The Senate approved sweeping deficit-reduction legislation
last night that would save about $35 billion over the next
five years by cutting federal spending on prescription
drugs, agriculture supports and student loans, while
clamping down on fraud in the Medicaid program.
The measure would also open Alaska's Arctic National
Wildlife Refuge to oil drilling, a long-sought goal of the
oil industry that took a major step forward after years of
political struggle. A bipartisan effort to strip the
drilling provision narrowly failed.
This while the government spends trillions on the
military, gives billions to Halliburton and other Bush
cronies in corrupt contracts, and cuts taxes for
corporations and the wealthy: Tax the poor, subsidize the
rich, and cut programs for people: that's neoliberalism.
rkm
--------------------------------------------------------
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/03/AR2005110300999.html
washingtonpost.com
Senate Passes Plan to Cut $35 Billion From Deficit
By Jonathan Weisman
Washington Post Staff Writer
Friday, November 4, 2005; A01
The Senate approved sweeping deficit-reduction legislation
last night that would save about $35 billion over the next
five years by cutting federal spending on prescription
drugs, agriculture supports and student loans, while
clamping down on fraud in the Medicaid program.
The measure would also open Alaska's Arctic National
Wildlife Refuge to oil drilling, a long-sought goal of the
oil industry that took a major step forward after years of
political struggle. A bipartisan effort to strip the
drilling provision narrowly failed.
The Senate bill, which passed 52 to 47, is the first in
nearly a decade to tackle the growth of entitlement
spending, the part of the federal budget that rises
automatically based on set formulas and population
changes.
It would shave payments to some farmers by 2.5 percent,
while eliminating a major cotton support program and
trimming agriculture conservation spending. A proposal to
limit payments to rich farmers failed yesterday. The
measure passed largely along party lines, with only two
Democrats voting for it and five Republicans voting
against it.
Yesterday's action is part of an effort by congressional
Republicans to demonstrate fiscal discipline after
widespread complaints of profligate spending on Capitol
Hill. Although many Democrats and some moderate
Republicans are concerned that the effort may go too far,
prominent Republicans in the Senate and House said the
cuts were necessary to slow the rate of spending and
control a deficit projected to total $314 billion by the
end of the fiscal year.
During a speech yesterday to a Heritage Foundation group,
former House majority leader Tom DeLay (R-Tex.) repeatedly
apologized for excessive spending by Congress, including
recent highway legislation that was loaded with lawmakers'
pet projects. After noting that House Republicans have
voted to cut taxes ever year since winning the majority in
1994, DeLay acknowledged, "Our record on spending has not
been as consistent, unfortunately."
The Senate bill would raise billions of dollars by
auctioning off parts of the broadcasting spectrum for
digital television. It would raise $2.5 billion through
leasing parts of the Alaskan refuge to oil and gas
interests. Companies with traditional pension plans would
be charged higher premiums for insurance coverage under
the Pension Benefit Guaranty Corp. And the profits of
student lenders would be squeezed by $9.7 billion over
five years.
Some of the savings would be spent on relief for Katrina
survivors and higher payments to health care providers
helping Medicare patients.
The focus now shifts to the House, where the Budget
Committee voted 21 to 16 yesterday to approve a more
extensive bill saving nearly $54 billion through 2010 with
cuts to Medicaid, food stamps, student loans, agriculture
subsidies and child support enforcement. The House measure
would allow states to impose premiums and co-payments on
poor Medicaid recipients for the first time.
With so many controversial provisions, the House measure
is forcing Republican leaders to scramble for support in
what could be the most difficult vote of the year. Some
Republican moderates are balking at cuts to anti-poverty
programs, especially in light of a $70 billion tax cut
that could come to a vote soon after the budget bill, more
than wiping out the first bill's deficit reduction.
Other Republicans usually in the leadership's camp are
protesting measures with regional implications, such as a
provision that would end a moratorium on offshore oil
drilling and another that would halt the practice of
sending some import duties to companies impacted by unfair
trade practices. And environmentalists are making a last
stand to keep oil exploration out of the Arctic refuge.
"There are a dozen issues, any one of which could break
this deal," said Rep. Adam Putnam (R-Fla.), a budget
committee member. "This is going to be a heavy lift."
Among the deepest cuts are those hitting Medicare and
Medicaid. The House bill would cut the growth of Medicaid
by $12 billion over five years and by nearly $48 billion
over the next decade, according to the nonpartisan
Congressional Budget Office. The Senate would trim
spending on Medicaid and the related Children's Health
Insurance Program by $4.3 billion through 2010, and $14
billion through 2015. The Senate measure mitigates cuts to
health care programs for the poor by shifting the bulk of
cost savings to Medicare, which would be cut by $5.7
billion over five years. That savings would balloon to
$40.6 billion through 2015.
Even liberal advocacy groups say the Senate measure
largely shields Medicare and Medicaid beneficiaries,
imposing the burden instead on pharmaceutical companies,
private insurers and more-affluent Americans who
fraudulently qualify for nursing-home coverage by
transferring assets to family members. But the Senate
Medicare provisions have prompted a veto threat from the
White House, which has strongly objected to the bill's
tampering with President Bush's Medicare prescription drug
benefit.
The Senate bill would save $36 billion over the next
decade by eliminating financial incentives to lure managed
care companies into Medicare. The White House called those
enticements "critical."
"If a final bill is presented to the President that limits
the choices of seniors, takes away their prescription drug
coverage, or cuts the Stabilization Fund . . . , the
President's senior advisors will recommend that he veto
the bill," a White House statement said.
Senate Budget Committee Chairman Judd Gregg (R-N.H.)
dismissed the threat last night as "absurd."
The House's Medicaid cuts present a far more immediate
political obstacle. By allowing states to impose new
co-payments and premiums while scaling back some benefits,
the legislation is expected to save more than $30 billion
over 10 years, the CBO said, not because cost-sharing
would bring in revenue but because new costs would keep
the poor out of the health care system.
House Energy and Commerce Committee Chairman Joe Barton
(R-Tex.) has staunchly defended the cuts as the tough
medicine needed to save a program already suffering from
draconian cutbacks in some states. The House measure, he
said, would grant states more flexibility to tailor
Medicaid coverage to their needs while inducing Medicaid
recipients to use the health care system more wisely by
imposing some modest costs on them.
"It is perplexing that so many who say they care the most
want to do the least. If you want Medicaid patients to
lose health care, the best thing to do is nothing," he
said.
Still, some health care experts say new premiums and
co-payments that would be imposed on the working poor
would drive millions of families out of the Medicaid
system entirely.
"From a beneficiary's perspective, [the changes] are
hugely significant," said Jocelyn Guyer, senior program
director at Georgetown University's Center for Children
and Families, who estimated that 6 million children will
be affected by the changes.
Under the House plan, states could raise co-payments for
Medicaid recipients below the poverty line from $3 to $5
per doctor's visit or prescription, then keep raising them
with the medical inflation rate. For the working poor just
above the poverty line, there would be no limit to higher
co-payments, although out-of-pocket health costs are not
supposed to exceed 5 percent of a family's income. Health
policy analysts say that protection may not amount to much
as poor families will have difficulty tracking health care
expenses that closely.
For the first time, poor children and pregnant women --
currently shielded from any out-of-pocket payments --
could be billed for some medications or hospital visits
for non-emergency care.
›Ý2005ÝThe Washington Post Company
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