Citing rising India, China, Obama seeks balanced deficit cuts

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On a cross-country trip to sell his deficit reduction plan, President Barack Obama has focused on the growing competition from fast rising India, China and Brazil to warn that America's finances are 'unsustainable'.

Members of both political parties in Washington need to work together to start reducing the federal deficit in a 'balanced way' without sacrificing on essentials like education, he said.

"If we're going to reduce our deficit, we're not going to do it by cutting education. This is another bright idea that some in Congress have," Obama said on the first of his stops on Thursday at a Town Hall in Reno, Nevada.

"In a world where our kids are going to be facing tougher competition than ever before, where you've got hundreds of millions of Chinese kids and Indian kids and Brazilian kids and Eastern European kids, all who are trying to compete for the jobs of tomorrow, how are we not going to invest in making sure our kids have the best skills possible?" he asked.

Warming up to his theme at a Democratic party event in San Francisco, California, Obama said: "Internationally, we were seeing changes around the world - countries like China and India rising; areas like the Middle East becoming less stable; the world shrinking because of technology, much of it invented right here in this region."

"And so I think we understood that we were going to have to adapt in some fundamental way in order to make sure that our kids and our grandkids ended up inheriting the kind of America that we inherited," he said.

At another party event in San Francisco, Obama outlined a vision "of a big America, of a compassionate America, a caring America, an ambitious America".

"There are those right now who say that this is kind of the end of the line. We've got these deficits, we've got debt, we've gone through this recession, there's international competition."

"China and India and Brazil, they're all growing faster than we are. And you know what, maybe we've just got to shrink. We've got to shrink everything."

"That's not a vision of America that I want to pass on to (daughters) Malia and Sasha," he said.

"I want a vision of America that is big and bold and ambitious as it has ever been. A vision where we're living within our means but we're still investing in our future."