Bush’s budget boosts defense proposal

CHICAGO TRIBUNE

WASHINGTON — President Bush, facing his final go-around on spending with a Democratic-run Congress during this presidential election year, on Monday unveiled a $3.1 trillion budget for 2009 that boosts defense spending and pares Medicare costs while leaving a near-record deficit.

It is unlikely that Bush will win all of what he is seeking in the budget, with Republicans and Democrats grappling for control of the White House. However, the president and Congress already are moving toward agreement on a tax-relief plan to stimulate the economy — and that is certain to sharply increase a federal budget deficit that had fallen from a record high in 2004.

“We’ve made a determination to drive up the deficit in order to stimulate the economy,” said Jim Nussle, Bush’s budget director. The spending plan proposed by the White House envisions a 7.5 percent boost in defense spending, while acknowledging that the full costs of the wars in Iraq and Afghanistan are not included. As it stands, the proposal represents a 70 percent increase in defense spending during Bush’s two terms.

The Bush blueprint also asks doctors and hospitals to hold the line on what they charge the elderly for medical care, in a bid to slow the expected increase in spending on Medicare next year from 7.2 percent to 5 percent. This and other measures would save $178 billion over the next five years, averting a financial crisis down the road.

The budget also takes into account something that the Republican president and Democratic-controlled Congress already have agreed to in principle: offering individuals, families and businesses about $145 billion in tax relief this year in an attempt to spur the economy.

The combination of all this augurs a sharp negative turn in the nation’s budget deficit, which had reached a record of $413 billion in 2004 and had fallen to $162 billion. The White House now projects what it calls “an uptick” — a deficit of $410 billion in 2008 and $407 billion in 2009.

These deficits could well surpass the record, in sheer dollar terms, when the full costs of war are accounted for in 2009 — though the White House maintains that the deficit is shrinking as a percentage of the nation’s Gross Domestic Product.