Sessions Pushes Medicare Cap

Posted February 10, 2004 at 6:24pm

Sen. Jeff Sessions (R-Ala.) is rallying colleagues on the Budget Committee to use this year’s budget process to cap spending on the newly enacted Medicare prescription drug program.

“We ought to be able to create benefit programs that are not unguided missiles,” Sessions said in an interview.

Senate Budget Chairman Don Nickles (R-Okla.) is seriously considering adding a mechanism that would trigger Congressional action if the costs of the program were going to exceed the original $400 billion estimate to any budget reconciliation measure that might pass through the chamber, a senior Senate GOP aide said.

The move comes amid outrage among conservatives over a recent Office of Management and Budget estimate that put the new drug program’s cost at $134 billion more than what the Congressional Budget Office projected.

As Sessions envisions it, Republicans should put language in a budget reconciliation bill directing the Finance Committee to come up with statutory ways to keep Medicare prescription drug spending within a $400 billion cap so that actual spending on the prescription drug program could not exceed CBO’s projections.

Reconciliation bills are privileged and cannot be filibustered, and therefore, they are the preferred method for pushing controversial revenue measures.

“It’s time for Congress, when they get an estimate on the cost of a bill, to make sure they stick to it,” said Sessions, chairman of the influential GOP Steering Committee.

Fellow Budget Committee members Sens. Wayne Allard (R-Colo.) and Jon Kyl (R-Ariz.) said they favored the notion of using the reconciliation process to rein in spending on Medicare. Allard, however, cautioned that this year might not be the year to do it.

But Kyl said he supports Sessions’ plan, noting that he and Budget Chairman Don Nickles (R-Okla.) had tried to get the cap included in the Medicare bill last year, but Democrats threatened to filibuster.

Indeed, Democrats still think it’s a bad idea.

Sen. Edward Kennedy (D-Mass.) called Session’s plan “unworkable” and said Congress ought to help keep the costs of the program down by repealing a section of the new law that prevents the government from negotiating lower drug prices for Medicare beneficiaries.

“That’s really the best way to save money,” Kennedy said.

Sen. Max Baucus (D-Mont.), ranking member on the Finance panel, also took issue with Sessions’ proposed solution to Medicare spending problems.

“It doesn’t address the root causes of why might Medicare and health care costs be rising,” he said.

Baucus also defended CBO’s estimate by saying Congress has always deferred to its own number crunchers, and not officials at OMB, which is run by the White House.

“It’s not what the administration says it is,” Baucus said. “CBO has not changed its estimates.”

Sen. Olympia Snowe (R-Maine), who has proposed triggers on tax cuts to keep the soaring deficit in check, was skeptical of Sessions’ proposal and implied that a “trigger” to just rein in Medicare would be a bad idea.

“We should do selected triggers all throughout the budget,” she joked. “Does he want triggers for the tax cuts too?”

Sessions acknowledged that he may be traveling in uncharted waters, given that his plan is a rare attempt to limit spending on an entitlement program.

Because of the nature of entitlement programs, such as Medicare and Social Security, the costs cannot necessarily be controlled once the program is set in motion because every citizen who is eligible for the benefit must be given it under law.

Kennedy said limiting spending on Medicare prescription drugs could potentially prevent some people from getting the benefits they’re entitled to or force the Health and Human Services Department to jack up the cost of premiums for Medicare to make up the difference. He said it would create a lose-lose situation under what he said was an already seriously flawed law.

“It seems to walk us even further away from the commitment … seniors need,” he said.

Still, the controversy over how much the plan may cost has caught fire in Congress, especially since many Republicans reluctantly voted for the measure after being assured by GOP leaders that CBO’s estimates were sound.

That’s probably why Sessions may not just stop at the budget process in trying to get his plan enacted.

He said the simplest way to prevent the Medicare drug program from spending more than Congress allocated in the fiscal 2004 budget resolution is go back to the original proposal that Democrats rejected — writing a $400 billion cap into the Medicare law.

If actual spending threatened to break that cap, HHS would have to notify Congress. Sessions said Congress could either act to break the cap or reinforce it.

But that’s a scenario Baucus said would be dangerous.

“It’s not wise to go back and revisit that because that means opening up the whole bill again,” he said. “And there’d be a lot of amendments from Democrats.”

Baucus may not have to worry about that, however, because Senate Majority Leader Bill Frist (R-Tenn.) told reporters last week that he did not envision a scenario in which the chamber would consider such direct changes to the Medicare law this year.