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Summers: Pass tax bill ASAP

Summers: Pass tax bill ASAP
Chief of the National Economic Council Larry Summers speaks with guests before U.S. President Barack Obama names Pete Rouse as his new Chief of Staff in the East Room of the White House in Washington on October 1, 2010. Summers is expected to depart the administration to return the faculty at Harvard. UPI/Roger L. Wollenberg | License Photo

WASHINGTON, Dec. 8 (UPI) -- White House economic adviser Larry Summers said Wednesday failure to pass the tax deal between President Obama and Republicans could cause the economy to stall.

The tax compromise reached Monday between Obama and congressional Republicans changes "in a very important way the economic picture as most observers would have judged it even two weeks ago," Summers, director of the National Economic Council, told reporters during a media availability at the White House. "That's why essentially all the major economic forecasting firms are in the process of rerunning their models and revising upwards their estimates of GDP in the 1 percent range and their estimates of job creation over the next year-plus in the range of 1 million or more jobs. …

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"Economic forecasting is uncertain," Summers said when asked how quickly the negotiated tax deal will begin to jump-start the economy. "We have not achieved escape velocity and we have not stalled out. If we had taken more time over this, the risk that the next thing that would happen would be the economy stalling out would have significantly magnified."

"Much as we regret the elements in it that do not seem to us to be prudent use of public resources, on balance the benefits to the economy make this a very worthwhile deal."

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