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Congress wrestles with cuts, drilling as session nears end

WASHINGTON - Republicans will work into the weekend in hopes that Congress will be able to wrap up a $40-billion-plus spending cut plan, though a fight over oil drilling in Alaska remains an obstacle.

The defense budget and the largest of the government's domestic appropriations bills remain unfinished as well.

The end-of-session debate was dominated by a bid by Sen. Ted Stevens, R-Alaska, to attach a plan for Arctic National Wildlife Refuge drilling to a huge defense spending bill for the current year. That legislation blends Pentagon funding and money for the war in Iraq with hurricane aid and a scaled-down plan to fight avian flu.

At the same time, a $602-billion appropriations bill for the departments of Labor, Health and Human Services, and Education has stalled in the Senate. GOP leaders are considering adding that measure to the ever-growing defense bill.

It was unclear if Stevens would succeed in opening a wildlife refuge along Alaska's North Coast to drilling. Stevens said he is "pretty close" to getting the votes required to overcome a procedural challenge planned by opponents of drilling in the refuge.

Democrats opposed the plan, but acknowledged they won't mount a full-blown filibuster.

Many critical details on the longer-term budget plan - a key piece of the GOP's fall agenda - remained to be worked out.

The bill would take on, for the first time since 1987, the growth of federal benefit programs such as Medicaid, Medicare and student loan subsidies. It is part of a campaign by Republican leaders to reduce a deficit swelled by the Iraq war and Hurricane Katrina.

House Budget Committee Chairman Jim Nussle, R-Iowa, said he hopes official House-Senate talks expected today will produce agreement on the budget plan.

Tentative agreements include:

Raising $3-billion by increasing the per-employee premiums paid into federal pension guaranty funds from $19 to $30.

Saving $13-billion from the student loan program, in part by establishing a fixed 6.8 percent interest rate instead of maintaining lower variable rates.

Saving about $6-billion from Medicaid by requiring new co-payments for prescription drugs, tightening rules designed to limit the ability of elderly people to shed assets to qualify for nursing home care, and increasing rebates paid by drug manufacturers.

Freezing Medicare physician payments for one year instead of allowing a 4.4 percent cut to be imposed. A "pay for performance plan" to link health care provider payments to the quality of care they give their patients was under consideration to help offset the $7-billion cost of forestalling the cut to doctor fees.

Cutting a net of $3-billion from agriculture programs, mixing $4-billion in cuts with an extension of a milk income payment program that benefits smaller dairy farms. House Agriculture Chairman Robert Goodlatte, R-Va., reluctantly dropped a plan to end eligibility for about 250,000 food stamp recipients.

[Last modified December 17, 2005, 01:02:06]