Bush takes fight to economic home front

IN A signal that President Bush hopes to move on from foreign wars to the battle on the home front for the economy, his State of the Union address last night concentrated on plans for tax cuts, beating the budget deficit and an ambitious revamp of social security.

Bush outlined plans to move pensions reliance from federal handouts to personal accounts.

But his first message was to opponents and those in his own ranks alarmed by the huge run-up in the US budget deficit, which he plans to address by slashing federal spending.

'America's prosperity requires restraining the spending appetite of the federal government,' Bush said. His coming budget would slash or eliminate more than 150 government programmes and hold spending growth for many others at below inflation. The budget he will send to Congress on Monday 'stays on track to cut the deficit in half by 2009'.

Bush last year proposed a budget totalling $2.4 trillion (£1.2 trillion) for fiscal 2005. 'My budget substantially reduces or eliminates more than 150 government programmes-that are not getting results, or duplicate current efforts, or do not fulfil essential priorities,' he said.

'The principle here is clear: a taxpayer dollar must be spent wisely, or not at all.'

The task of reducing the deficit is Herculean, with the recent $80bn in new funding this year for military operations in Iraq and Afghanistan pushing the 2005 deficit to a record $427 billion.

But Bush made clear his domestic priority was overhauling social security, which he warned was heading for bankruptcy. 'We must join together to strengthen and save Social Security,' he said.