Senate acts to trim Medicare, Medicaid

Measure allows drilling in Alaska refuge


WASHINGTON -- The Senate approved yesterday a far-reaching measure that would trim spending for Medicare, Medicaid and other domestic benefit programs, to save $35 billion over five years, and allow oil and gas drilling in Alaska's Arctic National Wildlife Refuge.

The House, meanwhile, moved closer to a floor vote - probably next week - on a version of the budget bill that would cut $54 billion over the next five years.

The differences between the two bills extend beyond dollars. While the Senate's cuts would affect mostly providers of federal benefits, such as pharmacies and drug companies, the House bill would trim the rolls of recipients, notably those receiving Medicaid benefits, food stamps and farm subsidies.

The vote in the Senate was 52-47, with all but two Democrats opposing the bill. Five Republicans voted against it.

Maryland's senators, Paul S. Sarbanes and Barbara A. Mikulski - both Democrats - voted with their party.

The measure represents Congress' first big spending-cut effort since 1997.

"This shows we are serious about fiscal discipline," said Senate Majority Leader Bill Frist, a Tennessee Republican.

The vote was a victory for President Bush at a time when his administration has been buffeted by bad news and his approval ratings are sagging in opinion polls.

Bush, who has presided over an explosion of deficit spending, has stepped up efforts to clamp down in response to a conservative clamor to offset at least some of the costs imposed by Hurricane Katrina. The Senate bill includes Bush's favorite energy initiative - opening the Arctic refuge to energy exploration.

After the vote, Bush issued a statement praising the Senate for taking "an important step forward in cutting the deficit."

But the final version of a budget bill - or whether one even passes Congress - remains uncertain.

In the House, a number of moderate Republicans oppose some of the spending cuts their GOP leaders are pushing for, as well as the Arctic drilling provision and a measure to relax a decades-old federal ban on new offshore oil and gas drilling. California Gov. Arnold Schwarzenegger came out against the offshore drilling provision yesterday.

In another sign of the difficulty facing the GOP leaders, a group of conservative Democrats known as the "Blue Dogs" - to whom Republicans often turn on budget votes - called the House budget bill a "sham." They expressed skepticism that the GOP is committed to deficit reduction, because party leaders also want more tax cuts.

As prepared by eight House committees and assembled yesterday by the chamber's Budget Committee, the House bill would also split the San Francisco-based U.S. Court of Appeals for the 9th Circuit in two, with California linked with Hawaii, Guam and the Northern Mariana Islands. The court has long been a target of conservatives who believe it is too liberal.

In the Senate, Democrats contended that the bill that passed yesterday, formally known as the Deficit Reduction Act, would actually increase the deficit in combination with $70 billion worth of tax cuts that Republicans hope Congress will approve.

In opposing the bill, Sen. Dianne Feinstein, a California Democrat, said the deficit-reduction package "is not what it claims to be. Yes, it will cut spending by more than $30 billion, but in a few weeks these savings will be spent on tax breaks for the rich. This fiscal strategy edges us closer to fiscal insanity and leaves our children and their children impoverished and riddled with debt."

Robert L. Bixby, executive director of the Concord Coalition, which lobbies for balanced budgets, said that yesterday's victory in the Senate for deficit reduction could prove hollow.

"It makes no sense for Congress to bang heads over spending cuts and still wind up with bigger deficit simply because they can't control their urge to cut taxes," he said. "It's like running around the block and then chowing down on a burger and fries."

A Democrat-led effort to strip the bill of the Arctic drilling provision was defeated 51-48.

Sen. Maria Cantwell, a Washington Democrat, warned that drilling in "America's last great wild frontier," home to polar bears and caribou, "will not solve our nation's energy problems and will do nothing to lower skyrocketing gas prices."

Proponents deliberately attached the drilling measure to the budget bill because, by Senate rules, such measures cannot be filibustered. A minority of the Senate's 100 members have used the filibuster in the past to derail oil exploration in the refuge. But by its inclusion in the budget bill, it simply needed a majority for approval, rather then the 60 votes needed to end a filibuster.

Supporters of drilling contended that the tundra offers potentially one of the most significant petroleum fields in the nation - an estimated 10 billion barrels of oil, compared with U.S. daily consumption of 20 million barrels a day.

Sen. Ted Stevens, an Alaska Republican, called the site "a barren wasteland" in the winter, when the drilling would occur.

"No trees, no beauty at all," he added.

Stevens and other proponents of Arctic drilling still have many bridges to cross.

"The real battle is in the House," said Melinda Pierce, a Sierra Club lobbyist. Environmental groups have been running ads in districts of potential Republican defectors.

If House Republican leaders succeed in rounding up votes to pass their version of a budget bill, lawmakers still would face the difficult task of forging a compromise between the House spending cuts and those sought by the Senate.

The Senate-passed measure would yield about $7 billion in savings over the next five years from Medicare and Medicaid, the government health insurance programs for the elderly and the poor, largely by targeting hospitals, doctors, pharmacies and drug companies.

Richard Simon and Joel Havemann write for the Los Angeles Times.

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