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Defense of Medicare Budget Cuts Takes Spotlight in
Washington
Administration officials faced angry Congressmen from both parties
Feb.8, 2006 – Today President Bush defended his
proposed $36 billion reduction for Medicare spending in his budget
proposal for FY 2007 and prepared to sign legislation already passed
that cuts another $39 billion from Medicare and Medicaid. Yesterday,
members of his administration were busy defending the $2.77 trillion
budget and the Medicare cuts. They also were facing questions about the
budget for the Department of Veterans Affairs, according to a report by
KaiserNet.org.
 Capitol Hill Watch | President Bush's FY 2007
Budget Plan, Including Medicare Cuts, Faces Criticism in Congressional
Hearings
[Feb 08, 2006]
Members of the Bush administration on Tuesday began
to testify before Congress in support of President Bush's $2.77 trillion
budget
proposal in the face of "congressional attacks" on some of the
plans, including $36 billion in spending reductions for Medicare over
five years and nearly $5 billion in Medicaid spending reductions over
five years, the
AP/Las Vegas Sun reports (Crutsinger, AP/Las Vegas Sun, 2/7).
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Medicare Budget Cuts May Not be Welcomed in Congress
KaiserNet.org provides more detail on specific
proposals, reactions
Feb. 7, 2006 – Although the President's budget for
2007 that was released yesterday has cuts of $36 billion for Medicare
($105 billion over 10 years), reportedly the biggest in the budget, many
are predicting it will be a hard sell to Congress after they, too, took
big hacks at the program at the first of the month. KaiserNet.org
examines the media and political reactions, and provides details on what
Bush has proposed in a number of health care programs.
Read more...
Read more on
Medicare or
Politics |
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Senate Budget Committee members at a Tuesday hearing "hammered"
White House
Office of Management and Budget Director Joshua Bolten on Bush's
budget proposal, CongressDaily reports.
Bolten said the proposed budget would slow annual
Medicare spending growth from 7.8% to 7.5% over 10 years, and he called
the budget proposals concerning Medicare a "modest first step." Some
Democrats and Republicans are "pushing alternatives" and saying that
Bush's budget "would disproportionately impact poor seniors in rural
areas by closing access to hospital care," CongressDaily reports (Cohn,
CongressDaily, 2/8).
According to
Roll Call, the budget proposal "may have created a more dangerous
political minefield for congressional Republicans" (Pierce, Roll Call,
2/8).
The Hill reports that "centrist House Republicans" are "on the hot
seat just weeks after they were asked to make a tough vote on budget
reconciliation" that also included spending cuts for Medicare and
Medicaid (Young, The Hill, 2/8). However, "there is still a core faction
of conservatives" in the Senate and House who are pushing for additional
cuts to entitlement programs, Roll Call reports (Roll Call, 2/8).
Comments
Senate Budget Committee Chair Judd Gregg (R-N.H.), reacting to a comment
from
Senate Labor-HHS Appropriations Subcommittee Chair Arlen Specter
(R-Pa.) that Bush's proposed cuts to health care and education are
"scandalous," said, "Specter was dealt a very tough hand last year, and
we all realize it. I'm hoping we can work with Specter to try and
address his concerns to some degree" (Dennis/Higa, CQ Today, 2/7).
Gregg said Congress must continue the work of
cutting entitlements that it began last year and said he would use
Bush's proposed Medicare and Medicaid cuts as the basis for any budget
reconciliation measure. Gregg said that lawmakers complaining about
another debate on entitlement cuts have "absolutely no political
courage," adding, "You cannot demagogue this issue any longer" (Roll
Call, 2/8).
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said, "It's
going to be more difficult (to address Medicare) than last year because
of the fact that it's an election year -- and it was very difficult to
do in a nonelection year."
Sen. Tom Harkin (D-Iowa) said, "I can't believe
that there's a will to cut $36 billion out of Medicare. I can't imagine
the Republican Party ... is going to allow this to come through this
year in an election year" (Taylor,
AP/Philadelphia Inquirer, 2/8).
Rep. John Shadegg (R-Ariz.) said, "Under the
president's budget, we would increase spending for Medicare by 7.5%
every year for the next five years, rather than by 7.8%. That is not a
'cut.' The program will still spend more than $2 trillion in those
years. Surely at a time of war, and facing a mountain of debt, it is
reasonable to slow the growth of spending by three-tenths of 1%."
Additional Comments
An unnamed Senate Democratic aide said, "The president is going to have
a very tough sell up here," adding, "He does play a little into our hand
on this. I don't know what he's thinking."
A senior Senate Republican aide said, "Seniors are
already angry about the drug benefit, and now they're saying we should
increase premiums for (seniors with) higher incomes?" The aide added, "I
can't quite figure out why they are going to make us jump off this
cliff" (Roll Call, 2/8).
Norman Ornstein, resident scholar at the
American Enterprise Institute, said, "It's not a budget the
Republicans are going to go anywhere near," adding, "Perhaps the best
thing they have going for them is that Democrats really don't have much
skill at turning these issues their way" (Silva,
Chicago Tribune, 2/8).
VA Budget
In related news, Sen. Patty Murray (D-Wash.) at the Senate Budget
Committee Hearing questioned Bolten about whether the proposed
Department of Veterans Affairs budget underestimates the cost of
providing health care to veterans, as apparently was the case with the
proposed FY 2005 and 2006 budgets, the
Spokane Spokesman-Review reports.
Murray cited a recent
Government Accountability Office
report that indicates VA based its budget for those years by
anticipating what the Bush administration would request, rather than by
projecting demand for health services. Murray said, "How do you justify
a VA budget request that is not based on demand of services?" Bolten
said, "There was an error made last year. ... I believe that the errors
that were in the modeling process last year that caused the damage have
been corrected." The proposed FY 2007 VA budget calls for a 9% increase
in health care funding, Bolten said. Murray then said that much of the
increase would be paid by charging larger fees to higher-income veterans
(Eder, Spokane Spokesman-Review, 2/8). Veterans groups on Wednesday are
expected to testify before a House panel against the proposed increases.
Under the budget proposal, veterans with incomes generally above $27,000
would pay $250 a year to enroll in the VA system and $15 for each
prescription. VA estimates 200,000 veterans would pay the enrollment
fee, and one million would pay the increased prescription fee (Stone,
USA Today, 2/8).
HSA Proposal
In other related news, Bush's FY 2007 budget proposal to expand health
savings accounts have led some congressional Democrats and union leaders
to "invok[e] a political comparison to last year's Social Security
privatization drive,"
The Hill reports (Schor, The Hill, 2/8).
Bush's proposal includes a
number of provisions related to encouraging the use of health savings
accounts, for a combined cost of $60 billion over five years. The cost
of the proposals, including tax incentives, is estimated at $156 billion
over 10 years.
The provisions include a modification to HSAs that would
allow employers to contribute more money to the accounts of workers with
greater health care expenses and a proposal to give tax credits to
low-income uninsured people who have high-deductible health plans (Kaiser
Daily Health Policy Report, 2/7).
Rep. Charles Rangel (D-N.Y.),
ranking member of the
House Ways and Means Committee, said, "It will go the same way
Social Security (did). He'll send it to the committee, we'll discuss
it." Rangel added that "a lot of those people can't set aside the money
because they don't have enough income to take a deduction." Brandon
Rees, director of
AFL-CIO's investment office, said, "We see a direct parallel between
Wall Street pushing private accounts carved out of Social Security and
advocating HSAs as an alternative to employer-provided health
insurance."
However, a financial services lobbyist said, "We will get
paid [by Bush's HSA proposal], but this isn't about a moneymaking
proposition. Our guys aren't licking their chops and saying, 'Oh, this
is a pot of gold, thank you, Congress'" (Schor, The Hill, 2/8). In
related news, the
Philadelphia Inquirer reports that the "theory" behind HSAs is that
patients "[a]rmed with knowledge of true health care costs ... will be
more discriminating consumers." However, some research into patient
behavior "suggests ... that people ... shrink from such decisions," the
Inquirer reports (Hall, Philadelphia Inquirer, 2/8).
 Additional
information about the FY 2007 budget proposal is available
online from the Office of Management and Budget.
Bush Expected To Sign Reconciliation Bill
Bush on Wednesday is expected to sign the FY 2006 budget reconciliation
bill (S
1932), which includes $39 billion in cuts over five years to various
programs including Medicare and Medicaid, the
Christian Science Monitor reports (Feldmann, Christian Science
Monitor, 2/8)
The bill includes $6.4 billion in cuts from Medicare and
$4.8 billion in cuts from Medicaid. Under the bill's Medicaid
provisions, states would have larger flexibility to charge copayments
and deny services for lack of payment. In addition, penalties would
increase for seniors who transfer assets before they apply for long-term
Medicaid coverage.
The bill would make seniors with home equity of more
than $500,000 ineligible for nursing home benefits. In addition, the
bill would increase Medicaid coverage for disabled children whose
families earn up to 300% of the federal poverty level, beginning Jan. 1,
2007. Provisions affecting Medicare include higher premiums for
beneficiaries and a freeze in payments for home health care providers.
The bill also cancels a scheduled cut in Medicare reimbursements to
physicians and provides medical care to some hurricane survivors. The
House voted 216-214 on Feb. 1 to approve the bill, and the Senate passed
the bill 51-50 on Dec. 21, 2005 (Kaiser
Daily Health Policy Report, 2/2).
Broadcast Coverage
NPR's "Morning
Edition" on Wednesday reported on cuts in Medicaid spending in the
fiscal year 2006 budget reconciliation bill. The segment includes
comments from Sara Rosenbaum of the
George Washington University School of Public Health; John Rother,
policy director at
AARP; and Grassley (Rovner, "Morning Edition," NPR, 2/8).
 The
complete segment is available
online in RealPlayer.
"Reprinted with
permission from kaisernetwork.org (insert hyperlink to http://www.kaisernetwork.org).
You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign
up for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a
free service of The Henry J. Kaiser Family Foundation. © 2006
Advisory Board Company and Kaiser Family Foundation. All rights
reserved.”
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