Bush’s budget filled with political land mines

By Andrew Taylor The Associated Press

WASHINGTON – President Bush sent his GOP allies in Congress an austere budget for next year that is filled with political land mines and flush with difficult choices.

The document unveiled yesterday clamps down on domestic programs favored by lawmakers and calls for politically perilous curbs to Medicare that promise to bog down in a Congress already poisoned by election-year politics.

“It’s a heavy lift,” said Senate Budget Committee Chairman Judd Gregg, R-N.H. “There’s no question it’s going to be a challenge.”

Despite the sacrifices called for in education, Amtrak, community development and local law enforcement grants, health research, and many other programs frozen or cut under his plan, Bush’s $2.77 trillion blueprint forecasts a record $423 billion deficit for the current year and improves upon that figure in 2007 largely by lowballing cost estimates for the war in Iraq.

Bush gives a generous 6.9 percent budget increase to the Pentagon – which would receive a record $439 billion before accounting for the wars in Iraq and Afghanistan – and wants Congress to pass a $3 billion or 14 percent increase in foreign aid.

His proposal projects $70 billion in new funds to execute the war in Iraq through the end of September, which will come in a detailed request later this month and bring total war funding for 2006 to $120 billion. Another $50 billion is allocated for next year.

“My administration has focused the nation’s resources on our highest priority – protecting our citizens and our homeland,” Bush said in his budget message.

The White House also said that it will request another $18 billion or so in hurricane relief in the next few days.

At the same time, Bush proposes to kill or dramatically slash 141 programs for savings of almost $15 billion. Congress is likely to reject many of the cuts, such as a proposal to kill the Commodity Supplemental Food Program, which provides food aid to the very poor.

Major initiatives like making Bush’s landmark tax cuts permanent and providing $52 billion in health care tax breaks through 2011 face challenges of their own. Every year, Bush has called for making his 2001 and 2003 tax cuts permanent. Congress has yet to do so.

Most of Bush’s tax cuts expire in 2010. Extending them would cost $120 billion in 2011 and $1.2 trillion from 2012-2016.

The White House credits Bush’s tax cuts for fueling economic growth and surging revenues despite high fuel prices, last year’s devastating hurricanes and the recession and terrorist attacks of 2001.

“Those tax cuts are essential toward sustaining the good economic growth we have now,” said White House Budget Director Joshua Bolten. “The most important thing we can do with our federal budget is keep a good, strong, growing economy that’s generating jobs.”

The budget plan projects deficits on a downward trajectory, especially when measured against the size of the economy and meets, at least on paper, Bush’s 2004 promise to cut the deficit in half. That year Bush projected a $521 billion deficit and promised to cut that in half by 2009.

Bush projects a 2009 deficit of $208 billion, but that depends on Congress accepting all of his spending cut proposals. His budget also leaves out the long-term costs of occupying Iraq and Afghanistan, which are impossible to predict with certainty.

With the increases for the Pentagon, this year’s Iraq and Afghanistan war costs, and new tax cuts for health care, the budget shows that deficits over the five years ending in 2011 would total nearly $1.2 trillion.

Democrats charged that the real picture is worse and that Bush was understating future deficits by leaving out major items such as the long-term costs of the Iraq war and permanently fixing the alternative minimum so it doesn’t hit more middle-class families.