Barack Obama, Budget Deficit | featured news

Congress and the White House veered toward a fiscal collision on Tuesday as the Obama administration rejected a short-term House Republican demand to cut $12 billion now in exchange for keeping the government open for one more week. At the same time, the Republicans’ budget chairman set forth a longer-range blueprint defining a new era of profoundly smaller government and steep tax cuts for corporations and individuals.

President Obama wants more control over the country's budget, and plans to ask Congress for it this week.

Government economic forecasters say President Obama's healthcare overhaul will increase the nation's healthcare tab instead of bringing costs down. The report by economic experts at the Department of Health and Human Services, released late Thursday, says the healthcare remake will achieve Obama's aim of expanding coverage.

Administration estimates record-setting amount will drop to $1.3 trillion in 2011; Obama's proposed $3.8 trillion budget focuses on economy.

President Barack Obama renewed his pledge on Saturday to make job creation his top priority in 2010 but said it was also critical to rein in a record budget deficit that threatened economic recovery.

President Obama goes before Congress for his first State of the Union address Wednesday night to show he can boost the economy and create jobs this year while cutting the budget deficit in 2011.

Sen. John McCain will support President Obama's plan to freeze much of the federal budget for the next three years, but said the president must also promise to veto any bills that are stuffed with pork barrel spending items.

The White House has told domestic agencies to assume their budgets will be frozen or even cut by 5 percent as it signals a big push to take on the deficit next year.

The Obama administration next week will project a federal budget deficit for fiscal 2009 of about $1.58 trillion, slightly less than previously predicted, a senior administration official said.

Washington Post-ABC News Poll | Public view of president slips on key issues, such as health-care reform, economy and federal budget deficit.