The 2009 Bush e-Budget

Feb 7th 2008 | WASHINGTON, DC
From The Economist print edition
George Bush’s fiscal plan will set off an epic fight
APART from its record-breaking size—over $3 trillion, for the first time ever—the most memorable novelty of George Bush’s budget proposal was the method he used to submit it to Congress. On February 4th Mr Bush held up a tablet PC and showed off his 2009 e-budget. “It saves paper, it saves trees, it saves money. I think it’s the first budget submitted electronically,” he noted. All the easier for the Democrats to drag it to the recycling bin.

AP
AP
One click and it’s gone

Since the plump document aims to keep Mr Bush’s policies in place long past his departure from the Oval Office, it seems tailor-made to antagonise the Democratic Congress. The president’s request for defence is up 8%, or $36 billion, from last year. He is insistent, in the face of strenuous Democratic opposition, that his 2001 and 2003 tax cuts should be made permanent, which would cost nearly a trillion dollars over the next five years.

To cut spending, Mr Bush slashes a range of government-run domestic programmes, including a scheme that trains paediatric specialists. His plan, which features a short-term stimulus package and generous assumptions about the economy’s strength, envisions a deficit of $407 billion (2.7% of GDP) in fiscal 2009. By 2012 the budget is meant to be in surplus.

That is unlikely. Mr Bush sets aside $70 billion to finance the war on terror next year, but the cost in past years has been more than double that. The document overstates likely tax revenue by assuming that Congress will not extend relief from the Alternative Minimum Tax, even though it is sure to do so. Given these two factors, the Centre on Budget and Policy Priorities, a Washington think-tank, calculates that under the plan the deficit will be $118 billion in 2012.

Some of the programmes Mr Bush wants to cut, including certain farm subsidies, deserve cutting. More important, his blueprint is a step towards reforming America’s ballooning entitlement schemes. Spending on the federal health programmes, Medicare and Medicaid, has increased some 2.5% faster than GDP per person over the past 40 years. If current policies were to persist, these health outlays would go from 4.6% of GDP to 12% in 2050 and 19% in 2082—about the same proportion as total federal spending is now.

Mr Bush’s solution—slashing payments to health-care providers—is insufficient and unsustainable, and might even force some patients into more expensive government programmes. But at least he attempts to address the government’s long-term fiscal insolvency, which is rather more than the Democrats are likely to do this year.

Regardless of its merits, Mr Bush’s plan may well lead to “world war three”, as one pundit put it: a budget fight made all the more bitter by the election that is coming. In last year’s budget row, Mr Bush and his allies all but refused to compromise with the leadership in Congress. This year the Democrats look just as wary of giving the president anything he wants. But in this particular war Congress has time on its side. It can always wait until Mr Bush has retired to pass a budget whose priorities are more to its liking.

February 7
(Christian Science Monitor) U.S. budget boosts coal and nuclear power
Bush’s budget request Monday cut funding for renewable energy, but increased spending for science.
A president’s priorities become clearer at budget time, even if Congress eventually rearranges things entirely. And that’s true about the place of energy and climate change in President Bush’s spending plan for next year.
Coal and nuclear power see big boosts in the 2009 Energy Department budget request sent to Congress Monday, and Mr. Bush is again calling for oil drilling in the Arctic National Wildlife Refuge. The budget favors nuclear and “clean coal” options over renewable power sources, McClatchy Newspapers noted.
“President Bush proposed large increases for nuclear energy and for capturing and storing carbon from coal-burning power plants in his 2009 budget requests for funding to combat climate change. At the same time, though, his budget would cut money for solar energy research and would provide only a small increase for other renewable-energy programs.”
Clean-energy advocates might wince at the emphasis on coal, oil, and nuclear power. But a big chunk of the energy budget proposal is for finding ways to reduce coal’s greenhouse-gas emissions.
4 February
(Bloomberg) Bush Boosts Defense Spending in $3.1 Trillion Budget
eb. 4 (Bloomberg) — President George W. Bush sent Congress a $3.1 trillion federal budget that trims Medicare and health care programs, boosts military spending and projects the deficit this year and next will hit near-record levels.
The budget blueprint for fiscal 2009 slows the rate of growth in spending for entitlement programs such as Medicare for savings of $208 billion over five years. Pentagon spending would rise 7.5 percent to $515 billion, the 11th consecutive year of increases. Programs in the departments of education, interior, transportation, justice and agriculture would be reduced.
Physical Sciences Win Out Over Biomedicine in 2009 Budget Proposal
ScienceNOW Daily News
President George W. Bush today proposed a flat budget for the National Institutes of Health (NIH) in 2009 while asking for double-digit increases at the National Science Foundation (NSF), the Department of Energy’s Office of Science, and the National Institute of Standards and Technology (NIST). The numbers, part of his request to Congress for the 2009 fiscal year that begins 1 October, mirror previous budgets by emphasizing the physical sciences at the expense of the biomedical sciences.

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