On Feb. 4, President George W. Bush released his final budget proposal — a record $3.1 trillion spending plan — for Fiscal Year 2009, spelling out his fiscal priorities and recommendations for Congress to consider in developing its own budget this year. Bush’s proposal would provide the biggest increase in military spending since World War II to fight the wars in Iraq and Afghanistan, while squeezing billions of dollars out of federal health care programs and freezing or cutting most domestic agencies to below FY 2008 levels. As part of the proposal, the Bush budget calls for making permanent — at a cost of $635 billion over five years — the 2001 and 2003 tax cuts weighted toward the most well-off Americans.
The budget proposal would freeze Department of Education (ED) spending at $59.2 billion in FY 2009. While some programs within ED’s budget would receive increases — notably, Title 1, Reading First, a new voucher program called Pell Grants for Kids, IDEA and Pell Grants — these would be paid for with $3.3 billion in cuts to other programs. Some of the spending cuts include a substantial decrease for Career and Technical Education ($1.3 billion), a large reduction to Safe and Drug-Free Schools ($150.5 million) and the elimination of the Elementary and Secondary School Counseling Program ($48.6 million), Mental Health Integration Grants in Schools ($4.9 million) and Federal Supplemental Educational Grants ($757.5 million). In total, 47 ED programs would be eliminated outright. Education officials stated the cuts and eliminations were in programs deemed “ineffective” or that had “accomplished the goals they were created for.”
The president’s budget also calls for deep funding cuts for many health care programs. Discretionary spending for the Department of Health and Human Services would be cut by nearly $2 billion, which will affect behavioral health programs. Funding for the Substance Abuse and Mental Health Services Administration would be set at slightly more than $3 billion for FY 2009, a 14 percent cut from last year’s funding levels.
The major entitlement programs, Medicare and Medicaid, would be cut by $178.2 billion over five years. While most of this $178.2 billion would be used to pay for increased defense spending and tax cuts, part would be used to increase funding for the State Children’s Health Insurance Program (SCHIP) by $19 billion during the next five years. The SCHIP increase is a step in the right direction, but members of Congress want to increase SCHIP spending by $35 billion over the same time period and have reacted negatively to the proposal to cut one part of the social safety net to patch up another.
On Medicare, the president’s proposal consists almost entirely of cuts, except for subsidies for managed care companies; the proposed budget would keep in place the billions of dollars of government overpayments to private sector Medicare Advantage plans.
Congressional Democrats quickly attacked the president’s budget, and the proposal also elicited concerns among some Republicans. Congress will now begin putting together the budget that it will use in configuring government spending for the next fiscal year. The outcome of deliberations concerning congressional budget targets and the budgetary rules Congress chooses to live by will predetermine the fate of this summer’s appropriations battles. The American Counseling Association is working within several coalitions to push Congress to adopt a more responsible budget framework.
Regulatory issues add to Medicaid/SCHIP fight
In December 2007, Congress passed legislation to provide enough funding to maintain current enrollment in the SCHIP program through March 2009. The bill also placed a six-month moratorium on Medicaid regulations issued by the Bush administration this past year, halting implementation of regulations that would have significantly restricted school-based services, rehabilitation coverage and targeted case management service options under Medicaid, among others. As one example, the administration wants to prohibit states from covering individuals over 250 percent of the federal poverty level (FPL) unless they have first covered 95 percent of those below 200 percent of FPL — a goal most experts have deemed impossible to attain.
The regulatory issues add fuel to already heated disagreements over Medicaid and SCHIP policy, but some analysts are hopeful that with states looking down the barrel of onerous restrictions, increased pressure on members of Congress may help break the logjam. The Medicaid/SCHIP regulatory issues will make this spring an even busier season for health care policymakers.