President Bush Monday submitted to Congress his administration's spending plan for the 12 month period beginning next October. The deficit is expected to nearly triple to a record $307 billion. But as a percentage of economic output, the projected deficit is about three percent of gross domestic product, compared to a record six percent in 1983. The government's financial situation has deteriorated sharply in recent years, the result of reduced revenue caused by recession and tax cuts approved two years ago. Until this fiscal year, the budget had registered surpluses for four consecutive years. Now, deficits are projected for the next four years.
The budget projects government spending of $2.2 trillion in the coming fiscal year. Among the biggest components are defense spending, $380 billion, a four percent increase over 2003. The budget also provides big increases for new spending on homeland security
The space agency is expected to have its budget increased by $470 million, a three percent boost. White House spokesman Ari Fleischer says that amount could be modified as a result of the loss of the space shuttle Columbia.
"As always, the budget goes up [to Congress]," he said. "We'll work with members of Congress on it. But the amount that is in the budget is the amount the president thought was necessary.
"Clearly, now a disaster has taken place and as the process unfolds, it's a healthy process," he continued, "it's a flexible process and it allows for additional input as events warrant."
Indeed, final spending approved by Congress often bears little similarity to the spending blueprint submitted by the president. Appropriation measures for the current 2003 fiscal year have not yet cleared the Congress.
The budget's economic assumptions are for a substantial uptick [increase] in gross domestic product. Growth is expected to rise to three point six percent by year end. The economy grew last year by 2.4 percent.
The budget includes President Bush's plan for greatly increased spending on combating AIDS and cutting taxes by another $670 billion over ten years. The cost of a possible war in Iraq is not included in the budget.
