Medicare and Medicaid spending would be cut by potentially billions of dollars under a 2004 budget resolution passed by the House Budget Committee today. The resolution would mandate a 1% reduction in spending for all mandatory federal programs except defense and homeland security, with the goal of balancing the federal budget by 2010. Lawmakers could trim different percentages from one agency to another, so exactly how big a hit the healthcare programs would take is not known. Published estimates put the reduction in spending at $215 billion over 10 years for Medicare and $93 billion over 10 years for Medicaid. Healthcare industry lobbyists hope to chip away at the resolution when it's debated by the full House. The proposal was developed by Budget Committee Chairman Jim Nussle (R-Iowa).
If passed as is, the resolution could imperil President Bush's Medicare reform plans. Bush has proposed additional Medicare spending of $400 billion over 10 years for a prescription drug benefit and other reforms. The budget committee resolution would authorize $428 billion in additional spending over 10 years, but $400 billion of that amount would have to come from existing federal spending, an aide said. "Medicare seems like a likely place to get that money," with provider payments among the first candidates for reduction, the aide said. The House and Senate are required to submit a joint budget resolution to the president no later than April 15. -- by Jeff Tieman