Budget Will Seek Slower Medicare Spending Growth

Department of the Treasury Secretary Henry Paulson on Thursday said the fiscal year 2008 budget that President Bush will propose on Feb. 5 will include provisions to reduce the estimated 7% annual growth in Medicare spending, the Wall Street Journal reports.

In an interview, Paulson said, "When the budget goes up, you will see a number of changes relating to Medicare ... aimed at slowing the growth of these liabilities, slowing the trajectory." Paulson did not discuss specific provisions, but others "say the savings -- expected to add up to $90 billion over five years -- are expected to come mainly from squeezing health providers, though some beneficiaries would be affected directly," the Journal reports.

Paulson said he has discussed the need to reduce growth in Medicare spending with Democrats and Republicans in Congress. "The key thing is to come together without preconditions," Paulson said, adding, "It's only fair that if you're going to have a bipartisan discussion, you can't tell someone we're not going to let you talk about your idea."

Medicare in 2006 cost about $374 billion, about 14% of all federal spending, and will cost an estimated $851 billion by 2017, according to the Congressional Budget Office (Solomon, Wall Street Journal, 1/26).

In other budget news, House Democratic leaders on Wednesday plan to propose a $463.5 billion FY 2007 budget that includes additional funds for NIH and community health centers (Cohn, CongressDaily, 1/26). The 109th Congress last year approved two of 11 FY 2007 appropriations bills and passed a continuing resolution to fund most federal agencies at FY 2006 levels until February.

Late last year, House Appropriations Committee Chair David Obey (D-Wis.) and Senate Appropriations Committee Chair Robert Byrd (D-W.Va.) said that they would complete the other FY 2007 appropriations bills through an extended continuing resolution and focus on FY 2008 appropriations bills.

House Majority Leader Steny Hoyer (D-Md.) on Wednesday said that House and Senate members have begun to negotiate an agreement on an extended continuing resolution. The House likely would not allow amendments to the agreement, Hoyer said.

However, the Senate "cannot block its members from offering amendments, and, without a carefully negotiated, bipartisan deal, the Senate could get hung up for days or even weeks on an appropriations package" (Higa/Ota, CQ Today, 1/24).

Senate Appropriations Senate Labor, HHS, Education and Related Agencies Subcommittee Chair Tom Harkin (D-Iowa) has requested a $2.3 billion increase in funds for NIH, community health centers and other programs. In addition, Democrats and Republicans have requested a $3 billion increase in funds for health care for veterans and a $2 billion increase in funds for military health care programs, according to CongressDaily (CongressDaily, 1/26).