With President Bush's proposed budget setting aside billions for the Iraq war and tax cuts for the well-heeled, the initial fear of local officials and activists is that domestic programs such as housing, child health, law enforcement and job training will suffer.

"It seems very important to this president to rebuild Iraq but not the cities and communities in this country," said Edward Schwartz, a former city councilman who heads the Institute for the Study of Civic Values.

Schwartz has decried the Bush budget for years, saying urban areas and programs targeting the poor and low-income Americans are being short-changed.

Community-development block grants, for example, would decline by 27 percent from $4.17 billion to $3 billion in Bush's proposed $2.9 trillion 2008 budget, Schwartz said. That funding, which has declined precipitously at the city's Office of Housing and Community Development, forms the backbone for a host of housing and economic-development projects.

Federal funding for local law enforcement would drop from $2.48 billion to $1.23 billion, he said. "The president is proposing this when crime rates are rising in cities all over the country," Schwartz said.

Joe Grace, Mayor Street's spokesman, said: "It's the same old story with the Bush administration. They're proposing to cut education, Medicare and Medicaid, federal aid to housing authorities, and aid for affordable housing. These are programs that matter to cities and to Philadelphia. The Street administration opposes this budget.

"When you are spending millions of dollars a day in a war with no clear mission nor end in sight and cutting vitally needed domestic programs, it's bad for cities," Grace said. "We are hopeful that the new Democratic majorities in Congress will eliminate the worst of this proposed budget."

Last month, Street met with congressional leaders to lobby for expanded funding for housing authorities, as well as for tighter gun laws.

Like any budget offered by a mayor, a governor or a president, Bush's new budget is simply a proposal, a point of departure for Congress to make its own proposals. Later this year, Bush and Congress may broker a deal.

Alisa Simon, the health-policy director at Philadelphia Citizens for Children and Youth, said she fears that the Children's Health Insurance Program could face a substantial hit, particularly for children whose families have incomes above 200 percent of the poverty level, or roughly $40,000 for a family of four.

The cutbacks, if supported by Congress, would hit at a time when the Rendell administration is preparing to expand dramatically the health-insurance program for Pennsylvania children. Simon said the Bush proposal would effectively kill the state effort to expand coverage.

Also, a child-care-assistance program that helps about 26,000 Philadelphia children and Head Start would see sizable cuts even as waiting lists for the child-care program remain long.

Carl Greene, executive director of the Philadelphia Housing Authority, was blunt in his criticism of the Bush budget.

"You look at what the administration is proposing to spend in Iraq and then see they are not taking into account the basic needs of communities across this country," he said.

Greene said that the Bush administration has cut the federal housing budget each year Bush has been in office. For 2008, Greene said, the administration is proposing to cut the capital budget from $2.4 billion to $2 billion.

On the operating side, the budget would rise by $500 million to $4 billion, but he said that number is less than the so-called "needs" budget, which was $4.6 billion this year.

"We continue to be short-changed by this administration," said Greene, who in response to earlier federal funding cuts laid off 350 housing authority employees in early January. *