Obama’s OMB director predicts $1 trillion deficit

President-elect Obama on Tuesday said his budget chief predicts
that the national deficit could reach $1 trillion before the next budget is proposed,
but argued that spending more is necessary to “jumpstart” the economy.

Obama told reporters that Peter Orzag, his incoming Office of
Management and Budget director, made that prediction. The president-elect added
that a $1 trillion deficit could be the reality for years to come even as his
administration starts working with Congress on an economic recovery package.

{mosads}However, Obama also pledged to cut unnecessary spending, increase
oversight and look for ways to cut the deficit.

“We’re going to have to stop talking about budget reform,” Obama
said after a meeting with his economic team. “We’re going to have to
embrace it. It’s an absolute necessity.”

Obama promised that the passage and implementation of his proposed
stimulus package, which is estimated to cost well over $700 billion, will have
the highest level of transparency and oversight.

The president-elect argued that his economic recovery and
reinvestment plan is necessary to right the economy.

“But we’re not going to be able to expect the American people to
support this critical effort unless we take extraordinary steps to ensure that
the investments are made wisely and managed well,” he added.

To that end, Obama said he will seek a ban on all earmarks in the
stimulus package and push the creation of a new oversight board.

The president-elect also stated that he will look to rein in the
federal budget by, among other things, forcing the government to “make tough
choices and break bad habits.”

Obama was asked about reports of his choice of former White House
chief of staff and ex-Rep. Leon Panetta (D-Calif.) to head the CIA, a possible
decision that has drawn fire from some Democrats who question Panetta’s
intelligence experience.

Obama said he has “the utmost respect” for Panetta, but the
president-elect cautioned that no announcements have been made.

“When we make the announcement, I think what people will see is,
is that we are putting together a top-notch intelligence team that is not only
going to assure that I get the best possible intelligence unvarnished, that the
intelligence community is no longer geared toward telling the president what
they think the president wants to hear, but instead are going to be delivering
the information that the president needs to make critical decisions to keep the
American people safe,” he said. “You’ll also see a team that is committed to
breaking with some of the past practices and concerns that have I think
tarnished the image of the agencies, as well as [our] foreign policy.”

Obama, who has been criticized for not speaking out more vocally
about the conflict between Israel and Hamas, again did not wade too deeply into
the issue but stated that he is “concerned” about the fighting and is
monitoring the situation daily.

He added that his administration would follow through on pledges
that he made during the campaign to try and solve tensions in the Middle East.