Washington: President Barack Obama's fiscal 2016 budget proposes $7.4 billion to fund clean energy technologies and a $4 billion fund to encourage U.S. states to make faster and deeper cuts to emissions from power plants, officials told Reuters.

Obama's budget, which will be published later on Monday, also calls for the permanent extension of the Production Tax Credit, used by the wind industry, and the Investment Tax Credit, used by the solar industry, the officials said.

Obama has made fighting climate change a top priority in his final two years in office. The White House sees it as critical to his legacy.

The investment in clean energy technologies would cover programs primarily at the Department of Energy and Department of Defense, the officials said.

The $7.4 billion figure is an increase from the $6.9 billion proposed in Obama's fiscal 2015 budget and over the $6.5 billion enacted by Congress for this year.

The administration is finalizing controversial rules that will slash carbon dioxide emissions from power plants nationwide. The new fund would give states incentives to speed up that process or go further than their mandated cuts, the officials said.

"They have the opportunity to really ... set their sights higher and lock into an even more ambitious trajectory when it comes to clean energy," one official said, speaking on condition of anonymity ahead of the budget's formal release.

In addition, the budget provides $400 million to help communities assess flood risks.

It also spells out the costs to the federal government of climate-related disasters, highlighting a fiscal argument to fight global warming. The United States has taken on over $300 billion in direct costs resulting from extreme weather and fire in the past decade, the budget says.

At present, those earnings are supposed to be taxed at a 35-percent rate, but many companies avoid that through the loophole that defers taxation on active income that is not brought into the United States, or repatriated.

The $238 billion raised from the one-time tax would fund repairs and improvements to roads, bridges, transit systems and freight networks that would replenish the Highway Trust Fund as part of a $478 billion package, the White House said.

Obama's budget will set a spending target of $4 trillion for fiscal year 2016, including a $474 billion deficit, which would represent a manageable 2.5% of U.S. Gross Domestic Product, The New York Times reported on Sunday. The budget also includes $105 million for ‘trade adjustment assistance’ to help workers who have been affected by free trade pacts, it said.

Obama's latest tax proposals are part of a broad tax reform package that he says is meant to help middle-income Americans.