Budget Cuts Pass By a Slim Margin
Poor, Elderly and Students to Feel Pinch

By Jonathan Weisman
Washington Post Staff Writer
Thursday, February 2, 2006; A01

The House yesterday narrowly approved a contentious budget-cutting package that would save nearly $40 billion over five years by imposing substantial changes on programs including Medicaid, welfare, child support and student lending.

With its presidential signature all but assured, the bill represents the first effort in nearly a decade to try to slow the growth of entitlement programs, one that will be felt by millions of Americans. Women on welfare are likely to face longer hours of work, education or community service to qualify for their checks. Recipients of Medicaid can expect to face higher co-payments and deductibles, especially on expensive prescription drugs and emergency room visits for non-emergency care. More affluent seniors will find it far more difficult to qualify for Medicaid-covered nursing care.

College students could face higher interest rates when their banks get squeezed by the federal government. And some cotton farmers will find support payments nicked. State-led efforts to force deadbeat parents to pay their child support may also have to be curtailed.

Yesterday's 216 to 214 vote, largely along party lines, gave a much-needed boost to President Bush, who is trying to reassert his control over domestic policy despite a series of legislative setbacks and near-record-low approval ratings. Bush had pushed many of the changes since he unveiled his 2006 budget proposal a year ago.

Thirteen Republicans joined 200 Democrats and one independent in voting against the measure. All Republican House members from Maryland and Virginia voted for the measure, while all Democrats voted against it.

The victory was seen by some as helpful to House Majority Whip Roy Blunt (R-Mo.) on the eve of a leadership election that he hopes will elevate him to House majority leader. A defeat could have rekindled questions over Blunt's ability to round up votes and manage the House floor.

Republican leaders said passage was a critical step toward containing the runaway growth of entitlement programs, including Medicaid and Medicare, that threaten to consume the budget as baby boomers begin to retire. "American taxpayers, and anyone concerned with the nation's long-term fiscal stability, have won a great victory today," said House Republican Conference Chairman Deborah Pryce (Ohio).

But Democrats blasted the White House and Republicans for allowing states to reduce Medicaid coverage and boost fees for Medicaid programs for the poor and disabled at the same time the president is calling for making permanent tax cuts for wealthy Americans.

The fight over the bill exposed deep divisions between conservative Republicans who drove many of the policy changes and some GOP moderates worried that the cuts hit the poor too hard. The House passed the measure at 6:07 a.m. on Dec. 19 after a grueling night of last-minute negotiations. Vice President Cheney cast the tie-breaking vote Dec. 22 to secure passage in the Senate by the narrowest of margins, but Democrats were able to make minor

changes, forcing yesterday's House vote.

That gave opponents more than a month to pressure House moderates to reconsider their votes, and it allowed new analyses to surface. In recent days, separate Congressional Budget Office documents estimated that Medicaid changes would impose new costs on 13 million poor recipients and end insurance coverage for 65,000 Medicaid enrollees, that cuts to federal child-support enforcement funds would shift costs to the states and eliminate billions of dollars in child-support payments, and that changes made to the Senate-passed budget package saved private Medicare insurers $22 billion over 10 years.

Those reports reinvigorated Democratic charges that the budget measure exemplified a congressional culture that protects the moneyed interests and their well-connected lobbyists at the expense of the unrepresented poor.

"This bill is Exhibit A for special interests and lobbyists writing legislation behind closed doors at the expense of the ordinary citizen," Rep. John D. Dingell (D-Mich.) said yesterday.

But with the federal budget deficit expected to rise again this year, to around $360 billion, Republicans implored their members to take what Rep. Adam Putnam (R-Fla.) called "this first step toward long-term, fiscal discipline and fiscal health for our government."

The impact of the bill on the deficit is likely to be negligible, slicing less than one-half of 1 percent from the estimated $14.3 trillion in federal spending over the next five years. As the House debated the budget-cutting measure, the Senate moved to begin final negotiations with the House on a package of tax cuts and extension of expiring tax cuts that could cost up to $60 billion over five years, more than negating the savings from the budget bill.

"I do not know how anyone can say with a straight face that when we voted to cut spending in December to help achieve deficit reductions, we can now turn around a short while later to provide tax cuts that exceed or cancel out the reduction in spending," Sen. George V. Voinovich (R-Ohio) said yesterday, as the Senate took up a procedural motion that would allow tax-cut negotiations to begin. "We cannot afford these tax cuts."

The policy changes in the budget legislation are significant. The bill allows state governments to impose new co-payments and deductibles on Medicaid recipients, a power sought by governors of both political parties to try to slow the exploding costs of the health program. It makes it far more difficult for middle- and upper-income seniors to attain Medicaid coverage for nursing care by transferring assets to family members, then pleading poverty.

The bill will end federal payments to the states for the administration of child-support enforcement efforts. It will allow some interest rates on student loans to rise and fall with the market, squeezing student lenders and, in some cases, college students. And it will make changes to the basic welfare program, Temporary Assistance for Needy Families, that would push states to tighten work requirements for women on assistance, a provision pushed hard by the administration for nearly four years.

It will also raise billions of dollars through an auction of the broadcast spectrum that will facilitate the spread of digital television while reserving more space for emergency response broadcasts.

And it will repeal a law -- considered illegal under international trade rules -- that directs payments of some import duties to the companies impacted by unfair trade practices. Instead, those duties will go to the U.S. Treasury.