President Barack Obama's Budget director spoke Wednesday on the administration's budget proposal, continuing his defense of the $3.6 trillion proposal. Although Peter Orszag noted that there are changes being made in both the House and Senate, the budget resolutions are in the same family as Obama's original proposal.
The changes will produce budgets that are not twins, Orszag said, but certainly brothers that look a lot alike.
Speaking with reporters on a conference call Wednesday morning, Orszag addressed concerns that the deficit is too large and could have a crippling effect on future generations. However, he emphasized that the Obama administration is merely trying to lay the foundation for strong growth in the future, and argument heard Tuesday night in Obama's prime-time news conference.
We're inheriting a budget situation which is a mess, which we're working our way out of, Orszag said.
He took issue with claims that the debt is spiraling out of control, noting Obama's commitment to cut the deficit in half by the end of his first term.
The projected $1.75 trillion deficit for 2009 would be the highest since World War II, equaling around 12 percent of Gross Domestic Product. Orszag noted that $1.3 trillion of that deficit was inherited by the Obama administration. The projected deficit for 2010 is smaller, at $1.17 trillion.
Orszag expects to cut the $1.3 trillion inherited deficit in half by 2013, to a more manageable $533 billion. However, estimates from the nonpartisan Congressional Budget Office last week predicted deficits from the Obama budge would average $1 trillion over the next ten years.
As for the goal of $533 billion deficit by 2013, the CBO estimates that Obama's spending plan will leave a deficit of $672 by that time. The difference comes from a sunnier growth forecast held by the Obama administration, while the CBO has a somewhat gloomier outlook.
Orszag noted that the budget resolutions being written by the House and Senate will be more general than his administration's.
It is true that the level of specificity in our budget proposal was greater.but that's natural, that's what happens during a budget resolution, he said.
Even so, the principles of the budget - with a focus on health care, education, green techbologies and infrastructure improvement, are very much in line with what even corporate leaders have been saying is the key to our future prosperity, Orszag said.
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