The report, due early next month, could crystallize for voters the harsh realities of the cuts that would have to be made automatically Jan. 2 under sequestration, Politico reported.
Consensus on where to make the initial cuts could be difficult. Democrats want to save domestic programs, while Republicans want to preserve military spending.
The president is required to make the across-the-board spending cuts, known as "sequestration," after a bipartisan committee failed last year to agree on a plan to cut the budget and increase taxes.
The cuts should not be necessary, Jeffrey Zients, director of the Office of Management and Budget, told the House Armed Services Committee last week.
"The right course is not to spend time moving around rocks at the bottom of a cliff to make for a less painful landing," he said. "The right course is to avoid driving off the cliff altogether."
The administration is prepared to be realistic. Zients has sent out a memo to federal agencies telling them to begin thinking about where to cut.