KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Lew Chosen For OMB Post As Federal Deficit Tops $1 Trillion

President Obama's pick to replace Peter Orszag to run the Office of Management and Budget is inheriting a federal deficit that has topped $1 trillion with three months left in the federal government's fiscal year.

The Associated Press: "In its monthly budget report, the Treasury Department said Tuesday that through the first nine months of this budget year, the deficit totals $1 trillion. That's down 7.6 percent from the $1.09 trillion deficit run up during the same period a year ago." In the meantime, Republicans are blocking extra spending on unemployment benefits and job creation bills. "Another failed effort would have provided cash-starved states with money to help avoid layoff of public employees and finance the Medicaid program for the poor and disabled" (Crutsinger, 7/13).

The Fiscal Times, a reported column: Jacob Lew, who will take over OMB, will likely have tough choices to make to mitigate the debt. "Lew faces a grueling challenge - the exact mirror image of his last tenure at OMB. Back then, tax revenues were flooding in so fast that surpluses were piling up even though Congress and the White House were ignoring pay-as-you-go restrictions. Now, the administration faces trillion-dollar deficit projections in the coming years. Obama has pledged to slash the deficit to 3 percent of gross domestic product by 2015, and his fiscal commission may recommend painful policy changes that would be difficult to get through Congress" (Pianin, 7/13).

The Washington Post: Lew "'handed the next administration a record $236 billion budget surplus,' [President Obama] said, and called on his new appointee to 'use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path.' … In the job of OMB chief, Lew would be responsible for drawing up a budget plan by February to reduce the federal deficit to 3 percent of the size of the economy by 2015. The current deficit is $1.3 trillion - more than 9 percent of the economy. To meet the goal, he probably would have to entertain the possibilities of tax increases and cuts to popular entitlement programs such as Social Security and Medicare" (Kornblut and O'Keefe, 7/14).

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