Highlights of President Bush's $2.77 Trillion Budget
February 6, 2006- President Bush's fiscal year 2007, $2.77 trillion budget continues the successful pro-growth policies that have encouraged robust economic growth and job creation. A strong economy, together with spending restraint, is critical to reducing the deficit.
The budget builds on last year's successful spending restraint by again holding the growth of overall discretionary spending (or funding debated by Congress during the budget process) below inflation, proposing to reduce non-security discretionary spending below the previous year's level and calling for the elimination or reduction of programs not getting results or not fulfilling essential priorities. Like last year, the budget proposes savings and reforms to mandatory spending programs (or automatic funding required by law), whose unsustainable growth poses the real long-term danger to our fiscal health.
Continuing Our Economic Expansion
The budget continues pro-growth policies vital to our economy's continued expansion. With the full implementation of the tax relief plan in 2003, the nation has added more than 4.7 million new jobs, productivity has increased at a 3 percent annual rate, homeownership has reached all-time highs and the American economy is growing faster than other major industrialized nations. Highlights include:
* Making permanent the tax relief enacted in 2001 and 2003, preventing a tax increase on families and small businesses.
The strength of our economy has produced rapid increases in the level of taxes collected by the federal governments, which is critical to reducing the deficit. From 2004 to 2005, receipts grew 14.5 percent ($274 billion), or more than twice as fast as the economy itself. The budget forecasts receipts to grow another $132 billion from 2005 to 2006, an increase of 6.1 percent.
Restraining Spending and Cutting the Deficit
Through continued pro-growth economic policies and spending restraint, the budget keeps the United States on track to cut the deficit in half by 2009. Highlights include:
* Holding growth of overall discretionary spending below inflation and reducing non-security discretionary spending below the previous year's level.
* Terminating or reducing 141 programs that are not getting results or not fulfilling essential priorities , for a proposed savings of $14.7 billion.
* Giving the president a line-item veto to cut specific funding programs and earmarks from the budget.
Under this budget, the deficit is projected to decline from its projected 2004 peak of 4.5 percent of gross domestic product ($521 billion) down to 1.4 percent ($208 billion) in 2009, more than in half and well below the 40-year historical average deficit of 2.3 percent.
The Long-Term Fiscal Danger
The greatest threat to the United States' fiscal health over the long-term comes from unsustainable growth in entitlement programs such as Social Security, Medicare and Medicaid. The president's proposed budget aims to slow the growth of these programs. Highlights include:
* Saving $65 billion over 5 years by slowing the future growth of entitlement spending and brings Medicare's finances in line with available resources.
Department highlights in the budget include:
Total Spending: $96.4 billion.
Percentage change from 2006: +0.2 percent
Spending: $6.3 billion
Percentage Change from 2006: -2.2%
Spending: $491.3 billion (increase expected mid-year)
Percentage Change from 2006: -8.7%
Spending: $63.4 billion
Percentage change from 2006: Unknown
Spending: $20.7 billion
Percentage Change from 2006: -1.8%
Environmental Protection Agency
Spending: $7.2 billion
Percentage change from 2005: -4.9%
Health and Human Services Department
Spending: $697.7 billion
Percentage change from 2006: +3.1%
Homeland Security Department
Spending : $31 billion
Percentage Change from 2006: +9.8%
Housing and Urban Development Department
Spending: $33.5 billion
Percentage Change from 2006: -1.8% (excludes onetime hurricane relief funding)
Spending: $9.1 billion
Percentage change from 2005: -2.4%
Spending: $22.5 billion
Percentage change from 2006: -0.6%
Spending : $54 billion
Percentage Change from 2006 : +5.5%
National Aeronautics and Space Agency (NASA)
Spending: $16.8 billion
Percentage Change from 2006: +1%
Spending: $33 billion
Percentage Change from 2006: +13.1%
Spending: $67.7 billion
Percentage change from 2006: +4.9%
Spending: $495.8 billion
Percentage Change from 2006: +9.2%
Veterans Affairs Department
Spending: $77.7 billion
Percentage Change from 2006: +10.4%