WASHINGTON (Reuters) - President Barack Obama wants  to slash America’s ballooning deficit in half by 2013 by  cutting spending on the Iraq war, eliminating wasteful public programmes and raising taxes on the wealthy, an administration  official said yesterday.
“The deficit this administration inherited was $1.3  trillion or 9.2 per cent of GDP. By 2013, the end of the  president’s first term, the budget cuts the deficit to $533  billion or 3.0 per cent of GDP,” the official said on condition  of anonymity.
“Most of the savings will come from winding down the war in  Iraq, increased (tax) revenue from those making more than  $250,000 a year, and savings from making government work more  efficiently and eliminating programmes that do not work,” the  official said.
Obama’s administration is due to deliver the outline of its  first budget on Thursday, for the 2010 fiscal year. It will  reflect big increases in spending on public works that were  part of the $787 billion economic recovery plan that Obama  signed this week.
“Over time, the budget deficit will make it harder for our  economy to grow and create jobs. That’s why the president’s  budget for FY (fiscal year) 2010 puts us on the path to cut the  deficit he inherited on January 20, 2009, in half by the end of  his first term,” the administration official told Reuters.

Earlier yesterday, Obama said he had ordered the US Treasury to implement tax cuts for 95 per cent of Americans,  fulfilling a campaign pledge he hopes will help jolt the  economy out of recession.
The tax cuts are part of the economic recovery plan passed  by the Democratic-controlled Congress over Republican  opposition. The aim is to put more money in the pockets of  Americans and stimulate the economy by increasing consumer  spending.

“I’m pleased to announce that this morning the Treasury  Department began directing employers to reduce the amount of  taxes withheld from paychecks, meaning that by April 1st, a  typical family will begin taking home at least $65 more every  month,” Obama said in his weekly radio address.
“Never before in our history has a tax cut taken effect  faster or gone to so many hard-working Americans,” he said.

With tens of thousands of Americans losing their jobs in  the midst of a global economic meltdown, Obama has said fixing  the US economy is his top priority. He has acknowledged that  his success or failure in that will define his presidency.