House GOP Frowns on Medicaid Cuts

A group of House Republicans is balking at a Bush administration proposal that would squeeze $20 billion out of the Medicaid (search) program over the next five years.

It's the third budget cut proposed by President Bush that has rankled more than a few members of his own party. Earlier in the week, the administration dropped its effort to cut government payment to farmers. The month before, the Senate voted to block Bush's proposal to cut community block grants for cities.

Now, about one out of five members of the GOP contingent on the House side — 44 members — opposes curbing Medicaid spending to the degree set out in a budget resolution approved in that chamber just last month.

The reductions "will negatively impact people who depend on the program and the providers who deliver health care to them," the GOP lawmakers said in a letter to Rep. Jim Nussle (search), R-Iowa, chairman of the House Budget Committee.

The letter could give senators more leverage as lawmakers from both chambers attempt to negotiate a budget plan for the year. The plan is nonbinding. However, it could be necessary if GOP leaders hope to pass any significant tax cuts or benefit cuts later this year because the resolution would shield the bills from filibusters in the Senate.

Democrats believe the letter to be a significant development.

"It is crystal clear that a majority of both House and Senate members support a budget resolution that does not require such cuts," said a press release from House Democratic leader Nancy Pelosi and Democratic Whip Steny Hoyer. "The question now is whether the Republican leadership and the Republican chairmen of the budget committees will honor the wishes of the majorities in both houses by reporting a conference report on the budget resolution with no cuts to Medicaid."

Rep. Heather Wilson, R-N.M, who initiated the letter, said a compromise could include some reduction for Medicaid. She also hopes a compromise includes funding for a bipartisan commission to review Medicaid and report back to Congress.

"The reality is the Senate had zero, the House had $20 billion," Wilson said. "This influences where a final number comes out and how it is connected to the formation of a commission."

The cuts that GOP leaders want would amount to about a 1 percentage point reduction from Medicaid's projected 7 percent-plus growth over the next several years. By law, benefit programs grow automatically to keep pace with factors such as inflation and ever-rising numbers of beneficiaries.

In February, Bush proposed $8.5 billion in Medicaid cuts. GOP leaders in the House and Senate proposed making the cuts bigger to pay for new tax cut (search) initiatives.

Advocacy groups that opposed the administration's budget applauded the letter.

"States are already warning that they can't sustain their existing Medicaid commitments, and a federal reduction in funding would exacerbate that problem," said Ron Pollack, executive director of Families USA, a liberal group that seeks quality health care for all Americans. "It would inevitably result in large state cutbacks for seniors and children who need Medicaid as their health safety net."

Virginia Gov. Mark Warner, chairman of the National Governors Association, said it would be unfair to states for the federal government to reduce Medicaid spending. He said states already are picking up the costs for businesses that drop health care coverage for employees and the rising number of elderly who rely on Medicaid to pay for nursing home care.

"We are on the road to a meltdown," Warner, a Democrat, told a forum sponsored by the Kaiser Family Foundation, a nonprofit research organization. "I would argue the president chose the wrong crises when he focused on Social Security (search)."