Welch, who will sponsor the Obama legislation in the House, joined the President onstage with a handful of other Members of Congress during the East Room announcement.

In order to ensure the federal government lives within its means, Welch and the President are seeking to enact legislation that would require new programs be paid for either by increasing revenue or cutting spending in other programs. One of Welch's first votes after he took office in 2007 was to enact "PAYGO" rules in the House.

The Obama bill, which Welch will sponsor in the House when it is introduced next week, would make PAYGO law, as it was in the 1990s. During that decade, PAYGO helped move the federal budget from large deficits to surpluses.

"Pay-as-you-go is a common sense principle that Vermonters live by every day and the federal government ought to. This is about establishing our national priorities and paying for them today, rather than passing debt on to future generations," Welch said.

During the speech, Obama highlighted the work of the Members of Congress on stage with him, who led the charge to enact PAYGO principles in the House and Senate.

"The ‘pay as you go' principle is very simple. Congress can only spend a dollar if it saves a dollar elsewhere," President Obama said. "This principle guides responsible families managing a budget. And it is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s - and that when this rule was abandoned, we returned to record deficits that doubled the national debt."

Click here for video of the President's announcement.