Administration Works to Create Jobs without Adding to Deficit

Washington Post (11/4, Fletcher) –The Obama Administration is intensifying its search for policies that can stoke job creation without adding significantly to the nation's crippling budget deficit." In a speech yesterday, OMB Director Peter Orszag "warned...that the nation's unemployment problem could have a long-term impact that the administration must work to minimize" and yet the Administration "is increasingly concerned about the federal government's perilous fiscal situation as swelling deficits threaten the nation's long-term economic health. ... 'Deficits of this size are serious and ultimately unsustainable,' Orszag said." The Post says the "soaring federal deficit threatens to lead to higher interest rates, and a weaker dollar, while posing a political vulnerability for the Obama administration."

The Hill (11/4, Alarkon) – Orszag "said Obama and the administration's economic team are looking at 'a range of options' to be included in the fiscal 2011 budget proposal that would address the record $1.4 billion deficit." The Hill notes that Orszag "didn't describe deficit-reducing options under consideration, such as tax increases or spending cuts. ... 'It is at this point that we are likely to observe a rise in interest rates, an increase in borrowing from abroad, or some combination thereof due to the deficits,' Orszag said. 'And it is at that point that deficits will be putting the health of our economy in jeopardy rather than helping to mitigate the most severe economic downturn in more than 50 years, as they are now.'" Hat Tip: NAM