President Barack Obama said the U.S. can cut the deficit and spur economic growth at the same time, and that short-term deficits aren’t the nation’s primary fiscal concern.
The president pointed to the shrinking federal budget deficit while arguing for continued spending on programs that he said will foster growth, such as investments in infrastructure, research and education.
“We are not lavishly spending on a whole bunch of social programs out there,” Obama said today at the Wall Street Journal’s CEO Council in Washington.
Spending cuts and higher tax revenue as the economy improves helped trim the federal budget deficit to $680 billion for the year ended Sept. 30. That’s the lowest in five years and about half the record deficit of $1.4 trillion in 2009.
Earlier at the Journal event, former Obama adviser and Treasury Secretary Lawrence Summers said policy makers should put more focus on steps to boost growth to avoid a prolonged period of economic weakness.
Greater growth would solve the country’s long-term fiscal problems, he said.
Obama said one of the main drivers of the nation’s long- term debt continues to be the cost of health care. Obama said his goal is to make health care "cheaper overall" and direct some of the savings to things like infrastructure and research.
He said that even with its troubled rollout, the health- care law enacted in 2010 is designed to address the growth of health spending.
Negotiators in a House-Senate budget conference committee have failed so far to hammer out a budget spending outline for fiscal 2014, which began Oct. 1. The government is now operating on a stopgap spending resolution which expires on Jan. 15, creating the potential for another government shutdown.
The government’s borrowing limit expires on Feb. 7, and Obama said he doesn’t expect Republicans will again try to use the debt ceiling as leverage to advance policy goals. The standoff earlier this year was a "dangerous precedent," he said.
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