Bush pushes for budget restraint

"Cutting the deficit during a time of war requires us to restrain spending in other areas," Mr Bush said in his weekly radio address.

He said his plans for the next fiscal year would show that his aim of erasing the deficit by 2012 could be achieved without giving up tax cuts.

Mr Bush's budget proposals are to be submitted to Congress on Monday.

The soaring federal deficit has been tipped to exceed $750bn (£381bn) for 2006.

'Restraint'

Mr Bush said the budget for the year starting in October 2007 would underline the need to tighten spending on domestic programmes - including on education, energy and health.

The Washington Post newspaper said domestic spending would increase by 1% - less than inflation.

Meanwhile military spending in Iraq and Afghanistan would increase.

"Unless we act, we will saddle our children and grandchildren with tens of thousands of unfunded obligations," Mr Bush said.

He said they would face huge tax rises, huge budget deficits or huge immediate cuts in benefits.

This will be the first budget Mr Bush will present to a Congress dominated by Democrats, who have been strong critics of Mr Bush's fiscal policies.