Trump wants $54B more in defence spending

The White House says Donald Trump's upcoming budget will propose a whopping $54-billion increase in defence spending and impose corresponding cuts to domestic programs and foreign aid.

White House budget officials outlined the information during a telephone call with reporters given on condition of anonymity. The budget officials on the call ignored requests to put the briefing on the record, even though the U.S. president decried on Friday the use of anonymous sources by the media.

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Trump's defence budget and spending levels for domestic agency operating budgets will be revealed in a partial submission to Congress next month, with proposals on taxes and other programs coming later.

The approximately 10 per cent increase for the Pentagon would fulfil a Trump campaign promise to build up the military. One official said there will be a reduction in foreign aid and that most domestic agencies will face cuts.

Trump vowed to rebuild the country's "depleted military" during a meeting with state governors at the White House on Monday,adding that he will make a "big statement" about his plans to rebuild the nation's roads and bridges in his address to Congress on Tuesday.

The U.S will "do more with less and make the government lean and accountable to the people," Trump told the governors.

Citing his reasons for the budget change, the U.S. president said,"we never win we never win wars" addingthat he feels the Middle East is worse off. He toldthe governors, "We have a hornet's nest. It's a mess."

But he also promisedthat his budget will increase spending for federal law enforcement, moves that will help the U.S. "fight crime." He said his budget proposal will also keep tax dollars in the U.S. to help veterans and first responders.

Markets react

The major U.S. stock indexes veered slightly higher in afternoon trading Monday after spending much of the morning wavering between small gains and losses. Investors were looking ahead to Trump's address to Congress on Tuesday for details of promised tax cuts and infrastructure spending.

"The theme for today is going to be the waiting game," said J.J. Kinahan, chief market strategist at TD Ameritrade. "The markets had this incredible run, much of it based on potential tax policy, and what everyone wants to see tomorrow night is some more details."