Obama's plan is likely to face fierce opposition from the Republican-controlled House because of its reliance on tax increases. He would let Bush-era tax breaks for families earning more than $250,000 lapse — an idea Republicans have repeatedly rejected but one that would save $866 billion. Those same families also would be limited in their deductions and exclusions, which could raise their taxes and would save the treasury $410 billion. Obama also proposed a guiding principle named after Warren Buffett that millionaires should not pay lower tax rates than middle-class workers.

But Republicans say the Obama plan would stifle the economy by levying higher taxes on job creators.

"Unfortunately, none of the president's proposals this year — from his February budget to his April budget speech, to his recommendations today — offers a credible plan to lift our crushing burden of debt while restoring economic growth," said House Budget Chairman Paul Ryan, R-Wis. "Instead of renewed prosperity, the president has offered us a plan for shared scarcity. The nation deserves better."

Obama took a challenging tone in drawing a line in the budget sand over taxes and Medicare.

"I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable."

Tamara Lytle is a freelance writer in the Washington, D.C., area who has covered government and politics for more than 20 years.