President Bush Proposes 10% Increase in Medicare Spending

In his first news conference since taking office, President Bush said yesterday that he will propose in his budget a $21 billion increase in Medicare spending, the Washington Post reports. This rise would amount to a 10% increase in this fiscal year's Medicare allocation (Milbank, Washington Post, 2/23). The Medicare budget currently stands at $216 billion (Davis, Wall Street Journal, 2/23). Expanding on Bush's statement, White House officials said that an "unspecified part of the increase" would go toward instituting Bush's proposed four-year block grant prescription drug program, while the remainder "would cover the escalating expense of running Medicare in its current form" (Washington Post, 2/23). During the campaign, Bush backed a two-part Medicare reform plan in which states would first receive $48 billion over four years to implement the block grant program for low-income seniors, followed by a long-term, $110 billion program to modernize Medicare by instituting private competition and offering drug benefits to seniors. Last month, Bush sent the "Immediate Helping Hand" prescription drug proposal to Congress, where it received a "skeptic[al]" response from members of both parties. Sen. Charles Grassley (R-Iowa), chair of the Senate Finance Committee, which holds jurisdiction over Medicare, has said he will not move forward with either aspect of Bush's campaign proposal, seeking instead to implement more limited Medicare reform that includes a universal drug benefit (California Healthline, 2/15).