President Barack Obama on Monday was selling a a $3.8 trillion election-year budget _ a spending outline designed to cut $4 trillion from the deficit in 10 years through spending restraints and higher taxes on the wealthy. Republicans said the plan fails to tackle the nation's deep fiscal problems. 
 
 In this photo released by CBS News White house Chief of Staff Jacob Lew talks on CBS's Face the Nation in Washington Sunday, Feb. 12, 2012. Lew, who appeared on various Sunday shows, said the new budget... (Associated Press) 
 
 Obama's budget _ as much a political document as spending plan _ clearly sets him apart from Republicans who are rabidly opposed to higher taxes and believe the only way to cut government red ink is to slash the heavy burden of social programs, particularly the federal Medicare health insurance program for Americans at age 65. 
 
 The budget frames and likely will intensify the deep partisan divisions that have kept Washington in gridlock since Republicans regained majority control of the House of Representatives in the 2010 election. 
 
 The president would achieve $1.5 trillion of the deficit reductions in tax increases on the wealthy and by removing certain corporate tax breaks. Obama rejected Republican charges of class warfare. "This is not about class warfare. This is about the nation's welfare," he insisted. 
 
 In a message that repeated populist themes Obama also sounded in his State of the Union address, the president defended his proposed tax increases on the wealthy, saying it was important that the burden of getting deficits under control be a shared responsibility. 
 
 "This is about making fair choices that benefit not just the people who have done fantastically well over the last few decades but that also benefit the middle class, those fighting to get into the middle class and the economy as a whole," Obama said. 
 
 Obama used an appearance before students at Northern Virginia Community College to unveil the budget and highlight a $8 billion proposal that aims at boosting the ability of the nation's community colleges to train students for the jobs of the future. 
 
 While administration officials defended the overall plan as a balanced approach, Republicans found ready material for attacks, particularly over Obama's failed 2009 promise to cut the skyrocketing deficit in half by the end of his first term. 
 
 "It seems like the president has decided again to campaign instead of govern," Republican Rep. Paul Ryan, chairman of the House Budget Committee, said in an interview. "He's just going to duck the responsibility to tackle this country's fiscal problems." Ryan is preparing an alternative to Obama's budget that will be similar to a measure that the House approved last year but failed in the Senate. 
 
 Jack Lew, Obama's chief of staff, said the administration had to contend with a deep recession and soaring unemployment that had driven the deficits higher than anyone anticipated. He said Obama's plan would cut the deficit below 3 percent of gross domestic product by 2018, to levels that economists generally view as sustainable. 
 
 He said faster deficit cuts now would set back an economy still struggling with high unemployment. Lew, Obama's former budget chief, also said it was critical that Congress agree to extend a payroll tax cut due to expire at the end of February. Failure to extend it, he said, would cause another hit to the economy. 
 
 The debate is almost certain to go all the way to Election Day in November, with gridlock keeping Congress from resolving many pressing issues on expiring tax cuts and across-the-board spending cuts until a lame duck session at year's end. That is the period between the November elections and the following January, when newly elected officials take their seats in Congress. Depending on the outcome of the presidential race, Obama, too, could be facing a departure from the White House in January. 
 
 Obama's spending blueprint for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits. 
 
 The budget projects a decline in the deficit to $901 billion in 2013 and continued improvements shrinking the deficit to $575 billion in 2018. 
 
 Senate Republican leader Mitch McConnell said Senate Democrats did not want to vote on Obama's spending plan. To force their hands, he will once again put it forward for a vote in the upper chamber, where he predicted it would fail as it did last year. 
 
 Lew blamed House Republicans for pushing extreme measures rather than trying to reach consensus with Democrats and avoid the kinds of last-minute crises that roiled financial markets in 2011, such as the summer showdown over raising the government's borrowing limit. 
 
 According to a White House fact sheet, Obama's budget will adhere closely to the approach he outlined in September in a submission to the congressional "supercommittee" that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January. 
 
 The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the tax cuts to expire at the end of this year for families making $250,000 or more per year. Those cuts were put in place during the presidency of George W. Bush, Obama's predecessor. 
 
 Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes. 
 
 Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan. 
 
 Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks. 
 
 ___ 
 
 Associated Press economics writer Martin Crutsinger contributed to this report. ||||| Advertisement Continue reading the main story 
 
 WASHINGTON — President Obama will lay out a budget blueprint on Monday that amounts to an election-year bet that a plan for higher taxes on the rich and more spending on popular programs like infrastructure and manufacturing will trump concerns over the deficit. 
 
 
 
 
 
 
 
 
 
 The new budget proposal contrasts with the deficit-cutting promises that attended the budget rollout last year and the debates that followed. Figures released on Friday indicate that the White House foresees a slightly higher deficit in the current fiscal year than the $1.3 trillion deficit of the 2011 fiscal year, even after the budget battles that dominated Washington last year. 
 
 The deficit is projected to fall to $901 billion in the fiscal year that starts in October, the first time since 2008 that the red ink would be below the $1 trillion mark. But last year, the White House had projected the 2013 deficit dropping further, to $768 billion. 
 
 Under White House projections, the deficit would reach $575 billion in 2018, or 2.7 percent of the economy, before rising again to $704 billion in 2022, or 2.8 percent. 
 
 The highlights of the plan for the 2013 fiscal year may not be those bottom-line figures but the spending inside. 
 
 A senior administration official on Friday evening framed the budget as the third act in a three-act play, which started with the fiery populism of Mr. Obama’s December speech in Osawatomie, Kan., continued with his State of the Union address and ends with a politically freighted budget rollout on Monday at a community college in the electoral battleground of Northern Virginia. Budget unveilings are usually handled in Washington by White House staff and cabinet members, with a brief message from the president. 
 
 The budget document distributed on Friday on Capitol Hill was permeated by the language of Mr. Obama’s State of the Union address and his call “to construct an economy that is built to last.” But the words and the policies hark back to the first year of Mr. Obama’s presidency and his call for a “New Foundation.” 
 
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 In essence, Mr. Obama will campaign on a vow to stay the course. 
 
 “We must transform our economy from one focused on speculating, spending and borrowing to one constructed on the solid foundation of educating, innovating, and building,” the document states. 
 
 As Democrats promote the revival of manufacturing, the president will call for an additional $2.2 billion for advanced manufacturing research and development, a 19 percent leap over the current year. In all, Mr. Obama will seek a 5 percent increase in nonmilitary research spending. 
 
 For more immediate job programs, the White House will urge $350 billion in short-term job spending, as well as a six-year transportation and infrastructure program that would cost $476 billion. He will ask for $60 billion to refurbish at least 35,000 schools and help state and local governments hire and retain teachers, firefighters and police officers. 
 
 Tens of billions of dollars have already been spent on such efforts through the stimulus program passed in 2009, and Republicans in Congress — intent on calling the first effort a failure — are not about to embark on a new round. 
 
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 But the latest budget document can be seen as more a platform for the president’s re-election campaign than a legislative proposal for budget debates that will begin next week. The budget will call for a 10-year, $61 billion “financial crisis responsibility fee” to hit the largest financial companies and a tax overhaul referred to as “everyone pays their fair share.” 
 
 Congressional leaders of both parties have vowed to pursue an overhaul of the tax code to make it simpler and fairer. But Mr. Obama’s version includes proposals that have been partisan flashpoints. His version pushes for the elimination of “unfair tax breaks for millionaires.” The current alternative minimum tax — which hits some middle-class families — would be scrapped in favor of the president’s “Buffett rule,” named after the billionaire investor Warren E. Buffett and devised to ensure that households earning more than $1 million a year pay no less than 30 percent of their income in taxes. 
 
 The budget document calls for a simpler tax code with lower rates, but the president also wants a tax overhaul to cut the deficit by $1.5 trillion through 2022 and allow President George W. Bush’s tax cuts to expire for families earning more than $250,000 a year. 
 
 New spending and targeted tax increases seem far more gaudy than the $638 billion in spending cuts the White House is claiming over 10 years from health programs like Medicare and Medicaid, agriculture subsidies, federal worker retirement funds and other programs. 
 
 In all, the White House is boasting of more than $4 trillion in “balanced deficit reduction” in the package over 10 years, a figure that includes $1 trillion in spending cuts agreed to last year after a series of confrontations with Congressional Republicans. 
 
 But the document’s numbers will show Mr. Obama has failed to meet his pledge to cut the deficit in half by the end of his term, and for Republicans, that will be the bottom line. 
 
 “President Obama pledged to cut the deficit in half by the end of his term,” said Stephen Miller, spokesman for the Republicans on the Senate Budget Committee. “Their optimistic projection is that next year’s deficit will be almost a trillion dollars — after four straight trillion-dollar deficits. So the White House is bragging about a broken promise?” 
 
 But deficit reduction may be beside the point. Mr. Obama appears to be laying out a campaign document that pits jobs programs paid for with tax increases on the rich against the deep spending cuts that will be the heart of the Republican Party’s economic program, rebuilding versus austerity. 
 
 House Republican leaders have already promised to follow the president’s plan with a budget document of their own that is largely based on last year’s blueprint drafted by Representative Paul D. Ryan, Republican of Wisconsin and the chairman of the House Budget Committee. 
 
 The new Ryan plan may temper his proposal to replace guaranteed, government-paid Medicare with vouchers that would be used to purchase private health insurance plans. Instead, Mr. Ryan is likely to propose a new version that offers traditional Medicare as an alternative to vouchers, mirroring the Republican presidential candidate Mitt Romney’s plan as well as the one Mr. Ryan drafted with Senator Ron Wyden, Democrat of Oregon. 
 
 As Republicans drive toward deeper spending cuts without tax increases, the president’s budget plan appears to have been drafted to maximize the contrast between the two parties, and to raise the stakes of the November election. ||||| President Obama's 2013 budget. 
 
 NEW YORK (CNNMoney) -- President Obama unveiled a $3.8 trillion budget request Monday that hikes taxes on the rich, spends new money on infrastructure and education, but does little to reform the entitlement programs that pose the biggest long-term threat to the federal budget. 
 
 "We built this budget around the idea that our country has always done best when everyone gets a fair shot, everyone does their fair share and everyone plays by the same rules," Obama said in his budget message. 
 
 
 
 
 
 
 
 
 
 But the budget forecasts a deficit for fiscal year 2012 that will top $1.3 trillion, before falling in 2013 to $901 billion, or 5.5% of gross domestic product. 
 
 The deficit projections, which have hovered near $1 trillion for each year of the Obama presidency, mean that Obama will not satisfy his 2009 promise to halve the deficit by the end of his first term. 
 
 White House officials described the budget as a continuation of two major speeches given recently by the president -- one in Kansas where he promised Americans a "fair shot," and last month's State of the Union. 
 
 The budget also offers fresh insight into how the White House plans to comply with last year's Budget Control Act, which allowed Congress to raise the debt ceiling in exchange for caps on discretionary spending accounts. 
 
 Many of the high profile recommendations made in the budget were first floated by the administration last year as part of a deficit reduction plan rolled out in September. 
 
 Spending: The administration is proposing a series of investments focused on infrastructure, education and domestic manufacturing, including old favorites like $30 billion to modernize schools and an additional $30 billion to retain and hire teachers and first responders. 
 
 One key element of that plan is a six-year proposal to spend $476 billion on surface transportation, a big increase from current levels, and much more than other proposals lawmakers are considering. 
 
 At the same time, the White House had to comply with the spending caps enshrined in the Budget Control Act, which total in the neighborhood of $1 trillion in discretionary spending over a decade. 
 
 That means many programs will see their funding cut. 
 
 "Every department will feel the impact of these reductions as they cut programs or tighten their belts to free up more resources for areas critical to economic growth," Obama wrote. 
 
 Discretionary spending is projected to fall from 8.7% of GDP in 2011 to 5.0% in 2022. 
 
 The budget details 210 places where programs will be cut or eliminated, for savings of $24 billion in 2013 and $520 billion over a decade. 
 
 For example, the budget eliminates an Air Force satellite system that is "no longer needed to meet mission requirements." 
 
 And the budget proposes consolidating the Bureau of Public Debt and the Treasury's Financial Management Service. 
 
 The president would also like to cut some mandatory spending, including select farm subsidies and federal employee retirement and health benefits, for savings of $217 billion over a decade. 
 
 Military spending will be reduced. The Pentagon plans to spend $487 billion less over 10 years, a course that Secretary of Defense Leon Panetta has already laid out in some detail. 
 
 But even with some cuts, annual deficits are still projected to be more than $500 billion every year for the next decade, and the budget would add $7 trillion to the debt held by the public between 2013 and 2022. 
 
 Taxes: The budget proposes a tax hike of $1.5 trillion, which includes a provision that will allow the Bush tax cuts to expire for high-income earners, a long-held Obama position. 
 
 Obama would like carried interest to be taxed as ordinary income, which means money managers would pay more than double the rate they currently pay on a portion of their compensation. 
 
 The budget also incorporates the Buffett Rule, a guideline to ensure that the wealthiest do not pay a lower overall tax rate than those who earn substantially less money. 
 
 Specifically, no household making more than $1 million will be a allowed to pay less than 30% of its income in taxes. 
 
 It also calls for a year-long extension of the payroll tax cut and unemployment insurance. 
 
 In addition, the White House wants to reform the individual tax code in a way that "eliminates inefficient and unfair tax breaks for millionaires while making all tax breaks at least as good for the middle class as for the wealthy." 
 
 On corporate taxes, details are scarce, but administration officials said that the president will unveil a plan to reform the corporate tax code later this month. 
 
 Entitlements: Because the president's budget does little to address how to curb the growth in entitlement spending, it's unlikely to stabilize deficits beyond the next 10 years. 
 
 The budget would cut more than $360 billion from Medicare, Medicaid and other health programs over a decade. But that's a drop in the bucket when compared to the rapid expansion of costs expected for entitlement programs. 
 
 "While [Obama's] budget stabilizes debt over the next decade, the real problem arrives thereafter, as entitlement costs spiral out of control and revenues are inadequate to deal with a wave of retiring baby boomers," Pete Domenici and Alice Rivlin, who led their own debt task force, said in a joint statement. 
 
 Of course, proposing significant cuts to Medicare and Social Security during an election year is a politically risky move, but by not saying much on the issue, the White House opened itself to criticism. 
 
 House Appropriations Committee Chairman Hal Rogers took Obama to task on Monday, saying the proposal "falls exceptionally short" on entitlement spending reform. 
 
 "It is imperative that both the President and Congress put greater focus on addressing the exploding costs of these programs," Rogers said. "Without meaningful action in this area, the nation's debt and deficit crisis will continue, increasing the risk to our nation's financial and economic future." 
 
 What's next: Obama's budget request is essentially a blueprint of his fiscal priorities -- the programs he would like to fund or cut, the new investments he would make and how he would pay for it all. 
 
 But the request is just that -- a request. And it's one that Congress can accept, reject or modify. 
 
 Even if Obama's budget is adopted -- which it won't be -- the estimates for deficit reduction may or may not pan out depending on how close to reality the administration's forecasts for unemployment, interest rates and economic growth prove to be. 
 
 In any case, Obama's 2013 budget is only the first step in a convoluted process that involves no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate. 
 
 If all goes well, a formal federal budget for government agencies will be in place by Oct. 1, the start of the 2013 fiscal year.
– President Obama officially unveiled his $3.8 trillion budget today, and as expected it draws a 2012 battle line, calling for higher taxes on the wealthy combined with spending measures intended to bolster the economy, the AP reports. "We built this budget around the idea that our country has always done best when everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules," Obama said, according to CNN. "This is not about class warfare. This is about the nation's welfare." Obama's budget would institute the so-called "Buffett Rule," replacing the Alternative Minimum Tax with a 30% rate on income above $1 million. It would also bump the capital gains tax rate up to 20%, and allow Bush-era tax cuts for the wealthy to expire. Obama unveiled the budget in a speech at Northern Virginia Community College, where he focused on a proposal to spend $8 billion boosting community colleges, Bloomberg reports. Obama estimates that under his budget the deficit would rise to $1.3 trillion in 2012, before falling to $901 billion in 2013. But the Wall Street Journal points out that Obama used cautious economic forecasts, ignoring recent employment gains. Republicans naturally bashed the budget for failing to address fiscal issues. "It seems like the president has decided again to campaign instead of govern," said Paul Ryan. For more on the budget particulars, click here.