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Obama plans to half US deficit in four years

world Updated: Feb 22, 2009 09:08 IST

President Barack Obama is to present plans to half the federal budget deficit by end of his first term, a senior administration official told AFP on Saturday.

The president is expected to roll out his budget proposals over the coming week, with a central aim of halving the US's soaring trillion-dollar-plus deficit.

Savings will be made by cutting spending on the war in Iraq and by eventually raising taxes for the "wealthiest Americans," the official said.

The official did not specify how much money a person must make to be categorized as the "wealthiest." But during the election campaign, Obama included into this group people making more than $250,000 a year.

The administration is expected to deliver its budget the 2010 fiscal year to Congress on Thursday, with the full multi-year budget expected in April.

On Tuesday President Obama will address a joint session of Congress, where he will lay out the first program of governance.

Even before the recent 787 billion stimulus plan was approved the federal government faced a deficit of over one trillion dollars.

With many seeing further budget stimulus packages as necessary, Obama will have to appeal to fiscal conservatives, wary that the government is placing too much debt on future generations.