24 Jan 2010

Obama urges panel to review deficit

12:05 pm on 24 January 2010

President Barack Obama has called on the United States Congress to create a bipartisan panel to look at ways to rein in America's soaring deficits.

Tn a statement Mr Obama said the country faced a "serious fiscal situation" that stemmed from the recession he inherited from the Bush administration and years of "failing to pay for new policies."

Reduction of the deficit is tipped to be a major theme in the State of the Union address on Wednesday.

The deficit grew to $US1.4 trillion in 2009. China, the biggest US foreign creditor, has been warning Washington to rein in spending.

Senator Kent Conrad (Democratic) and Judd Gregg (Republican) have been promoting legislation to establish a panel to make recommendations on cutting the deficit.

Mr Obama's approval ratings have fallen to 50% from 70% since he took office a year ago and his party suffered an embarrassing defeat this week in a special Senate election in Massachusetts.