IMAGE: BUSH WITH CABINET SECRETARIES
Susan Walsh  /  AP
Flanked by Interior Secretary Gale Norton, Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld, on the right, President Bush meets with his Cabinet at the White House.
updated 2/2/2004 8:53:10 PM ET 2004-02-03T01:53:10

President Bush sent Congress a $2.4 trillion election-year budget Monday featuring big increases for defense and homeland security but also a record $521 billion deficit. He blamed the shortfall on the 2001 recession and the costs of fighting a war on terrorism.

“The reason we are where we are is because we went through a recession, we were attacked and we’re fighting a war. Those are high hurdles for a budget and for a country to overcome,” Bush told his Cabinet on Monday.

He said he was confident that he could cut the deficit in half in five years by working with Congress “to bring fiscal discipline to the appropriations process.”

Bush’s budget projects a record deficit of $521 billion this year but says it can be cut to $364 billion in 2005. However, the 2005 deficit figure does not include the ongoing costs of fighting the war in Iraq and Afghanistan.

No wartime request until after elections
White House budget director Joshua Bolten told reporters that the administration would not make a request for wartime supplemental funding for 2005 until after the November elections. He said $50 billion would probably be the “upper limit” of what would be needed in 2005. If that level is reached, it would mean Bush’s $364 billion deficit target would rise to $414 billion.

“I would hope that we would be spending substantially less than we are today, but I don’t know,” Bolten told reporters at a briefing on the budget.

To battle the soaring deficits, 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.

In total, Bolten said, Bush’s budget would eliminate 65 government programs for a saving of $4.9 billion while proposing to cut spending in 63 other programs.

Bolten said the administration targeted duplicative programs and those not achieving their objectives.

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,” 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.”

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

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

The 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.

Democrats on attack
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.

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Sen. Edward Kennedy, D-Mass, called on Congress to reject Bush’s spending plan, charging that it was the “most anti-family, anti-worker, anti-health-care, anti-education budget in modern times.”

Rep. John Spratt of South Carolina, the senior Democrat on the House Budget Committee, said Bush’s budget would reduce government spending on a broad swath of government programs from transportation to environmental protection that provide “priority services that the American people want and expect.”

On the campaign trail, Democrats running for Bush’s job were also critical. Retired Gen. Wesley Clark said the budget showed that Bush’s priorities were “tax cuts for the rich and tough luck for everyone else.” Sen. Joseph Lieberman of Connecticut said the country “can’t afford another four years of the same destructive fiscal leadership.”

Defense proposals
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 would be sent to Congress, but not until after the November elections. Congress last year approved an $87.5 billion wartime supplemental request for the current budget year.

Homeland security, another top priority, would get 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 that 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, 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 includes only $1 billion in new money for the effort over the next five years, with $11 billion more reallocated from current NASA programs. In 2005, Bush proposes increasing NASA’s budget by 6 percent, to $16.2 billion.

Other programs that would get boosts in 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.

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 would be restrained to an overall increase of just 0.5 percent, below the rise in inflation, and some agencies would suffer outright cuts. Overall, the budget calls for outright spending cuts in seven of the 16 Cabinet-level agencies.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Democrats assess blame for deficit

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