Legislators prepare to cut billions

Medicaid will be one of the top targets for reduction.
WASHINGTON -- Lawmakers are drafting proposals that would cut billions of dollars from the growth of Medicaid, slice into student loans just as students return to college, pare back food stamps and trim farm price supports in the midst of a Midwestern drought.
The raft of bills, due out of 16 committees in the House and Senate by Sept. 16, will present the Republican Party its toughest test of fiscal austerity in nearly a decade. For years, the party has embraced the rhetoric of small government while overseeing legislation that has helped boost federal spending by more than a third since the GOP took control of Congress 10 years ago.
Now, Republican lawmakers will be faced with the tough votes needed to slow that growth and enact the first cuts in entitlement spending since 1997.
Extensive effects
The impact of the bills will be broad:
*The energy committees will produce legislation to open Alaska's Arctic National Wildlife Refuge to oil drilling to secure $2.4 billion in royalties and other payments.
*The Senate Finance Committee is trying to find as much as $10 billion in savings from Medicaid, trimming anticipated growth by as much as 13 percent at a time when states such as Tennessee and Missouri are throwing tens of thousands of people off their Medicaid rosters.
*The Senate agriculture committee will try to trim farm price supports by $2.4 billion through 2010 while cutting an additional $600 million from food stamps.
*Senate aides are crafting legislation to cut $7 billion from the federal student loan program.
*The House and Senate education and labor committees are expected to draft legislation to raise the premiums corporations pay to the troubled Pension Benefit Guaranty Corp. from $16 to $31 per worker, a move that would improve the government's balance sheet by $6.5 billion.
Influential legislation
The bills are mandated by a budget resolution that passed this spring, after acrimonious debate. The budget blueprint mandated $35 billion in entitlement savings over five years, along with $70 billion in tax cuts over that period. By parliamentary rules, the resolution ensures that both the spending and tax cut packages cannot be filibustered, and thus can pass the Senate with a simple majority of 51 votes.
Such rules were established by the Congressional Budget Act of 1974, specifically to facilitate passage of tough deficit-reduction measures. But since the GOP took control of Congress and the White House, the rules have been used instead to ease passage of President Bush's major tax cuts. This year, amid pledges of fiscal discipline, Republican lawmakers vowed to restore the budget act's original intent.
Now, they have just weeks to turn the abstract pledges of the 2006 budget resolution into detailed legislation.
"It's been off the radar screen, but I can assure you it will be front and center very soon," said Jim Manley, spokesman for Senate Minority Leader Harry Reid, D-Nev.
Congressional aides cautioned that no legislation will take final form until lawmakers return. But a series of meetings through July helped aides begin to shape the bills that must be passed in the coming weeks.
Medicaid will be the largest target. Even with the cuts, the program would grow from $184 billion this year to $250 billion, as Medicaid rosters swell with population growth and the working poor are dropped from employer-provided health plans. The budget resolution mandated that the Senate Finance Committee produce legislation that would carve $10 billion out of entitlement programs under its jurisdiction.
Finance Committee Chairman Charles Grassley, R-Iowa, had hoped to find all $10 billion from Medicaid, but committee and Senate leadership aides say divisions in the panel may force him to lower that Medicaid target.

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