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

Partial transcript of Q&A with Rep. Hakeem Jeffries (D-New York) 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. Hakeem Jeffries (D-New York):
…I believe you testified last year that the imposition of sequestration would cost the economy potentially 750,000 jobs that would be lost, is that correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
That sounds right to me, Congressman. I don’t remember specifically.

Rep. Hakeem Jeffries (D-New York):
Okay. And there were estimates, I believe, by Standard & Poor’s that the engineered, unnecessary government shutdown cost the economy about $24 billion in lost economic productivity, correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
I’ve seen an estimate but we have not done an estimate ourselves, Congressman. I can’t vouch for it.

Rep. Hakeem Jeffries (D-New York):
And I believe the CBO itself had said that as it relates to the failure to renew or extend unemployment compensation that could cost the economy 200,000 jobs during this calendar year. Correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes, that’s right.

Rep. Hakeem Jeffries (D-New York):
So there are choices that this Congress has made or will made – that will make moving forward – that could adversely impact the economy, economic productivity, and job creation moving forward, correct?

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

Rep. Hakeem Jeffries (D-New York):
Okay. Now, as it relates to the CBO discussion concerning the ACA, it’s your estimate that the ACA will result in the decline of full-time equivalent employment, correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
That’s how we – that’s one of the ways we’ve measured the effects that we’ve analyzed, yes.

Rep. Hakeem Jeffries (D-New York):
And just so I understand it, this stems from a net decline in the amount of labor that workers would choose to supply.

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

Rep. Hakeem Jeffries (D-New York):
I believe you said that on page 117.

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

Rep. Hakeem Jeffries (D-New York):
And so this estimate on the impact of the ACA’s – the estimate of the impact the ACA would have on labor market participation, you yourself nonetheless go on to characterize is substantially uncertain. True?

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

Rep. Hakeem Jeffries (D-New York):
And the reason why it’s substantially uncertain is because this is a new program and the impact of its imposition and the effects of the program are unclear. Correct?

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

Rep. Hakeem Jeffries (D-New York):
So, notwithstanding all of the hysteria that has been created over the last 24 hours related to your estimate on the impact on labor participation, by your own estimation, it’s not even clear that there will be an adverse impact moving forward. Correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
Congressman, we’ve not tried to quantify uncertainty. In some cases, we give the Congress not only our best estimate but a range of possibilities. That requires more analysis we’ve not really done in this case.

Rep. Hakeem Jeffries (D-New York):
Okay. But on page 118 of your report, you state that the actual effects of the ACA on labor participation could differ notably from your estimates. True?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes, that’s right.

Rep. Hakeem Jeffries (D-New York):
Now, it’s my understanding that the CBO also concludes that the impact of the ACA on the supply, even assuming that your estimates prove to be true, will be small or negligible for most categories of workers. Is that also your position?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes, that’s right.

Rep. Hakeem Jeffries (D-New York):
Okay. Now, just so that I understand it – and I believe this was pursued in an earlier line of inquiry – the reason why you estimate that the ACA could have an adverse impact on labor participation is because the ACA puts older workers in particular in a better position than they otherwise might have been in a certain stage in life. Is that true?

Douglas Elmendorf, Director of the Congressional Budget Office:
It puts a set of workers in a better position. Some of them are older workers and some are younger workers. We have not tried to analyze this for different age cohorts separately.

Rep. Hakeem Jeffries (D-New York):
And because it puts a set of workers in a better position, they might voluntarily decide not to participate in the labor market in numbers that they might otherwise have done. Correct?

Douglas Elmendorf, Director of the Congressional Budget Office:
Exactly, Congressman.

Rep. Hakeem Jeffries (D-New York):
Okay. Now, at the turn of the century, did the imposition of child labor laws reduce the impact on labor participation?

Douglas Elmendorf, Director of the Congressional Budget Office:
I think so, Congressman. I had never thought about that question.

Rep. Hakeem Jeffries (D-New York):
Okay. And did the standardization of the 40-hour work week in America reduce labor participation in this country?

Douglas Elmendorf, Director of the Congressional Budget Office:
It reduced the total number of hours worked, Congressman, I think yes.

Rep. Hakeem Jeffries (D-New York):
Right. And would you also say that the successful assault – not complete – but the successful assault on sweatshops in America reduced participation in the labor market?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes, I think it probably has, Congressman.

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