After meeting with his cabinet at the White House, President Bush told reporters his budget plan for 2006 seeks to reduce about 150 domestic programs that are inefficient or unnecessary.
The president is proposing cuts in politically sensitive subsidies to American farmers, reductions in the Medicaid health program that helps the poor, and cuts in housing programs.
"It is a budget that sets priorities," he said. "Our priorities are winning the war on terror, protecting our homeland and growing our economy. It is a budget that focuses on results. The taxpayers of America do not want us spending our money on something that is not achieving results. It is a budget that reduces and eliminates redundancy. It is a budget that is a lean budget."
President Bush is proposing cuts in domestic programs in an effort to gain more control over spending and to reach his goal of cutting the budget deficit in half by 2009.
The White House budget plan calls for the U.S. government to run a deficit of $390 billion in 2006, down from a record $427 billion projected shortfall this year.
Budgets for the Department of Defense and Homeland Security will increase, and President Bush has allocated more than three billion dollars for fighting AIDS worldwide.
The White House plan increases foreign aid, including three billion dollars for the Millennium Challenge Account for developing countries that are making progress on political and economic reforms.
President Bush called on Congress to support the administration's priorities.
"I look forward to explaining to the American people why we made some of the requests that we made in our budget," he said. "I fully understand that sometimes it is hard to eliminate a program that sounds good. But by getting people to focus on results - I am saying to members of Congress show us the results as to whether or not this program is working. I think we will get a pretty good response. I tell you we go into this process upbeat."
The president's budget plan does not reflect the costs for his number-one domestic priority, reforming the government pension program called Social Security.
It also does not include additional spending for military operations in Iraq and Afghanistan.
The president's budget is likely to spark months of debate on the country's spending priorities, and members of Congress are expected to resist many of the cuts in sensitive programs.