The 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."
House Minority Leader Nancy Pelosi

"It's budget that sets priorities," Mr. Bush said after a meeting with his Cabinet. "It's a budget that reduces and eliminates redundancy. It's a budget that's a lean budget." 

Mr. Bush acknowledged that it would be difficult to eliminate popular programs but he said programs must prove their worth. "I'm very optimistic." 

Democrats immediately branded the budget a "hoax" because it left out the huge future costs for the war in Iraq and Afghanistan and did not include the billions of dollars that will be needed for Mr. Bush's No. 1 domestic priority, overhauling Social Security. 

The budget's arrival Monday on Capitol Hill sets off months of contentious debate, with lawmakers from both parties expected to fight to protect favorite programs. 

House Democratic Leader Rep. Nancy Pelosi of California called Mr. Bush's budget "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." 

Bush aides said that since the Social Security plan is still being developed, accurate cost estimates could not be made. 

Also not included in the budget is any new spending for military operations in Iraq and Afghanistan. The administration has said it will seek an additional $80 billion to cover the costs of those campaigns. 

The spending document projects that the deficit will hit a record $427 billion this year, the third straight year that the red ink in dollar terms has set a record. Mr. Bush projects that the deficit will fall to $390 billion in 2006 and gradually decline to $233 billion in 2009 and $207 billion in 2010. 

Mr. Bush's 2006 spending plan, for the budget year that begins next Oct. 1, counts 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. 

However, outside defense, homeland security and the government's huge mandatory programs such as Social Security, Mr. Bush proposes cutting spending by 0.5 percent, the first such proposed cut since the Reagan administration battled with its own soaring deficits. 

Of 23 major government agencies, 12 would see their budget authority reduced next year, including cuts of 9.6 percent at Agriculture, 5.6 percent at the Environmental Protection Agency, 6.7 percent at Transportation and 11.5 percent at Housing and Urban Development. 

In his budget message to Congress, Mr. 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." 

But Democrats complained that Mr. Bush was resorting to draconian cuts that would hurt the needy in order to protect his first term tax cuts that primarily benefited the wealthy. 

"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, D-Nev. "Its cuts in veterans programs, health care and education reflect the wrong priorities and its huge deficits are fiscally irresponsible." 

Critics also contend that the five-year deficit projections also mask the costs of some Bush initiatives such as making his first-term tax cuts permanent, the bulk of which do not show up until after 2010. The budget puts the 10-year cost of making the president's tax cut proposals permanent at $1.29 trillion. 

Mr. Bush's budget proposed increasing military spending by 4.8 percent to $419.3 billion in 2006. However, even with the increase a number of major weapons programs, including Bush's missile defense system and the B-2 stealth bomber, would see cuts from this year's levels. 

Aside from defense and homeland security, favored Bush programs included a new $1.5 billion high school performance program, expanded Pell Grants for low-income college students and more support for community health clinics. 

One of the most politically sensitive targets on Mr. Bush's hit list is the government support program for farmers, which he wants to trim by $5.7 billion over the next decade, which would represent cuts to farmers growing a wide range of cuts 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, 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. 

About one-third of the programs being targeted for elimination are in the Education Department, including federal grant programs for local schools in such areas as vocational education, anti-drug efforts and Even Start, a $225 million literacy program. 

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. 

Many of the spending cuts in the budget are repeats of efforts the administration has proposed and Congress has rejected previously.