Reaction Mixed to Bush Budget Proposal
Members of the Bush administration on Tuesday began to testify before Congress in support of President Bush's $2.77 trillion budget proposal in the face of "congressional attacks" on some of the plans, including $36 billion in spending reductions for Medicare over five years and nearly $5 billion in Medicaid spending reductions over five years, the AP/Las Vegas Sun reports (Crutsinger, AP/Las Vegas Sun, 2/7).
Senate Budget Committee members at a Tuesday hearing "hammered" White House Office of Management and Budget Director Joshua Bolten on Bush's budget proposal, CongressDaily reports. Bolten said the proposed budget would slow annual Medicare spending growth from 7.8% to 7.5% over 10 years, and he called the budget proposals concerning Medicare a "modest first step."
Some Democrats and Republicans are "pushing alternatives" and saying that Bush's budget "would disproportionately impact poor seniors in rural areas by closing access to hospital care," CongressDaily reports (Cohn, CongressDaily, 2/8). According to Roll Call, the budget proposal "may have created a more dangerous political minefield for congressional Republicans" (Pierce, Roll Call, 2/8).
The Hill reports that "centrist House Republicans" are "on the hot seat just weeks after they were asked to make a tough vote on budget reconciliation" that also included spending cuts for Medicare and Medicaid (Young, The Hill, 2/8). However, "there is still a core faction of conservatives" in the Senate and House who are pushing for additional cuts to entitlement programs, Roll Call reports (Roll Call, 2/8).
Senate Budget Committee Chair Judd Gregg (R-N.H.), reacting to a comment from Senate Labor-HHS Appropriations Subcommittee Chair Arlen Specter (R-Pa.) that Bush's proposed cuts to health care and education are "scandalous," said, "Specter was dealt a very tough hand last year, and we all realize it. I'm hoping we can work with Specter to try and address his concerns to some degree" (Dennis/Higa, CQ Today, 2/7). Gregg said Congress must continue the work of cutting entitlements that it began last year and said he would use Bush's proposed Medicare and Medicaid cuts as the basis for any budget reconciliation measure. Gregg said that lawmakers complaining about another debate on entitlement cuts have "absolutely no political courage," adding, "You cannot demagogue this issue any longer" (Roll Call, 2/8).
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said, "It's going to be more difficult (to address Medicare) than last year because of the fact that it's an election year -- and it was very difficult to do in a nonelection year."
Sen. Tom Harkin (D-Iowa) said, "I can't believe that there's a will to cut $36 billion out of Medicare. I can't imagine the Republican Party ... is going to allow this to come through this year in an election year" (Taylor, AP/Philadelphia Inquirer, 2/8).
Rep. John Shadegg (R-Ariz.) said, "Under the president's budget, we would increase spending for Medicare by 7.5% every year for the next five years, rather than by 7.8%. That is not a 'cut.' The program will still spend more than $2 trillion in those years. Surely at a time of war, and facing a mountain of debt, it is reasonable to slow the growth of spending by three-tenths of 1%."
An unnamed Senate Democratic aide said, "The president is going to have a very tough sell up here," adding, "He does play a little into our hand on this. I don't know what he's thinking." A senior Senate Republican aide said, "Seniors are already angry about the drug benefit, and now they're saying we should increase premiums for (seniors with) higher incomes?" The aide added, "I can't quite figure out why they are going to make us jump off this cliff" (Roll Call, 2/8).
Norman Ornstein, resident scholar at the American Enterprise Institute, said, "It's not a budget the Republicans are going to go anywhere near," adding, "Perhaps the best thing they have going for them is that Democrats really don't have much skill at turning these issues their way" (Silva, Chicago Tribune, 2/8).
In related news, Sen. Patty Murray (D-Wash.) at the Senate Budget Committee Hearing questioned Bolten about whether the proposed Department of Veterans Affairs budget underestimates the cost of providing health care to veterans, as apparently was the case with the proposed FY 2005 and 2006 budgets, the Spokane Spokesman-Review reports. Murray cited a recent Government Accountability Office report that indicates VA based its budget for those years by anticipating what the Bush administration would request, rather than by projecting demand for health services.
Murray said, "How do you justify a VA budget request that is not based on demand of services?" Bolten said, "There was an error made last year. ... I believe that the errors that were in the modeling process last year that caused the damage have been corrected."
The proposed FY 2007 VA budget calls for a 9% increase in health care funding, Bolten said.
Murray then said that much of the increase would be paid by charging larger fees to higher-income veterans (Eder, Spokane Spokesman-Review, 2/8).
Veterans groups on Wednesday are expected to testify before a House panel against the proposed increases. Under the budget proposal, veterans with incomes generally above $27,000 would pay $250 a year to enroll in the VA system and $15 for each prescription.
VA estimates 200,000 veterans would pay the enrollment fee, and one million would pay the increased prescription fee (Stone, USA Today, 2/8).
In other related news, Bush's FY 2007 budget proposal to expand health savings accounts have led some congressional Democrats and union leaders to "invok[e] a political comparison to last year's Social Security privatization drive," The Hill reports (Schor, The Hill, 2/8).
Bush's proposal includes a number of provisions related to encouraging the use of health savings accounts, for a combined cost of $60 billion over five years. The cost of the proposals, including tax incentives, is estimated at $156 billion over 10 years. The provisions include a modification to HSAs that would allow employers to contribute more money to the accounts of workers with greater health care expenses and a proposal to give tax credits to low-income uninsured people who have high-deductible health plans (California Healthline, 2/7).
Rep. Charles Rangel (D-N.Y.), ranking member of the House Ways and Means Committee, said, "It will go the same way Social Security (did). He'll send it to the committee, we'll discuss it." Rangel added that "a lot of those people can't set aside the money because they don't have enough income to take a deduction."
Brandon Rees, director of AFL-CIO's investment office, said, "We see a direct parallel between Wall Street pushing private accounts carved out of Social Security and advocating HSAs as an alternative to employer-provided health insurance."
However, a financial services lobbyist said, "We will get paid [by Bush's HSA proposal], but this isn't about a moneymaking proposition. Our guys aren't licking their chops and saying, 'Oh, this is a pot of gold, thank you, Congress'" (Schor, The Hill, 2/8).
In related news, the Philadelphia Inquirer reports that the "theory" behind HSAs is that patients "[a]rmed with knowledge of true health care costs ... will be more discriminating consumers." However, some research into patient behavior "suggests ... that people ... shrink from such decisions," the Inquirer reports (Hall, Philadelphia Inquirer, 2/8).
Additional information about the FY 2007 budget proposal is available online from the Office of Management and Budget.
Bush on Wednesday is expected to sign the FY 2006 budget reconciliation (bill (S 1932), which includes $39 billion in cuts over five years to various programs including Medicare and Medicaid, the Christian Science Monitor reports (Feldmann, Christian Science Monitor, 2/8).
NPR's "Morning Edition" on Wednesday reported on cuts in Medicaid spending in the fiscal year 2006 budget reconciliation bill. The segment includes comments from Sara Rosenbaum of the George Washington University School of Public Health; John Rother, policy director at AARP; and Grassley (Rovner, "Morning Edition," NPR, 2/8). The complete segment is available online in RealPlayer.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.