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WASHINGTON (AP) -- The Pentagon is the big winner in President Bush's
proposed budget for next year, while domestic items such as aid to schools
and grants to local governments will get slight increases.
Medicare and Medicaid, the health program for the poor and disabled, would
shoulder modest but politically difficult cost curbs in the budget the White
House is submitting to Congress on Monday.
Some $18 billion in budget savings would come from farm programs over five
years.
Bush's spending plan totals almost $3 trillion for the budget year starting
October 1. It would produce a surplus in five years, helped by steady
revenue growth and a squeeze on the one-sixth of the budget that covers
domestic agencies such as the departments of Education, Energy and Health
and Human Services.
Domestic agencies would not face an outright cut, as proposed last year, but
would see increases averaging 1 percent, White House Budget director Rob
Portman said. That is less than anticipated inflation, but higher costs for
veterans' health care probably would result in a larger than average
increase.
The Pentagon, which also consumes one-sixth of the overall budget, would get
an 11 percent increase, to $481.4 billion in its core budget. And that is
before accounting for an additional $235 billion in war costs over the next
year and a half.
Bush's plan will get a skeptical reception from the Democratic-controlled
Congress. Democrats say it meets the president's promise to balance the
budget by 2012 by omitting war costs and expensive changes to the
alternative minimum tax and assuming politically untenable cuts in payments
to doctors under Medicare.
"There's this continuing deception about our real fiscal condition," the
chairman of the Senate Budget Committee said in an interview Saturday. "Over
and over again we see things left out of his budget that we know are going
to have to be dealt with," said Sen. Kent Conrad, D-North Dakota.
Democrats also say Bush's estimated cost of about $6 billion for increasing
U.S. combat troop strength in Iraq greatly understates the likely total.
For months, Conrad has worked in back channels to establish a group of
administration officials and lawmakers who would try to rein in costly
benefit programs such as Social Security, Medicare and Medicaid. But the
president's refusal to consider some tax increases has scuttled the idea, at
least for now.
Bush pushed the balanced budget idea -- to applause -- before a meeting
Saturday with House Democrats in Virginia. But he seemed to acknowledge that
a large-scale budget agreement with Democrats is a long shot. (Full story)
"I'm under no illusions of how hard it's going to be," Bush said. "The only
thing I want to share with you is, is my desire to see if we can't work
together to get it done."
There is room for some modest steps such as an increase in the maximum Pell
Grant for low-income college students to $4,600, $550 more than the current
cap. House Democrats last week passed an increase in the maximum grant to
$4,310.
Health care spending likely to be debated
The federal contribution to the popular State Children's Health Insurance
Program would rise slightly to address chronic shortfalls. States, however,
would get less money to cover children in families at twice the poverty
level or more. Democrats are pressing for far greater increases in the
children's health program.
The White House's budget also would trim $12 billion from Medicaid, mostly
through lower payments to states for administrative costs. About $5 billion
or so would go toward addressing shortfalls in the State Children's Health
Insurance Program, according to the White House budget office.
The proposed cuts to Medicare and Medicaid are relatively modest, given the
overall size of the programs. The Medicare reductions would come in part
from smaller inflation adjustments for hospitals, nursing homes, home health
care providers and hospices. More higher-income older people would face
increased premiums.
Hospitals in particular are a powerful lobbying group and often are some of
the leading employers in lawmakers' districts and states. Smaller Medicare
cuts of $36 billion proposed last year went nowhere in a GOP-led Congress,
and Democrats quickly pounced on the new proposal.
"I think that sounds like the president is declaring war on us and the poor
people in this country," said Rep. Pete Stark, D-California.
Stark and other Democrats probably will go after what they see as excessive
payments to private managed care plans that provide care to about 8 million
Medicare beneficiaries.
Democrats also must deal with a scheduled 8 percent cut in Medicare payments
to doctors, a byproduct from a 1997 budget bill. Bush's budget would leave
the cut in place, though Congress is virtually certain to provide relief as
it has since 2003 with other scheduled payment cuts. Such a move would eat
up Bush's proposed Medicare savings and then some.
All told, Bush is seeking $96 billion over five years from mandatory
programs providing fixed benefits such as Medicare, farm subsidies and
Medicaid and whose spending rises each year.
"Unless we act, we will saddle our children and grandchildren with tens of
trillions of dollars of unfunded obligations," Bush said Saturday in his
weekly radio address. "They will face three bad options: huge tax increases,
huge budget deficits or huge and immediate cuts in benefits." (Full story)
http://www.cnn.com/2007/POLITICS/02/03/bush.budget.ap/index.html
proposed budget for next year, while domestic items such as aid to schools
and grants to local governments will get slight increases.
Medicare and Medicaid, the health program for the poor and disabled, would
shoulder modest but politically difficult cost curbs in the budget the White
House is submitting to Congress on Monday.
Some $18 billion in budget savings would come from farm programs over five
years.
Bush's spending plan totals almost $3 trillion for the budget year starting
October 1. It would produce a surplus in five years, helped by steady
revenue growth and a squeeze on the one-sixth of the budget that covers
domestic agencies such as the departments of Education, Energy and Health
and Human Services.
Domestic agencies would not face an outright cut, as proposed last year, but
would see increases averaging 1 percent, White House Budget director Rob
Portman said. That is less than anticipated inflation, but higher costs for
veterans' health care probably would result in a larger than average
increase.
The Pentagon, which also consumes one-sixth of the overall budget, would get
an 11 percent increase, to $481.4 billion in its core budget. And that is
before accounting for an additional $235 billion in war costs over the next
year and a half.
Bush's plan will get a skeptical reception from the Democratic-controlled
Congress. Democrats say it meets the president's promise to balance the
budget by 2012 by omitting war costs and expensive changes to the
alternative minimum tax and assuming politically untenable cuts in payments
to doctors under Medicare.
"There's this continuing deception about our real fiscal condition," the
chairman of the Senate Budget Committee said in an interview Saturday. "Over
and over again we see things left out of his budget that we know are going
to have to be dealt with," said Sen. Kent Conrad, D-North Dakota.
Democrats also say Bush's estimated cost of about $6 billion for increasing
U.S. combat troop strength in Iraq greatly understates the likely total.
For months, Conrad has worked in back channels to establish a group of
administration officials and lawmakers who would try to rein in costly
benefit programs such as Social Security, Medicare and Medicaid. But the
president's refusal to consider some tax increases has scuttled the idea, at
least for now.
Bush pushed the balanced budget idea -- to applause -- before a meeting
Saturday with House Democrats in Virginia. But he seemed to acknowledge that
a large-scale budget agreement with Democrats is a long shot. (Full story)
"I'm under no illusions of how hard it's going to be," Bush said. "The only
thing I want to share with you is, is my desire to see if we can't work
together to get it done."
There is room for some modest steps such as an increase in the maximum Pell
Grant for low-income college students to $4,600, $550 more than the current
cap. House Democrats last week passed an increase in the maximum grant to
$4,310.
Health care spending likely to be debated
The federal contribution to the popular State Children's Health Insurance
Program would rise slightly to address chronic shortfalls. States, however,
would get less money to cover children in families at twice the poverty
level or more. Democrats are pressing for far greater increases in the
children's health program.
The White House's budget also would trim $12 billion from Medicaid, mostly
through lower payments to states for administrative costs. About $5 billion
or so would go toward addressing shortfalls in the State Children's Health
Insurance Program, according to the White House budget office.
The proposed cuts to Medicare and Medicaid are relatively modest, given the
overall size of the programs. The Medicare reductions would come in part
from smaller inflation adjustments for hospitals, nursing homes, home health
care providers and hospices. More higher-income older people would face
increased premiums.
Hospitals in particular are a powerful lobbying group and often are some of
the leading employers in lawmakers' districts and states. Smaller Medicare
cuts of $36 billion proposed last year went nowhere in a GOP-led Congress,
and Democrats quickly pounced on the new proposal.
"I think that sounds like the president is declaring war on us and the poor
people in this country," said Rep. Pete Stark, D-California.
Stark and other Democrats probably will go after what they see as excessive
payments to private managed care plans that provide care to about 8 million
Medicare beneficiaries.
Democrats also must deal with a scheduled 8 percent cut in Medicare payments
to doctors, a byproduct from a 1997 budget bill. Bush's budget would leave
the cut in place, though Congress is virtually certain to provide relief as
it has since 2003 with other scheduled payment cuts. Such a move would eat
up Bush's proposed Medicare savings and then some.
All told, Bush is seeking $96 billion over five years from mandatory
programs providing fixed benefits such as Medicare, farm subsidies and
Medicaid and whose spending rises each year.
"Unless we act, we will saddle our children and grandchildren with tens of
trillions of dollars of unfunded obligations," Bush said Saturday in his
weekly radio address. "They will face three bad options: huge tax increases,
huge budget deficits or huge and immediate cuts in benefits." (Full story)
http://www.cnn.com/2007/POLITICS/02/03/bush.budget.ap/index.html
