The move came on the seventh anniversary of the space shuttle tragedy that triggered the return to the moon plan.
The White House said the program was too much like the 1960s Apollo mission and would require large budget increases just to get astronauts back on the moon by 2030.
In the budget proposal released Monday, the White House instead promised a new approach with no details. Obama also proposed $6 billion over five years to encourage companies to build private spaceships that NASA could rent.
President George W. Bush proposed the moon mission after the 2003 space shuttle Columbia disaster. NASA has already spent $9.1 billion on the program.
