dr. elmendorf, for your testimony. frequently mentioned is increased spending, and your testimony certainly reinforces that as well. traditional approaches to addressing rising costs have included cutting people from care, cutting provider rates, cutting services. in my state of oregon we've come together in order to take a new approach, particularly regarding the uninsured in our medicaid dollars. it was quite refreshing to see business, labor, republicans, democrats, educators all come together and work on this health care transformation that is with a goal of improving care while cutting costs, integrating and coordinating services, including physical and mental and oral health care. the modeling that's taken place involves coordinating physical and behavioral health care, better preventing and managing chronic diseases using patient centered care homes and aligning care for individuals who are dual eligible. so the establishment of these care organizations is projected to actually improve care while reducing costs,

dr. elmendorf on health care. health care is mentioned as significant factor in increased spending and your testimony certainly reinforces that as well. . .

dr. elmendorf. referring something to what the ranking member mentioned about tax revenues as a percent of gdp, in 2007, i believe, under the current tax rates, revenues were 18.5% of gdp, and they are down now into the same tax rates so my question or point of this is that the amount 6 revenue as a percent of gdp is affected not just by rates, but by economic conditions. >> absolutely, congressman. >> okay. so if we had a better economy today, you would have a a larger share of revenue even under the existing tax rates? >> yes. >> 18.5% is fairly close to historic avenue since world war ii, is it not? >> when the cbs talks averages, we use the last 40 yiers. last 40 years, revenues averaged 49% of gd. >> right, under the existing tax rates and a good economy in 2007, we had a larger revenue as a share of the economy, actually larger than the average over the previous 40 years. >> yes, that's right. >> thank you. next question relative to what we charitably call obamacare and on the other side they

dr. elmendorf. two weeks ago you and your colleagues at the congressional budget congressional budget office released an analysis of the economic impact of the so-called fiscal cliff, painting a very somber picture of what might happen if congress fails to address expiring tax cuts and the looming automatic spending cuts that occurred at years and. you predicted a possible recession early next year and millions more are out of work. we would actually go over that fiscal cliff, yet your long-term outlook, cbo's long-term outlook which we are discussing today, also confirms that continuing to do business as usual, extending all the current tax and spending policies, will produce unsustainable deficits and debt, which will also hurt the economy in the long run. .. super low interest rates, should should be a no-brainer. we call upon speaker boehner to president put the president's jobs proposal a vote on the floor of the house. the second step is for lawmakers, the congress, the president to adopt a pl

dr. elmendorf for being here. always enjoy your analysis and testimony. i would like to talk about interest rates and segue into taxes. on page 32, one of your points that our interest rate says increasing government debt raises interest rates by leading people to allocate a portion of savings to purchase government -- treasury bonds crowding out investments to capital goods like computers. does your report touch on why interest rates at record low levels right now? >> we don't talk about that here. we will in the regular forecast update, the principal factor seems to be weak economy and weak private demand and a flight to relative safety from financial markets particularly europe. that are in especially fragile stage right now. >> qe 1, qe 2 is playing a part of that. if that expires are we going to see interest rates increasing in the future? >> more focused on the long run rates, and bring down longer-term rates. when one looks at financial markets, beyond the next few years and later in the decade they are expecting a noticeable increase in interest r

dr. elmendorf, thank you and your team for all your hard work in putting this very insightful, very harrowing report together. this hearing's adjourned. >>> on wednesday, jpmorgan chase ceo jamie dimon testifies before the senate banking committee about the company's $2 billion trading loss. live coverage of that hearing on c-span and c-span radio. and the house financial services committee will hold its hearing on the public policy implications of jpmorgan chase's recent trading loss on tuesday, june 19th. live on c-span 3 and c-span radio. >> we're going live now to the

dr. elmendorf on health care. health care is mentioned as significant factor in increased spending and your testimony certainly reinforces that as well. . . better preventing and managing chronic diseases, using patient-centered primary care and improving and allowing care for individuals who are dual eligible. so the establishment of these chordata care organizations is projected to improve care while reducing loss and increasing access. by courting services, they project 4.9-9.7% savings in the second year of implementation, compared without the transformation to a 10% increase. this savings is expected to build over time, and i wonder if you could talk a little bit about how this type of change would impact the federal budget a similar approach was implemented in other states as well. >> i think that are tremendous about of experimentation going on in different states, and different private providers of care, private insurers, in effort to get more value for health care dollars. and i think the experimentation

dr. elmendorf, as you said, all this involves a very difficult trade-offs. to the extent that we keep that low and we reduce revenue, that means that we have to cut much more deeply into other areas. is that right? >> yes. >> and given the fact that health care costs are increasing rapidly, especially medicare, it will mean that we have to come up with another way of dealing with medicare costs. is that right? >> yes. >> and, just to go back to the cbo analysis of the house republican plan, with respect to creating and medicare voucher, a premium support, whatever you want to call it, my recollection is that the cbo analysis showed that you are really just shifting a lot of the rising health-care costs off the medicare program and on it to seniors. is that right? >> looking at your door the plan, we did analyze and try to offer some rough estimates of the shift to beneficiaries. this year, we were not able to do that kind of analysis. the plan was more complicated. we were not able to do the comparable analysis yet this year. >> that is right. i think in the