Obama aims to cut deficit in half by 2013

WASHINGTON -- Now that his $787 billion stimulus bill is law, President Obama plans to spend this week promoting a budget plan designed to cut the federal deficit in half by the end of his first term.

The president will host a "fiscal responsibility summit" at the White House on Monday and will give a prime-time speech to Congress on Tuesday before unveiling a budget overview Thursday.

White House spokeswoman Jen Psaki confirmed that the administration pegs the current deficit at $1.3 trillion, or 9.2% of the overall economy, and projects that in four years the deficit will be down to $533 billion, or 3% of the economy as measured by the gross domestic product.

"The budget will cut the deficit that the president inherited upon assuming office at least in half by the end of his first term," said Kenneth Baer, a spokesman for the Office of Management and Budget.

Obama's 2010 budget includes plans for defense cuts — including a rollback of the Iraq war — and ending the Bush administration's high-income tax cuts, the Associated Press reported Sunday.

Alex Conant, a spokesman for the Republican National Committee, criticized both ideas. "Raising taxes and cutting defense spending will not grow our economy, which is essential to cutting the deficit," Conant said.

During his weekend radio address, Obama said the stimulus package will not revive the economy by itself. Instead, he said, new proposals to stem home foreclosures, encourage more lending and better regulate the nation's financial system would provide added benefits.

He said deficit-cutting measures would be the main topic of Monday's meeting. The summit will feature 130 guests, including outside experts, union members, advocacy groups and members of Congress from both parties. Obama said his speech Tuesday to a joint session of Congress — his first — will lay out "our urgent national priorities."

It will detail "my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline," Obama said.

He also plans to push his economic plans Monday in Washington for a meeting of the National Governors Association.

Republican Gov. Tim Pawlentyof Minnesota said Sunday it's a bad idea to raise taxes "in the middle of a deep, deep recession." Appearing on Fox News Sunday, Pawlenty noted the stock market slides in the wake of Obama's plans for home foreclosures and financial regulation.

Pennsylvania Gov. Ed Rendell, a Democrat, noted on the same program that Republicans raised the same fears about President Clinton's budget plan in 1993, which preceded years of economic growth and led to a balanced budget.