THE 1976 ECONOMIC REPORT OF THE PRESIDENT HEARINGS BEFORE THE 2 JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES NINETY-FOURTH CONGRESS SECOND SESSION PART 2 Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1976 74-796 O JOINT ECONOMIC COMMITTEE HUBERT H. HUMPHREY, Minnesota, Chairman WRIGHT PATMAN, Texas, Vice Chairman HOUSE OF REPRESENTATIVES JOHN SPARKMAN, Alabama RICHARD BOLLING, Missouri WILLIAM PROXMIRE, Wisconsin HENRY S. REUSS, Wisconsin ABRAHAM RIBICOFF, Connecticut WILLIAM S. MOORHEAD, Pennsylvania LLOYD M. BENTSEN, JR., Texas LEE H. HAMILTON, Indiana EDWARD M. KENNEDY, Massachusetts GILLIS W. LONG, Louisiana JACOB K. JAVITS, New York CLARENCE J. BROWN, Ohio CHARLES H. PERCY, Illinois GARRY BROWN, Michigan ROBERT TAFT, JR., Ohio MARGARET M. HECKLER, Massachusetts PAUL J. FANNIN, Arizona JOHN H. ROUSSELOT, California SENIOR STAFF ECONOMISTS JOAN R. KARLIK COURTENAY M. SLATER ECONOMISTS LUCY A. FALCONE ROBERT D. HAMRIN SARAH JACKSON L. DOUGLAS LEE RALPH L. SCHLOSSTEIN GEORGE R. TILER LARRI YUSPEH MINORITY CHARLES H. BRADFORD (Senior Economist) GEORGE D. KRUMBHAAR, Jr. (Counsel) M. CATHERINE MILLER (Economist) CH CONTENTS 1976 pt. 2 280 343 WITNESSES AND STATEMENTS FRIDAY, FEBRUARY 6, 1976 279 306 Opening statement.-- 344 383 Klein, Lawrence_ R., professor of economics, The Wharton School, the University of Pennsylvania. York, N.Y----- WEDNESDAY, February 25, 1976 Opening statement.----- 472 Gibson, Hon. Kenneth, mayor, Newark, N.J., and vice president, U.S. Conference of Mayors.-------- 480 Young, Hon. Coleman, mayor, Detroit, Mich., and chairman, Urban Economic Policy Committee, U.S. Conference of Mayors.. 482 SUBMISSIONS FOR THE RECORD 384 388 416 441 444 1 1 286 FRIDAY, FEBRUARY 6, 1976 Prepared statement.----- --------Shiskin, Hon. Julius: Press release No. 76-83 entitled “The Employment Situation: Janu ary 1976," Bureau of Labor Statistics, Department of Labor, February 6, 1976.---------- (III) ad 308 327 Page 354 355 376 377 379 THURSDAY, FEBRUARY 19, 1976 Burns, Hon. Arthur F.: Letter of response to Representative Heckler's query regarding the Federal Reserve Board's efforts to implement the Equal Credit Opportunity Act----- Houthakker, professor of economics, Harvard University --- ernment technology bank for financing new technology -- phrey ------ FRIDAY, FEBRUARY 20, 1976 de Vries, Rimmer: Prepared statement.--------- anty Trust Co. of New York, issue of January 21, 1976----- WEDNESDAY, FEBRUARY 25, 1976 AFL-CIO, Public Employee Department: Statement on the impact of recession upon public employes and the President's fiscal year 1977 budget proposal.---Landrieu, Hon. Moon: Statement on behalf of the U.S. Conference of Mayors.--------Young, Hon. Coleman: State of the city message, city of Detroit, January 22, 1976.----- 392 397 418 504 475 484 THE 1976 ECONOMIC REPORT OF THE PRESIDENT FRIDAY, FEBRUARY 6, 1976 Washington, D.C. The committee met, pursuant to recess, at 10:10 a.m., in room 1202, Dirksen Senate Office Building, Hon. Hubert H. Humphrey (chairman of the committee) presiding. Present: Senators Humphrey and Proxmire; and Representatives Hamilton and Long. Also present: John R. Stark, executive director; William R. Buechner, William A. Cox, Lucy A. Falcone, Robert D. Hamrin, L. Douglas Lee, Loughlin F. McHugh, and Courtenay M. Slater, professional staff members; Michael J. Runde administrative assistant; George D. Krumbhaar, Jr., minority counsel; and M. Catherine Miller, minority economist. OPENING STATEMENT OF CHAIRMAN HUMPHREY Chairman HUMPHREY. Today the Joint Economic Committee will hear from Mr. Walter Heller, the former Chairman of the Council of Economic Advisers to the President. We will also hear from Mr. Shiskin, Commissioner, Bureau of Labor Statistics. I would like to say that in having Mr. Walter Heller of the University of Minnesota before us today, we have an old friend and one of the most prominent economists in our country. Yesterday we heard from four other distinguished economists on the economic outlook, and I must say their outlook was more pessimistic than that of the administration witnesses who preceded them. They were followed yesterday afternoon by two other Cabinet members who again repeated the administration's position. The administration's position is basically to let the economy proceed as it is going. As we heard repeatedly, the administration's principal enemy is inflation, and unemployment, while too high at present and for the years immediately ahead, must remain "second fiddle” because faster recovery would lead to another“bust." I made it clear that I do not believe this is a responsible approach, nor is it adequate. We must get the unemployment down faster than the administration's program predicts or indicates. The unemployment rate, as indicated by the administration, will likely be in the range of 7 or 8 percent in the years ahead. I would hope today that we will be able to get further information on the outlook for the economy in 1976. Mr. Heller, although it is very difficult to predict anything about the economy, and it surely is more |