During the morning Budget Committee hearing, Chairman Greenspan began by emphasizing that the economy is recovering as tax cuts increase incomes and economic activity, and thus government revenue, and that deficits will decrease in the coming years as defense spending returns to non-wartime levels.  He went on to warn that increased pressure on the economy will be evident as the Baby Boomer generation retires.

"I commend Chairman Greenspan for his candor in describing what I call the approach of the "Perfect Storm," that is, the lack of preparedness for our nation's retiring generation of Baby Boomers," Franks said.

In response to Congressman Franks' question about the impact of tax cuts, Chairman Greenspan said they indeed contribute to economic growth, and that fundamental growth has been rooted in the flexibility that has resulted from deregulation.

"The Chairman today reiterated the message spoken so often by conservative Republicans:  the Federal government needs to get out of the way of free enterprise and let people produce, through less regulation, less taxes, and less intrusion into private markets and business.  This is the best way to ensure economic flexibility, which, as he said, has absorbed the shocks—such as 9-11, corporate scandal, and the war in Iraq—our economy has faced over the last 25 years."