House calls for cuts in Medicare, food stamps

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The White House's stand threatens $5.4 billion in savings.

"Today, the Senate took an important step forward in cutting the deficit," Bush said in a statement. "Congress needs to send me a spending-reduction package this year to keep us on track to cutting the deficit in half."

Democrats generally opposed the bill because it allows the oil drilling and increases the deficit when coupled with a $70 billion tax cut bill.

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"Their budget ... actually would make the deficit worse," said Senate Minority Leader Harry Reid, D-Nev. "That's fiscally irresponsible at any time, but especially when we should be saving to prepare for the baby boomers' retirement."

Yet in the Senate, Republicans did pick up the support of two Democrats, Sen. Ben Nelson of Nebraska and Mary Landrieu of Louisiana, whose hurricane-devastated state won emergency aid under the bill.

Drilling prompts GOP defections
The Senate Republicans who opposed the budget bill over the drilling issue were Norm Coleman of Minnesota, Susan Collins and Olympia Snowe of Maine, Lincoln Chafee of Rhode Island and Mike DeWine of Ohio.

The Senate bill reflects the influence of moderates who provided swing votes in the full Senate and in Senate Finance Committee, which came up with proposals to curb the growth in Medicaid and Medicare.

As a result, the Senate's cuts largely protect beneficiaries of the programs, while turning to drug companies, pharmacies and insurance subsidies for much of the savings.

The House bill exacts more savings from beneficiaries and less from industry groups.

Still, there is plenty of sugar to go along with the fiscal medicine. The bill contains about $35 billion in new spending to go along with the cuts:

Doctors would get an $11 billion reprieve next year from a scheduled 4.3 percent cut in their Medicare payments.
Dairy farmers won a $1 billion extension of milk income payments.
College students would get more than $8 billion in new grants.
More disabled children would retain Medicaid health coverage.

Senators also approved a $2.7 billion plan by Sens. Mike Enzi, R-Wyo., and Edward M. Kennedy, D-Mass., to lower student loan processing fees and provide aid to students and schools in hurricane zones.

It passed after the Senate rejected, 68-31, a bid by conservatives to make much of the aid available through school vouchers.

The bill includes $3 billion to subsidize television converter boxes for an upcoming changeover to digital broadcasts.

At the beginning of Thursday’s debate, Senate Majority Leader Bill Frist, R-Tenn., withdrew a $4 billion plan to combat avian flu, fearing Democrats would try to add even more.

Other provisions of the Senate measure include:

$10 billion in new revenues from auctioning analog television spectrum to wireless companies.
More than doubling the premiums paid by corporations to the financially troubled Pension Benefit Guaranty Corp.

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