One major concern of the new budget is that the administration's forecasts for economic growth -- which would have a major affect on revenues -- are too optimistic. The administration expects 3.2 percent GDP increase in 2010, and the CBO recently predicted 1.5 percent during the same year. But apparently that forecast did not take into account the economic stimulus package that became law last week, which is designed to increase growth. According to Robert Greenstein, head of the Center for Budget and Policy Priorities, who spoke to reporters on a conference call today, the projections come from Christina Romer, the chair of the Council of Economic Advisers, and she stands by them; he says the economists at the CBPP find them "plausible.," adding that "there certainly is a non-trivial potential that the economy could be considerably worse than this. ... Will the economy cooperate, will it rebound as well and as quickly as the budget assumes? ... It's always difficult to predict the future course of the economy, and its more difficult now than it's been in a long time."
-- Tim Fernholz
