Deficit | featured news

Republicans planned sharp cuts to foreign aid and education on Wednesday, while Democrats weighed a tax hike on millionaires, highlighting the yawning divide between the two parties in the budget debate.

President Barack Obama is sending Congress a $3.73 trillion spending blueprint that pledges $1.1 trillion in deficit savings over the next decade through spending cuts and tax increases.

The plan, containing sweeping austerity and reform proposals, receives support from 11 of the 18 members on the bipartisan commission, but 14 votes were needed to require Congress to consider it.

President Barack Obama will announce a two-year pay freeze for federal employees Monday, a move White House officials say is the first of many difficult decisions that must be made to reduce the nation's mounting deficit.

The Pentagon, trying to free up cash in the face of a yawning U.S. deficit, unveiled a series of cost-cutting measures on Wednesday that will shed thousands of jobs and shut down an entire military command.

Treasury Secretary Timothy Geithner on Sunday disputed claims that allowing a portion of the Bush tax cuts to expire will choke economic growth, saying the government needs to do the "responsible" thing and show the world it is capable of tackling the deficit.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery.

Congressional Budget Office predicts long-term deficits vastly exceeding White House estimates.

The federal deficit through the first four months of the budget year is running at a record-breaking pace even though the deficit in January was slightly smaller than expected.

Determined to have a deficit commission with or without Congress' backing, President Barack Obama plans to announce on Thursday that he is establishing a panel similar to – although weaker than – the one lawmakers rejected.