Senate to Decide Fate of
Budget Agreement
May 21, 2004 - The House of Representatives May 19
narrowly approved the conference agreement on the FY 2005
budget resolution (S.
Con.Res. 95 - H.
Rept. 108-498), but a handful of moderate Republicans
in the Senate appear ready to send the conference report to
defeat. Senators John McCain (R-Ariz.), Susan Collins (R-Maine),
and Lincoln Chaffee (R-R.I.) have confirmed they will oppose
the budget, and Senator Olympia Snowe (R-Maine) appears set
to join them. With Zell Miller (D-Ga.) expected to vote for
the conference agreement, Republicans, who control 51 seats,
can only afford to lose two of their members' votes. The Senate
was expected to begin debate on the conference agreement on
May 20; however, no date has been set for a final vote.
Negotiations on the budget plan had been delayed because
the House refused to concur with Senate language reinstituting
"pay-as-you-go" rules that would subject new tax
cuts and mandatory spending increases to a 60-vote point of
order in the Senate unless they are offset by other revenue
increases or spending cuts. The conference agreement imposes
the pay-as-you go rules only for one year and also exempts
extensions of several middle-class tax breaks that the Senate
is expected to consider as part of a budget reconciliation
package later this year.
The conference agreement does not include reconciliation
instructions included in the House version that would have
likely reduced Medicaid funding by $2.2 billion over 10 years.
The failed reconciliation instructions - part of a Republican-led
deficit reduction strategy - had directed the Energy and Commerce
Committee to "make whatever changes in the law they deem
appropriate" to achieve savings. The House had agreed
to the reconciliation instructions "on the assumption
that the savings [would] come from the elimination of waste,
fraud, and abuse in specific programs in their jurisdictions."
The resolution does include "Sense of the Senate"
language addressing Medicare physician payments. Offered by
Sen. Jim Bunning (R-Ky.) during initial debates over the Senate
package, the non-binding provision calls for "long-term
stability of the Medicare payment system for physicians …
such that payment rates keep pace with practice cost increases…."
It continues "while recent actions by Congress have helped
address the immediate reductions in reimbursement, further
action is urgently needed to put in place a new formula or
mechanism for updating … fees in 2006 and thereafter…."
Discretionary spending under the conference agreement is
capped at $821 billion in FY 2005, which is about $2 billion
less than President Bush requested in his budget. Overall
non-defense, non-homeland security discretionary spending
is frozen at the current year's level. For budget
function 550, which covers health programs other than Medicare,
the conference agreement assumes $53.3 billion in discretionary
spending. This would appear to be an increase of $1.4 billion
(2.8 percent) over the current year's level. However, the
FY 2005 total also includes $2.5 billion for the Bioshield
project that was not included in FY 2004, so the FY 2005 figure
is actually $1.1 billion (2 percent) below the current funding
level.
Meanwhile, House Appropriations Committee Chair C.W. Bill
Young (R-Fla.) has assigned allocations for each of the panel's
13 subcommittees, signaling the start of the appropriations
process. The Labor-HHS-Education subcommittee reportedly received
an allocation of $142.3 billion, about the same as the president's
request. At present, there is no timetable for consideration
of the spending bills in the House.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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