US president Barack Obama has proposed cutting the ballooning US budget deficit by $4 trillion (£2.5 trillion) over 12 years and called for talks with Democratic and Republican lawmakers to address the worsening fiscal woes.
Obama, who has been criticised by both Democrats and Republicans for taking too low a profile in the debate over how to tame long-term debt and deficits, said the budget savings should be achieved through a mix of spending cuts and revenue increases through higher taxes.
Obama shared details of his plan with Democratic and Republican lawmakers ahead of a speech. According to congressional sources, Obama's announcement will include plans to:
* Reduce the deficit by $4 trillion in 12 years or less
* Curb deficits to 2.5 per cent of GDP in 2015, two per cent toward the end of the decade
* End Bush-era tax rates for the wealthiest Americans
* Seek $770bn in savings by 2023 in cuts to non-security discretionary spending
* Save $480bn in Medicare and Medicaid by 2023 and at least $1 trillion more by 2033.
Obama will use the speech to try to regain control of the spending debate by drawing a contrast with a Republican plan to combine an overhaul of the Medicare health program with lower taxes to reduce the deficit by $4.4 trillion in ten years.
City A.M. Reporter