The budget will also include a $108 billion deficit — the first in four years. The shortfall comes from increased military and security spending as well as lower anticipated revenue from taxes.
“The budget for 2003 recognizes the new realities confronting our nation, and funds the war against terrorism and the defense of our homeland,” President Bush said in a message delivered with the complete budget. “The budget for 2003 is much more than a tabulation of numbers. It is a plan to fight a war we did not seek but a war we are determined to win.”
The military spending, some $379 billion for 2003 alone, will fund a 4.1 percent pay raise for troops in addition to new aircraft and unmanned surveillance vehicles. The 12 percent increase in funding will also pay for continued air patrols over major U.S. cities.
The proposal includes money for two more controversial Pentagon projects. The Bush administration proposes keeping the funding for an anti-missile system at $7.8 billion for the next year, the same as in 2002. The Department of Defense also included $2 billion for the troubled V-22 Osprey aircraft. The hybrid helicopter/aircraft has crashed four times killing 23.
On a visit to a northern Florida Air Force base, President Bush called on Congress to adopt his sweeping new defense initiative.
“We’re unified in Washington on winning this war. One way to express our unity is for Congress to set the military budget, the defense of the United States, as the No. 1 priority, and fully fund my request,” Mr. Bush said.
The budget for homeland security will more than double, surging 111 percent to $37.7 billion. The money will fund a variety of domestic efforts including combating bioterrorism and bolstering security along the borders.
Renewing the stimulus debate
In addition to the new government spending, the Bush administration is also calling on Congress to pass an economic stimulus proposal to boost the sluggish economy.
“Despite the encouraging signals from financial and
nonfinancial markets, a strong and sustained expansion is far
from assured,” the budget reads in part.
The document projects a recovering economy that grows only 0.7 percent for the rest of this year, but by the end of 2003 is expanding by 3.8 percent a year.
“This budget advances a bipartisan economic recovery plan that provides much more than greater unemployment benefits: it is a plan to speed the return of strong economic growth, to generate jobs, and to give unemployed Americans the dignity and security of a paycheck instead of an unemployment check,” President Bush said in his letter to Congress.
The proposal would cost $591 billion over 10 years and would include major tax relief for corporations and higher-income individuals as well as tax credits for low income wage earners to afford health insurance.
Senate Democrats have blocked a similar package of tax breaks and cuts, saying it would do little to grow the economy.
“Democrats think there needs to be a stimulus package, but they think it really needs to provide stimulus,” Ranit Schmelzer, spokeswoman for Senate Majority Leader Tom Daschle (D-S.D), told the AP.
Cuts and Deficits
Despite an overall increase of some 9 percent in so-called discretionary spending — that is spending not locked into the budget like Social Security and Medicare, the Bush administration has also offered a series of cuts in current programs to minimize the deficit.
Some of the larger cuts include $9 billion in highway projects, $500 million from the Army Corps of Engineers– which works on civilian and military engineering and environmental projects– and $505 million in expected savings from a streamlined federal job training system.
The Departments of Labor, Transportation and Agriculture will all see reductions in their overall funding.
The budget also assumes $1.2 billion in revenue from leasing areas of the Arctic National Wildlife Refuge for oil exploration.
Despite the cuts and new revenue sources, the budget released Monday projects the first deficit in four years –$106 million in 2002 and another $80 billion next year. Using revised projections, the administration said their plan would grow the public debt until 2004 when it would reach $3.6 trillion.
Democrats and some conservative Republicans questioned the wisdom of deficit spending.
Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said even those figures were misleading given that the budget uses Social Security and Medicare funds for other parts of the government. He compared the budget to the financial statements of failed energy giant Enron.
“Enron got into trouble because they didn’t fully disclose debt they have and that is precisely what the federal government is doing,” Conrad told the Associated Press.