This is the VOA Special English Economics Report.

This week, President Bush sent Congress his spending plan for two thousand eight. His budget proposes almost three trillion dollars in government spending, a four percent increase over this year. The new budget year begins October 1.

Mr. Bush says his plan will finance the war on terrorism and still lead to a balanced budget in 2012 without raising taxes.

His budget includes, for the first time, detailed cost estimates for the war in Iraq. Until now, war costs have been considered largely as emergency spending measures, when needed.

Mr. Bush is asking Congress for 145 billion dollars for operations in Iraq and Afghanistan for 2008. He also wants an additional one hundred billion dollars for this year.

Since the invasion in 2003, the war in Iraq has cost more than 340 billion dollars.

The president says his proposed budget is realistic even with the costs of the war. He says the budget can be brought into balance if the economy continues to grow and Congress shows financial restraint.

His chief economic advisor, Ed Lazear, says the strong economy will make it possible to limit cuts in government programs. He says it will also make it possible to pay for the war and reduce the current budget deficit.

This is the first time the president has proposed a budget to a Congress with a Democratic majority. House Armed Services Committee Chairman Ike Skelton noted the size of the defense requests -- 625 billion dollars. He said Congress must look at the details carefully, to make sure taxpayer dollars are spent wisely.

Approving a budget is a long and complex legislative process. Government offices could close if the president has not signed a new budget by October 1. But Congress can pass temporary spending measures known as continuing resolutions until a budget is in place.

In recent years, budgets have had a big increase in special interest projects added by individual lawmakers. These additions, called earmarks, are often criticized as wasteful.

Democrats have promised to restrict earmark spending. The president wants Congress to cut earmarks in half by the end of this year.

Mr. Bush is also asking for line-item veto power -- the power to veto individual spending items passed by Congress. Under the separation of powers, the president can only veto complete spending bills.

And that's the VOA Special English Economics Report. I'm Steve Ember.