Opening Statement of Chairman Murray: The U.S. Economic and Fiscal Outlook with Federal Reserve Chairman Janet Yellen
May 08 2014
“This hearing will now come to order. Thank you to Ranking Member Senator Sessions and all of our colleagues who have joined us.
“Today we have the great opportunity to hear from the Chair of the Federal Reserve, Dr. Janet Yellen.
“Dr. Yellen, I want to start by thanking you for your leadership in encouraging stronger economic growth, stability, and job creation throughout your tenure at the Federal Reserve, as Vice Chair and now as Chair. It is wonderful to have you here.
“I also want to recognize your predecessor, Chairman Ben Bernanke, for the work he did on behalf of the country through some extraordinarily difficult times.
“I’m glad we have the opportunity today to talk about our economic and fiscal outlook, and the steps we can take to continue creating jobs and broad-based growth, now and over the long term.
“Dr. Yellen, your new role at the Fed comes at a dynamic time.
“Just a few years ago, the economy faced its biggest crisis since the Great Depression. We were hemorrhaging jobs, businesses faced a massive liquidity crisis, and markets were in a free fall.
“I think we all remember how grave the situation was, and how much fear and uncertainty there was throughout the country.
“As all of this unfolded, the Fed stepped in and acted boldly and aggressively. It cut interest rates. It launched new emergency programs. And it played a key role in coordinating the crisis response.
“Thanks in no small part to the decisive work of the Federal Reserve, our economy is much stronger than it was five years ago when the Great Recession hit.
“More workers are getting back on the job, and the unemployment rate has declined to 6.3 percent—the lowest level since September 2008.
“But as you’ve noted before, Dr. Yellen, the unemployment rate is only part of the story.
“Across the country there are still far too many men and women who simply gave up hope of finding a job and dropped out of the labor force.
“There are millions of workers who would like to take on more hours, but are stuck in part-time jobs that leave them struggling to get by.
“Millions more have been hoping for a much-deserved raise for years, but are still waiting.
“And as a result of decades of rising prices and stagnant or declining wages, families are finding it more and more difficult to buy a home, send their children to school, and save for retirement—the opportunities everyone in this room wants them to have.
“So while we have made real progress, there is still a lot we need to do to not only get more Americans back to work, but also encourage the kind of economic growth that leads to higher-wage jobs, more opportunity, and a stronger middle class.
“Taking a responsible approach to our budget challenges will be a critical part of this effort.
“Since August 2010, Congress has put in place roughly $3.3 trillion in deficit reduction over the ten-year window.
“Some of that deficit reduction came from letting the Bush tax cuts expire for those at the top of the income spectrum. But the majority came from deep spending cuts as a result of fiscally austere policies, fought for by many of my Republican colleagues.
“That includes the across-the-board cuts from sequestration, which impacted so many families and communities across the country.
“Today, our near-term budget outlook has improved significantly. We’ve stabilized the deficit as a share of the economy for the next several years. And the deficit for this fiscal year is expected to be about a third lower than what the Congressional Budget Office projected it would be five years ago.
“It’s important to keep in mind, however, that as many economists and experts have noted, fiscal austerity, like the steep spending cuts from sequestration, has actually hurt our recovery, slowed growth, and cost jobs.
“These cuts also crippled critical federal investments that make our workforce more competitive and expand economic growth in the long term.
“And while the cuts did contribute to an improved fiscal outlook in the next few years, they did very little to tackle the real drivers of our debt in coming decades.
“Over the last few years, the conversation about these two challenges—boosting our economy and getting our fiscal house in order—took place within a cycle of lurching from crisis to crisis on the budget.
“Those crises created a lot of economic uncertainty, and also put the focus on getting through the next crisis, rather than reaching agreement on measures to help the economy recover in the near-term and tackle our debt in the long-term.
“With the two-year budget agreement Chairman Ryan and I reached in place, we finally have a chance to look at these challenges without one budget deadline after another hanging over us.
“I’m very hopeful that we can take advantage of this opportunity, and that we will be able to build on the Bipartisan Budget Act by working together on a balanced approach that puts job creation and growth first, and also continues to address our debt and deficit.
“This means that even as we look for ways to tackle our long term budget challenges, we need to address other deficits we face in areas like: education, innovation, infrastructure, and research, which are critical to job creation and broad-based economic growth now and over the long term.
“It means we will need to follow the recommendations of bipartisan experts and include both responsible spending cuts and new revenue from those who can most afford it in our deficit reduction efforts.
“And, as we’ve seen in the last few years, we will need to protect our economy by phasing in deficit reduction over time, rather than allowing deep, immediate spending cuts, like those in sequestration, to slow growth and hurt our recovery.
“I strongly believe that if we can take this kind of balanced approach, our economic growth will be stronger and more broadly felt—right now for the millions of workers and families still struggling, and for workers and families in the decades to come.
“All of this will be especially important as the Federal Reserve begins to scale back its most recent round of quantitative easing.
“For most of the last three years, the Federal Reserve has had to step up its efforts because of the counterproductive austerity measures pursued by some in Congress. But in this more stable budget environment, I hope Congress will be able to work together to encourage job creation and growth in a bipartisan way.
“I know that there are serious differences between the two parties when it comes to the best ways to encourage growth and fiscal responsibility.
“But our work on the Bipartisan Budget Act showed that when Democrats and Republicans come to the table ready to make tough choices and compromise, we can find agreement, and take some sensible steps toward addressing the nation’s near and long-term economic and fiscal challenges.
“That is what the American people expect of us. So I’m very hopeful we will be able to continue making progress.
“Dr. Yellen, thank you again for the critical work you are doing, and for taking the time to be here with us today.
“And now I’ll turn it over to my colleague Ranking Member Senator Sessions for his opening remarks.”