THE PRESIDENT

HEARINGS

BEFORE THE

JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES

NINETY-FOURTH CONGRESS

SECOND SESSION

ᏢᎪᎡᎢ 1

JANUARY 28 AND 29, FEBRUARY 4 AND 5, 1976

Printed for the use of the Joint Economic Committee

74-582

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1976

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $2.60

STOREORD LAWL LIBRARY

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

CONTENTS

WITNESSES AND STATEMENTS

WEDNESDAY, JANUARY 28, 1976

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

Opening statement..

Greenspan, Hon. Alan, Chairman, Council of Economic Advisers, ac-

companied by Paul W. MacAvoy and Burton G. Malkiel, Members-----

THURSDAY, JANUARY 29, 1976

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

Opening statement...

Lynn, Hon. James T., Director, Office of Management and Budget, ac-

companied by Paul H. O'Neill, Deputy Director; Dale R. McOmber,

Assistant Director for Budget Review; and Rudolph G. Penner, Deputy

Associate Director for Economic Policy..

WEDNESDAY, February 4, 1976

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

Opening statement__

Simon, Hon. William E., Secretary of the Treasury, accompanied by

Sidney L. Jones, Assistant Secretary for Economic Policy -

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Page

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5

61

65

129

132

THURSDAY, FEBRUARY 5, 1976

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

Opening statement__

195

Ackley, Gardner, professor of economics, University of Michigan.

Nathan, Robert R., chairman, Council on National Priorities and

Resources

196

205

219

227

Burress, Glenn, University of Texas of the Permian Basin, Odessa, Tex.,

and the Journal of Commerce, New York, N.Y.......

Parks, Robert H., Advest Co., New York..

AFTERNOON SESSION

Butz, Hon. Earl L., Secretary of Agriculture..

Richardson, Hon. Elliot L., Secretary of Commerce, accompanied by

Maynard Comiez, Acting Chief Economist; Beatrice N. Vaccara,

Associate Director for National Analysis and Projections; and John E.

Cremeans, Chief Statistician, Bureau of Economic Analysis, Department

of Commerce_

SUBMISSIONS FOR THE RECORD

WEDNESDAY, JANUARY 28, 1976

Greenspan, Hon. Alan, et al.:

Prepared statement...

Response to Representative Bolling's request for a list of specific pro-

posals to increase employment which have been examined by the

Council of Economic Advisers_

Response to Representative Bolling's request for estimates of the full
employment budget, by quarter, through the end of calendar 1976...

THURSDAY, JANUARY 29, 1976

Humphrey, Hon. Hubert H.:

Statement to the Committee on the Budget, U.S. House of Representa- Page
tives, January 26, 1976___

Article entitled "Government Growth in Perspective," by John L.
Palmer, from the Washington Post---.

Javits, Hon. Jacob K.:

Article entitled "Three States Deplore Health Fund Cuts," by Martin
Tolchin, from the New York Times, January 22, 1976..

Lynn, Hon. James T., et al.:

Prepared statement.

Budget message of the President.

Response to Chairman Humphrey's request to furnish an estimate of

the growth rate in outlays from fiscal year 1976 to fiscal year 1977.

Table: Financial assistance for health care, grant amount by State,

fiscal year 1977__

Response to Representative Bolling's request to supply an outline of

procedures to be followed by congressional committees in order to

accomplish the recommendations of the Budget Act----

Response to Senator Proxmire's query regarding number of OMB per-

sonnel assigned to Intelligence Branch

Response to additional written questions posed by Chairman

Humphrey..

86

119

79

66

66

69

81

90

107

122

WEDNESDAY, FEBRUARY 4, 1976

Simon, Hon. William E., et al.:

Response to Chairman Humphrey's request to supply an estimate of

full employment social security tax receipts..

131

Prepared statement. -

147

Tables:

Proposed tax changes-

Single person with itemized deductions of 16 percent of ad-

justed gross income.

167

Married couple-one earner with itemized deductions of 16

percent of adjusted gross income__

168

Married couple-two earners with itemized deductions of 16

percent of adjusted gross income..

168

Family of four-one earner with itemized deductions of 16

percent of adjusted gross income.

169

Family of four-two earners with itemized deductions of 16

percent of adjusted gross income-

170

Response to Senator Taft's query re classification of OPEC countries in

relation to the proposed IMF trust fund...

177

Article entitled "Fiscal Stimulus Not Issue in Deficit Spending De-
bate," by Beryl W. Sprinkel, from the Chicago Tribune, February 2,
1976_

181

Tables:

Total funds raised in U.S. credit markets.

Total funds supplied in U.S. credit markets.

186

187

Response to Representative Long's query regarding accelerated depre-

ciation deductions in areas of high unemployment-

191

Table: Federal old-age, survivors, and disability insurance trust funds,

receipts and outlays, fiscal years 1971-77.

Speech entitled "Some Observations of the 1976 Outlook and Its Im-

plications," before the 26th Annual Economic Outlook Conference,

University of Michigan, December 12, 1975----

202

Response to additional written questions posed by Chairman IIum-

phrey.

242

Burress, Glenn E.:

Prepared statement_

224

Prepared statement..

Nathan, Robert R.:

249

Chart: Percentage deviations of actual GNP from potential GNP.
Table: Actual and potential gross national product..

209

210

Response to Representative Moorhead's question regarding share of business fixed capital investment in gross national product – – Response to Representative Heckler's request to supply the recommendations of the Commission on Productivity...

263

269