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Inside Politics

Bush: New Medicare price tag means 'tough choices'

President vows budget deficit can be halved in 5 years

From Dana Bash
CNN Washington Bureau

President Bush, with Vice President Dick Cheney, talks with reporters Friday after a meeting with economists at the White House.
President Bush, with Vice President Dick Cheney, talks with reporters Friday after a meeting with economists at the White House.

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WASHINGTON (CNN) -- President Bush said Friday the news that his Medicare overhaul would cost significantly more than expected would require lawmakers to be careful with spending.

The Congressional Budget Office had estimated the Medicare legislation would cost $400 billion over 10 years, but this week the Office of Management and Budget put the figure at $535 billion.

The president is scheduled to present his 2005 budget to Congress on Monday.

"The Medicare reform we did is a good reform," the president said. "It fulfills a long-standing promise to our seniors.

"Congress is now going to have to work with us to make sure that we set priorities and make sure that we are fiscally wise with the taxpayers' money," he said.

"I am confident they can do that if they are willing to make tough choices so the budget we submit will show that we can cut the deficit in half in a five-year period."

The Medicare bill -- which includes a prescription drug benefit -- passed the House of Representatives after GOP leaders made the unusual move of keeping the vote open for hours as they sought to get conservative Republicans to vote for it.

Concerned about creating what they saw as a big-government program, some of those Republicans reluctantly voted in favor after being assured the estimated cost would not balloon.

White House spokesman Scott McClellan said the disparate numbers do not mean the president misled Congress. He said the administration's actuaries in the budget office began work on the numbers only after the bill became law.

"It is a very complex and difficult matter to predict," McClellan said. "Now the legislation has passed, and we made our best estimate based on the latest economic data available."

"It shouldn't be surprising that there are different cost estimates between the OMB and the Congressional Budget Office," he said. "That happens all the time."

Republican Reps. Mike Pence of Indiana and Jeff Flake of Arizona said the revised Medicare projections stunned them.

On retreat in Philadelphia, Pennsylvania, where administration officials briefed them on the 2005 budget, GOP lawmakers are concerned, sources said.

The president was briefed on his budget office's new estimates in the last couple of weeks, McClellan said.

McClellan declined to give Bush's reaction, saying only that "the president made a commitment to give seniors help with their prescription drug costs and modernize health care and he delivered on that commitment."

When asked if the president misled anyone on the program's cost, McClellan responded, "Of course not."

He said the White House has no plans to change the law because of the revised numbers.

Deficit projections draw fire

Democrats are calling the latest projection proof the new law doesn't do enough to curb the high cost of prescription drugs.

An opponent of the bill, Sen. Edward Kennedy, D-Massachusetts, has said the plan benefited drug companies more than patients. He said the new figures widen the disparity.

"The news on the Republican Medicare bill gets better and better for drug company profits and HMOs, and worse and worse for seniors and the Medicare program," said Kennedy.

"This new finding means an extra $49 billion in profits for drug companies, but the legislation still does nothing to reduce the exorbitant prices that drug companies charge."

Despite Bush's insistence he will be able to halve the deficit in five years, administration and congressional sources said a $520 billion deficit is predicted for 2004.

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