WASHINGTON - THE Obama administration insists it isn't so, but some private economists are wondering if it has brought 'Rosy Scenario' back to town.

In unveiling his budget, President Barack Obama pledged to bring 'honesty and fairness' back to the budget process by getting rid of the gimmicks past administrations had used to hide the real costs of government programs and proposed tax cuts.

But many economists who examined the economic assumptions that undergird the spending plan believe that Mr Obama may have resorted to one of the oldest gimmicks around - relying on overly optimistic economic assumptions to make it look like you are dealing with soaring budget deficits when in reality you are only closing the gap on paper.

'They used to joke during the Reagan years that the highest-ranking woman in the administration was Rosy Scenario,' said Nariman Behravesh, the chief economist at IHS Global Insight, a major private forecasting firm, who called the Obama administration's forecasts 'way too optimistic.'

'We may be seeing a return of Rosy Scenario,' Mr Behravesh said. For its part, the administration insisted that it hadn't cooked the books to show greater growth, and thus more tax revenues, in coming years. But the administration forecast is far higher than the projections for growth in the overall economy, as measured by the gross domestic product, of many private analysts.

GDP plays the biggest role in determining the accuracy of deficit forecasts because weaker-than-expected growth swells government payments for such things as unemployment benefits and food stamps and reduces tax receipts.

In its budget, the administration predicted that the overall economy, as measured by the gross domestic product, will shrink by 1.2 per cent this year but will grow by a solid 3.2 per cent in 2010.

That growth would be followed by even stronger increases of 4 per cent in 2011, 4.6 per cent in 2012 and 4.2 per cent in 2013.

By contrast, the consensus of forecasters surveyed by Blue Chip Economic Indicators in February predicted that the GDP will fall by a larger 1.9 per cent this year and then increase at weaker rates of 2.1 per cent in 2010, 2.9 per cent in 2011 and 2012 and 2.8 per cent in 2013.

Christina Romer, the head of the president's Council of Economic Advisers, defended the administration's stronger GDP forecast, contending that in previous severe recessions, the pattern often showed a stronger rebound once the downturn was over. She cited the Great Depression of the 1930s as one such episode when the economy rebounded by strong rates after years of sizable declines.

Ms Romer also suggested that many private forecasters may not be adequately taking account of the size of the government support that has been put forward, including the recently passed US$787 billion (S$1.2 trillion) economic stimulus bill.

'If there is ever a time when we think policy is going to contribute ... now is the time,' she told reporters at a budget briefing on Thursday. -- AP