Just returned from a briefing on the $3.5 trillion budget with OMB director Peter Orszag and Chair of the President’s Council of Economic Advisers Christina Romer.
The title of the budget outline: "A New Era of Responsibility: Renewing America’s Promise."
The first chapter was called "Inheriting a Legacy of Misplaced Priorities."
Orszag, saying the nation had been put on an "unsustainable fiscal course" by the previous administration, heralded the budget’s $2 trillion in deficit reduction — half from savings, half from tax increases and other similar revenue streams. Left unattended, the deficit would go up more than $9 trillion in new debt than it will with this plan, he said.
He also pointed out that he’s blogging again at the OMB website.
Orszag defended the reduction in itemized deduction for charitable contributions, saying the stimulus provides $100 million for charities and the economic recovery will mean charitable contributions will bounce back.
Romer predicts negative -1.2 percent GDP growth for 2009, but said it would be back up in 2010, +3.2 percent, and +4.0 percent in 2011.
She predicted unemployment would reach 8 percent in 2009, then would go down only slightly in 2010 to 7.9 percent.
Then: 2011 – 7.1 percent; 2012 – 6 percent; 2013 – 5.2 percent.
When asked, Romer said her projections were not in any way overly rosy.