Monday, February 07, 2005

Latest Business News and Financial Information |

Latest Business News and Financial Information |

By Caren Bohan and Adam Entous

WASHINGTON (Reuters) - President Bush on Monday proposed a $2.57 trillion budget that slashes domestic programs from farm aid to housing grants for the poor, as he sought to curb budget deficits that have soared on his watch.

Democrats derided Bush's plan as a "hoax" because it excludes future costs for the Iraq conflict and massive borrowing required for his proposal to add private investment accounts to Social Security.

Bush, who inherited a budget surplus that switched to record shortfalls, wants to show Wall Street and fiscal conservatives he is serious about tackling deficits.

The president's plan would cut discretionary domestic spending outside national security by 0.7 percent for fiscal year 2006 and keep it essentially flat for five more years.

"It's a budget that eliminates redundancy," Bush told reporters after a meeting with his Cabinet. "It's a lean budget."

But Democrats accused Bush of forcing the poor to absorb the brunt of the budget pain after giving billions of dollars of tax cuts to the rich in his first presidential term.

Some analysts said Bush would have trouble getting even a Republican-controlled Congress to sign off on a number of the cuts. Budget hawks question the president's resolve to push them through, given he has yet to veto a spending bill.

Indeed, a leading member of Bush's own Republican Party, House of Representatives Speaker Dennis Hastert of Illinois, called the plan a "starting point."