WASHINGTON (ABP) — President Bush formally presented Congress Feb. 6 with a $2.77 trillion budget proposal that would increase military spending and extend tax cuts but reduce spending on social programs such as Medicaid and Medicare.
The announcement comes just days after Congress finalized the 2006 budget, with close votes on a document that contained controversial constraints on social spending.
Bush proposed the budget to lawmakers — as the law requires him to do on the first Monday in February — for fiscal year 2007, but it also includes projections for following years. The document does not reduce overall spending. However, according to White House officials, it will cut the federal deficit in half by the year 2010.
But critics from both the left and the right asserted that figure is based on overly rosy projections for tax revenues. It also doesn't include tens of billions in so-called “supplemental” funding requests the White House will make to Congress for the wars in Iraq and Afghanistan and hurricane relief.
“This is a budget that continues to keep our economy growing and that builds upon the spending restraint that Congress has moved forward on at our urging, and makes sure that our national priorities are fully funded, like protecting the American people and winning the war on terrorism, helping the people of the Gulf Coast rebuild their lives and their communities, moving forward on key domestic priorities that will keep America the most competitive and innovative economy in the world,” said Scott McClellan, the White House press secretary, in his daily briefing with reporters after the budget was released.
The budget calls for significant reduction in, or elimination of, 141 federal programs the White House considers to be failing or inefficient. Last year, Bush proposed a similar number of programs cuts, and Congress agreed to 89 of those.
The biggest chunk of the projected savings Bush has proposed would come from a reduction in the rate of growth of Medicare spending. The budget Bush outlined would reduce spending on Medicare by $36 billion over the next five years. Spending on it and other programs, known collectively as “entitlements,” is based on fixed benefits and grows as the number of people using the program grows.
The budget also would squeeze student-loan programs and Medicaid, the federal health-care program for the poor, and proposes cuts in federal welfare programs, such as food stamps.
“The real fiscal danger that this country faces is from our entitlement programs, and that's why we need to continue to build upon that. The President proposed an additional $65 billion in reductions in the growth of entitlement spending.”
But opponents of Bush's budget said the savings effectively become a cut for users of the programs — the poor and the elderly.
“President Bush's budget continues to put special interests first while making worse the financial pressures confronting American families. This is an immoral and irresponsible approach that does not reflect the values of the American people,” said Senate Minority Leader Harry Reid (D-Nev.) in a prepared statement.
“After creating record deficits and debt with his budget-busting tax breaks, the president is asking our seniors, our students, and our families to clean up his fiscal mess with painful cuts in health care and student aid,” Reid continued.
Congress has the ultimate responsibility for crafting and approving the budget, and Bush's document is only a suggestion. Even when a president enjoys majority support in Congress, as Bush does, his budget recommendation almost never makes it into law without being altered significantly.
Bush may face more of an uphill budget battle this year than ever before in his five-year tenure with a generally compliant Congress. Besides stiff opposition from the minority Democrats, Bush is weighed down by low poll numbers. And, because 2006 is an election year, many moderate Republicans are skittish about voting for cuts in popular programs.
Just the week before the latest budget proposal, the House narrowly gave final approval to a 2006 budget that cut social programs far less than Bush wanted.
Bush is also calling for extending temporary tax cuts that, if allowed to expire, would bring in more than $1.7 trillion to the federal till over the next 10 years, according to non-partisan estimates. That would far outstrip the $172 billion in savings proposed over the same period by program cuts.
But some fiscal conservatives argue that such tax cuts stimulate the economy, creating greater tax revenues down the road.
Whatever the case, McClellan told reporters, curbing spending growth for programs like Medicare and Social Security will only continue to become a necessity as Americans age.
“If we don't act, and it continues on the course that it is going, we are going to — our children and grandchildren are going to — be in a serious situation,” he said. “We want to make sure that it is there for our children and grandchildren when they are seniors. We want to make sure that it continues to be there for people with disabilities. And that's why we need to take these steps to reduce the growth. And that's what we're talking about in this budget.”
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