WASHINGTON (REUTERS) — Responding to the unprecedented demands of Sept. 11, President Bush will send to Congress Monday a $2.1 trillion budget that brings back deficits and clamps down on domestic spending to finance the biggest military buildup since the Cold War.
Bush also calls for $591 billion in new tax relief over the next decade and sets the stage for an election-year battle with Democrats over proposed cuts in job training, highway construction and other domestic programs.
Bush’s budget priorities, like his presidency, have been transformed by the September attacks on the United States and the recession that deepened in its aftermath. The White House cites both to justify a fiscal 2003 budget that will plunge the federal government into deficits for the first time in five years and interrupt efforts to reduce the national debt.
“The budget for 2003 is much more than a tabulation of numbers. It is a plan to fight a war we did not seek, but a war we are determined to win,” Bush wrote in a letter to Congress that will accompany a budget sharply boosting federal spending to fund the war against terrorism, homeland defense and a new round of tax cuts to stimulate the recession-bound economy.
Budget documents show spending for government programs, other than automatic payments such as Social Security and Medicare, would increase by 9 percent to $746 billion next fiscal year, which starts Oct. 1. While military and homeland security spending would surge, the budget for everything else would increase by a meager 2 percent to $355 billion.
Bush is reviving his economic stimulus package that stalled last year, despite signs the economy may recover without it. He also calls on Congress to extend income tax rate reductions, marriage penalty relief, child tax credits and estate tax cuts which were part of the $1.35 trillion package that Congress passed last year. The extensions would cost $344 billion.
Democrats warned that these additional tax cuts and accompanying higher debt interest costs could drain more than $800 billion from Social Security and Medicare surpluses, weakening the retirement and health-care programs as the baby boom generation approaches retirement.
DEFICITS OVER NEXT THREE YEARS
Under Bush’s plan, the government will post deficits of $106 billion in fiscal 2002, $80 billion in 2003 and $14 billion in fiscal 2004. The debt held by the public would also increase from $3.48 trillion this year to $3.6 trillion in fiscal 2004, before beginning to decline in 2005.
But the White House and its Republican congressional allies expressed confidence Bush would get most of what he wants for the Pentagon and homeland security. As wartime commander in chief, Bush goes to Capitol Hill armed with sky-high approval ratings that will make it easier for him to push his agenda and harder for Democrats to attack it.
Under Bush’s budget plan, the military stands to benefit most, with proposed spending increases of $48 billion in fiscal year 2003 and $120 billion over the next five years.
If approved by Congress as expected, it would be the largest increase — 12 percent — in military spending since former President Reagan’s Cold War-era buildup 20 years ago.
Bush includes $7.8 billion for missile defense, unchanged from the current year. But critics of the testing program to shoot down missiles from “rogue” states are concerned over a Congressional Budget Office estimate this week that it could cost $238 billion over the next 15 to 25 years.
Bush also will propose more than doubling — by 111 percent — federal spending on homeland security to $37.7 billion in 2003, including money to combat bioterrorism and detect foreigners at the border who might try to launch attacks like those on New York and Washington.
White House budget chief Mitchell Daniels called the increases for defense and homeland security “non-negotiable.”
But battles are brewing over other domestic initiatives, particularly Bush’s proposed tax-cutting stimulus package and his 10-year, $190 billion plan to modernize Medicare with a prescription drug benefit for seniors.
