House Panel Considers Cutting Subsidies, Food Stamps

A plan to curb spending on farm subsidies and food stamps faced a test in a House committee, as lawmakers will work Friday to finish drafting a broader plan to slow the automatic growth of federal spending programs.

The belt-tightening came even as the Senate approved, by voice vote Thursday, $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 (search).

And the White House was 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.

These moves illustrated the continuing pressure to boost spending, even as Congress readied a sprawling $50 billion deficit-reduction bill. For the first time in eight years, lawmakers were taking on the automatic growth of federal programs such as Medicaid (search) and student loan subsidies.

For its part, the Agriculture panel was slated Friday to approve a $3.7 billion bill to curb farm subsidies and tighten eligibility for food stamps. The plan wrings $1 billion from commodity programs through the end of the decade and curbs the growth of the food stamp program by $844 million over the same period.

The overall plan also would raise revenue by auctioning television airwaves to wireless companies and leasing parts of the Arctic National Wildlife Refuge for oil drilling.

The farm and food stamp initiatives were relatively modest in impact and provided less savings than earlier draft bills by Agriculture panel Chairman Robert Goodlatte (search), R-Va. Still, they caused heartburn among some panel Republicans, who had to approve the bill without help from Democrats opposing the GOP's budget.

Goodlatte dropped one of his more controversial food stamp proposals — to block states from extending benefits for childless adults facing hardships such as homelessness — and pared back another affecting legal immigrants. He also scaled back cuts to commodity payments.

Late Thursday, a key House panel approved a proposal to curb Medicaid spending by about $9.5 billion by the end of the decade, advancing a plan to slow automatic growth of the health care program for the poor and disabled.

The Energy and Commerce Committee voted 28-22 along party lines 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 estimated to cost $1.1 trillion over the same period.

The Medicaid plan would impose new co-payments on Medicaid beneficiaries and would allow states to reduce 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, to lower pharmacy profit margins and to encourage pharmacies to issue generic drugs.

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

For the first time, people with 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 (search), 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 Thursday on fiscal 2006 spending bills, voting 94-3 to pass a massive measure covering health, education and labor programs.

The legislation 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 budget restraints, the GOP-led Senate rejected mainly Democratic proposals to boost spending 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 for the fiscal year that began Oct. 1.