IMAGE: President George W. Bush
Pablo Martinez Monsivais  /  AP
President Bush, second from left, speaking during a meeting with members of his cabinet, calls the nation's first ever $3 trillion spending plan "a good, solid budget."
updated 2/4/2008 1:34:08 PM ET 2008-02-04T18:34:08

President Bush sent the nation's first-ever $3 trillion budget proposal to Congress on Monday, contending that the spending blueprint will fulfill his chief responsibility to keep America safe.

The $3.1 trillion proposed budget projects sizable increases in national security but forces the rest of government to pinch pennies. It seeks $196 billion in savings over five years in the government's giant health care programs - Medicare and Medicaid.

But even with those restraints, the budget projects the deficits will soar to near-record levels of $410 billion this year and $407 billion in 2009, driven higher in part by efforts to revive the sagging economy with a $145 billion stimulus package.

Bush called the document, which protects his signature tax cuts, "a good, solid budget" But Democrats, and even a top Republican, attacked the plan for using budgetary gimmicks to claim the budget can return to balance in 2012, three years after Bush leaves office.

"They've obviously played an inordinate number of games to try to make it look better," Sen. Judd Gregg, the top Republican on the Budget Committee, said in an interview with The Associated Press.

"Let's face it. This budget is done with the understanding that nobody's going to be taking a long, hard look at it," said Gregg, R-N.H.

Democrats called Bush's final spending plan a continuation of this administration's failed policies which wiped out a projected 10-year surplus of $5.6 trillion and replaced it with a record buildup in debt.

Democratic response
"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.

For his last budget, Bush, as a money-saving measure, stopped the practice of providing 3,000 paper copies of the budget to members of Congress and the media, instead posting the entire document online at http://www.budget.gov. Democrats joked that Bush cut back on the printed copies because he ran out of red ink.

"This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing the skyrocketing debt,' said Senate Majority Leader Harry Reid, D-Nev.

"The president proposes more of the same failed policies he has embraced throughout his time in office - more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

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Bush defended his record, saying it supported a strong defense and, if his policies are followed, will produce a budget surplus of $48 billion in 2012.

"Two key principles guided the development of my budget - keeping America safe and ensuring our continued prosperity," Bush said in his budget message to Congress.

Reviewing the budget with his Cabinet, Bush said it would keep the economy growing and protect the U.S. militarily. He called it "innovative" because it was dispatched to Congress electronically.

Bush's final full budget is for the 2009 fiscal year, which begins on Oct. 1. It proposes spending $3.1 trillion, up 6 percent from projected spending of $2.9 trillion in the current budget year.

Part of the deficit increase this year and next reflects the cost of a $145 billion stimulus package of tax refunds for individuals and tax cuts for business investment that Bush is urging Congress to pass quickly to try to combat a threatened recession.

White House budget director Jim Nussle, briefing reporters on the spending plan, said that the quick bipartisan agreement reached on the stimulus package in the House showed what could happen when Democrats wanted to work with the White House to get things done. The stimulus plan has yet to clear the Senate.

Budget battles ahead
Democrats said the forecast of a budget surplus in 2012 was based on flawed math that only included $70 billion for the wars in Iraq and Afghanistan in 2009 and no money after that. It also failed 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 more than double the $48 billion surplus Bush is projecting for that year.

White House press secretary Dana Perino told reporters that the war effort in 2009 would "certainly" cost more than the $70 billion included in the budget.

Bush's spending blueprint sets the stage for what will probably be epic battles in the president's last year in office, as both parties seek to gain advantages with voters heading into the November elections. Some have suggested that Democrats, unable to override Bush's expected vetoes, might choose to keep the government operating with a stopgap funding bill in hopes that a Democrat more amenable to their priorities will be elected in November.

Video: Congress delivers $200 budget The 6 percent overall increase in spending for 2009 reflects a continued surge in spending on the government's huge benefit programs for the elderly - Social Security and Medicare, even with the projected five-year savings of $196 billion over five years. Those savings are achieved by freezing payments to hospitals and other health care providers. A much-smaller effort by Bush in this area last year went nowhere in Congress.

While Bush projects that total security funding in the areas of the budget controlled by annual appropriations will go up by 8.2 percent, he projects only a 0.3 percent increase in discretionary spending for the rest of government.

To achieve such a small boost, Bush would hold hundreds of programs well below what is needed to keep up with inflation. He also seeks to eliminate or sharply slash 151 programs he considers unnecessary.

Nussle said that Congress had agreed to eliminate 29 of 141 programs Bush targeted last year, which he said was a good start.

This year, the largest number of program terminations - 47 - are in education including elimination of programs to encourage arts in schools, bring low-income students on trips to Washington and provide mental health services.

Bush's budget 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.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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