President Obama on Deficits and Deficit Reduction – 2010

Here are some direct quotes from President Obama on deficits and deficit reduction in 2010.  Click the links for full transcripts!

1/27/10 State of the Union address, Washington, D.C.

Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan.

It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office — the independent organization that both parties have cited as the official scorekeeper for Congress — our approach would bring down the deficit by as much as $1 trillion over the next two decades. (Applause.)


Now, even as health-care reform would reduce our deficit, it’s not enough to dig us out of a massive fiscal hole in which we find ourselves. It’s a challenge that makes all others that much harder to solve, and one that’s been subject to a lot of political posturing. So let me start the discussion of government spending by setting the record straight.

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. By — (applause) — by the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade.

Most of this was the result of not paying for two wars; two tax cuts; and an expensive prescription-drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. All this was before I walked in the door. (Applause, other audience reactions.) Now — just stating the facts.

Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis, and our efforts to prevent a second Depression have added another $1 trillion to our national debt. That too is a fact.

I’m absolutely convinced that was the right thing to do.

But families across the country are tightening their belts and making tough decisions. The federal government should do the same. (Cheers, applause.)

So tonight I’m proposing specific steps to pay for the $1 trillion that it took to rescue the economy last year. Starting in 2011, we are prepared to freeze government spending for three years. (Scattered applause.) Spending related to our national security, Medicare, Medicaid and Social Security will not be affected, but all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t. And if I have to enforce this discipline by veto, I will. (Applause.)

We will continue to go through the budget line by line, page by page, to eliminate programs that we can’t afford and don’t work.

We’ve already identified $20 billion in savings for next year. To help working families, we’ll extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, for investment-fund managers and for those making over $250,000 a year. (Applause.) We just can’t afford it.


From some on the right, I expect we’ll hear a different argument: that if we just make fewer investments in our people; extend tax cuts, including those for the wealthier Americans; eliminate more regulations; maintain the status quo on health care — our deficits will go away.

The problem is, that’s what we did for eight years. (Laughter, cheers, applause.) That’s what helped us into this crisis. It’s what helped lead to these deficits. We can’t do it again.

7/20/10 Press Conference, The White House

When I came into office in January of 2009, I was very clear at the time, even before we knew the severity of the recession that we would experience, that we have a structural deficit that is unsustainable, and that for our long-term growth and prosperity, we are going to have to get a handle on that. I talked about that during my campaign; I talked about it in the days after I was elected; I talked about it after I had been sworn in.

We had an emergency situation on our hands. And so the entire world, working through the G-20, coordinated in making sure that we filled this huge drop-off in demand, we got the economy growing again. And we had to take a number of steps, some of which were unpopular and that, yes, added to the short-term deficit.

What I also said at the time was we are then going to make sure, number one, that we pay down whatever additional deficit had been added as a consequence of the recovery act and other steps that we had to take last year.

But then we’re still going to have to go back and deal with these long-term structural deficits.

And in fact in the first G-20 visit that I made in April, to England, I was very clear to the rest of the world that what they cannot rely on is an economic model in which the United States borrows, consumers in the United States borrow — we take out home equity loans; we run up credit cards — to purchase good from all around the world.

We cannot alone be the economic engine for the rest of the world’s growth. So that rebalancing ended up being a central part of our long-term strategy working with the G-20.

Now, what we’ve done is, we’ve initiated a freeze on our domestic discretionary budget. We are on the path to cutting our deficits in half. We have put forward a fiscal commission that is then going to examine, how do we deal with these broader structural deficits?

So this isn’t just an empty promise. We’ve already started taking steps to deal with it. And we’re going to be very aggressive in how we deal with it.

9/22/10 Falls Church, Virginia

Understand now — I want to make sure everybody’s clear. The Congressional Budget Office, which has made — is independent — it’s historically bipartisan; this is sort of the scorekeeper in Washington about what things cost — says that as a consequence of this act, the deficit is going to be over a trillion dollars lower over the course of the next two decades than it would be if this wasn’t passed.

9/29/10 Des Moines, Iowa

But I also have to make sure that we are paying our bills and that we’re not adding — putting off debt for the future generation.

And that’s what happened in the Bush tax cuts in 2001 and 2003. We lopped off taxes and we did not pay for it, and that is the single largest contributor to the debt and the deficit. It’s not anything that we did last year as — in emergency spending.

It’s not the auto bailout. It’s not the health-care bill. That’s not what’s added to our deficit.

The single biggest reason that we went from a surplus under Bill Clinton to a deficit of record levels when I walked into office had to do with these Bush tax cuts, because they weren’t paid for, and we didn’t make — cut — we didn’t cut anything to match them up.

10/18/10 Rockville, Maryland

We’ve still got to get control of our deficit in a serious way. And that’s going to require more than just platitudes; it’s going to require tough choices. And the question is going to be do we have people in place who are making those choices not based on what’s politically expedient or what special interests are lobbying for, but rather what’s good for America over the long term.

10/27/10 Interview with Michael Smerconish

And I think that we can responsibly set a pathway where, over the course of several years, we are reducing our deficit without endangering economic growth, without endangering, you know, the core investments that are required to make sure that the American dream continues, and without completely shredding our safety net.

11/29/10 The White House

As I said a few weeks ago, the most important contest of our time is not the contest between Democrats and Republicans. It’s between America and our economic competitors all around the world. And winning that contest means that we’ve got to ensure our children are the best educated in the world, that our research and development is second to none and that we lead the globe in renewable energy and technological innovation.

It also means making sure that in the future we’re not dragged down by long-term debt. This is a challenge that both parties have a responsibility to address: to get federal spending under control and bring down the deficits that have been growing for most of the last decade.

Now, there’s no doubt that if we want to bring down our deficits it’s critical to keep growing our economy. More importantly, there’s still a lot of pain out there, and we can’t afford to take any steps that might derail our recovery or our efforts to put Americans back to work and to make Main Street whole again. So we can’t put the brakes on too quickly, and I’m going to be interested in hearing ideas from my Republican colleagues as well as Democrats about how we continue to grow the economy and how we put people back to work.

But we do have to correct our long-term fiscal course, and that’s why earlier this year I created a bipartisan deficit commission that is poised to report back later this week with ideas that I hope will spark a serious and long-overdue conversation in this town.

Those of us who have been charged to lead will have confront some very difficult decisions, cutting spending we don’t need in order to invest in the things that we do.

As president, I’m committed to doing my part. From the earliest days of my administration, we’ve worked to eliminate wasteful spending and streamline government. I promise to go through the budget line by line to eliminate programs that outlived their usefulness, and in each of the budgets I’ve put forward so far, we’ve proposed approximately $20 billion in savings through shrinking or ending more that 120 of such programs.

I’ve also set goals for this government that we’re on track to meet: reducing improper payments by $50 billion, saving $40 billion in contracting, and selling off $8 billion of unneeded federal land and buildings.

I’ve also proposed a three-year freeze on all non-security discretionary spending, a step that would bring that spending to its lowest level as a share of the economy in 50 years. And we’ve brought unprecedented transparency to federal spending by placing all of it online at and, so Americans can see how their tax dollars are spent.

The hard truth is that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by the employees of the federal government.

After all, small businesses and families are tightening their belts. Their government should too. And that’s why, on my first day as president, I froze all pay for my senior staff. This year I’ve proposed extending that freeze for senior political appointees throughout the government and eliminating bonuses for all political appointees. And today I’m proposing a two-year pay freeze for all civilian federal workers. This would save $2 billion over the rest of this fiscal year and $28 billion in cumulative savings over the next five years.

12/22/10 Press Conference, The White House

And there is no better antipoverty program than an economy that’s growing; there’s no better deficit-reduction program than an economy that is growing.


Leave a Reply