WASHINGTON, May 2 (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.