Medicare Worries Force Panel to Slow Deficit Plan

In a dramatic sign of the difficulties Republicans face in squaring spending goals with political realities, the Senate Budget Committee on Wednesday pushed back its timetable for a deficit-cutting blueprint amid concerns about Medicare, taxes and other issues.

The budget panel’s announcement came as members of Congress continued to wrestle over ways to wring $1 trillion in savings needed to balance the federal budget by the year 2002, with House Republicans seeking huge savings in Medicare.

A recent report by Medicare’s trustees warning that the trust fund used to finance hospital visits would sink into the red in 2002 introduced a new element into the debate.

“There’s a general concern that when you have a report that says Medicare is going to go belly up in seven years, you want to call those folks before the committee and have an opportunity to question them,” explained an aide to Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), who made the decision to slow down the Senate timetable. The markup is now planned for May 8 instead of today.

Other key issues also have popped up as obstacles to Republican budget-cutters, such as whether to include tax cuts in the spending blueprint and, if so, what those cuts should be.

The arithmetic of balancing the budget suggests huge savings are required in Medicare, perhaps in the range of $300 billion or even more. The pressure is particularly acute because Republican leaders have agreed to leave Social Security--the other giant entitlement for the middle class--mostly alone. In addition, there is little desire to cut defense.

House Republicans, meanwhile, are weighing $305 billion in Medicare savings over the next seven years, the Associated Press reported Wednesday. The plan, being discussed behind closed doors, would rely heavily on cost controls that come from managed care, perhaps for future beneficiaries.

Republicans and Democrats are also locked in a debate over words, with Republicans describing their budget efforts as cuts “in the rate of growth” rather than literal cuts, in which spending declines in absolute terms.