WASHINGTON (Reuters) - President Barack Obama on Saturday touted the importance of long-term deficit reduction, saying the United States must go through its budget line by line and figure out ways to save money.
“Sometimes, particularly in tough times like these, you have to make hard choices about where to spend and where to save. That’s what being responsible means. That’s a bedrock value of our country. And that ought to be a value that our government lives up to as well,” he said.
In his weekly radio and Internet address, the Democratic president blamed the U.S. budget deficit — projected to be $8 trillion over the next decade — partly on the recession and rising healthcare costs, but also took a swipe at the Republican administration that preceded him and previous Congresses for cutting taxes for the wealthy and creating an expensive, but unfunded, drug program.
Obama signed a law on Friday lifting the U.S. government’s borrowing authority to $14.3 trillion and installing a pay-as-you-go rule that requires new spending to be offset with cuts elsewhere.
“Now, Congress will have to pay for what it spends, just like everybody else,” Obama said in the address.
Democrats, who control the U.S. Congress, crafted the “paygo” language to deflect voter anger over soaring spending.
Investors want to know the White House is serious about fiscal responsibility, and failure to convince them could hit the dollar and bond markets. Obama has tried to make fiscal prudence the centerpiece of his message on the economy while spending hundreds of billions of dollars in the near term to kick-start growth and boost job creation.
Obama has proposed a record $1.56 trillion deficit for fiscal 2010, equivalent to 10.6 percent of gross domestic product, but projects that funding gap to halve as a share of the economy by 2013.
He also explained his decision to use an executive order to create a panel, with Republican and Democratic members, to help tackle the country’s record deficit and mounting debt after Congress failed to create a deficit panel of its own.
“It’s easy to get up in front of the cameras and rant against exploding deficits. What’s hard is actually getting deficits under control. But that’s what we must do,” Obama said.
A presidential commission would produce recommendations but would lack the power to bind lawmakers. Republicans are expected to be wary of taking part for fear of giving the White House political cover to raise taxes.
Additional reporting by Alister Bull; Editing by Mohammad Zargham