Battle likely on bid to cut aid to poor

GOP calls cuts to social programs necessary to trim deficit

Democrats blame tax break

December 05, 2005|By THE DALLAS MORNING NEWS

WASHINGTON -- Lawmakers returning to Capitol Hill this week face a bruising fight over whether to curtail poverty programs.

A showdown is expected between conservative House Republicans and their more moderate Senate counterparts as congressional negotiators try to resolve differences between cost-cutting measures GOP leaders argue are necessary to cut the deficit.

Democrats and advocates for the poor argue that program reductions are the price for Bush administration tax cuts that largely benefit higher-income brackets.

The budget reduction proposals will trim the growth of future spending for Medicaid, food stamps and other programs.

The changes come as a handful of states are dealing with the costs of providing support for families displaced by hurricanes Katrina and Rita.

Texas Republican Joe L. Barton, chairman of the House Energy and Commerce Committee, is leading efforts to win approval of what he describes as desperately needed Medicaid reform that he says will not hurt the poor.

"All we are doing is nipping and tucking around the edges," said Barton, noting the changes were developed in part by a bipartisan group of governors under the auspices of the National Governors Association.

The $48 billion House bill would reduce Medicaid spending by giving states the option of reducing benefits and imposing premiums and co-payments on beneficiaries. It also would reduce payments for prescription drugs and make it more difficult for seniors to dispose of assets so they can qualify for long-term nursing home care.

The House also seeks to tighten eligibility for food stamps. That would cut off 220,000 people nationwide. The proposals include a provision requiring legal immigrants to wait seven years, instead of five, to receive food stamps.

The Senate's smaller $35 billion package contains fewer savings in poverty programs and would reduce funds the government pays to encourage private insurance companies to participate in Medicare. The White House opposes the provision.

The House bill also would clamp down on seniors seeking nursing home care from Medicaid by making individuals with more than $500,000 in home equity ineligible for benefits. Proponents such as Barton argue the elderly are soaking up two-thirds of Medicaid's funds, denying benefits that were intended for the poor.

Fiscal conservatives such as Rep. Jeb Hensarling, a Texas Republican, said containing future spending is needed to begin slowing runaway spending for the entitlement programs that account for two-thirds of the federal budget.

"If we do not reform these programs, we will end up doubling the taxes on our children," he said.

Stan Collender, a budget analyst and managing director at Financial Dynamics in Washington, finds elements of truth on both sides. The overall size of cuts is small, but individual beneficiaries are likely to be hurt by higher costs or a loss of benefits.

The white-hot rhetoric underscores how modest reductions can affect beneficiaries of the nation's social safety net at a time of renewed attention on the Bush tax plan.

"It is totally about tax cuts," said Scott McCown, executive director of the Center for Public Policy Priorities in Austin, Texas. "Our current deficits are not the result of critical spending to help low-income Americans. They are the result of tax cuts given in 2001 and 2003."

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