Bush plans $2.7 trillion budget
WASHINGTON – President Bush plans to propose a $2.7 trillion budget Monday that would shrink most parts of the government unrelated to the nation’s security while slowing spending on Medicare by $36 billion during the next five years, according to White House documents.
The spending plan Bush is to recommend to Congress will call for the elimination or reduction of 141 programs – for a savings of $14.5 billion – across a broad swath of federal agencies, according to administration and congressional officials who have had access to budget documents in advance. Wide-ranging as they are, those cuts pale in comparison with the White House’s attempt to carve money from Medicare – the first tangible result from a vow the president made in his State of the Union address last week to constrain the massive entitlement programs for the elderly and the poor.
Overall, the budget for the 2007 fiscal year would further reshape the government in the way the administration has been striving to during the past half-decade: building up military capacity and defenses against terrorist threats on U.S. soil, while restraining expenditures on many domestic areas, from education programs to train service.
For the second consecutive year, the White House will ask for an outright reduction in the “discretionary” part of the budget – the portion that is determined year to year – apart from the Pentagon and homeland security. According to one congressional source, White House officials plan to emphasize their frugality in discretionary spending, as they propose to cut it more deeply than Congress just did in the budget for the current fiscal year that was approved last week.
Bush foreshadowed his intentions in the State of the Union speech, saying, “Every year of my presidency, we’ve reduced the growth of non-security discretionary spending. … This year, my budget will cut it again.”
Spending for the departments of Commerce, Education, Energy and Interior, in particular, will be flat or decreased.
In contrast, the president plans to recommend for the Department of Homeland Security an increase of at least 5 percent from this year’s funding of $30.8 billion, not counting emergency spending to recover from last year’s hurricanes in the Gulf Coast region, congressional aides said.
Similarly, the budget will contain a hike of nearly 5 percent in the Pentagon’s funding for next year, defense officials said. The $439.3 billion includes $84.2 billion for weapons systems, an 8 percent increase in weapons spending.
In addition, the White House is continuing a pattern of leaving substantial military expenditures out of the budget; last week, the Pentagon announced it intends to ask Congress for an additional $120 billion – not contained in the new spending plan – to help pay for the wars in Afghanistan and Iraq this year and next.
The effort to curb Medicare spending by $36 billion by 2011 – and by $105 billion a decade from now – represents a sharp turnabout for the administration. Just last year, Bush said that the health insurance program that covers 41 million elderly and disabled people should be spared any cuts, saying that it would be wrong to change the program at a time when the administration was preparing to implement a new prescription drug benefit, the largest expansion in Medicare’s four-decade history. The drug coverage began last month, amid widespread complaints that elderly patients – especially the poor – are having difficulty getting medicine.
The budget for the 2007 fiscal year does not touch the drug benefit, nor does it recommend cuts in payments to doctors, who have just won from Congress a one-year reprieve from Medicare rate reductions that were to have taken effect last month.
Instead, about $20 billion of the $36 billion would come from reducing automatic payment increases to hospitals and other institutional providers, such as ambulance services and skilled-nursing facilities, while the rest would be spread among other forms of care. The reductions are in sync with ones that have been recommended recently by a federal Medicare commission that advises Congress.
The spending slowdown Bush envisions is far larger than the $6.4 billion in Medicare reductions over the next five years that Congress approved, after intense political fighting, in the current year’s budget.