Bush sends $2.9 trillion budget to Congress

Hands across the aisle
The president appealed for Democratic support during an appearance at a House Democrats’ retreat on Saturday, saying the government must do something to restrain the soaring costs of costs of entitlement spending on health care and Social Security before the looming retirement of 78 million baby boomers.

“I’m under no illusions of how hard it’s going to be,” he told the Democrats. “The only thing I want to share with you is ... my desire to see if we can’t work together to get it done.”

Bush once listed overhauling Social Security as the No. 1 domestic priority of his second term. But his effort two years ago to accomplish the overhaul by diverting some Social Security taxes into private investment accounts went nowhere in Congress even with Republicans in control.

For the first time, Bush will spell out details of the spending requests for Iraq and Afghanistan in the budget books. Previously, he has lumped that spending into supplemental requests with less detail.

$100 billion sought for war
Bush has asked for an additional $100 billion for Iraq and the global war on terrorism this year, on top of $70 billion already sought. For 2008, that spending would drop to $145 billion and fall to $50 billion in 2009, although administration officials conceded that the 2008 and 2009 requests could go higher depending on the progress of the war effort.

White House budget director Rob Portman said Sunday that the spending includes the cost of increasing troop strength in Iraq by 21,500, an increase that opponents want Congress to go on record as opposing in upcoming nonbinding resolutions. The administration projects that the troop increase will cost $5.6 billion this year, a figure that critics say is too low.

“We believe the president’s plan will be successful,” Portman said on CNN. “We’re giving Congress exactly what Congress asked for on a bipartisan basis, more transparency as to our costs and more information.”

As in past years, the Pentagon is scheduled to get a hefty increase in spending authority of 11 percent, pushing its 2008 budget to $481.4 billion.

More health care to uninsured
Bush’s budget also includes an initiative to expand health care coverage to the uninsured through a complex proposal that would make health coverage supplied by employers taxable for the first time but give all families a $15,000 deduction in hopes it would encourage those who don’t get health care through their job to sign up for coverage. Democrats have been highly critical of the plan.

Critics contend that Bush is able to show declining deficits and a balance in 2012 by leaving out major expenses. Bush does project the costs of extending his 2001 and 2003 tax cuts, which the Congressional Budget Office estimates will cost $2.3 trillion over 10 years. He only includes a one-year fix for the alternative minimum tax, which was initially designed to make sure the wealthy paid their fair share of taxes but is ensnaring more middle class wage earners.

The CBO estimates that just for 2012, the year Bush’s budget goes into balance, providing AMT relief would cost $49 billion, an amount likely to be close to the surplus Bush projects for that year.

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