Economic Growth Seen Slowing in 2001

President Clinton’s chief economic advisor said the U.S. economy will probably grow at a 3% rate next year, compared with an estimated 5.1% in the current year. Gene Sperling, chairman of the National Economic Council, said a White House report on the economy due in January will estimate that economic growth next year “is going to be less rapid. I think it’s going to be about 3%.” Sperling’s comments, on television Sunday, were in response to comments from President-elect George W. Bush and his aides’ warning that the economy might be on the verge of a recession. Clinton administration officials have said the Bush team’s economic warnings are politically motivated to make the case for their $1.3-trillion tax-cut plan. Sperling said some warnings are justified. “It’s actually fine for the new administration to say, ‘we’re not growing as rapidly as we have been; we’re going to be in a period of more moderate, sustained growth,’ ” he said.

Sperling’s comments were echoed by Treasury Secretary Lawrence Summers, who said a slowdown in the pace of U.S. expansion was unavoidable but there are sound reasons to expect steady economic growth next year. “Some deceleration in the economy from where it had been was an inevitable thing,” Summers said on ABC’s “This Week” program, pointing out that private-sector forecasters still predict “moderate growth” over the four quarters of 2001. But he said it was important not to dampen confidence, and contrasted the Clinton administration’s program of using budget surpluses for paying down the government’s debt with Bush’s call for returning the surpluses to taxpayers in the form of a broad-based tax reduction.