Obama sees economic hope as aides promote budget

By Jeff Mason and Richard Cowan

WASHINGTON (Reuters) - U.S. President Barack Obama expressed confidence on Tuesday his economic reforms would work as senior officials began lobbying Congress to support the administration's jaw-dropping budget proposal.

"We need economic growth and access to credit. That is what we are focused on in the next year or two," White House Budget Director Peter Orszag told the House of Representatives Budget Committee, formally launching the sales pitch for the $3.5 trillion spending plan for the 2010 fiscal year.

Orszag and Treasury Secretary Timothy Geithner defended the budget, which envisions a whopping $1.2 trillion deficit and proposes increasing taxes on the wealthiest Americans to help pay for domestic initiatives.

Some Republicans have criticized the proposed budget as a return to expensive Democratic-style big government, especially when it is combined with a $787 emergency economic stimulus package already pushed through by Obama and his fellow Democrats.

Orszag stressed that the budget includes $28 billion in loan guarantees to jump-start small business activity, while a much larger consumer lending program also was launched by the administration.

Obama hopes his 10-year budget plan will be the engine of economic growth, if Congress embraces it.

In a meeting with visiting British Prime Minister Gordon Brown on Tuesday, Obama said he was sure the U.S. economy would rally despite a weak near-term prognosis.

"I'm absolutely confident that credit is going to be flowing again, that businesses are going to start seeing opportunities for investment, they're going to start hiring again," he said.