President's 2004 Budget Released + Fact Sheet
For Immediate Release
February 3, 2003
2004 Budget Released
The Budget Message of the President
The budget for 2004 meets the challenges posed by three national priorities: winning the war against terrorism, securing the homeland, and generating long-term economic growth. It restrains the growth in federal spending and addresses the long-term fiscal challenge presented by Medicare and Social Securitys unfunded promises. This years budget also helps America meet its goals both at home and overseas.
We remain at war with an enemy that seeks to use murder, stealth, and fear against all free nations. Yet our response has been resolute. The people of Afghanistan have been freed from the oppressive regime that sponsors the terrorists who planned and carried out the attacks of September 11, 2001. We are hunting down the terrorist leaders and their collaborators, one by one. And we continue to disrupt their plots, shut down their financing, and deny them safe haven.
We have moved to secure the nations safety. Just 10 days ago, the new Department of Homeland Security began operations in the biggest reorganization of the Federal Government in a half-century. The cabinet-level department unifies the work of 22 programs and agencies and will move quickly to better protect Americans from threats here at home. We also have moved to defend Americas interests abroad, and to confront danger wherever it emerges. Working with our allies and partners, we will face down regimes that govern by fear and deception, and we will devote the necessary resources to protect ourselves and our friends against the use of weapons of mass destruction.
We are strengthening our economy by allowing American families to keep more of their own money and encouraging businesses to save, spend, and grow. While the economy is growing, it is not growing fast enough. Too many Americans who want to work cant find a job, and too many American families are falling behind.
The growth and jobs plan I outlined earlier this year will provide critical momentum to our economic recovery. For every American paying income taxes, I propose speeding up the tax cuts already approved by the Congress, because Americans need that relief today. And for America's 84 million investors, and those who will become investors, I propose eliminating the double taxation of stock dividends. Double taxation is unfair and bad for our economy.
Government cannot manage or control the economy. But government can remove the barriers blocking stronger economic growth. My plan will give Americans more tools to achieve that growth.
A recession and a war we did not choose have led to the return of deficits. My Administration firmly believes in controlling the deficit and reducing it as the economy strengthens and our national security interests are met. Compared to the overall federal budget and the $10.5 trillion national economy, our budget gap is small by historical standards. By protecting our vital national security interests and promoting economic growth, we will meet the challenges and concerns of the American people. We will not let them down.
I will also insist on spending discipline in Washington D.C., so we can meet our priorities. We must prepare for the future costs of Social Security and Medicare. My budget takes the first steps toward modernizing Medicare and includes prescription drug coverage.
We will continue to focus on getting results from federal spending. A federal programs measure of success is not its size, but the value it delivers. And my budget will focus on this goal in a new and important way. If federal programs cannot show results, they should be overhauled, or retired.
And while human compassion cannot be summarized in dollars and cents, this budget addresses the many challenges our society faces: bridging the gap for low-income families, so they can buy affordable homes; helping communities of faith pull the addicted from the grip of drugs; lifting children out of poverty and hopelessness by creating good schools and offering them caring adult mentors; and easing the pain and hardship of the global epidemic of AIDS.
Some of the challenges we face will endure for many years and require great resources. As we look down that path, we will not always get to choose which battles we fight. It is, however, our duty to fight them. History may not remember every single way we contributed to this nations betterment, but it will remember if we failed to try. The courage to take on challenges, and the enterprise with which we have succeeded in meeting them, have always distinguished America. This same courage and enterprise will help America meet these challenges, and prevail once again.
GEORGE W. BUSH February 3, 2003
For Immediate Release
Office of the Press secretary
February 3, 2003
Fact Sheet: President Bush's 2004 Budget
The President's FY 2004 budget, released today, will strengthen our economy, prosecute the war against terror, defend our nation and allow Americans to keep more of their own money. The budget also makes major new investments in top priorities - including education, Medicare, health care, homeland security, energy independence, the environment, compassion and the unemployed.
President Bush believes
that the best way to hold down deficits is to promote
pro-growth policies and control government spending. His
budget holds the overall increase in government spending to
4% -- the same amount as the paychecks of America's
Key Points on The President's FY 2004 Budget
Strengthening the Economy: The President's budget includes his jobs and economic growth plan to speed the pace of America's economic recovery and get more Americans back to work.
The plan provides broad, fair and permanent tax
relief to 92 million Americans who will keep an average of
almost $1,100 more of their own money.
The President's plan accelerates income tax rate reductions, the elimination of the marriage penalty, and the increase in the child tax credit from $600 to $1000. A family of 4 with income of $40,000 would see their federal income taxes fall from $1,178 to $45.
To boost investor confidence, and help nearly 10 million seniors who receive dividend income, the President's plan will end the unfair double taxation of dividends.
The President's plan also provides new incentives for small businesses to grow and invest. Under his plan, small businesses that purchase equipment to expand will get assistance through an increase in the expensing limits from $25,000 to $75,000.
The budget provides $3.6 billion over the next two years for the President's plan for new Re-employment Accounts, which will provide eligible unemployed workers the assistance they need to find a new job.
Winning the War on Terrorism: To address the needs of America's military and protect our nation, the budget provides $380 billion for our nation's military, a $15 billion or 4.2% increase.
Securing the Homeland: The President's budget provides $41 billion for total homeland security spending. Excluding Department of Defense spending, the budget includes $35 billion for homeland security, a $2.5 billion or 7.6% increase that more than doubles funding over the past two years. The budget includes:
million as a first installment of new funds for Project
BioShield to secure new vaccines against smallpox, anthrax,
and botulinum toxin.
$829 million for the DHS' Information Analysis and Infrastructure Protection Directorate providing brand new capabilities to access analyze and integrate threat information.
$500 million to assess the nation's critical infrastructure (e.g. nuclear power plants, water facilities, telecommunications networks) and ensure our highest priority vulnerabilities are addressed.
Modernizing Medicare with Prescription Drug Coverage: The President's budget proposes to invest $400 billion over 10 years to strengthen and improve Medicare with prescription drug coverage.
Excellence in Education: Last year, the President signed into law historic education reforms through the No Child Left Behind Act. The budget provides unprecedented levels of education funding to help strengthen America's schools. It includes $53.1 billion for education programs, an increase of $2.8 billion from FY 2003 and an increase of $3.2 billion over FY 2002. This funding represents an increase of 47% over FY 2000 and a 131% increase in education spending over the last 8 years. The budget includes $1.9 billion more for Pell Grants. The Budget strongly supports the No Child Left Behind Act with:
$1 billion more for Title I assistance in high-poverty
$1 billion more for special education
Significant increases for reading and early childhood learning programs
Strengthening Health Care: The budget provides $89 billion in health care tax credits to expand access to health care. It also proposes the creation of new tax-free savings accounts which could be used for health care needs and long-term care.
Improving the Environment: The President's budget builds on his strong commitment to protecting our environment through new technology, conservation, and responsible stewardship. It includes:
$1.7 billion over the next five years for the Freedom
Fuel and FreedomCAR programs for hydrogen fuel cell research
and development to enable the next generation of automobiles
to be pollution free.
Full funding for the Land and Water Conservation Fund ($900 million).
$2.7 billion for conservation programs under the new farm bill.
A $150 million increase to accelerate Superfund cleanups.
Promoting Compassion: The President's budget includes proposals to help extend the America's compassion to helping our neediest neighbors at home and abroad. It includes:
Funding for the Emergency Plan for AIDS Relief, a
five-year, $15 billion initiative to turn the tide in the
global effort to combat the HIV/AIDS pandemic. This
virtually triples U.S. funding to fight the international
$450 million over three years to bring mentors to more than 1 million disadvantaged students and to the children of prisoners.
$200 million as part of a three-year, $600 million federal treatment initiative to help addicted Americans find needed treatment from the most effective programs, including faith-based and community-based organizations. This will make treatment available to help 300,000 more Americans combat their addiction over the next three years.
Budget Discipline: The best way to counter deficits is through stronger economic growth and spending discipline in Washington. This budget would hold spending growth to 4%, no faster than the growth of the average American families' paycheck.
President is committed to balancing the budget as fast as
possible and consistent with national priorities.
Deficits are manageable in historical terms at 2.7% of GDP. This is appropriate in light of the war on terrorism, the continuing effects of the stock market on revenues, and economic needs.
The budget would be in double digit deficit if had there never been a tax cut in 2001. The budget returned to deficit because of war, recession and emergencies associated with the terrorist attacks of September 11th.
Long-term interest rates have dropped to 40-year lows even as the budget returned to deficit, and interest on the debt is very low. Currently, the federal government pays only 8 cents on the dollar, as compared to a recent high of 15 cents in 1996.
Budget Basics for FY 2004
Total government spending in FY 2004 will be $2.2 trillion, a 4.2% increase over 2003 levels.
Discretionary government spending will increase by 4%, comparable to the growth in family budgets, and enough to allow the federal government to meet its important priorities.
The fastest growing major category of discretionary spending is homeland security at 5.5%. Defense grows at 4.2%. The total of all other discretionary spending grows at 3.8%, funding important priorities such as education, health, energy and the environment.
The President's budget increases non-defense homeland security funding by 7.6%.
Economic assumptions are in line with CBO and private sector projections. Because of uncertainty in revenue levels, the Administration made an additional downward adjustment in revenues of $25 billion in 2003 and $15 billion in 2004.
Total tax and other revenue collections will be $1.9 trillion in 2004, a 4.7% increase.
A combination of the need to fund new priorities and a cautious forecast produces a deficit that peaks in 2004 at $307 billion, and declines thereafter to $190 billion by 2008.
The FY 2004 deficit is expected to be about 2.7% of GDP, manageable and modest by historical standards. It declines to 1.4% of GDP by 2008.
Publicly-held debt is 36.9% of GDP in 2004, well below average post-World War II levels, and declines to 36.4% by 2008.
While the deficit
rises in 2003, the interest cost on the federal debt
declines to 8% of total spending, the lowest level as a
percentage of total outlays in over 20 years. Interest
expense remains below 10% over the next 5 years.