U.S. budget deficits will drop to 2.8 per cent of the economy by 2018, down from the 8.5 per cent projected for this year, under a budget plan being unveiled by President Barack Obama next week, senior administration officials said on Friday.

The officials, who asked not to be identified, also said Obama will lay out his ideas for corporate tax reform by the end of February, not in the fiscal 2013 budget blueprint he will propose to Congress on Monday.

Obama and Democrats and Republicans in Congress have talked about the possibility of major tax reform efforts this year or next. Those efforts likely would cut the top corporate tax rate of 35 per cent, possibly to the mid- to high-20 per cent range.