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GOP Battling Democrats on Linking Tax Cut to Medicare Cut

October 6, 1995

WASHINGTON (AP) _ Trying to counter Democrats’ charge that Republicans are raiding Medicare to pay for tax cuts, GOP leaders said Friday they will support changing their bill to make that impossible.

Reps. Bill Archer, R-Texas, and Thomas Bliley Jr., R-Va., chairmen, respectively, of the House Ways and Means and Commerce committees, said they will support an amendment suggested by two freshmen to prohibit use of any Medicare savings for tax cuts.

The Senate Finance Committee added a similar amendment last week to its version of the bill to save $270 billion from Medicare over seven years.

Reps. Phil English, R-Pa., who is on Ways and Means, and Edward Whitfield, R-Ky., who is on Commerce, said they planned to make the proposal when the two committees begin voting on the overhaul of Medicare Tuesday.

But Democrats scoffed at such claims, saying the money saved from Medicare would still be part of the larger pool of budget cuts the Republicans are counting on to offset their tax cuts.

The Medicare reforms are the centerpiece of the GOP plan to trim $894 billion to balance the budget by 2002; half the savings come from Medicare and Medicaid. At the same time, the GOP is promising a $245 billion tax cut.

Medicare’s hospital fund is due to run out of money in 2002, but Democrats insist the Republicans are cutting Medicare three times deeper than necessary to free revenues for the tax cut.

Archer, in a letter to English, said the amendment ``is worthy of passage and should become a part of our bill to save Medicare.″

English’s administrative assistant, Bob Holste, said the actual amendment was still being drafted, but it will differ from the one that Sen. Don Nickles, R-Okla., got added to the Senate Finance bill. Nickles’ amendment directed that $71 billion in higher premiums and deductibles on seniors be earmarked for the Medicare hospital fund.

Holste said the House GOP amendment would create a trust fund for all the savings and premium increases, and make it illegal to spend that money on anything but Medicare.

Bliley wrote Whitfield, ``Your idea ensures that none of the $270 billion in Medicare savings will be diverted for tax cuts.″

``The `lock box’ is a shell game. It’s meaningless,″ said Ellen Dadisman, spokeswoman for Rep. Sam Gibbons, D-Fla., the top Democrat on Ways and Means. ``These are all federal spending cuts they are taking from Medicaid, Medicare and welfare to pay for tax cuts.″

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