Just returned from a briefing on the $3.9 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. -- jpt