White House and Congress start fighting for 2012 budget and US sovereign debt

Barack Obama and leaders from both parties in Congress face a new chain of disputes and fights over the US budget as the state has escaped a potential government shutdown.

As Obama is to offer a long-term plan for deficit reduction on Wednesday, the White House and Congress start fighting over the 2012 fiscal year budget and raising the $14.3 trillion limit on government borrowing authority.

The fights are expected to dominate the political agenda overshadowing Friday's 11th-hour deal to cut $38 billion in spending for the final six months of this fiscal year.

"The spending deal that was cut this week is only the beginning. This is the first bite of the apple," said Representative Eric Cantor, the No. 2 Republican in the House of Representatives.

Republicans, who made big gains in November's election with promises to cut spending and rein in government, are skeptical of Obama's sincerity on deficit reduction.

"For the last two months we've had to bring this president kicking and screaming to the table to cut spending," Cantor said on Fox News. "In my opinion, it's really hard to believe what this White House and the president is saying."

Senior White House adviser David Plouffe said Obama's plan will explore savings in defense spending and the government-run Medicare and Medicaid health programs for the elderly and poor in an effort to reduce the $1.4 trillion annual deficit.

The plan also will revisit the issue of tax increases for the wealthy and spell out specific deficit-reduction targets and a timeline, he said.