In an address to a joint session of Congress, President Barack Obama will offer an antidote to the growing federal deficit — including cuts to military spending and allowing the Bush administration’s tax cuts to expire.
Obama on Monday previewed the themes during a “Fiscal Responsibility Summit” at the White House. The event, more public relations than progress, was part of a multi-event, money-themed week at the White House.
“This administration has inherited a $1.3 trillion deficit, the largest in our nation’s history, and our investments to rescue that economy will add to the deficit in the short term,” Obama said at the White House. “We also have long-term challenges — health care, energy, education and others — that we can no longer afford to ignore.”
Obama’s speech, a first-term president’s version of a State of the Union address, will focus primarily on domestic issues including health care, energy and education — all key Obama policy areas so far lacking a coherent direction from the new administration.
The speech is not expected to include significant new policy initiatives. Instead, the White House described it as part of a multistage rollout of the president’s fiscal priorities, capped by Thursday’s release of the federal budget.
“I think you’ll see some real detail around the important investments that he believes this country does have to continue to make,” said White House press secretary Robert Gibbs. “And then I think you’ll see detail wrapped around that on Thursday.”
Cutting the deficit will require reducing defense spending, which the president aims to achieve by pulling U.S. forces out of Iraq, and by instituting severe cost-cutting on ineffective and wasteful programs in the budget.
Obama also plans to raise taxes on the wealthy by allowing Bush’s tax cuts to expire in 2010.
The change would affect individuals making over $200,000 a year and families making over $250,000 a year.
Republicans are signaling their opposition to the plan and are expected to challenge Obama with a call to freeze federal spending instead of allowing Bush’s tax cuts to lapse.
In the days leading up to the speech, the president has been trying out new budget talking points, expressing stern regret and measured outrage about the accounting and budgeting practices of the past.
The administration previously announced it was eliminating Bush administration accounting practices, which it claims concealed the true federal budget picture.
“We do ourselves no favors by hiding the truth about what we spend,” Obama said. “In order to address our fiscal crisis, we are going to have to be candid about its scope.”
As a member of the Senate, Obama presumably was familiar with the federal budget and its contents. But having inherited a financial crisis, Obama is taking pains to drive the point home — much like President George W. Bush did when he came into office after President Bill Clinton.
“The repeated failure to act, as our economy spiraled deeper into crisis, the casual dishonest of hiding irresponsible spending with clever accounting tricks, the costly overruns, the fraud and abuse, the endless excuses — this is exactly what the American people rejected when they went to the polls,” Obama said.
