Democratic leaders also are scrapping Mr. Obama's plan to direct more money to the financial sector bailout and restore some of the money-saving budget moves the president said he eliminated last month when he unveiled his $3.6 trillion request for the fiscal year that begins in October, the Washington Post reported.
The president is headed to Capitol Hill on Wednesday afternoon to try to drum up support for his budget plan from his former colleagues in Congress.
The Senate's version of the budget would drive the annual deficit to $1.2 trillion next year, compared to $1.4 trillion under the president's plan. By 2014, the deficit would fall to just more than $500 billion in the Senate plan, requiring the nation to borrow $3.8 trillion over the next five years as opposed to about $4.4 trillion under Mr. Obama's proposal, according to the Post.
Senate Budget Committee Chairman Kent Conrad, D-N.D., said he would leave out new spending for President Obama's proposed expanded health care coverage and a permanent $800 tax credit for working families. Conrad said lawmakers could adopt the policies as long as they didn't increase the deficit.
The Post reported that House leaders have a similar plan that could trim more than $100 billion from the spending plan with the aim of curbing the deficit while slicing out the president's aim to seek more cash for the Treasury Department's financial industry bailout.House Budget Chairman John Spratt Jr., D-S.C., said his companion blueprint would help push Obama's overhaul of the U.S. health care system through Congress without the threat of a GOP filibuster in the Senate, according to the Associated Press.
White House budget director Peter Orszag praised the House blueprint as well as the Senate version, saying it would "fulfill the president's objectives" on health care, education, clean energy and deficit reduction, the Post reported.
The president's budget has come under heavy criticism from Republicans and some Democrats because of large projected deficits in the next several years.
In fact, the budget proposals the two committees released Wednesday dropped plans to extend Obama's signature $400 tax credit for most workers after it expires at the end of next year unless other taxes are raised to pay for it.
Congressional budget leaders planned to make the major revisions to Mr. Obama's spending plans after a Congressional Budget Office report showed his proposal would force the nation to borrow nearly $9.3 trillion over the next decade -- $2.3 trillion more than his administration had estimated.
The trimming of the budget comes as Republicans have been criticizing Mr. Obama's proposed increase in government spending and expressing outrage over the massive amounts Washington is spending on rescuing banks and addressing the economic downturn in a $787 billion economic stimulus plan.
The criticism came from some world leaders as well. Czech Prime Minister Mirek Topolanek, whose country holds the European Union presidency, said Wednesday that President Obama's stimulus package and banking bailout "will undermine the stability of the global financial market," quoted the Associated Press.
Jean-Claude Juncker, chairman of the Eurogroup forum of euro zone finance ministers, dismissed President Obama's calls for leading economies to spend more in concerted action, saying on Wednesday that Europe was already doing enough to pump money into the world economy, according to Reuters.
The comments came before a meeting of the Group of 20 industrialized countries next week in London. Most European leaders favor tighter financial restrictions, while the United States has been pushing for larger economic stimulus plans.
European governments say their welfare safety nets automatically pump more money into their economies, on top of the formal stimulus packages they have announced.
The host of the summit, British Prime Minister Gordon Brown, praised Mr. Obama on Tuesday for his willingness to work with Europe on reforming the global economy.