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Pelosi Echoes Message of Caucus’ Fiscal Conservatives

Speaker Nancy Pelosi (D-Calif.) defended her stewardship of the federal purse Thursday, a day after 59 members of her Caucus sent her a letter urging cuts in spending to address the nation’s “fiscal crisis.”

“I support the principles in the letter,” she said.

She pointed to the House setting a discretionary spending cap $7 billion below President Barack Obama’s request for a domestic spending freeze, the president’s fiscal commission and the new pay-as-you-go law as evidence of the party’s commitment to fiscal responsibility.

Pelosi also said that other than unemployment insurance, other new stimulus items such as aid to the states would be paid for.

“Apart from the unemployment insurance, by and large most of these initiatives were paid for. … They did not add to the deficit,” she said of recent jobs-related bills. “I don’t believe that unemployment insurance should be paid for. I believe it diminishes the stimulative effect.”

Pelosi said additional aid to the states both for teachers and Medicaid is “essential” but suggested the funding could be offset.

“It is not in anybody’s interest, whether it is deficit reduction or job creation, for us to have the stability of the state economies jeopardized. … We have to do that in keeping with the letter. … We have to justify every investment and we have to make sure that we are not adding to the deficit.”

Pelosi appears to be bowing to the growing deficit-focused reality in Washington and to those in her ranks who are preaching fiscal discipline. While liberals and Obama’s budget envisioned hundreds of billions in additional emergency stimulus spending to jump-start hiring, fiscally conservative Blue Dog Democrats and other rank-and-file Members have balked at deficit spending, leading to the latest letter.

“We can no longer put off addressing our nation’s fiscal crisis, which was created by years of mismanagement and exacerbated by the economic crisis,” said the lawmakers, mostly Blue Dog Democrats.

The letter says that the Members are ready to “take meaningful steps to reduce spending and pay for our priorities now and in the future.”

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