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Bush 2007 Budget Proposes $2.7 Trillion in Spending

President Bush's 2007 budget proposes spending more than $2.7 trillion, showering big increases on defense and homeland security and a smattering of other favored programs such as scientific research, education and energy.

At the same time, Bush's blueprint being submitted to Congress on Monday proposes shrinking or eliminating 141 programs while achieving $36 billion in Medicare savings over the next five years.

The plan for the budget year that begins Oct. 1 lays out a path to achieving two of the president's chief domestic goals: making permanent his first-term tax cuts, which are set to expire after 2010, and cutting the deficit in half by 2009, the year Bush will leave office.

Details about the plan come from public statements, such as Bush's State of the Union address last week, and interviews with officials familiar with the budget proposal who spoke on condition of anonymity because they did not want pre-empt the president's announcement Monday.

The budget's arrival on Capitol Hill will set off months of intense debate, made even more contentious by congressional elections in November in which Democrats want to wrest congressional control from the Republicans.

While Congress is expected to reshape Bush's proposals significantly, Republicans voiced support for the blueprint's objectives.

"The American people know that our government's too big and it spends too much. And they expect Congress to do something about it," newly elected House Majority Leader John Boehner, R-Ohio, said on NBC's "Meet the Press."

Democrats sought to portray it as an election-year campaign document rather than an honest effort to deal with exploding deficits.

The budget proposal's release comes only weeks before the national debt will hit the current limit of $8.18 trillion, requiring Congress to vote for an increase to keep the government operating.

"This budget is just detached from reality. The debt is exploding and the president isn't facing up to it," Sen. Kent Conrad of North Dakota, the top Democrat on the Senate Budget Committee, said in an interview Sunday.

The administration has said the deficit for this year will top $400 billion, compared with last year's $319 billion. The costs of fighting in Iraq and rebuilding the hurricane-ravaged Gulf Coast have pushed government spending higher than anticipated.

The administration said last week that it would submit a supplemental spending request for an additional $18 billion for hurricane relief for the current budget year, bringing total spending in response to the storms to more than $100 billion.

The administration also will seek an additional $120 billion to help pay for the wars in Iraq and Afghanistan this year and the early part of 2007. That increase is on top of a nearly 5 percent rise in Pentagon spending to $439.3 billion in Bush's budget.

The Homeland Security Department is in line for about a 5 percent increase in its current operating budget, not counting the costs of hurricane relief. To offset these costs, the White House is seeking to double a passenger security fee from the current $2.50 per flight to $5, a proposal Congress rejected last year.

To achieve the goal of halving the deficit by 2009, the administration again wants to put a squeeze on the one-sixth of the budget that funds the nonsecurity operations of government -- everything from running the national parks to prosecuting criminals.

In this area, the Bush budget calls for the elimination or reduction of more than 140 programs at a savings of $14 billion. These programs, Bush said in his State of the Union address, "are performing poorly or not fulfilling essential priorities."

In last year's budget, Bush sought to curb 154 such programs for savings of $15.8 billion; Congress agreed to about two-fifths of those cuts.

One proposal would eliminate the $107 million Commodity Supplemental Food Program, which provides food to low-income mothers with young children and for the elderly poor.

Defenders of this program and others at risk are certain to fight aggressively.

Even programs not targeted for elimination are subject to tight budgets. That includes such previously favored agencies as the National Institutes of Health.

Bush is proposing to save $36 billion over the next five years by trimming growth in Medicare, the government's medical insurance program that covers 41 million older people and the disabled.

The spending reductions would not affect the new prescription drug program that just started last month, but the White House wants to trim $20 billion over the next five years in payments to hospitals and other institutions such as skilled-nursing facilities.

The Medicare reductions are expected to draw determined opposition in Congress, which just approved a reduction of $4.7 billion in spending for Medicaid; that was less than half the amount sought by the administration. Medicaid is a joint state-federal program that provides health care for the poor.

Bush's budget does contain some winners outside of defense and homeland security. Set for higher spending, as highlighted in the State of the Union address, are programs to address soaring energy costs, rising medical bills and increased global competition from countries such as China and India.

Bush is promoting his "American Competitiveness Initiative," which would extend an expired business tax break for research and development, double the government's commitment to basic scientific research and train thousands of new science and math teachers.

For health care, Bush wants to expand current health care savings accounts that provide tax advantages for the uninsured to buy health coverage.

His energy initiative seeks, by 2025, to replace three-fourths of the oil the United States now imports from the Middle East, partly by boosting ethanol production.

Missing from this year's budget is the president's big proposal from last year to overhaul Social Security by creating private accounts. The idea went nowhere in Congress.

Instead, the president this year is calling for creation of a bipartisan commission to study ways to deal with the exploding costs of Social Security, Medicare and Medicaid.