President Barack Obama Sends $3.8 Trillion Budget to Congress

WASHINGTON (Feb. 1) -- President Barack Obama sent a record $3.8 trillion budget to Congress Monday that he hopes will move the nation from recession to recovery by creating millions of new jobs and spark investments in education, clean energy, infrastructure and research.

The 2011 budget estimates the deficit at $1.3 trillion, or 8.3 percent of the gross domestic product. That's down from this year's deficit of nearly $1.6 trillion.

Deficits are projected to continue for the next decade but will shrink as a percentage of GDP, going from 10.6 percent this year to 4.2 percent in 2020. The numbers are based on the assumption that the nation's economy will rebound and grow.

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"This is a budget that makes tough choices while investing in programs to produce jobs," Dan Pfeiffer, the White House communications director, told reporters in a conference call. "This is not a left-wing budget. This is not a right-wing budget. It's a pragmatic budget."

Office of Management and Budget Director Peter Orszag said he was pleased that Congress has passed new "pay-go" rules that require new spending measures be paid for by tax increases or budget cuts.

"We want to make sure not to make the situation worse," he said. "We shouldn't dig a hole any deeper when the fiscal hole is already quite deep."

Details are scheduled to be released later Monday. Many of the highlights were included in the president's State of the Union address, while others will be revealed in the fine print of the massive budget document. Included in the president's proposal:

Jobs:

$100 billion to create jobs through small-business tax cuts and investments in infrastructure and clean energy.
Extension for another year of the Making Work Pay Tax Credit to 110 million families.
Elimination of the tax on capital gains from new investments in small business.

Budget cuts:

A three-year freeze on non-defense and homeland security spending to save $250 billion over 10 years.
Allowing the Bush tax cuts to expire for households making more than $250,000, a move that would raise $678 billion over 10 years. The budget would make permanent the 2001 and 2003 tax cuts for families earning less.
Elimination or reduction in more than 120 programs, for savings of more than $20 billion.
Elimination of $40 billion in tax breaks for oil, gas and coal companies over the next 10 years.
Killing NASA's Constellation program to return astronauts to the moon. The space agency budget calls for basic research on climate change and future missions to Mars.

Education:

A $3 billion increase for elementary and secondary education.
A $17 billion increase in Pell Grant funding for low-income college students.

Infrastructure and technology:

More than $100 billion in aid to states and local governments for infrastructure projects.
A $3.7 billion, or 6.4 percent, increase in civilian research and development, for a total of $61.6 billion.
More than $6 billion for clean-energy technologies.

Security:

A total of $193 billion to fund overseas military operations, including those in Iraq, Afghanistan and Pakistan.
Defense Secretary Robert Gates is expected to announce plans to cancel the C-17 cargo plane program and plans for an alternative engine for the F-35 stealth fighter plane.
The State Department will get a 2.6 percent increase for the costs of diplomacy not related to war.
The Department of Homeland Security gets a 2 percent budget boost, to $43.6 billion.
The Transportation Security Administration will spend $734 million to deploy up to 1,000 body imaging scanners at airports and install new explosive-detection equipment to screen baggage.
More funding to increase the number of federal air marshals on international flights.

The budget proposal reiterates Obama's call for a bipartisan fiscal commission to come up with ways to balance the federal budget, excluding interest payments on debt, by 2015. The idea failed to pass in the Senate last week, but Pfeiffer said the administration hopes Republicans will change their minds and "walk the walk" to help rein in the government's trillion-dollar deficits.