REMARKS BY THE PRESIDENT ON PROCUREMENT

THE PRESIDENT: Good morning. Even if these were the best of times, budget reform would be long overdue in Washington. And we have here some folks who have been working on these issues for a long time.

But these are far from the best of times. By any measure, my administration inherited a fiscal disaster. When we walked in the door we found a budget deficit of $1.3 trillion, the largest in American history. And this fiscal burden has been compounded by the most severe economic crisis since the Great Depression. It's a crisis that requires us to take swift and aggressive action to put Americans back to work, and to make the long-delayed investments in energy, health care and education, that can build a new foundation for growth.

As we get our economy moving we must also turn the tide on an era of fiscal irresponsibility so that we can sustain our recovery, enhance accountability and avoid leaving our children a mountain of debt. And that's why even as we make the necessary investments to put our economy back on track, we're proposing significant changes that will help bring the yawning deficits we inherited under control. We are cutting what we don't need to make room for what we do.

The budget plan I outlined next week includes $2 trillion in deficit reduction. It reduces discretionary spending for non-defense programs as a share of the economy that -- by more than 10 percent over the next decade, to the lowest level in nearly half a century. I want to repeat that. I want to make sure everybody catches this, because I think sometimes the chatter on the cable stations hasn't been clear about this. My budget reduces discretionary spending for non-defense programs as a share of the economy by more than 10 percent over the next decade, and it will take it to the lowest level in nearly half a century.

In addition, today I'm announcing that part of this deficit reduction will include reforms in how government does business, which will save the American people up to $40 billion each year. It starts with reforming our broken system of government contracting. There is a fundamental public trust that we must uphold. The American people's money must be spent to advance their priorities -- not to line the pockets of contractors or to maintain projects that don't work.

Recently that public trust has not always been kept. Over the last eight years, government spending on contracts has doubled to over half a trillion dollars. Far too often, the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability. In some cases, contracts are awarded without competition. In others, contractors actually oversee other contractors. We are spending money on things that we don't need, and we're paying more than we need to pay. And that's completely unacceptable.

This problem cuts across the government, but I want to focus on one particular example, and that is the