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Bush Signals Budget Accord
After the deficit spiraled to a record $413 billion in 2004, Bush promised to cut it in half within five years. Using as a starting point a higher projection that the deficit never reached, Bush achieved his goal last year when the deficit fell to $248 billion on the strength of better-than-expected revenue. Bush credits his tax cuts with spurring the economy and in turn producing more tax receipts.
But the government has spent more than $500 billion so far on the wars in Iraq and Afghanistan and counterterrorism operations elsewhere, and Bush plans to submit a new supplemental spending request at the same time he announces his regular budget next month, possibly near $100 billion.
  President George Bush eulogizes former President Gerald R. Ford during a State Funeral service at the Washington National Cathedral in Washington, Tuesday, Jan. 2, 2007. (Pablo Martinez Monsivais - AP)
VIDEO | In a Rose Garden address after meeting with his Cabinet, President Bush discusses his five-year budget proposal to be submitted next month that would balance the federal budget by 2012 and calls on the new Congress to put an end to lawmakers' pork barrel projects.
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Portman said that although war costs are appropriated separately, they will be counted in terms of balancing the budget by 2012. He offered no details about how Bush will accomplish that, other than saying that no tax increases will be included. Bush's past two budgets have frozen or even reduced non-security discretionary spending.
"It's going to require spending discipline," Portman said. "We've done a better job the last couple years."
Bush took aim at congressional perks as part of his message of fiscal discipline, praising Democrats for imposing a one-year moratorium on earmarks, proposing that they cut them in half next year and suggesting that the process be more transparent.
"One important message we all should take from the elections is that people want to end the secretive process by which Washington insiders are able to get billions of dollars directed to projects," he said. He also called again for a line-item veto.
Democrats plan to introduce legislation requiring lawmakers to attach their names to earmarks and to certify that such spending items would not financially benefit them or their spouses. "Given the track record of this administration, the last person in the universe who should lecture the Congress on fiscal responsibility is George Bush," said incoming House Appropriations Committee Chairman David R. Obey (D-Wis.).
Brian M. Riedl, an analyst at the Heritage Foundation, said the discussion of earmarks and a 2012 balanced budget will mean little unless Bush and Democrats tackle entitlements. With the cost of Social Security, Medicare and Medicaid on the rise, Riedl said he projects the annual deficit will grow to $750 billion in 10 years. "The reduced deficit of the last two years looks more like a short-term blip than a long-term trend," he said.
