- The Washington Times - Thursday, March 17, 2005

Senators voted to undo $15 billion in Medicaid cuts in their budget yesterday, erasing a key limit on entitlement spending President Bush had sought, but also voted to cut taxes more deeply than either the administration proposed or the House passed.

The Senate passed its budget 51-49, and the House passed its budget 218-214.

The two chambers now must square their budgets with each other, a task House Republicans said is more difficult because of the Medicaid funds the Senate added back in.

Failure to reach a budget deal for fiscal year 2006 also would imperil other measures attached to the budget, such as this week’s Senate vote to allow drilling for oil in part of the Arctic National Wildlife Refuge (ANWR).

“So far, I’m not real pleased with what I’m hearing the Senate saying,” said House Budget Committee Chairman Jim Nussle, Iowa Republican.

Seven Senate Republicans joined all the chamber’s Democrats and its lone independent in voting 52-48 to restore the five-year, $15 billion Medicaid reductions included in the budget that passed the Senate Budget Committee.

The amount of Republican support for the amendment left the party’s budget point man despondent.

“Its practical implication is to gut the only thing in this budget which actually will generate fiscal discipline. And it’s being done by Republicans,” said Senate Budget Committee Chairman Judd Gregg, New Hampshire Republican. “You know, you just have to ask yourself how they get up in the morning and look in the mirror.”

Even as the Senate was adding Medicaid funding, the House was including a $20 billion reduction in the program over five years.

Mr. Nussle said the Senate Medicaid vote should be a wake-up call for Mr. Bush on his hopes to achieve reform on bigger issues such as Social Security and taxes, which the president called for in his State of the Union address.

“To me, it’s momentum,” Mr. Nussle said. “If the Senate is not going to follow on the first item on the president’s agenda, then I think that’s a signal that the president needs to receive and react to immediately.”

But those who supported restoring the Medicaid money, who were led by Sen. Gordon H. Smith, Oregon Republican, said the amendment also establishes a commission to study reforming Medicaid, which they said was more responsible than making cuts.

“This is a way to proceed towards fiscal responsibility in a way that is thoughtful,” Mr. Smith said. “It is really important when we talk about a population as vulnerable as we are, those covered by Medicaid, that we do this carefully, that we do it thoughtfully, that we do it right instead of just doing it fast.”

Hours later, senators voted 55-45 to increase the amount of tax cuts allowed in their budget from $70 billion to $134 billion.

Sen. Jim Bunning, Kentucky Republican, said the extra room for tax cuts should be used to reduce income taxes on Social Security income. Democrats, though, said the amendment increases the deficit without specifying that the money, as Mr. Bunning said, would go to erase the unpopular tax on Social Security income.

“It doubles the tax cut. It undermines funding for Medicare, it provides no assurance that the money would be used to reduce the tax on Social Security benefits,” said Kent Conrad, North Dakota Democrat.

The House-passed budget allows for $106 billion over five years, and Mr. Bush had sought just $100 billion.

Congress has failed twice in the last three years to produce a budget, and this year may end up the same.

On those occasions, House leaders assumed their budget had passed, produced appropriations bills according to their budget, and counted on a veto threat from Mr. Bush to enforce their designated spending limit in House-Senate negotiations.

But without a final budget this year, Republican leaders’ hopes to open the Alaskan refuge to oil drilling could sink. Even though the Senate voted 51-49 on Wednesday to allow it, ANWR drilling could not survive a filibuster, which could happen outside the budget process.

Still, House Majority Whip Roy Blunt, Missouri Republican, was optimistic the Medicaid cuts could prevail in a House-Senate conference, with Mr. Bush providing more legislative muscle in negotiations.

“In a two-against-one fight, it’s better to be on the side of two,” Mr. Blunt said.

The House passed its budget 218-214, with 12 Republicans joining Democrats and the chamber’s lone independent voting against it.

It includes a 0.8 percent cut from fiscal year 2005 levels in nonsecurity discretionary spending, the first since President Reagan. It also includes a 4 percent increase in defense spending, bringing total discretionary spending to $843 billion.

House passage came only after Mr. Blunt and other leaders headed off a revolt among conservatives, who demanded and got new spending rules that allow for a specific vote to break budget caps on any spending bills that exceed the allocation in the budget.

In other action yesterday, senators approved amendments restoring money Mr. Bush proposed to cut from education, water projects and local police, fire and emergency workers. They also voted to kill Mr. Bush’s plan to combine community development block grants, a favorite of many mayors, with dozens of other programs and cut them by about $2 billion.

In a win for the president, the Senate did vote against removing $2.8 billion in agriculture savings from the budget.

This article is based in part on wire service reports.

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