Bush Spending Plan, President Bush, Spending Plan
Bush Spending Plan, President Bush, Spending Plan

Bush Budget Would Bring Record Deficits

ANDREW TAYLOR | February 4, 2008 11:11 PM EST | AP

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WASHINGTON — The record $3.1 trillion budget proposed by President Bush on Monday would produce eyepopping federal deficits, despite his attempts to impose politically wrenching curbs on Medicare and eliminate scores of popular domestic programs.

The Pentagon would receive a $36 billion, 8 percent boost for the 2009 budget year beginning Oct. 1, even as programs aimed at the poor would be cut back or eliminated. Half of domestic Cabinet departments would see their budgets cut outright.

Bush's overall request for defense spending in 2009 is $588.3 billion, compared with $670 billion this year. But it includes only $70 billion for initial war costs in Iraq and Afghanistan, $119 billion less than has been projected for this year. That $70 billion is almost certain to increase.

Slumping revenues and the cost of an economic rescue package will combine to produce a huge jump in the deficit to $410 billion this year and $407 billion in 2009, the White House says, just shy of the record $413 billion set four years ago.

But even those figures are optimistic since they depend on rosy economic forecasts and leave out the full costs of the war in Iraq. The White House predicts the economy will grow at a 2.7 percent clip this year, far higher than congressional and private economists expect, and the administration's $70 billion figure for military operations in Iraq and Afghanistan is simply a placeholder until the next president takes office.

Bush's lame-duck budget plan is likely to be ignored by Congress, which is controlled by Democrats and already looking ahead to November elections. His long-term projections are mostly academic since he's leaving office next January.

The president forecasts a $48 billion surplus by 2012, keeping a promise he made two years ago when strong revenue predictions made it look far easier. Now, he's relying on spending cuts _ for everything from transportation to Medicare and Medicaid to nonprofit groups that help the poor _ to do the job in order to keep his signature 2001 and 2003 tax cuts intact instead of expiring at the end of 2010.

"Our formula for achieving a balanced budget is simple: create the conditions for economic growth, keep taxes low and spend taxpayer dollars wisely or not at all," Bush said in his budget message.

Democrats said the forecast of a budget surplus in 2012 was based on flawed math that included only $70 billion for the wars in Iraq and Afghanistan in 2009 and no money after that. The budget plan also fails 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.

Jim Nussle, the White House budget director, said the softening economy, continuing war costs and the deficit-financed economic stimulus measure soon to clear Congress were responsible for the worsening deficit picture. And he said that the deficits experienced during the Reagan years and Bush's father's administration were far worse when compared to the size of the economy.

"It's a manageable deficit _ it isn't the largest in history by any stretch of the imagination _ and it's one that can be managed if we get economic growth back on track," Nussle said.

Bush is leaving his successor an enormous fiscal dilemma. The deficit numbers will mean pressure to allow some tax cuts to expire, especially the 35 percent bracket for wealthy taxpayers, which will revert to 39.6 percent at the end of 2010 unless renewed. Pressure from Wall Street to trim the deficit may cause even Democrats to go after the spiraling growth of Medicare and the Medicaid health care program for the poor and disabled.

"There was an assumption that in the short term that the budget would start to correct and that we could balance in the short term," said Sen. Judd Gregg of New Hampshire, top Republican on the Budget Committee. "But with the stimulus package and with the continuing war costs, that's not going to happen. In fact it's going to get very serious when you're hitting $400 billion deficits."

"We've been able to close the deficit gap with good economic growth, therefore good revenue growth. Those days are coming to an end, and we're going to have to do it the old fashioned way, through real spending discipline," said top House Budget Committee Republican Paul Ryan of Wisconsin.

Bush proposes killing or cutting back sharply 151 programs to save $18 billion next year. Many of those cuts have been proposed and rejected by Congress before, such as moves to eliminate community services grants to nonprofit groups that help the poor, a food program aimed at low-income seniors and grants to help states keep illegal immigrants convicted of felonies in jail. Lawmakers will surely restore proposed cuts to clean water grants, funding for local law enforcement and homeland security grants to states and local governments.

"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.

Overall, Bush proposes a five-year freeze on domestic programs funded by Congress each year. For 2009, that means just a 1 percent boost in a universally supported food program for poor pregnant women and their children, despite rapidly rising food costs. Health research funded by the National Institutes of Health would be frozen, which is likely to mean fewer research grants.

Some of Bush's proposals are hopelessly unrealistic, such as cutting veterans' medical programs for four years in a row after awarding them a small increase next year. Their costs have nearly doubled during Bush's tenure.

Bush's budget does contain some increases, for abstinence education, Pell Grants for college students from low-income families and grants to school districts. The Food and Drug Administration would get a larger-than-average budget increase to send staff overseas to inspect food and drugs imported into the United States.

Foreign aid would grow by 10.3 percent, to $22.7 billion, with big increases for HIV/AIDS programs, anti-drug and -crime programs in Mexico and Latin America, development aid, and security packages mainly for Israel, Egypt, Colombia and Lebanon.

Funding for the State Children's Health Insurance Program, the subject of an intense battle with Democrats last year, would increase by almost $20 billion over the next five years. That still falls short of a bipartisan plan passed twice by Congress.

The budget proposes eliminating the $283 million federal program to help people make their homes more energy efficient and would cut energy aid to poor households by $500 million, a 22 percent drop over this year's spending. Sen. Jeff Bingaman, D-N.M., called scrapping the home weatherization program "completely wrong headed" at a time of high heating costs.

Seven years ago, Bush took over a government predicted to generate $5.6 trillion in surpluses over 10 years. Those estimates were flawed, but there's no question he's leaving his successor a budget in far weaker fiscal shape than he inherited.

For instance, when he took office the total federal debt held by the public was $3.3 trillion, and some policymakers actually worried that investors might not be able to get their hands on enough federal bonds unless taxes were cut. Now, debt held by the public _ including foreign governments _ is expected to reach $5.4 trillion this year and $5.9 trillion in 2009, according to Bush's budget submission. Some $2.3 trillion is foreign held.

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"Yuk, Yuk, Yuk... see I can hold the budget in one hand." - Bush

    Favorite    Flag as abusive Posted 11:14 AM on 02/05/2008

I have shut my wallet in protest. As long the taxes generated from my spending go to fuel this lunatic ass hole's lust for war, destruction, suffering, death, and misery I will not be participating in the purchase of goods and services. Until he is out of office, I will only be buying necessities. Perhaps some might suffer if we all did the same but America is made up of more than just "consumers", I would like to believe we have a conscious as well.

    Favorite    Flag as abusive Posted 08:22 AM on 02/05/2008

How can anybody still be buying the Republican message?
Watching ads for a local Republican primary in Maryland one would think that we are still living in the 90s, that the last seven years just haven't happened.

The Republicans are still selling the message that the greatest threat to this country is the Liberals who hate America and want to surrender to terrorists.
(that is after they tax everyone into poverty and make them use socialized medicine, employing doctors with rusty tools from India and Pakistan).
And the GOOD Republicans have all voted in lockstep with George Bush who has fought to make the government smaller and the middle class stronger.

What planet would one have to live on to still believe this message?

    Favorite    Flag as abusive Posted 08:19 AM on 02/05/2008
- Ron I'm a Fan of Ron permalink

Since Bush has been in office he's preached he'll balance the budget, but every time it turns out to be nothing but Bush political doublespeak. He says one thing but does another. The Congress has been made powerless by this president, other than to determine an amount for the budget, then he'll threaten to steal it from the poor and needy if he doesn't get his way. Normal GWB policy. Look for massive tax cuts for the corporations and wealthy, with huge increases for the war machine, and the middleclass and poor pay through the nose.

    Favorite    Flag as abusive Posted 07:42 AM on 02/05/2008

We, the people, have the power. Let us not pay taxes on 15 April. They cannot lock us all up!
Hold it in your bank account and then let us make a deal. Who do they think they are?
Oh, yes, Bush is the decider. Well, let us help him to decide and not pay up.

    Favorite    Flag as abusive Posted 06:53 AM on 02/05/2008

Maybe Bush felt that the GOP wasn't doing badly enough already in the polls, leading up to November, and wanted to remind the American people why they hate him so much.

    Favorite    Flag as abusive Posted 06:53 AM on 02/05/2008

So, Doofus wants to make his friends' tax cuts permanent, while cutting social security and medicare. I have a better idea, and it involves him pulling his head out of somewhere very dark and smelly. If Republicans want to balance the budget, they should give the job to the Democrats. They're the only ones who know how to doing anything right anymore.

    Favorite    Flag as abusive Posted 05:34 AM on 02/05/2008
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Show of hands. How many out there don't believe that our economy can be dramatically improved with an infusion of 3.7 BILLION DOLLARS PER WEEK ???

That is the 2008 cost of our unjustified occupation of Iraq.

Demand of your representatives to end the occupation now ... ASAP.

8

    Favorite    Flag as abusive Posted 05:27 AM on 02/05/2008
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The last official act of any (corrupt) government is to loot the treasury.

    Favorite    Flag as abusive Posted 05:06 AM on 02/05/2008

quite telling about America's mindset while 1600+ comment on hillary's tear vs. a couple hundred opinions about how this president is looting the nation into the ground. tsk tsk.......

    Favorite    Flag as abusive Posted 03:36 AM on 02/05/2008
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I'll file this in the DUH folder

    Favorite    Flag as abusive Posted 12:47 AM on 02/05/2008

3.1 Trillion. That's a lot of money.

It is also a very distributive and backward budget. More for them (war) and less for us (domestic cuts).

That's the thinking here?

I just don't get it.

    Favorite    Flag as abusive Posted 11:38 PM on 02/04/2008

Lets keep this in context, a trillion dollars aint what it used to be. Thank God the Pentagon is getting a few more bucks....maybe we can afford an Octagon soon.

    Favorite    Flag as abusive Posted 11:30 PM on 02/04/2008

I like the idea proposed by someone to just ignore his budget and let him go out quietly. The current budget expires on Sept. 30 and the new budget goes into effect on Oct. 1. This means that all we have to do is wait him out about 3 1/2 months. We've done that before when Congress could not agree on a budget and kept the government running on temporary funding bills. However, I think the Democrats will cave in again. I don't hold out hope that they will finally put their foot down and draw that line in the sand once and for all. They refuse to impeach or hold Bush accountable so far so my guess is they'll cave in to his tantrum like a desperate parent and give him his last wish just to get him out. In the process we get screwed for the next generation to come; they get their retirement and medical care and we get the shaft.

    Favorite    Flag as abusive Posted 10:46 PM on 02/04/2008

Class warfare at its finest! Anyone still doubt that Bush the Second wants to obliterate the middle class, reduce most Americans to serfs, and travel back in time to the Middle Ages? I rest my case.

    Favorite    Flag as abusive Posted 10:39 PM on 02/04/2008
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