KEY POINTS:
WASHINGTON - President Bush today asked a skeptical, Democrat-run Congress to approve US$700 billion ($1,023 billion) in new military spending -- much of it for the Iraq war -- and to curb many domestic programs.
Bush also warned that even more money for Iraq could be needed, as he unveiled a US$2.9 trillion ($4.24 trillion) budget request for fiscal 2008 certain to stoke growing frustration among Democrats and some Republicans over the war.
Democrats, newly in control of Congress, may jettison many of Bush's domestic proposals and have pledged aggressive oversight of Iraq spending. But Democratic leaders have promised not to cut off funding for the troops.
The military spending request comes as Democrats have expressed alarm over Bush's plan to send 21,500 more troops to Iraq.
If Congress approves the war-funding request, the United States will have spent US$661.9 billion on combat in Iraq, Afghanistan and related activities, the administration said.
On the domestic front, Bush called for making his 2001 and 2003 tax cuts permanent and said it could be done while shifting the budget to surplus by 2012.
The spending plan would hold growth in domestic discretionary spending to 1 per cent. After accounting for inflation of 2.5 per cent, that rise would amount to a cut in programs ranging from labour to education and cleaning up the environment.
"Our priority is to protect the American people. And our priority is to make sure our troops have what it takes to do their jobs. We also have got priorities in national parks, in education, in health care," Bush told reporters at a meeting of his Cabinet.
"But we have proven -- and I strongly believe Congress needs to listen to a budget which says no tax increase and a budget, because of fiscal discipline, that can be balanced in five years," he said.
Democrats questioned Bush's upbeat fiscal outlook.
"The president's budget is filled with debt and deception, disconnected from reality, and continues to move America in the wrong direction," said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat.
"This administration has the worst fiscal record in history and this budget does nothing to change that," Conrad said.
Bush's budget request kicks off weeks of hearings on Capitol Hill, where lawmakers will try to produce their own version of a budget blueprint by spring.
Some of Bush's proposed savings would come in politically sensitive health programs. Bush would squeeze US$66 billion over five years in savings from Medicare and US$12 billion from the Medicaid health program for the poor.
Bush's budget authorizes US$717 billion in military spending between now and September 30, 2008, including US$235 billion on the wars in Iraq and Afghanistan. Spending for diplomatic operations would boost the total to $245 billion.
Bush requested US$481 billion for the regular Pentagon budget, a rise of more than 10 per cent. Some of that will pay for a permanent increase in the size of the military.
The White House said it will weigh whether to seek even more war funding. "As activity on the ground evolves, the administration may adjust the requested amount," it said.
Congress already has approved US$427 billion for the wars in Iraq and Afghanistan, the budget document said.
Democrats, while promising to do everything they can to help US combat troops, have vowed to look closely at Bush's request for military spending.
Brian Riedl, analyst at the Heritage Foundation, said Bush has little to lose politically and much to gain from a confrontation with Democrats over domestic spending.
"The president can draw a line on discretionary spending and refuse to sign a spending bill that is above his stated level," Riedl said. "He can enforce that top-line number through the use of his veto."
- REUTERS
