02 February 2004
Bush Proposes $2.4 Trillion Budget Emphasizing Defense, Security
FY05 request projects reducing deficit by more than half in three years
By Andrzej Zwaniecki
Washington File Staff Writer
Washington -- President Bush has proposed a $2.4 trillion budget for the fiscal year beginning in October 1 (FY05) that would boost defense, homeland security and international assistance spending while bringing closer his stated goal of halving the federal budget deficit over the next five years.
The 2005 budget proposal released February 2 by the White House's Office of Budget and Management (OMB) calls for funding federal government activities at a $2,399 billion level with $2,036 billion in revenues that would reduce the budget deficit from $521 billion in 2004 to $363 billion in 2005.
Sending the budget proposal to Congress opens the long and often arduous process of crafting specific appropriations bills in which final figures often differs from levels of spending requested by the president.
The budget proposal calls for discretionary spending -- spending not mandated by law -- of $818 billion, a 4.1-percent increase from the $786 billion approved for 2004.
Neither figure includes emergency funds for military and security efforts in Afghanistan and Iraq. In 2003 Congress approved $87 billion in emergency funding for these purposes. For FY05 the administration also will need supplemental funding to continue those operations, OMB Director Joshua Bolten said at a February 2 briefing. He put the likely cost of such request at around $50 billion.
In a message introducing the budget proposal Bush said that his budget reflects the "continued" importance of defense and security.
"We will continue to provide whatever it takes to defend our country" at a time when "our nation remains at war, " he said.
Under the budget proposal, defense spending would increase by 7 percent to $402 billion and homeland security spending by 10 percent, including an 11 percent boost in Federal Bureau of Investigation (FBI) funding to back intensified counter-terrorism activities and a 180-percent increase to support agriculture and food safety.
Moreover, the proposal would increase spending on international assistance by 17 percent to $31.6 billion, including $1.2 billion for rebuilding Afghanistan and more than $5.7 billion in military and economic assistance to front-line states supporting the global war on terrorism such as Turkey, Jordan and Pakistan.
The proposal says that the "administration remains committed to dramatic deficit reduction in the coming years." The 2005 budget request reflects efforts to bring federal spending closer to the president's stated goal of halving the budget shortfall by 2009. Bush asks Congress to keep discretionary spending outside defense and homeland security areas at 0.5 percent above 2004 spending by trimming and reshuffling domestic spending and eliminating scores of federal programs.
The budget request also includes a proposal to reestablish a budgetary mechanism based on the Budget Enforcement Act of 1991. This framework would put annual statutory caps on discretionary spending through 2009 and would require Congress to offset any new mandatory spending with reductions in existing mandatory spending.
The record $521 billion budget deficit forecast by the White House for 2004 exceeds the $477 billion deficit forecast by the Congressional Budget Office (CBO). While the White House figure would be the largest deficit ever in dollar terms, it is smaller as a proportion of gross domestic products (GDP), 4.5 percent, than the 6-percent gap in 1983.
The White House said it expects to exceed its stated goal of halving the deficit over the next five years by reducing it to $241 billion, or close to 2 percent of GDP, in 2007, two years sooner than promised earlier. However, White House and CBO deficit projections, which converge in 2005 at slightly more than $360 billion, diverge again in the following years with the White House forecasting a sharper decline than CBO does over 2006-2009.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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