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. To: riteaidbob

    it is YOUR JOB to report it to YOUR representative

    the media broadcast it, but they are just as biased as you and I

    don't be lazy, write a letter to your representative

    this BLOG is a waste of your time, but enjoyable

    July 19, 2009 01:07 pm at 1:07 pm |
  2. Gerald F. Canada

    Now that it was voiced. (The things are getting better shtick that is). You know that the other shoe is going to drop. Then good old back peddling 101 will start up. ( Again.)

    July 19, 2009 01:07 pm at 1:07 pm |
  3. TOM

    If we had electeda repub we would be worse off. Now all the rich people who would have their taxes cut would be happy.

    Trickle down economics is when you feed your horse oats so the birds will have something to eat later.

    July 19, 2009 01:09 pm at 1:09 pm |
  4. southerncousin

    Another obamatron says the recession is over? I got my quarterly 401K statement on Friday and also talked to my cousin who lost his job when the obamatramatic porkulus bill provided all those funds for George Soros, ACORN and the unions, and he still is very unemployed with no prospects. Why are these obamatrons lying, they must only talk to CNN listeners and readers, because they are the only ones who could possibly believe them, the after all voted for this idiotic thug in the White House.

    July 19, 2009 01:09 pm at 1:09 pm |
  5. To: New Yorker

    "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."

    I agree that the situation is bleak, but I don't agree that our president is the worst. Your version of my what is reality and mine are very different. I see this as a market correcting it self from some disasterous decisions, but it is correcting itself.

    You see it as the sky is falling, at least that is how I am reading your comment. Am I correct?

    July 19, 2009 01:12 pm at 1:12 pm |
  6. Grrr-awful-o

    "And if you believe that one, then let me tell you about how great socialized medicine is going to be..." Dims are asking for it... but reality is not your fantasy. Just like:
    – with the stimulus package unemployment will stay under 8%
    – we'll balance the budget by the end of my first term
    – we'll be out of Iraq by 2010 (aside: taken to mean, by Dims, that we won't be in any wars after that as well)
    – we will only raise taxes on the rich (aside: probably depends on what your meaning of is is)
    – nationalized healthcare will cover all Americans
    – nationalized healthcare will make medical treatment more available to all Americans


    July 19, 2009 01:13 pm at 1:13 pm |
  7. Carl

    According to Richie below, when it comes to the Posters of this article grasping the concept of Macro Economics, "Everyone", it seems, "has no concept". Sounds like Richie is not only all-knowing in this subject, but also has been informed as to the Posters' knowledge on the subject. Now THAT'S enlightenment.
    Ironicly, it's not macro economics people are concerned about, it's micro economics.
    It is true that President Bush did contribute to our current situation, however; the over-whelming majority of economists agree that Obama has done much (in only seven months), to cause this economy to spiral downward.
    That being said, (picking up the megaphone), "YOU, ON THE EXTREME LEFT.... STEP AWAY FROM THE KOOLAID" B')
    PS: oh, &nd quit being so mad. Your guy(s) won.

    July 19, 2009 01:14 pm at 1:14 pm |
  8. leah

    It took 8 years to be in the hole
    it will take more time to get out of it
    the bottom line is, things are looking slightly better
    slowly but surely

    July 19, 2009 01:17 pm at 1:17 pm |
  9. Ken

    I lived in NYC in 2001. It had been 8 months or so since Bush had taken office when a terrible tragedy beset our nation. I was reminded repeatedly by my Republican friends that he was still a new president, and could not be held responsible for not fixing everything in the first couple of months. They told me of all of Clinton's missed opportunities to fix the problem (nevermind that they accused him of wagging the dog when he did). So, I would ask today for those same Republicans who argued 8 years ago that 8 months isn't enough time to fix 8 years of mishandled policies that there has been no paradigm shift, that their logical consistency demands that they at least consider that they might have been right eight years ago... and that maybe, just maybe, they should consider applying the same standards to all presidents, not just the ones who they voted for.

    July 19, 2009 01:27 pm at 1:27 pm |
  10. JD

    Sorry, MikeH...you're just adding to the BIG LIE with your claims. History paints quite a different picture than you paint. If anything the joblessness you cite was courtesy of the Carter administration, not Reagan.

    What's worse, the Obama administration has turned into little more than Act II of the Carter insanity.

    God help us all. We're gonna need it.

    July 19, 2009 01:34 pm at 1:34 pm |
  11. Sue Ohio

    No republican complained when the CBO projected that 2.1 TRILLION dollars would be added to our national debt due to the Iraq war. Now they are complaining when the American people want to spend the money on Americans.

    Republicans spend as much as you want to go around the world and kill people but hold the reins tight when American lives depend on affordable health care and regulation reform.

    July 19, 2009 01:37 pm at 1:37 pm |
  12. 4 and the door

    Prez Pres "...That line about growing small business need to be helped is really bogus because small businesses don't have the capital that large corporate businesses have.

    You must have been part of Obama's cheering section to bail out GM, Chrysler and AIG. Enough said.

    July 19, 2009 01:38 pm at 1:38 pm |
  13. Demanding=not same as doing

    Obama is always demanding which is not the same as doing. Where
    is any white paper from the White House with proposals for any bill .
    Leading means just that..having plans of actions to really move
    forward and not: "I demand a bill for my signature for this or that on a specific date...without...without...We now have a President who is fudging and only comes out day after day with fancy rhetoric...getting
    bored with it...while the country is falling deeper into change of despair

    July 19, 2009 01:40 pm at 1:40 pm |
  14. tee

    I trust my President will do the right thing for the people, inspite of what he's up against. Most of these politicians have been in office for years, they speak of years of experience.........but can't or won't come up with a decent healthcare plan that will be beneficial for all americans. The corruption has been rampant for over 25 years or longer. Tax dollars have been wasted for years............Politician have been paid off for years..........corruption on wall street for years........Yet the republiklans say President Obama is destroying america?.......WHITE collar crime at the highest level is detroying america..............GREED AND INTOLERANCE WILL DESTROY AMERICA

    July 19, 2009 01:53 pm at 1:53 pm |
  15. Keith in Austin

    What else would you expect to hear from a budget director representing this White House? We have been lied to over and over again. Please wake up folks! For a real depiction of reality, look at the escalating unemployment rate,rapidly rising 1.2 trillion dollar debt and the true economic forecast by anyone with a shred of sense!

    July 19, 2009 01:55 pm at 1:55 pm |
  16. S M R

    You GOP bloggers are all IDIOTS. You have too be getting paid by the GOP to comment here or you people a just plain stupid. Support your President like a good patriot or STFU !!!

    July 19, 2009 01:55 pm at 1:55 pm |
  17. Fan of Common Sense

    Ever week it seems like I hear something different about the economy. One week our economy is free-falling and economic collapse is just around the corner. The very next week, we are on the rebound and prosperity is on the way.

    You have to remember, no one in the media or in Washington predicted the tech bubble, the housing collapse, or the resulting economic turmoil. No one predicted that my 401K would drop 40% of its value almost in just a few months. I hate to sound like one of the dooms-dayers, but I'm at the point that I don't believe ANYONE when it comes to the economy. We are in uncharted territory and no one really knows what is going to happend from one month to the next. Am I the ony one that feels this way?

    July 19, 2009 01:58 pm at 1:58 pm |
  18. omoregie john

    Americans just be happy that the hope of today and tommorow is the present adminstation and thank God that Bush is gone and forever

    Can you imagine how much of your Tax money spent in Iraq war just please check it with the population of American citizen that means every born American would have be MILLIONAIRE today- but it is obviously that Mr Bush and his conservative members who sees only their Nose looted this Billions and many Americans back home lives on the street
    Americans of all race join this regime for a better tommorow
    The truth is allways bitter

    July 19, 2009 02:14 pm at 2:14 pm |
  19. Michael M, Phoenix AZ

    Hey, Gang!,

    Checking out unemployment, just got back from traveling in South Dakota, Colorado, and New Mexico, and at least saw "Now Hiring" signs posted in many businesses....Everyone, unfortunately, thought that the day after Pres Obama was sworn in that the unemployment problem would "disappear" majically overnite....I do believe he said it would take months if not almost two years to get it turned around...remember, it took 8 years of one Presidency and 12 years of a Republican dominated Congress to create the mess we are in....It all really seemed to start when Bush 43 started mailing out those IRS "stimulus" checks in 2001 and eliminated the Treasure surplus in one fell swoop.

    July 19, 2009 02:18 pm at 2:18 pm |
  20. Kajun

    This is for Prez Pres...What was the unemployment rate before the Dems took over in 2006? The model that the Dems have created about bailing out large corporations is the fluke. That GM and Chrysler thing is really working out well for us non-union folks

    July 19, 2009 02:26 pm at 2:26 pm |
  21. Tatianna

    What are you thanking Obama for? We still have troops in Iraq, we still depending on foreign oil, NKorea still not complying, America unemployment not lowered and rising, continuing home foreclosures, nation still divided, Gitmo still open, ongoing warrantless wiretaps, renditions still exist, no healthcare for all, still open borders, Irans controversial nuclear program is ongoing, AQ and Islamic extremists still exist, Soldiers still dying, earmarks in bills, higher deficit, corrupt govt officials, lack of transparency – oversight and accountability, all admin positions not filled, lobbyists still exist, new majority of congress and still polarized. You have to wonder what kind of uneducated mass of voters actually believed Obama would solve anything

    July 19, 2009 02:31 pm at 2:31 pm |
  22. JoblessInSeattle

    John King is one of the best in our book.

    One thing I don't understand, though, is why CNN keeps having Donna Brazille in their discussion panel. All I have ever heard she says is "the Prez is doing the right thing, the Prez is doing a terrific job, the Prez is doing the right thing, the Prez is doing a terrific job...". How is that going to add any value to the discussion? Why not have someone who backs what he/she says with facts and numbers instead.

    July 19, 2009 02:36 pm at 2:36 pm |
  23. tony


    You know, the conservatives are still saying that the recession at the beginning of Bush's term was Clinton's fault because it started before the end of Clinton's term. (The National Bureau of Economic Research determined that the recession started on March 2001, but you will still get arguments from the conservatives.) For all the people who are saying that the sky is falling because Obama is now in office, he has only been there for 6 months. Most of the money in the stimulus bill has not been spent (53 billion as of June 19, according to MSNBC). That money will last us a few months in Iraq. The money from the stimulus bill is being spent too slowly to have any significant effect on the economy, according to some economists. If the sky is falling now, it is because the sky was already falling before Obama entered office and whatever Obama had done in 6 months was not enough to make a difference.

    July 19, 2009 03:04 pm at 3:04 pm |
  24. Steve A. , New Braunfels , Texas

    It appears there is a lot of GOP rightwing negativity in these comments. Could it be that the GOP is afraid and I do mean afraid that Obama and the DEMs just might pull it off and turn the economy around? Re-establish the middle class?Bring some sort of peace to the world?and they(the GOP)wouldn't get any credit for it. A succesful Obama administration will not be good for whats left of the GOP.

    July 19, 2009 03:13 pm at 3:13 pm |
  25. usualone

    I am glad we don't have to wonder what would happen to the country if the Republicans had stayed in office. They would not have offered any bail-out; therefore, unemployment would be obviously much higher than the sad 10% it is today. This administration inherited a huge mess and our economy was free-falling before they took office. It is easy to point fingers and say how "bad" the situation is now. Those naysayers should get quiet about such issues at this early time in the new presidency. They never offer suggestive criticism...just doom and gloom. It is disheartening that so many are buying into their tale tales. We are a country that needs an instant fix and are a throw away country. When will we learn to have some patience. I guess I'm kidding myself to think people will give this President some time.

    July 19, 2009 03:13 pm at 3:13 pm |
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