The Subcommittee will come to order. Let me extend a warm welcome to all of you, to Ranking Member Louise Slaughter, and to our witnesses – CBO Director Dan Crippen, CEA Chairman Glenn Hubbard, Mr. Cox, Mr. Matsui, and Mr. Stenholm. Thank you very much for being here.

Last week, we heard from outside experts on the merits and potential problems of including macroeconomic feedback effects in the official estimating process. Today, we are pleased to hear from the custodians of those models, who have the considerably weighty task of developing our federal government's budget estimates.

No one debates the fact that changes in tax policy will influence savings and investment decisions made by individuals and businesses, and thereby federal revenue collections. In fact, under current House Rules, the Chairman of the Committee on Ways and Means may request "dynamic" forecasts, and the Joint Committee on Taxation must provide them in a timely manner.

However, the real question is can we ensure that our expenditure and revenue estimates are as accurate as possible without thwarting good policy-making? Our goal is to uncover any potentially misleading conclusions that result from our current estimating process. For example, do cuts in marginal tax rates simply mean lost revenues or do they actually have the opposite effect by rewarding productive behavior? If the CBO baseline is intended "to provide an objective foundation for assessing policy options", then that is what we should have.

Reflecting the assertion that the current estimating models do in fact leave room for improvement, the Ways and Means Committee recently announced the formation of a Blue Ribbon panel comprised of a wide range of economists with modeling experience. The purpose of the panel is to review and evaluate the model currently used by the Joint Committee on Taxation. Our hope is that the Blue Ribbon panel will not only set forth some solid recommendations for improving federal revenue and expenditure estimates, but that it will ultimately result in a much more open and transparent process.

I would be surprised to find anyone in this room or in the halls of Congress who would not readily support increased disclosure of the underlying assumptions used in the scoring process. My sense is that until we let the genie out of its bottle, we are letting many opportunities for better policymaking slip through our fingers, and we cannot passively watch that happen.

I am thankful for the hard work that has been done over the years to advance this important issue, but I look forward to this being the year of action. I also look forward to the wisdom that our witnesses will pass along today.

With that, I would like to turn to Mrs. Slaughter for her opening statement.