–Obama’s February Budget Estimated FY10 Deficit at $1.6 Trillion
–Two Senate Panels to Hold Hearings on Lew Nomination for Budget Chief

By John Shaw

WASHINGTON (MNI) – In one of his final acts as White House budget
director, Peter Orszag will release the administration’s mid-session
budget review July 23.

The report, which will show the administration’s current thinking
on the nation’s fiscal and economic outlook, is not expected to be
packed with good news.

Analysts will be eager to compare the new batch of numbers
published in late July with those released in February when President
Barack Obama’s fiscal year 2011 budget was unveiled.

At that time, the administration projected an FY10 budget deficit
of almost $1.6 trillion, more than 10% of gross domestic product. The
administration budget saw the deficit dipping to $1.267 trillion in FY11
and $828 billion in FY12.

Looking further ahead, the White House’s February budget envisioned
deficits of $727 billion in FY13, $706 billion in FY14, $752 billion in
FY15, $778 billion in FY16 and FY17, $785 billion in FY18, $908 billion
in FY19 and $1.003 trillion in FY20.

For the FY11 through FY15 period, the White House projected
cumulative deficits of $4.280 trillion. For the FY11 through FY20
period, it saw cumulative deficits of $8.532 trillion.

The Congressional Budget Office said in March that 10-year deficits
under Obama’s budget would reach $9.8 trillion — 14% higher than the
administration projected.

The administration’s mid-session fiscal report will provide the
fiscal backdrop for the confirmation hearings for Jack Lew to succeed
Orszag as the White House budget chief.

The Senate Budget Committee and the Homeland and Governmental
Affairs Committee each will hold confirmation hearings for Lew. The
Senate is scheduled to begin its month-long summer recess on August 9
and there is some hope it might be able to confirm him by then.

The congressional reaction to the nomination of Lew has been
positive.

Budget Committee Chairman Kent Conrad touted his work as White
House budget chief from 1998 to 2001 under President Bill Clinton when
the federal budget generated surpluses.

“He’s the best,” Conrad said.

Sen. Judd Gregg, the ranking Republican the panel, called Lew “very
thoughtful, very smart, very capable.”

But Gregg said that Lew faces one serious problem.

“He’s going into a job where the numbers don’t meet. If he’s going
to be honest about the numbers — they’re in serious trouble and he’s
going to be the guy who has to say the emperor has no clothes,” Gregg
said.

** Market News International Washington Bureau: (202) 371-2121 **

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