Bush Plan Seeks Billions More for Iraq

President Bush waves to reporters as he departs St. John's Church on Sunday, Feb. 4, 2007, in Washington, after attending church services. (AP Photo/Evan Vucci) (Evan Vucci - AP)

WASHINGTON -- President Bush is sending Congress a $2.9 trillion budget that would provide billions of dollars for the war in Iraq, make his first-term tax cuts permanent and achieve a budget surplus three years after he leaves office.

The massive four-volume set of budget books, featuring two-tone green covers, was headed to Congress Monday, where the plan will receive a decidedly mixed reaction from Democrats. They have made clear that they plan to push their own budget priorities after regaining control of the House and Senate for the first time in 12 years.

In his new spending blueprint, for the 2008 budget year that begins Oct. 1, Bush is pledging to balance the budget by 2012, make health care and higher education more affordable and promote energy security.

Iraq is likely to dominate the debate with war opponents who are pushing nonbinding resolutions expressing disapproval of Bush's 21,500-troop buildup there.

Faced with the competing goals of funding the war effort, preserving his first-term tax cuts and still achieving a balanced budget, the president stuck mostly with modest new initiatives.

Democrats, however, contended that Bush was able to balance the budget only on paper by leaving out significant costs such as the money needed to make sure that the alternative minimum tax, initially targeted at the wealthy, does not ensnare more middle-income taxpayers. He includes a fix for 2008 but not for later years.

Democrats argued that Bush's insistence on preserving his first-term tax cuts will cost more than $2 trillion in lost revenue in the seven years after 2010, when the tax cuts are due to expire.

"The president wants to make the tax cuts permanent even though all the forecasts show that will explode the debt right at the time the baby boomers retire," Senate Budget Committee Chairman Kent Conrad, D-N.D., said in an interview Sunday. "This budget is plunging us toward a cliff that will take us right into a chasm of debt."

Bush's budget projects that the deficit, which hit an all-time high of $413 billion in 2004, will gradually decline until it becomes a surplus in 2012.

To accomplish that goal, Bush would allow only modest growth in the government programs outside of defense and homeland security. He is proposing eliminations or sharp reductions in 141 government programs, for a savings over five years of $12 billion, although Congress has rejected many of the same proposals over the past two years.

Bush also will seek to trim spending on farm subsidies by $18 billion over five years, mainly by reducing payments to wealthier farmers, an effort certain to spark resistance among farm state lawmakers.

Bush would achieve nearly $100 billion in savings over five years by trimming increases in Medicare, the health insurance program for 43 million retirees and the disabled, and Medicaid, which provides health care to the poor. That effort is also likely to trigger heavy opposition in Congress, which rejected smaller Bush cuts last year.