House Budget Bills Face Senate Fight

Republican leaders hailed House passage of the budget as proof that they were finally getting a handle on the federal budget after a five-year binge of new spending and tax cuts that turned record budget surpluses into a stream of deep deficits. The budget accord would cut less than one-half of 1 percent from a projected $14.3 trillion in federal spending over the next five years. Depending on the outcome of negotiations over as much as $60 billion in tax cuts that are to be passed next year, the savings in spending could vanish.

Congress, however, has not tried to slow the growth of entitlement programs such as Medicare, Medicaid and student loans for more than a decade. Extracting those cuts has been a politically painful process that has divided Republicans and kept Congress in session months after its once-scheduled Sept. 30 adjournment debate.

The last time Congress was in session this close to Christmas was in 1995, when the newly elected Republican Congress shut down the government over a spending dispute with President Clinton.

"A hard-fought victory, tonight's vote on our plan to achieve $40 billion in savings while reforming government was an exercise in budget discipline," said acting House Majority Leader Roy Blunt (R-Mo.).

Democrats and liberal economic analysts said the budget deal, although less dramatic than an earlier, House-passed version, would still allow states to impose significant new costs on health care for the poor, cut child-support enforcement and foster-care aid, and force states to impose new work requirements on welfare recipients without providing nearly enough child-care assistance.

"I don't know what the poor, the elderly, the disabled, or our foster children have done to Republicans to deserve this. . . . just a few days before Christmas, ," fumed Rep. Charles B. Rangel (D-N.Y.).

The final budget deal envisions more than $10 billion in savings over 10 years by allowing states to raise co-payments and deductibles for many recipients of Medicaid, the state and federal health program for the poor. An additional $6.1 billion in savings would come from health-benefit reductions, according to Congressional Budget Office documents.

Tens of thousands of low-income Americans are likely to lose health coverage under the measure, and many millions will face premiums, deductibles and co-payments for the first time, said Jocelyn Guyer, senior program director of the Georgetown University Center for Children and Families.

Budget savings that lawmakers had initially sought from pharmaceutical companies and private insurers in the Medicaid and Medicare programs were dropped from the final deal.

"Instead of asking for shared sacrifice to achieve budgetary savings, this agreement hands an early Christmas gift to the pharmaceutical and managed care industries at the expense of beneficiaries," the AARP statement said.

With opposition growing, lobbying for and against the measure focused on Sens. Arlen Specter (R-Pa.), Susan Collins (R-Maine) and Ben Nelson (D-Neb.). Specter said yesterday that he was inclined to vote for it, saying the Medicaid benefit cuts were limited and cuts to child support enforcement were held to $1.5 billion, not the $5 billion passed by the House.

"It's a bill to hold one's nose and let it go through," he said.

One provision added late to the bill angered the Association of Trial Lawyers of America and its allies in the Senate. It gives pharmaceutical companies extensive protection from lawsuits filed by people who believed they were injured by flu vaccines funded in the measure.

Sen. Edward M. Kennedy (D-Mass.) called the measure "a massive giveaway to the drug industry" and criticized it as "a midnight deal done in a back room of the Capitol."

Staff writers Jeffrey Birnbaum and Charles Babington contributed to this report.