Bush to get 'tough' on deficit

US president George W Bush has pledged to introduce a "tough" federal budget next February in a bid to halve the country's deficit in five years.

The US budget and its trade deficit are both deep in the red, helping to push the dollar to lows against the euro and fuelling fears about the economy. Mr Bush indicated there would be "strict discipline" on non-defence spending in the budget. The vow to cut the deficit had been one of his re-election declarations. The federal budget deficit hit a record $412bn (£211.6bn) in the 12 months to 30 September and $377bn in the previous year.

"We will submit a budget that fits the times," Mr Bush said. "It will provide every tool and resource to the military, will protect the homeland, and meet other priorities of the government." The US has said it is committed to a strong dollar. But the dollar's weakness has hit European and Asian exporters and lead to calls for US intervention to boost the currency. Mr Bush, however, has said the best way to halt the dollar's slide is to deal with the US deficit. "It's a budget that I think will send the right signal to the financial markets and to those concerned about our short-term deficits," Mr Bush added. "As well, we've got to deal with the long-term deficit issues."