President Barack Obama will forecast a 2009 deficit of $1.75 trillion on Thursday in a budget that covers big goals including reforming the health care system and stabilizing the U.S. economy, an administration official said.

The huge deficit figure, to be published in the president's budget later on Thursday, would represent 12.3 percent of the U.S. economy -- its largest share since World War II.

Obama, a Democrat, has pledged to halve the more-than $1 trillion deficit he inherited from former Republican President George W. Bush by early 2013, when his current term in office ends. The budget lays out a series of spending cuts in agriculture subsidies and other areas to meet that goal.

Two senior administration officials, speaking on condition of anonymity, laid out broad outlines of the budget ahead of its release and said Obama's expensive policy goals would be offset by cuts to put the country in better fiscal shape.

"There's no doubt that there are going to be things that we do that are going to create some political heartburn," one official said.

"But our fundamental mission is restore the health of the economy, put the budget on a better (footing) moving forward."

One official said Obama expected the deficit to decline steadily in the coming years, reaching $533 billion by 2013. He said the deficit would represent 3 percent of the economy that year and stabilize from there.

"$250 bln more for financial rescue"

The administration officials said that Obama's budget pencils in the possibility that he may request an additional $250 billion to help fix the trouble U.S. financial system.

Any additional request to Congress would come on top of the $700 billion financial bailout program that was enacted last year to deal with the overhang of bad mortgage debt that is hindering banks' ability to lend.

The administration officials, who spoke on condition of anonymity, emphasized that no decision has been made about whether to make a formal request to Congress for more money or how much Obama might seek.

One official said the $250 billion was put in the budget in the interests of "honest accounting" and is "nothing other than a placeholder should legislative action be necessary."

The official said that if the government were to spend $250 billion to inject money into the banking system, that would finance about $750 billion in asset purchases.

The bailout has proven to be highly unpopular with many Americans who see it as rescuing Wall Street bankers and others who made risky bets on the mortgage market.

Reuters