Hearing of the House Budget Committee on Economic Outlook and Current Fiscal Issues

Federal News Service

HEADLINE: HEARING OF THE HOUSE BUDGET COMMITTEE

SUBJECT: ECONOMIC OUTLOOK AND CURRENT FISCAL ISSUES

CHAIRED BY: REP. JIM NUSSLE (R-IA)

LOCATION: 210 CANNON HOUSE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES: FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN

BODY:
REP. NUSSLE: Good morning and welcome to this hearing of the House Budget Committee. Today we have with us the very distinguished chairman of the Federal Reserve, Alan Greenspan, to discuss again with our committee the economic outlook and the federal budget.

Chairman Greenspan, welcome again to the Budget Committee. We appreciate the time that you are always willing to spend with this committee, discussing the economy and discussing the budget over the years. And we appreciate the opportunity for that discourse and discussion again today.

It's been about a year since you last testified before the committee-actually, almost a year and a half now. And at that time our nation was really still in the early stages of recovering from the terrorist attack of September 11th of 2001, their aftermath. We were facing uncertainties at that time about the war in Iraq and we still had an economy that at least appeared to me and to many of my constituents in Iowa, having a difficult time getting back on track, and I think it's true for many within the country.

No one should underestimate that the challenges that we've had to overcome these last three years have been difficult. And the fact we've been I think as successful as we have is really something that we need to discuss today with you. Why is it that we've seen some of the successes that we're on the threshold of being able to really take advantage of at this point in time? Today, we're really in a much different position and certainly a much better position than the last time you came before the committee.

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Ms. Capps. Then we're going to go to Mr. Toomey and then to Mr. Thompson.

REP. LOIS CAPPS (D-CA): Thank you, Mr. Chairman.

Mr. Greenspan, welcome to our hearing today. Thank you for being here.

In a recent speech that you gave to the Greater Omaha Chamber of Commerce, you highlighted the importance of good education to the long-term health of the economy. I read the speech with great interest, and I agree with your assessment that general access to quality education has been critical to our economic growth to date and it's perhaps even more critical to the future of our nation's success. And it's one of the reasons I am very disappointed with this administration's failure to meet its commitment on education funding.

But I also believe that similar arguments-and this is the reason for bringing up education, but similar arguments can be made about the importance of health care to our economy. And I would like to ask you about this subject in the time allotted to me.

As a school nurse, I can tell you that healthy students are better students. Illness and injury are a distraction from studies. I believe they're also a distraction from the economy. When large portions of the workforce lack health care, their ability to be productive is reduced and our economy suffers. The Kaiser Commission on Medicaid and the Uninsured reports that 40 percent of non-elderly uninsured adults have no regular source of health care and forego needed care, and that over a third of the uninsured had trouble paying medical bills in 2003, a quarter were contacted by collection agencies, and that the uninsured are more likely to be hospitalized for avoidable reasons.

For these reasons, it's my belief that making sure our population has good access to quality health care is also a critical element in sustained economic growth. And in the context of this hearing today, with what you've told us about the baby-boom generation, I'd like to focus on that younger subset and ask you your assessment of the importance of access to health care for our economy today.

MR. GREENSPAN: Well, if I were to list all of the various things, programs, commitments, ideas that would be helpful for this economy and this society, I think I would prove that we find that the indispensable number of programs which have to be funded represent a percent of the GDP which is not capable of being reached.

So I emphasize again the question of process: that we've got to line up what various priorities are. And the only vehicle this country has got to do this is the Congress of the United States. I mean, you are the representatives of the people, and we all can't -- 300 million of us can't get in the middle of the street and make these decisions. It's got to be made. And in the process of being made, a number of highly desirable programs don't get funded. And there is no choice about that. In other words, it would be very nice if the GDP were twice what it is and we could do all of this, but it isn't. And it won't be. And so we are confronted with the issue of choice. And choice presupposes process. And I don't know any other way to do with it.

I can't disagree with anything you just said. I'm sure that if I were to look at the evidence, I'd find exactly what you're saying is correct. And yet if you line up all of the potential programs, all of which are highly desirable-indeed, in one sense almost obligatory-we don't have the resources to do them all.

REP. CAPPS: If you say that health care is one of a number of many programs, we're not getting to the fact of how basic it is to survival and to productivity. There are a number of ways that we can deal with health care. That's what we're faced with here.

Professor Gruber of the MIT says that this administration's tax credit proposal-which, you know, is a proposal, one of the programs that is being suggested to help-will only help 1.9 million of the 40 million uninsured despite its $70 billion price tag. So I'm asking, in the brief time, if there is a way that we can structure the programs, any programs, to more adequately address this need.

MR. GREENSPAN: Mrs. Capps, I'm not sufficiently familiar with the program to give you any sensible judgment on that. I do know, however, that every program that you get involved in is extraordinarily complex, and initial views are often wrong, especially when you begin to look at the details. And I wouldn't even hesitate-I would hesitate, I should say, to try to get involved in something which I know would take me five hours to get a good -- (inaudible).

REP. SHAYS: I thank the gentlelady.

REP. CAPPS: Thank you.