DETROIT, Feb. 8 -- President Bush prodded Congress on Tuesday to adopt what he called the most disciplined federal budget in more than 20 years, warning lawmakers that sacrifices must be made to finance a wartime government.
"Protecting America imposes costs that are large and they are necessary," Bush said in a noontime speech at the Detroit Economic Club. "That means we need to show even more discipline in other areas."
Dieter Zetsche, president and chief executive of DaimlerChrysler, introduces President Bush before a speech on the budget to the Detroit Economic Club.
(Jason Reed -- Reuters)
President Sends '06 Budget to Congress (The Washington Post, Feb 8, 2005)
Bush Calls for Familiar Trims (The Washington Post, Feb 8, 2005)
Congress Unlikely to Embrace Bush Wish List (The Washington Post, Feb 8, 2005)
Troops' Pay Raise, Retooling Efforts Come With Price (The Washington Post, Feb 8, 2005)
Plan Avoids Rollbacks That Some Feared (The Washington Post, Feb 8, 2005)
For Budget Director, No Red Ink and the Skies Are Not Cloudy All Day (The Washington Post, Feb 8, 2005)
Bush's $2.57 trillion budget, which he unveiled Monday, calls on Congress to essentially freeze non-defense discretionary spending in coming years to finance a more muscular national defense program.
Bush's budget, which is only a blueprint for Congress to follow or ignore, proposes reducing health care programs, farm subsides and scores of other programs but produces only minimal, if any, deficit reduction next year.
"It is essential that those who spend the money in Washington adhere to this principle: A taxpayer dollar ought to be spent wisely or not spent at all," the president said.
In a broad economic speech touching on issues including tax cuts and trade, Bush said Congress has a responsibility to confront the long-term financial problems facing America, such as the solvency of Social Security. But his budget does not account for the huge costs of creating personal Social Security accounts, making permanent the tax cuts enacted over the past four years and continuing the war in Iraq.
Democrats criticized Bush on Tuesday for concealing these costs and proposing cuts to several programs aimed at the poor and needy. The president said every program he wants to eliminate or reduce was reviewed by the White House and deemed ineffective or inefficient. In his speech, he highlighted farm subsidies, which pay some farmers as much as $360,000 per year, and a 16-year-old literacy program for poor families called Even Start.
Bush reserved the major portion of his speech to promote his plan to allow workers to divert a portion of their payroll taxes, which fund the Social Security system, into individual investment accounts. The plan would "replace the empty promises of government with real assets," he said.
Under the Bush proposal, workers could eventually put almost two-thirds of their 6.2 percent payroll tax into the accounts, investing the money in a small menu of stock and bond funds, and tap into it only after they retire. Most Democrats and some Republicans are opposed to the plan; a survey published in Tuesday's Detroit Free Press found that four of Michigan's nine GOP House members have refused to endorse the Bush plan so far.
Vice President Cheney has said the plan would cost trillions of dollars in the coming years, and Bush here once again expressed willingness to consider anything short of raising taxes to reduce Social Security costs. But the president said the accounts should be part of the final plan to restructure the 70-year-old program and keep the system from going broke.
Speaking in a state he lost in November, Bush also promoted plans to encourage more global trade, limit the number of lawsuits, permit drilling in Alaska's Arctic National Wildlife Reserve and provide incentives to produce cleaner-burning energy sources. "It's hard to be a growing economy if you are not sure you have got energy," he said.
With the economy continuing to add jobs, albeit at a slower pace than in the Clinton administration, Bush warned that if Congress does not extend his first-term tax cuts for individuals and business the economy will suffer. "Allowing taxes to go back up will only discourage growth and cost this country jobs and reduce paychecks," he said. The Congressional Budget Office projects the tax cuts will add $1.3 trillion to the deficit over 10 years.
The president renewed his push to simplify the tax code. A bipartisan panel he appointed is studying options to reduce the size of the tax code and will report to Bush later this year. Republicans do not expect action on tax reform until next year at the earliest.
While many of Bush's priorities face stiff resistance in Congress, Republicans are close to putting new limits on class-action lawsuits, which could emerge as the first Bush victory of the second term.