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Federal budget omits so much Bush, spending $10 billion a month for defense, still thinks he can cut

What's not in the proposed federal budget that President Bush sent this week to Congress is as telling as what is. There's no costly fix for the Alternative Minimum Tax, for example. Nor is the $120 billion supplemental spending for Iraq and Afghanistan included, although it will have to be. And much of the needed repair work on Social Security, Medicare and Medicaid is deferred to bipartisan commissions that are unlikely to get anywhere in a fiercely contested midterm election year.

This squeezes domestic spending, an unavoidable path for an administration caught between its drive to cut taxes more and its bills for wars, homeland security and hurricane relief. Speaking of which, the Bush budget cuts the Army Corps of Engineers construction budget by 34 percent, months after its levee repair plans went unfinished, leaving New Orleans so vulnerable. Cutting revenues while boosting defense and recovery allocations translates to cuts in 141 federal programs.

While a third of the cuts involve education programs, from student college loans and vocational education to arts funding and drug-free schools, health care is likely to feel the most pain. The White House defends these cuts as needed reductions in the rate of spending growth, not outright cuts.

But the plans still mean seniors will pay more in Part B Medicare premiums, and the poor will face demands -- likely to be swallowed by hospitals legally forbidden to turn away patients -- for higher co-payments for emergency room visits. Hospitals, nursing homes and home health care agencies also will be squeezed as the government caps inflation adjustments to compensation rates, bad news for an industry already struggling under current compensation rates.

The Bush administration continues to hold to the political philosophy that the poor will benefit most from an improved economy rather than increased "entitlements," and that the best way to improve the economy is to promote business and business investment. The basic argument is that aiding the wealthy encourages growth that eventually helps the poor. So it's now up to the Republicans to convince seniors that higher health care costs are for their own good, and persuade the poor that life's better.

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