Deficit foes: Defer new drug benefit to offset Katrina cost

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Some House and Senate members want President Bush to postpone his Medicare prescription-drug program to help pay for Hurricane Katrina relief as the fight over the deficit and the cost of rebuilding heats up.

By targeting the Medicare program, which Congress passed in 2003 despite objections from some conservatives, the lawmakers are striking right at Mr. Bush's signature first-term domestic-policy achievement.

A bill to delay for a year the January 2006 start of the new drug entitlement would save $40 billion and will be "front and center" tomorrow when members of the conservative Republican Study Committee present spending cuts to offset Katrina's costs, said Rep. Mike Pence, Indiana Republican and RSC chairman.

"It is a very serious option," Mr. Pence said, adding that "a broad number of members" have privately expressed support for the idea.

Sen. Lindsey Graham, South Carolina Republican, mentioned the delay as an option on "Fox News Sunday," and a spokesman for Sen. Tom Coburn, Oklahoma Republican, said the senator is considering sponsoring a bill or backing other senators' efforts.

Rep. Mark Steven Kirk, Illinois Republican, said he understands the sentiment, but doesn't think the proposal will go anywhere. "I just don't see formal legislative action coming on that," he said.

One Republican leadership aide said it drives home the point Republicans are serious about cutting spending.

"When you talk about someone's prescription-drug benefits, people get it," the aide said. He said the push for the delay is "probably a message to the White House" more than a policy goal.

White House spokesman Trent Duffy dismissed the delay idea.

"We've made a commitment to seniors. Their lives depend on it. ... Now is not the time to snatch medicines out of medicine cabinets," he said.

But Mr. Pence said the fact that the White House so quickly dismissed it may mean they are nervous. "If it was really going nowhere, it probably wouldn't have been ruled out," he said.

Deficit hawks both inside and outside of Congress say adding the cost of recovery and rebuilding to the deficit is a bad idea.

"Simply adding $200 billion or more to the deficit is unwise and unnecessary," said former Sen. Warren B. Rudman, New Hampshire Republican and chairman of the deficit-fighting Concord Coalition.

Some budget watchdogs say major spending cuts will be politically impossible to make as Congress approaches the midterm elections next year.

"I think this is a time when the leadership of the Congress and the White House should bury the ideological hatchet and suggest small increases in taxes and modest restraints on spending," said Robert Reischauer, former director of the Congressional Budget Office.

"Everybody has to put a few sacred cows on the chopping block for efforts like this to be acceptable, but it's highly unlikely in the climate we have now," Mr. Reischauer said.

But tax-cutters argue that any tax increases would weaken the economic recovery, lower tax revenues and thus worsen the deficit.

"Now more than ever, we need a vibrant economy which enables us to pay for things like helping New Orleans to recover," said Mallory Factor, a New York investor who heads the Free Enterprise Fund, which supports congressional candidates who favor lower taxes. "Tax increases are a nonstarter. We can't tax our way out of this spending, and it probably wouldn't reduce the deficit anyway."

One danger for Republicans is that the deficit will erode support for further tax cuts. Republicans had planned to enact about $70 billion in tax cuts under the budget process later this year, mostly by extending tax cuts from the 2001 and 2003 packages. But they now face opposition from within their own ranks.