Senators Fume at White House Disdain for Katrina Healthcare Plan

Senate Finance Committee members accused the White House on Wednesday of blocking a bipartisan $9-billion healthcare package for Hurricane Katrina victims.

Republicans’ publicly deepening dispute over the federal role in the recovery came at a hearing where the governors of Alabama, Mississippi and Louisiana, the three states hardest hit by Katrina, pleaded for more help.

Louisiana Gov. Kathleen Babineaux Blanco told the panel that 41% of her state’s businesses had been destroyed or forced to close. “To bring our folks home, we need jobs, housing and rebuilt communities,” she said.

Committee members promised to consider additional tax breaks and other measures to encourage reconstruction, but they spent much of their time fuming about administration opposition to the healthcare package introduced last week by Finance Committee Chairman Charles E. Grassley (R-Iowa) and Vice Chairman Max Baucus (D-Mont.).

The debate over legislation is a piece of the Capitol Hill fight over reconstruction costs and ways to offset them. House conservatives insist on deep budget cuts to help pay for rebuilding, expected to cost at least $100 billion.

Grassley’s legislation threatens conservatives’ efforts to limit costs and the federal government’s role.

The bill would give five months of Medicaid coverage to adult Katrina survivors who would otherwise have no health insurance, and President Bush would be able to double the program’s length. The bill would also require the federal government to pay all 2006 Medicaid costs in Louisiana, Alabama and Mississippi.

Grassley and Baucus expected the bill to pass by a voice vote Monday, but it was blocked by Republicans John E. Sununu of New Hampshire and John Ensign of Nevada. Sununu told senators the time had come to exercise greater caution in the relief effort.

“We need to do much more to try to find ways to cover this additional spending so we do not increase the deficit and leave an unfortunate financial legacy for future generations,” he said.

Baucus told Blanco on Wednesday that opposition to the healthcare package was fueled by concerns in the Senate about how hurricane relief had been spent so far.

“There are senators who already say, ‘Well, that’s too much.’ We’ve appropriated $62 billion, basically, in disaster assistance. Much of that’s wasted,” Baucus said. “That’s one of the main reasons why we’re having a hard time getting this Medicaid bill passed, frankly.”

Health and Human Services Secretary Mike Leavitt outlined the administration’s opposition to Grassley’s healthcare proposal in a letter to Senate leaders Tuesday, calling it “inadvisable” and a duplication of administration efforts.

Leavitt’s criticism triggered an unusual outburst and a rare threat from the normally taciturn Iowa senator at Wednesday’s hearing.

“I would suggest that people at the White House need to know that the chances of our getting a reconciliation bill moving out of my committee are very difficult if we don’t get this behind us,” Grassley said, referring to a key spending measure for the 2006 budget that his panel is supposed to finish by Oct. 19.

The threat elicited gasps from the packed hearing room. Grassley is usually one of the administration’s staunchest supporters, and he had previously urged senators to quickly move the spending bill, which includes a recommended $10 billion in cuts to Medicaid over five years.

The power of his threat lies in his committee’s key role in the budget process. Congress is struggling, for the first time in eight years, to slow the growth of such entitlement programs as Medicaid and student loans. The budget passed in April called for $35 billion in spending reductions over five years to such programs, a plan attacked by Democrats and moderate Republicans even before Hurricane Katrina hit.

If Grassley chooses not to let his portion of the spending bill out of committee, the entire effort is likely to collapse, Senate aides said.

“It would severely weaken the reconciliation process,” said one senior aide, speaking on the condition of anonymity. “The Finance Committee ... has one of the largest cuts on the table.”

Grassley’s stance won support from Democrats and Republicans on the Finance Committee.

“We can work with everybody, including the administration, or against them, but I’m prepared to go either way.... I’m going to look after our people first,” said Sen. Trent Lott (R-Miss.).

A furious Sen. Blanche Lincoln (D-Ark.) said the Senate had been “paralyzed over the web of red tape that this administration is spinning over the ability to provide the basic needs of healthcare to people who have been devastated.” She agreed with Lott that no one wanted to pick a fight “but sometimes you do have to fight, for people who can’t fight for themselves right now.”

In his letter to the Senate leadership, Leavitt said the Grassley-Baucus bill would duplicate efforts underway. The administration is negotiating state-by-state waivers that allow states housing hurricane survivors to quickly expand Medicaid programs without creating a new federal program, he said.

Grassley’s bill, Leavitt said, “requires a new Medicaid entitlement for Katrina survivors, regardless of whether that will work best for those survivors or the states.”