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House passes $49.9 billion in spending cuts

Posted on: Friday, 18 November 2005, 02:19 CST

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.

Source: REUTERS

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