WASHINGTON - President Bush proposed a $2.13 trillion budget yesterday that calls for vast increases in military and homeland defense spending, partly offset by cuts in such areas as job training, road construction and environmental protection.
The budget he sent to Congress reflects how profoundly the president believes the nation must adjust to counter the threat of terrorism and fight off a recession.
Bush proposed the largest increase in defense spending since the early years of the Reagan administration. And he would double spending on homeland defense, including efforts to fight bioterror and to tighten border security.
Taken together with the continuation of the tax cuts that Bush says are needed to stimulate the economy, his spending plan would send the budget into deficit after four years of surpluses. But Bush and his aides say the deficit, and the cuts in domestic programs, are a necessary sacrifice for a nation enduring economic hardships and fighting a war against terrorism.
Bush's plan will be subject to months of debate and revision in the closely divided Congress, which will be acting with an eye toward the November congressional elections. The budget is likely to look far different once it is approved in final form on Capitol Hill.
Still, the president's priorities for the fiscal year that begins Oct. 1 are clear in the glossy, voluminous budget books, which feature color photos of the remains of the World Trade Center and U.S. Marines fighting in Afghanistan.
To underscore that the fight against terror remains his top priority, the president visited Eglin Air Force Base in Florida, where he told troops, "We are unified in Washington on winning this war."
Bush said his plan "recognizes the vital role the military will play and recognizes we have only one alternative, and that is victory."
Democrats applauded the emphasis on counter-terrorism. But they complained that Bush would slash vital domestic programs to preserve the centerpiece of his agenda last year: a $1.35 trillion tax cut. If he just scaled back the tax cut, Democrats say, the president could fight terrorism and still tend to nonwar-related needs at home.
Bush characterized the cuts differently, saying he would eliminate waste at a time when the nation must spend more on security.
In a statement, the president also said his proposal reflects a "bold agenda for government reform" that would aggressively monitor whether agencies achieve their goals. Successful programs should be reinforced, Bush said, while failing programs "should be reinvented, redirected or retired."
Indeed, included in the White House budget for the first time are grades for federal programs, labeling them as effective or ineffective. Funding for programs deemed ineffective would be slashed.
Even with cuts in domestic programs, the president's ambitious call to boost defense spending by $48 billion and his effort to double homeland security funding, to nearly $38 billion, would produce deficits for the first time since 1997.
His budget projects that surpluses will return in 2005, though smaller than was forecast before the nation was attacked and the economy fell into recession. Bush's last budget projected a 10-year surplus of $5.6 trillion; the new budget envisions a 10-year surplus of $1 trillion.
Democrats argued that Bush's plan would carry the nation back into an era of deficit spending that would require dipping into Social Security and Medicare surpluses.
"The budget should promote long-term economic growth through fiscal responsibility, investments in people and technology and honoring our commitments to Social Security and Medicare," said Rep. Richard A. Gephardt of Missouri, the House Democratic leader. "The administration's budget fails on all three counts.
Mitchell E. Daniels Jr., the White House budget director, noted that the Bush plan projects an $80 billion deficit for next year and an even smaller $14 billion deficit in 2004. Those deficits are small, Daniels argued, given that the nation is in recession while being forced to fund a war.
"Running large surpluses and paying down debt is a very important objective," he said. "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."
Asked about the Democrats' argument that Bush's tax cut was forcing the administration to dip into Social Security and Medicare surpluses, Daniels said the president's tax relief "has nothing to do with" those surpluses, which are generated by payroll taxes.
Under the Bush plan, overall spending would grow by $76 billion, or 3.7 percent, over this year's total. Projected revenue would rise by $102 billion, or 5.2 percent, to $2.05 trillion.
Discretionary spending - which does not include programs like Social Security - would grow by a hefty 8 percent, about the same rate as this fiscal year. The bulk of the increase would be in defense and homeland security.
Programs unrelated to terrorism would be squeezed, growing by just 2 percent over this year. That alarmed many Democrats and advocates of those programs, including Baltimore officials.
The president has proposed to drastically shrink Youth Opportunity, a job training program for which Baltimore was awarded a five-year, $44 million grant two years ago to operate four training centers in the city.
"The money for homeland security is great, but not when it comes at the expense of job-training programs," said Aaron J. Greenfield, an aide to Mayor Martin O'Malley.
Conservatives cheered Bush's effort to cut many programs and consolidate others in order to pay for a war. Brian Riedl, a senior budget analyst at the Heritage Foundation, said Bush had three options - scale back tax relief, cut defense spending or cut in other areas - and that he chose wisely.
"It's not because these programs are totally useless, but because the nation's priorities have changed," Riedl said.
The White House had disclosed specific items in its budget, highlighting areas where Bush has proposed to boost funding. Bush had announced that he would increase funds for historically black colleges and for an early literacy program called Reading First.
But in nearly every department - including education - sacrifices required to free up spending on the military are evident. The Education Department would receive an increase in spending, but one not nearly as large as last year's.
Bush would boost spending on the Pell Grant program, which gives up to $4,000 each year to low-income college students. But to offset that priority, he would cut money for local education. He proposed to cut spending on local preschool tutoring, literacy efforts and school construction.
The president has again offered to fund one of his campaign priorities: prescription drug coverage for the elderly. He has proposed $190 million for that purpose, though Democrats have said it would take much more money than that.
Bush's stress on homeland security would affect many agencies. The Transportation Department, for instance, would see an overall increase in funding of $4.7 billion. But $4.8 billion of the department's total funding would pay for the new Transportation Security Administration, which was created after the Sept. 11 attacks.
Other areas would suffer, notably highway projects, which would lose nearly $9 billion next year.
Many Democrats have said that canceling elements of the tax cut, not eliminating programs, would best fund the war effort.
Maryland stands to gain more than some other states from the proposed boosts in defense spending. It has several large defense installations, including Fort Meade, Aberdeen Proving Ground and the Patuxent River Naval Air stations.
Further, Maryland is home to defense contractors that are benefiting from the war-time influx in defense dollars. The president's plan to spend nearly $35 billion of homeland defense on local police and firefighters would likely send additional aid to cities and counties throughout Maryland.
But Bush's efforts to trim the budget in areas that he says now have a lower priority would also target some Maryland programs. For example, he has proposed to cancel $2.5 million in drug treatment money that Maryland lawmakers succeeded in adding to the budget late last year.
The president has proposed environmental cuts that would trim $280,000 for Pfiesteria research in Maryland and $360,000 to help local tobacco farmers convert to alternative crops.
A spokesman for Gov. Parris N. Glendening said the governor was unhappy about what he called "devastating cuts" in environmental programs. Money for the Chesapeake Bay cleanup would be held at level funding, which amounts to a cut when inflation is considered.
In other bad news for the state, the president is proposing to cut $85.5 million from the Goddard Space Flight Center. Cuts at the NASA facilities affect the Mars Exploration Program as well as aerospace technology programs.
The new defense money would be spent on weaponry and other items, as well as a 4.1 percent pay raise for military personnel. By contrast, civilian federal workers would receive a raise of 2.6 percent.
Some lawmakers, including Rep. Steny H. Hoyer, a Southern Maryland Democrat who represents many federal workers, say they favor the same raise for everyone.
"We got a bill passed last year calling for parity between the two," Hoyer said. "I guess we're going to have to go up that hill again."
Sun staff writer Mark Matthews and the Associated Press contributed to this article.