Congressional Republicans renewed their push for a balanced federal budget last week by unveiling a six-year fiscal blueprint that seeks to squeeze $158 billion from Medicare and $72 billion from Medicaid.
The fiscal 1997 budget resolution resuscitated Congress' effort to rein in the growth of both Medicaid and Medicare, which are projected to increase at annual rates of 7% to 10% during the next 10 years if current law is not changed.
The Senate Budget Committee passed the GOP*budget plan on a straight party-line vote last week. At deadline, the House Budget Committee neared completion of its debate.
The resolution sketches only an outline of congressional spending priorities for the coming six years. It lacked the detail contained in balanced-budget legislation that passed Congress last year. That legislation died after extended negotiations between GOP congressional leaders and President Clinton.
But it took on the flavor of an election-year document as congressional Republicans were preparing to use the spending legislation, particularly the Medicaid and Medicare spending proposals, to highlight the differences between Senate Majority Leader Bob Dole (R-Kan.), the likely GOP presidential candidate, and Clinton.
Senate Budget Committee Chairman Pete Domenici (R-N.M.) portrayed the legislation as Dole's "plan for strengthening America."
Clinton, meanwhile, called the measure "movement in the right direction" but said Congress' Medicaid spending proposals still are unacceptable.
Although many provider groups said the latest measure is better than the larger spending restraints Congress proposed last year, the election-year taint caused them to doubt whether the legislation could be enacted.
"What will or won't happen with Medicare is murky," said James Scott, president of the Premier alliance's Washington office. "It's a situation where every move each party makes is looking down the road to how it advantages the party in the November election."
In addition, the groups cautioned that they wanted to see more details before endorsing the measure.
Thomas Scully, president and chief executive officer of the Federation of American Health Systems, said if Congress achieved all of its savings by reducing the growth of provider payments, "it would be pretty tough for us."
But in the end, Scully added, Congress may choose to reduce the Medicare savings proposals and take only small steps to extend the solvency of the Medicare Hospital Insurance Trust Fund, which now may be exhausted as soon as 2001, according to the Congressional Budget Office.
A trust fund preservation bill "might not be so bad for us," Scully said.
Under the congressional budget measure, total Medicare spending would grow at an annual rate of 6.1% between fiscal 1997 and 2002, from $196 billion in 1996 to $280 billion in 2002. The 2002 spending figure outlined in the legislation is about $49 billion less than is projected to be spent under current law.
The savings would be based on a package of reform provisions that Congress passed last year in the balanced-budget legislation. In particular, the 1997 bill would rely on savings from provisions that would enable Medicare beneficiaries to use their Medicare entitlement to pay for private-sector coverage.
Medicaid spending, meanwhile, would grow at an annual rate of 6.4%, from $96 billion in fiscal 1996 to $140 billion in 2002. The spending plan is based on previous Medicaid reform proposals endorsed by governors from both parties.