bbuWASHINGTON (Reuters) - U.S. President Donald Trump's administration proposed a $163 billion cut to federal spending next year, which would eliminate more than a fifth of the non-military spending excluding mandatory programs, it said in a statement.

The White House Office Management and Budget in a statement said the proposed budget would raise defense spending by 13% and homeland security spending by nearly 65% compared to 2025 enacted levels. Non-defense discretionary spending would be cut by 23% to the lowest level since 2017.

"At this critical moment, we need a historic Budget-one that ends the funding of our decline, puts Americans first, and delivers unprecedented support to our military and homeland security," said Russ Vought, OMB director, in the statement.

The annual White House budget request includes economic forecasts as well as detailed proposals about how much money should be spent by every government agency for the year that starts on October 1.

However, it will be the responsibility of the Republican-controlled Congress to craft spending legislation, and what lawmakers ultimately adopt often differs from the White House request.

The release comes as Republicans in the U.S. Congress are working to bridge internal divisions over proposed cuts in federal spending to pay for a landmark tax-cut bill they hope to enact by July 4. They may also have to factor in growing stress in the nation's economy arising from U.S. tariff hikes that are upending global trade.