Bush feels heat over $500bn deficit

PRESIDENT Bush, who is expected to use Tuesday's State of the Union address to tout his success in restarting the US economy, is facing increasing pressure from his own ranks to do more to reduce the federal deficit.

However, it is forecast that he will instead urge Congress to make recently enacted tax cuts permanent over the next decade and push his initiative to send Americans back to the moon - an adventure most legislators and many voters believe is unaffordable.

Even conservative Republicans are questioning the wisdom of the tax cuts, which they say helped push the deficit to a record of almost $500bn (£276bn), and the issue is expected to overshadow whatever else Bush may say.

Budget Committee chairman Jim Nussle and other Republican leaders expressed concern about the current level of spending at a private meeting with White House budget director Joshua Bolten. 'Not enough attention is being paid to holding the line on spending,' a spokesman for Nussle said.

Democrats are expected to be more vocal. Bush's nationally televised address comes at a politically tumultuous time, the day after the Iowa caucus - the first step in the Presidential nomination process - and a week before the Presidential primaries in New Hampshire.

Most Republican Party pressure, though, has been to reduce spending rather than reverse tax cuts. Republican Congressmen have privately told the White House more cuts must be made and Bush, who sends his $2.3 trillion budget to Congress on 2 February, appears to have listened. He is calling for Congress to limit spending growth for most government programmes to less than 4%.

But conservatives say that any initiative tackles a problem of the Administration's own making. They say spending under Bush is growing too fast and point to costly new legislation such as his Medicare prescription-drugs plan.

In this climate, Bush's space ambitions, which he had hoped would present him as a leader of vision, may be too much for even his allies to swallow.

While details of his plan are few so far, critics point to the cost of the Apollo space programme - $100bn at today's price - and the $150bn already spent on the space shuttle.

In his weekly radio address at the weekend, Bush played down security issues, the major theme of last year's address, and said the economy grew at its fastest pace in two decades in the third quarter of 2003 and that more than a 250,000 jobs have been created since August. But Democrats have been quick to seize on the jobs issue, pointing to a net loss of 2.3m jobs since Bush took office.