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WASHINGTON (Reuters) - President Barack Obama vowed Saturday to stick to the big-ticket items in his budget proposal but acknowledged that dollar amounts would "undoubtedly change" as Congress prepared to take up his record spending plan.

Trying to refocus attention from the AIG (nyse: AIG - news - people ) bonus scandal that has drawn public outrage, Obama stepped up defense of his $3.55 trillion budget for fiscal 2010, a linchpin of his efforts to rescue the ailing economy from the worst crisis in decades.

"It's an economic blueprint for our future, a vision of America where growth is not based on real estate bubbles or over-leveraged banks, but on a firm foundation of investments in energy, education and health care that will lead to a real and lasting prosperity," Obama said in his weekly radio address.

The budget committees of the Senate and House were set to begin crafting their budget legislation next week.

Republicans and even some of Obama's fellow Democrats who control Congress have complained that his budget, the first of his presidency, is too costly. It projects deficits of $1.75 trillion this fiscal year and $1.17 trillion next fiscal year.

Congressional budget experts Friday offered a darker economic and budget outlook, projecting a $1.8 trillion deficit this year which could complicate Obama's efforts to win passage of his 2010 budget.

Taking on his critics, Obama said: "These investments are not a wish list of priorities that I picked out of thin air.

"They are a central part of a comprehensive strategy to grow this economy by attacking the very problems that have dragged it down for too long: the high cost of health care and our dependence on foreign oil, our education deficit and our fiscal deficit."

Reminding listeners that he had inherited a "fiscal mess" from his Republican predecessor, George W. Bush, Obama -- who took office on Jan. 20 -- reiterated his pledge to cut the federal deficit in half by the end of his term.

But he acknowledged room for compromise on a final budget deal. "As the House and the Senate take up this budget next week, the specific details and dollar amounts in this budget will undoubtedly change," Obama said. "That's a normal and healthy part of the process.

He urged lawmakers to act with a sense of urgency, saying "the challenges we face are too large to ignore." (Editing by Chris Wilson)

President Obama's health care budget plays to nearly every type of constituent.

There is $6 billion set aside for cancer research and more than $70 million to improve access and quality to health care in rural areas. He's allotted $330 million to address chronic shortages of health care professionals. Even autism disorders and teen pregnancy prevention are earmarked to receive extra dollars.

But more likely to affect consumers directly are proposed changes to Medicare, the government program that provides health coverage to 37.6 million Americans over the age of 65.

Changes to Medicare, including the elimination of no-bid private plans, are expected to net a savings of $316 billion in the next decade.

These savings, combined with $318 billion in revenue generated from a tax increase on individuals and families who earn more than $200,000 and $250,000, respectively, make up a $634 billion so-called down payment on expanding health coverage to millions of uninsured Americans.

The end goal, according to administration plans released last week, is to simultaneously improve access and quality of care while containing the cost. (Currently at $2.1 trillion, health care spending accounts for 16% of the nation's gross domestic product.)

"I don't see anything in the budget that would lead to a reduction of quality of care," says Karen Davis, president of the Commonwealth Fund, a private foundation that supports health care research. "It's driven by rewarding providers who [are more efficient] and targets excesses."

Slowing tax revenues and a historic bailout of the U.S. financial system will drive the annual budget deficit to nearly $1.2 trillion this year, even without the massive economic stimulus package now under review by Congress, the Congressional Budget Office reported this morning.

As chief executive of Mercy Corps since 1994, Neal Keny-Guyer helped turn the Portland (Ore.) relief organization into a global powerhouse with 3,500 employees and a budget of nearly $300 million. But he was taken aback last year when one of his lieutenants proposed the radical step of buying a bank in Indonesia. Why would a not-for-profit disaster relief agency go the capitalist route and buy a bank?

Gradually, though, he warmed to the idea. He saw that, if Mercy Corps operated a wholesale bank that could offer capital to some 2,000 local microcredit organizations and had an ATM network, it could help turn microfinance into a powerful force in Indonesia. Keny-Guyer was in uncharted territory, however. In the last days before the acquisition closed in May, he feared the risky gambit would end in disaster. "I imagined a newspaper headline saying, `Mercy Corps' Bank in Bali Fails,' " he recalls. "I thought of the reaction of our donors to that bit of news."

Now, as the renamed Bank Andara cranks up operations, Keny-Guyer is hopeful. If the strategy works in Indonesia, he says, Mercy Corps may try it in the Philippines next.

This departure from business as usual in the nonprofit realm is part of a major shift in the way people are taking on the world's social problems. In developing nations and parts of the U.S., governments have failed to make substantial progress against poverty, disease, and illiteracy. Traditional charities and social service agencies often provide Band-Aids for problems instead of long-term solutions. Now a new breed of do-gooder—the social entrepreneur—is trying fresh approaches. While the term is used in many different ways, there's a narrow definition that gets to the heart of what makes these people stand out: Rather than depending solely on handouts from philanthropists, social entrepreneurs generate some of their own revenues and use business techniques to address social goals. "Traditional ways of doing things haven't produced the kind of progress we all hoped for, so we're trying to come up with new approaches that are truly transformational," says Keny-Guyer.

The idea of the social entrepreneur has been percolating for decades, but it has become a mass movement in the past couple of years. Thousands of people are launching ventures and trying out new business models, both for-profit and nonprofit. Now that the global financial crisis is squeezing charitable giving, socially oriented organizations are pushing even harder to reduce their dependence on donors and generate their own funds. Lehman Brothers, for instance, was a generous backer of both nonprofits and social entrepreneurs. No more. In this climate, only the most efficient and effective organizations will thrive.

Social entrepreneurs are being backed in part by a new generation of super-aggressive philanthropists and social investors, including Microsoft (MSFT) co-founder Bill Gates and former eBay (EBAY) executives Pierre M. Omidyar and Jeffrey Skoll. These guys expect results from their social investments and grants. Says Gates in an interview with BusinessWeek: "Nonprofits are applying what we've typically thought of as business strategies for better outcomes, and businesses are beginning to apply what I call creative capitalism strategies to increase the positive social impact of their work. That's a powerful combination." He believes the most effective way to make social progress is through partnerships among nonprofits, businesses, government, and philanthropists.

President-elect Barack Obama named Peter Orszag as his budget director on Tuesday and said his job will be to conduct a thorough review of federal spending programs, "eliminating those programs we don't need and insisting that those we do need operate in a cost-effective way."

With the economy in crisis, Obama said, "Budget reform is not an option. It's a necessity."

Echoing Abraham Lincoln, Obama added, "I will ask my economic team to think anew and act anew."

Orszag is the director of the Congressional Budget Office, a man who the president-elect said "knows where the bodies are buried."

Obama's focus on careful federal spending marked something of a contrast from Monday, when he declared that restoring the economy to health took priority over the budget deficit. He called on Congress to prepare an economic stimulus program for him to sign as soon after Inauguration day as possible. Estimates of the measure range from $500 billion to $700 billion over two years.

"We are going to have to jump-start the economy ... but we have to make sure that those investments are wise. We have to make sure we are not wasting money in every area," he said Tuesday, defining the two objectives that will guide his economic program.

Elected in an Electoral College landslide, Obama claimed "a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix we are in."