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Bush to propose defense boost

WASHINGTON - President Bush will propose a nearly 5 percent increase for next year's defense spending while calling for cuts in payments to farmers and work on a nuclear waste storage site in Nevada, according to documents and federal officials.

Bush also will propose boosting the size of Pell Grants for low-income college students as he seeks to abolish a widely used college loan program, Perkins loans, and to shrink federal subsidies for banks that lend money to students.

Those details and others emerged Friday about the roughly $2.5-trillion budget for 2006 the president will ship Congress on Monday. Including a smaller defense boost than was planned a year ago, the proposals underscore how Bush is responding to a string of record federal deficits by paring expenditures across the breadth of government.

"The people in Congress on both sides of the aisle have said, "Let's worry about the deficit,"' Bush said Friday in Omaha, Neb., as he barnstormed the country for his Social Security plan. "I said, "Okay, we'll worry about it again.' My last budget worried about it, this budget will really worry about it."

Bush administration officials also revealed new details of some health proposals the president will unveil.

Among them, Bush will propose $3,000 tax credits to encourage people who don't have public or employer-provided health insurance to buy coverage. The plan, which would cost $74-billion over the next decade, would be part of $140-billion in tax breaks and expenditures aimed at improving health care over the coming 10 years.

Administration officials had already said Bush will seek $60-billion in Medicaid savings over the coming decade. These will come largely from smaller reimbursements to pharmacies, reducing payments to other health providers, and making it harder for parents to qualify for coverage if their assets have been shifted to their children.

According to documents obtained by the Associated Press, Bush will propose $419.3-billion for the Pentagon for next year, a 4.8 percent boost over this year. That total, however, is $3.4-billion less than he planned a year ago for fiscal 2006, which begins Oct. 1.

Taking a major hit are his proposals for procuring weapons and other items, with a total of $78-billion - $2.4-billion less than he projected spending in 2006 a year ago.

None of the figures include expenditures for the wars in Iraq and Afghanistan. Bush plans in a few days to ask for another $80-billion - in a separate spending bill - for those conflicts. Congress last summer provided $25-billion for the wars in 2005.

[Last modified February 5, 2005, 00:58:03]