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For the first time in the Nation's history our standard of living depends very significantly on our role in the world economy, but that serves to underscore, not diminish, the Committee's concern for trends in the domestic economy. The newly established Subcommittee on Education and Health held major hearings on Competitiveness and the Quality of the American Work Force last year, and this year will hold hearings of comparable . magnitude on health issues. In addition to staff studies focused on domestic economic matters the Committee expects to release several major studies prepared under contract and currently in the draft stage.

On a different front the Committee, which for nearly two decades has been a focal point for the study of non-market economies, released "Gorbachev's Economic Plans" in November. This two-volume publication is the latest in the Committee's comprehensive studies of the Soviet economy, which are published every two-three years and serve as a basic reference document in both the private and public sectors. Their unusual timeliness in 1987 meant that they were even more sought-after than ever.

Finally, let me summarize briefly developments in the Committee with respect to staffing and the Committee's office automation plan. Over the past year the Committee's professional staff has expanded significantly to include specialists in a number of areas, and further additions to the staff are planned over the next several months as the Committee moves toward a full staff complement. The Office Automation System, designed to meet the needs of a Committee whose staff members work with highly technical materials and whose offices are located in five different congressional buildings, was approved by the Senate Rules Committee and the Senate Sergeant at Arms in September of last year; the first stage of installation is now nearing completion. When fully in place the system will have four local area networks (LANS), enabling staff members to communicate efficiently through the system, print documents and connect directly to computers that supply the data necessary for economic analysis. The Committee is making ever more productive use of its computer capability, and the networked OAS will further facilitate the Committee's work. Progress thus far in designing and installing the OAS has been very encouraging.

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Against this background of work accomplished, work in progress, expanded professional staff and computer capability, the Committee is requesting $3,430,000 and fifty-one positions for fiscal year 1989. The request represents an increase of $251,000 beyond the fiscal year 1988 appropriation and includes one additional staff position. (Of the five positions requested by the JEC for fiscal year 1987, three were recommended in the Legislative Branch appropriation reported by your Subcommittee for FY1987, and a fourth was recommended in the FY1988 appropriation. These recommendations were subsequently agreed to by the House and the Senate).

Virtually all of the increase is applicable to full-time payroll costs. It would provide for merit increases; the additional staff position; and agency contributions at a 23 percent rate. At present the Committee's agency contributions are running somewhat lower but, as you know, this is an area over which the Committee has little control. Senate employees had until December 31, 1987, to decide on retirement plans, and accordingly it should be possible to assess expenditures in this category more accurately as the current fiscal year progresses.

In submitting a budget request based on a careful estimate of the Joint Economic Committee's requirements for FY1989, I recognize the severe constraints which your Subcommittee faces with respect to all FY1989 appropriations requests, including the Committee's. Nonetheless I would emphasize the unique role the Committee plays in the Congress in analyzing the Nation's economic framework; in providing the background against which important legislative decisions in a number of areas will be made; in identifying the trends at work in the economy, both as they affect Americans' standard of living and America's place in the world; in defining the economic challenges that will face us in the future; and if not providing definitive solutions to those challenges, at least suggesting where solutions should be sought.

I appreciate your attention to the Joint Economic Committee's request.

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CATEGORIES

JOINT ECONOMIC COMMITTEE Analysis of Change to Budget Base by Organization and Object Class

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