House passes $49.9 billion in spending cuts

By Richard Cowan

WASHINGTON (Reuters) – The House of Representatives on
Friday narrowly voted to trim social programs for the poor
along with farm subsidies, student loans and other federal
benefits as part of a $49.9-billion package of spending cuts.

The “deficit-reduction” plan passed the House by a
cliff-hanger vote of 217-215, with all Democrats and 14
Republicans voting against the Republican-authored bill.

The vote came after House leaders worked for weeks to
convince rank-and-file Republican members to support the
measure. Many had balked at cutting social programs while their
leaders also pursued tax cuts that would benefit the rich. As a
result, Republicans shaved about $4 billion from their
spending-cut goal.

About 12 hours earlier, however, 22 Republicans joined with
Democrats to defeat a spending bill that would have cut $1.4
billion in health, education and labor programs this year.

The budget plan will “reform and find savings in the
largest portion of our federal spending,” said House Budget
Committee Chairman Jim Nussle, an Iowa Republican.

Democrats argued that by the time Congress wraps up its
work for the year, Republicans will actually add to the U.S.
deficit if they push through about $60 billion in tax cuts.

Rep. John Spratt of South Carolina, the senior Democrat on
the House Budget Committee, said: “After the tax cuts are
passed, there won’t be a dime to pay for (hurricanes) Katrina
or Rita.” He noted that the Republican budget calls for a $781
billion increase in U.S. borrowing authority.

The House will now have to work out a compromise budget
bill with the Senate, which has approved fewer spending cuts.

Scrapped from the House bill were plans to allow oil
drilling in Alaska’s Arctic National Wildlife Refuge and some
offshore areas such as in the Gulf of Mexico.

House leaders also ditched a move to deny free school
lunches to about 40,000 children from low-income families and
approved a last-minute change to proposed cuts in food stamps
so that people would not be discouraged from moving off welfare
and into jobs.

On November 3, the Senate approved a more modest,
$35-billion version of legislation to slow the growth of
rapidly-expanding programs such as Medicare and Medicaid health
care for the elderly and poor.

Democrats assailed the House legislation, complaining that
it would hamper the federal government’s efforts to enforce
child support payments and “allow dead-beat dads to walk away
from their obligations,” said North Dakota Rep. Earl Pomeroy.

They also criticized the bill’s $12 billion cuts to
Medicaid funding over five years and complained about more than
$14 billion in student loan reductions at a time when college
costs are soaring.

Republicans countered that with this legislation, they were
beginning to reform programs so that they help those “truly in
need,” said Rep. David Dreier of California.

The measure contains some new spending, including $1
billion to help low-income people in cold-weather states pay
their heating bills this winter. Rep. Sherwood Boehlert, a New
York Republican, said he would seek even more aid in the final
version of this bill.

While the legislation would slow the growth of the Medicaid
health care program for the poor, it would spend $2.5 billion
to extend benefits to Hurricane Katrina victims.

Nevertheless, Medicaid recipients would pay higher
out-of-pocket costs if the legislation reaches President George
W. Bush’s desk.

Unlike the Senate bill, the House measure would repeal a
U.S. trade law deemed illegal by the World Trade Organization.
The so-called Byrd amendment allows the federal government to
distribute money collected from punitive duties on foreign
goods to U.S. companies involved in trade disputes.