Dem blasts Obama econ team’s ‘mumbo jumbo’

A Democratic senator on Tuesday accused President-elect Obama’s incoming director of the Office of Management and Budget of talking “mumbo jumbo” instead of offering hard details on the economy.

“I would think that in this era of freshness and transparency the new administration would want to come forth with detail instead of this mumbo jumbo that is going on,” said Sen. Bill Nelson (D-Fla.), a member of the Senate Budget Committee, during Peter Orszag’s confirmation hearing.
 
{mosads}Orszag had little to say during Tuesday’s hearing on how the incoming administration would spend the second half of the $700 billion financial rescue package, known as the Troubled Asset Relief Program (TARP), or specifics regarding the economic stimulus package being drafted.
 
“We’ll have much more to say in mid-to-late February when the economic and budget overview is released,” Orszag told the panel.  
Nelson went even further, blasting Obama’s senior economic adviser, Lawrence Summers, for also failing to divulge the administration’s plans during a meeting over the weekend with Democrats.

“The discussion on Sunday was devoid of details with Mr. Summers. When are we going to get those details?” said Nelson.
 
Budget Chairman Kent Conrad (D-N.D.) halted the testy exchange by noting that Summers had sent the committee a letter outlining how the Obama administration would spend TARP funds differently than the Bush administration.
 
Despite the flare-up, Orszag is expected to receive Senate confirmation easily. Conrad is preparing an agreement with Republicans that would discharge Orszag’s nomination from the Budget Committee on Jan. 20, paving the way for full Senate confirmation that same day or soon after.  

At Tuesday’s hearing, Orszag laid out President-elect Obama’s broad priorities, which the incoming president discussed frequently on the campaign trail.
 
He said Obama’s highest priorities would be to expand the coverage and improve the efficiency of the nation’s healthcare system, provide tax relief to the middle class, reverse the downturn in the housing market, make homes more affordable to low- and middle-income households, develop renewable energy sources and improve education.
 
“Perhaps in that order, healthcare, energy, education, housing and support for the middle class being an overarching theme.”
 
Orszag told reporters after the hearing that Obama would like to dramatically expand healthcare coverage toward the goal of making it universal in the United States.
 
Yet he also understands the threat that government-funded healthcare poses to the nation’s long-term fiscal health.

“He recognizes that in the long run the big issue we have to deal with is holding down the cost of healthcare, and that’s something Peter has spent a lot of time [on] in recent years,” said James Horney, the director of fiscal policy at the Center for Budget and Policy Priorities.
In the short term, despite a projected federal deficit of more than a trillion dollars for 2009, Orszag said the government must act aggressively to overcome the lack of consumer demand. More and more Americans are saving their money or using it to pay debts during this time of economic uncertainty.

“We need to act. In particular, during periods like the current one, the key impediment to growth is aggregate demand,” said Orszag in his opening remarks.

“Even with the prospect of such large deficits, however, nearly every leading economist agrees we have no choice but to act aggressively to expand aggregate demand and address the macroeconomic crisis.”

He said that would create even larger deficits in the short term.

Over the long term, Orszag warned, the federal budget is on an unsustainable path.

“Even after the economy recovers from the current downturn … under current policies the nation faces the prospect of budget deficits that we believe will measure about 5 percent of [gross domestic product] over the next five to 10 years.”

He said deficits would worsen as healthcare costs rise and members of the baby-boom generation retire.