Orszag: Economic mess will change incoming president's agenda

It will be difficult to deal with much beyond the economy in the early stages of the next presidency, budget office chief says.

Dealing with the fallout from the economic meltdown will boost the federal budget deficit and will limit the agenda of the next president, according to Congressional Budget Office Director Peter Orszag.

"There is no question the budget deficit is going up," Orszag said on PBS' "Newshour with Jim Lehrer" Thursday. "It was increasing even before the most recent turmoil. If you add the potential for a significant recession and the operation of the federal government in trying to stave off the financial turmoil, we could be seeing a deficit of $750 billion or more."

CBO projects fiscal 2008 ended Sept. 30 with a deficit of $438 billion. Orszag said either Sen. John McCain, R-Ariz., or Sen. Barack Obama, D-Ill., will find it difficult to deal with much beyond the economy in the early stages of the next presidency. "It's going to be hard to get other topics on the agenda, not just for fiscal reasons, but also because we are just human beings and there is a limited amount of time and attention that can be given to different topics," he said.

Also Thursday, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., urged President Bush to call a meeting of G-8 leaders to address the downturn in the world economy. In a letter to Bush, they argued that the United States should take an even more proactive leadership role given the financial market crisis that has unfolded in recent days. "There is a sense of urgency that the United States take a leadership role in bringing together leaders of the largest economies to help avoid even more serious economic consequences," the leaders wrote.

House leaders will consider bringing lawmakers back to Washington before the Nov. 4 election to vote on an economic stimulus plan, Democratic Congressional Campaign Committee Chairman Chris Van Hollen of Maryland said Friday in an interview with Bloomberg Television. Pelosi has said the House might return after the election to consider a economic stimulus plan or package.

She and other Democratic House leaders will meet with economists Monday as lawmakers seek to craft the stimulus plan. The package is likely to include items Democrats have sought for months, including expanded unemployment insurance, increased spending for food stamps and Medicaid and infrastructure funding aimed at creating jobs. A spokesman told Bloomberg that Reid "will work with the House of Representatives and leave all options open to address this issue. Recent developments only reinforce the need for additional action to reinvigorate the economy."

Democratic leadership sources said such a move remains in play, given the need for more action to stabilize the U.S. economy. Bush has remained steadfastly opposed to a second stimulus package, but congressional aides said the state of the economy might allow Democrats to force his hand. Bush sought to calm the economic waters Friday, saying the government has an "aggressive" plan to address the mess, but that the plan would "take time to have its full impact." He added: "The American people can be confident in our economic future. We know what the problems are. We have the tools to fix them."