"This is not a blunt, across-the-board freeze," the official said, adding that some agencies will see spending increases while some will see spending cuts as the total remains constant.
Exempted from the freeze would be Pentagon funding, and the budgets for Veterans Affairs and Homeland Security.
"We do need to reflect the fact that we remain at war," the official said, noting the president was able to win several battles on cutting Pentagon spending.
The official declined to discuss specifics but said the new plan would save taxpayers $250 billion over 10 years.
If the changes are passed, the non-security discretionary spending will be at its lowest level in 50 years. It currently is $447 billion for fiscal year 2010, and the administration wants it kept at or below that level through 2013, the official said.
The official said the budget to be released Monday will reflect the proposal but still would invest in Obama's priorities.
The officials said the process is "healthy," and framed it as similar to how families make decisions about where they put their household dollars.
The official said the average proposed increase in administration budgets dating back to 1993 was 3 percent, and the average increase in budgets enacted was 5 percent. The official said to compare that with "effectively zero," which is what the Obama administration is proposing.
The decision was made in part after Obama called on his Cabinet members to find cuts in their agencies, and "lots of meetings and effort were required in order to achieve this proposal."
But nothing is for certain, as Congress must pass individual appropriations bills in addition to approving the budget blueprint.
The official said Obama is "hopeful" Congress would abide by the total and agree with the administration's spending priorities.
Late Update: Republican leadership staffers are emailing this story from The Hill suggesting the Obama pitch is "DOA." The piece quotes members of the budget committee dissing the plan when it was floated by the White House.