By Erik Wasson - 10/12/12 07:19 PM EDT
Treasury Secretary Timothy Geithner on Friday defended the White House approach to the deficit as his department officially confirmed a fiscal 2012 deficit of $1.089 trillion.
That figure is $207 billion less than in 2011, and $238 billion less than forecast in February.
The fact the deficit remains above $1 trillion for the fourth year in a row, despite President Obama's pledge to cut it in half by now, is a major headache for Obama’s reelection campaign.
“The president has put forward a balanced proposal to further strengthen the economy and reduce the country’s future deficits,” he said. “It is time for Congress to act on these necessary steps that will help create sustainable economic growth for years to come.”
“The path forward on deficit reduction is clear,” said Zients. “Congress needs to work with the administration to enact balanced deficit reduction that includes further spending cuts and additional revenue from asking the wealthiest to contribute their fair share.”
Obama says he has a $4 trillion deficit-reduction plan but critics have pointed out that the savings includes $1 trillion from last year’s debt-ceiling deal, war savings from having pulled out of Iraq and reduced interest payments.
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GOP challenger Mitt Romney’s deficit plan has also come under scrutiny. He says he wants to balance the budget in eight years while cutting taxes by 20 percent on top of continuing the Bush-era tax rates. His plan does not fully explain what spending cuts and tax loophole closings will be necessary to do this, however.
Most of the reduction in the deficit from 2011 was due to increased revenue, which was $147 billion higher. Spending was $61 billion lower.
The official Treasury numbers were previewed last week by a Congressional Budget Office estimate.
Senate Minority Leader Mitch McConnell (R-Ky.) ridiculed the Obama approach last week when CBO released its numbers.
"Americans have been looking for leadership from the White House, and while the president claims to have offered a ‘balanced and comprehensive deficit reduction’ approach, his plan was so unserious that it was rejected by every single member of Congress," he said.
A version of Obama's February budget was brought to the House and Senate floors but the White House urged all Democrats to reject it since it did not include all the same policy provisions.