Bush Would Boost Defense,
Security In Budget Plan
Social Programs Face Cuts In Proposal for Fiscal 2007;
Worries Over Heating Bills
DEBORAH SOLOMON and JOHN D. MCKINNON / Wall Street Journal
WASHINGTON — President Bush submitted a federal budget that proposes to
boost spending on defense, homeland security and scientific research, includes
no significant restraint on Social Security and contains only modest curbs on
In exchange, Mr. Bush would bring the budget knife down on domestic programs
other than homeland security, the same small slice of the federal budget that
Congress pared this year. The cuts would help Mr. Bush show a shrinking deficit
for fiscal 2007, which begins Oct. 1, even though spending would rise 2.3%, or
$62 billion, from the current fiscal year. The budget, released yesterday,
doesn't propose any new taxes.
Politically, the president may find it tough to persuade Congress to endorse
his plan. Much of the squeezing would be of programs aimed at low-income
Americans — and wouldn't save all that much money in the aggregate. Targeting
domestic programs tends to cause political indigestion for lawmakers, who know
how easy it is to put a human face on those who feel the impact of budget cuts,
particularly in a congressional election year.
In all, Mr. Bush proposes spending $2.77 trillion in fiscal 2007 — assuming
he needs only $50 billion in supplemental funding for Iraq and Afghanistan, an
amount that falls short of current spending. That works out to 20.1% of the
gross domestic product, or the total amount of goods and services produced in
the U.S. He expects revenue, after some tweaking of the tax code and some new
fees, to reach $2.42 trillion, a 5.7% increase from this year. That would bring
total revenue to 17.6% of GDP.
The deficit would fall to $354 billion, or 2.6% of GDP — but only if
Congress accepts all of Mr. Bush's money-saving proposals, which it likely
won't, and doesn't add any other spending or tax breaks. The deficit for the
current year is expected to be about $423 billion, or 3.2% of GDP.
Spending on Social Security would climb 5.6% to $581 billion next year —
all of it needed to pay benefits already provided by current law. Spending on
the Medicare and Medicaid health-insurance programs for the elderly, disabled
and poor would climb 10.4% to $592 billion. Mr. Bush proposes changes to the two
programs, but they would save only $3.2 billion next year, and $40.8 billion
over five years — about 1.2% of the programs' projected five-year spending.
By contrast, annual congressional spending outside of defense and homeland
security would be cut below this year's level, cuts that would be magnified by
inflation. Much of that money, which constitutes about a sixth of federal
spending, is targeted at the poor.
Big Increase for Border Patrol
The $439.3 billion defense budget for fiscal 2007 would be 4.8% more than the
current budget and would include billions of dollars for fighting insurgents and
other unconventional threats, as well as funding for conventional weapons
Driving the increases are both the need to pay for the wars in Iraq and
Afghanistan and a continuing desire to pay for big weapons-modernization
Spending for homeland security combines the government's priorities of
fighting terrorism with the new political realities of 2006. The budget requests
big increases for border control, in response to the increasingly contentious
debate within Mr. Bush's own party over immigration, and a boost in spending on
disaster response, following the federal government's poor initial response to
Mr. Bush also proposes to pump up the budget for the National Science
Foundation, the federal agency that provides grants for basic research in
colleges and universities. The budget for the foundation would increase 7.9% in
fiscal 2007, the first step in a planned doubling of its investments in science
and engineering in the next decade. The expansion is part of his "American
Competitiveness Initiative," aimed at keeping the U.S. in the lead in
technology even as global rivals emerge in Asia and elsewhere.
The initiative also seeks to strengthen math and science education in schools
and better prepare workers for high-technology jobs. Mr. Bush is making a
special push for alternative-fuel technology. To keep the economy expanding, he
also called again for making permanent broad tax cuts passed in his first term
that are scheduled to expire.
In a two-page message at the beginning of the budget, Mr. Bush wrote,
"My administration has focused the nation's resources on our highest
priority: protecting our citizens and our homeland." As for other domestic
spending, he stressed his desire "to bring greater accountability and
transparency to the budget process" with "firm spending limits"
that will help make sure "public funds are used for the best purposes with
the broadest benefits."
The president would cut funding for some domestic programs and outright
eliminate others, such as the Commodity Supplemental Food Program, a $111
million-a-year program that provides monthly bundles of cheese, cereal, peanut
butter and other nutritional staples to 400,000 low-income elderly people.
Some would receive increases, but not enough to offset inflation. For
instance, the budget gives $2 billion to the Low Income Home Energy Assistance
program, which provides cash to low-income people for their heating bills. That
is close to the same amount as initially appropriated for the program for 2006.
But nationwide, home heating costs are averaging 31% higher this winter than
a year ago, because of rising natural-gas prices. Indeed, Congress recently
allocated an extra $1 billion to cover expected high heating bills. Bush
administration officials say they also are seeking other funds for 2007 that
could be used to help the hardest-hit areas.
For Erin O'Conner, a single mother of four in St. Louis who is trying to
start her own cleaning service, higher natural-gas prices are taking a big bite.
Ms. O'Conner, who is 42 years old, said her monthly income averages about $700.
She expects to get another $600 this winter in federal assistance — a huge
help, she said. Still, her December heating bill alone was $300.
"It doesn't seem like I'm using more gas, but the bills are so much
higher," she said. Ms. O'Conner said she has taken part-time cleaning jobs
to supplement her income and has kept the thermostat at 70 degrees, but she
worries her heat would be cut off without enough federal aid.
As anticipated, the president's proposal also would slice 1.8% from the
budget for the Department of Housing and Urban Development. It would cut 26%
from a program aimed at the low-income elderly and known as Section 202, and
half the funding for a program known as Section 811, which is for low-income
people with disabilities.
Such figures could pose a dilemma for politicians in both parties.
"Overall, we're concerned that some of these cuts are really beginning to
bite," said Missouri Republican Sen. Christopher "Kit" Bond,
chairman of the appropriations committee that oversees housing. The White House
budget office, he said, "sits in some isolated cocoon and comes forward
with proposals that we don't think make any sense."
White House budget director Joshua Bolten challenged that notion. "When
we're in the midst of major national priorities — disaster, war, and so on —
it's only prudent that the government tighten its belt elsewhere," he told
reporters. "There's still plenty of opportunities for savings...we believe,
without fundamentally undermining the proper functions of a federal
Claude Allen, Bush's domestic policy adviser, said the administration has
substantially increased funding for "core programs" that effectively
deliver help to low-income people. In those areas, "the safety net is tight
and strong," he said. The administration is targeting programs it deems
ineffective, not shying away from programs just because they serve poor people,
Some in Mr. Bush's conservative base complained he isn't tightening the
federal belt enough. "Federal spending has grown twice as fast under
President Bush as under President Clinton," said Brian Riedl, a budget
analyst at the Heritage Foundation, a conservative think tank, pointing to such
Bush-backed initiatives as the Medicare prescription drug bill. The White House
says the terrorist attacks of Sept. 11, 2001, and subsequent wars in Afghanistan
and Iraq justified much of the added spending.
Democrats took the opposite view. "After creating record deficits and
debt with his budget-busting tax breaks, the president is asking our seniors,
our students and our families to clean up his fiscal mess with painful cuts in
health care and student aid," said Senate Minority Leader Harry Reid of
For politicians of both parties, the Washington debate, centering on acronyms
and back-and-forth sound bites, will play out quite differently on the local
level, where governments — and residents — are wrestling with the effects of
changes to Medicaid, job-training programs and other federal programs.
Congress recently approved money-saving changes to the state-federal Medicaid
program and gave states flexibility to ask the poor to pay a bigger share of
their own health tabs, for instance. The new budget's further squeeze on
Medicaid would mean more adjustments.
In Missouri, for instance, changes have reduced state and federal spending on
Medicaid by $626 million from what it otherwise would have been, to about $5.3
billion for the current fiscal year. Using flexibility allowed under federal
law, the state sought savings by lowering the income thresholds for Medicaid
eligibility to 22% of the federal poverty line this year, from a level last year
of 75%. That means that to qualify for Medicaid in Missouri, adults in a family
of three can earn no more than $3,504, excluding some child-care costs. Last
year, the figure was $12,067. (Children often remain eligible.) As a result,
about 74,000 low-income adults are losing health insurance.
One is Kristen Alliegro, 32, a single mother of two who said she earns $600
to $800 a month from two part-time jobs. She said she has been on Medicaid since
2003, when she lost a full-time job at Bank of America. After four months of
looking for a job that paid as much, she went back to school to earn a
bachelor's degree in psychology. Student loans and scholarships aren't enough to
cover an $800 monthly mortgage bill, a $300-a-month heating bill and the cost of
diapers and fuel, she said.
Her sons, who are 2 and 5 years old, will continue to be covered under
federal-state programs for children. She said the prospect of losing her own
government-provided health insurance is forcing her to consider a choice between
quitting work altogether so she can stay covered or continuing to work and
losing her insurance. While she could qualify for both Medicaid and welfare by
quitting, she said, "I'd lose my house, I'd lose my car, and I'd lose my
sense of esteem and self-worth. Once you're there, there's no way out."
Another area being cut is the Department of Health and Human Services'
Community Services Block Grant program, which for decades has been used by
Washington to fund state and local antipoverty efforts. Funding for that program
has been steadily reduced since its 2002 peak. Last year, Mr. Bush proposed
wiping it out altogether, though Congress appropriated about $630 million.
In his new budget, the president, again, proposes to eliminate the program.
Mr. Allen, the White House domestic policy adviser, said federal officials can't
effectively track the program's results, so the administration decided to focus
resources on other programs.
—Jackie Calmes contributed to this article.
Bush's 2007 Budget Proposal
Wall Street Journal 7feb2006
A broader view of what's growing and shrinking in Bush's 2007 proposal, in
Sources: Office of Management and Budget, AP *Includes miscellaneous,
undistributed offsetting receipts
A look at how the federal government is counting on bringing in revenue, and
how it plans to spend it in fiscal 2007. All figures in billions unless noted.
By assuming that federal spending will shrink as a share of the economy —
after five years of increases — the White House projects the federal budget
deficit (left) to drop sharply over the decade. Separately, with steady
reductions in corporate taxes (right), companies pay a decreasing portion of the
taxes Washington collects.
The president's defense budget (left) includes billions of dollars of
spending to fight unconventional threats like insurgents but defers the big
decisions on countervailing cuts to major weapons systems that most senior
defense officials acknowledge will eventually be necessary. Spending on health
care (right) is projected to continue as a growing part of the economy.
While the White House requests funding annually, the amounts Congress
appropriates don't always match. Here's how several projects fared over the past
few years. *Program realigned to reflect new initiatives
DEPARTMENT OF AGRICULTURE
Spending: $96.4 billion
Percentage Change From 2006: +0.2%
Mandatory Spending: $76.7 billion
- Reduces spending on commodity programs by $1 billion. Seeks to cut
payments to farmers by 5% and impose stricter limits on payments, reducing
the annual ceiling from $360,000 to $250,000 and closing loopholes that
enable big rice and cotton operations to get payments well beyond the
- Requires sugar producers to pay a 1.2% marketing assessment and dairy
producers to pay an assessment of 3 cents per hundredweight of milk.
- Cuts crop insurance subsidies and requires producers to buy crop
- The Bush administration is proposing farm payment reforms that were
rejected last year by Congress. However, such payments represent a fraction
of the department's spending.
- The department's major expense is for the mandatory food and nutrition
programs, where spending would go up as a record 30.9 million children
receive free or reduced-price meals through the school lunch program, an
increase of about 700,000 children.
- Still, the administration is again seeking to take food stamps away from
an estimated 300,000 people who qualify because they get other noncash
DEPARTMENT OF COMMERCE
Spending: $6.3 billion
Percentage Change From 2006: -2.2%
Mandatory Spending: $167 million
- Seeks more than $500 million for the National Institute of Standards and
Technology for nanotechnology, quantum information science, neutron research
and other components of the American Competitiveness Initiative President
Bush announced in his State of the Union address. The venture is aimed at
promoting U.S. innovation to ensure the country remains globally
competitive, especially given intense competition from China and India.
- Recommends that the U.S. Patent and Trade Office keep the roughly $1.8
billion in fees it collects and use it to reduce application processing
time, hire additional examiners and take other steps to improve efficiency.
- Provides $3.6 billion to the National Oceanic and Atmospheric
Administration, including money for the U.S. tsunami warning system.
- Provides $18 million to the National Telecommunications and Information
Agency, in part to help consumers make the switch from an analog to digital
- Eliminates the Advanced Technology Program that provided grants to
businesses to help develop new technologies for commercial use. Budget also
would terminate the Public Telecommunications Facilities, Planning and
Construction program, saying it duplicates other grant programs that support
the building of public telecommunications networks.
- "This administration is determined to continue providing American
entrepreneurs and workers with the tools they need to fuel our economy while
also reining in federal spending," said Commerce Secretary Carlos
DEPARTMENT OF DEFENSE
Spending: $491.3 billion
Percentage Change From 2006: -8.7%
Mandatory Spending: $2 billion
- Includes $50 billion for the wars in Iraq and Afghanistan, compared with
an estimated $125 billion that was spent in 2006 for those wars and for
hurricane relief in the U.S. The Pentagon is expected to request more money
for the wars as the year goes on.
- Increases spending on other military programs by 7%, to $439.3 billion.
- Boosts spending to nearly $2 billion on unmanned aircraft and ground
vehicles, which are being used extensively in the war.
- Significantly increases spending on special operations forces, adding
thousands of new Army Rangers and Navy SEALs, and creating a new Marine
special operations force.
- Provides nearly $6 billion for new armored humvees, protective armor,
trucks, communications gear and night-vision equipment for the Army.
- Cancels a tanker supply ship program to save $4.4 billion over the next
- Cancels the Aerial Common Sensor reconnaissance aircraft, for a saving of
about $314 million in 2007.
- Eliminates the alternative engine for the Joint Strike Fighter aircraft
and restructures the refueling tanker aircraft program to save nearly $900
million through 2011.
DEPARTMENT OF EDUCATION
Spending: $63.4 billion
Percentage Change From 2006: -28.5%
Mandatory Spending: $9 billion
- Eliminates 42 programs, including money for the arts, technology,
parent-resource centers and drug-free schools. Of the 141 programs that Bush
wants to eliminate or cut across the government, almost one-third would be
in education, accounting for almost $3.5 billion.
- Creates a $100 million program to give private-school vouchers or expand
tutoring for students who attend chronically poor-performing public schools.
- Spends $12.7 billion on poverty aid to school districts, known as Title I
funding, the largest federal education program. Notably, Bush is proposing
no new money for the program, although Title I spending would still be up
45% since he took office.
- Allocates $10.7 billion to educational help for children with
disabilities, an increase of $100 million, or 1%, over current spending.
- Revives a $1.5 billion plan to add academic help in high school and expand
the No Child Left Behind law by requiring two additional years of testing in
high school. Congress never really considered the program this year because
it would be funded primarily by erasing the government's vocational
- The real cuts to the education budget seem high because of one-time
changes that inflated the 2006 budget, such as emergency aid to schools hit
by hurricanes. Mandatory spending alone is expected to drop by $22 billion,
but that's mainly because of different assumptions about interest rates and
consolidated loans for college students borrowing money.
- The upshot is that discretionary spending would be $54.4 billion, a cut of
DEPARTMENT OF ENERGY
Spending: $20.7 billion
Percentage Change From 2006: -1.8%
- Proposes $4.1 billion, an increase of $505 million, for cutting-edge
scientific research as part of a 10-year program to double research into
such areas as hydrogen fuels, super computers and energy efficient lighting.
Also proposes $298 million, a 70% increase, for research into alternative
fuels such as ethanol and biodiesel as well as solar power.
- Proposes $250 million as a downpayment on multiyear program to resume
commercial nuclear fuel reprocessing, abandoned in the 1970s. The aim is to
reduce volumes of waste from commercial power reactors and develop an
international program to control civilian nuclear material. Also seeks $544
million, slightly more than this year but less than what was spent in 2005,
to continue work licensing a proposed nuclear waste dump at Yucca Mountain
- Provides $84 million, an increase of $60 million, to deploy radiation
detection equipment at border points and foreign seaports. Overall spending
for nuclear weapons programs proposed at $9.3 billion, an increase of $200
million. Spending for weapons complex environmental cleanup is proposed at
$5.8 billion, a 12% decline over fiscal 2006.
- As in past years, roughly two-thirds of the department's budget goes for
activities related to maintaining the U.S. nuclear stockpile and the
environmental cleanup left over from the Cold War years at weapons
ENVIRONMENTAL PROTECTION AGENCY
Spending: $7.2 billion
Percentage Change From 2006: -4.9%
- Cuts low-interest loans to states for water quality protection projects by
22%. The cut would decrease funding to $688 million for treating wastewater,
reducing pollution from nonspecific sources and managing watersheds and
- Increases loans for drinking water improvements by $5 million, to $842
- Increases to $50 million, from last year's $7 million, grants to promote
cleaner-burning diesel engines, a major source of fine particle pollution
blamed for a variety of respiratory illnesses.
- Proposes $1.3 billion, a slight increase of $28 million, for Superfund
toxic waste cleanup program, the one that's used when the agency has been
unable to pin the costs on a polluter.
DEPARTMENT OF THE INTERIOR
Spending: $9.1 billion
Percentage Change From 2006: -2.4%
- Cuts $312 million from the Office of Surface Mining program to reclaim
abandoned mines, because of the expiration of coal mining fees next June.
The department says more than $3 billion in health and safety work under the
program remains undone.
- Cuts the National Park Service budget by $89 million, to $2.484 billion,
in what officials call a return to "sustainable levels" after a
five-year maintenance initiative.
- Cuts $35 million from the budget for the Bureau of Land Management, which
handles permits for oil and gas drilling. That would decrease the agency's
budget to $2.834 billion.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Spending: $697.7 billion
Percentage Change From 2006: +3.1%
Mandatory Spending: $627.8 billion
- Cuts projected Medicare spending by $35.9 billion over five years. Without
legislative changes, the federal health insurance program for the elderly
and disabled would grow at an annual rate of 8.1%. Under the president's
proposal, Medicare spending would grow at a rate of 7.7%.
- Cuts the Administration for Children and Families budget by about $1.4
billion to $12.3 billion, mainly through the elimination of block grants
that pay for job training, housing and health programs intended to reduce
poverty. The administration says the block grant program lacks performance
measurements and does not award grants on a competitive basis.
- Flat funding of $28.4 billion for the National Institutes of Health, which
conducts health research to improve the detection and treatment of disease.
Cuts spending at the Centers for Disease Control and Prevention by about
- Health and Human Services Secretary Mike Leavitt: "Hard choices had
to be made and this budget reflects our effort to make those in the wisest
DEPARTMENT OF HOMELAND SECURITY
Spending: $31 billion
Percentage Change From 2006: +9.8%
Mandatory Spending: $98 million
- Boosts FEMA spending by $363 million — including $150 million in state
and local grants to help authorities avoid flooding or damage caused by
other disasters, in response to Hurricane Katrina. Adds 6,000 illegal
immigration detention beds and provides 1,500 new agents to patrol the
nation's border. The 2004 intelligence reform law requires that 2,000 border
patrol agents be added annually.
- Doubles airline security fees to $5 for a one-way flight to collect $1.3
billion in additional revenues, echoing a similar proposal that Congress
rejected last year.
- Provides $935 million for the 20-year Deepwater program to modernize Coast
Guard boats and planes, and $838 million in counterterror grants for the
highest risk cities and regions.
- The budget reflects Homeland Security's crackdown on U.S. borders through
new agents and technology to detect illegal immigrants, and detention beds
until they can be returned home. It also asks for $247 million to fund
President Bush's proposed guest worker program granting temporary visas to
immigrants seeking employment in the U.S.
- The government provided $87 billion to victims of Hurricanes Katrina and
Rita last year, but the department's budget gives little new money to
disaster relief. It triples grants to help residents and businesses in flood
plains, and provides a 9% increase to the nation's disaster relief fund for
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Spending: $33.5 billion
Percentage Change From 2006: -29.9%
- Consolidates several community development initiatives into the existing
Community Development Block Grant program, and cuts it by $975 million to $3
billion. Consolidated programs include one to redevelop polluted areas and
one to develop rural housing.
- Allows the Federal Housing Administration to base mortgage insurance
premiums on the credit ratings of home buyers. The number of FHA loans has
been dropping for three years, in part because low interest rates have
enabled home buyers to get less expensive deals in the private market.
- Federal Housing Commissioner Brian Montgomery said flexible premiums would
enable HUD to offer insurance to more home buyers — those with both good
and bad credit. With the changes, HUD projects a 50% increase in FHA loan
guarantees next year.
- Contains no new housing money for victims of Hurricane Katrina. Congress
recently approved about $11.5 billion in housing assistance for hurricane
victims. That money was added to the 2006 budget, which explains most of the
30% cut in spending for fiscal 2007.
DEPARTMENT OF JUSTICE
Spending: $22.5 billion
Percentage Change From 2006: -0.6%
Mandatory Spending: $3 billion
- The FBI budget would increase by 6.5%, to $6 billion. The bureau's
proposed budget is 87% higher than it was in 2001.
- The proposed increase reflects the FBI's top priorities since the Sept.
11, 2001, attacks — fighting terrorism and foreign espionage. But unlike
past years, the money would be spent on facilities and computer systems, not
- The Drug Enforcement Administration would see a 4% increase, to $1.7
billion, mainly devoted to expanding missions in South America and
Afghanistan. The High-Intensity Drug Trafficking Area Program, popular with
local law enforcement, would be cut by nearly 8% to $208 million and
transferred from the White House drug policy office to the Justice
- Project Safe Neighborhoods, an administration program targeting gun
crimes, would get $395 million, a jump of 64% over 2006, and a broader
mission focusing on gang violence.
- The Bureau of Alcohol, Tobacco, Firearms and Explosives would receive $860
million, a drop of nearly 6%. But the administration estimates the agency
would get an additional $120 million from a new fee paid by holders of
permits to purchase and handle explosives.
- Calling them ineffective, the administration proposes to end several grant
programs to state and local law enforcement, to save $1.1 billion.
- These programs include the State Criminal Alien Assistance Program, which
helps states defray the cost of jailing illegal immigrants and grants
focused on juvenile offenders. Congress has resisted similar proposals in
DEPARTMENT OF LABOR
Spending: $54 billion
Percentage Change From 2006: +5.5%
Mandatory Spending: $43.2 billion
- Provides $772 million to the Occupational Safety and Health Administration
and the Mine Safety and Health Administration to strengthen work place
safety, up from $749 million in the president's 2006 budget. The
administration wants Congress to pass legislation that would boost penalties
for mine safety violations from $60,000 to $220,000.
- Allocates $125 million in grants to prepare workers for jobs in high
growth industries. The money would train an estimated 50,000 workers.
- Provides $8 million to help update and improve the accuracy of the Bureau
of Labor Statistics' Consumer Price Index, a closely watched inflation
- Seeks legislative changes to prevent improper payments of unemployment
benefits. Almost $3 billion in benefits were paid to ineligible workers in
2005, the administration said.
- Proposes changes to the Federal Employees' Compensation Act, which
provides benefits to federal workers for occupational illness, injury or
death, that would save the government $592 million over 10 years.
Spending: $33 billion
Percentage Change From 2006: +13.1%
- Spending increase is the largest for an agency or branch of government.
Asks for $115 million to train Americans in languages deemed crucial to
- Reprises last year's request for $3 billion for the Millennium Challenge
Corp., a Bush administration initiative meant to reward good governance and
democratic commitments among developing nations, but which has been viewed
with skepticism in Congress. Last year, lawmakers gave the program only $1.7
- Requests $4 billion for a global program to fight HIV/AIDS, more than $740
million above last year, plus $225 million to combat malaria and $210
million to fight bird-flu abroad.
- Seeks $770 million for Iraq, and more than $470 million for a cultural
exchange program focused on the Muslim world.
- The budget reflects Secretary of State Condoleezza Rice's plan to place
greater emphasis on humanitarian programs and improve management of the Bush
administration's $18 billion foreign aid programs. It would fund programs
that emphasize up-by-the-bootstraps development overseas, although it also
preserves traditional assistance such as the more than $2 billion given
annually to Israel. There is an $80 million request for grants to private
groups promoting democracy.
DEPARTMENT OF TRANSPORTATION
Spending: $67.7 billion
Percentage Change From 2006: +4.9%
Mandatory Spending: $54.5 billion
- Spends far less for air traffic control equipment than Congress and
President Bush agreed to in the 4-year aviation budget plan signed into law
in 2003. Then, Bush agreed to spend $3.11 billion, but he asked for $607
million less than that for next year, a 20% decrease. Airports would receive
$340 million less next year than this year.
- Spends about a third less for airport buildings and equipment than Bush
and the Congress approved in 2003. Originally, they'd agreed to spend $3.7
billion. Bush wants to spend $2.73 billion next year, a 32% cut from the
2003 agreement and a slight reduction from this year's spending.
- Gives Amtrak $900 million to "enable Amtrak's new management team to
keep the trains running and act on its mandate to reshape the company."
In the 2006 budget, Bush offered no subsidy for the railroad, but Congress
decided to grant Amtrak $1.3 billion.
DEPARTMENT OF TREASURY
Spending: $495.8 billion
Percentage Change From 2006: +9.2%
Mandatory Spending: $484.2 billion
- The biggest chunk of the department's mandatory spending — roughly $441
billion — goes to paying interest on the national debt, including
obligations related to Social Security. The total interest includes $247
billion in payments to investors on debt held by the public.
- The bulk of the department's $11.6 billion in discretionary spending goes
to the Internal Revenue Service, which would receive $10.6 billion, slightly
more than last year's request. A portion of the money would modernize IRS
technology to improve electronic tax-filing options for taxpayers, replace
antiquated taxpayer databases and make other changes aimed at bolstering
efficiency. IRS also will use some of its funds to catch tax scofflaws and
crack down on dubious tax schemes.
- The Financial Crimes Enforcement Network, dubbed FinCen, would receive $90
million, up from a request of $73 million last year. The agency is
responsible for making sure the nation's financial system isn't abused by
terrorist financiers, drug dealers, and other criminals.
- "The president's proposed budget for fiscal year 2007 is a budget
that works to ensure that future generations of Americans will have the
opportunity to live in a nation that is more prosperous and more
secure," said Treasury Secretary John Snow.
DEPARTMENT OF VETERANS AFFAIRS
Spending: $77.7 billion
Percentage Change From 2006: +10.4%
Mandatory Spending: $42 billion
- Proposes again to charge a $250 health care enrollment fee to veterans
whose incomes are above certain levels and who have no illnesses or injuries
that resulted from their military service. Congress previously rejected a
- For the same veterans, increases co-payments for a 30-day supply of
prescription drugs from $8 to $15. Similar or identical proposals have been
rejected repeatedly by Congress.
- Raises spending on medical care from $28.7 billion to about $31.5 billion.
- Anticipates VA will care for more than 100,000 Iraq and Afghanistan
veterans in 2007.
- Estimates 3.7 million veterans and beneficiaries will receive about $38
million in benefits.
NATIONAL AERONAUTICS AND SPACE AGENCY
Spending: $16.8 billion
Percentage Change From 2006: +1%
- Budget anticipates continued operation of the Space Shuttle through 2010
with 16 flights to complete the International Space Station and one flight
to service the Hubble Telescope.
- Budget increases spending for solar system exploration, Earth-Sun science,
exploring systems and technology. Decreases are set for education, business
- Agency plans to reduce the number of full time workers from 18,410 to