The proposals, likely to face opposition on Capitol Hill, come as the Defense Department struggles to trim personnel costs and other expenses to pay for the war in Iraq and a host of other pricey aircraft and high-tech programs. Bush will send his 2007 budget to Congress on Feb. 6.
The proposed Army Reserve cut is part of a broader plan to achieve a new balance of troop strength and combat power among the active Army, the National Guard and reserves to fight the global war on terrorism and to defend the homeland.
The Army sent a letter to members of Congress on Thursday outlining the plan. A copy was provided to The Associated Press.
Under the plan, the authorized troop strength of the Army Reserve would drop from 205,000--the current number of slots it is allowed--to 188,000, the actual number of soldiers it had at the end of 2005. Because of recruiting and other problems, the Army Reserve has been unable to fill its ranks to its authorized level.
Army leaders have said they are taking a similar approach to shrinking the National Guard. They are proposing to cut that force from its authorized level of 350,000 soldiers to 333,000, the actual number now on the rolls.
Some in Congress have vowed to fight the National Guard cuts. Its soldiers and resources are controlled by state governors unless Guard units are mobilized by the president for federal duty, as Bush did after the Sept. 11, 2001 terrorist attacks.
"I remain convinced that we do not have a large enough force," Rep. Ike Skelton, D-Mo., said in a letter to Defense Secretary Donald H. Rumsfeld.
Proposals to cut funding in two key jet fighter programs were described by defense analysts and congressional aides, some of whom spoke on condition of anonymity because the reductions have not been announced.
One plan would eliminate funding for an alternative engine for the Joint Strike Fighter, the military's next-generation combat plane.
The second would cut money for F-22 fighters during 2007. But it is actually a contract restructuring that would add that money back and more over the long run by stretching out the program for an additional two years and buying up to four more planes. The new plan calls for buying 60 aircraft through 2010, rather than 56 in the next two years.
The Joint Strike Fighter engine is being built by General Electric and England-based Rolls Royce, and the plan to dump them as suppliers has triggered intense lobbying, including a handwritten note from British Prime Minister Tony Blair to Bush.
On the homefront, the close to $2 billion cut would hit General Electric engine plants, and possibly jobs, in Ohio and Massachusetts and a Rolls Royce plant in Indiana.
"This is a big question for GE," said Loren Thompson, military analyst with the Lexington Institute think tank. "They could get shut out of the fighter engine business over the next 10 years."
The proposal would benefit Connecticut-based Pratt & Whitney, which got the original contract for the Lockheed Martin aircraft, and delivered its first engine last month.
GE spokesman Dan Meador said the alternate engine program provides competition for Pratt & Whitney, helping to drive down costs while also providing a back-up if problems arise.
"It's very important to GE and Rolls Royce, and we're performing well," he said.