Obama won't defeat the deficit

WASHINGTON — President Barack Obama's $3.8 trillion budget for next year sets deficit record of $1.56 trillion, includes a big job program and rolls back Bush-era tax cuts for high earners.

But Obama sidestepped any major attack on chronic deficits, which not drop below $700 billion even after a recovery.

The job package includes not only the $100 billion collection of tax cuts for small business and other items to spur hiring, but also a continuation of unemployment insurance, aid to fiscally strapped states and other measures that were set to expire this year, totaling about $250 billion.

Total tax revenue would rise to $2.2 trillion, including rolling back the Bush tax cuts on those earning $250,000 a year or more and ending a welter of corporate tax breaks. Republicans, swiftly slammed the plan.

"The president has sent Congress a budget proposal that contains more spending, more borrowing and more taxes," Sen. John Cornyn, R-Texas, said in a statement. "This, after promising the American people that he was going to restore fiscal discipline to Washington by going through the budget to cut wasteful spending."

Sen. Kay Bailey Hutchison, R-Texas, echoed Cornyn's concerns, adding in a statement that the proposal "includes massive deficit spending levels and tax increases, which will make it even more difficult for businesses, large and small, to create jobs to fuel our economic recovery."

Democrats welcomed the boost in their key priorities such as science, infrastructure, clean energy and education, investments Obama describes as building a "new foundation" for the economy.

The president defended his priorities, saying, "Just as it would be a terrible mistake to borrow against our children's future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century."