House panel approves Medicaid cuts

WASHINGTON -- A key House committee late Thursday approved a proposal to curb Medicaid spending by about $9.5 billion by the end of the decade, advancing a plan to slow spending on the federal government's health-care program for the poor and disabled.

The Energy and Commerce Committee voted a party-line 28-22 for the measure, over protests from panel Democrats who said Republicans were trying to cut the deficit on the backs of poor. Republicans countered that they were making only modest trims -- about 1 percent -- in a program predicted to cost $1.1 trillion over the same period.

The Medicaid measure is to be folded into a sprawling budget bill to implement Republican plans that would, for the first time in eight years, take on the growth of federal programs such as food stamps, farm subsidies and student loan subsidies. The plan also would also raise revenue by auctioning television airwaves to wireless companies and leasing parts of the Arctic National Wildlife Refuge for oil drilling.

The belt-tightening comes even as the Senate on Thursday approved by voice vote $8 billion in emergency spending to prepare vaccines and antiviral drugs and make sure health facilities are ready for an outbreak of much-feared bird flu.

And the White House is expected to ask Congress on Friday to redirect $17 billion in already approved hurricane relief funds to projects like repairing highways and federal facilities damaged by the storms.

Such moves illustrate the pressure to boost spending, even as the Republican-dominated House implements its budget plans. The Senate is scheduled to debate a companion $39 billion deficit-cutting plan starting Monday.

The House Medicaid plan would impose new co-payments on Medicaid beneficiaries and would allow states to scale back coverage. It also would tighten rules designed to limit the ability of elderly people to shed assets in order to qualify for nursing home care, lower pharmacy profit margins and encourage pharmacies to issue generic drugs.

The House bill would extract significantly less savings from drug manufacturers and pharmacies than would a companion Senate measure. Beneficiaries would bear a greater share of the cuts, with advocates for the poor noting that working families would shoulder the greatest burden.

And, for the first time, people with significant home equity of $500,000 would be ineligible for nursing home care under Medicaid.

"Medicaid is a victim of its own success. The program has grown so expansive that it is unsustainable in its current form," said panel Chairman Joe Barton, R-Texas. "The reforms we are offering . . . will help to save the program while at the same time protecting the poorest of our society."

Panel Democrats lost a series of votes to ease the cuts.

The Senate, meanwhile, completed floor action on fiscal 2006 spending bills, voting 94-3 to pass a massive measure covering health, education and labor programs.

The legislation, the largest of the spending bills Congress considers every year, includes $146 billion for non-entitlement programs and about $458 billion for benefits such as Social Security, Medicare and Medicaid.

Among the programs are $29.4 billion for the National Institutes of Health, $6.9 billion for Head Start and $12.8 billion in aid for high-poverty schools.

Citing budgetary restraints, the GOP-led Senate rejected mainly Democratic proposals to boost spending significantly for such programs as the Low-Income Home Energy Assistance Program, funded at $2.2 billion; Pell grants, budgeted at $13.2 billion; and the Individuals with Disabilities Act, funded at $11.7 billion.

The legislation now goes to House-Senate negotiations. So far Congress has completed, and the president has signed, only three of the 11 spending bills that fund federal programs for the fiscal year that began Oct. 1.

The Agriculture Committee, meanwhile, postponed until Friday a vote on a $3.7 billion plan to curb farm subsidies and tighten eligibility requirements for the food stamp program. The committee's earlier target was slightly higher but GOP leaders gave panel Chairman Robert Goodlatte, R-Va., a break after another committee exceeded its savings goal.

With a lower savings target, Goodlatte dropped one of his more controversial food stamp proposals -- which would block states from extending benefits for childless adults facing hardships such as homelessness -- and modified another affecting legal immigrants.

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