Senator Dan Coats (R-Ind.), the chairman of the Joint Economic Committee (JEC), today delivered the following opening statement during a hearing examining the Economic Report of the President:

“Chairman Furman, welcome. Vice Chairman Brady, Ranking Member Maloney and I appreciate your willingness to continue the longstanding tradition of the Chairman of the Council of Economic Advisers testifying before the Joint Economic Committee. We look forward to discussing the Economic Report of the President with you.

“I often hear from Hoosiers that we must take action to grow the economy, and I think it’s safe to say all of us in this room agree on that. But the age-old question in economics is this: how does a nation or state best create economic growth and rising living standards for its citizens?

“It has been nearly six years since the recent recession ended. While there are many encouraging signs of improvement, the recovery has been modest, and there are still many Americans in need of opportunity. In fact, since 1960, our nation has experienced 7 recessions and recoveries, but the current recovery has been the slowest of them all.

“The recoveries of the past 50 years provide comparative data to measure the progress of our current recovery. On measures of GDP, jobs, and income growth, our current recovery ranks either dead last or second-last. Annual GDP grew 4 percent in the average post-1960 recovery; this recovery has averaged just 2.3 percent GDP growth. Personal income rose an average of 15.3 percent in past recoveries; this recovery has reached 7.1 percent over the same time frame. Median household incomes have collapsed by $2,100 in real terms during the recovery. And while the pace of new jobs has picked up recently, there are still 5.5 million fewer private-sector jobs in this recovery than the average of past recoveries. That’s not something to be proud of.

“Why is this recovery so different? And just as important, if not more important, what does the future economic situation look like for the average American family?

“In addition to working to improve the recovery in the short-term, I believe we also must address our long-term fiscal health. Earlier this year, the non-partisan Congressional Budget Office issued its updated budget and economic outlook for the next decade. The report warned that under current law our “large and growing federal debt would have serious negative consequences, including increasing federal spending for interest payments; restraining economic growth in the long term; giving policymakers less flexibility to respond to unexpected challenges; and eventually heightening the risk of a fiscal crisis.”

“Federal Reserve Chairman Yellen said essentially the same thing when she appeared before this committee last year. Her answer highlighted why the long-term deficits Washington currently is projected to run must be addressed.

“She told me, “There is more work to do to put fiscal policy on a sustainable course... Progress has been made over the last several years in bringing down deficits in the short term, but [through] a combination of demographics, the structure of entitlement programs, and historic trends in health-care costs, we can see that, over the long term, deficits will rise to unsustainable levels relative to the economy.”

“With these comments, the Fed Chairwoman joined a long list of academics, economists, and business leaders who have all stated the obvious: Unless the United States makes tough spending choices in the near term, eventually we are going to face a debt-induced crisis at some point in the future. It is only a matter of time; the clock is ticking, and we continue to postpone the ever more necessary policy changes that will help us avoid the coming fiscal crisis.

“In fact, if interest rates were not being artificially held down by the Fed at historically low levels, we might already be facing our day of reckoning. According to CBO, even a one percentage-point increase in interest rates would add $1.7 trillion to the United States’ deficits over 10 years. And that new debt would occur without any changes in spending or taxing — interest rates alone would simply drive our debt out of control.

“We look forward to discussing these issues in more depth with Chairman Furman.”