President Obama's 2013 budget. 
 
 NEW YORK (CNNMoney) -- President Obama unveiled a $3.8 trillion budget request Monday that hikes taxes on the rich, spends new money on infrastructure and education, but does little to reform the entitlement programs that pose the biggest long-term threat to the federal budget. 
 
 "We built this budget around the idea that our country has always done best when everyone gets a fair shot, everyone does their fair share and everyone plays by the same rules," Obama said in his budget message. 
 
 
 
 
 
 
 
 
 
 But the budget forecasts a deficit for fiscal year 2012 that will top $1.3 trillion, before falling in 2013 to $901 billion, or 5.5% of gross domestic product. 
 
 The deficit projections, which have hovered near $1 trillion for each year of the Obama presidency, mean that Obama will not satisfy his 2009 promise to halve the deficit by the end of his first term. 
 
 White House officials described the budget as a continuation of two major speeches given recently by the president -- one in Kansas where he promised Americans a "fair shot," and last month's State of the Union. 
 
 The budget also offers fresh insight into how the White House plans to comply with last year's Budget Control Act, which allowed Congress to raise the debt ceiling in exchange for caps on discretionary spending accounts. 
 
 Many of the high profile recommendations made in the budget were first floated by the administration last year as part of a deficit reduction plan rolled out in September. 
 
 Spending: The administration is proposing a series of investments focused on infrastructure, education and domestic manufacturing, including old favorites like $30 billion to modernize schools and an additional $30 billion to retain and hire teachers and first responders. 
 
 One key element of that plan is a six-year proposal to spend $476 billion on surface transportation, a big increase from current levels, and much more than other proposals lawmakers are considering. 
 
 At the same time, the White House had to comply with the spending caps enshrined in the Budget Control Act, which total in the neighborhood of $1 trillion in discretionary spending over a decade. 
 
 That means many programs will see their funding cut. 
 
 "Every department will feel the impact of these reductions as they cut programs or tighten their belts to free up more resources for areas critical to economic growth," Obama wrote. 
 
 Discretionary spending is projected to fall from 8.7% of GDP in 2011 to 5.0% in 2022. 
 
 The budget details 210 places where programs will be cut or eliminated, for savings of $24 billion in 2013 and $520 billion over a decade. 
 
 For example, the budget eliminates an Air Force satellite system that is "no longer needed to meet mission requirements." 
 
 And the budget proposes consolidating the Bureau of Public Debt and the Treasury's Financial Management Service. 
 
 The president would also like to cut some mandatory spending, including select farm subsidies and federal employee retirement and health benefits, for savings of $217 billion over a decade. 
 
 Military spending will be reduced. The Pentagon plans to spend $487 billion less over 10 years, a course that Secretary of Defense Leon Panetta has already laid out in some detail. 
 
 But even with some cuts, annual deficits are still projected to be more than $500 billion every year for the next decade, and the budget would add $7 trillion to the debt held by the public between 2013 and 2022. 
 
 Taxes: The budget proposes a tax hike of $1.5 trillion, which includes a provision that will allow the Bush tax cuts to expire for high-income earners, a long-held Obama position. 
 
 Obama would like carried interest to be taxed as ordinary income, which means money managers would pay more than double the rate they currently pay on a portion of their compensation. 
 
 The budget also incorporates the Buffett Rule, a guideline to ensure that the wealthiest do not pay a lower overall tax rate than those who earn substantially less money. 
 
 Specifically, no household making more than $1 million will be a allowed to pay less than 30% of its income in taxes. 
 
 It also calls for a year-long extension of the payroll tax cut and unemployment insurance. 
 
 In addition, the White House wants to reform the individual tax code in a way that "eliminates inefficient and unfair tax breaks for millionaires while making all tax breaks at least as good for the middle class as for the wealthy." 
 
 On corporate taxes, details are scarce, but administration officials said that the president will unveil a plan to reform the corporate tax code later this month. 
 
 Entitlements: Because the president's budget does little to address how to curb the growth in entitlement spending, it's unlikely to stabilize deficits beyond the next 10 years. 
 
 The budget would cut more than $360 billion from Medicare, Medicaid and other health programs over a decade. But that's a drop in the bucket when compared to the rapid expansion of costs expected for entitlement programs. 
 
 "While [Obama's] budget stabilizes debt over the next decade, the real problem arrives thereafter, as entitlement costs spiral out of control and revenues are inadequate to deal with a wave of retiring baby boomers," Pete Domenici and Alice Rivlin, who led their own debt task force, said in a joint statement. 
 
 Of course, proposing significant cuts to Medicare and Social Security during an election year is a politically risky move, but by not saying much on the issue, the White House opened itself to criticism. 
 
 House Appropriations Committee Chairman Hal Rogers took Obama to task on Monday, saying the proposal "falls exceptionally short" on entitlement spending reform. 
 
 "It is imperative that both the President and Congress put greater focus on addressing the exploding costs of these programs," Rogers said. "Without meaningful action in this area, the nation's debt and deficit crisis will continue, increasing the risk to our nation's financial and economic future." 
 
 What's next: Obama's budget request is essentially a blueprint of his fiscal priorities -- the programs he would like to fund or cut, the new investments he would make and how he would pay for it all. 
 
 But the request is just that -- a request. And it's one that Congress can accept, reject or modify. 
 
 Even if Obama's budget is adopted -- which it won't be -- the estimates for deficit reduction may or may not pan out depending on how close to reality the administration's forecasts for unemployment, interest rates and economic growth prove to be. 
 
 In any case, Obama's 2013 budget is only the first step in a convoluted process that involves no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate. 
 
 If all goes well, a formal federal budget for government agencies will be in place by Oct. 1, the start of the 2013 fiscal year. ||||| President Barack Obama on Monday was selling a a $3.8 trillion election-year budget _ a spending outline designed to cut $4 trillion from the deficit in 10 years through spending restraints and higher taxes on the wealthy. Republicans said the plan fails to tackle the nation's deep fiscal problems. 
 
 In this photo released by CBS News White house Chief of Staff Jacob Lew talks on CBS's Face the Nation in Washington Sunday, Feb. 12, 2012. Lew, who appeared on various Sunday shows, said the new budget... (Associated Press) 
 
 Obama's budget _ as much a political document as spending plan _ clearly sets him apart from Republicans who are rabidly opposed to higher taxes and believe the only way to cut government red ink is to slash the heavy burden of social programs, particularly the federal Medicare health insurance program for Americans at age 65. 
 
 The budget frames and likely will intensify the deep partisan divisions that have kept Washington in gridlock since Republicans regained majority control of the House of Representatives in the 2010 election. 
 
 The president would achieve $1.5 trillion of the deficit reductions in tax increases on the wealthy and by removing certain corporate tax breaks. Obama rejected Republican charges of class warfare. "This is not about class warfare. This is about the nation's welfare," he insisted. 
 
 In a message that repeated populist themes Obama also sounded in his State of the Union address, the president defended his proposed tax increases on the wealthy, saying it was important that the burden of getting deficits under control be a shared responsibility. 
 
 "This is about making fair choices that benefit not just the people who have done fantastically well over the last few decades but that also benefit the middle class, those fighting to get into the middle class and the economy as a whole," Obama said. 
 
 Obama used an appearance before students at Northern Virginia Community College to unveil the budget and highlight a $8 billion proposal that aims at boosting the ability of the nation's community colleges to train students for the jobs of the future. 
 
 While administration officials defended the overall plan as a balanced approach, Republicans found ready material for attacks, particularly over Obama's failed 2009 promise to cut the skyrocketing deficit in half by the end of his first term. 
 
 "It seems like the president has decided again to campaign instead of govern," Republican Rep. Paul Ryan, chairman of the House Budget Committee, said in an interview. "He's just going to duck the responsibility to tackle this country's fiscal problems." Ryan is preparing an alternative to Obama's budget that will be similar to a measure that the House approved last year but failed in the Senate. 
 
 Jack Lew, Obama's chief of staff, said the administration had to contend with a deep recession and soaring unemployment that had driven the deficits higher than anyone anticipated. He said Obama's plan would cut the deficit below 3 percent of gross domestic product by 2018, to levels that economists generally view as sustainable. 
 
 He said faster deficit cuts now would set back an economy still struggling with high unemployment. Lew, Obama's former budget chief, also said it was critical that Congress agree to extend a payroll tax cut due to expire at the end of February. Failure to extend it, he said, would cause another hit to the economy. 
 
 The debate is almost certain to go all the way to Election Day in November, with gridlock keeping Congress from resolving many pressing issues on expiring tax cuts and across-the-board spending cuts until a lame duck session at year's end. That is the period between the November elections and the following January, when newly elected officials take their seats in Congress. Depending on the outcome of the presidential race, Obama, too, could be facing a departure from the White House in January. 
 
 Obama's spending blueprint for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits. 
 
 The budget projects a decline in the deficit to $901 billion in 2013 and continued improvements shrinking the deficit to $575 billion in 2018. 
 
 Senate Republican leader Mitch McConnell said Senate Democrats did not want to vote on Obama's spending plan. To force their hands, he will once again put it forward for a vote in the upper chamber, where he predicted it would fail as it did last year. 
 
 Lew blamed House Republicans for pushing extreme measures rather than trying to reach consensus with Democrats and avoid the kinds of last-minute crises that roiled financial markets in 2011, such as the summer showdown over raising the government's borrowing limit. 
 
 According to a White House fact sheet, Obama's budget will adhere closely to the approach he outlined in September in a submission to the congressional "supercommittee" that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January. 
 
 The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the tax cuts to expire at the end of this year for families making $250,000 or more per year. Those cuts were put in place during the presidency of George W. Bush, Obama's predecessor. 
 
 Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes. 
 
 Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan. 
 
 Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks. 
 
 ___ 
 
 Associated Press economics writer Martin Crutsinger contributed to this report. ||||| The Obama administration will propose an $8 billion, three-year plan for shoring up career programs at community colleges to help train 2 million people for the workforce. 
 
 The plan, to be administered by the Education and Labor departments, designates funds in the 2013 budget to establish training courses for skilled careers, develop partnerships between the schools and employers, and help state and local governments attract businesses, according to an Education Department statement. 
 
 Shrinking state budgets and increasing numbers of unemployed people in the wake of the recession that began in 2007 have strained community colleges. The funding would help colleges accommodate more students in need of job skills, said David Baime of the American Association of Community Colleges in Washington. 
 
 “It looks pretty darned good at this point,” said Baime, the association’s vice president for government relations, in a telephone interview. “At this scale, these resources could have a real benefit in helping colleges meet the demands of the workforce and the expectations that people have of them.” 
 
 The association represents about 95 percent of the 1,200 community colleges in the U.S., Baime said. About 8 million students take courses for credit at community colleges each term, and an additional 5 million take non-credit courses, according to the association. 
 
 Technical Skills 
 
 Many Americans looking for work lack the experience to fill positions that require technical skills, such as in health care, advanced manufacturing, energy, and information technology, the Education Department said. Employers in the science, technical, and engineering fields frequently report that they need more trained workers, said Thomas Bailey, director of the Community College Research Center in New York. 
 
 “This is an area where investment of resources could be useful,” Bailey said. 
 
 The program, called the Community College to Career Fund, will pay to expand training and certification programs at community colleges for growing employment fields. It will also support internship programs for low-income community college students, according to the statement. 
 
 States will be allowed to apply for funds to help businesses increase workers’ skills. The plan also calls for online courses in entrepreneurship for small-business owners to be offered through community colleges. 
 
 Lack of Funds 
 
 Over the next three years, an additional $1.5 billion will go to extending programs that help train and find employment for workers who have been hurt by international trade agreements, according to the statement. 
 
 Community colleges have been hurt by a lack of funds for buildings and equipment needed to teach specialized courses for highly skilled jobs, said Karen Stout, president of Montgomery County Community College, which has two campuses in the county just west of Philadelphia. The college’s budget was cut 10 percent last year, and it hasn’t had new funds for building in four years, she said. 
 
 While she would like to expand her college’s programs for health-care workers and nuclear engineering technicians, they require equipment and specialized instructors she can’t currently afford, Stout said. 
 
 “It sounds like this program matches up exactly with those needs,” said Stout, who hadn’t seen all the details of President Barack Obama’s plan. 
 
 Obama in Virginia 
 
 Obama will unveil the program later today at Northern Virginia Community College, in Annandale, Virginia, the Education Department said. Later this month, Labor Secretary Hilda Solis, Education Secretary Arne Duncan, and Vice President Joe Biden’s wife Jill Biden will travel across the country to recognize community colleges and businesses that are working together to train and employ workers. 
 
 Obama in 2009 proposed a $12-billion, 10-year-plan to support community colleges that Congress cut to $2 billion. State budget cuts have fallen hard in California, where in the 2009-2010 academic year, 133,000 first-time students couldn’t get into any course as community colleges cut offerings, according to a statement from Jack Scott, California Community Colleges Chancellor, in a statement Feb. 1. 
 
 “Those trends of terrible fiscal situations and surging enrollments are still there at community colleges,” said Bailey at the Community College Research Center. 
 
 To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net 
 
 To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net ||||| Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com 
 
 WASHINGTON—The White House based its budget for fiscal-year 2013 on a cautious economic forecast that predicts gradual growth still threatened by European instability. 
 
 The economic assumptions underpinning President Barack Obama's budget, released Monday, show a subdued recovery that is "projected to gain momentum in 2012-2103 and to strengthen further in 2014." Because the administration's projections were completed in mid-November, however, the outlook doesn't reflect the stronger economic data that have since been released, including labor-market strengthening. The unemployment rate fell to 8.3% in January, down from 8.7% in November 2011. 
 
 Still, the White House predicted the economy would bounce back ...
– President Obama officially unveiled his $3.8 trillion budget today, and as expected it draws a 2012 battle line, calling for higher taxes on the wealthy combined with spending measures intended to bolster the economy, the AP reports. "We built this budget around the idea that our country has always done best when everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules," Obama said, according to CNN. "This is not about class warfare. This is about the nation's welfare." Obama's budget would institute the so-called "Buffett Rule," replacing the Alternative Minimum Tax with a 30% rate on income above $1 million. It would also bump the capital gains tax rate up to 20%, and allow Bush-era tax cuts for the wealthy to expire. Obama unveiled the budget in a speech at Northern Virginia Community College, where he focused on a proposal to spend $8 billion boosting community colleges, Bloomberg reports. Obama estimates that under his budget the deficit would rise to $1.3 trillion in 2012, before falling to $901 billion in 2013. But the Wall Street Journal points out that Obama used cautious economic forecasts, ignoring recent employment gains. Republicans naturally bashed the budget for failing to address fiscal issues. "It seems like the president has decided again to campaign instead of govern," said Paul Ryan. For more on the budget particulars, click here.