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President Obama's economic speech at Georgetown

(Page 8 of 9)



In fact, we have undertaken an unprecedented effort to find this kind of savings in every corner of the budget, because the final pillar in building our new foundation is restoring fiscal discipline once this economy recovers.  Already, we have identified two trillion dollars in deficit-reductions over the next decade.  We have announced procurement reform that will greatly reduce no-bid contracts and save the government $40 billion.  Secretary Gates recently announced a courageous set of reforms that go right at the hundreds of billions of dollars in waste and cost overruns that have bloated our defense budget without making America safer.  We will end education programs that don’t work, and root out waste, fraud, and abuse in our Medicare program.

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Altogether, this budget will reduce discretionary spending for domestic programs as share of the economy by more than 10% over the next decade to the lowest level since we began keeping records nearly half a century ago.  And as we continue to go through the federal budget line by line, we will be announcing additional savings, secured by eliminating and consolidating programs we don’t need so that we can make room for the things we do need.

Now, I realize that for some, this isn’t enough.  I know there is a criticism out there that my administration has somehow been spending with reckless abandon, pushing a liberal social agenda while mortgaging our children’s future.

Well let me make three points.

First, as I said earlier, the worst thing that we could do in a recession this severe is to try to cut government spending at the same time as families and businesses around the world are cutting back on their spending.  So as serious as our deficit and debt problems are – and they are very serious – major efforts to deal with them have to focus on the medium and long-term budget picture.

Second, in tackling the deficit issue, we simply cannot sacrifice the long-term investments that we so desperately need to generate long-term prosperity.  Just as a cash-strapped family may cut back on luxuries but will insist on spending money to get their children through college, so we as a country have to make current choices with an eye on the future.  If we don’t invest now in renewable energy or a skilled workforce or a more affordable health care system, this economy simply won’t grow at the pace it needs to in two or five or ten years down the road.  If we don’t lay this new foundation, it won’t be long before we are right back where we are today.  And I can assure you that chronically slow growth will not help our long-term budget situation.

Third, the problem with our deficit and debt is not new.  It has been building dramatically over the past eight years, largely because big tax cuts combined with increased spending on two wars and the increased costs of government health care programs.  This structural gap in our budget, between the amount of money coming in and the amount going out, will only get worse as Baby Boomers age, and will in fact lead us down an unsustainable path.   But let’s not kid ourselves and suggest that we can do it by trimming a few earmarks or cutting the budget for the National Endowment for the Arts.  Along with defense and interest on the national debt, the biggest costs in our budget are entitlement programs like Medicare, Medicaid, and Social Security that get more and more expensive every year.  So if we want to get serious about fiscal discipline – and I do – then we are going to not only have to trim waste out of our discretionary budget, a process we have already begun – but we will also have to get serious about entitlement reform.

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