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US President George W. Bush sent Congress a US$2.77 trillion budget on Monday for the fiscal year of 2007, which provides big increases for defense but squeeze other government programs in an effort to cut budget deficit.

The spending plan for the fiscal year beginning next Oct. 1 would be up by 2.3 percent from projected spending of US$2.71 trillion this year.

"My administration has focused the nation's resources on our highest priority - protecting our citizens and our homeland," Bush said in his budget message.

"Working with Congress, we have given our men and women on the front lines in the war on terror the funding they need to defeat the enemy and detect, disrupt and dismantle terrorist plots and operations," he said.

Under the proposed budget, military spending would rise by 6.9 percent to US$439.3 billion in 2007. That is the biggest spending increase in the budget. The plan of US$439.3 billion does not include the costs of fighting wars in Iraq and Afghanistan.

Last week, the administration said it would ask Congress for an additional US$120 billion to cover fighting for the rest of this year and the early part of 2007. The administration would seek another US$18 billion in hurricane relief this year.

The Department of Homeland Security would also see a spending increase of about 5 percent from this year's funding of US$30.8 billion, not counting emergency spending to recover from last year's hurricanes in the gulf coast region.

On the other hand, the budget calls for the elimination of reduction of 141 government programs for a savings of US$14.5 billion.

The spending in Medicare, the government's giant health care program for the elderly and disabled, would be cut by US$35.9 billion over five years. Similar reductions would be made in a number of other benefit programs.

Other proposed savings in so-called mandatory spending, which means the payments are set in law for all who are eligible, include US$4.99 billion in changes in farm commodity programs, and US$16.7 billion in reforms of the Pension Benefit Guaranty Corp., the government program that backs private pensions.

Nine of the 15 Cabinet-level agencies would see outright cuts in their discretionary spending for next year.

Even programs not targeted for elimination are subject to tight budgets including such previously favored agencies such as the National Institutes of Health, where spending overall essentially would be frozen at the current level next year.

Set for higher spending are programs to address soaring energy costs through development of alternative fuels, rising medical bills through expanded health savings accounts and global competition through a new "American Competitiveness Initiative", unveiled in Bush's State of the Union address.

The initiative would extend an expired business tax break for research and development, double the government's commitment to basic scientific research and train more teachers in science and math.

According to the administration, the budget deficit for this year will soar to an all-time high of US$423 billion. That reflects increased spending for the Iraq war and hurricane relief.

The administration says that the 2007 budget would keep the government on a path to achieve Bush's goal of cutting the federal deficit in half by 2009.

Congress will spend many months debating Bush's proposals and the budget lawmakers eventually adopt may differ significantly from the proposals.

(Xinhua News Agency February 7, 2006)