The ink is hardly dry on the big budget-cutting "summit" agreement between Congress and the White House, but already an angry dispute has arisen over the Medicare provisions.
House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) sent an angry letter yesterday to James C. Miller III, director of the Office of Management and Budget, warning that the budget summit agreement could fall apart if OMB insists on demanding larger Medicare cuts in fiscal 1988 and 1989 than Rostenkowski said were called for by the agreement.
Rostenkowski said news reports of proposals in President Reagan's forthcoming budget message indicate that OMB, in an "act of bad faith," is trying to welsh on the budget deal and slash Medicare $1.25 billion more than agreed over the next two years.
He has warned Miller that if the president tries to reopen what Congress considered a completed deal on Medicare savings, "then members of the Congress will be free to reopen policies they do not favor," including defense spending.
The OMB says the Medicare program changes, included in the budget reconciliation bill passed by Congress last month, fall $1.25 billion short of meeting the cost-reduction targets over fiscal years 1988 and 1989 in the budget agreement.
The OMB has ordered the Department of Health and Human Services to propose additional program cuts that would increase the cost reductions $1.25 billion.
Rostenkowski said, "The contention that the enacted Medicare savings do not meet the summit agreement was nonsense when it was first raised and is nonsense now." He said the agreement had called for Medicare cost reductions of $2 billion in fiscal 1988 and $3.5 billion in 1989 -- $500 million a year greater than the version of the bill passed by the House in October.
That, he said, had been done: the final compromise bill projected Medicare savings of "$2.1 billion in fiscal 1988, $550 million more than the House-passed bill, and $3.8 billion in fiscal 1989, over $650 million more than the House-passed bill."
The dispute turns on how much savings can be expected from certain program changes, and Miller said yesterday, "The budget that will go up will in our judgment comport 100 percent with the agreement. The president ought to be able to price the budget as his experts counsel him." He said Congress accepted OMB savings estimates on agricultural programs, but insisted on using Congressional Budget Office estimates for Medicare because in that case the CBO savings estimates were higher.