The budget foresees a $474bn deficit, 2.5% of GDP. It projects deficits stabilising at that rate over a 10-year period, officials said.
Obama’s budget fleshes out proposals from his State of the Union address last month and helps highlight Democratic priorities for the last two years of his presidency and the beginning of the 2016 presidential campaign.
But it is as much a political document as a fiscal road map and would require approval from the Republican-controlled Congress to go into effect.
“There are going to be areas where we get big disagreements, but what I want us to focus on is the areas... we have in common,” Obama said on American television.
“And we’ll have some battles along the way, but there’s going to be a whole bunch of stuff that we can do that’s really productive.”
Republicans have said they see room for compromise in areas such as tax reform and infrastructure, but many of Obama’s programmes, which were rolled out in the weeks before the budget’s release, have landed with a thud.
“When... he devotes his time and energy to talking about the new tax-and-spend policies that progressives like and Republicans universally oppose, he signals to Congress that he is once again looking to argue rather than to legislate,” said Keith Hennessey, a former economic adviser to Republican president George W Bush.
Democrats, however, viewed the budget as a statement of their priorities and a chance to demonstrate that they represent the party that champions middle-income Americans.
“(It) affords him an opportunity to contrast his vision of helping the middle class with the Republican Congress’ approach of exacerbating inequality, ignoring the middle class, and making the burdens of those who want to enter it even greater,” said Neera Tanden, president of the Centre for American Progress, which has close ties to the White House.
The budget achieves some $1.8 trillion in deficit reduction over the next 10 years through healthcare, tax, and immigration reform, but the forecast assumes Republican support for Obama’s proposals, which is unlikely.
The White House foresees a continuation of the decline in unemployment, forecasting a rate of 5.4% in 2015. The rate is currently 5.6%.
It also proposes a new infrastructure bank, a 6% increase in research and development, and a controversial consolidation of government agencies.
It calls for a one-time, 14% tax on an estimated $2.1 trillion in profits piled up abroad by companies such as General Electric and Microsoft, while imposing a 19% tax on US companies’ future foreign earnings.
The budget would also reform rules governing trust funds and raise the capital gains and dividend rates to 28% from the current top rates of 23.8%.