ben s bernanke : long - term fiscal challenges and the economy testimony by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, before the committee on the budget, us house of representatives, washington dc, 28 february 2007. * * * chairman spratt, representative ryan, and other members of the committee, i am pleased to be here to offer my views on the federal budget and related issues. at the outset, i should underscore that i speak only for myself and not necessarily for my colleagues at the federal reserve. my testimony will focus on the long - term budget outlook and will draw on the most recent set of longterm budget projections from the congressional budget office ( cbo ), issued in december 2005. the cbo constructed its projections based on the assumptions that real gross domestic product ( gdp ) would rise about 3 - 1 / 2 percent per year in 2005 and 2006 and at a rate of 2. 9 per cent per annum from 2007 through 2015. the growth projections through 2015 were in turn based on the assumptions that trend labor force growth will average 0. 8 percent per year and that trend labor productivity growth in the nonfarm business sector will average 2. 4 percent per year. the cbo has since updated those assumptions for the purposes of other analyses, but the revisions were not large enough to materially alter the broad contours of the fiscal outlook. 1 as for the longer - term outlook, the cbo assumed that the growth rate of real gdp will average about 2 percent per year starting around 2020. while such projections are subject to considerable uncertainty, the cbo's assumptions provide a sensible and useful starting point for assessing the budget situation over the longer run. before discussing that longer - run outlook, i will comment on recent budget developments. as you know, the deficit in the unified federal budget declined for a second year in fiscal year 2006, falling to $ 248 billion from $ 318 billion in fiscal 2005. so far in fiscal 2007, solid growth in receipts, especially in collections of personal and corporate income taxes, has held the deficit somewhat below year - earlier levels. of course, a good deal of uncertainty still surrounds the budget outcome for the year as a whole. federal government outlays in fiscal 2006 were 20. 3 percent of nominal gross domestic product ( gdp ), receipts were 18. 4 percent of gdp, and the deficit ( equal to the difference of the two ) was 1

donald l kohn : nomination as vice chairman to the board testimony by mr donald l kohn, member of the board of governors of the us federal reserve system, before the committee on banking, housing, and urban affairs, united states senate, washington dc, 8 june 2006. * * * chairman shelby, senator sarbanes, and members of the committee, i am honored to have been nominated by president bush to be the vice chairman of the board of governors of the federal reserve system and grateful to this committee for scheduling this hearing so expeditiously. i have enjoyed a long and productive relationship with the banking committee and its staff over the years, working together to determine how the federal reserve can best contribute to the economic wellbeing of our citizens. as a governor and, if you confirm me, as vice chairman, i look forward to continuing to be a part of the shared pursuit of that goal. the board's vice chairman has a very limited role under the federal reserve act - - to preside over the board in the absence of the chairman. by tradition and practice, however, the vice chairman has played a leadership role within the system. he or she has acted as the chairman's deputy or alternate in important international groups, has headed ad hoc committees within the board, system, or federal open market committee to help develop policy alternatives for consideration by the larger group, has helped the chairman to lead the board, and has worked closely with the chairman in a variety of circumstances, including when responding to disturbances in the financial sector that had the potential of affecting the broader economy. the federal reserve faces considerable challenges today in meeting the responsibilities that you have given us : for fostering price stability and maximum employment at a time of rapid change in the u. s. and global economies ; for helping maintain a safe and sound banking system and stable and efficient payments and financial systems in the face of innovations in financial instruments and institutions ; and for protecting and educating consumers as they take advantage of the greater variety and sophistication of financial instruments available to them. i believe that my long and wide experience within the federal reserve - - at a reserve bank and at the board, on staff and as governor - along with my close working relationship with chairman bernanke will enable me to make even greater contributions to the work of the federal reserve as the board's vice chairman should you choose to confirm me to this position.