July 19th, 2009
11:22 AM ET
12 years ago

Orszag: 'We've stepped back' from economic 'free fall'

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/07/19/art.orszagwall0719.cnn.jpg caption="White House Budget Director Peter Orszag said Sunday that unemployment will lag behind the rest of the economy once the economy begins to turn around."]
WASHINGTON (CNN) – White House Budget Direct Peter Orszag said Sunday that the struggling economy has backed away from the precipice it was teetering on late last year but a return to economic growth has not occurred yet.

“Where we are is the sense of free fall that we had back in December . . . we’ve stepped back from that precipice but we’re not yet in the growth zone,” Orszag said on CNN’s State of the Union. “Most private sector forecasters are suggesting that won’t happen till later this year.”

Orszag also said Sunday that unemployment – now approaching 10 percent nationally – could take some time to turn around.

“Unemployment will lag somewhat,” Orszag told CNN Chief National Correspondent John King, as the economy begins to turn around later this year.

“Firms - usually even after the economy begins to pick up again – they still remain reluctant to hire people for some period of time. So, the unemployment rate is going to remain elevated – too elevated and there are too many people who are suffering – for some period of time.”

“It’s going to take some time to work our way out of it,” Orszag also said.

Filed under: Economy • Peter Orszag • Popular Posts • State of the Union
soundoff (80 Responses)
  1. Neil

    IF the 800 billion plus healthcare reform package that Obama is trying to sell gets approved we will be right back in freefall agian. These guys are married right, I think their wives ought to start managing the federal budget, they obviously can't.

    July 19, 2009 11:39 am at 11:39 am |
  2. Va Womyn

    They have said this at least once a month since January. How about instead of hope and change we get some solutions and stability?

    July 19, 2009 11:41 am at 11:41 am |

    What planet is this cat from?

    July 19, 2009 11:43 am at 11:43 am |
  4. CJ in FL

    It's nice to just 'decide' that the freefall is over.

    First they say the stimulus is crucial. Then they say it may not work (Bush's fault). Then they say it's working. Then they way things were worse than they thought (Bush's fault). Now they're saying things might be better...or they might not.

    July 19, 2009 11:44 am at 11:44 am |
  5. Greg

    Yay!!!! We've very slightly slowed the rate at which the economy is going into the toilet...THAT is Change We Can Believe In! Take to the streets and celebrate! The Recession Is Over! Obama for LIFE!!!!

    July 19, 2009 11:47 am at 11:47 am |
  6. John

    They're right on the money! Just replace the word "over" with "begin."

    July 19, 2009 11:48 am at 11:48 am |
  7. Randy

    Yes for Goldman Sachs and the investment banker because poured money all over them and some it stuck. We are now subsidizing them to foreclose on the Americans that need the help. Obama is not living up to his rhetoric.Obama is proving the two party system is worthless if both parties are bought off by the same wealthy families and corporations.

    July 19, 2009 11:50 am at 11:50 am |
  8. Jeff

    I'm sure that Americans in Michigan, where unemploymen is at 15%, are encouraged by these predictions ffrom another of President Obama's underlings. At least when this turns out to be false (like the Stimulus Package holding unemployment at 8% did) the President will be able to say truthfully that he never said the free fall was over.

    July 19, 2009 11:51 am at 11:51 am |
  9. Alan

    Tell it to the people that are unemployed and losing everything while you fly around in lear jets drinking wine.

    This country voted for change, but if voted for the wrong change. We need to throw these bums out, all of them Dem and Rep, and start electing people that care about America, not just power.

    Look at CA if you think that the Obama change is good. It's not working out so well for them!

    July 19, 2009 11:56 am at 11:56 am |
  10. JoblessInSeattle

    I am not sure if I can believe what Orszag (or Robert Gibbs) says anymore, but in this particular instance I pray he is right.

    July 19, 2009 11:57 am at 11:57 am |
  11. Steve A. , New Braunfels , Texas

    This economic recovery is like Bush's/Cheeny's/Rumsfield's war, in the beginning it was supposed to be over in six weeks or so then they told us it's not a sprint it's a marathon and here we are six or seven years later still dreaming of some kind of victory. It's just 10 billion a month forever I guess. Misssion acomplished. Gee Thanks W...

    July 19, 2009 11:57 am at 11:57 am |
  12. JD

    Yet another Obama-naut telling the BIG LIE in hopes that political correctness will assure an end to the discussion.

    Sorry, folks...unemployment is still skyrocketing, prices are still going up, and all the Obama administration appears to care about is raising taxes, penalizing the successful, raising energy costs, and engaging in still more political witch hunts against the previous administration.

    2012 can't get here soon enough. All members of this misguided administration need to join the ranks of the unemployed.

    July 19, 2009 11:57 am at 11:57 am |
  13. Al, CA

    Obama is managing well.

    Under GOP, god forbid, we would be already destroyed.

    July 19, 2009 11:59 am at 11:59 am |
  14. marshall

    The free fall may be over but it has been reduced to a steady descent it seems. Unemployment rampant and the real rate is closer to 16-18% if you figure in those who were never elegible for benefits, those that have exhausted them, those that have quit looking, and those who are underemployed . Do not forget the new full time now averages 37 hours . America needs jobs and responsible banks giving responsible people and small businesses access to credit otherwise the road is long and winding and perhaps rougher then anyone thought.

    July 19, 2009 12:01 pm at 12:01 pm |
  15. Geraldo

    economy is suck now, exactly like obama it is

    July 19, 2009 12:01 pm at 12:01 pm |
  16. goodness, the first nine comments are pretty negative

    I just got back from a WaMu picnic, over half continue to be unemployed, it is tough not just in Michigan

    but even those that are struggling are not half as bitter as the posters her

    It is no suprise that unemployment will lag, that is a normal tenant of economic models

    It is also no surprise that an economist (a whitehouse economist no less) says we may get better, or we may not

    I have no use for economists, I think they got us into this mess in the first place

    HOWEVER... we are very lucky to have Obama, he is making the correct moves, we are in uncharted waters and politicians all the way back to the first Bush including Congress all are at fault

    So, it all doesn't matter and I enjoy reading your comments BUT it would make a bigger impact if you wrote them to your congressmen (I say this even though I am an Obama supporter)

    July 19, 2009 12:02 pm at 12:02 pm |
  17. GI Joe

    I find it interesting that our representatives are always yelling they don't have time to read these things. THEY WRITE THEM.

    The CBO had time to read them – maybe our representatives need to do their jobs and quit grand-standing in from of TV cameras.

    Also, how is that Sports ruling coming along Sen. Hatch? That is taking time away from what the PEOPLE need.

    July 19, 2009 12:06 pm at 12:06 pm |
  18. annie s

    I realize that no one in this forum will give credit where credit is due, but the policies of this Administration HAVE begun to work. It takes time to turn around the poor economic policies of the last 25 years – we're finally on the right track!

    July 19, 2009 12:07 pm at 12:07 pm |
  19. New Yorker

    "Goodess,the first 9 comments..." are negative because our situation here in the U.S. is getting worse with this president at the helm. Face reality, like the rest of us who see what this guy is up to. The situation is bleak at best.

    July 19, 2009 12:07 pm at 12:07 pm |
  20. riteaidbob

    Al, CA July 19th, 2009 11:59 am ET

    Obama is managing well.

    Under GOP, god forbid, we would be already destroyed.

    Your not just a fool...your a blithering idiot.

    Stop drinking the koolaid and start thinking for yourself.

    It's pathetic how the left/dems are so IGNORANT to what this CLOWN and his dolts are doing to this country!

    July 19, 2009 12:07 pm at 12:07 pm |
  21. richie

    Every one who hast posted on this entry has no concept of macro economics. It takes time! This mess was caused by years of deregulation. We are only 7 months into the obama administration.. he has been incredibly productive. How much success have you people seen in the first. 7 months of your job. Please you wouldn't even have been up for promotion. He is running a country not pigly wiggly. Hopefully you are all just old and will stop expressing your ignorant narrow minded, conservative ideaology from now on. You guys are in the minority and amazingly it will stay that way. Conservatism is dead

    July 19, 2009 12:08 pm at 12:08 pm |
  22. Greg

    So it doesn't matter what "facts" are, as long as we continue to believe in Dear Leader and remain positive about it? That's what is most important?

    July 19, 2009 12:10 pm at 12:10 pm |
  23. Flipper

    I love all of these mixed messages coming from the White House. They create phony numbers about the jobs they supposedly "saved," or they claim that they (& incredibly everyone else) "misread" the economy, or make ridiculously vague statements like taking credit for pulling the economy away from the brink yet they have no real way of actually proving it. Meanwhile, the nat'l & state unemployment rates keep going up up up (yeah, I know, the unemployment rate is a lagging indicator. Dems always remind people of this when a Dem is in the White House)!

    July 19, 2009 12:11 pm at 12:11 pm |
  24. riteaidbob

    No matter how far in debt this Chicago THUG takes us...no matter how far he expands the size and POWER of the Federal government (and Executive branch)...no matter how many socialist/communists/radicals he puts in positions of power (Czars)...no matter how many campaign promises he breaks/ignores...no matter how many times he silently ignores the constitution or tramples on your rights the left/Dems will spend the next decade saying...


    July 19, 2009 12:13 pm at 12:13 pm |
  25. Peter

    For one! stimulus has done magic at least the economy has stabilized abit, without the stimulus may be we could be waiting for hours to buy a bread. The free fall could be a disaster equivalent to what happened in Russia. And failure to act on health care now will cost our children tripple of what we could have used now, the lobbyist and the special interest groups are not telling you the truth take for instance, the present value of the federal government major reported that long term "fiscal exposures" the difference between what was promised and what was dedicated revenues totaled $50 trillion in 2006. This represented close to 4 times gross domestic product (GDP) in fiscal year 2006 and was up from about $ 20 trillion, or 2 times GDP in the year 2000. If we wanted to put a side today enough money to cover these promises, it would take about $ 440,000 per American household up from $ 190,000 in 2000. Talk about the time value of money and you gonna unmask the hypocrisy perpetrated by the lobbyist, special interest groups etc. Here the loosers are the people who can't afford to go abroad for hip placement! etc. The radio talk shows presenters earns 6 figure salaries some even write books for sale to make more money! so if they tell you to go for a tea party ask yourself what is their for you? or are they just using you?

    July 19, 2009 12:13 pm at 12:13 pm |
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