Bush Sends $3.1T Budget To Congress

President Bush unveiled a $3.1 trillion budget on Monday that supports sizable increases in military spending to fight the war on terrorism and protects his signature tax cuts.

Mr. Bush reviewed the budget with his Cabinet. He held aloft a computer tablet that contained the budget details.

"This is a good, solid budget," the president said. "It's not only an innovative budget in that it's coming to Congress over the Internet. It's a budget that's balanced - gets to balance in 2012 and saves taxpayers money."

The spending proposal, which shows the government spending $3 trillion in a 12-month period for the first time in history, squeezes most of government outside of national security, and also seeks $196 billion in savings over the next five years in the government's giant health care programs - Medicare for the elderly and Medicaid for the poor.

Even with those savings, Mr. Bush projects that the deficits, which had been declining, will soar to near-record levels, hitting $410 billion this year and $407 billion in 2009. The all-time high deficit in dollar terms was $413 billion in 2004.

Mr. 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.

"It's a budget that keeps important objectives. One, it understands our top priority is to defend our country so we fund our military as well as fund the homeland security," Mr. Bush said. "Secondly, the budget keeps our economy growing.

Bush also called on Congress anew to make expiring tax cuts permanent.

Bush said his plan would boost money for education, health, housing and helps make the tax code fairer.

"This budget is one that keeps spending under control," the president said. He said it would eliminate or reduce 151 "wasteful or bloated" programs, which would save taxpayers $18 billion.

"It also takes a hard look at entitlement growth over the next five years," Bush said.

"It's essential that we make sure that we deal with the uncertainties — the economic uncertainties we face," Bush said.

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 Mr. Bush is urging Congress to pass quickly to try to combat a threatened recession.

Mr. Bush projects that the deficit will decline rapidly starting in 2010 and will achieve a $48 billion balance in 2012.

But Democrats said that forecast was based on flawed math that only included $70 billion for the wars in Iraq and Afghanistan in 2009 and no money after that and 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 $118 billion, more than double the surplus Mr. Bush is projecting for that year.

"This is a budget that sticks it to the middle class, comforts the wealthy and has a set of priorities that are not the priorities of the American people," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

Even some Republicans faulted Bush's budget sleight of hand.

"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.

Mr. 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.

Mr. Bush proposes boosting spending to hire more diplomats at the State Department and in some areas of education such as Title I grants, the main source of federal support for poor students.

But at the same time, Mr. Bush seeks to eliminate 47 other education programs that are seen as unnecessary, part of 151 programs he is targeting to either eliminate or sharply scale back. A similar effort last year met with little success.

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 Mr. Bush in this area last year went nowhere in Congress.

Social Security, Medicare, Medicaid and other so-called entitlement programs - where the government is obligated to pay benefits to all who are eligible - now account for half of the total budget, with the costs expected to continue rising rapidly in coming years as 78 million baby boomers reach retirement.

Mr. Bush had hoped to make overhaul of Social Security a top goal of his second term but his plan to introduce individual investment accounts went nowhere.

While Mr. 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, Mr. Bush would hold hundreds of programs well beyond what is needed to keep up with inflation. He also seeks to eliminate or sharply slash 151 programs he considers unnecessary.

Mr. Bush targeted many of the same programs last year but Congress rejected the effort.