Defense is cornerstone of Bush's budget plan

Military increases countered in part by domestic cuts

$80 billion deficit projected

President says war, recession require sacrifices

February 05, 2002|By David L. Greene and Karen Hosler | David L. Greene and Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - President Bush proposed a $2.13 trillion budget yesterday that calls for vast increases in military and homeland defense spending, partly offset by cuts in such areas as job training, road construction and environmental protection.

The budget he sent to Congress reflects how profoundly the president believes the nation must adjust to counter the threat of terrorism and fight off a recession.

Bush proposed the largest increase in defense spending since the early years of the Reagan administration. And he would double spending on homeland defense, including efforts to fight bioterror and to tighten border security.

Taken together with the continuation of the tax cuts that Bush says are needed to stimulate the economy, his spending plan would send the budget into deficit after four years of surpluses. But Bush and his aides say the deficit, and the cuts in domestic programs, are a necessary sacrifice for a nation enduring economic hardships and fighting a war against terrorism.

Bush's plan will be subject to months of debate and revision in the closely divided Congress, which will be acting with an eye toward the November congressional elections. The budget is likely to look far different once it is approved in final form on Capitol Hill.

Still, the president's priorities for the fiscal year that begins Oct. 1 are clear in the glossy, voluminous budget books, which feature color photos of the remains of the World Trade Center and U.S. Marines fighting in Afghanistan.

To underscore that the fight against terror remains his top priority, the president visited Eglin Air Force Base in Florida, where he told troops, "We are unified in Washington on winning this war."

Bush said his plan "recognizes the vital role the military will play and recognizes we have only one alternative, and that is victory."

Democrats applauded the emphasis on counter-terrorism. But they complained that Bush would slash vital domestic programs to preserve the centerpiece of his agenda last year: a $1.35 trillion tax cut. If he just scaled back the tax cut, Democrats say, the president could fight terrorism and still tend to nonwar-related needs at home.

Bush characterized the cuts differently, saying he would eliminate waste at a time when the nation must spend more on security.

In a statement, the president also said his proposal reflects a "bold agenda for government reform" that would aggressively monitor whether agencies achieve their goals. Successful programs should be reinforced, Bush said, while failing programs "should be reinvented, redirected or retired."

Indeed, included in the White House budget for the first time are grades for federal programs, labeling them as effective or ineffective. Funding for programs deemed ineffective would be slashed.

Even with cuts in domestic programs, the president's ambitious call to boost defense spending by $48 billion and his effort to double homeland security funding, to nearly $38 billion, would produce deficits for the first time since 1997.

His budget projects that surpluses will return in 2005, though smaller than was forecast before the nation was attacked and the economy fell into recession. Bush's last budget projected a 10-year surplus of $5.6 trillion; the new budget envisions a 10-year surplus of $1 trillion.

Democrats argued that Bush's plan would carry the nation back into an era of deficit spending that would require dipping into Social Security and Medicare surpluses.

"The budget should promote long-term economic growth through fiscal responsibility, investments in people and technology and honoring our commitments to Social Security and Medicare," said Rep. Richard A. Gephardt of Missouri, the House Democratic leader. "The administration's budget fails on all three counts.

Mitchell E. Daniels Jr., the White House budget director, noted that the Bush plan projects an $80 billion deficit for next year and an even smaller $14 billion deficit in 2004. Those deficits are small, Daniels argued, given that the nation is in recession while being forced to fund a war.

"Running large surpluses and paying down debt is a very important objective," he said. "But there are two or three things that come ahead of that goal: defeating terrorism, defending the lives of Americans and getting the economy rolling again."

Asked about the Democrats' argument that Bush's tax cut was forcing the administration to dip into Social Security and Medicare surpluses, Daniels said the president's tax relief "has nothing to do with" those surpluses, which are generated by payroll taxes.

Under the Bush plan, overall spending would grow by $76 billion, or 3.7 percent, over this year's total. Projected revenue would rise by $102 billion, or 5.2 percent, to $2.05 trillion.

Discretionary spending - which does not include programs like Social Security - would grow by a hefty 8 percent, about the same rate as this fiscal year. The bulk of the increase would be in defense and homeland security.

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