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Budget Breakdown: Defense, Health and Energy

MICHELE NORRIS, host:

To learn a bit more about the president's budget proposal, I'm joined here in the studio by three of our own experts. Jackie Northam covers national security issues for us. Julie Rovner covers healthcare. And Christopher Joyce covers energy issues.

So glad that you're all here with us.

JACKIE NORTHAM: Hi, Michele.

NORRIS: First to you, Jackie, as we just heard from David Greene, the president is asking for more than $700 billion for defense spending. Jackie, can you break this down for us?

NORTHAM: Well, a major portion of that required for defense spending is simply a base budget for the Pentagon. It's a $481.4 billion request. Now, this covers things such as maintenance, construction, operations, better weaponry. It also represents a three percent pay raise for service members, healthcare, that type of thing. This one actually represents an 11 percent increase in the 2007 budget, just for the base operations. Then, there's the funding for the wars in Iraq and Afghanistan. And the president is asking for an additional $94 billion for this year. It's already received $70 billion and then $145 billion for next year, 2008 fiscal year.

NORRIS: Up until now, the administration has received funding for the wars through supplemental spending bills. Now it's going to provide details about how and where the money is being spent. Why the change?

NORTHAM: Well, that's right. Over the past few years, the administration really hasn't provided a lot of details to both Iraq and Afghanistan war budget. Instead, its received fundings from emergency spending bills, which as you know don't receive as much scrutiny as the usual budget request. And that's created a lot of ire amongst many Democrats and some Republicans.

Now over the past few weeks, administration officials have increasingly said this budget, there's going to be more transparency. And earlier today, the Pentagon did provide a lot of concise details about where the money is going. Why the change? We can only speculate. You know, this is Democratic-controlled Congress now and the budget is in its lap. And so, this puts the Democrats in a very sticky position. They don't want to be seen as short changing the troops. At the same time, they don't want to be seen as signing on to a huge and almost open end to commitment to the war.

NORRIS: I'd like now to turn to Julie Rovner on healthcare. And speaking of that change in power in Congress, President Bush's budget calls for cuts in Medicare and Medicaid, about hundred billion dollars over five years. How's that likely to go over in Congress?

JULIE ROVNER: Well, we talk about these budgets as being dead on arrival frequently, whether it's a Democratic or Republican president. I think this one is not only dead on arrival. It's something of a slap in the face to the Democratic Congress. The president was just down in Williamsburg over the weekend, talking to Democrats about how he wants to work them on a bipartisan basis on healthcare. And yet here, healthcare, one of their major priorities, he's coming in with some of the biggest cuts that have ever been proposed in two of the really high profile healthcare programs, Medicare and Medicaid.

The president is proposing about $75 billion in cuts over five years to Medicare, which include cuts to healthcare providers, hospitals, nursing homes, home health agencies, and increases for wealthier Medicare beneficiaries and what they pay for their premiums and about $25 billion in cuts to Medicaid, the low-income program.

NORRIS: Now, the president is also calling for money for the children's health insurance program at the state level, but not as much as many in Congress would like. Tell me about that.

ROVNER: That's right. This is another place where there's been bipartisan consensus. This is a program that has worked very well in the 10 years it's been on existence. It's covered about six million children. But it needs $13 billion just to cover the children it covers now. The president is only proposing five billion dollars. And what's more, the president wanted to cover only children up to 200 percent of the federal poverty line. There are 17 states that cover children above that level. There's another 18 states that cover children up to 200 percent and perhaps a little bit more. So all those states might have to change eligibility thresholds.

NORRIS: Now, turning now to energy and our resident expert on this subject, Christopher Joyce, we got some clues last month in the president's State of the Union address. He made an ambitious promise to reduce the country's use of gasoline by 20 percent over 10 years. Does the budget request reflect that promise?

CHRISTOPHER JOYCE: It does somewhat. There's a 20 percent increase in the amount of money to be spent on ethanol, which is the alternative fuel of the moment. We're never going to make that goal, if you talk to any industry expert in the country, just using what we use now, which is corn, to make ethanol.

So a lot of this money is going to go to research into new feed stocks, as they call it, for making ethanol. These could be things like switch grass, which the president mentioned the year before. I don't know how many people still know what it is. But anybody who grows switch grass, I suppose, is going to be happy, because we're going to spend a lot of money trying to find out how to make an ethanol from it.

The other big winners in the energy budget are, surprise, surprise, the nuclear industry. They're getting a lot more money to develop new types of reactors, as well as to reprocess fuel that's in reactors now and use it again. And the coal industry's getting something like a 33 percent increase, too, to do clean coal research.

NORRIS: The subject of climate change is garnering more and more attention with the release last week of the new U.N. report that says humans almost certainly are warming the planet. Anything in the energy budget on that?

JOYCE: Not directly. The words climate change or global change or global climate change, whatever - none of them appear in the DOE budget, for that matter, not the Environmental Protection Agency budget, either.

You know, even the amount of money that's spent on the Climate Change Research Program, which is spread across several agencies, is down a bit this year, basically flat, but down a bit.

You could argue that money being spent on clean coal or on ethanol is in a sense an acknowledgement that there's a need for alternative forms of energy that are not creating carbon dioxide that warms the planet, but I think the bottom line is in this budget, like most others, the president's approach is to invent our way out of dependence on foreign oil and out of climate change.

NORRIS: Thank you, Chris.

JOYCE: You're welcome.

NORRIS: That was NPR's Christopher Joyce. Thanks also to you, Jackie.

NORTHAM: Thank you.

NORRIS: NPR's Jackie Northam and Julie Rovner.

ROVNER: You're welcome. Transcript provided by NPR, Copyright NPR.

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