President's Budget Would Cut Deeply Into Important Public Services and Adversely Affect States
 The authors would like to thank Matt Fiedler for his invaluable assistance in analyzing the President's funding proposals.
 In this analysis, proposed cuts in 2008 and subsequent years are calculated by comparing the proposed funding levels in the budget for those years with the level just enacted in the full-year continuing resolution for 2007 adjusted for inflation.
 Medicaid is traditionally excluded from this analysis because changes in Medicaid grants largely reflect inflation in health-care costs in the public and private sectors alike. Considering grants other than Medicaid gives a more accurate picture of the relative level of federal funding for state and local services. The President's budget does include cuts in Medicaid relative to the amounts required to maintain the program. The large majority of those cuts would shift costs to states; see “The Administration Again Proposes to Shift Federal Medicaid Costs to States,” by Leighton Ku, Andy Schneider, and Judy Solomon, Center on Budget and Policy Priorities, February 2007, .
 The Administration’s budget says that it calls for a one percent increase in funding for domestic discretionary programs for 2008, but it derives this percentage figure by comparing its proposed level of funding for domestic discretionary funding in 2008 to an assumed funding level for 2007 that is below the amount that was actually enacted. (The full-year continuing resolution had not been finalized when the Administration completed work on its budget.) In addition, in comparing its proposed 2008 level to the level assumed for 2007, the Administration did not adjust the 2007 level for inflation. The overall level of funding the Administration is proposing for domestic discretionary programs in 2008 is $1.5 billion below the level enacted for 2007 even before inflation is taken into account, and $12.9 billion below that level after adjustment for inflation.
 This cost reflects the cost of extending the President's tax cuts, assuming Alternative Minimum Tax relief is continued. See Aviva Aron-Dine, "Extending the President's Tax Cuts and AMT Relief Would Cost $3.5 Trillion Through 2017," Center on Budget and Policy Priorities, January 31, 2007, p. 3.
 A forthcoming Center analysis will discuss this issue in detail.