Obama pledges to cut deficit in half

Monday - 2/23/2009, 4:45pm EST

President Barack Obama is seen on stage in the East Room of the White House in Washington, Monday, Feb. 23, 2009, before he addressed lawmakers at the Fiscal Responsibility Summit. (AP Photo/Charles Dharapak)
President Barack Obama has vowed to cut the country's budget deficit in half by the end of his first term. Obama laid out the guiding principle of his budget policy at a White House conference. He said he believes the time has come for "a frank conversation" about the problem and said the deficit, projected to total $1.3 trillion this year, must be brought under control.

The President said that he's committed to going through the budget to "root out waste and inefficiency." He's asked each member of his cabinet to do so as well.

"Take one example -- the Department of Agriculture has moved some of its training programs online, saving an estimated $1.3 million a year," he added. "They're modernizing their financial management system, saving an estimated $17.5 million. They're saving tens of thousands of dollars by cutting back on conferences and travel and other small expenses that add up over time."

He also said that he wants to reinstate a pay-as-you-go policy on federal spending programs, get rid of programs that do not work, end tax breaks for companies that ship jobs overseas, and ending no-bid contracts in Iraq.

"The pay-go approach is based on a very simple concept: You don't spend what you don't have," he said. "So if we want to spend, we'll need to find somewhere else to cut. This is the rule that families across this country follow every single day -- and there's no reason why their government shouldn't do the same."

Calling for fiscal restraint even while federal spending soars, Obama summoned allies, adversaries and outside experts to a White House summit Monday to address skyrocketing budget deficits and announced $15 billion in Medicaid money to states from his $787 billion economic stimulus package.

"As we take the steps that we must to get through the crisis we're in now, we will not lose sight of the long-term," Vice President Joe Biden said as he opened the event. Obama's No. 2 promised that the administration would be frank with the public about budget challenges, though he also said there was a need to reform the nation's health care system and wean the United States off heavy reliance on foreign oil.

The summit came one week after the president signed into law the gargantuan stimulus measure designed to stop the country's economic free fall and, ultimately, reverse the recession now months into its second year. The new law is certain to add to this fiscal year's deficit, which the administration projects will be $1.5 trillion.

Obama led the summit to address the nation's future financial health after meeting with Republican and Democratic governors who are poised to benefit from his unprecedented emergency spending-and-tax cut measure.

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