are you republicans ready to rejoice now? http://www.cnn.com/2004/ALLPOLITICS/01/06/elec04.prez.bush.spending.ap/index.html WASHINGTON (AP) -- Conservatives wait warily as President Bush makes final decisions about his election-year budget, three years into an administration on whose watch spending has mushroomed by 23.7 percent, the fastest pace in a decade. While Bush has emphasized repeatedly the need to rein in spending, overall federal expenditures have grown to an estimated $2.31 trillion for the budget year that started October 1. That is up from $1.86 trillion in President Clinton's final year, a rate of growth not seen for any three-year period since 1989 to 1991. Much of the increase stems from the fight against terrorism and wars in Afghanistan and Iraq. Also expanding relentlessly have been huge programs such as Social Security, Medicare and Medicaid, which grow automatically with inflation, higher medical costs and more beneficiaries. What has vexed conservatives most is the 31.5 percent growth since Bush took office in discretionary spending. That is the one-third of the budget lawmakers approve annually for defense, domestic security, school aid and everything else except Social Security and other benefits. Such spending grew by an annual average of 3.4 percent during Clinton's eight years. Further infuriating conservatives, Bush and the Republican-run Congress have enacted a $400 billion, 10-year enlargement of Medicare; $87 billion in expanded benefits for farmers; and $40 billion for increased veterans' payments and the Air Force's leasing and buying of refueling tankers. "Re-election has become the focus of Republicans in the White House and Congress. And those in power have determined the road to staying in power is paved with government spending," said Brian Riedl, who monitors the budget for the conservative Heritage Foundation. Surplus dives to deficit Mounting spending has combined with the recession and two major tax cuts to turn a four-year string of annual surpluses into deficits that last year hit $374 billion, the worst ever in dollar terms. Administration officials and private forecasters say red ink could hit $500 billion this year, with more to follow. Things look bleak in the long run, too. Director Douglas Holtz-Eakin of the nonpartisan Congressional Budget Office has said the Medicare bill could cost from $1.7 trillion to $2 trillion during its second 10 years, as the huge baby boom generation retires and foists added costs on taxpayers. "The U.S. budget is out of control," the investment bank Goldman, Sachs & Co. wrote its clients, projecting large deficits for the next decade. "Any thoughts of relief thereafter are a pipe dream until political priorities adjust." In the new budget Bush is to send Congress on February 2, Bush is expected to propose limiting the growth of discretionary programs to 4 percent, perhaps excluding defense and domestic security. Last February, Bush proposed holding discretionary spending increases to 4 percent this year and next, although aides now say he meant to exclude the military and anti-terror activities. Discretionary expenditures will hit an estimated $873 billion this year, assuming the Senate completes a House-passed measure in January combining the year's seven remaining spending bills. That is $27 billion, or 3.2 percent, more than last year. "President Bush has been resolute in pursuing his priorities of winning the war on terrorism, protecting the homeland and strengthening our economy. In pursuing those, he's also exercised fiscal restraint," said Joel Kaplan, deputy director of the White House budget office. Domestic and defense expenses Bush, speaking at a fund-raiser Monday in St. Louis, said "we've passed budget agreements that is helping to maintain much-needed spending discipline in Washington, D.C." Critics say with nine months left in the government's budget year, there's plenty of time for more spending increases, such as for war costs. And they note this year's discretionary spending increase, though low, adds to boosts of 11 percent and then 15 percent in Bush's first two years as president. "It's an administration that in principle is committed to controlling spending but is unwilling to make hard choices," said Maya MacGuineas, executive director of the Committee for a Responsible Federal Budget, a bipartisan anti-deficit group. The administration says most discretionary spending increases have been for defense and programs it considers anti-terror -- the Homeland Security Department and other domestic security efforts. Of the $209 billion three-year discretionary increase under Bush, which includes $20 billion Bush added for homeland security for 2001 right after the Sept. 11 attacks, the administration says $159 billion has been for defense and domestic security. That means 76 percent of the increases have been for those programs. During that same period, spending for all remaining discretionary programs has grown from $331 billion to $381 billion. That's 15 percent, or 5 percent a year. "There clearly is a need for the Republican majority to sharpen its pencils and return to its foundation of discipline" in spending, said conservative Rep. Mike Pence, R-Indiana. "There is room for more restraint, especially as the economy recovers, but this is hardly the record of a domestic-program spending spree," White House budget chief Joshua Bolten wrote last month in The Wall Street Journal.