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By Jeff Mason PHILADELPHIA (Reuters) - President Barack Obama will call for a 7 percent rise in U.S. domestic and military spending in his budget that would end caps known as "sequestration," the White House said on Thursday, setting up a new conflict with Republicans in Congress. The fiscal 2016 budget, which the administration plans to unveil on Monday, would fund a host of programs that Republicans are unlikely to support. It is the latest salvo by the Democratic president lobbed at a Congress controlled by the opposition party, and follows a defiant State of the Union address last week that critics said betrayed an unwillingness to seek compromise. Obama maintained that tone during remarks to congressional Democrats in Philadelphia, promising not to remain on the sidelines during the last two years of his presidency and urging lawmakers to be unapologetic about backing progressive policies.