WASHINGTON — President Bush on Monday proposed a $3.1 trillion budget for fiscal 2009 that Democrats said was more of the same — big deficits, big tax breaks and big increases in defense spending — while even Republicans conceded that Congress is likely to ignore its major provisions.
Bush's spending plan would push the federal deficit near and perhaps beyond the record $413 billion of fiscal 2004.
The deficit would grow partly because of the roughly $150 billion economic stimulus agreement that Bush and House of Representatives leaders agreed to last month, a plan that includes�rebates for most taxpayers this summer. The budget projects deficits of $410 billion this fiscal year and $407 billion in fiscal 2009 — more than twice last year's $163 billion shortfall.
Bush proposed sharp spending increases for defense and homeland security and holding spending on many popular domestic programs well below the rate of inflation — and targeting 151 such programs for elimination or deep cuts.
"Our budget protects America and it encourages economic growth," he told his Cabinet on Monday.
The president allotted $70 billion for 2009 for the wars in Iraq and Afghanistan, but left war-spending targets for future years — and for that matter much of next year — up to future presidents and Congresses.
"It's unrealistic," said Chris Edwards, the director of tax policy at Washington's Cato Institute. War spending in the current fiscal year is estimated at $212 billion; last year's cost was $192 billion.
Budget Director James Nussle defended Bush's approach, calling the $70 billion a "bridge in order to deal with that which we know," at least until Gen. David Petraeus, the U.S. commander in Iraq, reports to the president on the war's progress next month.
Also left unaddressed and unfunded is a permanent solution to the alternative minimum tax, which continues to affect more middle-class families. Bush proposed $46.7 billion to "fix" the AMT in the coming fiscal year, but nothing beyond that.
He also didn't say how he'd pay for making his tax cuts permanent; they're set to expire in 2010. His budget estimates the 10-year cost of extending them at $2.1 trillion.
The reason for the vagueness, Nussle said, is that "budgets are, frankly, one-year documents. We project over five years, but they're one-year documents, and they project what we believe is the path in order to get back to balance."
But to Democrats — and some Republicans — the path to budget balance was far too murky to be believed.
"This is a budget that in many ways is imaginary," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "It doesn't tell us his real intentions."
Democrats painted Bush's budget as cold-hearted and insensitive to a long list of domestic needs.
"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.
Bush's ultimate budget goal is to create a $48 billion surplus by 2012 while maintaining a strong commitment to national security. That's why he'd provide nearly $500 million for 2,200 new Border Patrol Agents and money for new technology and additional miles of fencing along the Mexican border.
His defense budget would include $515.4 billion for the Pentagon, a 7.5 percent increase, including $20.5 billion to boost the size of the Army and Marine Corps, as well as a 3.4 percent pay raise for military personnel.
The chief value of the budget, transmitted in electronic form to Congress for the first time, is likely to be political. Republicans have in it a thick new portfolio of charts and numbers to bolster their economic arguments. They can point to how Bush proposed to limit growth in non-security discretionary spending — generally all domestic programs other than Social Security, Medicare and Medicaid — to less than 1 percent next year and keep it at those levels for the next four years.
House Republican Leader John A. Boehner of Ohio, aware that that probably won't happen, said it's up to Democrats to come up with their own balanced budget plan.
"Anything short of that," he said, "would show that this Congress is not serious about fiscal responsibility and pro-growth economic policies."
One way to get more revenue, said House Majority Leader Steny H. Hoyer, D-Md., is to deny Bush the tax cut extensions that he wants.
"The president's proposals for ferreting out wasteful spending are dwarfed by the more than $700 billion that would be added to the deficit over the next five years" if the tax breaks become permanent, Hoyer said.
What sparked Democrats' ire most was Bush's decision to eliminate or sharply reduce 151 programs, which the president estimated would save $18.1 billion next year.
Many are small education grant programs that include help for career and technical education, civic education, elementary and secondary school counseling, alcohol abuse reduction, the National Writing Project, Special Olympics education and the Thurgood Marshall Legal Opportunity program. Bush's proposed savings from the education program cuts would total $3.2 billion.
Nussle said that some of those savings would help pay for a new $300 million program to help lower-income students get scholarships to private schools or public schools far from troubled neighborhoods.
One of the biggest spending cut proposals targets Medicare and Medicaid, where the president wants to slash about $200 billion over the next five years. He would cut payments to health-care providers and to hospitals.
Congress rejected many of those same proposals last year and is unlikely to accept them in an election year.
- Includes a roughly $150 billion economic stimulus plan that would provide tax rebates for individuals and breaks for businesses later this year.
- Would provide a 7.5 percent increase in Pentagon spending and $70 billion to help pay for the wars in Iraq and Afghanistan.
- Would increase homeland security spending by about 11 percent, includes money for 2,200 new Border Patrol agents.
- Would cut Medicare costs by about $200 billion over five years by freezing payments to health care providers and limiting payments to hospitals.
- Would eliminate or sharply reduce spending for 151 domestic programs, notably many education grants.
- Would provide a one-year "patch" for the alternative minimum tax, but no funding for a longer-term solution.
- Would hold the growth in non-security discretionary spending below 1 percent next year.
ON THE WEB
Read a summary of the budget proposals.
McClatchy Newspapers 2008