Obama promises to cut budget deficit in half

U.S. | But spending now is rising and Wall St. shrugs

WASHINGTON -- Urging strict future restraint even as current spending soars, President Obama pledged on Monday to slash the skyrocketing annual budget deficit.

"If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road," the president warned, promising to cut the yearly deficit in half by the end of his four-year term. "We cannot simply spend as we please and defer the consequences."

He said he would reinstitute a pay-as-you-go rule that calls for spending reductions to match increases and would shun what he said were the past few years' "casual dishonesty of hiding irresponsible spending with clever accounting tricks."

Wall Street seemed unimpressed by all the talk. The Dow Jones industrials dropped 251 points for the day.

Obama goes before Congress and the nation tonight to make the case for his agenda and his budget plans, which the White House is to release in more detail on Thursday.

By the president's account, the administration inherited a $1.3 trillion deficit for the current fiscal year from the Bush administration -- that's the figure Obama says he'll cut in half.

The administration hopes to trim the deficit by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government.

"We are paying the price for these deficits right now," Obama said, estimating the country spends $250 billion -- one in every ten dollars of taxpayer money -- in interest. AP