US President George W. Bush Monday proposed more than US$700 billion in new spending for the US military, principally to bolster the Iraq War budget. If passed, this budget would slash domestic programs ranging from health to education.

Bush further warned that more spending for Iraq could be needed, as he unveiled a US$2.9 trillion budget for the fiscal 2008 year sure to aggravate Democrats already braced for "sticker shock" over the war tab.

The cost of the 4-year-old war is fast approaching a staggering US$1 trillion mark. If Congress approves the war-funding request, the United States would have poured US$661.9 billion on combat alone in Iraq, Afghanistan and related activities, the administration said.

On the domestic front, Bush called for his 2001 and 2003 tax cuts to be made permanent, saying this could be done while still obtaining a budget surplus by 2012.

His spending plan would stabilize growth in domestic discretionary spending to 1 percent. After normal inflation of 2.5 percent, this rise would see a cut in programs ranging from labor to education and cleaning up the environment.

"My formula for a balanced budget reflects the priorities of our country at this moment in its history, protecting the homeland and fighting terrorism, keeping the economy strong with low taxes and keeping spending under control," Bush said in a statement.

But Democrats, controlling both the House of Representatives and the Senate after their November mid-term clean sweep, are sure to question Bush's upbeat fiscal projections.

"The president's budget is filled with debt and deception, disconnected from reality, and continues to move America in the wrong direction," said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat. "This administration has the worst fiscal record in history and this budget does nothing to change that."

Bush's budget request will kick off weeks of hearings on Capitol Hill, where lawmakers will try to produce their own version of a budget blueprint by spring.

The bulk of Bush's proposed savings would emanate from charged health programs. US$66 billion would be taken over five years in savings from Medicare with US$12 billion also removed from the Medicaid health program for the poor.

If embraced by Congress, Bush's budget would authorize spending US$716.5 billion on defense between now and September 30, 2008, including US$235.1 billion on the wars in Iraq and Afghanistan. Spending by diplomatic operations would further boost the total to US$245 billion.

Bush is requesting US$481 billion for the regular Pentagon budget, an increase of over 10 percent. Part of this increase would cover the much-touted permanent increase in the military sought by Bush late last year.

The White House announced that it would evaluate seeking even more war funding. "As activity on the ground evolves, the administration may adjust the requested amount," it said.

(China Daily via agencies February 6, 2007)