U.S. Federal deficit in fiscal year 2011 is expected to top historic high level of 1.645 trillion dollars, according to details of the budget proposal provided by the White House before its official release on Monday.
The proposal also projects that the budget red ink in 2012 will fall to 1.101 trillion dollars. It will be the fourth year in a row that the U.S. fiscal deficit surpasses 1-trillion-dollar mark.
In 2010, the U.S. budget deficit hit 1.29 trillion dollars after it recorded 1.42 trillion dollars in 2009.
Although the Americans vowed to cut deficit and restore fiscal discipline, the serious austerity policy is not in the near term.
Addressing widespread public fear toward the ballooning deficit, the Obama Administration pledged to cut the deficit by more than one trillion dollars over the next 10 years.
In 2012, Obama plans to trim 90 billion dollars from Government spending, while dramatically boosting tax revenues, Senior Administration Officials said.
Administration Officials said that two-thirds of the deficit reduction would come from lower spending, including a five-year freeze on programmes unrelated to national security and defence that would save 400 billion dollars through 2021.
The other one-third of savings would come from tax increases.
"These are tough choices. I think this budget will withstand the test that we live within our means," White House Budget Chief Jack Lew told local media.
Since last year's budget, the fiscal position has worsened, partly because of the tax-cut compromise passed by the lame-duck Congress in December.
Fears are growing that the inability of the United States to get its budget under control could eventually lead to a debt crisis with the economic recovery gaining traction and a debate over fiscal credibility dominating U.S. politics. The Republicans are not satisfied with the Obama Administration's budget reduction plan.
"We're broke," House Speaker John Boehner said Sunday on NBC's "Meet the Press." He criticised that the Obama Administration's budget is not winning the future, but spending the future.
"Americans don't want a spending freeze at unsustainable levels," said Senate Republican Leader Mitch McConnell. "They want cuts, dramatic cuts."