Monday, February 04, 2008

Bush's Budget

Bush Budget Forecasts Deficit Hike

President Bush wants to cut funding for teaching hospitals and freeze medical research in a $3 trillion budget for 2009 that is still likely to generate a record deficit once war costs are tallied up.

The Bush budget to be submitted Monday would cut the budget for the Health and Human Services Department by $2 billion, or 3 percent. By contrast, the Pentagon would get a $35 billion increase to $515 billion for core programs, with war costs additional.

With tax revenues falling as the economy slows - and with the deficit-financed economic stimulus bill adding more than $150 billion in red ink to federal ledgers over 2008-2009 - the White House acknowledges that the budget deficit for this year and next is projected to reach $400 billion or more.

The largest-ever budget deficit, $413 billion, was recorded in 2004. Bush's budget will forecast a deficit for 2009 that's below that, an administration official said. But that assumes costs of $70 billion for the wars in Iraq and Afghanistan, well below the almost $200 billion request for this year.


Bush's budget plan will also, on average, freeze most domestic programs funded by Congress each year. Since departments such as Veterans Affairs and Homeland Security will be getting increases, that means other agencies would bear difficult cuts.

The budget for the Health and Human Services Department, for example, would be reduced by almost 3 percent under the Bush budget plan to be released Monday. The $2 billion in HHS cuts are about double the size of the reductions Bush sought last year; Democrats controlling Congress rejected them.


These reductions would be in addition to almost $200 billion in cuts to Medicare and Medicaid over the next five years that administration officials acknowledge are in Bush's budget. Much of the savings would come from freezing reimbursement rates for most health care providers for three years.


Within HHS programs, Bush would eliminate a $302 million program that gives grants to children's hospitals to subsidize medical education. A $300 million program for public health improvement projects would be eliminated, while grants to improve health care in rural areas would be cut by 87 percent.

The Centers for Disease Control's budget would face a 7 percent reduction of $433 million. The budget for a program to treat and monitor the health of first responders and others exposed to toxins at the World Trade Center after the Sept. 11 attacks would be cut by 77 percent, from $108 million this year to $25 million in 2009.

The National Institutes of Health, which funds health research grants, would see its budget frozen at $29.5 billion.

A program providing grants to help mental health and substance abuse providers update their treatment programs would be cut almost in half. Bush also would eliminate a new $49 million program to help states provide health insurance to people who are ailing and cannot obtain health insurance in the commercial market.


At the same time, a popular program that provides heating subsidies to the poor would be cut by $570 million, to $2 billion.

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