Congress Sends Budget to Bush
Slashing Social Spending
But the War Rages On
Agence France Presse 1feb2006
The House of Representatives narrowly approved a budget bill slashing some 39 billion dollars over five years from federal pay outs to the elderly, indigent and students.
The bill, approved by a vote of 216 to 214, already was passed in the US Senate in December, and now goes to President George W. Bush's desk for signing.
House Majority Leader Dennis Hastert said the bill, dubbed the Deficit Reduction Act, reins in runaway federal spending.
"We are keeping good on a promise we made the American people to restrain federal spending and reform federal programs.
"Our citizens have said they don't want to see waste in the federal government, so this bill includes 40 billion in mandatory savings.
"I'm proud that House Republicans have delivered our constituents a bill that not only has important savings, but will also make the federal government more efficient and effective," he said.
Republican Bill Thomas, Chairman of the Ways and Means Committee, called the bill "an important step in removing wasteful and unnecessary spending from the budget."
"This compromise legislation is a first step on what will be a long road of getting our mandatory spending programs under control."
But with provisions that limit aid to middle and lower income college students and which restrict a federal health insurance program for the poor, lawmakers like US Senator Ted Kennedy on Wednesday condemned the legislation as heartless.
"Today the Republicans showed their true colors by turning their backs on the needs of the hardest working Americans and their families," he said.
"The passage of this Draconian bill solidifies the Bush administrations misplaced priorities and proves that special interests dictate their policies," the Democratic senator said.
Top House Democrat, Nancy Pelosi said she found particularly disturbing that the aid cuts come at a time when Congress is debating a 70 billion dollar reduction in taxes for the wealthy.
"The sad truth is all of this is to pay for tax cuts for the wealthiest people in our country," she said.
The bill passed without a single Democratic vote, but Republicans, who outnumber Democrats in Congress, were able to avoid
"This isn't about small government," Pelosi said. "This is about small-minded, petty government that does not meet the needs of the American people."
source: http://news.yahoo.com/s/afp/20060202/pl_afp/uspoliticsbudget_060202041941&printer=1;_ylt=Ajw1yI4MIAxdEFL2dEJ8._mGOrgF;_ylu=X3oDMTA3MXN1bHE0BHNlYwN0bWE- 1feb2006
House Sends Bush Budget-Cutting Bill
ANDREW TAYLOR / AP 2feb2006
WASHINGTON — The budget-cutting bill awaiting President Bush's signature may only make a small dent in the nation's huge deficit, but he is expected to propose more cuts in his 2007 plan, including farm subsidies, Medicaid and Medicare.
The House on Wednesday sent Bush a major bill cutting benefit programs like Medicaid and student loan subsidies. The president is ready to sign the five-year, $39 billion budget-cutting bill and move on to next year's budget cycle.
On Feb. 6, he is releasing his 2007 budget plan, which is likely to call for new cuts to benefits programs like farm subsidies, Medicaid, food stamps and Medicare. Many lawmakers and budget experts are skeptical, though, of the chances for another budget-cut bill during an election year.
The House passed the bill 216-214 on Wednesday, mostly along party lines. It was Congress' first attempt in eight years to slow the growth of benefit programs like Medicaid and student loan subsidies.
Republicans hailed the bill as an important first step to restoring discipline on spending.
"Once again, House Republicans are on record as defending budget discipline," said Acting Majority Leader Roy Blunt, R-Mo. [left] "We have achieved $39 billion in savings, while streamlining government."
Democrats attacked the measure as an assault on college students and Medicaid patients and said powerful Washington lobbyists had too much influence on it.
"As the Republican budget ax fell on the poor and students, powerful special interests were cutting special deals in the conference committee," said Minority Whip Steny Hoyer, D-Md.
The bill blends modest cuts to planned spending on Medicaid, Medicare and student loan subsidies with a renewal of the 1996 welfare reform bill and $10 billion in new revenues from auctioning television airwaves to wireless companies. Dairy farmers with smaller herds won a $1 billion extension of a subsidy program that pays them if milk prices drop. Physicians were spared a 4 percent cut in Medicare fees, but radiologists and home health care providers participating in the program would face cuts in their scheduled payments.
The $39 billion in cuts are generally small compared with deficits expected to total $1.3 trillion or more through 2010. Still, the bill set off a brawl between Democrats and Republicans and whipped up opposition from interest groups like AARP.
The House passed a nearly identical bill Dec. 19, but the chamber held an unusual revote because Senate Democrats forced technical changes that the House needed to accept before the bill could be sent to Bush's desk.
Republicans said the measure cemented the GOP's status as the party of smaller, more efficient government. But Democrats said the measure, when combined with an upcoming bill cutting taxes by about $70 billion, would lead to an increase in the deficit.
As if on cue, the Senate kicked off debate on a tax cut bill that would revive some expired tax breaks and safeguard millions more families from paying the alternative minimum tax. The House version of that bill would extend tax cuts for capital gains and dividends.
The powerful AARP seniors lobby, student groups, radiologists, pediatricians and others have mounted a monthlong campaign against the bill, making some lawmakers uncomfortable with their earlier votes in December.
"Over the intervening month, people that I know and respect have gone through the details of this legislation ... and they've said, 'This is really a disaster,'" said Rep. Rob Simmons, D-Conn., who switched his vote from "aye" to "nay." Simmons was one of 13 Republicans to oppose the bill, joining 200 Democrats and liberal Independent Bernard Sanders of Vermont.
AARP is opposed to a provision tightening Medicaid nursing home care rules regarding people who shed assets to qualify for such care.
Pediatricians say provisions allowing states to eliminate some guaranteed Medicaid child health care services and charge new and increased co-payments would end up hurting children by driving tens of thousands of beneficiaries out of the program.
Student groups charged the bill harmed college student through $11.9 billion in cuts to the student loan program, including higher fees on student and higher interest rates on parent loans. But Republicans countered that the lions share of the savings came from lender subsidies and that much of the savings was channeled into a grant program for low-income college students studying math, science or specialty languages.
source: http://www.sfgate.com/cgi-bin/article.cgi?file=/n/a/2006/02/02/national/w043329S84.DTL&type=printable 2feb2006
House Passes $40 Billion in Changes to Aid Programs:
Student loans, welfare, Medicare Among Services Affected
JONATHAN WEISMAN / Washington Post 2feb2006
Washington — The House narrowly approved on Wednesday a hard-fought, budget-cutting package that would save nearly $40 billion over five years by imposing substantial changes on programs from Medicaid and welfare to child support and student lending.
With its presidential signature all but assured, the bill represents the first effort in nearly a decade to try to slow the growth of entitlement programs, one that will be felt by millions of Americans.
Women on welfare are likely to face longer hours of work, education or community service to qualify for their checks. Recipients of Medicaid can expect to face higher co-payments and deductibles, especially on expensive prescription drugs and emergency room visits for nonemergency care. More affluent seniors will find it far more difficult to qualify for Medicaid-covered nursing care.
College students could face higher interest rates when their banks get squeezed by the federal government.
And some cotton farmers will find support payments nicked. State-led efforts to force deadbeat parents to pay their child support may also have to be curtailed.
Wednesday's 216-214 vote, largely along party lines, gave a much-needed boost to President Bush, who is trying to reassert his control over domestic policy despite a series of legislative setbacks and near-record-low approval ratings. Bush had pushed many of the changes since he proposed his 2006 budget a year ago.
Thirteen Republicans joined 200 Democrats and one independent in voting against it.
Republican leaders said passage was a critical step toward containing the runaway growth of entitlement programs, including Medicaid and Medicare, which threaten to consume the budget as Baby Boomers begin to retire.
But Democrats blasted the White House and Republicans for allowing states to reduce Medicaid coverage and boost fees for Medicaid programs for the poor and disabled at the same time the president is calling for making permanent tax cuts for wealthy Americans.
The fight over the bill exposed deep divisions between conservative Republicans who drove many of the policy changes and some GOP moderates worried that the cuts hit the poor too hard.
The House passed the measure at 6:07 a.m. on Dec. 19 after a grueling night of last-minute negotiations. Vice President Dick Cheney cast the tie-breaking vote Dec. 22 to secure passage in the Senate by the narrowest of margins, but Democrats were able to make minor changes, forcing Wednesday's House vote.
That gave opponents more than a month to pressure House moderates to reconsider their votes, and it allowed new analyses to surface.
In recent days, separate Congressional Budget Office documents estimated that Medicaid changes would impose new costs on 13 million poor recipients and end insurance coverage for 65,000 Medicaid enrollees, that cuts to federal child support enforcement funds would shift costs to the states and eliminate billions of dollars in child support payments, and that changes made to the Senate-passed budget package saved private Medicare insurers $22 billion over 10 years.
Those reports reinvigorated Democratic charges that the budget measure exemplified a congressional culture that protects the moneyed interests and their well-connected lobbyists at the expense of the unrepresented poor.
"This bill is Exhibit A for special interests and lobbyists writing legislation behind closed doors at the expense of the ordinary citizen," Rep. John Dingell, D-Mich., said Wednesday.
But with the federal budget deficit expected to rise again this year, to around $360 billion, Republicans implored their members to take what Rep. Adam Putnam, R-Fla., called "this first step toward long-term, fiscal discipline and fiscal health for our government."
The impact of the bill on the deficit is likely to be negligible, slicing less than one-half of 1 percent from the estimated $14.3 trillion in federal spending over the next five years.
As the House debated the budget-cutting measure, the Senate moved to begin final negotiations with the House on a package of tax cuts and extension of expiring tax cuts that could cost up to $60 billion over five years, more than negating the savings from the budget bill.
"I do not know how anyone can say with a straight face that when we voted to cut spending in December to help achieve deficit reductions, we can now turn around a short while later to provide tax cuts that exceed or cancel out the reduction in spending," Sen. George Voinovich, R-Ohio, said Wednesday, as the Senate took up a procedural motion that would allow tax cut negotiations to begin. "We cannot afford these tax cuts."
Highlights of the five-year bill that the House passed by a vote of 216-214 on Wednesday:
- Student loans: $11.9 billion in net savings, achieved chiefly by reducing lender subsidies and retaining a scheduled shift from variable interest rates to a 6.8 percent fixed rate on most loans. Increases loan limits to $3,500 for first-year students and from $3,500 to $4,500 for second-year students. Establishes a new $3.7 billion grant program for low-income college students.
- Medicare: Saves a net $6.4 billion from the health care program for the elderly. Saves $6.5 billion by increasing Medicare payments to insurers that cover sicker patients and lowering payments to those covering healthier patients. Accelerates premium increases for better-off Medicare patients for doctor visits.
- Medicaid: Saves $4.8 billion from the health care program for the poor and disabled by reducing payments for prescription drugs, tightening asset-transfer rules for nursing home eligibility, permitting states to reduce benefits and increasing co-payments paid by beneficiaries.
- Pensions: Raises $3.6 billion in new revenues for the Pension Benefit Guaranty Corp., which insures defined benefit pension plans, by increasing the annual premium employers pay for each covered worker or retiree and establishing a $3,750-per-employee fee on companies that terminate their plans.
- Agriculture: Achieves $2.7 billion in savings from agriculture conservation programs and delaying advance subsidy payments to farmers.
- Welfare overhaul: Extends the 1996 welfare reform law, freezing core funding at $74.3 billion over five years, while tightening work requirements. Provides $11.7 billion for child care subsidies for welfare recipients required to work.
source: http://www.washingtonpost.com/wp-dyn/content/article/2006/02/01/AR2006020100329.html 2feb2006