–OMB’s Orszag: ‘No Significant Change’ In Deficit Outlook Since Feb
–OMB’s Orszag: US Economy ‘Remains Weaker Than We Would Like’
–CEA’s Romer: Admin Sees A ‘Ramping Up of Growth’ In Future Years

By John Shaw

WASHINGTON (MNI) – White House budget director Peter Orszag Friday
said that the budget deficit in fiscal year 2010 will be $1.471
trillion, a number that is “slightly smaller” than the administration’s
estimate in February.

The Office of Management and Budget’s mid-session review sees
budget deficits falling slightly to $1.416 trillion in FY’11 and $911
billion in FY’12.

The administration now projects deficits of $736 billion in FY’13,
$698 billion in FY’14, $762 billion in FY’15, $758 billion in FY16, $721
billion in FY’17, $749 billion in FY”18, $822 billion in FY’19 and $900
trillion in FY’20.

In a conference call with reporters, Orszag and Christina Romer,
chairman of the Council of Economic Advisers, said the administration
believes the economy is strengthening, but that budget deficits and the
unemployment rate remain too high.

“The economy remains weaker than we would like and budget deficits
are higher than we would like,” Orszag said.

The nation’s budget deficits “require attention,” Orszag said.

Orszag said that budget deficits will fall in the coming years as
the economy strengthens further. He added that health care reform will
add to deficit reduction over the next two decades, but acknowledged
that “more will need to be done.”

Orszag said that the combination of economic weakness in 2008 and
2009, the cost of enacting fiscal stimulus measures, and higher debt
service costs because of recent deficits have pushed longer-term deficit
projections higher.

Orszag said that failure to enact the TARP program in the fall of
2008 and pass fiscal stimulus legislation in early 2009 could have led
“to the second Great Depression.”

Romer said the administration’s new economic assumptions were
“locked in” by the end of May and show an economy which will see a
“ramping up of growth” in future years.

Romer said the financial instability in Europe has caused a
“certain amount of turbulence for the U.S. economy.”

The White House’s new budget and economic report projects 3.1% real
GDP growth for the four quarters of 2010, 4% in 2011, 4.3% in 2012 and
4.2% in 2013.

The report sees the average unemployment of 9.7% in 2010, 9% in
2011, 8.1% in 2012, 7.1% in 2013, 6.3% in 2014, and 5.7% in 2015.

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

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