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Obama calls for new spending cuts

“Even as we make critical investments to create jobs today and lay a foundation for growth tomorrow — by cutting taxes for small businesses, investing in education, promoting clean energy, and modernizing our roads and railways — we have to continue to go through the budget line by line, looking for ways to save,” Obama said in his weekly radio address.

“We have to cut where we can, to afford what we need,” he added.

The Obama administration acknowledged earlier this month that the budget deficit will swell to a record 1.556 trillion dollars.

Accumulating deficits beyond this year — although expected to decline — would double federal debt held by the public to 15.686 trillion dollars in seven years and push it even higher to 18.573 trillion dollars in 2020.

Measured against the size of the economy, the 1.556 trillion budget shortfall in 2010 would equal a hefty and unsustainable 10.6 percent of the gross domestic product, the basic measure of a country’s overall economic output.

Vowing to rein in this trend, the president praised so-called “pay as you go” legislation that he has just signed into law and that prevents Congress from approving new spending unless it is offset by budgetary cuts elsewhere.

But Obama said this measure alone will not be enough. He recalled that this year he had proposed another 20 billion dollars in budget cuts and called for a freeze in government spending for three years.

The president has also proposed a bipartisan fiscal commission to provide recommendations for long-term deficit reduction.

“Unfortunately this proposal — which received the support of a bipartisan majority in the Senate — was recently blocked,” Obama noted. “So, I will be creating this commission by executive order.”