Economy and Fiscal Policy

This paper was presented to the U.S. House of Representatives, Committee on the Budget, March 2, 1988.Mr. Chairman and members of the Committee, I am pleased to have this opportunity to appear before you today and present my views on the outlook for the U.S. economy and the implications for the fiscal 1989 bud-get. My comments will focus on the following issues: (1) the economic outlook for the next two years; (2) the effects of the stock market crash; (3) the concerns regarding the dollar on foreign-exchange markets; (4) the proposed balanced budget amendment; and (5) a proposal for normalizing the economic assumptions so that budget priorities can be set independently of the financing requirements. The Full Employment and Balanced Growth Act of 1978, known as the "Humphrey-Hawkins" legislation, set forth useful long-term goals that are still achievable