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Bush: Budget will spur growth, rein in spending

President Bush says his budget for 2007 will eliminate federal programs that are underperforming.


White House
George W. Bush
New Hampshire

MANCHESTER, New Hampshire (CNN) -- President Bush on Wednesday talked up his budget on a trip to New Hampshire, hours before signing a bill he says is a major step toward cutting the nation's deficit in half by 2009.

The president said his fiscal year 2007 budget will promote economic growth by keeping taxes low, will restrain government spending and will eliminate federal programs that don't produce results.

"I look behind the numbers and see the quality-of-life issues," Bush told a gathering of the Business and Industry Association.

"Those of us who put it together really did see the human dimension behind the budgeting."

Bush touted some numbers he said indicate the health of the nation's economy, including 3.5 percent economic growth last year, the highest rate of home ownership in history and an addition of 4.7 million jobs in the past two years.

"In spite of the numbers and the economic growth there is uncertainty. Some of the uncertainty comes as a result of competition from places like India and China," Bush said.

"The temptation with uncertainty and competition is to say 'We can't compete.' ... If you look at the history of the United States, the economic history, there have been periods of protectionism and isolationism in the hopes that that will lead to a better lifestyle for our citizens."

The president warned against such actions, saying he strongly rejects the notion of becoming a protectionist nation.

"I don't think this country ought to fear the future; I don't think we ought to fear competition. I know we ought to shape the future with good policies out of Washington, D.C., and make sure we're the pre-eminent economy in the world," he said.

After returning to the White House from New Hampshire, the president signed the Deficit Reduction Act of 2005, which makes $39 billion in cuts to student loan subsidies, Medicare, Medicaid, farm subsidies and other programs. (House passes cuts to Medicaid, student loans)

"Spending restraints means making difficult choices, yet making those choices is what the American people sent us to Washington to do," the president said before signing the legislation.

$2.8 trillion budget

Bush's budget, which was released Monday, came in at $2.8 trillion and included increases in military and homeland security spending while cutting money for Medicare and other non-defense programs. (Full story)

The White House expects the deficit to climb to $400 billion in fiscal 2006, but administration officials said Bush still hopes to reduce the flow of red ink to $260 billion a year by the end of his term.

The budget's cuts to Medicare and education programs have been criticized by a bipartisan group of legislators. (Full story)

Repeating themes from his January State of the Union speech, the president again urged the Senate to pass liability legislation and said the country needs to cut its dependence on oil from "unstable parts of the world."

He also called on Congress to make permanent the tax cuts he introduced in his first term in office.

"There's a direct correlation between cutting taxes on the capital gains and dividends, and quality of life all across America," Bush said.

He said his budget also will cut discretionary spending not related to homeland security or defense, and will trim $14 billion from federal programs that aren't performing well.

Those results are demonstrated on a new Web site called www.expectmore.govexternal link, Bush said. On it, there are descriptions of programs that didn't show results or that proved to be inefficient.

The president said his budget reintroduces "fiscal sanity" and will help the American economy continue to grow.

"You can't be the pre-eminent economy of the world if your economy doesn't grow," Bush said.

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