Bush sends Congress $3.1 trillion budget plan
Spending plan features big increases for defense and big deficits

AP

updated 3 minutes ago
WASHINGTON - President Bush sent the nation's first-ever $3 trillion budget proposal to Congress on Monday, contending that the spending blueprint will fulfill his chief responsibility to keep America safe.

The $3.1 trillion proposed budget projects sizable increases in national security but forces the rest of government to pinch pennies. It seeks $196 billion in savings over five years in the government's giant health care programs - Medicare and Medicaid.

But even with those restraints, the budget projects the deficits will soar to near-record levels of $410 billion this year and $407 billion in 2009, driven higher in part by efforts to revive the sagging economy with a $145 billion stimulus package.

Bush called the document, which protects his signature tax cuts, "a good, solid budget" But Democrats, and even a top Republican, attacked the plan for using budgetary gimmicks to claim the budget can return to balance in 2012, three years after Bush leaves office.

Democrats called Bush's final spending plan a continuation of this administration's failed policies which wiped out a projected 10-year surplus of $5.6 trillion and replaced it with a record buildup in debt.

Democratic response
"Today's budget bears all the hallmarks of the Bush legacy - it leads to more deficits, more debt, more tax cuts, more cutbacks in critical services," said House Budget Committee Chairman John Spratt, D-S.C.

For his last budget, Bush, as a money-saving measure, stopped the practice of providing 3,000 paper copies of the budget to members of Congress and the media, instead posting the entire document online at http://www.budget.gov. Democrats joked that Bush cut back on the printed copies because he ran out of red ink.

"This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing the skyrocketing debt,' said Senate Majority Leader Harry Reid, D-Nev.

"The president proposes more of the same failed policies he has embraced throughout his time in office - more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

Bush defended his record, saying it supported a strong defense and, if his policies are followed, will produce a budget surplus of $48 billion in 2012.

"Two key principles guided the development of my budget - keeping America safe and ensuring our continued prosperity," Bush said in his budget message to Congress.

Reviewing the budget with his Cabinet, Bush said it would keep the economy growing and protect the U.S. militarily. He called it "innovative" because it was dispatched to Congress electronically.

Bush's final full budget is for the 2009 fiscal year, which begins on Oct. 1. It proposes spending $3.1 trillion, up 6 percent from projected spending of $2.9 trillion in the current budget year.

Part of the deficit increase this year and next reflects the cost of a $145 billion stimulus package of tax refunds for individuals and tax cuts for business investment that Bush is urging Congress to pass quickly to try to combat a threatened recession.

White House budget director Jim Nussle, briefing reporters on the spending plan, said that the quick bipartisan agreement reached on the stimulus package in the House showed what could happen when Democrats wanted to work with the White House to get things done. The stimulus plan has yet to clear the Senate.

Budget battles ahead
Democrats said the forecast of a budget surplus in 2012 was based on flawed math that only included $70 billion for the wars in Iraq and Afghanistan in 2009 and no money after that. It also failed to include any provisions after this year for keeping the alternative minimum tax, originally aimed at the wealthy, from ensnaring millions of middle-class taxpayers. The Congressional Budget Office estimates that fixing the AMT in 2012 would cost $118 billion, more than double the surplus Bush is projecting for that year.

White House press secretary Dana Perino told reporters that the war effort in 2009 would "certainly" cost more than the $70 billion included in the budget.

Even some Republicans faulted Bush's budget sleight of hand to project a balanced budget in 2012.

"They've obviously played an inordinate number of games to try to make it look better," Sen. Judd Gregg, the top Republican on the Budget Committee, said in an interview with The Associated Press.

"Let's face it. This budget is done with the understanding that nobody's going to be taking a long, hard look at it," said Gregg, R-N.H.

Bush's spending blueprint sets the stage for what will probably be epic battles in the president's last year in office, as both parties seek to gain advantages with voters heading into the November elections. Some have suggested that Democrats, unable to override Bush's expected vetoes, might choose to keep the government operating with a stopgap funding bill in hopes that a Democrat more amenable to their priorities will be elected in November.

The 6 percent overall increase in spending for 2009 reflects a continued surge in spending on the government's huge benefit programs for the elderly - Social Security and Medicare, even with the projected five-year savings of $196 billion over five years. Those savings are achieved by freezing payments to hospitals and other health care providers. A much-smaller effort by Bush in this area last year went nowhere in Congress.

While Bush projects that total security funding in the areas of the budget controlled by annual appropriations will go up by 8.2 percent, he projects only a 0.3 percent increase in discretionary spending for the rest of government.

To achieve such a small boost, Bush would hold hundreds of programs well below what is needed to keep up with inflation. He also seeks to eliminate or sharply slash 151 programs he considers unnecessary.

Nussle said that Congress had agreed to eliminate 29 of 141 programs Bush targeted last year, which he said was a good start.

This year, the largest number of program terminations - 47 - are in education including elimination of programs to encourage arts in schools, bring low-income students on trips to Washington and provide mental health services.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Bush proposes $3.1-trillion budget

Military spending would grow and retiree health benefits would shrink under the plan. Democrats in Congress assail it.

By Maura Reynolds and Ricardo Alonso-Zaldivar, Los Angeles Times Staff Writers
9:59 AM PST, February 4, 2008

WASHINGTON -- President Bush unveiled a $3.1-trillion budget today that would boost military spending and trim health benefits for retirees. The proposal was immediately tagged by Democrats as "irresponsible."

The first spending plan in history to top $3 trillion would freeze or eliminate many domestic spending programs yet still rack up a $407-billion deficit for fiscal 2009, which begins Oct. 1. The Pentagon is the only department for which Bush proposes a significant increase; its budget would grow 7.5% to $515 billion.

"It's a good budget," Bush said after meeting with his Cabinet. "It's a budget that achieves some important objectives. One, it understands our top priority is to defend our country, so we fund our military as well as fund the homeland security."

Because Bush is leaving office in a year, his budget proposal is largely an academic exercise. The Democratic-controlled Congress has responsibility for proposing and passing budget bills, and it's unlikely to adopt his priorities.

The plan's significance is mostly political. Bush's proposal seeks to codify the policies he considers his legacies as president, namely the tax cuts he won in 2001 and 2003; significant increases in military spending; and a few education programs, including his No Child Left Behind legislation.

For Democrats, the Bush budget provides a summary of the policies of his administration they find most egregious: the war in Iraq, tax cuts that worsened the federal deficit, and the squeezing of social programs such as Social Security and Medicare.

"This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing our skyrocketing debt," said Senate Majority Leader Harry Reid (D-Nev.). "President Bush's fiscal policies are the worst in our nation's history -- he has turned record surpluses into record deficits -- and this budget is more of the same."

Bush said the proposal would balance the federal budget by 2012. But Democrats said it would do so by relying on accounting tricks, including ignoring most funding for the Iraq war and pretending that the government would essentially permit a huge tax increase on the middle class by not rescinding the alternative minimum tax after Bush leaves office.

"The president proposes more of the same failed policies he has embraced throughout his time in office -- more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan," said Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee.

The deficit projections are also worsened by the $146-billion economic stimulus package negotiated between the administration and Congress in an effort to soften or forestall a feared recession. The budget assumes a 3% increase in gross domestic product this year, a rate that is unlikely if the economy continues to slow down as it has in recent months.

"When President Bush took office, the national debt stood at $5.7 trillion," said Rep. John M. Spratt Jr. (D-S.C.). chairman of the House Budget Committee. "Today it is $9.2 trillion and rising, projected to increase to $9.7 trillion by the time President Bush leaves office -- up by $4 trillion in eight years. This is the legacy our children and grandchildren will inherit from the fiscal policy of this administration."

But the administration hailed the budget as balanced and innovative.

In a cost-saving gesture, the government for the first time did not provide free copies of the four-volume proposal to Congress, instead releasing it online and charging $200 per printed copy ordered through the Government Printing Office.

"It's not only an innovative budget, in that it's coming to Congress over the Internet, it's a budget that's balanced -- gets to balance in 2012 and saves taxpayers money," Bush said.

A hefty chunk of the proposed savings would come from the government's two giant healthcare programs, Medicare and Medicaid, but leading Democratic lawmakers have already called the cuts unacceptable.

Medicare, which serves about 44 million seniors and disabled people, would be squeezed by $178 billion over five years, reducing its growth from an average of 7.2% a year to 5% a year. At least $115 billion of the savings would come from reduced payments to hospitals, according to initial calculations by a senior Democratic congressional aide. Hospitals and other providers in traditional Medicare would face the sharpest cuts, and private health insurance plans that now constitute one of the fastest-growing parts of the program would get only a light trim, critics said.

Over 10 years, Bush's proposed Medicare savings would grow to $556 billion.

The president also called for reductions totaling $17 billion over five years in Medicaid, a federal-state partnership that serves some 55 million people, including the poor and many elderly nursing home residents.

Although the scale of Bush's Medicare reductions appear to be far beyond what Congress would accept, some of his specific proposals may make into law. Congress must act by the summer to roll back a scheduled cut in Medicare fees to doctors, and it will have to consider cutting other parts of the program to offset the added costs of protecting physicians.

Addressing other health priorities, Bush proposed a modest increase in the Food and Drug Administration's food safety budget, but some critics said it would do little more than offset inflation. And public health advocates protested a proposed 7% cut for the Centers for Disease Control and Prevention.

maura.reynolds@latimes.com

ricardo.alonso-zaldivar@latimes.com

Hrm, no discussion on this?

Discussion is difficult when your jaw goes slack.
I have no discussion because I am dumbfounded.