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Special Event

Senate Budget Committee Asks Greenspan About Surpluses

Aired January 25, 2001 - 10:04 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: Now, we go across town to the Senate Budget Committee. This is the committee that will be hearing today from Fed Chairman Alan Greenspan.

Let's go ahead and listen ahead of time to what some of the committee members have to say.

SEN. PETE DOMENICI (R), BUDGET CHAIRMAN: Senators, let me -- let me say that I was trying to make a point in the way we allocated time, that we are very privileged to have a witness here with us that we want to hear from.

And frankly, we all know a lot about the subject. But frankly, we will have many meetings and many opportunities to express our views. This is a meeting when we intend to ask the Federal Reserve Board chairman to give us his views about the most interesting phenomenon that is occurring in the United States, and that seek his help and advice.

First of all, Mr. Chairman -- I'm speaking now to the U.S. Federal Reserve Board chairman. We want to spread on this record unequivocally, the highest compliments of this committee for the way you have handled your role as the chairman of the Federal Reserve Board of the United States.

We've had a rather fantastic, unparalleled era of growth with low inflation. We know what you think about this. And keeping inflation under control has been very important to you.

And at the same time, we have had undercurrent that we never expected, where productivity increases have been phenomenal. In fact, in some instances, we're only founding how phenomenal they are by looking backwards and trying to measure them in hindsight.

While that was occurring, clearly, unemployment was coming down. Those who have worked for living were making more than they were before. And this pervasive notion of productivity -- phenomenal productivity, just permeated things and has had such a phenomenal impact on what we're talking about.

It is now -- we now have a modest turn in the opposite direction, where we are not growing as fast. I, for one, would like you to tell us if you think is a short-term problem or a long-term problem. I believe it's short-term. I believe the productivity is still evident in the economy, which is the big positive sign. And I think the principal way to solve this short-term problem is through monetary policy. And I compliment you for your approach to that, and hope that you will continue in a stimulative mode.

But the -- what has occurred in the meanwhile is something we have never experienced in American history. And that is the accumulation of surplus of huge amount. And I hope you will tell us whether you think this is a short-lived phenomenon or a rather permanent phenomenon that is going to be a -- besetting the American economic scene.

KAGAN: We've been listening to the opening comments of the Senate Budget Committee. They are listening to -- or they are set to listen to Fed Chairman Alan Greenspan today; listening carefully to what he might have to say about proposed tax cuts by President George Bush. Also, if he will give any hint as to what he'll say about what the Fed might do coming up next week in terms of interest rates.

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