SAN ANTONIO - A former White House official and leading bankexecutive today delivered a predominantly pessimistic view of thechallenges facing the U.S. economy to executives attending PSCUFinancial Service's 2011 Senior Leadership Workshop and MemberForum.

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

Among them, he said, was the reality that a double dip recessionin Europe is highly possible and that an increasing degree ofpolitical polarization hobbles U.S. efforts to combats its ownfiscal crises.

He described how political partisanship and polarization haveincreased in the U.S. since after World War II to reach theirhighest point today and how researchers were starting to seeevidence that people were segregating themselves by politicallines, even in their choices of neighborhoods in which to live.

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

Orszag said the political polarization is taking place at aparticularly bad time for the U.S. because of the near, medium andlong-term fiscal crises that he said the country faces. This, hesaid, was primarily because neither of the major political partieswere courageous enough to face up to the truth about the fiscalsituation and raise revenues.

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