Bush budget makes military, Iraq its centerpiece

WASHINGTON, Feb 4 (Reuters) President George W Bush tomorrow will seek 245 billion dollars for the wars in Iraq and Afghanistan while boosting other military spending and curbing domestic programs, setting the stage for a big battle with Democrats over funding priorities.

Democrats newly in control of Congress have pledged to give close scrutiny to the hefty proposals for Iraq spending.

And as details of Bush's fiscal 2008 budget have leaked out into the media, Democrats were already taking aim at expected proposals to wring savings from children's health care and other domestic programs.

Bush has pledged to balance the budget in five years and is adamant about his desire to extend his tax cuts that Democrats have called fiscally irresponsible.

But he acknowledged the looming budget debate at a conference on Saturday of House of Representatives Democrats.

''Some of it you'll like, some of it you won't like,'' he said of his budget.

Speaking on CNN today, White House budget director Rob Portman confirmed that Bush will ask Congress for 0 billion more for the Iraq and Afghanistan wars for the fiscal year 2007 that ends in September.

He will propose 145 billion dollars in war spending in 2008 and pencil in an estimate of 50 billion dollars for Iraq in 2009, Portman said.

The war spending for 2007 will mark the highest annual level since the invasion of Iraq nearly four years ago. The total for this year of 170 billion dollars includes the 100 billion dollars request and billion that Congress already appropriated.

'SERIOUS OVERSIGHT' Even before Portman's confirmation of the figures, Senate Democratic Leader Harry Reid seized on media reports of the numbers to highlight reports of past misspending in Iraq and to promise ''serious oversight'' of the newest request.

''America has already spent almost 400 billion dollars on this war, too much of which has been wasted on boondoggles like Olympic-sized swimming pools in unused multimillion dollar training camps in the desert,'' said Reid, a Nevada Democrat.

Portman said corrections had been made. ''We believe we have the controls in place to do a better job going forward,'' he told CNN.

Reid and House Speaker Nancy Pelosi, a California Democrat, also sent Bush a letter on Friday asking him to boost funding for a health program for children that has been cited in the media as targeted for proposed reductions.

Meanwhile, an administration official who has been briefed on the numbers said the president will seek to boost the Pentagon's regular budget by 10.5 per cent to 1 billion.

The budget would also hold discretionary nondefense spending to a 1 percent increase, according to the official who was contacted by Reuters and spoke on condition of anonymity so as not to preempt Bush's announcement.

The proposed increase in domestic spending would amount to a cut in programs after accounting for inflation, which is running at 2.5 per cent.

Bush is also proposing to squeeze tens of billions in savings from popular programs like the Medicare health program for the elderly, according to the official.

Some Democrats who are urging that the United States begin a pullout from Iraq have suggested that the administration direct some of the money that would be spent there toward the hurricane-devastated Gulf Coast region.

But Portman cited the 110 billion dollars in federal money that has been approved for New Orleans and other storm-hit areas in the Gulf Coast and said the region had not been short-changed.

''We can do both and we can continue to make progress in reducing the deficit at the same time,'' Portman said.

REUTERS MS BST0019