Senate Approves Budget Resolution Without $14B in Medicaid Cuts; House Approves Separate Budget Plan With $20B in Medicaid Spending Reductions

The Senate on Thursday voted 52-48 to approve an amendment that would remove $14 billion in proposed Medicaid cuts from the Senate's fiscal year 2006 budget resolution and instead create a commission to study and recommend possible changes to the program, the Washington Post reports. Republican Sens. Gordon Smith (Ore.), the amendment's author; Lincoln Chafee (R.I.); Norm Coleman (Minn.); Susan Collins (Maine); Mike DeWine (Ohio); Olympia Snowe (Maine) and Arlen Specter (Pa.) and all 45 Senate Democrats voted in favor of the amendment. Senators also approved amendments that would add $2 billion in spending for health research and $500 million for HIV/AIDS efforts globally. The Senate approved the full budget resolution on a 51-49 roll call vote (Weisman, Washington Post, 3/18).

Medicaid Amendment Action
The budget resolution approved last week by the Senate Budget Committee had called for $32 billion in cuts over five years for mandatory spending programs, including Medicaid, which would have been similar to cuts proposed by President Bush. In his FY 2006 budget plan, Bush suggested revisions to Medicaid that he estimated would save $60 billion over 10 years and $14 billion over five years. The Congressional Budget Office projected that Bush's plan would reduce Medicaid spending by $9 billion over five years. Under the original Senate proposal, the Senate Finance Committee, which has authority over Medicare and Medicaid, would have been tasked with finding the Medicaid cuts (Kaiser Daily Health Policy Report, 3/11). Before senators approved the amendment averting the Medicaid cuts, Senate Majority Leader Bill Frist (R-Tenn.) had proposed a nonbinding amendment that would have distributed any savings from the $14 billion in Medicaid cuts to states and would have prevented any loss in coverage for beneficiaries. However, senators defeated that amendment on a 51-49 vote (Rogers, Wall Street Journal, 3/18).

House Action
The House on Thursday voted 218-214 to approve its budget resolution, which calls for "steep cuts in Medicaid" and other entitlement programs, the New York Times reports (Stolberg, New York Times, 3/18). The budget resolution, as approved by the House Budget Committee last week, would reduce spending on mandatory programs, including Medicare and Medicaid, by $69 billion over five years, about $18 billion more than Bush requested in his budget proposal (Kaiser Daily Health Policy Report, 3/11).

Reconciliation Prospects
Reconciling the House and Senate budgets could be difficult because of the approved Medicaid amendment, some House Republicans said, the Washington Times reports. House Majority Whip Roy Blunt (R-Mo.) predicted that budget conference committee members would approve the House's proposed Medicaid spending reduction, so long as Bush supports such cuts (Dinan, Washington Times, 3/18). House Budget Committee Chair Jim Nussle (R-Iowa) said budget negotiations with the Senate are "going to be challenging" (Washington Post, 3/18).

Reaction From Lawmakers
Senate Budget Committee Chair Judd Gregg (R-N.H.) said, "It is not the bill I would have chosen if I'd had a magic wand. But this is the middle of the process, and I hope it will improve" (Fram, AP/Detroit News, 3/18). He added, "The essence of this budget is ... whether or not our generation, the baby boom generation, is going to be willing to stand up and admit we put too much on the books for our children to bear" (Washington Post, 3/18). Gregg said that the Medicaid amendment "will guarantee that the issue of Medicaid is not addressed," adding, "That is a guarantee" (Cohn, CongressDaily, 3/17). Sen. Max Baucus (D-Mont.) said, "Let's not fool ourselves into thinking we are really cutting fraud and abuse in Medicaid with these [proposed] cuts. Rather, these cuts [would] hurt people" (CQ HealthBeat, 3/17). Although DeWine said that lawmakers "need to make reforms," he added that he supports giving states more flexibility to make changes to the program before being required to make spending reductions (New York Times, 3/18).

White House Comments
Bush in a statement said the House budget "closely follows [his] budget proposal and reflects [a] shared commitment to be wise with the people's money and restrain spending in Washington." The president did not comment on the Senate budget, according to the New York Times (New York Times, 3/18).

Broadcast Coverage

• NPR's "Morning Edition" on Friday reported on the approval of the Medicaid amendment. The segment includes comments from Baucus, Coleman, Gregg, Smith and House Speaker Dennis Hastert (R-Ill.) (Welna, "Morning Edition," NPR, 3/18). The complete segment is available online in RealPlayer.
  
• NPR's "All Things Considered" reported on the approval of the amendment (Welna, "All Things Considered," NPR, 3/17). The complete segment is available online in RealPlayer.