Obama promises a gimmick-free spending plan

President says he will cut the estimated $1.3 trillion deficit in half in four years by raising taxes on the wealthy and reducing spending on the Iraq war.

Pledging to end "the casual dishonesty" of the budget process and warning of the dire consequences of inaction, President Obama Monday pledged an assault on soaring budget deficits and promised to cut the current shortfall in half in four years.

The president's remarks came at the opening of a fiscal responsibility summit that brought more than 130 lawmakers, administration officials, economists and academics to the White House to begin charting a path toward solvency.

The president was particularly biting in his denunciation of the way the federal budget has been written in recent years, calling the process "an exercise in deception" that elevates "clever accounting tricks" and "endless excuses" over reliable numbers and accurate projections.

"This," he said, "is exactly what the American people rejected when they went to the polls."

Examples he cited included budgeting nothing for the Iraq war and for natural disasters, and pretending that continuing programs needed to be funded for one year. He said those practices will not continue in the budget he plans to unveil Thursday.

The challenge is certainly daunting, with the deficit estimated by the White House at $1.3 trillion. But Obama pledged to reduce that to $533 billion in four years. To get there, he will look to cut spending on the Iraq war and increase revenue by ending the Bush administration's tax cuts for the highest-earning Americans. Both measures will be controversial in Congress, and there will be stiff political resistance to efforts to get entitlement spending under control.

Office of Management and Budget Director Peter Orszag, in his remarks, said controlling healthcare costs is "the single most important thing we can do" for the long term. He called that "the key to our fiscal future." Mark Zandi, chief economist at Moodys.com and an adviser to Sen. John McCain, R-Ariz., warned conservatives that "the financial system is in disarray and the economy" and that "policymakers must be aggressive." He added that "crises of the magnitude of the current one only end with overwhelming government action."

Robert Greenstein, executive director of the Center on Budget and Policy Priorities, was particularly bleak in the outlook he shared with participants. "It is hard to see how you avert a debt explosion without major policy changes in both spending and revenue." He said sacrifice seems inevitable, adding, "Everything on both the spending and tax side will have to be on the table."