Obama: Budget keeps promise to American people

President Barack Obama on Thursday stressed the need for shared sacrifice as he vowed to slash federal spending by $2 trillion, even as the administration initially invested large sums of money to revive the faltering economy.

On the day he proposed a $3 trillion-plus budget, Obama acknowledged that "we must add to our debt in the short run" to restore American business vitality. But at the same time, he said lowering the debt in the longer-term would be the only responsible approach to the country's fiscal policies.

"Each and every one of us has to compromise on certain things we care about, but which we simply cannot afford right now," the president told reporters in brief remarks. With his economic team standing behind him, Obama pushed a message of sacrifice, saying that won't please some interest groups but that he plans to "bring the change that people voted for last November."

Administration officials talking on grounds of anonymity earlier told The Associated Press that the new blueprint predicts a whopping $1.75 trillion deficit in the current budget year.

Obama said his budget would move the nation toward health care for all, expand bank rescues, roll up bigger deficits and slap higher costs on wealthy people to help pay for it all.

The budget amounts to his first signature on federal spending, outlining the most fundamental and important of daily issues: Where all the money goes.

But it is only a proposal. Congress makes the final decisions on spending, and Obama's blueprint is already setting off intense debate among lawmakers. What follows now is a legislative process of hashing over the right priorities, how to pay for them, and how to cobble together the votes.

Obama's budget would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care. That is a little more than half the money it would take to extend insurance to 48 million uninsured Americans.

"We must make it a priority to give every single American quality, affordable health care," Obama said. The president said that promise, one of the most ambitious and costly of his presidential campaign, is the key to turning around the nation's worsening budget deficits in the long term.

His budget is a 140-page outline, with the complete details scheduled to come in mid- to late-April. The new budget year begins Oct. 1.

As part of the effort to end the nation's financial crisis, the administration will propose boosting the budget deficit by an additional $250 billion this year - to the record $1.75 trillion - enough to support as much as $750 billion more in spending under the government's rescue program for financial institutions.

As he did in his speech to Congress on Tuesday night, Obama kept his focus on what he considers to be the right priorities: honest and open budgeting; investments in health, energy and education; and tax relief for middle-income families.

He compared the nation's budget woes to a family's, saying this is not a time to redecorate the house, but rather one when the foundation must be built.

"A budget is more than simply numbers on a page," Obama said. "It is a measure of how well we are living up to our obligations to ourselves and one another. It is a test of our commitment to making America what it was always meant to be: a place where all things are possible for all people."