President Bush asked Congress to approve a total of $725 billion (£368 billion) in military spending today while cutting nearly $80 billion ($41 billion) from health and education programmes.

Presenting a $2.9 trillion budget for the fiscal year of 2008, Mr Bush said a mixture of increased defence spending and domestic belt-tightening "reflects the priorities of our country at this moment in its history" but there were immediate signs that the White House faces months of dissent from the Democratic-controlled Congress.

Although wary of cutting funding for American forces serving abroad, Democratic lawmakers are thought to be unlikely to agree to a range of cuts to health and education services, many of which are designed to serve the country's elderly and working poor.

“The President’s budget is filled with debt and deception, disconnected from reality, and continues to move America in the wrong direction,” said Kent Conrad, the Democratic chairman of the Senate Budget Committee, which haggle with the White House's spending proposals over the coming weeks.

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“This Administration has the worst fiscal record in history and this budget does nothing to change that."

John Spratt, a fellow Democrat who chairs the House Budget Committee, agreed: “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either.”

Mr Bush's budget would preserve his Administration's tax cuts while restraining the growth in domestic discretionary spending to 1 per cent, below the rate of inflation.

Over the next five years $66 billion would be effectively shaved off Medicare, health insurance for America's elderly, and $12 billion from Medicaid, the health programme for those on low incomes. Mr Bush also seeks to cut a further $12 billion by eliminating 141 federal spending schemes — cuts which have been proposed before but always rejected.

“My formula for a balanced budget reflects the priorities of our country at this moment in its history, protecting the homeland and fighting terrorism, keeping the economy strong with low taxes and keeping spending under control,” said Mr Bush in a statement.

According to White House forecasts, whose methodology is disputed by the Democrats, the tightening of domestic spending would help set the Government on the road to a surplus — albeit in 2012, three years after Mr Bush leaves office.

The cuts stood in contrast to eye-catching increases in military spending which budget analysts compared to the early years of the Reagan Administration. On top of the $245 billion proposed for the wars in Iraq and Afghanistan over the next two years, the budget envisages an 11 per cent rise in funding for the Pentagon, to $481 billion: a total of $726 billion. Some of that money will go towards enlarging the US armed forces by 92,000 personnel.

The proposed increase will take the total cost of Mr Bush’s wars since September 11, 2001, to almost $750 billion which — even when prices are adjusted for inflation — exceeds that spent by the US in Vietnam over a much longer period. Before the invasion of Iraq in March 2003, officials promised that war costs would be limited to $100 billion.

And the White House today gave warning that those costs could rise even further, reserving the right to modify the budget request “as activity on the ground evolves" in the coming months.

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