SAN ANTONIO - A former White House official and leading bank executive today delivered a predominantly pessimistic view of the challenges facing the U.S. economy to executives attending PSCU Financial Service's 2011 Senior Leadership Workshop and Member Forum.

Peter Orszag, former director of the Office of Management and Budget and current vice chairman of the Institutional Clients Group at Citigroup, laced his remarks with humorous anecdotes about his career in Washington, but still left a fairly grim picture of the challenges facing the U.S. at this time.

Among them, he said, was the reality that a double dip recession in Europe is highly possible and that an increasing degree of political polarization hobbles U.S. efforts to combats its own fiscal crises.

He described how political partisanship and polarization have increased in the U.S. since after World War II to reach their highest point today and how researchers were starting to see evidence that people were segregating themselves by political lines, even in their choices of neighborhoods in which to live.

“And one thing we have seen is that when people surround themselves only with those of like mind, their views get more extreme,” he told the group.

Orszag said the political polarization is taking place at a particularly bad time for the U.S. because of the near, medium and long-term fiscal crises that he said the country faces. This, he said, was primarily because neither of the major political parties were courageous enough to face up to the truth about the fiscal situation and raise revenues.

He said that the country had gone as far as was likely possible toward getting its fiscal house in order solely by making budget cuts, even if all the budget cuts currently on the table for this fiscal year and the next were passed.