WASHINGTON The Senate's Finance Committee chairman on Tuesday dismissed President Bush's final budget as unrealistic, making clear that the Democratic-led Congress would ignore his proposals to cut Medicare and Medicaid spending.
"A good budget must be realistic," Sen. Max Baucus said at a hearing featuring Treasury Secretary Henry Paulson. Baucus said key aspects of the Bush budget proposed cuts in health programs, making Bush's tax cuts permanent and omitting war costs in predicting a budget surplus by 2012 failed that test.
The top Republican on the panel, Sen. Charles Grassley of Iowa, chided the administration for not considering the costs of adjusting the alternative minimum tax in future years and acknowledged that people's attention was already shifting to the next administration. "The focus is not going to be on the president's budget. The focus is going to be on what the next president will do."
Paulson defended the first-ever $3 trillion federal budget proposal introduced Monday, saying its emphasis on a pro-growth tax system, entitlement reform and a balanced budget was in the best interest of the country. But his opening remarks centered on prodding the Senate to act quickly on an economic stimulus package aimed at keeping the country out of recession.
White House Budget Director Jim Nussle on Monday urged congressional Democrats to adopt the same cooperative spirit that produced a quick House agreement on a $160 billion economic stimulus package of tax rebates and business tax cuts now being debated in the Senate.
Democrats, who now control both the House and Senate, were emphatic that the Bush plan won't be the model as they put together their own budget proposals over the coming weeks.
"We will be going our way and they will be going their way and we won't likely converge," House Budget Committee Chairman John Spratt, D-S.C., said.
"The only real significance of the president's budget is to serve as a legacy of his disastrous fiscal management over the last seven years," said Sen. Hillary Rodham Clinton of New York, one of two Senate Democrats competing for their party's presidential nomination this year.
Bush's budget for fiscal year 2009 beginning Oct. 1 proposes spending just below $3.1 trillion. Last year, he proposed $2.9 trillion for the current budget year, but he now estimates that spending in fiscal 2008 will also exceed $3 trillion once all the costs of the continuing war in Iraq are included.
Excluding the war, Bush is proposing an 8 percent increase in the Pentagon's base budget, to $515.4 billion, next year. Overall defense spending would decline from $670.5 billion this year to $588.3 billion in Bush's 2009 budget. The request includes just $70 billion in initial war costs, a figure certain to be exceeded when Bush leaves office.
Bush also wants to boost homeland security spending by almost $4 billion, with big increases devoted to cybersecurity, tightening borders, detecting nuclear materials arriving in port and improving airport passenger and cargo screening. The Homeland Security Department itself would get $40 billion, a 2.5 percent decrease from this year.
Some of the spending increases would be offset by prescribing $196 billion in savings to Medicare and Medicaid programs over the next five years and reducing or eliminating 151 programs, saving $18 billion.
But slowing spending in those programs also reflects Bush's determination to preserve his 2001 and 2003 tax cuts after he's gone. Many of those tax cuts expire in 2010, and the cost of writing them into permanent law would be $635 billion over five years.
"It's a good budget," Bush said after meeting with his Cabinet. "This budget is one that keeps spending under control; discretionary spending is held to less than 1 percent."
Democrats made it clear they're not even going to consider most of Bush's ideas for saving.
"We're not going to cut the COPS program 100 percent," Senate Budget Committee Chairman Kent Conrad, D-N.D., said of a community policing program. "We're not going to cut weatherization assistance 100 percent. Those aren't the priorities of the American people. So I think there will be significant differences."
Other proposed savings or cuts that Congress is likely to reject affect programs for low-income heating assistance, Environmental Protection Agency clean water grants and the Centers for Disease Control and Prevention.Democrats also said the White House's projection that the budget deficit will hit $410 billion this year and $407 billion in 2009, just under the $413 billion record set four years ago, was overly optimistic.
On the Net: The budget: www.budget.gov/
The budget: www.budget.gov/