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Thursday, 24 January, 2002, 12:14 GMT
Bush defence bonanza fuels budget deficit
USS Enterprise, one of ship involved in attacks against Afghanistan
Weapons to win 'war against terrorism' are costly
By the BBC's Henri Astier

At the same time as announcing ambitious plans for boosting US defence spending, President Bush has acknowledged that the proposed $48bn rise will put a strain on the federal budget.

The defence budget will rise to nearly $US380bn - if the proposals are accepted by Congress.

The move reflects the new priorities identified by President Bush in the aftermath of the 11 September attacks - the war on terrorism and homeland security.

Even before Mr Bush's announcement the surpluses were disappearing fast - and these latest proposals would mean a budget deficit, estimated at over $100bn

The extra spending would include a $10bn war reserve that could fund operations beyond Afghanistan.

And as Mr Bush made clear, the increase would also be used to develop more high-tech weaponry.

"The tools of modern warfare are effective, they are expensive, but in order to win this war against terror they are essential," he said.

Much of the extra money - at least $15bn according to White House officials - would also go to local police, fire and rescue departments.

Surpluses dwindle

But the American president has to get his plan through Congress and not everyone there is convinced.

Sceptics worry about the fiscal implications of the president's spending spree.

Only a year ago, projected surpluses were stretching as far as the eye could see, and the question on Capitol Hill was what to do with it all.
George Bush announcing military spending rise
Bush wants war chest for possible operations outside Afghanistan

But even before Mr Bush's announcement the surpluses were disappearing fast - and these latest proposals would mean a budget deficit, estimated at over $100bn.

Democratic Congressman Ciro Rodriguez expressed concern about how all this would be paid for.

"We started this year with a projected surplus of over 5.6 trillion dollars. In less than a year, because of irresponsible and reckless tax cuts he's squandered almost four trillion dollars of that", Mr Rodriguez said.

War mentality

But these arguments are unlikely to prevail in Congress.

The United States remains in effect a nation at war, largely united behind a popular leader.

Twenty years ago, at the height of the Cold War, another Republican president, Ronald Reagan, convinced Americans that increased military spending was more important than balanced budgets.

Mr Bush is using similar arguments in his war on terrorism, and he may well get his way too.

See also:

24 Jan 02 | Americas
Big boost for US military spending
24 Jan 02 | Americas
US prepares for budget battle
08 Jan 02 | Business
Bush argues for budget deficit
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