WASHINGTON — President Bush and congressional Democrats are headed for their first showdown over the federal budget. For both sides, more than money is at stake.

Mr. Bush, who only vetoed one piece of legislation passed by the Republican Congress in his first six years in office, is now threatening to reject almost every spending bill sent to him by the Democratic-controlled Congress unless lawmakers abandon plans to spend $23 billion more than he requested.

While the amount involved is less than 1% of the $2.9 trillion federal budget, the political stakes are greater.

A little more than 16 months before the 2008 elections, Democrats and Republicans alike figure a fight may be in their interests. “It’s a very big fight over a fairly small sum of money,” says Bob Bixby, executive director of the Concord Coalition, an Arlington, Va.-based nonpartisan group that advocates a balanced budget. “It has a lot of political significance in terms of the signals being sent.” Mr. Bush and the Republicans, stung by criticism that they presided over a surge in government spending, are looking to rehabilitate themselves among core supporters by holding the line on the budget.

Democrats, meanwhile, are trying to show they can deliver on promises to shore up education, health care, and a host of other initiatives.

Other consequences might only become clear over time. The additional spending proposed by the Democrats would barely affect a deficit the Congressional Budget Office says might exceed $220 billion next year, though it may end up costing more than expected if it causes agency budgets to grow faster over time. Mr. Bush, 61, has pledged to put the budget on course to be balanced by 2012. The deficit in 2006 was $248 billion.

Unlike other measures such as the immigration legislation that died last month in the Senate, the annual spending bills must pass to keep the government’s doors open.

And neither Mr. Bush nor the Democrats are eager for a repeat of the budget fights of 1995, when the federal government partially shut down twice after President Clinton refused congressional Republicans’ demands to pare taxes and spending by hundred of billions of dollars.

Still, with both sides spoiling for a fight, there’s a chance things could spin out of control. “This is going to be a very serious showdown,” says Stephen McMillin, deputy director of Mr. Bush’s Office of Management and Budget. “The differences could not be more stark.”

The House Appropriations Committee chairman, Rep. David Obey, a Democrat of Wisconsin, dismisses the administration’s veto threats. His party’s budget, he says, will “make a hell of a difference in people’s lives, but it has virtually no difference on the deficit.”

The fight will unfold during the coming months as Democrats begin sending Mr. Bush the 12 annual spending bills, and may consume much of the rest of this year’s legislative agenda.

It will play out at the margins of the federal budget, as the vast majority of spending has become politically all but untouchable. Defense and homeland-security spending, entitlements such as Social Security and Medicare, and interest payments on the national debt now consume more than 80% of the government budget.

The remainder pays for domestic programs ranging from the space program to national parks and must be approved annually by Congress. Mr. Bush submitted a plan in February that would cut spending on those programs by 0.3%, according to a Congressional Budget Office estimate.

Democrats say the proposal falls short of what’s needed just to maintain current services, and want to spend 5% more, with much of the increase slated for education, veterans and health-care programs.

Democrats say the proposed increase is the minimum needed to shore up programs eroded by a dozen years of Republican budgets.

“We’re not making humungous new investments,” Mr. Obey, 68, said. “I’ve never had anybody in my district say, ‘Why don’t you guys get your act together and cut cancer research?”‘

The Republicans, he says, are attempting to block the new spending because they’ve “blown the budget sky-high and now are looking for a way on the cheap to recover their image.”

Since Mr. Bush took office in 2001, federal spending has increased 32 percent, and the budget is now equivalent to 20.3% of gross domestic product, the most since 1996.

The Republicans’ control of Congress, which ended in November, was marked by an explosion in pet-project spending, the creation of a costly prescription-drug entitlement program and a string of budget deficits that peaked at $413 billion in 2004.