President Bush's Final Budget Proposals

The President, while not able to pass bills in Congress, always puts together a budget proposal for Congress, outlining the Presidents goals and objectives for that fiscal year. While the Congress doesn't have to follow his ideas (and if the President is weak and Congress is in control of the opposite Party, they usually don't) it serves as a good starting point for the budgeting process. President Bush is proposing his final budget to Congress and over the weekend of Feb 2nd-3rd, preliminary information was released for analysis.

Bush's proposal essentially continues his focus on two things: Tax Cuts and Defense Spending. According to an Associated Press article, Bush is proposing "a 3 Trillion spending blueprint that would provide a big boost to defense and protect his signature tax cuts." The article points out that Bush is going to become the first President ever to propose a budget over $3 trillion dollars and was also the first to propose a budget over $2 trillion.

First looking at Defense spending, a Washington Post article explains that the overall increase in defense spending is going to increase by about 5%. This increase will put the total spending on defense at over $515 Billion dollars. As the article points out, this does not include the majority of spending for the wars in Iraq and Afghanistan. Additionally, the article points out the the State Department, headed by Secretary of State Condoleezza Rice, will received a 6.5% increase over last years budget to a total of $700 Million.

While there are a few other areas that Bush wants to increase funding, the bulwark of his plan actually tries to cut and reduce spending on a lot of domestic programs. A Bloomberg.com article points out that Bush wants to "cap the increase in non-defense domestic spending at less than 1%, well below last year's 4.1% inflation rate." The article points out that his proposals will either eliminate or dramatically decrease the spending on 151 programs. These including cutting Medicaid spending by $30 Billion dollars. Comparing this to the increased spending on the military, the article tells us that defense spending has increased now for 11 straight years and since Bush took office, defense spending has increased by a whopping 30%. The Washington Post article cited above goes even deeper when talking about the cuts and specifies some key areas. The article points out that Bush wants to make a $500 million dollar cut in a program that helps the state protect children from neglect and abuse as well as a cut of $280 million to the Low Income Home Energy Assistance Plan that provides money to poor people to help cover the costs of heating their homes.

There have been two major talking points coming out of President Bush's proposal. The first is the talk of an increased deficit. A Reuters article explains that because of the increase in defense spending and a downturn in the economy, Bush's proposal "forecast a deficit of $410 billion for the budget year 2008...and $407 billion for fiscal 2009." As the article points out, this almost doubles the current deficit of $162 billion in 2007 as well as get us close to the record budget deficit of 2004 which hit $413 billion.

The other impact from this budget has been the response from the Democratic Party, which has been highly critical. All four articles quoted thus-far have all talked about how the Democrats are all opposing President Bush's proposals. The Reuters article even states that "many -- if not most -- of the priorities of the Bush budget will be jettisoned by the Democratic-led U.S. Congress." Also, the Bloomberg.com article quotes several democrats who state that because Bush is in his last year, he is essentially a "lame-duck" and they are not going to follow his proposals at all.

However, when looking at the budget and the articles that examine it, we can see one clear concept coming from it: battle. This is going to be a very contentious year regarding the budgeting process. Democrats feel that they are in control and that Bush is weak in the eyes of the public. This will make them want to fight Bush on a number of issues and make it a key issue in this years Presidential Election. Since both of the major candidates for the President on the Democratic Ticket are Senators, they are going to be able to use their issues as a way to distinguish themselves from the Republican nominee. Whatever the outcome of the budget, if they follow it or not, we can definitely mark this down as the starting point to a very contentious year.

Martin Crutsinger, "$3 Trillion Bush Budget Already Attacked", Associated Press

Michael Abramowitz and Jonathan Weisman, "President's Spending Plan Would Rival 2004 Deficit"; Washington Post

Roger Runningen and Brian Faler, "Bush's Last Budget to Spark Election-Year Medicare, War Fights", Bloomberg.com

Caren Bohan and Jeremy Pelofsky, "Bush budget sees bigger deficits as economy slows", Reuters