Bush sends record $521 billion Deficit to Hill

February 2nd 2004 - President Bush sent Congress a $2.4 trillion election-year budget on Monday featuring big increases for defense and homeland security but also a record $521 billion deficit.

To battle the soaring deficits, Mr. Bush proposed squeezing scores of government programs and sought outright spending cuts in seven of 15 Cabinet-level agencies. The Agriculture Department and the Environmental Protection Agency were targeted for the biggest reductions.

The president declared that his spending blueprint, which will set off months of heated debate in Congress, "advances our three highest priorities" winning the war on terror, strengthening homeland defenses and boosting the economic recovery.

"Our nation remains at war," Mr. Bush declared in his budget message. "This nation has committed itself to the long war against terror. And we will see that war to its inevitable conclusion: the destruction of the terrorists."

The president's plan for the 2005 budget year, which begins next Oct. 1, proposes spending $2.4 trillion for all government activities, up 3.5 percent from the current year. Revenues will total $2.04 trillion, a sizable 13.2 percent increase that the administration forecasts will occur from growing tax receipts powered by a stronger economy.

The budget assumes economic growth of 4.4 percent this year and 3.6 in fiscal 2005. For all of 2003, the economy grew at a 3.1 percent rate.

The president projects the 2005 deficit will be $364 billion, down from a projected record high deficit in dollar terms of $521 billion this year. He pledged to cut that in half over the next five years.

The president's budget states that stronger economic growth and reductions in general government spending will produce steady improvements in the deficit, which the administration projects will fall to $237 billion in 2009.

However, Democrats immediately attacked the spending proposal for what they viewed as harmful reductions in various government programs and the president's insistence on making his 2001 and 2003 tax cuts permanent at a cost projected in the budget of more than $900 billion over 10 years.

"This administration pledged that its tax cuts and policy choices would not turn record surpluses into record deficits, but this budget shows that's exactly what's happened," said Senate Democratic Leader Tom Daschle of South Dakota.

Sen. Ted Kennedy, D-Mass, called on Congress to reject Mr. Bush's spending plan, charging it was the "most antifamily, anti-worker, anti-healthcare, anti-education budget in modern times."

Mr. Bush would boost military spending by 7 percent in 2005, but that does not include the money needed to keep troops in Iraq and Afghanistan. Officials said a supplemental request for these funds will be sent to Congress but not until after the November elections. Congress last year approved an $87.5 billion wartime supplemental for the current budget year.

Homeland security, another top priority would receive a 10 percent boost, including an 11 percent increase in FBI funding to support increased counterterrorism activities.

A firestorm of criticism erupted last week when it was revealed the administration had re-estimated the 10-year cost of the newly enacted Medicare prescription drug benefit program at $534 billion, far above the $400 billion figure Congress used in passing the measure two months ago.
The budget documents said the major reasons for the discrepancy were higher estimates for the number of participants in the program and new projections for health care price increases.

As previously announced, Mr. Bush's budget proposes an ambitious program to return Americans to the moon as early as 2015 and eventually send a mission to Mars. However, the budget only contains $1 billion in new money for the effort over the next five years with another $11 billion reallocated from current NASA programs. In 2005, Mr. Bush proposes increasing NASA's budget by 6 percent to $16.2 billion.

Other programs that would receive boosts in Mr. Bush's budget include his No Child Left Behind education program; job training programs, including one that links community colleges with employers' and an $18 million increase for the National Endowment for the Arts.

Mr. Bush's budget proposes to hold the spending increase for all of the government's discretionary programs — those other than entitlement programs such as Social Security and Medicare — to 3.9 percent in 2005. That average rise includes big boosts for the military and homeland security.

Scores of government programs outside those two areas will be restrained to an overall increase of just 0.5 percent, below the rise in inflation, and some agencies will suffer outright cuts.

The proposed military budget, which goes to Congress to decide its fate, rings in at $401.7 billion. According to figures from the nonprofit Center for Defense Information, that will make U.S. military spending greater than the combined total of the next 21 biggest spenders, including Russia, Britain, China and France.

Under the president's budget, missile defense efforts would receive almost $10.2 billion in the new budget. That is nearly a $1.2 billion increase over this year, according to budget books provided by the Pentagon.

The proposed budget also includes a 3.5 percent raise in base pay for military personnel.

The budget also includes money to purchase 11 V-22 Osprey tiltrotor aircraft, 8 for the Marine Corps and 3 for the Air Force. The program was plagued by deadly crashes during its development.