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The $2.1 Trillion Question

President Bush sends a $2.1 trillion budget request to Congress Monday, a budget that includes sharp increases for defense and homeland security in the wake of the Sept. 11 attacks.

"My budget includes the largest increase in defense spending in two decades," the president said in his State of the Union speech last week. "While the price of freedom and security is high, it is never too high. Whatever it costs to defend our country, we will pay it."

Overall, the budget proposal for 2003 marks a 9 percent increase in federal spending and will lead to the first projected federal deficits in five years.

Along with the deficits, Mr. Bush also faces a recession, forcing him to level off or cut spending for a number of programs. Up until now, though, there hasn't been much indication as to where those cuts may be.

"It's a bit of a mystery where the cuts will be since all Bush has been talking about is where he wants increases," Chris Edwards, director of fiscal policy for the libertarian Cato Institute, told

A few of the cuts have been announced: the Department of Transportation mentioned a $9 billion decrease in highway funding; and the Agriculture Department, while increasing spending for researching diseases and improving food safety, will suffer a slight budget cut overall.

Among the areas where the president proposes spending increases:

  • Defense: Mr. Bush is asking for $379 billion — a $48 billion, or 14 percent, rise over fiscal 2002.
  • Homeland Security: The president is requesting $38 billion, almost double what was spent in fiscal year 2002, with special emphasis on bolstering "first responders" — police, firefighters and emergency medical teams.
  • Health and Human Services: The administration is seeking a $3.7 billion increase for the National Institutes of Health, including $1.5 billion for bioterrorism research.
  • Education: Education Secretary Rod Paige said Wednesday that Mr. Bush is requesting a $1.3 billion increase in the Pell grants program, which helps low-income college students. The president has targeted $2.1 billion in so-called "pork" projects to help pay for this increase, raising the ire of members of Congress, who say they need these projects in their home districts.
  • Prescription Drugs: The president mentioned in his State of the Union address that he wants to include a benefit for seniors on Medicare. The White House says it will set aside $190 billion over ten years to reform Medicare and include a prescription drug benefit.
  • USA Freedom Corps: Mr. Bush wants $560 million for his effort to promote volunteerism, including $230 million to expand AmeriCorps, $50 million for the Peace Corps, $50 million to add volunteers to the Senior Corps and $230 million to create a Citizen Corps.

    All of this spending has a price, however, including program cuts, running a deficit, slowing down debt eduction and using the Social Security and Medicare surpluses to fund other federal programs.

    But the political cost of the budget may not be that high for the president, says Allen Schick of the Brookings Institution. "Democrats will say there's not enough for the unemployed, that he's cutting needy domestic programs," Schick said. "But it won't be a frontal assault, Bush is too strong now," referring to the president's 82 percent approval rating.

    Mr. Bush's popularity may not be the only reason a political assault would be futile. Most Americans already seem to believe the government will overspend next year. According to a recent CBS News/New York Times poll, 85 percent of Americans approve of the proposals Mr. Bush laid out in his State of the Union speech, but 54 percent don't think the government will be able to afford them.

    As for the deficit, given the state of the economy and the amount the government will spend, it's no surprise the White House Budget Office estimates an $80 billion shortfall in fiscal 2003. "Our budget will run a deficit that will be small and short term so long as Congress restrains spending and acts in a fiscally responsible way," Mr. Bush said in his State of the Union speech.

    While the president puts the onus of a balanced budget on the Congress, Senate Majority Leader Thomas Daschle, D-S.D., disagrees, blaming the president's 10-year, $1.35 trillion tax cut.

    "Oh, we'd like it to be in balance," Daschle said Wednesday. "We've been in balance now for the last several years, and it's unfortunate this year that we're not in balance. A big part of it is the tax cut, of course. Another part of it is the recession."

    Another victim of the current economic situation is the national debt. Mr. Bush's budget director Mitchell Daniels warned last week that paying off the debt might be overlooked in the upcoming budget proposal. "If we have a couple of years of deficits, then net debt will not go down until we begin running surpluses," Daniels told reporters last week.

    In the end, the president's request is just the first step in the months-long budget process, so what's revealed on Monday should be considerably different when Congress gets through with its budget debates later this year.

    On the subject of how Congress will ultimately react to Mr. Bush's requests, the Cato Institute's Edwards joked, "They'll probably take it and throw it in the garbage like they always do."

    © MMII, CBS Worldwide Inc. All Rights Reserved

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