UPDATE 1-W.House's Orszag warns of dangers of huge deficits

Tue Apr 27, 2010 10:51am EDT

(Updates with Orszag quote)

WASHINGTON, April 27 (Reuters) - President Barack Obama's top budget adviser, Peter Orszag, said on Tuesday that the U.S. government must significantly alter its policies in order to tackle a growing mountain of debt.

Orszag warned that huge deficits could cause the market to lose confidence in a government's creditworthiness.

Out-of-control deficits could also "require increased borrowing abroad which will mortgage our future income to foreign creditors," Orszag told the first meeting of the 18-member National Commission on Fiscal Responsibility and Reform.

Reining in the deficit, which was $1.4 trillion in 2009, would "require significant changes in policy that build on what we have done," Orszag said. (Reporting by Kim Dixon and Ross Colvin, editing by Jackie Frank)