Mr. FAZIO. What would you do if you suddenly find you are not only assisting the two committees and other committees with their fiscal and budget responsibilities as you normally would be at this time of year, but also providing information that will surely be needed with respect to these negotiations? How do you spread yourself around enough to be able to handle the work load? Mr. PENNER. We have been worried about that, Mr. Chairman. Right at this moment, if there was a heavy workload in February, frankly, we would be in considerable trouble. We have this year the additional, enormous task of doing this report on the Grace Commission's 2,000 and some recommendations, aside from our usual things on the base line and the President's budget and so on. So it is an enormous task. So what we would have to do, frankly, is be absolutely brutal in having to reject requests that are not in our direct line of things that are required by law and devote every resource we could to fulfilling the needs of an extra group like this. Mr. FAZIO. Well, obviously, as one who is very anxious to see the analysis of the Grace Commission report, for my own reasons, I think we probably would all say this would have to take the lowest priority at the present time. It will get done eventually. Mr. PENNER. I am not sure all would say that. Mr. FAZIO. I understand a few wouldn't. We may have to deal with pressures for change generated by it. I welcome the opportunity to confront the issue. I really think you have to proceed with the work that is most related to the immediate first budget resolution. Mr. PENNER. Yes. Mr. FAZIO. That probably would have to be your priority anyway. Mr. PENNER. I won't say that it might be a problem for us. Jim, did you want to expand on this? COMPENSATION FOR OVERTIME Mr. FAZIO. How do you handle overtime? Everybody will be working much longer hours. Do you simply try to compensate for it later on in the year? Mr. FAZIO. You do keep track of the efforts people make? Mr. PENNER. Yes. Mr. FAZIO. I don't know how we compensate people. Maybe at the Defense Department if you discover a widget costs 28 dollars instead of 28 cents, they give you a gold watch. Perhaps there should be some Mrs. BOGGS. They try you. Mr. FAZIO. That is the way it was before. Now, they venerate you. Mr. PENNER. I think for a gold watch it has to be $2800. Mr. FAZIO. Silver-plated if it is 28. We should do something to recognize service above and beyond the call of duty. Mr. GREIGG. Well, we do a number of things, Mr. Chairman. We keep close tab. I think just like in your office, when anybody seeks employment or finds employment, they know there is no such 32-133 0-84--9 thing as being paid for overtime. That is the same way we are structured. It is just Hill procedure. We do have an awards ceremony though, during the appropriate time of the year at which we recognize outstanding effort. Mr. FAZIO. This wouldn't be the Christmas party, would it? Mr. GREIGG. No. In addition to that. Mr. PENNER. I got a plastic scissors at Christmas. Mr. FAZIO. We enjoyed having you with us for the first time, Mr. Penner. Good to see all of your staff back again. We don't have anything else at this time. Šome questions have been submitted by Mr. Conte to be answered for the record. I don't think there are too many things left to surprise anybody. [The questions and responses follow:] QUESTIONS FOR THE RECORD FROM MR. CONTE Question. Mr. Penner, first I want to join my colleagues in welcoming you on board as the new Director of CBO. The apparent lack of major controversy surrounding your appointment speaks well for your background, and I wish you well. I also commend you for holding the line in this budget request-no new positions and a current services budget overall. I am interested in a couple of CBO reports you mentioned in your prepared statement. As one of the three House Republicans on the bipartisan group which is to work with the President to lower the deficit, it would be very helpful to me to receive as early as possible the report entitled "Reducing the Deficit: Spending and Revenue Options" and your analysis in conjunction with GAO of the Grace Commission Survey on Government Cost Control. Can you say when this month those will be available? Would you make a note to have those delivered to my office, even in an early draft form, as soon as possible? Response. Congressman, thank you for your kind comments. The CBO report entitled "Reducing the Deficit: Spending and Revenue Options" will be released on February 8, 1984. Be assured that copies of the reports you have cited will be delivered in a timely fashion to your office. The joint CBO-GAO analysis of the Grace Commission Survey on Government Cost Control, which is being prepared at the request of the House and Senate Budget Committees, is scheduled to be released on February 28, 1984. A copy of that report will be made available to you. Question. You also mentioned an analysis entitled "Defense Spending and the Economy." What were the major conclusions of that analysis, especially in the area of jobs? Response. Economists differ widely in their views on the precise quantitative effects on employment of deficit-financed government spending. But most agree that broad categories of defense and nondefense spending on goods and services will have similar stimulative effects on employment in the short run. Economists also agree that the long-run employment effects of expansionary fiscal policy are nil. Thus, in the long run, jobs created by the federal government can come only at the expense of other employment. Econometric models generally predict that greater government spending will stimulate employment in an economy suffering from high unemployment. These same models predict larger employment gains if the spending goes for goods and services rather than transfers and if the spending is financed by deficits rather than taxation. Moreover, these models also assume that, if left alone, the economy eventually moves up to full employment. Since, in the long run, employment can be no higher, the models predict no appreciable change in long-run employment from higher government spending. The current version of the model developed by Data Resources Incorporated predicts that with all other policies fixed-an additional $10 billion in defense spending in 1984 would raise employment about 200,000. The model projects almost the same employment gain from $10 billion more in spending on nondefense goods and services. In either case, however, the model predicts higher inflation as a result of the added fiscal stimulus. However, there is enormous disagreement among economists about the reliability of such forecasts. Some believe that no appreciable growth would occur without increases in the money supply. Some even propose that only unanticipated increases in money can cause employment and production to rise above the paths they would obtain on their own. But regardless of whose views are most nearly correct, we - would not expect to observe large differences in employment stimulated by added defense or nondefense purchases. All of the theories predict about equal effects for these different kinds of spending. Question. I assume you are aware of this Committee's past position with regard to the use of outlays as a meaningful measure of appropriations levels. We don't believe the state of the art is such that it is a meaningful measure. Do you have any plans to improve methods of determining outlays, perhaps in cooperation with OMB and outside economic consultants? Response. Unlike most budget authority provided in appropriation bills, cash outlays that will result from these bills in any fiscal year must be estimated. As implied in your question, these outlay estimates are subject to errors. CBO, however, continually is reevaluating its estimating procedures to minimize potential estimating errors. To accomplish this, we compare our estimates regularly with the monthly reports of federal outlays by the Treasury. We also compare information on outlays with that of OMB, various Federal agencies and private organizations such as major banks and economic consultants. I also would mention that the techniques that CBO uses to estimate outlays for appropriations bills generally are consistent with those used for the budget resolution most recently adopted by the Congress. This permits a consistent comparison of outlays for appropriation bills with budget resolution targets, and in this sense are a meaningful measure. CLOSING REMARKS Mr. FAZIO. At this time we will thank you and recess the committee until two o'clock, at which time we will take up the Joint Economic Committee and the General Accounting Office. THURSDAY, FEBRUARY 2, 1984. JOINT ECONOMIC COMMITTEE WITNESSES HON. ROGER W. JEPSEN, CHAIRMAN, JOINT ECONOMIC COMMITTEE, A U.S. SENATOR FROM THE STATE OF IOWA BRUCE R. BARTLETT, EXECUTIVE DIRECTOR, JOINT ECONOMIC COMMITTEE JAMES K. GALBRAITH, DEPUTY DIRECTOR, JOINT ECONOMIC COMMITTEE Mr. FAZIO. We would like to welcome you, Senator Jepsen. Please proceed if you have any remarks that you would like to make, or you may summarize your statement. We would be happy to hear from you. For the record the request is $2,569,000, which is an increase over 1984 appropriation to date of $2,437,000. After adding a $75,000 supplemental the fiscal year 1985 amount would be a total increase of $57,000 (2.3 percent). Senator JEPSEN. It would be a net of $57,000, Mr. Chairman. 2.3 percent. Mr. FAZIO. Do we have a difference of opinion here? We will work on that and see if our numbers can be put in sync. Go ahead. Senator JEPSEN. Thank you, Mr. Chairman. I appreciate the opportunity to appear before you this afternoon to discuss the fiscal year 1985 budget request. I will summarize my statement. It is a primarily housekeeping request with the 2.3 percent requested increase which will be used exclusively for payroll and agency contributions that are allowed all the employees as per rules or guidelines set by the Congress. This is the eighth consecutive year that the committee has not requested an increase in staff. We are not asking for an increase in monies for any type of outside studies or consultant fees. This is a request which will keep the committee current with regard to the fiscal year 1984 budget appropriation. In our computation it is a $57,000 increase, which is 2.3 percent over the fiscal year. [The statements of Senator Jepsen, Mr. Hamilton and Mr. Wylie follow:] (131) |