Bush Plan Reins In Domestic Spending

The State Department would receive nearly $35 billion, an increase of more than 20 percent over current spending estimates, plus $3 billion in emergency spending related to the administration's "global war on terror."

Federal agencies other than State, the Pentagon and Homeland Security would receive increases of about 1 percent over 2007 spending estimates, with requests for eight agencies -- including education and environment -- falling below fiscal 2006 levels.

Bush proposes a number of new initiatives, including a plan to boost the size of Pell grants to help students pay for college, a program to fund pilot projects to reduce traffic congestion and a new effort to raise $3 billion in public and private matching funds to improve national parks. But those programs' costs would be offset with cuts elsewhere.

For example, the Education Department's request for discretionary funding would rise $10 million over the 2007 estimate -- about 1 percent less than the agency received in 2006. The increase for Pell grants and an extra $1.2 billion for elementary and secondary education would be paid for in part by slashing subsidies to the banks that provide student loans and eliminating a student loan program for students at vocational and technical schools.

The Justice Department would get about a 1 percent increase, including substantial boosts for counterterrorism and counterintelligence programs and more than 220 new FBI agents. But law enforcement groups say the proposal would effectively cut grants and other assistance to local police by 75 percent at a time when violent crime is rising nationally.

And state officials complained that the president is seeking an 18 percent reduction in funds to provide heating assistance to 5.6 million low-income families, a proposal that would force states either to contribute more money or cut off assistance to about 1 million families.

Democratic budget leaders decried the cuts, many of which have appeared in previous Bush budgets.

"These things have been around the track numerous times and never made it to the finish line," said House Budget Committee Chairman John M. Spratt Jr. (D-S.C.). "It's doubtful they're going to pass."

House Speaker Nancy Pelosi (D-Calif.) also criticized the president for allowing the alternative minimum tax to expand to millions of additional families by 2012, subjecting them to substantial tax increases. The tax was originally conceived as a way to ensure that wealthy Americans did not escape paying taxes.

Grover G. Norquist, president of Americans for Tax Reform and a staunch administration advocate, said conservatives are likely to applaud the package. "By putting a line in the sand that says that 'You can -- and I have -- balanced the budget without raising taxes,' then the Democrats have to do the same," Norquist said.