Bush budget’s fine print may have big impact

/ Source: The Associated Press

President Bush’s budget calls for robust spending on defense and homeland security as well as fresh tax cuts and a counterattack on relentless red ink. That’s comfortable territory for Republican lawmakers in an election year.

The finer print seeks $71 billion in savings over five years from Medicare, Medicaid, payments to farmers and other benefit programs. Democrats eager to regain power swiftly attacked them — and politically vulnerable Republicans may well shy away.

Some safe-seat Republicans, too.

“Nearly $9 billion in cuts over the next ten years are being proposed for agriculture, including changes to dairy programs, crop payments and marketing loans,” said Kansas GOP Rep. Jerry Moran, who drew no Democratic opponent in winning a fifth term in 2004. “These proposed cuts to agriculture do not come at a good time.”

“I am disappointed and even surprised that this budget instead cuts $48 billion from Medicare and Medicaid over the next five years,” added Sen. Olympia Snowe of Maine, whose race has not yet drawn significant attention from Democrats.

Bush, not on the ballot, took a different view. “Unconstrained spending in the nation’s large entitlement programs poses a serious threat to the federal budget and to the health of the economy,” the budget said.

There’s expert supporting testimony on that point from David Walker, head of the nonpartisan Government Accountability Office. “Taken together, Social Security, Medicare and Medicaid represent an unsustainable burden on future generations,” he told lawmakers nearly a year ago.

Message to Congress: Pick your poison
“Absent meaningful changes to these programs, the nation will ultimately have to choose among persistent, escalating federal deficits, huge tax increases, and/or dramatic budget cuts.”

Message to members of Congress: Pick your poison. Now or later.

Entitlement programs is government-speak for Social Security, Medicare, Medicaid, farm price supports, food stamps and other programs that generally are on automatic pilot. They serve millions — often identifiable, influential blocs of voters — and grow as the eligible population does.

Thousands of other programs are known as discretionary, and they cover everything from the arts to Zuni Indian Tribe water rights settlements. Defense is by far the largest of them.

Big or small, unlike the benefit programs, these all receive annual scrutiny in Congress. As a result, they are more likely to change from year to year to reflect the priorities of a president or congressional majority.

Squeezing discretionary spending
Bush’s general approach has been to squeeze spending on discretionary spending other than for defense and homeland security, at the same time he has sought and won substantial tax cuts. Deficits have risen during his tenure.

A year ago, according to his budget book, he urged Congress to hold overall spending on non-benefit programs below the rate of inflation.

Within that category, he asked lawmakers to cut spending on all programs not related to defense or homeland security. And he called for reductions in or elimination of 154 programs.

“The Congress delivered on all three goals,” his current budget book says.

He tried on benefit programs, too, with decidedly mixed success. Under fierce pressure from Democrats, Republicans ran from his call for private accounts under Social Security, and the legislation died without reaching the floor of either house.

Yet in debate that spilled over to the new year, the GOP-controlled Congress approved the first curbs on benefit programs in about a decade. The savings total about $39 billion over five years — a trim of 0.4 percent Medicaid funding and 0.3 percent cut in Medicare.

If the budget savings were relatively modest, the political battle was monumental.

Cheney's tie breaker vote
The bill passed on the strength of Vice President Dick Cheney’s tie breaker in the Senate, and cleared the House 216-214. Not a single Democrat in either House supported it.

Bush arranged to sign the bill on Wednesday — two days after urging lawmakers to go back for a second, far bigger bite.

In some cases, he’s asking them to go back and do in an election year what they refused to do last year. Farm price support programs escaped any cutbacks in the bill Bush is signing; he wants nearly $5 billion over five years in the budget submitted for the coming year.

Medicaid savings totaled $4.8 billion in the just-passed bill, a number shaved from earlier levels to satisfy Republicans on the ballot in 2006. Now Bush wants another $5 billion from Medicaid and the states’ health program for low-income children.

Medicare in the crosshairs
Medicare savings totaled a net of $6.4 billion in the bill the president will sign into law. Now he wants another $36 billion over five years — and $105 billion over 10.

Better-off beneficiaries would feel the impact directly as higher costs. The list of providers pinched is as long as it is well-represented by lobbyists — hospitals, skilled nursing facilities, home health care workers, inpatient rehab facilities, hospices, ambulance companies, laboratories, wheelchair companies and oxygen suppliers.

Not to mention doctors. They were ticketed for a 4.4 percent reduction in Medicare payments in 2006. That was until Congress decided to favor the physicians. It reversed the cut, at a cost to the government of $7 billion.

That, too, is part of the deficit-cutting bill the president is eager to sign.