The United States President Barack Obama on Wednesday announced its long-term debt plan, setting a goal to cut 4 trillion U.S. dollars over the next 12 years.

President Barack Obama delivers a speech on the U.S. fiscal and budgetary deficit policy at the George Washington University in Washington, April 13, 2011. Obama proposed cutting ballooning U.S. budget deficits by $4 trillion over 12 years and called for talks with Democratic and Republican lawmakers to address the worsening fiscal woes. [Xinhua/AFP Photo]

This deficit reduction is a balanced approach to maintaining economic recovery, Obama said in a speech at George Washington University.

Obama said his administration would take four steps to achieve debt balance, including savings on the defense budget, elimination of waste in healthcare spending, control of domestic expenditures and reform of the federal tax system.

The White House projected that Obama's framework would reduce deficits as a share of U.S. economy to about 2.5 percent of GDP in 2015, and put deficits on a declining path toward close to 2.0 percent of GDP toward the end of the decade.

Obama said that tackling the U.S. budget deficit would require broad sacrifice. "We all have to make sacrifice but we do not have to sacrifice Americans."

Meanwhile, Obama said that he would refuse to renew Bush-era tax breaks for wealthier Americans. "It is unfair to ask the elderly to pay more for health care while cutting taxes on the richest."

Obama's plan falls well short of the more than 5 trillion U.S. dollars in cuts over a decade proposed by House Republicans, and dismissed by Democrats as draconian.