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In final budget, Bush sees chance to seal legacy

Seeks to keep tax cuts, increase defense spending

Email|Print| Text size + By Martin Crutsinger
Associated Press / February 4, 2008

WASHINGTON - In the nation's first-ever $3 trillion budget, President Bush seeks to seal his legacy of promoting a strong defense to fight terrorism and promoting tax cuts to spur the economy. Democrats, who control Congress, are pledging fierce opposition to Bush's final spending plan, perhaps even until the next president takes office.

The 2009 spending plan being sent to Congress today will project huge budget deficits, about $400 billion for this year and next and more than double the 2007 deficit of $163 billion.

Even those estimates could prove too low given the rapidly weakening economy and the total costs of the wars in Iraq and Afghanistan, which Bush does not include in his request for the budget year beginning Oct. 1.

Last year, when Democrats were newly in the majority, there were drawn-out veto struggles. This year's fights could be worse because it is an election year.

As in past years, Bush's biggest proposed increases are in national security. Defense spending is projected to rise by about 7 percent to $515 billion and homeland security money by almost 11 percent, with a big gain for border security. Details on the budget were obtained through interviews with administration officials, who spoke on condition of anonymity until the budget's release.

The bulk of government programs for which Congress sets annual spending levels would remain essentially frozen at current levels. The president does shower extra money on some favored programs in education and to bolster inspections of imported food. Bush's spending proposal would achieve sizable savings by slowing the growth in the major health programs - Medicare for retirees and Medicaid for the poor. There the president will be asking for almost $200 billion in cuts over five years, about three times the savings he proposed last year.

Democrats attacked the plan as a continuation of failed policies that have seen the national debt explode under Bush; projected surpluses of $5.6 trillion wiped out; and huge deficits take their place, reflecting weaker revenues from the 2001 recession, the terrorism fight, and, Democrats contend, Bush's costly $1.3 trillion first-term tax cuts.

"This administration is going to hand the next president a fiscal meltdown," Kent Conrad, a North Dakota Democrat who is chairman of the Senate Budget Committee, said yesterday in an interview. "This is a budget that sticks it to the middle class, comforts the wealthy and has a set of priorities that are not the priorities of the American people."

Bush's budget reflects the outlines of a $145 billion stimulus plan that the president is urging Congress to pass quickly to combat the growing threat of a recession. While the House passed a stimulus bill close to the president's outline, Senate Democrats are trying to expand the measure to include cash relief for older people and extended unemployment benefits.

Bush's five-year blueprint makes his first-term tax cuts permanent while still claiming to balance the budget by 2012.

In a change from last year, the administration is also seeking to increase spending on the State Children's Health Insurance Program by $19.7 billion over the next five years. That request is midway between the $5 billion increase requested by Bush last year and the $35 billion increase in bills passed by Congress but vetoed by Bush in October and December.

Deficits in the range of $400 billion would be very close to the record high imbalance, in dollar terms, of $413 billion set in 2004 during Bush's first term. Many private economists are forecasting that the deficits this year and next will surpass the 2004 record because they believe the country is heading into a recession.

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