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THE PRESIDENT.

3

HEARINGS

BEFORE THE

JOINT ECONOMIC COMMITTEE

CONGRESS OF THE UNITED STATES

NINETY-FOURTH CONGRESS

SECOND SESSION

PART 2

FEBRUARY 6, 19, 20, AND 25, 1976

Printed for the use of the Joint Economic Committee

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1976

༄་་་་

JOINT ECONOMIC COMMITTEE

(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)

HUBERT H. HUMPHREY, Minnesota, Chairman
WRIGHT PATMAN, Texas, Vice Chairman

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Humphrey, Hon. Hubert H., chairman of the Joint Economic Committee:
Opening statement....

Page

279

Heller, Walter W., regents' professor of economics, University of Minnesota. Shiskin, Hon. Julius, Commissioner, Bureau of Labor Statistics, Department of Labor..

280

306

THURSDAY, FEBRUARY 19, 1976

Humphrey, Hon. Hubert H., chairman of the Joint Economic Committee:
Opening statement..........

343

Burns, Hon. Arthur F., Chairman, Board of Governors, Federal Reserve
System...

344

FRIDAY, February 20, 1976

Reuss, Hon. Henry S., member of the Joint Economic Committee, presiding:
Opening statement...

383

Klein, Lawrence R., professor of economics, The Wharton School, the
University of Pennsylvania__

384

de Vries, Rimmer, vice president, Morgan Guaranty Trust Co., New York, N. Y.--

388

Galenson, Walter, professor of economics, Cornell University.

416

WEDNESDAY, February 25, 1976

Humphrey, Hon. Hubert H., chairman of the Joint Economic Committee:
Opening statement..

441

Carey, Hon. Hugh L., Governor, State of New York..

444

Landrieu, Hon. Moon, mayor, New Orleans, La., and president, U.S.
Conference of Mayors...

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---

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Press release No. 76-83 entitled "The Employment Situation: January 1976," Bureau of Labor Statistics, Department of Labor, February 6, 1976_.

308

Statistical notes on the unemployment rate by revised seasonal adjustment methods____

327

(III)

Burns, Hon. Arthur F.:

THURSDAY, FEBRUARY 19, 1976

Letter of response to Representative Heckler's query regarding the
Federal Reserve Board's efforts to implement the Equal Credit
Opportunity Act...

Tentative outline of an omnibus anti-inflation bill by Hendrik S.
Houthakker, professor of economics, Harvard University-
Response to Senator Javits' query regarding the desirability of a gov-
ernment technology bank for financing new technology -
Response to additional written questions posed by Chairman Hum-
phrey..

Page

354

355

376

377

379

Response to additional written questions posed by Senator Taft..

FRIDAY, FEBRUARY 20, 1976

de Vries, Rimmer:

Prepared statement..

392

World Financial Markets, monthly publication of the Morgan Guaranty Trust Co. of New York, issue of January 21, 1976---

397

Galenson, Walter:

Prepared statement__

418

WEDNESDAY, FEBRUARY 25, 1976

AFL-CIO, Public Employee Department:

Landrieu, Hon. Moon:

Young, Hon. Coleman:

State of the city message, city of Detroit, January 22, 1976.

Statement on the impact of recession upon public employes and the
President's fiscal year 1977 budget proposal..

504

Statement on behalf of the U.S. Conference of Mayors...

475

484

THE 1976 ECONOMIC REPORT OF THE PRESIDENT

FRIDAY, FEBRUARY 6, 1976

CONGRESS OF THE UNITED STATES,
JOINT ECONOMIC COMMITTEE,
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

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