Growth of benefit programs to be cut

Bill trimming $39 billion from federal programs over 5 years squeaks by House

Bush praises vote

February 02, 2006|By RICHARD SIMON AND JOEL HAVEMANN | RICHARD SIMON AND JOEL HAVEMANN,LOS ANGELES TIMES

WASHINGTON -- The House gave final approval yesterday to a far-reaching bill that will trim the growth of federal benefit programs by more than $39 billion in the next five years - Congress' first major budget-cutting exercise in almost a decade.

The measure squeaked through the Republican-led House by a vote of 216 to 214, without a single Democrat in favor. The Senate had passed the legislation shortly before Christmas, also with no Democratic support, when Vice President Dick Cheney broke a 50-50 tie.

President Bush issued a statement praising the House vote and adding, "I look forward to signing this bill into law." He said the 2007 budget he would submit to Congress on Monday "will continue to build on the spending restraint we have achieved."

Among its many provisions, the bill will charge higher interest rates on student loans, reduce federal aid for forcing absent parents to pay child support and impose stricter work requirements on welfare recipients.

Republican leaders have portrayed the bill as a critical part of their drive to reduce the federal budget deficit. Rep. Mike Pence, an Indiana Republican who is a leader of House conservatives, called the measure "an important first step toward restoring public confidence in the fiscal integrity of our national government."

Yet the measure would trim only about 0.3 percent of federal spending projected for the next five years. And even as the House was passing the spending-cut bill, the Senate was debating a $56 billion tax cut that the House has passed - a combination that would add $16 billion to federal deficits.

Democrats condemned budget cuts that were focused on programs to benefit the poor even as Republicans plan more tax cuts that disproportionately benefit the wealthy.

"This isn't about small government," said House Minority Leader Nancy Pelosi, a California Democrat. "This is about small-minded, petty government that does not meet the needs of the American people."

The bill includes some provisions that reach far beyond mere budget cuts. Upon Bush's signature, the legislation will reauthorize and revamp the welfare reform law that Congress enacted in 1996 but that expired in 2002. Since then, Congress has extended the program, Temporary Assistance to Needy Families, with a series of short-term reauthorizations.

States will face reductions in federal welfare grants if they cannot meet strict new requirements for moving their welfare recipients into jobs or activities such as job training.

The bill's Medicaid provisions spell bad news for many of the program's low-income recipients but good news for health insurers and drug companies. The bill could mean that beneficiaries with incomes just above the poverty line will have to pay far more than the current $3 co-payment for many medical services. It will tighten restrictions on elderly people who transfer assets to family members to qualify for Medicaid.

Senate-passed provisions to force insurance companies and drug manufacturers to absorb some of the cuts were dropped by the House-Senate conference committee that wrote the final bill.

The deepest cuts - $12.7 billion over five years - were exacted on the government's student loan programs. Kevin Bruns, executive director of America's Student Loan Providers, said the savings would come at the expense of students, parents and lenders alike. "No one got off easy," he said.

Maryland's House delegation voted along party lines, as it did in December. The two Republicans, Reps. Roscoe G. Bartlett and Wayne T. Gilchrest, supported the bill, while the six Democrats - Reps. Benjamin L. Cardin, Elijah E. Cummings, Steny H. Hoyer, C.A. Dutch Ruppersberger, Albert R. Wynn and Chris Van Hollen - opposed it.

As much as the measure's passage was welcomed by Bush, it was perhaps sweeter yet for House Majority Whip Roy Blunt, whose hopes of succeeding former Majority Leader Tom DeLay of Texas could have been derailed if he had failed to corral the necessary votes.

Blunt, a Missouri Republican, has emerged as the favorite in today's GOP vote for a House majority leader, a contest that has been dominated by debate over the party's direction in the wake of ethics scandals.

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

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