The House Ways and Means Committee voted yesterday to extend the 16-cent-a-pack cigarette tax, enlarge the federal welfare program and cut Medicare spending as it approved legislation that would reduce the federal deficit by $19 billion over the next three years.
The final vote was 22 to 14, with no Republicans supporting the measure.
Republicans reportedly opposed the measure because of the cigarette tax extension and changes in the welfare program, but Democrats dismissed the GOP complaints.
"The bill proves that budgets are not dead -- that deficits are as worrisome as ever before," said Ways and Means Chairman Dan Rostenkowski (D-Ill.). "We have once again met our budget target without cutting the nation's safety net."
Rostenkowski said the Medicare cuts would not hurt beneficiaries and said the cigarette tax extension did not represent a new tax.
The Medicare cuts in the bill would reduce program outlays by a net of $10.2 billion over the next three years.
In other action yesterday, the committee approved provisions extending coverage of the Medicare program and Medicare tax to all newly hired state and local employes, beginning in 1986.
The committee also approved provisions to prevent hospitals from turning away emergency patients for fear the patients cannot pay and to require that private health insurance plans provided by employers permit widows, divorced spouses and children of employes to continue in the group health plan at their own expense.
Earlier, the committee voted to limit increases in Medicare payments to hospitals to 1 percent in 1986, freeze payment rates to doctors if they do not agree to accept the Medicare payment as their full payment and wipe out existing provisions guaranteeing private, for-profit hospitals a return on equity.
In a major change in the program of Aid to Families with Dependent Children (AFDC), the bill would require all states to provide welfare to low-income families with needy children if the father is present but unemployed.
Currently, welfare for such families with an unemployed parent is optional, and 23 states, Guam and the District of Columbia, provide it to such families. The bill would make such two-parent families eligible throughout the country, adding about 75,000 families to those on the rolls.
The other $9 billion in deficit reduction comes through additional revenues. More than half of the $9 billion comes from permanently extending the tax on cigarettes of 16 cents a pack. One cent of the tax is to be set aside for the next few years to support tobacco price-support programs. The tax was due to drop to 8 cents a pack on Oct. 1. The administration had favored allowing the tax to go back to 8 cents.
The bill calls for an additional $1.6 billion over three years from added customs fees and the addition of 800 people to the customs force. The administration wanted to eliminate 887 customs employes. Other revenues would come from customs user fees and increased railroad unemployment compensation taxes.
And, $1.3 billion would come from stricter enforcement of the tax law through the addition of 1,500 workers to the Internal Revenue Service.
As part of the changes in the welfare program, the committee approved a new program to combat teen-age pregnancy, with an estimated cost of $150 million over two years. The committee also voted to reduce penalties for significant overpayments to welfare recipients because of state errors and inefficiency.
The bill would raise from $2.60 to $8 per worker annually the premium payable to the government for an insurance program guaranteeing private pensions that are run by a single employer that run out of money. The fund to support the insurance program would have a deficit of $721 million at the end of fiscal 1986 without this provision.
The committee also voted to extend the trade adjustment assistance programs for four years and to raise coal excise taxes to help fund black lung disability benefits.