WASHINGTON -- Western senators expressed unhappiness Thursday with an array of federal land cost savings the Bush administration has proposed for next year, including more property sales and cuts to county payments.

Interior Secretary Gale Norton defended the initiatives, saying the nation is in "tight budget times" and engaged in a costly war against terrorists.

But Democrats and Republicans presented their own political reality at an Energy and Natural Resources Committee hearing, saying plans to cut spending for rural communities while diverting revenue from federal land sales will be a tough sell in Congress.

"Selling public land for deficit reduction or agency operational funding needs is, in my view, an extremely short-sighted policy," said Sen. Jeff Bingaman, D-N.M.

The Bush administration is asking Congress to change how Bureau of Land Management land sale profits are spent.

Six years ago, lawmakers mandated that at least 80 percent of land sale revenue in a state be used to buy up environmentally sensitive property.

Norton said Thursday the system "frankly has not operated very well."

Instead, she said, lawmakers should change the formula to earmark 70 percent of BLM land sale profits to the U.S. Treasury. The remainder of the funds could be spent on BLM operations rather than more land purchases.

Sen. Craig Thomas, R-Wyo., questioned why profits couldn't be spent to care for the 262 million acres the BLM now manages.

Agency officials identified 898,000 acres eligible for sale under the 2000 land program. They have sold 14,000 acres to date. Land sales in the Las Vegas Valley and in Lincoln county are sold at auction under separate laws.

In another program dear to Western lawmakers, the Bush administration is proposing to reduce by 60 percent the annual payments to counties that have large amounts of federal land.

"We're in a real bind," Sen. Lisa Murkowski, R-Alaska, said, referring to the cutback in county assistance through the "payment in lieu of taxes," or PILT, program.

"It seems to put another spear in the back of rural America," said Sen. Ken Salazar, D-Colo.

Norton said she was forced to make a budget choice between county tax payments and staffing her agencies.

"I object very strongly to that characterization," Norton said in response to Salazar's comment. "We have a stronger funding level than existed for PILT in the 1990s."

Norton also noted that PILT is a fraction of the federal aid many Western states -- although not all of them -- receive from oil and gas royalties.

In Nevada, rural counties rely more on PILT payments because the state is not a major oil and gas producer. They received $13.7 million in PILT payments compared to $7.7 million in mineral royalties last year, according to the Minerals Management Service.

Thomas also questioned why Norton for a second year proposed to eliminate a $10 million rangeland improvement program funded by grazing fees.

"If you lease land, you'd like to have some go back into range improvements from those fees," Thomas said.

BLM officials say federal financing on the range won't be necessary when new rules come out later this year to allow ranchers to own the improvements they build on their federal allotments such as fences and water systems.