By and  on February 6, 2007

WASHINGTON — The $2.9 trillion federal budget proposal President Bush sent to Congress Monday, highlighting permanent tax cuts and spending for the war in Iraq, called for increases and trims in funding for key industry programs involving trade, labor, and port and cargo security.

The 2008 budget request outlined an elimination or reduction in spending for 141 programs, saving $12 billion over five years, as Bush faces opposition from the new Democratic-controlled Congress that must approve it.

Democrats said they would push their own budget priorities, many of which are expected to conflict with the President's blueprint. The budget seeks to hold the rate of growth for nonsecurity discretionary spending to 1 percent, which is below the rate of inflation, and eliminate the deficit by 2012.

"I strongly believe Congress needs to listen to a budget which has no tax increase, and a budget, because of fiscal discipline, that can be balanced in five years," Bush told reporters.

Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee, said, "In some places, this budget shows vision and in some places, the President's eyes are shut tight to this country's fiscal reality."

Among the proposed budget items affecting the fashion industry are:

l A 31 percent increase, to $10.1 billion, for the U.S. Customs & Border Protection division of the Department of Homeland Security, responsible for protecting ports and border entry points and overseeing private-public supply chain security initiatives.

l A $59 million cut, to $14 million, for the Labor Department's International Labor Affairs Bureau.

l An additional $5 million to $44 million for the Office of the U.S. Trade Representative, responsible for negotiating trade deals and working with the World Trade Organization.

l An increase of $618,000 for three full-time officials for the Treasury Department's Enhanced International Economic Policy Coordination initiative that supports high-level meetings with countries like China. Treasury Secretary Henry Paulson Jr. has made reform of China's economic and fiscal policies a top priority amid growing bipartisan pressure from Congress.

l A $4 million boost, to $63 million, for the Commerce Department's Import Administration that investigates antidumping and countervailing duty trade cases, and tracks apparel and textile imports.l Commerce's Manufacturing & Services program would receive a $2 million funding rise to $49 million to help U.S. producers and service providers compete.

l Labor's Wage & Hour program would get another $17 million, to a total of $187 million, to enforce the Fair Labor Standards Act and other worker-related laws.

l The U.S. International Trade Commission would receive a $4 million increase, to $67 million, to administer trade remedy laws and provide independent feedback to the president and Congress.

"It's reflective of the fact that trade is a big issue and that the agencies are being given additional resources to cover what they need to cover, whether it be on enforcement or negotiating trade agreements," said Erik Autor, vice president and international trade counsel for the National Retail Federation.

Baucus said Congress would soon begin debating an extension of the President's Trade Promotion Authority and said the budget should have included funding proposals for expanding U.S. export programs, as well as "increased assistance to businesses when trade has negative effects."

Thea Lee, policy director at the AFL-CIO, said, "There are a lot of areas that need more money and we see continued priority on tax cuts for the wealthy at a time when many important labor protections are being shortchanged," citing health and safety, and child-labor initiatives.

One of the more dramatic cuts was the $59 million decrease in funding for Labor's International Labor Affairs Bureau that supports efforts to eliminate child labor abroad and provides technical assistant to foreign governments.

"It's a little bit of a dance now that happens — Bush slashes, Congress puts most of it back," Lee said.

The ILAB reduction represents the elimination of grants for international child labor, said a Labor Department spokesman for the program. He said this would still leave ILAB's Office of Child Labor, Forced Labor & Human Trafficking with more than 120 active projects in over 75 countries. Much of the funding goes to the International Labor Organization, based in Geneva.

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