–White House Budget Chief: ‘False Debate’ on Jobs vs Deficit Cuts
–Deficits Cuts Needed, But ‘Timing’ is Key
–‘Need Both’ Short-Term Stimulus & Long-Term Deficit Cuts
–Admin Hopes Deficit Panel Can ‘Kick Start’ Budget Fix

By John Shaw

WASHINGTON (MNI) – In his final speech as White House budget
director, Peter Orszag said Wednesday that serious deficit reduction
steps are needed in the U.S., but warned that it would be “foolish to
dramatically reduce the deficit immediately.”

In remarks at the Brookings Institution, Orszag said policymakers
should avoid the “false debate between jobs and the deficit.”

Sound economic policies require short-term stimulus and longer-term
deficit reduction, he said.

“We need both and it’s all a question of timing,” Orszag said.

Orszag said the administration supports “additional targeted
measures” to boost job growth, citing a small business lending program
pending in the Senate and additional funds for state governments to
avoid future teacher layoffs in the fall.

But he said that as the recovery strengthens, attention should
shift to deficit reduction measures.

“It’s all a matter of timing,” he said. “Over the medium and long
term, we’re on an unsustainable fiscal path.”

The White House budget chief said passage of comprehensive health
care reform this year has done a great deal to tackle long-term
deficits, but added “more needs to be done.”

Orszag said the administration is eager to review the work of the
deficit reduction commission chaired by former White House chief of
staff Erskine Bowles and former senator Alan Simpson.

Their report is due in December and Orszag said the White House
hopes it provides a “critical kick start” to the fiscal debate next
year. The panel’s finding should help policymakers “get ahead of the
problem,” he said.

Orszag said a good deficit reduction plan will have a strong
“balance between spending reductions and revenue increases.”

But the United States is in “no immediate danger” of a loss of
global confidence in its ability to manage its fiscal affairs, he said.

Orszag is stepping down as White House budget director at the end
of this week. President Barack Obama has nominated former White House
budget director Jack Lew to succeed him.

Lew’s nomination is expected to be considered by the Senate in
September.

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

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