In President Barack Obama's hands, the $700 billion financial rescue fund offers a bit of bookkeeping magic: an opportunity to pay down the deficit while also spending more _ thereby adding to it.

Under law, any paybacks to the bailout known as the Troubled Asset Relief Program must be used to reduce the deficit. But in an economic speech on Tuesday, the president sought to have it both ways. Increased repayments from banks to the Treasury will reduce the deficit all right, but it will give Congress the budgetary room to spend more _ and the president encouraged just that.

"There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other," Obama said. "But this is a false choice."

To be sure, governments spend money during recessions to prime the economy, and they must be wary not to pull back too soon or to spend too long. But TARP returns are required by law to be used for deficit reduction. Yet if banks can help lower the deficit through one program, Congress can bump it up elsewhere.

What's more, even under Obama's rosier expectations the $700 billion TARP would still add $141 billion to the deficit.

It wasn't the president's only attempt at having his cake and eating it, too, in his speech.

OBAMA: "We were forced to take those steps largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that led to the crisis, decided to hand it over to others to solve," he said, describing his administration's infusions of money to banks and the auto industry.

Later, however, he conceded that the TARP program was "launched hastily under the last administration," and argued the policy was flawed.

THE FACTS: Obama's partisan swipe glosses over some of the circumstances before he took office. First, he and his fellow Democrats presided over some of the decision-making that led up to the crisis, because they controlled Congress for two years before Obama became president. Obama's Treasury Secretary Tim Geithner also had a hand, as chief of the Federal Reserve Bank of New York under the Bush administration.

Moreover, the $700 bailout fund was initiated under the Bush administration by then Treasury Secretary Henry Paulson. It was endorsed at the time by Federal Reserve Chairman Ben Bernanke and by Geithner. As Illinois senator during the presidential campaign, Obama backed that package.

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OBAMA ON TUESDAY: "Even as we have had to spend our way out of this recession in the near term, we have begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run."