Washington, D.C. ? The worst seems to be over, President Barack Obama’s budget director said Sunday. But he also warned against taking signs of economic recovery as a reason to celebrate or delay changes in health care policy.

Peter Orszag said the nation’s economy appears to have bottomed out, even as the White House prepared to revise its budget projections to reflect higher-than-expected unemployment. He said an improving economy and changes to how the United States provides health care would help narrow federal deficits.

The administration, however, faces serious challenges. Some 1.3 million jobs have been lost since February and the auto and financial industries are in precarious positions.

Obama’s Democratic allies have been reluctant to endorse the White House’s health proposals while Republicans have vowed to stop them; Republican National Committee chairman Michael Steele told NBC’s “Meet the Press” that he doesn’t think health care will pass this year.

Meanwhile, Orszag said the administration would update its budget numbers in the coming months.