US president Barack Obama has proposed a budget that would cut the country's deficit by $US1.1 trillion over 10 years, setting the stage for a bitter fight with Republicans who vow even tougher spending controls.
Conservatives claim Mr Obama, a Democrat, is a tax-and-spend liberal, and they aim to make the 2012 presidential election a referendum on his fiscal track record.
Details of the budget proposal - provided by the White House before its official release - showed the deficit rising to $US1.645 trillion in fiscal 2011, then falling sharply to $US1.101 trillion in 2012.
This trend would trim the deficit as a share of the US economy to 3.2 per cent by 2015 from 10.9 per cent this year.
Mr Obama's budget for fiscal 2012, to be formally released later Monday (local time) is a proposal to Congress laying out the president's policy priorities.
Months of wrangling with the Republican opposition in Congress will now follow.
"Even though we might have some differences at the outset, we're very eager to work with Republicans to cut spending, reduce our deficit," a senior Obama administration official told reporters.
The official cited a December tax pact forged between Mr Obama and Republicans as evidence the two sides can work together.
"The debate in Washington is not whether to cut or to spend. We both agree we should cut. The question is how we cut and what we cut," the official said.
But Republicans have already unveiled much tougher proposals aimed at reining in rising US debt, which is set to hit a legal limit in coming months.
Failure by politicians to agree on funding government operations after a March 4 deadline expires could result in the government shutting down.
That would replay a 1995-1996 showdown between a Democratic president and a Republican-led House of Representatives that ultimately backfired on Republicans.
The public sided with then-president Bill Clinton, who won re-election.
Growth lifts revenue
Two-thirds of Mr Obama's deficit savings come from spending cuts and expected reductions in interest payments as the deficit declines.
The rest comes from higher revenue, in part as provisions in a December pact on payroll taxes and jobless aid expire, and also as stronger growth lifts tax revenue.
As a result, Mr Obama's budget delivers on a promise to halve the deficit by the end of his current term in the White House, in January 2013, compared to when he took office in 2009.
To help reach that goal, Mr Obama plans to freeze non-security discretionary spending for five years, lowering the deficit by $US400 billion over 10 years.
That pledge, unveiled in Mr Obama's State of the Union address last month, means cuts in more than 200 federal programs.
These will save $US33 billion in fiscal 2012, which starts on October 1, 2011, and means half of all federal agencies will see their budgets reduced.
The budget shows the deficit steadying around 3 per cent of gross domestic product from 2015 onward, slowing the rate at which the nation adds to its debt, although it will have still have climbed to 77 per cent of GDP by 2021, up from 72 per cent in 2011.
The budget also proposes funding an annual "fix" for the alternative minimum tax for the next three years by lowering the rate at which high-income Americans can itemise tax deductions.
The budget also seeks $US62 billion in healthcare savings over the next 10 years to pay for two years' worth of reimbursements politicians traditionally deliver in a so-called "Doc-fix" to ensure physicians keep seeing the elderly patients served by the Medicare program.
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