PRESIDENT BARACK Obama has promised to cut the United States’ budget deficit in half by the end of his first term, despite spending more than $1 trillion during his first month in office alone on economic stimulus and shoring up the housing market.
Opening a “fiscal responsibility summit” at the White House yesterday, Mr Obama said he would cut government programmes that are ineffective, end tax breaks for companies that send jobs overseas and reintroduce a “pay-as-you-go” policy on federal spending.
“We cannot, and will not, sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation,” he said.
The president said that, when he introduces his first budget later this week, he will be candid on the cost of every measure and put an end to what he called the budgetary “deception” employed by the Bush administration in keeping the cost of wars, natural disasters and other major events off the books.
“We’re not going to be able to fall back into the same old habits, and make the same inexcusable mistakes: the repeated failure to act as our economy spiralled deeper into crisis; the casual dishonesty of hiding irresponsible spending with clever accounting tricks; the costly overruns, the fraud and abuse, the endless excuses,” he said.
“This is exactly what the American people rejected when they went to the polls. They sent us here to usher in a new era of responsibility in Washington, to start living within our means again and being straight with them about where their tax dollars are going.”
Yesterday’s summit was designed to bring together congressional leaders from both parties along with outside interest groups and experts to look at ways to cut spending on expensive government programmes like Medicaid and Medicare, which offer health care to the poor and the old.
Earlier, Mr Obama told state governors that the administration would this week distribute $15 billion to the states to shore up Medicaid, as part of the $787 billion economic stimulus package he signed into law last week.
‘That means that by the time most of you get home, money will be waiting to help 20 million vulnerable Americans in your states keep their healthcare coverage,” he said. “We will get the rest of this plan moving to put Americans to work doing the work America needs done, making an immediate impact while laying the foundation for our lasting growth and prosperity.”
Republican governors are divided over the stimulus plan, with some – including California’s Arnold Schwarzenegger and Florida’s Charlie Crist – welcoming the flood of cash into their troubled states. Others, such as South Carolina’s Mark Sanford and Louisiana’s Bobby Jindal – both tipped as 2012 presidential candidates – say they do not want the money.
“At times it sounds like the Soviet grain quotas of Stalin’s time – X number of jobs will be created because Washington says so. And that’s not the way that jobs get created,” Mr Sanford said.
“I would secondly say what we are looking at is, in many cases, the money that would come to our state comes with substantial strings attached that, frankly, undo a lot of what we’re trying to do at the state level.”
Mr Obama yesterday dismissed much of the criticism of the plan as “cable news chatter” and warned Republicans against playing politics with the country’s economic future.
“I will always be open to honest disagreements, and I think there are some legitimate concerns that can be raised on a whole host of these issues. And you’re responsible at the state level, and if the federal government gives you something now, and then two years later it’s gone, and people are looking to you and starting to blame you, I don’t want to put you in that position. And so you need to think about how this money is going to be spent wisely,” he said.
“What I don’t want us to do, though, is to just get caught up in the same old stuff that inhibits us from acting effectively and in concert. There’s going to be ample time for campaigns down the road. Right now we’ve got to make sure that we’re standing up for the American people and putting them back to work.”