Bush and Congress Plan to Slash Veterans Healthcare Budget


Bush May Seek Freeze in Farm, Housing Budgets, Frist Aide Says

Jan. 7 (Bloomberg) — The Bush administration plans to freeze most spending in programs for agriculture, housing and veterans to help cut the budget deficit in half by 2009, the Senate majority leader’s top budget aide said.

“Absolute freeze — I think that’s the signal I’m picking up” for programs not required by law, said Bill Hoagland, the top budget aide to Senator Bill Frist, a Tennessee Republican. With inflation and population growth, a freeze would amount to a reduction in many programs.

“It’s going to be a challenge and one of the toughest budgets I’ve seen on the discretionary side in a couple of decades,” Hoagland said in an interview today.

President George W. Bush has said the Defense Department and Homeland Security are in line for budget increases. They make up about 19 percent of the budget.

Medicare health insurance for the elderly and disabled, Medicaid health aid for the poor and Social Security retirement benefits are the key entitlements whose spending is required by law, making up 56 percent of annual government spending. Seven percent of the budget is interest on the federal debt.

That leaves about 18 percent of the budget subject to a freeze, Hoagland said. Farm crop subsidies are in line for reductions, mostly through tighter payment limits, he said.

Process Not Complete

The administration is still putting the finishing touches on the budget and some agencies are appealing the decisions, said Chad Kolton, spokesman for the White House Office of Management and Budget, said in an interview.

“The budget process is not yet complete,” Kolton said. “One thing I can say with certainty is this will be a very tight budget that will keep us on track to cut the deficit in half by 2009.”

Hoagland said his comments were based on meetings with House and Senate Republican leaders and White House Budget Director Josh Bolten and his deputy, Joel Kaplan.

“It should not be surprising if agriculture support programs are in for significant budget restraints,” Hoagland said. Budget officials are also considering spending cuts in unspecified housing, as well as veterans programs that may include increased co-payments for medical care, he said.

To contact the reporter on this story: Roger Runningen in Washington rrunningen@bloomberg.net To contact the editor responsible for this story: Joe Winski in Washington jwinski@bloomberg.net

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