A drive by President Bush and top congressional Republicans to make modest Medicaid cuts is hitting a buzz saw in the person of a moderate GOP senator from Oregon.
The Senate seemed likely to vote Thursday on an effort led by Sen. Gordon Smith, R-Ore., to eliminate all $14 billion in five-year savings the chamber’s budget proposes in the health care program for the poor and elderly. That would be a 1 percent reduction from the $1.12 trillion Medicaid is projected to spend over that period.
The vote was expected to be close, with Smith and co-sponsor Sen. Jeff Bingaman, D-N.M., supported by all Senate Democrats and a handful of GOP moderates. A potentially pivotal Sen. Susan Collins, R-Maine, said late Wednesday that she was “inclined to support” Smith but was being lobbied hard by Republican leaders.
Smith’s amendment has become a test of the GOP-run Congress’ taste for trimming popular benefit programs at a time of record federal deficits that most analysts agree will take far sterner medicine to control.
Sen. Lamar Alexander, R-Tenn., said the proposed savings were “a modest but important step toward controlling the biggest problem we have in Washington” — spending by rapidly growing benefit programs.
Smith: 'A matter of life and death'
Smith said paring Medicaid, which serves nearly 50 million people, would hurt “the most vulnerable Americans.” He would eliminate the Medicaid cuts and create a commission to study the program’s spending and report back in a year.
“It may well be a matter of life and death for thousands of Americans,” Smith said.
The showdown approached as the House and Senate moved toward completing similar $2.6 trillion budgets for 2006.
House GOP leaders cleared the last hurdle to final passage by striking a deal with conservatives to allow procedural votes on whether to kill spending bills that exceed budget limits.
Generally following the approach Bush charted in his budget last month, both chambers’ fiscal outlines would cut a wide range of domestic programs in an effort to reduce slowly deficits that soared to a record $412 billion last year. Defense and domestic anti-terrorism programs would get increased funds.
Bush seeking $100 billion in tax cuts
In addition, Bush wants five-year tax cuts totaling $100 billion. The House budget makes room for $106 billion in tax cuts, the more moderate Senate $70 billion.
By 50-50 — a vote shy of the majority needed — Democrats and moderate Republicans narrowly lost an effort Wednesday to require any new tax cuts be paid for with revenue increases or spending reductions. Though GOP leaders prevailed in defending one of Bush’s top priorities, the vote showed how tenuous Senate support is for a fresh round of tax cuts.
For the first time since 1997, the House and Senate both want to carve savings out of benefit programs, which consume nearly two-thirds of the federal budget and are growing rapidly. Social Security, Medicare and Medicaid are the biggest, but neither Social Security or Medicare are on the chopping block this year.
Overall, these programs are projected to spend $7.7 trillion over the next five years. By law, they pay benefits to anyone who qualifies and cover inflation and growing numbers of recipients, so their spending increases automatically every year.
Bush proposed saving $51 billion from benefit programs over the next five years, including from Medicaid, farm aid, student loans and fees on employers to support the fiscally ailing federal agency that backs private pension plans. The House budget calls for $69 billion in savings, the Senate’s $32 billion.
If anything, the Senate displayed its preference for more spending on Wednesday, voting to provide extra money for veterans, education and biomedical research.
The discrepancy between the two chambers has irked House Budget Committee Chairman Jim Nussle, R-Iowa, who has made repeated barbs about the Senate and predicted the two chambers may not complete a compromise budget this year.
“They’re not going to do real reform,” he said Wednesday. “I’m very frustrated with what I see over from the other body. They’re watering it down every step of the way.”