Washington:
US President Barack Obama unveiled a multitrillion-dollar spending plan on Monday, pledging an intensified effort to fight high unemployment and asking Congress to quickly approve new job-creation efforts that would boost the deficit to a record-breaking 1.56 trillion US dollars.
Obama's new budget blueprint preaches the need to make tough choices to restrain run-away deficits, but not before attacking what the administration sees as the more immediate challenge of lifting the country out of a deep recession that has cost 7.2 million jobs over the past two years.
The result is a budget plan that would give the country trillion-dollar-plus deficits for three consecutive years.
Obama's new budget projects a spending increase of 5.7 percent for the current budget year and forecasts that spending would rise another 3 percent in 2011.
Obama's budget offers tax cuts for businesses, including a 5-thousand US dollar tax credit for hiring new workers this year, help for the unemployed and 25 billion US dollars more for cash-strapped state governments.
All the temporary measures would boost the deficit over the next two years by 245 billion US dollars.
The deficit for this year would surge to a record-breaking 1.56 trillion US dollars, topping last year's then-unprecedented 1.41 trillion US dollar gap, a number which had dwarfed the previous record of 454.8 billion US dollars set in 2008 under former President George W. Bush.
Much of the spending surge starting in 2008 was a result of the massive economic stimulus measures passed by Congress to deal with the worst economic downturn since the Great Depression.
Addressing the huge deficit during remarks on his budget proposal on Monday, Obama told reporters the United States has to change its mindset when it comes to spending.
"We can't simply move beyond this crisis, we have to address the irresponsibility that led to it. And that includes the failure to reign in spending as well as reliance on borrowing from Wall Street to Washington to Main Street to fuel our growth. That's what we have to change. We have to do what families across America are doing: save where we can so that we can afford what we need," he said.
The administration is forecasting that deficits over the next decade will add an additional 8.5 (t) trillion US dollars to the national debt, even if Congress adopts the administration's package of proposals to trim future deficits starting in 2011.
Those include a three-year freeze on spending for government programmes, an effort which does not touch popular benefit programs such as Social Security and Medicare and which also exempts defence and homeland security.
It also proposes a boost in taxes on the wealthiest Americans, families making more than 250-thousand US dollars annually, by allowing the Bush tax cuts of 2001 and 2003 to expire.
Obama said as he unveiled the budget that he welcomed "any idea, from Democrats and Republicans" to help redress the deficit but he said that he rejected "grand standing when the cameras are on, and the same irresponsible budget policies when the cameras are off."
"It's time to save what we can, spend what we must, and live within our means once again," he added.
Republicans were not impressed with Obama's deficit cutting, saying that it fell far short of the bold steps needed in light of the fiscal challenges the country is facing.
The administration argued that Obama inherited a deficit that was already topping 1 trillion US dollars when he took office and, given the severity of the downturn, the president had to spend billions stabilising the financial system and jump-starting economic growth.
Obama's new budget carries forward the pledge he made in his State of the Union address: to put full attention on reviving the moribund US economy, an effort to convince recession-battered voters that Democrats are in tune with the issues that affect their lives.
It assumes enactment of a comprehensive health care programme, the issue that dominated the president's first year in office. Passage of that proposal is currently stalled with Democrats trying to figure out how to cope with the loss of a key Democratic seat that gave them the 60 votes they needed to overcome a Republican filibuster.
Under this budget, the deficit for 2010 would be 10.6 percent of the total economy, a figure unmatched since the country was emerging from World War II.
The administration does not trim the deficit below 3.6 percent of GDP for any year in the next decade, failing to meet its goal of lowering the deficit to 3 percent of GDP by 2015.
White House Budget Director Peter Orszag said the administration will rely on a deficit commission which the president will create by executive order to recommend ways to further reduce the deficit plus cope with deficits projected to soar further in the next decade with the retirement of millions of baby boomers.