Transcript: Q&A w/ Rep. Earl Blumenauer on the CBO’s 2014 budget & economic outlook

Partial transcript of Q&A with Rep. Earl Blumenauer (D-Oregon) on the Congressional Budget Office’s (CBO) 2014 federal budget and economic outlook. The House Budget Committee hearing was held on Feb. 5, 2014:

Rep. Earl Blumenauer (D-Oregon):
…What I heard you say is that risk corridor, which we borrowed from the Republicans when they the prescription Medicare drug programs – there were risk corridor in there, were there not?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes.

Rep. Earl Blumenauer (D-Oregon):
And you just said that helped save money over the long haul, and that in your estimation…it will save money over the long haul under the Affordable Care Act?

Douglas Elmendorf, Director of the Congressional Budget Office:
I would say it’s only a three-year program as you understand. So I think over the three years that it’s in place –

Rep. Earl Blumenauer (D-Oregon):
I know. Unlike the Medicare prescription drug program that didn’t have a time limit, this is just three years. But if it were eliminated, it adds to volatility and probably will cost more…

…The difference between jobs and workers. The unemployment rate is very likely to go down even though there are people leaving the workforce. Because we’re not going to put a gun at their head and force them to work past retirement age or if for some reason they’re not tethered to a job because of their fear of losing their insurance, people might have more choices. So there are less participation for whatever reason but not less jobs. I appreciate that clarification.

I don’t know if you have had a chance for your team to look at an analysis from the Urban Institute and from the Robert Wood Johnson Foundation that found that 1.5 million Americans might start new businesses because of the freedom under the Affordable Care Act.

Have you folks looked at that report?

Douglas Elmendorf, Director of the Congressional Budget Office:
I think my colleagues have, Congressman, but I have not had a chance myself. We’ve not had a time to talk about it.

Rep. Earl Blumenauer (D-Oregon):
Well, I just thought it’s interesting that here’s an opportunity to increase employment and we would appreciate at some point getting some feedback whether the folks at Robert Wood Johnson and the Urban Institute were off in the ozone or if, as is usually the case, it’s pretty good analysis. That would be very valuable to hear that you experts if you’ve had a chance to look at it.

I wanted to just focus for a moment on this notion my friend, Mr. Woodall, talked about tax levels being high…and if I understood him correctly that we really haven’t seen this era of really high deficits in our history such as we’ve experienced and may be looking at in the future. My understanding – I’m just looking here at the chart that you provided that shows the long-term average for revenue was 17.4%. You think that that’s going to go up to 18.1% going forward as a percentage of GDP. But on the same chart on page 6 of the document that was provided to us, it shows back when we were actually in surplus, the revenues were higher than 19.1%. And I think my friend, Mr. Van Hollen, alluded to that in his opening statement…We have seen revenues that were higher back when we were producing surpluses. And we have seen deficits that were much higher back when we were struggling with a depression and World War II, and we get these things into balance…

I think what you’ve done here in your testimony was pointing out the difference between jobs and workers and loss of workforce participation is not necessarily bad, and that risk corridors are not some foreign concept that’s going to cost us money that we can steal as part of a budget debt ceiling notion, and that the revenues we’ve enjoyed over time when we were in surplus are actually higher than the – [time expired].

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