Obama seeks $17 billion in U.S. budget savings

By Caren Bohan and Jeff Mason

WASHINGTON (Reuters) - President Barack Obama on Thursday proposed to wring $17 billion in savings from the fiscal 2010 budget as he sought to allay worries about soaring deficits and build support for a hefty domestic agenda.

Unveiling the detailed version of a budget blueprint he outlined in February, Obama offered a slim list of savings he will seek in programs from weapons systems to education to the cleanup of abandoned mines.

"We can no longer afford to spend as if deficits don't matter and waste is not our problem," Obama told reporters. "We can no longer afford to leave the hard choices for the next budget, the next administration or the next generation."

The proposals to trim 121 programs identified by the White House as wasteful or unnecessary amounted to only a half of 1 percent of the $3.55 trillion budget that Obama has submitted for the fiscal year that begins in October.

Of the $17 billion in budget savings the White House identified, about half were in the defense budget.

The 2010 budget aims to overhaul the healthcare system to provide coverage to the uninsured and bolster education programs. Obama also wants to help fight climate change by capping emissions of greenhouse gases such as carbon dioxide from big industries and allowing them to trade rights to pollute. Such systems are commonly called "cap and trade."

Both critics and supporters of Obama consider the plan ambitious. Some proposals such as the climate initiative face a tough sell in the U.S. Congress.

Amid spending on the wars in Iraq and Afghanistan and bailouts for the banking and auto industries, the White House has forecast that the budget deficit will hit $1.75 trillion in the current 2009 fiscal year. The administration expects the deficit to drop to a still-huge $1.17 trillion in 2010.