* Obama to propose wringing $17 billion from budget
* Plans to announce new specifics of $3.55 trillion budget
* Republican says spending cuts don't go far enough
By Caren Bohan and Jeff Mason
WASHINGTON, May 7 (Reuters) - President Barack Obama on Thursday will propose slashing $17 billion from the U.S. budget as he seeks to ease worries about deficits and counter criticism that his policies would bloat the government.
White House aides said the president plans to release a list of 121 programs from weapons systems to education to the cleanup of abandoned mines where savings could be found.
Obama will unveil the list as he lays out new specifics of the $3.55 trillion budget for fiscal 2010 that he released in February. The budget announcement is scheduled for 10:35 a.m. EDT (1435 GMT).
He is under pressure to signal a willingness to tackle budget deficits amid White House projections that the government shortfall will reach an enormous $1.75 trillion in the current 2009 fiscal year.
The administration expects the deficit to drop to a still-high $1.17 trillion in the 2010 fiscal year that begins in October.
Obama's budget includes a 10-year, $634 billion reserve fund to help pay for a proposed overhaul of health care, a proposed initiative to tackle global warming and money to bolster education programs.
It also incorporates the $787 billion stimulus package of public works projects and tax cuts enacted earlier this year to give the ailing economy a boost.
Republicans have charged that Obama's budget would hamper economic growth by increasing the size of government and exacerbating deficits. Obama has pointed out that he inherited a more than $1 trillion deficit from former President George W. Bush, a Republican.
Deficits have skyrocketed since last year as the recession has weakened revenue and the government has spent billions to bail out troubled financial institutions and to throw a lifeline to distressed U.S. automakers General Motors and Chrysler.
Some Democrats have also expressed wariness about the deficit outlook, though the Democratic-led Congress has already passed a $3.4 trillion budget blueprint that will guide tax policy and government spending for the upcoming fiscal year.
That plan embraces many of Obama's top priorities.
DEFENSE CUTS
Of the spending cuts Obama will lay out on Thursday, about half would be in the defense budget.
Many of those cuts had been announced already by Defense Secretary Robert Gates, who has proposed trimming missile-defense spending and canceling multibillion-dollar weapons programs as part of a broad overhaul of the department's spending.
An early childhood education program known as "Even Start" and a long-range radio navigation system that has been made obsolete by GPS technology were on the chopping block, U.S. officials said.
Other examples of cuts included halting payments to states for abandoned mines that have already been cleaned up, saving $142 million, and cutting a Department of Education attache position in Paris, saving more than $600,000.
Obama, who has vowed to cut the country's ballooning deficit in half by 2013, was ridiculed last month when he challenged agencies to find $100 million in savings. Critics pointed out that was about equal to what the government spends in 13 minutes.
Republicans in the House of Representatives said they would offer their own set of proposed savings.
"While we appreciate the newfound attention to saving taxpayer dollars from this administration, we respectfully suggest that we should do far more," House Republican leader John Boehner said in a statement.
Within his budget request, Obama will ask for $1.25 billion from Congress to settle claims by black farmers that they were denied help by the Agriculture Department due to racism, the White House said.
The White House has already revealed that Obama will include in the 2010 budget a $63 billion, six-year health initiative to help people in the world's poorest countries, largely bolstering existing programs.
Obama also wants to tighten tax laws for U.S. multinational companies and wealthy individuals who invest overseas. The White House estimated the proposal would save $210 billion over the next decade, but the idea, which faces strong opposition from businesses, has received only a lukewarm reception in the U.S. Congress.
(Additional reporting by Richard Cowan, Jeremy Pelofsky and Charles Abbott; Editing by Vicki Allen)