President George W Bush has proposed a $2,770bn (£1,600bn) annual budget, with more money to fight terrorism, but less for many social areas.
President Bush aims to secure more funding for defence and security
Mr Bush is seeking a 6.9% hike in US military spending to $439.3bn, and a 3.3% rise in homeland security funds.
To keep plans to cut the fiscal deficit on track, big cuts have been proposed in healthcare spending.
While Democrats attacked the proposed cuts, Mr Bush's Republican allies said they were a sign of fiscal prudence.
Democratic Senate Minority Leader Harry Reid said Mr Bush's budget was "filled with pages of giveaways to special interests and cuts to those who can least afford it".
But Republican Senate Budget Committee Chairman Judd Gregg said action was needed to cut the budget deficit.
"We have to face up to the fiscal reality that this baby boom generation is going to retire soon and we need to do something about it," she said.
Mr Bush wants to cut spending on Medicare - the healthcare programme for elderly and disabled people - by $35.9bn over the next five years.
Savings are also sought in vocational education, justice and transportation.
The reductions are needed as Mr Bush aims to halve the US budget deficit by 2009.
His administration said the deficit for the current financial year is expected to hit a fresh record high of $423bn. Mr Bush wants this to fall to a maximum of $354bn next year.
"My administration has focused the nation's resources on our highest priority - protecting our citizens and our homeland," said Mr Bush in his budget message.
"Working with Congress, we have given our men and women on the front lines in the war on terror the funding they need to defeat the enemy and detect, disrupt and dismantle terrorist plots and operations."
Mr Bush's $2.77 trillion spending plans - a 2.3% rise on the year before - will now have to be approved by Congress.
As Congressmen face elections in November, analysts said he may have some difficulty getting backing for all his proposed cuts in social spending.