Democrats slam Bush budget, Republicans eye cuts

WASHINGTON - Democrats have criticised President George W Bush's plans to slash funding for scores of United States government programmes and some Republicans said the cuts are too small to dent the record budget deficit.

In his US$2.4trillion fiscal 2005 budget, Bush asks Congress to kill 65 major domestic spending programmes and reduce another 63, while also calling for big boosts in homeland security and defence funding and the extension of his 2001 and 2003 tax cuts at a cost of about US$1 trillion over the next decade.

That will likely set the stage for a bitter fight over tax and spending priorities in the run-up to November's presidential election and provide fresh opportunities for Democratic rivals to attack Bush's fiscal record.

"The new Bush budget is more of the same: record deficits, tax cuts for the wealthy and special interests, and cuts in areas that matter to families -- such as health care and education," Massachusetts Democratic Senator John Kerry said.

Other Democratic presidential hopefuls took a similar tack, with former Vermont Governor Howard Dean accusing Bush of "fiscal insanity" and retired Genera; Wesley Clark characterising his priorities as "tax cuts for the rich and tough luck for everyone else."

But the massive fiscal reversal that has taken place on Bush's watch -- with a record budget surplus of US$236 billion in 2000 giving way to a record deficit of US$521 billion this year -- has also goaded Republican fiscal conservatives into near revolt and spurred calls for even tougher curbs on spending.

"We want to move further, we want to move faster with regard to deficit control, with regard to spending control," House of Representatives Budget committee chairman Jim Nussle, an Iowa Republican, told reporters on Monday.

Bush has proposed to hold the growth of the spending Congress controls, outside of homeland security and defence, to 0.5 per cent next year -- well below the rate of inflation -- as part of an effort to halve the deficit over five years. But many conservatives would like a complete freeze, Nussle said.

Some other Republicans, though, note the spending targeted by Bush makes up less than a fifth of the budget, and that even a freeze will cut the deficit by a "minimal" US$3 billion.

"No one should expect significant deficit reduction as a result of austere non-defence discretionary spending limits. The numbers simply do not add up," Republican Bill Young, the House's chief overseer of federal spending said.

But neither Bush nor Congress are eager in an election year to grasp the nettle of curbing so-called mandatory spending, automatic payments for programmes like Social Security and Medicare, which makes up almost two-thirds of the budget.

In fact, the budget significantly boosts the estimate of how much the legislation to add a prescription drug benefit to Medicare, newly enacted in December, will likely cost over the next decade -- from US$400 billion to more than US$530 billion.

Democrats also complain Bush is hiding the true costs of his policies by leaving key items -- like the rising cost of the war in Iraq and a budget-busting but politically imperative reform of the alternative minimum tax -- out of his forecasts.

"This budget is neither credible nor realistic because it omits so many costly items," John Spratt, the top Democrat on the House Budget Committee said.

The White House admitted on Monday it may need up to US$50 billion in extra funding, not contained in the budget, for military operations in Iraq and Afghanistan next year -- on top of the nearly US$167 billion already provided by Congress.

- REUTERS