WASHINGTON – The White House on Monday presented President Bush's $2.57 trillion budget, laying out a plan for fiscal 2006 that includes major spending cuts.
The budget, which begins Oct. 1, depends on a healthy economy to boost revenues by 6.1 percent to $2.18 trillion. Spending, meanwhile, would grow by 3.5 percent to $2.57 trillion.
"It is a budget that sets priorities — our priorities are winning the War on Terror, protecting our homeland, growing our economy. It's a budget that focuses on results," the president said after meeting with his Cabinet.
Calling the budget a "lean" one that included spending reduction requests from both sides of the political aisle, Bush said, "Congress needs to look at this budget and Congress needs to act on this budget in a fiscally responsible way."
Bush's proposal restrains the growth in discretionary programs to less than 2.3 percent while defense and homeland security are slated for large increases.
Of the 150 programs where cuts are proposed, the budget included reducing subsidies paid to the nation's farmers, cutting health care payments for poor people and veterans and trimming spending on the environment and education.
The proposal does not include the estimated $80 billion in future expenses in Iraq or Afghanistan but does give $419 billion to the Defense Department — a 4.8 percent increase from last year.
"This budget represents the latest installment in the president's strong commitment to transforming this department to face the challenges of the 21st century," Defense Secretary Donald Rumsfeld (search) said in a statement Monday. "We continue our transition to a more agile, deployable and lethal force."
But even with the increase, a number of major weapons programs, including the missile defense system and the B-2 stealth bomber (search), would see cuts from current levels.
Vice President Dick Cheney (search), in an exclusive interview with Chris Wallace of "FOX News Sunday," described the budget as the tightest since the president arrived in Washington.
"I think you'll find, once people sit down and have a chance to look at the budget, that it is a fair, reasonable, responsible, serious piece of effort," Cheney said in the interview. "It's not something we've done with a meat ax, nor are we suddenly turning our backs on the most needy people in our society."
To read more of Cheney's interview, click here.
Of 23 major government agencies, 12 would see their budget authority reduced next year, including cuts of 9.6 percent at the Department of Agriculture and 5.6 percent at the Environmental Protection Agency.
In his budget message to Congress, Bush said: "In order to sustain our economic expansion, we must continue pro-growth policies and enforce even greater spending restraint across the federal government."
The budget did not, however, include the cost of Bush's No. 1 domestic priority — overhauling Social Security. That fight is expected to be a nasty one.
The administration argues that the system is too broken to leave untouched and the future of the program is in peril in its current state, but Democrats argue that the program doesn't need a radical overhaul.
"Reform in Washington never comes easy, but I think doing it today or doing it a year from now is more manageable than doing it 10 years from now," Matthew Dowd, chief strategist for Bush's re-election campaign, told FOX News on Monday. "The Democrats as of yet have offered no alternative."
Joshua Bolten, the president's budget director, said the administration would soon be coming forward with a supplemental request for an additional $81 billion for operations in Iraq and Afghanistan. He said that request was reflected in the overall spending projections in Bush's budget for the current year and into 2006.
But he said including further additional spending for Iraq and Afghanistan "wouldn't be responsible" because it would represent guesses on what will be needed. Bolten also said that even if transition costs for Social Security had been included, the president would still be able to meet his goal of cutting the deficit in half by 2009 as a percentage of the total economy.
Dems Call Budget a 'Hoax'
Democrats complained that Bush was resorting to draconian cuts that would hurt the needy in order to protect his first-term tax cuts.
"This budget is part of the Republican plan to cut Social Security benefits while handing out lavish tax breaks for multimillionaires," said Senate Democratic Leader Harry Reid (search) of Nevada. "Its cuts in veterans programs, health care and education reflect the wrong priorities and its huge deficits are fiscally irresponsible."
House Democratic Leader Nancy Pelosi (search) called the Bush budget proposal "fiscally irresponsible, morally irresponsible and a failure of leadership."
"The president's budget is a hoax on the American people. The two issues that dominated the President's State of the Union Address — Iraq and Social Security — are nowhere to be found in this budget," Pelosi said in a statement.
"Further, the budget should be a statement of our national values, but this budget is an assault on our values," she added, referring to cuts for first-responders, community policing initiatives and education and health care cuts.
The Education Department is taking a $4.3 billion hit in programs such as federal grant programs for local schools in areas like vocational education, anti-drug efforts and the $225 million literacy program called Even Start (search).
But the budget includes a new $1.5 billion high school performance program, expanded Pell Grants (search) for low-income college students, job-training efforts and more support for community health clinics.
Voters, however "don't want to see cuts in the health care, they don't want to see cuts in education, that's not what they voted for," said Democratic pollster Anna Greenberg.
The deficit is projected to reach a record $427 billion this year; Democrats predict the Bush budget will produce a $6.1 trillion deficit over the next decade.
But the White House still remains committed to its goal; the president projects that the deficit will fall to $390 billion in 2006 and gradually decline to $233 billion in 2009 and $207 billion in 2010.
In fact, critics say Bush's plan only achieves its deficit-reduction goals by leaving out big-ticket items such as the cost of keeping troops in Iraq and Afghanistan and paying for his No. 1 domestic priority — overhauling Social Security (search) by permitting younger workers to set up private accounts.
"Today's administration budget brings more bad news for the U.S. economy and American taxpayers," South Carolina Rep. John Spratt (search), the ranking Democrat on the House Budget Committee, said in a statement.
"For the third year in a row, the administration's budget calls for a new record deficit, $427 billion. The administration has failed to offer a credible plan to cut the deficit in half, as the president promised ... this budget continues the wrong choices and misplaced priorities that have created record deficits and rising debt over the last four years."
Agriculture, Education and Health Care
Also omitted was the cost of making Bush's first-term tax cuts permanent or fixing the problem of the alternative minimum tax (search), which was designed to tap the wealthy but is ensnaring more and more middle-income taxpayers.
One of the most politically sensitive targets on Bush's hit list is the government support program for farmers, which he wants to trim by $587 million in 2006 and by $5.7 billion over the next decade. Price supports would be reduced for a wide range of crops, from cotton and rice to corn, soybeans and wheat.
Overall, the administration projected saving $8.2 billion in agriculture programs over the next decade including trimming food stamp payments to the poor by $1.1 billion.
Other programs set for cuts include the Army Corps of Engineers (search), whose dam and other waterway projects are extremely popular in Congress; the Energy Department; several health programs under the Health and Human Services Department and federal subsidies for the Amtrak passenger railroad.
In all, the president proposed savings of $137 billion over 10 years in mandatory programs with much of that occurring in reductions in Medicaid, the big federal-state program that provides health care for the poor, and in payments the Veterans Administration makes for health care.
The administration proposed no savings for Medicare, the giant health-care program for the elderly.
The White House is, however, proposing over $300 million to build more community health centers, especially in rural areas. The president also is expected to earmark $3.2 billion to fight the global AIDS epidemic.
Last year, the president proposed eliminating 65 programs and sharply cutting spending in 63 others. However, only four programs were abolished, while spending was cut in 20 others, according to the House Appropriations Committee.
FOX News' Megyn Kendall and Liza Porteus and The Associated Press contributed to this report.