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Obama discusses FY2011 budget

From NBC's Athena Jones
Saying it was time to save what we can, spend what we must, and live within our means once again, President Obama today unveiled a budget that includes new spending on job creation proposals and education, while urging both parties to come together to find ways to cut wasteful spending in other areas.

The proposed FY2011 budget puts overall spending at $3.83 trillion dollars during the fiscal year, and projects a deficit of $1.27 trillion, or 8.3% of the Gross Domestic Product.

With the unemployment rate stuck at 10%, the administration has been under pressure to defend its spending decisions. Republican critics say efforts to pull the economy out of recession have done little to produce jobs and have added too much to the deficit. Obama has consistently argued the spending was necessary to prevent total economic collapse and has sought to remind people that he inherited an already huge $1.3 trillion deficit, was prepared to take steps to reduce it, and wants help from both parties.

"If we had taken office during ordinary times, we would have started bringing down these deficits immediately. But one year ago, our country was in crisis," the president said during his brief remarks from the Grand Foyer. "We initiated a rescue and that rescue was not without significant costs. It added to the deficit as well. One year later, because of the steps we've taken, we're in a very different place. But we can't simply move beyond this crisis; we have to address the irresponsibility that led to it and that includes the failure to reign in spending as well as reliance on borrowing."

The president -- who was joined by Treasury Secretary Tim Geithner, OMB Director Peter Orszag, and economic advisers Christina Romer and Larry Summers -- has called for freezing non-security discretionary spending for three years, which the administration estimates will save $250 billion over 10 years.

"We're not simply photocopying last year's budget. Freezing spending does not mean we won't cut what doesn't work to pay for what does," Obama said. "We have gone through every department's spending line by line, item by item, looking for inefficiency, duplication, and programs that have outlived their usefulness."

He also outlined some of the $20 billion in savings the administration had identified -- including mine clean up and ending a program that allows people to collect advances for their Earned Income Tax Credit. (Obama said that while he supports the EITC, the advances program was not run effectively.)

The president responded to critics who say his proposals steps don't go far enough to rein in federal spending they see as out of control by focusing anew on bipartisanship.

"I'm willing to reduce waste in programs I care about, and I'm asking members of Congress to do the same," he said. "I'm asking Republicans and Democrats alike to take a fresh look at programs they've supported in the past to see what's working and what's not, and trim back accordingly."

Along those same lines, the Obama called on the Republican leaders in Congress -- Ohio Rep. John Boehner and Kentucky Sen. Mitch McConnell -- to support a bipartisan fiscal commission on the deficit, which is set to be established by executive order after failing to pass the Senate despite early support from members of both parties.

Obama closed by reiterating that he was open to Republican ideas. "I welcome any idea, from Democrats and Republicans," he said. "What I will not welcome -- what I reject -- is the same old grandstanding when the cameras are on, and the same irresponsible budget policies when the cameras are off. It's time to hold Washington to the same standards families and businesses hold themselves."

The 2011 budget focuses on key parts of the president's agenda from education and clean energy, to infrastructure and efforts to boost job creation -- like $33 billion for tax cuts for small businesses to encourage them to hire new workers and increase salaries.