US President Barack Obama has proposed cutting ballooning US budget deficits by $4 trillion over 12 years. He has also called for talks with Democratic and Republican politicians to address the worsening budgetary situation.
Obama said the budget savings should be achieved through a mix of spending cuts and revenue increases through higher taxes. He shared details of his plan with Democratic and Republican politicians before a speech later tonight.
According to congressional sources, Obama is proposing cutting the US deficit by $4 trillion in 12 years or less. He plans to cut the deficit to 2.5% of GDP in 2015 and 2% towards the end of the decade.
Obama also proposes an end to Bush-era tax rates for the wealthiest Americans. while he is seeking $770 billion in savings by 2023 in cuts to non-security discretionary spending and $480 billion in Medicare and Medicaid savings by 2023.
The deficit issue has become entangled with a vote Congress will consider in the next few weeks on raising the nation's borrowing limit. Republicans say they will not vote to lift the debt limit without commitments to rein in long-term deficits.
The debt is expected to hit the $14.3 trillion ceiling as early as mid-May and a failure to lift it could raise the spectre of default and ripple through financial markets.
