dr. elmendorf. large and persistent deficits like we have over the long-term are a bad thing for economic growth, job creation and potentially have the debt crisis risk that you discussed, right? >> yes, congressman. >> but the solution to that, which is some kind of fiscal contradiction either through tax increases or spend regular ducks, can cause a reduction in short-term economic growth and/or job creation. >> exactly, congressman. >> so we're in a bit of a pickle. >> yes, congressman. >> so the question is, how do we get out of this thing? in europe, greeks and spanish and italians waited too long and had to do a substantial fiscal contradiction in a short period of time which resulted in extremely high unemployment and large contradiction in their contraction in their g.d.p. is that correct? >> other factors have been at work as well but we think the shamp fiscal austerity have contracted their economies. >> if we were to try to decide the fix the whole budget deficit in two years or forced to

dr. elmendorf. let me get into the debt itself. we have the state of the union address last night and as we all do we go to the microphones and give our play-by-play analysis of what we thought of the speech and what we liked him what we didn't like. one thing stood out that gave me a real cause for concern and i heard it in mr. van hollen's opening statement which gives me very big con -- cause for concern. the notion that we have our degout $2.5 trillion of deficit reduction taking taken care of and in the bank with not much farther to go to finish the job, this calculation, this $2.5 trillion in debt reduction does not count the spending that took place during that time. it doesn't count the stimulus spending of $831 billion doesn't account for publicly held debt has doubled from 36% of gdp to 73% in 2012. 77% by 20203. i guess you know alternative alternate fiscal scenario meaning doc fix and all the other things you think congress will do based on reasonable assumptions. total debt is already a

dr. elmendorf, for being here today. this report does certainly bring a lot of concerns about where we are going and the huge challenges that we will expect going down the road. as i was reading through here, i made notes where i see a lot of things are unsustainable. social security is unsustainable. without reform, it will go bankrupt in 2033. medicare is unsustainable. social security disability insurance -- which we do not talk very much about, and i think that is really a very important topic that i would love to see either this committee or some other committee take a look at because i got concerned about this last year when i started reading about how it will go bankrupt in 2016. a big concern. then on the education site -- pell grants. $1 million shortfall in fiscal year 2015. then annual shortfalls of $5 billion or more from fiscal year 2016 through 2023. all of these programs as we are looking at them -- it is very scary to see that they will go bankrupt unless we have some form of reform. let me now turn to lo

dr. elmendorf for being here. you did give positive news, we are in a recovery with positive signs of economic growth and you have heard already that it is difficult to reduce the deficit and a fair and balanced way. have seen economic growth to see a contraction for the first time so the debates have any effect and it is not just politics but serious how we grow the economy, strengthen the middle-class in the global marketplace and how we meet our obligations to our seniors. we have positive news this week that the private sector institute pointed out we have seen slower growth in the cost of health care private and public sector that is significant with double digit growth and cost , 100 percent increase in the private sector and medicare and medicaid we would see these delivery systems to push the health care system with doctors and hospitals to give us better value and improve quality for seniors and in a cost-efficient way. so in particular the demographic problems of 10,000 seniors per day but could you spea

dr. elmendorf. senator sessions. >> thank you, madam chair. thank you, mr. ndorf, for appearing before the committee today. we value what you do. it's important to us to help us have honest numbers that we can work with and honesty and our financial situation is absolutely critical at this point in history. i'd also like to welcome the new member to the committee and look forward to a productive year. we absolutely face some very serious challenges. and of course the reason chairman murray indicated that deficits have become the topic of the day is because we never had such systemic deficits as we have today. they exceed anything the nation has ever had, and we are on a systemic course that continues those deficits. as the report was given to us shows, they get worse in the out years. we cannot continue on this course. bowles and simpson told us in this very room there are nation has never faced a more predictable financial crisis. so that's why we got to talk about this and we got to ask some fundamental questions. the chair has set forth the president's --

dr. elmendorf.th respect to the timing of the budget submission, i think all of us know that we struggled and toast january 2 to pass legislation to avoid the fiscal cliff. the results of that legislation was to make sure we did not see a sharp increase in taxes on middle income americans. we ask higher income individuals to begin to contribute to reducing the debt over the long term. that action help strengthened the economy. it took us until january 2 to do it and we do not know how much revenue will be coming in this year or the next 10 years. it is understandable that the president needs a little bit more time on the budget. as the budget committee, our challenge is to try to come up with a blueprint for our country's decisions on spending and taxes. while we talk about numbers, ultimately it should be a reflection of where the american people are in terms of their values and their priorities. i hope we share this you, as we approach the budget our number one priority has to be expanding economi

dr. elmendorf. i have not heard from an economist or read who has not said that we have to approach this serious economic challenge by a balance of reducing spending and generating new receive news and i think there is no question that the president's aparticular can you lation of that model is something we have to do it and do it in a way that is timed and making the investments that are necessary to grow our economy. we have to reduce spending and we have to make choices in what we invest in. i wonder if you would share some thoughts in terms of getting the most bang for our buck, what are the kinds of policies when we are engaged in spending, we are likely to produce the economic growth and greatest help to our economy because not all spending is the same. in that regard, in particular, i would like to know your thoughts about infrastructure spending, rebuilding the crumbling infrastructure of our country and the old fashioned w.p.a. way which leaves behind an asset which contributes to economic

dr. elmendorf. and we are going to have a series of votes called. we'll work our way through five minutes each and hope people can come back and forth from votes so people who have questions can ask. dr. elmendorf. >> thank you. to all the members of the committee, i appreciate the opportunity to be with you today and discuss c.b.o.'s outlook for the budget and economy over the next 10 years. our analysis shows that the country continues to face very large economic and budget and hn come back and forth from votes so people who have questions dit and i'll turn to the budget. we anticipate that economic growth will remain slow this year, because the gradual improvement that we see in underlying factors will be offset by a tightening of fiscal policy scheduled under current law. the good news is the effects of the housing and financial crisis appear to be fading. we expect that an upswing in housing construction, rising real estate and stock prices an year, because the gradual improvement that we see w

dr. elmendorf is being very clear with us that we have to work together and replace the sequester. doesn't mean we are going to shirk our responsibility to address the long-term debt, the medium-term debt but if we are going to be stuck with this 7 1/2% unemployment rate, that is not sustainable. are there other policies that could help us that are within the control of the congress to create more jobs? categories. there are a number of changes in fiscal policy. higher spending or lower taxes than are under current law and as you know, few reports in the past few years of trying to evaluate the bang for the buck of different sorts of changes in tax and spending policy. turning off the sequester would be one item. >> did you also mention immigration in your outlook? the outlook. we have done other work. i think immigration can be -- more immigration can be a positive force for the economy in the medium term and long- term depending on what the reforms are that consider might consider. those are reforms that wouldn't take effect that would provide a big boost in the economy this year

dr. elmendorf at his chair and here to adopt the committee rules and oversight plan.oducing our new

dr. elmendorf, in terms of the negative economic impacts of sequester, .6%, what does that translate into in terms of lost jobs? >> so our estimate is that the sequester alone will reduce gdp growth this year by 0.6 percentage points, lowering the level of gdp at the end of the year. we think that would reduce the level of employment at the end of the year by 750,000 jobs. >> 750,000 jobs now and in this calendar year 2013, right-click >> yes, congressman. >> that's that's a whole lot of jobs obviously we should be working overtime to prevent that kind of job loss. if you were to replace the deficit reduction through that austerity program, because the sequester what the plan that accomplish the same deficit reduction spread over the ten-year period, you would not have that had jobs, if i right-click >> that's right, congressman. >> we've heard about the defense says. this is not sort of the congressional budget office and the republican leader, mr. cantor had it exactly right by september on the floor of the house when he said he allowed the sequester take place, quote, unemployment woul