Washington – President Bush took aim Monday at domestic spending as part of a plan to balance the budget in five years without raising taxes while increasing funding for the Iraq war and permanently expanding the military.
With the $2.9 trillion budget he submitted to Congress, Bush signaled he would attempt to squeeze spending on health care, education, housing and other domestic programs important to the Democratic majority for the duration of his term. Overall domestic spending would be held below the rate of inflation in the fiscal year that begins Oct. 1 and frozen thereafter.
The new Bush budget would also seek to reduce the rapid rate of growth in Medicare and Medicaid, trimming $101 billion from the two programs over the next five years by reducing payments to health care providers and forcing wealthier seniors to pay more for physician services and prescription-drug coverage.
Bush said his plan would bolster national security while “keeping the economy strong with low taxes and keeping spending under control.”
But Democratic leaders, who will control the budget process for the first time since Bush took office, immediately denounced the plan as an irresponsible attempt to make permanent costly tax cuts for the wealthy and to finance the war by shortchanging children, the elderly and the nation’s long- term fiscal health.
“It is disingenuous for the president to suggest cuts to Medicare and Medicaid that he knows the Congress will not support,” said House Ways and Means chairman Charles Rangel, D-N.Y. “It’s not going to happen.”
Some Democrats questioned the president’s math, saying his budget plan relies on a series of rosy economic assumptions to transform the nation’s $248 billion deficit into a $61 billion surplus by 2012. Even if the plan is successful, Democrats noted, the president would only be restoring the country’s fiscal condition to the surplus he inherited when he took office in 2001.
“This budget is filled with debt and deception, disconnected from reality and continues to move America in the wrong direction,” said Senate Budget Committee chairman Kent Conrad, D-N.D.
While the spending blueprint met resistance from Democrats, it appeared to shore up the president’s position with conservatives in his party, who have been deeply unhappy with the growth of federal spending over the past six years.
Extending Bush’s first-term tax cuts, a collection of rate reductions and tax credits that has kept more than $1 trillion in taxpayers’ pockets since 2001, would cost the Treasury an estimated $374 billion between 2008 and 2012, according to the administration.
Most of the cuts are scheduled to expire in 2010.
Bush’s proposed fiscal 2008 budget would provide another big boost in spending for the war and overall defense and diplomatic spending.
The budget plan includes $623 billion for the military next year, including $141 billion for the wars in Iraq and Afghanistan and a $50 billion down payment on the president’s plan to permanently increase the size of the armed forces by 92,000 over the next five years.
The State Department would receive nearly $35 billion, a double-digit percentage increase over current spending estimates, plus $3 billion in emergency spending related to the administration’s “global war on terror.”
