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Fiscal summit looks at how to halve deficit
WASHINGTON -- President Obama pledged Monday to target Medicare, farm subsidies, tax breaks for companies that ship jobs overseas and no-bid contracts in Iraq in the proposed 2010 budget he will unveil later this week.
Turning his attention from short-term economic stimulus to long-term fiscal discipline, Obama said he will urge Congress to require that any spending increases or tax cuts be paid for, rather than add to a $1.3 trillion deficit. That requirement was dropped as the Bush administration waged wars in Afghanistan and Iraq.
"If we want to spend, we'll have to find somewhere else to cut," Obama said.
The focus on budget-cutting came as the president and his economic advisers held an unusual "fiscal responsibility summit" at the White House with members of Congress and outside experts. Wall Street was unimpressed; the Dow Jones industrials dropped 251 points to their lowest close in nearly 12 years.
Even as he spoke soberly about deficit reduction, Obama told the nation's governors that he would begin distributing $15 billion in federal Medicaid funds to states this week. It's the first installment in the $787 billion economic stimulus package passed by Congress this month.
White House spokesman Robert Gibbs acknowledged some "push-pull" between increased spending to stimulate the economy and cutting spending to reduce the deficit, but said the best way to address the fiscal challenges is by "dealing with all of them at the same time."
Obama said the key to getting the deficit and nearly $11 trillion debt under control was to confront skyrocketing health care costs, both in Medicare and Medicaid as well as the private sector.
"Some of these things will ultimately involve some tough decisions and some tough votes," Obama said after three hours of discussions on health care, Social Security, taxes and other issues.
Challenged by Rep. Joe Barton, R-Texas, on the need to include Republicans in decision-making, the president warned the GOP minority in Congress not to be partisan.
