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President Obama's Debt Commission Remarks

The White House released President Obama's prepared remarks on how the Debt Commission will work together to reduce the deficit.

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Remarks of President Barack Obama – As Prepared for Delivery

First Meeting of Fiscal Commission

Tuesday, April 27, 2010

As a nation, we continue to experience the consequences of three distinct but closely related challenges. One is a financial crisis, born of reckless speculation that threatened to choke off lending to families and businesses. This crisis led, in turn, to the deepest recession we’ve known in generations – costing millions of Americans their jobs and homes, closing thousands of businesses, and devastating Main Streets across our country. And over the past two years, this downturn has aggravated an already severe fiscal crisis, brought on by decades of bad habits in Washington.

As a result, the day I walked in the door, the deficit stood at $1.3 trillion, with projected deficits of $8 trillion over the next ten years. Partly, this was caused by the recession, which meant the government was taking in less while the demand for assistance for those who lost their jobs was far greater. Another contributor to our deficits has been the rising cost of health care. Each year, more tax dollars are devoted to Medicare and Medicaid.

But what also made these large deficits possible was that, for years, folks in Washington deferred politically difficult decisions and avoided telling hard truths about the nature of the problem. The fact is, it’s always easier, when you’re in public life, to share good news – to tell people want they want to hear instead of what they need to know. And, as the gentlemen behind me can attest, this has been the norm around Washington for a very long time when it comes to the state of our finances.

Now, over the past year, we’ve had to take emergency measures to prevent the recession from becoming another Depression. And at a time when millions of people are out of work, we’ll continue to do what it takes to spur job creation while investing in a new foundation for lasting growth. But these emergency measures have added about $1 trillion to the deficit over the next ten years. As a result, even as we take these necessary steps in the short run, we have an obligation to future generations to address our long-term, structural deficits which threaten to hobble our economy and leave our children with a mountain of unpaid bills.

That’s why I asked Congress to restore the “pay as you go” rule. This rule says that Congress can’t spend a dollar on a new tax cut or entitlement program unless it saves a dollar elsewhere. It’s what helped lead to the balanced budgets of the 1990s. In fact, it was only by abandoning the “pay as you go” rule that record surpluses turned into record deficits during the course of a decade.

Next, we’ve been scouring the budget, line by line, identifying more than $20 billion in savings this year alone. We’ve cut or eliminated scores of outmoded or ineffective programs and begun to reform our bloated contracting system. We’ve also successfully challenged the custom in Congress of courting favored contractors by approving weapons systems the Pentagon itself has said it doesn’t want or need. Because in these hard times we have to save where we can to afford what we need – the same way families do.

Finally, I’ve proposed a freeze in government spending for three years. It won’t affect benefits through Medicare, Medicaid, or Social Security. And it will not affect national security – including benefits for veterans. But it will affect all other discretionary spending. My budget ends loopholes and tax giveaways for oil and gas companies and for the wealthiest 2 percent of Americans – because we just can’t afford them. And I kept my promise to pass a health reform bill without adding a dime to the deficit. In fact, by attacking waste and fraud and promoting better care, reform is expected to bring down our deficits by more than $1 trillion over the next two decades.

But these steps – while significant – are not enough. For even as we rein in waste and ask that Congress account for every dollar it spends, this alone will not make up for the years in which those in Washington refused to live within their means. And it will not make up for the chronic failure to level with the American people about the costs of the services they value. This will require that people of both parties come together and take a hard look at the growing gap between what the government spends and what the government raises in revenue. And it will require that we put politics aside – that we think more about the next generation than the next election. There is no other way.

That’s why I appointed the National Commission on Fiscal Responsibility and Reform – based on a proposal by a bipartisan group of Senators. And today, the commission will have its first official meeting. I’m grateful to all of its members – Democrats and Republicans, folks in government and folks from the private sector – for participating. I especially want to thank Erskine Bowles and Alan Simpson for chairing the commission. These two men may have different political affiliations, but they share a strength of character, an ability to work across party lines, and a willingness to tell the truth even when it’s hard. These qualities will be essential, as will be the courage they have already shown by taking on this assignment.

Now, I have said that it’s important that we not restrict the review or recommendations of this commission in any way. Everything must be on the table. Of course, this will mean that our friends in the media will ask me and others once a week, or once a day, about what we are willing to rule in and what we are willing to rule out. It’s an old Washington game – and one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure fiscal footing. So my message is simple: we’re not playing the game. Because I want this commission to be free to do its work.

In theory, there are few issues on which there is more vigorous bipartisan agreement than fiscal responsibility. But in practice, this responsibility for the future is often overwhelmed by the politics of the moment. It falls prey to the pressure of special interests, to the pull of local concerns, and to a reality familiar to every single American: it’s a lot easier to spend a dollar than save one. That’s what, at root, led to these exploding deficits. That’s what has led to this day of reckoning.

But I believe, with the help of these gentlemen and this commission, we can begin to meet this challenge in a serious and thoughtful way. And I believe we must, for the future of our country. So I thank you, Alan, Erskine, and all of the members of the commission for their willingness to serve. I wish you well in your important work.

Thank you.

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