Bush's 2009 budget: Slash Medicare and Medicaid, freeze domesticprograms, load up the war and milit

WASHINGTON - President Bush's 2009 budget will virtually freeze most

domestic programs and seek nearly $200 billion in savings from federal

health care programs, a senior administration official said Thursday.

Overall, the Bush budget will exceed $3 trillion, this official said.

The deficit is expected to reach about $400 billion for this year and

next.

Bush on Monday will present his proposed budget for the new fiscal

year to Congress, where it's unlikely to gain much traction in the

midst of a presidential campaign. The president has promised a plan

that would erase the budget deficit by 2012 if his policies are

followed.

To that end, Bush will propose nearly $178 billion in savings from

Medicare over five years_ nearly triple what he proposed last year.

Much of the savings would come from freezing reimbursement rates for

most health care providers for three years. An additional $17 billion

would come from the Medicaid program, the state-federal partnership

that provides health coverage to the poor.

The budget for most domestic programs funded by Congress will look

similar to last year's, according to the official, from the Office of

Management and Budget.

"It's a very small increase," he said. "Very small."

A second administration official said domestic discretionary spending

would increase by less than 1 percent under Bush's proposal.

Both officials spoke on condition of anonymity because the budget has

not yet been released

In his State of the Union address Monday, Bush said his budget

envisioned a surplus in 2012. "American families have to balance their

budgets, and so should their government," he said.

The federal government is expected to spend about $650 billion on

Medicare and Medicaid in 2008. It represents more than $1 out of every

$5 spent by the federal government.

The OMB official said the president views the budget as a final

opportunity to slow the growth of entitlement programs but recognizes

that Congress probably won't go along.

He said spending on Medicare would increase under Bush's new budget,

but not as quickly as had been expected. "Medicare will grow at 5

percent. It just won't grow over 7 percent," he said.

Savings also would come by charging wealthier people higher monthly

premiums for Medicare's drug program.

The Centers for Medicare and Medicaid Services said the Bush budget

would project the 10-year cost of the program, from 2008 to 2017, at

$915 billion. That's $117 billion less than what had been forecast

last summer. The agency attributed the lower estimate to smaller

increases in the cost of medicines, and better deals negotiated

between insurers and drug manufacturers.

The agency said 25.4 million people were now enrolled in a Medicare

drug plan.

Bush last year asked Congress for nearly $65 billion in Medicare

savings over five years. Congress refused to go along.

Independent experts have warned that the government needs to address

the rising cost of health care for businesses to stay competitive and

for the government to be able to pay for other important programs in

the decades ahead.

"In fact, if there is one thing that could bankrupt America, it's

runaway health care costs. We must not allow that to happen," David M.

Walker, the U.S. comptroller general, told lawmakers Tuesday during a

congressional hearing.

But Democrats said Bush's budget targets the wrong health care

providers for cuts. They said insurers subsidized to provide Medicare

coverage are being overpaid.

"The president is proposing to once again slash health care coverage

for seniors and low-income working Americans," House Speaker Nancy

Pelosi, D-Calif., said. "The president's cuts are exactly the wrong

medicine when the cost of health care and the number of uninsured

continue to rise and families are feeling economically insecure."

Health care providers said the president's recommendations would make

it harder for them to meet expenses, which would continue to rise as a

result of inflation, even as their reimbursement rates were frozen.

"That level of reduction is so outrageous that it will be summarily

rejected by members of both parties in Congress," said Tom Nickels,

senior vice president of federal relations for the American Hospital

Association. "I don't think it will be taken seriously."

http://news.yahoo.com/s/ap/20080131/ap_on_go_pr_wh/bush_budget

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Meanwhile, watch for Bush to do the same thing he has done for years:

Ask for funding outside the budget for the war in Iraq. So -- not

only will the budget run a deficit, but he will increase the deficit

with extra spending on the war.