Bush to project budget surplus for fiscal 2012

WASHINGTON (Reuters) - President George W. Bush will project not just the balanced budget he has promised for fiscal year 2012 but a surplus for that year, a Bush administration official said on Friday.

The forecast will be included in the fiscal year 2008 budget proposal that Bush will send to Congress on Monday.

The administration official, who spoke on condition of anonymity, also confirmed a report in the New York Times saying that Bush will proposing squeezing $70 billion in savings from the Medicare and Medicaid health programs over the next five years.

Wringing savings out of entitlement programs can be politically difficult.

The official said that while the administration believes such savings are important for the long-term health of the budget, the expectation of a surplus "does not rest" on the achievement of the Medicare savings.