Senate dismisses Bush's plan for Medicare budget cuts

The upper chamber's action could leave more budgetary room for physician rate increases.

By David Glendinning, AMNews staff. April 10, 2006.

Washington -- In last month's opening round of the fiscal year 2007 budget debate, the Senate rejected President Bush's call to slash tens of billions of dollars from planned Medicare growth.

The upper chamber instead approved a $2.8 trillion budget resolution for next year that largely leaves Medicare on its current funding course. If both the House and the Senate can agree on a compromise version of the measure, it would serve as a blueprint for the appropriators who authorize money for the government's programs.

House budgeters at press time were working on a resolution that would more closely follow the White House plan, setting up a potential fight between the chambers over the final version. Congress still can set funding levels for government programs without a blueprint in the event lawmakers are unable to draft a consensus package.

The White House recommended in its budget that Congress restrain Medicare spending by nearly $36 billion over the next five years. While the bulk of savings would come from hospitals, skilled nursing facilities and medical equipment providers rather than physicians, the proposed level of austerity would complicate doctors' requests for tens of billions of dollars in funding to reverse upcoming Medicare reductions.

Although fiscal conservatives in Congress applauded Bush's plan, they soon realized that the Senate does not have enough of an appetite to cut federal entitlements to a large degree in an election year, said Senate Budget Committee Chair Judd Gregg (R, N.H.). Republicans as well as Democrats showed resistance to such Medicare cuts.