WASHINGTON, Feb 6: US President George W. Bush sent a historic $2.77 trillion budget request to Congress on Monday, including $600 million pledged to Pakistan under the Camp David agreement three years ago.

Half of the pledged assistance for Pakistan will be for security and the other half for economic development. Under the agreement, signed in June 2003 when President Pervez Musharraf visited Camp David, Pakistan is to receive $3.2 billion in five years.

The 2007 budget plan, the biggest in US history, projects the economy will grow 3.3 per cent in 2007, compared with the forecast of 3.4 per cent growth this year.

The budget proposals include a record $439.3 billion for US defence aimed at fighting both unconventional terrorism and major conflicts with other nations if necessary.

This seventh consecutive increase in Pentagon spending doesn’t include an extra $120 billion Mr Bush wants for military operations in Iraq and Afghanistan this year and next. The Pentagon plan also does not include $9.3 billion in the Energy Department’s 2007 budget for maintaining the nuclear arms stockpile.

Proposed increase in defence and security expenditure would shrink spending for Medicare and other social programmes by $65 billion over five years.

The Defence Department budget for the fiscal year that starts on Oct 1 would increase 6.9 per cent over Mr Bush’s last budget to $439.3 billion. This will be the seventh consecutive increase in Pentagon spending.

The deficit forecast of a record $423 billion this year equals about 3.2 per cent of the gross domestic product. That’s an increase from the shortfall of $318 billion last year, or 2.6 per cent of the GDP. The record was 5.9 per cent of GDP in 1983.

In 2007, the White House projects a shortfall of $354 billion, or 2.6 per cent of the GDP, after the bulk of funds to rebuild the hurricane-ravaged Gulf Coast have been spent.

The deficit estimate this year includes the extra war costs of about $70 billion that will be submitted in a few weeks. The $50 billion in war funds for 2007 is only a placeholder figure and isn’t reflected in the deficit estimate.

Homeland Security would receive a 7 per cent budget increase to $35.6 billion, though much of the increase is in fees, which Congress has opposed in the past.

The Pentagon budget for 2007 seeks $84.2 billion for weapons procurement, including additional unmanned aircraft to monitor threats by extremist groups and governments worldwide, and $73.2 billion for research and development on new arms.

The defence budget also would boost Army spending to $111.8 billion next year, a major increase over the current $99.2 billion, to repair and modernize a service that has been strained by the Iraq and Afghan wars.

The new Pentagon budget would increase the size of military special forces by 15 per cent to about 60,000 troops in 2007 to help battle terrorist threats overseas. It would also keep up spending on major weapons programmes in anticipation of any potential future conflict with other nations, including growing military power China.

The $84.2 billion request for weapons programmes in the 2007 budget includes $3.5 billion for 42 advanced F/A-18 fighter jets built by Boeing Co., $2.5 billion for two new high-tech DDX Navy destroyers under development by General Dynamics Corp. and Northrop Grumman Corp., and $2.4 billion for an additional Virginia Class attack submarine built by Northrop Grumman and General Dynamics.

The Bush five-year defence plan for procuring weapons would increase such spending to $99.7 billion in fiscal 2008, $109 billion in 2009, $111.7 billion in 2010 and nearly $118 billion in 2011.

The Air Force would get $2.2 billion in funding for new F-22 fighter jets, built by Lockheed Martin Corp., in 2007, allowing it to buy 20 of the expensive radar-evading jets each year in 2008, 2009 and 2010.