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White House budget memo riles Democrats

McClellan: 'No decisions have been made'

Congressional Democrats say a White House memo indicates the administration's desire to cut domestic programs.
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WASHINGTON (CNN) -- A White House memo instructs government agencies to consider possible budget reductions in 2006, and Democrats -- who distributed the document -- asserted cuts in various education, environmental and veterans programs could be expected.

The White House dismissed the Democratic furor over the memo, saying talk of cuts was "speculation" and stressing that no budget decisions for 2006 have been made.

At issue is spending for the fiscal year that begins October 1, 2005 -- after the general election. Bush faces re-election in November.

The president submits a budget proposal to Congress each year, but that is often just the starting point for budget negotations.

The May 19 "Budget Procedures Memorandum" -- its details first reported by The Washington Post -- warns that if an agency wants to increase funding for a program, it must cut somewhere else.

"Assume accounts are funded at the 2006 level specified in the 2005 Budget database," the memo tells federal program associate directors and their deputies.

"If you propose to increase funding above that level for any account, it must be offset within your agency by proposing to decrease funding below that level in other accounts."

Asked about the memo Thursday by reporters, White House spokesman Scott McClellan said no decisions on spending cuts have been made, and stressed that the memo marks the start of a long budget process.

"First of all, any speculation at this point about the 2006 budget really has no basis in fact, because no decisions have been made, and they won't be made for months," McClellan said.

"This president will continue to work to make sure we fund our highest priorities, while restraining spending elsewhere in the budget. And he will continue to work to cut the deficit in half over the next five years."

But Democrats seized on the memo to argue that the administration was poised to cut popular programs if Bush is re-elected.

And they blamed, in part, the administration's "oversized tax cuts" for possible cuts to domestic programs.

"All along, the administration vowed their policies would be painless," said Senate Minority Leader Tom Daschle, D-South Dakota. "They said we could continue to honor our veterans, invest in our children, protect our elderly and do right by average Americans.

"But now a memo forecasts administration plans for billions of dollars of cuts to America's veterans, schools, health care, homeland defense, worker-training programs and medical research," Daschle said.

In a letter to Democratic colleagues that distributed copies of the memo, Rep. John Spratt Jr., the top Democrat on the House Budget Committee, said any cuts would be "a direct result of the administration's oversized tax cuts, the record high deficits the Bush policies have generated and the administration's stated desire to 'shrink' the size of government."

According to a Democratic analysis, the White House memo means that the 2006 budget for Veterans Affairs would be cut about 3 percent, or $900 million; the Department of Education would face a reduction of 2.6 percent, or $1.5 billion; and the EPA would face a cut of 2.1 percent, or $161 million. Overall, the analysis predicted cuts for 11 departments or agencies.

One Democratic source told CNN the memo shows Bush is intent on cutting programs, like education, that he has said he wants to protect.

"Our take is that the administration's budget calls for significant, important spending cuts largely necessary because he has tax cuts of almost $1 trillion" plus the costs of the Iraq war.

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