Tue Feb 1, 4:02 PM ET
By Adam Entous
WASHINGTON (Reuters) - President Bush (news - web sites) will call for a near-freeze in the overall growth of government spending not connected to national defense to try to rein in record deficits, a senior administration official said on Tuesday.
Bush will make the proposal in Wednesday's State of the Union address, previewing the fiscal 2006 budget he will send to Congress next Monday.
A senior administration official pointed to Congress' approval last year of a 0.8 percent cap in non-defense, non-homeland security discretionary spending, and said Bush "will articulate a similar type of goal or principle, which his budget will adhere to."
With the White House projecting inflation at about 2 percent, government programs subject to the cap would face the budgetary equivalent of a cut in spending from levels enacted in fiscal 2005.
The senior administration official left open the possibility the cap would be less than 0.8 percent, saying Bush "believes we can even go further" in restraining spending growth.
Having pushed through sweeping tax cuts in Bush's first term as president, "it's now time also to focus on the priority of fiscal discipline," the official added.
But the proposed cap would affect only about one-sixth of all federal spending since discretionary spending does not include automatic payments like Social Security (news - web sites) and Medicare.
Bush has promised to halve the federal budget deficit by 2009 from a $521 billion forecast he made in early 2004.
Critics have accused the White House of using an inflated forecast to make it easier for Bush to meet his deficit-reduction targets, a charge the White House denies.
Analysts say achieving Bush's goal of cutting the deficit in half was made more difficult with the announcement last week the White House would seek $80 billion in new funding this year for military operations in Iraq (news - web sites) and Afghanistan (news - web sites).
The White House acknowledged the funding request would push the fiscal 2005 deficit to a record $427 billion, but Bush will say his deficit-reduction plans remain on track, officials said.
SKEPTICISM
Democrats and some Republicans are skeptical.
"The last four years have been very disappointing for fiscal conservatives," said Brian Riedl of the conservative Heritage Foundation.
Overall government spending has increased by 26 percent between 2001 and 2004, while discretionary spending during the same period has surged 38 percent, according to an analysis by Riedl.
Although spared outright cuts, the belt-tightening in the 2006 budget will extend to the Pentagon (news - web sites) and the Homeland Security Department.
A Pentagon plan would reduce previously budgeted purchases by $6 billion in fiscal 2006, which begins Oct. 1, and nearly $30 billion through 2011. Lockheed Martin Corp. and Northrop Grumman Corp. would bear the brunt of proposed cuts in U.S. weapons purchases.
Critics also warn of cutbacks for international aid programs.
Although Bush will propose a small increase to combat the spread of AIDS (news - web sites) globally, he is expected to propose about $3 billion -- far less than advocates had hoped -- for the Millennium Challenge Account, a program to provide cash to some of the world's poorest nations in exchange for economic and democratic reforms.
When he first proposed the Millennium Challenge Account program in March 2002, Bush pledged $5 billion by 2006, and aid groups accused the president of backing away from his commitment. Eligible countries under the program have yet to receive any money.
===== "I'm not too worried by hegemony / I know the cadre will look after me" - Magazine, "Model Worker," 1978