Bush Projects Record Deficit
WASHINGTON (Feb. 1) - President Bush will send Congress a $2.2 trillion budget for 2004 that projects record federal deficits and proposes a long-range plan to push military spending beyond $500 billion, officials say.
Bush's fiscal blueprint will estimate this year's deficit at $307 billion, with the 2004 shortfall dipping only to $304 billion, said congressional and administration officials speaking on condition of anonymity. Until now, the historic high was $290 billion in 1992, when Bush's father was president.
After four straight annual surpluses under President Clinton, the revived red ink is already adding friction to this year's budget battle.
Democrats blame Bush-backed tax cuts and say war with Iraq and other problems could drive actual shortfalls even higher; White House officials and congressional Republicans play down the numbers and say the weak economy and fight against terror must be confronted first.
''They're underestimating the seriousness of it,'' said Sen. Kent Conrad of North Dakota, senior Democrat on the Senate Budget Committee.
Conrad argued that deficits will be mounting just as the government should be shoring up Social Security and Medicare for the retirement of baby boomers beginning in a few years.
Without revealing the precise numbers before, administration officials have said for weeks that deficits of this size are manageable because the U.S. economy will surpass $10.5 trillion this year.
''The way to get rid of deficits is to grow the economy and reduce spending, and that's what we intend to do,'' said Trent Duffy, spokesman for the White House budget office.
According to administration figures, the projected shortfalls would equal 2.8 percent of the economy this year and 2.7 percent in 2004. When deficits peaked in the 1980s and 1990s, they were as much as 6 percent the size of the economy.
On Wednesday, the nonpartisan Congressional Budget Office projected deficits of $199 billion this year and $145 billion in 2004 - excluding any new tax or spending initiatives that might be enacted into law.
Meanwhile, Bush will propose a 4.4 percent increase, or $16.9 billion, in overall defense spending next year to $399.1 billion, even without any war with Iraq, according to figures obtained by The Associated Press.
The Defense Department would get $379.9 of that amount, compared with $364.6 billion in this year's budget. The rest of the money is for the Energy Department nuclear weapons program and defense programs in other agencies.
The proposal would increase money for missile defense and pay for seven new ships, compared with five this year. The higher costs also include pay increases ranging from 2 percent to 6.25 percent for military personnel.
Increases include:
-The military pay raises, which would cost an additional $3.7 billion.
-Inflation in areas other than pay, which would cost $4.3 billion.
-Spending for shipbuilding would increase by $2.7 billion, to $12.2 billion.
-Missile defense would increase by $1.5 billion to $9.1 billion.
-Spending for special operations forces would increase to $4.5 billion, from $3 billion.
The Pentagon says it would save $7.1 billion through a variety of programs to include early retirement of aircraft and ships, reducing Navy personnel and ending upgrades of some weapons systems.
Bush's budget will also propose more money for the Treasury Department to help the government sever terrorists from their sources of financing and to combat money laundering.
Treasury's Financial Crimes Enforcement Network, which plays a key role in trying to nab terrorist financiers and money launderers, would receive $57.6 million in fiscal year 2004, a 14 percent increase from a requested $50.5 million for the 2003 budget year, which began Oct. 1.
Bush, who will also renew his proposal to open mineral drilling in the Arctic National Wildlife Refuge, will project $2.4 billion in oil lease sales there by 2005, said Rebecca Watson, assistant interior secretary for land and minerals management.
She said half the money would be spent to research solar, wind and other alternative energy.
AP-NY-02-01-03 1051EST
Copyright 2003 The Associated Press. |
