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Bush budget aids defense, home security

THE BALTIMORE SUN

WASHINGTON - Saying the "nation remains at war," President Bush released a budget plan yesterday that calls for hefty increases for defense and national security and forecasts a record deficit this year of $521 billion, alarming even conservatives in Bush's own camp.

The proposal envisions an additional deficit next year of $364 billion - a figure that even the Bush administration concedes could easily top $400 billion once new costs of the military campaigns in Iraq and Afghanistan are included.

Bush said he is confident, though, that within five years he can halve the deficit. To do so, he would squeeze scores of programs and eliminate others. Many of the agencies targeted for cuts involve education, the environment and agriculture.

The president put off one enormous task in his $2.4 trillion budget plan: How to continue paying for military campaigns in Afghanistan and Iraq without further swelling the deficit. Aides said Bush would seek up to $50 billion for those needs after the November election. That would mean that the deficit would be higher than predicted under his plan.

Bush, who entered office at a time of huge surpluses, is seeking to explain to Americans in an election year why the nation now faces record deficits. The nonpartisan Congressional Budget Office has said the government is on pace to pile up nearly $2.4 trillion in further debt over the next decade, beyond the current $7 trillion debt.

Speaking after a morning Cabinet meeting, Bush said the United States had been dealt severe blows - a recession and a terrorist attack, leading to costly wars - that pushed the government into red ink.

He praised his budget proposal as a way to pay for priorities in difficult circumstances, while reducing, if not eliminating, the deficit.

Bush said his plan reflects his top priorities, including defeating terrorism, protecting the nation, energizing the economy, educating children and making sure the elderly benefit from prescription drug coverage through a reformed Medicare system. The proposal also serves Bush's interest in portraying himself in an election year as a wartime leader intent on protecting America.

"We went through a recession, we were attacked and we're fighting a war," the president said. "These are high hurdles for a budget and for a country to overcome, and yet we've overcome them, because we've got a great country."

His proposal set off an avalanche of criticism on Capitol Hill even before it arrived, beginning a conflict that will put Bush on the defensive against some members of both parties and perhaps complicate his re-election campaign. Congress will be working to reshape his budget plan through the November elections.

Most troublesome for the president, his proposal appears to have strained relations with a key base of support - conservative Republicans. They complained that his budget plan, austere as it is, would not go nearly far enough to curb spending or to reduce the deficit.

"While [Bush] showed restraint in several areas, the total spending is still too high," said Rep. Sue Myrick of North Carolina, head of the conservative Republican Study Committee. "Hard-working Americans have to watch their spending, and so should Congress."

Rep. Jim Nussle, the Iowa Republican who chairs the House Budget Committee, said: "We want to move further and we want to move faster with regard to deficit control and with regard to spending control."

After a weekend Republican retreat at which some conservatives denounced Bush's budget approach, Nussle said lawmakers might call for a freeze on spending for programs other than the military. That would put a tighter squeeze on many federal programs than under the president's plan.

Some Republicans are not convinced that Bush's plan to hold spending - other than for the military, national security and "entitlements" such as Social Security and Medicare - to an increase of 0.5 percent next year would achieve the deficit reductions he projects.

"The numbers simply do not add up," said Rep. C.W. Bill Young of Florida, the Republican who, as chairman of the House Appropriations Committee, will lead congressional efforts to rein in spending.

Sen. Olympia J. Snowe, a Maine Republican, said there are "troubling gaps" in Bush's plan. And House Majority Leader Tom DeLay of Texas, usually one of the president's cheerleaders, issued a tepid response, calling the budget proposal "a good start."

Democrats, meanwhile, heaped criticism on what they called a misdirected assault on programs that ordinary Americans depend on.

"This administration pledged that its tax cuts and policy choices would not turn record surpluses into record deficits," said Senate Minority Leader Tom Daschle of South Dakota. "But this budget shows that's exactly what's happened."

Sen. Edward M. Kennedy, a Massachusetts Democrat, called Bush's blueprint the "most anti-family, anti-worker, anti-health care, anti-education budget in modern times."

The front-runner for the Democratic presidential nomination, Sen. John Kerry of Massachusetts, attacked the budget plan as the "same failed Republican prescription that has caused Bush to lose 2.5 million jobs in the last three years."

The president would boost military spending by 7 percent, to more than $400 billion.

The war on terror that Bush has made an overriding priority would draw money away from other programs.

At the State Department, out of the $19 billion proposed for foreign aid, $6.9 billion would be given as aid to allies in the war on terror or spent for reconstruction in Afghanistan.

To balance increases at the Justice Department in homeland security and counterterrorism, the Bush administration would cut many of the department's community programs, including slashing its community-oriented policing services budget by nearly $400 million.

The Bush plan would eliminate programs that target telemarketing scams against the elderly, help find missing Alzheimer's patients, monitor prescription programs and help victims of human trafficking.

Under the Bush proposal, state and local police forces would be charged for FBI forensic services. For nearly a century, police departments across the country could have crime scene evidence analyzed - for free - at the bureau's forensic lab, which examines and matches fingerprints, DNA, hair and fiber samples, and other materials such as paint chips, carpet fibers and soil.

Across the government, Bush is proposing to cut 65 programs, at a savings of $4.9 billion. Bush's budget director, Joshua B. Bolten, said programs designated for cuts were generally those that were never envisioned to exist permanently or were duplicated by others.

On the chopping block are 38 education programs that deal with such issues as alcohol abuse and drop-out prevention.

The budget proposes a $492 million reduction in funding for clean water programs at the Environmental Protection Agency. The Centers for Disease Control and Prevention would lose more than $400 million in funding. NASA's budget would rise by close to $900 million, in part to begin funding Bush's proposal to send astronauts back to the moon and eventually to Mars.

In his budget, Bush proposes new type of tax breaks and savings accounts for employees that could replace long-standing savings programs such as the 401(k), and perhaps eventually become an alternative to traditional Social Security.

In an election year, budget battles risk dividing Bush's party between those who want fiscal restraint and moderates who are concerned about being seen by voters as cruelly slashing government programs.

Also controversial, even within the president's party, are tax cuts, which critics say have contributed heavily to the swelling budget deficits.

Bush is calling in his budget for $1.1 trillion more in tax cuts, mostly by making permanent the tax reductions he championed in 2001 and 2003. The president says the reductions are vital to continue stimulating a recovering economy. Democrats complain that the tax cuts are far too expensive and mostly benefit the wealthy.

Robert Bixby, executive director of the Concord Coalition, a conservative budget watchdog group , said the president should consider holding off on at least some of the tax cuts while the deficit is ballooning. He complained that the administration's deficit projections fail to consider the money that will be needed next year for the military campaign in Iraq.

"It's like saying, 'I'm going to go on a diet, but I just won't count all those calories I eat at lunch,'" Bixby said. "They left out so much. You can't call it credible."

Sun staff writers Laura Sullivan and Tom Bowman contributed to this article.

Department budget plans, at a glance

Department of Agriculture

Spending: $83.3 billion

Percentage change from 2004: +6.2 percent.

Highlights:

Would cut discretionary spending from $20.7 billion this year to $19.1 billion, a decrease of 8.1 percent, the biggest cut for a major government agency.

Department of Defense

Spending: $402.6 billion

Percentage change from 2004, excluding most costs for Iraq and Afghanistan: +7 percent.

Highlights:

The White House said yesterday that up to an additional $50 billion will be requested for military operations in Iraq and Afghanistan in the coming months.

Department of Health and Human Services

Spending: $571.6 billion

Percentage change from 2004: +2.7 percent.

Highlights:

Would decrease spending for the Centers for Disease Control and Prevention by $408 million, or 8.9 percent.

Would increase spending at the Food and Drug Administration by $109 million, or 7.9 percent, including an additional $65 million to protect the food supply and $8.3 million for enforcement of animal feed regulations designed to prevent spread of mad cow disease.

Department of Housing and Urban Development

Spending: $34 billion

Percentage change from 2004: -1.9 percent

Highlights:

Would increase discretionary spending by 3.9 percent, to $31.3 billion. The remaining $2.7 billion in the HUD budget would fund programs already mandated by law.

Would revamp the voucher program serving 2 million renters with a goal of giving local and state housing authorities more flexibility in helping low-income families.

Department of Justice

Spending: $21.8 billion.

Percentage change from 2004: -12.7 percent.

Highlights:

Discretionary spending on all Justice Department programs would decrease by 3.1 percent, to a total of $18.7 billion. The overall decrease comes from a reduction in the Sept. 11 victims fund from $4.1 billion to $396 million.

Spending on counterterrorism programs would rise by 19 percent, to $2.6 billion.

State Department and International Assistance

Spending: $30.4 billion

Percentage change from 2004: -34.8 percent.

Highlights:

Spending on foreign assistance would fall to about $19 billion from this year's $36 billion, which included more than $18 billion for rebuilding Iraq and Afghanistan. Included in the figure for next year is about $5.7 billion in military and economic aid to frontline allies in the war on terrorism.

Budget flash points

Narrower focus

Budgets typically project their impact over 10 years. Bush projected the loss of revenue from permanent tax cuts over only five years, minimizing the effect.

Missing Iraq war costs

Next year's estimated $50 billion costs for Iraq and Afghanistan were not part of the budget and no funds will be requested until later this year, almost certainly after the election.

Pet projects

A $375 billion highway construction plan pending in Congress includes raising gasoline taxes, a move that has spooked the White House. The Bush highway budget figure is $260 billion. The $115 billion gap may be impossible to bridge this year.

Inside: A budget glance. Page 4A

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