Barack Obama aims to cut back US deficit by $1 trillion

US PRESIDENT Barack Obama's proposed budget for the fiscal year 2012 will seek to cut the record federal deficit by $1.1 trillion (£687 billion) over the next ten years, White House budget director Jack Lew said yesterday.

Mr 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 runs until January 2013.

But Republicans, who control the House of Representatives, said the spending cuts in the president's budget, to be released today, were not enough.

"We are 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," Mr Lew said. 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 per cent of US GDP.

The White House intends to get two-thirds of the $1.1 trillion in savings from spending cuts and a third from tax revenues, including by closing several tax loopholes, according to sources familiar with the budget.

Republicans were not impressed. Talking to NBC's Meet the Press show, House of Representatives Speaker John Boehner said: "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."