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New fiscal rules will curb spending, Obama says

PAY AS YOU GO President Obama has been trying to show the public that he is taking steps to tighten Washington’s purse strings. PAY AS YOU GO
President Obama has been trying to show the public that he is taking steps to tighten Washington’s purse strings.
By Darlene Superville
Associated Press / February 14, 2010

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WASHINGTON - President Obama said yesterday that new budget rules that say spending cuts must accompany spending increases will force Congress to “pay for what it spends, just like everybody else.’’

Obama signed a bill Friday reinstating budget rules known as “paygo’’ - short for “pay as you go.’’

In place during the 1990s, the rules helped create balanced budgets and surpluses. Obama blames eliminating them for creating much of the $1.3 trillion deficit he faced upon taking office in January 2009 and for a total debt of $8 trillion projected over the next decade.

The president has been trying to show a public alarmed by higher government spending in the midst of an economic downturn that he is taking steps to tighten Washington’s purse strings.

But the bill also lifted the cap on the amount of money the United States can borrow by $1.9 trillion - to a total of $14.3 trillion. The ceiling was lifted from $12.4 trillion to keep the United States from going into default.

In his weekly radio and Internet address, Obama said the “politics of the moment’’ often overwhelms the desire Democrats and Republicans have to produce balanced budgets - something the federal government legally is not required to do.

“Now, Congress will have to pay for what it spends, just like everybody else,’’ he said.

Obama did not discuss raising the debt ceiling in his message.

The president also repeated a promise to create, by executive order, a panel of Democrats and Republicans to suggest ways for closing the gap between what the government spends and what it collects in revenue. His proposal is weaker than a similar plan recently defeated by the Senate because Congress would not be required to vote on the presidential panel’s recommendations.

Obama was expected to sign the executive order as early as this week.

The administration is projecting a $1.56 trillion deficit for the budget year ending Sept. 30.

Republicans mocked Obama for signing the “paygo’’ bill behind closed doors.

“With a simple stroke of his pen, President Obama now has the ability to continue his binge spending agenda to the tune of an additional $1.9 trillion, the largest one-time increase in our history,’’ Michael Steele, Republican Party chairman, said Friday. “Taxpayers will continue to foot the bill for the Democrats’ fiscal irresponsibility.’’

In other action yesterday, Obama named a White House lawyer as his special envoy to the Organization of the Islamic Conference, part of his continuing effort to repair strained US relations with the world’s Muslims.

Obama announced Rashad Hussain’s appointment during a video address to the 7th US-Islamic World Forum meeting in Doha, Qatar.

As his liaison to the OIC, the president said Hussain will continue working to repair US-Islamic relations and develop the types of partnerships Obama called for when he addressed the Muslim world during a speech last year in Cairo.

US relations with the Muslim world became strained after the wars in Iraq and Afghanistan.