Obama plans to cut deficit by $1.1 trillion

US President Barack Obama's proposed budget for fiscal 2012 will seek to cut the record federal deficit by $1.1 trillion over the next 10 years, White House budget director Jack Lew said on Sunday. Lew, speaking on CNN, said the president was also on track to halve the budget deficit by the end of his first term in office, which goes through 2012.
But Republicans, who control the House of Representatives, said the spending cuts in the president's budget to be released on Monday were not enough. "We are reducing programs that are important programs that we care about, and we're doing what every family does when it sits around its kitchen table: we're making the choices about what do we need for the future," Lew said.
"We have a responsible budget that will cut in half the deficit by the end of the president's first term." The White House sees the budget as a starting point for a debate on spending and reducing the deficit, forecast to reach $1.48 trillion this fiscal year, or 9.8 percent of US GDP. This would be down from 10.0 percent of GDP in 2010, but still very high for the United States on a historical basis.
The 2012 fiscal year begins on October 1.
The White House intends to get two-thirds of the $1.1 trillion in savings from spending cuts and one-third from tax revenues, including by closing several tax loopholes, according to sources familiar with the budget.
That figure is higher than the $400 billion in savings that Obama promised in his State of the Union address in a five-year spending freeze on non-discretionary domestic spending. "The challenge we have is to live within our means but also invest in the future," Lew said, adding "tough tradeoffs" would have to be made to achieve that goal.
"There are scores of programs that are being reduced, and I think it's important to note that we're beyond the easy, low-hanging fruit."
Republicans were not impressed. "He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House of Representatives Speaker John Boehner said on NBC's "Meet the Press."
Democrats and Republicans in Congress have clashed over how far to go with spending cuts to trim the deficit. Obama argues that some spending increases are necessary to make the US economy more competitive. Republicans are pushing for deeper cuts and oppose any tax hikes.
A Democratic aide said the budget would reduce Pentagon spending by $78 billion over five years. Pentagon cuts would include the C-17 aircraft, the alternate engine to the Joint Strike Fighter and the Marine Expeditionary Vehicle that the Defence Department says it does not need.