Budget takes aim at entitlements

The agreement, seen as a victory for Republicans, also opened the door to oil drilling in the Arctic National Wildlife Refuge.
WASHINGTON -- Republican leaders in Congress announced agreement Thursday on a 2006 budget that calls for new belt-tightening in major domestic programs, even as it allows $106 billion more in tax cuts and leaves a $382 billion deficit.
The agreement also paves the way for adoption later this year of legislation to expand oil drilling in part of Alaska's Arctic National Wildlife Refuge, a top White House priority.
The compromise, which was expected to be approved by the House and Senate Thursday night, calls for $40 billion in savings in Medicaid, farm programs and other fast-growing entitlement programs over the next five years.
Those savings fall short of the $69 billion that President Bush initially sought. Still, the budget agreement marks the first time since 1997 that Congress has taken even a modest step toward slowing the growth of government entitlements.
The budget -- a compromise between earlier versions passed separately by the House and Senate -- is a victory for Republican leaders who were hoping to avoid repeating the embarrassment they suffered last year, when the two chambers could not reach agreement on a budget.
"Is this a perfect budget? Of course not," said House Budget Committee Chairman Jim Nussle, R-Iowa. "Having a plan is better than not having a plan."
The budget resolution is a nonbinding blueprint that does not require Bush's signature. But it sets spending limits and revenue targets for tax and appropriations bills drafted later this year.
It also sets in motion a procedure that will allow the tax and spending cuts mandated by the budget to be considered in a special bill that is immune from Senate filibusters. The Alaskan oil drilling initiative is expected to be included in that measure, enabling it to circumvent the filibusters that have blocked that signature piece of Bush's energy policy in past years.
Negotiations over final terms of the budget were tricky because the House, where conservatives have been restive over the growth of government spending in recent years, insisted on tighter restrictions on domestic spending than the Senate wanted.
A point of particular controversy was Medicaid, the federal-state health-care program for the poor. The House version of the budget called for slowing the growth of the program by $20 billion over five years. In the Senate, Republican Gordon Smith of Oregon led an effort to spare the program from cuts.
During negotiations on the compromise, Smith and others threatened to vote against the whole budget if it went too far in squeezing Medicaid. He accepted the terms of the final compromise, which calls for $10 billion in Medicaid savings through 2010 but requires none of those savings to be made in 2006. Negotiators also agreed to establish a task force to report by Sept. 1 on ways to slow Medicaid growth.

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