Obama to set big goals in first budget

By Caren Bohan

WASHINGTON (Reuters) - President Barack Obama's budget this week will set out big goals: to rescue the economy from freefall, expand U.S. health care coverage and move within a few years to slash huge deficits.

The budget, due out on Thursday, will indicate Obama's timeline for achieving many of the domestic priorities he pushed during the campaign.

Sources familiar with the administration's thinking have said the blueprint will reflect Obama's interest in moving forward on a pledge to expand health care coverage to the 46 million Americans who lack it.

Health care will be an important theme all week, including in Obama's address to a joint session of Congress on Tuesday night in which he will sketch out his major domestic and foreign policy goals.

Steps to tackle global climate change could also be incorporated in the budget for the 2010 fiscal year that begins on October 1.

At the same time, it will show the impact on the budget deficit of the recently passed $787 billion (541 billion pounds) economic recovery package, the largest fiscal stimulus in history.

The stimulus is the centrepiece of initiatives Obama has put forth to jolt the economy out of a year-long recession.

While acknowledging the stimulus added massively to the government's red ink, Obama will promise budgetary discipline in the future, a theme he will highlight at a bipartisan "Fiscal Responsibility Summit" at the White House on Monday.