President George W Bush has proposed a $2.4 trillion election-year budget that would increase defence spending, cut 128 programmes, and seek to cut this year's record deficit in half.
But $50 billion extra is needed for military operations on top of the agreed $400 billion, and there is scepticism that the deficit can be significantly addressed.
After inheriting a surplus from Mr Bill Clinton, President Bush has overseen a dramatic worsening of the US economy. But in recent months there have been signs of a recovery, although unemployment remains stubborn.
Mr Bush hopes his electoral prospects will be boosted before November's poll by laying out plans to reduce the record $521 billion deficit by a third next year and in half between 2007 and 2009.
But he is asking Congress to terminate 65 major programmes and reduce another 63, reserving the bulk of new federal spending for homeland security and defence while making his tax cuts permanent.
Among the programmes to be scrapped are $149 million allocated for public housing and $171 million for the Commerce Department advanced technology programme.
The White House still expects the budget shortfall to total $1.35 trillion through 2009 and government debt to rise from $8.1 trillion to $10.5 trillion, prompting warnings from Democrats that chronic deficits would crowd out private investment, drive up interest rates and slow economic growth.
Mr Bush said he was "confident" his deficit targets would be met, but Democrats and Republicans expressed doubts and said they were bracing for a bitter fight between the White House and Congress that could stretch through the campaign season.