But congressional Republicans said the president's budget proposal would only deepen the deficit crisis while weighing down the economy with tax hikes.
The proposal Obama sent to Congress includes $350 billion in stimulus measures and $476 billion for transportation and infrastructure that would be partially paid for by savings from the end of the wars in Iraq and Afghanistan.
The budget blueprint would cut $4 trillion in spending over the next 10 years, Obama said during a speech at Northern Virginia Community College in Annandale, Va. It also includes raising $1.5 trillion through taxes.
Obama said he was proposing some difficult cuts that he said he normally wouldn't make "if they weren't absolutely necessary. But they are."
"And the truth is, we're going to have to make some tough choices in order to put this country back on a more sustainable fiscal path," he said. "We can't cut back on those things that are important for us to grow. We can't just cut our way into growth."
He said his plan would end tax breaks for companies that ship jobs overseas and give them to companies creating jobs in the United States.
The nation's dependence on foreign oil can be reduced by "ending the subsidies for oil companies and doubling down on clean energy that generates jobs and strengthens our security," he said.
"And to make sure our businesses don't have to move overseas to find skilled workers," Obama called for investments in the nation's community college system to graduate a skilled workforce and ensure "higher education is affordable for every hardworking American."
The document would let expire the tax cut for the wealthy that was enacted during President George W. Bush's presidency, and would include the so-called "Buffett rule" of a 30 percent tax paid by households earning at least $1 million. The surtax was coined after billionaire Warren Buffett, who said he paid less in taxes than his secretary. He and several other millionaires have said they were willing to pay higher taxes.
"That's not fair. I don't need a tax break," Obama said.
To critics who charged Obama with engaging in class warfare, Obama responded "That's not class warfare; that's common sense."
The election-year budget proposal is unlikely to pass either the Republican-controlled House or the Senate, where Democrats lack the 60-vote filibuster-proof majority.
"Our nation needs Washington to demonstrate some courage with a budget that honestly addresses the near- and long-term challenges we face," House Speaker John Boehner, R-Ohio, said in a statement. "Instead, the president offered a collection of rehashes, gimmicks, and tax increases that will make our economy worse."
The budget would also produce a deficit of about $1 trillion for a fifth straight year, budget figures leaked to several news organizations indicated.
His budget plan also seeks increases for roads, infrastructure, manufacturing and education, as well as call for a year-long extension of emergency unemployment benefits and the temporary payroll tax holiday due to expire at the end of the month.
Obama said the budget request was a "reflection of shared responsibility."
"It says that if we're serious about investing in our future ... well, we've got to pay for it, and that means we've got to make some choices," he said. "And if we work together in common purpose, we will build an economy that lasts, and remind people around the world why America is the greatest country on earth," Obama said.