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U.S. President Barack Obama discusses the details of his $3.83-trillion budget unveiled on Monday. ((Pablo Martinez Monsivais/Associated Press))

U.S. President Barack Obama unveiled a nearly $4-trillion-US budget on Monday that includes a spending freeze on some programs but will leave the government with a record-breaking deficit.

The proposed budget, which needs approval from Congress, would provide billions of dollars for job-creation measures and tax breaks, partly offset by tax hikes on high-income earners.

According to the proposed $3.83-trillion budget, the U.S. deficit will swell to $1.56 trillion this year, surpassing last year's deficit of $1.41 trillion, and America will be saddled with trillion-dollar-plus deficits for three years.

This follows the $787-billion stimulus passed in February 2009 and a decrease in tax revenues because of the economic downturn.

'We can’t simply move beyond this crisis. We have to address the irresponsibility that led to it.'—President Barack Obama

Obama blamed the previous administration and Congress for fiscal mismanagement, saying that on the day he entered office he was already contending with a $1.3-trillion deficit.

As well, he faced an economic crisis and had to take steps that carried "significant costs" and added to the deficit.

'Save where we can'

"We can’t simply move beyond this crisis. We have to address the irresponsibility that led to it, and that includes the failure to rein in spending, as well as reliance on borrowing," Obama said. "We have to do what families across America are doing — save where we can so that we can afford what we need."

To tackle the deficit, Obama proposed a three-year freeze on spending for many domestic government agencies beginning in 2011. He stressed that this won't apply to national security spending and to Social Security, Medicaid or Medicare benefits.

Obama said his administration has so far identified $20 billion in cuts — an amount critics have dismissed, considering the size of the overall budget.

The budget would see spending increase by 5.7 per cent this year, with forecasts of a three per cent increase in 2011.

Obama's budget includes a $100-billion plan to boost jobs with tax breaks for small businesses and increased spending on infrastructure and energy projects.

While middle-class tax breaks would be extended, tax cuts for oil companies, investment fund managers and individuals earning over $250,000 a year will not be continued, Obama said.

The president has endorsed a pay-as-you-go proposal that passed the Senate last week. It would require any new tax cuts or entitlement spending to be paid for, and he has promised to create a bipartisan commission to recommend ways to trim the deficit.

With files from The Associated Press