Washington, April 14: US President Barack Obama has rolled out a wide-ranging deficit reduction plan aimed at slashing the country’s budget shortfall by $4 trillion within 12 years.
In a speech on the US fiscal policy on Wednesday, Obama unveiled his plan to tackle the country’s budget deficit by curbing domestic spending and reducing excess health care expenditures, Reuters reported.
The US budget shortage hit a record $1.65 trillion this year –10.9 percent of GDP — according to figures in Obama’s 2012 budget.
The new plan, which is aimed at reducing deficits to 2.5 percent of GDP in 2015 and 2 percent toward the end of the decade, will also seek saving in the defense budget and overhauling the country’s tax code.
Finding $770 billion in savings by 2023 in cuts to non-security discretionary spending as well as saving $480 billion in Medicare and Medicaid and at least $1 trillion more by the same year are among the main features of the new scheme.
Obama, who secured $39 billion in new spending cuts in a last ditch attempt to fend off a government shutdown last week, said in his Wednesday speech that deficit reduction is achievable, but requires “tough decisions.”
“Economists think that with the economy just starting to grow again, we will need a phased-in approach — but it does require tough decisions and support from leaders in both parties,” the US president said.
He went on to blame the wars Washington has been leading in Iraq and Afghanistan as well as an expensive prescription drug program for the country’s bloated budget deficit and financial woes the Americans have been suffering over the past decade.
Obama also warned that the US’s steadily rising debts could cost jobs and play havoc with the economy, adding that the current trend could force the country to borrow more from other countries such as China.
The president said he was consulting a bipartisan fiscal commission which had warned about the US economic crisis last year, urging Democrats and Republicans to come together to secure a thriving future for their country.
The new plan comes nearly a week after the Republicans introduced a spending blueprint, which is supposed to cut the US government’s expenditures by about $6 trillion.
——–Agencies