The economic outlook of the White House budget director
Jim Nussle strikes a note of caution on government finances as the economy potentially slows down.
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"Revenue growth has slowed dramatically as economic growth has softened," Mr. Faucher said. The Congressional Budget Office's current estimate for this year's federal deficit is $155 billion.Skip to next paragraph
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Nussle did not offer a specific projection for the deficit but did strike a note of caution on government finances. "The concern I would have overall for this next year is more in the area of economic growth," Nussle said. "In the past few years … economic growth has surprised us to the positive, and that in turn has had some acceleration in revenue. This coming year, we may not see those surprises to the good. We may either hit it right on the head as we have the last couple of months, or we may see a slight decline."
Slower expected growth is one reason the Bush administration opposes fixing the alternative minimum tax (AMT) with offsetting revenue from other sources, Nussle said. Last week, the House passed a measure that kept the AMT from hitting middle-class families and offset the loss of revenue to the government by raising taxes on equity fund managers and multinational corporations.
"Again, going back to this whole notion of the potential of a slowing of economic growth – not a recession, certainly, but slower growth than possibly was anticipated – this would be the wrong time to have a tax increase," Nussle said. "It would not have a good effect for the economy. This is not the time to take economic growth for granted. And so we do not support raising taxes at this point in time in order to pay for whether it is AMT relief or more spending."
The director of the Office of Management and Budget (OMB) offered a spirited defense of Bush's economic legacy when he was asked about an article in the December issue of Vanity Fair by Nobel laureate in economics Joseph Stiglitz. Mr. Stiglitz, who worked for President Clinton, charged: "The economic effects of Bush's presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America's being displaced from its position as the world's richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush."
"This is somebody that worked for Clinton.... I guess enough said," Nussle quipped. Then he added, "The president kept America safe. Let's start with that. And unless the country is safe and free, your economy is not going to work. So if you are putting the economy before the safety and freedom of the country, I believe you are missing the point."
Nussle is in his third month as OMB director after a long career in Congress. He earned a bachelor's degree from Luther College in Decorah, Iowa, and a law degree from Drake University in Des Moines, Iowa. In 1990, at age 30, he won a seat in Congress. While on the Hill, he served as a member of the Agriculture, Banking, and Ways and Means Committees and was chair of the House budget panel. He retired from Congress in 2007 after making an unsuccessful run for governor of Iowa.