WASHINGTON (AP) – President Bush unveiled a $2.9 trillion budget yesterday that rewards the Pentagon with a record $50 billion budget hike but pinches programs cherished by Democrats, including health research and heating subsidies for the poor.

In control of Congress for the first time in a dozen years, Democrats accused Bush of trimming domestic programs, using smoke and mirrors to predict a balanced budget in five years and ignoring a hidden tax threat to middle-class families. His $245 billion request for Iraq and Afghanistan has given lawmakers sticker shock.

Despite common agreement that something must be done soon about the spiraling cost of benefit programs such as Social Security and Medicare, Bush recommended mostly modest steps – while refusing to consider tax hikes that could draw Democrats into negotiations.

“There’s a lot of skittishness on both sides about coming to the table,” said Sen. Judd Gregg of New Hampshire, the top Republican on the Senate Budget Committee. “The White House is afraid of taxes and the Democrats are afraid of controlling spending.”

Democrats went on the attack.

“The president has simply offered more of the same, proposing a budget that cuts . from Medicare and Medicaid, while sending $240 billion more in American taxpayer dollars to Iraq,” said Rep. Rahm Emmanuel (D-Ill.) “This is not a tradeoff the American people want.”

Bush touted his fiscal blueprint as “protecting the homeland and fighting terrorism, keeping the economy strong with low taxes and keeping spending under control.” He said after meeting with his Cabinet, “Congress needs to listen to a budget which says no tax increase, and a budget, because of fiscal discipline, that can be balanced in five years.”

Bush said $245 billion is needed for military and diplomatic operations in Iraq and Afghanistan over the next year and a half, bringing total Pentagon funding for the wars to $662 billion.

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