Washington - US President Barack Obama said Thursday his administration has identified 17 billion dollars in budget cuts for 2010 by reducing or eliminating 121 programmes across government agencies.

But the cuts make a small dent in the 3.4-trillion-dollar federal budget proposed for the coming year. About half of the savings come from defence programmes, and Obama promised to find more areas to save money over the coming months.

"These is a lot of money being spent inefficiently, ineffectively, and in some cases in ways that are actually pretty stunning," Obama said in a statement at the White House. "These savings, large and small, add up."

The cuts are the result of a months-long review of government programmes.

But Obama has drawn criticism for planning to run a budget deficit of about 10 per cent of gross domestic product (GDP) next year, promising big increases in health, education and energy spending. However, he says the spending is necessary to revive the lagging economy.