Thank you and good morning, Mr. Chairman, and Members of the Committee. I want to welcome Dr. Yellen. I appreciated the opportunity to visit with you last month and discuss the economic status and challenges our country will face in the future.
Dr. Yellen, I enjoyed learning about your collaboration with your husband on many economic studies. Not every married couple has the opportunity to work closely together in this way. My wife and I also had the privilege of working as a team in our shoe store business in Gillette, Wyoming.
Most couples go their separate ways at 8 o'clock in the morning and may not see each other until late that evening -- both working for the sole purpose of providing income for the family. They are both working full-time because they have to pay their bills and their taxes, not because they want to pay for a second home or other luxuries. Without an income from both individuals, the family would suffer. I believe we need a sound pro-family federal economic policy. A policy that encourages natural wage growth, provides incentives for small businesses and families, and promotes long- term economic growth. A policy that gives employees individual power over the design of their work week.
We are in an era of economic activity and expansion. In today's fast-paced international marketplace, the responsibility of those analyzing the macroeconomic conditions of our country and world is very great. There are many more factors that influence the economy today than there were 10 years ago and factors that have added a new dynamic to the economy include the expansion of markets in Asia and the former Soviet Republics, increased usage and dependence on technology, and the development of free trade agreements.
Even more important than recognizing the expanding international marketplace is the growing national debt. We have a $5.2 trillion debt. That is $20,000 for every man, woman, and child in this country. The only way we can reduce this debt is by balancing the budget. It has been proven too many times that the intention of balancing the budget is not sufficient. We will keep adding programs and that bankrupts the next generation. I believe we need to pass the Balanced Budget Constitutional Amendment. It will not be easy to balance the budget, but we need to learn how to say "no" to more government. The economic impacts of a balanced budget would be significant. It would lower interest rates, and spur economic growth and investment. The financial markets have reacted favorably to the suggestions of a balanced budget.
The Consumer Price Index also influences the budget and the economy. The CBO estimates that a 1.1 percentage point change in the CPI would reduce the deficit by about $148 billion and the national debt by $691 billion by 2006. If the CPI is not corrected, entitlements will spiral out of control, eating up the limited remains of what is called discretionary spending.
Whether we like it or not, the economic policies that we set now will have an effect on the economy now and into the future. If confirmed as Chairman of the Council of Economic Advisors, you will be in the unique position of giving advice to the President and the National Security Council. This responsibility is not to be taken lightly, because the impact of your actions, as Chairman of the Council of Economic Advisors will affect the performance of America's economy for the long-term. I look forward to hearing your viewpoints regarding the long-term economic stability of our country, as well as how you believe we can reduce the financial stress on America's working families, assist educational opportunities and provide tax relief under the requirements of a balanced budget.
Thank you very much. Mr. Chairman, I yield the remainder of my time.
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