Obama’s Future Budget Czar Ducks Question of Whether Obama Will Ever Balance Budget
Orszag admitted that the current budget was “unsustainable,” but offered no indication whether Obama ever planned to balance it.
“We’re going to have a lot more to say about our nation’s fiscal future in mid-February,” Orszag told CNSNews.com.
“I’m not even confirmed yet,” he added before ducking into a private room behind the Senate committee chamber where his nomination hearing had been held.
During his Wednesday confirmation hearing, Orszag did tell the members of the Senate Homeland Security and Government Affairs Committee that the federal government would run a deficit of at least $1 trillion per year for the next two years, half of Obama’s term.
Taking questions from the committee’s chairman, Sen. Joe Lieberman (I-Conn.), Orszag also said that tax cuts were not as good as government spending because people tend to save some of the money they receive.
Lieberman: “We’re talking about a two year period of time for spending it (the stimulus) out?”
Orszag: “That’s correct.”
Lieberman: “If you go with that $1 trillion deficit, that would put (the deficit) at about $2 trillion over two years?”
The nominee added: “(T)he highest bang for the buck is direct federal government spending on infrastructure and on real goods and services. (The reason) tax relief is somewhat less effective from a short-term stimulus perspective is that part of the money is saved rather than spent.”
Orszag admitted, however, that federal budget levels cannot be sustained, despite the paradoxical need for titanic federal deficits. He said that any reform would have to wait until after the current crisis is over -- after the federal government no longer needs to spend massively.
“The federal budget is on an unsustainable course,” Orszag told the committee. “The course that we are on needs to be rectified as we emerge from the current downturn or we will face a fiscal crisis.”
Orszag, currently the head of the Congressional Budget Office, has been tasked by Obama to eliminate programs that are inefficient or duplicative. When asked about what these cuts might be, Orszag was silent saying that any cuts for 2009 wouldn’t be announced until mid-February.
“The president-elect will be releasing a budget and economic overview in mid- to late-February which will contain some program eliminations,” Orszag said.
The hearing was book-ended by Sen. Claire McCaskill (D-Mo.), who worried in closing comments that the unprecedented federal spending would lead to unprecedented federal waste.
“The scary part about us spending a lot of money at once is that that’s when things get sloppy,” McCaskill said.