Lawmakers React to Bush Budget

WASHINGTON – Having managed to read President Bush's five-volume budget in a matter of hours, U.S. lawmakers responded quickly and predictably to the president's $2.23 trillion proposal, with Republicans praising it and Democrats blasting it.

"The president's budget makes the necessary investments in the future, without spending our nation into bankruptcy," said House Speaker J. Dennis Hastert, R-Ill. "This budget includes an increase in defense spending, which is necessary to continue the fight against terrorists and those nations who support them. It pays for an upgrade in homeland security, it includes provisions for a prescription drug benefit for senior citizens and it makes the education of our children a top priority. It also includes critical changes in our tax code that will help grow our nation's economy."

"The president's budget is most notable for what it doesn't do. It doesn't make the necessary investments to get us back on track to economic growth. It doesn't improve access to quality health care. It falls short of funding the president's own education proposals. And, it continues to underfund our urgent local and state homeland security needs," Rep. Dick Gephardt, D-Mo., a potential presidential candidate in 2004, said of the very same budget.

Bush's proposed budget includes a 4 percent overall increase in spending, but puts a major portion of it in Department of Defense and Homeland Security spending. Defense spending will get a 6 percent hike over last year for a total of $380 billion. That doesn't count the costs that a war against Iraq would incur.

The Department of Homeland Security will get $41 billion, twice what was spent two years ago on those agencies making up the new department.

The new budget provides $66.2 billion to Department of Health and Human Services, a 2.5 percent increase. Much of the additional cash will go toward bioterrorism preparations, improving health care access in rural and urban areas and beginning the transition toward a Medicare prescription benefit for seniors.

It also proposes a $674 billion tax cut over 10 years.

The budget is "stunning in its lack of fiscal responsibility" and will only "push us deeper into deficit and debt right at the time we should be paying down the debt," said Sen. Kent Conrad, D-N.D., the ranking member of the Senate Budget Committee. "What the president is proposing is massive hemorrhaging, unsustained debt, unprecedented tax increases."

"The Republicans have proposed a budget that promotes a tax cut for the wealthy at the expense of the needs of everyday Americans and in doing so increases the federal deficit to alarming new heights," said House Minority Leader Nancy Pelosi, D-Calif.

Democrats "weren't the party of fiscal discipline" when the Senate debated the omnibus appropriations bill last week, said Senate Budget Committee chairman Don Nickles, R-Okla., who noted that Democrats proposed up to $350 billion in additional spending during debate last week on the current fiscal year's budget that began last Oct. 1.

"Democrats were never concerned about deficits when we were talking about spending ... [they're] only concerned about deficits when we talk about tax cuts," Nickles said.

The overall budget picture foresees a $307 billion deficit.

White House budget director Mitch Daniels said the deficits are manageable. He said the administration wants to return to surpluses, but that goals of defense, homeland security and tax cuts outrank balancing the budget this year.

"Given what it is for, given the choices that go into it, we're talking about the physical protection of Americans, we're talking about the economic well-being of Americans and these other priorities, the president finds it acceptable. We want to move back, and the budget says we want to move back in the direction of balance and that's an important goal too," Daniels said.

When compared to the size of the U.S. economy, which generates about $10.5 trillion in goods and services, this year's projected deficit will be about 2.8 percent of the gross domestic product. By comparison, in 1983 the government ran a $207 billion deficit, about 6 percent of the nation's economy that year and twice the magnitude of this year's projected deficit.

Other areas of the budget receive only modest hikes, including $900 million for Amtrak, rather than the $1.2 billion the railroad's president pleaded for. It requests $7.3 billion for public transit, the same amount as in 2003, and only $164 million for the Clinton-era Community Oriented Policing Services, down from $737 million this year.

Daniels' office argued that studies showed the program's "impact on crime is inconclusive" and the agencies receiving grants have been unable to account for 18,000 of the positions approved through 2000. It also moved less than 90,000 of the 100,000 police officers to the street, as the program envisioned when it was created in 1994.

The president's plan proposes increasing Securities and Exchange Commission spending on investigations and prosecutions of fraud by $78 million, to $282 million, in response to last year's wave of corporate and accounting scandals. It also increases funding for SEC stock market supervision and regulations to $131.6 million, a more than $40 million increase.

Under the president's plan, teachers who work for five years in underperforming schools in math, science and special education can increase the amount of student loans they don't have to pay back from $5,000 to $17,500.

NASA would get a 3.1 percent increase. The last budget reduced its budget by 1.9 percent. Treasury would earn a 3.5 percent increase if the president gets his way. That money would go to IRS enforcement, fighting the financial war on terror and paying for one-time transfers of Treasury employees who are headed to the new Department of Homeland Security.

The president also offers a range of initiatives that seem designed to appeal to independent swing voters and minorities: A $15 billion five-year program to combat the international AIDS epidemic, mentoring programs to help children of imprisoned parents, a new drug-rehabilitation program, a federal effort to develop pollution-free cars and an ambitious "BioShield" proposal to let the government stockpile vaccines.

"The Bush administration does not have a budget. It has a 308-page press release ... pure PR with color pictures of little children and brave soldiers designed to distract the American public from the truth," said Rep. Charles Rangel, D-N.Y., the top Democrat on the House Ways and Means Committee.

It took 200 years of this country's history — from 1789 until 1989 — for the president's budget to reach $1.1 trillion a year in spending, but it has taken only 13 years since then to double that.

The president's budget surprised some conservative supporters who think he is attempting to extend government's reach too far.

"This budget, which I find a lot to like in, is excessive in terms of how much money it's willing to spend and how many new government programs it would create to solve every problem, up to and including AIDS in Africa," said Stephen Moore, president of the Club for Growth, a tax-cut advocacy group. "Bush philosophically believes you can do good things with government money. That's very different from the Reagan theme that government isn't the solution, it's the problem."

But the plan alarmed moderate Republicans, like Sen. Olympia Snowe, R-Vt., who want more limited tax cuts.

It also changed the 10-year forecast to a five-year one. Administration officials argued the longer-term projections were unreliable. But critics say the move is an attempt to hide future deficits that will come from the president's tax cut plan.

"There's no doubt that the president's budget is affected by the election-year cycle. It's also a budget that has gone through yeoman's efforts to manipulate it so that it minimizes the real costs and maximizes the benefits," said Norman Ornstein, a scholar at the American Enterprise Institute.

Fox News' Major Garrett and The Associated Press contributed to this report.