Bush bids for permanent tax cuts
By Richard Thomson
Updated: 19:00 EST, 1 February 2004
PRESIDENT Bush is boosting US defence and counter-terrorism spending in his budget that goes before Congress today, but is trying to make his tax cuts permanent in a year when the budget deficit is at record levels.
At the same time, the US government is forecasting a slowing in economic growth from above 6% this year to below 4% over the next three years.
In an election year, the move to abolish the temporary status of the tax cuts may prove difficult as concern grows across the political spectrum at the unprecedented size of the deficit.
The budget proposal calls for spending of $2.4 trillion (£1.3 trillion) and forecasts tax revenues of $2.03 billion, leaving a shortfall of nearly $400 billion in 2005.
That is a slight reduction on Bush's projected deficit in the current year of a record $521 billion. However, the President is promising tough action to reduce the deficit.
' We will devote the resources necessary to win the war on terror and protect our homeland,' he said. 'And we'll be responsible with the people's money by cutting the deficit in half over five years.'
Military spending will get a 7% boost, but that does not include new money needed for the occupation of Iraq after the last $87 billion appropriation runs out.
Officials said no new money would be requested until after the Presidential election in November.
Security spending will also rise by 10%, the FBI receiving an 11% increase to help it combat terrorism. But there will be no increase in many areas of spending.