Herbert/AP President-elect Barack Obama speaks to reporters after a meeting with his top economic advisers Tuesday.

WASHINGTON-President-elect Barack Obama forecast trillion-dollar deficits for “years to come” on Tuesday,arguing that the government has no choice but busting the federalbudget to rescue a precarious economy.

“We’re already looking at a trillion-dollar budget deficit or closeto a trillion-dollar budget deficit,” Obama told reporters at a meetingwith his economic team.

“Potentially we’ve got trillion-dollar deficits for years to come,even with the economic recovery that we are working on at this point,”he warned.

The federal deficit stood at $455 billion when the 2008 fiscal year ended Sept. 30, 2008.

Obama wants to pump at least $775 billion into the economy through a two-year stimulus spending plan. Senate Democratic leader Harry Reid of Nevada this week predicted the plan could be in the ballpark of $1.2 trillion.

“Obama is sending a plan to Congress knowing it’s going to increase.The $775 billion is just a baseline. It could balloon to over atrillion dollars,” said a Senate leadership source.

Obama’s economic rescue package includes a $300 billion middle-classtax cut and comes on top of the $800 billion bailout plans for theailing finance and banking industries and the Big Three automakers.

“We’re going to be investing an extraordinary amount of money tojump-start our economy, save or create 3 million new jobs, mostly inthe private sector, and lay a solid foundation for future growth,”Obama said.

He wants to expand unemployment benefits, increase food stampallotments and boost construction jobs. He also is consideringsubsidizing up to 65% of health insurance costs for laid-off workers,sources confirmed to the Daily News.

Obama took a jab at President Bush, saying his administration will restore transparency and accountability to government.

Sen. Chuck Schumer (D-N.Y.) is pushing to include an expanded college tuition tax credit somiddle-class families can write off $4,000 per child. Obama likes theidea, but isn’t sure it should be included in the stimulus legislationor a separate bill.

Senate GOP leader Mitch McConnell of Kentucky urged Congress to proceed slowly – ignoring climbing unemployment,slumping housing and retail sales, a gridlocked credit market andskyrocketing tuition costs.

“We should encourage, not discourage questions,” said McConnell, whowarned Democrats against a “reckless rush to meet an arbitrarydeadline.”

But as the measure is cobbled together, the President-elect againput Congress on notice he won’t tolerate a plan that includespork-barrel “earmarks” for projects like Alaska’s notorious bridge to nowhere.

“I’m saying there are no earmarks in the recovery package. That is the position that I am taking,” Obama said.

Congress has pledged to curtail the often politically motivatedearmarks – money appropriated in the middle of the night for petprojects.

A senior Senate source disclosed Obama is working most closely with House Speaker Nancy Pelosi (D-Calif.) on the spending plan.

“The Senate is going to play follow the leader on this one. Obamahas decided Pelosi is the person to drive the stimulus package. We’rejust going along for the ride,” the Senate source said.

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