By ANDREW TAYLOR, Associated Press Writer

WASHINGTON – A congressional official says the Obama administration's new budget pegs the national deficit in the current fiscal year at a record of $1.6 trillion and that the deficit number for the 2011 fiscal year is $1.3 trillion.

In addition, the official said Sunday, deficits over the next decade will average 4.5 percent of the size of the economy, a level which economists say is dangerously high if not addressed.

The official spoke on condition of anonymity because the official was not authorized to discuss the budget before its public release.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — The Obama administration on Sunday endorsed spending an additional $100 billion to attack painfully high unemployment as it prepared to send Congress a $3.8 trillion budget that would provide billions more to pull the country out of the Great Recession while increasing taxes on the wealthy and imposing a spending freeze on many government programs.

White House spokesman Robert Gibbs said the administration believed "somewhere in the $100 billion range" would be the appropriate amount for a new jobs measure made up of a business tax credit to encourage hiring, increased infrastructure spending and money from the government's bailout fund to get banks to increase loans to struggling small businesses.

That price tag would be below a $174 billion bill passed by the House in December but higher than an $83 billion proposal that surfaced last week in the Senate.

Gibbs said it was important for Democrats and Republicans to put aside their differences to pass a bill that addresses jobs, the country's No. 1 concern. "I think that would be a powerful signal to send to the American people," Gibbs said in an appearance on CNN's "State of the Union."

Job creation was a key theme of the budget President Barack Obama was sending Congress on Monday, a document designed, as was the president's State of the Union address, to reframe his young presidency after a protracted battle over health care damaged his standing in public opinion polls and contributed to a series of Democratic election defeats.

Obama's $3.8 trillion spending plan for the 2011 budget year that begins Oct. 1 attempts to navigate between the opposing goals of pulling the country out of a deep recession and dealing with a budget deficit that soared to an all-time high of $1.42 trillion last year.

The Congressional Budget Office is forecasting that the deficit for the current budget year will be only slightly lower, $1.35 trillion, and the flood of red ink will remain massive for years to come, raising worries among voters and the foreign investors who buy much of the country's debt.

On the anti-recession front, congressional sources said Obama's new budget will propose extending the popular Making Work Pay middle-class tax breaks of $400 per individual and $800 per couple through 2011. They were due to expire after this year.

The budget will also propose $250 payments to Social Security recipients to bolster their finances in a year when they are not receiving the normal cost-of-living boost to their benefit checks because of low inflation. Obama will also seek a $25 billion increase in payments to help recession-battered states.

Obama's new budget will set off months of debate in the Democratically controlled Congress, especially in an election year in which Republicans are hoping to use attacks against government overspending to gain seats. Obama has argued that he inherited a deficit of more than $1 trillion and was forced to increase spending to stabilize the financial system and combat the worst recession since the 1930s.

Obama's new budget was expected to repeat many of the themes of his first budget. But in a bow to worries over the soaring deficits, the administration is proposing a three-year freeze on spending for a wide swath of domestic government agencies. Military, veterans, homeland security and big benefit programs such as Social Security and Medicare would not feel the pinch.

The freeze would affect $447 billion in spending and is designed to save $250 billion over a decade. However, it would not fall equally on all domestic agencies. Some would see budget cuts to free up spending for programs the administration wants to expand such as education and civilian research efforts.

NASA's mission to return astronauts to the moon would be grounded with the space agency instead getting an additional $5.9 billion over five years to encourage private companies to build, launch and operate their own spacecraft for the benefit of NASA and others. NASA would pay the private companies to carry U.S. astronauts.

Obama's budget repeats his recommendations for an overhaul of the nation's health care system, the fight that dominated his first year in office. It proposes to get billions of dollars in savings from the Medicare program and again seeks increased taxes on the wealthy by limiting the benefits they receive from various tax deductions. Both ideas have met strong resistance in Congress.

Gibbs insisted Sunday that the president's push for health care was "still inside the 5-yard line," but Senate Republican leader Mitch McConnell, also appearing on CNN, said the public was overwhelmingly against the bill and the administration should "put it on the shelf, go back and start over."

In addition to the freeze on discretionary nonsecurity spending, Obama is proposing to boost revenues by allowing the Bush administration tax cuts of 2001 and 2003 to expire at the end of this year for families making more than $250,000 annually. Tax relief for those less well-off would be extended.

The new Obama budget will also include a proposal to levy a fee on the country's biggest banks to raise an estimated $90 billion to recover losses from the government's $700 billion financial rescue fund. Those losses are expected to come not come from the bank bailouts but from the support extended to General Motors and Chrysler and insurance giant American International Group as well as help provided to homeowners struggling to avoid foreclosures.

Also on the deficit front, the president has endorsed a pay-as-you-go proposal that passed the Senate last week. It would require any new tax cuts or entitlement spending increases to be paid for, and he has promised to create a commission to recommend by year's end ways to trim the deficits. However, a legislatively mandated panel was rejected in a Senate vote last week. Republicans opposed establishing the panel because it might recommend tax increases to close the deficit.

http://news.yahoo.com/s/ap/20100131/ap_on_go_pr_wh/us_budget

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WHAT HAPPENED TO THE MONEY THE BANKS HAVE PAID BACK ?

The dems want change Tarp to another giveaway instead of applying the money back to the deficit.

I am really curious about how this "pay as you go" is going to work out..

I am beginning to think that this and the freeze on discretionary spending is their strategy in case the republicans close the gaps in congressional seats.

From the New york Times

So far, that experiment is more than paying off. The government has taken profits of about $1.4 billion on its investment in Goldman Sachs, $1.3 billion on Morgan Stanley and $414 million on American Express. The five other banks that repaid the government — Northern Trust, Bank of New York Mellon, State Street, U.S. Bancorp and BB&T — each brought in $100 million to $334 million in profit.


From me

Still a ways to go, but a start anyhow

i love to here folks say obama is wasting tax dollars. i guess bush did not waste any money. he bombed Iraq. then agreed to rebuild it. but guess that's not wasting money. republicans get real.

I love to here dem folks sayin that Bush did this so it's ok fo obama to do it..

No.. Running up the debt is not OK.. It wasn't ok when Bush did it and it's not ok that Obama is doing it..

Debt..BAD..

you republicans try your best to blame everything on obama. in short. you republicans have no power left. only thing you can do is complain. you lost all your power. now you say your being left out of the of the power. but guess . republicans should have through about that. you no what they say about payback.

wait...so you are saying the dems are paying back the reps? Is that a way to run a country? The power should be for the people not this party or that party.

meh this thread is indicative of the problems in this country's government

its not a matter of what is good for the country but its a matter of what makes the other side look bad

how are the two sides suppose to work together for the betterment of the United States when no spare breath is wasted demonizing and denigrating the other side?

funny how now the democrats are in charge now. and the republicans cry foul. funny. don't you think. after republicans being in charge. and keeping dems out. now republican cry foul.

I agree, there needs to be more cooperating(working together) and less competing(pointing fingers). I have alot of respect for anyone, politician or not, who can give credit to others beside themself and accept responsibility as often as they place blame.

Congress, Senate, and President need to step up when something goes astray and learn to use the word 'WE' instead of passing the buck...as in WE havent got this healthcare bill passed, WE havent gotten Guantanamo Bay closed,,,,etc,,,,,

the dems have had the majority for a couple of years now. I don't like either side and I would cry foul if either side kept the other side from discussions etc

there isn't going to be any cooperating.. people are no longer running for office based on what they are for, they are running based on what they are against. I couldn't tell you one thing Scott Brown is for, but I could tell you 5 things he is against.. That is the problem..

Interesting budge information

From BBC news

The US budget deficit hit a record $1.4 trillion (£877bn) in the year to 30 September, US Congress estimates say

From Politifact.com

On Jan. 7, 2009, two weeks before Obama took office, the Congressional Budget Office reported that the deficit for fiscal year 2009 was projected to be $1.2 trillion



An increase, but not quite the BALLOONING that so many claim has happened.

Your beloved party is in power as you so less than eloquently put it.

Stop whining.. I know it's difficult since that is all your party has done for the last 10 years.

You talk about payback... that is what you are getting, and you don't seem to like it..

This attitude right here is our problem, Repubs and Dem's at each others throat when frankly the decision of the party that you represent are made behind closed doors where you really don't have any clue what is going on.

Personally I like issues from both sides, and I think both sides should be needed to pass anything. In order for a bill to bass I believe it should HAVE to have 50% Dem approval AND 50% repub approval. That way we FORCE the sides to come up with 'inbetween' plans. It would take a while for them to get use to...you know listeining to each others opinions and HAVING to give them some credit. But that's just me. I think a group effort best.

that was 2009.. In 2010 its 1.56 trillion .. 2011 is the budget he just released.. 1.3 trillion.. So that is 2.86 trillion in his 2 years in office..

Debt=Bad

We will see once he has actually been in for two years,, I guess.
From daily finance.com

The deficit in 2011 would total $1.27 trillion, the third straight trillion-dollar-plus imbalance TOTAL 1.27 not 2.86.

When we are standing in breadlines maybe people will realize that maybe he made bad choices....but guess we will have wait.