Strict spending caps on entitlement programs such as Medicare and Medicaid would result in some short-term savings but would not reduce costs in the long run, the General Accounting Office said last week.
To make any real changes in spending, fundamental program changes, such as reducing eligibility or benefits, must be made, according to a report by the GAO, Congress' research arm.
The report's release came as the House of Representatives began considering proposals aimed at reducing entitlement spending, which is growing rapidly and fueling federal budget deficits. The Clinton administration is pushing a plan that would require Congress to review the programs if entitlement spending exceeded set targets.
A conservative group of Democrats, led by Rep. Charles Stenholm of Texas, supported a much more stringent plan, one that would implement across-the-board spending cuts should budgets be breached. However, the House voted 392-37 late last week against Mr. Stenholm's measure, which would have cut entitlements by $150 billion over five years and established a formula for setting annual caps on spending.
Provider groups opposed the Stenholm plan, which they said would take needed funding away from healthcare reform. The American Hospital Association and the Association of American Medical Colleges last week sent a letter to members of Congress asking them to oppose the Stenholm plan.
Last year, the federal government spent nearly $695 billion in mandatory programs, the GAO said. Of that, more than $200 billion was incurred by the Medicare and Medicaid programs.
Rep. John Conyers (D-Mich.), who requested the GAO study, said it showed that "increases in federal spending are due not to the absence of an entitlement cap, but the absence of fundamental healthcare reform."
Another problem with entitlement caps, according to the GAO report, is that because many entitlement programs are shared, state-federal responsibilities, such an across-the-board cap would be difficult to implement.