U.S. deficit to swell

President Barack Obama today took the wraps off a $3.73-trillion (U.S.) budget guaranteed to spark a fight with Republicans over spending and debt levels.

The Obama administration sees a federal deficit this year surging to $1.65-trillion, or almost 11 per cent of GDP. The president unveiled plans to cut the deficit by more than $1-trillion over the next 10 years, which would include a freeze on programs that aren't related to national security for five years.

His administration is under intense pressure to slash debt levels, now more than $14-trillion. Some key points:

• This year's deficit would be the fattest ever in terms of dollar amounts, and as a percentage of the economy the heftiest since the Second World War.
• The deficit would decline to $1.1-trillion, or 7 per cent of GDP, in fiscal 2012, and $627-billion, or 3 per cent of GDP, five years later.
• The economy will expand 2.7 per cent this, and 3.6 per cent next year, according to projections.
• Unemployment will average 9.3 per cent this year, and 8.6 per cent in 2012.

The economic projections are believed to be out of date, though the jobless level in the United States is expected to remain stubbornly high. Many private forecasters now see a better-than-expected growth performance.

• Obama budget focuses on short term
• Obama proposes $3.73-trillion budget

Ecuador court fines Chevron

A court in Ecuador has hit Chevron Corp. with an "adverse judgment" that a lawyer for the plaintiffs in the case says is an order to pay $8-billion (U.S.).

In a short, but strong, statement, the oil giant said the court's finding is "illegitimate" and it would appeal.

The judgment relates to a lengthy environmental fight, and allegations of environmental damage by Texaco in the country's northern jungle, according to The Associated Press. People in Ecuador's Amazon region sued in the Lago Agrio court, which became Chevron's issue after it acquired Texaco about a decade ago.

The lead lawyer for the plaintiffs told The Associated Press the amount was at least $8-billion.

This, according to The Wall Street Journal, followed a ruling last week by an international arbitration panel that ordered Ecuador to stop, temporarily, enforcing judgments against the company.

"The Ecuadorian court's judgment is illegitimate and unenforceable," Chevron said in a statement.

"It is the product of fraud and is contrary to the legitimate scientific evidence. Chevron will appeal this decision in Ecuador and intends to see that justice prevails.

"United States and international tribunals already have taken steps to bar enforcement of the Ecuadorian ruling. Chevron does not believe that today's judgment is enforceable in any court that observes the rule of law."