Bush called his spending proposal a lean budget that funnels tax dollars to the most vital government programs.
Overall spending for discretionary programs covered by the annual budget process would rise about 2.1 percent - slightly below the projected 2.3 percent inflation rate - but the money would be allocated unevenly. Programs unrelated to defense or homeland security would see a 1 percent cut. About 150 programs would be eliminated or dramatically reduced, but administration officials declined to list them, and Congress is sure to have different ideas. Bush targeted 65 programs for elimination last year; all but four survived.
Expenditures for Social Security, Medicare, Medicaid, and other mandatory entitlement programs that are essentially outside the annual budget process - and that constitute about half of all federal spending - would continue to grow at rates well above most other government programs.
"Our priorities are winning the war on terror, protecting our homeland, growing our economy. It's a budget that focuses on results," the President said at a White House meeting with his cabinet. "I fully understand that sometimes it's hard to eliminate a program that sounds good."
Although Bush said he was on track to halve the deficit by the time he leaves office, his projections do not include spending in Iraq and Afghanistan beyond this year, the long-term cost of extending his tax cuts, or any costs of his plan to let workers divert some of their Social Security taxes to personal investment accounts - a plan that alone is projected to cost trillions.
Democrats called the President's budget a hoax that masks the true outlook for deficits.
"This budget continues the wrong choices and misplaced priorities that have created record deficits and rising debt over the last four years," said Rep. John M. Spratt Jr. of South Carolina, the top Democrat on the House Budget Committee. "By any realistic accounting, the President's policies make the deficit problem worse, not better."
Bush, who inherited a $236 billion surplus and a declining economy when he took office in 2001, hopes to put the government on a path to a $207 billion deficit by fiscal 2010. The government expects to end the current fiscal year $427 billion in the red.
That's a record in dollar terms but not as a percentage of the economy, which is considered a more important gauge of the government's financial health.
The budget would accelerate the shift in federal priorities that began after the Sept. 11, 2001, attacks. Four years later, the threat of terrorism has become a fact of life that influences federal spending across the board.
Bush's plan to increase defense spending by about 5 percent next year would bring the total increase since 2001 to 41 percent. The $419.3 billion defense budget for 2006 would consume about half the money that Congress has available for programs covered by the annual budget process. Funding for homeland security, which already has tripled since 2001, would increase to nearly $50 billion. About $34.2 billion would go to the Homeland Security Department, but more than two dozen other agencies also have responsibility for homeland-security programs.
The fear of a chemical, biological or nuclear attack is a recurring theme in Bush's budget. The FBI would get $5.7 billion - an 11 percent rise - to help pay for more translators, intelligence analysts and overseas agents.
Despite a 6 percent cut in overall spending at the EPA, the agency would get a 73 percent rise - to $185 million - for programs related to homeland security. The EPA is responsible for decontaminating any sites that are attacked by weapons of mass destruction.
Social Security, Medicare, Medicaid and other so-called mandatory programs would continue to consume about half of all the tax dollars Americans send to Washington. In addition, interest on the federal debt would take a $211 billion bite out of the budget, more than twice the combined amount allocated for the EPA, the Energy Department, federal law enforcement and foreign aid.
Bush offered no new details on overhauling Social Security but said he hoped to save $45 billion over the next 10 years in Medicaid, the federal-state health-care program for the poor. Even with the changes he advocates, Medicaid spending would increase by about 7.2 percent a year.
The proposed savings would put new burdens on state governments while many of them are struggling to avoid deficit spending. The National Governors Association said Bush's plan could force cuts in Medicaid services to the elderly and people with disabilities.
"The Medicaid program is growing rapidly because health-care inflation is running two to three times the general inflation rate and the case load has grown 33 percent over the last four years," the association said in a statement responding to Bush's budget. "Governors have little control over these two cost drivers, and do not want to be in the position of having to choose between funding health-care programs for grandparents or programs for their grandchildren."
The administration's refusal to provide a list of programs it proposes to eliminate was a tacit acknowledgment of the political difficulties Bush's budget faces in Congress. And the process will take months; Congress rarely completes work on tax and spending bills flowing from a president's budget before the new fiscal year begins Oct. 1.
"Are we going to get all the program cuts we wanted?" said Josh Bolten, Bush's budget director. "No. Are we going to get all the spending increases we asked for? No, I don't expect that. But I think we will get a lot of them."
Contact reporter Ron Hutcheson at 202-383-6101 or rhutcheson@krwashington.com.
