Congress leaves a lump of coal in stockings of nation's poor and powerless

December 30, 2005|By CLARENCE PAGE

WASHINGTON -- In a season of holiday cheer and giving, congressional conferees have come up with a Grinch-style lump of coal for Americans who don't have a lot of political clout or money.

While much more public attention probably was going to the successful fight by conservationists in the Senate to save the caribou and other creatures in the Arctic National Wildlife Refuge from oil drilling, Vice President Dick Cheney cast the tie-breaking vote to trim federal spending over the next five years, mostly from popular social programs.

Senate Republican leaders were puffed up with pride over the trims they managed to impose for the first time in eight years on the growth of such programs as Medicare, Medicaid and student loans.

Their ostensible purpose was to reduce the deficit, which has returned with a growing vengeance in the Bush years. But that savings probably will vanish like the proverbial drop in the pork barrel in the wake of the Bush tax cuts, such as the recently approved $70 billion in capital gains tax cuts for mostly upper-income earners and investors.

The new Senate-passed budget cuts $39.7 billion during the next five years, during which the Office of Management and Budget estimates total federal spending will exceed $13 trillion.

Thank Republican moderates for blocking spending cuts that conservative House members had pushed to offset the $60 billion in Hurricane Katrina-related aid Congress pledged in the fall.

Unfortunately, the result is a bill that does less to reduce the deficit than to shift its burden to the shoulders of poor and middle-class folks who, for example, need help with paying for a nursing home or putting their kids through college.

Yes, the biggest savings, $12.7 billion over five years, comes from student loan programs. It would fix interest rates on student loans at 6.8 percent, effective July 1. The rate will be fixed, not adjustable, even if commercial rates are lower.

Since student loan rates now stand at 5.375 percent, students who are thinking about consolidating their student loans to lock in a low rate for the life of their loans are strongly advised to consolidate immediately.

Note to young folks: Consider this to be your political payback for not voting in greater numbers.

Not that older folks got much more respect in this newly proposed budget's priorities. Out-of-pocket costs for the poor people who rely on Medicare would go up by way of increased co-payments and premiums, for a net five-year savings of an estimated $6.4 billion.

States also will be allowed to scale back some Medicaid benefits while tightening eligibility for Medicaid nursing home reimbursement. Net five-year savings: $4.8 billion.

Student loans and Medicaid nursing home reimbursements have become a major help to middle-class families. Student loans are a true investment in enterprising students and the future of our economy. Nursing home aid has become a last-ditch help to many middle-class families. Yet, at a time of rising costs, Congress has put the budget-cutting knife to these very worthwhile and popular programs - as though they fostered laziness.

Democrats pushed through enough small changes to force the Senate bill back to the House for yet another vote before it can be sent to President Bush for signing into law.

The House is expected to pass it with little substantive change.

Still, the delay offers a slim but important opportunity for the public and for principled lawmakers from both parties to take a hard look at what this 774-page budget offers - and what it takes away.

Clarence Page is a columnist for the Chicago Tribune. His column appears Tuesdays and Fridays in The Sun. His e-mail is

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