Spending

• The budget would spend $3.1 trillion in FY2009.
• Non-security discretionary spending under the proposal will decline by about 2 and a half percent after adjusting for inflation, security-related spending would see about a 5 and a half percent increase.
• Department of Defense would see a 5 percent increase after adjusting for inflation and will total over $500 billion, which is
  
  
  
  • 1 out of ever 6 dollars spent by the federal government
    
  • More than all non-security discretionary spending combined.
    

• The budget assumes sharp declines in both security and non-security discretionary spending over the next 5 years. By 2012, security spending would decrease by 22 percent, while non-security would decrease by 18 percent.
• The budget contains at least $3 billion in reduction to grants to states in 2009.

Deficits:

• The deficit for 2009 under the proposal is $407 billion, or 2.7 percent of GDP; thus, debt as a share of the economy would increase this year.
• The proposal suggests declining deficits, and that a surplus would be reached in 2012, however this conclusion is built on an illusion:
• Despite a stated desire for a permanent solution, the budget only includes a 1 year patch of the AMT. Extending the patch would cost around $100 billion in 2012.
• The budget only includes $70 billion in war spending for 2009 (by contrast, 2008 funding totaled over $108 billion) and no spending thereafter.
• The budget contains tens of billions in annual cuts to health care for the elderly and the poor that are unlikely to be enacted. In 2012, the budget includes $50 billion worth of cuts.
• The budget assumes sharp declines in both security and non-security discretionary spending over the next 5 years. By 2012, security spending would decrease by 22 percent, while non-security would decrease by 18 percent.

Revenue

• The proposal would reduce federal revenues by $117 billion in 2009, and over $2.3 trillion over the next 10 years. The 10-year figure is an understatement of the revenue loss since it does not include a fix for the AMT.
• The Budget includes the impact of a stimulus package, which would reduce revenues by $125 billion in 2008, and $20 billion in 2009 (and small revenue increases in later years.

Economy

• The budget assumes only a very mild economic slowdown:
• Real GDP for calendar year 2008 is assumed to be 2.7 percent, returning to 3 percent next year.
• Unemployment is assumed to average just 4.9 percent.

For the reception on the Hill see...

Bush Unveils $3.1 Trillion Spending Plan - washingtonpost.com

Budget is Out | Posted February 4, 2008 11:38 AM by John Irons