Share this article

print logo

Entitlement costs unaffordable, White House says

The White House on Monday said the country cannot pay for mandated increases for Medicare, Medicaid and welfare indefinitely, and it called for additional restraints on spending.

But New York's two Democratic senators said most of the "belt-tightening" envisioned in President Bush's proposed $2.77 trillion federal budget for fiscal 2007 would be imposed on low- and middle-income Americans.

Bush's priorities are reflected in a proposed Defense Department budget 7 percent higher than this year's -- $439 billion, without counting the additional costs of wars in Iraq and Afghanistan.

At the same time, Bush is calling on Congress to restrain the spiraling cost of Medicare and other entitlement programs that absorb an increasing share of the national budget, proposing $36 billion in cuts in Medicare's growth over the next five years.

The savings the president seeks in the nation's two major health care programs, said Sen. Hillary Rodham Clinton, D-N.Y., are far outbalanced by Bush's plans to make permanent his tax cuts for higher-income people.

The extension of capital gains tax cuts over 10 years would cost $202 billion, Clinton said, adding that the repeal of the estate tax would cost $339 billion in revenue in the next decade.

In a White House briefing Monday, budget director Joshua B. Bolten said restraints on spending would save Medicare $36 billion and Medicaid $4.9 billion over the next five years.

Curbs on Medicaid -- the health care program for children, low-income people and the elderly -- could hit the state's economy, particularly its health care sector, very hard, said Sen. Charles E. Schumer, D-N.Y. "These budget cuts [on Medicare and Medicaid] are like a one-two punch to New York's seniors," Schumer said.

With only 6 percent of the nation's population, New York gets 14 percent of Medicaid funding.

When Congress and the White House were controlled by different parties, it became routine to dismiss proposed federal budgets as speculative. With Republicans running both the executive and legislative branches since 2001, however, the budget proposal has real meaning.

Congress took last year's budget and passed laws in December that disqualified many elderly people from Medicaid nursing home or home care coverage.

Under proposed curbs in spending on Medicare -- the Social Security-based health care program -- "New York will see $136 million worth of cuts in the home health care industry alone, and approximately $20 million in cuts to hospice care [in the first year]," Schumer warned.

Nationally, he said, the $3.5 billion in proposed Medicare cuts come out of hospice, ambulances, hospitals, skilled nursing facilities and home health care agencies.

Medicare Part B premiums, which are paid by senior citizens for access to physician care, Schumer said, are expected to increase as well for those in certain income brackets, at a cost of $1.9 billion.

Locally, Erie County Social Services Commissioner Michael Weiner said the new budget threatens to put agencies like his in a "Catch-22 situation."

Weiner said congressional action could require single mothers to spend longer hours at work or in training while the federal government cuts back their money for child care. "How are they going to qualify for TANF if they have to spend more time outside the home but can't pay for child care?" Weiner asked.

Weiner said that under state mandates imposed by Congress, counties can be penalized in lost Temporary Assistance for Needy Families allocations if they do not raise the proportion of TANF recipients who are in training or other sanctioned programs.

Demands for increased co-payments for emergency hospital care mandated by the White House, Weiner said, could result in sick people being turned away from hospitals.

Bolten said these cuts are needed to keep the nation's economy growing. He noted that the effects of a weak economy "fall most heavily on the poor and the people who are struggling" and not on the rich.

As in last year's budget, the costs of the wars in Iraq and Afghanistan were difficult to isolate. A year ago, Bolten said, Congress would have to pass a supplementary war appropriation bill of $50 billion. Monday, he said this would have to be increased to $70 billion for the current year. He said extra costs for the wars in 2007 would come to $50 billion.

The Concord Coalition, a nonpartisan budget watchdog group, said Bush's proposed budget is "unrealistic" on several points, particularly on war costs.

"The mix of spending and tax cut proposals in the president's budget would actually increase the deficit by more than $400 billion through 2011," the Concord Coalition said.

The current budget projects a deficit of $423 billion for 2007, the largest in nominal dollars in history. However, Bolten said the correct way to measure the deficit is as a share of all the goods and services produced in the country. It is 3.6 percent now, and will be 1.4 percent in 2009, Bolten said.

Bolten said criticisms that the budget "cuts" Medicare and Medicaid are untrue: "These are reductions in the rate of growth."

But William D. Novelli, executive director of AARP, said the "budget relies on cutting Medicare and Medicaid, rather than focusing on skyrocketing costs [in] the health care system." He said, "Arbitrary caps on Medicare will mean that providers or beneficiaries will have to make up the difference through lower payment rates or higher cost-sharing. Over time, this will create a crisis in quality and access to health care for older Americans."


There are no comments - be the first to comment