Tough talk, but not enough to reassure the world that US public finances are in safe hands: the White House budget does mark a departure from the spendthrift ways of George W. Bush's first term as president. Planned cuts in non-security discretionary programmes will cause real pain - if they survive Congress. But even quite savage cuts to limited categories of spending will do little to restore America's long-term fiscal health. The bigger questions of what to do about taxes, military spending, Social Security and Medicare remain unanswered.

Republicans claim that Mr Bush's earlier decision to slash taxes and push the US deep into deficit was part of a strategy to "starve the beast" - force reductions in government spending by denying it resources. This justification flies in the face of the first-term record: the president spent freely, and not just on defence. But yesterday's budget suggests the administration does at least want to appear willing to take tough decisions to shrink government to fit its straitened circumstances.

Within a narrow sphere, the cuts are ambitious, even unrealistic. Mr Bush proposes cutting spending on non-security discretionary programmes by 1 per cent. Rich farmers and the urban poor will suffer most; the Environmental Protection Agency also loses badly. Health, education and other programmes also face painful cuts. The White House knows Congress will try to restore funding for favoured programmes: one wonders how hard Mr Bush will be prepared to fight.

But brutal though these cuts appear, even if they do make it through Congress they will not do much to change America's fiscal position. Non-security discretionary outlays make up only a small proportion of federal spending: under 20 per cent. Mr Bush continues to pump up the already bloated defence budget. Meanwhile the giant Social Security and Medicare remain on autopilot. Even more importantly, there are no moves to raise extra tax revenues, even though revenue shortfalls are responsible for two-thirds of the deterioration in public finances since 2001.

The White House may still meet its own target of halving the deficit by 2009 thanks to the cyclical boost to revenue from the economic upswing. But this is a thoroughly inadequate target. The cost of tax cuts (if made permanent) and the new Medicare prescription benefit mount from 2010, when the impact of population ageing on Social Security and Medicare also starts to be felt. Piling up borrowing now compounds these problems, and will result in US government debt stablising higher than necessary.

Indeed, it is worth noting that for all the talk of a Social Security "crisis", the sums on deficit reduction only add up because both Social Security and Medicare will continue to run big cash flow surpluses for some years to come. A real fiscal conservative would seek to balance the budget excluding these trust funds over the economic cycle. Alas, Mr Bush is not such a man.