President George W Bush's overall budget for the 2007 fiscal year, starting October 1, represents a rise of about 2.2 percent in spending from this fiscal year.
And it has a projected deficit of $354 billion.
The biggest winner is defence and homeland security portfolios, with defence spending by nearly 7 percent to $439.3 billion, and lift homeland security spending by 3.3 percent to $33.1 billion.
"My administration has focused the nation's resources on our highest priority, protecting our citizens and our homeland," President Bush said in his budget message.
The US administration justified the additional defence spending by saying it needed to stave off conventional rivals while fighting the "war on terror".
The proposal includes funding for more Predator surveillance drones, more special operations forces and making the army fit for "irregular" wars requiring fast deployments.
But the administration also wants money for state-of-the-art fighter aircraft and other costly Cold War-era weapons.
Spending for international programs including the State Department would increase 12.2 percent to $33.9 billion.
Cuts
But while President Bush is spending big on some areas, other "discretionary" spending -- those programs not required for mandatory retirements or health care – would be cut by 0.5 percent to $398.3 billion.
Among the proposed cuts:
- Agriculture would drop 6.5 percent to $19.7 billion
- Education funding would decrease 3.8 percent to $54.4 billion
- Health care spending would be cut 2.3 percent to $67.6 billion
- Justice funding would drop 7.2 percent to $19.5 billion
- Transportation funding would decline 9.4 percent to $13.2 billion.
President Bush also said that his administration had identified 141 programs "that should be terminated or significantly reduced in size."