Obama warns on surging US deficit amid spending on jobs

City A.M. Reporter
US PRESIDENT Barack Obama yesterday pledged to halve a record 2010 budget deficit by the end of his first term in office, but made tackling double-digit unemployment his immediate priority with a spending plan that risked public ire and a rough battle in Congress.

Criticised by Republicans for raising taxes on wealthy Americans, Obama is under pressure to convince investors and creditors like China that he has a credible plan to control the US deficit and debt.

“We won’t be able to bring down this deficit overnight, given that the recovery is still taking hold,” Obama said after laying out $3.8 trillion (£2.38 trillion) in spending plans for the fiscal year to 30 September 2011.

“We will continue, for example, to do what it takes to create jobs. That is reflected in my budget. It is essential,” he said in a televised statement from the White House.

Obama’s blueprint now goes to a Congress deeply split on how to handle the twin woes of a massive deficit and high unemployment amid a still fragile emergence from recession.

Politicians will be in no mood to anger voters ahead of congressional elections in November.