Image: Bush, legislators
Gerald Herbert  /  AP
President Bush, flanked by lawmakers, signs legislation Wednesday aimed at trimming Medicaid and Medicare spending over the next five years. 
updated 2/8/2006 11:30:35 PM ET 2006-02-09T04:30:35

President Bush signed a measure Wednesday that trims Medicaid and Medicare spending over the next five years, but he said Congress must make bigger changes as baby boomers retire.

Bush said programs such as Medicare, Medicaid and Social Security are the biggest long-term challenge to the budget. Even after the cuts he signed into law, the growth rates projected for the programs are unsustainable, he said.

“By 2030, spending for Medicare, Medicaid, and Social Security alone will be almost 60 percent of the entire federal budget,” Bush said just before signing the Deficit Reduction Act in the East Room of the White House.

“That will leave future generations with impossible choices — staggering tax increases, immense deficits, or deep cuts in every category of spending,” the president said.

He defended his budget blueprint for the coming fiscal year in the face of critics from both parties who say he is shaving too much from Medicare and other programs. He said his critics are thinking like free-spending Europeans.

“There are some that, frankly, whose policies would make us look more like Europe than we should, and that is kind of a centralization of power,” Bush said in a visit Wednesday to tax-averse New Hampshire. “The surest way to centralize power is to take more of your own money to Washington.”

Automotive metaphor
Bush’s proposal for the budget year that begins Oct. 1 asks Congress to trim Medicare spending by $35.9 billion over five years, allowing the program to grow at a rate of 7.7 percent instead of 8.1 percent currently projected.

“It is the difference between slowing your car down to the speed limit, or putting your car into reverse,” Bush said both at the White House and before the Business and Industry Association in Manchester, N.H.

The bill he signed is a leftover measure from his 2005 agenda. The measure aims to trim $39 billion out the of budget over five years, partly through small cuts to Medicaid, Medicare and student loan subsidies.

The bill also:

  • Renews the 1996 welfare overhaul bill.
  • Cuts $11.9 billion in student loan subsidies.
  • Aims to raise $10 billion in new revenues from auctioning television airwaves to wireless companies.
  • Includes $1 billion in new spending to extend an income subsidy program for dairy farmers.

Small cuts compared to deficit
The $39 billion in cuts in the bill are generally small — a 0.4 percent cut in total Medicaid money and 0.3 percent cut from Medicare over five years — compared with deficits expected to total $1.3 trillion or more through 2010. But Bush said it will save an average of about $300 per taxpayer over the five years.

Democrats said the measure was an assault on college students and the elderly and disabled who rely on Medicaid to pay for their health care. They said the bill, which was written in private, was evidence of the undue influence of corporate interests such as insurance companies and drug manufacturers.

Sen. Edward Kennedy, D-Mass., said in a statement that Bush was trying to put “a high gloss on his harsh budget.” He said if Congress approved the plan, it would make life harder for widows, orphans, the disabled and families trying to make ends meet, while making the rich more wealthy.

“Budgets are moral documents and this one is clearly unfair,” Kennedy said.

Baby boomer commission
In his State of the Union address last week, Bush proposed a bipartisan commission to examine the impact of baby boomer retirements on Medicare, Medicaid and Social Security. He is asking the commission to recommend long-term solutions to control costs and keep the programs running.

In an odd twist that required Senate action Wednesday night, the bill Bush signed was technically different than the measure that passed the House because of errors committed by the legislative clerks who officially enroll the bills. But Senate Democratic and Republican aides said the chamber would act to pass a technical fix that would solve the problem.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments