President Bush Asks Lawmakers To Resist Raising Taxes

WASHINGTON — President Bush, a day after sending Congress a $2.9 trillion budget, urged lawmakers to resist raising taxes and to address the unsustainable growth in entitlement programs by restraining spending.The president said his spending plan will lead to a balanced budget by 2012 while keeping tax rates at current levels and spending a record amount on defense and the conflicts in Iraq and Afghanistan. Rolling back the tax cuts he pushed through Congress would be a drag on the economy, he said.“Do tax cuts work? They work,” Mr. Bush said yesterday at a Manassas, Va., plant operated by Micron Technology Inc. Boise, Idaho-based Micron is the biggest American memory chipmaker. “Low taxes means economic vitality, which means more tax revenues” to bring the budget in balance.As hearings on the fiscal 2008 budget got under way in Congress yesterday, members of the Democratic majority greeted Mr. Bush’s spending blueprint with skepticism and signaled they will press forward with their own priorities. The party’s congressional leaders say they have no plans to repeal all of the tax cuts approved during Mr. Bush’s first term.Mr. Bush’s budget for the fiscal year that begins October 1 would increase federal spending 4.2% over the current year, even as funding for agencies outside defense and homeland security would rise an average of 1% in each of the next four years. That effectively is a cut because it is less than the rate of inflation, which was 2.5% in 2006.The Senate Budget Committee chairman, Senator Conrad, a Democrat of North Dakota, said yesterday that the president’s spending plan is “filled with debt and deception.”The biggest challenge, Mr. Bush and his advisers say, will be dealing with escalating costs for Medicare, Medicaid, and Social Security, known as entitlements because benefits and eligibility are set in the law. Outlays for all three would total $1.2 trillion in fiscal 2008.“There is now nearly universal, bipartisan agreement that the unchecked growth of these programs presents real long-term threats to beneficiaries, our federal budget and the economy,” Mr. Bush’s budget director, Rob Portman, said yesterday in testimony to the House Budget Committee.Mr. Bush proposes to trim the growth of Medicare, which provides health insurance for those 65 and older, and Medicaid, which benefits low-income individuals, by $78 billion over five years. The reductions would come from boosting costs for beneficiaries and cutting payments to some providers.Mr. Bush’s budget doesn’t offer a legislative solution for Social Security, the government’s retirement assistance program that last year covered about 49 million American retirees with $539 billion in benefits.As the number of Medicare, Medicaid, and Social Security beneficiaries swells so do outlays. Mr. Portman said mandatory spending programs accounted for 53% of the budget in 2006, up from 26% in 1962.Mr. Bush has been prodding lawmakers to open a discussion about how to deal with the projected shortfalls in the program as the number of retirees drawing benefits rises relative to the number of workers paying into the system. The trustees of the system project that Social Security will begin paying out more in benefits than it takes in from payroll taxes by 2017.“We have a fundamental problem when it comes to a program like Social Security,” Mr. Bush said. “Now’s the time for members of Congress from both political parties to bring their best ideas to the table.”Mr. Bush’s effort two years ago to overhaul Social Security and add private accounts for workers never got off the ground because a lack of support from lawmakers and the public.

President Bush Asks Lawmakers To Resist Raising Taxes

President Bush Asks Lawmakers To Resist Raising Taxes

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