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Bush's 05 budget to tighten Americans' belt
Updated: 2005-02-07 09:46

US President Bush's $2.5 trillion budget is shaping up as his most austere, trying to restrain spending across a wide swath of government from popular farm subsidies to poor people's health programs.

Vice President Dick Cheney on Sunday defended the plan against Democratic criticism that Bush had to seek steep cuts in scores of federal programs because he is unwilling to roll back first-term tax cuts that opponents contend primarily benefited the wealthy.

US President Bush and first lady Laura Bush arrive for morning services at St. John's Episcopal Church in Washington, Sunday, Feb. 6, 2005. [AP]

The budget's submission to Congress on Monday will set off months of intense debate. Lawmakers from both parties can be expected to vigorously fight to protect their favorite programs.

"This is the tightest budget that has been submitted since we got here," Cheney told "Fox News Sunday."

"It is a fair, reasonable, responsible, serious piece of effort. It's not something we have done with a meat ax, nor are we suddenly turning our backs on the most needy people in our society."

The president, who campaigned for re-election on a pledge to cut the deficit in half by 2009, is targeting 150 government programs for either outright elimination or sharp cutbacks.

Bush will propose spending $2.5 trillion in the budget year that begins Oct. 1. For the current year, he is estimating the budget deficit will reach a record $427 billion. That compares with last year's $412 billion deficit and is the third straight year the Bush administration will have set, in dollar terms, a deficit high.

The five-year projections in the budget will show the deficit declining to about $230 billion in 2009, when a new president takes office.

Those projections do not take into account some big-ticket items: the military costs incurred in Iraq and Afghanistan, the price of making Bush's first term tax cuts permanent, or the transition costs for his No. 1 domestic priority, overhauling Social Security.

Sen. Kent Conrad, the top Democrat on the Senate Budget Committee, said Bush's budget "talks about the next five years of reducing deficits, but what that hides is what happens after that five-year window. The cost of everything he advocates explodes."

Sen. John McCain, R-Ariz., praised the administration's willingness to tackle the deficit. "I'm glad the president is coming over with a very austere budget. I hope we in Congress will have the courage to support it," he told ABC's "This Week."

Joshua Bolten, Bush's budget director, said that when the budget is released, the administration will provide some estimates of the cost in increased government borrowing for the president's proposal to allow younger workers to set up private savings accounts.

But he said the administration cannot provide total cost figures for the Social Security overhaul because all the elements of the plan have yet to be decided upon.

Cheney would not confirm estimates the overhaul could cost $4.5 trillion in additional government borrowing over 20 years.

Bush's budget will restrain the growth in discretionary programs to less than 2.3 percent. But because defense and homeland security are set for increases above that amount, the rest of government programs will see outright cuts or tiny gains far below the rate of inflation.

One of the biggest battles is certain to occur in the area of payments and other assistance to farmers, which the administration wants to trim by $587 million in 2006 and by $5.7 billion over the next decade.

Those payments go to farmers growing a wide range of crops from cotton, rice and corn to soybeans and wheat.

The United States and other rich countries have come under criticism for these agriculture subsidies from poor countries. In the current round of global trade talks, these nations are pressing for the subsidies' elimination.

Other programs set for cuts, the AP has learned, include the Army Corps of Engineers, whose dam and other waterway projects are extremely popular in Congress; the Energy Department; and a number of health programs under the Health and Human Services Department.

About one-third of the programs being targeted for elimination are in the Education Department, including federal grant programs for local schools in such areas as vocational education, supporting drug-free schools and Even Start, a $225 million literacy program.

The administration also will seek to restrain growth in mandatory spending, primarily by trimming costs in Medicaid, the joint program with states that pays the cost of poor people's health care.

Spending on the military, the biggest part of discretionary spending, is on target to rise by 4.8 percent in 2006 to $419.3 billion, according to documents obtained by the AP. This figure does not include the $80 billion the administration has said it soon will seek to pay for the costs of continued military operations in Iraq and Afghanistan.

Even the increase for the military will be below what the Pentagon had hoped to receive with several major weapons programs, including Bush's missile defense system and the B-2 stealth bomber, scheduled for cuts from current levels.

Many budget experts believe Bush's plan will not come close to achieving his goal of cutting the deficit in half because Congress will refuse to go along with the cuts, and Bush and the Republican-controlled Congress do not support tax increases.

"There is really no way out of the bind we are in now without some kind of increase in taxes," said Robert Reischauer, the president of the Urban Institute and a former head of the Congressional Budget Office.

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