Health and Human Services Secretary Margaret M. Heckler is considering appealing major cuts in Medicaid and welfare for the aged, blind and disabled that the Office of Management and Budget wants included in the president's fiscal 1986 budget, departmental sources said yesterday.
The proposed cuts face strong opposition on Capitol Hill.
Medicaid, which provides free health care to about 21.5 million low-income people, is the nation's largest welfare program, with total federal-state outlays of about $38 billion in fiscal 1984; the U.S. share of that was $20.5 billion.
OMB Director David A. Stockman, in documents sent to Capitol Hill in December and again yesterday, proposed to cut federal Medicaid payments to the states by $1 billion from the total they would otherwise reach in 1986, $2.34 billion in fiscal 1987 and $3.9 billion in fiscal 1988. Growth of the federal Medicaid payment, under this plan, would be limited to an amount equal to the national inflation rate, although in the past the growth of Medicaid has far exceeded the general inflation rate.
State governors and members of Congress say the cap on federal outlays proposed by Stockman would force the states to cut benefits or eligibility.
Sources said Heckler may ask the president to overturn the Stockman proposal and seek much smaller cuts, if any.
Stockman also has proposed that no automatic cost-of-living increase be paid in 1986 to the 4 million low-income aged, blind and disabled people who are receiving federal Supplemental Security Income (SSI) welfare payments.
Heckler is expected to argue that a wipeout of SSI cost-of-living adjustments (COLAs) would have the effect of negating Social Security increases for up to 2 million people who benefit from both programs.