GOP Leader Eyes Tobacco Funds for Medicare Fix

Senate Budget Committee Chairman Pete V. Domenici said Saturday that any money the government reaps from a tobacco settlement should be used to shore up Medicare rather than fund the Washington-based programs outlined in President Clinton’s budget proposal.

“We should save Medicare first,” said Domenici (R-N.M.) in the GOP’s weekly radio address.

Domenici’s comments come as congressional Republicans puzzle over how to respond to the fiscal 1999 budget proposal that Clinton released Monday. GOP lawmakers haven’t started writing their own spending plan, and they are divided over how to use any tobacco funds.

Clinton’s $1.73-trillion package claims a $9.5-billion surplus next year. It also assumes the federal government will pocket $65.5 billion over the next five years from the tobacco industry, which is far from certain because complicated issues in the huge tobacco settlement remain unresolved. The president would use that money for cancer research, child care initiatives and other social programs.

Republicans want to block the extra spending, but they don’t want to appear to oppose popular programs while defending the tobacco industry. Domenici hopes he has found a way by proposing to use tobacco funds to help Medicare, the national health-care program for people 65 and older.

Medicare’s Part A Trust Fund, which uses a payroll tax to finance hospital care for 38 million recipients, is projected to run out of money in 2007.

Also commenting on the budget plan, House Speaker Newt Gingrich (R-Ga.) said the nation’s politicians should take advantage of reductions in the federal deficit to begin “a genuine national dialogue” on Social Security so that current recipients and future generations will have the best possible retirement system.