The mayor is required by law to present at preliminary budget by the end of July. Friday's draft spending plan was heavy on theme but light on details.
"We have come to that moment of truth as a city," he said. "This system needs reform. It is calling out for it."
Emanuel made it clear early on that Chicago's fiscal problems are rooted not in the recession but rather in the last decade of the Daley administration as documented in the 54-page draft budget.
"Looking back over 10 years, what this shows is that the city of Chicago every year since 2001 has run a deficit," he said.
Emanuel would not offer specifics on where or how he will find $635 million in cuts to balance the 2012 budget. His only promise is that his plan will not include reductions in police patrols or a tax increase of any kind next year.
"I can't ask people to pay more money into a system that needs fundamental restructuring," the mayor said.
"He's going to restructure and thus reduce the cost of city government and that's how he's going to balance that budget,'" said Laurence Msall, Civic Federation.
The mayor repeated his call for union work rule changes and let organized labor know he will give their work to private companies if the public worker unions cannot do it for less money.
"Competition will get the service at the most competitive price for the taxpayers," said Emanuel.
Earlier this week, the Chicago Federation of Labor recommended $242 million in savings, including cutting top-heavy management. Union leader Henry Bayer says privatization is no guarantee of better service.
"You could have a well-run private business just as you could have a well-run government," said Bayer.
Finally, Emanuel was asked if his no tax increase pledge applied to years after 2012.
"I'm not saying anything about 2013, as it relates to 2012. I am not going to ask people who have been nickeled and dimed to pay more for a system that has not been restructured," he said.
Emanuel promises a detailed budget proposal including specific cuts and restructuring on October 15. He also has invited taxpayers to make recommendations online at www.chicagobudget.org. The budgeteers promise to read every suggestion as it looks for ways to reduce the $635 million deficit.