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Bush presents a $2.1 trillion wartime budget

Bush addresses troops at Eglin Air Force Base in the Florida panhandle Monday.
Bush addresses troops at Eglin Air Force Base in the Florida panhandle Monday.  

WASHINGTON (CNN) -- President Bush presented Congress with a $2.1 trillion wartime budget Monday that would sharply increase funding for the U.S. military and for homeland security, but would limit spending in other areas and return the federal government to deficit spending.

The president's budget proposal for the 2003 fiscal year, which begins October 1, includes the largest single-year increase for the Pentagon since Ronald Reagan was president.

It would provide $369 billion in military spending as well as a contingency for another $10 billion to pay for the war in Afghanistan.

It also would nearly double spending on homeland security, providing $38 billion for efforts such as border security and funding for local law enforcement.

"The budget for 2003 is much more than a tabulation of numbers," Bush said in a message to Congress accompanying the budget. "It is a plan to fight a war we did not seek -- but a war we are determined to win."

The hefty four volumes of the budget -- with red, white and blue covers -- outline the White House spending goals for a host of domestic and international initiatives, ranging from health, education and transportation to funding the war on terrorism.

President Bush says the 2003 budget aims to protect U.S. citizens, but the proposal is under fire because it marks a return to red ink after five years of surpluses. CNN's John King reports (February 5)

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U.S. President George W. Bush's budget proposal includes a record $48 billion increase in spending for the Pentagon. CNN's Jamie Mcintyre reports (February 4)

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 Budget at a glance:
Some highlights of President Bush's proposed budget for the 2003 fiscal year:

  • Total budget: $2.13 trillion
  • Defense: $379 billion
  • Homeland Security: $38 billion
  • Education: $50 billion
  • Health & Human Services: $488 billion
  • Justice: $29 billion
  • Treasury: $398 billion
  • Deficit: $80 billion

    Bush budget: 2002 budget vs. 2003 proposal 
    Budget highlights  480k (PDF) 2003 Budget 

    Yet apart from the spending boosts related to the war on terrorism, the Bush plan largely imposes fiscal belt-tightening on other agencies.

    Apart from defense and homeland security, the rest of the budget would grow by a threadbare 2 percent under the president's plan, which projects a deficit this year of $106 billion and $80 billion next year.

    The return to deficits comes after four years of surpluses, but administration officials projected the red ink will turn to black again in 2005.

    Bush's plan seeks to revive the economic stimulus package, including tax cuts for businesses and additional funds for unemployment compensation, that became stalled amid partisan wrangling in Congress late last year.

    It would extend the $1.35 trillion, 10-year tax cut pushed by the president and approved by Congress last year by at least another two years. In his State of the Union address last week, Bush said he would like to make the tax cuts permanent.

    Some Democrats, however, reacted skeptically to the president's plan, though they said they supported his proposal for military spending.

    Sen. Kent Conrad, D-North Dakota, chairman of the Senate Budget Committee, criticized Bush's budget for dipping into the Social Security surplus -- funds lawmakers had vowed not to touch for government spending, a promise made while the economy was still booming.

    "The truth is there are no surpluses," Conrad said. "There are liabilities."

    Conrad also faulted the president for submitting a plan that called for deficit spending.

    "If you are not able to pay down the debt, that means that the federal government is in competition with private-sector borrowers for money, driving up the costs of interest rates and that's a hidden tax on every American family -- higher mortgage payments, higher car payments, higher college loan payments," Conrad said.

    As part of the administration's pitch for the budget -- which is sure to set off months of debate in Congress -- President Bush visited Eglin Air Force Base in Florida on Monday to encourage the military's support for his proposal to increase defense spending to levels not seen since the Cold War.

    "We need to be agile and mobile, and therefore we need to replace aging aircraft and get ready to be able to defend freedom with the best equipment possible," Bush told the uniformed men and women in Florida.

    "Our men and women deserve the best weapons, the best equipment and the best training," he said, "and therefore I've asked Congress for a one-year increase of more than $48 billion for national defense, the largest increase in a generation."

    The Pentagon's total proposed budget of $379 billion, when adjusted for inflation, would be the biggest since the Cold War.

    Most of the increase would go toward the fight against terrorism, which is expected to cost more than $27 billion in 2003.

    Funds for military personnel would take about 20 percent of the Pentagon's request, which includes pay increases and improvement of housing allowances within the services.

    Under the newly created homeland security category, the budget includes $3.5 billion in grants for state and local police, fire and rescue workers who would likely be the first responders to terrorist attacks, $4.8 billion for airport security; additional funds for border security, and boosts for public health and combating bioterrorism.

    In other areas, the White House proposal includes mandatory spending of $472 billion for Social Security and $231 billion for Medicare. It includes $355 billion for all other domestic spending.

    In his statement, Bush said the budget "calls for maintaining low tax rates, freer trade, restraint in government spending, regulatory and tort reform, promoting a sound energy policy and funding key priorities in education, health and compassionate social programs."

    For the first time this year, the White House used a "management scorecard" to evaluate the effectiveness of federal programs and measures progress in five key areas.

    The new system shifts money away from areas deemed less effective and focuses them on other programs that the administration has found to be more productive.

    "The federal government is not a very well-managed enterprise. I don't think this is exactly shocking news. We don't have all the right incentives in place," said Mitchell Daniels, the director of the White House budget office.

    "And, very honestly, this has not been a point of focus for most administrations in the past, of either party. "Now, this president -- our first MBA president -- said as a candidate that he would take this seriously."

    The submission of the president's budget marked the beginning of what will be months of debate in Congress on federal spending. Daniels cautioned against any efforts by Congress to redirect the priorities outlined by Bush.

    "If there are attempts to raid defense for lesser priorities, or to raid homeland security for lesser priorities, then we'll resist that. And I think pretty strongly," Daniels said. "So, I think that's the difference between last year and a wartime era."





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