President Barack Obama pledged on Monday to cut the ballooning US budget deficit by half in the next four years and said the country would face another economic crisis if it did not address its debt problems soon.
Obama, whose month-old administration has pushed through a $787 billion economic stimulus package to jolt the country out of recession, said the need for immediate spending did not mean US budget problems could be put off.
"If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road," Obama told participants at the opening of a White House summit on "fiscal responsibility."
Obama, who rolls out his first budget on Thursday, emphasized he inherited a $1.3 trillion deficit when he took office and said interest payments in 2008 alone hit $250 billion -- three times more than the country spent on education.
"We cannot and will not sustain deficits like these without end," he said. "Today I'm pledging to cut the deficit we inherited by half by the end of my first term in office."
Obama, a Democrat, took over from former Republican President George W. Bush last month. His current term in office goes through January 2013.
Obama needs to reassure markets he has a responsible attitude toward the deficit and wants to show fiscal discipline that will keep interest rates down and the economy in shape.
The Dow Jones industrial average fell to an 11-year low on Monday as investors dumped shares on uncertainty about the latest potential US government action to shore up beleaguered banks.
Although his administration has focused its energies almost entirely on pulling the United States out of recession and addressing the financial sector problems that sparked it, Obama also wants to make good on campaign promises such as extending health care benefits to uninsured Americans and fighting climate change.
HEALTH CARE AN ECONOMIC PRIORITY
His budget director, Peter Orszag, said reducing healthcare costs was critical to assuaging US economic ills.
"The single most important thing we can do to put the nation back on a sustainable (fiscal) course is slow healthcare costs," he said.
Vice President Joe Biden underscored Obama's push to boost the country's fiscal position, saying the economic crisis should not overshadow necessary fiscal changes.
"We want to be clear: as we take the steps that we must to get through the crisis that we're in now, we will not lose sight of the long-term," Biden told the same gathering.
"We will not lose sight of the need to tackle unmet needs for health care reform, to deal with the energy policy that we need and so many other challenges that are going to determine what the 21st century looks like," Biden said.
Obama invited lawmakers from both parties, business people, union leaders and budget experts to Monday's fiscal summit to discuss ways to deal with long-term issues including health care, entitlement programs and federal contracting in areas such as defence.
Prominent Republicans including House of Representatives Minority Leader John Boehner and Arizona Senator John McCain, Obama's rival in last year's presidential campaign, attended.
Boehner and other Republicans, who have lambasted the president's stimulus package, called on Monday for a federal spending freeze.
"President Obama has called for both parties to get serious about fiscal responsibility," Boehner said in a statement.
"With our budget deficit potentially reaching $3 trillion this year, Republicans stand ready to work with him, and we believe we should start right now."