Deep Medicare & Medicaid Cuts Eyed as Deficits Swell

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Deep Medicare & Medicaid Cuts Eyed as Deficits Swell

Record high deficits have led to recent proposals to cut Medicare and Medicaid by hundreds of billions of dollars. House and Senate budget writers have laid out plans that initially proposed cutting Medicare by $214 billion, offsetting President Bush’s proposed $400 billion for adding a prescription drug coverage. Initial proposals also called for trimming Medicaid spending by an estimated $93 billion over the same period of time. Budget planners were forced to rethink those proposals when met with stiff opposition from more moderate Members of Congress.

The proposals illustrate, however, the difficulty Congress is having making room for President Bush’s proposed new tax cuts, and a war with Iraq at a time of record high deficits. Although budget resolutions are not binding and do not carry the force of law, they establish the framework for actual tax and spending legislation later on.

In March, the Congressional Budget Office (CBO) put out a new estimate of the deficit. If President Bush’s proposals were enacted, the CBO said, the government would remain in deficit through 2013, just as the first of the Baby Boomers begin to retire. The CBO concluded that the president’s tax and spending policies would leave the government with $2.7 trillion in debt through 2013.

Source: “Chronic Budget Deficits Forecast,” Jonathan Weisman, The Washington Post, March 8, 2003. “Congressional Budget Plans Differ on Depth of Cuts,” Jonathan Weisman, The Washington Post, March 13, 2003.

For a related story see, “Legislative Update: As More Seniors Fall Below Poverty Level, the Safety Net is Shrinking” at http://www.tscl.org/NewContent/101827.asp.

June 2003