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The New York Times
Bush Presents Budget
That Would Increase
Deficit
By SHERYL GAY
STOLBERG, nytimes.com on the Web, February 5, 2008
WASHINGTON — President Bush
sent Congress a $3.1 trillion budget on Monday that would increase military
spending and curb the growth of Medicare and Medicaid but raise the federal
deficit by nearly $250 billion, a major setback for a president who is trying to
restore his credentials as a fiscal conservative.
The 2009 budget, Mr. Bush’s last before leaving office, was also the first to be
submitted to lawmakers entirely electronically, prompting some Democrats to joke
that the president did not print up copies because he had run out of red ink.
Mr. Bush used the document to champion some of his favorite causes — cutting
earmarks and making his tax cuts permanent — while pledging, as he did last
year, to balance the budget by 2012. But the plan stands virtually no
chance of being adopted.
Even Republicans conceded on Monday that its value was mostly, if not entirely,
symbolic.
“It’s almost a pro forma exercise,” said Senator Judd Gregg of New
Hampshire, the senior Republican on the Senate Budget Committee. Referring
to the White House, Mr. Gregg said, “I don’t think they even worked very hard at
it.”
While Mr. Bush had hoped to preside over a shrinking of the federal deficit in
his final year in office, the budget projects that the deficit, which dropped
substantially from 2004 to 2007, will go up again, to $410 billion in 2008 from
$162 billion last year. That would approach the record set in 2004, when
the deficit hit $413 billion.
The growing deficit is primarily, but not entirely, due to the economic stimulus
package of tax rebates being developed on Capitol Hill. Even so, Mr. Bush
says his proposal puts the nation on track for a balanced budget by 2012.
“This is a good, solid budget,” he said, after meeting with his cabinet at the
White House on Monday morning.
The plan covers the fiscal year 2009; Mr. Bush will be gone from office three
months after that year begins. Democrats say they intend to replace the
proposal with their own. They complained, as did some Republicans, that
the budget achieved its goals through fiscal trickery, by not fully accounting
for war spending and by assuming, for example, that domestic spending would hold
steady from 2009 to 2013.
Fulfilling a promise he made in his State of the Union address, Mr. Bush
proposed eliminating or reducing 151 programs as wasteful or inefficient, saving
$18 billion in 2009. The Department of Education accounts for 47 of the
terminated programs and three of the programs to be reduced.
Among them is a college scholarship program named for Senator Robert C. Byrd,
the 90-year-old West Virginia Democrat who is the chairman of the Senate
Appropriations Committee. Mr. Bush proposed eliminating the program, for a
savings of $40 billion, which infuriated Mr. Byrd.
“The president has slammed the door to a college education in the faces of young
Americans,” he said in a statement.
Every budget is as much a declaration of principles as an actual spending plan.
For Mr. Bush, who took office with a $236 billion surplus that turned into a
deficit after the Sept. 11 terrorist attacks and the war in Afghanistan, this
final budget offers a chance to rewrite his fiscal history. For years, he
has faced criticism from fiscal conservatives like Mr. Gregg.
As a result, this year’s budget limits the growth of all federal programs, other
than the military, domestic security and so-called entitlements like Social
Security and Medicare, to less than 1 percent. Representative John A.
Boehner of Ohio, the House Republican leader, called the plan “a chance to show
we are serious about reforming pork-barrel spending.”
Mr. Bush proposes a significant increase in spending for the Pentagon. If
the Defense Department’s proposed $515.4 billion budget is approved in full, it
will mean that, when adjusted for inflation, annual military spending will reach
its highest level since World War II. The figure does not include spending
on the wars in Iraq and Afghanistan, the war on terror and supplemental items.
Mr. Bush said his budget would slow “the unsustainable growth of entitlement
spending” with proposed savings of $208 billion over five years. This
includes savings of $178 billion in Medicare, $17 billion in Medicaid and $6
billion in student aid programs. Medicare, for instance, would grow by 5
percent under the Bush budget, not the 7.2 percent as currently predicted,
according to Mr. Bush’s budget director, Jim Nussle.
The budget estimates that federal receipts will decline this fiscal year by $47
billion, to $2.5 trillion, mainly because of the soft economy and a decline in
corporate income tax receipts. At the same time, federal spending is
expected to rise this year by $201 billion, to a total of $2.9 trillion.
(By contrast, receipts grew at a brisk pace averaging 11 percent a year from
2004 to 2007.)
Federal debt held by the public, the accumulated total of federal borrowing, has
grown substantially and would continue to do so. According to budget
documents released Monday by the White House, debt held by the public stood at
$3.3 trillion in 2001, when Mr. Bush took office, and is expected to climb to
$5.4 trillion this year and $5.9 trillion in 2009.
“Ever since this administration turned record surpluses into record deficits,
they’ve assured us that there’s good news just around the corner, good news just
around the corner,” said Representative John M. Spratt Jr., the South Carolina
Democrat and chairman of the House Budget Committee. “Well, we’ve turned
the corner and we’ve found out the news is not so good at all.”
Robert Pear contributed reporting from Washington.
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