No more wasteful spending, says Obama

US President Barack Obama on Saturday unveiled new steps to restore US fiscal discipline, including support for legislation that would require Congress to pay for any new programmes by raising taxes or cutting other expenditures.

As he approaches the milestone of 100 days in office next Wednesday, Obama acknowledged that he had spent heavily to confront a historic economic crisis since taking office on 20 January, adding that the country was on an unsustainable course and would have to make hard choices to bring the budget under control.

"We came into office facing a budget deficit of $1.3 trillion for this year alone, and the cost of confronting our economic crisis is high," the president said in his weekly radio address. "But we cannot settle for a future of rising deficits and debts that our children cannot pay."

Obama indicated he was moving to tackle the problem. He said his administration had identified $2 trillion in deficit reductions over the next decade and would cut or eliminate more than 100 programmes.

"Earlier this week I held my first cabinet meeting and sent a clear message: cut what doesn't work," Obama said. "But we can't stop there. We need to go further," he added, outlining four additional steps the administration would take to help restore fiscal discipline.

"We need to adhere to the basic principle that new tax or entitlement policies should be paid for," Obama said, adding that so-called pay-as-you-go principles had helped transform deficits into surpluses in the 1990s.

He urged Congress to pass legislation that would enforce the pay-as-you-go idea. The principles would require that any new programmes, except for emergencies, be paid for either by raising taxes or cutting other programmes.

Obama also said he would create incentives for government agencies to reduce wasteful and unnecessary spending, such as allowing them to keep a portion of the savings to spend on programmes that work. "The result will be a smaller budget, and a more effective government," he said.

Workers' ideas sought
The government would also solicit cost-cutting ideas from government employees and adopt business-style innovations and technology to find ways to work more efficiently. The president said employees' ideas would be a key.

"After all, Americans across the country know that the best ideas often come from workers, not just management," Obama said. "That's why we'll establish a process through which every government worker can submit their ideas for how their agency can save money and perform better. We'll put the suggestions that work into practice."

Obama's pitch comes at the end of a week focused on federal spending. On Friday, Democrats in Congress neared a deal on Obama's budget proposal and inched closer to passing a bill that would result in some $500 billion in deficits.

To counter that perception, Obama, earlier in the week, ordered officials to identify $100 million in savings to achieve over time - a relative pittance against the broader plan, his aides later acknowledged. Critics scoffed at the amount, compared to the massive spending Washington allocates annually. But Obama continued to push hard for fiscal restraint.

But Obama's Republican rivals blasted the high deficits in their own radio address, noting that spending was so out of control the United States was even being scolded by France over its finances.

"The Democratic Congress passed a budget with such big deficits that it makes the United States literally ineligible to join France in the European Union," said Republican Senator Lamar Alexander.

''French deficits are lower than ours, and their president has been running around sounding like a Republican - lecturing our president about spending so much," Alexander added.