Bush budget would curb some tax breaks, while halving deficit by 2009

? President Bush’s $2.4 trillion budget for 2005 would ease away from tax breaks for energy and business favored by Republicans while cutting spending on programs from environment to community development, GOP officials said Saturday.

Bush’s election-year fiscal plan, which he plans to ship to Congress on Monday, also envisions cutting spending on agriculture, natural resources and energy, said the officials, who spoke on condition of anonymity. Further reflecting the pressures mounting federal deficits have heaped on him, his plan will edge only slightly toward the extra highway spending many members of both parties are demanding, said the officials.

Included is a smaller package of tax breaks for energy production than the $23 billion he supported last year. One official said Bush wanted the energy tax cuts to cost less than $8 billion.

The president’s budget, already known to predict an unprecedented $521 billion deficit this year, projects the red ink will fall to $363 billion next year, the officials said.

In 2009, when Bush has pledged to cut the shortfall in half, it would be a projected $237 billion. In Philadelphia Saturday to address GOP lawmakers gathered there, Bush said cutting the red ink in half was an “important goal.”

The largest deficit on record in dollar terms was last year’s $375 billion. The soaring shortfalls and spending have angered conservative Republicans and prompted them to pressure Bush produce a budget that takes clear, strong steps toward controlling spending and federal shortfalls.

In his remarks to lawmakers, Bush stressed the austerity he said his fiscal blueprint would impose.

“You spend, I propose,” he said, acknowledging the division of power between the executive and legislative branches. “Together we’re responsible. And this is going to be a challenging year for making sure we spend the people’s money wisely.”

GOP aides said those remarks echoed similar, earlier comments at the three-day meeting by White House budget director Joshua Bolten. They said the statements seemed to hint that the administration was willing to negotiate on the deeper spending cuts some Republicans want.

Democrats scoff that Bush has been anything but a fiscally responsible leader. Halving the deficit in five years masks the far more serious longer-term pressures the budget will face from his plan to make earlier tax cuts permanent or from the looming retirement of the baby boom generation, they said.