New budget includes reduced social, increased defense spending

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February 2003

New budget includes reduced social, increased defense spending
Senate responds to Africa food crisis

Budget includes reduced social, increased defense spending
President Bush sent Congress a $2.23 trillion 2004 budget on February 4 that would speed up billions of dollars in income tax cuts, provide huge increases for the Pentagon, offer a modest jump in spending for NASA, and lead to record annual deficits in the future.

The administration's budget forecasts a deficit of $304 billion in the current fiscal year and projects a deficit of $307 billion for the 2004 fiscal year, which begins October 1. Over the next five years the total projected deficit would be more than $1 trillion. The budget was in surplus in 2001.

Among other proposed budget increases: international development assistance, elementary and secondary education, food and nutrition assistance.

Among proposed budget decreases: adult education, higher education, energy conservation, community and regional development, transportation.

The budget comes after the Bush Administration has released a "stimulus package" that has called for new tax cuts of well over $1 trillion dollars in the next 10 years. The Bush budget makes no provision for the cost of a war with Iraq—some estimates say war costs may total $100 billion but could be as high as $200 billion—nor for the costs of clean-up, reconstruction, and nation-building in Iraq after the war. By some estimates a military occupation and rebuilding of Iraq could cost more than $50 billion or more than twice the current total international aid budget.

The 2004 budget includes modest cuts in some discretionary spending but a whopping 15 percent increase in the defense budget, which jumps from $365 billion in 2003 to $380 billion in 2004. The current national debt is fast approaching its $6.4 trillion dollar legislative ceiling.

The budget calls for cuts in a wide range of domestic spending, including trims in Justice Department programs on juvenile delinquency and tribal courts and a halt in financing for the hiring of police officers. Money for a public housing program and aid to rural schools also would be cut. Over time, government-financed child care and children's health insurance would be reduced.

The 2004 budget proposes new eligibility requirements that would make it more difficult for low-income families to obtain a range of government benefits, from tax credits to school lunches. Arguing that much of the federal money intended for poor people is diverted through error and fraud, the administration wants to require families to supply more proof of their income and living arrangements before they can qualify for aid, but critics say that the extra steps would deter eligible poor people from applying for needed assistance.

The 2004 budget sets aside $400 billion over the next 10 years to overhaul Medicare but offers no significant new details on how the administration plans to alter the program.

The President's FY 04 budget is available online at: http://www.whitehouse.gov/omb/budget/fy2004/budget.html.

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