Obama presents 3.8-trillion-dollar budget

Feb 1, 2010, 15:12 GMT

Washington - The Obama administration on Monday offered up a 3.8-trillion-dollar government budget for 2011.

The budget shows an ongoing focus on economic recovery and job creation, as well as efforts to trim spending with a three-year freeze on non-security discretionary spending, which makes up just under a third of all spending, officials said.

'The budget reflects a focus on job creation, middle class security and a path to fiscal sustainability,' said Peter Orszag, director of the White House Office of Management and Budget.

President Barack Obama's plans include 100 billion dollars for job creation, including 33 billion dollars in tax cuts for small businesses and infrastructure and clean energy investments.

In total the budget includes some 300 billion dollars in tax cuts.

While the budget includes some measures to reduce the country's skyrocketing deficit, Orszag said it would take a bipartisan effort to 'go the rest of the distance.'

He urged Republicans to support Obama's plan to create a fiscal commission that would make recommendations on where to cut spending in the coming years.

An outline of budget priorities released by the White House showed the deficit is expected to reach 1.6 trillion dollars, or 10.6 per cent of gross domestic product (GDP), this year, and decline slightly to 1.3 trillion dollars, or 8.3 per cent of GDP, in 2011.

Perhaps the most high-profile victim of Obama's money-saving efforts is NASA's effort to return astronauts to the moon.

The budget will eliminate the Constellation programme that has been working to design a spacecraft to replace the ageing space shuttle and instead offers up a competition for private space flight.

Obama will also use the power of the purse to tax banks that benefited from the unpopular 700-billion-dollar government bail-out with a 'financial crisis responsibility fee' designed to raise 90 billion dollars over 10 years.

It also includes 159.3 billion dollars for the wars in Iraq and Afghanistan and an additional request for 33 billion dollars this year.

Spending for anti-terrorism efforts in the Department of Homeland Security includes 734 million dollars for 1,000 advanced screening machines for airports.