Tuesday, February 3, 2004

President Bush yesterday proposed a $2.4 trillion budget for next year that holds most discretionary spending to a half-percent increase and terminates 65 federal programs in an effort to trim the federal deficit from $521 billion to $364 billion.

For the 2005 fiscal year that begins Oct. 1, spending on defense would rise 7 percent and the homeland security budget would increase by 10 percent, but all other discretionary spending would be held to the half-percent increase.

The overall budget, with massive entitlement spending such as Medicare and Social Security included, would rise by 3.5 percent — about three times as fast as the projected rate of inflation.

Homeland defense would be one of the big budget winners for the fiscal year. Overall spending is set to rise 14 percent to $47.4 billion, which includes an 11 percent increase in FBI funding for counterterrorism, a 9 percent increase for the Coast Guard, more money to protect the nation’s food supply and a large increase to battle biological threats.

The Justice Department’s Community Oriented Policing Services program would be one of the Bush budget’s big losers, dropping from $481.9 million in funding in 2004 to $97 million in fiscal 2005. The Clinton-era program never achieved success, administration officials said.

The Agriculture Department and the Environmental Protection Agency also were targeted for the biggest reductions in discretionary spending.

Sixty-three other programs would receive reduced funding under the Bush proposal. In addition, 65 government programs — 38 of them education-related, including those focused on alcohol abuse, the arts, dropout prevention, school counselors and school leadership — would be terminated for a savings of $4.9 billion.

“The president’s request focuses on the most urgent needs of our country: protecting our homeland, winning the war on terror, and maintaining economic and job growth,” said House Budget Committee Chairman Rep. Jim Nussle, Iowa Republican.

Meanwhile, Sen. Edward M. Kennedy, Massachusetts Democrat, called on Congress to reject Mr. Bush’s spending plan, charging it was the “most antifamily, antiworker, anti-health care, antieducation budget in modern times.”

Democrats also panned the plan as not sufficient to deal with the projected $521 billion deficit, but Mr. Bush said the nation has gone through a tough few years and Americans will have to be patient.

“The reason we are where we are, in terms of the deficit, is because we went through a recession, we were attacked, and we’re fighting a war,” he said after a meeting with his Cabinet. “And these are high hurdles for a budget and for a country to overcome, and yet we’ve overcome them, because we’ve got a great country, full of decent people.

“And the economy is getting better. And as the economy gets better, it enables us to send up a budget to the Congress that does cut the deficit in half.”

The deficit in the 2005 budget would be $364 billion — down from $521 billion this year.

The 2005 budget also calls for the continuation of the president’s 2003 tax cuts, some of which are set to expire next year.

Democrats, many of whom have complained about the rising deficit, yesterday derided Mr. Bush for cutting programs.

“This administration pledged that its tax cuts and policy choices would not turn record surpluses into record deficits, but this budget shows that’s exactly what’s happened,” said Senate Minority Leader Tom Daschle, South Dakota Democrat.

Sen. John Kerry, Massachusetts Democrat, the leading presidential contender, said: “The president clearly does not understand the economic, social and security challenges that our nation faces today.”

But Bush administration officials said the president is making the tough decisions necessary to hold down spending and move toward a balanced budget.

To do so, the Bush proposal would include a 3 percent education increase — a figure Democrats say is too small. In addition, the proposal would cut water projects, rural conservation, aid to state and local law enforcement agencies, the Amtrak passenger railroad and federal prisons.

The EPA’s 8.9 percent decrease overall would include a $492 million reduction in low-interest loans to states and communities for water pollution control projects. Funding would drop from $1.3 billion to $850 million.

In addition, a $335 million cut would come from allocations to local governments to improve wastewater, storm-water and drinking-water facilities. Last year’s budget provided $429 million.

The proposed budget would add $1 billion apiece for both disabled students and poor school districts. Foreign aid also would grow, including a $400 million increase over this year’s $2.4 billion for battling AIDS abroad. Mr. Bush also wants $2.5 billion — up from $1 billion — for his Millennium Challenge Account for countries embracing democratic reforms.

Republicans praised the new budget.

“The president’s budget is a good start to funding our priorities and a good answer for the Democrats who are proposing increased spending and an increased deficit,” said House Majority Leader Tom DeLay of Texas. “They’re not calling for responsible spending — they’re calling for a tax hike.”

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