WASHINGTON, DC — House Budget Committee Chairman John Spratt (D-SC) made the following statement at a hearing on the economy with Federal Reserve Chairman Ben Bernanke.

"We convene today to discuss the progress of the economic recovery and the challenges that lie ahead.  We are pleased to have as our witness the Chairman of the Board of Governors of the Federal Reserve System.

"This economic crisis has profoundly affected the lives of so many Americans, and the task of restoring the strength of our economy and putting in place a foundation for enduring prosperity has been and remains at the top of the priority list for Congress and the Administration.

"While everyone agrees that more progress must be made, there clearly has been some noticeable improvement from where things stood a year and a half ago.  When the 111th Congress began and the current Administration took office, the economy was shrinking at a 5.4 percent annualized rate; a year and a half later, the economy has experienced its third straight quarter of economic growth – including 5.6 percent growth in the fourth quarter of 2009 and 3.0 percent growth in the first quarter of 2010. 

"A year and a half ago, the economy was hemorrhaging jobs – losing 779,000 jobs in January 2009 alone.  Now, employers have added nearly 1 million jobs through between January and May of this year.

"The ultimate strength of our economy lies in the private sector – our businesses and workers – but the actions taken by this Congress and this Administration have also played an important role.  For example, in the judgment of the nonpartisan Congressional Budget Office, the Recovery Act passed in February 2009 has contributed significantly to the economic turnaround, raising real GDP by 1.7 to 4.2 percentage points in the first quarter of 2010, and increasing employment by between 1.2 million and 2.8 million jobs.  Meanwhile, the Treasury Department, the Federal Reserve, and the FDIC have engaged in unprecedented and coordinated efforts to stabilize banks and the financial system by injecting liquidity, securing people’s savings, and requiring banks to raise more capital. 

"While Democrats have been focused on economic recovery, we have also been cognizant of the need to restore fiscal responsibility.  Unlike the previous Administration, which inherited a $5.6 trillion ten-year surplus and turned it into large deficits, the current Administration was handed a $1.3 trillion deficit for 2010 and an $8 trillion ten-year deficit. While the recession and recovery efforts take an unavoidable toll on the budget in the short run, we are focused on bringing the deficit down as the economy recovers.

"We have passed statutory Pay-As-You-Go into law – to require that new mandatory spending or revenue reductions be paid for.  We have passed a health care reform bill that reduces the deficit.  The President has established a bipartisan commission – which is now hard at work -- to make recommendations to bring the deficit down to a sustainable level by 2015.  The President has proposed to freeze non-security discretionary spending for three years.  Last month I introduced a bill to add to our fiscal toolbox an additional tool called 'expedited rescission,' which allows the President to sign a bill into law but at the same time recommend that Congress eliminate some items included in the bill that have a budgetary cost.

"We will continue to pursue these and other steps toward fiscal responsibility so that over the medium and long term, we put the nation on a fiscal path that will provide the foundation for a strong economy in the future.  At the same time, the key concern in the short term remains the economic outlook.  As we continue to work on additional legislation to address the economic situation, we are fortunate to have Chairman Bernanke here to present his testimony and answer our questions.   

"Most fundamentally, at a time when too many Americans continue to feel the lingering effects of the recession, we would like to hear your view of how the recovery is progressing, and what constructive steps can be taken to maximize the return of sustained economic strength."