Bush Seeks $48-Billion Defense Hike

President Bush said Wednesday that he will ask Congress for a $48-billion defense budget increase next year to help pay for the war on terrorism, futuristic weapon systems and a military pay raise.

“We will invest in more precision weapons, in missile defenses, in unmanned vehicles, in high-tech equipment for soldiers on the ground,” the president said in a speech to military reserve officers. “Whatever it takes, whatever it costs, this patient, this resolved nation will win the first war of the 21st century.”

Bush’s proposed 14% increase from this year’s $331-billion defense budget would mark the largest spending boost, on a percentage basis, since the defense buildups under Presidents Carter and Reagan two decades ago. The $379-billion plan will be part of the 2003 budget that Bush sends to Congress on Feb. 4.

A defense official said the administration plans to request a $10-billion contingency for war operations, suggesting that the Pentagon plans to continue its war on terrorism at about the current pace.

The 3 1/2-month-old war in Afghanistan has added $3.8 billion to the defense budget, or roughly $1 billion a month. The three-month war in Kosovo cost the Defense Department an extra $3 billion.

“We need to have Congress and the rest of the world appreciate that we’ll still be engaged in the war on terrorism,” a defense official said on condition of anonymity. “This is our best appreciation of what we’re going to need to start to get there.”

The contingency fund would allow the Pentagon to carry the war to other fronts, such as those often mentioned as terrorist host states: Somalia, Sudan, Yemen and Iraq. Hundreds of U.S. military advisors are already in the Philippines.

“It’s a sizable chunk of money by historical standards,” said Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments. “It’s a very significant and intensive involvement in some kind of overseas missions that go above and beyond what we would normally be doing.”

Bush also said Wednesday that he intended to ask Congress for “a major new increase” in spending for homeland security, such as hiring 300 more FBI agents, modernizing public health labs, stockpiling medicines and earmarking funds for local police officers and fire and rescue workers.

“The American people are on watch against future attacks. And so with their government,” Bush said.

He did not elaborate on spending for homeland security, but Mitchell E. Daniels Jr., Bush’s budget director, has been quoted as saying that the amount would be $24 billion.

In Reversal, Deficit to Total $106 Billion

Bush tipped his hand on the military budget even as Daniels reported that the administration now estimates that the budget for this year is $106 billion in deficit, a dramatic reversal from the $231-billion surplus that the administration foresaw only a year ago.

The budget director also predicted that the deficit for fiscal 2003, which begins Oct. 1, will be $80 billion rather than the $242-billion surplus the administration had foreseen a year ago. Daniels also said the budget would show a fiscal 2004 deficit of $14 billion before returning to surplus the following year.

Bush has blamed the recession, which he insists began before he took office, and the Sept. 11 terrorist attacks for the return to deficit spending.

“The tools of modern warfare are effective,” he said. “They are expensive. But in order to win this war against terror, they are essential. Buying these tools may put a strain on the budget, but we will not cut corners when it comes to the defense of our great land.”

Salaries would rise by at least 4% for military personnel, a Pentagon official said. That comes on top of a 5% increase in 2002. Housing funds would also increase.

Bush urged Congress to approve the funds, which could also go far to pay for the military modernization program launched under the Clinton administration.

“Those who review our budget must understand that we are asking a lot of our men and women in uniform, and we’ll be asking more of them in the future,” the president said. “In return, they deserve every resource, every weapon needed to achieve the final and full victory.”

Although Pentagon officials “remain committed to missile defense,” a Pentagon official said, that budget would remain at the 2002 level of about $8.3 billion.

But as Bush made clear, it would also include money to buy equipment that has proved itself in the Afghan war. A priority is replacing the bombs and equipment being used in Afghanistan, defense officials say.

The first unmanned planes armed with Tomahawk missiles and precision weapons such as a wind-corrected cluster bomb made their debut there. Stockpiles of laser- and satellite-guided weapons, never huge, have been rapidly depleted as thousands rained on Afghan soil.

“Ammunition is a key inventory,” a senior Navy official said. “We do not have and will not have the numbers we’d like to have in our inventories for years. Is there a risk of running out? It all depends on how quickly we use them.”

Pentagon officials also want to replace aging ships and planes. The Navy carrier John F. Kennedy, slated to replace the Theodore Roosevelt in the Arabian Sea, failed an inspection last month. The B-52 bombers and refueling tankers used in Afghanistan are more than 40 years old.

Hike Would Outpace Reagan Increase

Some defense analysts remained skeptical of the Bush buildup.

“This is an opening bid; the game is not over,” said Gordon Adams, a former Office of Management and Budget official in charge of defense spending who is now director of security policy studies at George Washington University. “It’s not always clear that the Pentagon knows how to spend money wisely when it gets this much all at once.”

John Isaacs, president of the Council for a Livable World, complained that Bush’s proposed defense spending increase outpaced even the spending burst at the beginning of the Reagan administration.

“Just the increase from last year is greater than the military budget of any other nation in the world,” Isaacs said. “We now spend more on our military than the rest of the world combined.”

Many members of Congress welcomed Bush’s proposals, if only because few dare speak ill of Pentagon spending at a time of war and domestic anxiety about terrorism.

“It may be we will even consider increasing it,” said Sen. Ted Stevens of Alaska, ranking Republican on the Senate Appropriations Committee.

Even Democrats who have been critical of Bush for allowing deficits to blossom did not speak ill of his defense proposal, even if they did not immediately endorse it either.

“Our top priority is to defend the nation,” said Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee. “We will provide the resources to do it.” But he warned that there would be no “blank check” for defense.

Senate Majority Leader Tom Daschle (D-S.D.) said it was too early to say how much Congress would provide for defense, adding, “We recognize we’re fighting a war on terrorism.”

In his remarks to the 80,000-member reserve officers group, Bush also renewed his call on Congress to pass an economic stimulus bill.

‘It’s time to set aside all of the politics, all the posturing and figure out how to take care of workers whose lives were affected because of the attacks on 9/11,’ Bush said.

Daschle said he intends to bring the bill to the Senate floor today, although he failed to win a Republican agreement to limit the number of permissible floor amendments. Without such an understanding, Republicans can continue to offer amendments until Daschle gives up and pulls the bill off the floor.

After clearing the House, the bill stalled at the end of last year, with Bush and Republicans supporting a version that would provide $90 billion in tax cuts for businesses and individuals as well as extended benefits for unemployed people. Democrats opposed that version, saying it would do too little for the unemployed and cut taxes too deeply for the affluent.

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Times staff writers Nick Anderson, Peter G. Gosselin and Janet Hook contributed to this report.