OCTOBER 21, 2005 -- The House Ways and Means Committee is likely to turn to programs that serve low-income Americans to meet its budget reconciliation targets, the Center on Budget and Policy Priorities (CBPP) predicted Friday.
In a conference call with reporters, analysts from the left-leaning think tank said Ways and Means members would likely look to trim as much as $8 billion in spending from programs such as the Earned Income Tax Credit, the Supplemental Security Income program, and the Temporary Assistance for Needy Families program.
"There are clear indications that the House Republican leadership is reluctant to have any cuts in Medicare in reconciliation," said Robert Greenstein, the center's executive director.
A spokesman for the Ways and Means panel said Friday that no final decisions had been made on how the committee would meet its share of cuts.
On Thursday, Senate Finance Committee Chairman Charles E. Grassley announced his package of Medicare and Medicaid spending cuts that would save a net of $10 billion over five years.
Part of Grassley's plan would eliminate a fund created by the 2003 prescription drug law (PL 108-173) to encourage preferred provider organizations to offer regional coverage to Medicare beneficiaries. Lawmakers say the fund has proved unnecessary because plenty of plans stepped forward.
The industry says eliminating that fund—which would save about $5.4 billion over five years—would create a lack of trust in the government's ability to act as a good business partner.
"Just two years after enactment, and three weeks before beneficiaries start making choices [on drug plans], members of Congress are proposing to change the rules," said Karen Ignagni, president of America's Health Insurance Plans. "It sends a serious message that members of Congress weren't serious about private–public partnerships."
On Oct. 18, Ways and Means Chairman Bill Thomas played down the idea of targeting the "stabilization" fund alone. "We are in the business of managing the pain," he said, indicating several programs could be pared.
If the Ways and Means panel turned to other programs within its jurisdiction, such as the Temporary Assistance for Needy Families or the Earned Income Tax Credit (EITC), the results would be devastating on the nation's poor, Center analysts said Friday. A $1 billion cut in the EITC, for example, would mean that 110,000 families would lose the credit, the analysts said.