Bush, Congress Reach Budget Agreement, $300B for Prescription Drug Coverage

The White House and congressional negotiators agreed yesterday on a "non-binding" budget deal that would boost discretionary spending 4.9% next year, a figure "greater" than President Bush had proposed but less than "what most Democrats said was needed to pay for domestic programs," including some health care initiatives, the New York Times reports. While Democratic leaders "criticized" the agreement, the deal "won the support" of a "handful" of "moderate" Democrats -- including Sens. John Breaux (La.) and Ben Nelson (Neb.) -- votes that Bush "needs" to move the measure through the evenly divided Senate. The agreement, the "final major piece" of Bush's FY 2002 budget, would increase discretionary spending next year to $666.6 billion, up from $635.4 billion this year, with $341.8 billion earmarked for domestic programs. In addition, the budget would provide up to $300 billion over the next decade for adding a prescription drug benefit to Medicare (Stevenson/Rosenbaum, New York Times, 5/3). The $300 billion figure would almost "double" the funding Bush had proposed for a drug benefit (Hitt/Cummings, Wall Street Journal, 5/3). In addition, the budget would include an 11-year, $1.35 trillion tax cut, less than the 10-year, $1.6 trillion reduction that Bush had originally proposed (Hosler, Baltimore Sun, 5/3). At the White House yesterday, Bush "hailed" the budget agreement as a "victory." He said, "It was time to come together to put a good budget together on behalf of the American people. What we're talking about is not partisan politics, but good budget politics, good budget policy" (Wall Street Journal, 5/3). The House and Senate will likely approve the measure today (New York Times, 5/3).

'Unrealistic' Blueprint?
Democratic leaders said that the tax cut would "still be too large" to fund other initiatives, such as a prescription drug benefit under Medicare (Baltimore Sun, 5/3). "The tax cut really crowds out all of those other things that everybody wants to do," House Minority Leader Dick Gephardt (D-Mo.) said (Fram, AP/Ft. Worth Star-Telegram, 5/2). Senate Minority Leader Tom Daschle (D-S.D.) also criticized the budget agreement, calling the 4.9% spending increase "unrealistic" (New York Times, 5/3). According to Rep. Charles Stenholm (D-Texas), "They are literally betting the ranch that the surplus will grow so there will be enough money for ... health care and all the things that are out there" (Baltimore Sun, 5/3). Rep. Robert Menendez (D-N.J.) said, "The view I have is you can't have the president's budget without cutting ... health care," adding that the agreement also "threatens" Medicare (Earle/Wegner, CongressDaily, 5/2). Democrats also criticized the $300 billion earmarked for prescription drug coverage, a figure "widely considered to be less than what the program will ultimately cost," the Times reports (New York Times, 5/3). However, the Journal reports that additional Medicare reforms that would allow private insurers to provide drug coverage could help "offset costs" (Wall Street Journal, 5/3).

Blowing Smoke?
Meanwhile, the Washington Post questions whether Bush's budget numbers "add up" or whether the White House is "committing the nation to a course that will eventually return the government to deficit spending." Some budget experts maintain that the projected surpluses "do not appear to cover all of the potential costs" of the president's proposals. For example, although the budget outline allocated $300 billion for a prescription drug benefit under Medicare, congressional analysts have "sharply increased" their cost estimates for a such drug benefit "in the wake of spiraling drug prices" (Kessler, Washington Post, 5/3). The Journal also reports that Bush's 4.9% "spending cap" may "not be realistic," with both Republicans and Democrats displaying a "strong ... appetite for new spending" (Wall Street Journal, 5/3).