WASHINGTON - President Barack Obama's proposed budget predicts the national deficit will crest at a record-breaking $1.6 trillion in the current fiscal year, then start to recede in 2011 to $1.3 trillion, a congressional official said Sunday.
Still, the administration's new budget to be released Monday says deficits over the next decade will average 4.5 percent of the size of the economy, a level economists say is dangerously high if not addressed, said the congressional official. The official was not authorized to discuss the budget before its public release.
Details of the administration's budget headed for Congress include an additional $100 billion to attack painfully high unemployment. The proposed $3.8-trillion budget 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."
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.