1/ Applicable to nonfarm families. Projections assume consumer price indices of 179.11 in 1977 and 198.26 in 1979. Fifty dollar payment to social security and railroad retirement beneficiaries Total rebate program Simplification and reform program: Fiscal Years 1977 : 1978 8.2 1.4 9.6 1.8 11.4 Replace the current law standard deduction with a flat deduction of $2,400 for single returns and $2,800 for joint returns 1/ Business tax reduction program: Optional increase in the investment tax credit from 10 percent to 12 percent or an income tax credit equal to 4 percent of employers' social security tax payments 1/ Includes extension of the $35 general tax credit to exemptions for age and blindness. The CHAIRMAN. Thank you very much, Mr. Secretary, for an extremely able presentation. Director Lance? STATEMENT OF BERT LANCE, DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET Mr. LANCE. Mr. Chairman and members of the committee, I, too, share Secretary Blumenthal's pleasure and privilege in appearing before the committee. I think that in the interest of bringing about efficiency and responsiveness in Government, we might as well start with the Director of OMB, and you have my printed statement, and I will not attempt to make any comments in that regard. You have had a chance to read it, and I think in the best interests of the committee and the best interests of the stimulus package could be served by our responding to questions of the committee. So, if you don't mind, I will simply submit the statement. [The prepared statement of Mr. Lance follows:] EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON, D.C. 20503 Wednesday, February 2, 1977 STATEMENT OF BERT LANCE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET BEFORE THE HOUSE COMMITTEE ON BANKING, CURRENCY AND HOUSING Mr. Chairman and Members of the Committee: of I am very pleased to be here this afternoon for my first appearance before this committee. You, and your counterparts in the Senate, are essential to the conduct effective economic policy in this country. All of us at the Office of Management and Budget will cooperate in whatever way we can with this committee and others involved in the economic policy area. In that connection, I know you will be interested in the broad outlines of President Carter's revisions to the 1978 budget as they affect fiscal policy, capital markets, and housing programs. The Budget 15. Committees have asked us to have the broad outlines ready by February While I cannot promise that we will have everything completed exactly by that date, we are working mightily, and will try to come as close to that goal as we possibly can. President Carter's 1978 budget revisions will, of course, reflect his major program initiatives and fiscal priorities, although time will prevent making extensive original budget. These he believes, essential initiatives and to laying the changes to the priorities are, groundwork for a healthy economy and fulfilling his commitment to the aspirations of the American people in the years ahead. What I am prepared to talk with you about today is the President's proposals for economic stimulus. I think Secretary Blumenthal will want to comment in particular on the implications of the President's proposals and the related financing requirements for the capital markets. The goal of revitalizing the economy and establishing a balanced, effective approach to curbing unemployment is at the core of the President's budgetary program. Toward this end, the President has proposed a series of specific fiscal initiatives that, taken together, constitute an "economic recovery package." about the disappointing performance I am sure you are all familiar with the basic facts of the economy, particularly in the second half of the last calendar year. Final returns for the fourth quarter are not in yet. There are signs of some improvement in the recovery during recent months, such as the increases in industrial November and production in December. However, our best judgment is that |