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Tax cut, slimmer surplus jeopardize health initiatives

Tighter budget limits may constrict funding for measures to reduce the number of uninsured and provide a Medicare prescription drug benefit.

By Amy Snow Landa, amednews staff. June 18, 2001.

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Washington -- The Bush administration and members of Congress on both sides of the aisle say they want to pass legislation this year to reduce the number of uninsured Americans and establish a Medicare outpatient drug benefit.

As evidence, they point to this year's nonbinding budget resolution, which earmarked significant funds for health care spending: $300 billion over 10 years for a Medicare prescription drug benefit and about $100 billion to expand health insurance coverage for the uninsured.

But Congress and the president are facing tighter budget constraints than they did earlier in the year, now that Congress has passed Bush's $1.35 billion tax-cut package and the Congressional Budget Office has dramatically reduced its estimate of the budget surplus. The combination of those factors could endanger Congress' and Bush's much-touted health initiatives.

"There is a day of reckoning ahead as Congress realizes the tax cut is going to put a squeeze on health care spending," says Bob Doherty, senior vice president for governmental affairs and public policy for the American College of Physicians--American Society of Internal Medicine. "But it's too early to put up the white flag of surrender" on a drug benefit or the uninsured, he said.

Still, there does not appear to be much of a cushion left for spending beyond the levels provided in the budget resolution, which is likely to make it more difficult to achieve agreements on big-ticket items like a prescription drug benefit and health coverage expansion. [...]