President Barack Obama on Thursday unveils his first budget projecting spending of a whopping 3.606 trillion dollars for fiscal 2010 and outlining aggressive plans to fix the US economy and its health care system.
The plan, which encompasses Obama's efforts to pull the country out of its worst economic crisis since the Great Depression of the 1930s, would see the government deficit soar to the largest percentage of the US gross domestic product since World War II.
The 2010 spending compares to 3.724 trillion dollars for the previous fiscal year, official data out on Thursday show. In fiscal 2010 which starts October 1, the budget forecasts a deficit of 1.171 trillion dollars down from a projected 1.750 trillion in fiscal 2009.
The projected spending would include around 200 billion dollars to fight wars in Iraq and Afghanistan over the next 18 months, and a huge 634-billion-dollar, 10-year fund to pay for health care reforms, a key plank of Obama's election campaign, administration officials said.
Obama has also asked for 250 billion dollars to be set aside if needed to bail out the US financial industry, on top of the 700 billion dollars already committed to the effort.
The Obama administration currently has no plans to use the extra bailout money, but wants the funds included as an "overly conservative" placeholder just in case, a senior administration official said.
The budget is due to set the stage for a fierce battle in Congress, with many Republicans angered by plans to raise taxes on the country's wealthiest.
Obama was scheduled to deliver brief remarks about the budget around 9:30 am (1430 GMT), the White House said.
The president "will speak about the need to invest in energy, education, and health care in order to rebuild our economy, while also setting us on the path to fiscal discipline as the only sure way to long-term growth and prosperity," the White House said in a statement.
Obama will also ask Congress for 634 billion dollars to fund health care reform in his 2010 budget.
The document will formally set down a long list of campaign promises and will be the best evidence yet of Obama's argument that times of dark economic crisis can be a catalyst for sweeping political reform.
Obama will fulfill a campaign pledge to raise taxes on Americans earning more than 250,000 dollars a year from 35 percent to just under 40 percent, yielding some two trillion dollars over ten years.
Major savings are expected by winding down US military efforts in Iraq, which currently soaks up some 170 billion dollars a year.
The president also reportedly plans to raise money through a mandatory cap on greenhouse emissions, but is expected to ask Congress to finance education, energy and environmental reforms.
Obama's budget director Peter Orszag earlier estimated that a cap-and-trade scheme could generate 112 billion dollars by 2012, and up to 300 billion dollars a year by 2020.
The budget represents Obama's latest attempt to take on the multi-fronted economic meltdown, which he says will balloon the deficit in the short-term while insisting the US must end debt-fueled government spending.
Obama's request includes 75.5 billion dollars for 2009 to send more US troops to Afghanistan, officials said.
The president also will ask for 130 billion dollars for Iraq and Afghanistan for the 2010 budget and set operations in those countries at 50 billion dollars annually in the next several years, they said.
An Obama administration official, speaking on condition of anonymity, said the massive health care fund would be financed by raising taxes on highest earning Americans and by savings from existing health care programmes.
The size of the figure was the latest indication of the new president's intent to push for health care reform, a polarizing political issue that has bedeviled Democratic presidents for decades. Over 45 million Americans have no health care whatsoever.
Another expensive priority is the president's intention to provide each US child with a "complete and competitive education," and to broaden access to expensive higher learning institutions.
The budget, the 2009 version of which topped 3.5 trillion dollars, will also include the first in-depth details of Obama administration tax policy and defense and social spending.