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Limits on Federal Benefits Programs | White House Seeks Cuts in FY06 Budget

When President Bush submits his budget request to Congress next month it is expected that he will try to impose, enforceable limits on the growth of federal benefit programs, and the respective House and Senate Budget Committees will support that effort.

President Bush is also expected to seek cuts in housing assistance for low-income families, freeze or slightly increase most domestic programs, and larger increases for domestic security. The spending plan for 2006, like the appropriations enacted for this year, would give priority to military operations and domestic security over social welfare programs.

The new chairman of the Senate Budget Committee, Sen. Judd Gregg (R-New Hampshire) has said he and other fiscal conservatives wanted to establish “enforcement mechanisms” to “put the brakes on the growth of entitlements” which pay benefits to millions of Americans.

A legislative proposal drafted by the White House would make it more difficult for Congress to pass legislation increasing the “long term unfunded obligations” of benefit programs like Social Security, Medicare, Civil Service retirement and disability, veterans disability compensation, and health benefits for retired federal employees.

A White House document describing the proposal says that Medicaid, the health program for low-income people, can be added to the list as soon as federal officials devise a reliable way to estimate its long-term costs. Medicaid spending has gone up 43% in the last five years, so that federal and state outlays together now total more than $300 billion a year.

The president’s proposal, the Spending Control Act, closely resembles a bill drafted by Rep. Jim Nussle (R-Iowa) and the chairman of the House Budget Committee.