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Senate bill includes cuts in Medicare, Medicaid

WASHINGTON -- The Senate is digging into a budget plan that would bundle mostly modest Medicare and Medicaid spending cuts with a controversial plan to open an Alaskan wilderness area to oil drilling.

Republicans are seeking to burnish their budget-cutting credentials but face unanimous opposition from Democrats who contend it is part of an overall plan that will increase the deficit once a companion $70 billion tax cut bill is passed.

''When I went to Roosevelt grade school in Bismarck, North Dakota, if you reduced spending by $39 and you reduced your income by $70, you were deeper in the hole," said Kent Conrad, top Senate Budget Committee Democrat. ''You've added to the deficit. You haven't reduced it."

The bill is estimated to trim $39 billion from budget deficits totaling $1.6 trillion over five years -- just 2 percent. For the budget plan's first year, which began Oct. 1, the cuts total $6 billion.

Still, Republicans say the debate marks an important pivot for their party, which gained control of the House 11 years ago with promises to balance the budget. The return of intractable deficits and surging spending has caused many conservatives to despair that the GOP has lost its way on spending.

The long-planned budget measure, slated for a final vote Thursday, would make the first cuts to so-called mandatory programs since 1997. These account for 55 percent of the budget and include Medicare, Medicaid, farm subsidies, and student loan subsidies. Without changes, the rapid growth in Medicare and Medicaid threatens to swamp the budget after the baby boom generation retires.

''We can act now . . . or we can just bury our heads in the sand," said Budget Committee Chairman Judd Gregg, Republican of New Hampshire. ''It is not good policy to pass this problem on to our children. It's not fair and it's not right."

The bill reflects the influence of moderates providing swing votes in the chamber and on key committees such as the finance panel, which drafted provisions curbing the growth in Medicaid and Medicare, the federal healthcare programs for the poor and the elderly.

As a result, the Senate's Medicare and Medicaid cuts largely won't touch beneficiaries of the programs, instead tapping drug companies, pharmacies, and insurance subsidies for much of the savings. The Agriculture Committee dropped plans to cut food stamps.

It's a different story in the House, where the companion bill -- slated for a floor vote next week -- features new copayments for Medicaid beneficiaries and would let states reduce coverage.

The House bill would leave Medicare alone but would include $844 million in cuts to food stamps that would drop about 300,000 people from the program. A small but politically explosive cut would mean about 40,000 schoolchildren lose free lunches.

In the Senate, advocates of permitting oil drilling in the Arctic National Wildlife Refuge are cautiously confident they will prevail as they did earlier this year on a 51-49 vote. But inclusion of that provision could bleed GOP votes from the overall bill, and environmental advocates are turning up the heat on wavering lawmakers, especially the seven Republicans who opposed the drilling in the earlier vote. Among the fence-sitters is Lincoln Chafee, Republican of Rhode Island.

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