MARTIN CRUTSINGER AP Economics Writer WASHINGTON (AP)
President Bush unveiled a $3.1 trillion budget today that supports sizable increases in military spending to fight the war on terrorism and protects his signature tax cuts. The spending proposal , which shows the government spending $3 tri l l ion 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, 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. Democrats attacked Bush's final spending plan as a continuation of this administration's failed policies which wiped out a projected 10-year surplus of $5.6 trillion and replaced it with a record buildup in debt. "Today's budget bears all the hallmarks of the Bush legacy it leads to more deficits, more debt, more tax cuts, more cutbacks in critical services," said House Budget Committee Chairman John Spratt, D-S.C. For his last budget, Bush, as a moneysaving measure, stopped the practice of providing 3,000 paper copies of the budget to members of Congress and the media, instead posting the entire document online at www.budget.gov. Democrats joked that Bush cut back on the printed copies because he ran out of red ink. "The president proposes more of the same failed 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," said Senate Budget Committee Chairman Kent Conrad, D-N.D. Bush defended his record, saying it supported a strong defense and, if his policies are followed, will produce a balanced budget by 2012, three years after he leaves office. "Two key principles guided the development of my budget keeping America safe and ensuring our continued prosperity," Bush said in his budget message to Congress. "As commander in chief, my highest priority is the security of the American people." 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. 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 Bush is urging Congress to pass quickly to try to combat a threatened recession. 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 Bush is projecting for that year. 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. 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. The 6 pe rc ent ove ral l 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 Bush in this area last year went nowhere in Congress. While 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, 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. Bush targeted many of the same programs last year but Congress rejected the effort.