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When the Cutting Is Corrupted

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By E. J. Dionne Jr.
Tuesday, December 27, 2005

With indicted superlobbyist Jack Abramoff reportedly ready to cooperate with prosecutors and his partner, Michael Scanlon, already singing, 2006 is expected to be the year of congressional scandals.

Lord knows, a housecleaning in the Capitol is definitely in order. But the Abramoff scandal is just part of the corruption of our political system. There is another level of special-interest influence that cannot be handled by prosecutors: Only the voters can render a judgment on a politics of favoritism that has created a new Gilded Age. It's clear that the national government has placed itself squarely on the side of the wealthy, the privileged and the connected.

Rarely does a single action by Congress serve as so powerful an example of how the system is working. The recent budget bill, which squeaked through the House and Senate just before Christmas, is a road map of insider dealing. It shows that when choices have to be made, the interests of the poor and the middle class fall before the wishes of interest groups with powerful lobbies and awesome piles of campaign money to distribute.

Republican majorities in the Senate and House insisted that they wanted to cut the federal budget. But the Senate and House offered competing plans for achieving savings. When it came time to meld the two proposals, almost every choice congressional leaders made favored the interest groups.

Consider federal health programs. The House bill proposed substantial cuts for Medicaid beneficiaries, but the Senate bill -- partly because of pressure from moderate Republicans -- did not include those cuts. Instead, the Senate proposed to save taxpayer money by eliminating a $10 billion fund to encourage regional preferred-provider organizations, known as PPOs, to participate in the Medicare program. It also sought more rebates to the federal government from drug manufacturers participating in Medicaid.

Note the difference: Instead of imposing cuts on the poor, the Senate sought savings from corporate interests. Surprise, surprise: The final bill dropped the $10 billion cut to the PPOs and most of the rebate demands on drug manufacturers. Instead, the agreement hammered Medicaid recipients with $16 billion in gross cuts over the next decade. (The net cuts are lower because of new Medicaid spending, partly to help cover the scattered victims of Hurricane Katrina.)

The Medicaid cuts include increased co-payments and premiums on low-income Americans, and the budget assumes savings because fewer poor people will visit the doctor. As Kevin Freking of the Associated Press reported: "The Congressional Budget Office has concluded that such increases would lead many poor people to forgo health care or not to enroll in Medicaid at all -- contributing to some of the $4.8 billion in Medicaid savings envisioned over the next five years."

Ah, say their defenders, but these cuts will be good for poor people. According to the New York Times, Rep. Joe L. Barton (R-Tex.), an architect of the Medicaid proposals, said the higher co-payments were needed to "encourage personal responsibility" among low-income people. Spoken like a congressman who never has to worry about his taxpayer-provided health coverage.

And that is just one instance among many of corporate interests being shielded from cuts, while child support enforcement and foster care programs were sliced. Shortly before the bill went to the House floor, Republican leaders, at the insistence of a group of GOP lawmakers from Ohio, dropped a $1.9 billion cut that would have changed Medicare payments to oxygen equipment manufacturers. The main beneficiary of this change was Invacare Corp. of Elyria, Ohio.

Sen. Norm Coleman (R-Minn.) opposed the original, milder Senate budget bill but turned around and voted for the final, harsher bill. According to Congress Daily, Coleman backed the final budget "after negotiators took out cuts affecting his state's sugar beet growers." Coleman told the paper: "Karl Rove called me and asked what I wanted. A few hours later it was out of the bill."

The good news is that this budget is not law yet. Sen. Kent Conrad (D-N.D.) used a clever procedural maneuver to force it back to the House for one more vote next year.

When this 774-page behemoth hit the House floor shortly after 1 a.m. on Dec. 19, many members were not fully aware of what was in it. Now that they know, maybe some of the moderate Republicans who caved to their leadership and voted for it will save their party's honor by killing this special-interest mess. If I may borrow from Mr. Barton, doing so would definitely "encourage personal responsibility" among Republican leaders.

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