President Barack Obama has proposed
a budget that will cut the U.S. deficit by $1.1 trillion over the next 10
years, but Republicans said it did not curb spending deeply enough to meet
Conservatives say Obama, a Democrat,
is a tax-and-spend liberal, and they aim to make the 2012 presidential election
a referendum on his fiscal track record.
The proposal contains a $3.729
trillion budget in which the deficit rose to $1.645 trillion in fiscal 2011,
and then fell sharply to $1.101 trillion in 2012.
This trend would trim the deficit
as a share of the U.S. economy to 3.2 per cent by 2015 from 10.9 per cent this
Two thirds of Obama’s deficit
savings come from spending cuts and expected reductions in interest payments as
the deficit declines.
The rest comes from higher revenue,
in part as provisions in a December pact on payroll taxes and jobless aid
expire, and also as stronger growth lifts tax revenue.
The budget also proposes ending 12
tax breaks for oil, gas and coal companies to raise $46 billion over 10 years
and allowing tax cuts for wealthier Americans to expire in two years’ time,
although the extra revenue this increase in tax rates was not counted in the
The White House sees a December tax
pact forged between Obama and Republicans as evidence they can work together,
but the initial reaction from the other party was sceptical.
Republicans have already unveiled much
tougher proposals aimed at reining in rising U.S. debt, which
is set to hit a legal limit in coming months.
Failure by lawmakers to agree on
funding government operations after a 4 March deadline expires could result in
the government shutting down.