Page 2 Chairman Vic Fazio Legislative Branch Subcommittee Joint Economic Committee FY '88 Budget As a member of the Subcommittee, I realize that the coming year will be no easier than any we have faced in the last several sessions of Congress. While the total resources we have to allocate will be quite limited, there is no place in my judgement that the Congress or the federal government needs to place a greater effort than in developing a more complete understanding of the underlying economic forces that are reshaping our globe and the economic status of the American families. Our failure to do so may mean that legislation which we develop altering our trade laws, our system of banking, our support of local schools or contributing to International Financial Institutions may fall far short of the long-term overall reforms that are necessary to protect and improve the living standards of American families. During the past fiscal year, the Joint Economic Committee made strong headway in probing the underlying problems facing the American Economy. In FY 1986, more than 58 hearings were held and testimoy was taken from more than 350 witnesses. The Committee released more than 30 major studies conducted either by Committee staff or outside experts. Much of this work was concentrated in four major areas. The Committee became a focal point of work on American family income. A series of reports documented a decline in median family income in the U.S. beginning in the early 1970's and becoming more severe after 1979, the peak of the last recovery. This trend has been particularly pronounced for young families with children and has occurred despite the fact that more mothers were entering the work force. The Committee has also received considerable notice for the work it has done on specific aspects of the U.S. trade deficit. An in-depth analysis by the JEC staff on the impact of the Latin American Debt Crisis on U.S. industry, agriculture and banking has become a standard reference in the current trade debate. Of equal importance were JEC studies documenting the impact of the trade deficit on U.S. economic growth and analyzing the decline of the U.S. in world trade of high tech merchandise. The Committee has continued its role as the international focal point for the study of non-market economies. Last spring for instance, the Committee released a two-volume study on the Chinese economy containing selected papers from more than 50 of the top experts in the world on that subject. The China papers come at a time when thousands of American businesses are looking to China as a source of new markets and increased competition in the export of manufactured goods. Understanding the U.S. trade potential with The People's Republic of China and problems which we face in maximizing that potential may significantly affect the number of good-paying jobs Americans will hold in the year 2000. Finally, the Committee has begun efforts to develop a deeper understanding of how the economic changes taking place in a number of nations on the so-called "Pacific Rim" will affect our economic future. The emerging industrial and financial power of not only Japan but Hong Kong, Singapore, Korea, Taiwan and Malaysia promises to have an impact on the U.S. and world economies that will be even more dramatic in the next decade than it has been in the last. If I were to make a single criticism of the Congress during the more than 16 years I have served here, it would be that we have ignored the problems that were fundamental and profound in order to wade through the daily mesh of details. What we spend on the JEC is only one of the investments we make each year to look at policy problems below the surface, to think in more depth about the direction events are taking us and the total impact of all policy on that direction, not just how good or bad one piece of legislation is going to be. I think whether or not we increase that investment in the coming fiscal year, we should face up to the fact that we have much greater needs in this area than current resources can address. The Committee has also requested & supplemental appropriation for the current Fiscal Year of $261,000 of which $155.000 is en increase in agency contributions for the Federal Employees Retirement System and $106,000 is for the three percent cost-ofliving pay increase effective January 1, 1987. |