Elite Economists Advise Governor on Budget Deficit

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Governor Paterson is turning to an elite group of economic experts for advice on addressing the state’s budget difficulties, including a Nobel Prize-winning economist who favors raising taxes on wealthy New Yorkers to bridge the gap.

“Facing deteriorating economic times and declining revenues now, more than ever, we need creative ideas and solutions,” Mr. Paterson said yesterday in a statement. “I can think of no better collective group to help steer us back to fiscal health, and I look forward to hearing their recommendations.”

Yesterday, the 18-member Council of Economic Advisers convened to offer Mr. Paterson its analysis of the state budget, which faces a projected shortfall of $6.4 billion next year.

The group includes Joseph Stiglitz, a Columbia University professor who won the 2001 Nobel Prize in economics and served as chairman of the Council of Economic Advisers under President Clinton. In a letter to Mr. Paterson and state legislatures last March, Mr. Stiglitz said raising taxes on high-income residents was preferable to cutting expenditures. Mr. Paterson has so far taken the opposite approach, resisting calls from state lawmakers to raise taxes in favor of trimming state spending.

According to one member of the group, Bernard Anderson, a former assistant secretary of labor who is now a senior fellow at the Wharton School of the University of Pennsylvania, there was “no significant suggestion” during yesterday’s meeting that taxes be raised. Instead, the focus of the meeting was on assessing the current state of the budget and economy, he said.

In addition to Mr. Stiglitz, the group includes several other former Clinton administration officials, among them Robert Rubin, who served as secretary of the treasury and is currently the chairman of the executive committee of Citigroup, and Roger Altman, who served as deputy secretary of the treasury and is now the CEO of Evercore Partners. Other members of the council are a former chairman of the Metropolitan Transportation Authority, Richard Ravitch, the CEO of developer Tishman Speyer, Jerry Speyer, and the president of Macroeconomic Advisers, Chris Varvares.

Aside from giving economic advice, the group’s well-connected members could potentially be tapped as a fund-raising resource for Mr. Paterson’s re-election campaign in 2010. One member, Steve Rattner, whose firm, Quadrangle Group, handles Mayor Bloomberg’s estimated $16 billion fortune, has raised millions of dollars for high-profile Democrats such as Senators Clinton and Kerry and Vice President Gore.


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