"committing the government to actions that would bring deficits under control once the economy recovers."

President Obama on Budget Savings in the NY Times:

"President-elect Barack Obama vowed on Tuesday to scour wasteful spending from the federal budget to help offset an investment in a huge recovery plan to jump-start the ailing economy, a pledge that he called part of his “mandate to move the country in a new direction.”

For the second straight day, Mr. Obama called a news conference to explain how his administration would respond to the nation’s financial crisis. He named no specific government programs to be eliminated but said tightening the budget was part of the sacrifice he would ask Americans to endure.

“We can’t sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of politicians, lobbyists or interest groups,” Mr. Obama said. “We simply can’t afford it.”

This is good news. I understand that he's not being very specific, but at least he keeps saying it over and over. That's a good start.

"With an eye on the economy, Mr. Obama announced that he would nominate Peter R. Orszag as director of the Office of Management and Budget. After running the Congressional Budget Office for nearly two years, as well as handling economic policy in the Clinton and Bush administrations, Mr. Orszag “doesn’t need a map to tell him where the bodies are buried in the federal budget,” Mr. Obama said."

He's a good appointment.

"Together with a two-year economic recovery package of hundreds of billions of dollars in spending and tax cuts, Mr. Obama hopes to win early approval in Congress next year for separate language committing the government to actions that would bring deficits under control once the economy recovers."

This is important to reassure investors that we will not default or print money, but will raise taxes or cut spending in the future. We need to say it and mean it, whether or not anyone believes us.

"Advisers to Mr. Obama and to Congressional leaders say they have hardly begun to figure out what kind of process they could devise to enforce fiscal discipline. But Obama advisers, in particular, consider it essential to signal that Democrats are not using the economic crisis to go on a spending binge without concerns for future deficits.

“In these challenging times, when we are facing both rising deficits and a sinking economy, budget reform is not an option,” Mr. Obama said. “It’s a necessity.”

Totally agree.

"Budget controls are also considered important to securing the votes of conservative Democrats in the House and the Senate, who might otherwise balk at an economic stimulus package that could exceed $500 billion. One of those at the center of the effort to draw up proposals is Rahm Emanuel, who was the fourth-ranking House Democratic leader until Mr. Obama tapped him to be the White House chief of staff."

This is good news.

"Mr. Obama cited, as an example of the possible cuts he expects Mr. Orszag and the rest of his budget team to find, the findings of a recent government report indicating that farmers whose incomes exceeded $2.5 million had most likely been mistakenly paid about $49 million in government subsidies from 2003 to 2006.

He did not offer any other specific targets, and by itself, correcting the problem with the farm program would make an undetectable dent in the government’s soaring deficits. After the financial recovery is under way, Mr. Obama said, the chase after wasteful spending will begin in earnest.

“Just because a program, a special interest tax break or corporate subsidy is hidden in this year’s budget does not mean that it will survive the next,” he said. “The old ways of Washington simply can’t meet the challenges of today and tomorrow.”

Time will tell.