Obama: Budget shrinks deficits and expands economy

President Barack Obama
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President Barack Obama says his proposed $3.77 trillion budget for 2014 can shrink federal deficits and expand the U.S. economy. He says: "We can do both."

Obama spoke at the White House Wednesday as his administration issued his budget proposal. It would replace $1.2 trillion in automatic spending cuts scheduled to take effect over the next 10 years with $1.8 trillion in deficit-reduction measures. His plan calls for reductions in Social Security and Medicare spending and increases in taxes, mostly on the wealthy.

He says: "It replaces these cuts with smarter ones."

Those proposals to cut Social Security and Medicare have already angered some Democrats and left-leaning interest groups.

Obama also would increase cigarette taxes by 94 cents a pack to pay for expanded preschool programs. He also calls for $50 billion in public works spending.

By law the president's budget was due on the first Monday in February, so today's budget release comes nine weeks late.

Learn more about the president's budget.

Read the GOP budget proposal.