I would like to take this opportunity to welcome you and thank you for the visit that we had in my office about two weeks ago. With your experience as a member of the Board of Governors of the Federal Reserve System and your record of publication in the field of economics, I believe that you have a great deal of experience to bring to the Council of Economic Advisors.
You come to this job at a very fortunate time. As a result of the discretionary spending cuts implemented by the 104 th Congress and the 1993 Clinton tax hike, the federal deficit for FY 96 fell to $107 billion. In addition, the President and Congress have both professed their willingness to make the tough decisions necessary to balance the budget by 2002. But even if the Congress and the President do keep their word and reach an agreement which would balance the budget by 2002, the outlook for the deficit in the longer run is bleak. In the absence of reform, entitlements are forecast to consume an ever larger portion of the federal budget and to fuel a rapidly increasing budget deficit in the years after 2002. 1 look forward to hearing your thoughts as to what policies you would encourage the President to pursue to provide for the long- term financial stability of the federal government.
In addition, I believe that the federal government has grown too large and intrudes far too often into the lives of the American people. The American people need tax relief that is paid for with cuts in spending. In my questions, I will be asking you for your viewpoint on certain tax policies and the appropriate role of the federal government in the economy.
Again, I welcome you to the Banking Committee and I look
forward to hearing your thoughts on various economic issues that will
directly affect the people of the state of Colorado in the years to come.
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