12:00 pm - By ANDREW BUNCOMBE
WASHINGTON - President George Bush yesterday requested $US11billion ($26 billion) to tackle the threat to the US from bioterrorism as he sent Congress a budget that places unprecedented importance on the issue of homeland security.
The budget – which the president literally wrapped in the flag by adorning the document with the Stars and Stripes – brings back deficits to fund America's biggest military build-up since the Cold War.
If approved by Congress, America's defence budget would match those of the next 15 nations combined.
Mr Bush said his spending plan "recognises the new realities confronting our nation". He added: "It is a plan to fight a war we did not seek - but a war
we are determined to win."
The total budget of $US2.1 trillion (tn) includes a 12 per cent increase in military spending and a 111 per cent increase on homeland security.
The military spending increase of $US48bn in the fiscal year 2003 - followed by projected increases over the next five years - would take military spending
from its current total of $US120bn to $US450bn by 2007.
If approved by Congress as expected, it would be the largest increase in military spending since Ronald Reagan's Cold War-era build-up two decades ago. It would also augur well for the top military contractors such as Lockheed Martin, Boeing, General Dynamics and Northrop Grumman.
Under the President's proposals the budget for everything else would increase overall by just a mere 2 per cent.
The budget also revives Mr Bush's controversial economic stimulus package, despite signs that emerged last week suggaesting America's faltering economy may already be recovering without it.
It also calls on Congress to extend income tax rate reductions, marriage penalty relief, child tax credits and estate tax cuts that were part of the $US1.35tn package that Congress passed last year. The extensions would cost $US344bn.
"Despite the encouraging signals from financial and non-financial markets, a strong and sustained expansion is far from assured," the budget statement said.
But like much else in America, Mr Bush's spending priorities have been determined by the events of September 11 and their aftermath.
Following the spate of anthrax postings last year which killed five people, infected 18 and led to 30,000 people taking antibiotics as well as the discovery of documents in Afghanistan suggesting al Qaeda was preparing biological weapons, Mr Bush has set aside $11bn over the next two years to counter that threat.
The budget proposes $US5.9bn to finance improvements in the country's public health system. This is in addition to the $US1.4bn Congress approved last year and a supplemental request of $US3.7bn which has already been approved.
The proposed increase in homeland security spending also sets aside $US10.6 billion ($NZ26 billion) to help stop would-be terrorists at the border.
To make room for these huge increases, Mr Bush is calling for controversial cuts in a wide range of domestic programs, including grants that support job training in poor areas.
The budget will trim $US9bn from highway programmes and cut the Army Corps of Engineers' budget by nearly $500 million.
Bush would reduce the Environmental Protection Agency's budget by about 4 per cent, slashing spending on clean water projects for states. The Forest Service also faces cuts.
Buoyed by unprecedented approval ratings, the administration is confident that its military spend proposals will be approved, despite the criticism of
some Republicans that under the plan the government would post deficits of $US106 bn in 2002, $US80 bn in 2003 and $US14 bn in 2004. Likewise, the debt held by the public would increase from $US3.48 tn this year to $US3.6 tn in 2004, before beginning to decline in 2005.
Democrats warned that tax cuts and accompanying higher debt interest costs could drain more than $800 billion from Social Security and Medicare surpluses, weakening retirement and health care programmes.
While Mr Bush has a largely free-hand on Capitol Hill in regard to his war-time agenda, with the Democrats controlling the Senate, the passage of his non-defence proposals is much less certain.
Story archives:
Links: War against terrorism
Timeline: Major events since the Sept 11 attacks
Bush budget puts aside $26 billion for war against bioterrorism
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