AARP gears up to fight GOP over Medicaid budget cuts

The already thorny work of hashing out a compromise on the vastly different budget resolutions passed by the House and Senate could be made more challenging if proposed Medicaid cuts prompt AARP to oppose the merged bill.

AARP already is facing off against the GOP over Social Security, actively campaigning against President Bush’s proposal to add private accounts to the program.

In 2003, the seniors organization played a pivotal role in the passage of Medicare prescription-drug-benefit legislation when it endorsed the bill favored by the White House and GOP leaders in Congress. The move angered AARP’s traditional allies in the Democratic Party, but the group appears to be looking to rehabilitate that relationship.

Since then, AARP has earned the ire of Republicans over Social Security and the group’s efforts to get Congress to permit drugs to be imported, among other changes to the Medicare drug benefit.

As Senate Budget Committee Chairman Judd Gregg (R-N.H.) and House Budget Committee Chairman Jim Nussle (R-Iowa) begin to negotiate, AARP is making it clear to members that it will push hard against Medicaid cuts like those that could be provoked if the House version is adopted.

AARP’s senior legislative representative, Ridge Multop, said his group is already lobbying Senate budget conferees. House conferees have not been announced.

As much as $20 billion in potential cuts to the healthcare program for the poor that would be authorized over five years if the conference committee adopts the House version of the resolution. AARP opposes the cuts. The Senate stripped $15 billion in Medicaid spending reductions from its resolution with an amendment sponsored by Sen. Gordon Smith (R-Ore.) that attracted five other Republican votes. AARP endorsed Smith’s bill.

AARP has not completely closed the door on Medicaid reductions, Multop emphasized. He said that cuts based on a target figure, as in the House budget, rather than programmatic changes would be resisted.

Instead, Congress should ask, “What’s a reasonable change in the program that’s going to save money?” Multop said. The group supports Smith’s plan to establish a bipartisan commission on Medicaid that will devise a comprehensive reform strategy.

Other interest groups are cautious. Chip Kahn of the Federation of American Hospitals said that the group has “grave concerns” about cuts to programs that pay its members but that taking a position of the budget before it is completed would be premature. Kahn added that the compromise budget probably would not call for $14 billion to $20 billion in cuts.

“I don’t see that as a very likely outcome,” he said.

The American Health Care Association (AHCA), which is working with AARP and the Service Employees International Union to fight the cuts, also is taking a wait-and-see approach. “I won’t know [our position] until we see the number,” AHCA lobbyist Cynthia Morton said.

Smith continues to press his case and has maintained the support of the moderate Republicans who voted for his amendment. The Oregon Republican is drafting a letter reiterating his opposition to the Medicaid cuts and might shop it to Sens. Susan Collins (R-Maine), Olympia Snowe (R-Maine), Lincoln Chafee (R-R.I.), Mike DeWine (R-Ohio) and Arlen Specter (R-Pa.).

Fellow Oregonian Sen. Ron Wyden (D) predicted that Smith would not back down: “I think he’s going the distance.”

Smith has said, however, that he is willing to negotiate.

Collins insisted that she remains open to discussing more modest cuts. “I’m not drawing any lines in the sand,” she said. “I’d like to see a budget I can support.”

Gregg and Nussle met yesterday morning to open discussions on a compromise. Nussle’s spokesman downplayed the differences between the House and Senate versions and the strong opposition in both chambers to any significant changes. “That’s why the two guys talk. … That’s what negotiations are all about,” he remarked.

The Nussle aide said that the House bill does not specify that the Energy and Commerce Committee cut $20 billion from Medicaid. Instead, he said, it instructs the panel to trim that amount from all mandatory spending under its jurisdiction. The resolution marked up by the Senate Budget Committee would have obligated the Finance Committee to trim $14 billion from the program.

Nussle may press Gregg to adopt the House’s model, he added, saying, “It’s possible that not only do we negotiate a number but we negotiate an approach.”

Gregg, however, hinted that he might not be able to move the Senate toward the House on issues such as Medicaid. Before drafting the Senate resolution, Gregg polled authorizing committee chairmen to determine how much in savings could be found. On Tuesday, he indicated that he does not expect the chairmen to agree to deeper cuts and that he is reluctant to burden them with an “arbitrary number.”

Nevertheless, Gregg predicted that he and Nussle would succeed in crafting a resolution both chambers could tolerate. He was less sure about their ability to do so by the deadline, which is April 15. “I certainly hope so, but it’s very hard to make,” he said, citing the interruption of a two-week recess in March.

Operating without a budget again this year would not be acceptable, Gregg indicated. “To govern well, you should have a budget.” The failure of the GOP to pass a budget would open Republicans to attacks from Democrats, which Gregg said would be fair. “I think it’s legitimate to criticize us if we don’t have it,” he said.

President Bush weighed in Tuesday after a Cabinet meeting. “It’s important we get a budget,” Bush said. “We’ve presented some meaningful, realistic, common-sense reforms on the mandatory spending side” that ought to be adopted, he said.