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Bush proposes steep cuts in $2.57T budget
(Agencies)
Updated: 2005-02-08 09:06
![US President Bush speaks with reporters, Monday, Feb. 7, 2005, in the Cabinet Room of the White House. Bush sent Congress a $2.57 trillion spending plan Monday, constrained by war and record deficits, that seeks to slash spending in a number of popular programs from farm subsidies to health care. At left is Secretary of Treasury John Snow. [AP]](xin_150202080910296324782.jpg)
US President
Bush speaks with reporters, Monday, Feb. 7, 2005, in the Cabinet Room
of the White House. Bush sent Congress a $2.57 trillion spending plan
Monday, constrained by war and record deficits, that seeks to slash
spending in a number of popular programs from farm subsidies to health
care. At left is Secretary of Treasury John Snow.
[AP] | WASHINGTON - US President
Bush proposed a $2.57 trillion budget Monday that would erase scores of
programs and slice Medicaid, disabled housing and many more but still worsen
federal deficits by $42 billion over the next five years.
In one of the most austere presidential budgets in years — one that faces
precarious prospects in Congress — Bush would give nine of the 15 Cabinet-level
departments less money in 2006 than they are getting this year. Overall, he
would cut non-security domestic spending — excluding automatically paid benefits
like Medicare — by nearly 1 percent next year. Bush said it was the first such
reduction proposed by the White House since President Reagan's day.
Forty-eight education programs would be eliminated, including one for ridding
drugs from schools. In all, more than 150 government-wide programs would be
eliminated or slashed deeply, including Amtrak subsidies, oil and gas research,
and grants to communities hiring police officers.
Bush would slow the growth of benefit programs by $137 billion over the next
decade, nearly quadruple the savings he proposed a year ago with little success.
Chief among the targets would be Medicaid, the federal-state health insurance
program for the poor and disabled, but farmers' payments, student loans and
veterans medical services were also on the chopping block.
"It's a budget that focuses on results," Bush told reporters after meeting
with his Cabinet. "The taxpayers of America don't want us spending our money
into something that's not achieving results."
Yet largely because of Bush's plans for a defense buildup, this year's
Iraq and Afghanistan war costs, and a handful of new tax cuts, the budget
shows that deficits over the five years ending in 2010 would total nearly $1.4
trillion.
That is $42 billion worse than they would be if the government continued
current spending levels and made no tax-law changes other than making permanent
his already enacted tax cuts, his budget tables showed.
Bush's blueprint would leave next year's deficit at an estimated $390
billion, and omits any new money next year for wars in Iraq and Afghanistan.
That would be a reduction from last year's record $412 billion shortfall and
would still leave Bush on his course to halve deficits by 2009, the White House
said.
Even so, a $390 billion shortfall would be the third worst ever if his
projection for $427 billion in red ink for this year comes true.
Without Bush's new tax and spending plans, the 2006 deficit would otherwise
be $361 billion, the budget tables showed. The figures demonstrated how federal
costs are soaring despite growing revenues the economy is pumping into the
government.
"We have investments we need to be making," said White House budget office
spokesman Chad Kolton, referring to Bush's proposed military boost and other
proposals. "Even so, we are significantly reducing the growth of spending" and
moving toward halving the deficit.
Bush's package faced an uncertain fate in Congress, where conservatives
seemed ready to demand deeper deficit reduction and Democrats — and some
Republicans — were sure to resist its spending cuts.
Underscoring the jostling that lawmakers were preparing for, House Speaker
Dennis Hastert, R-Ill., lauded the plan as "a blueprint to fund our nation's
priorities" but called it "a good starting point for the Congress to begin its
work."
Democrats chided the package for its proposed cuts and because they said it
obscured more serious deficit problems ahead. They complained it excludes next
year's war costs and the price tags of Bush's Social Security overhaul and of
keeping the alternative minimum tax from affecting more middle-income families.
"Why is he playing this hide-and-seek game?" asked Sen. Kent Conrad of
North Dakota, top Democrat on the Senate Budget Committee. "I believe it's
because he really doesn't want people to know where he is headed."
Among other proposals that deficit hawks considered unrealistic were the
budget's assumption that spending for non-security programs would remain level
at $389 billion over the next five years.
Bush was expected to propose an $81 billion war package for the rest of 2005
in a few days. Congress has already approved $25 billion for the year.
Besides omitting the impact of revamping Social Security, Bush proposed no
specific savings at all from Medicare, the health program for the elderly and
disabled. The $340 billion-a-year program, though $200 billion smaller than
Social Security, faces a long-term solvency problem whose solution is
technically and politically more complicated because of the intricacies of
health costs.
Bush was using some of his budget cuts to funnel billions to White House
priorities.
Defense and domestic security would both see healthy growth, as would select
education, public housing, space and other programs. He would also create tax
breaks totaling $74 billion over the next decade to encourage low-income people
to buy health insurance.
Even so, the budget provided ample evidence that deficits were limiting his
agenda.
Bush's proposed 4.8 percent increase for the Pentagon would bring its budget
next year to $419.3 billion, excluding Iraq war costs. Yet that was $3.4 billion
less than he projected for 2006 just a year ago, with weapons procurement among
the leading areas feeling the crunch.
He was seeking increases for perennial favorites like veterans health care,
aid to low-income school districts, special education — but all dramatically
less than he proposed last year.
Even his tax-cutting agenda was under the gun and had little new. Of the $1.4
trillion in 10-year tax cuts, more than $1.1 trillion was his oft-repeated call
to make his 2001 and 2003 tax cuts permanent.
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