US President Barack Obama will use his first budget, due to be unveiled next week, to put the United States on track toward cutting its ballooning deficit in half by 2013, an administration official said today.
"The deficit this administration inherited was $1.3 trillion or 9.2 percent of GDP. By 2013, the end of the president's first term, the budget cuts the deficit to $533 billion or 3.0 percent of GDP," said the official who spoke on condition of anonymity.
"Most of the savings will come from winding down the war in Iraq, increased revenue from those making more than $250,000 a year, and savings from making government work more efficiently and eliminating programs that do not work," the official added.
Earlier, Mr Obama said Americans would start reaping the benefits of a $787 billion economic stimulus package in a matter of weeks.
"Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans," he said in his weekly radio and Internet address today.
He said the Treasury Department has begun directing employers to reduce the amount of taxes withheld from people's wages in accordance with the new law, and that in six weeks, a typical family will start taking home at least $65 more every month.
Mr Obama says his signature "Making Work Pay" tax break will affect 95 per cent of working families.
The $400 credit for individuals is to be doled out through the rest of the year. Couples are expected to get up to $800. Most workers are to see about a $13 dollar per week increase in their take-home pay.
People who do not earn enough money to owe income taxes are eligible for the credit, an attempt to offset the payroll taxes they pay.
Mr Obama's expensive and ambitious package of federal spending and tax cuts is designed to revive the economy and save or create 3.5 million or more jobs.
It will inject a sudden boost of cash into transportation, education, energy and health care, while aiming to help recession victims through tax cuts, extended unemployment benefits and short-term health insurance assistance. It also will add to a rapidly growing national debt.
The president signed the measure into law on Tuesday.
In his weekly address, Obama said he was grateful to Congress, governors, mayors and everyday people who supported the measure.
Still, he added: "It is only a first step on the road to economic recovery. And we cannot fail to complete the journey."
He said the country also must stem foreclosures, repair the banking system, get credit flowing again and revamp financial industry regulations.
And, even as he promoted the record-breaking spending plan, he called for doing what's necessary to control "exploding" deficits as the economy begins to improve.
Mr Obama is holding a bipartisan "fiscal responsibility summit" at the White House on Monday to talk about ways to control the trillion-dollar budget deficit.
The next day, he will address a joint session of Congress, a speech expected to focus heavily on the economy.