Obama's $3.8 trillion budget heading to Congress

WASHINGTON — 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 $2.8 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.