Tuesday, February 5, 2008

Dems set for fight on Bush budget

WASHINGTON — President Bush set the stage Monday for an election-year battle over spending priorities by proposing a $3.1 trillion budget that cuts spending and taxes while more than doubling the federal deficit.

Bush sent his 2009 budget to Congress over the Internet, but it landed with a figurative thud on Capitol Hill. Democrats vowed to ignore most of the threatened cuts to Medicare and other domestic programs.

Unlike last year, when Bush forced Democrats to accept lower spending figures, this year could prove more difficult for the president. The fiscal year begins Oct. 1, less than four months before he leaves office.

"He doesn't have us over a barrel this year, because either a President Clinton or a President Obama will have to deal with us next year," said Senate Majority Leader Harry Reid, D-Nev. "We are not going to be held hostage to the unreasonableness of this president."


Much of the president's plan has little chance of passage, lawmakers and budget experts say. Nearly $200 billion in Medicare and Medicaid savings need congressional approval, which Democrats are unlikely to provide. "Dead on arrival," vowed Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.

And while Democrats may extend tax cuts for lower- and middle-income families enacted in 2001 and 2003, most won't expire until after 2010. "It will be something that the next Congress will have to deal with," said Rep. John Spratt, D-S.C., chairman of the House Budget Committee.

Democrats may have difficulty passing a budget that unifies their party, however. An economic slowdown is reducing revenue. The $146 billion package of tax cuts pending in the Senate will boost the deficit. Costly wars in Iraq and Afghanistan won't be easy to end.

Unlike Bush, Democrats have promised in most cases to pay for tax cuts or spending increases so they don't raise the deficit. That makes their task harder.

Bush's budget would sharply reduce the growth of Medicare and virtually freeze most domestic spending, while providing increases for defense, diplomacy and homeland security. "Our top priority is to defend our country," Bush said Monday. "Our budget protects America, and it encourages economic growth."

Even with the restrained spending on domestic programs, the deficit would rise from $162 billion in 2007 to $410 billion this year and $407 billion next year.

White House budget director Jim Nussle called the increase "temporary" and "manageable." As a share of the economy, the deficit would be less than 3%, or half what it was in 1983, at its post-World-War-II peak of 6%. Bush projects a $48 billion surplus by 2012.

Winners in the budget include the Pentagon, which would get nearly 8% more, and border security, up nearly 20%. Losers: Medicare and Medicaid, and domestic programs not related to national security.

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