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Tuesday, May 21, 2024

Deficit Puts Pressure on Bush Budget

President Bush wants Congress to slow defense growth and slice aid to farmers and college students, testaments to the pressures record federal deficits are heaping on his forthcoming budget.

President Bush wants Congress to slow defense growth and slice aid to farmers and college students, testaments to the pressures record federal deficits are heaping on his forthcoming budget.

Bush plans to send his roughly $2.5 trillion spending plan for 2006 to lawmakers Monday. But as details leaked out, it was clear that even the Pentagon – a bipartisan priority at a time of war – was going to face some restraints, at least for now.

“This budget will really worry about” deficits, Bush told a crowd Friday in Omaha, Neb., as he rallied support for his Social Security overhaul. “And I’m looking forward to working with members of Congress to make tough choices.”

The president wants the Pentagon to get $419.3 billion next year, or 4.8 percent more than this year. That total, however, is $3.4 billion below what he planned a year ago for fiscal 2006, which begins Oct. 1.

The figures exclude expenditures for the wars in Iraq and Afghanistan. A few days after sending Congress his budget, Bush plans to ask for another $80 billion for those conflicts for this year. Congress has already provided $25 billion for the wars for 2005.

Feeling much of the pinch in 2006 would be Pentagon purchases of weapons and other major items. Bush would hold such spending next year to $78 billion – $2.4 billion less than he projected for 2006 a year ago.

Weapons systems that would get less next year than in 2005 include the Aegis destroyer, the F-22 Raptor fighter and the C-17 cargo plane. The Apache helicopter and the Army’s future combat system would see increases.

More than half the Pentagon’s $19.2 billion increase next year – or $10.8 billion – would be for training, maintenance and other costs associated with keeping the military ready for action. Most of the rest would go for military salaries and construction of bases and housing.

In the longer run, Bush envisions defense spending growing steadily after next year, hitting $502.3 billion by 2011.

Also Friday, several federal officials speaking on condition of anonymity said Bush will:

-Seek about $650 million for the Yucca Mountain nuclear waste-storage project north of Las Vegas, or about half what once was envisioned for 2006. Though Bush and Congress approved the project in 2002, opposition has continued and a federal court has rejected proposed radiation safety standards. New standards are being developed.

-Propose slicing farmers’ federal payments and other agriculture supports by $587 million in 2006 and $5.7 billion over the next decade. Payments to producers would drop by 5 percent, and the current $360,000 annual ceiling on those payments would be cut to $250,000.

-Move to raise the maximum Pell Grant for students from $4,050 to $4,550 over five years, or by $100 a year. Along with other changes, Bush’s financial aid plan would cost about $28 billion over 10 years.

To help pay for it, the president would shrink subsidies the government pays banks to encourage them to make low-interest loans, and to the agencies that insure the loans for the lenders, education department officials said. He would also phase out Perkins loans, 673,000 of which were made to graduate and undergraduate students last year.

-Create $3,000 tax credits to encourage people who don’t have public or employer-provided health insurance to buy coverage. The plan, which would cost $74 billion over the next decade, would be part of $140 billion in tax breaks and expenditures aimed at improving health care over the coming 10 years.

Administration officials had already said Bush will seek $60 billion in Medicaid savings over the coming decade. These will come largely from smaller reimbursements to pharmacies, trimming payments to other health providers, and making it harder for parents to qualify for coverage if their assets have been shifted to their children.

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