Obama Seeks to Slash Domestic Programs

WASHINGTON - President Barack Obama is asking government agencies to develop plans for 5 percent reductions in array of domestic programs, the White House said on Tuesday.

"We are asking each agency to develop a list of their bottom 5 percent performing discretionary programs, as measured by their impact in furthering the agency's mission," White House budget director Peter Orszag said in excerpts from remarks he is to deliver later at the Center for American Progress think tank.

"In addition, to ensure that we can meet the president's insistence on a freeze for non-security agencies while funding priority areas, we are asking non-security agencies to specify how they would reduce their budgets by 5 percent," Orszag said.

Republicans have seized on huge budget deficits to attack Obama's handling of the economy in a congressional election year in which they are seeking to overturn Democratic majorities in both houses of Congress.

Obama has said the deficits are a legacy of the Bush administration and has pledged to tackle the problem but says that must be balanced against the need to boost the economy in the near term.

The White House strongly backs a package of measures such as an extension of unemployment benefits and aid to cash-strapped states and cities that it says will give growth a lift.

The U.S. budget deficit reached $1.4 trillion last year and is projected to come in at $1.6 trillion this year.