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Senate, House Approve Historic Budget Plans

Massive budgets chart course to balance, revamp Medicare

WASHINGTON (AllPolitics, June 25) -- The House and Senate passed historic bills separately this afternoon that aim to end federal red ink by 2002, the first time the government's books would be in balance since Lyndon Johnson's administration.

"The lesson learned is we can get things done ... that are good for the American people if we just work at it," said Senate Budget Committee Chairman Pete Domenici (R-N.M.), who has been at the epicenter of a budget battle that has gripped Washington for more than two years.

After a day of voting on various amendments, the final Senate vote was 73-27. The House passed a similar bill 270-162, just minutes after the Senate vote, over heated opposition from Democrats.

Both bills extract some $140 billion from Medicare, mainly through savings from recipients, hospitals and various other federal programs. Also approved by the Senate was a provision to grant Supplemental Security Income to disabled immigrants who resided in the country when the new welfare law was enacted last August. And the House provided $1.5 billion to help poor Medicare recipients pay monthly premiums which could grow by $20 by 2002.

Left out by the House were controversial Medicare proposals approved by senators that would raise Medicare eligibility gradually from age 65 to 67 by 2027. Under another Senate proposal, affluent seniors would see their Medicare premiums rise by up to 300 percent.

It's a matter of "fundamental fairness," Senate Majority Leader Trent Lott (R-Miss.) asserted during debate, asking, "Why should working people making $35,000 a year be paying for wealthy people who make $100,000 to get Medicare?"

The Senate plan would raise the base $540 premium for elderly individuals about $32 for every $1,000 earned over $50,000, capped at $2,160 for those earning over $100,000. For couples, higher premiums would start for incomes greater than $75,000.

In the House, while considering less controversial Medicare provisions, numerous Democrats assailed the Republican-written plan, accusing the GOP of straying from the five-year balanced budget agreement reached with President Bill Clinton on May 2.

Texas Rep. Lloyd Doggett held up a large sign that said "WRECKCONCILIATION," while arguing that the agreement "is based on many questionable assumptions."

Scoffing at Democrats' arguments, House Budget Chairman John Kasich countered, "Don't listen to a bunch of people who are trying to find an excuse to keep this House divided, for an excuse to nitpick."

Weeks of negotiations loom, as House and Senate conferees will have to negotiate their differences. Clinton is likely to weigh in heavily against the Senate's Medicare proposals, since he has said that income-based premium hikes and age eligibility changes were never intended to be part of deal.

Tax Cuts On Tap

Lawmakers in both chambers planned to turn their attention Thursday to sweeping tax cutting bills. For many Republicans, those measures are higher priorities than the budget pact.

"Today and tomorrow we are at a historic moment," House Speaker Newt Gingrich told a group of jubilant House Republicans.

Though House Ways and Means Democrats bitterly opposed GOP tax proposals, the Senate Finance Committee was more harmonious, with senators agreeing 18-2 on a package of tax cuts totaling some $77 billion. The centerpiece of that package is a $500-per-child tax credit for children under age 17, and education and retirement tax credits.

But now some Democrats are pushing an alternative crafted by Senate Minority Leader Tom Daschle (D-S.D.).

Daschle's plan expands eligibility for the $500-per-child credit to lower-income families, allowing them to take the full credit if it is invested in an individual retirement account (IRA) for the child. Also, Daschle would provide a capital gains tax break targeted at middle- and lower-income families and small business owners, in contrast to the across-the-board rate decrease from 28 percent to 20 percent contained in the GOP plan.

Though a House-Senate consensus seems to be emerging in support of a tobacco tax, Daschle's plan doesn't mention it or other revenue increases. With the Senate expected to debate and vote on various tax proposals into this weekend, Daschle hoped to get the backing of all 45 Senate Democrats.