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)

Most of the Medicare savings would come in slowing the growth of payments to hospitals and other health care providers, but $11.5 billion in savings would come from boosting insurance premiums paid by the wealthiest Medicare recipients.

The president, appealing for Democratic support during an appearance at a House Democrats retreat Saturday, said the government must do something to restrain the soaring costs of entitlement spending on health care and Social Security before the looming retirement of 78 million baby boomers.

Bush once listed overhauling Social Security as the No. 1 domestic priority of his second term. But his effort two years ago to accomplish the overhaul by diverting some Social Security taxes into private investment accounts went nowhere in Congress.

The administration is asking for an additional $100 billion for Iraq and the global war on terrorism this year, on top of $70 billion already requested. That spending would drop to $145 billion in 2008 and fall to $50 billion in 2009, although administration officials conceded that future requests could go higher depending on the progress of the war.

"It's tough to know what the military commanders are going to need on the ground," White House budget director Rob Portman said Sunday on CNN.

The Pentagon is scheduled to get a hefty 11 percent increase in spending authority, pushing its 2008 budget to $481.4 billion.

Bush's budget also includes an initiative to expand health care coverage to the uninsured through a complex proposal that would give every family a $15,000 tax deduction for purchasing health coverage but would make current employee-supplied health coverage taxable.

Bush is also proposing to increase the maximum Pell grant, which goes to low-income students, from the current $4,050 to $4,600. Democrats are pushing for even larger increases.

Bush's energy proposals would expand use of ethanol and other renewable fuels with a goal of cutting gasoline use by 20 percent over the next decade.