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Bush unveils $2.13 trillion 'bold agenda' budget

Associated Press

President Bush waves to servicemen and their families as he promotes his defense spending agenda yesterday at Eglin Air Force Base, Fla. Many of the high-tech weapons used in Afghanistan, like the missile used as a stage prop in the foreground, were developed and tested at Eglin.

By Associated Press
Tuesday Feb. 5, 2002

WASHINGTON - President Bush sent Congress a $2.13 trillion budget yesterday that would give the military the biggest increase in two decades to pursue the war on terrorism while doubling spending on homeland security.

However, the budget also proposed steep cuts across a wide swath of other government programs from highway construction to farm subsidies-reductions that Democrats contended were being made to protect Bush's favored tax cuts.

After four years of surpluses, Bush's budget projects the government will go in the red through 2004, including a $106 billion deficit this year. The $2.13 trillion spending proposal for the fiscal year beginning Oct. 1 reflects an increase of $75.9 billion, or 3.7 percent, above this year's spending.

But that overall amount masks wide differences, with favored programs such as defense and homeland security slated to receive huge increases while scores of agencies would face big cuts. Spending for highway projects would fall by nearly $9 billion, due to a drop in gasoline tax collections as a result of the recession, and subsidy payments to farmers would decline by $5 billion, reflecting administration hopes that crop prices will rise next year.

Bush, visiting Eglin Air Force Base in Florida, said he was asking for the biggest increase in Pentagon spending in a generation to finance the battle against terrorism.

"We're unified in Washington on winning this war," he told cheering troops. "One way to express our unity is for Congress to set the military budget, the defense of the United States, as the No. 1 priority and fully fund my request."

The spending blueprint is the opening act in what will be months of wrangling in Congress. The massive five-inch high stack of budget books had barely reached congressional desks before Democrats started complaining.

Senate Budget Committee Chairman Kent Conrad, D-N.D., likened the administration's budget accounting to tactics employed by the bankrupt Enron Corp.

"Enron got into trouble because they didn't fully disclose debt they have and that is precisely what the federal government is doing," Conrad said.

He contended the administration would raid Social Security and Medicare surpluses to cover shortfalls in the rest of government.

"The president funds large new tax cuts by tapping Social Security," said Thomas Kahn, Democratic staff director for the GOP-led House Budget Committee. "Over 10 years, we are depleting $1.5 trillion of the Social Security trust fund."

White House Budget Director Mitchell Daniels defended the dip back into deficit spending, which will last through Bush's current term.

"Running large surpluses and paying down debt is a very important objective in this administration," Daniels told reporters at a budget briefing. "But there are two or three things that come ahead of that goal: defeating terrorism, defending the lives of Americans and getting the economy rolling again."

In the most dramatic indication of how much the budget landscape has been altered in a year's time, Bush projects that surpluses over the next 10 years will total just $1 trillion - down from the $5.6 trillion that he estimated just a year ago.

While Bush blamed much of the erosion on the country's first recession in a decade and the costs of waging a war against terrorism, Democrats pointed to Bush's 10-year, $1.35 trillion tax cut. They said the administration, to protect those tax cuts, was seeking unnecessarily severe budget cuts across a wide swath of government programs.

The president's spending plan for the next fiscal year came wrapped in a red-white-and-blue cover depicting the American flag - and for the first time ever featured color photos of everything from military jets to ordinary Americans in an effort to bring the mind-numbing parade of budget charts to life.

Defense would get a $48 billion boost in its spending and ability to award contracts, the biggest increase in two decades. Spending to make Americans more secure at home would nearly double to $37.7 billion.

To make room for those big gains, scores of other programs from highway spending to environmental projects, would be cut.

The president, in a message accompanying the budget, said his administration was prepared to do whatever it took to win the war against terrorism.

"My budget provides the resources to combat terrorism at home, to protect our people and preserve our constitutional freedoms," Bush said.

He pledged to wage a "bold agenda for government reform" that would eliminate wasteful spending by using for the first time a formal performance rating that determined which government programs were failing to do their job effectively.

Bush's proposed cuts include a $9 billion reduction in highway spending, reductions in water projects by the Army Corps of Engineers and elimination of hundreds of education and health projects that lawmakers had won congressional approval for last year for their home districts.

Critics contended Bush was wielding the budget knife to protect his most prized economic achievement: last year's passage of a massive $1.35 trillion, 10-year tax cut.

In his new budget, the president proposes spending $344 billion to make that cut, which is due to expire after 2010, last for two more years.

Overall, Bush proposes new tax cuts totaling $591 billion over 10 years. Two major reductions involve tax relief for corporations and higher-income individuals - part of his economic stimulus program that has been stalled in the Senate because of Democratic objections.

Bush's budget is being released in a vastly different environment than his first spending blueprint just a year ago.

Because of the recession, the terrorist attacks and his huge tax cut, the projection he made just a year ago for a 10-year surplus of $5.6 trillion has melted down to just $1 trillion, a figure that assumes his new spending and tax proposals become law. The budget projects a deficit for the current year of $106 billion, breaking a string of four straight years of surpluses, a feat last accomplished 70 years ago.

For the 2003 budget, Bush projects a deficit of $80 billion followed by a small $14 billion deficit in 2004 before surpluses return in 2005.

Bush proposes getting $1.2 billion in new revenue by leasing the drilling rights in Alaska's Arctic National Wildlife Refuge, something strongly opposed by environmentalists.

The president also makes another attempt to win congressional approval by providing prescription drugs for Medicare recipients, which he estimates would cost $190 billion over the next decade. Democrats contend the cost would be much higher.

One of the president's savings would be a $9 billion reduction in 2003 in federal payments to hospitals.

The military budget would increase by 14.5 percent, the biggest gain since 1982 when Ronald Reagan was president, with seven cents of every dollar in the $379 billion proposal going for the war on terrorism.

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