President Bush yesterday proposed a $2.23 trillion spending plan for next year, built on record budget deficits, that calls for a steep increase in defense spending, further tax cuts and an overall freeze on money for domestic programs across the government.
The fiscal 2004 budget that Bush is recommending to Congress would devote to national defense 60 percent of the $28 billion increase the White House envisions in the parts of federal spending that are set each year -- even without including money for an increasingly likely war against Iraq. On the other hand, the White House wants to pare many functions of government and eliminate some altogether.
The budget calls for reductions in vocational training and after-school services and would eliminate 45 programs in the Department of Education alone. It also would reduce aid for rural development, phase out a Clinton administration effort to put 100,000new police officers on the nation's streets -- a Bush target in the past -- and eliminate a decade-old program that has demolished and replaced dilapidated public housing.
Bush included in his budget several proposals that would profoundly recast the federal role in some of the government's best-known services, including health insurance programs for elderly and poor Americans and Amtrak, which would be shifted partly to the private sector at greater cost to states. The plan also ratchets up the administration's attempt to gauge the effectiveness of government, warning that programs will be "overhauled or retired" if the White House does not deem them worthwhile.
In yesterday's budget, the third of his presidency, Bush builds on the framework for spending priorities he set forth a year ago: fighting terrorism abroad, protecting Americans' safety within the United States, and promoting economic growth.
The plan also relies on budgetary devices the administration has sought to employ before -- notably an expansion of user fees, such as new charges for some veterans' medical care and for meat and poultry producers that must undergo food safety inspections. The plan reflects the administration's basic conservatism, as it proposes to lean more heavily on private companies to deliver government services and to give states vast new control over some federal programs, such as the preschool program Head Start.
Bush said during a visit to the National Institutes of Health that his budget proposal "keeps the fundamental commitments of our government, including our commitments to be good stewards with taxpayers' money." Congressional Democrats disagreed.
The release of the budget is an annual ritual in which the president sends his fiscal plan to Congress, which has final say over how -- and how much -- government money is spent. The White House's five, glossy-paged budget documents -- including a new rating of agencies called "Performance and Management Assessments" -- will form the basis for partisan negotiating that will continue at least until October, when the next fiscal year begins.
This year's budget decisions will carry strong political overtones, because they will determine the shape of the government for 2004, a presidential election year. The budget debate begins against a difficult backdrop: Congress last year proved unable to agree on a federal budget for the current fiscal year that began four months ago and is still working on the matter. As a result, the increases and decreases cited in Bush's new proposal are comparisons to the White House's request a year ago, not to an actual budget.
The plan acknowledges that the government has reentered a period of budget deficits for the foreseeable future. The plan anticipates a $307 billion deficit next year and continuing deficits the following four years for a total of $1.08 trillion. Next year's budgetary hole eclipses the previous largest deficit of $290 billion in 1992, and puts the government on a far more bleak fiscal trajectory than the era of surpluses forecast when Bush took office.
In budget documents and briefings with reporters, White House officials repeatedly characterized the deficits they foresee as moderate. White House Budget Director Mitchell E. Daniels Jr. said that, measured against the size of the budget and the economy overall, they are not that large. The budget document includes a detailed discussion that attempts to refute critics, who say that the $1.35 trillion tax cuts Bush pushed through Congress in 2001 helped bring about the return to deficits.
The deficits and Bush's request for $670 billion worth of additional tax cuts were the central features that Democrats assailed. Senate Minority Leader Thomas A. Daschle (D-S.D.) called the spending plan "a budget-busting epic disaster" and said it "confirms that President Bush is leading the most fiscally irresponsible administration in history."
Rep. David R. Obey (Wis.), ranking Democrat on the House Appropriations Committee, condemned the budget, too. In particular, he said it would allot to education $5 billion less than the GOP-led Senate approved for the current fiscal year a week ago. And Sen. Kent Conrad (N.D.), ranking member of the Senate Budget Committee, said: "The Bush budget burdens us, and our children, with trillions of dollars of new debt. His plan will push up interest rates, retard economic growth, and create massive problems for the soon-to-be retiring baby boom generation."
The White House, as it has done for the past two years, attempted to shift blame for budget imbalances onto Capitol Hill, renewing its warning that Bush would not tolerate efforts by members of Congress to guarantee spending on programs favored by specific constituents.
The budget document makes little attempt to mask that the administration is giving domestic programs a relatively low priority, with the exception of several initiatives that the White House has unveiled in recent days and in Bush's State of the Union address a week ago. "One conclusion is inescapable," the central budget document says. "The federal government must restrain the growth in any spending not directly associated with the physical security of the nation."
Overall, the proposal would increase "discretionary" spending, the money that Congress appropriates each year, by 4 percent, which administration officials said is about the expected increase in family income. The portion unrelated to defense would go up by about 3 percent, but that includes a major increase for the Department of Homeland Security, which began its existence 10 days ago.
Liberal budget analysts said those figures obscure the squeeze the administration has placed on many domestic programs over the past two years. Aside from national defense, homeland security and international affairs, spending on the rest of government would grow by one-half of 1 percent from 2002 levels.
One of the largest percentage increases in the budget would go to the Homeland Security Department, for which Bush proposed $36.2 billion next year. That is an increase of more than 7 percent over the money the administration had recommended for the current year for the same work, which has been decentralized in various agencies until now.
The largest actual increase in money would go to defense, which would get a $16.9 billion increase in funding for the Pentagon, missile defense and other programs.
Critics said that sum vastly understates the military spending the White House anticipates, noting that the administration already is planning to ask Congress for extra money for the current year -- and that a war with Iraq, if it occurs, could cost $100 billion or more by some estimates. Still, Republicans on Capitol Hill yesterday signaled that they would push for more military spending. Rep. Duncan Hunter (R-Calif.), chairman of the House Armed Services Committee, said the administration needs to spend $43 billion more than it has proposed for purposes ranging from more stealth aircraft to larger stockpiles of "smart" bombs.
In large and small ways, the budget seeks to shift federal duties to states and private companies. The budget reiterates that Bush wants to devote an extra $400 billion over the next decade to Medicare, creating some form of prescription drug benefits and encouraging elderly Americans to join private health plans. In addition, the budget documents recommend that Congress begin to allow the Internal Revenue Service to use private contractors and say that the U.S. Mint will decide whether private companies should be hired to mail orders for coins.
Reflecting his conservative social views, Bush's budget would increase money for programs to help pregnant young women who decide to keep their babies, expand government efforts to foster marriage, and create a new system of vouchers so that drug addicts could take subsidies to treatment programs run by religious groups.
One of the budget's biggest winners in percentage terms was the Securities and Exchange Commisson. Bush sought $841 million for the SEC, 48 percent more than last year's budget request, as the agency handles a growing load of corporate fraud cases.
Staff writer Jonathan Weisman contributed to this report.