Obama stresses fiscal discipline in $3.8T budget

President Barack Obama on Monday presented a $3.8 trillion budget that he said would both create new jobs and reduce the deficit in the long term.

Obama cast his second budget as an effort to address the nation’s deepening fiscal crisis even as his administration spends money to help revive the economy.

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"We simply cannot continue to spend as if deficits don't matter… as if we can ignore the problem for another generation,” Obama said in  remarks at the White House introducing the fiscal year 2011 budget.

Obama highlighted a number of areas where the administration is proposing budget cuts, both to initiatives he considers worthy and on others he called wasteful and unnecessary. 

Obama singled out cuts in environmental cleanup programs and a tax credit initiative as examples of painful but needed scale-backs.

"We have to do what families across America are doing; save where we can so we can afford what we need,” he said. "I'm willing to reduce programs I care about; I am asking Congress to do the same."

But the president also sought to assure people that his administration will still work to create jobs, revive the economy, and pursue its policy goals.

“We will continue to do what it takes to create new jobs,” he said. 

Obama offered a vigorous defense of his budget amid a debate shaping up to be more contentious than last year’s.

Obama already had called for a three-year freeze on discretionary spending unrelated to national security, defense, veterans' affairs and foreign operations, which would save about $25 billion per year over the next decade. He made that announcement in his State of the Union address.

The freeze wouldn't affect Obama and Democrats' plans for a new jobs bill likely to include new programs and tax breaks for small businesses, infrastructure and state fiscal aid.

But some Democrats in Congress expressed concern last week that the proposed freeze would prevent the government from doing everything it can to jolt the economy and create jobs.

Several Republicans said that the cuts were a good start, but are not enough on their own to bring down the ballooning annual deficit.

Obama repeatedly compared the government to a business and a family, saying that in a recession, it needed to take steps to stay afloat, such as spending within its means.

Still, the president did identify specific areas of so-called need where he proposed new spending. Specifically, he cited a six percent increase in the Department of Education’s budget as well as investments in clean energy jobs and scientific research.

“In the 21st century, there is no better anti-poverty program than a world class education,” he said.

In prefacing his budget, Obama addressed critics on both sides, saying that more could not be done immediately to rectify the nation’s fiscal mess because money is still needed for job creation.

“If we had taken office during ordinary times, we would have started taking down these deficits immediately,” he said. “[But] many feared of another Great Depression so we initiated a rescue, and that rescue was not without great costs.”

Obama also heaped blame upon the Bush administration and previous Congresses for "creat[ing] an expensive new drug program, pass[ing] massive tax cuts for the wealthy, and fund[ing] two wars without paying for any of it -– all of which was compounded by recession and by rising health care costs."

Obama praised this Congress for reviving pay-go legislation to make sure spending cuts and tax increases are paid for and said he would create an executive fiscal commission to suggest such measures.

“[We need to hold] Washington to the same standards that families and businesses hold themselves,” he said.