on out broader set of experiments. the massachusetts experience did not result in net job losses? you did not see that behavior? >> it is hard to know what the effects of the massachusetts health reform was on labor markets in massachusetts. i do not know enough myself to speak rarely do it. labor markets are affected by a lot of different things. extracting any particular factor is difficult. ,e estimated a few years ago and still, i think very strongly, that the american recovery act spurred employment and output relative to what otherwise would have happened in this country. at the same time, a lot of other

factors were affecting employment. >> [indiscernible] >> we don't use words like that. [laughter] >> i won't. look up a can't just whatseries and determine influence the economy? >> we've got about 10 minutes left. let's go to boston and chris moody before we do a second round. >> how do you compare projections that you and others thought compared to what actually happened, both with jobs and deficits? again with health care -- would you be willing to serve another term when this one is up? >> on the first question, there have been a number of analyses of the effects of the recovery act on the economy. they have reached a set of different conclusions. we still think in that case the

more powerful evidence comes of researchhistory on the effects of federal changes in spending and taxes. we get some weight to the research that focuses specifically on the recovery act, but we give weight to studies that looked over time to all-time the changes in taxes. we have drawn on this case and a working paper a year or so ago. our assessment is essentially what it was five years ago, the recovery act by raising federal spending and cutting taxes spurred the demand economy at ain the time when demand was a factor. by doing that the recovery act raised employment substantially compared to what would have been otherwise. on the second question, i love my job and i'm focused on doing

it this year. >> ok. chris? >> the media landscape has changed, particularly with the rise of social media. hot political issues get amplified on twitter when someone writes a headline that is not particularly accurate. we saw that in the health care study. --t just if amplified on gets amplified on twitter. all of a sudden the message is gone. it is just the narrative. can you explain when there is a paper that you have worked on that is thousands of pages long gets reduced to a tweet? clearlyied to write as as we can about our analyses. in this case, the effect of the affordable care act on the him labor markets -- on the labor market, i think we were quite

clear. come almostwould entirely from decisions by workers on where and how much to work. at the same time, we recognize in this case and many others, the work that we do is technically complicated and people who read it will misunderstand it sometimes. part of ourregular process to look at what people have written about our work and give them a call if we think they have misunderstood it. we reach out to you if we read something that we think shows that not everything was clear. we do the same thing, of course, with the people on the hill for whom we work. if we see misunderstandings in our work, basically we try to clarify them. a seems to me there are growing number of people who are interested in serious quantitative analysis of public

policy. thingk that is a great for folks like myself who do serious quantitative analysis of public policy. but you are right, there is a faster feedback loop in the commons and there has been before -- in the comments that there has been before. in the cbo someone that watches twitter and sees the narrative shaping up? every journalist who is here, who you know, is watching what is happening. we are not a very large place. probably any given area you can name, there are fewer people doing that then you might expect. we rely on a few really good people to watch our territory. that is true in our communication strategy. that is also true and how we do our i.t. and all of the areas analyzed by the congress. we try to get the most out of the funds we receive.

our job is mostly to speak to the congress. we think it is important that the reporting of our work be accurate, because we recognize many members and staffers in the congress won't go to our website necessarily. they will learn about our work through something else they read. it's very important to have that the right. but our job is basically do the analysis and give to congress, to be -- give it to congress, not to be the hall monitor in the twitterverse. for think that is the quote the morning. come to you. >> are you taking a more in-depth look at the proposals on the labor market than you did in the past, and if so is that because you have more sophisticated models? >> one of the areas we have focused on in the last five years at cbo is to strengthen

our modeling of the affect on the labor market in the economy. that is a crucial issue for congress. a lot of proposals to deal with the growing budget deficits and debt have involved significant changes in policy that would affect the economy and potentially important ways, and we think as we look at changes in immigration policy that are being considered, changes in tax policy that might be considered, we need to be able to give congress estimates, analysis that is at the cutting edge of what the economics profession can do. we have spent time building up models in that area. we have looked in other areas as well, obviously. we have strengthened our modeling of the health insurance system for people under age 65. we have strengthened our modeling of the health insurance system for people over age 65.

part of what we need to do at cbo all the time is to do the analytic work to be ready for the policy proposals when they come. we try to scramble to catch up. pre-k's go for it. >> my apologies for being late today. the president's budget expected to be submitted march 4. how long to get something back to congress after the state? question isall under noticed back in november-september. saying to stabilize the debt, you need true trillion dollars from the long-term. that is very similar to what bowl simpson sang back in 2010.

an overview of how much progress was made and that's set reduction in the four years from 2010 to what seems to be a budget will -- lull. us aboutally it takes a month to produce estimates of the president's budget, but the time frame varies depending on what the policy proposals are. also vary depending on the release of underlying data. separate from proposals that very important in a plating -- updating proposals. i cannot be directly to what they were saying a few years ago. certainly, there have been changes in federal policy in the past few years that have narrowed episodes.

-- deficits. particularly caps on discretionary funding. also, changes in policy that have euro deficits depending on the starting point. taxextension of most of the cuts worsened the deficits relative to the current law. but allowing some of them to expire narrowed the deficit compared to what other people referred to as current policy baseline. barry hard to keep track and we have not tried to keep track formally over the past few years. this point in time, what are the choices unconstrained it faces going forward? as you said, we have reported and will report on deficit reduction and a date that if congress wanted 25 years from now to have the debt to gdp ratio about where it is now, then it would mean reduce deficits over the next year.

it would continue in the 10th year at about the same gdp beyond that. bringing it down to average over the past 40 years, it would need $4 trillion in deficit reduction. that is the best estimate of where things stand now. >> what is your best guess for where the numbers have moved since 2010? bigger or smaller? depends on what the benchmark is to start with in terms of the expiring tax provision. if one started from the view assuming the tax cuts would be extended, certainly the efforts to reduce deficits since then have narrowed the future fiscal cap. on the other hand, if one started where we had to start then, with current law, the extension of most of the expiring tax provisions have lightened the fiscal gap. elmendorfto thank dr.

for doing that. hope you will come back soon. >> i would love to. thank you all very much. >> a reminder, you can see all of this event online. we are taking you live now to the national press club where the energy secretary will talk about a focus on domestic energy production and likely to announce six $.5 billion and a federal loan guarantee for the construction of a nuclear powerpoint -- power plant in georgia. he is being introduced by myron felton. live coverage just getting underway. >> the markets are forcing the closure of many plants in supporting the obama administration's drive to reduce greenhouse gas emissions. in addition, there is enough supplies of natural gas can be exported to mexico, canada, and overseas. in addition, the production of

electricity is at record levels. the secretary embraces resident obama's all of the above energy strategy, including support or nuclear power as a long-term carbon free power source, hydraulic fracturing to reduce natural gas until a new generation of low carbon energy technologies emerges. those positions have not endeared him to many in the environmental community. the secretary is helping to the energy review, which will focus on the development of a comprehensive strategy for the infrastructure involves in transporting, transmitting and delivering energy. he led thesicist, energy program at the massachusetts institute of technology before he joined the obama administration last may. he was under secretary of energy during the clinton

administration. please join me in welcoming to , ernestonal press club monee's, secretary of energy. [applause] >> thank you. it is a great pleasure to be here at the press club and to note also, i learned this is the president's first lunch as president. i feel honored doubly. i also want to thank the speakers committee for pulling this event together. you have also been introduced to some of my colleagues who may some of the questions. it has been a busy few weeks since the president gave his state of the union speech. traveling across the country,

highlighting and reinforcing some of the messages in terms of the administrative efforts to promote production and create jobs and opportunities and address serious issues surrounding climate change. i will start with the travel log. three weeks ago i was in virginia to talk about stem creation. this is a critical challenge. we need to draw upon all of our population.g the it was impressive, in particular , to see how at hampton intorsity, it has resolved a research university parlayed collaboration within earmark -- nearby department of energy and nasa facilities and recruit the president to be an ambassador for the new minorities and

energy program. two weeks ago i was in texas, the university of texas in austin and san antonio. they're talking about domestic oil and gas production. meeting with students and thingseneurs doing some that are pretty fascinating. we explored how it is and can to move through energy efficiency. this was made hospital by an extraordinary public-private partnership. state governments and utilities that are the customers for the solar generated electricity. in a few minutes, i will talk about tomorrow's travel and another piece of the president all of the above approach to energy and climate.

i will note the travel california, texas, virginia and tomorrow another southeastern state. we are saving the north tour for spring and summer, although as we have seen, we have had a real touch of winter going pretty far south and that is something we need to pay attention to, and in fact, a pointed out -- a theme that we on at theng department of energy, which is the resilience of the energy structure. parts ofng different the energy system, let me return to the state of the union where you heard the president reiterates the importance of energy and climate. i will make a brief quote. one of the biggest factors in

bringing more jobs back is the commitment to american energy. above american energy strategy i announced a few years ago is working. today america is closer to energy independence than we have been in decades. so today what i want to do is elaborate more on the strategy. note that all of the above is not a slogan, a policy and a pathway to creating jobs, and that the same time, reducing carbon emissions that recently stood at the lowest level in 20 years. as we willabove, discuss, certainly encompasses fossil fuels, nuclear power, renewables, energy efficiency, but it starts with a commitment to lowering carbon emissions and addressing irrigation responsibilities that we have for climate change. so let's start looking at the

sources and discussing it in this context. as you all know, we are producing more natural gas than ever before. the energy administration forecast this will continue for the foreseeable future. half of the drop we have seen in carbon emissions are due in fact to the low to moderate priced gas, particularly through substitution for whole in the electricity there. ,e are producing a lot more gas but we are using as to what is sometimes referred to as part of -- lowdge to a low were were carbon future. at the same time, a remarkable effect on domestic manufacturing. the president said businesses have or will invest $100 million in new factories that use natural gas. think this was

probably appropriately on the conservative side. the administration will be committed to supporting manufacturing across the united states. in fact, last month, the president traveled to north carolina and announced that north carolina state university have been select the to lead the newest manufacturing innovation hub, one dedicated to semiconductors for power electronics, which has implications across many parts of the energy industry and this will bring together companies, universities, federal resource to bothunder one roof generate power electronics. the president announced lands to launch six more in you fracturing plants this year. we are ready started one in concert with the department of defense. we will do more this year.

that will include the department of energy. oil tremendously increase production. we are producing more crude oil square.than we are all how does this fit in with the climate? the climate commitment that i indicated earlier. it fits in because in no way does this increase production, which has dramatically increased imports. obviously helps in terms of balancing payments. but we continue to focus on reducing dependence on oil. here we have a three-pronged strategy. first, efficiency standards for vehicles. are café standards projected to save 2 million

barrels per day of oil by 2025 and saved a u.s. $1.7 trillion in fuel costs. the other prongs of the approach tolude an ongoing commitment develop next-generation biofuels. those costs are coming down. finally, to continue to advance a electric acacia and a vehicles , and the cost of vehicle batteries has dropped significantly. electrification of vehicles. returned to the efficiency standards, just yesterday the president directed , thepa to develop an issue next phase of medium and heavy duty vehicle for vehicle standards by the end of march. officeartment of energy of energy and renewable energy

is working with industry on what is called a super truck collaboration to in fact advanced the technologies that will be needed to meet the new standards coming forward. improve theto efficiency, the 10 mile per gallon, by at least 50% in class eight trucks, heavy duty long haul trucks. they are about four percent of the vehicles and use about 25% of the transportation fuel. they do not get very good mileage. increasing that is a high leverage situation. literally as i walked out the door on the way here today, i witnessed the first product of that super truck collaboration. this was a peterbilt super truck. it had achieved already a 75%

increase in fuel efficiency. contributing to it from advanced engine technology, advanced powertrain technology, aerodynamics and other innovations, they will start working their way into the commercial products. things like this will be critical for meeting the new challenges. oilmessage is that production greatly increasing. oil imports decreasing but continue to work heavily on the oil demand side. in fact, the u.s. trade deficit fell to a four year low in november insmed -- in no small part because of the booming domestic energy production. those are some of the fossil fuel initiative. we have also seen for marketable

progress in clean and renewable -- renewable energy. we intend to see a doubling of that in the next five years. tools we used for advancing renewables, in addition to research and development and programs and the like is our loan program. i want to spend a little time on that. we are supporting right now first a portfolio of more than $30 billion invested in more than 30 projects around the country. we recently announced up to $8 billion in available loan guarantees for advanced fossil

energy projects that will reduce carbon emissions and increase efficiency. 8.4rovided more than billion in loans to the auto industry to allow the mystic auto producers to ritual american factories to produce cleaner and more efficient vehicles that are increasingly demand at home and around the world. these range from loans to establish major companies like , retooling factories in six tesla, to start up like was a very different business model. a very high-performance vehicle, which will start export next month. $4 billion in loan guarantees to a variety of clean energy thewable projects across country. these are supporting one of the largest wind farms.

several of the largest solar energy systems and more than a auto new or retooled manufacturing plants. last week i was in california for the opening of the solar energy system. the world's largest concentrating solar power system. it received a 1.6 billion dollar loan guarantee from the department of energy. where if youtime, recall, some of us are already forgetting it was not exactly easy to get debt financing in that time. so this program was really critical for kickstarting major utility scale projects. i than skill project is a remarkable feat of innovation and engineering. over 3000 mirrors the size of garage doors reflect the energy to three massive powers were

water is heated, converted to steam and then spinning turbines. this is on the order of what one needs to surface, nearly 100,000 homes. they have now demonstrated to the private sector that this technology is feasible on a scale that has not been seen before. opens up an export market for this technology and suitable geographies. we all know they are first mover program -- problems in terms of new technology at a new scale and that is essentially what we are doing, getting over the first mover problem for activities.cale i should say that we have also had remarkable success through investments in care technology as well. helping to finance the first five plants, larger than 100

megawatts in the united states. proving to industry these projects were viable. projectstly 10 utility are now privately financed without department support. that is the nature of the program. get the first movers out there and then have the private sector, and. last year was a banner year for solar. , 2300 megawatts of solar installed in the united states in 2013. we haveo emphasize that issued or made provisional commitments of over $30 billion of loan guarantee. we have substantial remaining authorities over $40 billion. acrossg to move forward the energy spectrum with more

projects, assuming we can find good commercial type projects that could benefit from this kind of debt financing. efficiency isadd critical. certainly inlieve the long term a solution to private change -- climate change will require major efforts on the demand side, and clean energy on the supply side. of the ways the department of energy is moving forward on this is by picking up the pace on issuing appliance efficiency standards. weeks intot a few 2014 we finalized efficiency external power supplies. no individual one of these may sound overwhelming but the cumulative effect of all of the new efficiency standards will be

to reduce carbon emissions by more than 3 billion tons. that is not bad for a series of actions addressing essentially every day appliances. we have also seen remarkable , -- breakthroughs. today led lights, perhaps the factor of six more efficient. a single fixture replacing a 60 with 130 dollars of lifetime energy cost savings to consumers, and the prices are now the low $10. i can guarantee you you will see them below $10 this year. this is the kind of cost reduction that will drive the transformation of our system to clean energy. few words about

climate change specifically. going back to the state of the union, the president stated the strong commitment to reducing domestic carbon emissions. the president said, when our children's children look us in the eye and ask if we did all we could to leave them safer, more stable world with new sources of energy, i wanted to be able to say yes, we did. one feature of that is the reaction to what we have been seeing in terms of the number -- number of extreme weather events. tellly i am not here to you we can tie any storm or drought or climate change warming, but the patterns are alarming and they have been statistically anticipated for quite some time. 20-25 years. what we see is warming

amplifying the effects of such things as storms. part of superstorm sandy was an example of category one hurricane transformed into a storm that devastated much of the northeast coastline. last summer president obama in the climate action plan emphasized not only the issues of cutting carbon emissions to as much as possible the impacts of climate change, but he also emphasized the importance of preparedness to the consequences of climate change. sometimes called, adaptation. the department of energy has some major roles to play, particularly in leading response around the energy infrastructure.

report last summer detailing former abilities of the energy sector to climate change. 2012, several power plants in illinois had to get special permits to operate with higher than normal allowed discharge temperatures for cooling water. this past summer wildfire damage threatened california, leaving the governor to declare a state of emergency, even though the fires were distant from the major load centers. , a number of companies that extract natural gas and oil through hydraulic fracturing were denied access to water for weeks or more in several states. emphasizing the water nexus that is one of the areas of major concerns with climate change. particular then

electrical grid and fuel supply will be a major focus this year as we work throughout the administration on the quadrennial energy review. it is first installment of 2014 will focus specifically on the transmission, storage and distribution of energy, and as we have seen, even only in the past week our infrastructure challenges require urgent attention. through this fund, we will be able to help communities plan and prepare and further support like true technologies that will make us more resilient in the face of a changing climate.

to the itinerary since the state of the union. as we have said, the itinerary has reflect that all of the above. i have mentioned fossil fuels, efficiencies and renewables. travel to will waynesboro, georgia to finalize a $6.5 billion loan guarantee for the construction of nuclear reactors. in 2010, the department of energy offered conditional commitments -- additional commitments to support construction of the country's first new generation nuclear power plant in nearly 30 years. this was in the spirit of the first mover challenge of getting , anduclear plants built three separate commitments made --three of the four corners

owners of the plant. georgia power and another power operation, constituting $6.5 billion of loan guarantees. truly, i want to emphasize we are working across the board to try to push the technology forward into the marketplace for all of our energy sources. these will be new megawatt ap 1000 nuclear reactors. in fact, earlier him at the deal cosh or the moving design of the certification onto a program to stimulate the development of next-generation reactors with passive safety features. once completed, the new units will produce enough -- enough safe and reliable energy to power 1.5 million homes. clearesident did make it

he sees nuclear energy as part of america's low carbon energy portfolio, and it already is a major part of carbon-free portfolio. to conclude, obviously an exciting time in the energy world. we are producing more domestic energy here in the united states than ever before. the promise is clean, affordable domestic energy is finally coming true on a massive scale. notid not get hit -- and get here by accident. the advances in clean, renewable is not happen by accident. theact, monday was five-year anniversary of the signing of the american covering and reinvestment act. worth remembering the president took office in the middle of the

worst economic crisis since the great depression at a time the economy was losing over 700,000 jobs per month in the midst of the worst six-month time for gdp growth in over 60 years. the recovery act was an unprecedented effort to jumpstart the economy, save and create jobs and make a down payment on addressing long neglected challenges so the country could thrive in the 21st century. some of the most important investments work in clean and renewable energy. the recovery act divided more than $16 billion in loan guarantees to 25 energy products -- projects. at a time when debt financing was just not available. , the and other investments science office, they are establishing tomorrow's clean energy policies to meet the domestic needs or affordable and secure clean energy, and to

position us as a major supplier to the global market. , a nonprofit estimated the world will need a global investment of $36 trillion or nearly $1 trillion per year on average over the next four decades to address climate change on the scale we believe is required. while of course applying energy and managing the demand side. that is a pretty serious investment. most of us -- many of us think be faring nothing will more expensive. when those technologies are beloyed, we cannot afford to at the back of the train.

investing in clean energy is not a decision that limits economic potential, an opportunity to lead the global clean technology markets that are forming right now. tomorrow, maybe i will ask the 3.5 thousand construction -- three and a half thousand construction workers how they feel about this new technology. [applause] >> thank you. made several references to the state of the union address. i know you are not present because you were designated to watch the shop while the other cabinet members went to the help. i hope you're colleagues are envious of you because you got to come to the national press club while they had to stay elsewhere. inc. you again. you have hinted some of the older energy regulations need to

be revisited and reviewed. how and when do you see that first, i have to clarify that i did not say the restrictions should be lifted. response to ae question, differences and how gas and oil exports are managed was simply to point out that many steps were taken in the energy world in the 1970's in embargo.to the oil for example, at creation of the department of energy and obviously the energy world has and one might be re-examining all whole set of issues in the context of today's energy market.

what will be the focus of >> as ist review? stated, the focus is on infrastructure and storage and distribution of energy. i think as we narrowed that down further, i think we have seen in two majoronths really focus areas. one is the electricity grid and how we develop a grade for the future. one that is more resilient perhaps. large-scaleows renewables. one that may provide new services to consumers, and in doing so, to address the whole variety of risks that we face. theentioned in the remark

risk of extreme weather. obviously cyber security is a major issue. a very significant fraction of the cyber attacks in this country are in fact on energy infrastructure. another our physical risks. ofe of you have may -- some you may have seen chronologies of physical threats to the electricity infrastructure. another risk is the interdependency of the infrastructure. as we saw and sandy when the great going down took out access to transportation fuels. that is one major focus. in another major focus will be around the infrastructure for distributing fuels. again, the last weeks we have seen the problems in new england with natural gas prices. we have seen the continuing concerns about propane. again, the issue was getting the

toduct from where it was where we needed it and the infrastructure was not there. lex had you been working on climate change issues for countries that produce a lot of ?missions come as such as india how do you believe they should reboot energy sources? >> we are carrying on extensive dialogue of cooperation with china and india, for example. china is by far the largest coal user. billion tons per year. with both china and india, i will be going to india in about two weeks. i was in china recently.

i was there, all of the senior government officials focused immediately upon the bad air quality issue. it is not just carbon emissions but air quality. the indexat i arrived in beijing was roughly 10 times under eitherhere -- under epa regulations. they have a very strong motivation to address emissions across the board, but i also want to emphasize that i would say in all the discussions we have had, the commitment to --ressing carbon emission emissions israel. clearly they are balancing that against economic growth. one of the things we're doing is trying to increase collaboration

on the carbon dioxide capture utilization and sequestration technologies that are key for us and them it to be using cold -- coal in a low carbon world. >> a few questions from some of our international correspondent. >> you had negotiations with your russian counterparts. do you have new programs and projects that you want to develop with russia and the near future? >> we did indeed complete the megawatts program. for those of you not familiar, perhaps a brief explanation is in order. starting in 1993, the united states and russia went into a partnership in which 500 times of highly enriched uranium from the new their weapons program

was down blended and became used as fuel in american civil nuclear power plants. it is not widely known that half of the nuclear power plants were operating on the former russian weapons material for 20 years. this was a program that was completed on schedule, and successfule most nonproliferation programs removing weapons material that we have had. with the head of the organization and russia, we are discussing a number of new initiatives, and have signed an agreement to have more collaboration. there is a very strong interest on collaborating on civilian nuclear power. a strong interest on collaborating on national security programs with our laboratories and a very strong interest in collaborating on things like unconventional gas

and oil production. another question from a japanese colleague. the u.s. energy department authorized exports to japan last week. this is the third approval for japan. what kind of interpretation would you picked -- put under those approvals? >> i should clarify that we did sixth approvale last week. one of those is final. five are still conditional in waited -- awaiting environmental review before those become final. i do want to clarify the department of energy does not choose where the car goes go. what we do is make a public interest determination on export to countries with which we do not have a free trade agreement.

that would include japan. certainly the questioner is three of the six to have as major customers japan. that included the cameron license last week. we are continuing with the announced procedure in terms of evaluating license applications for public interest in the order that has been posted since 2012 on the website. expect, mr.uld secretary, a lot of these cards or questions related to the keystone pipeline. i think i could summarize with one question, what is your opinion on the project, and would you like to make a major announcement, because the national press club is where news happens. i will not be making news in

this case. my opinion and statements of fact is that secretary kerry, the department of state has responsibility for making the public interest determination, and we look forward to his doing so. >> we will ask him to come tomorrow. predecessor -- thank you. your predecessor started a number of initiatives focused on streamlining federal agency reviews of electric transmission infrastructure projects. what are your plans? do you intend to keep it a high priority and how much can they realistically accomplish? first, it is the case that as suggested our authorities are somewhat limited, although there are certainly authorities that can be used, particularly for moving large-scale renewables

across large distances. all i can say is that we are looking at several possibilities. we actually did -- was commissioned through the loan program there was a transmission built and commissioned with loan support in nevada recently to move across the state. now there are some applications that would across state lines or in fact international borders, particularly in new england and are under active consideration. >> levels of methane greenhouse gas have been rising since 2007. the news report says the budget

is down for monitoring this. sufficient funding to stay on top of the potential problem with fracking? first, let me say that we have a very active interagency methane emissions working group. it involves the domestic policy council, department of energy, department of interior and the usda. there are methane issues in the agricultural side, which we will not talk about here. so first of all, we are very active in that. certainly one of the major issues that i think is suggested is that we certainly need more data in terms of what our methane emissions. not just from production wells, to end, including transmission and distribution systems for natural gas. now, there have been recent

publications, one that got a fair amount of attention in science magazine last thursday for example. and i amstion there, just repeating what they said, quite respectable group of authors, that the total methane emissions are probably somewhat higher than epa current estimate, although certainly in the ballpark. the productiony wells are not the major focus of that. and then to data respond in a variety of ways. there are others in the are doing a terrific job as well. alliancea blue-green of environmental groups and labor unions looking at the methane problem, and we will be convening the groups to

redevelop an action plan. i would also say when it comes to production wells and unconventional shale or oil production, that certainly that technologies for capturing the methane are there. they are being increasingly used , recently in north dakota the state government made a commitment to 95% capture of methane, much of which is being flared because of lack of infrastructure. over the next few years i am certainly hoping we will see significantly reduced emissions. >> i teach my students that sometimes a follow-up question is important. secretaryide the kerry in the state department will have to make an ultimate decision, can you give us insight-- what is the

the department of energy on the keystone pipeline impression? follow-up questions often lead to the same disappointment as the initial question. we arecurrently -- currently in a time in which the agencies are to make comments on the supplementary -- supplementary environmental impacts they meant. >> i was thinking of an answer to the follow-up question. appreciate it. goodis what we could -- do at the national press club. i am so glad you could come and the other cabinet members had to say away while you could come to the national press club. where will the department of energy likely have the most impact on u.s. energy policy during your tenure?

>> well, i might broaden it to energy technology. certainly on the policy side, we have mentioned in the review under development. led want to emphasize is out of the executive office of the president where they will in agencies across the administration. the department of energy has a special role in terms of providing the executive and the analytical capacity to analyze many of the crosscutting issues. the product of the first years activities will be a set of recommendations for advancing energy infrastructure questions come up and as we go to the next year and next year, that will broaden out to include the supply side, demand-side, etc..

that will be the mechanism and engine for driving administration-wide policies with strong political grounding. on the technology side, we will continue through the whole spectrum of programs from our efficiency and renewable programs. and loan programs. we will keep across the envelope entire spectrum of research, development demonstration and deployment. you areay that many of quite aware that the role of the government in research and development is generally quite accepted. once one goes to the deployment -- end of the spectrum, there is more divergence of you as far as the role of the federal government. i want to say that i think the

need to accelerate the pace of change in response to climate challenges makes it essential dot we continue to investments such as those i mentioned earlier in the loan program that get the first movers out there in the commercial market, pushing the technology envelope so that the marketplace will eventually have the set of choices it needs for the various low carbon solutions that will needed -- be needed in different parts of the country in different countries of the world. that is the way we're looking at it and expect to make significant impact in both of those realms. about solar power. solar power is fast becoming as affordable as natural gas. why is the obama administration --ling to incentivize

failing to give incentives for solar power infrastructure since it is more climate friendly? we are providing major incentives for solar power. it is a big spectrum. i already mentioned the loan program for the first five utility plants. thermalhave five solar plants, two of which are operating. beyond that, we have a whole are writing of mechanisms. we have a program that has very explicit targets for lowering costs. what is important is that the programs are not only looking at the core solar conversion technologies, but also looking at the soft cost. if you want to put [inaudible]

on your rooftop, the soft costs can dominate the overall budget cost. we believe there is a lot of room to reduce that. wind of solar and onshore and batteries and leds have come down dramatically. one of the messages is, we should stop theseng that somehow technologies are always 5-10 years away. we believe the costs are now coming into the range where there are lots of marketplace opportunities under appropriate regulatory standards. we are pushing solar very hard. personally am extremely bullish on solar. i believe we will see it grow faster than almost any of the

predictions we have had. but it will be part of a system. it is obviously a variable. at a minimum, the son is only out on average 12 hours per day. that leads to integration, either through grades, combination with perhaps gas-fired, storage. these are all mechanisms that will allow solar to play a role at a large scale. >> from solar, we go nuclear. the nrc is reviewing the waste policy. utilities still say they want to keep nuclear on the table as an option. loanthe deal we consider guarantee and do this as a kickstart for small modular reactors?

as i said earlier, we still have a very significant amount of loan authority for advanced vehicles and another program for all of the above. as we go forward, we are developing plans for all of the above. this can include nuclear and small modular reactors in which we currently have two commitments to advance rather different designs of small firstr reactors to him mover status and roughly a decade. -- in roughly a decade. summary question. given the fact that the market has been making choices, why do we need a federal energy policy?

>> good question. scriptfirst give a post to that last question. in addition to the nuclear power issue, the nuclear waste was also mentioned. let me repeat where we are on that. all, we continue to think the mountain project is unworkable, and that we need to pursue the recommendations made in the blue-ribbon commission that the president and secretary put together a few years ago that i happen to serve on. the first important point there is we believe only a consent-based approach will be ultimately successful and we ultimately believe that we need to pursue repositories in

facilitiesth storage , long-term storage facilities, sometimes called interim storage facilities. there, the administration has proposed and a bipartisan group in the senate that's what we should be doing is promptly go to a pilot storage facility that would at least take the spent fuel from the reactor shutdown. free up the site and consolidate the fuel. now, back to the current question on national energy policy. what i would say is take the subject of the quadrennial energy review i mentioned already for the first year. ultimately is in the private sector hand. but we have tremendous public

need for this. , we will bele carrying out at the department, wholet of a review, all set of fuel resiliency studies that are regional in nature. the fuel challenges we have seen are very different in different parts of the country. what that will lead to in terms of policy -- will it require government-sponsored installations? will it require suggestions of legislation? will it require working with states in terms of their regulatory structures to encourage that we're moving coherently towards the kind of energy infrastructure that will move electricity and fuels to people when they need them under normal conditions and when they

need them under abnormal conditions. >> thank you. we have two minutes left. i will talk faster. i would like to remind everyone that the next speaker even will be monday, february 24. fromll have the republican california who was chair of the house armed services committee. second, i would like to present the guest speaker today. i must say, didn't he do well with answering such a wide range of questions? we thank you very much. [applause] i would like to present you with the traditional national press club mug. i do not know what types of energy drinks to use, but i am sure they can fit in there. i want to go over by 30 seconds to ask a final question. the economist wrote this week about the united states becoming the new -- the world's new petro

state and had a smiling barack obama, which i do not think we would have dreamed of seeing years ago, but do you agree with the statement that the united states is headed towards being the world new petro >> first of all, it depends on how you define petrol state. i don't want to provide a resource curse. on the other hand, the international energy agency has predicted that the united states will become the world's largest gas producer and oil producer in this decade. we are certainly already the producer inined btu terms of oil and gas. that is very real and we've already discussed some of the economic implications. >>est