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chairman simpson:it seems a little cool in here. i think, i was just reflecting,i think you could hang meat in this room. it's rather cold. it's just perhaps,perhaps just me. anyway, please proceed. (inaudible) (laughter) chairman simpson:no, i feel very warm toward you, and i don't even know you. bob mcintyre:hi, i'm bob mcintyre, and i'm director of
citizens for tax justice. i've been doing this businessfor 34, 35 years now. i mention that not so much toexplain why i'm so old and gray and decrepit, but just to letyou know that i came in to this before president reaganallegedly taught some people that deficits don't matter. we always thought they did,because tax fairness does, also means that you don't borrow themoney from the future and put it on the next generation, butthat you pay for it now.
so we've been long-time deficithawks, and we're glad to see that this commissionis working on it, too. now, i assume when all the dustclears that the results from the commission will include bothrevenue increases and tax reductions, and i'm only goingto talk about the -- excuse me, tax increases, and i'm onlygoing to talk about taxes because that's the onlydamn thing i know about. what you do on thespending side is up to you. and here's what we think youought to do on the tax side.
income taxes. the tax that we know and love,sort of, is the part of the tax system that we need to fix. it's a mess. we haven't had a real reform ofit since 1986, the barnacles have gotten very deep, and itdoesn't raise enough revenues to pay for the government. in general we think you need toget the personal income tax back up to about 10% of the economy,and the corporate tax back up to
about 3 or 4% of the economy ascompared to the 7 or so percent that the personal income taxis now and the 2% that the corporate income tax is now. now how do you do that? well, part of it would be to getrid of more of the bush tax cuts than president obama hasbeen willing to address. he's suggested keeping 80% ofthose bush tax cuts, which are a big part of our deficit problem,and it's going to cost three and a half trillion dollars over thenext decade if he does keep them all.
he's got a rule that says nobodyunder $250,000 should ever pay a nickel more in tax. i think that's way too higha level and we've got to get people like me involved inhelping pay for this government a little more, too. the second and more importantpart or as important is we need to close the loopholes that havegrown into the tax code over the last 25 years. and you need to focus on what ithink is the gross undertaxation of capital income.
now i say that and you're goingto be shocked to hear it, i don't know. a friend of mine who used to runthe joint tax committee said to me recently, he said, you know,the economists all seem to think that we way overtax capitalincome, the tax lawyers know that we hardly tax it at all. well, i'm a lawyer, and, youknow, if you look at what's going on with profits, u.s. profits being shifted offshore,a depreciation system that in conjunction with the interestdeductions produces negative tax
rates on virtually every realcapital investment in this country, what we have left inthe corporate income tax right now is mostly just thegovernment's return on the tax subsidies that are providedto these investments. there's really hardly anythingleft because the rates are generally negativeon most investments. the offshoresituation is a mess. i've been mentioning going toterritorial would make it even more of a mess, as presidentbush's tax commission, which
endorsed territorial, admitted. we get a bonus out of theloophole closing reform besides raising revenue, it willprobably help the economy because you won't have thegovernment telling businesses what to invest in. we'll have markets and consumerdemand deciding those things, and that's the wayit ought to be. that's the way we did it in 1986under president reagan and bob packwood and dan rostenkowski.
see what a bipartisan guy i am? and finally one thing,the value-added tax. don't do it. it's incredibly complicated,it's incredibly regressive, and it does nothing for us on trade,and if you wanted to read my story about why that's true,that and other things you can find on our web page at ctj.org. thanks a lot. chairman simpson:i see you're still disarming people with your humor,
hanging around -- bob mcintyre:i got that from you. chairman simpson:yeah. no, you're better atit, you always were. julio abreu:good afternoon, chairman simpson and members of the fiscal commission. my name is julio, i'm thepresident of the coalition for health funding and seniordirector of government affairs of mental health america.
i'm pleased to offer thisstatement on behalf of the coalition to inform your policyrecommendations on reducing the federal deficit. since 1970, the coalition hasadvocated for sufficient and sustained discretionaryfunding for the u.s. public health service, includingnih, cdc, hrsa, samhsa, arc, fda, and the indianhealth service. that's quite apublic health team. our diverse membership of over60 national organizations
represents the fundingpriorities of over 100 million patients, health care providers,public health professionals and scientists, nearly athird of our population. we support the belief thatfunding for the public health service is essential forimproving health and health care through greater access, higherquality, lower costs, improved safety, faster cures, andultimately healthier people. costly and often preventablechronic conditions like asthma, diabetes, heart disease andobesity, particularly among our
young people, are on the riseand threaten our military readiness, our academicachievement, and our social -- societal productivity. and we are just one flu pandemicor biological attack away from a disaster of monumentalproportions. the coalition's pressing andimmediate goals are to build the capacity of our public healthsystem to address these and other health needs and tosupport the implementation of the affordable care act.
in this regard we urge you toconsider opportunities to both reduce federal spending andalso raise federal revenue. in particular, we should lookbeyond nondefense discretionary spending which represents lessthan half of all discretionary spending as the principalvehicle for deficit reduction. we believe recent efforts incongress and the administration to cut nondiscretion --nonsecurity discretionary spending are short sighted,they just won't reach our goal. such efforts disproportionatelyrestrict funding for critical
public health programs, weakenour ability to respond to a health crisis, and immeasurablyharm america's most vulnerable, who rely on the federalgovernment to provide basic and necessary services, particularlyin these times of economic hardship. furthermore, such efforts willnot substantially reduce the deficit, nor make a dentin the national deficit. nondefense discretionaryprograms comprise only 20% of all federal spending. indeed, the real costs of thesecuts far outweigh the perceived
fiscal benefits. the public health infrastructureis continually asked to do more with less. on average federal investment inthe agencies of public health service has increased by only2.5% per year over the last five years, and many agencies'budgets have increased at a much slower rate, well belowthe rates of inflation and population growth. the erosion of the public healthcontinuum is felt in communities
across america, with stateseliminating hundreds of millions of dollars in public healthprograms and reducing their workforces by 15%. these cuts have left communitiesaround the country struggling to deliver basic prevention andemergency help preparedness services at a time when thepublic health infrastructure is already buckling under theweight of ongoing recession and aging population -- no one herein this room is included in that -- raising rates of chronicdisease, and behavioral health
conditions, and a healthworkforce shortage. a nondefense discretionaryspending freeze would have a devastating effect on the healthof our nation and seriously hinder the impact of theaffordable care act. only with increased investmentin public health can we build capacity to transform our healthsystem from one that reacts when people are sick to one thatproactively keeps people healthy. that's the best way to trulybend the cost curve and reduce the federal deficit.
we hope you will consider thesocial cost of discretionary spending cuts and the valueof public health programs in reducing health care costs andimproving the lives of american families. we look forward toworking with you. thank you. and i apologize to you and to myfellow panel members, but i have an airplane to catch that i'mperilously close to missing, so i want to excuse myself. chairman bowles:i'm only hoping to make a 9:00 flight tonight.
julio abreu:good luck, mr. chairman. deborah weinstein:good afternoon, chairman simpson and bowles, members of the committee and staff, thankyou for your patient attention and thank you for theopportunity to share the views of member organizations ofthe coalition on human needs. my name is deborah weinstein,i'm executive director of the coalition on human needs. i have peppered you in themiddle of the night with copies of a letter signed by 119national organizations which i
am submitting as partof this testimony. speaker:and thank you for it. deborah weinstein:thank you for noticing it. the letter asks you to makethe commitment that your recommendations to reduce thedeficit will not make low and moderate incomepeople worse off. we ask this out of an urgentconcern about our nation's future. the service providers, faithgroups and others who signed this letter all report thepainful impact of the recession.
economists tell us that ifwe had the official poverty statistics for this year, theywould show that more than one in four of our childrenis living in poverty. there is ample research to showthat children growing up in poverty are more likely to havepoor nutrition, become sick, be hospitalized, move frequently,fall behind in school, and drop out of school, thanchildren who are not poor. in multiple ways, poverty placesroadblocks to opportunity. we cannot afford to close doorsto millions of our children and
youth and expect our futuresecurity and prosperity to be assured. neither can we afford to deepenpoverty for the unemployed, people with disabilitiesor retirees. that will increase governmentcosts and shrink consumer spending. your commission, yourcommission's mission is not concerned with today's crisis,but you must determine whether your recommendations will setin stone policies that deny opportunities to those currentlyleft out of whatever glimmerings of recovery we arenow experiencing.
if your recommendations preventadequate investments in nutrition, public health,education, youth employment, and rebuilding low incomecommunities, today's children and young workers will be morelikely to drop out of school with reduced job prospectsand productivity. today 25% of our youthdrop out of school. we should be investing to reducethat number and to increase the number of students who completepost secondary programs. we do not dispute that there areserious choices ahead of us, but
we do dispute that the choicesinevitably must hurt the poor and vulnerable. in an analysis by the center onbudget and policy priorities, the bush era tax cuts andspending on the wars in iraq and afghanistan alone will add $17trillion in deficit spending from 2009 through 2019. since 2001, tax cuts account foralmost half of deficit growth, military spending isresponsible for another 35%. the commission should directmuch of its attention to fair
and adequate revenues andwasteful military spending. when faced as we are with aprolonged period of unemployment and rising poverty, it is vitalthat we know whether proposals will make conditions worse. we urge you to find out whetherthe proposals you make will make conditions worse. it will be tempting for you tosimply call for percentage cuts in certain types of spending,but if you recommend spending cuts without coming to gripswith what those cuts will mean,
it will almost certainly resultin a further reduction in support for education, for jobtraining, work supports like child care and public transit. these cuts will assuredly makelow and moderate income people worse off. the commission ought to play aleadership role in turning away from these grave missteps. as the letter states, anexplicit goal to protect the most vulnerable in our nation,together with the impact
analyses to ensure the goalis being met will assist the commission in producingrecommendations that can put the nation on a sustainable fiscalcourse without harm to those who have no margin tosacrifice more. joel packer:mr. chairman, thank you for the opportunity to present the views of the committee for education funding or cef. i'm joel packer, executivedirector of cef, which is the nation's oldest and largest -- (audio cuts out)
we come before you today with one simple message long-term economic growth and our global competitiveness. increased investments ineducation are also a moral imperative. our nation continues to faceunacceptable gaps in educational achievement and attainment atall levels, student academic achievement, high schoolgraduation, college attendance and college completion. african americans and hispanicslag behind their white peers in all of these categories, as dolow-income students and students
with disabilities. as an example, looking at fourthgrade reading, in 2009 only 15% of african-american studentsscored at the proficient or higher level, as did only 16% ofhispanic students, compared to 41% of white students. while about 70% of students earntheir high school diploma, among minority students only58% of hispanic, 53% of african-american, and 49% ofamerican indian and alaskan native students do so.
lower levels of educationalattainment directly translate into lower levels of earnings,lower levels of tax payments, and increased levels ofgovernment spending on social service programs. looking at the impact ofeducation on unemployment, individuals with less than ahigh school diploma had an unemployment rate three timesthat of those with a bachelor's or higher degree, yet thefastest growing segments of our population are from these veryracial and ethnic groups who are
still being left behind. between 2006 and 2020, thewhite population's projected to decline by 6%, while africanamericans will increase by 10%, and hispanics by 33%. our failure to close theseeducational gaps threatens not only the future of tens ofmillions of children from these groups, but also threatens ourlong-term economic outlook and our global competitiveness. at the same time that we mustaddress these achievement gaps,
our schools and collegesalso face record levels of enrollments with increasesprojected throughout the decade. making matters even morechallenging, the educational attainment level requiredfor jobs continues to rise. estimates are that by 2018nearly two-thirds of all jobs in the united states will requiresome form of post secondary education or training. we are also losing our edge inthe global knowledge economy. america's high school graduationrate, once the best in the
world, now ranks 18th amongindustrialized countries. and our share of the world'scollege students has dropped from 30% in 1970 to lessthan half that today. investments in educationdirectly increase earnings and thus revenues. it's estimated that over thecourse of their working life, a bachelor's degree recipient willearn nearly $1 million more than an individual who onlyhas a high school diploma. research has also demonstratedthat if we close achievement
gaps, revenues and gdp willsignificantly increase. if the number of high schooldropouts was cut in half, the government could reap $45billion via extra tax revenues and reduced costs of socialservice program spending. if we had closed the gap betweenour educational achievement levels and those ofbetter-performing nations, gdp in 2008 could have been between$1.3 trillion to $2.3 trillion higher. however, despite -- in spite ofthese facts, the share of the federal budget devoted toeducation is less than 3% of all
federal outlays. cef supports increasing thisshare of federal spending to 5% of outlays. solving our nation's fiscalsituation and reducing the debt can't and won't happen simplyby cutting federal spending, capping discretionary spending,and freezing education. investments in education areinvestments in our fiscal future, and oursocietal well-being. when what one earns isincreasingly linked to what one
learns, when the globalleadership of the u.s. is threatened by other countriesoutperforming us on education and when the need to close oureducation gaps is greater than ever, education deserves to andindeed must become a larger share of the federal budget. chairman bowles:it's kind of interesting, in this year if you look at the naep scores, andtake a little city-state like singapore, 44% of their eighthgraders scored at the most advanced level inmath and science.
in north carolina, less than34% of our kids were even proficient, must less at themost advanced level, and less than 14% of our lowincome kids were. joel packer:right. chairman bowles:and if you think about what happens to those eighth graders, for every 100eighth graders 58 graduate from high school, 38 go to college,28 come back for the second year, and 18 graduate. that is a formula for failurein a knowledge-based global economy.
joel packer:you saidit better than i did. (laughter) (inaudible) chairman simpson:anyway, thank you very much. very helpful for us. i mean that. we learn. go forth and multiply. joel packer:thank you. chairman simpson:yes, now the next group, if you'll come forward
and as i say, get comfortableand then tell us your name and the group you represent, andwe're probably about at the halfway mark here. he thinks he's going to get outof here at 9:00, he's crazy as hell. no, i didn't mean that. well, thank you. and thank you to the commissionmembers who have stayed. david cote has just left, annfudge, you're very -- and kent conrad was here and andy stern,we appreciate that very much.
you're very helpful. so, go right ahead, please. rob nichols:thank you, chairman simpson, chairman bowles, members of thecommission, thank you very much for the opportunity toparticipate in today's hearing and to share our perspectiveregarding our national's fiscal circumstances. my name's rob nichols, i'm thepresident of the financial services forum, it's anonpartisan financial and
economic policy organizationcomprised of the chief executive officers of 19 of the largestand most diversified financial institutions that have businessoperations here in the united states. our nation's fiscal condition,which as you know has deteriorated appreciablysince the onset of the recent financial crisis, representsperhaps the single greatest threat to financial stability,our nation's standard of living, and the productivevitality of the u.s.
economy over the longterm, longer term. with that in mind, theimportance of your charge to identify and recommend policiesto improve our nation's fiscal situation in the medium term andachieve fiscal sustainability over the long termcannot be overstated. we thank each and every one ofyou for your service to this critically important effort. given the large volume ofspeakers today, i'm sure others will ably outline differentproposals to fix the situation
and the deteriorationof our fiscal situation. instead i thought i would verybriefly touch on the risks of inaction to ourfinancial markets. failure to meaningfullyaddress the nation's fiscal circumstances entails a numberof financial dangers that could significantly impact theproductive vitality and job creating capacity of the u.s. economy. principal among these is therisk that global investors could become increasingly worriedabout america's debt position
and begin demanding higher riskpremia to continue purchasing u.s. government debt. at current elevated levels ofdebt, rising interest rates could quickly compound analready challenging debt situation, adding further to thenation's debt burden, increasing investor anxiety, leading toeven higher interest rates, and touching off a vicious circle ofdeterioration, often referred to as the debt trap. moreover, given that treasurybills and bonds are the basis
for borrowing structures inprivate credit markets, the impact of rising government debtrates on the cost of capital, economic growth and job creationwould be far-reaching and decidedly negative. given the likely impactof higher rates on u.s. economic prospects, anotherrisk associated with further deterioration in the nation'sdebt position is that investors may become increasinglyreluctant to hold dollar denominated assets.
as investors increasinglychoose foreign investment opportunities, the relativevalue of the dollar would fall, undermining america's purchasingpower and our standard of living. the falling dollar, of course,also has dangerous implications for inflation. finally, given the likely impactof higher interest rates, slower growth and a falling dollaron asset prices and market confidence, furtherdeterioration in the nation's debt position would likelybe associated with greater
financial market instability. history teaches us that sharpreversals in market confidence occur abruptly, often withlittle if any advanced warning. greece is but the most recentexample of this historical pattern. because broader circumstances,not to mention global markets' reaction to them cannot bepredicted or anticipated with any kind of certainty, prudencestrongly suggests that the u.s. act decisively long beforecrisis becomes a realistic possibility. thanks very much for theopportunity to participate
before the commission, and moreimportantly, thank you very much for your service to our nation. we're extremely fortunateto have your leadership. donna meltzer:chairman simpson,chairman bowles and distinguished members of thecommission, my name is donna meltzer and i currently serve asthe chair of the consortium for citizens withdisabilities, or ccd. ccd's members are organizationsthat represent the needs of people living with disabilitiesand their families.
we conduct our work through avariety of task forces, banding together to advocate for publicpolicy that will positively affect people with disabilities. i appreciate the opportunitytoday to share some of our collective thoughts with you,and have submitted a longer version in writing. sound federal fiscal policy iscritical to ensuring adequate resources to support programsthat promote the independence and productivity of children andadults with disabilities in the
unfortunately, federal resourcesfor these vital programs has been eroding overthe past decade. the result of this lack ofinvestment is that more, not fewer children are deprivedof all of the best in a free, appropriate public education. more, not fewer people withdisabilities find it hard to get and keep gainful employment. more, not fewer families arefinancially devastated by the lack of assistance withexcessive health care expenses
for their family member with adisability, and more, not fewer communities are diminished bythe lack of inclusion of and participation from some of theirmost valuable citizens, those ccd supports workingtoward a strong economy. this can be accomplished iffederal funding decisions and tax policy do not result in afederal budget that is crafted at the expense of peoplewith disabilities. services, supports and benefitscritical to the well-being of people with disabilities andtheir families are protected,
improved and expanded, and whenneeded the federal government leads or assists states in beingfair and efficient in carrying out their responsibilities topeople with disabilities and their families. reductions in entitlement anddiscretionary spending threaten health care and quality of lifefor people with disabilities. medicaid policy changes as wellas changes at the state level could adversely affect ourconstituents, eliminating critically-neededservices and supports.
since our most vulnerableconstituencies who receive supports, their futures areinextricably linked to any shift in medicaid policy. certain changes to our socialsecurity system also could have a devastating impact onbeneficiaries and on human services funding. there are three areas in whichthe disability community is most focused right now: employment,health, and long-term services and supports.
by addressing the need to employpeople with disabilities, providing health care andaddressing the fact that people with disabilities may needlong-term care for many years, we can begin to eliminatesome of the fiscal burden we currently know. recent enactment of theaffordable care act puts into place a number of health andlong-term care programs that we believe will, over time, yieldsignificant positive results and reduce the current burdenon the medicaid program.
we strongly caution thatthese programs be allowed to materialize before consideringany further cuts to critical health and long-termcare programs. subsequently, there are manydiscretionary programs in addition to entitlement programsthat result in helping people with disabilities findemployment, and equally if not more importantly,keep their employment. incentives to work and aneventual end to poverty or underemploymentshould be encouraged.
ccd urges the commission toconsider some of the following: the failure of our nation,states and communities to honor the civil rights of individualsof all ages with disabilities is a cost we cannot afford. we need to address thesignificant unmet needs of people with disabilities andtheir families by increasing existing federal fundingand expanding the federal government's investment inpeople with disabilities to enable them to live and work asindependently as possible in the
community with appropriateflexible long-term individual and family supports. this will result in creatingtaxpayers and fewer who are needing help. most importantly, what i'd liketo say today is that i'm a mom. i'm the parent of a 13-year-oldson who lives with three different diagnoses thathe battles with each day. i hope that together on behalfof my son and the millions like him, we are able to create acountry with a sound fiscal
situation that provides supportsin school, supports at work, good health care, and acommunity that is caring and supportive of all of our people. on behalf of ccd we look forwardto working with all of you as you continue to do yourvery difficult task. thank you for what you're doing. joe guggenheim:good afternoon, members of the commission. my name is joe guggenheim,from bethesda, maryland. i'm just an individual citizen.
i'm now a mostly retired-- oh, is that on? i'm sorry. i'm joe guggenheim,bethesda, maryland. i'm now mostly a retiredbusiness person and publisher. in the interest of fulldisclosure i have to admit that in fact in my earlier yearsi was once an economist. thank you so very much forgiving individuals like myself a chance to talk to you on thesecritical issues that you're facing. i urge the commission to help toachieve long-term fiscal balance
primarily by emphasizing avigorous policy of promoting economic growth andfull employment. moving toward balanced budgetsin the short term or medium term is not nearly as important asfull employment and the economic well-being of all americans. to increase our anemic currentrate of economic growth we need targeted public investment thatshould probably include major spending on critically neededinfrastructure, education at all levels in job training, andhelping to revitalize distressed
communities by providingtraining and jobs for the unemployed residentsof these areas. the commission should also playa critical role in dampening the outcry against any more fiscalstimulus now which we need to bring down excessiveunemployment. in the long run, a high-growtheconomy can produce enough tax revenue to meet our nationalneeds when combined with prudent measures to raise revenues andreduce questionable spending. as a society, i believe we cansustain national debt as a
higher percentage of ourtotal economic output. i believe we really do not knowthe difference between the potential impact of a nationaldebt of 50% of gdp as opposed to the impact of a nationaldebt of 100% of gdp. for more than 50 years i haveread the predictions of the forthcoming ruination of ournation because we were not balancing the federal budget. i am still waiting to hearexactly how the economic and social well-being of ourcitizens has suffered over these
50 years of budget deficitsbecause of the budget deficits. as a prosperous society, thereis no reason that we cannot sustain current benefit levelsof social security, medicare, and other entitlement andneeded social spending. the focus of budget policies inthese areas should be on cutting costs, rather thanreducing benefit levels. better balancing of our budgetscan also be achieved through substantial reductions inmilitary spending, ending our two wars, eliminating taxloopholes and unnecessary tax
expenditures, taxing capitalgains at the same rate as regular income, substantiallyincreasing irs efforts to audit tax returns, and if necessary,increases in income tax rates for upper middle incomeand wealthy individuals. because our nation is facingstagnation and low growth in the size of the labor force, along-term solution might also include substantially revisedimmigration policies to attract skilled and/or motivatedimmigrant workers who would reduce the ratio of retiredpersons to active workers, would
contribute to economic growth,and would produce substantial increases in social security andmedicare tax receipts to help pay for entitlement programs. highly developed europeannations have used immigration to counter the impact of a stagnantpopulation and labor force. our own cities with largenumbers of immigrants such as miami, new york, and los angeleshave prospered in recent years. for over 100 years, this nationhas prospered mightily as millions of hard workingimmigrants looking for a better
life flocked to our shores. we can learn something fromour past history in this area. in the year 2001, the ten-yearbudget outlook by the congressional budget officeenvisioned substantial budget surpluses and a totalelimination of our national debt. what's happened in the interim? that outlook in 2001 envisioneda higher rate of economic growth. unfortunately, our situation istotally different today because of the two wars, the bush eratax cuts, anemic economic
growth, and a major recession. if this commission, because oftime and personal constraints is unable to fully investigate whatpolicies are needed to promote full employment and rapideconomic growth, you might recommend that anotherpresidential commission be appointed to makerecommendations on these vital issues. thanks so much forlistening to my ideas. chairman bowles:may we have the next group, please. if you'll just introduceyourself and start.
dan siciliano:mr. chairman, commissioners, thank you for having me. thank you for this opportunity. my name is dan siciliano, andi am a senior fellow with the immigration policy center, partof the nonpartisan american immigration council. i am perhaps as importantly thefaculty director of the arthur and toni rembe rock center forcorporate governance at stanford university, and a member of thelaw school faculty, where i teach venture capital financeand corporate finance.
i think today you've received alot of technical information, we've also entered severaltechnical reports into the record and some other testimony,and it seems like you are bombarded with a lot of datawhich i'll try not to add too much to, but rather perhapsprovide in this limited amount of time some logical informationthat ties some of these pieces together with a focusparticularly on immigration reform. and so the prior witness was agood segue to what i hope to bring up.
i'm hoping to land in the sweetspot where intellect i hope meets up with intuition. i'm going to suggest thatcomprehensive immigration reform must be a part of anysophisticated analysis or recommendation that comes fromthe commission, in part because we know that immigration hasa lot to do with innovation, business formation, and overtime, industrial and job formation. first, i think it's the easiestcase to make the connection between innovation, economicgrowth, and skilled immigration.
andy grove, cofounder of intel,put it best when he suggests that each time one of the bestand brightest from the globe arrives in the united states,is kind enough to typically pay full tuition at a university,a university like stanford, oftentimes subsidized by theirgovernment, and then graduates with a technical or highlyskilled degree that we seek, perhaps we should simply staplea green card to their diploma and hope that they stay andreturn the favor of having already paid our universitiesbut also form companies that are
great and prosperousand employ many people. this analysis comes from thecongressional budget office, from the kauffman foundation,the connection between highly-skilled immigrants andinnovation and job growth is fairly clear, but let me tiethat in a way which is a little bit harder to articulate andsometimes not obvious to comprehensive immigration reformand the 10.8 million people who are here in anundocumented fashion. so first it's worth noting thatthe economic consensus has
emerged fairly strongly in thelast several years, led by work done by a labor economist namedgiovanni perri at uc davis, and some of his work is entered intoyour record, that shows that the aggregate income of u.s. born workers nine out of ten times is enhanced by the presence of all types of immigrants. and this has a lot to do withthe fact that we know that the u.s. sensitivity and positive signaling to the world about immigration causes thosewho have choices as skilled immigrants to decide to cometo the united states and our
graduate programs versus theother choices which they increasingly have in places likesingapore, dubai, uk, and other places. and so how we treat and howwe provide communities of all immigrants, includingundocumented immigrants, impacts their selection and theircontribution to our economy in the future. but as importantly, perhaps thenontechnical innovation and the small business formation and thegeneral labor market dynamism that results from entrepreneursgenerally which are drawn from
both the documented andundocumented population is an important point for you. we know that significantcomponents of our economic growth in the '90s came inpart from a surge of legalized individuals who had beenotherwise well disposed to entrepreneurialism and good ataggregating capital, but had not felt it easy to emerge fullyinto the integrated economy. we have that same scenario now,and so in turn, it turns out that immigrants of all types,skilled and unskilled, have a
propensity for strategic andeffective risk taking, have a profile which is amenable bothto aspirations for themselves and their children that leads tojob formation, and then in the end, perhaps as demonstrated inthe '90s, are good at forming companies which generate jobsand in turn generate revenue. comprehensive immigration reformwould jump start that capital formation and would allow thatpent up capital in part to be unleashed. that and a normalization perhapsgoing from in 2003 to now, nine to more than $17 billion ofenforcement, a normalization of
that enforcement would also helpequalize budget allocation. i'm happy to answerany questions. chairman bowles:thank you. dan siciliano:thank you. katie robbins:good afternoon, chairman bowles, chairman simpson, and members ofthe committee and staff. thank you for thisopportunity to testify. my name is katie robbins, i'mthe national organization -- i'm the national organizer ofhealthcare now, an organization
founded in 2004 tosupport bill h.r. 676, the national health careact for expanded and improved medicare for all. with membership in 50 states,healthcare now has broad support for single-payer health care. healthcare now opposes anyconsideration of cutting, privatizing or raising ageeligibility for social security, medicare and medicaid. we seek to strengthen, notweaken our social safety net.
if passed, h.r. 676 would establish a national single- payer medicare for allsystem, granting everyone inthe united states access to comprehensive high-qualityhealth care using our existing privately run infrastructureand a progressive financing to guarantee coverage for allnecessary medical care without financial or other barriers. according to harvard universitystudies, eliminating the waste of the multipayer privateinsurance industry in our health care system and moving to asingle-payer system will save
$400 billion a year. more savings are found incost controls that only a single-payer system can provide,such as negotiating drug costs and medical equipment andglobal budgeting for hospitals. since h.r. 676 was introduced in 2003, it has received tremendous support, including endorsements by 582union organizations in 49 states, the u.s.conference of mayors, 63 local governments, including ten of the nation's 30 largest cities. the episcopal church, theunited methodist church, the
presbyterian church, theunitarian universalist church, the united church of christ, andthe majority of nurses, patients and physicians support this. broad support for single-payermedicare for all continues even after the new healthlaw has passed. for example, this past saturday,june 26th, america speaks, a privately-run company, organizedtown hall meetings in 20 cities across the country to discussthe nation's deficit. america speaks received fundingfrom the peter peterson
foundation, the same foundationwhich i understand is funding staff to this fiscal commission. peterson is known to be vocallyin support of cutting and privatizing socialsecurity and medicare. america speaks claim that alloptions would be considered, yet the materials distributed by theevents did not include an option to support single-payer healthcare as a means of controlling health care costs. despite efforts to silencesupport for single payer, many
participants at these meetingsdemanded the option to vote on a single-payer type health caresystem which would ultimately reduce costs by making healthcare more efficient rather than just cutting services inmedicare and other public sector programs. participants also votedoverwhelmingly for defense cuts and for progressive taxation. because cost controls arenotably absent from the new health law, the nationalcommission of fiscal responsibility should listen towhat the public is urging them
to do and address meaningfulcost control in our health care system, which only asingle-payer system can provide as a means to controlthe nation's deficit. we urge you to address costcontrols immediately, healthcare now and our network ofsupporters urge congress to work to defeat any bill to cut,privatize, or dismantle our social safety net, socialsecurity, medicare, and medicaid. we continue to demand theenactment of an expanded and
improved medicare for all systemto fix our economy and still broken health care system. rob dugger:good afternoon, i'm rob dugger, i'm speaking as an individual. i feel actually quitedisconnected from the other witnesses, but i draw kinshipfrom a lot that others have said about the importance of humancapital in getting this economy going again. i especially, chairman bowles,your comments earlier about singapore versus the unitedstates and the naep scores.
it may be that it's davidson andchapel hill and duke and the school of life at lumberton,fort bragg in north carolina that sort of teachesme these lessons. could have learned them inwyoming, co-chairman simpson, with wonderful augusts spentevery year for the past 15 years in jackson hole. i'm rob dugger, i'm founder andmanaging partner of hanover investment group. we're a consulting firm thatadvises businesses, asset
managers on how tonavigate fiscal crises. i'm also the vice chairman ofthe governing board of inet economics, and i'm a co-founderof the partnership for america's economic success. obviously, my testimony is myown, i don't represent the views of any of the entitiesi'm affiliated with. the essence of what i haveto say today is this: the experiences of the last year,fiscal crises of the last year have taught investorssomething extremely important.
what they thought of assomething that could be put off or not worried about for manyyears actually affects asset prices today. the process is explained in mytestimony, but let me tell you in brief. when assess managers begin tocalculate the present value of the tax increases and spendingcuts necessary to bring about fiscal sustainability, theyrealize that these have an impact on company profits.
when they calculate this presentvalue and put it into company profits it changes theirvaluation of a company's bonds and its stocks. right now, as a consequenceof the size of the u.s. deficit, stocks and corporatebonds are weakening faster than treasury bonds. investors are doubting or havingincreased questions about whether this commission orcongress will be able to deal with deficits, and as aconsequence they are discounting
the value of u.s. corporate and -- corporate bondsand stocks, selling them off and rotating into treasury bonds,and treasury bonds are improving in strength. the second thing that they havelearned is that as they have seen strikes, demonstrations,significant cutbacks in spending and stress within othercountries that are going through acute fiscal crises, they'verealized that budget crises are not about money.
they've realized thatbudget crises are civil. a budget is an architectureor a fabric of all the civil relationships, all the civilcommitments we've made to each other. when we say we have a civil,when we say we have a budget crisis, what we're actuallysaying is that the fabric of civil commitments isbeing ripped apart. the most important thing thatthis committee can do, this commission can do, and it beginsliterally today, and so far i have to say my compliments toyou on it, is to convey to
american voters and investorsin american assets that this commission is committed to theidea that the civil fabric of this country is goingto be held together. investors need three things fromyou, and they need it literally in every meeting. they need to have a sense fromyou that there is a -- oops, i'm at the end of my time. they need to have from you asense that there is a set of principals that will guidebudget decision making.
a set of principals thatmakes sense to families and businesses. they need to understand -- theyneed to see in you the kinds of actions that halt thedeterioration in civil unity in this country, and they needrecommendations from you of year by year targets. this is particularly theinvestment community. year by year targets and aframework that guarantees this time we will actually meet thosecommitments, and in this regard a statutory commission is a veryattractive option to investors.
as far as that set ofprincipals, i recommend to you the partnership for america'seconomic success principles. put human capital first,invest in kids, transparency, performance evaluation,and sustainability. i'll stop there. chairman bowles:thank you very much. roger hickey:co-chairs and members of the commission, thank you for the opportunityto testify today. i have to acknowledge someadmiration for your stamina.
i know people who are coming inat 8:00 tonight to testify, so i admire your stamina. i'm roger hickey, i'mco-director of the institute for america's future. we support smart economicpolicies to reduce structural deficits over time. however, i want to sharethree major concerns. one, we're in danger of killingor weakening needed growth in the name of reducing deficits.
our organization is a memberof the jobs for america now coalition, and we and manyamericans want to warn you that we are very concerned thatpremature deficit reduction could undermine not only thefragile economic recovery, but the will to do additionalstimulus, which is very, very important right now as theeconomy teeters on the edge. the focus on deficits is causingsenators to fail to pass needed jobs bills, for example. forecasters predict thatofficial unemployment rates will
remain well above 9% forseveral years into the future. this is simply unacceptable. we need new efforts to createjobs, stimulate the economy, and send aid to the states,and it's not happening. adopting spending cuts or taxincreases prematurely will simply slow the recovery andundermine the tax revenues that we need to balance the budget. now, number two, while deficitsshould be reduced over time, some deficit reductionstrategies are misguided.
my organization was the leaderof the americans united for social security and healthcare for america now. i helped pass the health carereform bill, and we know that deficits were caused primarilyby the tax cuts, by the recession itself, by themilitary buildup, and most importantly, the growing healthcare costs in the whole society. unfortunately, many deficithawks are fixated on cutting social security benefits andcutting medicare and medicaid benefits or capping them.
we feel that those are mistaken. social security has nothing todo with our deficit problems. it is supported by its owndedicated payroll taxes. i would also suggest that thiscommission should really put social security aside. this is not the venue fordiscussing social security solvency, since it does notcontribute to the deficit and will not for decades, if ever. and i would suggest thatcomments so far from members of
the commission have underminedthe faith that this commission could treat socialsecurity effectively. it's a matter of trust. the growth in medicare andmedicaid spending is a problem, and one that is driven byrising health care costs. we need structural reformsadditionally, such as the public option that can give competitionto private health insurers and requiring drug companies tocompete for lower prices. this kind of structural reformin the health care system, not
simply cutting medicare costs,which are symptoms of that larger health care problem. additional health carereform is the way to go. and finally, to achieve fiscalbalance, we should not simply reduce the deficit, but also weneed to invest in the future. my organization is the founderof the apollo alliance for green jobs and new energy. we applauded president barackobama when he ran and won on a program of investment, publicinvestment that would stimulate
new, productive industries thatwould make our economy more energy efficient and the privatesector grow as a result. we estimate that it's going totake billions and billions of dollars, $400 billion annuallyover the next five years to really do the job. so my admonition to you,don't just cut the deficit. we agree that once recoverycomes the deficit needs to be reduced. however, we need to grow theeconomy, reduce the deficit, and invest in the future.
thank you very much. have the next group, please.
