President Obama unveils US budget

Hard choices lie ahead. That was the message from US President Barack Obama, as he outlined his first federal budget.

The record $3.6 trillion dollar spending package for 2010 aims to boost investment in areas such as health care, education and renewable energy and pull the US out of the financial crisis.

But there's a catch. This year the US government is expected to spend $1.75 trillion more than it earns from taxes.

Spending cuts

This is the biggest budget deficit the United States has seen since World War II.

Mr Obama has promised to halve the deficit within four years. But that will mean cuts in some areas, as well as tax increases.

Harvard economist professor Jeffrey Frankel told World Business News's Theo Leggett where President Obama was going to reduce spending, in order to fund his planned investments.

Listen Listen to Jeffrey Frankel (2 mins 30 secs)

But the US budget package has no shortage of critics - among them economist Chris Low of FTN Financial in New York.

Listen Listen to Chris Low (1 min 42 secs)

First broadcast on World Business News on 27 February 2009