Sweeping spending bills intended to balance the budget by 2002 and change the course of Medicare and other social programs for virtually all Americans were approved Wednesday by the House and Senate.
“We are going to balance the budget,” said House Budget Committee Chairman John Kasich, R-Ohio. “The Berlin Wall of big government is going to fall. It’s no longer rhetoric, it’s reality.”
The vote in the House was 270-162, and in the Senate, 73-27. About half the Senate Democrats supported the bill, but only a quarter of House Democrats did.
The White House supported passage of the spending bills, while seeking to negotiate changes in many details that Clinton administration officials say would violate the president’s budget deal with Congress.
Dozens of major differences in the House and Senate bills must be resolved before final legislation can be sent to President Clinton. Among the thorniest: Senate provisions that would raise the Medicare eligibility age to 67 and charge upper-income retirees higher premiums.
And the House bill includes curbs on abortion and limits on medical malpractice claims that are unlikely to be acceptable in the Senate.
More sticking points: how to permanently restore welfare and health-care benefits for elderly and disabled legal immigrants, and how to distribute new funding to buy health coverage for uninsured children.
Passage of the spending bills was just one of two pieces of business that Congress plans to accomplish this week to carry out the landmark balanced budget agreement with Clinton.
Both the House and Senate will turn today to tax bills that will trim federal taxes by about $135 billion and give new tax breaks to families and businesses. Congress hopes to finish work on that legislation before it breaks for the Fourth of July holiday this weekend.
South Carolina Rep. John Spratt, the senior Democrat on the Budget Committee, said he reluctantly decided to support the House bill because he’s certain its faults will be fixed in negotiations.
“I’m betting that…cooperation will produce a bill that’s truly bipartisan and one we can all vote for,” he said.
Unlike two years ago, when the government partially shut down because of a budget standoff, Clinton and congressional Republicans already have agreed on the broad outlines of a deal. Furthermore, Republicans have learned to be more flexible, increasing the White House’s leverage in negotiations.
The budget bills would hold the growth of total federal spending to around 3 percent a year for the next five years, thus reducing currently projected increases by almost $300 billion. Nearly 40 percent of the savings would come from Medicare.
If all works according to plan, the combination of spending restraint and a strong economy would balance the federal budget by 2002 - and allow for tax cuts for middle-class families, stock market investors, and businesses.
But critics said the numbers are flawed. “A sizable portion of this budget is held together by sham and fraud,” said Rep. John Dingell, D-Mich., questioning what he called grossly inflated revenue estimates from sales of the public airwaves.
“The money is not there, and we’re looking at further deficits,” said Dingell. “We lied to each other, and we lied to the American people.”
Most lawmakers were unaware of the fine details of the bills they were voting on. Some focused only on how their states and districts would be affected, others on such constituencies as the elderly or small business.
“There are so many deals being made around this Capitol, that after we pass this thing we’re going to look at it and say: ‘What? I voted for that?’ ” said Rep. E. Clay Shaw, R-Fla.
The biggest changes in the legislation involve Medicare, the health-insurance program for 38 million elderly and disabled people that has been a cornerstone of middle-class retirement since 1965.
The budget agreement slows the growth of Medicare, saving $115 billion over five years mainly by curbing payments to hospitals, managed-care plans, and other providers. A big chunk of home health-care costs would be shifted from Medicare’s hospital trust fund to the government’s general account.
Those changes would postpone the bankruptcy of the hospital fund for about five years, buying time for a bipartisan commission to propose more-fundamental changes to preserve the program for baby boom retirees.
Medicare beneficiaries would pay higher premiums under the deal. In 2002, the basic monthly premium would be $66.60 under the House bill, and $64.50 under the Senate plan, compared with the $51.50 projected under current law. Under pressure from Clinton, the House and Senate added money to offset the burden to low-income beneficiaries. Premiums would rise more quickly after 2002.
Both bills would set up a system of cost-conscious, managed-care plans alongside traditional Medicare. Beneficiaries could choose not only health maintenance organizations (HMOs) - as they can now - but also preferred provider organizations, new doctor-run HMOs, and medical savings accounts. Eventually, beneficiaries would be allowed to switch plans only once a year, as working people do now.
The bills would improve preventive services in traditional Medicare, expanding coverage of cancer screenings and diabetes care.