WASHINGTON - Federal grants to state and local governments would total $476.1 billion in fiscal 2009, a 2% increase over the $466.6 billion expected to be provided in 2008, according to President Bush's $3 trillion budget proposal.

The meager increase in federal spending for state and local programs is part of a broader strategy to spend tax dollars more wisely and ultimately eliminate the nation's budget deficit by 2012, Bush said in budget documents published yesterday. However, the funding increase is above the 1% growth limit that the White House is seeking to impose on most non-security related programs.

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