Obama asks agencies to identify 5 and 10 pct cuts

VINEYARD HAVEN, Mass. Thu Aug 18, 2011 6:54pm EDT

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VINEYARD HAVEN, Mass. Aug 18 (Reuters) - President Barack Obama, who wants Congress to boost jobs while also controlling the national deficit, has asked government agencies to identify cuts of 5 and 10 percent in their 2013 budget proposals.

White House budget chief Jack Lew, in a blog posted on the White House website on Thursday, said he had asked for budget submissions to give Obama options in meeting deficit-cutting targets agreed in a recent deal to lift the U.S. debt limit.

"To meet this goal we asked agencies to provide budgets based on two scenarios: a five percent cut and a 10 percent cut," Lew said. His request, made on Wednesday, seeks cuts in discretionary spending from funding levels in 2011.

Obama's reelection hopes next year hang on his success in lowering unemployment, currently pinned above 9 percent, while easing public concerns about the high U.S. deficit and debt.

Spending reductions in social programs that help the poor are likely to be resisted stoutly by Obama's Democrats, while Republicans traditionally oppose trimming defense spending.

Lew said the instruction did not mean Obama would impose such cuts on an individual agency's budget, or on all budgets.

"We do not believe in making across-the-board cuts; rather, we believe that we should cut what is wasteful or not essential," he said.

Congress lifted the U.S. debt limit by $2.4 trillion earlier this month and agreed to seek spending reductions that would lower the deficit by at least that amount over 10 years.

"We asked agencies to provide these two options so that the President can have the information needed to make the tough choices necessary to meet the hard spending targets," Lew said.

Obama, who arrived on the Massachusetts island of Martha's Vineyard on Thursday for a family holiday, will urge Congress next month to take fresh steps to boost hiring.

He will also propose that a special congressional committee, set up to find deficit savings, seek reductions of more than $1.5 trillion over 10 years in order to permit more government spending to boost growth and jobs now. (Reporting by Andy Sullivan and Alister Bull; editing by Todd Eastham; email: alister.bull@thomsonreuters.com; +1-202-898-8392)

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