Obama aiming to halve U.S. deficit by 2013

U. S. President Barack Obama wants to cut the federal deficit in half by the end of his first term, mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government, an administration official said Saturday.

Obama's proposal for the 2010 fiscal year that begins Oct. 1 projects that the estimated $1.3 trillion US deficit he has inherited from former President George W. Bush will be nearly halved to $533 billion by 2013.

He's expected to outline some broad themes of his budget request Monday at a White House summit on fiscal policy and touch on it during his first speech to Congress on Tuesday evening.

Obama is slated to officially send at least a summary of it to Congress on Thursday, barely a week after his $787 billion US economic stimulus plan became law.

The official, who spoke on the condition of anonymity because the president has not yet released his budget, said Obama hopes to achieve his deficit-reduction goal by generating savings as he follows through on three core campaign promises over the next four years.

He has pledged to wind down the Iraq war by withdrawing most combat troops within 16 months of taking office.

He also has said he would let the temporary Bush tax cuts for people making more than $250,000 a year expire in 2011, effectively raising taxes on those people.

And he has vowed to scale back spending and improve government efficiency by eliminating programs that don't work.

Obama has pledged to make deficit-reduction a priority both as a candidate and as president. But he also has said economic recovery must come first.

In his first month in office, he has overseen enormous amounts of spending aimed at stabilizing the economy.