Obama pledges to slash deficit at fiscal summit

WASHINGTON – Urging strict future restraint even as current spending soars, President Barack Obama pledged on Monday to dramatically slash the skyrocketing annual budget deficit as he started to dole out the record $787 billion economic stimulus package.

“If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road,” the president warned, promising to cut the yearly deficit in half by the end of his four-year term. “We cannot simply spend as we please and defer the consequences.”

He said he would reinstitute a pay-as-you-go rule that calls for spending reductions to match increases and shun what he said were the past few years’ “casual dishonesty of hiding irresponsible spending with clever accounting tricks.” He called the long-term solvency of Social Security “the single most pressing fiscal challenge we face by far” and said reforming health care, including entitlement programs, was a huge priority.

Obama goes before Congress and the nation Tuesday night to make the case for his agenda and his budget plans, which the White House is to release in more detail on Thursday.

On Monday, he sought to prepare people for tough choices ahead.

He summoned allies, adversaries and outside experts to what the White House characterized as a summit on the nation’s future financial health one week after triumphantly putting his signature on the gargantuan spending-and-tax-cut measure designed to stop the country’s economic free fall and, ultimately, reverse the recession now months into its second year.

At the same time, federal regulators announced a revamped program to shore up the nation’s banks that could give the government increasing ownership. It was the administration’s latest attempt to bolster the severely weakened banking system without nationalizing any institutions, which the White House has said it does not intend to do.

Associated Press writers Jim Kuhnhenn, Jennifer Loven, Jeannine Aversa, Darlene Superville, Philip Elliott, Brett Blackledge and Erica Werner contributed to this report,/i>

Obama’s Medicaid move could give Ill. $471 million

SPRINGFIELD, Ill. – Illinois could collect nearly $471 million from President Barack Obama’s decision to release Medicaid money included in the federal stimulus package, providing a little relief to the pharmacies and hospitals waiting months to be paid for their services.

Obama announced Monday that states will soon get $15 billion for their Medicaid programs, which provide health care to poor families. The money is part of the spending package meant to help boost the economy.

The first installment of the money will be available to states starting Wednesday, the White House said.

Many states are having trouble paying their Medicaid bills. That means businesses provide health care and then have to wait week after week to be reimbursed for their services.

In Illinois, the official wait is 62 days. But that only counts the period after a state agency gives a bill to the comptroller for payment. The actual time from service to payment can be much longer.

The state’s backlog of unpaid bills, for Medicaid and for many other expenses, stands at about $2.8 billion, Comptroller Daniel Hynes’ office says. That means a $471 million increase from the federal government won’t come close to solving the problem.

The Illinois Department of Healthcare and Family Services oversees Medicaid. Department spokeswoman Annie Thompson said the additional money will help reduce the wait for providers but she could not estimate how much.