WASHINGTON, Feb 7: The United States budget for 2007, sent to the Congress on Monday, shows that the cost of the war in Iraq remains a major drain on the American economy.

According to the proposals, America’s wars in Iraq and Afghanistan and its homeland defence could cost $10 billion a month this year –- nearly 50 per cent more than last year.

To control soaring government spending, caused partly by the wars, the Bush administration has been forced to make politically sensitive cuts to its programmes, especially Medicare and Medicaid, the health care scheme for low income earners. The proposed cut to Medicare over the next five years is $36 billion.

White House estimates indicate that the US will spend more than $125 billion on wars during the fiscal year ending in September. An additional $50 billion is being planned as a down payment for war costs in 2007.

US officials, quoted by media, however, admit that the $50 billion was just a starting point and much more will be needed as the wars continue.

Last week, the White House said it planned to ask Congress for an additional $70 billion to pay for the wars in Iraq and Afghanistan, driving the cost of military operations in the two countries to $120 billion this year, the highest ever.

Most of the new money will pay for the war in Iraq, which has cost an estimated $250 billion since the US invasion in March 2003.

The additional spending, with other war funding the Bush administration will seek separately in its regular budget next week, will push the price tag for combat and nation-building since Sept 11, 2001, to nearly half a trillion dollars, approaching the inflation-adjusted cost of the 13-year Vietnam War.

The cost of military operations in 2006 is $35 billion, higher than what Congress had estimated a few months ago the defence department would need this year. The higher costs are occurring even as the Pentagon is planning to reduce troop level in Iraq in coming months, reflecting the continuing wear and damage to military equipment in desert combat, the need to upgrade protection for US troops and the effort to train and equip Iraqi forces.

Recently, the US defence department said it spent about $4.5 billion a month on the conflict in Iraq during the fiscal year 2005. This is about $100,000 per minute. And if US defence expenditures in Afghanistan are included, the figure adds up to $6.8 billion a month.

War experts and economists have predicted that the White House is going to have a huge problem once this cost surpasses the cost of the Vietnam War, even if it does entail inflation-adjusted costs.