Proposed Clinton Budget Takes Aim At Health Programs
WASHINGTON (AllPolitics, Jan. 14) -- Details from President Bill Clinton's upcoming Fiscal 1998 budget are beginning to seep out of the White House, with good news for deficit hawks. Targeted for austerity are the Medicare and Medicaid health care programs.
Clinton's proposed changes to Medicaid are angering members of his own party. Medicaid, which provides health care coverage to the poor, is currently funded as an entitlement; that is, anyone who qualifies for the program is fully covered by it. That has made it hard to predict how much it would cost each year, and helped the program's costs explode.
Clinton's budget calls for capping Medicaid spending by tying its growth to the growth each year of the nation's per capita economic output before inflation.
"I have great reservations about the whole idea," said Rep. John Dingell (D-Mich.). "It is my view that cuts in Medicaid can be achieved by intelligent and sensible mechanisms."
The president's approach may produce no short-term headaches. Per capita output has been rising about 4 or 5 percent a year, and Medicaid's costs went up only 3.3 percent last year. But in years when Medicaid costs surpass the nation's economic output growth, states would have the unenviable choice of cutting benefits or dropping people from the program altogether, or both. Annual growth in Medicaid costs can be much higher than 3.3 percent; it grew by 27 percent in both 1991 and 1992.
Clinton's budget also proposes to save about $100 billion over five years on Medicare, the government health insurance program for the elderly, partly by reducing payments to health maintenance organizations, doctors and hospitals. The plan reportedly does not include coverage cutbacks or premium increases.
Republicans are expected to propose at least $150 billion in savings in their budget proposals. Clinton and other Democrats skewered GOP candidates all throughout the 1996 election season for their previous proposal to reduce the growth in Medicare spending by $270 billion over seven years.
As for tax cuts, the president's proposed tax cut proposals come to around $100 billion over five years. They include the same tax cuts he proposed during the campaign -- a $500 per child tax credit, tuition tax credits, a modest capital gains tax cut for the sale of a house, and expanded Individual Retirement Accounts. Republicans say they'll push for heftier tax cuts.
Other details, according to the The New York Times:
CNN's Wolf Blitzer contributed to this report.
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