Highlights: Obama budget sees deficit soaring in 2010

WASHINGTON (Reuters) - President Barack Obama on Monday unveiled a budget that projected the 2010 deficit soaring to a post World War Two high of $1.56 trillion, or 10.6 percent of the economy, but falling steeply in following years to half that level by the time his term ends in 2012. The following are highlights from the budget:

CUTTING $1.2 TRILLION FROM DEFICIT

The budget forecasts cutting $1.2 trillion from the deficit over the next 10 years.

- The largest saving will come from Obama's plan to allow 2001 and 2003 tax cuts on wealthy American families earning more than $250,000 a year to lapse on schedule next year, boosting revenue by $678 billion over 10 years.

- Obama has also proposed saving $250 billion from the budget by 2020 by imposing a three-year freeze starting in fiscal 2011 on domestic spending outside of national security. The budget will identify 120 federal programs to curb, including the NASA space agency's Constellation project to develop human spaceflight and return an American to the moon.

- In addition, Obama seeks revenue of $90 billion from big financial firms via a fee to recoup losses taxpayers suffered when they bailed out the banking industry during the 2008 financial crisis. A further $40 billion over 10 years will be saved by eliminating subsidies for oil, gas and coal companies.

FISCAL COMMISSION

- Obama plans to create a bipartisan fiscal commission to get the country's finances in order by examining potential tax hikes and spending cuts, but the White House said the exact timing of the executive order was still being discussed.

- Commission will be charged with balancing the primary budget -- excluding interest payments on debt -- by 2015, which adds up to a deficit-to-GDP goal of 3 percent if those costs are included.

$100 BILLION FOR JOBS

- $33 billion in tax credits aimed at small businesses who hire more workers or increase their payrolls, which Obama announced on Friday.

- $6 billion for clean energy investment, mainly focused

in research and development.

- $4 billion for a new National Infrastructure Innovation and Finance fund

- Extending the Making Work Pay tax credit for middle class families for another year for most American families, at a cost of $61.2 billion over the next decade. The credit phases out for people who make more than $75,000 a year or couples earning over $150,000.

- Increasing child-care tax breaks, eliminating capital gains tax from new investments in small businesses and extending a break for small businesses to encourage investment.

DEFENSE

- $33 billion for a 2010 supplemental request to cover Obama's decision to deploy more troops to Afghanistan

- $159.3 billion for 2011 to support ongoing foreign operations including Obama's strategy in Afghanistan and Pakistan.

- Increasing Department of Defense family support programs by 3 percent to $8.8 billion.

MONEY FOR AIR SAFETY

- The budget includes $734 million to help fund the deployment of up to 1,000 "Advanced Imaging Technology" screening machines at airports as well as new equipment to detect explosives in baggage.

(Reporting by Alister Bull, Caren Bohan and Jeff Mason; Editing by Eric Walsh)