Can you make the case that bypassing you have done it here several times the 7179 business extension, if that is it will bring the debt . Iling limit closer assume that the expiring provision will not be renewed. Obviously, if it is renewed, that will have an effect on revenues in the short term. Im not sure, to be honest. We would have to sit down and do the calculations. I hate to yes. Federal Health Care Spending has been growing faster than the economy, of course. Did you see any differences in . At trend do you see a faster rate of growth for federal Health Care Spending, or do you see . It slowing down at all any changes . Keith we do not have some of the data yet. We will probably have that by the and in the year. To get an idea of if we want to adjust our forecast and premiums. Exchangeup rate in the is always a big unknown in our forecast. We do expect premiums to rise anyway. And the uptake in exchanges is always a big unknown in our forecast to my because we do not have any experience with that yet. Just to followup looking at the larger picture, there has been in the past several years a slowing in the growth rate in the federal Health Care Spending. The question is, will that continue or will the growth rate return to a faster pace . Do you have any better sense for that growth rate is headed at this point . Keith it is certainly part of our forecast that spending on health care will increase significantly going forward. It has been a longterm trend, and then of course, the effect of the subsidies is a big unknown in the exchanges. We do expect that Health Care Spending is going to continue to rise. Any differences in your projections between now and march traceable to the Health Care Law . Keith no, it is pretty close to the same right now. On your revision of the increase and potential Labor Force Participation, what drove you guys to make that change . Has there been any interplay with the afford care act on your projections with Labor Force Participation . And could it inform any thinking about slower wage gains so far over the past 18 months or so . Keith i think our notion of a slightly higher Labor Force Participation in part comes from the pattern. We find people returning to the labor force a little bit faster than we would have anticipated. It makes us think that the cyclical impact of the labor force is bigger than we thought before. That is the main reason. I dont know that we have seen any impact on the Labor Force Participation from the aca. It is hard to know how much that is going to affect things. Certainly, you want to keep monitoring it and get an idea of what the impact would be. One of the big issues is that the employer mandate is only partially kicked in this year and we have more to kick in later. We will have to see what impact that has. On Interest Rates, in your changes from the market a sign from the market baseline, you indicate 3 million plus downgrade in Interest Payments. Can you explain that . Talk about why that is, because i thought you made a decision on lower than historic rates previously. What new information is there that is lower, or is that just fluctuations in the forecast . And how does this play into the idea that our interest will become such a big word and that we will have trouble in five or 10 or 30 years paying our continued interest . Keith the change in the Interest Rate forecast really came from a look at the Financial Markets and the expectations in the Financial Markets. We are beginning to expect a little lower growth in Interest Rates than we did. We made an adjustment for that. But we still anticipate a rise in Interest Rates, a significant rise in Interest Rates. In fact, the picture is still up there. We will also have a very large increase in Interest Payments as Interest Rates go up. You know, you can adjust it a little bit, but its still going to be a very large increase in the cost of interest on the debt. On the Interest Rate question, or related i guess, two things. One was there is a line about no expectation for a cola for Interest Rate inflation. Along similar lines, do you have new data on disability and when that will be exhausted in your estimates . Keith the Social Security is set by law to follow the consumer index. I forget exactly, but its a one or two your time change. The way it looks now, there will just not be much inflation on the cpi to give much of an index on Social Security. That is what we anticipate. And the other part, im sorry . On disability insurance. Keith i dont recall what it was last time, but i know we talked about it in our longterm budget outlook. But i dont recall. If they havent already, democrats will probably use this report to say, look, no need to cut spending. Republicans will argue longterm we need to do something about it. Who is right . [laughter] keith this doesnt change our longterm projection, or even our 10 year projection. The pattern is very much like it was in march, very much like it was in january. Under current law, the growth in debt is not sustainable. At some point it will get to a very high level. Obviously, you cannot predict tipping points, but at some point this becomes a problem. The wave is going, it is not just that the debt gets to a high level, i think Something Like 70 of gdp by 2025. But there is also the trend. 70 and growing. That factors into things as well. This is an unsustainable path here for the federal debt. Does your point take into account any kind of economic boost from cutting taxes . In other words, do we use dynamic scoring to indicate revenues would not be as low as previous they suggested . Keith implicitly there is dynamic analysis in this work all the time. It is sort of been nothing new in the Economic Force that we rely on, the current law that we rely on, and part of the fact part of this is the growing debt probably having some effect on crowding out investment and slowing Economic Growth going forth. Speaking of dynamic, since you brought it up, you guys just recently issued your dynamic estimate of a particular bill, the extenders back in early august. I wonder you could give us the aspects of how that decision was made in terms of the formatting, the table and so on. And also, how much of that was made in discussion with the budget committees, particularly the Senate Budget committee . Keith they certainly requested the estimate and i believe it was large enough for the automatic dynamic analysis to begin. We did that analysis along with jct. Part of the analysis is figuring out how to effectively communicate the impact. We did our analysis on that particular tax extension relief act of 2015. We estimated it would increase the deficit by 87 billion over a tenyear timeframe. We also put in the estimate that without the macroeconomic effects, you can see where those effects are. In terms of the fort amounting, was that the formatting, what was was that decision made here . Keith oh, it was our decision. We also anticipate it will improve the quality of our estimates to be able to improve that include that. There was perhaps an issue of our estimates not being centered without having the the macroeconomic effects included. That is probably true to an extent, but there is always uncertainty in terms of forecasting the effects. We are kind of used to the idea of uncertainty in our macro forecast. You mentioned center. Could you go over that issue again . Keith sure, the tax extension the tax relief extension act is a good example. The increasing deficits with by about 97 billion, but you expect the lower income tax rate will have some sort of macroeconomic effect, reducing a little crowding out and such. We anticipate an increase deficit by less than that, by about 87 billion. We had a shift of about 10 billion to our point estimate to the impact, if that makes sense. How much of a challenge has it been to i mean, it is easier probably to do a range of dynamic estimate. You estimate a range of the dynamic impact of inflation as opposed to a single number. Has it been a challenge or an issue to do a single number rather than a range . Keith in my mind it really happened in, because we are asked for our best estimate. We could put a range around estimates without macro effects just like we can with one with a macro effect. I think we are doing a good job to give a pointed estimate. This is our best estimate. But it is also probably true to communicate the uncertainty in the range. We can do that at least wanted to play. It is hard to do it numerically we can at least do that qualitatively. It is hard to do it numerically. Was the range what you expected, or more than you expected . Keith i think it was pretty much what we expected. I did not sit down and try to predict it, but we have been using the macroeconomic effects for a while now and we have the models down, so we have a feel for what that will look like. As estimates continue forward, it is important to be transparent on the modelers so we can get some discussion about how we do the estimates and maybe we can improve that over time. How much more uncertain is this tax extenders bill, how much more uncertain is this dynamic score of 87 billion than the standard score of 97 billion . Because we hear the score is less certain. This is only a 10 billion difference. What would your thoughts be . Keith on the difficulty with the macroeconomic effects and really, almost all of our estimates, is that there is an unknown thing there. We all know how accurate it is, what the ranges. When we do our forecast, especially Something Like the longrun forecast, we will do a parameter of values to give you a feel for the accurate a. But that is not released this is the goal standard error that is not really a statistical standard error or Something Like that. Hopefully over time we will get a better notion of that and be able to begin communicating that a bit better going forward, what the likely range will be. To the tax cuts pay for themselves . Keith no, the evidence is that the tax cuts do not pay for themselves. And you so and our models show that in the tax extension relief act. We are hoping the estimate is more centered now, that we are going to get into the right that the point estimate is being more accurate. There has been uncertainty lately. Not to be a pessimist, but we do have a fed at the zero lower around. We do have an historically high and growing amount of debt to gdp. What are the risks to these two conditions should there be a global recession, which is presumably not unthinkable given what we are seeing in some of these markets. Keith im not sure the markets are suggesting anything about a global recession as of yet. As long as the longterm economic fundamentals remain and change, then this is not some we should worry about stop and what i have seen what we should worry about. And what ive seen from the fed is that the fluctuations in the equity markets, thats not the same thing. That is one of the reasons why we are concerned about the growing debt, because as debt continues to grow in handcuffs the government if we go into another recession about what they can do policy wise to work through it. We lose flexibility. And to give you an idea of how important that is, i will repeat something that you probably know. But keep in mind the jet to the debt to gdp ratio in 2007 was Something Like 30 of gdp. We are now up to 74 and that is a huge change. That is a difficult thing. Starting at 74 would be a difficult thing to do with another downturn like that. There was something in the changes about between march and last week about the 200 million in related health care. It was reclassified in march and then reclassified again this time. Can you walk us through . Keith i think it was a technical change, but the fact that it was in our forecast in march makes it a change that affected our estimate of revenues, but it did not fall into the technical category. What was the original thing to come up with 200 billion . What was the treatment in march and the treatment in march versus the treatment now . Keith that i do not know. I have had too many things to look at. We can follow up. Keith so it is absolutely clear we have left you with no questions . Its things like there are not as many changes in this update as in a lot of the previous reports. It seems like minor changes. Keith i dont have experience with previous reports, but certainly the economic change, the drop in and disappointing firstquarter with growth had a bit of an impact. And even now it looks like since july 7, even less of an impact than first thought because the data looked a little better going forward. And then, i guess, the revenue rise. But other than that, we really havent changed our views on the potential of gdp in the longterm view of the economy and the budget going forward. We have not changed that much. We still have a tricky time because we are still looking at significant slack in the economy. Weve got until the end of 2017, at least by our forecast, until that slack is gone. And until that goes, we dont anticipate the wage growth will be what we would like it to be, what it should be until that slack goes away. I think that will be a challenge going forward. That we get sufficient Economic Growth. This may be outside your purview, but any thoughts on what kind of policy changes could accelerate that growth and reduce the slack . Keith i wouldnt want to set speculate to speculate on that. It is oh is difficult to imagine what will spur the economy in the short run. We are doing now is the setting of the automatic stabilizers. The demand has faded from that. That is what we are dealing with, but you are always dealing with that in a recession. One of the things that i think looks like a real almost unknown challenge right now is productivity is not growing like it usually does through a business cycle. And i think that is probably a real concern not just to the united aids, but around the world. Productivity growth being strong to the United States, but around the world. Productivity growth being strong. It is actually part of our forecast that we will get a bounce back in productivity, but in some ways it is overdue right now. Is it that worldwide productivity growth is weak . Keith it is. There is no real clear answer. Hopefully when we see it bounce back we will figure out why it was this low. But that is an important part of this forecast and the revised forecast, productivity. When he gets back to Something Like it usual longterm range of growth. Like its usual longterm range of growth. Can you walk us through where that potential gdp has been to where it is now to where it could go . Keith Something Like potential gdp, it requires a number of things. You get back to full use of economic resources. You get your labor force balancing back bouncing back and unemployment to bounce back. Weve probably got some catch up in capital investment. In fact, part of our forecast is a little ketchup in business investment. Actually, that is one of the things that we differ a little bit from some of the other forecasters. We are a bit more bullish about a bounce back in investment. But you get labor force back and investment back, and in you hopefully get this productivity back. That is sort of the at the recipe for Economic Growth going forward. And although weve had some disconnect between productivity and wage growth, a number of years ago growth in productivity is now following labor compensation. They still are related and we are still expecting you will need to have growth in productivity and competition. And that is one of the things, too, the share of gdp is still low. That needs to bounce back. That will be part of getting rid of the labor market slack and increasing demand for labor services. This coming saturday marks the 10year anniversary of Hurricane Katrina hitting the gulf coast. The storm displays nearly one Million People and killed nearly 2000 along the coast from florida to texas. A year after the hurricane, cspans and a crew to the region to look at the recovery, and tonight, well show you scenes from st. Bernard parish a townsiana hollowed by meeting with then mayor ray nagin. Heres a portion of what you will see. We purchased a total of 107 trailers, and i have them at four different sites, but when you walk across the street here, you will see 42 set up for our teachers and members. That was the only way, especially back in november, that i could get a staff at the school to teach the children because there was no place to live. If you go further behind into that subdivision, you will see complete and utter devastation. You will see very few people actually living there, gutted homes, some not added as of yet. Some totally destroyed. You will see some trailers in front of their homes where people are working on them, but you will not see the vibrant community there once was. Residents of new orleans reacting to the governments response after Hurricane Katrina. You can see the entire 2005 town hall meeting with Hurricane Katrina victims tonight starting at 8 00 eastern. Also, we will show you a tour of st. Bernard parish in louisiana a year after the hurricane struck. By the way, president obama will be in new orleans meeting with residents there and talk about the rebuilding. We will have live coverage of the president s remarks starting at 5 00 eastern. Coming up friday, washington journal will be spending the morning delving into the anniversary of Hurricane Katrina, talking with a guest live from new orleans, including