President Barack Obama on Wednesday proposed a $3.77 trillion budget he called "a fiscally responsible blueprint for middle class jobs and growth" that he says will reduce the deficit.

Setting up an expected fight with Congress, Obama wants $563 billion in tax increases aimed at the wealthy and $78 billion over 10 years from new cigarette taxes and assumes a deal to roll back the sequester cuts will be struck.

And Obama is counting $1.384 billion in savings from winding down the wars in Iraq and Afghanistan and $452 million in cuts to a program that provides funding for heating assistance for low-income households. The budget also includes major cuts to farm subsidies, cuts to the LIHEAP heating programs for the poor, lowering the budget for detaining illegal immigrants, new embassy security as recommended by the Benghazi Review Board and $222 million for gun control efforts.

"The American people deserve better than what we've been seeing, the short-sighted, crisis-driven spending cuts that are already hurting a lot of communities out there," Obama said at the White House. "If we want to keep rebuilding our economy on a stronger, more stable foundation, then we've got to get smarter about our priorities as a nation."

Read more at Politico.