On Monday, President Bush unveiled a $2.77 trillion budget for fiscal 2007 (which begins 1 October), with record defense spending, domestic spending cuts, deficit spending and no on-budget acknowledgement of the ongoing costs of the conflicts in Iraq and Afghanistan.
The 2007 budget includes a request of $439 billion for defense, a record figure that does not include the cost of the Iraq-Afghanistan conflicts, which have ranged from $4.4 - 7.1 billion per month since fiscal year 2003.
Last week, Bush asked Congress for another $70 billion this year for Iraq and Afghanistan, pushing 2006 annual costs to $120 billion, "the highest since the Sept. 11 attacks." The Congressional Budget Office (CBO) has estimated that the Iraq war will cost American taxpayers $179-392 billion over the next 10 years.
The bulk of the "savings" comes from cuts in Medicaid: $36 billion over the next five years and $105 billion over the next 10. However, last week — after one month of operation — the Administration projected the cost of its Medicare prescription plan at $678 billion over the next 10 years, considerably more than the $400 billion it promised Congress when the bill was enacted.
The CBO now projects that deficits for the five years starting 1 October 2006 will exceed $2.2 trillion. "Over the past 40 years, deficits have averaged 2.3 percent of G.D.P.; last year they ran at 2.6 percent. This year the deficit will be 3.2 percent," according to the New York Times.
Contributing to the deficits: Bush wants to make permanent his tax cuts, which would reduce federal income an estimated "$178.6 billion over the next five years and $1.35 trillion over the next decade."
In this, his sixth budget, Bush gives the Department of Homeland Security, now in its fourth year, a 6 percent boost, to $43 billion. And a new program, the American Competitiveness Initiative (ACI), would cause a 7.8 percent increase in funding for the National Science Foundation, 14 percent for the Department of Energy, and 18 percent for the National Institute for Standards and Technology, which helps industry develop new technologies.