THE WHITE HOUSE

Office of the Press Secretary

STATEMENT OF FRANKLIN D. RAINES, DIRECTOR OF THE OFFICE OF

MANAGEMENT AND BUDGET, ON CBO'S NEW BUDGET FORECAST

We are pleased that, with the release of its forecast, the Congressional Budget Office (CBO) has moved closer to the Administration's views about the direction of our economy and the size of the deficit. With the gap between us narrowing, the President and Congress can focus more squarely on the issue at hand -- how to balance the budget by 2002 while protecting our values.

For the last four years, both OMB's and CBO's projections have proved too conservative. The economy has performed better than either projected, while the deficit has fallen much faster. OMB's projections, however, have been a bit closer to the mark. As we look ahead, we expect that to continue. CBO expects taxable incomes in the economy to fall substantially, even though profits have grown rapidly in recent years. They also expect unemployment to rise to 6 percent; it has remained well below that the last two years.

Although CBO's assumptions are within the range of mainstream views, we believe they will continue to prove pessimistic. Since such assumptions may affect our ability to reach agreement on a balanced budget, we look forward to continued discussion of these important matters with Congress.

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