On Monday of this week, President Bush released his budget request for Fiscal Year 2007 which proposes $2.77 trillion in total spending – an increase of $61 billion or 2.2% over Fiscal Year 2006 levels.
Under the President’s proposal, discretionary spending would total $870.7 billion, an increase of $27.4 billion – or 3.2% -- over FY06. The bulk of this increase would go toward spending on defense programs (slated to increase by $28.5 billion, or 6.9% over FY06) and homeland security (proposed to increase by $1 billion, or 3.3% over the prior fiscal year). Non-security discretionary spending would be reduced under the President’s budget request by $2.2 billion, or 0.5% below FY06 levels.
Mandatory spending – programs like Medicare and Social Security, which account for 63% of total federal spending – would increase by $64 billion, or 3.8%.
The President’s FY07 budget includes anticipated requests for emergency supplemental appropriations of $88 billion in Fiscal Year 2006 and $52.3 billion in 2007. Of the amount anticipated for 2006, $70 billion would be for ongoing operations in Iraq and Afghanistan, and $18 billion for hurricane-recovery activities. The $52.3 billion for 2007 emergency funding would consist of $50 billion for the war on terror and $2.3 billion for avian flu preparedness. These new requests add to the $58.4 billion in emergency supplemental funds already enacted in fiscal year 2006 for Iraq and hurricane recovery.
Below are some of the highlights of the President’s FY07 budget:
- Medicare spending would increase by $49 billion, or 14.5%, and grow at an average of 7.7% through FY 2011.
- Social Security would increase by $31 billion, or 5.6%, and grow at an average of 5.6% through FY 2011. In addition, the President would fund two years of the transition to proposed Social Security personal accounts, costing $81.6 billion over two years.
- Medicaid and SCHIP spending would increase by $7 billion, or 3.5%, and grow at an average of 6.4% through FY 2011.
- Veterans’ medical care would increase by $2.2 billion, or 9.6%.
- The budget proposes to terminate or reduce 141 programs (a detailed list of which has not been put forward by the White House).
- The budget would prevent $178.6 billion in tax increases over five years by making permanent the tax cuts from 2001 and 2003. An additional $202.9 billion over five years in tax relief is also proposed, including $51.7 billion for health care-related tax provisions. Only one year of Alternate Minimum Tax relief is proposed ($20.5 billion in FY07).
Now that the President’s budget request has been delivered to Congress, the Appropriations Committee will begin its annual process of hearings, during which we will question Executive Branch witnesses on their requested program funding. You can follow the hearing schedule for the House Interior Subcommittee, which I have the privilege to Chair, at the following site: http://appropriations.house.gov/index.cfm?FuseAction=AboutTheCommittee.Events&SubcommitteeId=10
If you would like to study the details of the President’s budget for yourself, you can access it by clicking this link: http://www.whitehouse.gov/omb/budget/fy2007/