Highlights of Budget Bill

Highlights of a nearly $40 billion, five-year deficit reduction bill that passed the Senate by the narrowest of margins, 51-50, on Wednesday.

-- Student loans. $12.7 billion in net savings, achieved chiefly by reducing lender subsidies and retaining a scheduled shift from variable interest rates to a 6.8 percent fixed rate on most loans. Increases loan limits to $3,500 for first-year students and from $3,500 to $4,500 for second-year students. Establishes a new $3.7 billion grant program for low-income college students studying math, science or specialty languages.

-- Medicare. Saves a net $6.4 billion from the health care program for the elderly. Saves $6.5 billion by increasing Medicare payments to insurers that cover sicker patients and lowering payments to those covering healthier patients. Accelerates premium increases for better-off Medicare patients for doctor visits. Increases Medicare beneficiaries' premiums for coverage of doctor visits by about $2.30 a month in 2007. Saves $2.8 billion by reducing payments for imaging services, and saves $2 billion by freezing payments to home health care providers. Provides $7 billion for doctor's fees to avoid a 4.4 percent cut otherwise taking effect Jan. 1.

-- Medicaid. Saves $4.8 billion from the health care program for the poor and disabled by reducing payments for prescription drugs, tightening asset-transfer rules for nursing home eligibility, permitting states to reduce benefits and increasing co-payments paid by beneficiaries.

-- Pensions. Raises $3.6 billion in new revenues for the Pension Benefit Guaranty Corp., which insures defined benefit pension plans, by increasing from $19 to $30 the annual premium employers pay for each covered worker or retiree and establishing a $3,750-per-employee fee on companies that terminate their plans.

-- Agriculture. Achieves $2.7 billion in savings from agriculture conservation programs and delaying advance subsidy payments to farmers. Extends for two years a $1 billion payment program for dairy farmers if milk prices drop.

-- Digital television. Requires television broadcasters to shift from analog to digital signals by February 2009, which would require about 21 million owners of non-digital TVs without cable or satellite service to purchase converter boxes. Sets aside $1.5 billion to give two $40 coupons per household for converter boxes, estimated to cost between $50 and $60 each. Auctions a portion of the analog airwaves to wireless companies, raising an estimated $10 billion, and sets aside four emergency communication channels for public safety agencies.

AP-ES-12-21-05 1134EST