Obama calls for new spending in election-year budget

(Reuters) - President Barack Obama unveiled an election-year U.S. budget plan on Monday that would see a $6.7 trillion increase in the debt over the next decade despite what he called "very difficult" cuts to government spending and programs.


Obama, gearing up for the November 6 general election, said the American economy was on the mend but "not out of the woods yet" and called for more spending on education and infrastructure to boost hiring, downplaying the fiscal austerity message that dominated his 2011 fights with Congress.


The president's budget proposal for fiscal 2013, which begins on October 1, previews the populist economic themes he will take to the country as he campaigns for re-election this year amid continued high unemployment and fragile growth.


In his fourth budget proposal to Congress, Obama called for higher taxes on families earning more than $250,000 a year and other top earners. He is positioning himself against his Republican rivals for the White House, including former private equity executive Mitt Romney who does not see tax hikes as a debt fix.


As is often the case with presidential budget proposals, this one is expected to be ignored by Congress. Congressional Republicans already have slammed Obama's spending initiatives, which they say would continue chronically high budget deficits.