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President's Spending Plan Would Rival 2004 Deficit

President Bush, with Office of Management and Budget Director Jim Nussle, signs the executive order protecting American taxpayers from government spending on wasteful earmarks. The president will present a budget tomorrow.
President Bush, with Office of Management and Budget Director Jim Nussle, signs the executive order protecting American taxpayers from government spending on wasteful earmarks. The president will present a budget tomorrow. (Pool Photo By Dennis Brack Via Getty Images)
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[Graph: Federal budget surpluses and deficits, 2000-2007]
Graph: Bush's Budgets

The president had success last year using his veto to force lawmakers to trim back spending bills, but this year Democrats are better positioned to simply wait for the next president, congressional aides said. That may mean less ferocity than usual in the budget battle as both sides wait to see the results of November's election.

But the growth of programs such as Medicare and Medicaid are on automatic pilot unless Congress writes a law to restrain them, a move Bush wants but one that appears highly unlikely. A Bush plan to slow the growth of Medicare would save $170 billion over five years, and fully $43 billion of that would come from Medicare Advantage, the private, managed care program that competes with the government-run fee-for-service program for the elderly, an administration official said.

Bush has defended Medicare Advantage from cuts proposed by Democrats, but this year, a senior administration official said, he will propose payment freezes to health-care providers that will affect all aspects of Medicare.

The budget will include $70 billion for the wars in Iraq and Afghanistan, although Bush has requested nearly $200 billion in 2008, much of which has yet to be approved by Congress. The five-year budget will contain no war-funding requests beyond 2009, leaving questions about how much to spend to the next president and Congress.

Officials said they expect the president's base budget for defense spending to rise about 5 percent to about $515 billion in fiscal 2009, reflecting the Pentagon's plan to expand the Army and Marine Corps for the ongoing wars in Iraq and Afghanistan and potential future conflicts.

Administration officials described fierce behind-the-scenes battles over spending in the final Bush budget. Secretary of State Condoleezza Rice went back three times to the internal budget review board -- which includes Vice President Cheney, Treasury Secretary Henry M. Paulson Jr., Chief of Staff Joshua B. Bolten and National Economic Council Director Keith Hennessy -- to appeal for more funds. In the end, she also spoke directly with Bush to secure an increase of $700 million for the State Department, 6.5 percent over last year's budget.

On the domestic front, the White House will call for trimming discretionary spending within the Department of Health and Human Services by more than $2 billion, to $74.2 billion, according to budget documents.

Among the reductions are more than $1 billion to programs run by the Administration for Children and Families, including a $280 million hit to the Low Income Home Energy Assistance Program, a block grant program that helps the poor pay heating and air-conditioning bills.

The budget plan argues for a $500 million reduction in the Social Services Block Grant program, which helps states protect children from neglect and abuse, and pay for day care, adoption, health services, foster care and other services for children and families.

The Centers for Disease Control and Prevention would lose more than $430 million, including $27 million from its efforts to detect and control infectious diseases, and $28 million from chronic disease prevention and health promotion. A $301 million program that trains 4,700 pediatricians and pediatric specialists at children's teaching hospitals also would be eliminated, at a time when pediatric specialties, such as rheumatology and pulmonology, face critical shortages.

Education Secretary Margaret Spellings said Bush will seek to restore funding for the embattled $1 billion-a-year Reading First program, an initiative at the center of his signature No Child Left Behind Act that has been besieged by allegations of conflicts of interest. Congress slashed funding for the program by 61 percent to $393 million in the 2008 budget.

"The president is going to work hard to get that funding restored, to ask for the billion dollars and help Congress see the error of their ways," Spellings said Friday in a conference call with reporters.

Money for the Safe and Drug-Free Schools Program would be sliced from $294 million to $100 million, and federal aid to afterschool programs would take a hit.

Bush will continue to boost Department of Homeland Security spending to tighten the borders. But states and cities would see cuts of $1.5 billion from the $3.75 billion in grants for security, law enforcement, firefighters and emergency medical teams approved by Congress for this year. The White House last year tried to slash state and local grants, but Congress ended up adding $1 billion instead.

Staff writers Maria Glod, Spencer Hsu, Christopher Lee, Josh White and Robin Wright contributed to this report.

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