Bush Cut Medicaid

Bush budget cuts Medicaid, disabled housing, but still worsens deficits

President George W. Bush proposed a $2.57 trillion US budget Monday that erases scores of programs and slices Medicaid, disabled housing and many others but still worsens federal deficits by $42 billion over the next five years.

In one of the most austere presidential budgets in years - one that faces precarious prospects in Congress - Bush would give nine of the 15 cabinet-level departments less money in 2006 than they are getting this year. Overall, he would cut non-security domestic spending - excluding automatically paid benefits like Medicare - by nearly one per cent next year. Bush said it was the first such reduction proposed by the White House since former president Ronald Reagan's day.

Forty-eight education programs would be eliminated, including one for ridding drugs from schools. In all, more than 150 government-wide programs would be eliminated or slashed deeply, including Amtrak subsidies, oil and gas research, and grants to communities hiring police officers.

Bush would slow the growth of benefit programs by $137 billion over the next decade, nearly quadruple the savings he proposed a year ago with little success. Chief among the targets would be Medicaid, the federal-state health insurance program for the poor and disabled, but farmers' payments, student loans and veterans medical services were also on the chopping block.

"It's a budget that focuses on results," Bush told reporters after meeting with his cabinet. "The taxpayers of America don't want us spending our money into something that's not achieving results."

Yet largely because of Bush's plans for a defence buildup, this year's Iraq and Afghanistan war costs, and a handful of new tax cuts, the budget shows that deficits over the five years ending in 2010 would total nearly $1.4 trillion.

That is $42 billion worse than they would be if the government continued current spending levels and made no tax-law changes other than making permanent his already enacted tax cuts, his budget tables showed.

Bush's blueprint would leave next year's deficit at an estimated $390 billion and omit any new money next year for wars in Iraq and Afghanistan. That would be a reduction from last year's record $412 billion shortfall and would still leave Bush on his course to halve deficits by 2009, the White House said.

Even so, a $390 billion shortfall would be the third worst ever if his projection for $427 billion in red ink for this year comes true.

Without Bush's new tax and spending plans, the 2006 deficit would otherwise be $361 billion, the budget tables showed. The figures demonstrated how federal costs are soaring despite growing revenues the economy is pumping into the government.

Bush's package faced an uncertain fate in Congress, where conservatives seemed ready to demand deeper deficit reduction and Democrats - and some Republicans - were sure to resist its spending cuts.

Underscoring the jostling that legislators were preparing for, House Speaker Dennis Hastert (R - Ill.) lauded the plan as "a blueprint to fund our nation's priorities" but called it "a good starting point for the Congress to begin its work."

Democrats chided the package for its proposed cuts