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To: Christopher Loe who wrote (5141)	12/17/2003 3:11:11 PM
From: Ruffian	Respond to of 108702

Budget Deficit a Concern - W.House Aide Wednesday December 17, 2:49 pm ET WASHINGTON (Reuters) - A top White House economic adviser said on Wednesday the United States would likely run a budget deficit around 4 percent of U.S. gross domestic product next year and said growing shortfalls were a concern. "Next year we will probably have a deficit in the ballpark of 4 percent of GDP, a little more -- maybe 4-1/2 percent of GDP," Council of Economic Advisers Chair Gregory Mankiw told the Excheckr Club in answer to a question. "The deficit is a concern and the president has said many times ... that he's committed to getting it down," he said. "He wants to shrink it in half toward 2 percent of GDP over five years, and his (fiscal 2005) budget will reflect that," Mankiw said, referring to a budget plan the White House will unveil early next year. "There are two ways to do that: one is to get the economy growing again in order to get revenues, and the other is to restrain spending," Mankiw said. Mankiw also told the group that the large U.S. trade gap was not necessarily a problem for the economy. "I don't view it, in and of itself, as a risk to the U.S. economy," he said, saying it was largely symptomatic of a relatively slower pace of growth among U.S. trading partners. "Slow growth abroad is one of the major contributors to our trade deficit," Mankiw said, because it curtails U.S. exports, and it contributes to a desire of overseas investors to place their money in the United States. Mankiw said part of an adjustment toward more-balanced trade could involve an increase in domestic U.S. savings. He noted President Bush had early this year proposed an expansion of tax-free savings accounts, but he stopped short of saying they would resurface in the fiscal 2005 budget plan. "One of the things I've learned in my new job is don't get ahead of the boss, so I won't suggest it will be in the next budget. But I encourage you to stay tuned," Mankiw said. Mankiw, who noted an updated administration forecast would be released with the budget proposal, said he expected the U.S. economy to grow above its long-term historical average of 3.3 percent next year but then revert toward the long-run trend as the economy approaches full employment.