CQ TODAY - BUDGET
Senate Budget Plan Would Pressure Congress
to Curtail Medicare Spending
By Steven T. Dennis, CQ Staff
Senate Budget Chairman Judd Gregg proposed new rules Wednesday intended to crack down on emergency spending and increase pressure to cut Medicare spending in future years as part of what he called a "vanilla" budget resolution.
As the panel began its markup of the fiscal 2007 budget resolution, Gregg's proposed mark would forgo the opportunity for filibuster-free bills cutting entitlement spending and taxes this year, and include a stand-alone $3 billion reconciliation provision that would allow drilling in Alaska's Arctic National Wildlife Refuge (ANWR).
Gregg, R-N.H., would direct $1.05 billion from the ANWR proceeds to land and water conservation programs.
The resolution essentially ignores President Bush's proposals to find a net $65 billion in savings from entitlement programs such as Medicare over the next five years.
The ANWR-only reconciliation gambit faces a near-certain fight on the Senate floor, with moderate GOP senators already circulating a letter opposing the maneuver, said Sarah Chamberlain Resnick, executive director of the Republican Main Street Partnership, which represents moderates.
"They may have enough to block it in the Senate unless you get Democrats to cross over, which I don't know will happen in this environment," Resnick said.
The Budget panel is expected to approve its budget resolution Thursday on a party-line vote after considering dozens of Democratic amendments. The full Senate is expected to take it up the week of March 13.
In his chairman's mark, Gregg proposed budget enforcement measures, including a point of order requiring 60 votes to overcome, which would kick in if emergency spending exceeds $90 billion in a year. Gregg assumes that emergency spending will be $90 billion in fiscal 2007, or $37 billion more than assumed in Bush's budget.
Another proposal would create a budget point of order against new mandatory spending proposals if Medicare falls deeply into the red. The proposal would be triggered when government revenue other than Medicare taxes and fees subsidize more than 45 percent of the program's cost - a situation that could occur within five years. Such spending would not be subject to a point of order if offset.
Health and Human Services Secretary Michael O. Leavitt had proposed that new enforcement provision, Gregg said.
Gregg proposed an $873 billion cap on fiscal 2007 discretionary spending, close to the president's proposal as scored by the Congressional Budget Office.
His budget plan assumes that Bush's tax cuts will be extended at a cost of $227 billion over five years, but provides no reconciliation protection to do so. Without such protections, the president's proposals for expanded health savings accounts are unlikely to pass, said Senate Finance Chairman Charles E. Grassley, R-Iowa.
Gregg's proposal also would make good on Bush's plan to cut the deficit in half by 2008 rather than 2009. Under his plan, the budget deficit would drop each year, declining to $159 billion in 2010, or 1 percent of gross domestic product, before rising again in 2011 to $177 billion.
Gregg's budget also outlines numerous reallocations of Bush's priorities under the discretionary cap, though such allocations are ultimately up to the Appropriations committees.
Gregg's budget calls for cutting $3 billion from the Defense Department allocation and $2 billion from foreign aid, while adding $2 billion to border security, $1.5 billion to education and $1.5 billion for health programs. The budget assumes an additional $2 billion for border security would come from emergency funds. Gregg said his suggestions for added education and health spending were a nod to concerns of Sen. Arlen Specter, R-Pa., chairman of the Labor, Health and Human Services and Education Appropriations Subcommittee. Specter has threatened to vote against the budget resolution over a $4 billion cut to his panel under the president's proposal.
The House, meanwhile, postponed its markup of the budget resolution until after the mid-March recess to give Republicans more time to reach a consensus. Conservatives are pushing for deeper cuts than the president has sought, while moderates are worried about considering a budget savings package in an election year and are especially opposed to ANWR.
RSC's Budget Proposal
The conservative House Republican Study Committee (RSC) Wednesday unveiled a plan to balance the budget in five years through massive cuts to discretionary spending and entitlement programs. "Our goal is to drive this process as far in the direction of a balanced budget as we possibly can in an election year," said the group's chairman Mike Pence, R-Ind.
Pence said a final House-Senate budget deal should include more entitlement cuts, warning that a failure to do so could portend trouble getting it adopted in the House. "I believe we can agree to a budget that includes reconciliation," he said. If not, "all bets are off."
Members of the RSC called the plan the "Contract With America Renewed," an allusion to the set of conservative priorities assembled by the GOP Class of 1995. The RSC budget plan would not raise taxes, and would make permanent the 2001 and 2003 tax cuts (PL 107-16, PL 108-27).
It would produce a budget surplus of $11 billion in fiscal 2011 by slashing funding for a wide array of programs.
For instance, the plan would cut total spending on transportation programs from $74.4 billion in fiscal 2006 to $15.6 billion in fiscal 2011. It would turn Medicaid into a block grant program, and reduce education spending from $106.4 billion in fiscal 2006 to $78.7 billion in fiscal 2007.
