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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 he signed last week.

AP – President Barack Obama pause as he speaks at the close of the Fiscal Responsibility Summit

"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 would 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 burgeoning entitlement programs, was a huge priority.

Wall Street seemed unimpressed by all the talk. The Dow Jones industrials dropped 251 points for the day.

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.

Obama said there would be another summit next week on health care reform. "It's not that I've got summititis here," he added wryly.

By the president's account, the administration inherited a $1.3 trillion deficit for the current fiscal year from the Bush administration — that's the figure Obama says he'll cut in half — and the stimulus law, coupled with rescue efforts for ailing automakers, the financial industry and beleaguered homeowners will raise this year's red ink to $1.5 trillion.

The administration hopes to trim the deficit by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government.

"We are paying the price for these deficits right now," Obama said, estimating the country spends $250 billion — one in every ten dollars of taxpayer money — in interest on the national debt. "I refuse to leave our children with a debt that they cannot repay."

As an example of a purchasing process "gone amok," the president said he had ordered a thorough review of his new fleet of Marine One helicopters, now far over budget. He was asked about the fleet by former presidential rival John McCain at the end of the White House meeting.

"The helicopter I have now seems perfectly adequate to me," Obama said, to laughter. "Of course, I've never had a helicopter before. So, you know, maybe I've been deprived and I didn't know it."

Earlier, Obama met with Republican and Democratic governors who are poised to benefit from his unprecedented emergency economic package. He told the chief executives, attending a three-day National Governors Association meeting in Washington, that he would begin distributing $15 billion to their states within two days to help them with Medicaid payments to the poor.

The recession has strapped state budgets, in particular in regard to the Medicaid program that is jointly underwritten by states and the federal government. In total, states will eventually receive $90 billion for Medicaid from the new law.

One month into office as the economy continues its downward spiral, Obama is seeking to balance twin priorities: turning around dismal conditions with a huge injection of spending while lowering huge budget deficits. With his re-election race just a few years away, he also has an interest in avoiding being labeled as a big-government, big-spending Democrat.

The White House meetings opened a jam-packed White House week that includes a State-of-the-Union-style address to Congress Tuesday night and the president's first budget proposal on Thursday. A common thread: addressing current economic turmoil while controlling the country's long-term costs.

"This will not be easy," Obama told his White House audience, which included congressional leaders, 2008 GOP presidential nominee McCain, and Republican Sen. Judd Gregg of New Hampshire, who recently backed out as Obama's commerce secretary.

After Obama spoke, attendees broke into five groups to brainstorm how to address costly areas including military weapons, Social Security, health care and tax reform.

During one, Rep. Henry Waxman, D-Calif., said, "Our deficit really cannot be controlled until we figure out how to deal with health care costs." At another, House Republican leader John Boehner of Ohio proposed raising the Social Security retirement age to 70 over a number of years.

Afterward, Obama emphasized areas where he said there was agreement and consensus on moving forward in a bipartisan way, including that the country must ensure people have retirement security, that the tax process must be simplified and that the existing budgeting process isn't working. He also directed his team to pull together a final report from the sessions in 30 days.

WASHINGTON – In a first-day whirlwind, President Barack Obama showcased efforts to revive the economy on Wednesday, summoned top military officials to the White House to chart a new course in Iraq and eased into the daunting thicket of Middle East diplomacy.

"What an opportunity we have to change this country," said the 47-year-old chief executive, who also issued new ethics rules for his administration, hosted a reception at the presidential mansion for 200 inauguration volunteers and guests selected by an Internet lottery and even took the oath of office again after it was flubbed Tuesday.

After dancing at inaugural balls with first lady Michelle Obama past midnight, Obama entered the Oval Office for the first time as president in early morning. He read a good luck note left behind by President George W. Bush, then began breaking cleanly with his predecessor's policies.

Aides circulated a draft of an executive order that would close the detention facility at Guantanamo Bay, Cuba, within a year and halt all war crimes trials in the meantime.

Closing the site "would further the national security and foreign policy interests of the United States and the interests of justice," read the draft prepared for the new president's signature. A copy was obtained by The Associated Press, and an aide said privately that Obama would sign a formal order on Thursday.

Some of the 245 detainees currently held at Guantanamo would be released, while others would be transferred elsewhere and later put on trial under terms to be determined.

Obama's Cabinet was moving closer to completion.

At the Capitol, the Senate confirmed Hillary Rodham Clinton as secretary of state after a one-day delay forced by Republicans. The vote was 94-2, and spectators seated in the galleries erupted in applause when it was announced.

Treasury-designate Timothy Geithner emerged unscathed from his confirmation hearing, apologizing for having failed to pay $34,000 in taxes earlier in the decade.

To the evident anger of Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, Republicans on the panel invoked long-standing rules to postpone a vote on Eric Holder's appointment as attorney general.

Counting Clinton, seven Cabinet members have been confirmed so far, as have the two top officials at the Office of Management and Budget.

Obama's schedule for the day included separate sessions on the economy and the wars in Iraq and Afghanistan.

The new president has pledged to take bold steps to revive the economy, which is struggling through the worst recession since the Great Depression. Last week, he won approval to use $350 billion in leftover financial industry bailout funds.

He presided over the White House meeting on the economy as the House Appropriations Committee moved toward approval of $358 billion in new spending, part of the economic stimulus package making its way to his desk.

The new commander in chief held his first meeting in the Situation Room, where he, Vice President Joe Biden and senior military and foreign policy officials discussed war in Iraq and Afghanistan. Obama campaigned on a pledge to withdraw U.S. combat forces from Iraq within 16 months, and to beef up the commitment in Afghanistan. Obama asked the Pentagon to do whatever additional planning necessary to "execute a responsible military drawdown from Iraq."

The new White House press secretary, Robert Gibbs, said Obama's phone calls to leaders in the Middle East were meant to convey his "commitment to active engagement in pursuit of Arab-Israeli peace from the beginning of his term."

Gibbs also that in conversations with Israeli, Palestinian, Egyptian and Jordanian leaders, the president emphasized he would work to consolidate the cease-fire between Israel and Hamas in Gaza.

Obama intends to name former Senate Majority leader George Mitchell as a special envoy to the region.

Not everything was new at the White House.

In the Oval Office, Obama worked at a desk built from the timbers of a British naval vessel, the HMS Resolute, and used off-and-on by presidents since the 1870s, including Bush. It also appeared that the carpet that Bush used in his second term, a yellow sunbeam design, was still in place.

If some of the furnishings remained in place, there was no doubt that the new president meant to fulfill his campaign promise of change.

"As of today, lobbyists will be subject to stricter limits than under any ... other administration in history," Obama told reporters as he signed the new rules. The restrictions included a ban on gifts by lobbyists to anyone serving in the administration.

He also imposed a pay freeze for about 100 White House aides who earn $100,000 or more. Its implementation was unclear, since none of them was on the payroll before Tuesday's noontime inauguration.

On Tuesday, within hours of Obama's inauguration, his administration froze last-minute Bush administration regulations before they could take effect.

Among them was an Interior Department proposal to remove gray wolves from Endangered Species protections in much of the northern Rocky Mountains, and a Labor Department recommendation that would allow companies that manage employee retirement plans to market investment products to plan participants.

On Wednesday night, Chief Justice John Roberts administered the oath to Obama at the White House — a rare do-over. The surprise moment came in response to Tuesday's stumble, when Roberts got the words of the oath a little off, which prompted Obama to do so, too.

The White House reassured that Obama has still been president since noon on Inauguration Day. But Obama and Roberts went through the drill again out of what White House counsel Greg Craig called "an abundance of caution."

Obama also dropped by a party for his staff at a packed DC Armory, telling his supporters that they deserve credit for his historic election victory, in part because they didn't know any better. He said they simply didn't know that a guy like him shouldn't win, that their fundraising model wasn't typical and that the odds were stacked against them.

Obama and his wife began their day at a prayer service that is traditional for the first business day of a new administration. They were joined in front-pew seats by Biden and his wife, Jill, as well as former President Bill Clinton and his wife, hours away from confirmation as the nation's top diplomat.

"Grant to Barack Obama, president of the United States, and to all in authority your grace and good will. Bless them with your heavenly gifts, give them wisdom and strength to know and to do your will," prayed the Rev. Andy Stanley, one of numerous clerics from several religions to speak.

WASHINGTON – Roland Burris failed to capture President-elect Barack Obama's old Senate seat Tuesday in a wild piece of political theater, but the Democrats' opposition cracked when a key chairwoman said seating him was simply the legal thing to do.

AFP/Getty Images/File – Senate Majority Leader Harry Reid(R), House Speaker Nancy Pelosi(L) addressing reporters on Capitol Hill

Democratic leaders, set to meet with Burris on Wednesday, were searching for a way to defuse the dispute before it further overshadows the 111th Congress. Knowledgeable Senate officials of both parties widely predicted that the saga would end with Burris being seated. They spoke on condition of anonymity because they were not authorized to speak publicly.

Seating Burris seemed more likely late Tuesday, when Sen. Dianne Feinstein rejected the reasoning that all of the chamber's Democrats, herself included, had cited in a letter last week — that corruption charges against Burris' patron, Illinois Gov. Rod Blagojevich, tainted his appointment.

"Does the governor have the power, under law, to make the appointment? And the answer is yes," said Feinstein, chairwoman of the Senate Rules Committee, which judges the credentials of senators.

Burris marched into the Capitol earlier Tuesday, declaring himself "the junior senator from the state of Illinois." But Secretary of the Senate Nancy Erickson rejected his certification, as he knew she would, saying it lacked Illinois Secretary of State Jesse White's signature and the state seal.

Late Tuesday, Feinstein urged the Senate to settle the matter.

"If you don't seat Mr. Burris, it has ramifications for gubernatorial appointments all over America," the California senator said. "Mr. Burris is a senior, experienced politician. He has been attorney general, he has been controller, and he is very well-respected. I am hopeful that this will be settled."

A spokesman for Senate Majority Leader Harry Reid did not immediately respond to a request for comment.

Earlier, Reid had said, "Mr. Burris is not in possession of the necessary credentials from the state of Illinois."

Burris, meanwhile, pivoted from his rejection at the Capitol to the Illinois Supreme Court, asking it to order White to certify his appointment.

Burris was expected to meet with Reid on Wednesday.

It would be his second appearance at the Capitol in as many days. His first included an escort by Capitol police officers to Erickson's third-floor office for what was described as a highly cordial, 21-minute meeting.

Burris, 71, then led a small mob of lawyers, consultants, police and reporters across the street in pouring rain, to a news conference which Burris aides said Reid had tacitly allowed.

Erickson, Burris reported, had advised him that "I would not be accepted, and I will not be seated, and I will not be permitted on the floor."

The former Illinois attorney general said he was "not seeking to have any type of confrontation" over taking the seat. In addition to his court filing late in the day in Illinois, Burris said he was considering a federal lawsuit to force Senate Democrats to seat him.

It was a distraction for majority Democrats eager to project an image of progress with Obama on an economic stimulus package estimated to cost as much as $800 billion.

Democrats and Obama have said that the corruption charges against Blagojevich would strip credibility from anyone he appointed to the seat.

Blagojevich denies federal accusations that he tried to sell the seat Obama has given up for the presidency.

In a written statement Tuesday, the governor said allegations against him shouldn't be held against Burris, whom he called a "good and decent man."

"The people of Illinois are entitled to be represented by two senators in the United States Senate," Blagojevich said.

An attorney for Burris, Timothy W. Wright III, said that "our credentials were rejected by the secretary of the Senate. We were not allowed to be placed in the record book. We were not allowed to proceed to the floor for purposes of taking oath. All of which we think was improperly done and is against the law of this land."

Some of Burris' supporters have bemoaned the fact that Democrats would stand in the way of the Senate gaining its only black member. Burris himself downplayed the issue of race, telling reporters: "I cannot control my supporters. I have never in my life, in all my years of being elected to office, thought anything about race."

"I'm presenting myself as the legally appointed senator from the state of Illinois. It is my hope and prayer that they recognize that the appointment is legal," he said on CBS' "The Early Show."

Members of the Congressional Black Caucus said Tuesday that Burris should be seated.

"A lot of people want to talk about race or the governor and his problems, but the bottom line is you have a sitting governor who has certain legal rights and authorities and he's made an appointment," said Rep. Elijah Cummings, D-Md. "This is an issue that goes beyond race."