Wednesday, April 20, 2011

Obama defends U.S. deficit plan, sees common ground

(Reuters) - President Barack Obama drew a sharp line on Tuesday between Republican and Democratic plans to cut the deficit, but he said a deal could be reached despite ideological differences between the two sides.

Democrats and Republicans agree that $4 trillion needs to be slashed over roughly a decade, Obama told a town hall-style event in Virginia. But the two parties disagree on what to cut to get there.

"The big question that is going to have to be resolved is: how do we do it?" Obama told students at a community college. "I don't want to lie to you, there is a big philosophical divide right now."

The president was promoting his plan for cutting the deficit a day after Standard & Poor's threatened to strip America of its prized triple-A credit rating. The Wall Street ratings agency cited concern that Washington's polarized politics would make it difficult to reach a debt deal before the 2012 presidential election.

Obama, who is traveling around the country this week to advocate his deficit proposals, did not show any greater flexibility over his demands that taxes go up for the wealthiest Americans.

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