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Attacking The Deficit

The deficit is now in the crosshairs of Washington with the President today announcing the creation of a budget deficit taskforce. If you do the math, this year's deficit is expected to climb to 10.6% of GDP. That's a huge increase compared to last year's 9.9% figure, which marked the highest figure since World War II.

Maria Bartiromo spoke with White House National Economic Council Director Lawrence Summers in a CNBC Exclusive about the deficit taskforce.

When asked why the responsibilities are not handled by Congress, Summers said, "The situation is out of control" and that over the 8 preceding years Congress has lost discipline. Summers said we, "need to make sure by 2015, debt goes down relative to national income."

This week the Treasury released a report on international capital flows that showed the biggest month-over-month decline ever recorded in China holdings of US Treasuries.

When Bartiromo asked whether that's a concern, Summers told her "these numbers fluctuate" and that "It's very clear from market responses over the last two years that the US is seen as a major source of quality."

One bright spot for the administration continues to be the labor market.

Summers remained upbeat on the outlook for job growth throughout 2010 saying, "We should see job creation during the course of this year. Our economy has improved. We are in a very different place than we were 6 months ago. Because of the Recovery Act, stress tests and private capital raising...we have walked back from the precipice of depression."

Donna Burton contributed to this article.

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