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Senate okays $36-billion budget cut

WASHINGTON - The Senate on Thursday narrowly approved the first cuts since 1997 to benefit programs such as Medicare, Medicaid and farm subsidies, giving Republicans a victory against ever-rising government spending.

The bill, passed by a 52-47 vote, makes mild cuts to the health care programs for the elderly, poor and disabled, but leaves the food stamp program untouched.

The measure also permits exploratory oil drilling in an Alaskan wilderness area. Five Republicans in the Senate who oppose the drilling voted against the bill.

"The Senate took an important step forward in cutting the deficit," President Bush said in a statement issued in Mar del Plata, Argentina, where he is attending a conference. "Congress needs to send me a spending-reduction package this year to keep us on track to cutting the deficit in half by 2009."

The spending battle now heads to the House, where Republicans are divided over whether to cut more deeply across a broader range of social programs. Also, House GOP leaders might remove the provision that allows drilling in the Arctic National Wildlife Refuge.

The Senate bill is estimated to trim $36-billion, or 2 percent, from budget deficits forecast at $1.6-trillion over five years. The cuts total $6-billion for the plan's first year, with deficits predicted to exceed $300-billion.

The long-planned budget measure would make the first cuts to mandatory programs since 1997. These programs account for 55 percent of the budget and include Medicare, Medicaid, farm subsidies and student loan subsidies.

"After years of allowing spending to grow unchecked, I am gratified to see the Senate take a step in the right direction toward serious fiscal discipline," said GOP Sen. Judd Gregg of New Hampshire, chairman of the Senate Budget Committee.

Many Democrats generally opposed the bill because it allows the oil drilling and increases the deficit when coupled with a $70-billion tax cut bill. But two Democrats supported the bill, Sen. Ben Nelson of Nebraska and Mary Landrieu of Louisiana, whose hurricane-devastated state won emergency aid under the bill.

Also Thursday, the House Budget Committee approved a $54-billion deficit-reduction bill on a party-line vote. But so many GOP lawmakers are unhappy with the bill that Republican leaders say it will have to be reworked before a final vote in the full House next week.

It also appears likely that House GOP leaders might drop the oil drilling plan and revisit it in final compromise talks with the Senate.

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's cuts largely protect beneficiaries of Medicaid and Medicare, while turning to drug companies, pharmacies and insurance subsidies for much of the savings. The Agriculture Committee, meantime, dropped plans to cut food stamps.

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.

College students would get more than $8-billion in new grants.

More disabled children would retain Medicaid coverage.

[Last modified November 4, 2005, 01:42:07]