No More Medicare Cuts, Rostenkowski Warns Reagan

An angry Rep. Dan Rostenkowski warned Tuesday that the delicate budget deal between President Reagan and Congress may collapse if the White House seeks further savings in Medicare spending, declaring that such action “would be an act of bad faith.”

The influential chairman of the House Ways and Means Committee issued his blunt assessment in response to reports that Reagan’s fiscal 1989 budget, to be announced next month, may propose nearly $1 billion in Medicare savings in addition to the $3.5 billion agreed on last month in the budget compromise between Congress and the White House.

“The heart of any negotiated agreement is living up to all aspects of the agreement, not just the parts you favor,” the Illinois Democrat said in a letter to Budget Director James C. Miller III.

Peril to Compromise Told

Rostenkowski warned that the compromise could fall apart, leaving Congress free to resume the partisan struggles over taxes and spending that prevented approval of a budget until late last year, well after fiscal 1988 began on Oct. 1.

“If the President, in his fiscal 1989 budget, reopens the issue of Medicare savings, then members of the Congress will be free to reopen policies they do not favor,” he said. “This could easily lead to different levels of revenues and spending on defense and other programs.”

Miller brushed aside Rostenkowski’s criticism, saying that “the President will submit a budget comporting 100% with the summit agreement,” which was worked out between the Administration and Congress only after marathon negotiations.

Nevertheless, he said in an interview with The Times, “That doesn’t mean the budget must agree with a congressman’s or a senator’s perceptions.” He added that “we lament the fact that the Ways and Means staff refused to meet with us to discuss these differences.”

The sharply clashing views could threaten the carefully crafted budget compromise, which aims to reduce the federal deficit by $30 billion this fiscal year and $46 billion in fiscal 1989.

Reluctance on Medicare Cuts

A key component of the compromise of budget cuts and tax increases is an effort to restrict the growth of Medicare spending. Democrats, who control both houses of Congress, agreed to changes in this popular domestic program with much reluctance and can be expected to balk at any additional trimming.

The Administration, on the other hand, is arguing that some of Congress’ proposals provide only illusory savings.

The argument stems from complex methods of figuring budget savings. Both sides agree that the savings in the Medicare program will come from new rules restricting payments to doctors and hospitals, rather than those requiring the 32 million Medicare beneficiaries to pay more for health services. But there is deep disagreement over the size of the savings.

Rostenkowski’s committee says that enough money will be saved without making any further cuts. Budget experts in the Reagan Administration disagree, insisting that they must find an additional $900 million in real, rather than anticipated, savings.

‘Do Not Measure Up’

“It’s our responsibility to produce a budget perfectly consistent with the summit agreement,” Miller said. “Some of the savings called for, Congress didn’t enact, and other savings do not measure up to the full amount called for in the agreement.”

Congressional accountants, for example, assume that money will be saved when $250-a-pair shoes for diabetics are purchased under Medicare, eventually reducing the need for costly surgery to amputate infected feet. Administration officials do not believe that significant savings will result.

Miller and Rostenkowski showed little inclination Tuesday to compromise on Medicare savings. The budget director insisted that the Administration spending plan is fair, consistent and true to the spirit of the budget summit package, but Rostenkowski accused him of trying to rip it apart.

“The contention that the enacted Medicare savings do not meet the summit agreement was nonsense when it was first raised and is nonsense now,” Rostenkowski wrote Miller. “I urge you to abandon your stubborn insistence on this ill-conceived proposal. Its inclusion in the President’s budget will certainly cause major difficulties with the budget in the months ahead.”