WASHINGTON (Reuters) - President Barack Obama unveiled new steps on Saturday to restore U.S. fiscal discipline, including support for legislation that would require Congress to pay for any new programs by raising taxes or cutting other expenditures.
Acknowledging that he had spent heavily to confront a historic economic crisis since taking office January 20, Obama said the country was on an unsustainable course and would have to make hard choices to bring the budget under control.
“We came into office facing a budget deficit of $1.3 trillion for this year alone, and the cost of confronting our economic crisis is high,” the Democratic president said in his weekly radio address. “But we cannot settle for a future of rising deficits and debts that our children cannot pay.”
Obama’s Republican rivals blasted the high deficits in their own radio address, noting that spending was so out of control the United States was even being scolded by France over its finances.
“The Democratic Congress passed a budget with such big deficits that it makes the United States literally ineligible to join France in the European Union,” said Republican Senator Lamar Alexander.
“Now of course we don’t want to be in the European Union. We’re the United States of America. But French deficits are lower than ours, and their president has been running around sounding like a Republican -- lecturing our president about spending so much,” he said.
Obama indicated he was moving to tackle the problem. He said his administration had identified $2 trillion in deficit reductions over the next decade and would cut or eliminate more than 100 programs.
“Earlier this week I held my first Cabinet meeting and sent a clear message: cut what doesn’t work,” Obama said. “But we can’t stop there. We need to go further,” he added, outlining four additional steps the administration would take to help restore fiscal discipline.
“We need to adhere to the basic principle that new tax or entitlement policies should be paid for,” Obama said, adding that so-called pay-as-you-go principles had helped transform deficits into surpluses in the 1990s.
He urged Congress to pass legislation that would enforce the pay-as-you-go idea. The principles would require that any new programs, except for emergencies, be paid for either by raising taxes or cutting other programs to obtain the funding.
Obama also said he would create incentives for government agencies to reduce wasteful and unnecessary spending, such as allowing them to keep a portion of the savings to spend on programs that work.
“The result will be a smaller budget, and a more effective government,” he said.
The government would also solicit cost-cutting ideas from government employees and adopt business-style innovations and technology to find ways to work more efficiently.
“Government has a responsibility to spend the peoples’ money wisely, and to serve the people effectively,” Obama said.
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