Bush's $2.8T Budget Proposal Cuts Domestic Programs
By Jonathan Weisman
Washington Post Staff Writer
Monday, February 6, 2006; 1:51 PM
President Bush today proposed a $2.8 trillion budget for fiscal 2007 that would cut billions of dollars from domestic programs ranging from Medicare and food stamps to local law enforcement and disease control, while extending most of his tax cuts beyond their 2010 expiration date.
Under the plan, a budget deficit -- expected to reach $423 billion this year -- would fall to $183 billion by 2010, more than meeting his goal to cut the deficit in half by 2009. But it would rise again to $205 billion in 2011, reflecting the cost of the extensions in the president's tax cuts.
"We have set clear priorities that meet the most pressing needs of the American people while addressing the long-term challenges that lie ahead," Bush said in his budget message. "The 2007 Budget will ensure that future generations of Americans have the opportunity to live in a Nation that is more prosperous and more secure."
The budget, for the fiscal year that begins Oct. 1, is a tall order for a Congress facing a difficult election year. Defense spending would rise 6.9 percent, from $411 billion to $439 billion. Homeland security spending would rise by 3.3 percent.
But all other operations of government would fall by $2.2 billion, or 0.5 percent.
To accommodate increased spending in the president's favored non-security programs such as diplomacy and foreign aid, veterans health care and energy, other programs would face significant cuts. Agriculture spending would fall 6.5 percent and education spending would drop 3.8 percent. The Department of Transportation would lose 9.4 percent of its discretionary budget. The Army Corps of Engineers -- a congressional favorite that was highly criticized in the wake of Hurricane Katrina -- would be cut 11.2 percent.
But the biggest savings would come from entitlement programs, in which spending rises and falls according to complex formulas that Congress would have to change to meet Bush's demands. The president proposed cutting Medicare by $36 billion over five years, and $105 billion over a decade -- mainly by reducing payments to hospitals and other providers. Federal child-support enforcement payments would fall slightly, while Medicaid and the State Children's Health Insurance Program would lose $5 billion over five years and $12 billion over 10 years.
Some of the savings that Bush seeks were specifically rejected by Congress last year, such as tightening eligibility for food stamps and opening Alaska's Arctic National Wildlife Refuge to oil drilling.
And a slew of tax cuts, tax incentives and tax-cut extensions would cost the Treasury $1.7 trillion over the next decade, dwarfing the $172 billion in entitlement savings and proposed user fees in the budget. Bush also included the cost of his embattled plan to add private investment accounts to Social Security, at a cost to the Treasury of $82 billion in the first two years of the program and $172 billion over the first seven years.
All totaled, his proposals for entitlement programs -- including cuts, tax hikes and Social Security partial privatization -- would actually increase spending by $551 billion. But those costs are not reflected in Bush's deficit projections, since the president did not deduct the Social Security costs from the bottom line.
The spending cuts, coupled with the policy changes and tax proposals, are a recipe for tough fights in Congress. Many House Republicans, having just elected a new majority leader on pledges of fiscal austerity, will be ready to embrace many of the president's proposals.
"As we continue our efforts to control spending and reduce the deficit, the president's proposal provides a solid starting point for this year's budget by focusing on our most pressing needs: sustaining our strong economy and job creation, and ensuring the strength of our national defense and homeland security," said House Budget Committee Chairman Jim Nussle (R-Iowa).
But Democrats are spoiling for a fight, especially in tough congressional districts where Republican moderates will be caught between the demands of their Washington leadership and the misgivings of many voters.
"When it comes to protecting those who need it most, America has always had a moral compass," said Senate Minority Leader Harry M. Reid (D-Nev.). "For the past six years, President Bush has read it upside down. After driving the nation into a fiscal mess, the president is asking our seniors, our students and our families to clean it up while the wealthy special interests reap the rewards."
© 2006 The Washington Post Company
By Jonathan Weisman
Washington Post Staff Writer
Monday, February 6, 2006; 1:51 PM
President Bush today proposed a $2.8 trillion budget for fiscal 2007 that would cut billions of dollars from domestic programs ranging from Medicare and food stamps to local law enforcement and disease control, while extending most of his tax cuts beyond their 2010 expiration date.
Under the plan, a budget deficit -- expected to reach $423 billion this year -- would fall to $183 billion by 2010, more than meeting his goal to cut the deficit in half by 2009. But it would rise again to $205 billion in 2011, reflecting the cost of the extensions in the president's tax cuts.
"We have set clear priorities that meet the most pressing needs of the American people while addressing the long-term challenges that lie ahead," Bush said in his budget message. "The 2007 Budget will ensure that future generations of Americans have the opportunity to live in a Nation that is more prosperous and more secure."
The budget, for the fiscal year that begins Oct. 1, is a tall order for a Congress facing a difficult election year. Defense spending would rise 6.9 percent, from $411 billion to $439 billion. Homeland security spending would rise by 3.3 percent.
But all other operations of government would fall by $2.2 billion, or 0.5 percent.
To accommodate increased spending in the president's favored non-security programs such as diplomacy and foreign aid, veterans health care and energy, other programs would face significant cuts. Agriculture spending would fall 6.5 percent and education spending would drop 3.8 percent. The Department of Transportation would lose 9.4 percent of its discretionary budget. The Army Corps of Engineers -- a congressional favorite that was highly criticized in the wake of Hurricane Katrina -- would be cut 11.2 percent.
But the biggest savings would come from entitlement programs, in which spending rises and falls according to complex formulas that Congress would have to change to meet Bush's demands. The president proposed cutting Medicare by $36 billion over five years, and $105 billion over a decade -- mainly by reducing payments to hospitals and other providers. Federal child-support enforcement payments would fall slightly, while Medicaid and the State Children's Health Insurance Program would lose $5 billion over five years and $12 billion over 10 years.
Some of the savings that Bush seeks were specifically rejected by Congress last year, such as tightening eligibility for food stamps and opening Alaska's Arctic National Wildlife Refuge to oil drilling.
And a slew of tax cuts, tax incentives and tax-cut extensions would cost the Treasury $1.7 trillion over the next decade, dwarfing the $172 billion in entitlement savings and proposed user fees in the budget. Bush also included the cost of his embattled plan to add private investment accounts to Social Security, at a cost to the Treasury of $82 billion in the first two years of the program and $172 billion over the first seven years.
All totaled, his proposals for entitlement programs -- including cuts, tax hikes and Social Security partial privatization -- would actually increase spending by $551 billion. But those costs are not reflected in Bush's deficit projections, since the president did not deduct the Social Security costs from the bottom line.
The spending cuts, coupled with the policy changes and tax proposals, are a recipe for tough fights in Congress. Many House Republicans, having just elected a new majority leader on pledges of fiscal austerity, will be ready to embrace many of the president's proposals.
"As we continue our efforts to control spending and reduce the deficit, the president's proposal provides a solid starting point for this year's budget by focusing on our most pressing needs: sustaining our strong economy and job creation, and ensuring the strength of our national defense and homeland security," said House Budget Committee Chairman Jim Nussle (R-Iowa).
But Democrats are spoiling for a fight, especially in tough congressional districts where Republican moderates will be caught between the demands of their Washington leadership and the misgivings of many voters.
"When it comes to protecting those who need it most, America has always had a moral compass," said Senate Minority Leader Harry M. Reid (D-Nev.). "For the past six years, President Bush has read it upside down. After driving the nation into a fiscal mess, the president is asking our seniors, our students and our families to clean it up while the wealthy special interests reap the rewards."
© 2006 The Washington Post Company
Bush’s $2.77 trillion budget for fiscal 2007, federal spending would top revenue by $354 billion, following a six-year string of staggering deficits -- 
, the total since 9-11 attacks is about $440 billion. That’s apart from the defense budget upped 7% from last year to $439.3 billion. 
