Senate Budget Proposal Excludes Medicare, Medicaid Cuts
Senate Budget Committee Chair Judd Gregg (R-N.H.) on Wednesday proposed a fiscal year 2007 budget resolution that "essentially ignores President Bush's proposals to find a net $65 billion in savings from entitlement programs such as Medicare over the next five years," CQ Today reports (Dennis, CQ Today, 3/8).
According to The Hill, the resolution, which would "assume revenue" by allowing oil drilling in Alaska's Arctic National Wildlife Refuge, is "expected to be approved by the committee" on Thursday.
Gregg said, "I call it a standard, vanilla budget" (Allen/O'Connor, The Hill, 3/9). Gregg said the resolution does not include more cuts because there are not enough Senate votes to pass them.
The budget debate has been influenced by "[e]lection-year politics," the AP/Houston Chronicle reports (Taylor, AP/Houston Chronicle, 3/9). Congress in 2005 pushed "broad spending cuts" through the "filibuster-proof reconciliation process," but Senate leaders this year "have opted [instead] to create a single, narrowly targeted reconciliation bill," The Hill reports (The Hill, 3/9).
Gregg's proposal includes a provision that would create a budget point of order against new mandatory spending proposals if government revenue other than Medicare taxes and fees subsidize more than 45% of the program's cost.
Gregg said HHS Secretary Mike Leavitt had proposed the provision, which could be applicable within five years, CQ Today reports (CQ Today, 3/8).
Gregg's proposal "won only faint praise" from other Republican senators, the AP/Chronicle reports.
Sen. Lamar Alexander (R-Tenn.) said the proposal is like "treading water in the ocean budget," adding, "It's better than sinking, but it's not a long-term solution, and you can't do it forever."
Sen. Pete Domenici (R-N.M.) said, "No one should kid themselves. This is not a budget that is going to have a significant impact on the fiscal policy of this country."
The AP/Chronicle reports that it is "not clear" whether the Senate and House will be able to agree on a final budget (AP/Houston Chronicle, 3/9).
In related news, the House Republican Study Committee on Wednesday announced a five-year budget plan that would spend nearly $1 trillion less than Bush's budget proposal, the Washington Times reports (Hurt, Washington Times, 3/9). Medicaid would be turned into a block grant program under the RSC proposal (Schatz, CQ Today, 3/8). The proposal also includes $217.9 billion in Medicare cuts over five years.
RSC is planning to offer the proposal as a "substitute" to the FY 2007 budget resolution when it reaches the House floor, CongressDaily reports (CongressDaily, 3/8).
RSC Chair Mike Pence (R-Ind.) said, "Our goal is to drive this process as far in the direction of a balanced budget as we possibly can in an election year." Pence added that a House-Senate deal should include entitlement cuts, and that the House may not pass a budget if cuts are not included.
Republican moderates are "likely to meet [the proposal] with stiff resistance," CQ Today reports (Schatz, CQ Today, 3/8).
In other related news, more than 60 House Republicans in a letter to House Budget Committee Chair Jim Nussle (R-Iowa) on Wednesday said they oppose Bush's proposal to cut $37 billion from Medicare over five years. The letter, --"spearheaded" by moderate Reps. Jim Gerlach (R-Pa.) and John McHugh (R-N.Y.) -- also was signed by Reps. Tom Davis (R-Va.), Ernest Istook (R-Okla.), Richard Pombo (R-Calif.) and Don Young (R-Alaska), among others.
The lawmakers write, "At a time when 32% of hospitals have negative total margins and seven out of 10 are losing money on Medicare, we strongly believe now is not the time for further reductions" (Cohn, CongressDaily, 3/9). They add, "Hospitals are not just a health care safety net for their communities but also anchor local economies. They also must stand ready to respond to natural disasters, pandemic diseases and the threat of terrorism" (Los Angeles Times, 3/9).
AARP CEO William Novelli in a letter to Gregg and Senate Finance Committee Chair Chuck Grassley (R-Iowa) also said two Bush budget proposals affecting Medicare should not be approved.
Novelli said lawmakers should oppose a provision that would create an automatic 0.4% across-the-board cut to Medicare when general revenues increase to 45% of Medicare spending. Lawmakers instead should enforce a provision in the Medicare drug law that calls for a review of spending when federal general revenues fund more than 45% of Medicare spending, Novelli said.
AARP also said lawmakers should reject Bush's proposal to eliminate indexing of income-related Medicare Part B premiums. Under Bush's plan, about 3.8 million Medicare beneficiaries would pay a higher share of premiums by 2016.
Novelli wrote, "We are particularly concerned about proposals to cut Medicare that would ignore the fact that unsustainable growth in health care spending through the system is the root of the problem." Novelli added, "Proposals that would impose automatic arbitrary cuts to program spending would be harmful to the health of more than 42 million Americans who rely on Medicare for their health insurance" (Carey/Schuler, CQ HealthBeat, 3/8).