Bush Proposes Record Defense Budget, Cuts in Domestic Programs
Tuesday February 7, 2006
On Monday, President Bush unveiled a $2.77 trillion budget for fiscal 2007 (which begins 1 October), with record defense spending, domestic spending cuts, deficit spending and no on-budget acknowledgement of the ongoing costs of the conflicts in Iraq and Afghanistan.
The 2007 budget includes a request of $439 billion for defense, a record figure that does not include the cost of the Iraq-Afghanistan conflicts, which have ranged from $4.4 - 7.1 billion per month since fiscal year 2003.
Last week, Bush asked Congress for another $70 billion this year for Iraq and Afghanistan, pushing 2006 annual costs to $120 billion, "the highest since the Sept. 11 attacks." The Congressional Budget Office (CBO) has estimated that the Iraq war will cost American taxpayers $179-392 billion over the next 10 years.
The bulk of the "savings" comes from cuts in Medicaid: $36 billion over the next five years and $105 billion over the next 10. However, last week -- after one month of operation -- the Administration projected the cost of its Medicare prescription plan at $678 billion over the next 10 years, considerably more than the $400 billion it promised Congress when the bill was enacted.
Deficits Are Us
In January 2001, the CBO projected a federal budget surplus greater than $5.6 trillion between 2002 and 2011. The 2006 budget now has a projected deficit of $423 billion.
The CBO now projects that deficits for the five years starting 1 October 2006 will exceed $2.2 trillion. "Over the past 40 years, deficits have averaged 2.3 percent of G.D.P.; last year they ran at 2.6 percent. This year the deficit will be 3.2 percent," according to the New York Times.
Contributing to the deficits: Bush wants to make permanent his tax cuts, which would reduce federal income an estimated "$178.6 billion over the next five years and $1.35 trillion over the next decade."
Domestic Programs
In this, his sixth budget, Bush gives the Department of Homeland Security, now in its fourth year, a 6 percent boost, to $43 billion. And a new program, the American Competitiveness Initiative (ACI), would cause a 7.8 percent increase in funding for the National Science Foundation, 14 percent for the Department of Energy, and 18 percent for the National Institute for Standards and Technology, which helps industry develop new technologies.
Health programs, on the other hand, see budgets shrink at the same time that boomers are reaching age 60: Centers for Disease Control (responsible, among other things, for response to avian flu) cut $367 million .... National Institutes of Health (responsible for research) frozen ... Medicaid -- the cost of which is shared with states and which has had an abysmal change in its prescription drug benefit would be cut $12 billion over five years.
Moreover, the budget includes a provision for reducing Medicare spending by $36 billion, when it is the Bush Administration that pushed through the budget-busting Medicare prescription drug plan.
The Department of Education, responsible for the Bush "No Child Left Behind" program, would see a 4 percent ($3.5 billion) cut, including education technology grants. The Environmental Protection Agency would also see a 4 percent ($300 million) cut, with the largest program affected being one for aging sewer system upgrades. State and local air pollution programs would be cut 16 percent ($35 million).
Another program cut: one that helps the poor insulate their homes, thus saving them money on heating bills and reducing the demand for energy.
Although more and more companies are turning their pensions over to the underfunded Pension Benefit Guaranty Corporation (PBGC), Bush wants to save $16.7 billion over five years. PBGC reports that US pensions are underfunded by about $450 billion while it faces a $23 billion deficit. One study showed that "11 percent of Fortune 1000 companies that had pension plans in 2004 terminated or froze them. That was up from 7 percent in 2003 and 5 percent in 2001."
The 2007 budget includes a request of $439 billion for defense, a record figure that does not include the cost of the Iraq-Afghanistan conflicts, which have ranged from $4.4 - 7.1 billion per month since fiscal year 2003.
Last week, Bush asked Congress for another $70 billion this year for Iraq and Afghanistan, pushing 2006 annual costs to $120 billion, "the highest since the Sept. 11 attacks." The Congressional Budget Office (CBO) has estimated that the Iraq war will cost American taxpayers $179-392 billion over the next 10 years.
The bulk of the "savings" comes from cuts in Medicaid: $36 billion over the next five years and $105 billion over the next 10. However, last week -- after one month of operation -- the Administration projected the cost of its Medicare prescription plan at $678 billion over the next 10 years, considerably more than the $400 billion it promised Congress when the bill was enacted.
Deficits Are Us
In January 2001, the CBO projected a federal budget surplus greater than $5.6 trillion between 2002 and 2011. The 2006 budget now has a projected deficit of $423 billion.
The CBO now projects that deficits for the five years starting 1 October 2006 will exceed $2.2 trillion. "Over the past 40 years, deficits have averaged 2.3 percent of G.D.P.; last year they ran at 2.6 percent. This year the deficit will be 3.2 percent," according to the New York Times.
Contributing to the deficits: Bush wants to make permanent his tax cuts, which would reduce federal income an estimated "$178.6 billion over the next five years and $1.35 trillion over the next decade."
Domestic Programs
In this, his sixth budget, Bush gives the Department of Homeland Security, now in its fourth year, a 6 percent boost, to $43 billion. And a new program, the American Competitiveness Initiative (ACI), would cause a 7.8 percent increase in funding for the National Science Foundation, 14 percent for the Department of Energy, and 18 percent for the National Institute for Standards and Technology, which helps industry develop new technologies.
Health programs, on the other hand, see budgets shrink at the same time that boomers are reaching age 60: Centers for Disease Control (responsible, among other things, for response to avian flu) cut $367 million .... National Institutes of Health (responsible for research) frozen ... Medicaid -- the cost of which is shared with states and which has had an abysmal change in its prescription drug benefit would be cut $12 billion over five years.
Moreover, the budget includes a provision for reducing Medicare spending by $36 billion, when it is the Bush Administration that pushed through the budget-busting Medicare prescription drug plan.
The Department of Education, responsible for the Bush "No Child Left Behind" program, would see a 4 percent ($3.5 billion) cut, including education technology grants. The Environmental Protection Agency would also see a 4 percent ($300 million) cut, with the largest program affected being one for aging sewer system upgrades. State and local air pollution programs would be cut 16 percent ($35 million).
Another program cut: one that helps the poor insulate their homes, thus saving them money on heating bills and reducing the demand for energy.
Although more and more companies are turning their pensions over to the underfunded Pension Benefit Guaranty Corporation (PBGC), Bush wants to save $16.7 billion over five years. PBGC reports that US pensions are underfunded by about $450 billion while it faces a $23 billion deficit. One study showed that "11 percent of Fortune 1000 companies that had pension plans in 2004 terminated or froze them. That was up from 7 percent in 2003 and 5 percent in 2001."
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