Despite seeking extra funding for the military in Iraq and Afghanistan, Bush said he would balance the overall budget within five years, partly through cuts on health care and other non military spending including environmental protection.

Health cuts

He is seeking $78bn in savings through cuts in the government's big health care programmes, Medicare for the elderly and Medicaid for the poor, over the next five years.

Bush's plan would make tax cuts passed in 2001 and 2003 permanent, at a cost of $1.6 trillion over 10 years.

The budget called for a four per cent cut in the Environmental Protection Agency's budget to $7.2bn while education outlays were held at $56bn.
 

Only World War II has cost the US taxpayer
more than the conflict in Iraq [AFP]

"Our priority is to protect the American people. And our priority is to make sure our troops have what it takes to do their jobs. We also have got priorities in national parks, in education, in health care," Bush told reporters at a meeting of his Cabinet.

"But we have proven - and I strongly believe Congress needs to listen to a budget which says no tax increase and a budget, because of fiscal discipline, that can be balanced in five years."

Spiralling cost

So far the wars in Iraq and Afghanistan have cost US taxpayers $360bn. Bush would spend $100bn more in 2007 and $145bn next year.

The Iraq war has already surpassed the cost of the Vietnam war in inflation-adjusted dollars with only World War II more costly.

The budget includes a $141.7bn request in emergency appropriations to fund the government's war on terror in the 2008 fiscal year starting October 1.

It also includes a $93.4bn request in supplemental appropriations for 2007 to support ongoing military missions overseas.
 

"The president's proposal, if approved, would take us right over the cliff into a chasm of debt"

Kent Conrad, US senator

The budget request means the US would spend 11 per cent more on the military next year and aside from ensuring the US military gets enough new tanks, helicopters and munitions, the proposal also seeks to fund a planned increase in the size of the armed forces.

It foresees funding to pay for an increase in the size of the US army to 547,400 personnel from its current 482,400 by 2012.

Strong opposition

The spending plans project that the US will have spent $661.9bn in its global war on terror since the 2001 attacks on New York and Washington.

Senior Democrats were quick to voice their criticism of the budget proposal.

Pelosi said: "Today's budget from the president is just more of the same fiscal irresponsibility and misplaced priorities; it takes our country in the wrong direction."

Harry Reid, the Democrat's majority leader in the Senate, promised to give Bush's 2008 budget a "tough" review.

Another Senator, Kent Conrad, said: "The president's proposal, if approved, would take us right over the cliff into a chasm of debt."