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House calls for cuts in Medicare, food stamps

A battle over deep cuts to popular federal programs like Medicaid and food stamps promises to intensify next week in the House despite relatively smooth sailing in the Senate.
/ Source: The Associated Press

A battle over deep cuts to popular federal programs like Medicaid and food stamps promises to intensify next week in the House despite relatively smooth sailing in the Senate. On Thursday, the Senate passed a measure calling for mild cuts in the health care programs for the elderly, poor and disabled, while leaving the food stamp program untouched.

For now, the House bill generates $54 billion in savings, in part by imposing new fees on Medicaid patients, eliminating about 300,000 people from food stamp rolls and cutting enforcement funds against parents who duck child support.

"Who bears the burden of the cuts made by this bill?" said Rep. John Spratt of South Carolina, top Democrat on the House Budget Committee. "Single mothers seeking child support from deadbeat dads. Students struggling to pay loans for their college education. Foster children. The sick and poor whose only access to health coverage is Medicaid, or whose nutrition depends on food stamps."

Republicans say the debate is an important moment for their party, which gained control of Congress 11 years ago with promises to balance the budget.

Senate would allow arctic refuge drilling
The Senate bill, which passed 52-47, also would permit exploratory oil drilling in the Alaskan refuge, prompting five Republicans in the GOP-controlled chamber to vote against the bill.

An earlier vote to extend a 44-year-old drilling ban in the refuge failed, 51-48.

The Senate bill is estimated to trim $36 billion, or 2 percent, from budget deficits forecast at $1.6 trillion over five years.

The cuts total $6 billion for the plan's first year, with deficits predicted to exceed $300 billion.

A House plan approved by a key committee Thursday cuts more deeply across a broader range of social programs.

Republican moderates who don't like the cuts say it makes even less sense to vote on them if it's clear the Senate won't go along.

To ease passage next week, House GOP leaders may drop a provision that would allow drilling in Alaska's Arctic National Wildlife Refuge, with the intention of revisiting it in final compromise talks with the Senate.

Fiscal heartburn for Republicans
The return of intractable deficits and surging spending has caused heartburn for many Republicans over their record on holding the line on spending and addressing budget deficits.

The long-planned budget bills would make the first cuts to mandatory programs since 1997.

These programs account for 55 percent of the budget and include Medicare, Medicaid, farm subsidies and student loan subsidies.

"This is a major step forward," said GOP Sen. Judd Gregg of New Hampshire, chairman of the Senate Budget Committee. "It is a step towards fiscal responsibility and it is a reflection of the Republican Congress' commitment to pursue the path of fiscal responsibility."

The House Budget Committee approved the bill Thursday on a party-line vote.

But so many GOP lawmakers are unhappy with the bill that Republican leaders acknowledge it will have to be reworked before a final vote in the full House next week.

White House threatens vetoDespite strongly supporting the overall effort, the White House has threatened to veto the bill over an obscure proposal to kill subsidies for some regional health insurers that offered Medicare prescription drug coverage.

The White House's stand threatens $5.4 billion in savings.

"Today, the Senate took an important step forward in cutting the deficit," Bush said in a statement. "Congress needs to send me a spending-reduction package this year to keep us on track to cutting the deficit in half."

Democrats generally opposed the bill because it allows the oil drilling and increases the deficit when coupled with a $70 billion tax cut bill.

"Their budget ... actually would make the deficit worse," said Senate Minority Leader Harry Reid, D-Nev. "That's fiscally irresponsible at any time, but especially when we should be saving to prepare for the baby boomers' retirement."

Yet in the Senate, Republicans did pick up the support of two Democrats, Sen. Ben Nelson of Nebraska and Mary Landrieu of Louisiana, whose hurricane-devastated state won emergency aid under the bill.

Drilling prompts GOP defections
The Senate Republicans who opposed the budget bill over the drilling issue were Norm Coleman of Minnesota, Susan Collins and Olympia Snowe of Maine, Lincoln Chafee of Rhode Island and Mike DeWine of Ohio.

The Senate bill reflects the influence of moderates who provided swing votes in the full Senate and in Senate Finance Committee, which came up with proposals to curb the growth in Medicaid and Medicare.

As a result, the Senate's cuts largely protect beneficiaries of the programs, while turning to drug companies, pharmacies and insurance subsidies for much of the savings.

The House bill exacts more savings from beneficiaries and less from industry groups.

Still, there is plenty of sugar to go along with the fiscal medicine. The bill contains about $35 billion in new spending to go along with the cuts:

  • Doctors would get an $11 billion reprieve next year from a scheduled 4.3 percent cut in their Medicare payments.
  • Dairy farmers won a $1 billion extension of milk income payments.
  • College students would get more than $8 billion in new grants.
  • More disabled children would retain Medicaid health coverage.

Senators also approved a $2.7 billion plan by Sens. Mike Enzi, R-Wyo., and Edward M. Kennedy, D-Mass., to lower student loan processing fees and provide aid to students and schools in hurricane zones.

It passed after the Senate rejected, 68-31, a bid by conservatives to make much of the aid available through school vouchers.

The bill includes $3 billion to subsidize television converter boxes for an upcoming changeover to digital broadcasts.

At the beginning of Thursday’s debate, Senate Majority Leader Bill Frist, R-Tenn., withdrew a $4 billion plan to combat avian flu, fearing Democrats would try to add even more.

Other provisions of the Senate measure include:

  • $10 billion in new revenues from auctioning analog television spectrum to wireless companies.
  • More than doubling the premiums paid by corporations to the financially troubled Pension Benefit Guaranty Corp.