Posted on 5-2-2003

Bush Budget In The Red
By Elisabeth Bumiller, NYT 3 Feb03

President G W Bush sent Congress a $2.23 trillion budget today — with
record deficits — that would speed up billions of dollars in income tax
cuts, provide huge increases for the Pentagon and offer a modest jump in
spending for NASA.

Mr. Bush's budget forecasts a deficit of $304 billion in the current fiscal
year, and projects a deficit of $307 billion for the 2004 fiscal year,
which begins Oct. 1. Over the next five years the total projected deficit
would be more than $1 trillion, a potentially problematic number for Mr.
Bush, who as a presidential candidate vowed that he could both cut taxes
and eliminate the national debt. In his budget message to Congress, the
president said his budget reflected his most urgent national priorities:
"Winning the war against terrorism, securing the homeland and generating
long-term economic growth."

The budget included no projection of the cost of any war with Iraq, which
administration officials have said could be as low as $50 billion and as
high as $200 billion. If there is a conflict, officials said, Mr. Bush
would ask Congress for the money as an emergency supplement.

The budget calls for cuts in a wide range of domestic spending, including
trims in Justice Department programs on juvenile delinquency and tribal
courts and a halt in financing for the hiring of police officers. Money for
a public housing program and aid to rural schools also would be cut. Over
time, government-financed child care and children's health insurance would
be reduced.

Democrats immediately attacked the White House for the deficits and what
they called the most fiscally irresponsible budget in decades. "The
president's budget is worse than a bad movie that no one wants to see
twice," Senator Tom Daschle of South Dakota, the Senate Democratic leader,
said in a statement distributed by his office. "It's a budget-busting epic
disaster."

Administration officials just as quickly dismissed such concerns. "A
balanced budget is a high priority for this administration," said Mitchell
E. Daniels Jr., the White House budget director, in a briefing for
reporters today. "It is not the top or the only priority."

The president's top priority, Mr. Daniels said, was protecting the country
from terrorist attack. As a reflection of that, he said, the administration
was requesting $41 billion for domestic security and $380 billion for
defense, an increase of 4.2 percent beyond what was already the biggest
military buildup since the administration of Ronald Reagan.

Mr. Bush, in his budget message to Congress, attributed the deficits to the
costs of the campaign against terrorism, calling it "a war we did not
choose" and a recession that started in early 2001. "My administration
firmly believes in controlling the deficit and reducing it as the economy
strengthens and our national security interests are met," he said.

Mr. Daniels asserted that the $300 billion deficit, representing 2.7
percent of the nation's gross domestic product, was not large enough in
percentage terms to cause trouble or to raise interest rates — an assertion
that Democrats and some budget analysts called outrageous. "Mitch Daniels
has proved once again that he is first and foremost a political operative
and not a budget director," said Robert Greenstein, the executive director
of the Center on Budget and Policy Priorities, a liberal research group. "I
can think of few budget directors in recent history who would have made
such astounding statements."

Mr. Greenstein said that the current deficits, while relatively small, were
a threat to the near future, when a tidal wave of retiring baby boomers
will tax the ailing Medicare and Social Security systems.

Mr. Bush's budget, a five-inch stack of five paperback volumes weighing
more than 13 pounds, also details his proposals for increases in education
and AIDS programs. It is filled with cheerful pictures of children lining
up for school lunches and of a new kindergarten in Afghanistan supported by
the Agency for International Development, prompting Representative Charles
B. Rangel of New York, the ranking Democrat on the Ways and Means
Committee, to brand it a press release. "What Congress received today is
pure P.R. with color pictures of little children and brave soldiers
designed to distract the American public from the truth," Mr. Rangel said.
The truth, Mr. Rangel said, was that the president's proposed $670 billion
economic package, which proposes the elimination of the tax individuals pay
on stock dividends as well as the acceleration of planned income tax cuts,
was running up the debt for a future generation to pay.

Mr. Bush's budget sets aside $400 billion over the next 10 years to
overhaul Medicare, and offers a photograph of the president framed by a
large backdrop of a "Strengthening Medicare" sign from a recent event. But
the budget offers no significant new details on how Mr. Bush will change
the program. It also does not answer the fundamental question, which
administration officials have so far declined to answer, of whether the
elderly will have to leave their fee-for-service Medicare plans for health
maintenance organizations to get insurance coverage for prescription drugs.

The NASA budget, normally little noticed by people outside of aeronautics,
drew intense attention today. The president proposed that NASA financing
should grow by nearly $500 million to $15.5 billion, an increase that White
House officials said was in place before the space shuttle Columbia ripped
apart on Saturday. Financing for the space shuttle program, which included
four orbiters until the loss of Columbia, would increase to $3.9 billion
from $3.2 billion.