Obama Seeks to Cut Deficit by $1.1 Trillion

WASHINGTON (Reuters) - U.S. President Barack Obama's proposed budget for fiscal 2012 will seek to cut the record federal deficit by $1.1 trillion over the next 10 years, White House budget director Jack Lew said Sunday.

Lew, speaking on CNN, said the president was also on track to halve the budget deficit by the end of his first term in office, which goes through 2012.

Obama is set to present his budget to Congress Monday. He intends to get two-thirds of the savings from spending cuts and one-third from tax revenues, including by closing several tax loopholes, according to sources familiar with the budget.

A Democratic aide said the budget would reduce Pentagon spending by $78 billion over five years.

Pentagon cuts would include the C-17 aircraft, the alternate engine to the Joint Strike Fighter and the Marine Expeditionary Vehicle that the Defense Department says it doesn't need.

The $1.1 trillion in savings over the next decade is more than double the $400 billion that Obama outlined in his State of the Union address last month as part of a proposed a five-year spending freeze on non-discretionary domestic spending.

Obama, a Democrat, and Republicans in Congress have clashed over how far to go with spending cuts to trim the deficit. Obama argues that some spending increases are necessary to make the U.S. economy more competitive. Republicans are pushing for deeper cuts and oppose any tax hikes.

Republican congressional leaders said Obama's budget proposals did not go far enough to rein in spending and reduce the deficit.

"He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House of Representatives Speaker John Boehner said on NBC's "Meet the Press."