|00:00:00||EVENLY DIVIDED ON TWO SIDES.|
|00:00:03||ACCORDING TO MOST NEUTRAL OBSERVERS, INCLUDING THE FEDERAL RESERVE AND A CONSENSUS OF PRIVATE ECONOMISTS THE CURRENT ECONOMIC EXPANSION IS QUITE HEALTHY.|
|00:00:13||THAT'S GOOD NEWS.|
|00:00:16||INDEED IF ANYTHING THERE SEEMS TO BE LITTLE CONCERN IN MOST QUARTERS THAT THE ECONOMY MAY BE GROWING TOO FAST.|
|00:00:23||A CONCERN THAT I DO NOT SHARE.|
|00:00:27||THE U.S. ECONOMY GREW 4% IN 2004 AND ADVANCED AT A RATE OF ABOUT 3.|
|00:00:36||5% IN 2005.|
|00:00:37||THE GROWTH RATE IN THE FIRST QUARTER OF 2006 IS EXPECTED TO BE VERY ROBUST, PROBABLY OVER 4%.|
|00:00:44||CONSISTENT WITH THE TREND OF STRONG GROWTH SEEN SINCE 2003.|
|00:00:51||THE IMPROVEMENT IN ECONOMIC GROWTH IS REFLECTED IN OTHER ECONOMIC FIGURES AS WELL.|
|00:00:56||LET ME NAME A FEW.|
|00:00:59||SINCE AUGUST OF 2003, BUSINESS PAYROLLS HAVE INCREASED BY FIVE MILLION JOBS.|
|00:01:05||THE UNEMPLOYMENT RATE HAS DECLINED TO 4.|
|00:01:11||8%. CONSUMER SPENDING CONTINUES TO GROW.|
|00:01:14||HOMEOWNERSHIP HAS HIT RECORD HIGHS.|
|00:01:18||AND HOUSEHOLD NET WORTH HAS ALSO REACHED A RECORD HIGH.|
|00:01:24||PRODUCTIVITY GROWTH CONTINUES AT A HEALTHY PACE.|
|00:01:28||LONG-RUN INFLATION PRESSURES APPEAR TO BE CONTAINED.|
|00:01:31||LONG-TERM INTEREST RATES INCLUDING MORTGAGE RATES ARE STILL RELATIVELY LOW ALTHOUGH SOMEWHAT HIGHER THAN THEY HAD BEEN PREVIOUSLY.|
|00:01:40||THE RESILIENCE AND FLEXIBILITY OF THE ECONOMY HAVE OVERCOME A NUMBER OF SERIOUS SHOCKS, MOST RECENTLY THE HURRICANES OF LAST YEAR.|
|00:01:51||SOFTWARE INVESTMENT HAS BEEN STRONG OVER THIS PERIOD.|
|00:01:56||HOWEVER WITH SOMEWHAT HIGHER MORTGAGE RATES, THE HOUSING SECTOR IS SLOWING ALTHOUGH IT APPEARS THAT A SOFT LAND SOMETHING MOST LIKELY.|
|00:02:03||IT IS CLEAR THAT THE FEDERAL RESERVE REMAINS POISED TO KEEP INFLATION UNDER CONTROL AND THEN A RECENT POLICY REPORT TO CONGRESS THE FED NOTED THAT THE U.|
|00:02:14||S. ECONOMY DELIVERED A SOLID PERFORMANCE IN 2005.|
|00:02:19||FURTHERMORE, THE FED OBSERVED THAT U.|
|00:02:21||S. -- THE U.|
|00:02:22||S. ECONOMY SHOULD CONTINUE TO PERFORM WELL IN 2006 AND 2007.|
|00:02:27||THE FED ALONG WITH THE NUMBER OF PRIVATE ECONOMISTS AND GOVERNMENT AGENCIES EXPECTS THAT ECONOMIC GROWTH IN 2006 WILL BE ABOUT 3.|
|00:02:39||5%. STILL VERY HEALTHY GROWTH.|
|00:02:40||THE ECONOMIC GROWTH WILL CONTINUE TO EXPAND EMPLOYMENT AND FURTHER REDUCE UNEMPLOYMENT.|
|00:02:46||IN SUMMARY, OVERALL ECONOMIC CONDITIONS REMAIN POSITIVE.|
|00:02:51||THE U.S. ECONOMY HAS DISPLAYED REMARKABLE FLEXIBILITY AND RESILIENCE IN DEALING WITH THE MANY SHOCKS INCLUDING TERRORIST ATTACKS AND WEATHER EFFECTS.|
|00:03:05||THE FORECAST FOR 2006 IS COMPARABLE WITH THOSE OF THE BLUE CHIP KAHN CENSUS AND FEDERAL RESERVE WITH GROWTH EXPECTED TO BE ABOUT 3.|
|00:03:13||5% IN 2006.|
|00:03:15||THE CURRENT ECONOMIC SITUATION IS SOLID AND THE OUTLOOK REMAINS FAVORABLE.|
|00:03:21||I RESERVE THE BALANCE OF MY TIME.|
|00:03:24||THE CHAIRMAN: THE GENTLELADY FROM NEW YORK.|
|00:03:27||MRS. MALONEY: TO ADDRESS THE HOUSE.|
|00:03:28||THE CHAIRMAN: YES.|
|00:03:38||SPEAKER, I AM PLEASED TO SPEAK IN THE TIME RESERVED FOR THE BUDGET -- BY THE BUDGET ACT FOR A DISCUSSION OF|
Mr. SAXTON. Mr. Chairman, I yield myself such time as I may consume.
As you just indicated, the first hour of this budget debate has been set aside pursuant to the Humphrey-Hawkins section of the Budget Act. Under the rule, the Joint Economic Committee will have this hour evenly divided on two sides.
According to most neutral observers, including the Federal Reserve, and a consensus of private economists, the current economic expansion is quite healthy. That is good news. Indeed, if anything, there seems to be a little concern in most quarters that the economy may be growing too fast, a concern that I do not share.
The U.S. economy grew 4 percent in 2004 and advanced at a rate of about 3.5 percent in 2005. The growth rate in the first quarter of 2006 is expected to be very robust, probably over 4 percent, consistent with the trend of strong growth seen since 2003.
The improvement in economic growth is reflected in other economic figures as well. Let me name a few.
Since August of 2003, business payrolls have increased by 5 million jobs. The unemployment rate has declined to 4.8 percent. Consumer spending continues to grow. Homeownership has hit record highs. Household net worth has also reached a record high. Productivity growth continues at a healthy pace. Long-run inflation pressures appear to be contained. Long-term interest rates, including mortgage rates, are still relatively low, although somewhat higher than what they had been previously. The resilience and flexibility of the economy have overcome a number of serious shocks, most recently the hurricanes of last year. Equipment and software investment have been strong over this period. However, with somewhat higher mortgage rates, the housing sector is slowing, although it appears that a soft landing is most likely. It is clear that the Federal Reserve remains poised to keep inflation under control.
In a recent policy report to Congress, the Fed noted that the U.S. economy delivered a solid performance in 2005. Furthermore, the Fed observed that ``the U.S. economy should continue to perform well in 2006 and 2007.'' The Fed, along with a number of private economists and government agencies, expects that economic growth in 2006 will be about 3.5 percent, still very healthy growth. This economic growth will continue to expand employment and further reduce unemployment.
In summary, overall economic conditions remain positive. The U.S. economy has displayed remarkable flexibility and resilience in dealing with the many shocks, including terrorist attacks and weather effects.
The administration forecast for economic growth in 2006 is comparable with those of the blue chip consensus and the Federal Reserve. With growth expected to be about 3.5 percent in 2006, the current economic situation is solid and the outlook remains favorable.
Mr. Chairman, I reserve the balance of my time.