Daschle, Bush Tout Rival Economic Stimulus Proposals
Senate Majority Leader Tom Daschle (D-S.D.) and President Bush this weekend traded comments over taxes and the economy, touching briefly on health care issues. In a speech on Friday, Daschle proposed a new "seven-point" stimulus plan that -- while primarily focused on new tax provisions for businesses and spending for security and research -- would also expand unemployment benefits and help cover the cost of health insurance for unemployed workers. The plan also proposes allocating additional funds to states for Medicaid. Daschle "borrowed some ideas" for the proposal from legislation that Democrats proposed in the Senate last year (Godfrey, Congressional Quarterly, 1/4). Last fall, Senate Democrats proposed a $73 billion bill, which Republicans blocked, that would have provided $12.3 billion to help unemployed workers purchase health insurance through COBRA and would have allowed states to extend Medicaid coverage to unemployed workers who do not qualify for COBRA. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, allows unemployed workers to retain health coverage under their former employers' insurance plans by paying 102% of the premiums. The bill also would have provided $1.4 billion to boost the federal match to states for Medicaid (California Healthline, 11/15/01). Although Bush, who spoke on Saturday, offered "no new proposals" on economic stimulus, he said that he supports legislation passed in the House late last year that would extend unemployment benefits and help unemployed workers purchase health insurance, among other provisions (Sanger, New York Times, 1/6). The Republican-sponsored legislation would have provided an individual tax credit to cover 60% of the cost of private health insurance for unemployed workers. In addition, the bill would have provided a number of tax reductions for businesses and individuals (California Healthline, 12/20/01).
Bush administration officials this weekend "left the door open to further compromise" on an economic stimulus bill but "made it clear they are sticking" with the legislation passed in the House in December (McKinnon, Wall Street Journal, 1/7). On NBC's "Meet the Press" Sunday, Treasury Secretary Paul O'Neill said that the bill would provide unemployed workers nationwide with "the same access to money to help with their health insurance," while under the plan proposed by Daschle, "about half of the people ... would get money through their former employers and the other half would be thrown to the vagaries of action by 50 state [legislatures], adding them to the Medicaid rolls, in effect, which we've never used ... for this kind of population." He added, "It would be a wholly new entitlement with very uncertain circumstances" ("Meet the Press" transcript, NBC, 1/6). However, an internal GOP congressional analysis prepared last week "suggests" that Bush and Republicans may have to "accept bigger changes" to pass an economic stimulus bill this year. According to the analysis, "In the end, what is more likely is a 'stimulus lite' bill" that includes expanded unemployment benefits, "minor tax provisions" and increased federal funds for state Medicaid programs (Wall Street Journal, 1/7).
Meanwhile, the New York Times reports that short-term budget deficits and reduced long-term surplus estimates are forcing Republicans and Democrats to "scale back plans for initiatives" such as a prescription drug benefit under Medicare (Stevenson, New York Times, 1/6). The Philadelphia Inquirer also reports that the "road looks rocky" for a number of "big-ticket items," including Medicare reform, a prescription drug benefit and a patients' rights bill. According to analysts, the government has "no money" to reform Medicare, and proposals to add a prescription drug benefit to the program would "get really expensive very quickly." In addition, Bush will not likely push a patients' rights bill this year for "political reasons." Analysts said that "if Bush made concessions to the Democrats on this perennial Democratic issue, he would anger a lot of conservative Republicans who believe that reform would trigger a surge in litigation that would hurt the economy" (Polman, Philadelphia Inquirer, 1/7).
Democrats "blame" reduced budget surpluses on the 10-year, $1.35 trillion tax cut that Bush pushed through last year. The Democratic National Committee plans to "deploy" state parties, labor unions and state lawmakers to "make the case" that the tax cut will lead to "rising deficits" and could endanger Medicare and Social Security. In his Friday speech, Daschle added that Bush's tax cut "by far" served as the "largest factor" behind reduced surpluses and may "threaten" Medicare and Social Security (Allen, Washington Post, 1/6). Sen. John McCain (R-Ariz.) this weekend also questioned whether the government "can afford tax breaks while paying for Social Security, Medicare" and other programs (Bazinet, New York Daily News, 1/7).