US President Barack Obama has unveiled a budget projecting a record deficit this year, with billions of dollars to curb unemployment and tax hikes on the rich to tame big fiscal shortfalls.
'It's a budget that reflects the serious challenges facing the country,' Obama said at the White House after sending the mammoth spending plan to Congress.
'We're at war, our economy has lost seven million jobs the last two years and our government is deeply in debt after what can only be described as a decade of profligacy.'
The $3.834 trillion budget includes a freeze on non-security discretionary spending, a $100 billion jobs package and more money for overseas wars, education and homeland security.
It makes a grim forecast that unemployment, currently at 10%, will average 9.2% in 2011, and 8.2% in 2012, the year when Obama faces a re-election campaign, carrying a punishing legacy of the worst financial crisis since the Great Depression.
The economic forecast, however, predicts solid GDP growth of 2.7% in 2010 and 3.8% in 2011.
The budget, for fiscal year 2011, foresees a record deficit of $1.556 trillion in 2010, falling to $1.267 trillion in 2011, and abandons a bid to send men back to the moon, by ending the Constellation program.
The Obama administration said the 2011 budget is aimed at dealing with the aftermath of the financial, fiscal, housing and unemployment crises, and to put the US on a path to long-term economic security.
The administration says that the deficit will stand at $1.267 trillion in 2011, which will represent 8.3% of GDP, compared to 10.6% of GDP in 2010.
Republicans and some conservative Democrats have raised the alarm at high government spending, which has swelled the deficit, and the issue has been a source of considerable political pressure for Obama.
The 2011 budget contains more than $300 billion in tax cuts for families and businesses over the next 10 years and terminates 120 programs for savings of $20 billion.
It will, however, allow tax cuts introduced by former president George W Bush to expire for people earning more than $250,000 a year.
There is $100 billion for job-creating investments in small businesses, tax cuts and clean energy, designed to start bringing down the unemployment rate.
As the administration combines a push for green energy development with deficit cutting, the budget will phase out fossil fuel subsidies for oil, gas and coal companies to raise $40 billion over 10 years.
Following the thwarted bid by an Al-Qaeda affiliated group in Yemen to bring down a US airliner on Christmas Day, the budget also makes new investments in US security.
