THE WHITE HOUSE

Office of the Press Secretary

STATEMENT OF JANET L. YELLEN

Today's release of the private-sector forecast from the Blue Chip Economic Indicators highlights the conservative nature of the Administration's economic assumptions. For the past four years, the Administration has built a record of conservative, credible economic assumptions: for four years in a row, growth has been higher and the deficit has been lower than the Administration predicted. Today's Blue Chip release shows that the Administration's forecasts for the next five years are similarly conservative.

The Blue Chip forecast for real GDP for the next five years is higher than the Administration's: the Blue Chip forecasts 2.3 percent growth per year compared to the Administration's assumption of 2.2 percent per year. The Administration's forecast for nominal GDP growth is similarly conservative: 4.9 percent over the next five years, compared to the Blue Chip forecast of 5.0 percent growth. Finally, the Administration's forecasts of real GDP, nominal GDP, and GDP inflation are closer to the Blue Chip than the Congressional Budget Office (CBO) is to the Blue Chip forecasts of these measures.

The Administration is committed to using conservative, credible economic assumptions for budgetary purposes. We have submitted a budget that balances by 2002 under our conservative economic assumptions. And, CBO has verified that this budget balances under their assumptions as well. The Administration looks forward to working with Congressional leaders to reach agreement on balancing the budget by 2002.

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