Bush Unveils $3 Trillion Budget Proposal

Feb 4th, 2008 by admin1 | Scroll down for comments

By Jonathan WeismanWashington Post Staff Writer
Monday, February 4, 2008; 11:57 AM

President Bush today unveiled a tough-minded, $3 trillion budget proposal for fiscal 2009 that would slice $14.2 billion from the growth of federal health-care programs, eliminate scores of programs and virtually freeze domestic spending — but would still record a $407 billion budget deficit.

This Story

• Bush Unveils $3 Trillion Budget Proposal

• On the Web: Budget of the U.S. Government (pdf)

The president’s final budget is a sharp contrast to the priorities of the Democratic-controlled Congress, which is likely to wait out Bush’s presidency rather than accede to many of his demands. The Bush budget plan would continue his first-term tax cuts beyond their 2011 expiration date, at a cost to the Treasury of $635 billion through 2013, extend abstinence education programs, create elementary and secondary education vouchers and guard other White House initiatives.

The president also takes aim at programs that Congress has guarded zealously — and is likely to continue protecting. Among the programs Bush would eliminate are commodity price supports for farmers, research assistance to manufacturers, career and technical education grants, weatherization assistance, community development grants, graduate medical education at children’s hospitals and a public housing revitalization program that the House just overwhelmingly reauthorized.

“In my 2009 Budget, I have set clear priorities that will help us meet our nation’s most pressing needs while addressing the long-term challenges ahead. With pro-growth policies and spending discipline, we will balance the budget in 2012, keep the tax burden low and provide for our national security,” Bush said in his final budget message.

Overall, the budget proposal underscores the precariousness of the federal government’s fiscal position as the demands of the aging baby boom generation begin to climb and an uncertain economy no longer can be expected to churn out tax revenue at a record pace.

The White House foresees the federal budget deficit rising to $410 billion this year, a sharp increase from 2007’s $162 billion deficit. Measured against the size of the economy, the deficit, at 2.9 percent of gross domestic product this year, would be well shy of the deficits of 2003 and 2004.

But, bloated in part by the $150 billion stimulus plan Bush is expecting Congress to pass in the coming weeks, the red ink of 2008 would rival the nominal dollar record of $412.7 billion in 2004. Bush’s budget office projects that the deficit will stay at $407 billion in 2009 before falling sharply, then reaching a surplus in 2012.

Budget analysts and Democrats say the good news in later years is probably illusory. The Bush budget plan makes room for $61 billion in 2009 to stop the growth of the alternative minimum tax, a parallel tax system enacted in 1969 to make sure the rich pay income tax that is increasingly squeezing the middle class. The cost of an AMT fix will continue to grow each year, but the budget makes no more allowances for the cost of that fix.

The document also assumes $70 billion in costs for the Iraq and Afghanistan wars next year, a fraction of the true costs, which could reach $200 billion in 2008. Beyond 2009, the budget includes no war costs at all.

Bush also foresees raising $2.1 billion in health-care fees on non-disabled veterans through 2013. A promised crackdown on tax cheats is supposed to raise $10.5 billion over that time.

“We’ve seen this script before,” Senate Budget Committee Chairman Kent Conrad (D-N.D.) said in a statement. “The President proposes more of the same failed fiscal 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. The result can only be the same — a further explosion of debt and the undermining of our nation’s economic security.”

Response to the budget’s toughest proposals was equally fierce from groups that would be affected. Under the budget, funding for after-school education programs, known as 21st Century Learning Centers, would fall from $1.1 billion to $800 million, and Bush proposes to transform the effort from a competitive grant program administered by the states to a system of vouchers given to the parents of participants.

“What he is proposing to do would dismantle after-school programs,” said Jodi Grant, executive director of the Afterschool Alliance.

Under the plan, a $301 million program that trains 4,700 pediatricians and pediatric sub-specialists at children’s teaching hospitals also would be eliminated, at a time when pediatric sub-specialties, such as rheumatology and pulmonology, face critical shortages.

“The request to eliminate funding to train the doctors that care for kids comes on the heels of the president’s veto of the State Children’s Health Insurance Program,” said Lawrence McAndrews, president and chief executive of the National Association of Children’s Hospitals. “I don’t think the president could be any clearer about his intentions towards children’s health care. ‘Wrong’ doesn’t begin to describe his actions.”

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