Obama's austerity budget maintains support for key allies

WASHINGTON - United States President Barack Obama sent Congress a US$3.73 trillion ($4.93 trillion) budget proposal that highlights the partisan divide bound to shape next year's presidential race.

Obama Administration officials say the 2012 spending plan submitted yesterday would cut the US deficit over the long haul, while investing in America's future with spending on clean energy, education and high speed rail.

Republicans said Obama's plan would do little to cut debt. "He's making it worse, not better," said Paul Ryan, the Republican chairman of the House Budget Committee.

Obama, who is expected to seek re-election next year, largely ignored the politically painful recommendations of his own deficit commission. That panel had warned that the US is imperilled without significant cuts to huge entitlement programmes, including health and pension plans..

Obama proposed trimming the deficits by US$1.1 trillion over a decade. The Administration is projecting that the deficit will hit US$1.65 trillion this year and then drop sharply to US$1.1 trillion in 2012, with an expected improvement in the economy and as reductions in some taxes expire.

Even some Democrats complained that Obama needed a more potent attack on future deficits.

"We need a much more robust package of deficit and debt reduction over the medium- and long-term," said Senate Budget Committee Chairman Kent Conrad, a Democrat, who called for a budget presentation matching the ambition of Obama's deficit commission.

The US$14 trillion national debt - the cumulative total of deficits - would grow to US$16.7 trillion by September 30, 2012.

The budget plan would trim spending at the State Department, while maintaining significant funds for programmes in Afghanistan and Pakistan as well as Iraq.

The budget retains major assistance for US allies in the Middle East, including US$1.5 billion for Egypt.

Officials stressed that money for Egypt, including US$1.3 billion in military aid, could be altered depending on developments.

Israel will get US$5.6 billion, including US$3.1 billion in military aid.

Development funds in Africa and Latin America will be cut.

Direct military assistance totalling US$5 million for Chile, Haiti, Malta, East Timor and Tonga will be eliminated.

- AP