CBO chief likely Obama pick as budget director

It's among the toughest jobs in Washington, but Democratic aides say Orszag seems likely to accept if it is offered. The 39-year-old CBO chief has been reluctant to leave Capitol Hill's budget agency in the middle of his four-year term but would find it virtually impossible to turn down a request from Obama, they said.

The aides spoke on condition of anonymity because the Obama transition team has requested silence about internal deliberations. Neither the Obama campaign nor Orszag responded to requests for comment.

As CBO director, Orszag would bring an in-depth view of the budget to Obama's still unnamed economic team. Democrats said Orszag was likely to be named in concert with other members of the economic team.

Orszag served as an economist in the Clinton White House and made a small fortune after establishing an economic consulting firm. Within the Clinton administration and as CBO director, he has preached the need to address the budget deficit, which economists such as former Clinton Treasury Secretary Robert Rubin say poses a major problem for the Treasury.

Some back-of-the-envelope estimates foresee a $1 trillion deficit for the budget year that began Oct. 1, with permanent deficits in the $500 billion range extending for years. Such deficits threaten Obama priorities like tax cuts for the middle class and new tax credits for the working poor.

"It will be crucial to address the nation's looming fiscal gap - which is driven primarily by rising health care costs - as the economy eventually recovers from this current downturn," Orszag said in a recent statement.

Democratic deficit hawks on Capitol Hill are worried about their party's ability to rein in the government's red ink.