November 4, 2005 in Nation/World

Senate cuts budget by $35 billion

Jonathan Weisman Washington Post

Arctic drilling provision

» The Senate voted 51-48 on Thursday to open up the Arctic National Wildlife Refuge to oil drilling after being blocked by environmentalists for decades.

» Repeated attempts to approve such drilling had failed in the Senate because drilling supporters were unable to muster the 60 votes needed to overcome a filibuster by opponents. This year, drilling supporters attached language ending the ban on drilling in the refuge to a budget measure that is immune from filibuster.

» Drilling advocates argue that the country needs the estimated 10.5 billion barrels of oil that are believed to lie beneath the refuge’s coastal tundra in northeastern Alaska to slow the growing dependence on oil imports.

» The House is considering a measure that also includes a provision to open ANWR to oil companies. It cleared the Budget Committee on Thursday but has garnered so much opposition that House leaders are thinking about jettisoning the contentious refuge drilling section.

Associated Press

WASHINGTON – The Senate approved sweeping deficit-reduction legislation Thursday night that would save roughly $35 billion over the next five years by cutting federal spending on prescription drugs, agriculture supports and student loans, while clamping down on fraud in the Medicaid program.

The measure would also open Alaska’s Arctic National Wildlife Refuge to oil drilling.

The Senate bill, which passed 52 to 47, is the first in nearly a decade to tackle the growth of entitlement spending, the part of the federal budget that rises automatically based on set formulas and population changes.

It would shave payments to some farmers by 2.5 percent, while eliminating a major cotton support program and trimming agriculture conservation spending. A proposal to limit payments to rich farmers failed Thursday. The measure passed largely along party lines, with only two Democrats voting for it and five Republicans voting against it.

Thursday’s action is part of an effort by congressional Republicans to demonstrate fiscal discipline in the wake of widespread complaints of profligate spending on Capitol Hill. Although many Democrats and some moderate Republicans are concerned that the effort may go too far, prominent Republicans in the Senate and House said the cuts were necessary to slow the rate of spending and control a deficit projected to total $314 billion by the end of the fiscal year.

The Senate bill would raise billions of dollars by auctioning off parts of the broadcasting spectrum for digital television. It would raise $2.5 billion through leasing parts of the Alaskan refuge to oil and gas interests. Companies with traditional pension plans would be charged higher premiums for insurance coverage under the Pension Benefit Guaranty Corp. And the profits of student lenders would be squeezed by $9.7 billion over five years.

Some of the savings would be spent on relief for Katrina survivors and higher payments to health care providers helping Medicare patients.

The focus now shifts to the House, where the Budget Committee voted 21-16 Thursday to approve a farther-reaching bill saving nearly $54 billion through 2010 with cuts to Medicaid, food stamps, student loans, agriculture subsidies and child support enforcement. The House measure would allow states to impose premiums and co-payments on poor Medicaid recipients for the first time.

With so many controversial provisions, the House measure is forcing Republican leaders to scramble for support in what could be the most difficult vote of the year.

“There are a dozen issues, any one of which could break this deal,” said Rep. Adam Putnam, R-Fla., a budget committee member. “This is going to be a heavy lift.”

Among the deepest cuts are those hitting Medicare and Medicaid. The House bill would cut the growth of Medicaid by $12 billion over five years and by nearly $48 billion over the next decade, according to the nonpartisan Congressional Budget Office. The Senate would trim spending on Medicaid and the related Children’s Health Insurance Program by $4.3 billion through 2010, and $14 billion through 2015. The Senate measure mitigates cuts to health care programs for the poor by shifting the bulk of cost savings to Medicare, which would be cut by $5.7 billion over five years. That savings would balloon to $40.6 billion through 2015.

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