Bush budget would slow growth of spending

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President Bush's budget would slow overall spending increases -- which have run at an annual growth rate of 5 percent to 8 percent in the past five years -- to 2.3 percent in response to rising complaints from his conservative base.

In comparison to his earlier budgets, Mr. Bush's proposed election year spending blueprint would allow spending to grow relatively modestly from $2.71 trillion this year to $2.77 trillion in 2007. If the Republican-run Congress were to approve his recommendations, it would be the smallest one-year spending increase of his presidency and represent a sharp brake on future discretionary spending.

Mr. Bush's budget calls for major increases in the Pentagon and the Department of Homeland Security, but it also would impose net discretionary spending cuts in nine of the 15 Cabinet agencies. It also would include modest reductions in the growth rate in Medicare and Medicaid, and a virtual spending freeze at the National Institutes of Health, whose budget has risen sharply under his administration.

Conservative spending critics yesterday gave much of Mr. Bush's budget plan a strong vote of approval, with the exception of his proposals to trim Medicare and Medicaid entitlements, which were deemed insufficient to hold down the programs' spending trend lines.

"Overall, he wants to reduce nonsecurity discretionary spending by eliminating wasteful programs, and we give him a very generous pat on the back for that," said Michael Franc, vice president for government relations at the Heritage Foundation, which has been among Mr. Bush's most vocal spending critics.

Mr. Franc has similar praise for Mr. Bush's proposals on maintaining U.S. defense capabilities in the war on terror and to make the tax cuts permanent and expand other savings and business investment initiatives. But on entitlements, "given the baby boomer retirement challenges we face, his relatively modest reduction in Medicare is woefully insufficient," he said.

Others credited criticism from Mr. Bush's conservative base for the administration's change in direction.

"The growth in spending is significantly lower than what we've seen in past years, and clearly the president, who is responding to pressure in his own party, wanted to show he was serious about putting forward a budget that was tight on spending," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

The federal deficit fell by nearly $100 billion two years ago because of increased tax revenue due to higher economic growth, but rose again by roughly that amount last year as a result of costs from Hurricane Katrina and Iraq. The administration estimates that the deficit will be $354 billion in 2007.

Still, Thomas A. Schatz, president of Citizens Against Government Waste, called Mr. Bush's proposals "a good start. We're obviously encouraged that the [spending] increase is lower than in previous years, but we would like to see Congress take the effort more seriously."

But Chris Edwards, chief budget analyst at the Cato Institute, doubted that Congress will give Mr. Bush the cuts that he is proposing in an election year.

"The Bush administration has a very poor record on following through on spending cut proposals. It's partly Bush's fault. He's not playing hardball with Congress on spending," Mr. Edwards said.