Obama budget to cut deficit by $1.1 trillion

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Obama budget to cut deficit by $1.1 trillion

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President Barack Obama's 2012 budget plan would slash the US deficit by $1.1 trillion over 10 years, officials said, but Republicans were unimpressed and vowed to push for deeper cuts in spending.

14 February,2011 07:43 am

White House budget director Jack Lew said that the proposal to be unveiled on Monday puts the government on track to halve the federal budget deficit by the end of Obamas first term in office, which extends through 2012. Republicans, who control the House of Representatives, said Obamas proposed cuts would not do enough to rein in the growing deficit and promised their own plan would go further. The deficit is 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 White House intends to get two-thirds of the $1.1 trillion in savings from spending cuts and one-third from tax revenues, including closing several tax loopholes, according to sources familiar with the budget.