WASHINGTON -- The Bush administration unveiled a massive $3.1-trillion budget today with soaring deficits.
Main features of the proposed spending plan call for sizable increases in military spending while protecting President George W. Bush's signature tax cuts.
It shows the U.S. government spending at $3 trillion in a 12-month period for the first time in history.
Despite the increases, most government programs outside of national security face a squeeze.
Among other things, the budget seeks $196 billion in savings over the next five years in the government's giant health care programs -- Medicare for the elderly and Medicaid for the poor.
Even with those savings, Bush projects that deficits, which have been declining, will soar to near-record levels, hitting $410 billion this year and $407 billion in 2009. The all-time high deficit in dollar terms was $413 billion in 2004.
Bush's final full budget is for the 2009 fiscal year, which begins on Oct. 1. It proposes spending $3.1 trillion, up six per cent from projected spending of $2.9 trillion in the current budget year.
Part of the deficit increase this year and next reflects the cost of a $145-billion stimulus package of tax refunds for individuals and tax cuts for business investment that Bush is urging Congress to pass quickly to try to combat a threatened recession.
Bush projects that the deficit will decline rapidly starting in 2010 and will achieve a modest surplus in 2012.
But Democrats said that forecast was based on flawed math that only included $70 billion for the wars in Iraq and Afghanistan in 2009 and no money after that.
It also failed to include any provisions after this year for keeping the alternative minimum tax, originally aimed at the wealthy, from ensnaring millions of middle-class taxpayers.
The Congressional Budget Office estimates that fixing the AMT in 2012 would cost $118 billion, more than double the surplus Bush is projecting for that year.
Even some Republicans faulted what they say as Bush budget's sleight of hand.
"They've obviously played an inordinate number of games to try to make it look better,'' Senator Judd Gregg (R-N.H.), the top Republican on the budget committee, said in an interview with The Associated Press.
"Let's face it. This budget is done with the understanding that nobody's going to be taking a long, hard look at it,'' Gregg said.
Bush's spending blueprint sets the stage for what will probably be epic battles in the president's last year in office, as both parties seek to gain advantages with voters heading into the November elections.
