WASHINGTON — President Bush's budget will propose big boosts for defense and homeland security and a renewed drive to revive the economy, clipping the coming decade's surplus to $1 trillion, White House budget chief Mitchell Daniels says.
To help hold down spending, Bush will propose cutting the budgets of the departments of Agriculture, Commerce, Interior and Labor as well as Army Corps of Engineers water projects, said a congressional official speaking on condition of anonymity.
Those details of Bush's $2 trillion budget for next year, which he sends Congress on Feb. 4, emerged as the administration and the nonpartisan Congressional Budget Office severely downgraded their surplus forecasts.
Both now envision annual deficits for the immediate future. The costs of last year's tax cut, the drive against terrorism and the recession have brought an abrupt end to a four-year string of surpluses that began in 1998.
"Buying these tools may put a strain on the budget," Bush said of precision weapons and other military purchases he will propose. "But we will not cut corners when it comes to the defense of our great land."
Democrats chiefly blame the 10-year, $1.35 trillion tax cut Bush shoved through Congress last spring for the budget's deterioration.
"Read my lips: No more surpluses," said Rep. John Spratt of South Carolina, top Democrat on the House Budget Committee, mimicking the first President Bush's pledge to not raise taxes.
The Congressional Budget Office provided Wednesday's first dose of bad news. It projected a surplus for the next decade of $1.6 trillion, 71 percent less than the $5.6 trillion it and the White House forecast a year ago.
The new CBO number assumed lawmakers will make no changes in current tax and spending laws, which is extremely unlikely. It includes expected shortfalls of $21 billion this year and $14 billion in 2003, with annual surpluses resuming in 2004.