Transcript: Q&A w/ Sen. Debbie Stabenow on the CBO’s 2014-2024 budget & economic outlook

Partial transcript of Q&A with Sen. Debbie Stabenow (D-Michigan) on the Congressional Budget Office’s (CBO) 2014-2024 federal budget and economic outlook. The Senate Budget Committee hearing was held on Feb. 11, 2014:

Sen. Debbie Stabenow (D-Michigan):
…I want to back up and start with some good news, and if in fact bringing down the deficit increases economic activity, we’d all be celebrating today.

Mr. Elmendorf, when you say that in 2009 we had a $1.4 trillion deficit; this year it will be $500 billion. Did I hear you say that?

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

Sen. Debbie Stabenow (D-Michigan):
Yes, that’s a pretty big drop. Pretty big drop. And we should actually view that as good news, and in fact, it is good news. It may not be good politically for folks who want to use the issue but it’s good news.

We’ve also had seen 8.5 million private sector jobs – we need more – certainly in the last few years and that’s a good thing.

Do you stand by your statement that says in your report in CBO’s judgment there’s no compelling evidence that part-time employment has increased as a result of the Affordable Care Act?

Douglas Elmendorf, Director of the Congressional Budget Office:
Yes, we stand by that, Senator.

Sen. Debbie Stabenow (D-Michigan):
Yes, thank you. So in fact, what we are seeing is job growth and what we need is more of it.

One of the things that is concerning to me in your numbers – for us as policymakers – is that you’ve indicated in discretionary – our investments in education, opportunity, rebuilding America’s infrastructure, innovation, those things we do to compete in the global economy – that in the next 10 years we’ll see the lowest investments in those things that affect people and opportunity, economic development since 1940? Did I hear you correctly?

Douglas Elmendorf, Director of the Congressional Budget Office:
So the specific fact, Senator, was that all of the federal spending apart from Social Security, the health care programs, and the interest on the debt. So the rest includes defense spending, non-defense discretionary spending, and the other benefit programs not in mandatory spending – that collection of programs together spending will be smaller as a share of the economy in 2024 under current law than at any point since at least 1940.

Sen. Debbie Stabenow (D-Michigan):
So, when we’re looking at a global economy competing with China, with those around the world investing like crazy and lower the cost of their college, to build their countries, to invest in clean energy and so on, we in America are actually going in the opposite direction. And I want to underscore that when you talk about economic growth mitigating some of the other factors, obviously we care about long-term deficit and obviously we want to continue to stay on a path of fiscal responsibility, but certainly growing would do an awful lot, creating jobs would do an awful lot to mitigate that.

My questions – I want to go back just one more time because I feel like we’re speaking two languages here on the committee as it relates to the Affordable Care Act, so I want to go back just one more time and ask you as it relates to the ability for people to have freedom to dream big dreams and make decisions without being chained to their desk or their job. One more time: Did the February 2014 report on the budget and economic outlook find that the Affordable Health Care law will end 2.5 million jobs?

Douglas Elmendorf, Director of the Congressional Budget Office:
What we’ve found, Senator, was that about 2.5 million – we found that people would reduce their work effort by the equivalent of about 2.5 million full-time equivalent positions. But that – [interrupted]

Sen. Debbie Stabenow (D-Michigan):
Okay, but that’s 2.5 million we would lose?

Douglas Elmendorf, Director of the Congressional Budget Office:
We said that – we did not say that 2.5 million people would lose their jobs.

Sen. Debbie Stabenow (D-Michigan):
Or that we would lose 2.5 million jobs in the economy?

Douglas Elmendorf, Director of the Congressional Budget Office:
We’ve not quantify the ultimate effect on employment. I want to be careful here, as you say, Senator. What we think that when people talk about – people outside of economic and budget people talk about people losing their jobs, they mean people who are laid off from jobs they want to keep. But what we’ve described in our report is almost entirely people who are choosing to work less or not to work because of the extra benefits they will receive under the Affordable Care Act and the withdrawal of those benefits as incomes rise. So there’s a reduction in the supply of labor that is driving the change, and the amount of the change is ultimately the reduction of the equivalent of 2.5 million full-time equivalent positions.

Sen. Debbie Stabenow (D-Michigan):
So, we’re giving people more choices, just like those who are very wealthy and live off investments can choose whether or not to be actively in the workplace or not or to do other things, philanthropic things, or to spend time with their families. We’re giving a choice to someone in my family, in fact, where this is very real who wants to stay home with her 18-month-old and has not been able to do that because her family’s health care comes from her job as opposed to her husband, who’s in small business. And so, they’re going to have a different kind of freedom to be able to do something, I would argue, that is just as productive, which is to raise a little boy and have mom at home.

Douglas Elmendorf, Director of the Congressional Budget Office:
So, Senator, as we were clear yesterday, we’re not judging – [interrupted]

Sen. Debbie Stabenow (D-Michigan):
I appreciate that…[overlapping audio].

What I’m doing is adding the evaluation, which is moms or dads being able to be home with little ones has tremendous value for their family and for all of us. And I’m so proud that we’re going to be able to give moms and dads that choice…I think that the freedom involved in folks being able to make choices is one of the wonderful things about moving forward and not having health care have to be tied to employment.

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