Tentative Medicaid Budget Deal Reached; Medicare Cuts Possible
Aides for Sen. Gordon Smith (R-Ore.) said that Bush administration officials have accepted the senator's request to create a commission to study Medicaid "in hopes of securing support from him and other moderate Republicans for $10 billion worth of cutbacks" to the program, the New York Times reports. Demetrios Karoutsos, a spokesperson for Smith, said, "It's our understanding that the administration has agreed, in principle, to a Medicaid commission." Smith last month in negotiations on the Senate budget successfully pushed for an amendment that eliminated $14 billion in Medicaid cuts from the Senate's budget resolution (Pear/Gay Stolberg, New York Times, 4/27).
Smith on Tuesday confirmed he was working on a deal with HHS to create the commission, saying, "We've won the concept, ... we're just working on the details." Smith said that the commission by August likely would issue recommendations on proposals to save $10 billion in Medicaid over the next five years (CQ HealthBeat , 4/26). Smith said he believes the majority of the six other Republicans who supported his amendment opposing Medicaid cuts will support the terms of the deal. Smith said he had not met with all six senators. HHS Secretary Mike Leavitt declined to comment on his negotiations with Smith (CQ HealthBeat , 4/26).
According to the Times, while there are other "sticking points" in reaching an agreement on the budget, "Medicaid is the biggest point in the dispute." President Bush's fiscal year 2006 budget proposal called for savings to Medicaid of $13 billion over five years, while the House approved a budget resolution with Medicaid savings of $15 billion to $20 billion (New York Times, 4/27).
The House on Tuesday voted 348-72 in favor of a "symbolic" motion instructing budget conference committee members not to require the House Energy and Commerce Committee to find savings from Medicaid and other programs, CQ Today reports (Allen/Taylor, CQ Today, 4/26).
The measure endorses the creation of a commission to study ways to slow Medicaid's rising costs. Rep. John Spratt (D-S.C.) said the vote "puts a majority of the House clearly on record as opposing Medicaid cuts" (Havemann, Los Angeles Times, 4/27). However, conferees "are all but certain to ignore" the measure, CQ Today reports.
House Budget Committee Chair Jim Nussle (R-Iowa) said he encouraged Republicans to support the House measure because he favors studying Medicaid and finding "savings, not cuts." However, Nussle said the measure is written in a way that "give[s] everybody the opportunity to make the political points, to issue [their] press releases" (CQ Today, 4/26).
House Minority Leader Nancy Pelosi (D-Calif.) said House Republicans "knew they could not defeat a motion to protect Medicaid. They negotiated behind closed doors to include Medicaid cuts in the final budget report, regardless of how the majority in both houses vote" (New York Times, 4/27).
Some "lawmakers, aides and lobbyists have begun indicating that cuts to mandatory programs could be aimed at extracting savings from Medicare as well," CQ Today reports. Sen. Judd Gregg (R-N.H.), who previously said that Medicare would not likely be cut, on Tuesday did not answer a question on whether the program would face spending reductions (CQ Today, 4/26). Asked to confirm a report that a tentative agreement includes $7 billion in cuts to Medicare over the next five years, Gregg paused and then said, "I'm not aware of that, ... I'll take it" (CQ HealthBeat , 4/26).
Republicans such as House Ways and Means Committee Chair Bill Thomas (R-Calif.) believe Medicare cuts "could be explored" as "the pressures mount this summer" to make cuts, the Wall Street Journal reports (Rogers, Wall Street Journal, 4/27).
Senate Majority Leader Bill Frist (R-Tenn.) said he is "cautiously optimistic" that both chambers will approve a budget by the end of the week (New York Times, 4/27). Gregg said, "We may not get a budget if it falls out of this week," adding, "The dynamics for getting it done are now" (CQ HealthBeat , 4/26). The budget conference report likely will call for more than $40 billion in savings from mandatory programs, CQ Today reports (CQ Today, 4/26).
According to the Times, "one sign that a budget deal is near" is that the House on Tuesday selected budget negotiators (New York Times, 4/27). Senators on the budget conference committee include Gregg, Kent Conrad (D-N.D.), Wayne Allard (R-Colo.), Pete Domenici (R-N.M.), Chuck Grassley (R-Iowa), Patty Murray (D-Wash.) and Paul Sarbanes (D-Md.). House members on the conference committee include Nussle, Spratt and Jim Ryun (R-Kan.) (CQ Today, 4/26). Senate and House budget conferees are expected to have an open meeting on Wednesday (New York Times, 4/27).
Congress "is likely to approve a budget blueprint this week that manages to be profligate and mean-spirited at the same time," a Times editorial states. Although the budget "is expected to add at least $125 billion to the federal budget deficit in the next five years," it also "aim[s] to ensure that spending on Medicaid and other programs for the poor ... be cut by $17 billion," the editorial states.
Four of the seven senators who voted to eliminate Medicaid cuts in March -- Smith, Susan Collins (R-Maine), Arlen Specter (R-Penn.) and Norm Coleman (R-Minn.) -- are "in the strongest position politically" to "fix this dreadful bill," according to the editorial. The editorial concludes, "Fairness and fiscal sanity hang in the balance" (New York Times, 4/27).