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Education, Health Get Squeezed In Bush Budget

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By ANDREW TAYLOR, The Associated Press

Published: February 3, 2008

WASHINGTON - The spiraling growth of Medicare and the high cost of renewing President Bush's tax cuts are squeezing popular education, health, housing and anti-poverty programs in the budget blueprint he will hand to lawmakers Monday.

Even with difficult-to-digest proposals to curb Medicare costs and kill programs to repair dilapidated public housing, fund community action agencies and provide food to the elderly poor, Bush's $3 trillion budget will project deficits around $400 billion this year and next.

Bush's submission is being criticized by Democrats castigating him for inheriting a government in surplus and leaving Washington with a budget deficit that is likely to break the $413 billion record set four years ago, once war bills and the cost of giving the economy a fiscal jolt with tax rebate checks are factored in.

"The next president is going to inherit a colossal mess because of the fiscal irresponsibility of this president," Sen. Kent Conrad, D-N.D., chairman of the Budget Committee, said Saturday.

Bush's budget will demonstrate a way to produce balance in four years and still renew tax cuts on income, investments and people inheriting large estates - cuts now scheduled to expire at the end of 2010. The cost of renewing those tax cuts exceeds $300 billion by 2013, according to congressional scorekeepers.

But he will be able to predict that balance only by cutting spending in ways that Congress has rejected many times.

After his proposal to kill or significantly cut 141 programs to save $12 billion was rejected by Congress last year, Bush is upping the ante by 50 percent with an even more controversial plan. And his bid to squeeze $178 billion from Medicare over five years has no chance on Capitol Hill, even though the program would still grow by 5 percent a year under his proposal.

Despite a worsening deficit picture, caused in large part by slumping tax revenue as the economy sours, Congress is likely to take no action this year to reverse the tide. No one likes to take painful steps to reduce federal spending in a presidential election year.

When the budget is out Monday, the wrath of interest groups will be felt. Hospitals and other health care providers are protesting cuts to Medicare and the Medicaid health care program for the poor and disabled; advocates for the poor vow to again reverse huge cuts to social services block grants to states and funding for nonprofit groups that help the poor.

The Bush forecast for a balanced budget by 2012 is likely to strike many as unrealistic. It assumes there will be no additional war costs for Afghanistan or Iraq after a $70 billion infusion for next year.

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