The US Congress has entered their fall cutting season - when they try to reconcile the budget they wrote in the spring, with the reality they're faced with now. This year is especially tough. Congress has already appropriated 62 billion dollars to help rebuild after hurricane Katrina – and that figure is expected to rise. Add that to a deficit that has grown through a combination of tax cuts, spending for entitlement programs and the Iraq War. The House and the Senate are considering different ways to bridge the gap.
NHPR Correspondent Julie Donnelly has more from Washington.
Medicaid is clearly on the chopping block this year. Congressman Charlie Bass is defending the house energy and commerce committee's decision to cut eleven billion dollars from the health program for poor people..He says there's not a program in the world that is run perfectly, and that the amount of money spent does not necessarily predict how effective a program will be. He says the cuts Congress made reflect the suggestions they received from the states.
"the governors came here...and they are the people who would not want to cut programs or poor people"
The Medicaid cuts would include an increase in co-pays for some patients. Most Medicaid recipients do not pay anything for office visits or prescriptions - the few that do pay three dollars or less. The House proposal would raise some co-pays to 5 dollars and co-pays would apply to more households. In addition, the plan would require some Medicaid recipients to pay monthly premiums.
Advocates for low income people say thousands of poor families would be left with no coverage at all because they would not be able to afford the monthly fees.
But Congressman Jeb Bradley says that when the Congress is faced with paying for Hurricanes Katrina and Rita, they've got to find the money somewhere.
"we cannot keep running up the credit card of government..."
Programs that benefit the poor represent about twenty percent of the overall federal budget, according to the Center on Budget and Tax Policy - a left leaning think tank. But those programs will take a disproportionate hit when it comes to cuts.
That's because some large items are off the table. There will be no cuts to the defense department or the department of homeland security, for instance, because those departments are considered crucial to national security.
The fate of what's left over hinges in part on political calculations. Senate Republicans take a slightly different path from their House colleagues. The Senate plan would cut about half as much from Medicaid and make up the difference by trimming Medicare, the health program for seniors.
The cuts would reduce payments to HMOs that administer Medicare. Jim Horney from the center on budget and tax policy says House leadership has been unwilling to touch health care for seniors.
"they feared that in going after Medicare they were affecting a program that benefits middle income people..."
Horney says the cuts will unlikely have much effect on reducing the national deficit. He agrees with Democrats who says the elephant in the room is the large bundle of tax cuts that are due to expire.
There is no viable proposal on Capitol Hill to get rid of those tax cuts in order to protect social programs. Senator John Sununu says there's a very simple reason for that.
"if you look at the package that's expiring, they are by and large very popular with democrats and republicans, despite the rhetoric. they benefit families, teachers"
One thing that Democrats and Republicans - at least those from cold states - agree on, is the urgent need to protect and expand low income heating assistance.
The high price of fuel has prompted Senator Judd Gregg to become the first Republican to support a tax increase to pay for it. Gregg, who usually supports tax cuts, now says the record high profits of oil companies should be taxed at a higher rate.
Companies like Exxon Mobil saw their profits jump by almost fifty percent this quarter – as compared with last year. Meanwhile, consumers are expected to pay as much as fifty percent more this year for home heating fuel.
For NHPR News, I'm Julie Donnelly in Washington.
