Obama says expects deficit to approach $1 trillion

[Americanhero1]

WASHINGTON (Reuters) – President-elect Barack Obama said on Tuesday that he expects to inherit a U.S. budget deficit approaching $1 trillion and that his administration would have to make some tough budget choices.

Just after meeting with his economic team, Obama said it was possible that trillion-dollar deficits could stretch into coming years and that he and his team want to instill a "sense of responsibility" about future budget choices.

Obama, who takes over from President George W. Bush on January 20, is seeking quick action from Congress on a package of spending and tax-cut measures that would total nearly $800 billion over next two years.

While many in the Democratic-led Congress are also eager to move swiftly on an economic stimulus, Republicans are insisting that the package receive careful scrutiny to avoid wasteful spending.

Any package would add to already spiraling budget deficits.

Obama spoke about the fiscal outlook a day before the Congressional Budget Office, the nonpartisan budget analyst for the U.S. Congress, plans to unveil its latest estimates on the budget deficit.

Private analysts expect the report to show a deficit of more than $1 trillion for the fiscal year 2009 that ends in September. That would be more than double the roughly $400 billion shortfall of 2008.

Obama, who is trying to garner broad backing for the stimulus plan and has been courting Republicans as well as Democrats, said Americans who voted for him were "demanding that we restore a sense of responsibility," including on budget practices.

He said his pick to become the new White House budget director, Peter Orszag, was forecasting that the budget deficit would likely approach $1 trillion "before we've even started" and that more deficits could be coming in years ahead.

"The reason I raise this is because we're going to have to stop talking about budget reform" and realize it is "an absolute necessity."

He said a rescue package is needed but that "we're not going to be able to expect the American people to support" the rescue unless steps are taken to reform the budget.

Orszag, who attended the meeting that Obama held at his transition headquarters in Washington, has been head of the Congressional Budget Office for the past two years.

But the budget report to be issued on Wednesday will be prepared by acting CBO director Robert Sunshine.

http://news.yahoo.com/s/nm/20090106/ts_nm/us_usa_obama_budget