A Responsible Budget Plan
The budget recently submitted by President Bush to the Congress reflects the priorities of our nation as we continue to build on an economic recovery already underway, and face down the threat of terrorism here at home and abroad. At the same time, the budget calls for fiscal restraint in many areas of spending, while maintaining a strong commitment to priorities like education and health care.
In his budget, the President calls for making the tax relief approved in 2001 and 2003 permanent. This is absolutely critical to maintaining the economic growth we now see developing. There is strong proof that the tax relief is working for Californians. As a result of the changes made, more than 12.4 million Californians have seen their incomes taxes reduced, over 3 million small business taxpayers in California have additional tax savings to invest in new equipment, expand facilities and hire new workers, and over 2.9 million American families in California have benefitted from the increase in the child tax credit from $600 - $1,000. Making this relief permanent will give businesses and families the certainty they need to plan for their future. And as an added benefit, we know that tax relief creates economic growth which increases the revenues to the federal treasury. Tax relief, as well as fiscal restraint, will help us tackle the deficit we have accrued in the face of the war on terror.
As a reflection of our continuing challenges, homeland security efforts for California and other large states receive substantial increases in this budget. Since 2001, the federal government has provided more than $13 billion to help state and local governments to respond to potential terrorist threats. The President's 2005 budget proposal includes $1.4 billion in preparedness grants specifically targeted to high-threat urban areas like the Los Angeles region. Despite the time that has passed since the events of September 11, 2001, I share the President's belief that complacency is not an option.
President Bush also laid out funding requests for important domestic issues including caring for our veterans and meeting our medicaid needs. California's veterans will benefit from a $5.9 billion increase in VA medical care. The budget also includes more than $183 billion for Medicaid funding, including $18 billion in California.
The President's budget will serve as a roadmap as Congress begins work this year on meeting our country's needs. I believe it is an important first step that will provide us with a strong framework for a fiscal plan that will for America and California.
