It is hard to describe as modest a prescription for spending $3 trillion. But President Bush's final budget, which he will deliver to Congress on Monday, the first by any president to reach that landmark figure, marks a long step towards caution after the previous seven.

It is gloomier in its view of the economy, more restrained in its spending plans - and puts in nothing for Iraq and Afghanistan beyond December. Even so, and despite proposing savage cuts in healthcare, the budget is not credible in claiming to set a course for a surplus in 2012. The White House still overstates growth, according to a recent report by the independent Congressional Budget Office (CBO), and puts too much weight on the supposed boost from tax cuts.

The budget will not pass Congress in this form, of course. The freedom that Bush has found, in his final year in office, to acknowledge more of the budgetary constraints on the presidency than he has done in the past, will not be appreciated or endorsed by Congress in an election year. The service this budget performs, then, is to illustrate the tough choices facing his successor, hemmed in by the deficits which are part of his legacy and the economic uncertainty ahead.

A giant, cartoon-like question mark could take the place of the section on Iraq. The White House is jealously guarding most details until Monday but on defence and healthcare, a clear sketch has emerged. The White House has said that it will ask only for three months and three weeks of funding for the two wars, to cover the time from the September 30 fiscal year end until the next president takes over. It won't confirm sums but analysts of both parties put them at $70 to $80 billion.

The White House does not want to prejudge the strategy of the next president, it has explained. But in leaving the war unfunded beyond Bush's tenure, it has angered many in Congress. Republicans who support the troops' presence are concerned that the money to sustain it has not been set aside while some Democrats have attacked the lack of transparency.

The part of Monday's offering which is most likely to resemble what the federal Government eventually spends is that on Medicare, the healthcare programme for the elderly, and Medicaid, for the poor. Congress has no desire to make cuts ahead of the November elections - but if it passes nothing at all, doctors will automatically see their fees cut by a tenth from July onwards.

So Congress will pass something, although doctors in teaching hospitals are lobbying hard to be spared the harsh cuts they face in Bush's version. The plan gives a sense of how the US will eventually tackle the rising cost of Medicare and Medicaid - $627 billion last year and set to double in a decade. It will do it messily, in gulps, but with growing acknowledgement that it can't afford the projections.

The rest of Bush's proposed cuts - a list of 151 programmes to scrap or shrink totalling $18 billion - are surely there for show. As in previous years, he can put them in to lay a claim to prudence, knowing Congress will throw them out. The separate economic stimulus package he more or less agreed with Congress last week also softens the apparent harshness of the plans.

Despite taking its proposed cuts as a done deal, when they are not, Monday's budget still reckons that deficits will rise this year and next from last year's $163 billion. This is more realistic than in the past; still too rosy; and a warning that the next occupant of the White House will inherit two wars, many elderly Americans and a faltering stream of revenue to spend on them.

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