Mr Obama delivers remarks on his proposal at the White House Rose Garden
President Barack Obama has sent a $3.77trn budget to Congress hoping to overcome fundamental differences with Republican rivals.
The ongoing struggle between Republicans and Democrats over taxing and spending has pushed the US to the brink of dysfunctional shutdown a number of times.
The American leader is looking for a compromise between the two parties on the issues that have divided US politics.
Republicans are ideologically opposed to raising taxes, hoping to balance books with severe spending cuts instead. They believe it is not possible to tax and spend a way out of deficit.
Democrats believe raising taxes on the rich will not jeopardise recovery and oppose drastic cuts in public spending. They seek inspiration from the Bill Clinton years when a strong recovery took the US from deficit to surplus in one presidential term.
The White House says Mr Obama's budget is a common sense and reasonable balance between spending cuts and tax increases.
But at its heart is an offer he has already made to Republicans and seen rejected. House Speaker John Boehner has already walked away from the proposal to raise taxes on the rich.
Among its other proposals are plans to reduce defence spending by an additional $100bn, set aside a billion to launch manufacturing innovation institutions nationwide and cutting $400bn from health care programmes for the elderly and poor.
The president has been criticised from the right and left on his proposals but insists they form the basis for a longer term solution to an issue that has bedevilled US government for much of his term in office.
To try and win over opposition Mr Obama is inviting a dozen Republican senators to the White House for dinner to discuss the budget, along with gun control and immigration.
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