Obama defends budget as deficit forecast surges

From Google.com

US President Barack Obama defended his budget plans Saturday, insisting that he remained committed to halving the deficit within four years despite new data showing it was bigger than expected.

In his weekly radio and video address, Obama said his administration was scouring every corner of the budget to produce two trillion dollars in deficit reductions over the next decade.

"In total, our budget would bring discretionary spending for domestic programs as a share of the economy to its lowest level in nearly half a century," he said.

"And we will continue making these tough choices in the months and years ahead so that as our economy recovers, we do what we must to bring this deficit down."

The comments came as Congress was poised to launch debate next week on the 3.55-trillion-dollar multiyear budget unveiled by Obama's administration last month.

But the nonpartisan Congressional Budget Office (CBO) forecast Friday the deficit could hit 1.845 trillion dollars this year under the Obama proposal, quadrupling the 2008 record shortfall.

The CBO said its latest budget deficit estimate for fiscal 2009, which ends on September 30, would amount to 13.1 percent of the country's total economic output.

Since its early January estimate of a 1.2-trillion-dollar gap, the CBO said the enactment of the 787-billion-dollar stimulus plan, other measures to revive the economy and additional factors had hiked deficit projections for 2009 and 2010 by over 400 billion dollars.

Republicans immediately seized on the report to blast Obama's economic policies. "It's worse than even the most pessimistic predictions for this budget," said Senate Republican Leader Mitch McConnell.