The plan largely ignores his own deficit commission's plea to slash huge entitlement programs like Social Security and Medicare.
- The plan includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations.
- The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000.
- Wealthy taxpayers would have their itemized deductions limited starting in 2012, including deductions for mortgage interest, charitable contributions and state and local taxes.
The president said his budget saves more than a trillion dollars over the next 10 years. Two-thirds of that will come from cuts, and the other third will come from tax increases.
His changes would actually add to the deficits this year and next. Obama is projecting the deficit will hit an all-time high of $1.65 trillion this year and then drop sharply to $1.1 trillion in 2012, with an expected improvement in the economy and as reductions in Social Security withholding and business taxes disappear.
Republicans, who took control of the House in the November elections and picked up seats in the Senate, want more cuts.
They've unveiled their own spending bill, promising $100 billion in cuts.
Cabinet members are set to testify before Congress about the budget this week. Though, the real battle begins in two and a half weeks, when government funding is expected to run out and lawmakers will have to vote to extend it.
The Associated Press contributed to this report.