Senate defeats moves to curb costs of Medicare

Associated Press • Mar 23, 2007 at 12:06 PM

WASHINGTON - The Senate easily defeated conservative Republicans' efforts to curb the Medicare program's spiraling growth as debate on a $2.9 trillion budget outline for 2008 entered a third day Thursday.

And a vote is likely Friday on a bid by Sen. Gordon Smith, R-Ore., to increase tobacco taxes to pay for a big boost in a popular program providing health insurance for children from low-income families.

On Medicare, the Senate voted 74-23 to dismiss a bid by Sen. John Cornyn, R-Texas, to trim $34 billion from the program's $2.2 trillion budget over the next five years. His plan was aimed at reducing payment increases to Medicare providers and was roughly half the size of the cost curbs President Bush proposed in February.

A move by Sen. John Ensign, R-Nev., to require well-off Medicare beneficiaries to pay higher premiums for prescription drugs was subsequently defeated by a 52-44 vote.

The twin moves are the types of steps Congress would consider if it turned to overhauling Medicare to absorb the influx of retiring baby boomers in coming decades. But the efforts also exposed the difficult politics of cutting the popular Medicare program that delivers health care and prescription drugs to the elderly.

Republicans, said Sen. Sherrod Brown, D-Ohio, "come to the floor of this chamber ... over and over, from every different direction they attack one of the single greatest programs that this government has ever done."

"My amendment might be a little unpopular back home, but you know that's what happens when you go on a budget," Cornyn said. "We've been on a binge with no limitation on spending, and it's time for the federal government, like the American family, to get on a budget."

Smith's bid to raise tobacco taxes faced uncertain prospects. His amendment aims to increase taxes on a pack of cigarettes by 61 cents to $1. Taxes on other tobacco products would go up as well under the plan, which would raise up to $35 billion over five years to eliminate chronic budget shortfalls in the popular State Children's Health Insurance Plan.

The budget before the Senate has already been rewritten under pressure from moderate Democrats eager to go on record as favoring extending $180 billion worth of popular tax cuts that are to expire at the end of the decade.

The move, however, erased a $132 billion surplus predicted to appear in five years under the Democrats' original budget.

In fact, once the increased tax cuts' effect on federal borrowing costs are calculated, the Senate Democratic budget would produce a $6 billion deficit in 2012 instead of the surplus originally promised.

More votes on taxes loom Friday, with Democratic supporters of cutting the estate tax in a particularly ticklish position. They face a difficult vote on a move by Jon Kyl, R-Ariz., that mirrors a plan by Mary Landrieu, D-La., to establish a $5 million exemption from the estate tax, and a 35 percent tax rate on estates that exceed that level.

In any event, the Democratic-controlled Congress, like its GOP predecessors, is not expected this year to follow up with binding legislation on the estate tax or any of the Bush-backed tax cuts that expire in 2010. Those debates are expected after the 2008 presidential election.

Both the Senate Democratic budget and a House counterpart approved by the House Budget Committee early Thursday morning envision big spending increases to domestic programs, including homeland security, education, and health care.

The immediate impact of the House and Senate budget blueprints for next year is to award increases above inflation to domestic agencies for the portion of their budgets passed each year by Congress.

The Senate's plan would give nondefense programs an $18 billion increase, about 4 percent more than current spending. The House measure proposes a $25 billion increase, almost 6 percent.

Both Democratic plans adopt Bush's $145 billion budget for the wars in Iraq and Afghanistan next year, as well as his double-digit increases for core Pentagon operations.

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