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In November the city passed a budget to close a $469m shortfall.
With no sign of a new budget to close this chasm, one credit agency has already downgraded California's debt.
Mr. Obama will propose that Congress adopt some of the provisions proposed in his annual budget to close corporate tax loopholes.
The administration has asked each city agency to come up with a list totaling 7.5percentt of its budget to close a projected $5 billion gap in the city's budget for next year.
Mayor Bloomberg spoke of the taxes a day before his planned announcement of his proposal to modify this year's budget to close a deficit of as much as $1 billion.
Unlike last year, when the mayor and the Council fought over how to cut the budget to close a yawning deficit, this year the debate centers on the opposite: how to spend surplus funds no one foresaw a year ago.
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Governor Paterson is "taking over" budget cuts to close the state's 9.2-billion-dollar deficit.
Barack Obama's budget proposes to close loopholes which allow American companies to use offshore centres to avoid taxes.
Mr Paterson will need every ounce of charm to pass a $124 billion budget and to close a $4.4 billion deficit by April 1st.
They merely needed some help from the government and the central bank — rather than budget cuts — to close the output gap.
The budget intends to close a $3.3 billion deficit in the next fiscal year.
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