War is top priority in Bush’s budget

WASHINGTON — President Bush will send Congress a $2.39 trillion budget today that cuts environment, agriculture and energy programs while giving large increases to military and homeland security spending, administration and congressional officials said.

Bush spoke to a retreat of congressional Republicans in Philadelphia this weekend and reminded them, "We’re at war — you’re a war Congress." His aides said the budget, which he is proposing for the fiscal year beginning Oct. 1, reflects anti-terrorism priorities.

The budget also reflects campaign priorities, including permanent versions of the tax cuts Congress passed in Bush’s first three years, which now have sunset provisions that would eliminate them by 2010. Bush again will postpone the costly job of restructuring the alternative minimum tax, a provision that was aimed at wealthy taxpayers but would raise the taxes of millions of nonwealthy families in the years ahead because it does not adjust for inflation.

Bush will ask for increases for the Education Department and the No Child Left Behind accountability program. He is seeking more funding for the National Endowment for the Arts, which some key Republicans say they will not pass.

Today’s delivery of the budget will begin a rancorous process that will set Bush against many conservatives in an election year. Many Republicans were already upset about the pace of spending and deficits when they found out this past week that the cost of adding a prescription drug benefit to Medicare would be one-third higher than the administration had advertised just two months ago.

"We’ve dealt with the war and recession, and now we should be throttling back on spending," said a Republican leadership aide who attended the session. "A couple of the members are angry, but lots of them are serious about trying to restrain spending."

Bush is limiting the increase in discretionary spending — spending not mandated by law — to a nearly flat 0.5 percent, when defense and homeland security are excluded. House Appropriations Committee Chairman C.W. Bill Young, R-Fla., pointed out at the Philadelphia retreat that the part of the budget that has been essentially frozen amounts to 17 percent of the total and will have a negligible effect on the deficit.

Bush’s Pentagon request is up 7 percent from a year ago, to $401.7 billion. But that figure does not include money that may be needed for military operations in Iraq and Afghanistan after the money runs out from the $87.5 billion wartime supplemental budget bill Bush signed in November. Officials said they expect tens of billions of dollars more will be needed. But the White House said Bush will not request that money until calendar year 2005, after the election.

The Environmental Protection Agency and the Interior Department will be squeezed as Bush reduces his request for spending on the environment and natural resources from $32.2 billion last year to $30.3 billion this year. But a senior administration official said there would be no cuts in the EPA’s enforcement budget.

Bush will trim some measures he has supported in the past. Congressional sources said the budget will cut back on tax breaks for energy production that he supported last year. An administration official said Bush will not propose extending a law that temporarily lets companies take faster tax write-offs for equipment purchases. "You want to have a deadline because if it goes on forever, there’s no incentive when you’re trying to jump-start the economy," the official said.

In his continuing effort to put the onus for spending restraints on Congress, Bush announced in his radio address Saturday that he wants to make "spending limits the law" so that "every additional dollar the Congress wants to spend in excess of spending limits must be matched by a dollar in spending cuts elsewhere."

Aides said this would essentially reinstitute pay-as-you-go budget rules, which originated in 1990 and expired Oct. 1, but with one big change: Bush’s version would not apply to tax cuts.