Rep. Jim Nussle Proposes Additional Budget Reductions To Offset Hurricane Recovery Costs
House Budget Committee Chair Jim Nussle (R-Iowa) on Wednesday proposed to increase the $35 billion in spending reductions to entitlement programs outlined in the fiscal year 2006 budget reconciliation process by 10% to $38.5 billion, the Washington Post reports (Weisman, Washington Post, 10/6). The FY 2006 budget resolution called for $10 billion in Medicaid spending reductions over five years (California Healthline, 10/5).
Nussle also proposed a 2% across-the-board reduction in discretionary spending as an amendment to the FY 2006 budget resolution to save about $16.8 billion (Dennis, CQ Today, 10/5). According to Nussle, the proposals would provide "a down payment" on costs related to Hurricane Katrina. Spending and tax cuts related to the hurricane approved to date will cost $71 billion, and conservative lawmakers have called for spending reductions to offset the cost.
"This is not making that much of a dent in the total amount that will be needed to deal with all the proposals in their totality for the Gulf," Nussle said.
Senate Finance Committee Chuck Grassley (R-Iowa) on Wednesday presented to Republican committee members a proposal that would reduce growth in Medicaid spending by as much as $12 billion over five years, $2 billion more than the amount outlined in the FY 2006 budget reconciliation process (Washington Post, 10/6). Grassley said that the proposal would not affect health care services for beneficiaries, but he did not provide specific details.
However, Grassley said, "I don't know if I can get the votes to do it" (CQ Today, 10/5). In addition, the budget reconciliation process has "become intertwined" with a bill (S 1716) sponsored by Grassley and Sen. Max Baucus (D-Mont.) that would provide federally funded Medicaid coverage for Hurricane Katrina survivors, CongressDaily reports (Heil, CongressDaily, 10/6).
In response to concerns raised by conservative lawmakers about the original $8.9 billion cost of the bill, Grassley has proposed a modified version of the legislation estimated to cost about $6.1 billion. The bill would allow low-income hurricane survivors to bypass some standard Medicaid eligibility rules to qualify for coverage. Individuals from Louisiana, Mississippi and Alabama affected by the hurricane with annual incomes less than the federal poverty level would qualify for Medicaid for five months.
Children and pregnant women from families with annual incomes less than 200% of the federal poverty level also would qualify. The federal government would pay 100% of Medicaid costs in the affected states for 12 months, with part of the cost paid with $800 million in Federal Emergency Management Agency funds (California Healthline, 10/5).
A Baucus aide said that the senator has not made a final decision on whether to support the modified bill (CongressDaily, 10/6).
Meanwhile, Senate Budget Committee Chair Judd Gregg (R-N.H.) has assembled a group of senators to develop a proposal for spending reductions that he hopes will lead to more savings than the Nussle proposals. Gregg said that he might not seek to include the proposed spending reductions in the FY 2006 budget resolution.
In addition, Gregg asked the White House to explain plans for spending reductions to entitlement programs and to reconsider opposition to revisions to the 2003 Medicare law. The Medicare prescription drug benefit is "already $43 billion over budget and it hasn't even started yet," Gregg said.
Sen. John McCain (R-Ariz.) and Rep. Jim Cooper (D-Tenn.) have sought to delay the Medicare prescription drug benefit, which is scheduled to begin on Jan. 1, 2006 (CQ Today, 10/5).
According to the Post, the Republican Party is "sharply split" by "small government conservatives" who are "emboldened to scale back the overall reach of government" and moderates who support "more anti-poverty spending, not less." Some conservative House lawmakers have said that "they may revolt against the GOP leaders" if at least some of the spending reductions Nussle has proposed are not passed, according to the Post.
Rep. Jeff Flake (R-Ariz.) said, "I can tell you if we don't see more than rhetoric, this leadership team is not secure" (Washington Post, 10/6).
However, Sen. Ted Stevens (R-Alaska), chair of the Senate Appropriations Subcommittee on Defense, said that he opposes a 2% across-the-board reduction in discretionary spending. "There's not room," Stevens said (O'Connor, The Hill, 10/6).
House Speaker Dennis Hastert (R-Ill.) and other House Republican leaders have not endorsed the Nussle proposals, although they do support revisions to the FY 2006 budget resolution to further reduce spending. Ron Bonjean, a spokesperson for Hastert, said, "The speaker believes Congress can and should do much more to tackle the cost of Hurricane Katrina" (Dinan, Washington Times, 10/6).
Meanwhile, Gregg said that Republican lawmakers have a "genuine desire" to find a "fairly strong" amount of spending reductions (CQ HealthBeat, 10/5).
House Minority Leader Nancy Pelosi (D-Calif.) and Rep. John Spratt (D-S.C.) on Wednesday in a letter to Hastert and Nussle said that lawmakers should cancel the $35 billion in spending reductions outlined in the FY 2006 budget reconciliation process, which they said could lead to cuts in relief programs for Hurricane Katrina survivors, including Medicaid. They added that Republican proposals would "cut taxes for the wealthy while requiring deep spending cuts for those in need" (The Hill, 10/6).
In addition, they wrote, "We disagree with Republicans who are using Katrina as a rationale to justify reconciliation cuts to safety-net programs (Washington Times, 10/6).
In related news, physicians and hospitals in Arkansas said that they require federal assistance to provide medical care to an estimated 50,000 to 70,000 Hurricane Katrina evacuees who have traveled to the state, the Arkansas Democrat-Gazette reports.
Paul Cunningham, senior vice president of the Arkansas Hospital Association, said, "I think it's pretty urgent. There is a lot of unreimbursed care in Arkansas."
David Wroten of the Arkansas Medical Society said the passage of the Grassley-Baucus bill is needed for physicians, adding that "the patients need it more." He said, "Patients need to know they are not going to have a problem getting heath care. Obviously, you can only provide uncompensated care up to a point" (Barton, Arkansas Democrat-Gazette, 10/6).
"Let's not pretend that the Republican plan to cut Medicaid this fall has anything to do with finding the money to pay for Hurricane Katrina," a Boston Globe editorial states.
The editorial adds," It would be ironic and cruel if programs to help poor people elsewhere were sacrificed to repair the lives of the poor people who were in Katrina's path," but "that is precisely what is happening in Washington" (Boston Globe, 10/6).