Is the AP trying to shed its cheerleader togs?

President Barack Obama speaks on the economy at the Brookings Institution...

WASHINGTON (AP) - 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.