President sends $3.83T budget to Congress

WASHINGTON — President Barack Obama sent Congress a $3.83-trillion budget today that would pour more money into the fight against high unemployment, boost taxes on the wealthy and freeze spending for a wide swath of government programs.

The deficit for this year would surge to a record-breaking $1.56 trillion, topping last year’s then unprecedented $1.41 trillion gap. The deficit would remain above $1 trillion in 2011 although the president proposed to institute a three-year budget freeze on a variety of programs outside of the military and homeland security as well as increasing taxes on energy producers and families making more than $250,000.

The budget proposal reflects the competing pressure on Obama ahead of the November congressional elections to cut the deficit while pulling the country out of a deep recession — a step that normally requires more rather than less government spending.

Obama and the Democrats are trying to regain their political footing after the surprising loss of a Massachusetts Senate seat long held by the late Sen. Edward M. Kennedy. That vote cost them their supermajority needed to pass major legislation and has given momentum to Republicans.

With his plans to overhaul health care now unlikely to move forward soon, Obama pledged in his State of the Union address last week to make job creation his top priority.

Following up on the pledge, Obama put forward a budget that included a $100 billion jobs measure that would provide tax breaks to encourage businesses to boost hiring as well as increased government spending on infrastructure and energy projects. He called for fast congressional action to speed relief to millions left unemployed in the worst recession since the 1930s.

After a protracted battle on health care dominated his first year in office and led to a string of Democratic election defeats, the administration hopes its new budget will convince Americans the president is focused on fixing the economy.

Republicans complained about Obama’s proposed tax increases and said the huge projected deficits showed he had failed to get government spending under control. But administration officials argued that Obama inherited a deficit that was already topping $1 trillion when he took office and given the severity of the downturn, the president had to spend billions of dollars stabilizing the financial system and jump-starting growth.

Obama’s job proposals would push government spending in 2010 to $3.72 trillion, up 5.7 percent from last year. Obama’s blueprint for the 2011 budget year, which begins Oct. 1, would increase spending further to $3.83 trillion, 3 percent higher than projected for this year.

While Obama projects that deficits from 2011 to 2020 will add $8.5 trillion to the national debt, the administration said that figure would have been $1.2 trillion higher were it not for deficit cuts the administration is proposing, including elimination of the 2001 and 2003 Bush tax cuts for families making more than $250,000 annually, something Republicans have vowed to oppose.

Much of the spending surge over the past two years reflects the cost of the $787 billion economic stimulus measure that Congress passed in February 2009 to deal with the worst economic downturn since the Great Depression. The surge in the deficits reflects not only the increased spending but also a big drop in tax revenues, reflecting the 7.2 million people who have lost jobs since the recession began and weaker corporate tax receipts.

“Having steered the economy back from the brink of a depression, the administration is committed to moving the nation from a recession to recovery by sparking job creation to get millions of Americans back to work,” the administration said in a statement accompanying its budget.

The administration’s $100 billion proposed jobs measure would be lower than a $174 billion bill passed by the House in December but far higher than a measure that the Senate could take up as early as this week.

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