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A budget is much more than a collection of numbers. A budget is a
reflection of a nation’s priorities, needs, and promise. With this budget I
am confident that we can make a great Nation even better. In the midst
of this budget’s heft and detail, there is a vision for a better and more
prosperous America.
President George W. Bush’s 2002 Budget is shaped around a clearly defined goal —the belief that Government should be activist but limited. Government cannot create a strong economy, but it can create the conditions that permit a free citizenry to do so.
At the same time, Government must also learn from the private sector, finding ways to increase efficiency and customer satisfaction. The President’s Budget moderates the rapid growth of discretionary spending that began with the arrival of budget surpluses in 1998 while funding key Federal priorities in education, health, environment, and other programs.
Thematic Highlights of President Bush’s 2002 Budget
Funds the Nation’s spending priorities. For example, the budget strengthens and reforms education, granting the Education Department the largest percentage spending increase of any department (11.5 percent increase in 2002).
Moderates recent explosive growth in discretionary spending to 4.0 percent growth in 2002, an increase of $26 billion over 2001.
Achieves historic levels of debt reduction, retiring the maximum amount of debt possible over 10 years ($2 trillion).
Allocates projected $5.6 trillion surplus over 10 years. Breakdown of surplus:
—Saves all of Social Security surplus ($2.6 trillion) for Social Security and commits to reforming the program.
—Lets taxpayers keep roughly one-fourth of the surplus they produced ($1.6 trillion over 10 years).
—Creates an unprecedented $1.0 trillion reserve for additional needs and contingencies.
Modernizes and reforms Medicare, and spends every penny of Medicare tax and premium collections over the next 10 years only on Medicare.
Restores commitment to military personnel and begins transition to a 21st Century force structure.
Champions compassionate conservatism by supporting the critical role that faith-based and community organizations play in helping people at the local level.
Saves taxpayers billions of dollars by making reductions in one-time spending, unjustified programs, duplicative programs, and programs that have completed their mission in 2002.
The President’s Policy Priorities
The President’s Budget, which is balanced for 10 consecutive years, funds America’s priorities, retires an unprecedented $2 trillion in debt, provides needed tax relief for everyone who pays income taxes, revitalizes education, reforms and modernizes Social Security and Medicare, brings defense strategy and spending in line with the challenges of the next half-century, supports faith-based and community outreach efforts, moderates Government spending growth to a reasonable four percent, and establishes a first-ever $1 trillion contingency fund for unexpected needs.
The President’s Budget commits to using today’s surpluses to reduce the Federal Government’s publicly held debt so that future generations are not shackled with the responsibility of paying for the current generation’s overspending. It commits to an unprecedented amount of $2 trillion in debt over the next 10 years and reduces Federal debt as a share of the economy to the lowest level in a century.
The President’s Budget proposes a bold and fair tax relief plan that will reduce the inequities of the current tax code and help ensure that America remains prosperous. This tax relief plan promotes the values that make the American economy second to none—access to the middle class, family, equal opportunity, and the entrepreneurial spirit. This plan will reduce taxes for everyone who pays income taxes, and it will encourage enterprise by lowering marginal tax rates.
The Administration believes that every young American should have the opportunity to go to a good school and acquire the skills that will be needed to advance in today’s high technology society. Today, America’s public schools serve some children well. But some schools clearly do not teach adequately, nurture consistently, or offer a fair start in life. Members of both parties and both Houses of Congress agree that Federal education dollars should be spent in ways that restore local control; encourages States to set high standards; hold schools accountable for improving student achievement, including by measuring achievement through frequent assessment; improve the quality of classroom instruction and school safety; and, where a school persistently fails, assist parents in finding better options. Some education initiatives in this budget originated on one side of the political aisle, some on the other. All stress results over promises and accountability over process. Federal spending is a small part of America’s total education spending. The President’s Budget declares that the Federal Government must not spend for spending’s sake. This budget puts together an education program and budget that ensures that “no child is left behind.”
The President’s Budget shores up Social Security’s finances so that this program can continue to provide retirement security for all future retirees. Today, the Social Security program is in surplus. Beginning around 2016, beyond the Government’s 10-year planning horizon, the program will begin to run a cash deficit. After 2038, the trust fund will be depleted and payroll taxes at that time will cover only 73 percent of promised benefits. Returns have declined to such a point that future retirees would do two or three times better if they invested their Social Security taxes in low risk securities. Unless Social Security is reformed, many young people of following generations might not get back from Social Security what they put in. Social Security could be a losing proposition for them. Reform must make Social Security a sound program for tomorrow’s retirees. The cost of saving Social Security goes up with every passing year, and our ability to improve returns on total contributions goes down. With this budget, the Administration commits itself to working with both parties and Houses of Congress to fix Social Security now.
The President is committed to shoring up Medicare’s finances as well, while providing better, more efficient coverage for our seniors. Medicare is already spending more than it takes in. Medicare spending already exceeds taxes and premiums by $66 billion this year. That will grow to $216 billion (constant dollars) by 2020. The antiquated division of the program into hospital and non-hospital pieces does not encourage efficient medical care. Medicare has not adapted to 21st Century medicine. Medicare is often slow to incorporate new technologies and methods of delivering health care. In addition, although medical care increasingly relies on pharmaceuticals, it lacks prescription drug coverage. As in virtually all fields, technological and entrepreneurial innovation are among the keys to creating more value for the dollar in health care. Reform that works for patients must make room for such innovation. Reform should expand patients’ choices—not restrict them. This budget initiates the process of Medicare modernization and delivers immediate relief on prescription drugs for our neediest seniors.
The Administration is committed to enhancing our national security. Today our Nation faces no major foreign adversary. Our military is unquestionably the strongest on earth. And yet our forces are deployed around the world maintaining peace and keeping a watchful eye on our national interests with increasing frequency. These deployments have created some stress on our military. To boost the morale of these dedicated men and women, the President’s budget will, in addition to the well-deserved pay raises earned each year, include an additional $1.4 billion to ensure better compensation for our troops. The budget also includes $3 billion in additional funding to improve military housing and increase research and development.
Furthermore, the United States must develop a strategic vision for the 21st Century national security agenda that will inform research, development, and procurement decisions for the next generation of defense systems. This budget begins the process of force re-examination. And it commits America to developing, designing, and building a national missile defense as fast as possible.
The President’s plan will support community and faith-based efforts to help needy Americans. Today, Federal funds are denied to many faith-based and other community-based programs that have succeeded in helping people curb criminal behavior, conquer addiction, strengthen families, and overcome poverty.
Federal policy should become outcome-based, insisting on success and steering resources to the effective and to the inspired. Federal tax policy must spark an outpouring of private philanthropy in America, spurring billions more annually in charitable giving to neighborhood-serving groups, both sacred and secular. The Government must heed the growing consensus across America that successful Government programs can work in fruitful partnership with community-serving and faith-based organizations, whether run by Methodists, Muslims, Mormons, or good people of no faith at all. The United States must observe the bedrock principles of pluralism, nondiscrimination, evenhandedness, and neutrality. With this budget, private and charitable groups, including religious ones, will have the fullest opportunity permitted by law to compete on a level playing field for Federal funds, so long as they achieve valid public purposes. With this budget, the Federal Government rallied and supports these armies of compassion across America.
K-12 Education. Increases funding for elementary and secondary education by $1.9 billion in 2002 over 2001 funding.
Reading. Fully funds the President’s Reading First initiative, including Early Reading First, at $975 million in 2002, more than tripling funding for reading.
Medicare. Sets aside $153 billion over the next 10 years for the Immediate Helping Hand initiative and Medicare modernization.
National Institutes of Health (NIH). Continues commitment to double NIH, by providing a $2.8 billion increase, the largest annual funding increase in NIH’s history.
WIC. Funds the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) at 7.25 million individuals a month, maintaining current program level.
Conservation. Provides the highest ever request for the Land and Water Conservation Fund—fully funding the program at $900 million.
Energy Assistance. Nearly doubles the existing Weatherization Assistance Program providing an increase of $1.4 billion over 10 years.
Community Health Centers. Launches a doubling of the number of people served by Community Health Centers by adding 1,200 sites.
Provides tax relief to all Americans who pay income tax.
Reduces the marriage penalty.
Ends the death tax.
Tax incentives. Provides other tax incentives for education, farmers, the disabled, health care, the environment, and charitable purposes.
National Defense. Provides a $14 billion increase in Department of Defense spending in 2002 to begin to arrest the decline in national security, including $1.4 billion for military compensation to improve quality of life and reenlistment and retention of military personnel, $2.6 billion for research and development for new technologies (including missile defense alternatives), and $400 million to improve housing for our military members and their families.
Veterans’ Assistance. Increases funding to $1.1 billion to fully implement legislation that will assist in the processing of veterans’ disability claims.
International Security. Improves embassy security overseas, adding $1.2 billion.
The time for bold action is now. We have the unprecedented opportunity
to fund our national priorities, reform critical programs, pay off all of
the Federal debt that makes sense to, and provide needed tax relief. I
present this budget in the spirit of cooperation and with the great expectation
that the will of the people and the needs of the Nation will guide
our deliberations and lead us to success.
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