Senate Conservatives, Moderates Still Divided on Medicare, Medicaid Cuts in Reconciliation Package

The Los Angeles Times on Monday examined support and opposition among Senate Finance Committee members for committee Chair Chuck Grassley's (R-Iowa) budget reconciliation package to cut $10 billion over five years from Medicaid and Medicare (Havemann/Simon, Los Angeles Times, 10/24). The plan includes $25.1 billion in proposed spending reductions and about $15 billion in spending increases for Medicaid and Medicare. It would provide a net savings of $4.26 billion in Medicaid costs and a new savings of $5.76 billion in Medicare costs (California Healthline, 10/21).

Committee members are scheduled to vote on the package Tuesday, a move that "could be crucial to this year's effort to rein in federal spending," the Times reports. Some conservative Republicans "are reportedly upset that the [Hurricane] Katrina aid is too generous," according to the Times. Democrats are unified in opposition to the package, meaning that Grassley must win support from all finance committee Republicans (Los Angeles Times, 10/24).

Republican Opposition

Sen. Craig Thomas (R-Wyo.) is said to be "balking" over additional spending outlined in the package, CongressDaily reports. A Thomas spokesperson said he did not know how the senator will vote but indicated that Thomas has serious reservations. In addition, Sen. Jim Bunning (R-Ky.) reportedly wants the bill to include language barring specific types of intergovernmental transfers of Medicaid funds, which states sometimes use to increase federal contributions. A Bunning spokesperson said, "As it stands, he would vote against it. But we're working with the committee to try to get his concerns addressed."

Finance committee moderates "insist" that language on intergovernmental transfers should not be included in the reconciliation package, CongressDaily reports. A spokesperson for Sen. Gordon Smith (R-Ore.), a committee moderate, said, "If you put language [on intergovernmental transfers] in the statute, CMS loses flexibility, states lose out and it ultimately harms beneficiaries" (Heil, CongressDaily, 10/21). Smith and Sen. Olympia Snowe (R-Maine), a fellow moderate, favor Grassley's package, according to the Times (Los Angeles Times, 10/24).

House Leaders 'Struggling'

In related news, House leaders are "struggling" in their attempt to increase budget reconciliation savings from $35 billion to $50 billion, CQ Today reports. The targeted cuts include an additional $7 billion from the House Ways and Means Committee, which has some oversight of Medicare (Dennis/Higa, CQ Today, 10/21).

Rep. Jeff Flake (R-Ariz.) said, "The leadership is saying they will only go to the floor if they know they have the votes. They don't have the votes" (Los Angeles Times, 10/24). Analysts from the Center on Budget and Policy Priorities on Friday in a conference call with reporters said the committee likely will look for cuts in programs other than Medicare.

Robert Greenstein, executive director for CBPP, said, "There are clear indications that the House Republican leadership is reluctant to have any cuts in Medicare in reconciliation." A spokesperson for the committee on Friday said no final decisions had been made on which programs will be targeted (CQ HealthBeat, 10/21). "Even if both chambers can settle on their own totals [for cuts], they may have difficulty compromising on a package that is neither too robust for the Senate nor too anemic for the House," the Times reports (Los Angeles Times, 10/24).

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