House Budget Committee Approves Budget Proposal that Includes $350B for Medicare Reform, Rx Drug Benefit

The House Budget Committee last night approved a $2.1 trillion budget proposal for fiscal year 2003 calling for $350 billion over 10 years to reform Medicare and create a prescription drug benefit -- $160 billion more than proposed by President Bush in his fiscal year 2003 budget proposal, the Los Angeles Times reports (Hook, Los Angeles Times, 3/14). The $350 billion, which would also increase Medicare+Choice payments and physician reimbursements, is $50 billion more than what Congress set aside last year for Medicare reform. The figure is also $50 billion more than the original amount House Speaker Dennis Hastert (R-Ill.) said the Republican-controlled House would propose earlier this year. The boost came in response to "widespread speculation" that the Democratic-controlled Senate will ask for at least $400 billion for Medicare reform (Cusack, InsideHealthPolicy.com, 3/12). The committee budget proposal also calls for a 45% increase in HHS bioterrorism preparedness funding, to $4.3 billion, and meets President Bush's request for $27.2 billion for the NIH, up $3.9 billion from this year (House Budget Committee release, 3/13). The budget does not include the Bush administration's request that some veterans be charged a $1,500 deductible for health care (Dinan, Washington Times, 3/14).

Congress' budget resolution is a non-binding tool used to guide spending priorities when lawmakers pass appropriations bills later in the year. The Republican-controlled committee passed the budget proposal -- which the full House will vote on next week -- on a party-line vote of 23 to 18 (Los Angeles Times, 3/14) This year's process stands in sharp contrast to last year's, as the nation's budget surplus has disappeared following President Bush's tax cut, the war on terrorism and the recession (Kessler/Eilperin, Washington Post, 3/14). The committee's budget proposal, which calls for a 1.3% increase in spending on non-defense programs to $4.6 billion, would create a projected deficit of $45.6 billion, after a projected deficit of $65.7 billion in FY 2002 and four years of surpluses before that (Stevenson, New York Times, 3/14). And unlike last year, the budget plan does not reserve surplus Medicare funds solely for deficit reduction or reform of the program, meaning that Congress may dip into the reserves to help balance the budget. And while the Republican Medicare reform proposal comes closer to the funding amount that Democrats are seeking, Democrats nevertheless "sharply attacked" the GOP plan, "noting that the budget provided only $5 billion a year for the next two years" (Washington Post, 3/14).