Bush to unveil budget dominated by military, Iraq

WASHINGTON, Feb 5 (Reuters) President George W Bush is expected today to estimate the costs for the Iraq war at nearly 300 billion dollars over the next 2 1/2 years and propose limiting domestic spending for fiscal year 2008.

The new budget, which also includes a 10.5 per cent increase for other military spending, is the first he will submit to the Democratic-controlled Congress. It will be released at 2030 hrs.

A fight is looming over domestic priorities, and Democrats say they are braced for ''sticker shock'' on the Iraq estimate, which comes as Bush faces criticism over his plan to send in more troops.

As details of the budget spilled out over the weekend, some Democrats accused Bush of fiscal irresponsibility for seeking to make his tax cuts permanent while projecting huge costs for Iraq.

Some expressed worry that the price tag for the war could end up being even higher than Bush has estimated.

''As is typical of this administration, this will be a budget that conceals more than it reveals,'' Senate Finance Committee Chairman Kent Conrad told Reuters in an interview.

The North Dakota Democrat said Bush's fiscal policies were pushing the country ''off a cliff and into a chasm of debt.'' White House budget director Rob Portman said the budget estimates on Iraq were ''prudent'' and insisted Bush would be able to reach his goal of erasing the budget deficit by 2012.

''Going forward, the president has laid out not only declining deficits every year, but a balanced budget within five years,'' Portman told CNN.

WAR SPENDING RISING He confirmed Bush would ask Congress for 100 billion dollars more for the Iraq and Afghanistan wars for fiscal year 2007, which ends in September, and 145 billion dollars for 2008. He will also pencil in a forecast of 50 billion dollars for 2009 but include no war projections beyond that year.

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 0 billion request and billion that Congress already appropriated.

The military has told the White House it needs billions of dollars to replace tanks, artillery and other weapons used in the Iraq war. Those costs will be included in the 2007 and 2008 Iraq war requests.

An administration official who has been briefed on the budget said Bush will propose a 10.5 per cent rise in the Pentagon's regular budget to 481 billion dollars in 2008.

The spending plan totaling 2.9 trillion dollars would hold growth in domestic discretionary spending to 1 percent, said the official, who was contacted by Reuters and spoke on condition of anonymity so as not to pre-empt Bush's announcement.

Brian Riedl, an analyst at the Heritage Foundation, said that, politically, Bush has little to lose and much to gain from a confrontation with Democrats over domestic spending.

Bush will try to turn the tables on Democrats who have attacked his fiscal stewardship and shore up support from Republicans who view him as a big spender, Riedl said.

''The president can draw a line on discretionary spending and refuse to sign a spending bill that is above his stated level,'' Riedl said. ''He can enforce that top-line number through the use of his veto.'' REUTERS AKJ ND1210