President Barack Obama on Tuesday urged Congress to head off deep, automatic spending cuts set to hit the Pentagon and other federal agencies on March 1 and replace them, at least for a few months, with a new debt-reduction package that includes fresh tax revenue.

As Obama spoke, the nonpartisan Congressional Budget Office rolled out new projections showing that the spending battles of the past two years have helped shrink record budget deficits but have also hampered economic growth.

The deficit — the annual gap between taxes and spending — is projected to fall to $845 billion this year, the first time it's come in under $1 trillion since 2008.