US & Canada

Obama: US Budget deficit deal can be reached

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Media captionBarack Obama: "I'm not going to quit until we've found every dime of waste"

US President Barack Obama has said he believes Democrats and Republicans can come together to reach a deal on the federal budget deficit.

"Both sides have come together before. I believe we could do it again," he said in a town hall speech in Virginia.

But Mr Obama warned a failure to tackle the deficit could cause "serious damage" to the US economy.

The speech kicked off a three-day campaign on spending cuts, as Congress prepares to debate fiscal policy.

The president touted his recently outlined deficit reduction plan in an appearance at Northern Virginia Community College in Annandale in Virginia, while attacking a Republican proposal he said could harm the poor and elderly.

Mr Obama is travelling across the US this week with a message that the government must reduce its staggering debt.

The president's plan aims to reduce the deficit by $4tn (£2.45tn) in the next decade by trimming domestic spending, including defence, and raising taxes on wealthy Americans.

The town hall meeting comes as Congress grapples with the passage of a budget for fiscal year 2012, which begins 1 October.

Lawmakers must also raise the federal debt ceiling so the government can continue meeting its obligations.

The deficit is forecast to reach $1.5tn (£921bn) this year and both Democrats and Republicans have said cutting it is a priority.

Economic crisis

The ballooning US deficit is set to be a top issue in the 2012 election campaign, and the president's speech on Monday came as his re-election bid is now in full swing.

"There's a way to solve this deficit problem in an intelligent way that is fair and share sacrifice so that we can share opportunity all across America," Mr Obama said.

He added: "We can't just tell the wealthiest among us, `You don't have to do a thing. You just sit there and relax and everybody else, we're going to solve this problem.'"

Republicans have offered their own proposal that would go further than Mr Obama's, slashing $6.2tn from government spending over the next decade, based on big reductions in healthcare, social programmes for the poor and elderly and in education spending.

"Exploiting people's emotions of fear, envy and anxiety is not hope, it's not change, it's partisanship. We don't need partisanship. We don't need demagoguery. We need solutions," Representative Paul Ryan of Wisconsin, chairman of the House budget committee, said after Mr Obama outlined his proposal last week.

The president said on Monday he disagrees with the burden the Republican plan places on the shoulders of the poor and middle class.

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