Bush releases new budget proposal

WASHINGTON -- President Bush sent his GOP allies in Congress a budget for next year that calls for increasing defense spending, cutting Medicare and education spending as well as local law enforcement grants, and forecasts a record deficit.

"It's a heavy lift," said Senate Budget Committee chairman Judd Gregg, R-N.H. "There's no question it's going to be a challenge."

The senior democrat on the Senate Budget Committee, Sen. Kent Conrad of North Dakota, said Bush's proposal conceals details, such as large costs surrounding the Iraq war, that would inflate the deficit forecast.

Congress already rejected many of Bush budget cut proposals when it sent him a $39 billion deficit cut package last week, but they showed up again in his 2007 blueprint.