WASHINGTON -- President-elect Barack Obama is warning of huge deficits for the next several years. But he also says Washington needs to exercise discipline in spending.
As staggering as it sounds, the government could run a trillion-dollar deficit not only this year - but years to come. That's according to incoming President Obama, who's been holding daily meetings on the economy since returning to Washington.
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"At the current course and speed a trillion-dollar deficit will be here before we start the next budget," the President-elect said.
The irony? His proposed economic stimulus plan now nearing $800 billion in spending and tax cuts will only plunge the federal budget deeper in the red.
It's a reality of dealing with the times. A country in recession with rising unemployment and in need of a jolt to pull the economy out of its weakness.
With a new Congress officially in session, lawmakers say fixing the economy is the first order of business.
"Our country cannot afford to wait," said Rep. Nancy Pelosi House Speaker. "Our country needs action, and it needs action now."
But budget hawks worry about a feverish rush to pass a stimulus bill and the overall cost with a national debt already at $10.6 trillion.
"This is not a package that's ever going to be paid for by the current generation," said Rep. John Boehner, Minority Leader. "It's being paid for by our kids and grandkids."
To calm these concerns, Obama is also preaching responsibility and reform, pledging that his administration practice fiscal discipline, rein in government spending, and eventually work to reduce the budget shortfall.
"I'm going to be willing to make some very difficult choices in how we get a handle on this deficit," Obama said.
Obama's task is tough. On the one hand, he must persuade Americans and the Congress to buy into the notion that his massive spending plan in the short run will help to stimulate the economy. While at the same time, convince the public and a wary market that there's a long-term strategy to get spending under control.