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Bush Budget Analysis

By February 8, 2005

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The Bush budget released Monday proposes the largest cut in domestic spending since President Reagan was in office; excluding military-related expenditures, discretionary spending (such as for education and the environment) would be cut about 1 percent. However, according to the Office of Management and Budget (OMB), spending growth under Bush has averaged 7.4 per cent a year compared with 3.5 per cent under Bill Clinton, with much of Bush's spending off budget.

For example, President's budget did not include an $80 billion supplemental request for Afghanistan and Iraq. Nor does it consider the cost of proposed Social Security privatization. Thus, the deficit reduction predictions are overly optimistic, according to Administration critics.

From 1970 to 2010, federal spending has averaged 20.4 percent of GDP. Under Bush, spending is projected at 19.5 percent.

However, the Bush tax cuts have resulted in U.S. tax revenue falling to 17 percent of gross domestic product this year, down from 21 percent in 2000, to its lowest level in four decades.

Thus, critics suggest that the "budget problem" is one of income, not out-go.

Proposed cuts include agricultural subsidies, environmental protection, the Small Business Administraion and Amtrak. In his last budget, the President achieved five of 65 proposed cuts. Increases include NASA (at 2.4%, less than half of what Bush promised last spring).

News and commentary on the budget from around the world

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