House, Senate Panels Consider
FY 2004 Budget Plans
March 14, 2003 - The House and Senate Budget Committees
began deliberations March 12 on their respective FY 2004 budget
resolutions. The House panel approved its budget resolution
at 1:30 a.m. March 13 on a 24 to 19 party-line vote after
rejecting more than 40 Democratic amendments aimed at increasing
funding for a variety of domestic programs. The Senate Committee
approved its plan later the same day.
With both committees controlled by Republicans, the budget
resolutions were expected to closely track President Bush's
FY 2004 budget, submitted to Congress on Feb. 3. However,
the House Committee, under the leadership of Budget Committee
Chairman Jim Nussle (R-Iowa), approved a more aggressive plan,
calling for reductions in both discretionary and mandatory
spending in the coming year to support most of the President's
tax plan and balance the federal budget by 2010. The proposal
outlined by Senate Budget Committee Chairman Don Nickles (R-Okla.)
calls for balancing the budget by 2013.
For discretionary spending, the House resolution provides
$775 billion in budget authority for FY 2004, a 1.3 percent
increase over FY 2003. The House plan provides the President's
request of $400 billion for defense spending, a 2 percent
increase. For non-defense discretionary spending, the House
resolution includes $375 billion, a $1.6 billion (0.4 percent)
increase; however, non-defense, non-homeland security funding
is cut by 1 percent. At press time, no details were available
on funding assumptions for individual budget functions such
as health.
Chairman Nickles' proposal would provide a total of $784.5
billion, an increase of $18.7 billion (2.4 percent) over the
current year. Defense spending would grow by $7.9 billion
(2 percent) to a total of $400.2 billion, while non-defense
spending would grow by $10.7 billion (2.9 percent) to $384.4
billion. However, the Senate plan would increase discretionary
health funding under budget function 550 by only $152 million
(0.3 percent) to $49.6 billion in FY 2004.
Included in the House budget legislation are reconciliation
instructions to the Ways and Means and Energy and Commerce
committees to "eliminate waste, fraud and abuse"
in mandatory programs, which include Medicare and Medicaid.
The Ways and Means Committee is instructed to reduce spending
by $6.6 billion in FY 2004 and $261 billion over 10 years;
the Energy and Commerce Committee is instructed to reduce
spending by $2.5 billion in FY 2004 and $110 billion over
10 years. The Senate budget resolution does not include reconciliation
instructions to reduce spending.
Both the House and Senate budget resolutions include a $400
billion Medicare reserve fund to provide a prescription drug
benefit and modernize
Medicare. The House budget bill language indicates that the
reserve fund "provides adjustments to the Medicare program
on a fee-for-service, capitated, or other basis." A late
night amendment clarified that any savings created from Medicare
reform/
modernization legislation could apply to the $261 billion in
savings that Ways and Means has to produce.
Moreover, both bills also include a reserve fund for Medicaid
and SCHIP reform. According to the House summary of the bill,
the spending "accommodates the Bush request for Medicaid
and SCHIP funding"; the Senate budget bill summary says
the reserve fund is "based on the Administration's proposal
for a new Medicaid and SCHIP program option, under which states
may take their Medicaid and SCHIP funding in a single federal
payment." Both bills also extend the availability of
expiring SCHIP funds and restore availability to 1998 and
1999 previously expired funds. The Senate bill creates a reserve
fund for this purpose. Last, the Senate bill includes a $50
billion reserve fund that would assist the uninsured in gaining
access to quality, affordable health insurance.
Both the House and Senate budget resolutions are expected
to be debated on their respective chamber's floor the week
of March 17.
Information:
Dave Moore, Senior Associate Vice President
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
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