Bush Encourages Congress To Cut Medicaid Spending To Offset Hurricane Costs
President Bush on Tuesday said Congress should include in hurricane-related bills "substantial" new spending cuts for entitlement programs, the Wall Street Journal reports (Cooper, Wall Street Journal, 10/5). Republican leaders, concerned about the effect of Hurricane Katrina on the budget, are preparing a package of cuts to Medicaid and other programs that could total up to $40 billion, in addition to the $35 billion in cuts called for under the fiscal year 2006 budget reconciliation process. The budget reconciliation cuts called for $10 billion in Medicaid spending reductions over five years. Spending so far on expenses related to Hurricane Katrina totals $62 billion, and predictions of the total cost go as high as $200 billion (California Healthline, 10/3).
Speaking to reporters on Tuesday, Bush said Congress should look beyond the cuts called for under budget reconciliation. "I'll work with members of Congress to identify offsets and to free up money for the reconstruction," Bush said (Taylor, AP/Las Vegas Sun, 10/5). Although Bush is "unlikely" to win support in the Senate for a budget resolution with greater cuts, he could decide to put one on the House floor so that conservative members have a "chance to vote for deeper cuts," CQ Today reports (Dennis, CQ Today, 10/4).
With the appropriations process "nearing its endgame" and Congress expected later this month to consider separate legislation that would curb Medicaid costs, House Budget Committee Chair Jim Nussle (R-Iowa) and other conservatives welcomed Bush's comments, the AP/Sun reports. Nussle, who has suggested increasing cuts in a budget implementation bill and an across-the-board "haircut" to domestic agencies, said, "The real issue here for those of us who have to do the trench warfare here and actually pass these bills is: we need the details."
Senate Budget Committee Chair Judd Gregg (R-N.H.) said, "We need to have presidential leadership, and [the cuts] can't be the usual suspects." Gregg added, "They can't just send up another list of the requests that they made at the beginning of the budget process and claim that they've done their job" (AP/Las Vegas Sun, 10/5). Senate Minority Leader Harry Reid (D-Nev.) said in a statement that it would be wrong to cut Medicaid and other spending "so we can spend more on tax breaks for special interests and multimillionaires" (CQ HealthBeat, 10/4).
Senate Finance Committee Chair Chuck Grassley (R-Iowa) has reworked legislation (S 1716) that would allow hurricane survivors to receive Medicaid coverage. In response to complaints from conservatives about the bill's $8.9 billion cost, Grassley's modified proposal is expected to cost about $6.1 billion once final scoring is complete, CQ Today reports.
The bill, co-sponsored by committee ranking member Max Baucus (D-Mont.), would allow low-income hurricane survivors to bypass some standard Medicaid eligibility rules to qualify for coverage. People from Louisiana, Mississippi and Alabama affected by Katrina with annual incomes below the federal poverty level would be eligible for Medicaid for five months. Children and pregnant women from families earning up to 200% of the federal poverty level also would be eligible.
The original Grassley-Baucus bill would have had the federal government pay 100% of Medicaid costs in the affected states for 16 months, but in the new bill shortens that time period to 12 months. In addition, a provision has been dropped that would have provided additional federal Medicaid funds to 29 states. Under the revised bill, the program in part would be paid for with $800 million from Federal Emergency Management Agency funds, CQ Today reports.
However, conservatives still could oppose the bill if they see it as "a broad expansion of the health care program," CQ Today reports. The Bush administration is opposing the bill, instead favoring its ongoing Medicaid waiver negotiations with individual states (Schuler, CQ Today, 10/4).
Wall Street Journal: Bush's statement "follows last week's announcement from Senate Majority Leader Bill Frist (R-Tenn.) that Congress would introduce 'a special rescission bill' canceling previously appropriated funding for low-priority programs ... in order to offset some of the $200 billion cost of Katrina cleanup," a Journal editorial states. The editorial adds, "If Bush is really serious, he'll now take Mr. Frist at his word and send his own White House rescission bill to Congress." The editorial concludes, "Maybe it's time for Republicans to regain the public's trust by honoring their pledge to make government smaller and smarter" (Wall Street Journal, 10/5).
- Robert Samuelson, Washington Post: The "White House agrees" with Congress that cuts must be made to offset Katrina-related spending "but scorns one obvious step, repealing the Medicare drug benefit (projected 2006-08 spending: $151 billion), that would make a big difference," Samuelson, a Post columnist, writes (Samuelson, Washington Post, 10/5).