Obama Will Cut $1,5 Trillion Deficit

President of the United States (U.S.), Barack Obama, said Republicans are ready to work with in order to avoid automatic spending cuts starting March 1, 2013. Trimming spending by U.S. $ 1.2 trillion feared would cripple the U.S. defense and cutting essential programs for the middle class.

Denis McDonough, the White House chief of staff, said Obama offered a deficit reduction of $ 1.5 trillion in order to avoid automatic spending cuts. The proposal was considered balanced, as it offers also increased state revenue. "The question for themselves. What is most important for the U.S. economy and middle class family," he said.

Previous Senate Democrats have proposed alternative cuts in defense spending U.S. $ 110 billion. Democrats also proposed a termination payment of direct aid farmers and sets minimum tax rates for upper-class citizens.

The proposal was to avoid budget cuts that would reduce the estimated 0.6% growth in gross domestic product (GDP) this year and eliminate 750,000 jobs.

Overhauling the tax code

Since fears of a fiscal or fiscal cliff climbing, the U.S. economy during the last three months running slow. Suspension deficit policy and income tax increases to make U.S. businesses hold back expansion.


If the U.S. Congress does not approve Obama's proposal, beginning March 1, 2013, the government should initiate the first round of budget cuts in 2013 worth U.S. $ 1.2 trillion. Pruning feared worsen the economy. In 2012 the total U.S. deficit reached U.S. $ 16 trillion.

Republican-led U.S. Congress has always opposed any plan Obama. The reason is considered to be too dependent on the state in an effort to raise revenue to close the state budget gap.

Moreover, during this time, the White House has never revealed specific budget cuts. "Republicans oppose an increase in income taxes, it will not be much useful in closing the deficit," said Paul Ryan, Chairman of the U.S. House Budget Committee.

According to Ryan, Obama's efforts to close the deficit by raising revenue will comprehensively overhaul the tax code. According to him, the current low tax rules, it is important to boost the economy