February 23rd, 2009
01:05 PM ET
5 years ago

Fiscal responsibility summit on tap as federal spending soars

The President spoke Monday as the White House convened a bipartisan summit about the federal government's long term fiscal outlook.
The President spoke Monday as the White House convened a bipartisan summit about the federal government's long term fiscal outlook.

WASHINGTON (CNN) - President Barack Obama is reaching across party lines Monday to host a bipartisan "fiscal responsibility summit" as the government tackles the seemingly contradictory tasks of controlling a soaring federal deficit while spending the country's way out of a deep recession.

The summit is intended to serve as the starting point for a "frank discussion" on the long-term fiscal problems facing the country, White House Press Secretary Robert Gibbs said Friday.

"The summit is the first step in the process of beginning to lay out how we can bring down the deficit and put our economy back on sound financial footing. It opens a week that will be focused on the attention of many fiscal issues," Gibbs added.

Obama's address to a joint session of Congress Tuesday night is expected to be dominated by economic and budgetary issues. The president is slated to officially unveil his fiscal year 2010 budget Thursday.

Roughly 130 people have been invited to the unusual White House conference, including the Democratic and Republican leadership in Congress, heads of key congressional committees, and a range of business, academic, financial and labor leaders.

Related video: Suzanne Malveaux reports on the summit

The summit participants are expected to separate into small groups for the purpose of discussing more specific fiscal challenges facing the country, including taxes, health care, Social Security, and the budget process.

Obama is seeking to cut the federal deficit in half by the end of his first term, an administration official told CNN Saturday. The official said most of the savings would come from spending less on the war in Iraq, raising taxes on those who make more than $250,000 a year and streamlining government.

The president's budget proposal projects that the estimated $1.3 trillion deficit he inherited from the Bush administration will be halved to $533 billion by 2013, or from 9.2 percent of the gross domestic product to 3 percent, the official said.

In his weekly address Saturday, Obama pledged to "release a budget that's sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."

Obama's plans to cut the deficit may be complicated by the continuing economic downturn, which threatens to reduce tax revenues. A group of leading economists is now forecasting a far deeper and more painful recession ahead in the first half of the year, with a solid recovery not taking hold until 2010.

The economy is likely to decline at a 5 percent rate in the first quarter, even sharper than the 3.8 percent drop recorded in the fourth quarter of last year, according to a survey of 47 top forecasters from the National Association of Business Economics.

And according to estimates by economists Alan Auerbach of the University of California at Berkeley and William Gale of the Brookings Institution, the deficit - largely because of the recession and the new economic stimulus effort - will average at least $1 trillion per year for the next 10 years, even if the stimulus is limited to two years and the jobs picture improves dramatically.


Filed under: President Obama
soundoff (92 Responses)
  1. Greg Pottstown, Pa.

    Some quotes form Thomas Jefferson:

    My reading of history convinces me that most bad government results from too much government.

    Never spend your money before you have earned it

    That government is best which governs the least, because its people discipline themselves.

    The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

    Dose any one get the point?

    February 23, 2009 04:06 pm at 4:06 pm |
  2. Critic

    Translated, that is "I will only run a $533 billion deficit instead of the $1.3 trillion dollar one I am running now." Cutting spending in Iraq will be insufficient. To truly tackle the issue, taxes have to be substantially hiked on the upper class, Medicare and Social Security benefits have to be cut, overall military spending has to be severely cut, corporate tax rates need to be raised, there needs to be heavy investing in green energy to stimulate the economy, and the Treasury has to hold fewer securities auctions. The problem is, these moves are politically unpopular. Americans refuse to pay higher taxes. They instead force their leaders to rely on borrowing money so they can have what they want. The next generation has to pay off the debt, so they will have to use their money. In effect, spending borrowed money is spending the next generation's money.

    February 23, 2009 04:06 pm at 4:06 pm |
  3. Hannah Stevens

    "have never seen the words "fiscal responsibilty" and "Bush">>. and that is why we are in the mess we are in today. There were wheel barrels "billions" of cash being hauled off in Iraq and they still don't know where it all went. No bid contracts and the work never done... and on and on... Now that we are fixing bridges, schools, health care, the neocon right calls this pork. Creating jobs so people can support their families and start buying again so the economy is fixed is pork. How ignorant can you get?

    February 23, 2009 04:08 pm at 4:08 pm |
  4. Wake-me-when-it's-over

    Hang in there Obama Victim. The earth will revolve long enough for the world to see the result of President Obama. Let us just be sure that it is only 4 years of hard turning of the soil.

    February 23, 2009 04:08 pm at 4:08 pm |
  5. Lush Limprick is the real RNC chairman

    I love all the neo-cons whining about the stock market.

    First you wanted the "free market" to "self correct" and no government intervention.

    Now, your whining that President Obama does not come out with "happy talk" and "calm the waters".

    You twits are schizophrenic.

    February 23, 2009 04:09 pm at 4:09 pm |
  6. Hammer

    What a joke Obama talking about fiscal responsibility! Maybe someone should explain what that means. Maybe they should explain what responsibility means. Seems his whole agenda is to reward the irresponsible and the foolish who made self-indulgent decisions and took insane risks

    February 23, 2009 04:09 pm at 4:09 pm |
  7. CHANGE we need

    You GOT to be kidding me!! A week after signing a pork basket worth $1 Trillion, this man has the nerve to talk fiscal conservation? That is like going to an all you can eat buffet and being lectured on dieting...THIS is change we all need....not!

    February 23, 2009 04:10 pm at 4:10 pm |
  8. Val in MA

    Your comment is awaiting moderation.

    "What tax cuts is Obama talking about? The $13.00 per week? Is that it? He can shove it you know where. People are losing hundreds if not thousands every day and he is trying to comfort us with $13.00 per week. Just look at the Dow – it lost 200 points again today."

    February 23, 2009 04:14 pm at 4:14 pm |
  9. Fred the moderate

    Ignore the voice of the radical republican. They have lived by promoting the myth that they are fiscally responsible. We have done it! Bill Clinton was the first president in US history to deliver a balanced budget to the US Congress. That's right – regan didn't, bush one or 2 didn't, nixion didn't heck even Washington didn't. We have balanced the budget.
    President Obama will sift through the federal budget and trim the waste developed by the bush admin. and balance our budget. That will happen.
    So if your hoping rush would be right, guess again – it ain't happening

    February 23, 2009 04:14 pm at 4:14 pm |
  10. Is it 2013 yet?

    Fiscal responsibility summit?

    Is this empty, empty vessel serious or does he think we are ALL stupid?

    Actually, he KNOWS he can fool the liberal druids who can't uh, uh, uh, uh think for themselves.

    I challenge one of you druids to post on the following, so put down your etch a sketch, it's big people time:

    $250 million to Philipine sollldiers does not help us

    $300 million for condoms creates no jobs

    $30 million to save mice for pelosi is wasteful

    $8 billion for a train for Harry Reid is wasteful

    $300 million for a Italian junket is criminal

    A frisbee golf course is wasteful

    New cars and offices for government employees is wasteful

    New uniforms for TSa is wasteful

    There is way too much pork in the bill and that is what we are MAD ABOUT.

    February 23, 2009 04:15 pm at 4:15 pm |
  11. Matthew, Detroit

    THE BEST ANSWER STILL:

    NO SPENDING. NO TAX INCREASES. LET THE MARKET SOLVE IT.

    LET PEOPLE FORECLOSE that is the system and it works.
    Bankruptcy for Chrysler, GM, and Ford.
    GM and Ford I am confident will come out of it.
    Chrysler should never have been given money. They were dying already.

    The worst part is that in all of the stimulus bill are little welfare, healthcare and spending slots that do not have sunset clauses. It is permanent welfare and entitlement spending. It is permanent taxation that will have to be accounted for.

    I SAY DON cut taxes for 95% of America. Dont cut any. Leave it as is and let the market fix itself.
    Change the banking laws that cause it. Period.

    February 23, 2009 04:15 pm at 4:15 pm |
  12. The PARTY of NOT Country First

    Great intelligent and country first response by FLA Governor Crist! He made the comments that he supports the people of his state and does not care whether the ideas for their survival and recovery are Democratic or Republican. This is not a time to being playing games. He spoke out against his Republican Party of "NO" for caring more about Party politics than about the American people who are in desperate need. Crist is a real American who truly cares about the people of his state. I hope FLA remembers who stood up for them.

    However. Gov Jindal of LA says he will reject stimulus money regardless of how it might hurt his state's residents because he is sticking to his "principles' as a fiscal conservative. He sure stuck to them in allowing Bush to throw $35B a month into Iraq but doesn't believe we should invest similiar dollars in rescuing our own people?? Guess LA residents who do not get the help they need will remember how Jindal's principles (as he prepares to already run for President in 2012) mattered more to him than the people who elected him! Just love these "compassionate" Conservatives with all their "values"!!! What a laugh.

    February 23, 2009 04:17 pm at 4:17 pm |
  13. Alan

    If you have a 401k and you voted for Obama, you are getting what you deserve, another 220 point drop today.

    Now he is putting the biggest idiot ever, Biden, in charge of the stimulus.

    February 23, 2009 04:19 pm at 4:19 pm |
  14. Felicia

    Here's my opinion, now all of a sudden we're in a recession it's terrible out here. Where the hell was the recession when AA's were losing they're jobs.

    Now all of a sudden the other people losing everything it's a major concern. AA's have been surviving for century after century and know one ever gave a damn about us. All i see is a bunch of racist fools who thinks the world revole around them.

    You people are gonna have to start sharing this world and stop bein so hateful.

    February 23, 2009 04:21 pm at 4:21 pm |
  15. John

    Excuse me,
    The republicans didn't offer anything. Their only answer was more Tax Cuts. This has been done and it didn't work. Democrats gave up items out of the stimulus package and the Republicans didn't give anything. Like Obama said, "We're not going to be doing the same thing we did for the past 8 years. The party is over." We need to stimulate the economy.
    In normal times you can do it with Monetary Policy (cutting interest rates) or Fiscal Policy (spending). The overnight deposit interest rate is ZERO. What else is left but Fiscal Spending? If you say, Tax Cuts, Well, we've done that for the last 8 years!! Bush was the ONLY president to ever cut taxes in war time. And look where we are. This is the result of 30 years of conservative ideology on both the Democrat & Republican side. The country wants to move to the left. Look at who is sitting in the Whitehouse. – nuff said.

    February 23, 2009 04:22 pm at 4:22 pm |
  16. JP

    Great idea, but actions speak louder than words. We needed a stimulus bill what Obama signed was one part stimulus two parts pork. The more I read about whats in the stimulus the less I trust Obama.

    February 23, 2009 04:24 pm at 4:24 pm |
  17. FLA Governor Crist Cares About His State

    Where was Republican responsibility when they let Bush waste $35B a month in Iraq that they knew was a total lie??? Yet now they are critical of investing a dime in America?? Who are these hypocrites? They have no leader, no common sense of purpose, and no solutions for America. Their single-minded focus is for America to fail so they bring back their tax cuts for the rich and their greediness.

    Great intelligent and country first response by FLA Governor Crist! He made the comments that he supports the people of his state and does not care whether the ideas for their survival and recovery are Democratic or Republican. This is not a time to being playing games. He spoke out against his Republican Party of "NO" for caring more about Party politics than about the American people who are in desperate need. Crist is a real American who truly cares about the people of his state. I hope FLA remembers who stood up for them.

    However. Gov Jindal of LA says he will reject stimulus money regardless of how it might hurt his state's residents because he is sticking to his "principles' as a fiscal conservative. He sure stuck to them in allowing Bush to throw $35B a month into Iraq but doesn't believe we should invest similiar dollars in rescuing our own people?? Guess LA residents who do not get the help they need will remember how Jindal's principles (as he prepares to already run for President in 2012) mattered more to him than the people who elected him! Just love these "compassionate" Conservatives with all their "values"!!! What a laugh.

    February 23, 2009 04:24 pm at 4:24 pm |
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